MOTOR CARRIERS & BROKERS (CARMACK) – Gazillionth decision ruling that a “broker” is not a “motor carrier” under 49 U.S. Code § 13102, and that the Carmack Amendment (49 U.S. Code § 14706) applies only to the latter and not to the former. But note how ridiculous is the plaintiff shipper’s argument that § 13102(23)(B)’s definition of “transportation” extends to the mere “arranging for [movement of] … property”. Such arguments continue to be offered, and, as here, no mention of sanctions on the party who wasted the court’s and other litigants’ time on them.

Infinity Air, Inc. v. Echo Global Logistics, Inc., No. 3:13-cv-00307-MO (U.S. District Court for the District of Oregon, June 20, 2013). Court-issued opinion available here.

Note Court’s analysis in its Footnote 1 of plaintiff’s argument that a “broker” can be a “motor carrier” through the plaintiff’s tortured reading of the definition of “transportation” per § 13102(23)(B)’s definition of “transportation”, i.e., that “transportation” extends to the mere “arranging for [movement of] … property” – therefore by that logic a “broker” is also a “motor carrier”:

“The definition of ‘transportation’ does not alter my analysis. Section 13102(23)(B) states that ‘transportation’ includes ‘services related to [the] movement [of passengers or property], including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, handling, packing, unpacking, and interchange of passengers and property.’ If the definition of ‘motor carrier’ incorporated the definition of ‘transportation’ and extended to any person ‘arranging for [the movement of] . . . property,’ brokers would cease to exist under the Act. I decline to read the definition of ‘motor carrier’ in a way that renders the definition of ‘broker’ meaningless. Applying the canon of statutory construction noscitur a sociis, I interpret the general term ‘arranging for’ to be similar to the other specific terms in the series, which all relate to the conduct of the actual transporter. Because Echo did not ‘arrange for’ the movement of property in this more limited sense, it is a broker rather than a motor carrier under the Act.”

CARMACK AMENDMENT (LIABILITY LIMITATIONS) / Shipper claimed damage in transit to $1.3 million transformer by CSX Transportation (railroad) and sued under the Carmack Amendment; railroad raised defense of bill of lading language purporting to limit railroad’s liability to $25,000 – U.S. Court of Appeals for the 4th Circuit looked to (1) bill of lading and (2) railroad’s 12-page “CSX Price List 4605” setting forth numerous rules relating to railroad’s transport of machinery and held: Reversed district court’s ruling that $25,000 limit applied, holding that railroad did not offer limiting language consistent with Carmack Amendment, thereby subjecting the railroad to full liability under the Carmack Amendment.

ABB, Inc. v. CSX Transportation, Inc., No. 12-1674 (U.S. Court of Appeals for the 4th Circuit, June 7, 2013). Copy of court-issued opinion available here.

What amounts to a “master class” in Carmack Amendment analysis with respect to Carmack Amendment’s exacting requirements regarding liability limitation. 

REMARKS / Court case deciding pretrial motion about what evidence should be allowed at upcoming trial relating to damage to freight – one issue: Does parking a truck rig on consignee railroad’s tracks amount to “delivery” under Carmack? Comment: Seriously? “Delivery?” Isn’t this claim more like the drunk who denied smoking in bed: “It was on fire BEFORE I got into it”. Well … I think the point here is not that “delivery” (if it was that) was well done, but that it happened in any way, shape or form.

Union Pacific Railroad Company v. Beemac Trucking LLC, 8:11CV8 (U.S. District Court for the District of Nebraska, April 30, 2013. Copy of court-issued opinion available here.

See this week’s blog post here.

REMARKS – Plaintiff shipper’s contract and tort claims against broker who arranged motor carrier shipment in which plaintiff’s freight (a machine) was damaged was NOT PREEMPTED by the Carmack Amendment because that statute does not cover actions by a broker. COMMENT: The basics of Carmack Amendment’s coverage remain the subject of confusion and – as here – unnecessary litigation.

ATLAS Aerospace LLC v. Advanced Transportation, Inc., Case No. 12-1200-JWL (U.S. District Court for the District of Kansas, April 24, 2013). Free copy from the court available here.

Legal Take-Away:

The legal take-away is entirely unremarkable. A simple reading of the Carmack Amendment (49 U.S. Code § 14706) reveals that the Carmack Amendment does not apply to a “broker” but instead to a “carrier”.

Applicable “broker” and “carrier” definitions (49 U.S. Code § 13102) are mutually exclusive.

Practical Take-Away:

Non lawyers should assure themselves that counsel understand transportation law before paying them to bring expensive litigation.

Lawyers should know what they are doing before they file pleadings.

Not to be snarky, but there is no excuse for any lawyer bringing a lawsuit against a “broker” under the Carmack Amendment, or with Carmack Amendment defenses being raised with respect to the actions of a “broker”. 

FREIGHT LOSS STATUTE (CARMACK) / Subcontractor held liable to shipper’s insurer for collision damage where insurer brought suit as subrogee against motor carrier and carrier’s subcontractors: (1) Carmack did not extend carrier’s limitation on liability to third-party contractors; and (2) federal law of bailment did not extend shipping contract limitation did not extend bailee’s limitation to bailee’s sub-bailees.

Extension of liability limitations in shipper-carrier contract to third-party subcontractors was entirely a function of contract language that would express parties’ intent to that end – or the lack of such language.

Royal & Sun Alliance Ins., PLC v. International Management Services Co., Inc., — F.3d —, 2013 WL 57847 (U.S. Court of Appeals for the 2nd Circuit, January 7, 2013). Free copy available here.


“I. Carmack Amendment Continue reading

REMARKS: “MOTOR CARRIER & “TRUTH-IN-LEASING” / Federal statute (49 U.S.C. § 14704) gives “a person injured” by violation of the “Truth-in-Leasing” regulations (49 C.F.R. § 376.12 / “Written Lease Requirements”) a private right of action in court to recover money damages from the offending “carrier” or “broker”. Here court found an issue of fact to be sent to the jury or to the court as trier of fact: Should an individual defendant’s actions be ascribed to an “agent” (not covered by the statute) or a “carrier (covered by the statute)?”

From New Rules & Decisions week of December 17, 2012.

Mervyn v. Nelson Westerberg, Inc., 2012 WL 6604492 (U.S. District Court for the Northern District of Illinois, December 17, 2012). Free copy available here.


A straightforward reading of 49 U.S.C. § 14704 (“Rights and remedies of persons injured by carriers or brokers”) [free copy available here] makes clear that its remedies are available only to a “carrier” or a “broker”.

And each of those terms is defined in the statute. 49 U.S.C. § 13102 [free copy available here].

What is significant here is that the defendants collectively organized their business in such a way as to muddy the proverbial waters as to what they actually were under the “agent” versus “carrier” headings.

As a result, the motion to dismiss on grounds that the statute did not offer a remedy against a defendant that was neither a “carrier” nor a “broker” – the defendant organization had so organized itself that the acts of an “agent might be attributed also to a “carrier”.

As a result this case proceeds in the direction of trial on the issue of whether or not the defendants or one of them constituted a “carrier” against whom a private right of action under 49 U.S.C. § 14704 will provide a remedy.

Legal take-away & Practical take-away: 

In some circumstances it can be a good thing for a defendant in the trucking business to Continue reading

FREIGHT LOSS / Held: (1) Named ship itself was liable in rem under pre-COGSA/pre-Harter maritime law for damage to freight here, and (2) named ship itself was liable as a “carrier” for damage to freight here as well. On this second point American courts differ – but same legal conclusion whether either (a) court applies bill of lading’s Clause Paramount that applies Hague-Visby Rules, or (b) court concludes that COGSA applies.

Man Ferrostaal, Inc. v. M/V Akili, 2012 WL 6050643 (U.S. Court of Appeals for the 2nd Circuit, December 6, 2012. Free copy available here.

Who is affected? Shippers and carriers of freight by ocean ship where the load is lost or damaged.   Continue reading

FREIGHT LOSS / Shipment of plasma from Baxter Healthcare in Kentucky to Vienna, Austria. Shipper/Baxter (through contractor) issued “sea waybill between Baxter and [ocean carrier] for shipment from Kentucky to Vienna, Austria. Freight destroyed in motor carrier accident en route to ocean port and ocean carrier in Port of Norfolk, Virginia for transit by sea. Held: COGSA, not Carmack, governed.

Royal & sun Alliance Insurance, PLC v. Service Transfer, Inc., 2012 WL 6028991 (U.S. District Court for the Southern District of New York, December 4, 2012. Free copy available here.

Who is affected? Shippers and carriers of freight by ocean ship where the load is lost or damaged during motor carrier leg to ocean port where bill of lading is a “through” one to foreign, trans-ocean destination. Continue reading

FREIGHT LOSS / Freight destroyed in motor carrier accident. Holding #1: Whether or not Carmack governed depended on the factual question of whether defendant was acting as a “carrier” or “broker” under 49 U.S.C. § 13102; Holding #2: If defendant acted as “broker”, then complaint claims for “negligent hiring” of carrier might apply to its selection of the motor carrier that had the accident.

Viasystems Technologies Corp. v. Landstar Ranger, Inc., 2012 WL 6020015(U.S. District Court for the Eastern District of Wisconsin, December 3, 2012. Free copy available here.

Who is affected? Shippers and carriers of freight by motor carrier where the load is lost or damaged.

Rulings in context of motion for summary judgment.

FREIGHT LOSS (CARMACK & COGSA) / Where (1) shipper hired ocean carrier to transport freight from Kentucky to Brazil; (2) ocean carrier acting through its freight forwarder issued “through” bill of lading; and (3) train wreck destroyed freight en route to U.S. seaport, held: (a) Carmack did not govern railroad’s liability because bill of lading was maritime in character, (b) railroad was not “receiving carrier”, and (c) shipper’s freight forwarder had opted against accepting railroad’s offer of assuming Carmack liability before shipment began.

Norfolk Southern Railway Co. v. Sun Chemical Corp., 2012 WL 5951501 (Georgia Court of Appeals, November 29, 2012). Free copy available here.

Who is affected? Multi-modal shippers by ocean and land. Railroads. Freight forwarders arranging such freight moves.

This blogger begins each transportation course at The John Marshall Law School with the cases featured here: Norfolk Southern R. Co. v. Kirby, 543 U.S. 14; and Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., 130 S.Ct. 2433.

The Georgia Court of Appeals opinion here is a marvelous review in a setting where the freight move begins in the U.S. and is destined for abroad – rather than the other way around as is the case with the preceding two cases.