Emerson Elec Sup Co v. Estes Express Lines

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
6-16-2006
Emerson Elec Sup Co v. Estes Express Lines
Precedential or Non-Precedential: Precedential
Docket No. 05-2654
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 05-2654
EMERSON ELECTRIC SUPPLY COMPANY
v.
ESTES EXPRESS LINES CORPORATION,
Appellant
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil No. 03-cv-00885)
District Judge: Hon. Joy F. Conti
Argued March 31, 2006
BEFORE: SMITH and COWEN, Circuit Judges,
and ACKERMAN*, District Judge
(Filed June 16, 2006)
*Honorable Harold A. Ackerman, Senior United States District
Judge for the District of New Jersey, sitting by designation.
Lawrence J. Roberts, Esq. (Argued)
249 Catalonia Avenue
Coral Gables, FL 33134
Counsel for Appellant
William A. Gray, Esq.
Dennis J. Kusturiss, Esq. (Argued)
Vuono & Gray
2310 Grant Building
Pittsburgh, PA 15219
Counsel for Appellee
OPINION
COWEN, Circuit Judge.
Estes Express Lines Corporation (“Estes”) appeals the
order of the district court granting summary judgment in favor of
Emerson Electrical Supply Co. (“Emerson”) requiring Estes to
pay for the full value of damaged electrical equipment it
transported pursuant to the Carmack Amendment, 49 U.S.C. §
14706. The district court held that the recent legislative changes
to the Carmack Amendment did not eliminate the requirement
that a carrier such as Estes provide a shipper with a fair
opportunity to choose between two or more different rates with
corresponding levels of liability. The court concluded that Estes
could not limit its liability pursuant to its tariff because it failed
to provide Emerson two or more different rates. We will affirm.
I.
Emerson is a distributor and seller of electrical equipment
produced by various manufacturers, including OEM, Inc.
(“OEM”). Electrical Component Sales, Inc. (“ECS”) is a
distributor for OEM and provides technical and engineering
2
services to Emerson’s customers. Estes is a licensed and
authorized motor carrier that transports goods in interstate
commerce.
Emerson received a purchase order from Sharon Tube
Company for electrical equipment manufactured by OEM. The
total price of the equipment was $158,360.00. The shipping
arrangements were made by Keith Rypczyk, an employee of
ECS. Rypcyzk called Estes to request a quotation for
transporting the equipment. Rypcyzk informed Estes that the
shipment would consist of four pieces of electrical switch gears,
and he provided the approximate dimensions and weight of each
piece. Estes sent Rypczyk a fax quoting a shipping price of
$450. Estes did not inform Rypcyzk of other shipping rates with
corresponding levels of liability if the equipment were to be
damaged in transit.1
Pursuant to Rypcyk’s instructions, Estes picked up the
electrical equipment from OEM. The shipment consisted of four
uncrated, shrink-wrapped pallets and two packages of lifting
angles. OEM produced and signed a bill of lading that stated the
shipper agreed to the terms and conditions set forth in the tariff
governing the shipment. Pursuant to the bill of lading, the
classification of the shipment was class 77.5. The bill of lading
contained a declared value section that provided:
NOTE: Where the rate is dependent on value,
shippers are required to state specifically in writing
the agreed or declared value of the property. The
agreed or declared value of the property is hereby
specifically stated by the shipper to be not
exceeding $ ____ per ____.
(A2 173-74 ¶ 12.) OEM left the declared value spaces blank.
1
Estes did inform Rypcyzk that the “LTL” rate might apply
if the shipper did not reference the quotation number Estes
provided. The record does not explain what the LTL rate is and
whether it would affect Estes’s level of liability.
3
After OEM signed the bill of lading, Estes’s driver
affixed a pro sticker on the bill of lading that stated: “Driver’s
signature acknowledges receipt of freight only. Terms of
EXLA-105 Rules Tariff apply.” (A2 173 ¶ 8.) With respect to
uncrated, new equipment, Tariff EXLA-105 provided:
If the shipper fails or declines to release the value
of the property to a value not exceeding 10 cents
per pound, or designates a value exceeding 10
cents per pound, shipment will not be accepted, but
if a shipment is inadvertently accepted, it will be
considered as being released to a value of 10 cents
per pound and the shipment will move subject to
such limitations of liability.
(A2 199.) If the goods were crated, the tariff provided that class
77.5 shipments were limited to a maximum value of $7.90 per
pound.
The electrical equipment was damaged during shipment.
On January 13, 2003, Emerson filed a cargo claim with Estes for
$140,000.00. In response to the cargo claim, Estes sent a letter
to Emerson stating that its liability was limited to ten cents per
pound, or $1,020.00, based on Estes’s Tariff EXLA 105-H.
Emerson then commenced an action in the district court to
recover the full amount of the damaged shipment pursuant to the
Carmack Amendment, 49 U.S.C. § 14706. Estes moved for
partial summary judgment to limit its liability to $1,020.00
pursuant to the tariff limitations. Emerson filed a cross motion
for summary judgment contending that the equipment was in
good condition when the equipment was given to Estes for
transport, and Estes did not effectively limit its liability by
offering alternative valuations at different rates.
On June 29, 2004, the district court denied Estes’s motion
for partial summary judgment to limit liability. The district court
held that the legislative changes to the Carmack Amendment did
not alter the requirement that a carrier offer a shipper two or
more levels of liability. It also found that Estes failed to offer
4
Emerson two or more rates with corresponding levels of liability.
The district court denied Emerson’s motion for summary
judgment without prejudice stating that it failed to offer any
evidence that the goods were given to Estes in good condition.
On August 26, 2004, Emerson filed a second motion for
summary judgment contending that the equipment was in good
condition. The district court granted the motion and entered a
judgment against Estes and in favor of Emerson for
$145,192.80.
II.
The district court had jurisdiction under 28 U.S.C. §
1331, and we exercise appellate review pursuant to 28 U.S.C. §
1291. Our review of a grant of summary judgment is plenary.
See Gilles v. Davis, 427 F.3d 197, 203 (3d Cir. 2005).
The first issue we will consider is whether recent
legislative changes to the Carmack Amendment permit a carrier
to limit its liability for damaged goods without offering the
shipper two or more rates with corresponding levels of liability.
To address this issue, we delve into release value agreements
under the common law, legislative changes made to the Carmack
Amendment, and courts’ interpretations of the Carmack
Amendment.
Release Value Agreements Under the Common Law
At common law, a carrier’s liability for goods damaged in
transit was virtually unlimited.2 Nor was a carrier permitted to
exculpate itself from liability for its negligent acts. See First Pa.
Bank, N.A. v. E. Airlines, Inc., 731 F.2d 1113, 1116 (3d Cir.
2
A carrier was liable to the shipper for the full extent of
damage to the goods it transported unless the damage was caused
by an act of God, a public enemy, the shipper, public authority, or
the inherent vice or nature of the goods themselves. See Missouri
Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137 (1964).
5
1984). It could, however, limit its liability for damaged or lost
goods pursuant to a release value agreement. See id. Under a
release value agreement, a carrier and shipper agreed to a
reduced value of the goods in exchange for a reduced shipping
rate. See Union Pac. R.R. v. Burke, 255 U.S. 317, 321 (1921).
Courts would enforce these release value agreements as long as
the carrier gave the shipper the alternative of paying a higher rate
in exchange for greater carrier liability. See id. If a carrier failed
to provide the shipper with a reasonable opportunity to pay a
higher shipping rate in exchange for greater carrier liability, then
the carrier would be liable for the actual true value of the
damaged or lost property. See First Pa. Bank, N.A., 731 F.2d at
1117.
In 1887, Congress passed the Interstate Commerce Act to
regulate transportation. Congress established the Interstate
Commerce Commission (“ICC”), an independent regulatory
agency, to administer the act. S. R EP. No. 104-176, at 2 (1995).
The ICC initially regulated the railroad industry by requiring
rates to be “reasonable and just” and prohibited certain railroad
practices, such as rate discrimination, price fixing, and rebating.
Id. Congress gradually expanded the authority of the ICC by
allowing it to regulate other modes of transportation, including
the truck and bus industries. Id. at 2-3.
Initially, the Interstate Commerce Act did not contain a
provision concerning the liability of carriers for loss or damage
to goods. It was also silent on whether carriers could exempt
themselves from liability or limit their liability pursuant to an
agreement in the bill of lading or elsewhere. 3 S AUL S ORKIN,
G OODS IN T RANSIT §13.02, at 13-16.1 (2005).
In 1906, Congress addressed carrier liability in the
Carmack Amendment, which provided in pertinent part:
That any common carrier, railroad, or
transportation company receiving property for
transportation from a point in one State to a point
in another State shall issue a receipt or bill of
lading therefor and shall be liable to the lawful
6
holder thereof for any loss, damage, or injury to
such property caused by it . . . and no contract,
receipt, rule or regulation shall exempt such
common carrier, railroad, or transportation
company from the liability hereby imposed.
Act of June 29, 1906, ch. 3591, § 7, 34 Stat. 593 (1906).
In Adams Express Co. v. Croninger, 226 U.S. 491 (1913),
the United States Supreme Court considered whether the
Carmack Amendment prohibited a carrier from limiting its
liability by providing a choice of freight rates and corresponding
levels of liability in its bill of lading. In Croninger, a diamond
ring was lost during shipment. The limitation of liability
provision in the bill of lading provided that the carrier would not
be held liable for more than fifty dollars unless a greater value
was declared. The Court interpreted the Carmack Amendment as
a codification of the common law and held that a carrier and
shipper were still permitted to enter release value agreements.
See id. at 508-12; see also Peyton v. Ry. Express Agency, 316
U.S. 350, 351 (1942) (noting that the Supreme Court upheld the
power of a carrier to enter into release value agreements
following the Carmack Amendment).
Overview of Legislative Changes to the Carmack
Amendment
After the Supreme Court’s decision in Croninger,
Congress passed the first Cummins Amendment, 38 Stat. 1196
(1915), which prohibited all released rate arrangements except
when the goods were concealed by packaging and the character
of the goods was unknown to the carrier. See Shippers Nat’l
Freight Claim Council, Inc. v. I.C.C., 712 F.2d 740, 748 n.6 (3d
Cir. 1983). Finding the first Cummins Amendment too
restrictive, Congress passed the second Cummins Amendment,
39 Stat. 441 (1916), which substantially restored the common
law rule expressed in Croninger. See Peyton, 316 U.S. at 352.
Pursuant to the second Cummins Amendment, a carrier could be
authorized “by order of the Interstate Commerce Commission to
establish and maintain rates dependent upon the value declared in
7
writing by the shipper or agreed upon in writing as the released
value of the property.” Howe v. Allied Van Lines, Inc., 622 F.2d
1147, 1149 (3d Cir. 1980) (quoting previous version of the
Carmack Amendment, 49 U.S.C. § 20(11)).3 The ICC would
3
After the passage of the Cummins Amendments, the
Carmack Amendment, 49 U.S.C. § 20(11), provided in pertinent
part:
Any common carrier * * * subject to the provisions
of this chapter receiving property for transportation
from a point in one State * * * to a point in another
State * * * shall issue a receipt or bill of lading
therefor, and shall be liable to the lawful holder
thereof for any loss, damage, or injury to such
property caused by it * * * and no contract, receipt,
rule, regulation, or other limitation of any character
whatsoever shall exempt such common carrier * * *
from the liability hereby imposed; and any such
common carrier * * * shall be liable to the lawful
holder of said receipt or bill of lading or to any party
entitled to recover thereon, whether such receipt or
bill of lading has been issued or not, for the full
actual loss, damage, or injury to such property
caused by it * * * , notwithstanding any limitation of
liability or limitation of the amount of recovery or
representation or agreement as to value in any such
receipt or bill of lading, or in any contract, rule,
regulation, or in any tariff filed with the Interstate
Commerce Commission; and any such limitation,
without respect to the manner or form in which it is
sought to be made is hereby declared to be unlawful
and void: * * * Provided, however, That the
provisions hereof respecting liability for full actual
loss, damage, or injury, notwithstanding any
limitation of liability or recovery or representation or
agreement or release as to value, and declaring any
such limitation to be unlawful and void, shall not
apply * * * to property * * * received for
8
authorize such rates listed in the carrier's tariff if it found the
rates to be just and reasonable. See 3 S ORKIN § 13.02[1], at 13-
19.
In 1978, Congress passed the Revised Interstate
Commerce Act, Pub. L. No. 95-473, 92 Stat. 1337 (1978), which
recodified the Carmack Amendment. The expressed legislative
intent was to restore without substantive change the applicable
laws enacted prior to May 16, 1978. See id. The provisions
concerning released rates originally found in 49 U.S.C. § 20(11)
were codified at 49 U.S.C. § 10730. See Shippers Nat’l Freight
Claim Council, Inc., 712 F.2d at 742 n.2. Similar to § 20(11), §
10730 provided:
The Interstate Commerce Commission may require
or authorize a carrier providing transportation or
service subject to its jurisdiction . . . to establish
rates for transportation of property under which the
transportation concerning which the carrier shall
have been or shall be expressly authorized or
required by order of the Interstate Commerce
Commission to establish and maintain rates
dependent upon the value declared in writing by the
shipper or agreed upon in writing as the released
value of the property, in which case such declaration
or agreement shall have no other effect than to limit
liability and recovery to an amount not exceeding the
value so declared or released, and shall not, so far as
relates to values, be held to be a violation of section
10 of this chapter; and any tariff schedule which may
be filed with the commission pursuant to such order
shall contain specific reference thereto and may
establish rates varying with the value so declared and
agreed upon.
Caten v. Salt City Movers & Storage Co., 149 F.2d 428, 431 (2d
Cir. 1945) (citing the version of the Carmack Amendment after
Congress passed the Cummins Amendments).
9
liability of the carrier for that property is limited to
a value established by written declaration of the
shipper, or by a written agreement, when that value
would be reasonable under the circumstances
surrounding the transportation.
49 U.S.C. § 10730 (1979). This provision applied to all
interstate common carriers of property, other than water carriers.
See Shippers Nat’l Freight Claim Council, Inc., 712 F.2d at 742.
Congress then amended § 10730 with the Motor Carrier
Act of 1980, Pub. L. No. 96-296, 94 Stat. 793 (July 1, 1980).
Section 12 of the Motor Carrier Act divided § 10730 into two
subsections. Subsection (a) consisted of the prior § 10730 but
was made inapplicable to motor carriers of nonhousehold
property. The new subsection (b) allowed a motor carrier of
nonhousehold property to establish released rates without prior
approval of the ICC, but permitted the ICC to require the carrier
to have in effect full liability rates as well.4 See id.
4
Section 10730, as amended by the Motor Carrier Act of
1980, provided:
(a) The Interstate Commerce Commission may
require or authorize a carrier (including a motor
common carrier of household goods but excluding
any other motor common carrier of property and
excluding any rail carrier) providing transportation
or service subject to its jurisdiction . . . 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 declaration of the
shipper, or by a written agreement, when that value
would be reasonable under the circumstances
surrounding the transportation . . . .
(b)(1) Subject to the provisions of paragraph (2) of
this subsection, a motor common carrier providing
transportation or service subject to the jurisdiction of
10
the Commission . . . may, subject to the provisions of
this chapter (including, with respect to a motor
carrier, the general tariff requirements of section
10762 of this title), establish rates for the
transportation of property (other than household
goods) under which the liability of the carrier . . . for
such property is limited to a value established by
written declaration of the shipper or by written
agreement between the carrier and . . . shipper if that
value would be reasonable under the circumstances
surrounding the transportation.
(2) Before a carrier . . . may establish a rate for any
service under paragraph (1) of this subsection, the
Commission may require such carrier . . . to have in
effect and keep in effect . . . a rate for such service
which does not limit the liability of the carrier . . . .
Shippers Nat’l Freight Claim Council, Inc., 712 F.2d at 743
(quoting former version of Carmack Amendment, 49 U.S.C. §
10730).
Section 10762 provided in relevant part:
General tariff requirements
(a)(1) A carrier providing transportation or service
subject to the jurisdiction of the Interstate Commerce
Commission under chapter 105 of this title (except a
motor common carrier) shall publish and file with
the Commission tariffs containing the rates and (A)
if a common carrier, classifications, rules, and
practices related to those rates, and (B) if a contract
carrier, rules and practices related to those rates,
established under this chapter for transportation or
service it may provide under this subtitle.
Comsource Indep. Food Serv. Co. v. Union Pac. R.R., 102 F.3d
11
In enacting subsection (b), Congress sought to deregulate
transportation services and allow released value rates to foster
more competition in prices. H.R. R EP. No. 96-1069, at 26
(1980), as reprinted in 1980 U.S.C.C.A.N. 2283, 2308; S. R EP.
No. 104-176, at 10 (1995).
Congress then passed the Trucking Industry Regulatory
Reform Act of 1994, (“TIRRA”), Pub. L. No. 103-311, 108 Stat.
1673, 1684-85, which eliminated the requirement that
nonhousehold good carriers file a tariff containing rates with the
ICC. Next, Congress passed the ICC Termination Act of 1995
(“ICCTA”) which replaced § 10730 with § 14706. Under the
ICCTA, motor carriers and freight forwarders can establish rates
for the transportation of property, other than household goods,
under which the liability of the carrier is limited to a value
established by written or electronic declaration of the shipper or
by written agreement. As to motor carriers, the rate must be
reasonable. The Surface Transportation Board, which replaced
the ICC, is authorized to determine reasonableness. 3 S ORKIN §
13.02[3], at 13-20.2-13-21.
Federal Courts’ Interpretation of the Carmack
Amendment
In Carmana Designs Ltd. v. North American Van Lines,
Inc., 943 F.2d 316 (3d Cir. 1991), this Court noted that a carrier’s
ability to “limit [its] liability is a carefully defined exception to
the Carmack Amendment’s general objective of imposing full
liability for the loss of shipped goods; courts, thus, carefully
scrutinize agreements purporting to limit such liability.” Id. at
319. Prior to the enactment of the TIRRA and the ICCTA, a
carrier had to satisfy four requirements before it could limit its
liability under the Carmack Amendment:
(1) maintain a tariff within the prescribed
438, 443 n.10 (9th Cir. 1996) (quoting previous section of
Interstate Commerce Act, 49 U.S.C. § 10762).
12
guidelines of the Interstate Commerce
Commission; (2) obtain the shipper’s agreement as
to [the shipper’s] choice of liability; (3) give the
shipper a reasonable opportunity to choose between
two or more levels of liability; and (4) issue a
receipt or bill of lading prior to moving the
shipment.
Carmana Designs Ltd., 943 F.2d at 319; Am. Cyanamid Co. v.
New Penn Motor Express, Inc., 979 F.2d 310, 313 (3d Cir.
1992); accord Hughes Aircraft Co. v. North Am. Van Lines, Inc.,
970 F.2d 609, 611-12 (9th Cir. 1992); Norton v. Jim Phillips
Horse Transp., Inc., 901 F.2d 821, 827 (10th Cir. 1989); Hughes
v. United Van Lines, Inc., 829 F.2d 1407, 1415 (7th Cir. 1987).
The carrier had the burden of establishing these requirements.
See Carmana Designs Ltd., 943 F.2d at 319.
In the present case, Estes contends that the third
requirement that a carrier offer a shipper two or more levels of
liability is no longer mandated pursuant to the ICCTA. Prior to
the ICCTA, the liability limiting provisions under § 10730 of the
Carmack Amendment provided in pertinent part:
(b)(1) [A] motor common carrier . . . may . . .
establish rates for the transportation of property . . .
under which the liability of the carrier . . . for such
property is limited to a value established by written
declaration of the shipper or by written agreement
between the carrier and . . . shipper if that value
would be reasonable under the circumstances
surrounding the transportation.
(2) Before a carrier . . . may establish a rate for any
service under paragraph (1) of this subsection, the
Commission may require such carrier . . . to have in
effect and keep in effect . . . a rate for such service
which does not limit the liability of the carrier . . . .
49 U.S.C. § 10730(b).
13
Subsequent to the ICCTA, the liability limiting provisions
of the Carmack Amendment now state:
(c) Special rules.--
(1) Motor carriers.--
(A) Shipper waiver.--Subject to the provisions of
subparagraph (B), a carrier providing
transportation or service . . . may, subject to the
provisions of this chapter (including with respect to
a motor carrier, the requirements of section
13710(a)), establish rates for the transportation of
property (other than household goods described in
section 13102(10)(A)) under which the liability of
the carrier for such property is limited to a value
established by written or electronic declaration of
the shipper or by written agreement between the
carrier and shipper if that value would be
reasonable under the circumstances surrounding
the transportation.
(B) Carrier notification.--If the motor carrier is not
required to file its tariff with the Board, it shall
provide under section 13710(a)(1) to the shipper,
on request of the shipper, a written or electronic
copy of the rate, classification, rules, and practices
upon which any rate applicable to a shipment, or
agreed to between the shipper and the carrier, is
based. The copy provided by the carrier shall
clearly state the dates of applicability of the rate,
classification, rules, or practices.
49 U.S.C. § 14706.5
5
Section 13710(a)(1) provides:
Additional billing and collecting practices
(a) Miscellaneous provisions
14
Estes contends that 49 U.S.C. § 10730(b)(2) codified the
release value doctrine, and the ICCTA’s deletion of §
10730(b)(2) indicates Congress’s intent to no longer require
carriers to offer two or more levels of liability. We disagree with
Estes’s argument. Congress is presumed to know the federal
courts’ interpretation of a statute that it intends to amend. See
Ankenbrandt v. Richards, 504 U.S. 689, 700 (1992). “[C]ourts
presume that Congress will use clear language if it intends to
alter an established understanding about what a law means; if
Congress fails to do so, courts presume that the new statute has
the same effect as the previous version.” Firstar Bank, N.A. v.
Faul, 253 F.3d 982, 988 (7th Cir. 2001) (citing Cottage Savs.
Ass'n v. Comissioner, 499 U.S. 554, 562 (1991)). As noted
above, carriers have consistently been permitted to limit their
liability subsequent to the second Cummins Amendment through
a written declaration of the shipper or by a written agreement
between the shipper and carrier. In addition to the statutory
requirement of a written agreement between the carrier and
shipper, federal courts have required a carrier to offer a shipper
two or more rates with corresponding levels of liability in order
for a limitation of liability provision to be enforceable.
Consistent with prior versions of the Carmack Amendment, the
ICCTA permits a carrier to limit its liability through a shipper's
written declaration or a written agreement. The ICCTA does not
contain clear language altering the courts' additional requirement
that a carrier offer two or more rates with two or more levels of
liability. At most, the deletion of §10730(b)(2) indicates
(1) Information relating to basis of rate.--A motor
carrier of property (other than a motor carrier
providing transportation in noncontiguous domestic
trade) shall provide to the shipper, on request of the
shipper, a written or electronic copy of the rate,
classification, rules, and practices, upon which any
rate applicable to its shipment or agreed to between
the shipper and carrier is based.
49 U.S.C. § 13710.
15
Congress's intent to deregulate the motor carrier industry and to
abolish the ICC.
Moreover, the ICCTA’s legislative history does not reveal
a congressional intent to alter the two or more levels of liability
requirement. Because the ICCTA and its legislative history do
not express an intent to alter the two or more levels of liability
requirement, we hold that a carrier must continue to offer two or
more rates with corresponding levels of liability in order to
successfully limit its liability pursuant to the Carmack
Amendment.6
Further buttressing our holding is the decision by the
Court of Appeals for the Eleventh Circuit in Sassy Doll
Creations, Inc. v. Watkins Motor Lines, Inc., 331 F.3d 834, 841
(11th Cir. 2003). In Sassy Doll, the Eleventh Circuit considered
whether the TIRRA and ICCTA altered the requirement that a
carrier provide a shipper with a reasonable opportunity to choose
between two or more levels of liability. The Eleventh Circuit
stated:
The statutory language concerning liability “limited
to a value established by written or electronic
declaration of the shipper or by written agreement
between the carrier and shipper," 49 U.S.C.
14706(c)(1)(A), is identical in all material respects
6
We also note that the four-prong test in Carmana Designs
Ltd. has been altered pursuant to the TIRRA and the ICCTA. As
to the first prong, the Surface Transportation Board (“STB”)
replaced the ICC. Tariffs need only be filed with the STB in
certain circumstances for the transportation of property in non-
contiguous trade and household goods. See 49 U.S.C. § 13702(a).
For carriers that are not required to file tariffs, they must still
“provide to the shipper, on request of the shipper, a written or
electronic copy of the rate, classification, rules, and practices, upon
which any rate . . . is based.” 49 U.S.C. § 13710(a). The
requirements under the second and fourth prongs continue to exist.
16
in the current and previous versions of the
Carmack Amendment. . . . Notwithstanding the
amendments to the Carmack Amendment, a carrier
wishing to limit its liability is still required to give
the shipper a reasonable opportunity to choose
between different levels of liability.
Id. at 841-42.
Declared Value Box
In the alternative, Estes contends that the presence of a
declared value box in the bill of lading satisfied the two or more
levels of liability requirement. We disagree. In cases where the
presence of a declared value box satisfied the carrier's obligation
to offer two or more levels of liability, the tariff provided the
shipper an option to declare a higher value with a corresponding
level of liability. See, e.g., Nat'l Small Shipments Traffic
Conference, Inc. v. United States, 887 F.2d 443, 444 (3d Cir.
1989) (noting that shipper will be insured at lowest rate
permitted in tariff if shipper leaves declared value box blank
when tariff provided shipper an option to declare a higher value);
Hollingsworth & Vose Co. v. A-P-A Transp. Corp., 158 F.3d
617, 619 (1st Cir. 1998) (noting that carrier provided shipper
with two or more levels of liability because tariff provided for a
maximum liability of 10 cents per pound "unless the shipper
declare[d] otherwise"). Estes's tariff limited its liability to ten
cents per pound regardless of whether the shipper declared a
higher value or left the declared value box blank in the bill of
lading. Because the tariff did not provide an option to declare a
higher value with a corresponding level of liability, Estes failed
to meet the two or more levels of liability requirement.
Different Levels of Liability for Different Types of
Packaging
Estes finally argues that it offered two or more levels of
liability because different limitations of liability were offered
depending on how the shipment was packaged. Estes asserts that
an uncrated shipment had a .10 per pound limitation of liability
17
while a crated shipment designated as a class 77.5 had a $7.90
per pound limitation of liability. We are not persuaded. To
satisfy the two or more levels of liability requirement, a carrier
must offer two or more shipping rates with corresponding levels
of liability for one type of shipment. See New York, New Haven
& Hartford R.R. v. Nothangle, 346 U.S. 128, 134 (1953)
(“[O]nly by granting its customers a fair opportunity to choose
between higher or lower liability by paying a correspondingly
greater or lesser charge can a carrier lawfully limit recovery to an
amount less than the actual loss sustained.”); Union Pac. R.R. v.
Burke, 255 U.S. 317, 323 (1921) (refusing to uphold carrier’s
limitation of liability provision because carrier failed to offer
shipper two or more rates with corresponding levels of liability).
Estes failed to establish that it provided a choice of rates for
uncrated goods with corresponding levels of liability.
III.
For the foregoing reasons, the judgment of the District
Court entered on April 1, 2005, will be affirmed.
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