Morris v. Covan Wrld Wde Mov ( 1998 )

REVISED July 20, 1998
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 97-30667
_____________________
TEX MORRIS; CINDY SAGRERA MORRIS,
Plaintiffs-Appellants,
versus
COVAN WORLD WIDE MOVING, INCORPORATED;
COLEMAN AMERICAN MOVING SERVICES,
INCORPORATED,
Defendants-Appellees.
_________________________________________________________________
Appeal from the United States District Court for the
Western District of Louisiana
_________________________________________________________________
July 8, 1998
Before WISDOM, JOLLY, and HIGGINBOTHAM, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
Moving from Virginia to Louisiana, Tex and Cindy Morris lost
most of their furniture and belongings when a fire destroyed the
truck transporting their property. The Morrises sued the moving
company, seeking a greater recovery than statutory law--the Carmack
Amendment to the Interstate Commerce Act--allows them. Thus, the
primary issue in this case is whether federal common law remedies
are available in actions against common carriers for the loss of
goods shipped under a receipt or bill of lading within the scope of
the Carmack Amendment. The case further presents the question
whether summary judgment was inappropriate because there existed a
genuine issue of material fact as to the value of the plaintiffs’
goods lost while in the carrier’s custody. We hold that federal
common law remedies are preempted by the Carmack Amendment. We
also hold, however, that fact issues remain as to the value of lost
goods. We therefore affirm in part, reverse in part, and remand.
I
On January 9, 1995, the Morrises entered into a contract with
Covan Worldwide Moving, Inc. and Coleman American Moving Services,
Inc. (collectively, “Covan”) to transport their household goods
from Dale City, Virginia, to Baton Rouge, Louisiana. In the
process, the Morrises completed an “Estimate and Order for Service”
form in which they provided Covan with estimates as to what
property would be shipped and its value. The Morrises also filled
out a “Shipment Protection Plan” in which Covan offered three
levels of coverage. The Morrises requested the maximum, “full
value” coverage for their property.1 Finally, the Morrises signed
a bill of lading in which they declared the total value of their
shipped property to be $29,000.00. The total weight listed on the
bill of lading was 7,860 pounds.
On January 10, 1995, the Morrises’ property was loaded for
shipment to Baton Rouge. During the trip, the tractor-trailer
1
The Morrises further chose as part of the protection plan to
make an “Extraordinary (Unusual) Value Article Declaration,” which,
according to the plan, entitled them to declare the values of
certain higher priced items. Although the plan states that a
special inventory form would be used for such declarations, none
appears in the record.
2
caught fire. The blaze destroyed nearly everything. Covan
nevertheless delivered some of the property and charged the
Morrises for 4429 pounds of freight. The Morrises disputed the
charge, contending that all of the property delivered was
effectively destroyed by the fire and attending smoke and water.
Covan adjusted its figures to reflect a delivery of 2658 pounds of
freight and ultimately paid the Morrises $26,498.38 of the declared
value of $29,000.00.
The Morrises were dissatisfied with the settlement offer and
brought this action in the district court. They alleged that the
actual value of their property was $54,312.00 and that they had
suffered an additional $60,000.00 in punitive damages, lost wages,
and mental anguish resulting from the destruction of their
belongings. In all, the Morrises sought $87,813.62 in damages, the
difference between their actual losses and the amount Covan had
already paid them, as well as attorney’s fees.
The Morrises submitted timely discovery requests to Covan
seeking, among other things, a copy of the tariff under which Covan
was operating. Before any responses were received, however, Covan
moved for partial summary judgment. Covan argued that the action
fell within the scope of the Carmack Amendment and that the
Amendment limited the Morrises’ recovery to the value of property
declared in the bill of lading--$29,000.00.
The district court granted Covan’s motion and then dismissed
the entire lawsuit. Based on the bill of lading and Covan’s tariff
3
(which had been attached to Covan’s summary judgment reply brief,
but not provided to the Morrises in response to their discovery
requests), the court determined that the action was governed by the
Carmack Amendment and, thus, that Covan was entitled to limit its
liability to the declared value of the property. Accordingly, the
court dismissed all claims based on state or federal common law.
Also, because the alleged loss occurred before the effective date
of the recently added provisions permitting recovery of attorney’s
fees under the Carmack Amendment, the court held that the Morrises
were not entitled to attorney’s fees. Finally, and without
expressly addressing the Morrises’ claim that they were
nevertheless entitled to the unpaid balance on their $29,000.00
declaration (amounting to $2501.62), the court dismissed the
remainder of the case. The Morrises appealed.
II
We review the district court’s grant of summary judgment de
novo. Exxon Corp. v. Baton Rouge Oil, 77 F.3d 850, 853 (5th Cir.
1996). The court will not weigh the evidence or evaluate the
credibility of witnesses; further, all justifiable inferences will
be made in the nonmoving party’s favor. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255 (1986). If, as here, the nonmoving party
bears the burden of proof at trial, the moving party may
demonstrate that it is entitled to summary judgment by submitting
affidavits or other similar evidence negating the nonmoving party’s
claim, or by pointing out to the district court the absence of
4
evidence necessary to support the nonmoving party’s case.
Lavespere v. Niagare Mach. & Tool Works, Inc., 910 F.2d 167, 178
(5th Cir. 1990).
Once the moving party presents the district court with a
properly supported summary judgment motion, the burden shifts to
the nonmoving party to show that summary judgment is inappropriate.
Id. In doing so, the nonmoving party may not rest upon the mere
allegations or denials of its pleadings, and unsubstantiated or
conclusory assertions that a fact issue exists will not suffice.
Anderson, 477 U.S. at 256. Rather, the nonmoving party must set
forth specific facts showing the existence of a “genuine” issue
concerning every essential component of its case. Thomas v. Price,
975 F.2d 231, 235 (5th Cir. 1992). That is, the nonmoving party
must adduce evidence sufficient to support a jury verdict.
Anderson, 477 U.S. at 248. With these standards in mind, we turn
to the merits.
5
III
A
The first issue we address, whether federal common law
remedies are available in actions against common carriers within
the scope of the Carmack Amendment, is purely a question of law.
The Amendment provides, in relevant part:
A common carrier providing transportation or service
subject to the jurisdiction of the Interstate Commerce
Commission . . . shall issue a receipt or bill of lading
for property it receives for transportation under this
subtitle. That carrier . . . and any other common
carrier that delivers the property and is subject to the
jurisdiction of the Commission . . . are liable to the
person entitled to recover under the receipt or bill of
lading. The liability imposed under this paragraph is
for actual loss or injury to the property caused by (1)
the receiving carrier [or] (2) the delivering
carrier . . . .
49 U.S.C. § 11707(a)(1) (1995).2
The Morrises contend that the purpose of the Amendment was
simply to establish uniform rules governing the interstate shipment
of goods by common carriers. Furthermore, federal common law
remedies are not explicitly precluded by the text of the Amendment,
and applying those remedies here will not frustrate the Amendment’s
purpose. Covan, on the other hand, maintains that section 11707
expressly limits the carrier’s liability to the actual damages
caused to the property up to the amount declared in the bill of
lading.
2
Effective January 1, 1996, the entire Carmack Amendment was
recodified at 49 U.S.C. § 14706 et seq. This recodification has no
bearing on the issues presented in this appeal.
6
In support of their argument, the Morrises also point out that
the Carmack Amendment contains a “savings clause,” which provides
that “except as otherwise provided in this subtitle, the remedies
provided under this subtitle are in addition to remedies existing
under another law or at common law.” 49 U.S.C. § 10103 (1995).
Our reading of this language leads us to conclude initially that
two aspects of this clause are of particular relevance here.
First, remedies provided by the Carmack Amendment are “in addition
to” other remedies. Second, such other remedies include those
available under “common law.” Based on a plain reading of this
language, we would think that the Morrises’ claim for punitive
damages, if supported by federal common law, has a firm statutory
basis as an additional remedy under the Carmack Amendment. We are
not, however, writing on a clean slate and must therefore consider
how the Carmack Amendment and its savings clause have already been
interpreted.
B
Our analysis must begin with the Supreme Court’s decision in
Adams Express Co. v. Croninger, 226 U.S. 491 (1913). In Adams, the
plaintiff hired the defendant, a common carrier, to ship a package
containing a diamond ring from Ohio to Georgia. The package never
arrived. The bill of lading stated that charges for delivering the
package were based on the value of the shipment, that the value was
to be declared by the shipper, and that failure to declare the
value would result in a rate based on a value of $50. The
7
plaintiff had not declared a value. Nevertheless, he brought suit
against the defendant in Kentucky state court for the full market
value of the ring. Under Kentucky law, the contract to limit the
plaintiff’s recovery to an agreed or declared value was invalid,
and the plaintiff was generally entitled to recover the actual
value of the ring. The plaintiff prevailed, and the case
eventually went to the Supreme Court.
The primary issue before the Court was whether a contract for
an interstate shipment, as evidenced by a bill of lading, was
governed by “the local law of the state, or by the acts of Congress
regulating interstate commerce.” Adams, 226 U.S. at 499-500. The
Court noted that before the Carmack Amendment, the liability of
common carriers for an interstate shipment of property was governed
by either “the general common law”--as pronounced by the state and
federal courts--or the statutory laws of the states. Id. at 504.
Because of the many varying laws that might apply to a dispute
arising out of any given interstate shipment of goods, it was
impossible for interstate shippers and carriers to determine their
risks and responsibilities with any reasonable certainty. See id.
at 505. The Carmack Amendment, the Court held, “made an end to
this diversity, for the national law is paramount and supersedes
all state laws as to the rights and liabilities and exemptions
created by such transactions.” Id.; accord Air Prod. & Chem., Inc.
v. Illinois Cent. Gulf R.R. Co., 721 F.2d 483, 486 (5th Cir. 1983),
cert. denied, 469 U.S. 832 (1984).
8
The Court rejected the argument that the savings clause
preserved the plaintiff’s state law claims. It explained:
It was claimed that [the savings clause] continued in
force all rights and remedies under the common law or
other statutes. But . . . it was evidently only intended
to continue in existence such other rights or remedies
for the redress of some specific wrong or injury, whether
given by the interstate commerce act, or by state
statute, or common law, not inconsistent with the rules
and regulations prescribed by the provisions of this
act. . . . [I]t could not in reason be construed as
continuing in a shipper a commonlaw right the existence
of which would be inconsistent with the provisions of the
act. In other words, the act cannot be said to destroy
itself.
To construe this proviso as preserving to the holder
of any such bill of lading any right or remedy which he
may have had under existing Federal law at the time of
his action gives to it a more rational interpretation
than one which would preserve rights and remedies under
existing state laws, for the latter view would cause the
proviso to destroy the act itself. . . .
Adams, 226 U.S. at 507-08. Because the state common law upon which
the plaintiff’s claim relied was inconsistent with the regulatory
scheme established by the Carmack Amendment, the Court held that
the plaintiff’s state common law claim was preempted. Id. at 508-
13.
Recently, two Courts of Appeals have extended the holding in
Adams to conclude that no common law remedies, including those
based on federal common law, are available under the Carmack
Amendment. See Gordon v. United Van Lines, Inc., 130 F.3d 282 (7th
Cir. 1997); Cleveland v. Beltman N. American Co., 30 F.3d 373 (2d
9
Cir. 1994), cert. denied, 513 U.S. 1110 (1995).3 These courts have
construed Adams to have adopted a general rule that the Carmack
Amendment preempts any right or remedy “inconsistent” with those
expressly provided by the Amendment, despite the plain language of
the savings clause. See, e.g., Cleveland, 30 F.3d at 379. Federal
common law remedies, these courts have held, are inconsistent with
the Carmack Amendment essentially because their availability would
create an uncertainty in liability that the Amendment was enacted
to eliminate. See id. (“the availability of punitive damages
[under federal common law] would frustrate the goal of the Carmack
Amendment”); Gordon, 130 F.3d at 287 (“Even if we assume that a
federal common law rule with respect to punitive damages would be
uniform nationally, the punitive damages remedy would displace the
package of remedies that the Interstate Commerce Act contains, and
would allow precisely the uncertainty the Carmack Amendment was
designed to bar.”).
C
3
Other circuits have sent somewhat mixed signals on the issue.
The Fourth Circuit has permitted claims for punitive damages based
on federal common law in addition to other Carmack Amendment
remedies in an action for breach of the duty of nondiscrimination
under 49 U.S.C. § 316(d) (1976). See Hubbard v. Allied Van Lines,
Inc., 540 F.2d 1224 (4th Cir. 1976). The Tenth Circuit initially
interpreted the Carmack Amendment to preclude only state statutory
claims in actions based exclusively on a bill of lading, see Litvak
Meat Co. v. Baker, 446 F.2d 329 (10th Cir. 1971), but later held
that all state common law remedies were barred under the Carmack
Amendment, see Underwriters at Lloyds of London v. North Am. Van
Lines, 890 F.2d 1112 (10th Cir. 1989) (en banc) (overruling Litvak
with respect to claims based on state common law). The Tenth
Circuit’s approach to federal common law remedies is unclear.
10
We find ourselves in substantial agreement with the Second and
Seventh Circuits, although the conclusion reached by those courts
is not as clearly mandated as their decisions might imply. Adams
is somewhat ambiguous as to whether it contemplated that its
reasoning would extend to federal common law claims. The Court’s
statement that the savings clause preserved “any right or
remedy . . . under existing Federal law,” 226 U.S. at 507, could be
construed to permit remedies under federal common law. Ultimately,
however, it is difficult to square this reading of Adams with its
earlier statement that the savings clause preserved only those
“rights or remedies . . . whether given by the interstate commerce
act, or by state statute, or common law, not inconsistent with” the
rights and remedies already provided by the Carmack Amendment. Id.
(emphasis added). Adams was decided before Erie R.R. Co. v.
Tompkins, 304 U.S. 64 (1938). Thus, the Court’s reference to
“common law” must be construed to include both state and federal
common law, see Adams, 226 U.S. at 504 (describing “general common
law” to consist of law “declared by this court and enforced in the
Federal courts throughout the United States . . . or that
determined by the supposed public policy of a particular state”),
and its reference to “Federal law” to include only federal
statutory law.
We therefore understand Adams to mean that any federal common
law remedies preserved by the savings clause can afford no greater
relief than provided by section 11707. In actions seeking damages
11
for the loss of property shipped in interstate commerce by a common
carrier under a receipt or bill of lading, the Carmack Amendment is
the shipper’s sole remedy. That is, the Carmack Amendment preempts
any common law remedy that increases the carrier’s liability beyond
“the actual loss or injury to the property,” 49 U.S.C.
§ 11707(a)(1), unless the shipper alleges injuries separate and
apart from those resulting directly from the loss of shipped
property. Accord Gordon, 130 F.3d at 289; Rini v. United Van
Lines, Inc., 104 F.3d 502, 506-07 (1st Cir.), cert. denied, 118
S. Ct. 51 (1997).
The Morrises’ claims for compensatory and punitive damages
exceed those permitted under section 11707. Both are based
directly on the loss of property shipped in interstate commerce by
a common carrier under a bill of lading. The compensatory damages
are for lost wages and emotional suffering incurred by the Morrises
as a result of the destruction of their household goods. The
punitive damages are to punish Covan for any egregious conduct in
the course of discharging its duties under the shipping contract.
Because the Morrises do not allege any injuries separate from the
loss of their property, their claims based on federal common law
are preempted.
IV
The second and final issue we need to consider today is
whether the district court erred in granting summary judgment on
the Morrises’ Carmack Amendment claim. In addition to their claims
12
based on federal common law, the Morrises sought reimbursement for
the full value of their property as declared on the bill of
lading--$29,000.00. Covan paid them only $26,498.38, contending
that it had delivered the remaining $2501.62 worth of property
undamaged. In its memorandum ruling, the district court dismissed
the Morrises’ claims in excess of $29,000.00, and their federal
common law claims, but then, without further analysis, concluded
that all of the Morrises’ claims were to be dismissed. We agree
with the Morrises that the district court should have addressed
these matters.
The district court had no basis before it for dismissing on
summary judgment the Morrises’ Carmack Amendment claim for damages
up to $29,000.00. As discussed previously, the Carmack Amendment
permits shippers to recover the actual amount of loss to the
property shipped. See 49 U.S.C. § 11707(a)(1). And, as here, the
value of that property may be set by the shipper in the bill of
lading. See Adams, 226 U.S. at 508-12. The Morrises alleged in
their complaint that all of their household goods entrusted to
Covan’s care were destroyed by fire, smoke, or water. Covan
presented no evidence suggesting otherwise. Because a genuine
issue of material fact exists as to whether the goods eventually
delivered by Covan were damaged, and thus whether the Morrises are
entitled to the full $29,000.00 declared in the bill of lading,
13
dismissal of this claim must be reversed and remanded for further
development.4
V
For the foregoing reasons, we affirm the judgment of the
district court that the Carmack Amendment precludes the Morrises’
claims that exceed the value of the destroyed property. We remand
for further proceedings to consider the Morrises’ Carmack Amendment
claim for the full value of their destroyed property, their claim
for attorney’s fees, and their challenge to the validity of Covan’s
tariff.
AFFIRMED in part, REVERSED in part, and
REMANDED with instructions.
4
In determining that this case fell within the scope of the
Carmack Amendment, the district court applied the four-part test
adopted by this court in Rohner Gehrig Co. v. Tri-State Motor
Trans., 950 F.2d 1079 (5th Cir. 1992) (en banc). The district
court found in accordance with this test that, among other things,
Covan maintained a tariff within the prescribed guidelines of the
Interstate Commerce Commission. The Morrises, however, were never
provided an opportunity to examine or challenge the validity of the
tariff, despite requesting the tariff in discovery. Covan instead
submitted the tariff to the district court as an attachment to its
reply brief in support of its motion for summary judgment. On
remand, the district court should provide the Morrises with an
opportunity to examine and challenge the validity of the tariff.
If the tariff is invalid, of course, the case would not be governed
by the Carmack Amendment.
We also note that the district court erred in dismissing the
Morrises’ claims for attorney’s fees. Current provisions allowing
such fees in cases within the scope of the Carmack Amendment, see
49 U.S.C. § 14708, are merely a recodification (with slight
alteration) of provisions in effect since 1982. See 49 U.S.C.
§ 11711 (1995). On remand, the district court should also consider
whether the Morrises are entitled to attorney’s fees under section
11711. See Drucker v. O’Brien’s Moving & Storage, Inc., 963 F.2d
1171 (9th Cir. 1992).
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