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SEASON-ALL INDUS. v. MERCHANT SHIPPERS

May 26, 1978

SEASON-ALL INDUSTRIES, INC. Plaintiff
v.
MERCHANT SHIPPERS Defendant and Third-Party Plaintiff v. BREMAN'S EXPRESS, INC., BALTIMORE & OHIO RAILROAD COMPANY, PENN CENTRAL TRANSPORTATION COMPANY, BURLINGTON NORTHERN, INC. and ALASKA RAILROAD COMPANY Third-Party Defendants


Weber, J.


The opinion of the court was delivered by: WEBER

This is a suit for damages to a shipment of storm windows originating in Indiana, Pennsylvania, and terminating in Fairbanks, Alaska. The background of this dispute is fully set forth in our opinion at 417 F. Supp. 998 [W.D. Pa. 1976] and will not be repeated here. However, for reference we briefly state that plaintiff Season-All Industries, Inc. (Season-All) is the manufacturer of the windows and shipper; defendant Merchant Shippers is a freight-forwarder who arranged for the transportation of the shipment from plaintiff's plant in Indiana, Pa. to Fairbanks, Alaska; and the third-party defendants are all common carriers who took some part in the transportation of the shipment. Breman's Express, Inc. (Breman's) hauled the seven trailers by truck from Indiana Pa. to Merchant Shippers' terminal in Pittsburgh, Pa. and thence to the Pittsburgh terminals of the Baltimore & Ohio Railroad Company (B&O) and Penn Central Transportation Company (Penn Central). B&O transported five of the trailers "piggy back" to Chicago, and Penn Central the other two. Burlington Northern, Inc. (Burlington Northern) transported the trailers from Chicago, Illinois, to Seattle, Washington. The trailers were sealed in Pittsburgh, and remained sealed until delivered to Merchant Shippers' terminal in Seattle. Merchant Shippers reloaded the shipment into railroad boxcars. Burlington Northern then switched or transported the cars to dockside of Puget Sound Tug & Barge Company, where they were loaded onto barges for transport to Alaska. Substantial damage was discovered in Seattle at the time of the re-packing, prior to the delivery to Puget Sound Tug & Barge Co. Puget Sound transported the cars to Whittier, Alaska, where the Alaska Railroad Company (Alaska Railroad) received them and transported them to destination. The shipment was found to be damaged extensively when it arrived at Fairbanks, Alaska, and it was returned to Merchant Shippers' terminal in Seattle. Of the various carriers, only Puget Sound is not a party to this lawsuit, as jurisdiction over it could not be obtained.

 We previously granted summary judgment in favor of Alaska Railroad and Burlington Northern as to Merchant Shippers' claims against them, but denied summary judgment as to Merchant Shippers' claim against Breman's, who we held to be an initial carrier under the Carmack Amendment, 49 U.S.C. § 20(11). B&O and Penn Central have moved for summary judgment as to Merchant Shippers' third-party claims against them, and B&O, Penn Central, Burlington Northern, and Alaska Railroad have moved for summary judgment on the cross-claims of Breman's. Breman's, by answer to the motions, requests us to reconsider the previous opinion. Breman's does not have a direct interest in the claims of Merchant Shippers against the other third-party defendants, but our legal conclusions on these other motions will affect Breman's.

 We conclude that the entry of summary judgment on any claim would be imprudent at this time, except for Breman's cross-claim against Alaska Railroad, and that the case should proceed to trial with all parties present and all claims open. We also conclude that our entry of summary judgment on August 10, 1976 on the third-party claims of Merchant Shippers against Burlington Northern and Alaska Railroad should be vacated. While some of the claims raise difficult problems of proof, we cannot say there is no genuine issue of material fact.

  I.

 There is relatively little dispute as to the general principles applicable to this case, but the task of applying 49 U.S.C. §§ 20(11) and 20(12), and the freight forwarders act, 49 U.S.C. §§ 1001-1022, is not an easy one. Some of the difficulty is perhaps caused by the role played by the freight-forwarder Merchant Shippers. Despite the issuance of a through bill of lading by the first carrier Breman's, see 49 U.S.C. § 1013, Merchant Shippers assumed an active role in the handling and shipping of the cargo, particularly in receiving the cargo in Seattle, Washington, and there re-packing it from truck trailers to railroad boxcars.

 Initially, we reaffirm our earlier determination that with respect to Merchant Shippers, Breman's is an initial carrier under the Carmack Amendment, 49 U.S.C.A. § 20(11). Our reasons for this are fully set forth in our previous opinion, 417 F. Supp. at 1004, and we note now only that the freight-forwarder Merchant Shippers occupies two positions: as to the owner-shipper Season-All, it is treated as the initial and delivering carriers, but in relation to actual carriers, it is to be treated as a shipper, Chicago, Milwaukee, St. Paul & Pacific Railroad Co. v. Acme Fast Freight, 336 U.S. 465, 93 L. Ed. 817, 69 S. Ct. 692 [1949]. However, we conclude that Breman's liability is in all events limited to any damage occurring between Indiana, Pennsylvania, and Seattle, Washington, and that Breman's liability may possibly terminate in Pittsburgh, where it delivered the shipment into the control of Merchant Shippers.

 Breman's is not relieved from liability merely by the subsequent issuance of additional bills of lading by the connecting carriers for the passage of the cargo over their own lines. As stated in Mexican Light and Power Co. v. Texas Mexican Ry. Co., 331 U.S. 731, 734, 91 L. Ed. 1779, 67 S. Ct. 1440 [1947]:

 
"No matter what the convenience which a consignee may derive from a bill of lading issued by a connecting carrier on a through shipment unless the connecting carrier has received a consideration for the bill of lading in addition to that which flowed under the bill of lading issued by the initiating carrier, the Carmack Amendment makes such second bill of lading void. It can neither enlarge the liability of the connecting carrier nor contract that of the initiating carrier."

 However, as Merchant Shippers admits, since Merchant Shippers terminated the piggy-back shipment in Seattle and there re-claimed possession and control of the goods, Breman's is liable to it only for those damages attributed to the movement of the shipment between Indiana, Pa. and Seattle, Washington.

 This result follows not from any explicit authority cited by the parties, but from the general purposes and effects of the Carmack Amendment. We start with Atlantic Coast Line R. Co. v. Riverside Mills, 219 U.S. 186, 203, 55 L. Ed. 167, 31 S. Ct. 164 [1911], where it said:

 
"The rule is adapted to secure the rights of the shipper by securing unity of transportation with unity of responsibility. The regulation is one which also facilitates the remedy of one who sustains a loss, by localizing the responsible carrier."

 Reider v. Thompson, 339 U.S. 113, 119, 94 L. Ed. 698, 70 S. Ct. 499 [1950], states:

 
"The purpose of the Carmack Amendment was to relieve shippers of the burden of searching out a particular negligent carrier from among numerous carriers handling an interstate shipment."

 The effect of the Amendment has been noted;

 
"The indisputable effect of the Carmack amendment is to hold the initial carrier engaged in interstate commerce and 'receiving property for transportation from a point in one state to a point in another state' as having contracted for through carriage to the point of destination, using the lines of connecting carriers as its agents." Atlantic Coast Line R. Co. v. Riverside Mills, supra, at page 196

 Extending this logic to its limits requires us to take a closer look at the occurrences at Pittsburgh. It appears from the record that Breman's hauled the trailers to Merchant Shippers' terminal in Pittsburgh where a Merchant Shippers employee removed the seals, looked into the trailer and then re-applied seals. Thus, as in Seattle, the carrier delivered the goods into the hands of the shipper-consignee, and the question must be asked whether the original shipment terminated at that point and a new shipment began. The inspection by Merchant Shippers appears to have been most cursory, but it clearly had some opportunity to inspect the cargo and did make a limited inspection. We do not suggest a duty on the freight forwarder to unload and inspect a shipment every time the shipment is docked at its terminal. Perhaps such a duty, if there is one, would be limited to exclude cases where there is no outward manifestation of damage and the shipment is under ...


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