The Carmack Amendment

February 8, 2016

You’ve probably noticed the lack of regularity here. Apologies, but there are only so many hours in the day and stress has a way of shrink-wrapping them, so that an hour feels like it provided about three minutes worth of time for getting important things done.

Tuesday—Law Day, mostly, here at MRW—is upon us. Since moving is on my mind, I’m focused on the Carmack Amendment to the Interstate Commerce Act (49 U.S.C. § 1 et seq.) The law—Section 14706 of the Act—addresses the rights, duties, and liability of common carriers who cross state lines, when a freight loss occurs.

The law is named after Senator Edward Carmack (D-Tenn.), who served in the U.S. Senate from 1901-1907. He sounds like one nasty piece of work, but that was the lot of the Southern Ds, back in the day. (He got cross-wise with Ida B. Wells, an early civil rights leader, when she challenged lynching as a part of the social structure.) Anyway, his legislative accomplishment was the Carmack Amendment.

So what does the Carmack Amendment do? Simply, it federalizes the laws regarding liability for losses associated with shipping services provided by common carriers, so long as the goods travel between at least two states, even if the journey begins and ends in one state. (This notion may sound odd, but on the East Coast plenty of in-state travel involves travels through other states.)

By federalizing shipping law, the Carmack Amendment provides for uniformity. That’s a good thing, and it’s especially important when goods travel through several states and there is no way to determine when goods got damaged or went missing.

The law also creates a liability presumption. The shipper—that’s the customer—must establish that it delivered the goods to the carrier in good condition, that the goods did not arrive, or that they arrived in a damaged state, and that the loss can be measured in dollars. If the shipper meets these conditions, the carrier must prove that it was not negligent, or that something unexpected occurred which caused the loss. (Think about a Kansas tornado, a California earthquake, etc.)

So far, the Carmack Amendment advantages consumers pretty well. Alas, there’s a rub. Carriers can limit their liability for losses. How? By contract. To limit their liability carriers must have tariffs filed with the applicable federal agency, provide the shipper with options for setting value, and have the choice reflected in a writing. Of course, higher liability limits increase costs. Carriers don’t always encourage shippers to set higher values. Cost is always a factor. Minds are not focused. And, finally, most people do not appreciate how important the value-setting process will be if a loss occurs.

I have left out plenty here. Goods going to and from foreign countries may be treated differently. There are claims deadlines. And the law covers more than issues about the value of goods. For a horror story which does not relate to the issue I have focused on, ready Hall v. North American Van Lines. It’s a Ninth Circuit decision from 2007 which is properly decided under the Carmack Amendment, but it’s very hard to square the decision with any sense of fairness or justice.

So what’s the lesson? Really, really pay attention when you sign a shipping contract. Always pay attention when you sign any contract. But when you’re shipping goods and the truck will cross a state line, very strict laws apply, and judges simply don’t have the options we think they ought to have.

Too often, consumer transactions—of which moving your stuff is one that arises for most people not so often—involve form documents and the “it’s just a” justification for signing and giving the matter no more thought.

Finally, stay focused on the stress factor. Moving is a big deal, and it’s easy in that situation to “just sign here” when the carrier hands you the contract. Be careful!


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