News

News

Florida Supreme Court Holds Claims Against UPS Not Preempted by Carmack Amendment

On March 3, 2016, the Florida Supreme Court quashed the decision by Florida's Fourth District Court of Appeals in Mlinar v. United Parcel Service, Inc., which had dismissed all of the Plaintiff's claims against United Parcel Service, Inc. ("UPS"). The Florida Supreme Court held that UPS could not use the Carmack Amendment to shield itself from its intentional misconduct in misappropriating a shipment of paintings by artist Ivana Vidovic Mlinar.

In 2005, Ms. Mlinar created two (2) valuable oil paintings that were shipped via UPS to New York by a third party retailer, Pak Mail. When the container used to ship the paintings arrived at its intended destination, the paintings were not there and it became clear the paintings had been stolen. The loss was reported by Ms. Mlinar to UPS and to Pak Mail. Months after the paintings were stolen, Pak Mail offered Ms. Mlinar $100 for the missing contents of the package. Shortly thereafter, it was determined that UPS sold the paintings to Cargo Largo, a lost goods contractor. Cargo Largo later auctioned off the paintings. One of the paintings was purchased at the auction by an individual named Aaron Anderson. Two years after the loss of her paintings, Ms. Mlinar was contacted by Anderson who asked her about the value of the paintings. Anderson later also acquired the second painting.

The Carmack Amendment to the Interstate Commerce Act governs the liability of domestic common carriers for losses of or damage to goods en route. It was enacted to establish uniform guidelines designed to remove the uncertainty surrounding a carrier's liability when damage occurs to a shipper's interstate shipment. Specifically, the statute recognizes the right of a shipper and carrier to limit the carrier's liability to a stipulated value only if there are reasonable circumstances surrounding the transportation. It has been well-established that the statute "broadly" preempts state law claims arising from failures in the transportation and delivery of goods. In this case, The Florida Supreme Court recognized that Florida case law embraces two (2) competing tests for assessing Carmack Amendment preemption: the first is based on alleged harm to the shipper; and the second is based on the carrier's conduct.

The Carmack Amendment to the Interstate Commerce Act governs the liability of domestic common carriers for losses of or damage to goods en route. It was enacted to establish uniform guidelines designed to remove the uncertainty surrounding a carrier's liability when damage occurs to a shipper's interstate shipment. Specifically, the statute recognizes the right of a shipper and carrier to limit the carrier's liability to a stipulated value only if there are reasonable circumstances surrounding the transportation. It has been well-established that the statute "broadly" preempts state law claims arising from failures in the transportation and delivery of goods. In this case, The Florida Supreme Court recognized that Florida case law embraces two (2) competing tests for assessing Carmack Amendment preemption: the first is based on alleged harm to the shipper; and the second is based on the carrier's conduct.

The Florida Supreme Court noted that there is no compelling reason to adopt one test over the other as the exclusive standard for assessing Carmack Amendment preemption in Florida. Instead, the Court held that, in general, the Carmack Amendment preempts state law or common law claims against an interstate carrier of goods unless the claim alleges conduct or harm that is separate and distinct from the loss or damage to the goods transported. In the case at hand, the Court found that the causes of action raised by Ms. Mlinar were separate and distinct from the loss of the goods during the interstate shipment process and the claims were not preempted. UPS sought to argue that the Carmack Amendment preempted the state law actions because the actions stemmed from its loss of Mlinar's package. However, the Court disagreed and found that that UPS and the other defendants were attempting to evade liability arising not from the loss of the property, but from the defendants' intentional misconduct. Specifically, the Court pointed out that this is a case where a common carrier itself has adopted or ratified a dishonest practice and that to allow preemption to apply to the type of case where a plaintiff seeks to hold a carrier liable for larcenous misconduct would be repugnant.

To read a copy of the Florida Supreme Court's Opinion click here.

For more information about the Court's decision and how it may apply to specific facts and circumstances, please do not hesitate to contact us at info@chaloslaw.com.

Chalos & Co, P.C.
International Law Firm
www.chaloslaw.com
Email: info@chaloslaw.com

© 2016 Chalos & Co, P.C. Site by Webline Designs