Opinion ID: 780490
Heading Depth: 2
Heading Rank: 1

Heading: Actual Loss Liability Provisions Are Often Measured by Market Value at Destination

Text: 14 The term actual loss has a long history in carriers' liability provisions and has most frequently been measured by the fair market value of the lost or damaged goods at destination. The Supreme Court has noted the common law rule that [t]he measure of the shipper's recovery is normally the market value of the goods at destination, and has described this default measure as the shipper's actual loss from which contractual agreements could deviate by specifying a limitation of liability to invoice value plus freight. Ansaldo San Giorgio I v. Rheinstrom Bros. Co., 294 U.S. 494, 496-97, 55 S.Ct. 483, 79 L.Ed. 1016 (1935); see also Weirton Steel Co. v. Isbrandtsen-Moller Co., 126 F.2d 593, 594 (2d Cir.1942) (L.Hand, J.) (The ordinary rule is indeed that damages for injury to goods while in possession of a carrier are to be computed at the difference between the sound market value at destination and the value as damaged.). 15 Courts have also consistently interpreted statutory provisions that refer to loss during shipping as referring to the value of the goods at destination. In Chicago, Milwaukee & St. Paul Railway v. McCaull-Dinsmore Co., 253 U.S. 97, 40 S.Ct. 504, 64 L.Ed. 801 (1920), the Supreme Court not only interpreted a federal statute requiring rail carriers to be liable for any loss, damage, or injury to ... property to measure damages at the point of destination but also held that a private contract specifying damages computed ... at the place and time of shipment was contrary to the mandatory term imposed by the statute. Id. at 98-99, 40 S.Ct. 504. The Carriage of Goods by Sea Act caps a carrier's liability at the amount of damage actually sustained, 46 U.S.C. § 1304(5), a phrase that courts have interpreted ordinarily to measure damages at the market price of the cargo at the place of destination ... on the date when it should have arrived. Holden v. S.S. Kendall Fish, 262 F.Supp. 862, 864, 866 (E.D.La.1966) ([W]hat is `damage actually sustained?' This Court, without any hesitation, answers: damage computed on the basis of the fair market value of the goods at destination as of the date of arrival.), aff'd 395 F.2d 910 (5th Cir.1968). Similarly, the Second Circuit has stated that the provisions of the Carmack Amendment, a federal statute regulating rail carriers' liability and imposing liability for actual loss or injury to the property, 49 U.S.C. § 11706, were generally ... based on the fair market value of the goods. Project Hope v. M/V IBN SINA, 250 F.3d 67, 77 (2d Cir.2001). For this proposition, we relied on Contempo Metal Furniture Co. v. East Texas Motor Freight Lines, Inc., 661 F.2d 761, 764 (9th Cir.1981), a case that measured the fair market value at destination. See also Neptune Orient Lines, Ltd. v. Burlington N. & Santa Fe Ry., 213 F.3d 1118, 1120 (9th Cir.2000) ([W]hen the property does not arrive at all, [under the Carmack Amendment] we are left to determine its market value at the destination had it arrived safely.). 16