A.I.G. Uruguay Compania v. Aaa Cooper Transp., 02-11570.

• Decision Date: 19 June 2003
• Docket Number: No. 02-11570.,02-11570.
• Citation: 334 F.3d 997
• Parties: A.I.G. URUGUAY COMPANIA DE SEGUROS, S.A., as subrogee, Plaintiff-Appellee, v. AAA COOPER TRANSPORTATION, an Alabama Corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

334 F.3d 997

A.I.G. URUGUAY COMPANIA DE SEGUROS, S.A., as subrogee, Plaintiff-Appellee, v. AAA COOPER TRANSPORTATION, an Alabama Corporation, Defendant-Appellant.

No. 02-11570.

United States Court of Appeals, Eleventh Circuit.

June 19, 2003.

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Cindy Jane Mishcon, Pyszka, Blackmon, Levy & Savola, P.A., Jeffrey Arthur Mowers, Peters, Robertson, Demahy, Parsons, Mowers, Passaro & Drake, P.A., Hialeah, FL, for Defendant-Appellant.

Alvaro L. Mejer, Armstrong & Mejer, P.A., Coral Gables, FL, for Plaintiff-Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before BIRCH, CARNES and BRUNETTI^*, Circuit Judges.

BIRCH, Circuit Judge:

AAA Cooper Transportation accepted for shipment three shrink-wrapped pallets from Motorola, each containing a number of cellular phones. These pallets disappeared before delivery, and A.I.G. Uruguay Compania de Seguros, S.A., sues under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, for resulting damages. In this appeal, we clarify the evidentiary predicate necessary to prove the contents of a sealed container under the Carmack Amendment. We AFFIRM the district court.

I. BACKGROUND

The relevant facts in this case are undisputed, and we accept the district court's determination of them at trial, summarized for our purposes as follows. Abiatar, S.A. ("Abiatar"), an Uruguayan electronics company, contracted with Motorola, Inc., for the sale of 400 cellular telephones at $315 per phone, for a total of $126,000. Motorola packaged the phones at its factory and informed Abiatar's chosen freight forwarder, Miami International Forwarders ("MIF"), that the phones were ready to be shipped. MIF employed AAA Cooper Transportation ("Cooper"), a common carrier based in Dothan, Alabama, to transport the phones by ground from Motorola's factory in Illinois to Miami, Florida, where they would be shipped onward to Uruguay by MIF.

Cooper received the shipment at Motorola's factory on 24 August 1999, loaded it onto an truck, and drove it to Miami, where it arrived on 26 August. The shipment was unloaded at the Cooper Miami terminal and, on 27 August, loaded onto a local delivery truck. The driver of this truck attempted delivery to MIF that same day, but was turned away from MIF's terminal. The truck returned to Cooper's terminal, where the shipment was unloaded from the truck and loaded into a storage trailer for the weekend. On the following Monday, 30 August, the shipment was again loaded onto a local delivery truck, but when the truck later arrived at MIF for delivery, it was discovered that the Motorola shipment was not among the truck's contents. To date, the disappearance of the shipment is unexplained.

Abiatar insured this shipment through A.I.G. Uruguay Compania de Seguros S.A. ("AIG"), who paid Abiatar's claim for loss of the phones. AIG, as subrogee of Abiatar, sued Cooper for its apparent negligence, and, following a bench trial, the district court entered judgment for AIG in the amount of $126,000, the full value of the lost shipment.

II. DISCUSSION

On appeal following a bench trial, a district court's conclusions of law are reviewed de novo, and its findings of fact are reviewed for clear error. MiTek Holdings, Inc. v. Arce Eng'g Co., 89 F.3d 1548, 1554 (11th Cir.1996). The Carmack Amendment to the Interstate Commerce Act makes common carriers liable for actual loss of or damage to shipments in interstate commerce. 49 U.S.C. § 14706(a)(1). A prima facie case is established under the Carmack Amendment upon proof by a preponderance of the evidence that (1) the goods were delivered to the carrier in good condition, (2) the goods arrived at the destination in damaged condition, and (3) a specified amount of damages resulted. Fine Foliage of Fla., Inc. v. Bowman Transp., Inc., 901 F.2d 1034, 1037 (11th Cir.1990).

Once a prima facie case is established, the burden shifts to the carrier to prove (1) that it was free from negligence, and (2) that the damage to the cargo was caused by one of the five excusable factors: "(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." Id. at 1039 (quoting Missouri Pacific R. Co. v. Elmore & Stahl, 377 U.S. 134, 137, 84 S.Ct. 1142, 1144, 12 L.Ed.2d 194 (1964)).

If the carrier cannot meet this burden, then liability is established. The inquiry then becomes the amount of damages and, usually, whether the carrier legitimately limited its liability for the shipment to a specified value or amount. A carrier subject to the Carmack Amendment may only limit its liability under the released value provision of 49 U.S.C. § 14706(c)(1), which states:

a carrier providing transportation or service ... may ... establish rates for the transportation of property (other than household goods described in section 13102(10)(A)) under which the liability of the carrier for such property is limited to a value established by written or electronic declaration of the shipper or by written agreement between the carrier and shipper if that value would be reasonable under the circumstances surrounding the transportation.

Cooper argues that the district court improperly applied this framework in two ways: first, that the district court erred in allowing AIG to prove its prima facie case with circumstantial evidence, and, second, that the district court erred in finding that Cooper did not validly limit its liability on the shipment. We discuss each of these arguments in turn.

A. Proof of Delivery in Good Condition

One of the elements in a Carmack Amendment case is proof that the goods were delivered to the carrier in good condition. Fine Foliage, 901 F.2d at 1037. When the shipment at issue is not a sealed container, then the "carrier has the initial burden of informing itself of the condition of the goods received." Offshore Aviation v. Transcon Lines, Inc., 831 F.2d 1013, 1014 (11th Cir.1987) (per curiam). Because the carrier has the ability before and during shipment to ascertain for itself the nature and condition of the shipment, we do not require heightened proof. In these cases, a recitation of good condition and contents on the bill of lading may suffice. See Spartus Corp. v. S/S Yafo, 590 F.2d 1310, 1319 (5th Cir.1979).

When the shipment at issue is a sealed container, then the carrier has no independent ability to ascertain the contents of the shipment, and the shipper is held to a higher standard of proof. The bill of lading, by itself, is never sufficient to establish a prima facie case. Offshore Aviation, 831 F.2d at 1014-15. "Where goods are shipped under seal, the condition of the goods cannot be within the carrier's knowledge. A bill of lading accordingly can attest only to apparent or external good condition, and ... the shipper may reasonably be required to present some additional evidence of the condition of the goods at the time of delivery." Pillsbury Co. v. Illinois Cent. Gulf R.R., 687 F.2d 241, 244 (8th Cir.1982). "The carrier ... should not have the (initial) burden of separating damages arising from causes prior to shipment from damages due to negligent stowage." Id. (internal quotations omitted).

Our precedent in the Eleventh Circuit indicates that the type of proof necessary to meet this heightened standard depends on whether the shipment at issue was damaged or destroyed.¹ When the sealed shipment was damaged en route, and, consequently, the question is only the original condition of the shipment, then reliable, substantial circumstantial evidence of condition will suffice to prove a prima facie case. See Fine Foliage, 901 F.2d at 1038 (ferns damaged); Frosty Land Foods Int'l, Inc. v. Refrigerated Transp. Co., 613 F.2d 1344, 1347 (5th Cir.1980) (shipment of meat damaged); see also Allied Tube & Conduit Corp. v. Southern Pac. Transp. Co., 211 F.3d 367, 371 (7th Cir.2000) (pipes damaged); Pharma Bio, Inc. v. TNT Holland Motor Express, Inc., 102 F.3d 914, 917 (7th Cir.1996) (blood cells damaged by non-refrigeration). The bill of lading, by itself, is not sufficient circumstantial evidence to show good condition at delivery to the carrier. Reider v. Thompson, 197 F.2d 158, 161 (5th Cir.1952). But a case may be made by a bill of lading that recites receipt of the sealed packages in good external condition, when coupled with damage "of a kind which could not in the nature of things have occurred before the shipment." McNeely & Price Co. v. The Exchequer, 100 F.Supp. 343, 344 (E.D.Pa.1951); see also Reider, 197 F.2d at 161.

When the shipment was lost, destroyed, or damaged to such extent that it is impossible to tell what was contained in the shipment, then the question is not only the original condition of the shipment, but also the contents of the shipment. When a sealed shipment disappears or is destroyed, we cannot tell by looking at the remains of the shipment, if any, what it originally contained. Therefore, we have said in these circumstances that we require "direct" evidence of the original contents and condition of the shipment to prove a prima facie case. "It is well settled that documentary evidence alone, such as a bill of lading, is insufficient to establish proof of delivery of the contents of a sealed container." Highlands Ins. Co. v. Strachan Shipping Co., 772 F.2d 1520, 1521 (11th Cir.1985). "[D]ocuments cannot suffice for prima facie proof of contents in sealed containers." Offshore Aviation, 831 F.2d at 1015. "[T]he established rule requir[es] the plaintiff to supplement documentary evidence with some form of direct evidence of the contents of a sealed container." Highlands, 772 F.2d at 1522. "Direct evidence, such as the testimony of an eyewitness to the loading of the container, is necessary to confirm the contents." Id. at 1521; see also Continental Grain Co. v....