United States: Cargo Damage Litigation

Since our last edition of the Transportation Advisor, a number of important cargo damage decisions have been decided. What follows is a brief synopsis of a few important opinions from courts around the country.

A federal court in Massachusetts ruled in a post-ICCTA case that Con-Way could not reply upon the nine month claim filing deadline in the Uniform Straight Bill of Lading or the National Motor Freight Classification, despite the fact that the claim was actually filed some 13 months after delivery. In Norpin Manufacturing Co., Inc. v. CTS Con-Way Transportation Services, Inc., the court sent out a message to motor carriers involved in post-ICCTA cargo damage litigation: make sure that the provisions of your bill of lading are in fact incorporated into the bill of lading contract. This case involved $22,000.00 in damages for the total loss of a small airplane engine. The court rejected Con-Way’s argument that the pro sticker attached to a air waybill issued by an air freight forwarder incorporated the provisions of the Uniform Straight Bill of Lading. The court held that nothing on the pro sticker alerted the shipper about the nine-month claims filing requirement.

However, the Norpin court recognized the ICCTA provision which merely requires carriers to make tariffs available for review by shippers and quoted the language of the House Conference Report on ICCTA which explained that ICCTA "is intended to return to the pre-TIRRA situation where shippers were responsible for determining the conditions imposed on the transportation of aq shipment." This will be a often-quoted phrase in the future in enforcing limitations of liability. Norpin may relieve carriers from decisions like Toldeo Ticket in which carriers are required to provide shippers with a "fair opportunity" to choose differing levels of liability in return for higher freight charges.

In the post-ICCTA world, we live and die by our documentation. Use your own bill of lading if at all possible. Review and revise your pro-stickers, bills of lading, and, perhaps, send a copy of your tariff, form bill of lading and any other documentation covering your terms of carriage to a shipper as soon as possible even if not requested.

A quick note on other decisions:

Trepel v. Roadway Express, Inc. (October 1999): The infamous damaged wood carved Baga serpent case. The Sixth Circuit Court of Appeals (Tennessee, Kentucky, Michigan and Ohio) ruled that this circuit will accept written cargo damage claims even if they do not strictly comply with the requirements of 49 C.F.R. § 1005.2. The written claim form submitted by a shipper need only substantially comply. Unlike horseshoes, at least in the Sixth Circuit, close counts.

Vidicomp Distributors, Inc. v. Watkins Motor Lines, Inc. (May, 2000): Carrier removed cargo damage case from Florida state court to federal court. Shipper moved to remand arguing that Carmack Amendment did not pre-empt its state law claims for breach of contract and negligence. The federal court denied the motion to remand and ruled that Carmack pre-empted all state laws and regulations.

Mitsui Marine v. Japan Airlines (July, 1999): Shipper sued air carrier for $162,000.00 worth of computer equipment damaged either while being trucked from Boston to New York or during air carriage to Tokyo. No evidence that damage occurred during the trucking portion of the movement. The court entered judgment in favor of the shipper based upon the Warsaw Convention limitation of $20.00 per kilo ($6,490.00); apparently, the court relied upon Article 18(3) of the Convention which deems that damage occurs in the air unless the shipper proves that the damage occurred during the ground transportation of the freight in question.