Carmack Amendment to Interstate Commerce Act
Event Date: December 1, 2015
Author: Joel McKay, Sales Executive
What is the Carmack Amendment?
The Carmack Amendment is part of the Interstate Commerce Act and states that a common carrier that receives property for transit shall be liable for any loss, damage, or injury that is caused to the cargo. It makes the carrier of the cargo liable, without proof of negligence, for all damages to the goods. The act applies to motor carriers, airlines, freight forwarders, railroads and any other common carrier. The Carmack amendment is designed to remove any uncertainty surrounding a carrier’s liability when damages occur to a shipment.
Who does the Carmack Amendment Protect?
The Carmack Amendment essentially protects all parties in the transaction of interstate shipments. For motor carriers, the protection is two-fold:
1) The Carmack Amendment is a Federal Law and supersedes state law, making the requirements uniform across all states. This is critical for those transporting goods across state lines.
2) The Carmack Amendment also serves as a limit of liability for the motor carrier as well. A portion of the Carmack Amendment states that a specified limit of liability has to be included with the transport of all goods.
The shipper is also protected in the transaction as the Amendment contends that the motor carrier is strictly liable for any resulting damages. The shipper will be covered to the limit of liability as outlined in the initial agreement.
The first case, Northrich Company vs Group Transportation Services, Inc., illustrates the protection afforded to motor carriers by the act. The Court concluded that since the plaintiff could not show they were the shipper of the freight they could not establish what was the proper condition for the goods.
The Northern District in Ohio concluded that a plaintiff lacked standing to sue the carrier under the Carmack Amendment when it could not show it was the shipper or consignee under a bill of lading and further concluded that plaintiff was unable to produce any documentation establishing delivery in good order and condition to the carrier. Finally the Court held that there was no claim against a broker for damage caused by a motor carrier. (Northrich Company v. Group Transportation Services, Inc., 2015 U.S. Dist LEXIS 35826)1
The second case, Brudnak vs A.A. Moving & Storage, shows that while damages to goods being shipped are subject to the Carmack Amendment, consequential damages are not subject to the Carmack Amendment and the carrier’s liability may not be limited. The motor carrier can be found liability for consequential damages, such as damage to the home in this case, or delay in receipt, loss of profits, etc for the shipper.
The Carmack Amendment will preempt any claim that a shipper has for damage to household goods. However, the District Court in New Jersey concluded that claims for damages to the home during the move would not be preempted by the Carmack Amendment. (Brudnak v. A.A. Moving & Storage, 2015 U.S. Dist. Lexis 36359)1
|Joel is currently a sales executive at Cottingham & Butler. He has been with the company for nearly 12 years, holding various positions all related to trucking. Joel currently holds AIC and AINS insurance designations.
- “49 U.S. Code § 14706 – Liability of Carriers under Receipts and Bills of Lading.” Legal Information Institute. N.p., n.d. Web. 25 Nov. 2015.
- “Volume 18, Edition 3 | Central Analysis Bureau, Inc. – Make Better Decisions.” Central Analysis Bureau, Inc. N.p., 28 Mar. 2015. Web. 25 Nov. 2015.