The Federal District Court case of Scotlynn USA v. Titan Trans Corp. sheds light on issues that arise in cargo damage cases involving shippers, motor carriers and transportation brokers.
Scotlynn, a transportation broker, retained Titan as a carrier to transport a load of beef. The beef was damaged due to load shifting during carriage. Scotlynn paid its customer (the shipper of the beef) for the claimed damage, received an assignment of the shipper’s rights to sue Titan, and then sued Titan under the Carmack Amendment.
Scotlynn’s claim under the Carmack Amendment failed for several reasons. First, Scotlynn failed to produce any reliable evidence of the dollar damage to the beef as of the date the beef was delivered. Second, the evidence showed that the shipper loaded the beef on Titan’s trailer and was therefore responsible for the load shifting that allegedly caused damage to the beef. Third, the beef had salvage value at time of delivery, but Scotlynn failed to timely pursue salvage opportunities.
The case is illustrative of risks, sometimes unknowingly, taken on by transportation brokers. Oftentimes, brokers are required by their shipper customers to pay cargo damage claims that do not have legal merit. Brokers should closely review such claims before pursuing them in court. While it may make sense to pay the shipper’s claim to retain the shipper’s business, it may not be wise to pursue the claim in court. Further, brokers may have an obligation to take precautions to receive salvage value for freight rejected by a consignee.
Contact our Transportation Attorneys to discuss ways to minimize your risk as a broker.
This material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute legal advice. For information on your particular circumstances, please contact Chauvel & Glatt at 650-573-9500 for legal assistance near you. (photo credit: 123rf.com).