District Court, Nassau County, New York.

Rabiolla SOOMEKH, Plaintiff(s),

v.

UNITED PARCEL SERVICE, INC., Defendant(s).

March 29, 2005.

SCOTT FAIRGRIEVE, J.

ISSUES

Can plaintiff as consignee recover under the provisions of the Carmack Amendment to the Interstate Commerce Act?

Can the plaintiff recover the value of the gold plated silver coins under New York State common law principles from defendant? In the alternative, are plaintiff’s claims precluded by the Carmack Amendment, and thus, barred by the Tariff Provisions?

NATURE OF CLAIM

Plaintiff has commenced this action to recover $3,276.99 which is the alleged value of gold plated silver coins shipped on March 19, 2004 from California to the plaintiff’s home located in Great Neck, New York. The plaintiff (consignee) states the following as the basis of liability:

“Mr. Manochewr Amidi sent me a box on 3-19-04 from California which there was [sic] gold plated silver coin which I never received. I contacted U.P.S. few time and I never got a right answer why I never received the package.”

In support of its motion for summary judgment, defendant has submitted the affidavit of Artie Steigert who is the Security Manager for the Long Island District New York facility of UPS. UPS is a common carrier which entered into an agreement with “The Box Store” on March 9, 2004, to ship a package from California to Great Neck. The Box Store is an authorized shipping outfit where “customers can tender packages for transportation through UPS or other carriers.” In this case the package was shipped via UPS. Mr. Steigert claims in the affidavit that UPS “did not know what was in the package when Mr. Amidi shipped it.” UPS contends that its records demonstrate that the package was left at plaintiff’s door located at 4 Radcliff Drive, Great Neck, New York. This type of delivery is referred to as a “driver release” which is “appropriate pursuant to the terms of the UPS Tariff.”

Defendant contends that it cannot be held liable for the allegedly lost package because:

(1) package was shipped through an Authorized Shipping Outlet and so UPS has no direct relationship with plaintiff, and (2) coins, such as the Iranian gold-plated silver coins shipped herein, are considered “articles of unusual value” which may not be shipped via UPS pursuant to the terms of the UPS Tariff.

UPS submits the Tariff which governs this transaction entitled “General Tariff Containing the Classifications, Rules, and Practices for the Transportation of Property,” effective July 14, 2003. Tariff item 1090 is cited as barring a direct action by plaintiff:

AUTHORIZED SHIPPING OUTLETS

UPS Authorized Shipping Outlets or Commercial Counters (collectively referred to within this Item as “ASOs”) are independently owned and operated businesses and are not agents of UPS. UPS assumes no liability other than to the ASO, as the shipper of the package, for lost, damaged, or delayed packages sent via the ASO. Any such liability to the ASO is subject to the limitations set forth in the applicable UPS Tariff or Service Guide. All inquiries regarding packages shipped via ASOs must be directed to the ASO. UPS will deal solely with the ASO in all matters concerning packages shipped via an ASO, including but not limited to: tracking/tracing requests; claims and guarantees; C.O.D. preparation and remittance; return of undeliverable packages and letters; proper packaging and labeling; and billing. Even if UPS responds directly to ASO customers regarding tracking requests, UPS will not be liable to those who shipped packages via the ASO. The ASO agrees not to ship any articles that UPS does not accept for transportation. ASOs shall indemnify and hold harmless UPS in any action against UPS arising from the loss, damage, or delay of a package shipped via the ASO.

Tariff item 460 is cited as barring any claim for the 40 silver gold plated coins because these items are articles of unusual value; this provision states:

DEFINITION OF ARTICLES OF UNUSUAL VALUE, WHICH ARE NOT ACCEPTED BY UPS FOR TRANSPORTATION

Shippers are prohibited from shipping articles of unusual value via UPS. Articles of unusual value shall be deemed to include, but are not limited to:

(1)Coins (except pennies and nickels, and except proof and mint sets of United States coins tendered by United States mints of a face value not to exceed $2.41), currency, postage stamps, negotiable instruments (except checks), money orders, unset precious stones, and industrial diamonds.

(2)Any article which contains more than fifty percent by weight of gold, silver, or platinum or any combination thereof in raw form, bullion, balls, bars, grains, strip, sheet, wire, chain, ingots and the scrap of these metals.

(3)Any package having a value of more than $50,000.

UPS will not be liable for any loss of, or damage to, articles of unusual value.

Plaintiff opposes the defendant’s motion for summary judgment based upon the following set of facts asserted in the affidavit in opposition dated December 14, 2004:

1. In answer to your command for sending valuable coins, the material that was sent wasn’t Trading Coins. There [sic] were Memorial Coins that exchanges only between Persian community because it has the picture of King of Iran.

2.On your statement you said UPS doesn’t allow shipping articles of unusual value. But when the sender was sending the material the clerk at your office examined the material and never denied sending it or letter the sender know [sic] he’s prohibited of sending it and insured it for the amount of $3000.

3.You said ASO’ has no relation with UPS, but we have a record from UPS which I provide you with the copy of it and the copy of their business card. I have a shipping track No.1Z51XW20344361624 which belongs to UPS authority.

DECISION

This Court holds that the Carmack Amendment governs the liabilities of the parties to this dispute and bars all state claims. Judge Holwell explains in Travelers Indemnity Company of Illinois v. Schneider Specialized Carriers, Inc., N.Y.L.J. 2/22/05, p. 23, col. 1 (S.D.NY, 2005), that the purpose of the Carmack Amendment is to provide a uniform system to adjudicate all claims involving shipping of goods in interstate commerce and preempts all state claims:

The Carmack Amendment, enacted in 1906, “governs the liability of common carriers for loss or damage to goods shipped or transported in interstate commerce.” Calka v. North American Van Lines, Inc., No. 00 Civ. 2733(AGS), 2001 WL 434871, at *2 (S.D.NY Apr. 27, 2001) (internal citations and quotations omitted). Specifically, the Carmack Amendment “subjects a motor carrier transporting cargo in interstate commerce to absolute liability for loss to the cargo unless the carrier limits its liability by meeting certain requirements.” Wayne v. DHL Worldwide Express, 294 F.3d1179, 1185 (9th Cir.2002) (citing 49 U.S.C. § 14706(c)(1)(a)). The purpose of the Carmack Amendment is to “provide interstate carriers with reasonable certainty and uniformity in assessing their risks and predicting their potential liability.” Project Hope v. M/V IBN SINA, 250 F.3d 67, 73 n. 6 (2d Cir.2001) (citing Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 381 (5th Cir.1998). As such, the Carmack Amendment establishes a “single uniform regime for recovery by shippers directly from [the] interstate common carrier in whose care their [items] are damaged … and by pre-empt[ing][the] shipper’s state and common law claims against a carrier for loss or damage to goods during shipping.” Id. (internal citations and quotations omitted).

It is thus well settled that Congress clearly intended the Carmack Amendment to preempt all state law claims against interstate carriers for loss or damage to goods during shipping. See Adamd Express Co. v.Croninger, 226 U.S. 491, 505-07 (1913) (“Almost every detail of the subject is covered so completely that there can be no rational doubt that Congress intended to take possession of the subject, and supersede all state regulation with reference to it .”); Hoskins v. Bekins Van Lines, 343 F.3d 769, 778 (5th Cir.2003) ( “Congress intended for the Carmack Amendment to provide the exclusive cause of action for loss or damages to goods arising from the interstate transportation of those goods by a common carrier.”); Sorrentino v. Allied Van Lines, Inc., No. 01 Civ. 1449(AHN), 2002 WL 32107610, at *2 (D.Conn. March 22, 2002); Orlick v. J.D. Carton & Son, Inc., 144 F.Supp.2d 337, 345 (D.N.J.2001). Based on this interpretation, several courts have construed the Carmack Amendment to preempt completely state law causes of action. Hoskins, 343 F.3d at 778 (applying “complete preemption doctrine” and concluding that Carmack Amendment preempted claims of negligence, breach of contract and Texas Deceptive Trade Practices Act); Smith v. United Parcel Service, 296 F.3d 1244, 1246 (11th Cir.2002) (claims of fraud, negligence, wantonness or outrage preempted by Carmack Amendment); Ash v. Artpack Int’l Inc., No. 96 Civ. 8440(MBM), 1998 WL 132932, at *4 (S.D.NY March 23, 1998) (“The Carmack Amendment is an example of a statute that completely preempts the field it occupies.”).

The Court rejects defendant’s argument that the plaintiff as consignee is estopped from bringing this action under the Carmack Amendment. A consignee is permitted to bring an action against UPS under the Carmack Amendment and is bound by the terms of the Carmack Amendment; see Travelers Indemnity, supra, holding that:

Travelers Indemnity contends that as subrogee to Quality Carton, the consignee, it is not bound by the Carmack Amendment. According to Travelers Indemnity, the Carmack Amendment only applies to shippers. (Rodgers Decl. ¶ 10). Under the Carmack Amendment, a carrier must issue a bill of lading for property it receives for transportation. 49 U.S.C. § 14706(a)(1). The bill of lading subjects the carrier to liability to “the person bound by the bill of lading” for any losses arising out of the shipment of the goods. Id.; Calka, 2001 WL 434871, at *2. Indeed, the Supreme Court has specifically stated that “[b]y virtue of the Carmack Amendment, 34 Stat. 584, amended, 38 Stat. 1196, 49 U.S.C.A.s 20(11), [a] bill of lading determines the rights of consignee.” Mexican Light & Power Co., Ltd. v. Texas Mexican Railway Co., 331 U.S. 731, 733 (1947); Air Products and Chemicals, Inc. v. Illinois Central Gulf R. Co., 721 F.2d 483, 486-87 (5th Cir.1983) (purpose of the Carmack Amendment was to “provide a uniform rule that the carrier issuing the bill of lading would be responsible to the consignee for all loss, damage, or delay arising out of the contract to transport the goods so shipped.” (emphasis added); S & H Hardware & Supply Co. v. Yellow Transp. Inc., No. 02 Civ. 9055, 2004 WL 1551730, at *3 n. 6 (E.D.Pa. July 8, 2004) (remarking that a consignee has “standing to bring an action under the Carmack Amendment to recover the value of goods lost”). Accordingly, the Court concludes that Quality Carton, as consignee, and Travelers Indemnity, as subrogee to Quality Carton, are bound by the Carmack Amendment.

See also S & H Hardware & Supply Co. v. Yellow Transportation, Inc., 2004 WL 1551730 (E.D.Pa., 2004) holding that a consignee may maintain action under the Carmack Amendment.

This Court further holds that plaintiff cannot recover the value of the gold plated silver coins because UPS Tariff Section 460 specifically excludes coins from being shipped, and said coins constitute “articles of unusual value.” The Tariff specifically states that UPS is not liable for loss of articles of unusual value. Thus, plaintiff is precluded from recovering the loss of the coins shipped.

This ruling is consistent with other cases. In Commodities Recovery Corp. v. Emery Worldwide, 765 F.Supp. 210 (D.C.N.J.1991), the Court dismissed plaintiff’s action to recover the loss of a package valued at $42,000. which contained currency.

Recently, Judge Spatt, in Materazzi v. Atlas Van Lines, Inc., 180 F.Supp. 408 (E.D.NY, 2001), held that a defendant moving company was not liable pursuant to state or federal law remedies, because the Carmack Amendment preempts same. The Court dismissed the plaintiff’s claims for damages to her belongings during transport.

Thus, based upon the foregoing, plaintiff’s state law claims are preempted by the Carmack Amendment and plaintiff cannot recover the value of the coins based upon the restrictions of the Tariff applicable herein.

CONCLUSION

Plaintiff’s action is dismissed with prejudice. Plaintiff’s claims are preempted by the Carmack Amendment. There cannot be any recovery because the coins are articles of unusual value specifically excluded under Item 460 of the Tariff.

United States District Court,

N.D. Illinois, Eastern Division.

CONTINENTAL CASUALTY CO., as subrogee for Raymond J. Donnelly & Associates,

Plaintiff,

v.

UNITED PARCEL SERVICE, Defendant.

April 20, 2005.

MEMORANDUM OPINION AND ORDER

 

DARRAH, J.

Plaintiff, Continental Casualty Company, filed a negligence action against Defendant, United Parcel Service, in the Circuit Court of Cook County based on the damage to a Geodimeter while in transport with UPS. The suit was removed to federal court and subsequently dismissed because the state law claims of negligence (the only claims in the suit) were preempted by the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706. Plaintiff filed an Amended Complaint, alleging negligence (Count I), res ipsa loquitur (Count II), and violation of the Carmack Amendment (Count III). Presently before the Court is the Defendant’s Motion to Dismiss Plaintiff’s Amended Complaint.

In July 2001, Donnelly shipped a package containing a Geodimeter via UPS from Troy, Michigan, to Golden, Colorado. Donnelly insured the package with a third-party insurer, Continental. During the course of shipment, the Geodimeter caught fire and was damaged.

In August 2001, UPS notified Donnelly that the Geodimeter was damaged during its transport. Subsequently, Donnelly submitted a claim to Continental for damage to the Geodimeter in the amount of $25,640.00. Continental paid for the damaged Geodimeter pursuant to the insurance policy between Donnelly and Continental. Continental filed this action as subrogee of Donnelly’s rights against UPS.

In reviewing a motion to dismiss, the court considers all facts alleged in the complaint and any reasonable inferences drawn therefrom in the light most favorable to the plaintiff. See Marshall-Mosby v. Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir.2000). Dismissal is warranted if “it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45- 46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The “suit should not be dismissed if it is possible to hypothesize facts, consistent with the complaint, that would make out a claim.” Graehling v. Vill. of Lombard, Ill., 58 F.3d 295, 297 (7th Cir.1995).

Defendant argues that Plaintiff’s state law claims are preempted by the Carmack Amendment. The Carmack Amendment to the Interstate Commerce Act creates a uniform rule for carrier liability when goods are shipped in interstate commerce. See New York, New Haven, & Hartford R.R. Co. v. Nothnagle, 346 U.S. 128, 131, 73 S.Ct. 986, 97 L.Ed. 1500, (1953); Adams Express Co. v. Croninger, 226 U.S. 491, 506, 33 S.Ct. 148, 57 L.Ed. 314 (1913) (Adams Express ). To accomplish its goal of uniformity, the Carmack Amendment preempts state law claims arising from failures in the transportation and delivery of goods. See Adams Express, 226 U.S. at 505-06. This preemption includes claims for negligence in the transport and delivery of goods. See Smith v. United Parcel Service, 296 F.3d 1244, 1256-47 (11th Cir.2002); Shao v. Link Cargo Ltd., 896 F.2d 700, 706 (4th Cir.1993); Hughes v. United Van Lines, Inc., 829 F.2d 1407, 1412 n. 5 (7th Cir.1987). Accordingly, Plaintiff’s claims of negligence (Count I) and res ipsa loquitur (Count II) are preempted by the Carmack Amendment.

2 Defendant argues that Plaintiff’s Carmack Amendment count should be dismissed because the Plaintiff, as a non-party to the contract for shipment, does not have standing to bring the claim. However, as the insurer of the Geodimeter, Continental steps into the shoes of the insured and acquires the rights of those of the insured. See American Nat. Fire Ins. Co. v. Yellow Freight Sys., Inc., 325 F.3d 924, 936 (7th Cir.2003). Accordingly, Plaintiff has standing to file suit.

Defendant also argues that Plaintiff’s recovery is limited to a maximum of $100.00. This argument goes to the merits of Plaintiff’s claims and the amount of damages recoverable. Such argument is not grounds for dismissal at this stage of the pleadings.

In its reply brief, Defendant also argues that Plaintiff’s claims in Count III are preempted by federal common law, and is not actionable under the Carmack Amendment, because Plaintiff states in its response brief that the Geodimeter was shipped via UPS Air Service. However, Plaintiff’s statement in this regard will not be construed as pleading what means of transport were used. Plaintiff’s Amended Complaint in Paragraph 11(c) alleges that the Geodimeter was damaged when the UPS truck caught fire. Plaintiff’s statement in its brief is not an amendment to its Complaint. See Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1107 (7th Cir.1984). Thus, Plaintiff’s Amended Complaint sufficiently pleads a cause of action under the Carmack Amendment.

For the reasons stated above, the Defendant’s Motion to Dismiss is granted as to Counts I and II and denied as to Count III.