Court Opinion

ID: 9496320
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:23:15.015087+00
Date Added: 2024-06-11T17:57:29.669453
License: Public Domain

FERGUSON, Circuit Judge,
dissenting.
I respectfully dissent. The majority misconstrues our decision in King Jewelry, Inc. v. Fed. Express Corp., 316 F.3d 961, 966 (9th Cir.2003), effectively permitting common carriers to manipulate their rate structures by adding unpublished terms to their tariffs at the time of shipment. Even more troubling, the majority holds that a shipper has presumptively been afforded a fair “opportunity to purchase additional coverage” anytime she “could have bought separate insurance elsewhere or shipped with a different carrier.” Maj. Op. at 854-855. In other words, after this decision, a carrier may comply with the requirements of the released valuation doctrine by posting a sign listing some (but not all) of their terms and doing business in a location where there are other carriers or third-party insurance providers. This evisceration of the protection afforded by the released valuation doctrine is unwarranted and unwise. Because I believe that, construing the facts in the light most favorable to Kesel, UPS did not provide a “fair opportunity” to purchase greater liability coverage, I must dissent.
As the majority recognizes, under the released valuation doctrine,
[a common] carrier can lawfully limit recovery to an amount less than the actual loss sustained only if it grants its customers a fair opportunity to choose between higher or lower liability by paying a correspondingly greater or lesser charge ... [T]he shipper is bound only if he has reasonable notice of the rate structure and ... a fair opportunity to pay the higher rate in order to obtain greater protection.
Deiro v. Am. Airlines, Inc., 816 F.2d 1360, 1365 (9th Cir.1987) (internal citations omitted). The purpose of the released valuation doctrine “is to ensure that the shipper has an opportunity to make an informed choice between ... shipping at a lower cost with limited liability, and, on the other, separately purchasing insurance or shipping at a higher cost without limited liability.” Read-Rite Corp. v. Burlington Air Express, Ltd., 186 F.3d 1190, 1198 (9th Cir.1999). “Limited liability provisions are prima facie valid if the face of the[air waybill] ... recites the liability limitation and ‘the means to avoid it.’ ” Id. (citing *856Royal Ins. Co. v. Sea-Land, Serv. Inc., 50 F.3d 723, 727 (9th Cir.1995)). Thus, the notice provisions and the “fair opportunity” requirement are inextricably linked, as a shipper must have a “fair opportunity” to insure shipments pursuant to the terms of which she was given notice.
In the instant case, Kesel was provided notice of UPS’s general limited liability provisions through its waybill, Service Guide, and Tariff.1 However, not one of these publications stated or even implied that Kesel was prohibited from insuring his package for a value greater than what appeared on the Ukrainian customs form, or that a shipper is in any way restricted from submitting a speculative declared value for the purposes of acquiring additional insurance. Before Kesel passed on the responsibility of shipping to his agent, Be-lik, he reasonably believed that, in order to insure the paintings, he had only to declare their value on the UPS waybill. Nevertheless, as the majority concedes, the UPS clerk “categorically refused” to insure the paintings under the terms as set out in UPS’s waybill, Tariff, or Service Guide. In contrast to the majority’s assertion, see Maj. Op. at 854, Belik was not allowed to insure his shipment for the declared value that he provided to UPS. The UPS clerk would only allow Belik to ship the paintings with UPS if he agreed to declare them for the value that the UPS clerk had determined should be applied. While these actions may not technically qualify as coercion, they are certainly not consistent with the requirements of the released valuation doctrine.
The majority asserts that this was permissible because UPS’s Service Guide informs shippers that “[b]y providing required [customs] documentation, the shipper certifies that all statements and information relating to exportation are true and correct.” See Maj. Op. at 852. This directly contradicts the heart of the released valuation doctrine’s notice provision, however, which requires not only that a tariff “recite[ ] the liability limitation” but also “ ‘the means to avoid it.’ ” Read-Rite Corp., 186 F.3d at 1198 (citing Royal Ins. Co., 50 F.3d at 727.). In this case, UPS certainly did not state the supposed custom’s valuation limitation, let alone the means to avoid it.
In stark contrast to King Jewelry, in which the carrier’s “airbill and [ ]Service Guide contained prominent notice[ ]” of its limitation on coverage for “items of extraordinary value,” see King Jewelry, 316 F.3d at 962-63, 966, in the instant case there was no notice of any limitation on the items which could be insured, or the method by which they could be valued. King Jewelry’s holding was limited to the unremarkable proposition that the shippers in that case were bound by the “extraordinary value” limitation that was clearly listed on the waybill; it cannot possibly stand for the broad proposition that a carrier complies with the released valuation doctrine even if they provide only a nominal amount of insurance above the minimum coverage, regardless of the terms they publish in their tariffs or other documents. UPS has not argued that the paintings were items of extraordinary value or that they otherwise did not fall within the general provisions for additional liability coverage. They cannot come back now and argue that the information as to *857customs declarations, discussed in an entirely different section of the Service Guide from the insurance provisions and hardly a commonly understood limitation of interstate carriers, see Maj. Op. at 854, creates an implied term in their liability coverage contract.
The majority contradicts itself, holding that Kesel received adequate notice because of the clarity of the explicit general provisions in the Service Guide, but also stating that he had an adequate opportunity to purchase additional insurance because of what it construes to be unspoken terms in the Guide. See Maj. Op. at 854-855. There can be no notice of terms which were not present in the contract. Both the “fair opportunity” to insure and the notice requirement are meaningless if shipping companies can coerce customers into shipping with them by misinforming them about the terms of liability coverage with impunity.
The majority compounds its misunderstanding of the released valuation doctrine by implying that Belik also had an adequate opportunity to purchase additional coverage because he “could have bought separate insurance elsewhere or shipped with a different carrier.” Id. This is fallacious reasoning. The released valuation doctrine applies to the particular carrier that the case involves; the shipper must have had an adequate opportunity to purchase insurance from that carder, not just in the general scheme of things. See Read-Rite Corp., 186 F.3d at 1198 (“[carrier] contract must offer ... a fair opportunity to purchased higher liability”); Deiro, 816 F.2d at 1365 (“carrier can ... limit recovery ... only if it grants its customers a fair opportunity to choose between higher or lower liability by paying a correspondingly greater or lesser charge.”) (citing New York, New Haven & Hartford v. Nothnagle, 346 U.S. 128, 135, 73 S.Ct. 986, 97 L.Ed. 1500 (1953)). The majority’s assertion that the mere availability of third-party insurance “shows that the shipper had a fair opportunity to purchase greater liability” misses the point. See Maj. Op. at 854 n. 6. If this were so, then the fair opportunity requirement of the released valuation doctrine would have absolutely no substantive content whenever a party shipped within the United States or any country where third-party insurance is available.
Kesel is not arguing that he should have had a right to insure for whatever amount he desired; he is arguing that he should have been afforded the opportunity to insure under the terms that UPS published. The majority’s assertion that UPS should be allowed to limit liability to the amount declared in the customs form is unpersuasive, given that UPS included no such provision in its liability limitations. The evidence Kesel profered is sufficient to raise a triable issue of fact as to whether Belik was given a fair opportunity to purchase higher liability coverage. I therefore respectfully dissent.