807 F.3d 140
6th Cir.2015Background
- Exel (broker) and SRT (motor carrier) executed a Master Transportation Services Agreement (MTSA); MTSA made SRT "liable to Customer for loss" and measured loss by shipper's replacement value but was not signed by the shipper (Sandoz).
- Exel (as Sandoz's agent) prepared bills of lading for a November 7, 2008 pharmaceutical shipment; the bills included the notation "Item 60000 Class 85, RVNX $2.40" and a blank declared-value box.
- The truck was stolen and goods were not recovered; Sandoz made a claim; Sandoz later assigned its claim to Exel.
- Exel sued SRT for breach of contract (under the MTSA), breach of bailment, Carmack Amendment liability, and declaratory relief; the district court ultimately awarded Exel replacement-value damages under the MTSA.
- On appeal the Sixth Circuit held Exel lacked standing to enforce the MTSA (no injury/obligation shown to Sandoz) and limited Exel’s individual contract claim, but reinstated the Carmack claim only insofar as Exel is assignee of Sandoz’s bill-of-lading rights and remanded for factfinding on whether the bills of lading validly limited carrier liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Exel has standing to sue SRT under the MTSA for replacement-value loss | Exel contends MTSA creates a direct right to payment from SRT (a "contract to pay") and Exel incurred liability to Sandoz | SRT argues Exel suffered no injury and has no contractual obligation to Sandoz, so Exel lacks standing | Exel lacks standing to enforce MTSA (no demonstrated loss or obligation to Sandoz); district court reversed on this ground |
| Whether a broker (Exel) can sue directly under the Carmack Amendment | Exel argues Carmack allows agreements beyond bills of lading and broker can assert rights under MTSA | SRT argues Carmack provides remedies only to the shipper (or assignee) entitled under a receipt or bill of lading | Carmack does not give a non-shipper broker a direct cause of action; Exel cannot sue under Carmack on its own behalf |
| Whether Exel, as assignee of Sandoz, may pursue a Carmack claim for the lost shipment | Exel, having Sandoz’s assignment, says it stands in Sandoz’s shoes and can sue under Carmack | SRT contends any limitation in the MTSA cannot bind Sandoz and bills of lading limit liability to RVNX $2.40 per lb | Assignee Exel may pursue Sandoz’s Carmack claim; Carmack claim reinstated as to the assigned bill-of-lading rights |
| Whether the bills of lading limited SRT’s Carmack liability to RVNX $2.40 per lb | Exel argues bills were freight receipts and did not evidence a valid shipper-carrier written limitation; MTSA cannot limit liability without shipper’s signed agreement | SRT says the bill language (RVNX $2.40) set a per-pound released-value limit binding on the shipper | Question of fact remains: carrier must prove (inter alia) shipper had reasonable opportunity to choose and expressly agreed; summary judgment inappropriate — remanded for factfinding |
Key Cases Cited
- Adams Express Co. v. Croninger, 226 U.S. 491 (establishing Carmack Amendment purpose and national scheme of carrier liability)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires concrete, particularized injury)
- Trepel v. Roadway Express, Inc., 194 F.3d 708 (elements for limiting Carmack liability)
- Toledo Ticket Co. v. Roadway Express, Inc., 133 F.3d 439 (carrier must give shipper reasonable opportunity to choose levels of liability)
- OneBeacon Ins. Co. v. Haas Indus., Inc., 634 F.3d 1092 (assignee/subrogee may sue under Carmack)
- ABB Inc. v. CSX Transp., Inc., 721 F.3d 135 (Carmack places burden on carrier to prove written agreement limiting liability)