COVID-19 Resource Center

December 03, 2009

Carmack Provides Exclusive Cause Of Action For Interstate Transportation Losses

Unless a shipper and carrier have a contract which excludes the Carmack Amendment, the federal statute provides the exclusive remedy for loss or damage to goods arising from the interstate transportation by a common carrier. A trucking company is a carrier, essentially, if it provided motor vehicle transportation for compensation. However, the shipper can only bring a claim against the receiving carrier or the delivering carrier. If there was an intermediate carrier, the shipper cannot bring a claim against it, but the receiving or delivering carrier can bring a claim against the intermediate carrier to recover what they paid under a shipper’s claim.

In order to show a prima facie case of liability under Carmack, a shipper only needs to show delivery of the goods to the carrier in good condition and arrival of the goods in a damaged condition at the final destination. If this is shown, the trucking company can avoid liability by proving that it was free of negligence and that the damage or loss to the goods was caused by: (1) an act of God; (2) act of public enemy; (3) act of shipper; (4) act of public authorities; or (5) by the inherent vice or nature of the goods.

If liability is established, the only remaining issue is damages. Under Carmack, a shipper can recover actual loss or injury, which means the difference between the monetary value of the shipment after the damage or loss. The Carmack Amendment generally does not allow for special or consequential damages, such as the shipper’s loss of profits or business that resulted from the damaged or lost goods. The exception to this rule is if the carrier knew at the time of entering into the contract that the shipper would suffer a specific type of damage, other than the actual loss, if the cargo was lost or damaged. Special or consequential damages are generally not recoverable by a shipper in these circumstances because the Carmack Amendment preempts all state law claims. This preemption also precludes the right to recover attorneys’ fees. 

What It Means to You

Each situation involving the Carmack Amendment will require a review of the applicable contract documents and case law. The attorneys at Cipriani & Werner are ready to assist you in evaluating your rights and remedies under the Carmack Amendment.
 

Sources

Carmack Amendment, 49 U.S.C. §14706