This blog reported on the original Nevada Supreme Court decision in this case here earlier this month.
Nevada transportation lawyer Michael Mills of Las Vegas offers an amicus brief that argues, in essence, that we should not let a motor carrier’s bad conduct obscure clear-eyed application of the Carmack Amendment’s operative terms.
Legal doctrine take-away:
Sometimes the egregious conduct of a party can obscure the application of a statute’s actual terms.
Mr. Mills does not defend the motor carrier’s conduct here. Indeed, the defendant carrier’s conduct holding freight “hostage” on a basis not supported by the bill of lading in Dynamic Transit Company – the case on which reconsideration is sought – seems indefensible.
But what’s at stake in TIDA’s and Mr. Mills’ efforts is the consistency and uniformity of the federal statute that has governed freight loss in interstate trucking and rail since 1906. If a conversion exception to the Carmack Amendment gets traction in U.S. law, a plaintiff can evade the balance struck in 1906 between shippers’ rights and carrier liability by the simple expedient of pleading intentional wrongdoing like fraud or conversion.
Practical business take-away:
Commercially what’s at stake in the outcome here is the incremental addition of a “litigation tax” to freight rates that are already under pressure.
Losing the uniformity and consistency of the Carmack Amendment would likely create a rise in litigation risks and related costs to interstate trucking and railroad freight moves.
The Trucking Industry Defense Association is asking Nevada Supreme Court to take a second look through an amicus brief filed by Michael Mills, Esq. of Mills & Associates, Las Vegas. “The Trucking Industry Defense Association Retains Mills & Associates To Ask The Nevada Supreme Court To Rehear Its Decision Granting A “True Conversion” Exception To State Law Preemption Under The Carmack Amendment.” Write-up by Mills & Associates in “Nevada Trucking Law” blog available here.
Find the brief here, attached to Mr. Mills’ four-page motion to the Nevada Supreme Court.
Mr. Mills argues from the congressional logic of the Carmack Amendment. He presents it as providing for (nearly) strict liability in favor of shippers for damage to their freight while in a motor carrier’s or railroad’s custody. In return, he argues, Congress limited the motor carrier’s or railroad’s liability to the actual amount of economic loss occasioned by the freight loss or damage – not “consequential” damages or punitives – and it did so through a uniform federal statute that is meant to be consistent in its application regardless of the state in which a court sits.
As even casual perusal of freight damage cases will reveal plaintiffs continue to plead state common law exceptions to seek those “consequential” or punitive damages. Courts typically dismiss them according to the operative terms of the Carmack Amendment.
But this case is different. Here the court – the Supreme Court of Nevada – did not dismiss the state law claim despite facts that otherwise would have dictated application of the Carmack Amendment to the freight loss or damage.
Adoption of this “conversion” exception, Mr. Mills suggests, would upset the balanced approach to freight damage in interstate rail and motor carrier commerce that has served our economy well since 1906. This would pave the way for a proliferation of divergent state-by-state approaches.
Mr. Mills points instead to the holding of a 2007 case from the U.S. Circuit Court of Appeals for the 9th Circuit, Hall v. North American Van Lines, 476 F.3d 683 (9th Cir. 2007). Free copy available here.
Mr. Mills’ argument, and Hall v. North American Van Lines on which he relies as persuasive authority, rest on the premise that pleading of even an intentional tort such as conversion or fraud in a freight loss or damage context against an interstate motor carrier or railroad does not suffice to remove the controversy from the Carmack Amendment’s coverage.