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Beware the Pitfalls of Moving – Limitations on Liability under the Carmack Amendment

Posted May 31, 2022 at 12:12 PM

Litigation, News & Events

At some point in nearly everyone’s life, they will hire a moving company to ship furniture and other belongings to a new residence. Or a business may relocate its offices to another state. The process of packing and unpacking is cumbersome and time consuming. There are also risks that consumers should consider when hiring a moving or shipping company. When negotiating a moving/shipping contract, the carrier will typically present the customer with a limitation of liability document. Sometimes called a “Shipper Declaration of Value,” the document places an agreed dollar value per pound on the customer’s property. For instance, the customer may be directed to check a box designating a value of 60¢ per pound for each item.

This limitation is fully enforceable under federal law when the shipment crosses state lines. A little known statute called the “Carmack Amendment” (49 U.S.C.A. § 14706(f)(1)), provides that parties may agree to limit carrier liability through a “written declaration of the shipper or by a written agreement.” If the goods are lost or damaged in transit, the customer’s rights are extremely limited. The statute prevents the consumer from asserting claims of negligence in state court. Rather, any action filed in state court can be removed to federal court by the carrier, where the carrier may then assert the supremacy and limitations of the Carmack Amendment.

All is not totally lost for the customer. There are a few provisions in the Carmack Amendment intended for a consumer’s benefit. In order to effectively limit its liability, the carrier must: (1) maintain approved tariff rates with the ICC; (2) provide the consumer with a fair opportunity to choose between two or more levels of liability; (3) obtain the consumer’s written agreement as to its choice of liability; and (4) issue a receipt or bill of lading prior to moving the shipment. The burden is on the carrier to prove that it complies with these requirements.

MM&C Attorney Michael Campbell was recently involved in litigation with a moving company after his client’s belongings were lost in transit.  Mr. Campbell has 25 years of experience in civil litigation. You may contact him at (301) 762-5212 or mgcampbell@mmcanby.com. View more information about Miller, Miller & Canby’s Litigation practice by clicking here.

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