$9 Million in Claims Dismissed in Carmack Amendment Case

Kevin Anderson Cargo Liability, Contracts, Transportation

In a rare move, a federal district court out of New Jersey reversed itself on a motion for reconsideration in a $9 million transportation contract dispute. The issues presented to the court for another ruling included dismissal of the claim under the Carmack Amendment, negligence by the truck stop in allowing the goods to be stolen, and breach of contract.

This case was first decided by the district court in December of 2015. The reason this case is in litigation is because in 2009 a contracted truck company stopped at a Pilot truck stop while en route to deliver $9 million in pharmaceuticals. When the driver returned to his truck, he discovered that all of the drugs had been stolen. The insurance company involved reimbursed the shipper for the stolen goods, and then they joined up to go after the truck stop and carrier for reimbursement.

Court’s Original Ruling

A federal district court rarely reverses itself on a motion for reconsideration. Only under certain circumstances will it do so, such as:

  • when there is a change in the law that would clearly change the outcome of the court’s ruling;
  • new evidence comes to light that was not available before, and which would influence the court’s decision;
  • the court’s original ruling was clear error, or there is a manifest injustice.

As you can see, it is extremely difficult to obtain a favorable result on a motion for reconsideration, but that is what happened here.

In the original ruling, the court allowed the Carmack Amendment claim to proceed under the theory that the Carmack Amendment is the sole remedy for interstate cargo losses. But the court failed to adequately consider the contractual language the parties used in their original agreement. In the original transportation contract, the parties agreed that any and all provisions of the Carmack Amendment would be waived. At first, the court was not certain that parties could effectively waive the provisions of the Carmack Amendment.

New Ruling

In reconsidering its new ruling, the court determined that under the language of the Carmack Amendment, parties can waive its provisions and resort to other means to make claims. The real sticking issue in this case was whether a consignee must be party to any waiver, and in the new ruling the court ruled that a consignee is not required to waive Carmack Amendment claims for the waiver to be effective.

One big takeaway from this court’s opinion is the importance of language in transportation contracts. Sure, anyone can look online for examples of contract language, but those instruments may not accomplish what you want for your business. To ensure you are getting the most out of your agreements, consider seeking out advice from a professional team with decades of experience in the transportation law business.

At Anderson and Yamada, P.C., we have decades of experience handling every type of transportation legal issue. We can help your company create the right transportation contracts, defend Carmack Amendment claims, or do any other type of legal work your company requires. Contact us today so we can help your company grow.