UPS Supply Chain Solutions, Inc. v. Megatrux Transportation, Inc.
750 F.3d 1282
11th Cir.2014Background
- Shipment of Seagate disk drives stolen in transit (Sept. 18, 2009).
- UPS provided transportation under GLSPA with subcontracting allowed and liability capped at $100,000 unless gross negligence.
- Megatrux, via MTSA with UPS, subcontracted to Stallion without UPS consent, violating MTSA terms.
- GLSPA and MTSA governed liability; MTSA imposes full liability by carrier, with indemnification provisions for UPS.
- Seagate assigned to UPS rights against Megatrux for loss; UPS sued Megatrux under Carmack Amendment, MTSA indemnity, and related claims; district court found full liability and preemption of state claims for contract and negligence; denied indemnity fees under MTSA as preempted.
- On appeal, Megatrux challenges liability cap and proof of contents; UPS contends Carmack does not preempt MTSA indemnity fees; court reverses in part and affirms in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Carmack preemption vs. liability cap | Megatrux: Carmack cap limits to $100k under GLSPA. | UPS: MTSA creates full liability; upstream contract limits irrelevant. | Full Carmack liability applies; no valid lower limit shown. |
| Proof of contents/condition of shipment | UPS proved contents via invoices, photos, recovered disks. | Megatrux contested sufficiency of documentary proof. | Contemporary invoices, photographs, and recovered disks sufficient to prove contents. |
| Indemnity fees under MTSA and Carmack preemption | UPS seeks indemnity fees under MTSA; argues not preempted. | Carmack preempts contract-based fees arising from loss. | Carmack does not preempt indemnification for attorney’s fees under MTSA. |
| Intermediary liability limitation argument | Werner/Kirby allow intermediary to negotiate liability; Megatrux had no knowledge. | Full liability negotiated via MTSA should control. | Intermediary cannot rely on upstream limitations; no negotiated limitation below Carmack default. |
Key Cases Cited
- Adams Express Co. v. Croninger, 226 U.S. 491 (1913) (national Carmack framework; preemption of state law claims by federal act)
- Chesapeake & O. Ry. Co. v. A. F. Thompson Mfg. Co., 270 U.S. 416 (1926) (prima facie liability under Carmack; loss measured by market value at destination)
- A.I.G. Uruguay Compania de Seguros, S.A. v. AAA Cooper Transp., 334 F.3d 997 (11th Cir. 2003) (direct evidence required for contents of shipment; documents alone may be insufficient)
- Werner Enters., Inc. v. Westwind Maritime Int’l, Inc., 554 F.3d 1319 (11th Cir. 2009) (intermediary liability limitations can control; upstream contracts irrelevant to shipper’s knowledge)
- Sassy Doll Creations, Inc. v. Watkins Motor Lines, Inc., 331 F.3d 834 (11th Cir. 2003) (four-step test for Carmack liability limitations)