Court Opinion

ID: 8917362
Source: CourtListenerOpinion
Date Created: 2022-11-27 05:38:31.643693+00
Date Added: 2024-06-11T17:09:06.757212
License: Public Domain

GEORGE C. PRATT, Circuit Judge,
dissenting.
My colleagues find no difference “in principle” between a deductible and a released value, and thus conclude that since 1916 Congress has intended a deductible to be a permissible released value limitation under *75249 U.S.C. § 10730. As a result they have permitted carriers of household goods, despite contrary statutory language, to disclaim liability for loss, theft, or damage to a householder’s property up to the deductible amount. Since I cannot accept their analysis of § 10730, their premise that a deductible is a released value, or the “license to steal” that they grant to carriers of household goods, I dissent.
I.
The issue before us is not whether a deductible should be permitted as a means of limiting carriers’ liability — a decision for Congress and not this court — but rather, whether Congress has authorized deductibles for carriers of used household goods in 49 U.S.C. § 10730(a). My colleagues perceive a continuous congressional intent to authorize deductibles that began in 1916. They discern this intent despite a contradictory statutory history that led to the 1916 amendment, despite emphatic statutory language to the contrary, despite the structure and language of the current statute, and despite the absence of any showing that anyone had ever, prior to 1980, advanced the idea of using deductibles in the context of carriers’ liability.
I can find nothing in Congress’s language up to 1916 to suggest anything but disapproval of a deductible or any form of limitation of liability that would exempt the carrier from responsibility for the initial dollars of every loss or damage to the shipper’s property. If, as my colleagues believe, Congress in 1916 intended to authorize a deductible, it chose strange language indeed to express that intent.
In the relevant portions of the 1916 statute, set forth in the margin,* Congress expressed its basic disapproval of limitations on a carrier’s liability: “any such limitation” regardless of form was declared “to be unlawful and void”. As an exception to this blanket prohibition, Congress permitted rates that included carefully defined released values as long as they would “have no other effect than to limit liability and recovery to an amount not exceeding the value” declared by the shipper or agreed by the parties to be the “released value” of the goods. This language is precise and readily includes released values. Only by extreme, and in my view unjustified, generalization can it fairly be said to include deductibles.
In relevant part the statute remained in its 1916 form until 1978 when Congress enacted Public Law No. 95 — 473, entitled “An Act To revise, codify, and enact without substantive change the Interstate Commerce Act and related laws subtitle IV of title 49, United States Code, ‘Transportation’ ”. 92 Stat. 1337. This 1978 act was merely a recodification of the prior statutes included in the Interstate Commerce Act. Congress expressly negated any intention to change prior law:
Sections 1 and 2 of this Act restate, without substantive change, laws enacted before May 16, 1978, that were replaced by those sections. Those sections may not *753be construed as making a substantive change in the laws replaced.
Pub.L. No. 95-473, § 3, 92 Stat. 1337, 1466 (1978).
To replace and restate the elaborate 1916 prohibition against agreements limiting carriers’ liability, Congress provided in § 10730 that the 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 (emphasis added).
49 U.S.C. § 10730(a).
By Congress’s command, this language of § 10730 “may not be construed as making a substantive change” in the prior law, which had expressly declared any limitation of liability to be unlawful and void except an agreement limiting liability and recovery “to an amount not exceeding the [declared or released] value.” Thus, Congress in 1978 continued to authorize limitations of liability, but only in terms of an established value of the goods. Since deductibles have nothing to do with the value of the goods, it follows that Congress did not intend in 1978 to permit deductibles.
Furthermore, one would think that if Congress had perceived its intent in 1978 as the majority perceives it now — to permit deductibles as well as released values — Congress would have expressed that intent specifically, just as it did two years later. In 1980 Congress passed three amendments substantially revising the Interstate Commerce Act, one of which did specifically authorize deductibles for railroads. When read together, these three amendments simply and directly confirm that Congress did not intend to authorize deductibles in the transportation of household goods, the specific issue now before the court.
Prior to 1980 Congress had applied the same statute, § 10730, to various types of carriers, including railroads, motor carriers of household goods, and other motor carriers. All three of these carriers (1) needed advance approval of their rates, (2) were permitted to offer rates under which the carrier’s liability was “limited to a value” established by declaration or agreement, and (3) were required to establish limiting values that were “reasonable under the circumstances surrounding the transportation.” 49 U.S.C. § 10730 (Supp. II 1978). The 1980 amendments divided § 10730 into three subsections, one for each of these carriers, and treated each carrier differently with respect to these three requirements.
The “Staggers Rail Act,” Pub.L. No. 96-448, 94 Stat. 1895, passed October 1, 1980, no longer required railroads either to have their rates approved in advance, or to establish released values that were reasonable. Railroads were specifically authorized to use deductibles, which were described as “specified amounts to be deducted from any claim against the carrier for loss or damage to the property or for delay in the transportation of such property.” Pub.L. No. 96-448, 94 Stat. 1911; 49 U.S.C. § 10730(c) (Supp. IV 1980).
The “Motor Carrier Act of 1980,” Pub.L. No. 96-296, 94 Stat. 793, passed June 20, 1980, released motor carriers of other than household goods, like the railroads, from the requirement of advance approval of rates. Congress continued the authorization for released value rates and the requirement that their declared or agreed values be reasonable. Unlike the railroads, these carriers were not expressly authorized to use deductibles. 49 U.S.C. § 10730(b) (Supp. IV 1980).
In the “Household Goods Transportation Act of 1980”, Pub.L. No. 96-454, 94 Stat. 2011, passed September 30, 1980, Congress was significantly more restrictive with carriers of household goods than it was with the other carriers. Unlike the railroads and other motor carriers, it continued to require advance approval of rates by the commission. Unlike the Staggers Act and the Motor Carrier Act, the Household Goods Transportation Act continued to require advance approval of rates by the commission. Unlike the Staggers Act, it required that *754the released values be reasonable, and did not expressly ' authorize deductibles. 49 U.S.C. § 10730(a) (Supp. IV 1980).
My colleagues’ interpretation of the amended § 10730, insofar as they find deductibles included in the released value provisions, distorts the plain language of the statute and renders the deductible provision in subsection (c) surplusage, thereby violating the elementary canon of construction that courts must give effect to every word in a statute. Bird v. United States, 187 U.S. 118, 124, 23 S.Ct. 42, 44, 47 L.Ed. 100 (1902); Platt v. Union Pacific R.R. Co., 99 U.S. 48, 58, 25 L.Ed. 424 (1878). It also frustrates some of the policy aims Congress sought to achieve in the 1980 amendments.
If, as the majority holds, the commission is now properly exercising some latent authority to approve deductible limitations for carriers of household goods covered by subsection (a), it would seem to follow from the identical language in the Motor Carrier Act, codified at 49 U.S.C. § 10730(b), and taken from the same source in the 1916 statute, that Congress must also have intended to permit the other motor carriers to offer rates including a deductible, without first obtaining commission approval. Indeed, the commission has so held. See Decision on Petition for Declaratory Order on Deductibles in Household Goods Released Rates, No. 38752, at 4-5 (I.C.C. Mar. 17, 1982). However, the Motor Carrier Act itself suggests just the opposite, because it restricts sharply any attempt by the commission to deregulate the trucking industry in defiance of the statute. In section 3 of the Act, Congress specifically admonished that
* * * the Interstate Commerce Commission should be given explicit direction for regulation of the motor carrier industry and well-defined parameters within which it may act pursuant to congressional policy; that the Interstate Commerce Commission should not attempt to go beyond the powers invested in it by the Interstate Commerce Act and other legislation enacted by Congress; and that the legislative and resulting changes should be implemented with the least amount of disruption to the transportation system consistent with the scope of the reforms enacted.
Pub.L. No. 96-296, 94 Stat. 793 (1980). The house report to the Motor Carrier Act cautioned the commission “to stay within the powers specifically vested in it by the revised law.” H.R.Rep. 1069, 96th Cong., 2d Sess. 11 (1980) reprinted in 1980, U.S.Code Cong. & Ad.News 2283, 2293.
Despite this rather clear language, the majority reasons that prior to 1980, Congress “entrust[ed] the approval of transportation rates to the Commission without any statutory directive,” and finds nothing in the 1980 amendments “as having deprived the Commission of the authority to permit the use of deductibles.” Such a permissive, broad reading of § 10730 seems inconsistent with the narrow interpretation both enacted and urged by Congress, and it substantially undermines Congress’s attempts to rein in the commission.
Even were I to disregard Congress’s strong historical leanings toward prohibiting limitations of carriers’ liability, the language that Congress used in 1980 to restructure these three branches of the industry would still convey to me an intention that rail carriers should have deductibles, but motor carriers should not. And when I read these amendments in light of Congress’s earlier hostility to limitations of liability, this intention becomes inescapably clear.
II.
Central to my disagreement with the majority is their premise that deductibles do not differ from released value limitations. The majority artfully defines the released value provision in subsection (a) of § 10730 to include both released value limitations and deductibles, and therefore can logically conclude that § 10730(a) permits the commission to approve rates with a deductible limitation. However, the term “released value” has a specific and narrower meaning, which in light of prior case law and *755common sense cannot fairly be read to include a deductible.
As my colleagues acknowledge, the common law considered void, as against public policy, any agreement or limitation that insulated a carrier from liability for its own negligence or for the willful acts of its employees. And I acknowledge that the common law recognized an exception for agreements, known as released value limitations, whereby “the carrier’s liability for loss of property, including loss occasioned by its own negligence or that of its servants, was not entirely eliminated but was merely limited,” at p. 746, to a stated value in consideration for a lower rate. See Adams Express Co. v. Croninger, 226 U.S. 491, 512, 33 S.Ct. 148, 154, 57 L.Ed. 314 (1913). We disagree over whether a deductible is the same as a released value.
They are not the same, and the differences are significant. When liability is limited to a released value, the carrier is fully liable for all loss or damage up to the agreed or declared value of the shipment; when a loss occurs the shipper is estopped from asserting that the value of the shipped goods exceeded what he had declared in advance. As the Supreme Court noted in Adams Express, supra,
It is not in any proper sense a contract exempting him from liability for the loss, damage, or injury to the property, as the shipper describes it in stating its value for the purpose of determining for what the carrier shall be accountable upon his undertaking, and what price the shipper shall pay for the service and for the risk of loss which the carrier assumed.
Adams Express Co. v. Croninger, supra at 512, 33 S.Ct. at 154, quoting Bernard v. Adams Express Co., 205 Mass. 254, 259, 91 N.E. 325, 327 (1910). The common law’s intolerance of agreements exonerating carriers for their own negligence or misconduct was thus relaxed in recognition of the obvious fact that the cost of transporting goods was inextricably bound to the risks that carriers must assume for their damage or loss. By fixing a maximum value in advance, the carrier could know what degree of care was required, and the shipper was assured of recovery of his losses up to the amount declared.
A deductible has a different effect, because it exonerates the. carrier from all liability up to the deductible amount. A deductible does not discourage carrier negligence or theft: it imposes no liability on the carrier for many losses and excuses at least part of every loss. In contrast, a limitation based on a released value encourages care because it imposes some liability on the carrier for every loss. Thus, it is simply not accurate to say there is no difference “in principle” between a deductible and a released value limitation.
In Hart v. Pennsylvania R.R. Co., 112 U.S. 331, 5 S.Ct. 151, 28 L.Ed. 717 (1884), which the majority quotes approvingly, at p. 746, the Supreme Court carefully analyzed why a released value did not contravene the common law prohibition against limitations on a carrier’s liability, (at p. 746).
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.
Hart v. Pennsylvania R.R. Co., 112 U.S. at 340-41, 5 S.Ct. at 155-56.
The majority interprets this analysis of released value limitations to authorize deductibles because there is no “qualitative” difference between them “in principle”. However, the following sentence-by-sentence breakdown of the Supreme Court’s analysis demonstrates that a deductible is not the same as a released value, “in principle” or otherwise:

*756
Released Value

Deductible

(As described in Hart, 112 U.S. at 340-41 [5 S.Ct. at 155 — 56]*)
“The limitation as to value has no tendency to exempt from liability for negligence.”
A deductible is designed to exempt from liability for negligence.
“It does not induce want of care.”
A deductible does induce want of care and even petty theft.
“It exacts from the carrier the measure of care due to the value agreed on.”
A deductible exacts from the carrier no care up to the deductible amount.
“The carrier is bound to respond to that value for negligence.”
Below the deductible value the carrier is exempt from its negligence.
“The compensation for carriage is based on that value.”
The compensation for carriage is not directly related to the amount of a deductible.
“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.”
A deductible is unrelated to the value of the articles.
“The carrier must respond for negligence up to that value.”
The carrier is exempt from liability up to the deductible amount.
In short, because of the fundamental differences between them, deductibles cannot be permitted as simply another form of released value.
III.
By enacting the Household Goods Act of 1980 — which the majority has not mentioned, even though this case involves carriers of household goods — Congress demonstrated its concern for the problems faced by the relatively unsophisticated shipper of household goods. As noted by the house committee:
[Tjhese shippers usually move only once or twice in their lives and, consequently, lack thorough understanding of the industry and sufficient clout to negotiate with it. Their situation is made more vulnerable by the fact that the moves involve all of their personal possessions, which often are of a fragile nature.
H.Rep. No. 96-1372, reprinted in 1980 U.S. Code Cong. & Ad.News 4271, 4272. The committee further noted, that the household goods moving industry “is the single most frequent subject of consumer complaints to the Interstate Commerce Commission,” id., and that approximately half of those complaints relate to the loss or damage of goods — precisely the area where a deductible has its primary impact. In order better to protect consumer shippers of household goods, Congress authorized several new devices, including written binding estimates of charges, guaranteed pick-up and delivery times backed by penalties or per diem payments for delay, as well as provisions for informal dispute settlement programs to be established by carriers of household goods for the purpose of resolving shipper disputes in a fair, expeditious, and inexpensive manner. The amendment also restructured the penalty provisions of the act relating to the transportation of household goods in order to “place new emphasis on the need for carriers to minimize shipper harm and to encourage compensation when harm does occur.” Id. at 4285.
Thus, Congress demonstrated in 1980 a major change in its approach to the regulations of household goods carriers. It added several new protections for the consumer, but carefully balanced them by eliminating some unnecessary regulation of the carriers. The majority, however, ignores this change and by today’s decision significantly skews Congress’s carefully crafted program for protecting movers of household goods. By reaching back to 1916 to discover a latent intent to authorize deductibles, one that was neither expressed nor exercised in the ensuing sixty years, the majority undermines the legislature’s newly enhanced concern for householders. As petitioners colorfully argue, because the particular tariff under review grants the carriers a “license to steal” from each householder up to the deductible amount, it thereby removes much of the added consumer protection that Congress sought to create.
The petition for review should be granted and the commission’s order should be vacated.