Second Circuit Vacates Summary Judgment Award in Transportation/Insurance Action after Supreme Court Abrogates Precedent on Which Summary Judgment was Based

Nipponkoa Insurance Company, Ltd. v. Norfolk Southern Railway Company, No. 09-4866-cv, 2010 U.S. App. LEXIS 20145 (2nd Cir., September 29, 2010).

A train derailment near Dallas, Texas on April 18, 2006 resulted in multiple lawsuits relating to insurance coverage for the train’s cargo. In two lawsuits, the District Court granted summary judgment to plaintiff-insurers against the train operators, ruling that the Carmack Amendment, 42 U.S.C. § 11706, governing liability of rail carriers for shipments damaged after initial delivery to a rail carrier, applied to plaintiff’s claims. Subsequently, the U.S. Supreme Court issued a decision clarifying how and when the Carmack Amendment applies to certain types of claims, in Kawasaki Kisen Kaisha, Ltd. v. Regal-Beloit Corp., 130 S. Ct. 2433, 2010 U.S. LEXIS 4982 (2010).

The defendant train operators appealed on the basis that Supreme Court’s decision in Kawasaki abrogated the precedent on which the District Court had relied in granting plaintiffs’ motions for summary judgment. Plaintiffs agreed that the Supreme Court abrogated such precedent but argued that their motions were supported by independent bases which had not been argued in the court below because of the state of the law at the time. The Court of Appeals vacated the plaintiffs’ summary judgment awards and remanded to the District Court for further proceedings and to allow plaintiffs the opportunity to present their additional grounds for summary judgment to the court below.

For a copy of the order click here

Patrick Omilian and Joesph Oliva