Federal Circuit Court Dismisses Appeal for $9 Million in Stolen Medications

Kevin Anderson Cargo Liability, Transportation

Stolen cargo is one of the worst things that can happen to a truck driver, company, and shipper. Not only is the lost freight a financial loss to the different parties, but in most cases freight is designated for shipment because it will be required for use upon arrival. As a result, lost or stolen freight can seriously hamper other related business ventures.

In most cases when freight is lost, damaged, or stolen, the carrier responsible for shipping the freight must pay the costs associated with the loss. This is because of a national policy known as the Carmack Amendment. 49 U.S. Code ยง 14706. This law makes it clear that once a shipper entrusts their cargo with a carrier, the carrier has the burden of ensuring it gets to the destination, and must pay the damages if it does not.

Carmack Amendment Liability is Not Absolute

This national policy of liability is important for establishing a uniform system that is clear and enforceable across the fifty states. But the provisions of the Carmack Amendment can be waived when a shipper and carrier enter into a contract that goes through specific steps to waive it. That was one of the main issues in the case at hand: whether a shipper waived his rights to the Carmack Amendment for a shipment of medications worth $9 million.

This case goes back several years when a medical supply company contracted to have $9 million worth of medications shipped from Georgia to Tennessee. The operation went underway as planned until the truck driver in the case stopped at a rest stop to shower and rest before finishing his work. After being away from the truck for about an hour, the driver came back to discover that the truck had been stolen.

Insurer Blames Carrier, Truck Stop for Loss

Once the dust settled, the insurer in this case paid the shipper for the full value of the lost goods, and then went after the carrier and the truck stop of the damages related to the stolen goods. They argued that the carrier was liable under the Carmack Amendment, and the truck stop was liable for lax security at the truck stop.

The court of appeals in this case rejected both of these arguments, for several reasons. The Carmack Amendment argument was rejected because prior to the shipment, both the shipper and carrier entered into an agreement, waiving the applicability of the Carmack Amendment. The court found that the waiver was valid, and therefore binding on everyone involved in the shipment.

Next, the court addressed the issue of whether the truck stop company could be held liable for the losses under a theory of negligence for not providing adequate security. In this case there were no facts discovered to show that the truck company did not do something they should have to secure the area. As a result, the court dismissed the case because otherwise it would be guesswork to say whether the truck stop company could be held liable under a theory of negligence.

The Trucking and Transportation Law Firm in the Pacific Northwest

At Anderson and Yamada we have decades of experience handling cases just like these, everyday. We represent trucking and transportation companies throughout Oregon, Washington, and California, and look forward to helping your company with all its legal needs. Contact us today.