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. In that case, United Van Lines LLC, v. Hajjar, the trucking company was the first to bring suit over a claim that the shipper did not pay the agreed-upon contract rate. The man then countersued, claiming that they damaged his property and committed fraud. He then argued for attorney’s fees under Texas law.
Properly, the federal court dismissed the state law claims, including the fraud claims and attorney’s fees claims. The reason? Because the Carmack Amendment is the exclusive remedy for claims arising directly out of the transport of goods across the state lines. This includes fraud, negligence and other claims.
The Law in the Northwest
As the nuanced laws regarding the Carmack Amendment can change from region to region in the United States, it is important to know whether this same rule would apply in the Northwest, home of the 9th Circuit Court of Appeals. And it does. In a 2007 case the court of appeals for our area of the country made a similar ruling in Hall v. North American Van Lines, Inc.
In that case, the shipper came up with creative ways to plead his claims that did not necessarily involve the loss or damage to property. The lawsuit included claims of breach of contract, lack of good faith, and fraud. But they all stemmed from the same transaction, a botched interstate shipment of goods. And the court dismissed all of the state law claims to bring the entire suit under the umbrella of the Carmack Amendment.
This is a good system for interstate trucking companies. On the one hand it does impost liability on a shipping company for the loss or damage to property. But it prevents a company from dealing with fifty different sets of rules and regulations as they cross from one state to another to do their work. And it allows a company to modify liability and mold the applicability of the Carmack Amendment through well crafted bills of lading and carrier contracts.
If your company is facing a suit over lost or damaged goods, contact us. At Anderson and Yamada we have decades of experience handling these and other transportation law claims. We look forward to helping your company too.