The Carmack Amendment in Historical Context

Kevin Anderson Cargo Liability, Transportation

One of the great aspects of our interstate trucking framework is comprised of the laws that regulate liability to carriers if cargo is damaged, lost, or stolen. Thankfully we have the Carmack Amendment, a body of laws regulating when, how, and why a carrier can be held liable when cargo is lost, damaged, or stolen. Without it we would live in a world with fifty competing legal systems, each one imposing its own definition of what causes liability, and commerce would not be nearly as free flowing as it is.

But the state of interstate commerce was not always thus. Prior to the 1900s the law was not nearly as clear as it now regarding carrier liability for interstate shipments. Though it was widely known that Congress and the federal government had the prerogative to regulate interstate commerce, in many parts of the country that was secondary to the individual right to contract. As a result there was a mishmash of how liability was assessed across the country, and many state courts were reluctant to implement federal law against large companies like those who ran the trains.

Question of Liability Goes to Supreme Court

This was the environment when the question of reducing liability for lost interstate cargo made its way to the Supreme Court in 1913. In that case, Adams Express Co. v. Croninger, the court was tasked with ruling whether the Carmack Amendment or a private contract determined liability levels for damaged interstate cargo. It was one of the early, seminal rulings that led us to the framework we enjoy today.

In that case, the state court ruled that the parties agreed by private contract to reduce the amount of liability to $50. The problem with this reduction in liability is that it did not comply with the rates of liability as posted, at the time, by the Interstate Commerce Commission. And because it did not comply, the Carmack Amendment should have ruled the liability issue. And the Carmack Amendment would have put full liability on the carrier for all the damages.

The court was at a crucial juncture in federal jurisprudence, because they had to assert the power of the federal government to regulate interstate commerce. And that is exactly what they did. The opinion was not complicated, it simply stated that the Carmack Amendment prevailed over the parties’ private contract, and that the carrier would be fully liable. From then on the federal courts have built a body of case work which more than establishes this principle.

Understanding and Applying The Carmack Amendment in Oregon

At the time it was passed, the Carmack Amendment was not a revolutionary idea. In fact it was simply an embodiment of the prevailing common law approach to hold carriers liable for the full amount of cargo damaged, lost, or stolen while in their charge. And that simple rule continues on until this day, with different applications in different situations.

Understand how the Carmack Amendment will affect your business as a trucking company is key to your success. Whether you are facing a suit or claim for lost or damaged goods, or if you want to understand this rule better, contact us. At Anderson and Yamada we have decades of experience helping, advising, and representing trucking companies in transportation law issues. We look forward to being part of your winning team.