Summary
holding that contract was not a section 10709 contract, even though it contained a statement that it was entered pursuant to section 10709, because it failed to offer full Carmack liability as an option
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02 Civ. 129 (AGS)
January 16, 2003.
MEMORANDUM DECISION
I. Introduction
Plaintiff Tamini Trasformatori S.r.l. ("Tamini"), through an intermediary, arranged to have defendant Union Pacific Railroad Company ("UP") (s/h/a Union Pacific Railroad) transport three transformers by train. Upon arrival, the transformers were allegedly damaged. Tamini seeks $4,730,830.00 in compensatory damages in addition to punitive damages. UP moves for partial summary judgment, claiming that damages are contractually limited to $50,000.00 per train car. Tamini cross-moves for summary judgment on the same issue and moves to strike UP's affirmative defense relating to limitation of liability to $50,000.00. For the reasons set forth below, UP's motion is denied and Tamini's motion is granted.
Defendant repeatedly refers (incorrectly) to plaintiff as "Tamini Transformatori S.r.l."
II. Factual Background
Plaintiff, Tamini Trasformatori S.r.l., a builder of transformers, is an Italian corporation having its principal place of business in Italy. See Complaint, at ¶ 2. In the summer of 2000, Tamini sought to transport three transformers from Houston, Texas to three destinations: E. Chicago, Indiana, Petersburg, Virginia, and Midlothian, Texas. Tamini approached Saving Shipping Forwarding S.r.l., located in Italy, to act as freight forwarder. Saving Shipping Forwarding S.r.l. used Saving Shipping Forwarding USA ("SSF") as its agent.
Specifically, Tamini is a società a responsabilità limitata, or limited liability company.
In July 2000, Robert Zabka, an SSF employee, sent an e-mail to Leslie Go, an employee of defendant Union Pacific Railroad, asking for a rate quotation for transport of three transformers. See Declaration of Robert A. Zabka ("Zabka Decl."), Exhibit ("Ex.") A, B. UP is incorporated in the United States and is engaged in the business of transporting goods by rail. See Complaint, at ¶ 5. Go responded with the following e-mail:
In Plaintiff's Local Rule 56.1 Statements in Response to Defendant's Statement and in Support of Plaintiff's Cross-Motion for Partial Summary Judgment, at ¶ 3, Tamini mistakenly refers to Leslie (or Les) Go as "Leo Go."
The Complaint does not specify in which state UP is incorporated, but alleges that its principal place of business is in Omaha, Nebraska, and that it does business in the Southern District of New York.
All Rates are subject to clearance approval if needed.
Rate to Midlothian, TX: $1.89 cwt m/w 275,000 lbs Route: UP Limited Liability: $50,000
Rate to Petersburg, VA: $7.83 cwt m/w 250,000 lbs Route: UP — East St. Louis, IL — NS Limited Liability: $50,000
$9.96 cwt m/w 100,000 lbs Route: UP — East St. Louis, IL — NS Limited Liability: $50,000
Rate does not include special train charges
Rate does not include heavy duty car chahrges [sic]
Rate does not include idler car charges
Please fax all clearance information to: [fax number]
Thanks Leslie Go
Zabka Decl., Ex. B. According to Zabka, no declaration of value was ever requested, and no other offer was ever presented by UP.
On September 14, 2000, Zabka placed a fax order for three rail cars including a detailed description of the transformers to be shipped, the origin and destinations for the shipments. See Zabka Decl., Ex. C. However, no price term is listed, and no mention is made of any limitation on UP's liability. See id. The three shipments of transformers were transported in interstate commerce in November 2000. See UP's Rule 56.1 Statement, at ¶ 1; Plaintiff's Local Rule 56.1 Statements in Response to Defendant's Statement and in Support of Plaintiff's Cross-Motion for Partial Summary Judgment ("Tamini's Rule 56.1 Statement"), at ¶ 1. The place of loading for these shipments was Houston, Texas, and the destination points were E. Chicago, Indiana for car Q77X 131038; Petersburg, Virginia for car QTTX 131055; and Midlothian, Texas for car QTXX 131029. See UP's Rule 56.1 Statement, at ¶ 2; Tamini's Rule 56.1 Statement, at ¶ 2. Bills of lading were issued for the three shipments. The shipper designated on the bills of lading is Tamini Transformer c/o Saving Shipping Forwarding. See UP's Rule 56.1 Statement, at ¶ 3; Tamini's Rule 56.1 Statement, at ¶ 3. The bills of lading do not mention a limitation on liability, nor is there a place on the form referring to limitations on liability. See Affidavit of Terry Sheldon in Support of Defendant Union Pacific Railroad Company's [. . .] Motion for Partial Summary Judgment ("Sheldon Aff."), appended to Defendant Union Pacific Railroad Company's Motion for Partial Summary Judgment ("UP's Motion Brief"), Ex. A. Upon arrival, the shipments were allegedly damaged. See Complaint, at ¶ 8.
Two bills of lading are dated November 10, 2000 and one is dated November 16, 2000. In Plaintiff's Memorandum of Law in Opposition to Defendant's Motion for Partial Summary Judgment and in Support of Plaintiff's Cross-Motion for Partial Summary Judgment, Tamini states that one bill of lading is dated November 10, 2000 and that the other two are dated November 6, 2000. Since Tamini cites the same exhibit as UP, this statement would appear to be in error.
Following the shipment of the transformers, Tamini (through SSF) received three freight bills. See UP's Rule 56.1 Statement, at ¶ 4; Tamini's Rule 56.1 Statement, at ¶ 4. The freight bills appear to be dated sometime in December 2000. See Sheldon Aff., Ex. B. The bills list, inter alia, the shipment's origin and destination, a description of the shipment, and the amount due. None of the freight bills indicates a limitation on liability. However, each freight bill has the code "UPCQ 80722.000" listed under the heading, "price authority." See Sheldon Aff., Ex. B. The freight bills do not explain to what "UPCQ 80722.000" refers, and Zabka states that the notation "meant nothing to me." Zabka Decl., at ¶ 9. The three freight bills were paid. See UP's Rule 56.1 Statement, at ¶ 6; Tamini's Rule 56.1 Statement, at ¶ 6. In addition to the three freight bills, three waybills were also issued to SSF on behalf of Tamini. See UP's Rule 56.1 Statement, at ¶ 5; Tamini's Rule 56.1 Statement, at ¶ 5.
The Court's copy of the freight bills is written in a tiny font and is nearly illegible. Zabka states that the freight bills were issued on December 8, 2000. While two of the bills appear to bear that date, another appears to be dated December 20, 2000.
UPCQ 80722.000 is a separate document, which UP refers to as the "rate authority." The Court adopts this term in this Memorandum Decision for the sake of convenience only. The Court notes that it is not readily apparent from the face of the freight bill that UPCQ 80722.000 is in fact a separate document as opposed to an internal UP pricing code. Both Tamini and UP have provided documents purporting to be the relevant rate authority. Both documents are labeled UPCQ 80722.000 and both state that they are for the Saving Shipping Forwarding account. Both are effective as of September 7, 2000 and expire on March 30, 2001. Most importantly, both Tamini's and UP's rate authorities state, under the heading of "restrictions," that the rates quoted are "subject to a maximum liability of $50,000.00 per car." Sheldon Aff., Ex. E; Zabka Decl., Ex. D. Otherwise, the two rate authorities are similar but not identical. Significantly, Tamini's rate authority states that the rates are printed as of December 18, 2000, while UP's rate authority states that the rates are printed as of August 15, 2001. See Sheldon Aff., Ex. E; Zabka Decl., Ex. D. Zabka states that he never signed the rate authority and "it was never presented to me until after the cargo was tendered." Zabka Decl., at ¶ 10. He also states that he never accepted the rate authority by written notice. See id. at ¶ 10.
The other relevant document in this case is UP 6600-B. See Sheldon Aff., Ex. F. With respect to cargo loss and damage, UP 6600-B states:
Except as otherwise specifically provided in individual pricing documents referencing to this Circular, shipments shall be governed by the terms of U.S.C. § 11706 (Carmack), and 49 C.F.R. § 1005, with the following exceptions:
[. . .]
B. Railroad's liability will not exceed the actual amount of physical loss or damage sustained to the cargo. Railroad will not be liable for special damages, consequential damages, indirect losses or punitive damages arising from loss, damage, suspected contamination, or delay to cargo
[. . .].
UP 6600-B, at item 155. This document, the "General Rules for Pricing Documents," was consulted by Zabka. See Zabka Decl., at ¶ 8.
In light of the alleged $4,730,830.00 damage to the transformers, Tamini submitted a claim for damages to UP. See UP's Rule 56.1 Statement, at ¶ 11; Tamini's Rule 56.1 Statement, at ¶ 11. On August 20, 2001, UP declined Tamini's claim, stating, inter alia, that damages were of $50,000.00 per car and that Tamini had failed to provide evidence of rail mishandling or proof of damages. See Sheldon Aff., Ex. G. Tamini then filed the instant action.
Presently, UP moves for partial summary judgment, asking that the Court hold that its liability, if any, is limited to $50,000.00 for each of the three cars that transported the transformers. Tamini cross-moves for partial summary judgment on the same issue, seeking to strike UP's limitation of liability defense.
In its Notice of Cross-Motion for Partial Summary Judgment, Tamini moves to strike UP's ninth affirmative defense. UP's ninth affirmative defense states: "In the event that said shipment moved subject to any statutory or contractual limitations of liability, either specifically agreed to or contained in any applicable tariffs and/or governing publications, plaintiff may not recover in excess of such limitations." Answer and Affirmative Defenses of Defendant Union Pacific Railroad Company ("UP"), at ¶ 38. The parties devote their arguments to the issue of whether UP's liability is limited to $50,000.00 per car, which the Court addresses in this Memorandum Decision. The Court does not address the other issue relating to a limitation of liability (which is also not addressed by the parties) of whether Tamini may recover special, consequential, or punitive damages, indirect losses, or attorney's fees.
III. Legal Standard
Summary judgment may only be granted where the parties' submissions "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The burden lies with the moving party to demonstrate the absence of any genuine issue of material fact and all inferences and ambiguities are to be resolved in favor of the nonmoving party. See Hotel Employees Rest. Employees Union, Local 100 of New York, N.Y. Vicinity, AFL-CIO v. City of New York Dep't of Parks Recreation, 311 F.3d 534, 543 (2d Cir. 2002); Belfi v. Prendergast, 191 F.3d 129, 135 (2d Cir. 1999); Gallo v. Prudential Residential Servs., Ltd. Partnership, 22 F.3d 1219, 1223-24 (2d Cir. 1994). Thus, if "no rational jury could find in favor of the nonmoving party because the evidence to support its case is so slight, there is no genuine issue of material fact and a grant of summary judgment is proper." Gallo, 22 F.3d at 1224. Consequently, if reasonable minds could differ, summary judgment is inappropriate.
Once the moving party meets its burden of showing the absence of a genuine issue of material fact, the opposing party must produce evidentiary proof in admissible form sufficient to raise a material question of fact to defeat the motion for summary judgment, or, in the alternative, demonstrate an acceptable excuse for its failure to meet this requirement. See, e.g. Cifarelli v. Village of Babylon, 93 F.3d 47, 51 (2d Cir. 1996); Ortiz v. Makram, No. 96 Civ. 3285 (AGS), 2000 WL 1876667, at *4 (S.D.N.Y. Dec. 21, 2000). "[M]ere conclusory allegations, speculation or conjecture will not avail a party resisting summary judgment." Cifarelli, 93 F.3d at 51. Likewise, the nonmoving must show more than "metaphysical doubt" as to the material facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The mere fact that the nonmoving party points out a factual disagreement between the parties does not mean summary judgment is inappropriate: "the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248 (1986) (emphasis in original). Therefore, "[s]ummary judgment is called for where `it clearly appears that the issues are not genuine, but feigned.'" United Nat'l Ins. Co. v. Tunnel, Inc., 988 F.2d 351, 354 (2d Cir. 1993) (citation omitted).
Where cross-motions for summary judgment are filed, "a court `must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.'" Hotel Employees, 311 F.3d at 543 (quoting Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir. 1993)). In the instant case, the motion and cross-motion are both for summary judgment on the issue of whether damages are limited to $50,000.00 per car. While the issues involved in the motion and cross-motion is identical, the Court will consider the motion and cross-motion separately.
IV. Legal Analysis
The Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 11706 ("Carmack"), sets forth certain minimum terms below which carriers could not limit their liability. The section also states, in relevant part, that:
The liability of the rail carrier for such property is limited to a value established by written declaration of the shipper or by a written agreement between the shipper and the carrier [. . .].49 U.S.C. § 11706. Statutes passed in the 1970s and 80s served to deregulate the railroad industry. However, Congress still mandates that rail carriers who desire to limit their liability to shippers do so pursuant to 49 U.S.C. § 10502(e) which states:
No exemption order issued pursuant to this section shall operate to relieve any rail carrier from an obligation to provide contractual terms for liability and claims which are consistent with the provisions of section 11706 of this title. Nothing in this subsection or section 11706 of this title shall prevent rail carriers from offering alternative terms nor give the [Surface Transportation] Board the authority to require any specific level of rates or services based upon the provisions of section 11706 of this title.
(Emphasis added). Carmack, 49 U.S.C. § 11706, to which 49 U.S.C. § 10502(e) refers, provides that a common carrier is liable for the actual loss or injury to property it transports. See 49 U.S.C. § 11706(a). Therefore, while ordinarily the Carmack rules for liability apply (so that a carrier is liable for the actual loss or injury to property it transports), a shipper and a carrier may bargain for alternative terms, so long as a shipper has the option of receiving 49 U.S.C. § 11706 terms. See, e.g., Co-Operative Shippers, Inc. v. Atchison, Topeka and Santa Fe Ry. Co., 840 F.2d 447, 452 (7th Cir. 1988). Typically, a carrier will offer a reduced shipping rate if the shipper agrees to limit its liability. See, e.g., Co-Operative Shippers, Inc. v. Atchison, Topeka and Santa Fe Ry. Co., 840 F.2d 447, 451 (7th Cir. 1988) ("Carriers may partially limit their liability on a `released valuation' basis whereby in exchange for a low transportation rate, the shipper is deemed to release the carrier from liability beyond a stated amount.").
A. UP's Motion for Partial Summary Judgment
UP moves for partial summary judgment, claiming that there are no genuine issues of material fact. It claims that Tamini, through its agent, accepted a contract (i.e., UPCQ 80722.000) which explicitly limited UP's liability to $50,000.00 per car. See Sheldon Aff., Ex. E. UP notes that UPCQ 80722.000 was listed as the relevant "price authority" on the December 2000 freight bills which were sent to SSF. Tamini paid the bills. UP also notes that in responding to Zabka's initial July 2000 inquiry, UP's Leslie Go stated that liability would be limited to $50,000.00. See Zabka Decl., Ex. B.
According to UP, UPCQ 80722.000 (with its liability limitation) was agreed to by Tamini because the document is referenced in the December 2000 freight bills. For support, it turns to a prior decision of this Court, Ferrostaal, Inc. v. Union Pacific R.R. Co., 109 F. Supp.2d 146 (S.D.N.Y. 2000). In that case, this Court found that the non-Carmack terms of a UP circular referenced in the waybill and invoice applied to the transaction, reducing the two-year filing period (available under Carmack) to one year. UP claims that because UPCQ 80722.000 was referenced in the invoice or freight bill, it constitutes a binding contract.
However, as Tamini notes, Ferrostaal is inapposite in this case. The primary reason is that in the instant case (unlike Ferrostaal), the circular in question, UPCQ 80722.000, was not mentioned in the waybills. While the waybills are dated November 10 and 16, 2000 (i.e., the time of the shipments), the freight bills, in which UPCQ 80722.000 is listed, are dated in December 2000 — weeks after the shipment took place. Waybills, unlike freight bills, are contemporaneous receipts of a shipping transaction. Indeed, the Second Circuit noted the importance of waybills less than a week ago: "A bill of lading, also known as a waybill, [. . .] `is the document [that] contains the terms of the contract for the carriage of the goods agreed upon between the shipper of the goods and the shipowner.'" Jessica Howard Ltd. v. Norfolk So. Ry. Co., No. 02-7305, 2003 U.S. App. LEXIS 332, at *4 n. 1 (2d Cir. Jan. 10, 2003) (quoting William R. Anson, Principles of the Law of Contract 380 (Arthur L. Corbin ed., 3d Am. ed. 1919), quoted in Black's Law Dictionary 159 (7th ed. 1999)). In Ferrostaal, this Court underlined the significance of the fact that the circular was referenced in the waybill: "UP Exempt Circular 7-E is also referenced by the waybill"; "As set forth in the shipment's waybill, the `customer-furnished contract data' is the UP 000007 series"; "Consequently, the waybill reflects that plaintiff had elected to make the one year limitations period set forth in UP Exempt Circular 4-D applicable to the shipment." Ferrostaal, 109 F. Supp.2d at 148-49. The fact that no mention of a liability limitation, or a reference to UPCQ 80722.000, is made in the waybill differentiates this case from that in Ferrostaal. In passing, the Court notes that UP appears not to have followed its own instructions: the first sentence in UPCQ 80722.000 states that "[a]ll shipping [d]ocuments must make reference to UPCQ 80722.000 [. . .]." Sheldon Aff., Ex. E. UPCQ 80722.000 is not cross-listed in the waybills or bills of lading; consequently Ferrostaal's reasoning does not apply here.
In this case, the bills of lading and waybills are separate documents. However, it is not disputed that UPCQ 80722.000 is not referenced in either the bills of lading or the waybills.
UP also cites Commercial Union Ins. Co. v. Forward Air, Inc., 50 F. Supp.2d 255 (S.D.N.Y. 1999) for the same proposition. In that case, however, the limitation on the carrier's liability was enumerated in the waybill. See id. at 256.
The Court notes that the waybill is nearly undecipherable given its irregular spacing and use of a series of Byzantine numerical codes. The mere presence of the term "UPCQ 80722.000" on the waybill would not be enough; rather, something must indicate that the shipment is being made pursuant to the terms enumerated in UPCQ 80722.000.
UP also notes that the freight bills refer to the waybills and use the same commodity code, "3612911"; that the bills of lading refer to a truncated form of the commodity code ("3612"); and that UPCQ 80722.000 refers to a different truncation of the commodity code ("36129"). UP suggests that this commodity code correlation somehow shows that SSF (and by extension Tamini) knew of the terms of UPCQ 80722.000. UP provides no analysis or explanation as to why its premise suggests its conclusion.
UP also cites another case, Co-Operative Shippers, Inc. v. Atchison, Topeka and Santa Fe Ry. Co., 840 F.2d 447 (7th Cir. 1988) for the proposition that alternative, nonCarmack terms, may be binding upon a shipper. However, a close reading of the case reveals that its facts are wholly different from those present here. Co-Operative also concerned a limitation of liability beyond that provided in Carmack. In that case, the Seventh Circuit found that the shipper was bound by the non-Carmack terms. However, the factual predicate for this finding was that the shipper had "ample opportunity to read [the relevant contracts] before the transportation agreement was executed." Id. at 452. Indeed, the shipper "made a well informed, deliberate and absolute choice" in accepting the limitations on liability. Id. at 451. The Court noted that the "released valuation limitations bind the shipper, however, only if the shipper has notice of the rate structure and is given a full and fair opportunity to obtain greater protection." Id. at 451. The Court also noted that the carrier in Co-Operative did not seek to limit its liability to a shipper by "mere implication." Id. at 451.
In marked contrast to the facts in Co-Operative, here Tamini argues specifically that it did not make a well-informed choice at all. Indeed, Zabka's declaration states that he never signed UPCQ 80722.000 and, moreover, that the document was not presented to him until after the cargo was tendered. See Zabka Decl., at ¶ 10. The UPCQ 80722.000 enclosed by Tamini states that the rates are printed as of "12/18/00" — weeks after the cargo was shipped. See Zabka Decl., Ex. D. The UPCQ 80722.000 enclosed by UP states that the rates are printed as of "08/15/01" — approximately nine months after the cargo was shipped. In any event, in light of Zabka's declaration and the date of the documents provided by both parties, a reasonable jury could well find that UPCQ 80722.000 was not tendered to Tamini (or SSF) until long after the cargo was shipped. Tamini further notes that neither it nor SSF ever signed UPCQ 80722.000. UP responds by noting that UPCQ 80722.000 states that a shipper may accept this contract "either by written notice, or by tender of traffic under its terms." Sheldon Aff., Ex. E. However, this language is irrelevant given the fact that it appears that Tamini and SSF did not receive notice of UPCQ 80722.000 until after the traffic was tendered (and thus tender of traffic could not be construed as acceptance of the terms of the document).
UP argues that Tamini and SSF were aware of the liability limitation because UP's Leslie Go had e-mailed Zabka with rate quotes that included the language, "Limited Liability: $50,000." Zabka Decl., Ex. B. While this e-mail exchange provides some evidence that Zabka might have been aware of a potential limitation of liability, the rate quotes were not contractual offers, in part because of the header that "All Rates are subject to clearance approval if needed", and because there is no fixed price as the rates quoted in the e-mail do not include special train charges, heavy duty car charges, or idler car charges. Id. UP does not contend that the e-mail correspondence itself constitutes a contract.
B. Tamini's Cross-Motion for Partial Summary Judgment
Tamini cross-moves to strike UP's affirmative defense relating to limitation of liability. The crux of its argument is that UP is precluded from limiting its liability pursuant to the terms of UPCQ 80722.000 because it failed to offer SSF (and by extension Tamini) the option of contracting for Carmack (i.e., for the actual loss or injury) liability terms. Tamini cites Co-Operative Shippers, Inc. v. Atchison, Topeka and Santa Fe Ry. Co., 840 F.2d 447, 452 (7th Cir. 1988) for the proposition that a carrier may offer non-Carmack terms, so long as the shipper's opportunity to receive 49 U.S.C. § 11706 terms are also provided in the contract.
UP concedes that it did not offer alternative rates. See Defendant's Reply to Plaintiff's Opposition to Defendant's Motion for Partial Summary [sic] and Defendant's Response to Plaintiff's Cross-Motion for Partial Summary Judgment, at 2. It argues, however, that it was not required to offer the Carmack terms because UPCQ 80722.000 states that it is a contract pursuant to 49 U.S.C. § 10709. See Sheldon Aff., Ex. E. That statute states, in relevant part:
(a) One or more rail carriers providing transportation subject to the jurisdiction of the Board under this part may enter into a contract with one or more purchasers of rail services to provide specified services under specified rates and conditions.
(b) A party to a contract entered into under this section shall have no duty in connection with services provided under such contract other than those duties specified by the terms of the contract.
UP contends that because the purported contract, UPCQ 80722.000, was made pursuant to 49 U.S.C. § 10709, the Carmack protections do not apply. For support, UP cites Dow Chem. Co. v. Union Pacific Corp., 8 F. Supp.2d 940, 941 (S.D. Tex. 1998), which held that "[i]t is clear that the purpose of § 10709 is to allow parties the ability to alter federal mandates, or to avoid federal control and oversight over rail contracts."
UP is certainly correct to the extent that if UPCQ 80722.000 is a valid contract under 49 U.S.C. § 10709, then the Carmack protections (including full liability) do not apply. However, UP reads 49 U.S.C. § 10709 in a vacuum, without regard to the other statutes concerning common rail carriers. Specifically, UP ignores the fact that 49 U.S.C. § 10502(e) mandates that before an alternative contract is agreed to, the statutory Carmack terms must be offered:
Section [10502(e)] requires carriers to provide terms consistent with Carmack in the first instance. They may offer terms alternative to Carmack, which may be accepted or rejected by the shipper. But in any event, unless the shipper affirmatively elects the alternative limited liability terms, the Carmack terms should apply.Consol. Rail Corp. v. Sobiech, 710 F. supp. 988, 990 (S.D.N.Y. 1989). See also Bay State Shippers, Inc. v. Atchison, Topeka and Santa Fe Ry. Co., No. 95 Civ. 5586, 1995 WL 865481, at *4 (C.D. Cal. Nov. 30, 1995) ("As long as the railway carrier presents the shipper with the option of choosing the Carmack terms at the same time it presents its alternative terms, the contract is binding."). See also Co-Operative Shippers, Inc. v. Atchison, Topeka and Santa Fe Ry. Co., 840 F.2d 447, 452 (7th Cir. 1988). In other words, a 49 U.S.C. § 10709 contract can be entered into only if the carrier also offers the shipper Carmack terms. If the shipper chooses the Carmack terms (and ostensibly pays a higher shipping rate), then the Carmack terms govern. If the shipper chooses the alternative terms (and a corresponding lower shipping rate), then those terms govern and, under the terms of 49 U.S.C. § 10709, the shipper loses the protections of Carmack. Thus, while it is true that Carmack protections do not apply to 49 U.S.C. § 10709 contracts, the existence of such a contract presupposes that the shipper turned down Carmack terms. That never happened in this case, because, as UP concedes, it never offered SSF and Tamini Carmack terms.
Bay State criticized the part of the Sobiech opinion that held that limited liability terms must be presented as an alternative to Carmack terms rather than the Carmack terms being presented as an alternative to the limited liability terms. Both cases concur, however, on the more basic point; namely, that both options must be presented together.
UP's position must also be rejected because, even if it had offered Tamini Carmack terms, UP's submissions do not establish that UPCQ 80722.000 constitutes a binding contract. In his declaration, which is not contradicted by UP, Zabka states that UPCQ 80722.000 was not presented to him until after the cargo was tendered. See Zabka Decl., at ¶ 10. UP acknowledges that UPCQ 80722.000 was never signed by Tamini or SSF. Moreover, the face of UPCQ 80722.000 states that the rates quoted therein are printed "as of 12/18/02." See id., Ex. D. UP further concedes that the limitation of liability does not appear in either the bills of lading or the waybills, and that UPCQ 80722.000 is not referenced in the bills of lading or waybills, in spite of UPCQ 80722.000's clear language that "[a]ll shipping [d]ocuments must make reference to UPCQ 80722.000 [. . .]." In light of the documentary and affidavit evidence before the Court, the Court finds that no reasonable jury could find that Tamini (through SSF) agreed to the liability-limiting provisions of UPCQ 80722.000.
As noted supra, the UPCQ 80722.000 provided by UP states that the rates are printed as of "08/15/01". See Sheldon Aff., Ex. E.
See supra, note 11.
V. Conclusion
For the reasons set forth in this Memorandum Decision, UP's motion for partial summary judgment is DENIED and Tamini's cross-motion for partial summary judgment is GRANTED.
As noted supra, note 7, the Court's decision here is limited to the issue of whether UP may argue that its liability is capped at $50,000.00 per car. The Court does not here address the other issue raised by UP's ninth affirmative defense; namely, whether special, consequential, or punitive damages, indirect losses, or attorney's fees are recoverable.