Untenable Argument

Untenable Argument

Copyright 2003, Traffic World, Inc.

In his commentary, "Carmack Rolls in His Grave" (June 30), Bill Augello once again criticizes Congress, the courts, the rail and trucking industries and the association I manage for the manner in which cargo loss and damage claims are interpreted and handled. He states that in 1996 Congress enacted an "unconscionable provision" to the Carmack Amendment when it required motor carriers to provide a copy of their tariffs to shippers upon request. This change was enacted by Congress when it terminated the Interstate Commerce Commission and economic regulation in 1995.

In fact, Mr. Augello is largely responsible for this provision. Here''s why. When Congress eliminated tariff filings with the ICC, Mr. Augello seized the opportunity to try to create new law and impose a new legal obligation upon motor carriers. He developed the novel legal argument that since filed tariffs had provided legal or constructive notice to the public about a carrier''s rates, including released value rates, when Congress eliminated filed tariffs it impliedly imposed an obligation upon carriers to now enter into a transportation contract, separate from the bill of lading, if they wanted to limit their liability. His position was and is contrary to longstanding law. Common carriers and their customers historically have used the bill of lading, which is the transportation contract, to incorporate by reference the rates, terms of service and cargo liability terms in a carrier''s tariffs with the right of the customer to declare and pay for a higher cargo value. Congress did not change Carmack in the ICC Termination Act of 1995. If Bill''s position became the law, literally millions of shipments would be subject to additional transportation contracts. That is unworkable.

Back in 1995 and 1996, Mr. Augello knew his legal argument was untenable. That is why he made an attempt to change Carmack. He actually succeeded in getting language inserted into a Senate bill that would have changed the law by requiring separate contracts. That is when this association became involved. I still recall the numerous meetings held by both House and Senate committee staff at which a dozen or more trade associations discussed and debated this issue. In the end, the staff recognized that Congress did not intend to change Carmack in 1995 and that this should be clarified in the 1996 law so that needless litigation would not occur. The legislative process was open, lengthy and democratic. Mr. Augello''s position was rejected by Congress.

To this day, Mr. Augello faults others for not adopting his position. His legal opinion also has been rejected by the Surface Transportation Board, which assumed the remaining functions of the ICC. Subsequently, the STB approved revisions to section 2 in the uniform bill of lading, which provides actual notice to shippers to request this tariff information since a cargo liability limit may apply. Mr. Augello contested that change and lost.

The federal law embodied in Carmack has stood the test of time. When these federal rules come into play on the 1 or 2 percent of shipments where a claim arises, the carriers and, if necessary, the courts apply the law properly. Sure, there are some mistakes and misconduct but that does not mean you change 100 years of common and statutory law. The courts can and do correct mistakes.

Sen. Carmack would be displeased if this uniform federal law was undermined by applying the varying laws and procedures in the 50 states. He recognized that uniformity was important for the free flow of interstate commerce. Carriers and their customers need certainty about their legal rights and responsibilities when freight moves between different states each day. The application of punitive damages as a remedy, which Mr. Augello suggests, may benefit attorneys, but not the transportation community.

Kevin Williams, President

Distribution & LTL Carriers Association