Norfolk S. Ry. Co. v. Sun Chem. Corp.

A railway company, which was brought into an international ocean shipping arrangement two transactions after an ocean carrier had issued its bill of lading, could not be subject to Carmack liability.

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Appellee Sun Chemical Corporation hired an ocean carrier to transport two containers of ink manufactured by Sun from Kentucky to Brazil. After the ocean carrier hired a freight forwarding company to arrange the shipment, the freight forwarder hired appellant Norfolk Southern Railway Company to carry the ink by rail from Kentucky to Savannah, where it would begin its ocean voyage to Brazil. The rail cars carrying the containers derailed, however, and the ink was destroyed. Sun and its insurer, Continental Insurance Company, sued Norfolk Southern for negligence and breach of contract. Sun moved for summary judgment on several theories, including that Norfolk Southern was strictly liable for the loss under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 11706. On appeal from the trial court’s grant of summary judgment to Sun on that basis, Norfolk Southern argues that it is not subject to Carmack liability, that Sun should be bound by its agents’ rejection of Carmack coverage, and that Sun has no viable state law claim remaining. We agree with these contentions and reverse.

The relevant facts are not in dispute. Sun entered into a contract with Compaia Sud Americana de Vapores CSAV, an ocean carrier, to transport Sun’s ink. Under what is known as a “through bill of lading,” in which cargo owners “can contract for transportation across oceans and to inland destinations in a single transaction,”1 CSAV took “responsibility for the entire intermodal transportation” of the ink from the place of receipt to the place of final delivery, and retained “the right to use the services of other Precarriers and/or Oncarriers and any mode of transport to accomplish the same.”2 The latter provision also includes a warning about the liability of such intermediate carriers:

Norfolk S. Ry. Co. v. Sun Chem. Corp.

A railway company, which was brought into an international ocean shipping arrangement two transactions after an ocean carrier had issued its bill of lading, could not be subject to Carmack liability.

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