Carmack Amendment in the State Courts

Prior to the leading case of Adams Express Co. v. Croninger,’- decided January 6th, 1913, there was much diversity in the decisions of the state courts as to the validity of contracts between shippers and carriers limiting the amount of the carrier’s liability for injuries to goods shipped. Such limitations were held valid in some states, but invalid in others, and in some were declared invalid by statutes or constitutional provisions.2 State rules were applied to interstate as well as intrastate shipments, it being supposed that Congress had not legislated upon the subject. The CARMACK AmlNDVNT of i9o6s provided that every carier receiving property for interstate shipment should issue a receipt or bill of lading therefor, and be liable for any injury to such property caused by it or by any connecting carrier, and concluded with the words “no contract, receipt, rule or regulation shall exempt such common carrier, railroad or transportation company from the liability hereby imposed; Provided, that nothing in this section shall deprive any holder of such receipt or bill of lading of any remedy or right of action which he had under existing law.” It had been thought, both by state and by federal courts, that the proviso above quoted was intended to save to the shipper whatever rights he had under existing state law; and accordingly both state and federal courts continued to apply the rules, different in different jurisdictions, which had controlled before the passage of that amendment.’ In the Croninger case, however, -it was held by the United States Supreme Court that Congress had evinced, in the CARMACYC AMXNDMrNT, an intention to assume control over the whole field of the liability of common carriers on interstate shipments, and to supersede and abrogate all state laws in relation thereto; and that the proviso saving to the shipper his rights ‘under existing, law” meant to save him only such rights as he had under existing federal law. There was no existing federal law forbidding contracts limiting the amount of the carrier’s liability (a limitation of amount not being an exemption within the meaning of the amendment), and such contracts were therefore held to be valid, regardless of state rules or laws. Immediately following that decision, and in accordance with the doctrine there laid down, several state decisions holding such contracts invalid were reversed.5 The same rule was held to apply to contracts for the transportation of the baggage of a passenger, in Boston & Maine R. R. v. Hooker, where it was further held that the filed and published tariffs were binding on both carrier and shipper, and that regulations therein (including limitation of liability) were conclusively presumed to be a part of the contract of transportation. A year after the Hooker case, it was decided in Geo. N. Pierce Co. v. Wells Fargo & Co.,7 that under the CARMACK AMI=- MXNT a contract limiting the amount of the carrier’s liability for goods shipped between states was valid even though the stipulated amount was purely arbitrary and out of all proportion to the true value of the shipment, and even though the carrier knew that such true value was greatly in excess of the limit of liability. The theory of all these decisions was that Congress intended by its legislation to put all shippers of goods from state to state on precisely the same basis, to do away with discrimination of any kind in interstate transportation, and to make the laws governing shipments between states uniform and equal in their operation throughout the land.