Court Restricts Cap on Railroad Cargo Liability NEW YORK, NY -- Overturning a lower federal court and rejecting the reasoning of other courts, a U.S. appeals court has ruled that a railroad may not limit its cargo liability in accordance with a multilateral agreement on international shipments because a U.S. liability statute supersedes it. In its July 10 ruling, a unanimous 2nd U.S. Circuit Court of Appeals panel relied on a 1920 U.S. Supreme Court ruling that interpreted the meaning of a phrase in a provision in one of the U.S. statutes involved in the case. While that provision was not an issue in the latest case, the phrase was central to the 2nd Circuit's decision in Sompo Japan Insurance Co. of America vs. Union Pacific Railroad Co.. As a result of the ruling, Union Pacific Railroad Co. could be held strictly liable for the nearly $500,000 of damage caused to a shipment of 32 tractors when the Union Pacific train transporting the cargo derailed in Texas in 2002. The shipment originated in Japan and was transported to Los Angeles, where Union Pacific picked it up. The shipment was destined for Georgia. The railroad sought to limit its liability to $500 "per package," or $16,000, under the terms of the Carriage of Goods by Sea Act of 1936, which codified an international agreement that establishes a negligence-based regime. Union Pacific argued that the cargo owner’s ocean shipper, in arranging a seamless shipment under a through bill of lading, subcontracted with the railroad to transport the cargo across country and agreed that the railroad’s liability would be governed by COGSA, according to court papers. But the cargo owner’s insurer, Sompo Japan Insurance Co. of America, argued that the railroad faced strict liability for the damage under the 1906 Carmack Amendment to the Interstate Commerce Act of 1887 and the Staggers Rail Act of 1980. Under Carmack, a cargo owner can fully recover its loss either from the delivering carrier or the carrier that issued the bill of lading. Staggers allowed railroads to arrange alternative liability arrangements, but only if cargo owners explicitly agreed to waive Carmack’s liability requirements. The 2nd Circuit ruled that Carmack took precedent, even though the ocean shipper and Union Pacific agreed to an alternative liability arrangement. Key to the 2nd Circuit’s ruling was the ICA’s "from…to" language, which refers to shipments between the United States and a foreign country. Union Pacific argued that the language means the amendment applies only when a shipment originates in the United States. Rejecting several U.S. appellate court rulings and an "influential" Pennsylvania Superior Court decision, the 2nd Circuit relied on a 1920 case in which the U.S. Supreme Court said the wording is not intended to limit the act’s application to only those international shipments originating in the United States. The court also ruled that the cargo owner did not have adequate opportunity to elect full Carmack liability coverage. The case has been remanded to determine whether Union Pacific may limit its liability under any other provisions of Carmack or Staggers. - Dave Lenckus, Business Insurance
Not directly related, but the latest issue of TRP The Railroad Press Magazine has an "editorial" comment on UP lawsuites against a Canadian publisher of a UP calendar. The TRP article makes an interesting comment tying the lawsuites to violations of the First Amendment of the Constitution by UP...
Makes you wonder just how much UP profit is lost through all this legal mumbo jumbo (I mean the trivial stuff)...not to mention the higher costs passed on to us as railfans and model railroaders. Them lawyer fellers don't work fer cheap! :embarassed::zip:
Tim, the Canadian photographer is Nils Huxtable. I put a plug on the Yellow Pages for him a couple of weeks ago. Have a look: http://www.trainboard.com/grapevine/showthread.php?t=78684
Guess I missed that post! How much is the calendar - heck, I'll buy one to help support David battle Goliath!
Nils' prices are One Calendar $12.95 + $5 shipping Two Calendars $24.00 + $6 shipping Three " $32.00 + $7 " 4 or more 9.50 each $9 total And I apologize for putting this here rather than the yelllow pages.
