Reproduced with the Permission of Miles L. Kavaller

In its Decision served on December 24, 1997 in STB Docket No. ISM 35002, Amend The Uniform Straight Bill of Lading and Accompanying Contract Terms and Conditions, the Board refused to suspend or investigate the proposed amendments to the Uniform Domestic Straight Bill of Lading published on behalf of carriers in the National Motor Freight Classification ("NMFC"). The request was made by the Transportation Consumer Protection Council, Inc. ("TCPC"), formerly, the Shippers' National Freight Council which had objected to the incorporation by reference of carrier rates, classifications and rules and particularly limitations on liability for freight loss or damage maintained in "tariffs".

Under the provisions of the ICC Termination Act in 49 U.S.C. 14706(c)(1)(A) and (B) carriers may establish reasonable released rates and other liability limitations so long as that information is provided to shippers on request. Further, a released rate can be triggered only by an express declaration or agreement between the carrier and the shipper. The Board emphasized that the NMFC bill of lading prominently displays a notice on its face indicating that limitations of liability may exist and that information regarding these and other unfiled tariff provisions are available from the carrier upon request. It is likely that were a carrier to fail to provide shippers with full notification, the carrier would be prohibited from enforcing such liability limitations.

In this deregulated environment the bill of lading takes on increased importance. Shippers should determine whether the motor carriers whose services they utilize participate in the NMFC and utilize its Uniform Domestic Straight Bill of Lading. Shippers who have their own "home brew" bill of lading must determine whether the carrier will accept it or insist on the use of the carrier's NMFC version of the Uniform Domestic Straight Bill of Lading. There must be no misunderstanding about which bill of lading is being used.

The bill of lading is the transportation contract between the shipper and the carrier. But because the "filed rate doctrine" has been eliminated for shipments transported after August 24, 1994, the bill of lading is no more or less significant than any other commercial contract. Its terms and conditions, once having the force and effect of law under the filed rate doctrine, are no longer subject to the same deference. Courts, therefore, will treat these contracts like any other agreement and apply general contract and equitable principles.

In California, for example, a carrier may not limit its liability for freight loss and damage unless it enters into what has been called a "special contract". California Civil Code 2174 provides that "[t]he obligations of a common carrier cannot be limited by general notice . . . but may be limited by special contract." California Civil Code 2176 provides in pertinent part as follows:

"A . . . consignor, or consignee, by accepting a . . . bill of lading, or written contract for carriage, with knowledge of its terms, assents to the rate . . . the time, place and manner of delivery . . . and also to the limitation stated therein upon the amount of the carrier's liability in case property . . . is lost or injured, when the value of such property is not named . . . . But his assent to any other modification of the carrier's obligations contained in such instrument can be manifested only by his signature to the same." (Emphasis added).

While these provisions apply to California intrastate transportation, it is my guess that California courts and quite possibly even the federal district courts located in California and possibly elsewhere, will apply these principles to interstate shipments as well. They are not inconsistent with the provisions of ICCTA and specifically 49 U.S.C. 14706.

While carriers should not expect to escape liability for the "actual loss or injury" to the property transported without a specific liability limitation known to and accepted by the shipper, the shipper may not plead ignorance if the information is on the Uniform Domestic Straight Bill of Lading, contained in the carrier's "tariff" on file at its office to which the shipper has access.