Allied Tube v. Southern Pacific Transp

• Decision Date: 28 April 2000
• Docket Number: No. 99-3024,99-3024
• Citation: 211 F.3d 367
• Parties: (7th Cir. 2000) Allied Tube & Conduit Corporation, Plaintiff-Appellee, v. Southern Pacific Transportation Company, Defendant-Appellant
• Court: U.S. Court of Appeals — Seventh Circuit

Page 367

211 F.3d 367 (7th Cir. 2000)

Allied Tube & Conduit Corporation, Plaintiff-Appellee, v. Southern Pacific Transportation Company, Defendant-Appellant.

No. 99-3024

In the United States Court of Appeals For the Seventh Circuit

Argued February 10, 2000

Decided April 28, 2000

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 97 C 4594--Charles R. Norgle, Sr., Judge. [Copyrighted Material Omitted] Before Coffey, Flaum, and Diane P. Wood, Circuit Judges.

Flaum, Circuit Judge.

Allied Tube and Conduit Corporation ("Allied") brought suit under the Carmack Amendment, 49 U.S.C. sec. 14706, against Southern Pacific Transportation Company ("Southern Pacific") for damages allegedly sustained to its steel pipes during transit. The district court entered judgment in favor of Allied in the amount of $47,490.15. For the reasons stated herein, we affirm.

Background

In June 1996, Southern Pacific agreed to transport a shipment of approximately eighty bundles of fire protection/sprinkler system pipe to Hayward, California for Allied. Pursuant to their agreement, Allied paid $2,916 in freight charges to Southern Pacific, and Southern Pacific issued to Allied a bill of lading. Allied loaded the shipment onto one of Southern Pacific's rail cars--an open top, bulkhead type flatcar--at Allied's manufacturing plant in Illinois. Allied did not cover the pipe shipment with protective covering. Allied then tendered the railcar to Illinois Central Railroad Company for carriage to St. Louis, where Illinois Central tendered it to Southern Pacific for carriage to California.

When Southern Pacific presented the shipment at its California destination, the pipe was contaminated, pitted, and corroded by what appeared to be rock salt. Allied rejected the entire shipment. Southern Pacific learned that the shipment had been damaged, but it chose not to inspect it. Allied ultimately salvaged the shipment for scrap iron at auction for $6,211.

On June 26, 1997, Allied sued Southern Pacific for the value of the shipment pursuant to the Carmack Amendment, 49 U.S.C sec. 14706. Following a bench trial, the district court found in favor of Allied for $47,490.15.¹ Southern Pacific now appeals.

Discussion

The Carmack Amendment, a section of the Interstate Commerce Act, provides shippers with the statutory right to recover for actual losses to their property caused by carriers. See Gordon v. United Van Lines, Inc., 130 F.3d 282, 285-86 (7th Cir. 1997). It "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.'" Pharma Bio, Inc. v. TNT Holland Motor Express, Inc., 102 F.3d 914, 916 (7th Cir. 1996) (quoting Jos. Schlitz Brewing Co. v. Transcon Lines, 757 F.3d 171, 176 (7th Cir. 1985)). Pursuant to this statute, in an action to recover from a carrier for damage to a shipment, the shipper establishes a prima facie case when it shows (1) delivery in good condition; (2) arrival in damaged condition; and (3) the amount of damages. Upon such a showing, the burden shifts to the carrier to show both that it was free from negligence and that the damage to the cargo was due to one of the excepted causes relieving the carrier of liability.² See Missouri Pacific Railroad Co. v. Elmore & Stahl, 377 U.S. 134, 137-38 (1964).

The district court found that Allied had established a prima facie case under this scheme and that Southern Pacific failed to meet its burden to avoid liability. Southern Pacific argues that this conclusion was erroneous in several respects.

1. Burden of Proof

Allied first argues that the district court erroneously failed to find that this case involved a "shipper's load and count" shipment, in which case the burden would be on Allied to show that Southern Pacific acted negligently. The district court relied on the fact that no express language on Southern Pacific's bill of lading, nor anything else in the record, indicated that this was to be a "shipper's load and count" shipment, and it concluded that this was not such a shipment. Southern Pacific contends that the circumstances of this transaction--in particular, that Allied Tube packed and loaded the pipe and selected the type of rail car on which the pipe was shipped--prove that this was, indeed, a "shipper's load and count" shipment, and therefore the district court should have required Allied to show Southern Pacific's negligence.

We find no error in the district court's finding that this was not a "shipper's load and count" shipment. As noted by the district court, other jurisdictions have generally looked to whether a "shipper's load and count" designation appears on the face of the bill before shifting the burden of proof. See, e.g., Johnson & Johnson v. Chief Freight Lines Co., 679 F.2d 421, 422-23 (5th Cir. 1982); Minneapolis St. Paul & Sault Ste. Marie R.R. v. Metal-Matic, Inc., 323 F.2d 903, 905 (8th Cir. 1963). Even the federal statutory provision that Southern Pacific invokes for the proposition that a common carrier is not liable for damages caused by improper loading if the shipper loads the goods actually supports the district court's decision; that provision requires that the words "shipper's load and count" be printed on the bill of lading.³ Moreover, the New Jersey district court case that Southern Pacific cites for the proposition that a shipper's load and count shipment need not be expressly designated as such on the bill of lading actually supports the opposite conclusion. Modern Tool Corp. v. Pennsylvania Railroad Co., 100 F.Supp. 595, 596-97 (D.N.J. 1951), suggests that omission of such a designation "serves to shift upon the carrier the burden of proving that the goods were improperly loaded by the shipper, and that the damage ensued from that cause."

The district court did not err in finding that Allied's shipment was not a "shipper's load and count" shipment. Accordingly, Allied was not required to prove Southern Pacific's negligence to establish its prima facie case.

2. Allied's Prima Facie Case

As noted above, the Carmack Amendment does not place upon a shipper the burden of proving that a carrier was negligent in order to recover for damage to the shipment. Rather, once a shipper demonstrates (1) delivery of its goods to the carrier in good condition; (2) arrival in damaged condition; and (3) specific damages, the burden of proof shifts to the carrier, who can avoid liability if it shows that (1) it was not negligent; and (2) the damage to the cargo was caused by, among other things, the act of the shipper.

Southern Pacific argues that Allied failed to prove the first element: that the steel pipe was in good condition at the time it was delivered to Southern Pacific by Illinois Central, or when it was loaded by Allied. According to Southern Pacific, the only evidence Allied offered in this regard was the testimony of one of its forklift operators, Arturo Zambrano, who testified about the general procedures used by Allied. However, Zambrano did not know whether he loaded this particular shipment. Southern Pacific argues that this testimony was insufficient to establish good condition, and therefore Allied had the burden of proving Southern Pacific negligent--a burden it never met.

We remain unpersuaded that the district court's finding should be disturbed. This Court has previously held that a shipper may establish by circumstantial evidence that its cargo was in good condition upon delivery to the carrier. See Pharma Bio, 102 F.3d at 917; see also Fine Foliage of Florida, Inc. v. Bowman Transportation, Inc., 901 F.2d 1034, 1038-1039 (11th Cir. 1990). For example, in Pharma Bio, the shipper was not able to present any direct evidence...