Southern Pac. Transp. Co. v. United States

• Decision Date: 31 August 1978
• Docket Number: Civ. No. R-77-0180 TJM.
• Citation: Southern Pac. Transp. Co. v. United States, 456 F.Supp. 931 (E.D. Cal. 1978)
• Parties: SOUTHERN PACIFIC TRANSPORTATION COMPANY, Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Eastern District of California

456 F. Supp. 931

SOUTHERN PACIFIC TRANSPORTATION COMPANY, Plaintiff, v. UNITED STATES of America, Defendant.

Civ. No. R-77-0180 TJM.

United States District Court, E. D. California.

August 31, 1978.

James Diepenbrock, Jack V. Lovell, Carol A. Huddleston, Diepenbrock, Wulff, Plant & Hannegan, Sacramento, Cal., for plaintiff.

Herman Sillas, U. S. Atty., Robert Browning Miller, James S. Joiner, Asst. U. S. Attys., Sacramento, Cal., for defendant.

OPINION

MacBRIDE, Chief Judge.

This opinion addresses the question of whether the Southern Pacific Transportation Company, plaintiff herein, as part of its case in chief against the defendant, United States, must carry the burden of proving that it was free of any contributory negligence. The United States argues that this result is mandated by the application of the so-called Carmack Amendment, 49 U.S.C. § 20(11), with its attendant burdens of proof.

Briefly, the factual and procedural setting of this case is as follows. On April 28, 1973, eighteen bomb-laden boxcars exploded in the Antelope Yard of the Southern Pacific Transportation Company (hereinafter, Southern Pacific) in Roseville, California. These boxcars and bombs, both the property of the United States, were being transported by Southern Pacific, under a contract with the Department of the Navy, from Hawthorne, Nevada to Port Chicago, California.

Southern Pacific brought this suit against the United States pursuant to the provisions of the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671 et seq., for damages allegedly sustained by the Antelope train-yard as a result of the explosions. Southern Pacific also seeks recovery, inter alia, for loss of freight revenues, loss of use of corporate capital, and indemnification or contribution for sums paid in settlement of third party claims. These alleged damages total approximately $40 million. The defendant, United States, filed an answer and counterclaim against Southern Pacific seeking recovery for loss of its bombs and boxcars and indemnification and contribution for any third party claims against the United States.

Since November of 1977, this court, sitting without a jury, has heard evidence put on by Southern Pacific in support of its claim against the United States. The United States contends that the Carmack Amendment applies to a carrier's claim against a shipper for damages allegedly suffered by the carrier during its transportation of the shipper's goods. Thus, the United States contends that Southern Pacific, in order to recover its damages in the instant case, bears a double burden of proof that: (1) the United States was negligent and that such negligence was a proximate cause of Southern Pacific's damages; and (2) Southern Pacific itself was free of any contributory negligence. Southern Pacific urges that the Carmack Amendment is inapplicable to its claim, and hence, that the burden of proof on the issue of contributory negligence rests, not upon it, but rather upon the defendant.

The Carmack Amendment provides:

§ 20, par. (11). Liability of initial and delivering carrier for loss; limitation of liability; notice and filing of claim. Any common carrier, railroad, or transportation company subject to the provisions of this chapter receiving property for transportation from a point in one State . . . to a point in another State, . . . shall issue a receipt or bill of lading therefor, and shall be liable to the lawful holder thereof for any loss, damage, or injury to such property caused by it or by any common carrier, railroad, or transportation company to which such property may be delivered or over whose line or lines such property may pass within the United States . . . when transported on a through bill of lading, and no contract, receipt, rule, regulation, or other limitation of any character whatsoever shall exempt such common carrier, railroad, or transportation company from the liability imposed; and any such common carrier, railroad, or transportation company so receiving property for transportation from a point in one State, . . . to a point in another State . . . or any common carrier, railroad, or transportation company delivering said property so received and transported shall be liable to the lawful holder of said receipt or bill of lading or to any party entitled to recover thereon, whether such receipt or bill of lading has been issued or not, for the full actual loss, damage, or injury to such property caused by it or by any such common carrier, railroad, or transportation company to which such property may be delivered or over whose line or lines such property may pass . . . when transported on a through bill of lading, notwithstanding any limitation of liability or limitation of the amount of recovery or representation or agreement as to value in any such receipt or bill of lading, or in any contract, rule, regulation, or in any tariff filed with the Interstate Commerce Commission; and any such limitation, without respect to the manner or form in which it is sought to be made is declared to be unlawful and void: . . . Provided further, That nothing in this section shall deprive any holder of such receipt or bill of lading of any remedy or right of action which he has under the existing law: Provided further, That all actions brought under and by virtue of this paragraph against the delivering carrier shall be brought, and may be maintained, if in a district court of the United States, only in a district, and if in a State court, only in a State through or into which the defendant carrier operates a line of railroad: Provided further, That it shall be unlawful for any such receiving or delivering common carrier to provide by rule, contract, regulation, or otherwise a shorter period for the filing of claims than nine months, and for the institution of suits than two years, such period for institution of suits to be computed from the day when notice in writing is given by the carrier to the claimant that the carrier has disallowed the claim or any part or parts thereof specified in the notice . . ..

Although the Carmack Amendment does not contain any language dealing with burdens of proof, the Amendment must be read in conjunction with certain common-law rules which it has been held to have codified. Missouri Pacific R.R. v. Elmore & Stahl, 377 U.S. 134, 137, 84 S.Ct. 1142, 1144, 12 L.Ed.2d 194, 197 (1964). As the Court stated:

the statute codifies the common-law rule that a carrier, though not an absolute insurer, is liable for damages to goods transported by it unless it can show 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."

Id., quoting Bills of Lading, 52 ICC 671, 679. The Court then set forth the well-established scenario of the typical shipper versus carrier suit for damage to the transported cargo:

In an action to recover from a carrier for damage to a shipment, the shipper establishes his prima facie case when he shows delivery in good condition, arrival in damaged condition, and the amount of damages. Thereupon, the burden of proof is upon 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.

Id., 377 U.S. at 138, 84 S.Ct. at 1145, 12 L.Ed.2d at 198 (citations omitted).

There does not appear to be any dispute between the parties that the Carmack Amendment, together with its common-law roots, applies in the case of shipper versus carrier for damages to the shipped cargo. Rather, the issue here is whether the Carmack Amendment scenario outlined above applies to the situation of a carrier suing a shipper for damages suffered by the carrier.¹

This question is one of first impression in this circuit. Furthermore, notwithstanding the Government's contention to the contrary, Southern Pacific contends that the issue has never been directly decided by any court.² To resolve this question, the purposes behind the enactment of the Carmack Amendment and the rationale for the existence of its accompanying common-law gloss must be examined.

The legislative history of the Carmack Amendment provides very little guidance in its interpretation.³ The Amendment, however, has been the subject of numerous judicial opinions. It has been held to have created no new substantive rights, but instead, a new remedy for shippers against carriers. J & H Flyer Inc. v. Penn. R.R., 316 F.2d 203, 205 (2d Cir. 1963); Strachman v. Palmer, 177 F.2d 427, 430 (1st Cir. 1949). The Supreme Court has held that there are four "significant and dominating" features of the Carmack Amendment:

First. It affirmatively requires the initial carrier to issue "a receipt or bill of lading therefor," when it receives "property for transportation from a point in one state to a point in another."

Second. Such initial carrier is made "liable to the lawful holder thereof for any loss, damage, or injury to such property caused by it."

Third. It is also made liable for any loss, damage, or injury to such property caused by "any common carrier, railroad, or transportation company to which such property may be delivered, or over whose line or lines such property may pass."

Fourth. It affirmatively declares that "no contract, receipt, rule, or regulation shall exempt such common carrier, railroad, or transportation company from the liability hereby imposed."

Adams Express Co. v. Croninger, 226 U.S. 491, 504, 33 S.Ct. 148, 151, 57 L.Ed. 314, 319 (1913).

Prior to the enactment of the Carmack Amendment, the rule of carrier's liability for an interstate shipment of cargo was subject to varied and unpredictable treatment between federal and state courts and between courts of different states. Id. 226 U.S. at 502-05, 33 S.Ct. at 150-51, 57 L.Ed. at 319-20. Passage of the Carmack Amendment assured uniformity of treatment on this...