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The Carmack Amendment: The Most Important Thing to Know on Moving Day

Everyone has moved at one point in his or her life, some traveling through several states to get there. Moving is stressful, but if you are fortunate enough to have the assistance of professional movers much of the hassle can usually be avoided. Then again, that is not always the case. Imagine the anxiety of moving cross-country and of trusting strangers to pack, secure, and transport everything you own, only to arrive at your new home and discover that your trust was sorely misplaced. Maybe the movers destroyed the priceless antique armoire you inherited from your grandmother. Perhaps your prized collection of baseball cards is inexplicably missing. Clearly, if you experience such misfortune you will want to recover for your losses. What you may not know is that a federal statute known as the Carmack Amendment may provide the sole remedy.

History

Congress enacted the Interstate Commerce Act in 1887 to regulate interstate transportation, and in 1906 Congress enacted the Carmack Amendment. Babcock & Wilcox Co. v. Kansas City S. Ry. Co., 557 F.3d 134, 137 (3d Cir. 2009). The purpose of the Carmack Amendment is to establish uniform federal guidelines designed to remove the uncertainty surrounding a carriers liability when damage occurs to a shippers interstate shipment. Spray-Tek, Inc. v. Robbins Motor Transp., Inc., 426 F. Supp. 2d 875, 882 (W.D. Wis. 2006); see also 49 U.S.C. 14706 (2005). The Carmack Amendment engendered uniformity by codifying the strict liability rule that governed the liability of common carriers at common law. Sompo Japan Ins. Co. of Am. v. Union Pac. R.R. Co., 456 F.3d 54, 59 (2d Cir. 2006). The Carmack Amendment, which governs interstate carrier liability, allows matters to be brought in either federal court or state court, at the election of the plaintiff. Fogarty Van Lines, Inc. v. Kelly, 443 So. 2d 1070, 1071 (Fla. Dist. Ct. App. 1984). Interstate travel is essential to invoke the protections afforded by the Carmack Amendment.

The Role of Preemption

Congress created the Carmack Amendment to create uniformity and to occupy the field of interstate transportation to avoid the confusion of conflicting state laws. Adams Express Co. v. Croninger, 226 U.S. 491, 505 (1913). Congress had every intention of tak[ing] possession of the subject and supersed[ing] all state regulations with reference to it. Id. The Carmack Amendment absolutely preempts all state common law claims against interstate carriers. Atl. Mut. Ins. Co. v. Yasutomi Warehousing & Distrib., Inc., 326 F. Supp. 2d 1123, 1126 (C.D. Cal. 2004). For example, state law claims for conversion or unfair trade practices based on loss of or damage to cargo during shipment are preempted, even if those claims involve allegations of intentional wrongdoing. Miracle of Life, LLC v. N. Am. Van Lines, 368 F. Supp. 2d 494, 498 (D.S.C. 2005). To return to the initial scenario as an example, an emotional distress claim, or any other state law claims, for damage to a family heirloom would be preempted by the Carmack Amendment.

Jurisdictional Issues

Though the Carmack Amendment is a federal statute, state and federal courts have concurrent jurisdiction over claims against interstate carriers. 49 U.S.C. 14706(d)(1). Federal district courts have original jurisdiction over such actions if the amount in controversy for each bill of lading exceeds $10,000, not including interest and costs. 28 U.S.C. 1337(a). If there are multiple bills of lading, however, a plaintiffs claims may not be aggregated to establish the jurisdictional amount. Carousel Nut Prods., Inc. v. Milan Express Co., 767 F. Supp. 142, 143 (W.D. Ky. 1991). Additionally, a state law claim for which no independent basis of federal jurisdiction exists may not be aggregated with a federal claim under the Carmack Amendment to reach the jurisdictional amount. Rockholt v. United Van Lines, 697 F. Supp. 383, 384 (D. Idaho 1988). A case may be dismissed if it appears to a legal certainty that the claim is actually for less than the jurisdictional amount. Natl Semiconductor Corp. v. Commercial Lovelace Motor Freight, Inc., 560 F. Supp. 908, 910 (N.D. Ill. 1983). It is important to note that the Carmack Amendment does not appear to limit ones right to a jury trial. Comsource Indep. Foodservice Cos. v. Union Pac. R.R. Co., 102 F.3d 438, 441 (9th Cir. 1996).

Application of the Carmack Amendment

As previously mentioned, the Carmack Amendment applies only when there is interstate transportation by a motor carrier. 49 U.S.C. 13501(1). To continue with the example set forth in the initial scenario, even if the moving company departs from the southeastern part of Louisiana and arrives in the northern part of Louisiana, if the carrier must travel across Mississippi to reach the destination, interstate transportation occurs and the Carmack Amendment applies. The Carmack Amendment also applies to carriage between a place in the United States, or a place in a territory or possession of the United States, and a foreign country and to carriage through a foreign country to the United States, but only to the extent the transportation is in the United States. Id. However, the shipper and carrier may, in writing, expressly waive any or all rights and remedies under the Carmack Amendment for transportation covered by the carriage contract. 49 U.S.C. 14101(b).

A prima facie case of carrier liability under the Carmack Amendment is established by proving that the goods were delivered to the carrier in good condition, that they arrived at the place of delivery in damaged condition, and that the amount of damages is measurable. Case W. Reserve Univ. v. Yellow Freight Sys., Inc., 619 N.E.2d 42, 45 (Ohio Ct. App. 1993). The complaining party need only show that when the goods arrived they were damaged, not that the carrier necessarily damaged them. Id. The purpose of showing that goods were in proper condition when given to the carrier and then damaged on delivery is to show an adverse change in their condition while goods were in the carriers custody. Spray-Tek, 426 F. Supp. 2d at 882. To evidence the condition of the goods being shipped, the carrier issues a bill of lading, which is the carriers receipt for the condition and quantity of the goods. 49 U.S.C. 14706(a)(1). Furthermore, to state a valid claim under the Carmack Amendment, there must be a written or electronic communication from a claimant filed with a proper carrier within the time limits specified in the bill of lading, which communication must include adequate facts to identify the shipment; an assertion of the carriers liability for the damage, loss, or delay; and a claim for payment of a specified or determinable amount of money. Lewis v. Atlas Van Lines, Inc., 542 F.3d 403, 408 (3d Cir. 2008). A carrier may require that any claims for damaged goods be brought within nine months. Dan Barclay, Inc. v. Stewart & Stevenson Servs., 761 F. Supp. 194, 205 (D. Mass. 1994); see also 49 U.S.C. 14706(e)(1). The statute of limitations for filing suit is set at a minimum of no less than two years. Id.

Liability Limitations and Defenses

Once a plaintiff establishes a prima facie case under the Carmack Amendment, the carrier must then prove that it was not negligent or that the damage occurred from an unexpected cause. Mo. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137 (1964). The burden that the carrier must overcome is not a light one. Case W. Reserve Univ., 619 N.E.2d at 45. To avoid liability, the carrier must show that the damage was caused by an act of God; . . . the public enemy; . . . the act of the shipper himself; . . . public authority; . . . or the inherent vice or nature of goods. Mo. Pac. R.R., 377 U.S. at 137 (internal quotation marks omitted).

A carrier may also limit its liability if it establishes rates for the transportation of property under which liability is limited to a value established by written declaration of the shipper, or by written agreement between the carrier and the shipper if it would be reasonable under the circumstances. 49 U.S.C. 14706(c)(1)(A). However, a shipper cannot escape the terms of a proper bill of lading. In determining whether a shipper agreed in writing to limit the carriers liability, courts may consider whether the shipper was misled into signing a contract, the shippers education level, and whether the shipper was familiar with bills of lading are all factors that can be considered by the court. See Hughes v. United Van Lines, Inc., 829 F.2d 1407, 1417 (7th Cir. 1987). However, if the [carrier] cannot meet its burden the [shipper] is entitled to recover damages for [his] actual loss or injury to the shipment. Id.

Damages

Moving companies are liable for damage caused to property they transport in the amount of the actual loss or injury to the property. Burlington Air Express, Inc. v. Truck Air of the Carolinas, Inc., 8 F. Supp. 2d 508, 512 (D.S.C. 1998) (quoting Contempo Metal Furniture Co. of Cal. v. E. Tex. Motor Freight Lines, Inc., 661 F.2d 761, 764 (9th Cir. 1981)). Generally, the amount of damages is the difference between the market value of the property in the condition in which it should have arrived at its destination and its market value in the condition in which it did arrive. Id. Other recoverable damages also include damages for delay, lost profits, and all reasonably foreseeable consequential damages. Am. Natl Fire Ins. Co. v. Yellow Freight Sys., 325 F.3d 924, 931 (7th Cir. 2003). However, only those damages that are actual and foreseeable are typically recoverable. To recover special, or consequential, damages, the [shipper] must show that the carrier had notice of the special circumstances from which such damages would flow. Contempo, 661 F.2d at 765.

An unexpected benefit under the Carmack Amendment is that a shipper can collect attorneys fees in a claim involving household goods if : (1) the claim is for lost or damaged household goods; (2) the shipper submits a claim to the carrier within 120 days after the date the shipment is delivered or the date the delivery is scheduled, whichever is later; (3) the shipper prevails in a court action; and (4) a decision resolving the dispute was not rendered through arbitration under 49 U.S.C. 14708 within 60 days or within an extension of such period. 49 U.S.C. 14708(d); Nichols v. Mayflower Transit, LLC, 368 F. Supp. 2d 1104, 1109 (D. Nev. 2003). Prejudgment interest may also be awarded, and it typically accrues from the date of the loss or from the date on which the claim accrued. Am. Natl Fire Ins. Co., 325 F.3d at 935. Prejudgment interest in the context of loss, damage, or delay of goods could become very crucial depending on the amount of time it takes to reacquire those goods for their intended purpose. While the Carmack Amendment does allow for actual damages, prejudgment interest, and attorneys fees, if the proper procedure is followed, damages for state law claims generally are not recoverable. See Richter v. N. Am. Van Lines, Inc., 110 F. Supp. 2d 406, 414 (D. Md. 2000).

Conclusion

Should you find yourself in the unfortunate situation of having to file a claim for lost or damaged goods, remember that time is of the essence. Moving is a stressful event, especially when valuable items are lost or damaged by the moving company. Let the Carmack Amendment be your protection the next time you make an interstate move.

Elizabeth J. Palmer is an associate with the law firm of Rosen, Rosen, & Hagood, LLC, in Charleston, South Carolina, where she practices in the areas of business and commercial litigation, personal injury, and education law.

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