Petition for Writ of Certiorari — Meyer v. Grant

-

Supreme Court, US,

87 -970 Press

No. DEC 10 S67

eS ems emeesnecnss ania SPANIOL, JR.

a CLERK |

In Tue

Supreme Court of the Anited States

Octoser Term, 1987

EDWARD and NANCY HUGHES,

Petitioners,

Vv.

UNITED VAN LINES, INC.,

and 291 SISSER BROS., INC.,

Respondents.

~

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

JAMES P. DeNARDO

McKenna, Storer, Rowe,

Waite & Farrvue

200 North LaSalle Street

Suite 3000

Chicago, Tllinois 60601

(312) 558-3900

Counsel of Record for Petitioners

Edward and Nancy Hughes

Dated: December 10, 1987

Midwest Law Printing Co., Chicago 60611, (312) 321-0220

i

QUESTIONS PRESENTED

1. Does the Carmack Amendment to the Revised In-

terstate Commerce Act preempt common law causes of

action?

2. May a court invalidate a clear and unambiguous act

of Congress because it finds the Act inconsistent with its

interpretation of Congress’ intent in enacting a larger stat-

utory scheme?

3. Is the purpose of the Carmack Amendment to ex-

pand the common law rights of shippers or to enact uni-

form Federal guidelines?

4. May a common carrier in interstate commerce ma-

terially breach the conract of carriage and then rely on

a liability limit contained in the contract of carriage?

5. Is a carrier of household goods in interstate com-

merce to be held to a standard of strict compliance with

applicable Federal regulations or substantial compliance?

il ili

-TABLE OF CONTENTS III.

exnenneumte THE SEVENTH CIRCUIT COURT OF APPEALS

HAS ERRONEOUSLY HELD THAT THE PUR.-

POSE OF THE CARMACK AMENDMENT IS TO

PAGE ESTABLISH UNIFORM FEDERAL GUIDELINES

FOR INTERSTATE SHIPMENTS, WHEN THE

QUESTIONS PRESENTED .................. i PURPOSE IS TO IMPOSE ABSOLUTE LIABIL.

TABLE OF AUTHORITIES ................. iv ITY ON COMMON CARRIERS FOR LOSS OR

DAMA | ae

OPINIONS BELOW ..........0....00000e000 = ncaa ” .

PUOEOE oo ccvcvecccauceshbannenenaeen 2 THE SEVENTH CIRCUIT ERRONEOUSLY

STATUTORY PROVISIONS INVOLVED 2 ae ae rw coe IN THIS CASE TO

IMITATION OF LIABILITY,

STATEMENT OF THE CASE ............... 3 EVEN THOUGH THE CARRIER HAD MA.-

. TERIALLY BREACHED THE CONTRACT OF

REASONS FOR GRANTING THE WRIT: Nee cccccecce 10

1.

THERE IS A SPLIT OF AUTHORITY AMONG

THE FEDERAL CIRCUIT COURTS OF APPEAL

ON THE QUESTION WHETHER THE CAR-

MACK AMENDMENT TO THE REVISED IN-

TERSTATE COMMERCE ACT PREEMPTS COM-

MON LAW CAUSES OF ACTION ...........

Il.

THE COURT OF APPEALS FOR THE SEVENTH

CIRCUIT HAS INVALIDATED 49 U.S.C. §10103

BY HOLDING THAT, DESPITE ITS CLEAR AND

UNAMBIGUOUS LANGUAGE, 49 U.S.C. §10103

DOES NOT PRESERVE A SHIPPER’S COMMON

LAW BRSEEEO occcccccccccvccsesscuseunenen

V

THE SEVENTH CIRCUIT HAS ERRONEOUSLY

HELD THAT SUBSTANTIAL COMPLIANCE

WITH APPLICABLE FEDERAL REGULATIONS

IS ALL THAT IS REQUIRED OF A COMMON

CARRIER OF HOUSEHOLD GOODS .........

EEE IE EE

iv

TABLE OF AUTHORITIES

Cases

AAACON Auto Transport v. State Farm Mutual

Automobile Insurance Co., 537 F.2d 648 (2nd

Cir. 1976), cert. denied 429 U.S. 1042 (1977) ..

Adams Express v. Croninger, 226 U.S. 491, 33

Se . yaeeerrrrrrerercr rr rere

Anton v. Greyhound Van Lines, Inc., 591 F.2d 103

Se Se eo vk dnb Weng pcakees ule uswe ts

Caspe v. AAACON Auto Transport, Inc., 658 F.2d

613 (8th Cir. 1981) .......... eee eee eee eee

Consumer Product Safety Commission v. GTE

Sylvania, Inc., 477 U.S. 102, 100 S.Ct. 2051,

Fe fF fF errr rrr

Hall v. The Secretary of Health, Education & Wel-

fare, 600 F.2d 556 (6th Cir. 1979) .........

Hunter v. United Van Lines, 746 F.2d 635 (9th

Cir. 1984), cert. denied 474 U.S. 863 (1985) ...

Information Control Corp. v. United Ainlines

Corp., 73 Cal.App.3d 630, 140 Cal.Rptr. 877 (2d

ED ‘Winns dhbes nb kbeudeeren nine ers

Johnson v. Bekins Moving & Storage Co., 389 P.2d

109 (Idaho 1963), cert. denied 379 U.S. 913

DT Tenn dakekveentsxtsewenieeanaeaaeae>

GED 56k 5 b.60 decd deddcdsdeseeeredseteckasks

Marquette Cement Manufacturing Co. v. Louisville

and Nashville Railroad Co., 406 F.2d 731 (6th

EE k.evndcasuksndscavddssucednneteen

PAGE

10

12

11

11

Vv

Maschinenfabrik Kern A.G. v. Northwest Airlines,

Inc., 562 F.Supp. 232 (N.D. Ill. 1988) ......

Pettis ex rel. United States v. Morrison-Knudsen

Co., Inc., 577 F.2d 668 (9th Cir. 1978) .....

Reed v. AAACON Auto Transport, Inc., 637 F.2d

Bee GOOD GG DUD sacavevcevccsesesccecs

Season-All Industries, Inc. v. Merchant Shippers,

451 F.Supp. 727. (W.D. Pa. 1978) ...........

Seetapun v. Illinois-California Express, Inc., 518

P.2d 885 (Okla. 1973) ...............---0ee

United States v. Locke, 471 U.S. 84, 105 S.Ct. 1785,

ee in i ceechsaccese

Other Authorities

Statutes:

ED hvccisncduas pases eusseeves

ak ceiu een as Cenwee aks

Federal Regulations:

ED sv cvcconcccccacandensee

C.F. GRRE) 2 ncccccccccccccvcss

SP Gr ee TEED ev cccccccvcvcsecscss

Congressional Record:

Liability of Common Carriers Under Bills of

Lading Before a Subcommittee on Interstate

Commerce, 40 Cong. Rec. 5447, 48 (1914) .

11

11

10

2 AA NP

In THE

Supreme Court of the Anited States

Ocroser Term, 1987

EDWARD and NANCY HUGHES,

Petitioners,

v.

UNITED VAN LINES, INC.,

and 291 SISSER BROS., INC.,

Respondents.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

The petitioners, Edward and Nancy Hughes, respectfully

pray that a Writ of Certiorari issue to review the judg-

ment and opinion of the United States Court of Appeals

for the Seventh Circuit entered in the above-entitled case

on September 11, 1987.

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Seventh Circuit (App. 1) is reported in 829 F.2d 1407,

the opinion of the trial judge of the United States Dis-

—~2—

trict Court for the Northern District of Illinois, Eastern

Division, (App. 33) was not reported. Both opinions are

included in the Appendix.

JURISDICTION

The judgment of the United States Court of Appeals

for the Seventh Circuit was entered on September 11,

1987. This Petition for Writ of Certiorari was filed within

90 days of that date. The jurisdiction of this Court is in-

voked under 28 U.S.C. §1254(1).

STATUTORY PROVISIONS INVOLVED

49 U.S.C. §10103—Except as otherwise provided in this

subtitle, the remedies provided under this subtitle are in

addition to remedies existing under another law or at com-

mon law.

49 U.S.C. §11707—See Appendix at App. 45.

49 C.F.R. §1056.6(a)—See Appendix at App. 43.

49 C.F.R. §1056.6(bX11)—See Appendix at App. 43.

49 C.F.R. §1307.201(c)—See Appendix at App. 43.

- =

STATEMENT OF THE CASE

Petitioners, Edward and Nancy Hughes, entrusted all

of their personal belongings and household goods to the

respondent, United Van Lines, for shipment from Phila-

delphia to-Chicago during the summer of 1982. While

making arrangements for the move, Nancy Hughes told

United Van Lines she wanted full value protection for her

goods. United Van Lines agreed to provide the: and told

her to write in “$3.00 per pound full vali.’ on an order

for service. While standing in the dark near a United V

Lines moving van loaded with the Hughes’ goods, th

driver secured Ed Hughes’ signature on the bill of ladi

by telling him he was signing an inventory. The bili of

lading did not contain a liability limitation, but referred

to a full value guarantee by United Van Lines.

Enroutc, the moving van caught fire because it was

driven for about 50 miles with a flat tire. A locai

department had to unload the moving van to put the fire

out and the driver and his helpers then abandoned/ the

shipment for a time on the side of the highway, where

it was exposed to thieves, vandals and rain. The driver

and his helpers stole items from the shipment, did

other agents of United Van Lines who were hired to! clean

up the mess on the highway. |

On May 21, 1984, the shippers, Edward and Nancy Hughes

(hereinafter Hughes, coliectively), filed a complaint against

the Defendants, United Van Lines and its local Philadel-

phia agent, 291 Sisser Bros., common carriers, (hereinafter

the carrier, collectively), for the destruction and loss of

their personal belongings and household goods while being

shipped by the carrier. The complaint, as amended, sounded

sain

in negligence, the Carmack Amendment, breach of con-

tract of insurance, breach of contract of carriage, conver-

sion, intentional misrepresentation, negligent misrepresen-

tation, negligent infliction of emotional distress and wilful

and wanton conduct. The carrier filed a general denial,

a counterclaim for transportation charges and affirmative

defenses.

A bench trial began on July 16, 1985 before Judge Plunkett

of the United States District Court for the Northern Dis-

trict of Illinois, Eastern Division. The carrier conceded

the circumstances of the loss and did not contest the evi-

dence on damages, but contended that the Carmack Amend- ©

ment to the Revised Interstate Commerce Act provided

the exclusive remedy for Hughes. The carrier further con-

tended its liability for the loss was limited to $1.25 per

pound, a figure contained in the bill of lading.

The trial was concluded on July 19, 1985. On March 28,

1986, about eight months later, the District Court entered

judgment on behalf of Hughes and against the carrier in

the amount of $26,180, limiting the Hughes to a recovery

of $3.00 per pound, the figure in the order for service.

The District Court further held that the Carmack Amend-

ment to the Revised Interstate Commerce Act preempted

common law causes of action and denied recovery on the

Hughes’ common law counts.

The Hughes moved to amend judgment or for a new

trial and that motion was denied on July 11, 1986.

The Hughes appealed the trial court’s judgmnent and

denial of the post-trial motion to the Court of Appeals

for the Seventh Circuit. That appeal was argued Decem-

ber 11, 1986 and decided September 11, 1987. The Court

of Appeals for the Seventh Circuit affirmed the trial

court’s holding that the Carmack Amendment to the Re-

af

vised Interstate Commerce Act preempts common law

causes of action and further affirmed the trial court’s rul-

ing that the carrier had effectively limited its liability to

$3.00 per pound.

The statutory basis for the jurisdiction of the United

States District Court for the Northern District of Illinois,

Eastern Division, was a Federal question under the Re-

vised Interstate Commerce Act, 49 U.S.C. §10101 et seq.,

specifically §11707, and diversity of citizenship, 28 U.S.C.

§1332.

The statutory basis for the jurisdiction of the United

States Court of Appeals for the Seventh Circuit was 28

U.S.C. §1291.

The statutory basis for the jurisdiction of this Court is

28 U.S.C. §1254(1).

REASONS FOR GRANTING

THE WRIT OF CERTIORARI

THERE IS A SPLIT OF AUTHORITY AMONG THE

FEDERAL CIRCUIT COURTS OF APPEAL ON THE

QUESTION WHETHER THE CARMACK AMENDMENT

TO THE REVISED INTERSTATE COMMERCE ACT PRE-

EMPTS COMMON LAW CAUSES OF ACTION.

The Seventh Circuit Court of Appeais has erred in hold-

ing that the Carmack Amendment to the Revised Inter-

state Commerce Act preempts common law causes of

action. This is error because the Carmack Amendment

specifically provides that common law remedies are pre-

served. 49 U.S.C. §10103 states:

=f

Except as otherwise provided in this subtitle, the

remedies provided under this subtitle are in addition

to remedies existing under other law or at common

law.

In contrast to the Seventh Circuit, the Tenth Circuit has

specifically held that the Carmack Amendment does not

preempt common law causes of action. Reed v. AAACON

Auto Transport, Inc., 687 F.2d 1302, 1304 (10th Cir. 1981).

Similarly, the Second Circuit has also interpreted the Car-

mack Amendment as preserving a shipper’s full common

law rights of action. AAACON Auto Transport v. State

Farm Mutual Automodile Insurance Co., 537 F.2d 648,

654 (2nd Cir. 1976), cert. denied 429 U.S. 1042 (1977).

Additionally, the Eighth Circuit has allowed recovery

of consequential and special damages implying agreement

with the Tenth Circuit. Caspe v. AAACON Auto Trans-

port, Inc., 658 F.2d 613 (8th Cir. 1981). The Ninth Cir-

cuit has also indicated that, if presented squarely with

the question, it would hold that the Carmack Amendment

does not preempt a shipper’s common law rights. Hunter

v. United Van Lines, 746 F.2d 635, 639 (9th Cir. 1984),

cert. denied 474 U.S. 863 (1985).

While the Seventh Circuit says that the Sixth Circuit

agrees with its ruling, that is not altogether clear. Mar-

quette Cement Manufacturing Co. v. Louisville and Nash-

ville Railroad Co., 406 F.2d 731 (6th Cir. 1969).

A district court in the Third Circuit has issued a thought-

ful opinion on the question, including a discussion of the

legislative history, and agreed with the Tenth Circuit that

the Carmack Amendment does not preempt common law

causes of action. Season-All Industries, Inc. v. Merchant

Shippers, 451 F.Supp. 727, 132 (W.D. Pa. 1978).

Whether or not the Carmack Amendment preempts

common law causes of action is an important question to

= *

the many interstate shippers in this country and there

is a split of authority among the Federal Circuit Courts

of Appeal on that question. This is therefore a question

that needs to be resolved by this Court.

THE COURT OF APPEALS FOR THE SEVENTH CIR-

CUIT HAS INVALIDATED AN ACT OF CONGRESS BY

HOLDING THAT, DESPITE ITS CLEAR AND UNAMBIG-

UOUS LANGUAGE, 49 U.S.C. §10103 DOES NOT PRE-

SERVE A SHIPPER’S COMMON LAW RIGHTS.

A court may not discover a congressional intent, under

the guise of statutory construction, which is contrary to

the clear language of the statute itself. Hall v. The Sec-

retary of Health, Education & Welfare, 600 F.2d 556, 561

(6th Cir. 1979).

49 U.S.C. §10103 clearly and unambiguously preserves

all of the shipper’s common law remedies. However, the

Seventh Circuit has invalidated this provision by holding

the exact opposite.

It is necessary for this Court to review the Seventh

Circuit’s erroneous holding invalidating a Congressional

statute.

The Seventh Circuit invalidated the statute because it

held that the purpose of the Carmack Amendment was

*“*. . . to establish uniform federal guidelines designed in

part to remove the uncertainty surrounding a carrier’s

liability when damage occurs to a shipper’s interstate ship-

ment.” (App. 13). The Seventh Circuit advances no author-

ity in support of this interpretation of the Congressional

intent. This Court has held that:

.. . the fact that Congress might have acted with

greater clarity or foresight does not give courts a

=<}

carte blanche to redraft statutes in an effort to

achieve that which Congress has been perceived to

have failed to do . . . Nor is the judiciary licensed

to attempt to soften the clear import of Congress’

chosen words whenever a court believes those words

lead to a harsh result . . . On the contrary, defer-

ence to the supremacy of the legislature, as well as

recognition that Congressmen typically vote on the

language of a bill generally require us to assume that

“the legislative purpose is expressed by the ordinary

meaning of the words used.” (citation).

United States v. Locke, 471 U.S. 84, 105 S.Ct. 1785, 1793,

85 L.Ed.2d 64 (1985).

The Seventh Circuit’s holding is directly contrary to the

plain language of 49 U.S.C. §10103. The Seventh Circuit’s

interpretation, without citation to authority, is also con-

trary to the rule of statutory construction set forth by

this Court in the Locke case. Furthermore, the Seventh

Circuit’s interpretation renders the statute invalid because

under the Seventh Circuit’s interpretation the statute

would have no effect and is mere surplusage. Statutes

should not be construed as mere surplusage and a court

considering the intent of Congress is required to assume

that Congress said what it meant and meant what it said.

Pettis ex rel. United States v. Morrison-Knudsen Co.,

Inc., 577 F.2d 668, 672 (9th Cir. 1978).

It is a familiar canon of statutory construction that the

starting point for interpreting a statute is the language

of the statute itself. Absent a clearly expressed legislative

intention to the contrary, that language must ordinarily

be regarded as conclusive. Consumer Product Safety

Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108,

100 S.Ct. 2051, 2056, 64 L.Ed.2d 766, 772 (1980).

odfien

THE SEVENTH CIRCUIT COURT OF APPEALS HAS

ERRONEOUSLY HELD THAT THE PURPOSE OF THE

CARMACK AMENDMENT IS TO ESTABLISH UNIFORM

FEDERAL GUIDELINES FOR INTERSTATE SHIP-

MENTS, WHEN THE PURPOSE IS TO IMPOSE AB-

SOLUTE LIABILITY ON COMMON CARRIERS FOR

LOSS OR DAMAGE TO A SHIPPER’S GOODS.

The Court of Appeals for the Seventh Circuit offers no

authority for this purpose and none can be found. The

purpose of the Carmack Amendment, as can be found

both by contemporaneous remarks of legislators and appli-

cable case law, was to expand a shipper’s rights at com-

mon law by prohibiting limitations of value and to impose

absolute liability on a common carrier for loss of or dam-

age to a shipper’s goods. 49 U.S.C. §11707. A reading of

the statute will reveal it does not mention establishing

_ uniform federal guidelines.

Furthermore, the Tenth Circuit has held that:

The Carmack Amendment was not designed as a

comprehensive restatement of the law, redefining

with encyclopedic breadth and detail all rights and

responsibilities of interstate freight shippers and car-

riers. Rather, the Act confines itself to a statement

of the rights of a legal holder of a receipt or bill of

lading issued by a carrier upon receiving property

for interstate transportation and the responsibilities

of a carrier to such holder.

Litvak Meat Co. v. Baker, 446 F.2d 329, 335 (10th Cir.

1971).

The Seventh Circuit has reasoned that, since Congress

provided a remedy under the Carmack Amendment and

regulated interstate transportation of household goods,

Congress must have intended the Carmack Amendment

to be the sole remedy. As discussed above, this is con-

=

trary to the clear language of the statute. Moreover, Con-

gress has regulated other interstate industries, such as

aviation and banking, without preempting common law

causes of action. That is because federal regulation is not

at all inconsistent with allowing common law remedies.

In fact, this is the point of Adams Express v. Cron-

inger, 226 U.S. 491, 33 S.Ct. 148 (1913), the principal case

relied on by the Seventh Circuit for its holding. Cron-

inger held that the Carmack Amendment preempted state

reguiation of interstate commerce, but did not hold that

common law causes of action were preempted. The legis-

lative history behind the First Cummins Amendment, Act

of March 4, 1915, Ch. 176, §1, 38 Strat. 1196-97, enacted

two years after Croninger, indicates that it was enacted

to overrule Croninger, to the extent that it could be read

as preempting common law causes of action. Liability of

Common Carriers Under Bills of Lading Before a Sub-

committee on Interstate Commerce, 40 Cong. Rec. 5447,

48 (1914).

Courts throughout the country considering these types

of cases have become confused in construing the Carmack

Amendment because there is differing authority as to its

purpose. The purpose of the Carmack Amendment is an

important question that should be decided by this Court.

IV.

THE SEVENTH CIRCUIT ERRONEOUSLY ALLOWED

THE CARRIER IN THIS CASE TO RELY ON A LIMITA-

TION OF LIABILITY, EVEN THOUGH THE CARRIER

HAD MATERIALLY BREACHED THE CONTRACT OF

CARRIAGE.

The carrier in this case has admitted that it abandoned

the shipment. The uncontroverted evidence at trial was

that the carrier’s agents also stole from the shipment.

—

Abandonment and theft from a shipment are material

breaches of a contract of carriage and represent a com-

plete failure of consideration and compel recission of any

limitation. Information Control Corp. v. United Airlines

Corp., 73 Cal.App.3d 630, 140 Cal.Rptr. 877 (2d Dist.

1977); Seetapun v. Illinois-California Express, Inc., 518

P.2d 885 (Okla. 1973); Johnson v. Bekins Moving & Stor-

age Co., 389 P.2d 109 (Idaho 1963), cert. denied 379 U.S.

913 (1964); Maschinenfabrik Kern A.G. v. Northwest Air-

lines, Inc., 562 F.Supp. 232 (N.D. Ill. 1983).

An argument on this point was presented both to the

trial court and to the Court of Appeals for the Seventh

Circuit. Both courts ignored the testimony at trial, did

not address the question in their opinions, and allowed

the carrier to rely on a liability limitation not contained

in the contract, even though the carrier admitted material

breach. The carrier’s conduct in this case is no worse than

if the carrier had taken the shipment and dumped it in

a river. To allow the carrier to rely on a liability limita-

tion misrepresented in the first place as insurance is a

gross injustice. As a matter of basic contract law and sound

public policy, this Court should consider this question.

V.

THE SEVENTH CIRCUIT HAS ERRONEOUSLY HELD

THAT SUBSTANTIAL COMPLIANCE WITH APPLICABLE

FEDERAL REGULATIONS IS ALL THAT IS REQUIRED

OF A COMMON CARRIER OF HOUSEHOLD GOODS.

At trial, the Hughes argued that there was no limit to

the carrier’s liability. The carrier argued its liability was

limited to $1.25 per pound. Both the trial court and the

Court of Appeals for the Seventh Circuit erroneously found

that the liability was limited to $3.00, a figure found in

the order for service. However, 49 C.F.R. §1056.6(a) re-

odfiin

quires that the terms and conditions of the contract be

contained in the bill of lading. The $3.00 per pound limit

is not contained in the bill of lading and neither the trial

court nor the Seventh Circuit advanced any tenet of con-

tract law to justify the limit not found in the contract

of carriage. In fact, Federal regulations require that a lia-

bility limit must be contained in the bill of lading, which

the carrier failed to do. 49 C.F.R. §1056.6(bX(11).

Instead, the Seventh Circuit has adopted a test of sub-

stantial compliance with the applicable regulations for a

carrier engaged in the interstate transportation of house-

hold goods. Contrary to the Seventh Circuit’s opinion in

this case, the First Circuit has held:

. . . arrangements limiting liability on the part of in-

terstate carriers is (sic) a carefully defined exception

to the general thrust of Section 20(11) [now 49 U.S.C.

§11707] of the Interstate Commerce Act placing on

the carrier absolute liability for loss or damage of a

shipper’s goods. Consequently, such arrangements

must be carefully scrutinized and where they fail, as

in the present case, to fully comply with the provi-

sions of the Carmack Amendment, it is clear they

are ineffective to limit a carrier’s liability.

Anton v. Greyhound Van Lines, Inc., 591 F.2d 103, 109

(1st Cir. 1978) (emphasis added).

Anton, a case relied on by the trial court and the

Seventh Circuit, lists the elements a carrier must prove

to limit its liability.

As noted by Anton, the general thrust of the Carmack

Amendment places absolute liability for actual loss or

damage to a shipper’s goods on the carrier. Since a lia-

bility limitation is a carefully defined exception to the Car-

mack Amendment, carriers of interstate commerce should

be held to strict compliance with applicable federal regu-

-_ =

lations. The carrier in this case failed to comply with other

regulations besides 49 C.F.R. §1056.6. See 49 C.F.R.

§1307.201(c).

Whether or not carriers of household goods in interstate

commerce are to be held to strict compliance or to the

lesser standard of substantial compliance with applicable

regulations is an important question that needs to be de-

cided by this Court.

CONCLUSION

The District Court and the Court of Appeals for the

Seventh Circuit do not understand the purpose of the Car-

mack Amendment and have therefore erroneously held

that the Carmack Amendment preempts a shipper’s com-

mon law rights. In doing so, they have invalidated a clear

and unambiguous act of Congress and disregarded basic

contract law. In addition, they have validated a liability

limitation that was misrepresented as insurance in the

first instance. In doing so, these courts have departed

from the usual course of judicial proceedings so as to call

for an exercise of this Court’s power of supervision. The

writ should also be granted because of the split in author-

ity among the Federal Circuit Courts of Appeal.

Putting aside an intentional destruction of the shipment,

it is difficult to imagine facts more egregious than those

in this case. If this decision is allowed to stand, it will

send a signal to carriers of household goods across this

country that they can get away with anything. Such a

ailtiien

result is contrary to the intent of the Congress of the

United States.

For the reasons stated, the Petitioners urge that a Writ

of Certiorari should be granted to review the judgment

and opinion of the Seventh Circuit Court of Appeals.

Respectfully submitted,

JAMES P. DeNARDO

McKenna, Storer, Rowe,

White & FarruG

200 North LaSalle Street

Suite 3000

Chicago, Illinois 60601

(312) 558-3900

Counsel of Record for Petitioners

Edward and Nancy Hughes

Dated: December 10, 1987

APPENDIX

INDEX TO APPENDIX

Opinion of the United States Court of Appeals for

the Seventh Circuit, September 11, 1987 ...

Judgment Order of the United States Court of Ap-

peals for the Seventh Circuit, September 11,

a cece a tksse eeu bcdeeuce ence Rien oe tee

Memorandum Opinion and Order of the United

States District Court for the Northern District

. S| Bo ss eee

Judgment Order of the United States District

Court for the Northern District of Illinois, March

a news

Minute Order of the United States District Court

for the Northern District of Illinois Denying

Motion to Amend Judgment and for a New

ee I EE oc wi dnc tuabuseentbesiec

Ok ree

ee ED 6 50595 0de ov atecacevens

GF Gree ID ho cc vccdccsescceveccees

I eer

EE ncn nds Cinuedeevevvebedneks

PAGE

32

41

App. 1

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 86-2134

EDWARD and NANCY HUGHES,

Plaintiffs-Appellants,

v.

UNITED VAN LINES, INC., and

291 SISSER BROTHERS, INC.,

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 84 C 4367—Paul E. Plunkett, Judge.

ARGUED DECEMBER 11, 1986—Decipep SEPTEMBER 11, 1987

Before BAUER, Chief Judge, and Correy and EASTER.

BROOK, Circuit Judges.

CorFrey, Circuit Judge. Plaintiffs Edward and Nancy

Hughes, brought suit against defendants United Van

Lines, Inc. (United) and 291 Sisser Bros., Inc. (Sisser Inc.)

to recover the full value of their household goods de-

stroyed by fire while in transit in United’s van between

New Medford, New Jersey, and Chicago, Illinois. The dis-

trict court found United had limited its liability with the

plaintiffs to $3.00 per pound pursuant to its contract and

App. 2

awarded plaintiffs $26,180.00! and also denied the plain-

tiffs’ state and common law theories of recovery. Plain-

tiffs appeal the district court’s award contending that (1)

the district court erred in holding that the Carmack

Amendment to the Interstate Commerce Act, 49 U.S.C.

11707, preempted their state and common law theories

of recovery; and (2) the district court erroneously found

that the defendants properly limited their liability (in this

case to $3.00 per pound) under the Carmack Amendment.

Thus, the questions on appeal are, whether the Carmack

Amendment to the Interstate Commerce Act, 49 U.S.C.

11707, preempts state and common law remedies; and sec-

ond, cietiat the district court erred in holding that the

defendants satisfied the conditions necessary to limit their

liability under the Carmack Amendment. We affirm on

both issues.

I

In the spring of 1982, after accepting a new position,

laintiff Edward Hughes moved his family from Medford,

ee Jersey, to Chicago, Illinois. Mrs. Hughes initiated

the moving arrangements by contacting Larry Haney, a

United Van Lines agent who had organized the Hughes’

moves on several previous occasions. Haney in turn made

arrangements for Sisser Inc., the local United Van Lines

subsidiary moving company in New Jersey, to meet with

the Hughes to plan their move. Subsequently, Cy Pavliga,

a representative of Sisser Inc., met with Mrs. Hughes to

arrange the move of their sangre belongings and house-

hold goods to Illinois. Pavliga conducted a survey of the

Hughes’ furniture, clothing and other household and per-

sonal items and completed the ICC required Estimated

1 Because the actual weight of the shipment was 17,060 pounds,

United’s liability to the Plaintiffs, based on $3.00 per pound, equals

$51,180. United had, prior to this action, paid Plaintiffs $25,000.

See footnote 5 infra. Thus, $51,180, less the $25,000 already paid

to Plaintiffs, equals $26,180.

App. 3

Costs of Service Form. Upon completion of this form, the

carrier is required to estimate the weight of the shipment

while the shipper must choose the level of liability at which

he wishes to insure his goods. Pavliga estimated the weight

of the Hughes’ shipment at 12,000 pounds and discussed

with Mrs. Hughes the various levels of carrier liability

insurance available. He stated that he also provided Mrs.

Hughes with several Interstate Commerce Commission

(ICC) prescribed explanatory pamphlets.? The pamphlets

included information on how the shipper is to declare a

value for his goods and the liability the carrier assumes

based on that declared value. The pamphlets also recited

warnings to the shipper that he ‘“‘fully understand the

maximum liability of the option [the shipper] desire[s]

before signing any documents;” and a recommendation

that the shipper not transport family heirlooms or small

articles of high value. (Defendants Exhibits 3 and 4). Mrs.

Hughes then selected the liability package entitled “Gold

Umbrella Protection-Full Value Guarantee” based on the

weight of the shipment at $3.00 per pound.* The $3.00

2 The pamphlets are entitled, Lost or Damaged Household Goods-

Public Acvicory No. 4, and Summary of Information for Ship-

pers of Household Goods.

3 The “Gold Umbrella” coverage provided:

“FULL VALUE GUARANTEE

UNITED VAN LINES agrees that if there is a loss of or

to any item or items which are part of the SHIP-

PER’S household furniture and/or personal effects while in the

care, custody and control of UNITED VAN LINES or any

of its representatives, UNITED VAN LINES will make the

SHIPPER whole by exercising one of the following options

for each of those articles so lost or damaged:

A. Pay the current market replacement value, without

deductions for depreciation;

B. Pay for full cost of repairs;

C. Replace with like articles.

The SHIPPER MUST declare the value of his/her household

furniture and personal effects being shipped with UNITED

(Footnote continued on following page)

App. 4

per pound is the lowest valuation available under the “full

value protection” pac for the household goods. Based

on the assumption that the household goods weighed 12,000

pounds, Mrs. Hughes ordered $36,000 worth of coverage

at $3.00 per pound. Mrs. Hughes signed and kept a copy

of the Estimate for Services form, which provided that

United’s liability was limited to $36,000.

Subsequent to the meeting with Pavliga, Dave Hender-

shott, a sales coordinator with Sisser Inc., sent Mrs.

Hughes the required ICC Order for Service form with a

letter stating:

3 continued

VAN LINES at a figure o* not less than $3 per pound of ac-

tual weight or the actual va..*, whichever is r. The cost

to the shipper for this Gold Umbrella Full Value Guarantee

shall be $.75 per $100 of declared value. NOTE: The SHIP-

PER should e a realistic value on his/her personal pro-

perty.”

The “Gold Umbrella’ plan makes clear that the “full value guar-

antee” was subject to the shipper’s declared value on a Joy oa

basis. The plan also pointed out that the shipper “should declare

a realistic value on his/her pane ee. Obviously, cov

of $3.00 per pound on 12,000 pounds of personal property would

— a total coverage of $36,000—far short of the value the

ughes assign to their property destroyed during the move. Thus,

the Hughes failed to heed the express warning of the “Gold Um-

brella’”’ plan to declare a realistic value on their property. Mrs.

Hughes, at her initial meeting with Pavliga, Sisser Inc.’s agent,

tentatively chosen the Gold Umbrella full value protection

policy with a maximum replacement value limit of $36,000 ($3.00

per pound, assuming the weight was 12,000 pounds). Following

that meeting she called Mr. Haney requesting that he explain the

Gold Umbrella “insurance”’ policy she tentatively chosen. Ac-

cording to Mrs. Hughes, Mr. Haney said the cove was “ex-

cellent”; however, she failed to inform Mr. Haney that she had

also chosen to limit the full value protection policy to $3.00 per

pound. Apparently, relying on Mr. Haney’s half-informed recom-

mendation, the Hughes later confirmed their choice of full value

protection (i.e., replacement cost protection) with a $3.00 per pound

liability limitation by declaring that value on the “Order for Ser-

vice” form.

App. 5

“It is necessary to sign in two places and declare a

value and return to us in the accompanying envelope.

We have shown the desired areas for signing as well

as the place for valuation. (We understand that you

desire coverage, minimum $3.00 per pound, which

is what you should enter in that area.)”

Mrs. Hughes signed the blanks on the ICC Order for

Service form indicating that she had received a summary

of the information provided shippers of household goods

and declared that the coverage chosen was limited to

$3.00 per pound.

In the early morning hours of June 25, 1982, employees

of Sisser Inc. completed loading the Hughes’ goods in a

United moving van. The driver prepared a list of the

items loaded which her husband, Ed Hughes, signed. The

driver also presented Mr. Hughes with a Uniform House-

hold Goods Bill of Lading and Freight Bill which required

the shipper to declare and fill in the blank indicating the

valuation rate of the goods shipped and the signature of

the shipper. Ed Hughes signed his name in the appropri-

ate space reserved for the shipper’s signature, but mis-

takenly signed his name a second time in the space re-

served for the shipper’s declared value rate. Thus, because

Hughes claims that he mistakenly signed the bill of lading

where he was supposed to declare a value for the goods,

the Uniform Household Goods Bill of Lading and Freight

Bill form failed to expressly state and set forth the ship-

pers’ declared value rate for the goods shipped.

Immediately after departing New Jersey, the moving

van stopped at a es station and recorded the weight

of the shipment at 17,060 pounds or 5,060 pounds over

the estimate of 12,000 pounds Sisser Inc.’s agent made.

While in transit on the Ohio Turnpike, a fire on board

the moving van destroyed a substantial portion of the

Hughes’ shipment. Defendants concede liability for the

App. 6

loss incurred by the Hughes, but challenge the extent

(limitation) of their liability.‘

On May 21, 1984, the Hughes filed a complaint against

the defendants for full replacement cost or $111,848.31 of

their personal belongi and household goods damaged

or destroyed in the . On February 11, 1985, the

ie amended their complaint to include eight state

and common law counts for recovery.5 The district court

determined that the Hughes were entitled to coverage of

$51,180.00 ($3.00 per pound x 17,060 lbs.) and entered

judgment for the Hughes in that amount, less the $25,000.00

the defendants had already paid, or $26,180.00. In addi-

tion, the district court denied plaintiffs’ state and com-

mon law counts holding that the Carmack Amendment to

the Interstate Commerce Act preempted all state and

common law theories of recovery. Plaintiffs appeal the dis-

trict court’s holding that their state and common law

theories of recovery are preempted by federal law and

that their recovery under federal law is limited to $3.00

per pound.

* The defendants initially claimed that the H failed to limit

their liability to $3.00 per pound because the bill of lading con-

tained no declared value. refore, the defendants argued that

the Hughes were entitled to recover for the loss at the rate of

$1.25 per pound, the default level of coverage that automatically

applies where the parties fail to expressly provide otherwise. On

this basis, the defendants paid the Hughes $25,000. On appeal, the

defendants do not contest the district court’s finding that the

Hughes did declare a value for their goods of $3.00 per pound.

5 Hughes’ common law counts include: negligence, breach of insur-

ance contract, breach of contract of carriage, conversion, intentional

misrepresentation, negligent misrepresentation, and negligent in-

fliction of emotional distress.

App. 7

Il. CARMACK AMENDMENT

The plaintiffs initially argue that the Carmack Amend-

ment® does not precmpt existing state and common law

remedies and rely upon 49 U.S.C. § 10103 which provides:

“Except as otherwise provided in this subtitle, the

remedies provided under this subtitle are in addition

to remedies existing under another law or at com-

mon law.”

49 U.S.C. § 10103 (Revised Interstate Commerce Act). A

federal law may only preempt state and common laws if

it can be established that Congress so intended. Rice v.

6 Although the substance of the Carmack Amendment (original-

ly 49 U.S.C. § 20(11)) has been recodified into 49 U.S.C. § 11707,

§ 10730 and § 10103, these sections are commonly termed the Car-

mack Amendment.

49 U.S.C. § 11707 states in relevant part:

“A common carrier . . . subject to the jurisdiction of the Inter-

state Commerce Commission .. . issue a receipt or bill

of lading for property in receipt for transportation. . . . The

— . . . and any other carrier that de a the wd

and is providing transportation or service subject to the juris-

deten of os Cation os tele ts n entitled

to under the receipt or bill of lading. The liability imposed

under this paragraph is for the actual loss or injury to the

property caused by (1) the receiving carrier (2) the delivering

carrier or (3) another carrier over whose line or route the

property is transported in the United States... .”

49 U.S.C. § 10730 states in relevant part:

“The Interstate Commerce Commission may require or autho-

rize ...a carrier .. . to establish rates for transportation

of property under which the liability of the carrier for that

property is limited to a value established by written declara-

tion of the shipper, or by written agreement, when that value

would be reasonable under the circumstances surrounding the

transportation.”

49 U.S.C. § 10103 states:

“Except as otherwise provided in this subtitle, the remedies

provided under this subtitle are in addition to remedies ex-

isting under another law or at common law.”

App. 8

Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S. Ct.

1146, 1152 (1947). It is not necessary for a federal statute

to provide explicitly -_ wh ragpagy vd state laws are pre-

empted. Hills “a v. Automated Medical La-

boratories, Inc., 471 U. r 707 (1985). Congress’ intent to

supersede state law may be evidenced in several ways:

preemption may be inferred where Congress has —

SO cclmineniede that it has left no room for

tary state legislation, Rice v. Santa Fe Elevator on.

supra, at 230; further preemption may be inferred where

state legislation would im the very purpose and ob-

jectives of Congress as expressed in its legislative enact-

ment. Hillsborough County v. Automated Medical Labora-

tories, Inc., supra at 713.

The United States Supreme Court addressed the pre-

emptive scope of the Carmack Amendment relating to

state regulation of carrier liability in Adams Express Co.

v. Croniger, 226 U.S. 491, 33 S. Ct. 148, 59 L. Ed. 1137

(1913). re, the Court held that:

“{aJlmost every detail of the subject is covered as

completely that there can be no rational doubt that

Congress intended to take possession of the subject

and supersede all state regulation with reference to

it.”

Adams v. Croniger, supra at 504. Although the issue in

Croniger was whether the states could regulate carrier

liability ite the Carmack Amendment, the Court went

further and delineated the preemptive scope of the Car-

mack Amendment as it relates to the availability of state

and common law remedies. The Court stated:

“But it has been argued that the non-exclusive

character of this regulation is manifested by the pro-

viso of the section, and that state legislation upon

the same subject is not superseded, and that the

holder of any sueh bill of lading may resort to any

right of action against such a carrier conferred by

existing state law. This view is untenable. It would

result in the nullification of the regulation of a na-

App. 9

tional subject and operate to maintain the confusion

of the diverse tion which it was the purpose

of Congress to put an end to.

What this court said of § 22 of this act of 1906 in

the case of Texas & Pac. Ry. v. Abilene Cotton Mills,

204 U.S. 426, is applicable to this contention. It was

claimed that that section continued to force all rights

and remedies under the common law or other stat-

utes. But this court said of that contention what must

po said of the proviso in § 20, that it was ‘evidently

intended to continue in existence such other

rm Be or remedies for the redress of some specific

al or injury, whether given by the Interstate

Commerce Act, or by state statute, or common law,

not inconsistent with the rules and regulations pre-

scribed by the provisions of this act.’ Again, it was

said, of the same clause, in the same case, that it

could ‘not in reason be construed as continuing in a

shipper a common law right the existence of which

would be inconsistent with the provisions of the act.

In Sd words, the act cannot be said to destroy it-

self.’

To construe this proviso as preserving to the holder

of any such bill of lading any right or remedy which

he may have had under existing Federal law at the

time of his action, gives to it a more rational inter-

pretation than one which would preserve rights and

remedies under existing state laws, for the latter

—_ would cause the proviso to destory the act it-

se Aaa

Croniger at 507-08. Plaintiffs argue that to the extent that

the holding in Croniger eg state and common law

remedies in 1913, that holding was overturned with the

First Cummins Amendment adopted by Congress in 1915.

Plaintiffs point to the provision in the revised 1915 ver-

sion of the Carmack Amendment to support their argu-

ment that Congress intended to preserve for shippers

state and common law remedies. That provision stated:

App. 1

“Provided further, that nothing in this section shall

deprive any holder of such receipt or bill of lading

of any re or right of action which he has under

the existing law.”

In rejecting the plaintiffs’ argument, we initially note

that the remedy provision cited by the plaintiffs in the

First Cummins Amendment (incorporated into the Car-

mack Amendment) and recodified in § 10103 of the

revised Interstate Commerce Act is the very provision

the Supreme Court considered in Croniger. As mentioned

earlier, the Court interpreted this provision as meaning

that all state and common law remedies, as of that date,

inconsistent with the Carmack Amendment, were pre-

empted. In contrast to the plaintiffs’ contention that the

First Cummins Amendment was an attempt to overrule

the holding in Croniger re the remedy provision,

the First Amendment to the Car-

mack Amendment concerning remedies. Rather, the spe-

cific additions include (1) expanding the statute’s scope

to carriage of goods in adjacent foreign countries, (2) spe-

cifically providing that the carriers were liable “for the

full actual loss, damage or injury” to property transported

— for _~ received for transportation where the

shipper declares or agrees in writing to a release value

for t oan and (3) allowing carriers to require that

shippers give them notice of the contents of articles con-

cealed in “wrapping, boxing or other means” in which

event the carrier could require the shipper to declare a

value thereby limiting carriers’ liability. Thus, ny

to the plaintiff's contentions, the First Cummins Amen

ment addressed issues wholly separate from that of pre

serving for shippers their state and common law retell at

rather, it addressed the scope of the statute as it applied

to the carriage of in foreign countries, the scope

of the carrier’s liability, and notice requirements for “con-

cealed”’ rene ty Furthermore, the Supreme Court has held

since Croniger that the Carmack Amendment, even with

the addition of the First Cummins Amendment, preempts

state and common law remedies inconsistent with the fed-

App. 11

eral Act. See American Railway Express Co. v. Levee,

263 U.S. 19, 44 S. Ct. 11, 68 L. Ed. 140 (1923) (“The law

of the United States cannot be evaded by the forms of

local practice . . . the limitation of liability was valid,

whatever may be the law of the State in cases within its

control.’’). Galveston, Harrisburg & San Antonio Railway

Co. v. Woodbury, 254 U.S. 357, 41 S. Ct. 114, 65 L. Ed.

301 (1920).

Finally, the majority of circuit courts that have ad-

dressed the issue of whether or not state and common

law remedies are preempted where goods are damaged

or lost in interstate commerce have held that the Car-

mack Amendment does preempt state and common law

remedies oased on the ) vt roniger decision. See Air Prod-

ucts & Chemicals, Inc. v. Illinois Central Gulf Railroad

Co., 721 F.2d 483 (wth Cir. 1983) (“. the Carmack

Amendment, as judicially interpreted, rovides an exclu-

sive remedy for a breach of contract o provided

by a bill of lading. . .”); W.D. Lawson & Company v.

Penn Central Company, 456 F.2d 419 (6th Cir. 1972) (As

to the [] issue . tof] whether or not the Carmack

Amendment preempted common law suits .. . we hold

that it did”); R.H. Fulton v. Chicago Rock Island and

Pacific Railroad Company, 481 F.2d 326 (8th Cir. 1973)

(“The cases make it clear that when damages are sought

against a common carrier for failure to properly perform,

or for negligent performance of an interstate contract

of carriage, the Carmack Amendment governs’”’ quoting

American Synthetic Rubber Corp. v. Louisville & N.R.R.

Co., 422 F.2d 462, 468 (6th Cir. 1970)); George R. Hall,

Inc. v. Superior Trucwing Co., 514 F. Supp. 581 (N.D.

Ga. 1981) (“Though the Court is impressed by the reason-

ing in Litvak . . . seventy-five years of judicial interpreta-

tion of the Carmack Amendment have now settled the

question of the availability of state remedies against a

common carrier . . . {under the Carmack Amendment and

the judicial decisions interpreting it, plaintiff may only rely

on the remedies provided by the bill of lading. . .’’).

App. 12

Although the Seventh Circuit has not previously ad-

dressed this issue, a district court trial judge in Wirth

v. Silvretta, 575 F. Supp. 1274 (N.D. Ill. 1984), held that

the Carmack Amendment does indeed bar a shipper from

seeking any other remedy either state or common law

against a carrier for damages to the shipper’s goods that

have been transferred in interstate commerce. © he trial

judge stated:

“Though the court spoke in Croniger of the validity

of state restrictions on limitation of a carrier’s liabil-

ity, and not squarely on the subject of the continued

existence of state common law remedies, we think

that the case clearly implies that Congress has shown

a purpose to occupy the field of regulating claims for

damages to goods shipped interstate. We therefore

agree with those courts that have held the Carmack

Amendment preempts state common law remedies in

the present situation.”’

Wirth, at 1276-77.

The Tenth Circuit, for some reason unknown, stands

alone in not agreeing that the Carmack Amendment pre-

empts a shipper from seeking state and common law rem-

edies against a carrier who has damaged or lost the ship-

per’s goods during interstate transit. See Reed v. Aaacon

Transport, Inc., 637 F.2d 1302 (10th Cir. 1981); Litvak

Meat Company v. Baber, 446 F.2d 329 (10th Cir. 1971);

L.E. Whitlock Truck Service, Inc. v. Regal Drilling Co.,

333 F.2d 488 (10th Cir. 1964). Plaintiffs rely on these

Tenth Circuit cases to support their position.

In Litvak, the court addressed the preemption scope of

the Carmack Amendment and concluded that although the

amendment preempted any state legislation on the same

subject, it did not “‘oust all other remedial rights of the

shipper,” Litvak, at 335.

The court stated:

“By its very terms the statute did not intend to pre-

empt every cause of action brought by a shipper

App. 13

against a carrier for damage to its interstate ship-

ment.

* * *

[I}ts principal function is to permit a shippe. in inter-

state commerce to bring an action against the initial

carrier to recover for or pe to the shipment whether

such damages occurred while the goods were in the

hands of the initial carrier or connecting carrier.

Thus, though the Carmack Amendment allows a

shipper to enjoy the elimination of this one element

in his burden of proof, it does not compel him to avail

himself of the opportunity. The more difficult road

of common-law action against a carrier is still open

to a shipper wishing to transverse it.”

Litvak, 446 F.2d at 335-36.

We note that the Tenth Circuit has not yet been con-

fronted, based on our research, with a situation where

the carrier had limited its liability to a declared value.

In addition, the facts are unclear in these cases as to

whether the shipper’s choice of the common law remedy

was inconsistent with the federal remedy under the Car-

mack Amendment. We reject the Tenth Circuit’s ambig-

uous and unexplained narrow ruling that a shipper may

elect a common law remedy inconsistent with the Car-

mack Amendment. The purpose of this statute is to estab-

lish uniform federal guidelines designed in part to remove

the uncertainty surrounding a carrier’s liability when dam-

age occurs to a shipper’s interstate shipment. To permit

a shipper to choose among various types of remedies

fe cause confusion and insurmountable problems and

defeat the Act’s purpose of eliminating uncertainty as to

a carrier’s liability by injecting uncertainty back into this

area of transportation Congress has sought to regulate.’

7 If state remedies were available, imagine the scenario of legal

problems that an ingenious lawyer could invent. Consider a situa-

tion where a carrier of goods collides with another vehicle at a

(Footnote continued on following page)

App. 14

We reject the plaintiffs’ argument and their reliance on

the cases of the Tenth Circuit and hold that the remedy

provision of the Carmack Amendment preempts all state

and common law remedies inconsistent with the Interstate

Commerce Act based on our reading of First Cummins

Amendment, its legislative history, the Supreme Court

decisions, and the majority of circuit court decisions.

Ill. LIABILITY LIMITATION

Plaintiffs next contend that even if we hold that the

Carmack Amendment preempts state and common law

remedies, the defendants, United Van Lines and Sisser

Inc., failed to limit their liability under the Carmack

Amendment because they failed to comply with the four

steps necessary to limit their liability under the Carmack

Amendment.

There are four steps a carrier must take to limit its

liability under the Carmack Amendment: (1) maintain a

tariff within the prescribed guidelines of the Interstate

Commerce Commission; (2) obtain the shipper’s agreement

as to his choice of liability; (3) give the shipper a reason-

able opportunity to choose between two or more levels

of liability; and (4) issue a receipt or bill of lading prior

to moving the shipment. Anton v. Greyhound Van Lines,

Inc., 591 F.2d 103 (1st Cir. 1978).

Plaintiffs challenge the findings of the district court that

defendants met the latter three of these requirements on

the ground that the evidence presented at trial fails to

support the findings of the court. Specifically, they chal-

lenge the trial court’s determination finding that (1) plain-

tiffs agreed to limit the defendant carrier’s liability to

7 continued

state border causing damages to the goods, then skids across the

state line, is strick by another vehicle and a fire ensues destroy-

ing most of the goods being shipped. Assuming each state has dif-

ferent remedy provisions, which state’s statute prevails? In what

state was the damage caused to establish liability?

App. 15

$3.00 per pound; (2) that defendants gave them a reason-

able opportunity to choose between two or more levels

of liability; and (8) that defendants issued them a valid

receipt or bill of lading prior to moving.

Our review will necessarily be limited to whether the

district court’s findings were clearly erroneous since the

appellants’ challenge of the district court’s finding that

United complied with the Carmack Amendment requires

us to examine the facts underlying the trial court’s deci-

sion. Pullman-Standard v. Swift, 456 U.S. 273, 102 S. Ct.

1781, 72 L. Ed. 66 (1982). A finding is clearly erroneous

when although there is evidence to support it, if the re-

viewing court, after considering the entire record, is left

with the definite and firm conviction that a mistake has

been committed. Anderson v. City of Bessemer City, N.C.,

470 U.S. 564, 105 S. Ct. 1504, 84 L. Ed. 518 (1985) (quot-

ing from United States v. United States Gypsum Co., 333

U.S. 364, 68 S. Ct. 525, 92 L. Ed. 764 (1948)). The ques-

tion for the appellate court under Rule 52(a) is not whether

it would have made the same findings as the trial court,

but whether based on the evidence presented it is left

with a definite and firm conviction that the trial court

erred in its judgment. United States v. United States Gyp-

sum Co., supra, In the Matter of Fox, 808 F.2d 552 (7th

Cir. 1986). We consider each of these steps separately.

A. ICC-APPROVED TARIFF

The district court found, and plaintiffs do not contest,

that United Van Lines maintained a tariff that complied

with ICC guidelines at the time of the plaintiffs’ move,

and therefore, we accept the district court’s finding that

United’s tariff was in compliance with ICC guidelines.

B. SHIPPER’S AGREED CHOICE

OF CARRIER LIABILITY

The second step requires that the carrier obtain the

shipper’s written agreement of his (the shipper’s) choice

of carrier liability. Plaintiffs argue that the evidence does

App. 16

not support the district court’s finding that the Hughes

selected and agreed to value or “insure” their goods for

$3.00 per pound. They contend the district court ignored

both Mr. Hughes’ unrebutted testimony that he unknow-

ingly signed the bill of lading in the dark and Mrs.

Hughes’ unrebutted testimony that she continually re-

quested full value coverage for her goods. Plaintiffs argue

the evidence only supports the conclusion that Sisser Inc.

misrepresented to them the extent of coverage and misled

them into agreeing to “insure” their goods at $3.00 per

pound by not fully explaining the liability limitation in the

Gold Umbrella full value protection package. We are cer-

tainly sympathetic with their plight, but based upon prior

case law and its applicability to the fact situation before

the court, we are not persuaded that the district court

committed an error in ruling on this issue. See Sunstream

Jet Express, Inc. v. International Air Service Co. Lid.,

734 F.2d 1258 (7th Cir. 1984) (“If the contract imports

on its face to be a complete expression of the whole agree-

ment, it is presumed that the parties introduced into it

every material item, and parole evidence cannot be ad-

mitted to add another term to the agreement,” (citing

Pecora v. Szabo, 94 Ill. App.3d 57, 63, 418 N.E.2d 431,

435-36 (1981)).

We are bound by the trial court’s finding of fact if upon

our review of the entire record the district court’s account

of the evidence is plausible. The court of appeals may not

reverse it even though convinced that had it been sitting

as the trier of fact, it would have weighed the evidence

differently. Where there are two permissible views of the

evidence, the factfinder’s choice between them cannot be

considered clearly erroneous. Anderson v. City of Besse-

mer City, N.C., 470 U.S. at 574, 105 S. Ct. at 1512.

The standard for determining whether a shipper agreed

in writing to limit the carrier’s liability was discussed in

Chandler v. Aero Mayflower Transit Co., Inc., 374 F.2d

129 (4th Cir. 1967). There, the court stated, “Congress

no doubt used the words to indicate that a shipper should

agree in the same sense that one agrees or assents to

App. 17

enter into a contractual obligation.” Jd. at 135. See also

New York, N.H. & Hartford R. Co. v. Nothnagle, 346

U.S. 123, 73 S. Ct. 986 (1953). One who signs a contract

in the absence of fraud or deceit cannot avoid it on the

grounds that he did not read it or that he took someone

else’s word as to what it contained. But an agreement

signed under the belief that it is an instrument of a dif-

ferent character is void, and the failure to read an instru-

ment is not negligence per se but must be considered in

light of all surrounding facts and circumstances. Chandler,

supra at 136.

Based upon the Chandler standard, our review is limited

to the question of whether the district court’s finding that

the plaintiffs knew they were signing a contract for the

shipment of their goods was clearly erroneous. We hold

that the district court’s finding that the Hughes were

aware that they were signing a contract for the transpor-

tation of their goods was not clearly erroneous.

Evidence was introduced which supports an inference

that Mr. Hughes knew he was signing a contract, and was

not misled into signing the contract. The record shows

that Mr. Hughes was a college-educated, well-traveled

businessman. He had shipped his belongings and house-

hold goods and items in eleven prior moves, the last three

with the defendant United Van Lines or one of its agents.

Although this was the first time he had paid for a move

himself, Hughes was not completely “in the dark” as to

bills of lading. In fact, he does not deny that (1) he was

aware that the cost of the move was based on weight and

mileage (T. 216); (2) that he could declare a value for his

goods (T. 216, 225); and (3) that payment was due after

the goods were delivered (T. 200). In addition, Mr. Hughes

testified that the papers he signed “were all together, like

a contract. . .” and that although he could not read the

documents because it was too dark, he could see what

was on each sheet and distinguish between the different

inventory items (T. 223). The evidence also established

that Mr. Hughes was not misled into signing the bill of

lading. Mr. Hughes stated and admitted that he hurried-

App. 18

ly signed the inventory sheets and bill of lading because

“everybody was tired and everybody wanted to get on

their way”; (T. 188) and readily admits that he did not

read the documents thoroughly. (T. 220-21) Based on this

evidence, the district court record supports the trial

judge’s finding that Mr. Hughes knew he was signing a

contract for the shipment of his goods, and was not misled

into signing the same.

Plaintiffs argue that based on the standard set forth in

Chandler, the trial court’s verdict is not supported by the

evidence introduced at trial. We disagree. This case is

distinguishable from both Chandler and those cases in

which the shipper has proven no agreement was made

pursuant to the Chandler standard. In Chandler, the ship-

per did not sign a bill of lading at the time of the ship-

ment of the goods and further was fraudulently misled

by the carrier’s agent who told him he was resigning the

inventory sheets when in fact he was signing the bill of

lading. In addition, the agent compounded the problem

by admitting that he had earlier misinformed and misled

the shipper into believing that he was fully protected for

any kind of loss. Finally, the carrier admitted that he

never issued the bill of lading or a copy of it to the ship-

per. Thus, Chandler is clearly distinguishable from this

case.

In contrast to the Hughes, the shipper in Fireman’s

Fund Insurance Co. v. Barnas Electric, Inc., 590 F.

Supp. 640 (N.D. Ind. 1982), the shipper had a very limited

understanding of the English language, and although the

agent was aware of both the language limitation and the

valuable nature of the goods being transported, the agent

filled out the air bill (bill of lading) himself without ad-

vising and explaining to the shipper the different types

of liability coverage available to the shipper. In addition,

the shipper testified that the agent filled out what he

understood to be a “questionnaire,” and that he was un-

aware that he had signed a contract.

There is testimony in the record upon which the district

court could very well have concluded that Mrs. Hughes

App. 19

was not misled into choosing a $3.00 per pound liability

limitation. Mr. Pavliga, Sisser Inc.’s agent, testified that

he had in fact explained each level of liability coverage

available to Mrs. Hughes and that he made only a recom-

mendation as to what level of coverage to choose. He also

testified that he gave Mrs. Hughes several ICC required

pamphlets which explain to shippers the types of valua-

tion (“insurance”) available and the extent of coverage for

each level. Furthermore, Mrs. Hughes admits she called

Larry Haney after discussing the $3.00 per pound full

value package with a Sisser Inc. agent and relied upon

Haney’s recommendation to purchase the Gold Umbrella

full value package without discussing with him the extent

of her cov . (See footnote 3, supra.) Based on the en-

tire record, the district court’s finding that the plaintiffs

were not misled into agreeing to limit defendant’s liability

to $3.00 per pound was not clearly erroneous.

Plaintiffs, as a back-up position, offer an alternative

theory for challenging the district court’s finding that they

agreed to insure their goods for $3.00 per pound rather

than, as they contend, insure for the full $111,848.31. They

argue that because Mrs. Hughes was unilaterally mistaken

about the terms of the contract, there was no agreement,

and therefore there is no contract because of lack of mu-

tual understanding of terms and the contract is therefore

void. Plaintiffs raise this argument in response to the

district court’s holding which stated in relevant part:

“It may be that Mrs. Hughes misunderstood her con-

versation with Mr. Pavliga. She may have incorrectly

rceived that she was obtaining full value coverage

or her household goods which would be paid to her

in the event of loss and that such full value coverage

was available in return for a premium payment of

$3.00 Fed pound. However, a unilateral mistake by

Mrs. Hughes as to the amount of her coverage is not

a valid basis to vitiate a liability limitation. Cf.

Feinberg v. Railway Express Agency, 163 F.2d 998

(7th Cir.), cert. denied, 332 U.S. 847 (1948).”

App. 20

To challenge this, plaintiffs rely on Gammel Mfg. Inc.

v. HVAC Supply, Inc., 715 F.2d 112 (4th Cir. 1983), where

the appellate court held that a unilateral mistake may void

a contract in limited circumstances pursuant to the Re-

statement (Second) of Contracts § 153(a) (1981). The rule

states:

“Where a mistake of one party at the time a con-

tract was made as to a basic assumption on which

he made the contract has a material effect on the

agreed exchange of performances that is adverse to

him, the contract is voidable by him if [he does not

bear the risk under § 154 and]...

(a) the effect of the mistake is such that enforce-

ment of the contract would be unconscionable, or

(b) the other party had reason to know of the mis-

take or his fault caused the mistake.”’

We reject the plaintiffs’ novel and self-serving argument.

The law with regard to voiding the effect of a signature

on an ambiguous contract due to unilateral mistake is

clear. In the absence of fraud, the consent evidenced by

a signature may be voided only if two requirements are

met. They are (1) the shipper did not know at the time

he signed the papers that they were in fact contractual

documents; and (2) shipper’s failure to read the document

and ascertain their true nature was excusable under all

of the circumstances (i.e., the shipper acted as a person

of ordi prudence would have acted in the circum-

stances). Chandler, supra at 136-37.

Similarly, once the shipper was aware that the docu-

ment signed was a contract for transporting his goods,

absent fraud or bad faith, the shipper cannot reform the

bill of lading without the consent of the carrier on the

grounds that they were unilaterally mistaken about the

terms of the contract. See Hopper Furs, Inc. v. Emery

Air Freight Corp., 749 F.2d 1261 (8th Cir. 1984) (“{ship-

per’s] mistake was unilateral and therefore may not be

the basis for reformation of the contract [without the car-

rier’s approval].””); Thomas v. Transworld Airlines, Inc.,

App. 21

457 F.2d 1053 (8rd Cir. 1972) (“{WJhen no question of

fraud, bad faith or inequitable conduct is involved and the

right to reform an instrument is based solely on mistake,

it is necessary that the mistake be mutual... . Mere

failure to read an instrument, thus giving rise to plain-

tiffs unilateral mistake, is insufficient to obtain relief.”’)

As we stated earlier, we hold that there is more than

sufficient evidence to support the trial court’s finding that

the plaintiffs knew at the time of signing the document

that they were signing a contract for transportation of

their . The “Order for Service” form Mrs. Hughes

signed was a formal document which included the esti-

mated cost, notice to the shipper to declare a value for

the goods, two places for the shipper’s signature, and a

host of information regarding the move. Mrs. Hughes also

testified that she did not read the Full Value Guarantee

information provided with the Order for Service form. (T.

133, 151).

Likewise, taking Ed Hughes’ (an experienced mover)

testimony at face value that he was not aware that he

was signing a contract when he signed the inventory

sheets and the bill of lading prior to shipment, it was his

fault for not reading the bill of lading. A reasonable, pru-

dent person in those circumstances, particularly one as

experienced as Mr. Hughes, and one with a college educa-

tion, would have have taken the time to read and under-

stand the bill of lading in its entirety.

Plaintiffs rely on the Restatement of Contracts (Second)

§ 153 and the application of that section in Gamewell

Manufacturing, Inc. v. HVAC Supply, Inc., 715 F.2d 112

(4th Cir. 1983), to support their position that no contract

existed because of the Hughes’ unilateral mistake. The

Restatement section simply is not appropriate in this sit-

uation because its application has been limited to cir-

cumstances where a party settles a cause of action based

on a unilateral mistake. Gamewell involved a patent in-

fringement action where one party attempted to rescind

a settlement agreement after mistakenly relying on false

information about their product. The court limited its

App. 22

discussion to cases where one party sought to rescind a

settlement agreement. Thus, this principal has been nar-

rowly applied only to cases involving settlement agree-

ments. In addition, plaintiffs are unable to cite any

in the cases where the court has even considered

adopting this rule of unilateral mistake in contract for car-

riage cases.

Based on the well established law in contract for car-

riage cases and the very narrow application of the uni-

lateral mistake principal to cases involving settlement

agreements, we reject the plaintiffs’ argument that the

signature on the bill of lading may be voided if the sign-

ing party was unilaterally mistaken about the terms of

the contract, and we hold that the defendants satisfied

the second requirement under the Carmack Amendment

by agreeing in writing with the plaintiffs to limit their

liability to $3.00 per pound.

C. SHIPPER’S FAIR OPPORTUNITY

TO CHOOSE THE CARRIER’S LIABILITY

The third step a carrier must take to limit its liability

under the Carmack Amendment requires that a shipper

be given a fair opportunity to choose between a higher

liability level and a lower liability level. A fair opportunity

means that the shipper had both reasonable notice of the

liability limitation and the opportunity to obtain informa-

tion necessary to making a deliberate and well-informed

choice. Anton v. Greyhound Van Lines, Inc., 591 F.2d

103 (1st Cir. 1978), Quasaar Company v. Atchison, Topeka

and Santa Fe Railway Company, 632 F. Supp. 1106 (N.D.

Ill. 1986). In addition, any limitation of liability must be

brought to the attention of the shipper before the con-

tract is signed, and the shipper must be given a choice

to contract, with or without, the limitation of liability in

the movement of his goods. Chandler v. Aero Mayflower

Moving Co., supra, at 137.

The district court rejected the plaintiffs’ argument that

they were not given a reasonable and fair opportunity to

App. 23

exercise their right to choose between alternative levels

of coverage. The court stated:

‘(The evidence shows that United’s] instructions to

Mrs. Hughes (to fill in the $3.00 per pound liability

limitation on the Order for Service Form) was based

on Mrs. Hughes’ conversation with [the United Agent].

Mrs. ry not [United], selected the liability lim-

itation which governed the contract between parties.”

Plaintiffs argue that the evidence does not support the

district court’s finding because they allege that the trial

court ignored the testimony of the Hughes that they were

misled into signing a contract that limited their coverage

to $3.00 per pound on lost and damaged goods. We dis-

agree since the determination of whether the Hughes

were given a fair opportunity to choose between different

levels of liability is a question of witness credibility, and

it cannot be said the trial court erred in giving more

weight to the testimony of the defendants’ witness than

to the testimony of the plaintiffs. Once again, we empha-

size that the standard of review on appeal under Rule

52 is very narrow. When findings are based on determina-

tions regarding the credibility of witnesses, Rule 52 de-

mands even greater deference to the trial court’s findings;

for only the trial ju can be aware of the variations

in demeanor including but not limited to the actions, man-

nerisms, and facial expressions that bear so heavily on

the listener’s understanding of and belief in what is said.

ees v. Witt, 105 S. Ct. 844 (1985). When a trial

judge’s finding is based on his decision to credit the tes-

timony of one of two or more witnesses, each of whom

has told a coherent and facially plausible story that is

not contradicted by extrinsic evidence, that finding, if

not internally inconsistent, can virtually never be clear

error. pane v. City of Bessemer City, N.C., supra

at 1513.

Applying this standard, we conclude that based on a re-

view of the entire record, the trial court could very well

have found that the Hughes were intelligent and experi-

App. 24

enced movers, received adequate information from both

Mr. Pavliga and the informational pamphlets about the

extent of coverage available - the ific terms of each

type of coverage. Plaintiffs re IY on Allied Van Lines, Inc.

v. McKnab, 351 So. 2d 344 (Fla. 1977), to support their

position that Mrs. Hughes was not given a fair opportuni-

ty to choose between the higher and lower levels of liabil-

ity. They argue that, like the shippers in McKnab, the

fact that the carrier (United) filled in the value on the

bill of lading rather than the shipper is evidence that the

carrier had misled them about the extent of their liability

coverage.® But in McKnab, the trial court found that the

shipper had in fact been misled by the carrier agent as

to the available coverage and was prevented from choos-

ing adequate coverage. In contrast, the district court here

found that Mrs. Hughes was not misled about the types

of liability coverage available to them. The district court

quite emphatically stated that, “the evidence in this case

is devoid of any fact or inference to suggest that United

attempted in any way to mislead plaintiffs.” Unlike the

circumstances in McKnab, the plaintiffs here, were given

several opportunities to familiarize themselves with the

nature of their coverage and seek an explanation if they

had any questions. Instead, the plaintiffs allegedly relied

upon Mr. Haney’s explanation of the coverage without

completely informing him of the type of full value cover-

they had chosen. Thus, based on the entire record

which establishes that the Hughes (1) discussed the dif-

ferent types of liability coverage with Mr. Pavliga; (2)

chose the Gold Umbrella full value protection with a re-

placement value limitation of $3.00 per pound; (3) were

given informational pamphlets explaining the liability lim-

itations associated with the different rates a shipper could

declare for his goods; (4) had opportunities to call Sisser,

Inc. about any misunderstanding they had about their lia-

8 The record indicated that on a copy of the bill of lading United

had inserted the previously agreed upon declared value of $3.00

per pound.

App. 25

bility coverage; (5) signed the “Order for Service” form

voluntarily declaring the valuation rate to be $3.00 per

pound; and (6) were seasoned shippers of goods (11 times),

we hold the district court’s finding that the plaintiffs were

given a fair opportunity to choose heowene alternative

levels of coverage was not clearly erroneous.

D. PROVIDING THE SHIPPER

WITH A BILL OF LADING) -

The fourth step a carrier must take in order to limit

its liability under the Carmack Amendment is to provide

the shipper with a receipt or bill of lading before trans-

porting his goods. Although plaintiffs acknowledge receiv-

ing a receipt or bill of lading, they argue the bill of ladi

is void because it did not comply wi with federal regulations.

Plaintiffs argue the bill of is defective in three

ways. First, the bill of lading no release value writ-

ten on it as required by 49 C.F.R. § 1056.6(a) and

§ 1056.6(bX11); second, the carrier, rather than the ship-

per, t in its claimed liability limitation in violation

of 49 C.F.R. § 1307.201(c); and third, the li language

in the bill of lading was neither distinctively colored nor

in bold face type as required by 49 C.F.R. § 1307.201(c).

Plaintiffs initially argue that because the only figure

written on the bill of lading was an ambiguous reference

to “Full Value Guarantee”’ any liability limitation is void

aan to 49 C.F.R. § 1056.6(a) and § 1056.6(bX11).

Plaintiffs obviously ignore the fact that the absence of a

declared value on the bill of lading is the result of Mr.

Hughes’ failure to insert the value of their goods. Instead

of inserting in the space a the $3.00 per pound

value, Mr. Hughes i igned his name there.

There was no lions deeh Garth a sling coos

it provided tw tinct printed warnings to the experi-

enced shipper inteusting him where to declare the value

of his goods and the consequences of his or her failure

to properly insert the amount of coverage desired in the

space provided would result in limiting the carrier’s liabil-

App. 26

ity to $1.25 per pound. Although it was early morning

when Wr. Hughes signed the bill of lading, he admitted

his carelessness in that he made no attempt to read the

provision of the contract, and that he was tired and every-

body wanted to get on with the move. We know of no

case law nor has any been provided to us holding that

United has an obligation to ensure that the shipper reads

the bill of lading carefully. It was Mr. Hughes’ respon-

sibility, an experienced mover, to read the bill of lading

carefully, and question anything he did not understand.

His careless and negligent failure to do so, however, is

not grounds for voiding the limitation.

Plaintiffs next argue that the bill of lading is invalid

because the carrier, rather than the shipper, typed in its

claimed liability limitation on the bill of lading in viola-

tion of 49 C.F.R. § 1307.201(c). They cite Brannon v.

Smith Dray Line & Storage Co,, Inc., 456 F.2d 260 (6th

Cir. 1972), to support their argument. The regulation

states that:

(c) Statement on bills of lading. The bill of lading

. Shall have printed . . . a statement reading as

follows:

NOTICE: The shipper signing this contract

must insert in the space above, in his own hand-

writing, either his declaration of the actual value

of the shipment... .

49 C.F.R. § 1307.201(c).

The purpose of requiring that the shipper, rather than

the carrier, fill in the declared value of the goods is to

assure that the shipper makes a deliberate and well-

informed choice to the valuation of their goods. In Bran-

non, unlike this case, the district court found the ship-

per was not given a fair opportunity to make such choice.

There, the district court made findings of fact that the

shipper had not been given a copy of the written cost

estimate before or after she signed the contract, nor was

she given a copy of the Notice to Shippers of Household

Goods as required by the Interstate Commerce Com™nis-

App. 27

sion to be furnished to all prospective shippers of house-

hold goods in interstate commerce. Also, the carrier’s

agent did not adequately advise the shipper concerning

her opportunity to choose a range of valuation while assur-

ing her that the rate he suggested would afford her suf-

ficient coverage. It was based on these findings that the

court of appeals stated:

“In light of these findings, together with the fact that

the carrier had typed in the valuation figure on the

bill of lading rather than allowing the shipper to

write that figure herself as provided in the printed

instructions for completion of the document, the court

held that the shipper was not bound by this valua-

a

Brannon at 261. Thus, the significance of the fact that

_in Brannon the carrier, rather than the shipper, typed

in the valuation figure on the bill of lading is dependant

upon the surrounding circumstances and only significant

when the shipper is not adequately advised concerning

the shipper’s opportunity to declare a value for his or her

goods. In this case, unlike Brannon, it is not very signifi-

cant. Since, as the district court found, the defendants

clearly informed Mrs. Hughes of the alternative levels of

liability based on her meeting with Mr. Pavliga and the

ICC informational pamphlets she received from the defen-

dants. In addition, the district court found, and we agree

based on our review of the record, that Mrs. Hughes

made a deliberate and well-informed choice to limit cov-

erage to the $3.00 per pound level of coverage after her

meeting and conversation with Mr. Pavliga. She then de-

clared the value, in writing, on the Order for Service

Form after the Hughes had an opportunity to read the

informational pamphlets and discuss the coverage with a

United agent. Instead, Mrs. Hughes states that she ap-

parently mistakenly relied upon Mr. Haney’s half-informed

recommendation that they contract for the “Full Value

Guarantee” package (see footnote 3, supra). Based on the

fact that the Hughes (1) discussed the different types of

liability coverage with Mr. Pavliga; (2) chose the Gold Um-

App. 28

brella full value protection with a replacement value limi-

tation of $3.00 per pound; (3) were given informational

pamphlets explaining the liability limitations associated

with the different rates a shipper could declare for his

goods; (4) had opportunities to call Sisser, Inc. about any

misunderstanding they had about their liability coverage;

(5) signed the “Order for Service” form voluntarily declar-

ing the valuation rate to be $3.00 per pound; and (6) were

seasoned shippers of goods (11 times), the Hughes’ argu-

ment that the shipper’s inclusion of the $3.00 per pound

liability rate on the bill of lading evidences its intent to

mislead the Hughes about the extent of their coverage

is simply not valid. United filled in the $3.00 per pound

liability rate on the bill of lading after the Hughes had

clearly chosen that value and was merely confirming what

the plaintiffs had earlier decided.

Plaintiffs’, grasping one last straw, argue that United

failed to strictly comply with its tariff instructions and

federal regulations because the limiting language in its

bill of lading was neither distinctively colored nor in bold-

face type is unpersuasive. 49 C.F.R. § 1307.201(c) states

in relevant part:

“(c) Statement on bills of lading. The bill of

lading issued for any accepted for transportation .. .

shall have printed in distinctive color in boldface type

on the face thereof... .”

49 C.F.R. § 1307.201(c). Once again, plaintiffs’ argument

that the bill of lading is void because the warnings were

not sufficiently distinct on the face of the contract is too

formalistic. The limiting language in the bill of lading was

sufficiently distinct in color and type. It gave two warn-

ings to the plaintiffs that they must insert their declara-

tion of the actual value-of-the shipment. The bill of lading

sufficiently informed plaintiffs of their duty to complete

the instrument, and warned them of the consequences if

they failed to declare a release value.

Plaintiffs cite Caspe v. Aaacon Auto Transport, Inc.,

658 F.2d 613 (8th Cir. 1981), to support their position that

App. 29

failure to strictly comply with the tariff and federal reg-

ulations voids any liability limitation in the bill of lading.

In Caspe, although the trial court held that the carrier’s

failure to fully comply with its tariff and ICC order made

void the limitation clause in the bill of lading, the court

of appeal’s real concern focused on the carrier’s failure

to inform the shipper of the limitation clause. The circuit

court of appeals stated:

“It seems obvious that the purpose of putting a

limitation clause in bold-face type is to make it stand

out and attract the reader’s attention. It seems equal-

ly obvious that putting the entire agreement in

densely packed bold-face type, such as Aaacon did,

with the limitation clause buried in the middle of the

agreement, does not achieve that purpose. Additional-

ly, Aaacon’s agreement provided no space for ship-

per to declare the value of the property, as is con-

templated by the tariff and order, and which would

be a further means of attracting the shipper’s atten-

tion " causing him to focus on the value of the ship-

ment.

In this case, defendants orally and in writing informed

plaintiffs of the limitation provisions in the contract, and

gave them ample opportunity to review, question, under-

stand and, if need be, question the consequences of the

liability limitations if they were not satisfied with Mr.

Pavliga’s explanation. Defendants supplied Hughes with

information about the Full Value Guarantee package (De-

fendants’ Ex. 11), ICC required informational pamphlets

(Defendants’ Ex. 3 and 4) which explains to the shipper

the procedures and consequences of declaring a value for

the shipper’s goods; and ¢ bill of lading which contained

distinctly colored warnings in bold-face type about declar-

ing a value for the goods shipped. Despite the fact that

they are experienced movers whose three previous moves

were with United, the plaintiffs failed to read all the

documents United provided to them.

App. 30

This same concern of strict compliance with tariff and

ICC regulations was recently addressed in Robinson v.

Ralph G. Smith, Inc., 735 F.2d 186 (6th Cir. 1986) where

the court of appeals held that substantial compliance with

the ICC tariff requirements in a carrier’s bill of lading

form was sufficient to limit a carrier’s liability. In review-

ing the bill of lading the court stated:

“The language in the limitation clauses of both the

tariff and the bill of lading is similar and conveys the

same meaning. Furthermore, the limitation clause of

the bill of lading is eyecatching in that it is set out

in a separate paragraph and all in capital letters,

enhancing the probability that it will be seen by the

shipper, and ample space is provided for the ship-

per to write his own estimate of the value of the

animal to be shipped.”

Robinson, at 190. The rationale for that decision was that

the purpose of the regulation was to encourage competi-

tion by allowing shippers to choose for themselves the

amounts of “insurance” they wish to cover a shipped ar-

ticle, and to reduce unnecessary federal regulation. Based

on this policy, the court stated, “This legislation will best

be served by the adoption of a substantial compliance

rule.”” Robinson, Id.

Although we need not determine whether to adopt a

substantial compliance rule in this instance, based on the

existing case law and our review of the facts in this case,

we reject the plaintiffs’ argument that United’s liability

limitation is void because the bill of lading fails to strict-

ly comply with United’s tariff and ICC regulations be-

cause defendants did inform Hughes on several occasions

of the nature of the liability limitations, thus satisfying

the purpose for the distinct warnings on the bill of lading.

We hold that defendants’ bill of lading complied with fed-

eral regulations by distinctly highlighting the warnings

and providing the Hughes with a fair and reasonable op-

portunity to declare a value for their goods on the bill

of lading. The plaintiffs were provided a valid bill of lading

App. 31

prior to transporting their goods, and therefore United

successfully limited its liability under the Carmack

Amendment to $3.00 per pound.

IV

In summary, we hold that the district court’s action was

proper in holding that the proper interpretation of the

Carmack Amendment to the Interstate Commerce Act

(recodified 49 U.S.C. § 11707, § 10730, and § 10103) pre-

empts all stave and common law remedies inconsistent

with the Interstate Commerce Act. We also hold that the

district court’s finding that defendants satisfied all four

a needed to limit their liability under the bill

of lading was not clearly erroneous, and thus the district

court’s decision to award plaintiffs $26,180 while denying

all other claims. Affirmed.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

App. 32

JUDGMENT — ORAL ARGUMENT

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

September 11, 1987.

Before

Hon. WILLIAM J. BAUER, Chief Judge

Hon. JOHN L. Correy, Circuit Judge

Hon. FRANK H. EASTERBROOK, Circuit Judge

EDWARD and NANCY HUGHES,

Plaintiffs-Appellants,

No. 86-2134 Vv.

UNITED VAN LINES, INC., and

291 SISSER Bros., INC.,

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 84-C-4367—Paul E. Plunkett, Judge.

This case was heard on the record from the United

States District Court for the Northern District of Illinois,

Eastern Division, and was argued by counsel.

On consideration whereof, IT Is ORDERED AND ADJUDGED

by this Court that the judgment of the said District Court

in this cause appealed from be, and the same is hereby,

AFFIRMED, with costs, in accordance with the opinion of

this Court filed this date.

App. 33

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

EDWARD HUGHES and NANcy HUGHES,

Plaintiffs,

Vv.

UNITED VAN LINES, INC., and

291 SIssSER Bros., INC.,

Defendants.

No. 84 C 4367

Honorable Paul E. Plunkett

MEMORANDUM OPINION AND ORDER

Edward and Nancy Hughes (‘‘Plaintiffs’’) have brought

this action against Defendants United Van Lines, Inc.

(“‘United’’) and 291 Sisser Bros., Inc. (“Sisser’’) (collec-

tively ““Defendants’’) 7 that Defendants are respon-

sible for the destruction of all of their furniture and other

household goods during a move from Medford, New Jersey

to Chicago, Illinois. United is a common carrier and Sisser

is its local agent. Both Defendants contracted with Plain-

tiffs to move their household goods to Chicago. Plaintiffs

seek damages in excess of $200,000 in compensatory and

punitive damages on eight different common law theories

including breach of contract, negligence and misrepre-

sentation. Plaintiffs also seek recovery in Count II on the

basis of the Carmack Amendment to the Interstate Com-

merce Act, 49 U.S.C. §11707. Jurisdiction rests on diver-

sity of citizenship, 28 U.S.C. §1332, and the Interstate

Commerce Act, 49 U.S.C. §10101, et seg. and is not dis-

puted. The trial was conducted by this court without a

jury.

App. 34

Facts

Edward Hughes accepted a coaching position with the

Chicago Bears Football Club in the spring of 1982. Since

he was then living in Medford, New Jersey, he was re-

quired to move his family and his household goods to

Chicago.

Nancy Hughes, the wife of Edward Hughes, initiated

the arrangements for the move of the Hughes’ household

goods to Chicago. Mrs. Hughes — with a Larry Haney,

an employee of United who had helped Plaintiffs with sev-

eral earlier moves. United is a Missouri corporation en-

gaged in the business of a common carrier of household

goods and other commodities in interstate commerce under

authority of a certificate of public convenience and neces-

sity issued to it by the Interstate Commerce Commission.

United conducts most of its business through extensive

agency arrangements with local agents throughout the

United States.

Mr. Haney recommended that Nancy Hughes call Sisser,

the local agent for United in the New Jersey area. As a

result of that contact, Mr. Pavliga, an employee of Sisser,

met with Nancy Hughes at her home in New Jersey. Mr.

Pavliga conducted a survey of Plaintiffs’ household goods

and discussed various facets of Plaintiffs’ expected move

to Chicago. Mr. Pavliga gave Mrs. Hughes various ICC

prescribed exp!anatory pamphlets (Defendants’ Exhibits

3 and 4). Those pamphlets explained the various ways in

which shippers such as Plaintiffs may protect their house-

hold against loss during transit. Mr. Pavliga also

completed an ICC prescribed estimated cost of services

form (Plaintiffs’ Exhibit 1) and reviewed that document

with Mrs. Hughes. Mr. Pavliga discussed with Mrs. Hughes

the valuation sections of the estimate form relating to the

shippers’ declared value of the shipment and the various

levels of carrier liability which she could select to protect

her goods. After learning that Mr. Pavliga estimated the

total weight of her goods at 12,000 pounds, Mrs. Hughes

selected ‘‘full value protection” for her goods based on

App. 35

the estimated weight of the shipment (12,000 pounds) av

$3.00 per pound. $3.00 per pound is the lowest valu-

ation for which the “full value protection” was available.

In other words, Mrs. Hughes ordered protection of $36,000

for her household goods based on the assumption that her

household goods amounted to 12,000 pounds. Mrs. Hughes

signed the estimate and kept a copy of it.

Sometime thereafter, Mrs. Hughes contacted Sisser and

advised that she and her husband had selected United to

handle the move. Dave Hendershott, a sales coordinator

for Sisser, then prepared an ICC order for service form

(Plaintiffs’ Exhibit 2B) which was sent to Plaintiffs to-

gether with a short letter from Mr. Hendershott which

stated, in pertinent part, as follows:

It is necessary to sign in two places and declare a

value and return to us in the accompanying envelope.

We have shown the desired areas for signing as well

as the o for valuation (we understand that you

desire full value coverage, minimum $3.00 per lb.,

which is what you should enter in that area).

Mrs. Hughes, on the order for service form, signed the

blank indicating that she had received summary of infor-

mation for the shippers of household goods. She also

wrote, in a second blank, a valuation for her household

goods “‘not exceeding $3.00 per pound full value.” United

had estimated the charge for the move, including payment

for the cost of liability for loss, at $3,625.90. Mrs. Hughes

then returned the order for service form to United which

arranged for the shipment of her goods on June 25, 1982.

At the time of the actual shipment of the goods, Mr.

Hughes received and signed a Uniform Household Goods

bill of lading (Plaintiffs’ Exhibit 4A). The bill of lading

form also contained an area in which Mr. Hughes should

have written the actual value of his shipment. However,

Mr. Hughes signed his name in the blank provided for

the valuation and then signed his name again accepting

the valuation. In other words, no amount of valuation ap-

pears on the bill of lading.

App. 36

After leaving Plaintiffs’ residence, the driver of the van

proceeded to a truck scale where the shipment was weighed.

The actual tariff weight of the shipment was 17,060 pounds

rather than the estimated weight given by Mr. Pavliga

of 12,000 pounds. Since the liability of the carrier was

based upon $3.00 per pound, the carrier’s maximum liabil-

ity on the shipment increased from $36,000 to $51,180.

While Plaintiffs’ goods were in transit, a fire occurred

on the moving van and a substantial portion of Plaintiffs’

shipment was damaged or destroyed. United made arrange-

ments to have the items which were salvageable taken

to a Chicago warehouse where they were inspected by

Plaintiffs. Only a few items originally sent by Plaintiffs

from New Jersey were delivered in an undamaged condi-

tion to Chicago.

Thus, the evidence adduced at trial clearly established

that:

a. The Defendants were hired as common carriers

to transport Plaintiffs’ property in interstate com-

merce; and

b. The Plaintiffs’ property was nearly completely de-

stroyed while in the care of Defendants.

It is clear that Defendants are liable for a loss incurred

by Plaintiffs and Defendants have conceded as much. The

issue in the case is the nature and extent of Defendants’

liability.

Defendants contend that their liability to Plaintiffs is gov-

erned and limited by the Carmack Amendment. Under

that theory, when Defendants have complied with all the

requirements of that statute, their liability cannot exceed

the amount of the liability limitation contained in their

contract with Plaintiffs—namely, three dollars per pound.

Since the actual weight of the shipment is agreed to be

17,060 pounds, Defendants’ maximum liability is $51,180.00.

Plaintiffs contend that the Carmack Amendment does

not preempt existing state law remedies and point to 49

U.S.C. §10103 which provides:

App. 37

Except as otherwise provided in this subtitle, the

remedies provided under this subtitle are in addition

- remedies existing under another law or at common

aw.

Thus, we must first determine if the Carmack Amend-

ment to the Interstate Commerce Act preempts all state

common law remedies for contract or tort.

The Carmack Amendment permits carriers to limit their

liability to shippers if they comply with the following four

requirements:

1. maintain approved tariff rates with the ICC;

2. obtain a shipper’s written declaration of the value

to which the property is limited;

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 moving

the shipment.

49 U.S.C. §11707, Anton v. Greyhound Van Lines, Inc.,

591 F.2d 103, 107 (1st Cir. 1978).

The Carmack Amendment was enacted by Congress for

the purpose of providing uniform treatment of common

carriers in interstate commerce and to avoid the v ies

arising from regulations and policies by the different

states. In Adams Express Co. v. Croninger, 226 U.S. 491

(1913), the Supreme Court held that the Carmack Amend-

ment superseded all regulations and policies of a particu-

lar state. However, the court did not specifically address

the issue of preemption of common law remedies but only

attempted state regulation. Since Croninger, however,

numerous circuits have held that the rationale of the

Croninger decision applies to state remedies as well as

state tion. See, e.g., Fulton v. Chicago Rock Island

Pacific R.R. Co., 481 F.2d 326 (8th Cir.), cert. denied, 414

U.S. 1040 (1973); W.D. Lawson & Co. v. Penn Central

Co., 456 F.2d 419, 421-423 (6th Cir. 1972). Only the Tenth

Circuit in Litvak Meat Co. v. Baker, 446 F.2d 329, 335

(10th Cir. 1971), reached a contrary result. The Seventh

App. 38

Circuit has not addressed the issue of whether the Car-

mack Amendment preempts common law actions for dam-

age to interstate shipments. However, given the approach

of that court in Aero Trucking, Inc. v. Regal Tube Co.,

594 F.2d 619 (7th Cir. 1979), in holding that rights de-

fined by tariff cannot be enlarged or changed by either

the tort or contract of the carrier, we believe that our

circuit would follow the majority of the circuits in find-

ing preemption of the state common law remedies. In this

regard we agree with the reasoning of Judge Marshall

in Wirth, Ltd. v. Silvretta, 575 F. Supp. 1274, 1276 (N.D.

Ill. 1984):

Though the Court spoke in Croninger of the valid-

ity of state restrictions on limitation of a carrier’s

liability, and not squarely on the subject of the con-

tinued existence of state common law remedies, we

think the case clearly implies that Congress has

shown a purpose to occupy the field of regulating

claims for damages to goods shipped interstate.

Judge Marshall explained that the statutory provision pro-

viding common law remedies (49 U.S.C. §10103) did not

affect his conclusion since a nearly identical provision had

not affected the Supreme Court’s holding in Croninger,

226 U.S. at 567-568.

Even given our conclusion that the Carmack Amend-

ment preempts state common law remedies, we must still

determine whether Defendants complied with the four re-

quirements of the statute which brings them under the

protection of that Act.

It is clear that Defendants filed and maintained an ap-

proved tariff during the time of Plaintiffs’ move (Defen-

dants’ Exhibit 29). It is also clear that United obtained

the shippers’ written declaration of value. Mrs. Hughes

herself filled out and signed Defendants’ order for ser-

vices form. She declared the value to be “$3.00 per pound

full value.”’ Plaintiffs were also given a reasonable oppor-

tunity to choose between two or more levels of liability.

Mr. Pavliga gave Mrs. Hughes documents containing a

App. 39

discussion of this very subject and Mrs. Hughes acknowl-

edged the receipt of that information on the order for ser-

vice form. Finally, Mr. Hughes signed the bill of lading

prior to moving the shipment, although Mr. Hughes did

not fill in the amount of liability the shipper agreed to

undertake for his household goods. Thus, since 17,060 pounds

were shipped and both United and Plaintiffs agreed to a

$3.00 per pound valuation, United is liable to Plaintiffs

for $51,180.

Plaintiffs argue, however, that United did not comply

with all four requirements to limit their liability. First,

they point to the fact that a shipper is not bound by a

liability limitation if he was induced not to read the bill

of lading or if the legal significance of its provisions were

misrepresented. Anton v. hound Van Lines, Inc., 591

F.2d 103, 108 (1st Cir. 1978). However, we find that United

did not misrepresent the legal significance of its liability

limitation provisions. Mr. Pavliga explained those provi-

sfins to Mrs. Hughes and gave her and Mr. Hughes the

necessary documentation from which they could learn the

exact nature of each liability limitation available to them.

Plaintiffs also argue that they were not given a reason-

able and fair opportunity to exercise their right to choose

alternative insurance coverage. They point to the fact that

Mr. Hindershott’s memorandum instructed Mrs. Hughes

as to how to fill in the liability limitation section. Such

an ent misconceives the nature of the evidence at

trial. Mr. Hendershott’s instructions to Mrs. Hughes was

based on Mrs. Hughes’ conversation with Mr. Pavliga.

Mrs. Hughes, not Mr. Hendershott, selected the liability

limitation which governed the contract between the par-

ties. Thus, Allied Van Lines, Inc. v. McKnab, 351 So.2d

344 (Fla. 1977), is inapposite to the case before the court.

It may be that Mrs. Hughes misunderstood her conversa-

tion with Mr. Pavliga. She may have incorrectly perceived

that she was obtaining full value coverage for her house-

hold goods which would be paid to her in the event of

loss and that such full value coverage was available in

return for a premium payment of $3.00 per pound. How-

App. 40

ever, a unilateral mistake by Mrs. Hughes as to the amount

of her coverage is not a valid basis to vitiate a liability

limitation. Cf. Feinberg v. Railway Express Agency, 163

F.2d 998 (7th Cir.), cert. denied, 332 U.S. 847 (1948).

While we acknowledge that there are decisions in other

circuits which, for various reasons, permit exceptions to

the well established rule that liability limitations are valid,

we do not believe that such exceptions, even if accepted

in this circuit, would assist Plaintiffs. The evidence in this

case is devoid of any fact or inference to suggest that

United attempted in any way to mislead Plaintiffs. Plain-

tiffs accepted a limitation of liability of $3.00 per pound.

We will not give them any more than they agreed to ac-

cept. Accordingly, judgment is entered on behalf of Plain-

tiffs and against Defendants pursuant to the agreement

between the parties in the amount of $26,180 ($51,180 less

the $25,000 already paid to Plaintiffs) plus interest and

costs. Plaintiffs’ claims for recovery on state court com-

mon law theories, including their punitive damage claim,

are denied.

ENTER:

/s/ PAUL E. PLUNKETT

Honorable Paul E. Plunkett

District Court Judge

Dated: 3/27/86

App. 41

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

Eastern Division

JUDGMENT IN A CiVIL CASE

EDWARD HUGHES, et al

Vv. Case Number: 84C 4367

UNITED VAN LINE, INC., et al

(_} Jury Verdict. This action came before the Court for

a trial by jury. The issues have been tried and the

jury has rendered its verdict.

x! Decision by Court. This action came to trial or hear-

ing before the Court. The issues have been tried or

heard and a decision has been rendered.

It Is ORDERED AND ADJUDGED Judgment is entered

on behalf of plaintiffs and against defendants pursuant

to the ment between the parties in the amount of

$26,180 ($51,180 less the $25,000 already paid to plaintiffs)

plus interest and costs. Plaintiffs’ claims for recovery on

state court common law theories, including their punitive

damage claim, are denied.

March 27, 1986

Date

H. STUART CUNNINGHAM

Clerk

/s/ THERESA B. KINNEY

(By) Deputy Clerk

App. 42

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

Case Number: 84 C 4367 Date: 6-9-86

Name of Assigned Judge: Paul E. Plunkett

Case Title: Hughes -v- United Van Lines

* * * kK *

DOCKET ENTRY:

(1) (J Judgment is entered as follows:

(2) & [Other docket entry:]

Motion to amend judgment and for a new trial,

denied.

* * * * *

App. 43

STATUTES INVOLVED

49 C.F.R. Section 1056.6(a), (b)(11)

§ 1056.6 Receipt or bill of lading.

(a) Isswance of a receipt or bill of lading. Every n otor

common carrier engaged in the transportation of house-

hold goods as defined in 49 CFR 1056.1(bX1) shall issue

a receipt or bill of lading. The bill of lading shall contain

the minimum information required by § 1056.6(b) and the

terms and conditions of the contract. The carrier shall fur-

nish a complete copy of the bill of lading to the shipper

prior to the commencement of the loading of a shipment.

(b) Minimum information required on a receipt or bill

of lading. Whenever a a or bill of lading is issued

in compliance with paragraph (a), the carrier shall cause

to be included therein the following minimum information:

* * * * *

(11) The required released rates valuation statement.

49 C.F.R. Section 1307.201(c)

§ 1307.201 Released rates on household goods.

* * * * *

(c) Statement on bills of lading. The bill of lading

issued for any shipment accepted for transportation and

storage at released rates and charges established and

maintained under authority of this order, shall have

printed in distinctive color in boldface type on the face

thereof a statement reading as follows:

Unless the s»ipper expressly releases the shipment to

a value of 60 c-nts per pound per article, the carrier’s

maximum liability for loss and damage shall be either the

lump sum value declared by the shipper or an amount

equal to $1.25 for each pound of weight in the shipment,

whichever is greater.

App. 44

The release of value must be entered in the following

form directly below and immediately following the fore-

going statement, and must be completed only by the per-

son signing it.

The shipment will move subject to the rules and condi-

tions of the carrier’s tariff. Shipper hereby releases the

entire shipment to a value not exceeding

(To be completed by the person signing below)

Notice: The shipper signing this contract must insert

in the space above, in his own handwriting, either his

declaration of the actual value of the shipment, or the

words, “60 cents per pound per article.’’ Otherwise, the

shipment will be deemed released to a maximum value

equal to $1.25 times the weight of the shipment in pounds.

(Shipper)

(Date)

Provided that, Where the shipper is the employer of the

actual owner of the heneaiell 4 goods being transported

and is responsible for all transportation charges in con-

nection with such a move, the shipper may instruct the

motor carrier to release the shipment to a value of 60

cents per pound per article (a) by specification made on

a purchase order, or (b) by issuing, in advance of the ship-

ping date, appropriate letters of instructions to the car-

rier. In such instances, the motor carrier must incorporate

the instructions by reference to the document in (a) or

(b) above in the bill or lading in liev of the personal sig-

nature and handwritten statement relating to released

rates.

App. 45

49 U.S.C. Section 11707

§ 11707. Liability of common carriers under receipts and

bills of lading

(aX1) A common carrier providing transportation or ser-

vice subject to the jurisdiction of the Interstate Commerce

Commission under subchapter I, II, or IV of chapter 105

of this title shall issue a receipt or bill of lading for prop-

erty it receives for transportation under this subtitle. That

carrier and any other common carrier that delivers the prop-

erty and is providing transportation or service subject to

the jurisdiction of the Commission under subchapter I, II,

or IV are liable to the person entitled to recover under the

receipt or bill of lading. The liability imposed under this

paragraph is for the actual loss or injury to the property

caused by (1) the receiving carrier, (2) the delivering car-

rier, or (3) 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

and — to property reconsigned or diverted under a

tariff filed under subchapter IV of chapter 107 of this title.

Failure to issue a receipt or bill of lading does not affect

the liability of a carrier. A delivering carrier is deemed

to be the carrier performing the line-haul transportation

nearest the destination but does not include a carrier pro-

viding only a switching service at the destination.

(2) A freight forwarder is both the receiving and de-

livering carrier. When a freight forwarder provides ser-

vice subject to this subtitle and uses a motor common car-

rier providing transportation subject to the jurisdiction

of the Commission under subchapter II of chapter 105 of

this title to receive property from a consignor, the motor

common wrier may execute the bill of lading or shipping

receipt for the freight forwarder with its consent. With

the consent of the freight forwarder, a motor common car-

rier may deliver property for a freight forwarder on the

freight forwarder’s bill of lading, freight bill, or shipping

receipt to the consignee named in it, and receipt for the

App. 46

property may be made on the freight forwarder’s delivery

receipt.

(b) The carrier issuing the receipt or bill of lading

under subsection (a) of this section or delivering the prop-

erty for which the receipt or bill of lading was issued is

entitled to recover from the carrier over whose line or

route the loss or injury occurred the amount required to

be paid to the owners of the property, as evidenced by

a receipt, judgment, or transcript, and the amount of its

expenses reasonably incurred in defending a civil action

brought by that person.

(cX1) A common carrier may not limit or be exempt

from liability imposed under subsection (a) of this section

except as provided in this subsection. A limitation of lia-

bility or of the amount of recovery or representation or

agreement in a receipt, bill of lading, contract, rule, or

tariff filed with the Commission in violation of this sec-

tion is void.

(2) If loss or injury to property occurs while it is in

the custody of a water carrier, the liability of that car-

rier is determined by its bill of lading and the law appli-

cable to water transportation. The liability of the initial

or delivering carrier is the same as the liability of the

water carrier.

(3) A common carrier of passengers may limit its liabil-

ity under its passenger rate for loss or injury of baggage

carried on passenger trains, boats, or motor vehicles, or

on trains, or boats, or motor vehicles carrying passengers.

(4) A common carrier may limit its liability for loss or

injury of property transported under section 10730 of this

title.

(dX1) A civil action under this section may be brought

against a delivering carrier (other than a rail carrier) in

a district court of the United States or in a State court.

Trial, if the action is brought in a district court of the

United States is in a judicial district, and if in a State

court, is in a State, through which the defendant carrier

operates a railroad or route.

«tod ene ttiie BB ete

App. 47

(2XA) A civil action under this section may only be

brought—

(i) Against the originating rail carrier, in the judi-

cial district in which the point cf origin is located;

(ii) against the delivering rail carrier, in the judicial

district in which the principal place of business of the

person bringing the action is located if the deliver-

ing carrier operates a railroad or a route through

such judicial district, or in the judicial district in

which the point of destination is located; and

(iii) — the carrier alleged to have caused the

loss or damage, in the judicial district in which such

loss or damage is alleged to have occurred.

(B) A civil action under this section may be brought

in a United States district court or in a State court.

(C) In this section, “judicial district’’ means (i) in the

case of a United States district court, a judicial district

of the United States, and (ii) in the case of a State court,

the applicable geographic area over which such court exer-

cises jurisdiction.

(e) A carrier may not provide by rule, contract, or

otherwise, a period of less than 9 months for filing a claim

against it under this section and a period of less than 2

years for bringing a civil action against it under this sec-

tion. The period for bringing a civil action is computed

from the date the carrier gives a person written notice

that the carrier has disallowed any part of the claim spe-

cified in the notice. For the purposes of this subsection—

(1) an offer of compromise shal! not constitute a

disallowance of any part of the claim unless the car-

rier, in writing, informs the claimant that such part

of the claim is disallowed and provides reasons for

such disallowance; and

(2) communications received from a carrier’s in-

surer shall not constitute a disallowance of any part

of the claim unless the insurer, in writing, informs

the claimant that such part of the claim is disallowed,

App. 48

provides reason for such disallowance, and informs

the claimant that the insurer is acting on behalf of

the carrier.

(Pub.L. 95-473, Oct. 17, 1978, 92 Stat. 1453; Pub.L. 96-258,

§ 1(14), June 3, 1980, 94 Stat. 427; Pub.L. 96-296, § 26(b),

July 1, 1980, 94 Stat. 818; Pub.L. 96-448, Title II, § 211(c),

Oct. 14, 1980, 94 Stat. 1911.)

49 U.S.C. Section 10103

§ 10103. Remedies as cumulative

Except as otherwise provided in this subtitle, the rem-

edies provided under this subtitle are in addition to

remedies existing under another law or at common law.

(Pub.L. 95-473, Oct. 17, 1978, 92 Stat. 1340; Pub.L. 96-448,

Title II, § 214(cX2), Oct. 14, 1980, 94 Stat. 1915.)