Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-87-01872/USCOURTS-ca10-87-01872-0/pdf.json

Parties Involved:
North American Van Lines
Appellant
Underwriters at Lloyds of London
Appellee

Document Text:

PUBLISH 

FILED l 

u,~litc:d Statn ~rt ~f Appea 5 

'I'enth Ctr.r.mt 

NOV 3 0 1989 

IN THE UNITED STATES COURT OF APPEALS 

&OBERT L. HOECKER 

Clerk 

FOR THE TENTH CIRCUIT 

UNDERWRITERS AT LLOYDS OF LONDON, ) 

) 

Plaintiff-Appellee, ) 

) 

V • ) 

) 

NORTH AMERICAN VAN LINES, ) 

) 

Defendant-Appellant. ) 

No. 87-1872 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF OKLAHOMA 

(D.C. NO. 86-235-C) 

Kenneth D. Upton, Jr. (Linda G. Alexander with him on the briefs), 

Niemeyer, Noland & Alexander, Oklahoma City, Oklahoma, Attorneys 

for Plaintiff-Appellee. 

David A. Cheek (Victor F. Albert with him on the briefs), 

McKinney, Stringer & Webster,· P.C., Oklahoma City, Oklahoma, 

Attorneys for Defendant-Appellant. 

Before HOLLOWAY, Chief Judge, MCKAY, LOGAN, SEYMOUR, MOORE, 

ANDERSON, TACHA, BALDOCK, BRORBY, and EBEL, Circuit Judges. 

ANDERSON, Circuit Judge. 

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 1 
The court on its own motion has determined to consider en 

bane whether the Carmack Amendment to the Interstate Commerce Act, 

49 u.s.c. S§ 11707 and 10730, 1 preempts state common law remedies 

for negligent damage to goods shipped by common carrier. After 

reviewing the law on this subject, and reconsidering our position, 

we now hold that state common law remedies are preempted by the 

Carmack Amendment. To the extent that our prior decisions in Reed 

v. Aaacon Transportation, Inc., 637 F.2d 1302 (10th Cir. 1981); 

Litvak Meat Co. v~ ~aker, 446 F;2d 329 (10th Cir. 1971); and L.E. 

1 The pertinent. portions of the Carmack Amendment, as presently 

constituted, are as follows: 

"A common carrier •.• subject· to the jurisdiction of 

the Interstate Commerce Commission ••• shall issue a 

receipt or bill of lading for property it receives for 

transportation •••• That carrier ••• and any other 

common carrier that delivers the property and is providing transportation or service subject to the 

jurisdiction of the Commission ••. are liable to the 

person entitled to recover under the receipt or bill of 

lading. The liability imposed under this paragraph is 

for the actual loss or injury to the property caused by 

(1) the receiving carrier, (2) the delivering carrier, 

or (3) another carrier over whose line or route the 

property is transported in the United States ••.• " 

49 U.S.C. § 11707(a)(l). 

"The ·Interstate Commerce Commission may require or 

authorize a carrier ••• 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." 

49 u.s.c. § 10730(a). 

"Except as otherwise provided in this subtitle, the 

remedies provided under this subtitle are in addition to 

remedies existing under another law or at common law." 

49 u.s.c. § 10103. 

-2-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 2 
Whitlock Truck Service, Inc. v. Regal Drilling Co., 333 F.2d 488 

(10th Cir. 1964), hold or state otherwise, they are overruled. 

Because the proceedings and judgment in the district court were, 

of necessity, based on those decisions, the judgment of the 

district court must be vacated and the case remanded for further 

proceedings consistent with this opinion. 

I. 

In connection with an employment-related transfer, Robert and 

Lucinda Chapman engaged defendant-appellant North American Van 

Lines ("North American") to move their household goods and other 

personal property from Denver, Colorado to Houston, Texas. For 

this and other matters relating to the move, the Chapmans were 

assisted and represented by professional consultants hired by 

their employer. 

As permitted by the Interstate Commerce Commission, and in 

accordance with its filed tariff, North American's charge for 

transporting the Chapman's goods depended upon the extent of the 

liability it assumed for loss or damage. The bill of lading 

signed by the Chapmans contained the following terms relating to 

that subject: 

"VALUATION STATEMENT 

UNLESS THE SHIPPER EXPRESSLY RELEASES' THE SHIPMENT TO A 

VALUE OF 60 CENTS PER POUND PER ARTICLE, THE FORWARDER'S 

MAXIMUM LIABILITY FOR LOSS AND DAMAGE SHALL BE EITHER 

THE LUMP SUM VALUE DECLARED BY THE SHIPPER OR AN AMOUNT 

EQUAL TO $1.25 FOR EACH POUND bF WEIGHT IN THE SHIPMENT, 

WHICHEVER IS GREATER. 

THE SHIPMENT WILL MOVE SUBJECT TO THE RULES AND CONDITIONS OF THE FORWARDER'S TARIFF. SHIPPER . HEREBY 

-3-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 3 
RELEASES THE ENTIRE SHIPMENT TO A VALUE NOT EXCEEDING: 

$.60 per lb. 

NOTICE: THE SHIPPER SIGNING THIS CONTRACT MUST INSERT 

IN THE SPACE ABOVE, IN HIS OWN HANDWRITING, EITHER HIS 

DECLARATION OF THE ACTUAL VALUE OF THE SHIPMENT, OR THE 

WORDS '60 cents per pound per article.' OTHERWISE, THE 

SHIPMENT WILL BE DEEMED RELEASED TO A MAXIMUM VALUE 

EQUAL TO $1.25 TIMES THE WEIGHT OF THE SHIPMENT IN 

POUNDS." 

(Shipper) s/Lucinda Chapman DATE: 1/9/85 

Addendum at Tab 5, p. 1. The bill of lading also contained the 

following printed language, taken verbatim from North American's 

Interstate Commerce Commission Tariff: 

"This contract is subject to all the rules, regulations, 

rates and charges, in carrier's currently effective 

applicable tariffs on file with the Interstate Commerce 

Commission including, but not limited to, the following 

terms and conditions: 

* * * 

The carrier's maximum liability shall be either: 

(1) The amount of the actual loss or damage not_ 

exceeding $1.25 times the actual weight (in pounds) of 

the shipment, or the lump sum declared value, whichever 

is greater; or 

(2) The actual loss or damage not exceeding sixty 

(60) cents per pound of the weight of any lost or damaged article when the shipper has released the shipment 

to carrier, in writing, with liability limited to sixty 

(60) cents per pound per article." 

Id. at p. 2. 

The actual value of the Chapmans' property exceeded 

$100,000.00. However, North American's charge for assuming a 

liability in that amount substantially exceeded what plaintiffappellee Lloyds of London ("Lloyds") would charge for an equal 

amount of insurance on the goods. Accordingly, the Chapmans, upon 

the professional ~dvice of their consultant, made a delibetate, 

-4-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 4 
fully informed, and calculated decision to save money by insuring 

their goods for $100,000.00 with Lloyds and signing up for North 

American's cheapest freight charge. They obtained that low rate 

by declaring in handwriting on the bill of lading that the value 

of their goods did ~not exceed $.60 per pound, Def. Ex. 1, or a 

total of approximately $7,500, according to North American. 

As the district court found, the bill of lading, completed 

and signed by the Chapmans, clearly and unambiguously limited 

North American's liability for loss and damage to the Chapmans' 

household goods to $.60 per pound. The Chapmans knowledgeably 

bargained for that limitation and the corresponding freight rate. 

There was full equality of bargaining power, especially 

considering the professional consultants who advised the Chapmans 

in their dealings with North American. See,~' R. Vol. II at 

138-40, 153; R. Vol. III at 170. There is not the slightest 

indication that the bargained-for limitation on North American's 

liability was understood by the parties to be less than a blanket 

limitation covering all forms of action against North American for 

loss or damage to the Chapmans' goods. Finally, there is no 

dispute that the bill of lading was lawful in form, properly 

completed, and reflected a tariff duly filed with and approved by 

the Interstate Commerce Commission. 

In the course of shipment, the Chapmans' goods were destroyed 

or damaged by fire. Lloyds paid on its insurance policy more than 

$100,000.00 directly to or on behalf of the Chapmans for the loss 

and repair of their property. Thereafter, pursuant to its 

subrogation rights Lloyds pursued this suit against North American 

-5-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 5 
for the entire amount of the loss, without regard to 

tion on liability contained in the bill of lading. 

Lloyds litigation strategy for avoiding the 

limitation of liability in the bill of lading was to 

any limitaagreed upon 

plead and 

prove common law negligence on the part of North American. Lloyds 

reasoned that the bill of lading, being a contract, served only to 

limit damages in contract actions for an alleged breach of North 

American's obligations specified in the bill of lading, and that a 

cause of action in tort is completely separate from an action on 

the bill of lading itself. This position found partial support in 

our decisions in Reed, Litvak, and Whitlock, which held that the 

Carmack Amendment did not preempt state common law actions by 

shippers against carriers. None of those cases suggested what the 

court's position would be with respect ~o an argument that the 

parties could lawfully contract to limit common law tort 

liability, even if such a cause of action was not preempted by the 

Carmack Amendment. 

Because of our decisions in Reed, Litvak, and Whitlock, the 

district court denied North American's motion for partial summary 

judgment . to restrict the amount of damages in this case to the 

value stated in the bill of lading and allowed Lloyds to proOeed 

to trial be~ore a jury solely on a theory of common law 

negligence. During the trial the district court also refused to 

admit North American's evidence that even under a common law 

negligence cause of action, the amount of damages in this case 

were limited to the contractually agreed amount. At the close of 

the evidence North American moved for a directed.verdict limiting 

-6-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 6 
any damages to the contractually agreed amount of $.60 per pound 

per article. That motion was denied and the case was submitted to 

the jury under a common law negligence theory without evidence or 

instructions regarding the contractual limitation of damages. The 

jury returned a verdict in favor of Lloyds in the amount of 

$70,000.00. North American does not appeal the jury's finding of 

negligence. It appeals only with respect to the issue of damages. 

North American asks us first to reconsider this court's position 

on the preemptive effect of the Carmack Amendment on common law 

negligence remedies. As an alternative argument, North American 

contends that the district court erred in excluding evidence ·that 

the parties contractually limited North American's liability for 

negligent damage to the Chapmans' goods, and erred in denying 

North American's motion for a directed verdict limiting the amount 

of common law damages to $.60 per pound. 

II. 

The Carmack Amendment was enacted in 1906 as an amendment to 

the Interstate Commerce Act of 1887, and as part of the Hepburn 

Act, ch. 3591, 34 Stat. 584 (1906), and was codified at 49 u.s.c. 

20(11). It deals with the familiar and historic subject of 

carrier liability for goods lost or damaged in shipment. The 

enactment codified the initial carrier's liability. It also 

contained the proviso ''[t]hat nothing in this section shall 

deprive any holdei of such receipt or bill of lading of any remedy 

or right of action which he has under the existing law." 34 Stat. 

at 593. The substance of that proviso has been retained· to the 

-7-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 7 
present time, appearing at 49 u.s.c~ § 10103 as follows: 

"Except as otherwise provided in this subtitle, the 

remedies provided under this subtitle are in addition to 

remedies existing under ~nether law or at common law." 

In Litvak, relying extensively on our prior decision in 

Whitlock, we referred to that proviso in the law and noted that 

the statute "[b]y its very terms . . . did not intend to preempt 

every cause of action brought by a shipper against a carrier for 

damage to its interstate shipment." Litvak Meat Co. v. Baker, 446· 

F.2d at 335. Rather, "in addition to codifying the common-law 

rule of liability, the Carmack Amendment was enacted to eliminate 

from a shipper's burden of proof the often insurmountable hurdle 

of demonstrating damage at the hands of a specific carrier." Id. 

at 336. Thus, the principal function of the statute was to permit 

an action against the initial carrier even though damage may have 

been caused by a connecting carrier. Id. We drew a distinction 

between tort and contract causes of action against shippers, 

concluding; 

"Thus, though the. Carmack Amendment allows a 

shipper to enjoy the elimination of this one element in 

his burden of proof, it does not compel him to avail 

himself of the opportunity. The more difficult road of 

common-law action against a carrier is still open to a 

shipper wishing to traverse it. The common-law action 

is conceptualized on contractual principles with tort 

overtones, and is a special refinement of the general 

law of bailment. However, at common law a bailer has a 

choice of remedies where a bailee has damaged the bailed 

property or breached the bailment contract •••• 

[T]he existence of a contractual remedy at common law 

does not prevent the· shipper from bringing an action 

based solely on negligence. To be sure, in such an 

action, a ·greater burden is imposed on the plaintiff, 

for he must prove more than the fact of damage to the 

goods in shipment by the defendant; he must also prove 

-8-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 8 
,, 

that negligence of the defendant was the proximate cause 

of the damage claimed. To say that such a remedy exists 

is not .to say that it is often utilized by a .bailbrshipper against a bailee-common carrier. The relative 

ease of proving a case in contract, either at common law 

or under the Carmack Amendment, militates against its 

use, and is, to be sure, the more practical, available 

remedy. But here we are not dealing with the 

practicability of a remedy in negligence or the 

advisability of using it. Our inquiry is limited to a 

determination that such a remedy exists, apart from the 

contractual remedy offered by the Carmack Amendment." 

Litvak Meat Co. v. Baker, 446 F.2d at 336-37. 

Our view in Whitlock, Litvak, and Reed, that the Carmack 

Amendment "did not'oust·a11 other remedial rights of shippers," 

Litvak Meat Co. v. Baker, 446 F.2d at 337, appears to find direct 

support on the face of the statute, at least as a general 

proposition. However, there is no legislative 2 and virtually no 

judicial support for the more specific proposition that state 

common. law negl1gence remedies continue to exist apart from the 

federal statute. To the contrary, as illustrated more fully 

below, the Supreme Court and other authorities have described the 

Carmack Amendment in broad, preemptive terms, and have relegated 

the proviso relating to other remedies to a category of almost 

total insignificance. 

In New York, New Haven & Hartford Railroad Co. v .· Nothnagle, 

346 U.S. 128, 131 (1953), the Supreme Court stated that ''[w)ith 

the enactment in 1906 of the Carmack Amendment, Congress 

superseded diverse state laws with a nationally uniform policy 

governing interstate carriers' liability for property loss." 

2 The amendment itself was added with no discussion or debate. 

40 Cong. Rec. 7075 (1906). The only real description of the 

provision was,offered by Congr~ssman William Richardson, without 

touching on the issue at hand. See 40 Cong. Rec. 9580 (1906). 

-9-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 9 
L~kewise, in Atchison, Topeka & Santa Fe Railway Co. v. Harold, 

241 U.S. 371, 378 (1916), the Court st~ted that "[t]he Carmack 

Amendment ••• was an assertion of the power of Congress over the 

subject of interstate shipments ••. which, in the nature of 

things, excluded state action." But the most extensive review of 

the statute is found in the leading case of Adams Express Co. v. 

Croninger, 226 U.S. 491 (1913), in which the Supreme Court, 

referring to the Carmack Amendment, observed that --

"Almo~t every detail of the subject is covered so 

completely· that there can be no rational doubt that 

Congress intended to take possession of the subject, and 

supersede all state regulation with reference to 

i t • 0 • e 

To hold that the liability therein declared may be 

decreased or diminished by local regulation or local 

views of public policy will either make the provision 

less than supreme, or indicate that Congress has not 

showri a purpose to take possession of the subject. The 

first would be unthinkable and the latter would be to 

revert to the uncertainties and diversities of rulings 

which led to the amendment. The duty to issue a bill of 

lading and the liability thereby assumed, are covered in 

full, and though there is no reference to the effect 

upon state regulation, it is evident that Congress 

intended to adopt a uniform rule and relieve such 

contracts from the diverse regulation to which they had. 

been theretofore subject." 

Adams Express Co. v. Croninger, 226_ U.S. at 505-06. 

There is no doubt that negligent loss or-damage to goods was 

included within the broad subject matter which the Carmack Amendment was intended to codify. More than one hundred years ago the 

Supreme Court, in a case cited many times after the enactment of 

the Carmack Amendment, held that a fairly bargained-for limitation 

on lia~ility in a bill of lading covered a loss through 

negligence. Hart v. Pennsylvania R.R. Co., 112 U.S. 331, 338 

(1884). That recurring theme was referred to by the Supreme Court 

-10-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 10 
following the enactment ·of the Carmack Amendment in Atlantic Coast 

Line Railroad v. Riverside Mills, 219 U.S. 186, 206-07 (1911), 

where, referring to the reach of the Carmack Amendment, the Court. 

stated that ''[t]he receiving carrier is, ·as principal, liable no~ 

only for its own negligence, but for that of any agency it may use 

II 0 Cl 0. 0 In Adams Express Co., the Supreme Court relied squarely 

on the principles set forth in Hart to the effect that it would be 

unjust to permit a shipper to obtain a lower rate by contracting 

to limit the carrier's liability, and then avoid that limitation 

through a common law negligence action. The Court stated: 

·

11 Neither is it conformable to plain principles of 

justice that a shipper may understate the value of his 

property for the purpose pf reducing the rate, and then 

recover a larger value in case of loss. Nor does a 

limitation based upon an agreed value for the purpose of 

adjusting the rate conflict with any sound principle of 

public policy. The reason for the legality of such 

agreements is well stated in Hart v. Pennsylvania 

Railroad, cited above, where it is said (p.340): 

'The limitation as to value has no tendency to 

exempt from liability for negligence. It does not 

induce want of care. It exacts from the carrier the 

measure of care due to the value agreed on. The carrier 

is bound to respond in that value for negligence. The 

compensation for carriage is based on that value. The 

shipper is ·estopped from saying that the value is 

greater. The articles have no greater value, for the 

purposes of the contract of transportation, between the 

parties to that contract. The carrier must respond for 

negligence up to that value. It is just and reasonable 

that such a contract, fairly entered into, and where 

there is no deceit practiced on the shipper, should be 

upheld. There is no violation of public policy. On the 

contrary, it would be unjust and unreasonable, and would 

be repugnant to the soundest principles of fair dealing 

and of the freedom of contracting, and thus in conflict 

with public policy, if a shipper should be allowed to 

reap the benefit of the contract if -there is no loss, 

and to repudiate it in case of loss.'" 

Adams Express Co. v. Croninger, 226 U.S. at 510-11 (quoting Hart 

v. Pennsylvania R.R. Co., 112 U.S. at 340) (emphasis added). 

-:11-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 11 
Subsequent decfsions by the Supreme Court carry the same theme 

that the Carmack Amendment was a codification of the common law 

rule of liability for negligent damage to goods, as expressed in 

Hart. They do not give the slightest indication that some sort of 

separate state common law tort remedy is available to a shipper 

for the full value of negligent loss of or damage to goods. In 

Missouri, Kansas, & Texas Railroad Co. v. Harriman, 227 U.S. 657 

(1913), the Supreme Court reviewed an action to recover the value 

of cattle killed by a negligent derailment. The Court reversed a 

state court decision permitting a shipper to avoid the terms of a 

bill of lading on the ground "that every such contract, where the 

loss was due to negligence, was null and void under the law and 

public policy of the State II Id. at 667. The Supreme 

Court ruled that the Carmack Amendment governed and that the 

contract contained a valid limitation on liability stating that 

"the validity of a limitation upon the liability thereby 

imposed [by the bill of lading] is a Federal question to 

be determined under the general common law, and, as 

such, is withdrawn from the field of state law or 

legislation. The liability imposed by the statute is 

the liability imposed by the common law upon a common 

cariier, and may be limited or qualified by special 

contract with the shipper ••.• " 

Id. at 672 (citations omitted). Referring to the event of a loss 

by negligence, the court stated further that even though the value 

of the cattle shipped greatly exceeded the valuation represented 

by the shipper on the bill of lading, "[i]t is neither just nor 

equitable that he shall benefit by th~ lower rate, and then 

recover for a value which he said did not exist, in order to 

obtain that rate." Id. at 671. 

-12-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 12 
In George N. Pierce Co. v. Wells Fargo & Co., 236 U.S. 278 

(1915), the Supreme Court considered an action brought on both 

contract and common law negligence theories for the full value of 

some automobiles lost during shipment. It held that under the 

Carmack Amendment it was proper for a carrier to limit its 

liability in exchange for a lower rate, stating: 

"Since the Act to Regulate Commerce and its 

amendments have gone into effect, cases of this 

character must be decided in view of the provisions of 

the Commerce Act and its requirement. that the carrier 

shall file its tariffs and rates which shall be_open to 

inspection and shall prescribe rates applicable to all 

shippers alike, thus to effect one of the main purposes 

of the law often declared by this court, to require like 

treatment of all shippers and the.charging of uniform 

rates equally applicable to all under like circumstances. As this court said in one of the earlier. 

cases, considering the limited liability contracts in 

connection with the provisions of the Interstate 

Commerce Act (Kansas Southern Railway v. Carl, 227 U.S. 

639, 652): 

'The valuation declared or agreed upon as evidenced 

by the contract of shipment upon which the published 

tariff rate is applied, must be conclusive in an action 

to recover for loss or damage a greater sum. . . . To 

permit such a declared valuation to be overthrown by 

evidence aliunde the contract, for the purpose of 

enabling the shipper to obtain a recovery in a suit for 

loss or damage in excess of the maximum valuation thus 

fixed, would both encourage and reward undervaluations 

and bring about preferences and discriminations 

forbidden by the law. Such a.result would neither be 

just nor conducive to sound morals or wise policies.'" 

George N. Pierce Co. v. Wells Fargo & Co., 236 U.S. at 284; see 

also,~, Missouri Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134 

(1964); Southeastern Express Co. v. Pastime Amusement Co., 299 

U.S. 28 (1936); American Ry. Express Co. v. Levee, 263 U.S. 19 

(1923); Boston & Me. R.R. v. Piper, 246 U.S. 439 (1918); Georgia, 

Fla. & Ala. Ry. Co. v. Blish Milling Co., 241 U.S. 190 (1916). 

-13-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 13 
The proviso with respect to the preservation of common law 

remedies is not given the slightest recognition in these and other 

Supreme Court decisions as a possible alternative avenue by which 

a shipper can ignore its bargained-for limitation of a carrier,s 

liability for negligent damage to the shipper's goods. The reason 

is explained in Adams Express Co., where the Supreme Court imposed 

an exceedingly narrow construction on the proviso: 

"But it has been argued that the non-exclusive 

character of this regulation is manifested by the 

proviso of the section, and that state legislation upon 

the same subject is not superseded, and that the holder 

of any such bill of lading may resort to any right of 

action against such a carrier conferred by existing 

state law. This view is untenable. It would result in 

the nullification of the regulation of a national 

subject and operate to maintain the confusion of the 

diverse regulation which it was the purpose of Congress 

to put an end to. 

What this court said of§ 22 of this act of 1906 ~n 

the case of Texas & Pac. Ry. v. Abilene Cotton Mills, 

204 U.S. 426, is applicable to this contention. It was 

claimed that that section continued in force all rights 

and remedies under the common law or other statutes. 

But this court said of that contention what must be said 

of the proviso in § 20, that it was 'evidently only 

intended to continue in existence such other rights or 

remedies for the redress of some specific wrong or 

injury, whether given by the Interstate Commerce Act, or 

by state statute, or common law, not inconsistent with 

the rules and regulations prescribed by the provisions 

of this act.' Again, it was said, of the same clause, 

in the same case, that ·1 t could 'not in reason be 

construed as continuing in a shipper a common law right 

the existence of which would be. inconsistent with the 

provisions of the act. In other words, the act cannot 

be said to destroy itself.' 

To construe this proviso as preserving to the 

holder of any such bill of lading any right or remedy 

which he may have had under existing Federal law at the 

time of his action, gives to it a more rational interpretation than one which would preserve rights and 

remedies under existing state laws, for the latter view 

would cause the proviso to destroy the act itself." 

-14-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 14 
Adams Express Co. v. Croninger, 226 U.S. at 507-08. 

Thus, in Georgia, Florida & Alabama Railway Co. v. Blish 

Milling Co., 241 U.S. at 196-97, the Supreme Court held that a 

state conversion action could not be used by a shipper to avoid a 

provision in a bill of lading with respect to the time period in 

which a claim could be brought, remarking: 

"[T]he words of [the Carmack Amendment] are comprehensive enough to embrace responsibility for all losses 

resulting from any failure to discharge a carrier's duty 

as to any part of the agreed,transportation •••• 

(T]he effect of the stipulation could not be escaped by 

the mere form of the action. The action is in trover, 

but, as the state court said: 'If we look beyond its 

technical denomination, the scope and effect of the 

action is nothing more than that of an action for 

damages against the delivering carrier.' It is urged, 

however, that the carrier, in making the misdelivery, 

converted the [goods shipped] and thus abandoned the 

contract. But the parties could not waive the terms of 

the contract under which the shipment was made pursuant 

to the Federal act; nor could the carrier by its conduct 

give the shipper the right to ignore these terms which 

were applicable to that conduct, and hold the carrier to 

a different responsibility from that fixed by the 

agreement made under the published tariffs and regulations. A different view would antagonize the plain 

policy of the act and open the door to the very abuses 

at which the act was aimed." 

Id. (citations omitted). Similarly, in American Railway Express 

Co. v. Levee, 263 U.S. at 21, Justice Holmes delivered the opinion 

of the Court that a state rule purporting to regulate the burden 

of proof on damages could not be used to avoid a ~ontractual 

limitation on liability which was valid under the Carmack 

Amendment. The Justice wrote: 

"The effect of the stipulation could not have been 

escaped by suing in trover and laying the failure to 

deliver as a conversion if that had been done. No more 

can. it be escaped by a state law or decision that a 

failure to deliver shall establish a conversion unless 

explained. The law of the United States cannot be 

evaded by the forms of local practice ••.• The local 

-15-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 15 
rule applied as to the burden of proof narrowed the 

protection that the defendant had secured and therefore 

contravened the law." 

Id. (citations omitted). 

Although the proviso in question has been firmly narrowed by 

the Supreme Court for more than ~eventy-five years now, Congress 

has shown no inclination to disagree. In fact, in the two Cummins 

Amendments to the Interstate Commerce Act (incorporated into the 

Carmack Amendment in 1915 and 1916, respectively), Congress 

reacted to the Supreme Court decision in Adams Express Co. v. 

Croninger by first overruling and then restoring one aspect of the 

Court's decision. But, in so doing, nothing was said about the 

Co.urt's narrowing of the reach of the proviso with respect to 

common law remedies. Indeed, much of the debate on the floor of 

the House and Senate simply took for granted that the Carmack 

Amendment was the exclusive regulation of the subject of carrier 

liability for its own negligence resulting in the loss or damage 

to the shipper's goods. See H.R. Rep. No. 1341, 63d Cong., 3d 

Sess. 2 (1915); 53 Cong. Rec. 5450 (1915) (remarks of Rep. 

Vaughan); 53 Cong. Rec. 5448 (1915) (remarks of Rep. Towner); 53 

Cong. Rec. 5446 (1915) (remarks of Rep. Rayburn): 51 Cong. Rec. 

9779 (l914) (remarks of Sen. Sutherland). 

"What is asked by this bill is simply that the 

shall respond for their own negligence just 

do •••• Anyone would admit that ·a shipping 

which provided that if the shipper accepted 

given the railroad should be absolved of all 

for its own negligence would be wrong." 

53 Cong. Rec. 5449 (1915) (remarks of Rep. Towner). 

railroads 

as others 

contract 

the rates 

liability 

Because of the extensive history of Supreme Court 

interpretation of the Carmack Amendment, it is hardly surprising 

-16-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 16 
that every circuit which has considered the matter, with the sole 

exception of this circuit, has either held or indicated it would 

hold that the Carmack Amendment preempts state common law remedies 

against a carrier for negligent damage to goods shipped under a 

proper bill of lading. See Intech, Inc. v. Consolidated Freightways, Inc., 836 F.2d 672, 677 (1st Cir. 1987), (stating that ''the 

Carmack Amendment provides the exclusive remedy" for "an action 

for damages against the delivering carrier"); Hughes v. United Van 

Lines, Inc., 829 F. 2d 1407, 1415 ( 7th Cir. 1987) ( "We reject the 

plaintiff's argument and their reliance on the cases of the Tenth 

Circuit and hold that the remedy provision of the Carmack 

Amendment preempts all state and common law remedies inconsistent 

with the Interstate Commerce Act •••. "),cert.denied, 108 s. 

Ct. 1068 (1988); Hopper Furs, Inc. v. Emery Air Freight Corp., .749 

F.2d 1261, 1264 (8th Cir. 1984) ("A shipper who brings a 

negligence action may not recover in excess of the amount 

specified in the receipt or bill of lading."); Air Products & 

Chemicals, Inc. v. Illinois Cent. Gulf R.R. Co., 721 F.2d 483, 487 

(5th Cir. 1983) ("As the authorities previously noted hold, 

Congress intended by the Carmack.Amendment to provide a uniform 

national remedy against carriers for brea~h of the contract of 

carriage, including a liability for default in any common-law duty 

as a common carrier."), cert. denied, 469 U.S. 832 (1984); Millers 

Mut. _Ins. Ass'n of Ill. v. Southern Ry. Corp., 483 F.2d 1044, 1049 

(4th Cir. 1973) (stating that the court was inclined to accept the 

preemption argument, although not called upon to decide the issue 

in that case); Fulton v. Chicago Rock Island & Pac. R.R. Co., 481 

-17-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 17 
F.2d 326, 331 (8th Cir.) ("[W]e agree that the Carmack Amendment 

has preempted suits in specific negligence by holders of bills of 

lading against their carriers."), cert. denied, 414 U.S. 1040 

(1973); W.D. Lawson & Co. v. Penn Cent. Co., 456 F.2d 419, 421 

(6th Cir. 1972) {"As to the second issue posed by this appeal 

concerning whether or not the Carmack Amendment preempted common 

law suits of the nature of the first count stated in this case 

against both appellants, we hold that it did."); American 

Synthetic Rubber Corp. v. Louisville & Nashville R.R. Co., 422 

F.2d 462, 466,· 468 (6th Cir. 1970) ("These cases make it clear 

that when damages are sought against a common carrier for failure 

to properly perform, or for negligent performance of, an 

interstate contract of carriage, ••. a tort action does not 

lie."); United States v. Reading Co., 289 F.2d 7, 9 (3d Cir. 1961) 

(presuming that an action for negligence would be brought under 

the Carmack Amendment, which "codifies the common law rule of a 

carrier's liability"); see also Rockholt v. United Van Lines, 697 

F. Supp. 383, 387-88 (D. Idaho 1988) (adopting majority view with 

respect to complete preemption); Mesta v. Allied Van Lines Int'l, 

Inc., 695 F. Supp. 63, 65 (D. Mass. 1988) (rejecting Reed and 

accepting Hughes analysis); Sokhos v. Mayflower Transit, Inc., 691 

F. Supp. 1578, 1581 (D. Mass. 1988) (negligence claim preempted by 

the Carmack Amendment); George R. Hall, Inc. v. Superior Trucking 

Co., 514 F. Supp. 581, 583 (N.D. Ga. 1981) ("Though the Court is 

impressed by the reasoning in Litvak ••. seventy-five years of 

judicial interpretation of the Carmack Amendment have now settled 

the question of the availability of state remedies against· a 

-18-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 18 
common carrier Under the Carmack Amendment and the 

judicial decisions interpreting it, plaintiff may only rely on the 

remedies provided by the bill of lading • • . . II ) . Contra 

Starmakers Publishing Corp. v. Acme Fast Freight, Inc., 615 F. 

Supp. 787, 790 (S.D.N.Y. 1985) (accepting Litvak rule allowing 

common law negligence claims but holding no duty owed beyond the 

contract for the particular allegations involved); Season-All 

Indus., Inc. v. Merchant Shippers; 451 F. Supp. 727, 734-35 (W.D. 

Pa., 1978) ( recognizing a common law action for negligence as 

distinct from the Carmack Amendment); E.W. Bowman, Inc. v. Norfolk 

& W. Ry. Co., 403 F. Supp. 389, 391-92 (W.D. Pa. 1975) 

(acknowledging the rule in Litvak). 

III. 

Having reconsidered the history and judicial interpretations 

of the• statute, we now hold that the Carmack Amendment preempts 

state common law remedies against common carriers for negligent 

loss or damage to goods shipped under a lawful bill of lading. To 

the ext~nt that our previous decisions in Reed v. Aaacon Transportation, Inc., 637 F.2d 1302 (10th Cir. 1981); Litvak Meat Co. 

v. Baker, 446 F.2d 329 (10th Cir. 1971); and L.E. Whitlock Truck 

Serv., Inc. v. Regal Drilling Co., 333 F.2d 488 (10th Cir. 1964), 

' hold or state to the contrary, they are overruled. The shippers' 

damages in this case are limited to the released value of $.60 per 

pound per article as established by the bill of lading. Because 

of our decision on the preemption issue, it is unnecessary to 

consider the alternative position argued by North American. 

-19-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 19 
The judgment of the district court is VACATED and the cause 

REMANDED for furtp.er proceedings consistent with this opinion. 

-20-

Appellate Case: 87-1872 Document: 010110136498 Date Filed: 11/30/1989 Page: 20