USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 95-2334
JANE RINI,
Plaintiff - Appellee,
v.
UNITED VAN LINES, INC.,
Defendant - Appellant.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Michael A. Ponsor, U.S. District Judge]
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Before
Torruella, Chief Judge,
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Coffin and Campbell, Circuit Judges.
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Daniel J. Gleason, with whom Terry L. Wood, Nutter,
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McClennen & Fish, LLP, Wesley S. Chused, Lisa Sternschuss and
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Looney & Grossman were on brief for appellant.
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George W. Wright, Michael J. Rush and Kenneth E. Siegel on
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brief for American Movers Conference, Association of American
Railroads and American Trucking Associations, amicus curiae.
John P. Pucci, with whom Jeanne M. Kaiser and Fierst,
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Mitchell & Pucci were on brief for appellee.
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January 17, 1997
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TORRUELLA, Chief Judge. Plaintiff-appellee Jane Rini
TORRUELLA, Chief Judge.
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("Rini") hired defendant-appellant United Van Lines ("United") to
move her belongings from South Carolina to Massachusetts. Rini's
household items were packed on August 20, 1990, and loaded into a
moving van the next day. Her belongings arrived at their
destination on August 27, but certain items were missing. Rini
proceeded to file a claim with United. Following an acrimonious
attempt to settle the claim, Rini filed a complaint in district
court on December 22, 1992. The complaint included claims under
the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C.
11707 (1992),1 as well as state law claims of negligence,
misrepresentation, use of unfair and deceptive acts in violation
of Mass. Gen. L. ch. 93A, and intentional infliction of emotional
distress. See Rini v. United Van Lines, 903 F. Supp. 224, 225
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(1995).
The jury found for Rini on the Carmack Amendment,
negligence, and misrepresentation claims in connection with the
claims process. See Rini, 903 F. Supp. at 230. On the claim of
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intentional infliction of emotional distress, the jury found for
United. Id. The district court found that United, in handling
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Rini's claim, had willfully violated chapter 93A. Id. at 232-33.
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Damages were awarded in the amount of $50,000 on the Carmack
claim and a total of $300,000 on the state law claims. Id. 234-
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1 There have been amendments to the Carmack Amendment since 1990
when the events at issue in this case took place. Throughout
this opinion, references will be made to the pre-amendment
statute.
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35. In addition, Rini was awarded attorney's fees in the amount
of $146,950, costs in the amount of $7,359.60, and prejudgment
interest in the amount of $100,000. See Memorandum Regarding
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Plaintiff's Motion for Attorney's Fees, Costs, and Pre-Judgment
Interest, Nov. 1, 1995. This appeal by United ensued.
We must determine whether the state law claims on which
Rini prevailed are preempted by the Carmack Amendment. These
claims are for negligence, misrepresentation, and violation of
Mass. Gen. L. ch. 93A.
I. Preemption and the Carmack Amendment
I. Preemption and the Carmack Amendment
The Carmack Amendment to the Interstate Commerce Act,
49 U.S.C. 11707, passed in 1906 as part of the Hepburn Act,
ch. 5391, 34 Stat. 584, governs the liability of carriers for
lost or damaged goods. The relevant portions of the Amendment
are:
A common carrier . . . subject to the
jurisdiction of the Interstate Commerce
Commission . . . shall issue a receipt or
a bill of lading for property it receives
for transportation . . . . That carrier
. . . and any other common carrier that
delivers the property and is providing
transportation or service subject to the
jurisdiction of the Commission . . . are
liable to the person entitled to recover
under the receipt or bill of lading. The
liability imposed under this paragraph is
for actual loss or injury to the property
caused by (1) the receiving carrier, (2)
the delivering carrier, or (3) another
carrier over whose lines or route the
property is transported into the United
States . . . .
49 U.S.C. 11707.
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Article VI of the United States Constitution provides
that the laws of the United States "shall be the supreme Law of
the Land," notwithstanding contrary state laws. U.S. Const. art.
VI, 2. It is settled, therefore, "that all conflicting state
provisions be without effect." Maryland v. Louisiana, 451 U.S.
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725, 746 (1981). When faced with a preemption question, however,
consideration "starts with the assumption that the historic
powers of the States [are] not to be superseded by . . . Federal
Acts unless that [is] the clear and manifest purpose of
Congress." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230
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(1947).
Such a purpose [to displace state law]
may be evidenced in several ways. The
scheme of federal regulation may be so
pervasive as to make reasonable the
inference that Congress left no room for
the States to supplement it. Or the Act
of Congress may touch a field in which
the federal interest is so dominant that
the federal system will be assumed to
preclude enforcement of state laws in the
same subject. Likewise, the object
sought to be obtained by the federal law
and the character of obligations imposed
by it may reveal the same purpose.
Id. Finally, a state statute is void to the extent it is in
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conflict with a federal statute. Maryland, 451 U.S. at 747.
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In determining the scope of Carmack preemption, we look
to the intent of Congress and the purpose of the Amendment. Our
inquiry into the intent of Congress is made more difficult
because the Carmack Amendment was adopted without discussion or
debate. 40 Cong. Rec. 7075 (1906). It is accepted, however,
that the principal purpose of the Amendment was to achieve
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national uniformity in the liability assigned to carriers. "[I]t
is evident that Congress intended to adopt a uniform rule and
relieve such contracts from the diverse regulation to which they
had been theretofore subject." Adams Express Co. v. Croninger,
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226 U.S. 491, 506 (1912). The importance of uniformity has
frequently been stressed in subsequent Supreme Court opinions.
See, e.g., New York, N.H. & Hartford R.R. Co. v. Nothnagle, 346
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U.S. 128, 131 (1953); Atchison, Topeka & Santa Fe Ry. v. Harold,
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241 U.S. 371, 378 (1916).
The foundation for Carmack preemption analysis is Adams
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Express, in which the Supreme Court considered the preemptive
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scope of the Carmack Amendment, concluding:
That the legislation supersedes all the
regulations and policies of a particular
state upon the same subject results from
its general character. It embraces the
subject of the liability of the carrier
under a bill of lading which he must
issue, and limits his power to exempt
himself by rule, regulation, or contract.
Almost every detail of the subject is
covered so completely that there can be
no rational doubt but that Congress
intended to take possession of the
subject, and supersede all state
regulation with reference to it.
Adams Express, 226 U.S. at 505-06. The Court stated further that
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to allow state regulations to affect the liability of carriers
"would be to revert to the uncertainties and diversities of
rulings which led to the amendment." Id. at 506.
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The preemptive effect of the Carmack Amendment over
state law governing damages for the loss or damage of goods has
been reiterated by the Supreme Court in many cases and is well
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established. See, e.g., Southeastern Express Co. v. Pastime
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Amusement Co., 299 U.S. 28 (1936) (claim of negligence for
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failure to deliver a film on time is preempted); Charleston &
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Western Carolina Ry. Co. v. Varnville Furniture Co., 237 U.S. 597
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(1915) (state statute imposing a penalty for failure to pay
claims to a shipper within 40 days is preempted).
Unfortunately, the Supreme Court case law does not
provide clear guidance on the reach of the preemption doctrine.
In particular, the Court has not clarified the extent to which
state law provisions pertaining to the claims process, as opposed
to the shipping of goods, are preempted. Two cases, however, are
instructive. First, in Missouri, Kansas, & Texas Railway Company
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of Texas v. Harris, 234 U.S. 412 (1914), the Court considered a
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Texas statute that allowed for the recovery of reasonable
attorney's fees in cases where the value of the claims did not
exceed two hundred dollars. The Court held that because the
state statute at issue "had a broad sweep which only incidentally
includes claims rising out of interstate commerce, it follows
that it cannot be held to constitute a direct burden upon such
commerce." Id. at 416. For this reason, the statute was ruled
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to be valid and able to exist alongside the Carmack Amendment.
The important distinction made by the Court was that "the Texas
statute . . . does not anywhere either enlarge or limit the
responsibility of the carrier for the loss of property intrusted
to it in transportation, and only incidentally affects the remedy
for enforcing that responsibility." Id. at 420. Furthermore,
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"[t]he local statute . . . does not at all affect the ground of
recovery, or the measure of recovery; it deals only with a
question of costs, respecting which Congress has not spoken."
Id. at 421-22.
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Second, in Varnville, the Court ruled that a South
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Carolina statute that imposed a fine of $50 on carriers for
failure to pay within 40 days for damage to goods transported in
interstate commerce was preempted by the Carmack Amendment.
Varnville, 237 U.S. at 603. The Court determined that "the
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special regulations and policies of particular states upon the
subject of the carrier's liability for loss or damage to
interstate shipments, and the contracts of carriers with respect
thereto, have been superseded." Id. at 603. The state statute
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before the Court was found to "overlap[] the Federal act in
respect of the subjects, the grounds, and the extent of liability
for loss." Id.
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These two cases are of particular relevance to the
instant case because the state laws at issue did not govern
claims arising directly out of damage to goods. Like the instant
case, both Harris and Varnville consider state remedies that
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relate to the claims process. The distinction between the two
cases was made in Varnville, where the Court stated that:
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[i]t is true that in [Harris] the
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inclusion of the attorney's fee, not
exceeding $20, in the costs upon
judgments for certain small claims was
upheld, although incidentally including
some claims arising out of interstate
commerce. But apart from the effect
being only incidental, the ground relied
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upon was that the statute did not 'in any
way enlarge the responsibility of the
carrier' for loss or 'at all affect the
ground of recovery, or the measure of
recovery'. The South Carolina Act, on
the other hand, extends the liability to
losses on other roads in other
jurisdictions, and increases it by a fine
difficult to escape.
Id. at 603 (citations omitted).
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The lesson from these cases is that state statutes are
preempted by the Carmack Amendment if they "in any way enlarge
the responsibility of the carrier for loss or at all affect the
ground of recovery, or the measure of recovery." Id.
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The Carmack Amendment and the set of federal
regulations that complement it cover not only the actual
transport of goods, but they also govern the claims process. For
example, the Amendment itself provides that a carrier "may not
provide . . . a period of less than 9 months for filing a claim .
. . and a period of less than 2 years for bringing a civil action
against it under this section." 49 U.S.C. 11707(e).2
In light of the Court's holding in Varnville, we find
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that all state laws that impose liability on carriers based on
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2 See also 49 C.F.R. 1005.2-1005.5. These federal
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regulations govern the filing of claims, 1005.2, acknowledgment
of claims, 1005.3, investigation of claims, 1005.4, and
disposition of claims, 1005.5. Failure to comply with these
federal regulations subjects the carrier to sanctions. See Zola
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v. I.C.C., 889 F.2d 508, 509 (3d Cir. 1989); Aaacon Auto Transp.,
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Inc. v. I.C.C., 792 F.2d 1156, 1158 (D.C. Cir. 1986). Although
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"the mere existence of a federal regulatory or enforcement scheme
. . . does not by itself imply preemption of state remedies,"
English v. General Elec. Co., 496 U.S. 72, 87 (1990), the above
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federal regulations indicate that the claims process is within
the scope of the shipper-carrier relationship that the federal
government seeks to regulate.
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the loss or damage of shipped goods are preempted. A state law
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"enlarges the responsibility of the carrier for loss or at all
affects the ground of recovery, or the measure of recovery," id.
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at 603, where, in the absence of an injury separate and apart
from the loss or damage of goods, it increases the liability of
the carrier. Preempted state law claims, therefore, include all
liability stemming from damage or loss of goods, liability
stemming from the claims process, and liability related to the
payment of claims. Thus, the forty day limit for payment at
issue in Varnville is preempted. On the other hand, liability
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arising from separate harms -- apart from the loss or damage of
goods -- is not preempted. For example, if an employee of the
carrier assaulted and injured the shipper, state law remedies
would not be preempted. Similarly, a claim for intentional
infliction of emotional distress alleges a harm to the shipper
that is independent from the loss or damage to goods and, as
such, would not be preempted.3
II. Application
II. Application
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3 We are aware that our holding today conflicts with certain
previous decisions of the District Court of Massachusetts. In
particular, we note that the cases of Sokhos v. Mayflower Transit
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Inc., 691 F. Supp. 1578 (D. Mass 1988), and Mesta v. Allied Van
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Lines, 695 F. Supp. 63 (D. Mass. 1988), allowed certain claims
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that would be preempted under the decision that we lay down
today. To the extent these decisions are inconsistent with our
holding, they do not represent the law of the circuit. We are
also aware that our own decision in Fredette v. Allied van Lines,
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66 F.3d 369 (1st Cir. 1995), involved both Carmack Amendment and
state law claims. Id. at 372. That case did not, however,
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address the preemption issue and, therefore, offers us no
guidance.
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In the instant appeal, the state law claims at issue
all stem from the loss of goods. The alleged negligence and
misrepresentation took place in the course of settling a claim
for damages stemming from the move. Rini suffered no harm other
than the loss of goods and, therefore, her state law claims are
preempted by the Carmack Amendment. Had Rini prevailed on her
claim for intentional infliction of emotional distress, it would
not have been preempted. Because the three state claims at issue
in this appeal involve no injury save the loss of property,
however, we find them to be preempted.
Our conclusion is consistent with the view taken by the
Second Circuit in Cleveland v. Beltman North American Company, 30
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F.3d 373 (2d Cir. 1994), cert denied, 115 S. Ct. 901 (1995). In
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that case, the court described the plaintiffs' allegations as
follows:
In handling plaintiffs' claims, the
moving company -- in a deliberate and
determined effort to frustrate
plaintiffs' collection of damages for
their losses -- was guilty of foot-
dragging and stonewalling. It did not
deal fairly and in good faith with the
couple.
Id. at 374. The claim addressed by the court was a federal
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common law claim for breach of an implied covenant of good faith
and fair dealing in the claims process, damages from which "were
to be exclusive of damages awarded for actual loss under the bill
of lading." Id. at 376. The Second Circuit held that there
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could be no federal common law claim for a breach of the implied
covenant of good faith and fair dealing. Id. at 379. In so
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deciding, the court concluded that "[a] claim for breach of the
implied covenant of good faith and fair dealing resulting in an
award of punitive damages could well thwart one of the primary
purposes of the Carmack Amendment; that is, to provide some
uniformity in the disposition of claims brought under a bill of
lading." Id. Although Cleveland dealt with an issue of federal
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common law, the same reasoning implies that state law remedies
for loss or damage to goods would be preempted.
The instant case presents the same question as did
Cleveland. We face a plaintiff who has been ill-treated in her
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attempts to settle her claim with United. As a result of
United's unfair practices, the jury found for Rini on the
negligence and misrepresentation counts and the trial judge found
for Rini on the use of unfair and deceptive acts count. Like our
sister circuit before us, we note that although "[i]t may be that
Congress' enforcement scheme does not provide a sufficient
deterrent to the type of conduct defendants employed in this
case," id. at 379, we find that the federal scheme has preempted
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negligence, misrepresentation, and chapter 93A claims.
Finally, we note that our ruling preserves the
uniformity of the federal scheme by protecting the federal
government's exclusive jurisdiction over the shipper-carrier
relationship, the importance of which has been underscored on
numerous occasions.4 "The purpose of [the Carmack Amendment] is
to establish uniform federal guidelines designed in part to
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4 See supra pp. 4-5.
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remove the uncertainty surrounding a carrier's liability when
damage occurs to a shipper's interstate shipment." Hughes v.
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United Van Lines, Inc., 829 F.2d 1407, 1415 (7th Cir. 1987); see
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also Cleveland, 30 F.3d at 379 (stating that one of the primary
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purposes of the Carmack Amendment is to provide uniformity in the
disposition of claims brought under a bill of lading). Because
the Carmack Amendment was intended to provide uniformity to
claims for the loss or damage to goods, the goal of uniformity is
not frustrated by the allowance of state law claims for injuries
that are separate and distinct from such loss or damage.
III. Conclusion
III. Conclusion
For the foregoing reasons, the conclusion of the
district court regarding the preemptive effect of the Carmack
Amendment is reversed. In light of our ruling, the district
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court's judgment as to costs, fees and prejudgment interest must
be revisited. The case is remanded to the district court for the
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entry of an order with respect to damages and a ruling on fees,
costs, and interest consistent with this decision.
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