Pharma Bio, Inc. v. TNT Holland Motor Exp., Inc.

• Decision Date: 17 December 1996
• Docket Number: No. 96-1980,96-1980
• Citation: 102 F.3d 914
• Parties: Fed. Carr. Cas. P 84,040 PHARMA BIO, INC., Plaintiff-Appellant, v. TNT HOLLAND MOTOR EXPRESS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 914

102 F.3d 914

Fed. Carr. Cas. P 84,040

PHARMA BIO, INC., Plaintiff-Appellant, v. TNT HOLLAND MOTOR EXPRESS, INC., Defendant-Appellee.

No. 96-1980.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 1, 1996.

Decided Dec. 17, 1996.

Jessica B. Tucker (argued), Stephen H. Dabrowski, Chicago, IL, for Plaintiff-Appellant.

Joel H. Steiner (argued), Paul A. Gajewski, Axelrod, Goodman, Steiner & Bazelon, Chicago, IL, for Defendant-Appellee.

Before CUMMINGS, BAUER and EASTERBROOK, Circuit Judges.

CUMMINGS, Circuit Judge.

Plaintiff-appellant Pharma Bio, Inc. ("Pharma Bio") brought this action to recover damages against defendant-appellee TNT Holland Motor Express, Inc. ("TNT") pursuant to the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706 (formerly § 11707), for damages to a shipment of salvaged red blood cells transported by TNT. TNT filed a motion for summary judgment, and on March 21, 1996, the district court issued a memorandum opinion and order finding that Pharma Bio had failed to establish a prima facie case for damages under the Carmack Amendment. Accordingly, the court granted TNT's motion for summary judgment.

Plaintiff appeals to this Court from the district court's grant of summary judgment in favor of TNT. For the reasons set forth below, we agree with Pharma Bio and reverse the decision of the district court.

I.

For approximately ten years prior to the shipment in question, TNT transported salvaged red blood cells for Pharma Bio, from Pharma Bio's place of business in South Holland, Illinois, to the Upjohn Company in Kalamazoo, Michigan. On April 5, 1994, TNT picked up a shipment of salvaged red blood cells from Pharma Bio to the Upjohn Company, and then took the shipment to its Chicago freight terminal and placed the shipment in a "warm room" to protect the shipment from freezing. The temperature in this warm room was maintained at approximately 45F, unless the outside temperature exceeded 45F, in which case, over time, the warm room temperature would rise until it approached the actual outside temperature.

TNT's typical delivery service from Chicago to Kalamazoo is next day delivery, or two days at the latest. However, on April 6, 1994, prior to delivery of Pharma Bio's shipment of red blood cells to the Upjohn Company, the Teamsters Union went on strike at TNT and shut down its shipping operations until April 30, 1994. Following notification from TNT to Pharma Bio of the delay in shipment, Pharma Bio notified TNT that the red blood cells were then useless, because the cells were perishable and TNT had not kept the shipment refrigerated during the strike. Nevertheless, on May 2, 1994, TNT attempted to deliver Pharma Bio's shipment to the Upjohn Company. After checking with his supervisor, the Upjohn Company dock worker refused to accept delivery. No one at Upjohn Company inspected or opened the contents of the shipment, nor did anyone sample the contents to determine their condition; the dock worker only looked at the shipping date on the shipping papers. On May 4, 1994, Pharma Bio filed a standard loss and damage claim against TNT for $18,975 asserting that the shipment was exposed to excessive heat and thereby spoiled, and TNT denied the claim.

At no time could TNT observe the contents of the April 5 shipment at issue because the 47 packages were sealed when picked up. TNT contends that its only knowledge regarding the requirements of the shipment of red blood cells came from the Bill of Lading prepared by Pharma Bio, which stated "DO NOT EXPOSE TO EXCESSIVE HEAT OR FREEZING." However, Pharma Bio's president William Reiland has stated in an affidavit that TNT was told by Pharma Bio over the course of a ten-year relationship in shipping red blood cells on a weekly basis that red blood cells could not be shipped at temperatures in excess of 55F and were to be delivered no more than two days after pick up. According to Reiland, on numerous occasions during the ten-year business relationship, TNT employees were allowed to view Pharma Bio's operations, including production and packaging of red blood cells, and TNT always placed the shipments of red blood cells in a special place on its trucks and in its facilities to signify the delicate and perishable nature of the shipment. Reiland also asserts in his affidavit that Pharma Bio always followed the same procedure in the packaging of red blood cells and once a week, every week, for approximately ten years, TNT has delivered each shipment to Upjohn Company in good condition. As for the shipment in question, Reiland claims that the red blood cells at issue were placed in units in plastic bags with "blue ice" frozen water packs and further packed in special containers insulated with styrofoam and that the cells were maintained at 55F or less throughout the entire packaging process as is required to keep red blood cells from spoiling.

II.

Pharma Bio asserts that, in reviewing the record and all inferences in the light most favorable to Pharma Bio, plaintiff has established a prima facie case under the Carmack Amendment, and accordingly, the district court erred as a matter of law in granting summary judgment in favor of TNT.

This Court reviews the district court's grant of summary judgment in favor of TNT de novo, reviewing the record in the light most favorable to the non-moving party. See Testerman v. EDS Technical Products Corp., 98 F.3d 297, 301 (7th Cir.1996); Thiele v. Norfolk & Western Railway Co., 68 F.3d 179, 181 (7th Cir.1995); Walker v. Shansky, 28 F.3d 666, 670 (7th Cir.1994). Summary judgment is appropriate only if the record, viewed in the light most favorable to the non-moving party, shows that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265. After one party has filed a motion for summary judgment, "the burden shifts to the non-moving party to show through specific evidence that a triable issue of fact remains on issues [on] which the nonmovant bears the burden of proof at trial." Walker, 28 F.3d at 670-671.

The Carmack Amendment has been interpreted by the Supreme Court and this Court to provide that "a common carrier is liable for all losses which occurred while the goods were being transported by it, unless the carrier can demonstrate it is free from fault." See Jos. Schlitz Brewing Co. v. Transcon Lines, 757 F.2d 171, 176 (7th Cir.1985), certiorari denied, 474 U.S. 848, 106 S.Ct. 143, 88 L.Ed.2d 118. In order to recover damages under the Carmack Amendment, a plaintiff must first establish a prima facie case by providing evidence that (i) the goods in question had been delivered to the carrier in good condition; (ii) the goods had arrived at the final destination in a damaged or diminished condition; and (iii) the damages can be specified. See Missouri Pacific Railroad Co. v. Elmore & Stahl, 377 U.S. 134, 138, 84 S.Ct. 1142, 1144-1145, 12 L.Ed.2d 194; Schlitz, 757 F.2d at 173; S.C. Johnson & Son, Inc. v. Louisville & Nashville Railroad Co., 695 F.2d 253, 256 (7th Cir.1982). Once the plaintiff has satisfied these requirements, the defendant carrier will be liable for damage to the goods in question, unless it can show that it was free from negligence and that the damage was caused by "(a) the act of God; (b) the public enemy; (c) the act of the shipper himself; (d) public authority; (e) or the inherent vice or nature of the goods." Missouri Pacific, 377 U.S. at 137, 84 S.Ct. at 1144 (citations omitted); Schlitz, 757 F.2d at 173; S.C. Johnson, 695 F.2d at 256.

Defendant asserts, and the district court agreed, that Pharma Bio had failed to produce sufficient evidence as to the first and second elements of its prima facie case. As to the first element, whether plaintiff had proved by credible evidence that the salvaged red blood cells tendered to TNT were in good condition, the district court noted that the packages in the shipment were sealed when tendered to TNT and found that there was no evidence in the record that the blood cells were in good condition when tendered, even though Pharma Bio president Reiland's affidavit was sufficient for purposes of the summary judgment motion to establish that the salvaged blood cells were packaged properly. The court distinguished the cases cited by Pharma Bio-- Fine Foliage of Florida, Inc. v. Bowman Transportation, Inc., 698 F.Supp. 1566 (M.D.Fla.1988), affirmed, 901 F.2d 1034 (11th Cir.1990), and Pillsbury Company v. Illinois Central Gulf Railroad 687 F.2d 241 (8th Cir.1982)--based on Pharma Bio's alleged failure to provide...