Hubbard v. Allied Van Lines, Inc.

• Decision Date: 05 August 1976
• Docket Number: No. 75-1922,75-1922
• Citation: 540 F.2d 1224
• Parties: F. Patrick HUBBARD and Judy Hubbard, Appellants v. ALLIED VAN LINES, INC., Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1224

540 F.2d 1224

F. Patrick HUBBARD and Judy Hubbard, Appellants v. ALLIED VAN LINES, INC., Appellee.

No. 75-1922.

United States Court of Appeals Fourth Circuit.

Argued March 31, 1976.

Decided Aug. 5, 1976.

Walter A. Reiser, Jr., Columbia, S. C., for appellants.

Wayne F. Rush, Columbia, S. C. (Callison, Tighe, Nauful & Rush, Columbia, S. C., on brief), for appellee.

Before HAYNSWORTH, Chief Judge, and WINTER and BUTZNER, Circuit Judges.

WINTER, Circuit Judge:

Plaintiffs, the shippers of household furniture and other personal property, attack the legal correctness of an order of the district court striking from their complaint all allegations supporting recovery of punitive damages and damages for mental distress from defendant, a common carrier by motor vehicle, for breach of the duty of nondiscrimination imposed by Part II of the Interstate Commerce Act, 49 U.S.C. § 316(d). Assuming a private damage remedy would lie for a violation of § 316(d), the district court ruled that neither punitive damages nor damages for mental distress were proper elements of recovery. We reverse. We hold that a private right of action exists under 49 U.S.C. § 316(d), and that in a proper case punitive damages and damages for mental distress may be recovered. The allegations of plaintiffs' complaint were sufficient to entitle them to introduce proof supporting the recovery of such damages.

I.

In substance, the complaint alleged the following: On July 5, 1973, plaintiffs contracted with defendant for defendant to pick up plaintiffs' household furniture at New Haven, Connecticut, and to deliver it to plaintiffs at Columbia, South Carolina, on about July 18, 1973. The defendant delivered about eighty per cent of the goods on August 8, 1973, and the remaining twenty per cent on October 10, 1973. Some of the items were lost and others were damaged. Because of the delay in delivery, plaintiffs incurred various out-of-pocket expenses. In addition,

plaintiffs suffered extreme mental anguish and distress by reason of the failure of the defendant to make delivery according to the contract, as the plaintiff F. Patrick Hubbard was starting a new career as a law professor, and the plaintiff Judy Hubbard, his wife, was at the time four months pregnant, and for these reasons the plaintiffs were particularly anxious to get established in their new home in July.

Plaintiffs alleged that the delay occurred because the defendant used its equipment to haul the goods of other unknown persons instead of plaintiffs' goods, "without any valid reason therefor," and that defendant thereby gave an undue and unreasonable preference to such other persons. Plaintiffs further alleged that defendant "acted in a reckless, willful, and wanton manner, in callous disregard of the rights of the plaintiffs." The prayer for relief sought $25,000 actual and punitive damages, interest, and costs.

Defendant moved to strike all portions of the complaint relating to the plaintiffs' mental distress and to the defendant's scienter, on the grounds that damages for mental distress and punitive damages were not recoverable for undue discrimination against a shipper. The district court granted the motion and ordered the material stricken. The parties subsequently entered into a stipulation as to the remaining damages (out-of-pocket expenses and damages for loss and breakage of property), and judgment was entered for plaintiffs in the stipulated amount. The plaintiffs appeal from that judgment.

II.

In pertinent part, 49 U.S.C. § 316(d) provides:

It shall be unlawful for any common carrier by motor vehicle engaged in interstate or foreign commerce to make, give, or cause any undue or unreasonable preference or advantage to any particular person . . . in any respect whatsoever; or to subject any particular person . . . to any unjust discrimination or any undue or unreasonable prejudice or disadvantage in any respect whatsoever . . . .

We have found no case discussing the issue of whether a private damage remedy will lie for breach of the duty imposed by this section. However, the Civil Aeronautics Act, 49 U.S.C. § 1374(b), imposes the same duty on common carriers by air, and it is well established that a private right of action exists for violation of that section. See, e. g., Nader v. Allegheny Airlines, Inc., 167 U.S.App.D.C. 350, 512 F.2d 527, 537 (1975), rev'd on other grounds, --- U.S. ----, 96 S.Ct. 1978, 48 L.Ed.2d 643 (1976); Archibald v. Pan American World Airways, Inc., 460 F.2d 14, 16 (9 Cir. 1972); Fitzgerald v. Pan American World Airways, Inc., 229 F.2d 499, 501-02 (2 Cir. 1956). Defendant has suggested no reason for reaching a different result under Part II of the Interstate Commerce Act, other than to point to the obvious fact that the Aeronautics Act cases involve discrimination against persons, whereas this case involves discrimination against property. We believe this difference is immaterial, and are persuaded by the logic of the cases under the Aeronautics Act; thus, we hold that a private right of action exists for violation of 49 U.S.C. § 316(d). ¹

Defendant correctly observes, however, that the Carmack Amendment,49 U.S.C. § 20(11), ² concerning limitation of liability by common carriers, is made applicable to motor carriers by 49 U.S.C. § 319, but not to carriers by air. Defendant contends that the Carmack Amendment precludes recovery of the sort of damages sought by plaintiffs here. If defendant's view of the Carmack Amendment is correct, then cases indicating that punitive damages may be recovered under the Aeronautics Act, e. g. Nader v. Allegheny Airlines, Inc., 512 F.2d at 549-51; Archibald v. Pan American World Airways, Inc., 460 F.2d at 16; Wills v. Trans World Airlines, Inc.,200 F.Supp. 360, 366-67 (S.D.Cal.1961), are distinguishable.

Defendant places principal reliance on language of the Carmack Amendment making any common carrier receiving property for transportation liable for the "full actual loss, damage, or injury to such property caused by it" except where the I.C.C. has authorized the establishment of rates based on declared value, in which case liability may be limited to the declared value. (No suggestion is made that the exception is applicable to the instant case.) Based upon this language, defendant makes two arguments.

First, it contends that the phrase "to such property" indicates that the liability of motor carriers is limited by the Carmack Amendment to damages for physical injury to or loss of the property being transported. This contention has been repeatedly rejected by the Supreme Court. In New York, Philadelphia & Norfolk R. R. v. Peninsula Produce Exchange, 240 U.S. 34, 36 S.Ct. 230, 60 L.Ed. 511 (1916), the Court construed the phrase "to such property" as limiting only the word "injury"; thus, the words "loss" and "damage" are left unlimited, and the phrase "any loss, damage, or injury to such property" is "comprehensive enough to embrace all damages resulting from any failure to discharge a carrier's duty with respect to any part of the transportation to the agreed destination." 240 U.S. at 38, 36 S.Ct. at 232. The statute thus comprehends damages personal to the shipper, such as damages for delay in shipment. Southeastern Express Co. v. Pastime Amusement Co., 299 U.S. 28, 57 S.Ct. 73, 81 L.Ed. 20 (1936).

Second, defendant argues that the word "actual" which precedes the phrase "loss, damage, or injury" precludes the recovery of punitive damages, and possibly damages for mental distress as well. To accept this construction of the statute, we would be required to disregard the literal terms of the balance of its language and its evident overall meaning.

As preface, we summarize the language of the Carmack Amendment, 49 U.S.C. § 20(11), the material portions of which have been set forth in the margin in n. 2:

Any common carrier receiving property for transportation shall be liable for any loss, damage, or injury caused by it, and no contract or other limitation of any character shall exempt such carrier from the liability imposed. Any such carrier shall be liable for the full actual loss, damage, or injury caused by it notwithstanding any limitation of liability in any contract or in any tariff filed with the I.C.C., provided, however, that the provisions hereof respecting liability for full actual loss, damage, or injury, notwithstanding any limitation of liability, shall not apply where the I.C.C. has authorized the establishment of value-based rates, in which case liability may be limited to the declared value.

Even if we assume that "actual loss, damage, or injury" does not include punitive damages or damages for mental distress, it does not follow that the statute extinguishes a carrier's liability for these elements of damages. The initial portion of the statute, which imposes liability, speaks only in terms of "any loss, damage, or injury." This liability is to attach regardless of any limitation of a contractual nature. The second portion of the statute, which contains the phrase "full actual loss, damage, or injury" specifies that the liability it speaks of, i. e., liability for actual loss, may not be limited by contract or by tariff. Finally, the proviso permits liability to be limited where the I.C.C. has approved rates based on declared value, a circumstance not relevant here. Thus, to the extent that the Carmack Amendment has any impact on the availability of punitive damages and damages for mental distress under 49 U.S.C. § 316(d), we think its only effect would be to permit a carrier to limit its liability for such damages by tariff : the negative implication of the statute is that while liability for "any loss, damage, or injury" may not be limited by contract, it may be limited by tariff to the extent that it exceeds "full actual loss, damage, or injury." Defendant has not drawn our attention to any such limiting tariff.

Moreover, we are doubtful that the Carmack Amendment was...