Mauriello Law represents a local business in its claim for lost freight, a case that is pending in a North Carolina federal court.  Attorneys Chris Mauriello and Shannon Reid have won an important battle in this case, which would affect the amount their client could be awarded if it prevails on the claim.

The parties do not dispute that the company consigned its freight for interstate shipment or that the freight was lost and failed to arrive at the company’s place of business in Mooresville.  However, the freight carrier in this case claimed that, in the event it is found liable to the shipper for the lost freight, the carrier’s liability should be limited pursuant to the terms of a bill of lading.

Mr. Mauriello and Ms. Reid argued that the carrier cannot limit its liability in this case because it failed to meet certain requirements under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, et seq., which is the federal law that governs carrier liability for lost or damaged freight during interstate transit.

While carrier liability for actual loss is considered the default rule, Carmack permits a carrier to limit its liability by contract, which is often the bill of lading.  However, under well-established law, the carrier must provide the shipper a reasonable opportunity to select a higher rate in exchange for greater protection, inter alia.  Mr. Mauriello and Ms. Reid argued the carrier in this case did not provide such opportunity and, as such, the shipper could not limit its liability to the shipper.

In deciding the issue, the court considered seven factors:

Whether the provision providing the limitation was specifically brought to the shipper’s attention;

The shipper’s sophistication;

The shipper’s abundant experience;

The shipper’s extensive prior dealings with the carrier;

Whether the shipper drafted the shipping contract;

Whether the shipper directly negotiated the terms of the shipping contract; and

Whether the provision [setting forth] the limitation was specifically produced in the bill of lading.

The court agreed with the arguments advanced by Mr. Mauriello and Ms. Reid, finding the factors “[a]s a whole” tend to weigh in favor of the shipper.  As such, the court concluded “[the carrier’s] liability cannot be limited by the terms of the . . . bill of lading.”

For another report on this ruling see: blog.transportbusinesslaw.com/2012/12/26/2441.  The full text of the court’s 17-page decision is available at http://docs.justia.com/cases/federal/district-courts/north-carolina/ncwdce/5:2011cv00107/64023/18