[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
AUGUST 16, 2005
No. 04-14410 THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 02-01024-CV-ORL-22KRS
SIEMENS POWER TRANSMISSION & DISTRIBUTION, INC.,
Plaintiff-Appellant,
versus
NORFOLK SOUTHERN RAILWAY COMPANY,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(August 16, 2005)
Before EDMONDSON, Chief Judge, BIRCH and COX, Circuit Judges.
BIRCH, Circuit Judge:
This appeal presents two issues of first impression in our circuit: (1)
whether a shipper’s timely compliance with the minimum claim filing
requirements in 49 C.F.R. § 1005.2(b), a regulation promulgated by the Interstate
Commerce Commission (“ICC”), is a prerequisite to filing suit against a carrier
under the Carmack Amendment, 49 U.S.C. § 14706;1 and if so, (2) what standard
should be applied to determine whether a shipper has adhered to the regulation’s
requirement that a claim contain “a specified or determinable” amount of damages,
49 C.F.R. § 1005.2(b). We hold that a shipper must file with the carrier a notice of
a claim that satisfies § 1005.2(b) before filing suit under the Carmack Amendment.
We also conclude, however, that § 1005.2(b) should be interpreted liberally in light
of its purpose, which is to provide the carrier adequate notice of the claim so that it
can conduct an independent investigation of the damage, not to relieve the carrier
of liability.
Applying this standard here, we conclude that the notice of claim for damage
caused to an electrical transformer shipped by rail, submitted by Siemens Power
Transmission and Distribution, Inc. (“Siemens”), to Norfolk Southern Railroad
(“NSR”), satisfies the minimum claim requirements of § 1005.2(b) as a matter of
1
Effective 1 January 1996, Congress abolished the ICC and transferred most of its
functions to the newly established Surface Transportation Board, an agency within the
Department of Transportation. See ICC Termination Act of 1995, Pub. L. No. 104-88 §§ 1(a),
101, 701, 702, 109 Stat. 803 (1995). Because the regulations at issue in this case were
promulgated while the ICC was still in existence, however, we refer to them throughout as the
“ICC Regulations.”
2
law. We thus REVERSE and REMAND for proceedings consistent with this
opinion.
I. BACKGROUND
In the Spring of 1999, Siemens entered into an agreement with Florida
Power and Light Company (“FP&L”) for the sale of an electrical transformer. As
part of the agreement, Siemens agreed to arrange and pay for the transportation and
delivery of the transformer to FP&L’s facility in Florida.
In order to carry out this obligation, Siemens retained a transportation
consultant, Tranco, Inc. (“Tranco”), to arrange for shipment of the transformer
from Norfolk, Virginia, to Florida. Edward Henry, Tranco’s president, acted as
Siemens’s agent for purposes of communicating with rail carriers. In March 1999,
Henry approached NSR about possibly shipping the transformer to Florida by rail.
Additionally, Siemens installed an electronic impact recorder to record any
excessive shocks that might occur during transportation and cause damage to the
transformer.
Shipped from Germany by ocean vessel, the transformer arrived in Norfolk,
Virginia, on 15 January 2000. On 17 January 2000, Henry issued NSR a Straight
Bill of Lading (“the Bill of Lading”). The Bill of Lading incorporated by reference
3
the terms of the Uniform Straight Bill of Lading (“USBL”).2 Pursuant to the Bill
of Lading, NSR undertook the carriage of the transformer to FP&L’s facility in
Florida. The transformer arrived at FP&L’s facility on 28 January 2000.3
After the transformer arrived, the electronic impact recorder that had been
installed in the transformer was retrieved and read. The recorder indicated that the
transformer had been exposed to forces in excess of Siemens’s established
thresholds for safe carriage of the device. Additional tests revealed that the
transformer was not operating properly and needed repair. According to Siemens,
all of the forces that caused damage to the transformer had occurred while NSR
had custody and control over the device.4
On 1 March 2000, Henry sent NSR a letter indicating Siemens’s intent to
claim the costs of the repair of the transformer:
2
The Uniform Straight Bill of Lading provides, in relevant part:
As a condition precedent to recovery, claims must be filed in writing with the . . .
carrier . . . within nine months after delivery of the property . . . . Where claims
are not filed . . . in accordance with the foregoing provisions, no carrier hereunder
shall be liable, and such claims will not be paid.
R2-37, Ex. O § 2(b).
3
NSR made arrangements with Florida East Coast Railroad (“FECR”) to complete the
last portion of the delivery. The transformer was interchanged to the FECR in Jacksonville,
Florida.
4
NSR maintains that the damaging “shocks were recorded at different times during the
transportation of the transformer, both before, during, and after the time NSR was in possession
of the transformer.” R2-37 ¶ 11 at 3.
4
Please accept this letter as our intent to file a claim
for damage to an electrical transformer moving from the
Port of Norfolk, VA to Titusville, FL on QTTX-131117,
1/21/00.
The computerized impact recorder showed
longitudinal impacts on 1/21/00 at 4.85, 5.95 and 4.37
G’s. Time approximately 4:00 P.M. The load was in a
train moving from Crew, VA to Linwood, NC.
Upon an interior inspection damage was noted and
Siemens technical engineers are evaluating the damage.
At this time we cannot state a cost for repairs but
will send you a report when available. Siemens
estimated repairs at $25,000,00.
R2-51, Ex. 1. On 2 March 2000, Henry sent a fax to NSR “regarding [its] possible
claim” and invited NSR to send a representative to an inspection of the transformer
conducted by a Siemens team. Id., Ex. 3. According to Siemens, NSR neither
responded to either communication nor sent a representative to the inspection.
After inspecting the transformer in Florida, Siemens decided to ship the
transformer back to Germany for repairs. By letter dated 5 April 2000, Henry
informed NSR that “[a]t this time, Siemens is estimating a total cost of $700,000.00
- $800,000.00 and that is the amount of our claim. This covers transportation back
to Germany, repairs, and return to FP&L at Cape Canaveral, FL.” Id., Ex. 4. Henry
also stated that “Mr. Costa, Siemens insurance company’s representative, will be
inspecting the unit at Cape Canaveral on Monday, April 10, 2000. We feel [NSR]
should have their representative at this inspection to protect your interests.” Id.
5
According to Siemens, NSR sent a transformer consultant to conduct an
investigation of the transformer.
On 18 April 2000, Henry wrote NSR and stated that it planned to ship the
transformer to Germany “[u]nless [it] hear[d] differently from [NSR] within 72
hours.” R2-37, Ex. L. After the transformer arrived in Germany, Henry told NSR
that the transformer would be “opened for inspection” on 14 June 2000 “so if
[NSR] wanted [its inspector] at this inspection he could make plans to attend.” R2-
37, Ex. M.
In September 2002, Siemens initiated an action against NSR in the United
States District Court for the Middle District of Florida and sought $791,136 for
damages to the transformer. R1-1 ¶ 11, at 3. Siemens alleged that it had timely
filed a proper claim for damages with NSR prior to bringing suit. At the close of
discovery, NSR moved for summary judgment on the ground that Siemens had not
satisfied the condition precedent for bringing suit because it had not filed a valid
claim with NSR within nine months of the damage to the transformer.
Concluding that Siemens’s suit was barred, the district court granted NSR’s
motion. The district court stated that the ICC claims regulations5 provide the
5
In concluding that Siemens’s notice of claim was insufficient, the district court relied on
two paragraphs in § 1005.2: § 1005.2(b), which provides “[m]inimum filing requirements,” and
§ 1005.2(d), which governs “[c]laims filed for uncertain amounts.” As discussed subsequently,
we believe that § 1005.2(d)’s prohibition of voluntary payment by carriers of claims for
6
applicable minimum standards for a written notice of a freight claim. Noting that,
in Farmland Industries, Inc. v. Seaboard Coast Line Railroad Co., 733 F.2d 1509,
1510 (11th Cir. 1984) (per curiam), we had agreed that a main function of the notice
requirement “is to allow the carrier to exactly compute its losses,” the district court
concluded that the Eleventh Circuit would interpret the ICC regulations strictly.
The district court then determined that Siemens’s letters did not satisfy the ICC
regulations when strictly interpreted because they failed to make a claim for a
specified or determinable amount of damages. Additionally, the district court ruled
that Siemens’s claim did not fall within either of the two exceptions that courts have
recognized as excusing compliance with the ICC regulations. Siemens filed a
timely notice of appeal.
On appeal, Siemens urges that the district court committed error in
concluding that its letters to NSR did not constitute a valid claim such that it may
bring suit in district court. Siemens advances two primary arguments. First,
Siemens contends that the district court relied incorrectly upon 49 C.F.R. § 1005 in
barring its suit for cargo damage. Siemens argues that it should not be bound by the
ICC’s standard because it was not explicitly included in the Bill of Lading, the
USBL, the Carmack Amendment, or NSR’s Conditions of Carriage, and because
uncertain amounts does not apply in this case.
7
the regulation applies only to claims that are voluntarily resolved by the carrier, as
opposed to claims that are litigated. Siemens avers that we should instead assess
the sufficiency of its claim under the case law in existence prior to the issuance of
49 C.F.R. § 1005. In response, NSR contends that 49 C.F.R. § 1005 should apply
here because it was intended to supercede the case law on which Siemens urges we
rely.
Second, Siemens argues that if the regulations do apply, the district court
erred in adopting the “strict compliance” standard for assessing whether a claim
satisfies the minimum requirements set forth in 49 C.F.R. § 1005.2(b). Siemens
contends that the “strict compliance” cases decided by other circuits and cited by
the district court are relevant only where the claim at issue fails to include an
amount of damages in any form. Siemens argues that we must construe the
regulation liberally in favor of the shipper because (1) doing so will serve the
purpose of the regulation, which is to afford the carrier sufficient notice so that it
can decide whether to investigate the claim; and (2) taking the opposite approach
would derogate Siemens’s common law rights by preventing it from recovering
damages. Citing Farmland Industries, 733 F.2d at 1510, NSR responds that the
purpose of a written claim is to allow a carrier to compute its losses exactly. NSR
argues that this purpose cannot be achieved unless we require “actual compliance”
8
with 49 C.F.R. § 1005 by mandating that claims state a precise damage amount.
NSR also argues that our adoption of any standard less rigorous than “actual
compliance” will allow shippers to bypass the mandated uniform claims process
and immediately seek a resolution in district court.6
II. DISCUSSION
We review a district court’s grant of summary judgment de novo, and “we
view the evidence in the light most favorable to the non-moving party.” Wilson v.
B/E Aerospace, Inc., 376 F.3d 1079, 1085 (11th Cir. 2004). Summary judgment is
appropriate “if the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, 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). With this standard in mind, we review each
of Siemens’s arguments.
A. Application of the ICC Regulations
The Carmack Amendment to the Interstate Commerce Act imposes liability
on common carriers for the actual loss of or damage to shipments in interstate
6
Siemens also contends that it should prevail even if we apply a “strict compliance”
standard because (1) its claim satisfies § 1005.2 even if strictly applied; or (2) Siemens was
excused from compliance with § 1005.2 because, through no fault of its own, it could not
determine the exact amount of damages until more than 20 months after the delivery of the
transformer. Because we reverse the district court’s opinion on other grounds pressed by
Siemens, we need not address these arguments.
9
commerce. 49 U.S.C. § 14706(a)(1). Section (e) of the Carmack Amendment
provides that “[a] carrier may not provide by rule, contract, or otherwise, a period of
less than 9 months for filing a claim against it under this section and a period of less
than 2 years for bringing a civil action against it under this section.” 49 U.S.C. §
14706(e). Consistent with this section, the USBL requires that the shipper must
provide the carrier with a notice of claim for damages “within nine months” of
delivery of the cargo“[a]s a condition precedent to recovery.” R1-37, Ex. O § 2(b).
The standard for evaluating claims submitted pursuant to the Carmack
Amendment initially was set forth by the Supreme Court in Georgia, Florida and
Alabama Railway Co. v. Blish Milling Co., 241 U.S. 190, 36 S. Ct. 541 (1916).7 In
that case, the Court stated that the purpose of a requirement in a bill of lading that
claims for damages be presented in writing within a certain time after delivery was
not to allow the carrier to avoid liability, but to “secure reasonable notice” for the
carrier. Id. at 198, 36 S. Ct. at 545. Accordingly, the Court held that such
requirements “d[id] not require documents in a particular form,” so long as their
7
In 1915, the Carmack Amendment was amended to allow a carrier to stipulate that a
shipper must file a claim within at least four months of the damages. See An Act To amend an
Act entitled “An Act to amend an Act entitled ‘An Act to regulate commerce,’ approved
February fourth, eighteen hundred and eighty-seven, and all Acts amendatory thereof, and to
enlarge the powers of the Interstate Commerce Commission,” approved June twenty-ninth,
nineteenth hundred and six, 38 Stat. 1196, 1197 (1915). In 1930, the proviso was amended to
extend the time for filing claims to at least nine months. See An Act To amend paragraph (11)
of section 20 of the Interstate Commerce Act, as amended, 46 Stat. 251, 252 (1930).
10
purpose was served. Id. The Court also stated that the requirements “[were]
addressed to a practical exigency and . . . [were] to be construed in a practical way.”
Id. One year later, in St. Louis, Iron Mountain, & Southern Railway Co. v.
Starbird, the Court again discussed the purpose of such requirements. The Court
noted that they served to “put[] in permanent form the evidence of an intention to
claim damages, . . . call the attention of the carrier to the condition of the freight,
and enable it to make such investigation as the facts of the case require.” 243 U.S.
592, 605, 37 S. Ct. 462, 468 (1917). Courts applying the Blish Milling standard
assessed liberally written claims by shippers and generally held that the claims were
sufficient so long as they gave the carrier “reasonable notice” of the claim. See,
e.g., Wisconsin Packing Co., v. Indiana Refrigerator Lines, Inc., 618 F.2d 441, 444
(7th Cir. 1980); Thompson v. James G. McCarrick Co., 205 F.2d 897, 901 (5th Cir.
1953) (“There is no requirement that a written instrument be submitted in detail or
that the cause and exact amount of damage be stated thereon in order to constitute a
valid claim.”).
In 1972, the ICC responded to complaints of various abuses rampant in the
settlement of claims by shippers and carriers and promulgated regulations entitled
“PRINCIPLES AND PRACTICES FOR THE INVESTIGATION AND
VOLUNTARY DISPOSITION OF LOSS AND DAMAGE CLAIMS AND
11
PROCESSING SALVAGE.” 49 C.F.R. §§ 1005.2; see Ex. Parte No. 263: Rules,
Regulations, and Practices of Regulated Carriers with Respect to the Processing of
Loss and Damage Claims, 340 I.C.C. 515, 547-48 (1972) [hereinafter Ex Parte No.
263]. In creating the regulations, the ICC sought to combat carriers’ attempts to
discriminate among shippers in their payment of claims, to encourage prompt
investigation and voluntary settlement, and to facilitate more “harmonious
relationships” between carriers and claimants. Id. at 553.
Among other things, the ICC regulations provide “[m]inimum filing
requirements” for a written notice of claim. Id. § 1005.2(b). According to the
regulations, a written or electronic communication complies sufficiently “with the
provisions for filing claims embraced in the bill of lading or other contract of
carriage” if it contains “(1) . . . facts sufficient to identify the baggage or shipment
(or shipments) of property, (2) [an assertion of] . . . liability for alleged loss,
damage, injury, or delay, and (3) . . . [a] claim for the payment of a specified or
determinable amount of money.” Id. Additionally, the regulations dictate that
when a claim is filed for an “uncertain amount, such as ‘$100 more or less,’ the
carrier . . . shall determine the condition of the baggage or shipment involved at the
time of delivery by it, if it was delivered, and shall ascertain as nearly as possible
the extent, if any, of the loss or damage for which it may be responsible.” Id. §
12
1005.2(d). The carrier, however, “shall not . . . voluntarily pay a claim under such
circumstances unless and until” the shipper submits a claim containing “a specified
or determinable amount of money.” Id.
We have not yet expressly held that the ICC’s minimum claim requirements
apply to litigated claims, as opposed to claims that are resolved voluntarily, but
implicitly, we seem to have assumed as much. In Konst v. Florida East Coast
Railway Co., we held that a claimant could invoke the presumption that a railroad
carrier had received a properly mailed claim so that the claim could be considered
“filed” within the meaning of 49 C.F.R. § 1005.2. 71 F.3d 850, 851-52, 855 (11th
Cir. 1996). In so holding, we did not explicitly address whether § 1005 applies to
contested as well as uncontested claims, but we applied the regulation without
discussion and described § 1005.2 as “the federal regulations governing the
minimum requirements for making a damages claim against a common carrier.” Id.
at 853 & n.6.
Our assumption in Konst is supported by all but one circuit to have addressed
the issue. The First, Second, and Ninth Circuits have held that the regulations apply
to all claims, whether contested or voluntarily settled. See Nedlloyd Lines, B.V.
Corp., v. Harris Transport Co., 922 F.2d 905, 908 (1st Cir. 1991); Pathway Bellows,
Inc. v. Blanchette, 630 F.2d 900, 904 (2d Cir. 1980); Insurance Co. of N. Am. v. G.
13
I. Trucking Co., 1 F.3d 903, 906 (9th Cir. 1993). The Fifth and Sixth Circuits
applied the ICC regulations to litigated claims without explicitly ruling on the issue.
See Salzstein v. Bekins Van Lines, Inc., 993 F.2d 1187, 1188 (5th Cir. 1993);
Trepel v. Roadway Express, Inc., 194 F.3d 708, 711-12 (6th Cir. 1999). The
Seventh Circuit, in contrast, has concluded that the ICC regulations apply only to
uncontested claims. Wisconsin Packing, 618 F.2d at 445. Reasoning that §
1005.2(d) prohibits carriers from voluntarily paying claims for uncertain amounts,
that the legislative proposals accompanying the ICC regulations differentiate
throughout between “‘disputed claims’” and “‘claims determinations,’” id. at 445,
and that “the purpose of the regulation was to make claim settlement more
expeditious by providing procedures for the voluntary disposition of claims by
carriers,” id., the Seventh Circuit held that the sufficiency of a shipper's claim
should be assessed by the old Blish Milling “reasonable notice” standard, id.
After reviewing this precedent from other circuits and the contentions of the
parties, we agree with the First, Second, Fifth, Sixth, and Ninth Circuits that at least
the minimum claim requirements contained in section 1005.2(b) apply to contested
as well as voluntarily resolved claims.8 As stated by the First Circuit, the
8
We reject the district court’s conclusion that § 1005.2(d) operates here to bar Siemens’s
claim. Paragraph (d) prohibits the voluntary payment of claims for uncertain amounts by
carriers “unless and until a formal claim in writing for a specified or determinable amount of
money [is] filed in accordance with the provisions of paragraph (b).” 49 C.F.R. § 1005.2(d).
14
regulations’ section discussing the “[a]pplicability of the regulations,” 49 C.F.R. §
1005.1, does not distinguish between contested and uncontested claims. See
Nedlloyd Lines, 922 F.2d at 908. Instead, it states that the regulations “shall govern
the processing of claims for loss, damage, injury, or delay to property transported . .
. in interstate or foreign commerce.” 49 C.F.R. § 1005.1. Similarly, in the
extensive rulemaking accompanying the regulations, the ICC clearly indicated that
its regulations should be applied broadly:
We are persuaded by the record in this proceeding that our regulations
should embrace the full range of matters relating to the filing of claims,
including a prescription of minimum filing requirements and a
consideration of documents that do not constitute claims, and claims
for uncertain amounts . . . .
....
Thus, the rules set fort in section 1005.1 and 1005.2 . . . first establish
their overall applicability and then set out the manner and form in
which loss and damage claims must be filed by claimants in order to
accomplish the improvements shown to be required in the public
interest in this area.
Ex Parte 263, 340 I.C.C. at 555-56. Finally, as noted in Konst, the regulations
require carriers to fulfill certain obligations once a claim is received. See Konst, 71
F.3d at 853. Applying the regulations to all claims gives the carriers standards by
Paragraph (d) does not create a distinct standard, but rather specifies § 1005.2(b)’s claim
requirements should be met before carriers voluntarily pay claims that they have investigated.
Because this case does not involve a carrier’s voluntary payment of a claim, § 1005.2(d) is
inapplicable.
15
which to recognize valid claims when they receive them. See Pathway Bellows,
Inc., 630 F.2d at 904.
We find unpersuasive Siemens’s argument that it should not be bound by the
regulations’ minimum claim requirements because they were not incorporated into
the Carmack Amendment, the Bill of Lading, the USBL, or NSR's Conditions of
Carriage. As the district court noted, “[i]t is well settled that ‘[t]he laws in force at
the time of the making of a contract enter into and form a part of the contract as if
they were expressly incorporated into it.’” National Distrib. Co. v. James B. Beam
Distilling Co., 845 F.2d 307, 309 (11th Cir. 1988) (citation omitted and first
alteration added). The regulations at issue here came into effect long before
Siemens agreed to a Bill of Lading from NSR. Further, as we have explained, §
1005.2(b) applies to contested claims like Siemens’s. For these reasons, we
conclude that the question of whether Siemens’s letters constituted a valid claim to
NSR should be determined according to § 1005.2(b)’s minimum claim
requirements.
B. Assessing Compliance with the ICC Regulations
Having concluded that the minimum claim requirements in 49 C.F.R. §
1005.2(b) govern Siemens’s claim, we must now determine whether the regulation
requires that a written claim specify a precise dollar amount. Although, in
16
Farmland Industries, we agreed with the district court that “[o]ne of the principal
functions of the notice requirement in the bill of lading is to allow the carrier to
exactly compute its losses,” 733 F.2d at 1510, we have never expressly ruled on this
issue.
Federal “‘[s]tatutes which invade the common law . . . are to be read with a
presumption favoring the retention of long-established and familiar principles,
except when a statutory purpose to the contrary is evident.’” United States v.
Texas, 507 U.S. 529, 534, 113 S. Ct. 1631, 1634 (1993) (citation omitted). As
explained previously, longstanding federal common law established prior to the
promulgation of the ICC regulations provided that the sufficiency of claims should
be judged “in a practical way” in light of the claims’ purpose: securing reasonable
notice for the carrier so that it can conduct an independent investigation. See Blish
Milling Co., 241 U.S. at 198, 36 S. Ct. at 545; St. Louis, Iron Mountain, 243 U.S. at
605, 37 S. Ct. at 468.
We find no evidence that the ICC intended to serve a purpose radically
different from this one in promulgating the regulations. See Pathway Bellows, 630
F.2d at 903 n.5. To the contrary, portions of the regulations and their
accompanying source material indicate that the ICC meant to encourage carriers to
investigate claims independently. See 49 C.F.R. 1005.4(a); Ex Parte No. 263, 340
17
I.C.C. at 560. Further, as the Second Circuit reasoned, the ICC regulations do not
seem aimed at affording carriers an unfair opportunity to escape liability for
damages that occur during shipping. The minimum claim requirements “appear to
call for no more information than one ordinarily would expect a claim for damages
to contain, and compliance with these requirements is neither onerous nor
unreasonable.” Pathway Bellows, 630 F.2d at 903 n.5. Thus, because the purpose
of the regulations is consistent with longstanding common law, we interpret the
minimum claim requirements with a presumption in favor of the Blish Milling
common law principles. See United States v. Texas, 507 U.S. at 534, 113 S. Ct. at
1634.
Read literally, as by the district court, § 1005.2(b) could be construed to
invalidate written claims that provide an estimated damages range, with minimum
and maximum values, on the grounds that such a range is not “specified or
determinable,” 49 C.F.R. § 1005.2(b). See, e.g., Delphax Sys. v. Mayflower
Transit, Inc., 54 F. Supp. 2d. 60, 64 (D. Mass. 1999) (holding that a range of
$40,000 to $50,000 is not “specified or determinable”). Such a narrow
construction, however, undercuts the regulation’s purpose, which, as we have
explained, is “not to permit the carrier to escape liability but to insure that the
carrier has enough information to begin processing the claim.” Trepel, 194 F.3d at
18
713. “‘While it is true that the language of a statute should be interpreted according
to its ordinary, contemporary and common meaning, this plain-meaning rule should
not be applied to produce a result which is actually inconsistent with the policies
underlying the statute.’” Bragg v. Bill Heard Chevrolet, Inc., 374 F.3d 1060, 1068
(11th Cir. 2004) (citation omitted) (noting this rule and applying it to the
interpretation of a regulation). We thus reject the district court’s construction.
Keeping in mind the purpose of the ICC regulations and the Supreme Court’s
admonishment that we should interpret statutes and regulations in light of their
common-law backdrop, we construe 49 C.F.R. § 1005.2(b) liberally and conclude
that Siemens’s notice of claim, which specified a damages range of $700,000 to
$800,000, satisfies the minimum claim requirements. Siemens’s letters constituted
a written notice of damage with a clearly communicated intent to hold NSR liable.
Additionally, the letters indicated that Siemens’s claim would be significant and
gave NSR more than enough information to begin an investigation, which NSR in
fact did in sending its expert to inspect the transformer in Florida. Finally, the
range specified by Siemens included a minimum and maximum amount, unlike
“$100 more or less,” 49 C.F.R. § 1005.2(d), and the actual amount of damages it
claimed in court fell within that range.
We find unpersuasive all of NSR’s arguments to the contrary. First, we reject
19
NSR’s contention that the majority of circuit courts to have addressed the issue
have required “actual compliance” with the “specified and determinable amount”
provision so as to bar Siemens’s claim here, see Appellee’s Brief at 13, 23. In all of
the circuit court cases that NSR cites, our sister circuits have addressed situations in
which the shipper provided the carrier with no damage amount at all. In Salzstein,
the Fifth Circuit held that a notice which did not specify any damage amount did
not suffice. 993 F.2d at 1189, 1190-91. In Nedlloyd Lines, the First Circuit ruled
that letters that “in [no] way specified the amount of money claimed” fell short of
49 C.F.R. § 1005(b)’s requirements. 922 F.2d at 908. Similarly, in Pathway
Bellows, the Second Circuit deemed insufficient a claim that did not include an
amount of damages or assert that the carrier was liable. 630 F.2d at 901, 903, 904
(assessing a letter which stated “[a]lthough we have contacted your company
earlier, the purpose of this letter is to state, in writing, that we are in the process of
filing a claim for freight damage of a shipment”). Accordingly, these cases do not
stand for the proposition that the shipper must strictly comply with the regulation
by providing a single, certain damage amount.
On the other hand, two circuits have held that an estimate of damage was
sufficient in part because the carriers had begun to investigate the claims. In
Insurance Company of North America, the Ninth Circuit adopted a “substantial
20
compliance” standard and held that a written notice of damage which “clearly
communicated intent to hold [the carrier] liable” was sufficient under the
regulations, even though it only estimated the amount of damages. 1 F.3d at 904,
907 & n.3. In Trepel, the Sixth Circuit concluded that the purpose of the claim
regulation is to “insure that the carrier has enough information to begin processing
the claim” and found that a claim for an amount of damage “‘to be determined but
not to exceed $150,000.00 ’” substantially complied. 194 F.3d at 712, 713. Not
only do we find this reasoning more compelling, we also believe that the factual
circumstances at issue in these cases are more analogous here than those addressed
in Salzstein, Nedlloyd, or Pathway Bellows.9
Second, we do not read Farmland Industries to establish a rule that a claim is
not valid unless it includes an exact amount of damages. We did not address in that
case whether a claim is sufficient if it includes a damages range rather than a single
amount. Instead, based on the particular factual circumstances presented, we
declined to apply a rule that a shipper could be excused from filing a claim within
9
We are mindful that at least two district courts have applied Nedlloyd or Pathway
Bellows to hold that a claim which includes a damages estimate, rather than a single, certain
damage amount, falls short of § 1005.2(b)’s “specified or determinable” amount requirement.
See Delphax Sys., 54 F. Supp. 2d at 64; Bobst Div. of Bobst Champlain, Inc. v. IML-Freight
Inc., 556 F. Supp. 665, 668-69 (S.D.N.Y. 1983) (holding that a claim which estimated damages
at $100,000 was neither specified nor determinable). Not only are district courts persuasive
authority only, see Dow Jones & Co, Inc. v. Kaye, 256 F.3d 1251, 1258 n.10 (11th Cir. 2001),
but also we reject the district court’s conclusions in these cases for the same reasons, discussed
previously, for which we reverse the district court here.
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the prescribed nine-month period if the carrier had obtained “‘actual knowledge’”
of all information that a claim would have provided. 733 F.2d at 1510. Moreover,
our agreement with the district court that a “principal function[] of the notice
requirement in the bill of lading is to allow the carrier to exactly compute its
losses,” id., is consistent with our conclusion here. When a shipper provides a
carrier with a relatively narrow range of damages, the carrier is afforded the
opportunity to investigate the claim and may “exactly” compute a damages amount.
As Siemens argues, any carrier faced with a large claim would be neglectful of its
duties if it simply paid a large claim without making any independent efforts to
verify the shipper’s estimate.
Finally, we disagree with NSR’s assertion that our decision to view §
1005.2(b) liberally in light of its purpose will allow shippers to bypass the
mandated claims process by asking a court to determine whether a carrier should
pay a claim that was not presented properly in the first place. As the Ninth Circuit
explained, “[w]e fail to see why shippers will be eager to circumvent the notice
requirements, avoid voluntary settlement, and embark upon expensive, time-
consuming litigation to recover their damages.” Insurance Co. of N.A., 1 F.3d at
907 n.4.
Because, in this case, Siemens indicated its intent to hold NSR liable, gave
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NSR multiple opportunities to inspect the transformer, and provided a damages
range with a minimum and maximum amount in which its claim ultimately fell, we
consider Siemens’s claim sufficient under 49 C.F.R. § 1005.2(b) even though
Siemens did not specify a single, certain damages amount. Therefore, we reverse
the decision of the district court and remand for proceedings consistent with this
opinion.
III. CONCLUSION
In this appeal, we determined whether a notice of claim submitted by
Siemens to NSR regarding damage to an electrical transformer shipped in January
2000 satisfied the minimum claim filing requirements in 49 C.F.R. § 1005, a
regulation promulgated by the ICC. The district court found that Siemens’s claim
was not sufficient because, in stating that its transformer suffered damages
somewhere in the range of $700,000 to $800,000, it did not state a “specified or
determinable” amount as required by § 1005.2(b). First, we hold that the district
court correctly stated that § 1005.2(b) applies to litigated as well as uncontested
claims, and it governs Siemens’s claim here. Second, we conclude that the district
court erred in determining that Siemens’s claim was not valid. Because we construe
§ 1005.2(b) liberally in view of its purpose, which is to secure reasonable notice for
the carrier so that it may conduct an independent investigation of a shipper’s claim,
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we hold that Siemens’s claim met the requirements of § 1005.2(b) as a matter of
law. Accordingly, we REVERSE and REMAND for proceedings consistent with
this opinion.
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Siemens Power Transmission & Distribution, Inc. v. Norfolk Southern Railway Co.
Court: Court of Appeals for the Eleventh Circuit
Date filed: 2005-08-16
Citations: 420 F.3d 1243
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