Transportation

• Author: International Law Group

The Burlington Northern and Santa Fe Railway Company (Burlington) lost a container of Nike shoes it was conveying from Los Angeles, California, to Nike's distribution center in Memphis, Tennessee.

This shipment was part of a single "through" bill of lading between Neptune Orient Lines, Ltd. (Neptune) and Nike, Inc. The bill did not contain any declaration of value. Nike changes its shoe models so often that replacements for the same shoes are sometimes not available. After paying Nike the market value of the shipment or $182,892.08, Neptune sued Burlington for reimbursement.

In its motion for summary judgment, Neptune sought to recover the fair market value of the lost shoes. Burlington disagreed and argued that Neptune was only entitled to their replacement cost, that is, $94,567.13. The district court gave summary judgment to Neptune and Burlington appealed. The U.S. Court of Appeals for the Ninth Circuit affirms.

The Carmack Amendment (49 U.S.C. Section 11706) determines carrier liability for "transportation in the United States between a place in ... the United States and a place in a foreign country." (49 U.S.C. Section 10501(1)(F)). The Ninth Circuit had interpreted an earlier version of that provision to apply to separate inland bills of lading for...