5K Logistics, Inc. v. Daily Express, Inc.
659 F.3d 331
4th Cir.2011Background
- DRS contracted with 5K to transport two tube bundles from Chambersburg, PA to Lusby, MD; 5K acted as a broker subcontracting to Daily Express (DXI) as the carrier.
- Bills of lading identified DXI as carrier and ‘Dominion Power’ as shipper, with the bill incorporating DXI’s tariff terms.
- DXI’s tariff required nine-month claim filing and two-year suit from denial of claim for cargo damage.
- A tube bundle was damaged en route; DRS refused delivery in Lusby.
- 5K sent a November 14, 2006 letter notifying DXI of a claimed loss and potential subrogation against DXI; DXI denied the claim on November 27, 2006.
- DRS sued 5K in May 2009; 5K filed third-party complaint against DXI in September 2009; district court granted summary judgment against 5K on certain claims and later held 5K liable to DRS for $192,072.50 plus costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Carmack time limits apply to a broker’s indemnity claim. | 5K argues indemnity is not within Carmack’s scope for brokers under §14706(b). | District court correctly treated indemnity as Carmack-based against broker, preempted from tolling. | Time limits apply; brokers barred from indemnity claim due to Carmack framework. |
| Whether a timely Carmack claim was ever filed against DXI. | 5K contends its November 14, 2006 letter sufficed as a claim. | Letter did not assert present liability; no claim was filed within 9 months or within 2 years of denial. | No timely claim or suit; time-bar applied. |
| Whether 5K could obtain apportionment under §14706(b) given 5K’s broker status. | 5K seeks apportionment against the carrier to cover its indemnity losses. | Broker status excludes apportionment under §14706(b); only carriers may seek apportionment. | Apportionment available only to carriers; broker barred. |
| Whether policy concerns justify ignoring contractually bargained time limits. | 5K urges courts to create exceptions to Carmack to avoid harsh results. | Courts should enforce bargained time limits and not rewrite Carmack. | Rejects exceptions; enforces contract terms and Carmack framework. |
Key Cases Cited
- Shao v. Link Cargo (Taiwan) Ltd., 986 F.2d 700 (4th Cir.1993) (uniform nationwide Carmack framework; time limits are bargained terms)
- Adams Express Co. v. Croninger, 226 U.S. 491 (1913) (Carmack preemption and carrier liability balance)
- Mo. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134 (1964) (prima facie burden shifting in Carmack claims)
- Reider v. Thompson, 339 U.S. 113 (1950) (permitting shipper to sue carrier; framework under Carmack)
- Mitsui Sumitomo Ins. Co. v. Evergreen Marine Corp., 621 F.3d 215 (2d Cir.2010) (limits applicability of apportionment; broker exclusion)
- Swift Textiles, Inc. v. Watkins Motor Lines, Inc., 799 F.2d 697 (11th Cir.1986) (Carmack time limits are industry-standard floor)
- Scaife Co. v. Comm'r of Internal Revenue, 314 U.S. 459 (1941) (harsh results do not warrant relief from time bars)