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Sixth Circuit vacates District Court’s finding of replacement value for lost goods under Master Transportation Service Agreement for its failure to meet Carmack Amendment requirement of shipper’s consent to limitation of liability.

January 15, 2016
Exel, Inc. v. Southern Refrigerated Transport, Inc., 2015 FED App. 0270P (6th Cir)

In November 2015, the United States Court of Appeals for the Sixth Circuit remanded a case for further determination by the District Court for the Southern District of Ohio on the issue of carrier liability.  The case is somewhat complex in that it involves a broker, a shipper and a carrier. There was a Master Transportation Service Agreement (MTSA) between the broker and the carrier and bills of lading created by the shipper controlling the agreement between the shipper and carrier.  A further complexity was the broker and shipper entered into an Assignment of the Claim under the bills of lading.

The MTSA at issue included a term “RVNX $2.40,” which the carrier argued was a limit to its liability.  The broker/assignee argued that the limitation of liability was full liability under the Carmack Amendment.  In addition to the MTSA, the carrier issued bills of lading to the shipper, which did not limit liability.

The Sixth Circuit ruled against the carrier, finding the “RVNX $2.40” in the MTSA did not limit its liability under the Carmack Amendment because the MTSA did not meet Carmack's requirement of shipper’s consent to the carrier's liability.  Ultimately, the case was remanded to the District Court as to the broker assignee's claim for a determination of whether the carrier's liability is limited under the bills of lading where the shipper inserted “Item 60000 Class 85, RVNX $2.40.”

Case Law Alerts, 1st Quarter, January 2016

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