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What is the Carmack Amendment?
The Carmack Amendment is a federal statute (enacted in 1906 and codified at 49 U.S.C. § 14706) that governs the liability of motor carriers for property lost or damaged in interstate transit. Notably, the Carmack Amendment only applies where property crosses or is intended to cross state lines. In such cases, the statute extensively regulates the business relationship between shippers (owners of property) and carriers (movers of property) as well as other intermediaries, and provides a uniform framework for carrier liability. Among other things, the Carmack Amendment limits a carrier’s liability to the actual loss or injury to the property transported. For decades, our Firm has been at the forefront of Carmack Amendment litigation in Texas, having argued the Carmack Amendment before the United States Court of Appeals for the Fifth Circuit in the landmark case of Hoskins v. Bekins Van Lines, 343 F.3d 769 (5th Cir. 2003).
In Hoskins, the Fifth Circuit concluded that the Carmack Amendment provides the exclusive cause of action for loss or damage to goods arising from the interstate transportation of those goods by a motor carrier. This means that the Carmack Amendment completely preempts any and all state or common law claims arising from or related to loss or damage to property transported interstate, such as negligence, breach of contract, or violations of Texas statutes. The preemptive scope of the Carmack Amendment is broad and sweeping. It preempts not only property damage claims, but also claims regarding pre-move representations and post-move claims process.
To establish a prima facie case for loss or damage to goods arising from the interstate transportation of those goods by a motor carrier, the shipper must demonstrate: (1) delivery of the goods in good condition, (2) receipt by the consignee of less goods or damaged goods, and (3) the amount of damages. If the shipper establishes a prima facie case, there is a rebuttable presumption of negligence. The carrier can overcome this presumption by showing that it was free from negligence and that the damage was due to either the inherent nature of the goods or attributable to an act of God, public enemy, the shipper, or public authority.
Additionally, and perhaps most importantly, under the Carmack Amendment, a carrier may limit its liability to a specific dollar amount. To do so, the carrier must establish that it: (1) maintains a tariff within the prescribed guidelines of the Surface Transportation Board; (2) obtained the shipper’s agreement as to the shipper’s choice of liability; (3) gave the shipper a reasonable opportunity to choose between two or more levels of liability; and (4) issued a receipt or bill of lading prior to moving the shipment.
The Carmack Amendment’s preemptive scope and the enforceability of a carrier’s limitation of liability are often the central issues in Carmack Amendment litigation. Our Firm has successfully litigated these issues in Texas and throughout the country, at both the state and federal level. Despite its existence for over 100 years, the Carmack Amendment is often overlooked and misunderstood. But the Carmack Amendment plays a vital role in the interstate transportation industry and remains the governing law in disputes between shippers and carriers with respect to the interstate transportation of property.
-Davinder Jassal is an Associate Attorney with Henry Oddo Austin & Fletcher, P.C., specializing in Transportation Law and Personal Injury Defense. This article is made available by the attorney and/or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law; it is not being made available to provide specific legal advice. By using this website and/or article, you understand that there is no attorney-client relationship between you and the law firm publisher or attorney author. This website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
Jun 03, 2024
