Moving companies and motor carriers can be very beneficial when you move your home or business to a new location, or need to transport goods. They will load your belongings into a large truck, transport them across state lines to any destination and unload your property. However, some moving companies engage in an act of fraud that entraps many of their customers, holding their property hostage for exorbitant fees far higher than their quote. The end result is a move that will commonly be double or even triple the amount quoted, and very often it will be a price that the customer would never have agreed to in the first place. At that point, however, the customer, or shipper, will not have other options and will be forced to pay the extra amount. Those who refuse to pay will frequently not receive their personal or business belongings back from the moving company.
In addition, some movers and motor carriers are careless and will damage your goods, and then refuse to compensate you for that damage.
The Bach Law Firm has litigated these cases and will fight for your right to recover damages related to the loss, damage, or delay of your shipment. We have seen moving companies that have routinely participated in these illegal activities for years, but continued to get away with their actions because the customers did not know that the law protected THEM.
While intrastate moves or shipments are usually litigated in state court, interstate cargo claims are governed by the Carmack Amendment ("Carmack"), 49 U.S.C §14706, and are usually litigated in federal court. Carmack controls and limits the liability of common carriers for in-transit cargo and preempts some common or state law remedies that increase the carrier's liability beyond the actual loss or injury to the property. Carmack establishes a uniform regime of recovery by interstate shippers against motor carriers and freight forwarders, and allows a shipper to recover for actual loss or injury to the property, including if those goods are lost, damaged, untimely delivered, or held hostage. One purpose of Carmack is to relieve a shipper from searching for the particular company or carrier at fault from the often numerous carriers handling the shipment.
The Carmack Amendment subjects a motor carrier transporting cargo in interstate commerce to absolute or strict liability for "actual loss or injury to property." Missouri Pacific R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137 (1964). By limiting a carrier's liability to the actual loss or injury to the transported property, Congress intended to provide certainty to both shippers and carriers, and to enable carriers to assess their risks and predict their liability for damages. Hughes v. United Van Lines, 829 F.2d 1407, 1415 (7th Cir. 1987), cert. denied, 485 U.S. 913 (1988); Counter v. United Van Lines, Inc., 935 F. Supp. 505, 507 (D.C. Vt. 1996). Accordingly, Carmack permits the shipper a single method of recovery "directly from [the] interstate common carrier in whose care their goods are damaged." Windows, Inc. v. Jordan Panel Sys. Corp., 177 F.3d 114, 118 (2nd Cir. 1999). Section 14706(a)(1) provides, in part, that [t]he liability imposed under this paragraph is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States or from a place in the United States to a place in an adjacent foreign country when transported under a through bill of lading... 49 U.S.C. §14706(a)(1). The carrier's liability and duties under Carmack are determined pursuant to the bill of lading used in the shipment of the goods, and the limits are based on the carrier's rates or tariffs. See, e.g., 49 U.S.C. §§14706, 13501 (2005). Recovery under Carmack, however, is not limited to dam-aged goods. The phrase in Section 14706(a), the "liability imposed... is for the actual loss or injury to the property...," has been long interpreted by the courts to cover more than mere physical loss or damage to the goods. It includes any injury to or invasion of tangible or intangible property rights and economic loss not directly related to physical damage. Wang Labs., Inc. v. Burts, 612 F. Supp. 441, 444 (D. Md. 1984); Reagan v. Commonwealth Theaters of P.R., Inc., 300 F. Supp. 676, 678 (D.P.R. 1969).
The bill of lading, the terms and conditions of which bind the shipper and all connecting carriers, sets forth the limitations of the carrier's liability to which Carmack applies. For the bill of lading to, in effect, limit the carrier's liability, the carrier must take four steps before transporting the goods: 1) maintain a tariff, if required; 2) obtain the shipper's agreement as to his or her choice of liability; 3) give the shipper a reasonable opportunity to choose between two or more levels of liability; and 4) issue a receipt or bill of lading prior to movement of the shipment. Allison-Erwin Co. v. Saturn Freight Sys., 106 F. Supp. 2d 1328, 1330 (N.D. Ga. 2000); see also Cash Am. Pawn, L.P. v. Federal Express Corp., 109 F. Supp. 2d 513, 519 (N.D. Tex. 2000) (carrier limits liability if there is fair agreement and if shipper has option to a higher recovery if a higher rate paid).
Before a person can recover against the carrier for loss or damage, injury or delay of cargo under Carmack, that person must file a written notice of claim. 49 C.F.R. §370.3(a) (2005). The people who can file a claim are the holder of a bill of lading and persons beneficially interested in the shipment, although not in actual possession of the bill of lading, such as buyers, consignees or assignees. Tallyho Plastics, Inc. v. Big M Constr. Co., 8 S.W.3d 789, 792 (Tex. App.1999, no writ); Cohen v. Southern Ry. Co., 193 N.E. 480 (Ill. 1934). Insurance carriers subrogated to the rights of any of these individuals can also make a claim under Carmack. State Farm Fire & Cas. v. United Van Lines, 825 F. Supp. 1399 (D.S.C. 1992); see also 2 Sorkin, Goods in Transit §7.13 at 7-73. Two issues associated with a "notice of claim" are: 1) what constitutes a proper notice of claim; and 2) the time limitations to file a notice of claim. The notice must be in compliance with the bill of lading, the contract of carriage and all tariff provisions that apply. 49 C.F.R. §370.3(a). If the carrier and shipper agree beforehand, the notice can be written or electronically communicated, and must be filed with the proper carrier within the time limits specified in the bill of lading or contract. Id. at (b). At a minimum, the notice must contain facts sufficient to identify the shipments, assert liability for alleged loss, damage, injury or delay and make a claim for the payment of a specified or determinable amount of money. Id. However, when the shipper gives written notice of the damage, clearly communicating its intent to hold the carrier liable, and the carrier investigates the claim and agrees to pay the claim, the written notice of damage will likely constitute a "written claim." Id.; see also Kvaerner E & C (Metals) v. Yellow Freight Systems, Inc., 266 F. Supp. 2d 1065 (N.D. Cal. 2003) (where carrier does not agree to make repairs or pay claims, a written notice is not a "written claim"). Likewise, a shipper's letter to the carrier stating the reasons to refuse a shipment rejected by a consignee is an adequate statement to satisfy the written claim requirement of the bill of lading when the goods are identified by reference, the damages are included and the carrier has sufficient and timely information on the loss. Wisconsin Packing Co., Inc. v. Indiana Refrigerator Lines, Inc., 618 F.2d 441 (7th Cir. 1980), cert. denied, 449 U.S. 837 (1980).
Carmack allows the carrier to limit the amount of time a shipper has to file a claim, as long as the time to file the claim is not less than nine months. See 49 U.S.C. §14706(e)(1). The minimum nine-month period is not a limitation period, but rather, it is a statutory determination of what is a reasonable period for the shipper. State Farm Fire & Cas. Co. v. United Van Lines, Inc., 825 F. Supp. 896 (N.D. Cal. 1993). Accordingly, a carrier may include in a bill of lading a requirement that any claim of cargo damage be brought within a set time period greater than, or equal to, nine months. Dan Barclay, Inc. v. Steward & Stevenson Services, Inc., 761 F. Supp. 194 (D. Mass. 1991). This time period begins to run the day after the delivery of the goods. Inland Steel Corp. v. Consolidated Rail Corp., 714 F. Supp. 389 (D.C. Ind. 1989). The minimum nine month claim filing deadline is enforceable against anyone having a claim against the carrier, including a subrogating insurance carrier. State Farm Fire & Cas. v. United Van Lines, 825 F. Supp. 1399 (D.S.C. 1992).
Carmack does not set forth a limitations period for filing a suit. Rather, it allows the shipper and the carrier to set their own limitations for filing a civil suit so long as these limitations are within the minimum period set in Carmack. This statutory period for filing a civil action is "no less than two years to file a civil suit against [the carrier,]" or two years and one day. 49 U.S.C. §14706(e)(1) (2005). The period to file suit begins to run on the date the carrier gives the shipper written notice that the carrier has disallowed all or any part of the shipper's claim specified in the notice of claim. 49 U.S.C. §14706(e)(1). This means that the shipper has two years and one day to file a civil action from the date notice was given in writing by the carrier that the shipper's claim was disallowed or denied. See Kuehn v. United Van Lines, L.L.C., 367 F. Supp. 2d 1047, 1051-52 (S.D. Miss. 2005). If the shipper fails to file a civil action within this time, the suit is barred even if a timely notice of property damage claim was filed. Id. at 1051. To trigger the two year and one day statute of limitations, the carrier's denial must "operate as a clear, final and unequivocal disallowance of the claim" and must not use words that are susceptible of more than one meaning. Security Ins. Co. v. Old Dominion Freight Line, 2003 WL 22004895 (S.D.N.Y. 2003) (citing Combustion Eng'g, Inc. v. Consolidated Rail Corp., 741 F.2d 533, 537 (2nd Cir. 1984)). The disallowance does not have to be stated in so many words nor in the language contained in the bill of lading. 2 Sorkin, Goods in Transit §10.02[5] at 10-18. It is sufficient if it conveys the meaning that the claim is denied as made. Id. (citing Tribby v. Chicago & N.W. Ry. Co., 264 N.W. 185 (S.D. 1935)).
The carrier is liable for "the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported..." Id. §14706(1); see also Contempo Metal Furniture Co. v. East Texas Motor Freight Lines, Inc., 661 F.2d 761, 764 (9th Cir. 1981). The general rule for determining 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. Chicago, M. St. Paul Ry. Co. v. McCaull-Dinsmore Co., 253 U.S. 97 (1920); Mineral U.S. Inc., Exalmet Div. v. M/V Moslavina, 46 F.3d 501 (5th Cir. 1995); Camar Corp. v. Preston Trucking Co., Inc., 18 F. Supp. 2d 112 (D. Mass 1998), aff'd, 221 F.3d 271 (1st Cir. 2000). The market value rule, however, is not a hard and fast one. 2 Sorkin, Goods in Transit §11.03[3] at 11-31. If there is a contract to sell the damaged goods, the proper measure of damages is the price plaintiff would have received under the contract, minus any money plaintiff received by selling the damaged goods. Hartford Fire Ins. Co. v. Nova-cargo USA, Inc., 257 F. Supp. 2d 665, 676 (S.D.N.Y. 2003); see also Impact, Inc. v. International Freight Express (USA), 1997 WL 570580 (S.D. N.Y. Sept. 11 1997). In other instances, the courts have held that the proper measure of damages is the replacement value, especially when there was no market value at the port of destination and there was immediate need to replace the cargo. Waterman S.S. Corp. v. United States S.R. & M. Co., 155 F.2d 687, 694 (5th Cir. 1946); see also Fredette v. Allied Van Lines, Inc., 66 F.3d 363, 372 (1st Cir. 1995) (measure of damages can be by replacement or repair costs occasioned by the harm).
Carmack is also the source for the determination of the liability of the interstate carrier for delay damages. 49 U.S.C. §14706. Federal courts, when considering delay claims, have rejected the application of the Uniform Commercial Code, state common law, and federal common law causes of action. A carrier is liable for an unreasonable delay. The United States Supreme Court in Chesapeake & O. Ry. Co. v. Martin, 283 U.S. 209, 213 (1931), defined a reasonable time for delivery as "such time as is necessary conveniently to transport and make delivery of the shipment in the ordinary course of business, in light of the circumstances and conditions surrounding the transaction." In measuring damages for a loss due to a delay, courts hold that if the carrier is liable, the liability, subject to any applicable limitations of liability, is for the difference in the market value of the property on the date it should have been delivered and its market value on the date of actual delivery. Special and consequential damages are recoverable if the carrier had notice of the special circumstances giving rise to such damages. Reed v. Aaacon Auto Trans-port, Inc., 637 F.2d 1302 (10th Cir. 1981). Thus, the carrier is liable to pay labor costs incurred by the consignee before it discovers that the shipment is defective when the carrier has implied notice that plaintiff could not use the goods in its manufacturing process if damaged. Contempo Metal Furniture Co. of California v. East Texas Motor Freight Lines, Inc., 661 F.2d 761 (9th Cir. 1981).
Carmack, 49 U.S.C. §14708(d), allows an award of attorney's fees to prevailing shippers in certain circumstances involving a shipment of household goods. Campbell v. Allied Van lines, Inc., 410 F.3d 618 (9th Cir. 2005). The Campbell court also notes that: Congress unambiguously authorized the awarding of attorney's fees to shippers of household goods who meet certain conditions. None of those conditions require a shipper to first invoke arbitration. Campbell at 623.
A Carmack Amendment claim can become very complicated, especially when dealing with fault, damage and defense issues. An attorney experienced in this type of law needs to determine the relationships between the motor carrier and the shipper, broker, other carriers, freight forwarder, holder, consignor and consignee, in order to determine the validity of a claim or suit. The attorney must also determine the nature of the bill of lading and whether any contracts are applicable. Given that total motor carrier revenue in 2007 was $213billion, and growing, it is likely that courts will be seeing more and more of these claims. See Table 1084. Truck Transportation Summary: 2000 to 2007.
To better understand Carmack, one must be familiar with the definitions of certain terms related to the transportation of cargo. These terms are also important when determining Carmack's applicability. Several of the most important ones are discussed below:
Broker
The federal transportation statutes define a "broker."
The term "broker" means a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation. 49 U.S.C. §13102(2) (2005). Brokers are not subject to Carmack liability. Chubb Group of Ins. Cos. v. H.A. Transp. Sys., 243 F. Supp. 2d 1064, 1069 (C.D. Cal. 2002). Rather, state law governs their liability for loss or damage of cargo in transit. Id.
Carrier or Common Carrier
A "carrier" is defined as a "...motor carrier, a water carrier, and a freight forwarder." 49 U.S.C. §13102(3) (2005). The ICC Termination Act deleted all references to "common carrier," which is one that holds itself out to public as ready to carry goods for anyone who requests its services, as distinguished from a private carrier, which reserves the right to accept or reject employment as a carrier. J. Aron & Co. v. Cargill Marine Terminal, Inc., 998 F. Supp. 700, 704 (E.D. La. 1998). Under the Act, there is not a distinction between a "carrier" and "common carrier." 1 Sorkin, Goods in Transit §1.02[2] at 1-27.
Motor Carrier
A "motor carrier" is defined as "a person providing commercial motor vehicle (as defined in §31132) transportation for compensation." 49 U.S.C. §13102(14).
Consignee
A "consignee" is the person named in a bill of lading as the person to whom the goods are to be delivered. 49 U.S.C. §80101(1) (2005).
Consignor
A "consignor" is the person named in a bill of lading as the person from whom the goods have been received for shipment. 49 U.S.C. §80101(2) (2005).
Freight Forwarder
A freight forwarder is defined in the Interstate Commerce Act as follows:
"[F]reight forwarder" means a person holding itself out to the general public (other than as pipeline, rail, or water carrier) to provide transportation of property for compensation and in the ordinary course of its business-
(A) assembles and consolidates, or provides for assembling and consolidating shipments and performs or provides for break-bulk and distribution operations of the shipments;
(B) assumes responsibility for the transportation from the place of receipt to the place of destination; and
(C) uses for any part of the transportation a carrier subject to the jurisdiction under this subtitle.
49 U.S.C. §13101(8) (2005). Only surface freight forwarders are subject to Carmack liability requirements. 1 Sorkin, Goods in Transit §1.22[1] at 1-135. A surface "freight forwarder" can be either a receiving or a delivering carrier. 49 U.S.C. §14706(a)(2). A "freight forwarder" is considered a "receiving carrier" when the freight forwarder uses a motor carrier to receive property from a consignor and consents to the execution of the bill of lading or receipt by the motor carrier. Id. A "freight forwarder" is a "delivering carrier" when it consents to the motor carrier's delivery of its property to a consignee. Id.
Holder
A "holder" is the person who has possession of, and a property right in, a bill of lading. 49 U.S.C. §80101(4) (2005).
Shipper
A shipper, also known as the "consignor," is the party who supplies the goods to be transported.
Bill of Lading
Bills of lading are governed by the Bills of Lading Act. See 49 U.S.C. §§80101 to 80116 (2005). A bill of lading is basically a transportation contract between a shipper-consignor and the carrier, which terms and conditions bind the shipper and all connecting carriers. 1 Sorkin, Goods in Transit §2.01 at 2-10. The bill of lading represents the title of the goods and serves as evidence of the carrier's receipt of goods, their condition at the time of receipt, and their nature and quantity. Id. Carmack requires motor carriers and freight forwarders to issue a receipt or bill of lading for the property received for transportation. 49 U.S.C. §14706(a)(1) (2005). However, the carrier's "failure to issue a receipt or bill of lading does not affect the liability of the carrier." Id.
There are several forms of bills of lading:
A Straight Bill of Lading
A "straight bill of lading" states that the goods are consigned or destined to a person whose name is specified in the bill of lading. 1 Sorkin, Goods in Transit §2.08 at 2-86. A "straight bill of lading" is not a negotiable bill. 49 U.S.C. §80103 (2005). This type of bill of lading obligates the carrier issuing it to transport or arrange for the transportation, and to be responsible for the shipment through its destination even though the shipment may require transportation over lines or routes beyond those of the receiving carrier and by means of connecting carriers or other modes of transportation. 1 Sorkin, Goods in Transit §2.01[3] at 2-16.2.
A Way Bill
A "way bill" or a "waybill" is another term to describe a "bill of lading."
A Non-Negotiable Bill of Lading
A "non-negotiable bill of lading" is similar to a "straight bill of lading," and is defined by statute as a bill that states in writing that the goods are to be delivered to a consignee and that is "non-negotiable" or "not negotiable." 49 U.S.C. §80103(b)(1)-(2) (2005).
A Negotiable Bill of Lading A bill of lading is negotiable if the bill states that the goods are to be delivered to the consignee and does not contain an agreement with the shipper that the bill is not negotiable. 49 U.S.C. §80103(a) (2005). If the bill of lading is negotiable, "it controls possession of the goods and is one of the indispensable documents in financing the movement of commodities and merchandise." Norfolk S. Ry. Co. v. James N. Kirby, Pty. Ltd., 543 U.S. 14 (2004).
An Order Bill of Lading This type of bill of lading states that the goods are consigned to the order of any person named in the bill. 1 Sorkin, Goods in Transit §2.10[1] at 2-92.1. An order bill of lading is negotiable and cannot be made non-negotiable unless the shipper agrees in writing by endorsing the bill. Id., at 2- 93. The term "order" alone is defined as an "order by endorsement on a bill of landing." 49 U.S.C. §80101(5) (2005). An "order bill of lading" is basically the equivalent to a "negotiable bill of lading."
A Clean Bill of Lading A bill of lading that contains no language qualifying the acknowledgment of the apparent good order and condition of the cargo is known as a "clean bill of lading." Fox & Assoc., Inc. v. M/V Hanjin Yokohama, 977 F. Supp. 1022 (C.D. Cal. 1997). A "clean bill of lading" creates a rebuttable presumption that all of the cargo listed in the document was loaded in the condition described in the bill. Cummis Sales & Serv., Inc. v. London and Overseas Ins. Co., 476 F.2d 498, 500 (5th Cir. 1973), cert. denied sub nom.; Dampfschiff Ges. "Hansa" v. Cummins Sales & Serv., Inc., 414 U.S. 1003 (1973).
A Through Bill of Lading A "through bill of lading" is an international bill between the United States and a foreign country. 1 Sorkin, Goods in Transit §3.3[2] at 3-19. It may be a bill issued in a foreign country that governs a shipment throughout its transportation from abroad to its final destination in the United States. Id. It can also govern its transportation from an inland point in the United States to a location in a foreign country. Id.
A Multimodal or Intermodal through Bill of Lading A "multimodal or intermodal through bill of lading" is one that obligates the carrier to transport the cargo from origin to destination by more than one mode of transportation on a single freight charge by use of a single bill of lading. 1 Sorkin, Goods in Transit §§3.03[2], 3.15 at 3-109. If a shipper wants to avoid Carmack's limits on liability, the shipper can do so by using, for example, a multimodal ocean bill of lading to transport the inland portion of the delivery under that bill. See Allianz CP Gen. Ins. Co. v. Blue Anchor Line, 2004 WL 1048228 (S.D.N.Y. May 7, 2004) (citing Commercial Union Ins. Co. v. Forward Air, Inc., 50 F. Supp. 2d 255 (S.D.N.Y. 1999)). The shipper, on the other hand, may likely not avoid Carmack with a multimodal bill if the motor carrier issues a second bill of lading. American Road Serv. Co. v. Consolidated Rail Corp., 348 F.3d 565 (6th Cir. 2003); Swift Textiles, Inc. v. Watkins Motor Lines, Inc., 799 F.2d 697, 701 (11th Cir. 1986).
Contract for Carriage A "Contract for Carriage" means either a bill of lading or transportation provided under written agreement. See Metropolitan Sale Supply, Inc. v. M/V Royal Rainbow, 12 F.3d 58 (5th Cir. 1994); see also 49 U.S.C. 13102(4) (2005).
Contract under 49 U.S.C. §14101(b) 49 U.S.C. §14101(b) deals with the operations of carriers, and specifically with a carrier's contract with a shipper. Pursuant to §14101(b), a DOT carrier and a shipper may contract to provide specified services, waiving the applicability of Carmack's rights and remedies, and the carrier does not require a separate permit to do so. 49 U.S.C. §14101(b). 49 U.S.C. §14101(b) does not, however, apply to the movement of household goods. See §13102(10(A).
Rates A carrier must establish rates for the transportation of goods, other than household goods, under which the liability of the carrier is limited to a value established in a written or electronic declaration. 49 U.S.C. §14706(c)(1)(A) (2005). Rates have to be reasonable under the circumstances surrounding the transportation. Id; §13710(A)(2) (2005).
Written or Electronic Copy of Rates, Classification, Rules and Practices A motor carrier not required to file a tariff with the Surface Transportation Board (see below), must provide to the ship-per, upon request, "a written or electronic copy of the rate, classification, rules, and practices upon which any rate, applicable to a shipment, or agreed to between the shipper and carrier, is based." 49 U.S.C. §§14706(c)(1)(B), 13710(a)(1) (2005).
Tariffs Tariffs are publications containing the actual rates, charges, classifications, rules, regulations and practices of carriers. See 46 C.F.R. §536.2. Prior to 1995, motor carriers were required to file their tariffs with the former Interstate Commerce Commission if they did not have a contract with a shipper. 1 Sorkin, Goods in Transit §2.05[2] at 2-38.1. As of 1995, tariffs, when required, are filed with the Surface Transportation Board. 49 U.S.C. 13702(e) (1995). After 1995, the only transportation performed pursuant to tariffs filed with the Surface Transportation Board is transportation of household goods and of property in non-contiguous domestic trade. 3 Sorkin, Goods in Transit §13.04 at 13-72.1. Registered motor carriers transporting any other type of goods can now enter into contracts and negotiate their tariffs. 1 Sorkin, Goods in Transit §2.05[2] at 2-38.2.