karmic commitment in which the freight that was being transported was exempted from the karmic amendment by the surface transportation board and to railroads have been held liable in the car mecca mehmet despite having a contract with their take mr keene and how much is at stake if the court erred in treating this as a karmic matter if the court erred in treating this as a about carmack it's that's it it's correct they went all in on karma now i thought it was extraordinary but the complaint was a little unclear to me but at that point that's what we had and the judge reminded the parties of this fact several times as the case progressed that this is just a karmic case and in fact when the when the court denied the defendants rule fifty motion following trial the court again said this was a karmic case and this is what we presented to the jury in this is what the jury found so what we have before us here is just a legal issue of do they have standing to assert such claims now there are a number of problems they mentioned in the beginning the first problem is the party that is the carrier that is receiving the freighted origin is and there is complete agreement on this fun the marine is not a party that is a real carrier subject to the jurisdiction of the surface transportation board hyundai marine is not a motor carrier freight forwarder because the definition of freight forwarder excludes motor carriers so hyundai marine is just that it's a maritime company that's going to arrange to ship this freight eventually to taiwan it's going from harrodsburg kentucky carmack doesn't concern itself with the arranging carrier and you say do they are they a subject of the s t b jurisdiction and must they issue a karmic compliant bill of lading so is the first carrier that the trucking company are or aren't do you view the first carrier as hyundai the lot of use the first carrier is one they actually the parties agree on that it's in both briefly both both as a breach of the re hyundai is the receiving carrier in origin why because they arrange the entire deal and everything that gets touched after at the point of origin now that's why the plaintiff has had some trouble struggling there is no allegation that hyundai in the complaint there's no allegation that hyundai is a karmic carrier there was no evidence brought to trial that on option well if the shipper allows hyundai in section four big of the transportation contract to contract on so contract on any terms that it  that in international commerce you don't want multiple sets of laws and regulations hitting this freight depending upon where it is the supreme court has made it clear you want one set and it goes all the way across so you look at the about imports the supreme court he said we went out of the way it didn't apply to exports they said it was unnecessary to get to that and here's the regulation here's the policy behind it so they didn't say they didn't apply it to exports they just said it was unnecessary which makes sense because supreme court doesn't render advisory opinion but they said here's the law here's the policy behind the law and when you lay that on top of these facts it's very clear that karmic does not buy this movement going and there are a number of decisions that have since ruled that way since the handout that we're export movements specifically in the southern district of new york now there was one decision in the southern district of new york that with the other way was a decision by judge jones who was previously with the southern district of new york to things i can tell you the other courts did between monday morning incorporates the hyundai bill of lading and the bill of lading says that if somebody is found to be liable for damage then and i think the exact language is the damage to this caused by the subcontractor that that liability shall be to the extent to which some such subcontractor would have been liable to corning if it had made a direct and separate contract with corning in respect of such handling storage or carriage and the reason i ask that is if there had been such separate contracts surely you would have had a common problem possibly but in this case we don't have any contract case at all is purely we don't have the contractual relationship there are a number of scenarios or no that is the second this isn't as if there had been a separate contract that's what the bill of lading says if honda is found to be responsible for liable any damage that was actually caused by subcontractors then we look to those subcontractors as if they had had separate contracts with horning i thought why was that why is that and i don't have any idea there what does that mean as best i can make sense out of it is that the corning could then use the hyundai contract with let's say north from southern go directly after norfolk southern under that contract as if that contract was with some contractor had had direct and separate contracts and that's what's confusing me because if the sub contractor any of them because we don't have any idea where the damage actually occurred but if any of those subcontractors had had just decided i'm going to make my own arrangements to move this to the west coast i'm going to have my own separate contracts with the truck or the rail you're right be absolutely right that those those arrangements may very well have been then subject to car max because it's a separate building now the carriers are each of them now are not they're not some contractors on an international move they're now they're having separate direct contracts and now it is a domestic move until that until it gets to migrate i think the question here is this are we drawing a distinction without a difference so in other words even if it's not a direct carmack action and does hyundai i owe him oh that same amount of money to corning under the car under the bill of lading if this was a contract case because it's not it's a car minder stand and there's no contracts considered in the car car back context if this were really out of  it doesn't point to those so as a result our job today is actually much easier what this court can do is decide whether they want to say there's no harm in a claim because it's the international move and the origin of the receiving carrier is doesn't matter they just wouldn't qualify because they were the receiver receiving carrier this is the this is this is not an easy area i mean i've been living in this area the law for thirty years so i make assumptions and please forgive just have a karmic let me go back to you and this is displaying my ignorance of an area of this case and so i freely acknowledge that before we start but then talk to me a little bit about the your claim that this is this cargo has been completely exempted by the surface transportation explain that section ten five zero one of title forty nine authorizes the surface transportation board to take turd certain types of freight service and exempt them from either parts of the act or the entire act in this particular instance the united states surface transportation board conducted a number of hearings and made a determination that they would exempt containerized for a traffic such as this traffic from any of the point that that hyundai having been given carte watch from courtney from corning hyundai i opted out of any kind of karmic coverage correct it was in their contract they were given the right to do that as required by ten five zero two but they took the cheaper route because they had the ability to do that so they opted out of the car back and went not car max under ten five zero two so as a result now that that that's a different way for this work for me to say conclusion that there's no use for max that because it if the merchant or corning had negotiated a contract separately but in direct contract with the sub got so egregious that fiction the service contract reinforces contract an agency with it as a principle not as warnings so i'm backing agree to whatever it deems a bit in respect of hiring sub convert is but the service contract does not bind going into those contracts or your so you me and i think your words right there make it difficult for you because you say the bill of lading creates a fiction so in other words it's a fiction  the bottom line it tells you that one dies liability to the merchant which is corning is as if the merchant had entered into a separate and direct contract  one die standard of viability for damage which occurs in the hands of the sub contractor and it says it is as if the merchant had entered into a separate direct contract of but they did not pay and what i think you have to look back to measure what hyundai is liability here is you look at there there might be a liability here but i thought that we established at least it was the position of think of mr red say that you are a mr keenan but you must as your only claim is correct and comments liability stems from that clause five b two so it's derived from the contract why did you wave your contract claim now if you're saying that you know first of all that's that's the general contractor and common law gluttons there's no question about that so we didn't waive it right but see here's the problem car max is a statutory claim that does preempt other causes of action if it directly applies your argument is not that there's that tarmac applies here your argument is that there's a fiction created by contract that are damages would be as if the tarmac applied and those damages would be against hyundai not against no question that norfolk southern was the first real carrier in this in this whole scheme to accept the gaar cargo for interstate transportation of the goods and statutor plus those are all the arguments that that were made in reagan lloyd and while it did limit itself to the be the the import as opposed to export i mean just a sort of my r went on and on about what the statute says at the how it should be interpreted and that whole position as well as sound as it may seem right now was rejected by a majority of the supreme court i understand however a matter of course as a matter of law he goes into extending coggs only to the area of the port and b goes when the when the damage occurs in the hands of the sub contractor you look to what the contract would have been had the merchant had warning entered into that contract that's why you get insisted upon contract liability or if the railroad wished to exempt itself from karmic liability it would have gone to the railroad corning directly and said you have a choice between correct liability or to exempt yourself from know whether an actual carrier yes witch hunt i clearly as i understand this case is but which also is in charge of all of the arrangements is in fact meets the definition of a fr you don't even have to get there i think this is what we're struggling here with is are we talking about the statutory incorporation or the  cormack or is karmic applying here by virtue of contract i think we have to the starting point has to be it has to be by contract so the contract as set forth in  contract claims but judge simpson in the motions for summary judgment has held that the contract the service contract was the governing contract here the service contract was controlling the relationship from the party car hyundai i's comic liability says springs from that contract springs from the service contract which incorporates is clearly overridden by the independent contractor wind which in the service contract which says that at all times because the service contract said as i recall that to the extent that there was inconsistency between the service contract and it was the service contract that prevailed that's correct so that coupled with the with the language in the service private contract that says that we're allowing hyundai i enter into as a principal not as warnings agent i think the distinction of the independent contractors important there i think so if in your view if that if that is what those  portions of the contract provide for it in your view did honda have an obligation to give corning me opportunity to opt in or out with  line in which they re cite the magic language of giving their shipper the opportunity to opt in or opt out of contract during  to negotiate contracts and however it wished with the railroads to to complete the intermodal transportation i think you have to read the service contract because i think to the extent of the service contract allows one died to enter into some contracts which it does so we're hyundai is the principle in those contracts and they've pretty much admitted that they're the principle they did not discuss with warning any exemptions from product liability so if they're the principal they're authorized to to decline carmack coverage but that would be in your view as to their own know i think we can get that from the briefs or bottle just to be clear on one point there was a bench conference prior to the start of the trial during that bench conference judge simpson made it very clear when mr ratts i started mention contracts judge said i'm simply reminding you that you disclaimed any other claims in this case except the karmic amendment and later the court repeats you have disclaimed any other claims in this case except the but they're not a car back receiving carrier so the case should have ended right there as to hyundai well the other parties are connecting carriers they're not receiving carrier they can't have independent karmic liability spring course been very clear on that but but this is just because it is a back door car mack claim as a result of the contract there has never been an ocean carrier held liable in the karmic amendment until this case and there are very good reasons for that like you have a receiving carrier of an international move the domestic car back amendment does not apply not to that carrier not to any of the small railroad connecting carriers not to somebody that may have trucked it it does not apply and in fact the way this case should have gone down is that corning should have pursued his contract claim against wanda and that hyundai may have had various indemnification rights against the railroad but in didn't it went down to the karmic amendment and that is a major left turn in this case as i began i said that's a sea change in this case because when when that happens you see karmic applies by statute congress is what makes karmic apply not a contract a contract to incorporate terms or borrow terms that cetera but you cannot apply caulk carmack by contract you can apply its terms well this is not a breach of contract case so we look at what the congress say when they establish the karmic amendment and does it apply to this case and it does not this case is being closely watched not only by ocean carriers who do not want to be held suddenly liable in a karmic commitment but also by the railroads because the railroads need to rely upon the terms of the contract that they are moving freight and this case is it doesn't matter disruptive to international commerce as well as the railroads transportation it's a fairly serious issue thank you council think this will be submitted there being nothing further to come