Subcontractor Causes Troubles for Motor Carrier

Kevin Anderson Cargo Liability, Contracts, Transportation

The old adage of you are only as strong as your weakest link holds true with the link of different players that are typically involved in shipping goods from one state to another. Because of these complex relations, one breakdown with one or more of the players can put a company at risk, and cause severe damage to reputations, bottom lines, and company survival. This was the lesson learned as a trucking company lost an entire truckload of lobster recently. A news report from Massachusetts explains that a trucking company is being sued over a lost or stolen load of lobsters that could cost that company hundreds of thousands in legal fees and damages. The story reports about a lawsuit filed in federal court in Massachusetts that is claiming the shipping company is liable for an entire load of lobsters that was supposed to end up in California, but was …

Limits on Liability, Crux of Carmack Cases

Kevin Anderson Cargo Liability, Transportation

More often than not, a Carmack Amendment case comes down to one simple issue, and that issue is one of the most misunderstood in the industry. The crux of the majority of Carmack Amendment cases revolves around whether a carrier properly limited their liability prior to shipment. Obviously in the wake of lost or damaged cargo, the shipper almost always attempts to avoid full liability, while carriers universally affirm liability was limited. This argument surfaces again and again in Carmack Amendment cases, in part, because of nature of the carrier shipper relationship. Anytime a relationship begins between shipper and carrier, the two do not hope or anticipate anything going wrong with the shipment, and expectations are high that the cargo will make it to its destination without any problems. But that is just the sort of thinking that gets carriers into trouble and stuck with giant bills that can break …

Declaratory Judgment: A Tool for the Carmack Amendment

Kevin Anderson Cargo Liability, Transportation

Carriers involved in the shipment of goods from state to state are typically on the receiving end of a Carmack Amendment claim. But that does not always have to be the case. In fact, in some situations it is beneficial for a company to take the initiative and have their rights under the act declared by a federal judge. This is the lesson learned from a recent case out of the Northern District of California. That case, United Van Lines, LLC v. Deming, was initiated by the carrier after claims for lost and damaged goods were made by the shipper. The case began when a company relocating one of its employees contracted with a relocation company to have their employee’s goods transported from one state to another. As part of the transaction, the transportation services company agreed with the carrier to limit their liability to the lesser of $100,000 or …

When Carmack and FAAAA Do Not Preempt State Law

Kevin Anderson Cargo Liability, Transportation

An interesting case recently decided in a federal court in Illinois should be of note to any company involved in the trucking and transportation industry. That case, Muzzarelli v. United Parcel Service, Inc., presents two compelling issues related to trucking and transportation law. The first is related to the Carmack Amendment and when that federal statute does not preempt state law. And the second is a similar issue, although it regards the Federal Aviation Administration Authorization Act. The facts of this case involve a well known package delivery company and a property owner who sued them for injuries they suffered. The case began when one of that company’s employee’s left a package on the front porch of a house (a fairly common occurrence for the company and people). The conflict began when a woman living at the house tripped over the package and was injured as a result. A lawsuit …

Indemnification Without an Agreement

Kevin Anderson Bills of Lading, Cargo Liability, Transportation

One of the risks a carrier often runs involves carrying more valuable cargo than they know about or approve of. This can happen in a number of different scenarios, but one of the riskier situations is where two companies have an existing contract for transportation of goods, and a third party ships goods under that contract. That is what happened in a case earlier this year where a judge had to rule whether indemnification was an option when there was no agreement to indemnify. In that case, Macy’s Corp. Servs., Inc. v. W. Express, Inc., the shipper had a contract to transport goods for Macy’s, and a third party entered into that contract and had the carrier take a load of goods interstate. Before taking off, the third party and the carrier had a bill of lading with a declared value, and sometime during transit the cargo was stolen. In …

It Still Happens: Damaged Claims Fail to Mention Carmack Amendment

Kevin Anderson Cargo Liability, Transportation

One of the most common occurrences in transportation law related litigation is for a complaint alleging damaged or lost goods to fail to mention the Carmack Amendment. This happens for a number of reasons, and can work in favor of carriers facing lawsuits over lost or stolen goods. The biggest reason that lawsuits fail to include a claim under the Carmack Amendment is because it is relatively unknown in the legal world. During law school a law student will not learn about the Carmack Amendment, but will learn about other legal principles that should apply in most cases. Those include breach of contract, negligence, bailment, and other laws which typically would apply when goods are lost or get damaged. The problem with these legal principles when applied to the trucking industry is the fact that they are state-based. True, the principles are generally the same across state lines, but each …

Multi-Million Dollar Carmack Amendment Case Winds to a Close

Kevin Anderson Cargo Liability, Transportation

A Carmack Amendment case out of Ohio that could be described as an epic poem is finally (maybe) coming to a close. The storied case, Excel, Inc. v. Southern Refrigerated Transport, Inc., has made its way to district court, the Sixth Circuit Court of Appeals and back over beginning in December of 2007. Now the district court in the case has issued another final ruling, and the case should go away. This case began when a shipper contracted with a broker to have millions of dollars worth of pharmaceuticals shipped from one state to another. En route, the truck was stolen and all the goods were lost. The truck was never recovered, and the goods were considered a total loss. Under the Carmack Amendment the carrier is liable for the full value of goods lost, stolen, or damaged in transit. But there are exceptions to this rule, and that is …

The Carmack Amendment and Fraud Claims

Kevin Anderson Cargo Liability, Transportation

If you are a trucking company dealing with interstate commerce, then you likely know what the Carmack Amendment is. It is a series of federal laws that establish a uniform system of liability for carriers when the cargo they transport is damaged, or gets lost or stolen. Without it, there would be fifty different laws regarding cargo loss liability across the fifty different states. Because of the uniform system and because it is a federal law, any carrier sued for lost or damaged cargo can remove the lawsuit to federal court under the umbrella of the Carmack Amendment. This removal authority requires a federal judge to take over a case, and in almost all cases dismiss state law claims directly related to the loss or damage to goods shipped interstate. The Carmack Amendment Preempts State Claims This is the scenario that recently presented itself in a federal court in Texas. …

The Carmack Amendment, Intent, and International Shipments

Kevin Anderson Cargo Liability, Transportation

A federal judge in Maryland recently decided a difficult Carmack Amendment case where it was not clear whether state law or the Carmack Amendment would apply. Of course the Carmack Amendment is federal law establishing a uniform policy of liability for lost or damaged goods shipped interstate. Because it is a federal policy and law, it preempts state laws that would otherwise apply to lost or damaged goods shipped interstate. With the law nothing is ever as clear as the rules which so neatly describe what should happen. Each case is full of facts that could apply to one situation in one way, and a different in another. That is why we have lawyers, litigations, courts, judges, and juries. Each party plays an important role to produce a fair and just result under the law. But even with all the players involved, sometimes the results are not clearly correct, but …

The Carmack Amendment: A Uniform Theory of Liability

Kevin Anderson Cargo Liability, Transportation

It happens more often than shippers or carries wish it would, but the fact is that cargo is often lost, stolen, or damaged while being shipped interstate. Being an important issue of the national commerce, Congress decided long ago to regulate the loss and damaged of the cargo shipped interstate by passing the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 14706 et seq. The Carmack Amendment has been a solid source of reliability for both shippers and carriers dealing within the interstate trucking industry. The purpose of the Carmack Amendment is to establish a uniform policy of liability when cargo is lost, stolen, or damaged during interstate shipping. This uniform policy puts shippers and carriers on solid ground when they assess risk and liability before shipping goods. Carmack Amendment and Preemption Because the Carmack Amendment is a national, federal policy, it works to prevent claims being made under …