COGSA vs. Carmack - United States Supreme Court To Address Carmack's Application To Intermodal Shipments
At the end of last year the United States Supreme Court granted certiorari in two consolidated cases, Kawasaki Kisen Kaisha v. Regal-Beloit Corporation, No. 08-1553, and Union Pacific Railroad Company v. Regal-Beloit Corporation, No. 08-1554, to determine whether the inland portion of an intermodal shipment is subject to the Carmack Amendment even when no separate domestic bill of lading is issued. The specific question presented in No. 08-1553 is: “Whether the Carmack Amendment to the Interstate Commerce Act of 1887, which governs certain rail and motor transportation by common carriers within the United States, 49 U.S.C. §§ 11706 (rail carriers) & 14706 (motor carriers), applies to the inland rail leg of an intermodal shipment from overseas where the shipment was made under a ‘through’ bill of lading issued by an ocean carrier that extended the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 30701. Note, to the inland leg, there was no domestic bill of lading for rail transportation, and the ocean carrier privately subcontracted for rail transportation.” The Supreme Court previously determined that a through bill of lading could control inland transportation in Norfolk Southern Railway v. Kirby, 543 U.S. 14 (2004), but that decision only addressed the application of state law to a bill of lading that extended COGSA inland, where COGSA and the state law conflicted. It did not consider the ramifications of the Carmack Amendment, and the United States Courts of Appeals have split in their treatment of the competing principles under COGSA and the Carmack Amendment.
The two cases currently pending before the Supreme Court concern the proper forum for suits over damage to cargo being delivered to the United States from China, where the cargo was damaged when the United States rail carrier’s train derailed in Oklahoma on the inland domestic leg of the international multimodal or intermodal shipment. Regal-Beloit, other shippers and their subrogees brought suits against the rail carrier and the ocean carrier in the United States. The carriers argued that the suits were required to be litigated in Japan based on a forum selection clause in the ocean carrier’s bill of lading that was proper under COGSA. The issue essentially came down to whether the contractual provisions in a bill of lading can control over the default statutory rules set forth in the Carmack Amendment when a loss occurs on the United States on the inland leg of an international intermodal shipment. The Ninth Circuit Court of Appeals determined that “the contractual extension of COGSA to the inland leg cannot supersede the requirements imposed by the Carmack Amendment unless the parties properly agree to opt out of Carmack. Regal-Beloit Corp. v. Kawasaki Kisen Kaisha Ltd., 557 F.3d 985 (9th Cir. 2009). The carriers appealed this decision to the United States Supreme Court.
The carriers’ briefs on the merits were filed on December 23, 2009, and the respondents’ briefs were filed on February 12, 2010. Four amicus briefs were filed in support of the carriers, including one for the United States filed by the United States Department of Justice. The Transportation & Logistics Council, Inc., a non-profit organization representing shippers nationwide, and the American Institute of Marine Underwriters filed an amicus brief in support of the respondents. Oral argument has been set for Wednesday, March 24, 2010. The Supreme Court should issue its decision within two to three months after oral argument.
The Supreme Court’s decision could have a significant impact on the amount of damages recoverable against a carrier involved in an international shipment. While COGSA permits carriers to limit their liability to $500 per package, a plaintiff suing under the Carmack Amendment is entitled to the actual loss or injury to the property if the carrier has not effectively limited its liability by a written declaration or agreement. Check back with the Subrogation & Recovery Blog for the latest news regarding the Supreme Court’s upcoming decision.
attorneys. California’s Rules of Professional Conduct require every attorney to apply the diligence, learning and skill reasonably necessary for the performance of their services. The pervasive use and reliance on electronic data demands that attorneys be computer literate to fulfill this duty and understand the role electronic data and documents play in litigation. In addition, the California Supreme Court has made it clear that lawyers must instruct their clients to preserve and maintain any potentially relevant evidence. In the modern era, a large amount of relevant evidence comes in the form of ESI. ESI can be a separate and distinct category of information from what is contained in an electronic document’s paper counterpart. For example, many electronic documents contain “metadata,” which is commonly defined as “data about data.” More specifically, metadata is “information describing the history, tracking, or management of an electronic document.” As an illustration, if an attorney produces an electronic document, but erases the metadata, it is like copying only the front of a paper document that has print on both sides. A failure to understand metadata risks the loss of valuable information.
Unfortunately, recent ignition tests by Fire Findings shows little to no difference between ASTM E2187 approved cigarettes and traditional, non-ASTM E2187 cigarettes. See, Fire Findings, Vol.18, No.1 (Winter 2010). Fire Findings tested the propensity for ASTM E2187 cigarettes to ignite trash, dry potting soil and peat moss, and gasoline. The results of these tests were similar to the results of their previous tests of traditional cigarettes. Fire Findings concluded that both types of cigarettes, ASTM E2187 approved and non-approved, can ignite similar materials in real world situations. The next time your get a fire loss involving a cigarette, don't be so quick to discard it simply because the cigarette met the ASTM E2187 standard. 
In Fireman’s Insurance Company v. Fire-Free Chimney Sweeps, Inc.,
Cozen O’Connor attorneys successfully argued in the Delaware Superior Court that the adoption of a National Fire Protection Association standard by an administrative agency defined the standard of care for work performed by a chimney sweep. The Court accepted the argument advanced on behalf of a subrogating insurance carrier for a condominium association that a chimney sweep hired by the association to “clean and inspect” chimney flues was required to perform a full Level 1 inspection of the entire chimney and fireplace systems pursuant to NFPA 211. 
The chimney sweep was hired by the association to clean and inspect the chimneys that were utilized by the 294 unit owners in the condominium complex. NFPA 211 mandates cleaning of chimneys and flues, including the evaluation of the appliance which is attached to the chimney, in order to insure that the entire system is safe and operational. One of the unit owners had replaced the original fireplace doors with an after-market set of doors which effectively blocked the flow of air around the prefabricated fireplace. This prevented the fireplace from properly cooling while it was in operation and resulted in the ignition of combustible wood members surrounding the fireplace. The after-market doors had been installed by this unit owner prior to the time that the chimney sweep company performed its cleaning and inspection. 