SOTOMAYOR, J., DISSENTING
UNICODE VALUE="8195">KAWASAKI KISEN KAISHA LTD. V. REGAL-BELOIT
CORP.
561 U. S. ____ (2010)
SUPREME COURT OF THE UNITED STATES
NOS. 08-1553 AND 08-1554
KAWASAKI KISEN KAISHA LTD., et al., PETITIONERS
08–1553
v.
REGAL-BELOIT CORPORATION et al.
UNION PACIFIC RAILROAD COMPANY,
PETITIONER
08–1554 v.
REGAL-BELOIT CORPORATION et al.
on writs of certiorari to the united states
court of appeals for the ninth circuit
[June 21, 2010]
Justice Sotomayor, with
whom Justice Stevens and Justice Ginsburg join, dissenting.
In my view, the Carmack Amendment
to the Interstate Commerce Act (ICA), §7, 34 Stat. 595, plainly
applies to the inland leg of a multimodal shipment traveling on an
international through bill of lading. Unless they have permissibly
contracted around Carmack’s requirements, rail carriers in the
United States such as petitioner Union Pacific are subject to those
requirements, even though ocean carriers such as petitioner “K”
Line are not. To avoid this simple conclusion, the Court contorts
the statute and our cases, misreads the statutory history, and
ascribes to Congress a series of policy choices that Congress
manifestly did not make. Because I believe Carmack provides the
default legal regime for rail transportation of cargo within the
United States, regardless of whether the shipment originated
abroad, I would reach the second question presented: whether Union
Pacific was free to opt out of Carmack under 49 U. S. C.
§10709, or whether Union Pacific first had to offer “K” Line, its
contractual counterparty, Carmack-compliant terms under §10502. As
to that question, I would hold that opt-out under §10709 was not
available and would remand to the District Court to consider in the
first instance whether Union Pacific satisfied its obligations
under §10502. For these reasons, I respectfully dissent.
I
The Court’s interpretation of
Carmack’s scope is wrong as a matter of text, history, and
policy.
A
1
I begin with the statute’s text.
Two provisions guide my conclusion that Carmack provides the
default legal regime for the inland leg of a multimodal shipment
traveling on an international through bill of lading: §11706(a),
which outlines the basic requirements for liability under Carmack,
and §10501(a), which defines the jurisdiction of the Surface
Transportation Board (STB or Board), the successor to the
Interstate Commerce Commission (ICC), see
ante, at 7.
Section 11706(a) states as follows:
“A rail carrier providing
transportation or service subject to the jurisdiction of the Board
under this part shall issue a receipt or bill of lading for
property it receives for transportation under this part. That rail
carrier and any other carrier that delivers the property and is
providing transportation or service subject to the jurisdiction of
the Board under this part are liable to the person entitled to
recover under the receipt or bill of lading. The liability imposed
under this subsection is for the actual loss or injury to the
property caused by—
“(1) the receiving rail carrier;
“(2) the delivering rail carrier; or
“(3) another rail carrier over whose line or
route the property is transported in the United States or from a
place in the United States to a place in an adjacent foreign
country when transported under a through bill of lading.
“Failure to issue a receipt or bill of lading does not affect
the liability of a rail carrier. A delivering rail carrier is
deemed to be the rail carrier performing the line-haul
transportation nearest the destination but does not include a rail
carrier providing only a switching service at the destination.”
With respect to the Board’s jurisdiction, §10501(a)
provides as follows:
“(1) Subject to this chapter, the
Board has jurisdiction over transportation by rail carrier that
is—
“(A) only by railroad; or
“(B) by railroad and water, when the
transportation is under common control, management, or arrangement
for a continuous carriage or shipment.
“(2) Jurisdiction under paragraph (1) applies
only to transportation in the United States between a place in—
“(A) a State and a place in the same or
another State as part of the interstate rail network;
. . . . .
“(E) the United States and another place in
the United States through a foreign country; or
“(F) the United States and a place in a
foreign country.”
“A simple, straight-forward
reading of [these provisions] practically compels the conclusion
that the Carmack Amendment applies in a typical multimodal carriage
case with inland damage.” Sturley, Maritime Cases About Train
Wrecks: Applying Maritime Law to the Inland Damage of Ocean Cargo,
40 J. Mar. L. & Com. 1, 13 (2009) (hereinafter Train Wrecks).
The first sentence of §11706(a) sets forth the circumstances in
which a receiving rail carrier must issue a bill of lading: when
property is first “receive[d]” for domestic transportation. This
sentence does not define the full scope of Carmack liability,
however, as the penultimate sentence of §11706(a) makes the absence
of a bill of lading ultimately immaterial to the question of
Carmack liability
. Instead, the second sentence of
§11706(a) establishes Carmack’s expansive scope, explaining which
carriers are subject to Carmack liability: not only the rail
carrier that receives the property, but also “any other carrier
that delivers the property and is providing transportation or
service subject to the jurisdiction of the Board under this part.”
Critically, that a rail carrier’s provision of “transportation or
service subject to the jurisdiction of the Board” is the criterion
that establishes liability under Carmack demonstrates that
Carmack’s scope must be considered in tandem with the provision
describing the Board’s jurisdiction over rail carriage.
Under that provision, the Board has authority
“over transportation by rail carrier,” either when that
transportation is “only by railroad” or when it is “by railroad and
water, when the transportation is under common control, management,
or arrangement for a continuous carriage or shipment.”
§10501(a)(1). Board jurisdiction over transportation by rail
carrier “applies only to transportation in the United States,” not
to transportation abroad. §10501(a)(2). Within the United States,
however, Board jurisdiction exists broadly whenever that
transportation is “between,”
inter alia, “a place in … a
State and a place in the same or another State as part of the
interstate rail network,” “a place in … the United States and
another place in the United States through a foreign country,” or
“a place in … the United States and a place in a foreign country.”
§§10501(a)(2)(A), (E), (F).
With the jurisdictional framework in mind, I
return to the final sentences of Carmack, §11706. The third
sentence clarifies that liability under Carmack is imposed upon (1)
“the receiving rail carrier” (which, under the first sentence of
§11706(a) and the definition of the Board’s jurisdiction over
domestic rail carriage in §10501(a), is the rail carrier that first
receives the property for transportation in the United States); (2)
“the delivering rail carrier” (which, under the last sentence of
§11706(a) and the Board’s jurisdiction over domestic rail carriage
in §10501(a), is the final rail carrier providing the long-distance
transportation “nearest the destination” in the United States); and
(3) “another rail carrier over whose line or route the property is
transported in the United States or from a place in the United
States to a place in an adjacent foreign country when transported
under a through bill of lading.” §11706(a). This last phrase in
§11706(a)(3) serves two functions. It ensures that, where the
entire rail transportation is “[with]in the United States,” any
connecting rail carrier between the point at which the goods were
received and the point at which the goods were delivered is liable
under Carmack. It also ensures that, where the final destination of
the goods is in Canada or Mexico, such that there is no domestic
“delivering” carrier, a connecting carrier taking on the goods in
the United States will remain subject to Carmack as it travels
toward its foreign destination while still in the United States.
(As noted, the jurisdictional provision, incorporated by reference
in §11706(a), is limited to “transportation in the United States,”
§10501(a)(2).)
The language of Carmack thus announces an
expansive intent to provide the liability regime for rail carriage
of property within the United States. Once a first domestic rail
carrier subject to the Board’s jurisdiction receives property in
the United States, Carmack attaches, regardless of where the
property originated. Carmack then applies to any other rail carrier
subject to the Board’s jurisdiction in the chain of transportation,
no matter whether the ultimate destination of the property is in
the United States or elsewhere, for the period the carrier is
traveling within the United States.
It seems to me plain that, under these broadly
inclusive provisions, Carmack governs rail carriers such as Union
Pacific for any transportation of cargo within the United States,
whether or not their domestic transportation is part of a
multimodal international shipment, and whether or not they actually
issued a domestic bill of lading. There is no question that Union
Pacific is a “rail carrier” that is “subject to the jurisdiction of
the Board.” §11706(a). It “receive[d]” the cargo,
ibid.,
in California for domestic transportation to four different
domestic inland locations—
i.e., “between a place in … a
State and a place in … another State,” §10501(a)(2)(A)—while the
shipment itself was transported “between a place in … the United
States and a place in a foreign country,” §10501(a)(2)(F). Union
Pacific should have issued a bill of lading for the cargo it
received, but its failure to do so does not shield it from
liability, as §11706(a) makes clear. Carmack therefore provides the
legal regime governing Union Pacific’s rail transportation in these
cases.
Carmack does not, however, govern ocean
carriers such as “K” Line, because such carriers are not “rail
carrier[s] providing transportation or service subject to the
jurisdiction of the Board.” §11706(a). The ICA defines a “rail
carrier” as “a person providing common carrier railroad
transportation for compensation.” §10102(5). To resolve whether “K”
Line meets this definition, I would apply the STB’s well
established test and ask whether it “conduct[s] rail operations”
and “ ‘hold[s] out’ that service to the public.”
Assoc. of
P&C Dock Longshoremen v.
Pittsburgh and Conneaut Dock
Co., 8 I. C. C. 2d 280, 290 (1992).
Respondents—the owners of cargo that was
allegedly damaged during Union Pacific’s train derailment in
Oklahoma,
ante, at 2–3—primarily contend that “K” Line
conducted rail operations by using containers to transport the
cargo from China to the United States in conjunction with Union
Pacific’s subsequent carriage of those same containers. Brief for
Respondents 82–83 (noting that the statutory definition of
“railroad” includes “ ‘intermodal equipment used by or in
connection with a railroad,’ ” §10102(6)(A)). This
interpretation goes too far. Read so literally, the statute would
render a truck a railroad simply because the truck transported
containers during a journey in which the containers also traveled
by rail. Such a reading would gut the separate provisions of the
ICA governing motor carriage in subtitle IV, part B of Title 49.
The ICA’s broad description of what the term “railroad” “includes,”
§10102(6), is better read as ensuring that all services a rail
carrier conducts are regulated under the Act “to prevent
overcharges and discriminations from being made under the pretext
of performing such additional services.”
Cleveland, C., C.
& St. L. R. Co. v.
Dettlebach,
239 U. S. 588, 594
(1916).
At oral argument, respondents focused on a
separate argument, contending that “K” Line should be considered a
rail carrier because it conducts substantial rail operations at its
depot facility in Long Beach, California. Tr. of Oral Arg. 37
(describing transportation between Port of Los Angeles, where “K”
Line’s private chassis transport the containers on the Port’s train
tracks to the Los Angeles train depot, where the containers are
loaded onto Union Pacific trains for inland transportation). I
agree with the Board, however, that “ ‘ownership and operation
of private terminal facilities, including rail yards,’ ” is
not sufficient to bring a shipper within the definition of
“ ‘a rail carrier subject to [Board] jurisdiction’ ”
where the “ ‘terminal is maintained for [the ocean common
carrier’s] exclusive use in interchanging cargo with rail and motor
carriers providing inland transportation.’ ”
Joint
Application of CSX Corp. & Sea-Land Corp. Under 49 U.
S. C. §11321, 3 I. C. C. 2d 512, 519
(1987).[
Footnote 1]
The jurisdictional provisions of the ICA and
the Shipping Act of 1984, 46 U. S. C. §40101
et seq.,
confirm my view that “K” Line is not a rail carrier “subject to the
jurisdiction of the Board,” 49 U. S. C. §11706(a), under
Carmack. The STB’s jurisdiction over transportation by rail
carriers is “exclusive,” §10501(b), while ocean carriers are
subject to the jurisdiction of the Federal Maritime Commission
(FMC), 46 U. S. C. §40102; see also 46 CFR §520.1 (2009). In
addition, the Board’s jurisdiction over water carriage is limited
to domestic water carriage. 49 U. S. C. §13521(a)(3). The
Board itself has concluded that ocean carriers providing intermodal
transportation jointly with inland rail and motor carriers are
subject to the FMC’s jurisdiction rather than its own. See
Improvement of TOFC/COFC Regulations, 3 I. C. C.
2d 869, 883 (1987).
For these reasons, Carmack governs Union
Pacific but not “K” Line for the inland transportation at issue in
these cases.
2
In finding Carmack inapplicable
to the inland transportation in these cases, the majority relies on
the fact that Carmack does not govern ocean carriers such as “K”
Line. While I agree that “K” Line is not a rail carrier, the
majority places too much weight on that determination. That the
ocean carrier “K” Line is not subject to Carmack does not affect
the determination that the rail carrier Union Pacific is, for the
textual reasons I have explained. The majority’s contrary reading
of the statute reflects four fundamental errors.
First, the majority reads the
term “receiving rail carrier” in §11706(a) too narrowly. There is
simply no basis in the text of the statute to support the
majority’s conclusion that Carmack applies only when the first rail
carrier in the chain of transportation accepted the cargo at the
shipment’s point of origin. Cf.
ante, at 10, 12. The two
cases the majority cites for this proposition are inapposite, as
neither addresses an international, multimodal shipment in which
the first leg of the trip was by ocean.[
Footnote 2] In
St. Louis, I. M. & S. R. Co.
v.
Starbird,
243 U. S. 592, 594
(1917), the entire shipment was by rail from Arkansas to New York
City. And in
Mexican Light & Power Co. v.
Texas
Mexican R. Co.,
331 U. S. 731, 732
(1947), the entire shipment was by rail from Pennsylvania to
Mexico. Given that the first rail carrier was in each case the
carrier that received the goods from the shipper and issued a
through bill of lading, it is unsurprising that the Court, applying
Carmack, described that carrier as the “initial carrier.” 243 U.
S., at 595; 331 U. S., at 733. But nothing in these cases, and
nothing in Carmack itself, requires that the “receiving carrier”
take the goods from the shipper at the shipment’s point of
origin.[
Footnote 3]
Instead, these cases are compatible with my
view that the “receiving carrier” is any rail carrier that first
receives cargo for transportation in the United States. Union
Pacific, which is unquestionably a “rail carrier” in the normal
sense of those words, is also the “receiving carrier” subject to
liability under Carmack.[
Footnote
4] Our opinion in
Reider v.
Thompson,
339 U. S. 113
(1950), further supports this reading. There we explained that the
test for Carmack applicability “is not where the shipment
originated, but where the obligation of the carrier as receiving
carrier originated.”
Id., at 117. Because Carmack applies
to domestic rail transport, and the domestic rail carrier’s
obligation in that case arose in New Orleans where the rail carrier
received the goods, it did not matter that the shipment began
overseas in Buenos Aires. Similarly, in the instant cases, because
Union Pacific’s obligations to transport by rail originated in
California, it does not matter that the shipment began overseas in
China.[
Footnote 5]
Second, the majority errs in suggesting that
the issuance of an international through bill of lading precludes
the applicability of Carmack. Cf.
ante, at 10–11, 13. The
cases on which the majority relies do not stand for this
proposition. In
Reider, the Court found Carmack applicable
when the first domestic rail carrier issued a bill of lading from
New Orleans to Boston. Although we observed in that opinion that
there was no through bill of lading from Buenos Aires to Boston,
339 U. S.
, at 117, we did not say, and it is not a
necessary corollary, that the presence of such a bill of lading
would have commanded a different result. The observation is better
read as indicating that no law other than Carmack could possibly
have applied in that case: Because “the shipment … could not have
moved an inch beyond New Orleans under the ocean bill,”
id., at 118, a new domestic bill of lading for domestic
transportation was required, and as to that transportation, we
held, Carmack unquestionably applied.
For its part,
Mexican Light held only
that, where the first rail carrier in the chain of transportation
issued a bill of lading, a subsequent bill of lading issued by a
later rail carrier was void because Carmack contemplates one
through bill of lading governing the entire journey by rail. 331 U.
S., at 734. A subsequent bill of lading by a connecting rail
carrier, however, can be void under Carmack without requiring the
conclusion that an international through bill of lading involving
initial transportation by ocean carrier would void a subsequent
bill of lading issued in the United States by the first rail
carrier in the domestic chain of transportation. Because the text
of Carmack expressly requires a bill of lading to be issued for
property “receive[d] for transportation under this part,” and Union
Pacific first received the property for rail transportation in the
United States, it should have issued a bill of lading. Of course,
its failure to do so did not affect its liability under Carmack (or
that of a subsequent connecting or delivering carrier), as
§11706(a) explicitly states.
Third, the majority errs in giving weight to
the difference in scope between Carmack liability and the
jurisdiction of the Board.
Ante, at 14. I agree with the
majority that Carmack’s reach is narrower than the Board’s
jurisdiction. The Board’s jurisdiction extends over transportation
by rail carrier “in the United States between a place in … the
United States and a place in a foreign country,” §10501(a)(2)(F),
which indicates that it does not matter whether the movement of the
transportation is from the United States to the foreign country or
from the foreign country to the United States.[
Footnote 6] In contrast, Carmack applies only
when a rail carrier first receives property in the United States,
§11706(a), and therefore would not apply to a rail carrier
originating in Canada and delivering in the United States without
transferring the property to a domestic rail carrier.[
Footnote 7] As long as there is a receiving
rail carrier in the United States, however, Carmack attaches.
Because the property at issue in these cases was received in the
United States for domestic transportation by Union Pacific, Carmack
governs the rail carrier’s liability.
Finally, the majority misunderstands the role
I believe Carmack liability plays in international shipments to the
United States. My reading of the statute would not “outlaw through
shipments under a single bill of lading.”
Ante, at 13. To
the contrary, an overseas ocean carrier like “K” Line can still
issue a through bill of lading governing the entire international
trip to an American destination. That bill of lading reflects the
ocean carrier’s agreement with and obligations to the original
shipper of the cargo. As the ocean carrier has no independent
Carmack obligations of its own, the ocean carrier and the shipper
are free to select whatever liability terms they wish to govern
their relationship during the entire shipment. See
infra,
at 20–21. Carmack simply requires an American “receiving rail
carrier” like Union Pacific to issue a bill of lading to the party
from whom it received the goods for shipment—here, “K” Line. See
Norfolk Southern R. Co. v.
James N. Kirby, Pty
Ltd.,
543 U. S.
14, 33 (2004) (“When an intermediary contracts with a carrier
to transport goods, the cargo owner’s recovery against the carrier
is limited by the liability limitation to which the intermediary
and carrier agreed”);
Great Northern R. Co. v.
O’Connor,
232 U. S. 508, 514–515
(1914) (holding that a railroad company is entitled to treat the
intermediary forwarder as the shipper). As to that bill of lading,
Carmack provides the legal regime and defines the relationship
between the contracting parties (unless they have agreed to
contract out of Carmack, see
infra, at 23–26). The
issuance of this second bill of lading, however, in no way
undermines the efficiency of the through bill of lading between the
ocean carrier and the original shipper, nor does it require that
those parties bind themselves to apply Carmack to the inland
leg.[
Footnote 8]
B
In addition to misreading the
text, the Court’s opinion misapplies Carmack’s statutory history.
The Court states that no version of Carmack has ever applied to
imports originating overseas on a through bill of lading.
Ante, at 15. The Court further asserts that, because
Congress stated that the 1978 recodification of the ICA effected no
“substantive change,” Carmack should be read consistently with this
historical practice.
Ante, at 16. There are three problems
with this analysis.
First, if “Congress intended no
substantive change” to Carmack in the 1978 recodification, “that
would mean only that the present text is the best evidence of what
the law has always meant, and that the language of the prior
version cannot be relied upon to support a different reading.”
Keene Corp. v.
United States,
508 U. S. 200, 221
(1993) (Stevens, J., dissenting). Because the present text of
Carmack indicates that it applies to the domestic inland rail
transportation of a multimodal international shipment, there is no
reason to rely on Congress’ statement in the recodification.
Second, there is no necessary conflict between
the pre-1978 version of Carmack and my reading of the current text.
The pre-1978 text referred to a carrier “receiving property for
transportation from a point in one State or Territory or the
District of Columbia to a point in another State, Territory, [or
the] District of Columbia, or from any point in the United States
to a point in an adjacent foreign country.” 49 U. S. C.
§20(11) (1976).[
Footnote 9] A
rail carrier like Union Pacific who receives property in California
for transportation to locations in the American midwest “receiv[es]
property from a point in one State … to a point in another State,”
regardless of whether the property originated in California or
China. The geographical restriction “from any point in the United
States to a point in an adjacent foreign country” simply reflected
agreements between the ICC and its Canadian counterpart to respect
each other’s regulation of rail carriage originating in that
country. See Brief for United States as
Amicus Curiae
(hereinafter Brief for United States) 17–18. It does not indicate
any rejection of Carmack’s applicability to imports as a whole or
exports to a nonadjacent foreign country.[
Footnote 10] Instead, the “adjacent foreign country”
provision was expansive rather than limiting, ensuring that Carmack
would apply where a shipment traveled by rail from New York City
through to Montreal without stopping at the border of Canada.
Third, to the extent there are meaningful
differences between the pre-1978 text of Carmack and its current
text, it is the current text that we should interpret, regardless
of Congress’ general hortatory statement in the 1978 Public Law
applicable to the entire ICA. As we have often observed, “[a]
specific provision controls one of more general application.”
Gozlon-Peretz v.
United States,
498 U. S. 395, 407
(1991). The general statement that Congress intended no change to
the ICA should not require us to ignore what the current text of
the specific Carmack provision says, as both Union Pacific and “K”
Line explicitly ask us to do. See Brief for Petitioner in No.
08–1554, at 20 (“The Pre-1978 Statutory Language Controls This
Case”); Brief for Petitioners in No. 08–1553, at 41–49 (arguing for
reliance on pre-1978 text). Petitioners’ view of statutory
interpretation would give rise to an unwieldy—and unjust—system. I
would have thought it beyond cavil that litigants are entitled to
rely on the currently applicable version of enacted statutes to
determine their rights and obligations.
In the final analysis, the meaning of the
pre-1978 language is murky, and Congress’ instruction that the 1978
recodification effected no substantive change provides no
meaningful guidance. The current text does not restrict Carmack’s
coverage to trade with adjacent foreign countries, and it makes no
distinction between imports and exports. Carmack’s ambiguous
history cannot justify reading such atextual limitations into the
statute.[
Footnote 11]
C
The Court’s suggestion that its
interpretation properly effectuates the goals of Carmack and
“attains the most consistency between Carmack and [the Carriage of
Goods by Sea Act (COGSA)],”
ante, at 17, reflects its
fundamental misunderstanding of these statutes and the broader
legal context in which the international shipping industry
functions. As the mandatory default regime governing the
relationship between an American receiving rail carrier and its
direct contracting partner (here an overseas ocean carrier),
Carmack permits the shippers who contract for a through bill of
lading with the ocean carrier to receive the benefit of Carmack
through that once-removed relationship. Such a legal regime is
entirely consistent with COGSA and industry practice.
As noted, the Court’s position as
to Carmack rests on its erroneous belief that the “receiving
carrier” must receive the goods at the point of the shipment’s
origin.
Ante, at 12–15. Because Carmack provides that suit
against the receiving rail carrier “may only be brought … in the
judicial district in which the point of origin is located,” 49 U.
S. C. §11706(d)(2)(A)(i), and defines “judicial district” as
only a federal or state court, §11706(d)(2)(B), the Court
mistakenly concludes that were Carmack to apply to inland
transportation of international shipments, “there would often be no
venue in which to sue the receiving carrier” because that carrier
would have received the goods in a foreign country where no federal
or state court exists.
Ante, at 14–15, 17. Contrary to the
Court’s suggestion, however, the proper venue in which to sue a
receiving carrier under Carmack is the location in which the first
domestic rail carrier received the goods for domestic
transportation.
Supra, at 4–5, 9.
Nor is it true that Carmack’s focus is on
providing a single through bill of lading for an entire shipment.
Ante, at 17. Carmack’s purpose in §11706 is to ensure that
a single bill of lading, with a single protective liability regime,
governs an entire shipment by rail carrier within the United
States.[
Footnote 12] It does
not require the rail carrier to offer Carmack-compliant terms to
anyone but the party with whom the rail carrier contracts when it
receives the goods. It does not place obligations on the
relationship between any overseas carrier and any overseas shipper
who operate under their own bill of lading. That Congress expected
different liability regimes to govern ocean and rail carriers can
be inferred from the different regulatory oversight provided for
each type of carrier—the FMC for the former, the STB for the
latter, see
supra, at 8.
Moreover, that Carmack provides certain
greater protections than does COGSA demonstrates that one of
Carmack’s purposes—beyond simply the fact of a single bill of
lading governing all rail transportation—was to specify a
protective liability regime for that part of the shipment only. As
compared to COGSA, Carmack provides heightened liability rules for
rail transportation, compare COGSA §4, 49 Stat. 1207, note
following 46 U. S. C. §30701, p. 1179, with 49 U. S. C.
§§11706(a)–(c); stricter venue requirements, compare
Vimar
Seguros y Reaseguros, S. A. v.
M/V Sky Reefer,
515 U. S. 528,
535 (1995), with §11706(d); and more generous time allowances for
filing suit, compare COGSA §3(6), at 1179, with §11706(e). Congress
is evidently wary of creating broad exemptions from Carmack’s
regime: While Congress has given expansive authority to the STB to
deregulate carriers from the requirements of the ICA, it has
precluded the STB from excusing carriers from complying with
Carmack. See
infra, at 25 (discussing §10502). By taking
Carmack’s protections out of the picture for goods that travel by
rail in the United States whenever the goods first traveled by
ocean liner, it is the Court that “undermine[s] Carmack’s
purposes,”
ante, at 17. Cf.
Reider, 339 U. S., at
119 (applying Carmack to domestic rail transportation of goods,
even where the goods originated overseas, in order to avoid
“immuniz[ing] from the beneficial provisions of the [Carmack]
Amendment all shipments originating in a foreign country when
reshipped via the very transportation chain with which the
Amendment was most concerned”).
The Court’s suggestion that its interpretation
best comports with the goals of COGSA fares no better. The Court is
correct,
ante, at 8, that Congress has permitted parties
contractually to extend COGSA, which, by its own terms, applies
only to the period “from the time when the goods are loaded on to
the time when they are discharged from the ship.” §§1(e), 7, at
1178, 1180. But the Court ignores that COGSA specifically
contemplates that there may be “other law” that mandatorily governs
the inland leg, and makes clear that contractual extension of COGSA
does not trump this law. §12, at 1180 (“Nothing in [COGSA] shall be
construed as superseding … any … other law which would be
applicable in the absence of [COGSA], insofar as they relate to the
duties, responsibilities, and liabilities of the ship or carrier
prior to the time when the goods are loaded on or after the time
they are discharged from the ship”); see also Sturley, Freedom of
Contract and the Ironic Story of Section 7 of the Carriage of Goods
by Sea Act, 4 Benedict’s Mar. Bull. 201, 202 (2006) (“It is highly
ironic to suggest that section 7 was intended to facilitate the
extension of COGSA [inland]. The unambiguous history demonstrates
that section 7 was specifically designed to accomplish exactly the
opposite result”). Notably, when it wants to do so, Congress knows
how to specify that a contractual extension of COGSA supersedes
other law: COGSA elsewhere defines a limited circumstance—the
carriage of goods by sea between ports of the United States—in
which a contractual extension of COGSA has the force of law. §13,
at 1180 (providing that such bills of lading “shall be subjected
hereto as fully as if subject hereto by the express provisions of
[COGSA]”). That Congress did not make the same provision for inland
travel is powerful evidence that it meant for Carmack to remain the
default regime on land governing the relationship between an inland
rail carrier and an overseas carrier with which it directly
contracted.
The Court is also wrong that its
interpretation avoids the risk that two sets of rules will apply to
the same shipment at different times.[
Footnote 13]
Ante, at 17–18. Even under the
Court’s interpretation, two sets of rules may govern, because the
parties need not extend COGSA to the inland leg—they may agree on
any terms they choose to cover that transportation. §7, at 1180
(permitting the parties to “ente[r] into
any agreement …
as to the responsibility and liability of the carrier or the ship”
for the period before the goods are loaded on and after they are
discharged from the ship (emphasis added)); see also Train Wrecks
23 (“[C]arriers regularly include clauses in their bills of lading
to limit their liability [for inland travel] in ways that COGSA
prohibits”); 1 T. Schoenbaum, Admiralty and Maritime Law §10–4, p.
599–600 (4th ed. 2004) (describing typical non-COGSA liability
rules parties select for the inland leg). In these cases, for
example, “K” Line’s bills of lading include certain terms governing
the inland leg that differ from the terms governing the ocean
carriage. See,
e.g., App. 147 (providing different time
frames within which suit must be brought depending on whether the
actionable conduct “occurred during other than Water
Carriage”).
The Court relies heavily on
Kirby as
identifying the relevant policy consideration in these cases, but
it takes the wrong lesson from
Kirby. In that case, we
were concerned about displacing a single federal law, COGSA, with
50 varying state liability regimes.[
Footnote 14] 543 U. S., at 28–29. The rule the Court
establishes today creates even greater practical difficulties than
the regime we criticized in
Kirby by displacing Carmack
with as many liability rules as there are bills of lading. It would
even permit different liability rules to apply to different
lawsuits arising out of the same inland accident depending on where
each piece of cargo originated. Contrary to the Court’s view, then,
the value of uniformity articulated in
Kirby is best
promoted by application of Carmack to the obligations of the rail
carrier during the inland leg in these cases. Cf.
ante, at
7–8, 17–18.
Finally, while purporting to effectuate the
contractual choices of the parties in the international multimodal
shipping industry,
ante, at 17–20, the Court ignores the
realities of the industry’s operation. The industry has long been
accustomed to drafting bills of lading that encompass two legal
regimes, one governing ocean transportation and another governing
inland transportation, given mandatory law governing road and rail
carriage in most of Europe and in certain countries in Asia and
North Africa. See generally Convention on the Contract for the
International Carriage of Goods by Road, May 19, 1956, 399 U. N. T.
S. 189; Uniform Rules Concerning the Contract for International
Carriage of Goods by Rail, App. B to the Convention Concerning
International Carriage by Rail, May 9, 1980, 1397 U. N. T. S. 112,
as amended by Protocol for the Modification of the Convention
Concerning International Carriage of Rail of May 9, 1980, June 3,
1999. Indeed, “K” Line’s own bills of lading evidence this
practice, providing that, where an “applicable international
convention or national law” exists, “cannot be departed from,” and
“would have applied” if a separate contract for inland carriage had
been made between the merchant and the inland carrier, those laws
govern “K” Line’s liability. Brief for Respondents 53.
The recently signed United Nations Convention
on Contracts for the International Carriage of Goods Wholly or
Partly by Sea, also known as the “Rotterdam Rules,” provided an
opportunity for the international community to adopt rules for
multimodal shipments that would be uniform for both the ocean and
inland legs. See generally Train Wrecks 36–39. Instead, the final
version of the Rotterdam Rules retained the current system in which
the inland leg may be governed by a different legal regime than the
ocean leg. See United Nations Convention on Contracts for the
International Carriage of Goods Wholly or Partly by Sea, G. A. Res.
63/122, art. 26, A/RES/63/122, (Dec. 11, 2008). The Association of
American Railroads and the United States, among others, advocated
for this outcome.[
Footnote
15] See Proposal of the United States of America on the
Definition of “Maritime Performing Party,” U. N. Doc.
A/CN.9/WG.III/WP.84, at ¶¶1–2 (Feb. 28, 2007); Proposal by the
United States of America, U. N. Doc. A/CN.9/WG.III/WP.34, ¶7 (Aug.
7, 2003); Proposals by the International Road Transport Union
(IRU), U. N. Doc. A/CN.9/WG.III/WP.90, ¶1 (Mar. 27, 2007);
Preparation of a Draft Instrument on the Carriage of Goods [by
Sea], Compilation of Replies to a Questionnaire on Door-to-Door
Transport, U. N. Doc. A/CN.9/WG.III/WP.28, at 32–34, 43 (Jan. 31,
2003) (Comments on behalf of the Association of American Railroads
and the International Road Transport Union). Thus, the Court’s
mistaken interpretation not only upsets domestic law but also
disregards industry practice as evidenced by carefully calibrated
international negotiations.[
Footnote 16]
II
Because, in my view, Carmack
provides the default legal regime governing the relationship
between the rail carrier and the ocean carrier during the inland
leg of a multimodal shipment traveling on a through bill of lading,
I would reach the second question presented by these cases: whether
the parties validly contracted out of Carmack. I would hold that
where, as here, the STB has exempted rail carriers from Part A of
the ICA pursuant to its authority as set forth in 49 U. S. C.
§10502, such rail carriers may not use §10709 to opt out of Carmack
entirely. Instead, such rail carriers must first offer their
contractual counterparties Carmack-compliant terms for liability
and claims, as §10502(e) requires. Having reached that conclusion,
I would remand for consideration of whether the requirements of
§10502(e) were met in these cases. I set forth these views only
briefly, as the Court’s determination that Carmack does not apply
at all makes resolution of these questions moot.
A
In the Staggers Rail Act of 1980,
Pub. L. 96–448, 94 Stat. 1895, Congress set forth a national policy
of “allow[ing], to the maximum extent possible, competition and the
demand for services to establish reasonable rates for
transportation by rail” and “minimiz[ing] the need for Federal
regulatory control” of the railroad industry. §101,
id.,
at 1897. Consistent with these goals, 49 U. S. C. §§10502 and
10709 provide two options for contracting around the requirements
of the ICA.
Section 10502(a) provides that
when certain conditions are met, the Board “shall exempt,” “to the
maximum extent consistent with this part,” “a person, class of
persons, or a transaction or service” from either a particular
provision of Part A of the ICA or the entirety of that Part.
Section 10502(f) specifies that “[t]he Board may exercise its
authority under this section to exempt transportation that is
provided by a rail carrier as part of a continuous intermodal
movement.” Acting pursuant to this authority, the Board has broadly
exempted such transportation “from the requirements of [the ICA].”
49 CFR §1090.2 (2009). The authority to issue broad exemptions,
however, is not unlimited. Under 49 U. S. C. §10502(e), “[n]o
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 [Carmack],” although, at the same time, “[n]othing …
shall prevent rail carriers from offering alternative terms.”
Section 10502(g) further limits the Board from exempting rail
carriers from their obligations to comply with certain employee
protections under Part A of the ICA.
In turn, under §10709(a), “[o]ne or more rail
carriers providing transportation subject to the jurisdiction of
the Board … may enter into a contract with one or more purchasers
of rail services to provide specified services under specified
rates and conditions.” Having signed such a contract, a rail
carrier “shall have no duty in connection with services provided
under such contract other than those duties specified by the terms
of the contract.” §10709(b). Once such a contract is made, that
contract, “and transportation under such contract, shall not be
subject to this part, and may not be subsequently challenged before
the Board or in any court on the grounds that such contract
violates a provision of [Part A of the ICA].” §10709(c)(1).
According to Union Pacific, §10502(e) limits
only the Board’s exemption ability; it does not place any
affirmative obligation on rail carriers to offer Carmack-compliant
terms. Rail carriers, Union Pacific contends, may opt out of
Carmack entirely simply by entering into a contract under §10709,
thus escaping any duty imposed by Part A of the ICA. I disagree. I
am persuaded by the Government’s view that because the Board’s
order in 49 CFR §1090.2 exempted intermodal rail transportation
from all of Part A of the ICA, which includes 49 U. S. C.
§10709, “Union Pacific could not properly enter into a contract
under Section 10709 to relieve it of its obligations under Section
10502(e).” Brief for United States 31. Those obligations require “a
rail carrier providing exempt transportation [to] offer the shipper
the option of contractual terms for liability and claims consistent
with Carmack, presumably at a higher rate,” and they permit such a
rail carrier to “enter into a contract with different terms only if
the shipper does not select that option.”
Id., at 30.
Observing that the Board’s exemption order
relieves intermodal rail transportation from the “requirements” of
Part A, Union Pacific contends that §10709 is not a requirement but
a privilege and therefore is not included within the exemption. In
clarifying its order, however, the Board has described the
exemption as one from “regulation” under the ICA or “application”
of that Act. See,
e.g., Improvement of TOFC/COFC
Regulations, 3 I. C. C. 2d, at 869–870. Especially
in light of this clarification, there seems little reason to
ascribe significance to the Board’s use of the word “requirements,”
instead of the statutory term “provision,” in the exemption
order.
The Government aptly describes the policy
concerns that justify this reading of the interplay between §§10502
and 10709. Brief for United States 31–32. Because a rail carrier’s
counterparty to a §10709 contract can ordinarily require a rail
carrier to comply with common carriage rates and terms under Part A
(including Carmack), such counterparties possess considerable
bargaining power. But rail carriers the Board has exempted from
Part A under §10502 lack any obligation to comply with that Part.
If exempt carriers could escape Carmack’s obligations under §10709,
their counterparties would be at a significant disadvantage as
compared to counterparties to contracts with nonexempt carriers.
Such a disadvantage cannot be squared with Congress’ evident
intent, as expressed in §10502(e), to ensure that no carrier may be
automatically exempted from Carmack.
This interpretation of §§10502 and 10709
imposes no unfairness on exempt rail carriers. As the Court of
Appeals explained, “carriers providing exempt transportation gain
the benefits of deregulation, but lose the opportunity to contract
for preferable terms under §10709 without first offering Carmack
terms.” 557 F. 3d 985, 1002 (CA9 2009). Given rail carriers’
ability to charge higher rates for full Carmack coverage, see
New York, N. H. & H. R. Co. v.
Nothnagle,
346 U. S. 128,
135 (1953), and the likelihood that some counterparties will agree
to reject Carmack-compliant terms in favor of a lower price, such a
trade-off makes eminent sense.
B
Whether Union Pacific properly
contracted out of Carmack under §10502(e) requires a factual
determination better suited for resolution by the District Court in
the first instance. Accordingly, I would remand for consideration
of that issue. Cf. 557 F. 3d, at 1003. Union Pacific also
raises a related legal argument not decided by the courts below:
that the forum selection clause at issue in these cases is valid
because venue is not encompassed within the phrase “contractual
terms for liability and claims” in §10502(e). To the extent this
argument is not waived, it would also be properly considered on
remand.
* * *
In endorsing a strained reading
of the text, history, and purpose of Carmack, the Court is
evidently concerned with a perceived need to enforce the
COGSA-based contracts that the “sophisticated cargo owners” here
made with “K” Line.
Ante, at 18. But these cases do not
require the Court to interpret or examine the contract between the
cargo owners and “K” Line. The Court need consider only the legal
relationship between Union Pacific and “K” Line as its direct
contracting party. As to that relationship, it bears emphasizing
that industry actors on all sides are sophisticated and can easily
adapt to a regime in which Carmack provides the default rule
governing the rail carrier’s liability during the inland leg of a
multimodal shipment traveling on an international through bill of
lading. See,
e.g., Train Wrecks 40 (describing how ocean
and rail carriers have drafted their contracts to account for—and
permissibly escape—Carmack’s applicability); cf.
Kirby,
543 U. S., at 36 (recognizing that “our decision does no more than
provide a legal backdrop against which future bills of lading will
be negotiated”). In disregarding Congress’ commands in both Carmack
and COGSA and in discounting the practical realities reflected in
the Rotterdam Rules and other international conventions governing
the carriage of goods, the Court ignores what we acknowledged in
Kirby: “It is not … this Court’s task to structure the
international shipping industry.”
Ibid. I respectfully
dissent.
Footnote 1
Because I do not think that “K” Line conducts
rail operations at all, I would not reach the question whether “K”
Line holds itself out as offering rail common carriage. Compare
Brief for Respondents 84–85, with Reply Brief for Petitioners in
No. 08–1553, pp. 7–10.
Footnote 2
The additional cases the United States cites
for this proposition suffer from this same flaw. See Brief for
United States as
Amicus Curiae 27–28; Tr. of Oral Arg.
20.
Footnote 3
Carmack’s venue provision refers to the
“receiving rail carrier” as the “originating rail carrier” and
states that the proper venue for a lawsuit against this carrier is
“the judicial district in which the point of origin is located.”
§11706(d)(2)(A)(i). Especially because the focus of Carmack is on
transportation by rail, the phrase “point of origin” in this
context is best read as referring to the point of origin of the
“originating rail carrier[’s]” transportation, not the point of
origin of the shipment.
Footnote 4
The majority suggests that respondents
“conceded” at oral argument that Union Pacific was not a receiving
carrier but only a delivering carrier.
Ante, at 13. Of
course, this Court is not bound by a party’s concession in our
interpretation of a statute. See,
e.g.,
Massachusetts v.
United States,
333 U. S. 611, 624–625
(1948).
Footnote 5
Contrary to Union Pacific’s suggestion, Brief
for Petitioner in 08–1554, p. 33, its obligations did not originate
in China. “K” Line’s bills of lading, issued in China, “entitled
[“K” Line] to sub-contract on any terms … all duties whatsoever
undertaken,” App. 145, and therefore did not create any obligation
on the part of Union Pacific in China. In turn, the agreement
between “K” Line and Union Pacific—which “K” Line made “by and
through its duly authorized agent and representative in the United
States, ‘K’ Line AMERICA, Inc… ., a Michigan corporation,”
id., at 120—was a multiyear contract committing “K” Line
to “tender to [Union Pacific] not less than 95% of its Container
traffic,”
ibid., but did not actually commit “K” Line to
deliver any particular piece of cargo to Union Pacific. As “K” Line
explains, then, “the Agreement [with Union Pacific] was a
‘requirements’ contract, which did not become effective as to any
particular container until ‘K’ Line delivered it” to Union Pacific
in California. Brief for Petitioners in No. 08–1553, p. 12.
Footnote 6
The ICA’s jurisdictional provision uses the
term “foreign country” to describe the Board’s jurisdiction,
§10501(a)(2)(F), while Carmack uses the term “adjacent foreign
country” to describe the liability of connecting carriers,
§11706(a)(3). I find the difference between these terms to be of no
moment. Section 10501 describes the Board’s jurisdiction over rail
carriers, and it is impossible to have connecting rail lines
between the United States and a foreign country that is not
adjacent. This reading is confirmed by §10501(a)(2)(E), which
refers to the Board’s jurisdiction over transportation by railroad
“in the United States between a place in … the United States and
another place in the United States and a foreign country.” No rail
transportation between two places in the United States that is
interrupted by rail transportation through a foreign country could
be through a foreign country that is anything but adjacent.
Footnote 7
This situation is consistent with historical
agreements between the ICC and its Canadian counterpart. See
infra, at 14–15.
Footnote 8
The majority seems to find it troubling that
my view “would require two bills of lading.”
Ante, at 13.
But international shipments frequently contain more than one bill
of lading. See,
e.g., Kirby, 543 U. S., at 30–33
(interpreting the parties’ obligations under two bills of lading,
one between a shipper and a freight forwarding company to which the
shipper originally delivered its goods, and one between the freight
forwarding company and the ocean carrier to which the freight
forwarder delivered the shipper’s goods). The majority also
suggests that an original shipper might not be able to sue Union
Pacific under the terms of Union Pacific’s bill with “K” Line.
Ante, at 13. In
Kirby, however, we took as a
given that the shipper could sue the inland rail carrier, even
though the shipper was not a party to the rail carrier’s bill of
lading with an intermediary. Indeed, we held that in an action
against the rail carrier, the shipper was bound to the terms of the
bill of lading governing the rail carrier’s transportation, even
though those terms were less generous than the terms in the
shipper’s through bill of lading with the freight forwarder with
which it originally contracted. 543 U. S., at 33–34. We observed
that the shipper could sue the freight forwarder to recover the
difference.
Id., at 35. In light of this analysis, I see
no reason to doubt a shipper’s ability to sue an American rail
carrier under Carmack, even though its bill of lading with an
overseas ocean carrier is not governed by Carmack.
Footnote 9
The pre-1978 version of Carmack referred
generally to a “carrier,” rather than a “rail carrier.” It was not
until 1995 that Congress distinguished between Carmack’s
applicability to rail carriers, §11706, and motor carriers, freight
forwarders, and domestic water carriers, §14706. Pub. L. No.
104–88, §102(a), 109 Stat. 803, 847–849, 907–910.
Footnote 10
The Court ignores a further reason to believe
that prior to 1978, Carmack could be understood to apply to imports
as well as exports. Even assuming (contrary to my view) that the
relevant language in Carmack governing any international commercial
exchange was the phrase “from any point in the United States to a
point in an adjacent foreign country,” the seemingly
uni-directional “from … to” could reasonably have been interpreted
as also encompassing “to … from” in light of our decision in
Galveston, H. & S. A. R. Co. v.
Woodbury,
254 U. S. 357
(1920). In that case, this Court interpreted similar “from … to”
language in the jurisdictional section of the ICA as conferring
jurisdiction on the ICC over all transportation
between
such countries.
Id., at 359–360 (construing
“ ‘transportation … from any place in the United States to an
adjacent foreign country’ ” in former 49 U. S. C. §1 to
include “transportation …
from that country to the United
States”). Given the “presumption that a given term is used to mean
the same thing throughout a statute,”
Brown v.
Gardner,
513 U. S. 115, 118
(1994) (citing
Atlantic Cleaners & Dyers, Inc. v.
United States,
286 U. S. 427 (1932)),
our construction of “from … to” in the ICA’s jurisdictional
provision could reasonably have been read to sweep imports within
the scope of Carmack. I would not, however, read “from … to” in the
current version of §11706(a)(3) to encompass “to … from,” as
Congress specifically amended the similar language in the
jurisdictional provision at §10501(a)(2) to “between” while leaving
intact the “to … from” in Carmack, against the background of
Woodbury.
Footnote 11
The United States, as
amicus in
support of “K” Line and Union Pacific, makes an effort to find such
limitations in the current statutory text. See Brief for United
States 21; see also Reply Brief for Petitioner in No. 08–1554, p.
10 (agreeing with the United States’ interpretation). This argument
is unpersuasive. The United States observes that §11706(a)(3)
describes the liability of “another rail carrier over whose line or
route the property is transported in the United States or
from a place in the United States
to a place in
an
adjacent foreign country when transported
under a through bill of lading.” (Emphasis added.) According to the
United States, “[t]hat textual limitation, when read in light of
Carmack’s purpose, reflects Congress’s continued intent to restrict
Carmack to the carriage of goods between places in the United
States and for export to an adjacent foreign country.” Brief for
United States 21. As I have already explained, however, once a
domestic rail carrier first receives property for transportation
within the United States, regardless of where the property itself
originated, Carmack applies.
Supra, at 3–6. Section
11706(a)(3) simply ensures that when a connecting carrier that
neither received the property in the United States nor delivered it
in the United States transports the property from the United States
to either Canada or Mexico, that connecting carrier remains subject
to Carmack liability during the part of the transportation that is
in the United States. Further, as I explain below, see
infra, at 18–20, Carmack’s purpose would be better
effectuated by applying its provisions inland as the default rule.
In any event, the “adjacent foreign country” provision in
§11706(a)(3) has no bearing on the rail transportation provided in
these cases by Union Pacific as “receiving rail carrier,”
§11706(a), from California to four locations in the American
midwest. To this transportation, Carmack plainly applies.
Footnote 12
A separate version of Carmack applies to
motor and other nonrail carriers within the United States. See
supra, at 15, n. 8.
Footnote 13
Nor would my interpretation of the statute
necessarily require that two different regimes apply to each
shipment, given the parties’ ability to contract around Carmack as
long as they follow appropriate procedures,
infra, at
25–27, and, if they so choose, select COGSA terms.
Footnote 14
Kirby did not address the question
of Carmack’s applicability to the inland leg of a multimodal
international shipment traveling on a through bill of lading
because that question was not presented. Brief for United States as
Amicus Curiae in
Norfolk Southern R. Co. v.
Kirby, O. T. 2004, No. 02–1028, pp. 11–12;
ante, at 2.
Footnote 15
Petitioner Union Pacific is a leading member
of the American Association of Railroads. Train Wrecks 37, n.
214.
Footnote 16
The Court’s observation that nothing in the
Rotterdam Rules “requires every country to mandate a different
regime to govern the inland rail leg of an international through
shipment” is irrelevant.
Ante, at 20. The Rotterdam Rules
demonstrate simply that it is common practice to have different
regimes for inland and ocean transportation, so giving full effect
to Carmack as the default law governing the relationship between
“K” Line and Union Pacific can hardly be said to “undermine COGSA
and international, container-based multimodal transport,”
ante, at 17.
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