Beyond the Carmack Amendment: Alternate Theories of Liability

Kevin Anderson Cargo Liability, Regulations, Transportation

When it comes to carrier liability for lost and damaged goods from an interstate shipment, the Carmack Amendment is the big law regulating most situations. It was created by the federal government to establish a uniform set of rules regulating how damages to goods shipped interstate should be handled. In part, this was to eliminate the applicability of state laws, which vary from jurisdiction to jurisdiction.

When a carrier is sued over lost or damaged goods under a law or theory not involving the Carmack Amendment, it will in most cases be dismissed. But as one case recently decided from Illinois illustrates, that is not always the case. In fact there are many ways in which a trucking company can be held liable after a botched shipment.

Starr Indemnity & Liability v. TRC, INC.

The recent case out of Illinois involved the shipment of nearly $2 million worth of airplane parts. Along the way, the shipment was overturned when the trailer rolled over in Ohio, and all the parts were damaged. The shipper brought a claim against the carrier for the damaged goods, but used a unique set of claims to make her case. As a result, the carrier moved to dismiss the non-Carmack Amendment claims.

In most cases when a non-Carmack Amendment claim is made it is based on state law. Those claims are easy for a judge to dismiss because of the broad nature of the Carmack Amendment. But in this case the additional claims were made based on federal law, specifically parts of the Interstate Commerce Commission Termination Act, 49 U.S.C. § 14704(a)(2), 14704(e). Each of those laws regulate trucking companies and their employees.

One of the claims alleged that the trucking company permitted the cargo to be transported in an unsafe manner. If proven, it would be in violation of 49 C.F.R. § 398.4(g)(1). Another charged the driver with making false statements to the police following the accident in violation of 49 C.F.R. § 390.11, which requires motor carriers to comply with all the provisions of the FMCSR, including driving the speed limit. And finally, the shipper made a claim that the carrier should have known about certain criminal violations in the driver’s past that made him unfit for employment.

Court’s Ruling and Final Thoughts

The court was asked to dismiss the additional, non-Carmack Amendment claims. But because the claims were based on federal law dealing with transportation regulations, the court would not dismiss the claims as preempted by the Carmack Amendment. And this ruling is not likely limited to that jurisdiction. In fact, the 9th Circuit has recognized a private right of action for violations of 49 U.S.C. § 14704(a).

The takeaway from this case is that trucking companies should be aware of all the liability they are subject to under the law. That is where the counsel and advice of the right professionals is invaluable. That is what we offer you and your company at Anderson and Yamada. We have decades of experience counseling and representing trucking companies, and we look forward to helping you. Contact us today.