Tempel Steel Corp. v. Landstar Inway, 99-3903

• Decision Date: 02 May 2000
• Docket Number: No. 99-3903,99-3903
• Citation: 211 F.3d 1029
• Parties: (7th Cir. 2000) Tempel Steel Corporation, Plaintiff-Appellee, v. Landstar Inway, Inc., Defendant-Appellant
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1029

211 F.3d 1029 (7th Cir. 2000)

Tempel Steel Corporation, Plaintiff-Appellee, v. Landstar Inway, Inc., Defendant-Appellant.

No. 99-3903

In the United States Court of Appeals For the Seventh Circuit

Argued April 10, 2000

Decided May 2, 2000

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 98 C 6839--Suzanne B. Conlon, Judge.

Before Easterbrook, Kanne, and Rovner, Circuit Judges.

Easterbrook, Circuit Judge.

En route from Minster, Ohio, to Monterrey, Mexico, a large machine press was severely damaged. A motor carrier had not secured the press properly and drove too fast; this combination led to the loss, which cost almost $300,000 to fix. Tempel Steel, the owner, wants Landstar Inway, its carrier, to reimburse it for repair costs, and the district court granted summary judgment in Tempel's favor under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. sec.14706. See 1999 U.S. Dist. Lexis 11018 (N.D. Ill. 1999). But Landstar insists that it is not liable: a tariff disclaims all liability for casualties in Mexico, where the accident occurred, and anyway, Landstar insists, the loss was the fault of Teresa de Jesus Ortiz Obregon, a drayage company that Parker & Co., a customs broker, hired to move the cargo through U.S. and Mexican customs facilities before delivery to the Mexican interchange carrier.

A motor carrier must compensate the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States or from a place in the United States to a place in an adjacent foreign country when transported under a through bill of lading[.]

49 U.S.C. sec.14706(a)(1). Mexico is an adjacent foreign country; Landstar issued a through bill of lading; and Tempel is "the person entitled to recover under the . . . bill of lading." That the drayage company is "another carrier over whose line or route the property is transported" does not relieve Landstar of its liability. Having issued a through bill of lading (and touted its "seamless" service), Landstar is responsible for the entire movement. A shipper may look to its chosen carrier, which then bears the responsibility for seeking compensation from another carrier actually responsible for the loss. (Landstar's arrangement with its Mexican counterpart provides expressly for this; the originating carrier handles all loss, damage, and delay claims.) A straightforward application of the Carmack Amendment supports the district court's decision. If Landstar feared that Parker would use a feckless drayage company, it could have issued two bills of lading: one from Minster to U.S. customs, and the other from Mexican customs to Monterrey. But it did not do this and is liable for damage caused by intermediate carriers, no matter who selected them, under sec.14706(a)(1)(C).

Nonetheless, Landstar insists, the court should have applied its tariff in lieu of the Carmack Amendment. The bill of lading recites that the press was received "subject to the classifications and tariffs in effect on the date of the issue of this Bill of Lading." In December 1997, when it picked up the machine, Landstar maintained (apparently in its own files) a document containing this provision:

Carrier's transportation service to Mexico shall end at the border point when carrier delivers the shipment to a designated interline carrier. . . . At no time shall Carrier be held liable for any loss or damage to a shipment within the country of Mexico.

We doubt that this was a "tariff in effect" in 1997. Until 1995 tariffs had legal effect; the filed-rate doctrine made it impossible for shippers and carriers to contract around them. American Telephone & Telegraph Co. v. Central Office Telephone, Inc., 524 U.S. 214 (1998); Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476 U.S. 409 (1986). The ICC Termination Act, 109 Stat. 803 (1995), abolished the tariff filing requirement and the filed-rate doctrine, and it canceled the legal effectiveness of most extant tariffs. 49 U.S.C. sec.13710(a)(4). See Munitions Carriers Conference, Inc. v. United States, 147 F.3d 1027, 1029-30 (D.C. Cir. 1998). Today carriers adopt standard contractual terms, which some call "tariffs" out of habit, but which have no effect apart from their status as contracts. Landstar's bill of lading probably should have been revised to say that it incorporates "standard terms" rather than "tariffs in effect"; had it done this,...