John G. Roberts, Jr.: We will hear argument first this morning in Case 08-1553, Kawasaki Kisen Kaisha, Ltd. v. Regal-Beloit Corporation, and the consolidated case. Mr. Ballenger.
J. Scott Ballenger: Mr. Chief Justice, and may it please the Court: From its enactment in 1906 until very recently, it has been settled law for a century that the Carmack Amendment does not apply to the inland leg of an import through shipment. This Court had a factually identical--
Sonia Sotomayor: Are you taking -- are you taking a position different than the U.S., that it applies to exports but not imports? I think the -- the Solicitor General's position is that it doesn't apply to any import or export. Is it yours that it doesn't apply to imports?
J. Scott Ballenger: --I don't believe so, Your Honor. I think both of our position is that the current scope of Carmack is consistent with its historic scope, which had a very limited special application to exports to Canada and Mexico. Other than that, it doesn't apply to foreign trade at all.
Sonia Sotomayor: Could you tell me something? Is there -- do you know if there is a railroad line from the U.S. through to -- through Mexico? I know there is one from New York to Canada, a freight line.
J. Scott Ballenger: There certainly are rail connections between the United States and Mexico, yes, Your Honor.
Sonia Sotomayor: There are?
J. Scott Ballenger: Yes, absolutely. This Court had a factually identical import case just a few years ago in Kirby and, although it did not discuss the Carmack Amendment, this Court agreed unanimously on both reasoning and a result that are flatly inconsistent with Respondent's arguments here.
Ruth Bader Ginsburg: I thought the government told us in this -- in that case that Carmack wasn't in the case because it was either waived or something. But the case was considered on the basis of on the one hand, COGSA, and on the other, the law of 50 States.
J. Scott Ballenger: That's correct, Justice. The United States represented to this Court that -- that Carmack was not in the case, either because it was waived or because the traffic was moving under 49 U.S.C. section 10709, which of course is true here as well. Our view has always been that this Court wouldn't have granted certiorari purely on the basis of a waiver. But in any event, this Court's reasoning in Kirby was that it's very important to foreign trade and to the uniformity of rules on a through shipment--
Ruth Bader Ginsburg: Yes, but uniformity is one thing when you are talking about 50 States and another when it's just two Federal statutes.
J. Scott Ballenger: --That's absolutely true, Your Honor. But the -- for more than a century, the relevant Federal statutes have been construed harmoniously not to overlap in this particular situation. Foreign ocean commerce is governed by the Carriage of Goods At Sea Act, and the Carmack Amendment has always governed purely domestic traffic and exports to Canada and Mexico. Now, Respondents say that the settled meaning of that statute changed dramatically in 1978, but Congress said that it didn't. And it's not really that hard to read the present language--
John G. Roberts, Jr.: Well, what if -- what if Congress was wrong? I mean, the language that they adopted sure looks quite different to me than what was applicable prior to 1978, and the boilerplate provision that, oh, when we codify this we don't mean to change anything -- I mean, which prevails, the actual language they used or that boilerplate?
J. Scott Ballenger: --Your Honor, I think that this Court's task, as always, is to read the statute as a whole, which includes that language that Your Honor characterizes as boilerplate, and also includes the language that we are here to construe. And you would want to read it all together if possible. So let's look at the -- at the present language. It appears at the back of Union Pacific's reply brief at page 6a. Just like it always has, Carmack distinguishes between receiving carriers, delivering carriers, and connecting carriers. The simplest way to resolve this case is that I believe even Respondents would concede that for Carmack to apply, you need a receiving carrier that is a rail carrier. "K" Line is the receiving carrier here and they are not a rail carrier. Numerous decisions of this Court and the Interstate Commerce Commission confirm what the statute plainly says, which is that a rail carrier is a party providing common carrier railroad transportation, not--
John G. Roberts, Jr.: Those are -- those are two different arguments, right; your rail carrier argument and your pre-1978 argument?
J. Scott Ballenger: --They are, Your Honor. The simplest way to resolve this case is that the present language, even taken on its face, requires a receiving carrier that is a rail carrier. "K" Line is the receiving carrier here. They are not a rail carrier. This Court and the ICC have long held that merely subcontracting for common carrier service does not make you a common carrier. This Court held that in the American Railway Express case. The ICC made this crystal clear in the CSX/SeaLand matter in 1987, where they held that the ocean carrier SeaLand was not a rail carrier simply because it subcontracted for inland rail transportation and provided carrier containers to the inland rail carrier.
Sonia Sotomayor: So your -- I'm sorry. I'm a little confused. Your position is that "K" Line -- you are representing whom here?
J. Scott Ballenger: I -- my client is Union Pacific, but I am here today speaking for both of the Petitioners, "K" Line and Union Pacific.
Sonia Sotomayor: You have a bit of a conflict, don't you? Because isn't "K" Line taking the position it's not a rail line, and who are you speaking for when you say it's--
J. Scott Ballenger: For both of us, Your Honor, because that resolves -- actually resolves the case for both "K" Line and Union Pacific.
Sonia Sotomayor: --If it's considered what? If it's considered--
J. Scott Ballenger: "K" Line -- the statute requires -- to be triggered, it requires a receiving carrier that is a rail carrier. "K" Line is the receiving carrier here and they are not a rail carrier. So then the question becomes -- Union Pacific certainly is a rail carrier. The question becomes: Can you treat Union Pacific as the receiving carrier? You can't. The receiving carrier language has been in the statute since 1906. It has never changed. And for a century it has always meant the carrier that receives the property from the shipper at the point of origin. The current language--
Sonia Sotomayor: --Where is that defined in Carmack? Where in the pre-1978 provisions or in the current statute is that to be read?
J. Scott Ballenger: --Well, there are -- there is not an explicit definition of the term "receiving carrier", Your Honor. It appears in the first sentence of 11706, where it has always appeared in the first sentence of Carmack, and then there are implications in -- throughout the rest of Carmack, which I'm happy to talk about.
Sonia Sotomayor: That's -- I am trying to find it, statutorily. And what case says that? What case of ours defines a -- a receiving carrier in that particular way?
J. Scott Ballenger: Well, let's start with the statutory language, if we may. The first sentence of Carmack says that "A rail carrier providing transportation or service subject to the jurisdiction of the board under this part shall issue a receipt or bill of lading for property it receives for transportation under the-- "
Sonia Sotomayor: The only one--
J. Scott Ballenger: --That's how--
Sonia Sotomayor: --The only one who has -- the board has jurisdiction over is the railroad. It doesn't have jurisdiction over the ocean carrier receiving.
J. Scott Ballenger: --That -- that's correct, Your Honor. And then the question is--
Sonia Sotomayor: And so you are the -- you have to be the person -- the railroad has to be the person receiving the goods, correct?
J. Scott Ballenger: --No, Your Honor. The receiving carrier has always been the party at the point of origin of the shipment. And you see if you look at the venue provision in the current language--
Sonia Sotomayor: But you are not reading the language. Doesn't the language say the person who receives under the jurisdiction of the board?
J. Scott Ballenger: --No, Your Honor. It's -- it's two separate requirements. It's always been understood as two separate requirements. Carmack requires that the receiving -- a receiving carrier is subject to the jurisdiction of the board and then it also has to be the receiving carrier. The receiving carrier is the originating carrier. If you look at the venue provision--
Sonia Sotomayor: I -- I keep going back to: What language tells me that particular point in the statute?
J. Scott Ballenger: --Because otherwise the whole structure of the statute doesn't work. Carmack draws a distinction between receiving carriers, delivering carriers, and connecting carriers. If receiving property directly from another common carrier and merely moving it for a portion of the journey in connecting were enough to make you a receiving carrier -- and, of course, it is in common parlance; you are receiving goods in that circumstance. --but receiving--
Sonia Sotomayor: That's my problem.
J. Scott Ballenger: --"Receiving carrier" has always been a term of art in this statute. If that were enough to make you a receiving carrier, then the statutory structure would fall apart, because every interim carrier in the line would be a receiving carrier. Every single one of them receives.
Antonin Scalia: Yes, but not -- not every -- where you are dealing with -- with intermodal transportation, not every receiving -- not every rail carrier would be the receiving rail carrier. I mean, this--
J. Scott Ballenger: That--
Antonin Scalia: --Your client is the first rail carrier to receive, right?
J. Scott Ballenger: --It's not how -- that's not how the statute is worded, Justice Scalia. The -- the statute--
Stephen G. Breyer: Is this the language? The -- if it helps with Justice Scalia's question, the language says "a rail carrier providing transportation or service subject to the jurisdiction of the STB shall issue a receipt or bill of lading for property it receives. "
J. Scott Ballenger: --Correct.
Stephen G. Breyer: And so that's what it has to do. It's a bill of lading for property it receives. And you are saying "receives" means receives from the shipper.
J. Scott Ballenger: It has always--
Stephen G. Breyer: It does not mean receives from another carrier.
J. Scott Ballenger: --It has always meant that.
Stephen G. Breyer: Is that right?
J. Scott Ballenger: That's correct, Your Honor. It has always meant that. It has to mean that, because otherwise, if you read it to mean receives from another carrier then every connecting carrier or delivering carrier in the chain would be a receiving carrier as well as a connecting or delivering carrier and required to issue its own bill of lading, which would turn the historic purposes of Carmack on its head. The purpose of Carmack was to require the first carrier in the chain to issue a single through bill of lading to the destination that would govern the whole voyage under uniform consistent liability terms. No one else in the chain is supposed to issue a bill of lading, so there is only one receiving carrier. It's the first carrier who deals directly with the shipper. If you look at the venue provision you can see that the statute uses the term "originating carrier" interchangeably with "receiving carrier", and it provides venue over that carrier only at the point of origin of the shipment. That would make absolutely no sense if someone downstream could be the receiving carrier. In this circumstance you would say, I suppose, that Union Pacific was the receiving carrier.
Sonia Sotomayor: I always thought that the purpose of Carmack was to ensure rail responsibility, rail carrier responsibility, so that it was one bill of lading with respect to all railroad connections. If that was the purpose of Carmack--
J. Scott Ballenger: That's not quite correct, Your Honor. Historically, as this Court explained in Atlantic Coast Line v. Riverside Mills and in the Ward case, the purpose of Carmack was to require through transportation, a through bill of lading, from the originating point to the destination point, a single bill of lading under consistent terms, so that the shipper does not have to prove where damage occurred. The point of Carmack--
Sonia Sotomayor: --But on the rail line.
J. Scott Ballenger: --On--
Sonia Sotomayor: On rail -- on rail transportation.
J. Scott Ballenger: --On any transportation, actually, Your Honor. The way that the statute works, it can--
Sonia Sotomayor: Historically you say that?
J. Scott Ballenger: --Yes, Your Honor.
Sonia Sotomayor: In the pre-1978 Carmack, there is a -- if you want to take a look at it, it is in page 99a of your petition. It reads: "If the loss, damage, or injury occurs while the property is in the custody of a carrier by water, that liability -- the liability of such carrier shall be determined by the bill of lading of the carrier by water and by and under the laws applicable to transportation by water. "
J. Scott Ballenger: Yes, Your Honor.
Sonia Sotomayor: So--
J. Scott Ballenger: That provision was introduced in the Transportation Act of 1920. It's talking about domestic water carriers. And it's still there in the statute. It's just in the Carmack provision when Congress split Carmack into three in 1995 it moved that provision to 14706(c)(2).
Sonia Sotomayor: --So explain to me what happens in domestic water cases. It says that you can have a different bill of lading for the water transport. That bill of lading controls your damage on the water, and it separates that out from damage on the rail side?
J. Scott Ballenger: In domestic -- Congress drew a distinction between foreign and domestic commerce for a very long time, Your Honor. In domestic commerce the rule has been that a rail carrier could interconnect with a domestic water carrier and the a domestic water carrier could carry it for a leg of the trip. And the whole trip would still be governed by the Carmack through bill of lading. But if there was damage during the water portion, it would be governed by the water law, which was the Harter Act.
Sonia Sotomayor: And the railroad is covered by any damage that occurs on land?
J. Scott Ballenger: The railroad is liable on a through transportation basis for the entire trip, but if the damage occurred during the water leg its liability is limited and confined by the law that governs the water leg.
Sonia Sotomayor: So there already is domestically two different forms of liability protection?
J. Scott Ballenger: Congress made that compromise, because Congress was forced to choose between not having through bills of lading at all domestically or making -- or essentially repealing the Harter Act in circumstances where rail carriers interact with them. Congress made the choice to compromise and have kind of a hybrid arrangement. But in foreign trade -- the geographics of Carmack was always confined, that Carmack did not apply to imports at all and it did not apply to exports except for exports to adjacent foreign countries.
John G. Roberts, Jr.: Prior to 1978. If I think you lose under that question under the law as happens to be currently codified, but would prevail under the pre-1978 law, what is your strongest case for the proposition that what I referred to earlier as the boilerplate language trumps the plain language of the currently codified version?
J. Scott Ballenger: Your Honor, we don't think that this Court has ever interpreted language of that nature. But in a different context with a much weaker statutory language, the Fourco Glass line of cases, this Court applies a strong thumb on the scale that Congress didn't intend to change the law.
John G. Roberts, Jr.: It's kind of a difficult -- I mean, if you are a shipper and you are trying to figure out, okay, let's ship some goods, and you pick up the law and it says, well, this is what the law says, who's going to tell you that, well, you may think that's what the law says, but you are really governed by the pre-1978 law.
J. Scott Ballenger: Well, Your Honor, we don't think that it is necessary for this Court to read the statute in a countertextual way. You just have to do what this Court has always done and read the statute as a whole, including giving some weight to that provision which is in the text of the statute and reading the rest of the statute in light of it. And I think if you do that, particularly in this case, it's really not that hard to reconcile the pre-1978 law with the current law. Union Pacific cannot be a receiving carrier because it didn't receive the goods at the point of origin. "K" Line isn't a rail carrier. That's enough to resolve this case and this Court doesn't need to go any farther. Actually that would as a practical matter mostly resolve the commercial problem that this Court granted certiorari to resolve.
Anthony M. Kennedy: I have one question, and I know that your white light is on. Can I assume that whether we rule for Petitioners or Respondents in this case, the shipping world, the cargo world, will immediately adjust to our decision? It's not going to be a problem. There are insurers, there are freight forwarders, there are form contracts. People will know exactly what to -- they will adjust in 1 week to what we do. Am I right about that? Or can you say that if we adopt the Respondent's position it will be disruptive to the shipping trade and so forth?
J. Scott Ballenger: Not exactly, Your Honor, because of course Respondent's position is that Carmack is a mandatory regime; there is no way to contract around it if it applied. So Respondent's position is that Carmack mandatorily must govern the inland leg of any of these through shipments. The practical consequence of that is that true through bills of lading, unity of responsibility in one shipper under consistent terms for the entire voyage will become impossible in foreign trade. So there won't be a way to correct that.
John G. Roberts, Jr.: Thank you, Mr. Ballenger. Mr. Yang.
Anthony A. Yang: Mr. Chief Justice and may it please the Court: I would like to address a few of the questions that have come up already. Justice Sotomayor you asked what Supreme Court decision addresses the receiving carrier. There is a series of decisions which address receiving carriers and the nature of the receiving carrier as the initial care that receives goods from the shipper. I would -- Mexican Light and Power Company, 1947, is probably the best, but that traces its way back all the way to the 1910s, Galveston Wharf Company, Ward, Starburg, Lish Milling, Riverside Mills. These cases are largely cited at our brief at page 27 to 28, footnote 10. Regarding the geographic scope of Carmack on the current text, we believe that the current text, which is reproduced in the petition appendix at 69a -- if you look at the combination of both the first and the third sentences of Carmack, we believe that that reproduces the historic scope as encompassing only domestic transportation, purely domestic transportation, and transportation to an adjacent foreign country when it's an export. The first sentence requires that the rail carrier be providing transportation or service subject to the jurisdiction of the board and issue a receipt or bill of lading. The very purpose of Carmack from the very beginning, its core purpose, was to allow a shipper to sue the initial carrier. The initial carrier was responsible for the entire shipment. All the connecting carriers were deemed to be agents of the initial carrier and therefore there was an easy defendant for the shipper who dealt directly with that shipper -- or that carrier, and received a bill of lading from that carrier to sue.
John G. Roberts, Jr.: I read -- I read your brief, like your friend's, as relying almost exclusively on the pre-1978 language.
Anthony A. Yang: Our brief addressed the first sentence briefly in, I believe, the prior page. Page 20 to 21 deals with the first sentence, and then 22 with the third. But our point is that the first sentence sets an anchor in the United States as the -- as the origin of the shipment. Part A jurisdiction -- this is reproduced at page 62a in the petition appendix. It does cover shipments that themselves transit United States and foreign countries.
Antonin Scalia: Excuse me, what -- what are you referring to now?
Anthony A. Yang: 62a of the petition appendix. This is Section 10501, which defines Part A jurisdiction of the STB. And then I'm looking--
John G. Roberts, Jr.: The Union Pacific petition appendix?
Anthony A. Yang: --They are both -- both of them are actually the same. Both the petition appendixes are the same. So I'm looking down at -- A. 2 provides that the jurisdiction of the STB applies only to transportation into the United States when that's between -- you know, part of a larger transit between the U.S. and a foreign country or even purely domestically. So, a shipper -- or a carrier that is subject to STB jurisdiction has to be providing this U.S. transportation when it issues the bill of lading. So the -- again, the central purpose was to provide a carrier by which -- against whom the shipper can bring suit in a convenient form, the person that the shipper dealt with. And that's now reflected in section -- the forum provision of Carmack which is subsection (d)(2), it provides that a suit under Carmack may only be brought against the originating rail carrier in the judicial district in which the point of origin is located. And the prior provision said that that's a U.S. district court or a State court. Carmack itself anchors the transportation as starting in the United States. And then the third sentence explains the remainder of the historic scope. The third sentence--
Ruth Bader Ginsburg: We are looking where, now?
Anthony A. Yang: --This is back to 69(a) of Carmack. The third sentence in subsection (b), it defines the liability under Carmack. It says "The liability under this section is for damage caused by the receiving carrier, the delivering carrier or another rail carrier over whose line or route the property is transited in the United States or from a place in the United States to a place in an adjacent foreign country. " So, what that does is that provides the center for the two bookends. The first bookend is the originating carrier, the receiving carrier that received the goods in the United States, provides the bill of lading to the shipper. The second bookend is the delivering carrier, and in between -- remember Carmack was intended to cover the entire carriage as a unified whole. The in-between is transportation in the United States or export transportation from the United States to a point in a foreign country. We believe that that text, read as a whole, reflects the historic scope of Carmack that's existed since 1915 when it was extended beyond purely domestic transportation.
Antonin Scalia: But why -- why doesn't the (2), (a)(2), the delivering rail carrier -- if what you say is true, that should be the delivering rail carrier delivering in a -- in an adjacent foreign country.
Anthony A. Yang: Correct.
Antonin Scalia: That -- that limitation is strangely missing from (2).
Anthony A. Yang: Well, we believe the portion of (a)(3), which now looks like it's in (a)(3), the "over whose line or route the property is transited -- transported. " actually applies to the receiving and delivering rail carrier. If you would turn to page 5a and 6a of the reply brief of Union Pacific, there is a side-by-side comparison.
Antonin Scalia: Okay. Wait a minute now.
Anthony A. Yang: I'm sorry--
Antonin Scalia: The paragraphing you say is wrong?
Anthony A. Yang: --From 5a to 6a, you will see 5a is the 1978 version of Carmack that was enacted in the 1978 codification.
Antonin Scalia: Right.
Anthony A. Yang: The current version is reflected on the facing page. There was no paragraph indentation in 1978. And in 1995 when Congress changed the text, it did include a paragraph indentation, but the committee report -- the conference report is very clear that Carmack was not changed. Also--
Antonin Scalia: So all -- you are saying that -- I think what you are saying is that all we have to use the statutory statement that "nothing was meant to be changed or. " is to say, well, that paragraphing in 3 is just wrong, right?
Anthony A. Yang: --Well, I don't know -- you mean the indentation?
Antonin Scalia: The indentation.
Anthony A. Yang: The indentation was inadvertent. And I would actually direct the Court to 73a, which is the other part of Carmack that now exists for motor transportation and freight forwarders. There is no indentation. The current version of the other half of Carmack does not provide the indentation. The indentation is inadvertent. And in '95 -- the '95, which--
Antonin Scalia: I'm losing you. 73a?
Anthony A. Yang: --73a. (A)(1) reproduces what we were just looking for -- looking at in the rail carrier.
Antonin Scalia: Rail carrier.
Anthony A. Yang: It's a single paragraph. That's the way it's existed since, you know, 1915, basically, or 1927 when they added receiving carrier. So what the Court can do -- it's true, Carmack is less clear than it used to be. It was made somewhat less clear in '78 and in '95. But we believe that when you take the text as a whole, particularly when read in light of the context of this Court's decision, the longstanding practice in the United States reflected in the STB -- the STB's decision, that is the ICC's decision, the predecessor, that at least the provision is ambiguous. And if the provision is ambiguous, section 3(a) that mandated the statute should not be construed to make a substantive change in the law should control.
John G. Roberts, Jr.: This may not have anything to do with anything. Is there a reason the STB doesn't appear on your brief?
Anthony A. Yang: The STB does not appear in our brief--
John G. Roberts, Jr.: It did in the Kirby case just a few years ago.
Anthony A. Yang: --It did. It did. The STB has not taken a position about the current scope of Carmack and therefore decided not to join our brief.
Stephen G. Breyer: Is -- is there a way to -- are you finished?
Anthony A. Yang: No. I would say, though, that the ICC's decisions remain binding. That is 1995, the statute, ICDA section 204(a), which is a note now to section 701 of Title 49, specifically provided that the ICC's orders and determinations would remain binding unless changed by the STB. The STB just did not, at this point, come on record and take a position about the scope of Carmack.
Stephen G. Breyer: We don't even get into this problem if -- unless the ship line is a rail carrier?
Anthony A. Yang: In part. There's -- if you--
Stephen G. Breyer: Well, it says "A rail carrier providing transportation or service subject to the STB shall issue a receipt or a bill of lading. " That's what leads us into the problem.
Anthony A. Yang: --That would take care of the initial carrier, what we believe is the initial receiving carrier in the case, "K" Line. However, I believe the argument is being made that Carmack could suddenly apply mid-carriage at the border.
Stephen G. Breyer: But mid-carriage -- it only talks about -- they use that word "received". That's why I thought possibly it didn't because it says--
Anthony A. Yang: I believe the argument is that the first carrier who receives property in the United States would be deemed the receiving carrier.
Stephen G. Breyer: --That's a separate argument?
Anthony A. Yang: That's a separate argument.
Stephen G. Breyer: Did the Ninth Circuit pass on that argument?
Anthony A. Yang: You would have -- excuse me?
Stephen G. Breyer: Did the Ninth Circuit pass on that argument?
Anthony A. Yang: It did not.
Stephen G. Breyer: It did not.
Anthony A. Yang: It did not.
Stephen G. Breyer: So that's not right in front of us?
Anthony A. Yang: That is correct.
Stephen G. Breyer: It's quite different.
Anthony A. Yang: It is a different -- but we think it's clearly wrong in light of Carmack's historic purpose. This would be to divide the -- the -- if that were correct, it would divide the transportation in two.
John G. Roberts, Jr.: Thank you, counsel.
Anthony A. Yang: Thank you.
John G. Roberts, Jr.: Mr. Frederick.
David C. Frederick: Thank you, Mr. Chief Justice, and may it please the Court: It does not take great mental gymnastics to read the plain language of this statute and resolve it the way the Ninth Circuit did in favor of Respondents. The case is controlled by the plain language of several Federal statutes, and they have been averted to, to some extent. But I would like to point out to the Court that in 2-1/2 pages of our merits brief, starting at page 26 and going over to page 28, we not only cite the full language in full of the Carmack Amendment and the jurisdictional provision of the STB, but explain how Union Pacific is a delivering carrier within the meaning of the Carmack Amendment; under the plain terms of the statute, they are liable for the loss; the Carmack Amendment applies to their receipt of the property; and the train derailment which was caused by their negligence comes within the plain terms of the Carmack Amendment.
Stephen G. Breyer: Then under that view, I guess that -- that any intermodal transport, China, all the goods coming from China, which tend to move under a single bill of lading, as soon as they get to the United States and go on a train for 50 miles a new bill of lading must issue?
David C. Frederick: No. In fact, Carmack--
Stephen G. Breyer: Why?
David C. Frederick: --explicitly says, quote: "Failure to issue a receipt or bill of lading does not affect the liability of a rail carrier. " Carmack--
Stephen G. Breyer: All right, so you're saying they don't have to issue--
David C. Frederick: --They do not have to issue--
Stephen G. Breyer: --Fine. If they don't have to issue a separate receipt, what we are talking about is a bill of lading that was issued by the ship.
David C. Frederick: --That's correct.
Stephen G. Breyer: All right. Now, if that's correct and if the ship -- the only one that has to do that, it says, is a rail carrier, and a rail carrier is a person providing common carrier rail transport. And then that's defined to include intermodal equipment used by or in connection with a railroad. And my understanding, which I'm asking you for correction -- is that the argument here is the ship is providing intermodal equipment used by or in connection with a railroad.
David C. Frederick: That's correct.
Stephen G. Breyer: And it's the words "used by or in connection with. " that I am focusing on, because to apply those words here seems to me to bring every international shipment in the world, no matter how small the American portion by rail and no matter how big the foreign part of this transport, it brings it all within Carmack. And it means that the bill of ladings issued by people throughout the world are all going to have to apply to meet the terms of the Carmack Amendment, which had the purpose of railroads in the United States, and that's going to be a nightmare.
David C. Frederick: No, it won't, Justice Breyer.
Stephen G. Breyer: Now, first, is it true what I said? And second, if it is true why isn't it way contrary to purpose and a nightmare?
David C. Frederick: It is not -- it is true and not true, but for different reasons. And if I could take a moment to explain, because I think it is important. In 1978 the plain language of the statute defined what the STB's jurisdiction is. They do not dispute that the last part of the jurisdictional provision is the STB jurisdiction when a -- a shipment is in, quote, "between the United States and a place in a foreign country. " but the STB only has jurisdiction to the extent the transportation occurs in the United States. So it is true that imports into the United States are covered by the Carmack Amendment, but only to the extent of the transportation being within the United States.
Stephen G. Breyer: So why don't they have to issue a bill of lading? That's what they say. So every company, the Finnish company, Chinese, every company, every shipowner, even if you've never have been to the United States -- sad for him, but nonetheless -- if every one of those is going to have to issue a bill of lading, whatever, meeting whatever requirements are there, and we know at least one requirement you think applies.
David C. Frederick: Let me go back -- let me go back to the international point, Justice Breyer, because the railroads argued against an international uniform rule that would apply both to ocean carriage and inland carriage in the Rotterdam rules. And they made the representation to the international community, you don't need to have a uniform rule that applies to both ocean carriage and inland carriage, because we have this thing called the Carmack Amendment. And they made the representation that the Carmack Amendment would apply to imports, as this Court in the Woodbury case written by Justice Brandeis, decided in 1920, and a month earlier--
Antonin Scalia: What are you arguing, estoppel?
David C. Frederick: --No, I'm arguing that their position is inconsistent with their representations, and therefore the plain language of the statute--
Antonin Scalia: Which one is right? That's what we are concerned about.
David C. Frederick: --What I'm--
Antonin Scalia: Which one is right? Their earlier position or their current position?
David C. Frederick: --Their earlier -- their earlier position was correct under the plain language of--
Antonin Scalia: Why don't you speak to that rather than the fact that they had an earlier position?
David C. Frederick: --The plain language, Justice Scalia, as it is currently enforced I think disposes of the case without any real argument.
Sonia Sotomayor: Excuse me, can I go back to Justice Breyer's question?
David C. Frederick: Yes.
Sonia Sotomayor: And perhaps, as I understand this, I think we are all forgetting that none of these liability provisions come into play until there is proof that an incident has occurred somewhere, either on a railroad or on the ocean, correct?
David C. Frederick: Correct.
Sonia Sotomayor: And so the issue becomes which set of rules governs that particular incident--
David C. Frederick: Correct.
Sonia Sotomayor: --where it happens.
David C. Frederick: Correct.
Sonia Sotomayor: I think Justice Breyer asked you why it made sense that there would be two rules in effect for what happens on the ocean and what happens on land; and if we had it, wouldn't it create great difficulty. I think -- you may correct me.
Stephen G. Breyer: Your point was--
David C. Frederick: That's how the world--
Stephen G. Breyer: --if it creates such difficulty, why were the railroads in favor of it before?
David C. Frederick: --Correct. And that's how -- that's how Europe operates. Europe has separate conventions for rail and road that apply to damage that occur on land and the European nations have acceded to the various versions of Hague rules--
Stephen G. Breyer: Anything here that says on land? Anything in Carmack that says on land?
David C. Frederick: --Well, it's transport--
Stephen G. Breyer: In other words, if it's in a ferry boat? Remember, we have a very broad definition of "rail" where "rail" includes all things that have nothing to do with rail. So now we have got that broad definition, and I would have thought we through what has to be in the receipt and then we get to the -- that section and where it's exempt, because they got -- want to get rid of it; then you have to put in -- you have to put in a certain kind of waiver, which is very hard to achieve. And that -- that's my understanding of it.
David C. Frederick: --It's the Surface Transportation Board, Justice Breyer, that has the jurisdiction here.
Stephen G. Breyer: Yes, but they can't get rid of the thing you like.
David C. Frederick: No, they can.
Stephen G. Breyer: And--
David C. Frederick: They can.
Stephen G. Breyer: --How do they do it?
David C. Frederick: And I want to answer Justice Kennedy's question. They can. These are background rules that we are talking about and they will be contracted around. After the Sompo decision was decided in the Second Circuit, Union Pacific went right out and changed the contract that they had with ocean carriers to ensure that the ocean carriers would indemnify them if they were liable and did not get the full benefits of contractual extensions. What we're talking about here--
John G. Roberts, Jr.: Counsel--
David C. Frederick: --is whether there's an American forum for American cargo interests for an American train that is derailed in the United States. That's what we are talking about.
John G. Roberts, Jr.: --But part of your argument -- you don't rely heavily on your plain language argument when it comes to deciding that these huge ocean vessels are rail carriers.
David C. Frederick: Let me go to that point now, Mr. Chief Justice. The Port of Long Beach is situated more than 20 miles from Los Angeles and the port has 60 miles of train track with intermodal, multimodal facilities that get the cargo containers, which 20 miles away to the Los Angeles train depo where Union Pacific picks them up. Now, under 20-mile transport. We would submit as a factual matter, which of course would need to be done on remand, that there are facts that can be adduced to establish the functionality test which the ICC has long administered to look at the functions being performed as well as--
John G. Roberts, Jr.: So that's a little bit different from your argument that they are a rail carrier because their bill of lading would cover the train ride to Chicago.
David C. Frederick: --We didn't make that argument. Our argument was that, based on the functions and them holding themselves out to be a rail carrier, which they have done, they qualify under the normal ICC method of determining rail carrier.
John G. Roberts, Jr.: If it weren't -- if it weren't for the -- for the track from Long Beach to Los Angeles, you would say then they are not a rail carrier?
David C. Frederick: The argument as the ICC is defined it also looks at things like the multimodal facilities, like the containers, and -- and the holding themselves out as a rail carrier in their advertising. Those are important parts of the functionality test.
Anthony M. Kennedy: Well, how -- how does the Chief Justice's hypothetical work with the language of the statute? They -- it just goes to Los Angeles and it -- there is a railroad track right by -- by the wharf, and it's the Union Pacific Railroad.
David C. Frederick: Well, there are -- there are two ways to read the text and resolve the case. One is to say UP, Union Pacific, as the delivering rail carrier. Under the statute UP is not required -- although the first part says you are supposed to issue a bill of lading, their liability for the train derailment does not turn on whether they issued a bill of lading or not.
Sonia Sotomayor: Is your case -- does your case end if we hold that "K" Line is not a railroad carrier?
David C. Frederick: No.
Sonia Sotomayor: All right.
David C. Frederick: "K" Line gets out of the case. We would have to go to Tokyo to pursue "K" Line under the bill of lading. But we could continue our suit against Union Pacific as a delivering rail carrier delivering carrier under the Carmack Amendment.
Sonia Sotomayor: As a delivering carrier.
David C. Frederick: Correct.
John G. Roberts, Jr.: Well, unless we hold, as your friends argue on the other side, that they can opt out under 10709.
David C. Frederick: Well, you would need to reach the question of whether or not exempt carriage under 10502 takes away the option of a 10709 contract.
John G. Roberts, Jr.: And that's a different question with respect to liability and claims than with respect to venue.
David C. Frederick: Correct. And let me address that if I might.
Sonia Sotomayor: Could I just -- just briefly before you answer the Justice -- the Chief.
David C. Frederick: Sure.
Sonia Sotomayor: In what capacity -- "K" Line is the contracting party with Union Pacific. Under what contract could the shipper sue Union Pacific?
David C. Frederick: Under the--
Sonia Sotomayor: If "K" Line is -- is the shipper.
David C. Frederick: --Directly under the Carmack Amendment. And in fact, when Union Pacific removed this case from State court to Federal court, the Federal question was they said: There is a Carmack Amendment claim being asserted against us. That's how we get from State court to Federal court. And when they -- when they sought to transfer the case from California to New York, they did so on the basis of the convenience of 28 of the 32 witnesses to their train derailment being American citizens. So it's not like there needs to be some special -- there is a special cause of action within the Carmack Amendment, Justice Sotomayor, that provides a means of redress for damaged cargo interests to go directly against the railroad.
Sonia Sotomayor: Regardless of whether the shipment was by them directly or not?
David C. Frederick: Correct, if they caused the damage. That's the whole point of the Carmack Amendment.
John G. Roberts, Jr.: Maybe now you could respond to my question about the distinction under 10502 between claims and liability and venue.
David C. Frederick: Yes. The STB, in an authoritative determination that is entitled to our deference, has said that when it issues an exemption for certain categories of rail carriage, which it has done with the multimodal shipments, those exemptions remove the possibility of a 10709 contract carriage. And the reason for that is that in both situations the rail carrier has to provide an opportunity for Carmack-compliant terms to be given to the shipper. If it's exempt cargo carriage under 10502, 10502(e) says that the carrier must provide Carmack-compliant terms in order to take advantage of the exemption and contract under the exemption. 10709 provides contract carriage, but only if the rail carrier provides common carrier tariffs that a cargo interest could ship under. Here, because the transportation is exempt under 105 -- 10205, there is no common carrier tariff that is applicable. And that's why the STB has said if there is no common carrier tariff applicable under 11101, then there cannot be an opportunity for contract carriage. To do otherwise would be to make the statute a complete deregulation statute.
John G. Roberts, Jr.: Well, but it's a little -- I mean, am looking at page 64a of the petition appendix, where they are saying you can't exempt through contractual terms for liability and claims. Venue is treated elsewhere, separately from liability and claims. So again, under -- you are the plain language team, and that seems fairly plain that venue is not covered.
David C. Frederick: No -- well, liability, Your Honor, is where you can bring your suit and what your suit--
John G. Roberts, Jr.: No, the liability is not where you can bring your suit. Liability is liability. Venue is where you can bring your suit.
David C. Frederick: --The -- the way the board has construed this in the letter brief that they filed in the -- in the Second Circuit, which is entitled to our deference, says the Ninth Circuit in Regal-Beloit got it right with respect to the interplay between 10502, 10709, and -- and contract carriage.
Antonin Scalia: Wait. You say we have to defer to a letter brief in another case?
David C. Frederick: No--
Antonin Scalia: I think most of my colleagues would not defer to a letter brief in this case. And you are saying that we owe deference to a letter brief in another case?
David C. Frederick: --That is what this Court held--
Antonin Scalia: Which I didn't agree with, it seems to me.
David C. Frederick: "Mead did not overrule Auer, and in Auer the Court, this Court, gave deference to a brief by the Federal Government that was setting forth the authoritative-- "
Antonin Scalia: In another case?
David C. Frederick: --In that case.
Antonin Scalia: In that case. Do we have a-- brief here?
David C. Frederick: But I don't know why -- it's a distinction without a difference, because here the Second Circuit invited the views of the STB to tell us: What do you think is the interplay between these various provisions? And the STB gave an authoritative view to the Second Circuit so that it could resolve a case in which the STB was not a party.
Stephen G. Breyer: There are two things here I don't understand. I'm just trying to get clear. In the first part, 706(a), it talks about -- in the definition of "rail carrier". 102-6, I guess -- it says railroad includes -- railroad transport will include intermodal connect -- intermodal equipment transport used in connection with a railroad. What is intermodal equipment?
David C. Frederick: Those are the chassis. They are the containers that are used to--
Stephen G. Breyer: Okay. So now, if we read it literally, to go back to my -- I'm trying to produce the worst example that frightens me the most. There is three miles of railroad transport in the United States, but it carries the chassis, or it carries that big box, which has come all over the world, from all over the world. And if we read this with no limitation, this definition makes ships that carried it from other places, railroads, and once that's railroad transportation, we are into Carmack. And now, if STB exempts it, what happens is the provision comes into play that says you can't exempt an exempt carrier, in effect, from the liability provision. And it means the ships that had to issue the bill of lading now have to allow the kinds of suits -- now, here is the point I'm not certain about -- I would think against them, not just against a railroad carrier, and perhaps against them for anything that happens, even on the ocean, and not just the railroad carrier for something that happens within the United States.
David C. Frederick: --No.
Stephen G. Breyer: Now, explain to me: What is it that gets us out of that?
David C. Frederick: There -- the -- COGSA applies tackle to tackling. The damage is occurring on a ship.
Stephen G. Breyer: Yes.
David C. Frederick: The STB has no jurisdiction over that. Carmack does not apply. It is only once the ship--
Stephen G. Breyer: Well, where does it say that? Because I better read that one.
David C. Frederick: --Well, COGSA itself, which is set out in the--
Stephen G. Breyer: Yes. Where? Do you know -- do you know offhand where it says that, just so I can--
David C. Frederick: --Yes. I can give -- the provision of COGSA that you are looking for is the definition of "carriage", which is set forth in--
Stephen G. Breyer: --Good.
David C. Frederick: --page 48A of the petition appendix, and it is 1(e). The term "carriage of goods" covers the period from the time when the goods are loaded on to the time when they are discharged from the ship. And as the Court in Kirby said--
Stephen G. Breyer: That's COGSA. That's not Carmack.
David C. Frederick: --Right.
Stephen G. Breyer: So what gets us out of Carmack?
David C. Frederick: Carmack only applies if it is carriage and transportation within the STB's jurisdiction. The STB has no jurisdiction over COGSA carriers. That's the Federal Maritime Commission.
Stephen G. Breyer: Then why are we suing -- why are we suing -- why does the ship being sued here?
David C. Frederick: The ship is performing two different functions, Justice Breyer. It is performing an ocean function, and then once its on land -- and there were thousands of "K" Line containers all over the United States right now where "K" Line is performing services, motor service and rail carriage services, here in the United States.
John G. Roberts, Jr.: Is that because they have contracted for them?
David C. Frederick: They own them.
John G. Roberts, Jr.: Well, they don't own Union Pacific's rail line.
David C. Frederick: No, they own the containers that Union Pacific is pulling.
John G. Roberts, Jr.: So if I -- if I own a container being pulled by somebody else's train, I'm in the train business?
David C. Frederick: Under the definition of functionality, where that is part of how the STB regulates. And to say otherwise, Mr. Chief Justice, would be to deny the Federal government the regulatory authority over containers that come into this country representing approximately 80 % of the trade.
John G. Roberts, Jr.: No, it wouldn't. It would just -- it may not just mean that they don't have the regulatory authority because that container is a rail carrier. What is carrying it is the rail carrier. It's a container.
David C. Frederick: But they -- well, at one level, Mr. Chief Justice, it's sort of academic, because the STB exempted from Part A, which includes the Carmack Amendment, those containers, and it did so in an exemption order which we cited in our -- in our brief. So at some level, there is an academic quality to this colloquy.
Sonia Sotomayor: I think -- I am a little bit confused now. Now, back to being confused. You are suggesting that from the landing, it's an ocean carrier. And the minute that the containers are unloaded from the vessel and put on land, it becomes a railroad carrier, even though its delivery contract may have ended at that point?
David C. Frederick: No. If its delivery contract ended at that point it did not hold itself out as a rail carrier--
Sonia Sotomayor: So what about -- what is it that you're arguing makes them a railroad carrier once they put it there. Let's assume the reverse is the hypothetical that you -- that you posited. They deliver to the dock, and Union Pacific is the one that owns those three to six miles of connection to its main railroad. It's the one who is going to provide the motor carriage. It's the one who is going to take it from the -- the dock and bring it in.
David C. Frederick: --And can I just add to the hypothetical the fact, which is an important fact: Did the rail carrier hold itself out to the public as a rail carrier in making the contract with the original shipper? Because that is an important fact that does not help us resolve your particular hypothetical, Justice Sotomayor. If UP is picking up the goods with its equipment, the ocean carrier is not a rail carrier under our theory of the case. There has to be functions being performed that are multimodal functions and the ocean carrier has to--
Sonia Sotomayor: So it's not merely that it has possession of the container that it has dropped somewhere. It has to transport it in some way in relationship to the railroad?
David C. Frederick: --I think that's the best way to understand the statute.
Stephen G. Breyer: Can we go back one more second? Can you just give me the citation in Carmack -- not COGSA, but Carmack -- that would get our intermodal shipment out of the board's jurisdiction? Because what I'm thinking about is the intermodal shipment and the boat sinks near Hawaii. Okay? Now, on your reading of Carmack, not COGSA, what gets that shipment sunk in Hawaii -- or Midway or Guam or someplace -- what gets them out of Carmack? Which words?
David C. Frederick: Well, the -- on 62A, the petition appendix defines the general jurisdiction.
Stephen G. Breyer: And it includes transport just as you defined it between the United States and another place -- United States and a place in a foreign country.
David C. Frederick: Yes.
Stephen G. Breyer: So that's what this is. This is a shipment between Shanghai and San Francisco.
David C. Frederick: And at (a)(2) -- will you look at (a)(2), please? (A)(2) says jurisdiction under paragraph 1 applies only to transportation in the United States.
Stephen G. Breyer: Oh, sorry, between a place in -- oh, transportation in the United States.
David C. Frederick: In the United States.
Stephen G. Breyer: Between a place in.
David C. Frederick: Exactly.
Stephen G. Breyer: Thank you.
David C. Frederick: Yes, thank you. [Laughter] Now, it is not true that the law was settled prior to 1978. The Woodbury case applied the Carmack Amendment to imports. Union Pacific v. Burke applied it to imports. And in those cases, this court made the determination that the words "from" and "to" were also meaning "between". And Congress, when it cleaned up the statute in 1978 and provided words that are very easy to understand now, was not changing what had been a well-settled practice of goods that were getting -- arriving at a port in the United States and then being transported by land means. And it's important to understand the context in which this arose. Because I think our fundamental disagreement with the Solicitor General's presentation is that it ignores the container revolution that was occurring between the late 1950's and the '70s, when this act was codified and cleaned up. And in that container revolution, prior to the time when containers were used for multimodal transportation, it was common for goods to be repackaged at ports in the United States. They were taken off ships. They were repackaged, put onto trains or trucks, and that required a separate contractual arrangement. Now, this Court, in Woodbury and Burke, had said it is not so important whether or not there is a separate contract, so long as the function and the intent is clear that it is being moved by rail or road in the United States. The Carmack Amendment will apply, Justice Sotomayor. You are completely correct that the purpose of the Carmack Amendment was to hold railroads and motor carriers responsible for the liabilities caused by their loss. But when Congress cleaned that up and put it in section 3, it was not intending to obviate the clear and unambiguous language of the statute. It was simply providing, you know, some boilerplate that I think is very difficult to -- to cause the Court to override the plain language of the statute today. And in 1995, when Congress eliminated -- terminated the ICC and enacted the ICC Termination Act, it reenacted that language. It did not encompass section 3 at that time, so the statute as it presently exists does not have a statutory pointer as to how you are to interpret the language. And under the normal canons that this Court has instructed for courts in the bar, the easiest way to practice law in this area is to look at the statute, see what it says, and not have to go back, not just through the last iteration of the statute, but the one before that, and not just to be able to look at what was in the U.S. Code, but to have to go back to the statutes at large to see what other statutory provisions Congress had put into the statute. That would make the practice of law extremely difficult.
Antonin Scalia: Can I ask you a question about -- about whether -- whether the shipper becomes a rail carrier? Suppose it's not three to five miles. Suppose the -- suppose the American rail carrier is waiting right at the foot of the wharf. All these wharfs have rails that go out to the ship, okay? And let's assume that that's owned by the shipping company. And a crane takes the -- the goods off of the ship, puts it on a -- on a car that rides along those rails for a couple of hundred yards. Is that enough to make the shipper a railroad?
David C. Frederick: I would -- I would concede the point of interchange at the port, Justice Scalia. I don't think it's necessary for the Court to reach that. I will concede that point, so long as, you know, we are talking about an immediate nexus between the vessel and the ship. And -- and that is not -- not a point that we have to prevail on to win in this case.
Antonin Scalia: And you say here they own rail lines that--
David C. Frederick: There are 60--
Antonin Scalia: --that go for--
David C. Frederick: --Well, there was no discovery because this was decided on the pleadings as a matter of law. We believe that once discovery is permitted, if you allow the case to go back for factual development, that the facts would reveal that "K" Line was engaging in significant rail operations that at least get us beyond -- into the realm of legitimate advocacy.
Sonia Sotomayor: When you say "engaging in", are you talking about vis-à-vis this shipment?
David C. Frederick: Yes.
Sonia Sotomayor: Or is it just in general? Vis-à-vis you?
David C. Frederick: That's correct. When my colleague here says that we take the position that Carmack cannot be contracted around, that is not true. Our point here is that when there is exempt carriage, the STB has already defined this as something that can be provided by contract, but we believe that 10502(e) says that they have to provide Carmack-compliant terms. The industry will adapt to a decision by this Court in setting the background rules. We would submit that the simpler regime and the one that the railroad had advocated in the international community was their -- was for there to be a U.S. statute that applies and not to allow complete deregulation through contracts--
John G. Roberts, Jr.: Well, they -- they can't contract around liability for an event such as the one that happened here. Because they have to offer Carmack-compliant terms, and if the owner of the goods has the option of accepting those, they can't contract around that.
David C. Frederick: --That's correct. And -- and the point here about the forum is an important one, because Union Pacific has never thought that in these ocean bills of lading that that entitles American cargo interest to have to go to a foreign country under the ocean carrier's bill of lading in order to vindicate the interests in damage to their cargo. That was an invention by UP sought to remove it under the Carmack Amendment and transfer it to New York, and UP joined that motion and has argued throughout that the Carmack Amendment applies. It would be unusual, to say the least, to allow UP now to take advantage of a contractual extension of COGSA where section 12 of COGSA, by its plain terms, in language that is completely ignored by the other side, says COGSA stops basically at the tackle-to-tackle period and does -- otherwise does not affect otherwise applicable law. And there is a specific reference in section 12 to the Harter Act and any other applicable law. And in 1936, when Congress enacted COGSA to implement the United States -- of the Hague rules, it was aware of the Carmack Amendment.
John G. Roberts, Jr.: Thank you, Counsel. Mr. Ballenger, you have four minutes remaining.
J. Scott Ballenger: Thank you, Your Honor. Even Respondents can't really bring themselves to say that Union Pacific is the receiving carrier here. It's obviously not. They say that somehow, UP could be liable as the delivering carrier under Carmack. But of course, if "K" Line is not a rail carrier, there is no receiving carrier who is obligated to issue a bill of lading under Carmack. No one is allowed to under Carmack. That is how the statute always worked, from 1906 to 1978. If the receiving carrier was not governed by Carmack, as it was not in any import case and in any export case except for Canada and Mexico, then Carmack did not apply to anyone. You can't parachute in midstream into the middle of a big movement and impose Carmack's obligations at the midpoint, because that would turn the historic purpose of Carmack completely upside down. It would read Carmack as mandating the commercial problem that Carmack was designed to solve. The point of Carmack and the through bills under Carmack and COGSA is uniformity of responsibility under consistent terms for the whole voyage in one person. And the reason is that in order to recover from anyone, the shipper has to prove receipt of the goods in good condition by that carrier, and if you break the chain of the through bill, then you would have to prove -- the shippers would have to prove that Union Pacific, for instance, received the property in good order, when as Respondents concede, all that Union Pacific gets is a sealed container. It has no idea at that point. And -- and so the shipper would be left in a position at the end of the day; it opens the container, there's damage; no one knows where it occurs; and there is -- there is no source of law, no source of facts to figure out where the damage occurred. Respondents raise a lot of questions about some track that they say "K" Line owns from Long Beach to Los Angeles. None of this is in the record, and it's waived at this point, Your Honors. It's not actually true, that's not "K" Line; it's an affiliate; and they don't provide rail transportation, it's a Union Pacific subsidiary that provides the rail transportation. But the real point is that all of this is far too late. This case was decided on a rule 12(b)(3) motion to dismiss for improper venue, and the lower courts have made clear, sensibly, that if you are confronted with a forum selection motion to dismiss, you are required to at least come forward with any factual disputes that you think need to be resolved before the district court can grant or deny that motion. It's far too late to wait until the Supreme Court of the United States, and say we have discovered some X number of miles--
Stephen G. Breyer: How -- how do you get out of the language that says that a rail carrier providing transportation shall issue a receipt for property it receives? Now the boat, oddly enough, is a rail carrier under the definition.
J. Scott Ballenger: --The--
Stephen G. Breyer: And therefore, it should have issued -- since you agree it's the receiving character, it should have -- it should have issued a -- a bill of lading, that then, if it's within Carmack as I've just tried to put it, requires it to have certain things in it that they say aren't there.
J. Scott Ballenger: --Under the definition a rail carrier is a party providing railroad transportation. And this--
Stephen G. Breyer: Yes, right; and now we see a rail carrier; we've got the definition there; and it includes somebody who provides intermodal equipment and you look at transportation and transportation includes services related to that equipment.
J. Scott Ballenger: --The definitions of railroad and transportation have always been defined to include all of the equipment used by a real railroad. But that doesn't mean that anyone who happens to own that equipment is also a railroad. For instance--
Stephen G. Breyer: Ah, now all right. Fine.
J. Scott Ballenger: --the purpose of -- the purpose of those definitions from 1906 on is to make sure that railroads couldn't evade rate regulation by overcharging for the use of a bridge.
Stephen G. Breyer: But, now just give me how -- what I would write in the opinion that would in fact -- because what they did here, the ship, is it took the container and put it on the train. Okay? So that's interservice equipment. What's the language that does it your way?
J. Scott Ballenger: A party providing rail common carrier transportation, the scope of the -- of that transportation is defined to include a container. But that doesn't mean that everyone who owns a container is -- meets the first part of the definition of providing railroad transportation. Otherwise, for instance, everyone who owned a bridge or a track or provided rail cars would be providing railroad transportation.
John G. Roberts, Jr.: Thank you, counsel. The case is submitted.