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What is the Carmack Amendment and when does it apply?

On Behalf of | Sep 21, 2021 | Transportation Law |

In transportation law, understanding the difference between liability claims for interstate and intrastate shipments is crucial in establishing liability to either the receiving or the delivering carrier, or any other entity providing transportation or service when there has been loss or damage to the transported goods. There are both state and federal laws that apply, depending on the situation.

When carriers or shippers are filing a claim for damages or loss that occurred intrastate, or within a state, they will seek claims under state law causes of action, such as fraud, negligence, or breach of contract.

Regarding interstate travel over state lines, however, federal law supersedes state laws under the Carmack Amendment. First enacted in 1906, a substantial body of case law has found various interpretations of what Congress’s intent was and whether a carrier’s limitation of liability is enforceable. But in most commerce over state lines, it preempts state law.

What is the purpose of the Carmack Amendment?

The Carmack Amendment establishes a uniform national system of liability in claims affecting either the carrier or shipper over state lines, and it also limits the liability of carriers. This law applies to the interstate shipping of all commodities by shippers and carriers, with exceptions for fishermen, farmers and some other categories.

In order for the federal law to apply, the carrier must issue a receipt or bill of lading for the property that the carrier handles for transport. The carrier is responsible for any damages to goods that it is has transported, and no proof of negligence is necessary to establish liability under this law. The burden of proving otherwise is with the carrier, who may plead one of five exceptions:

  1. Act of God
  2. Public enemy
  3. An act or default by the shipper
  4. Public authority
  5. Inherent vice or nature of the goods shipped

The Carmack Amendment also establishes a limited period for filing claims of nine months from the date of loss.

Contracts can extend or overrule provisions of federal law, and they can also change liability for entities in the chain of transport. Contract language can also incorporate provisions of the Carmack Amendment to exempt commodities and for intrastate transport.

Interstate shipping is a vital part of the operations of many businesses in Long Beach and throughout California. Finding out how federal and state law applies is essential to limiting the extent of liability for the carrier or shipper when there is a dispute.

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