United States Court of Appeals
For the First Circuit
No. 99-1007
CAMAR CORPORATION,
Plaintiff, Appellant,
v.
PRESTON TRUCKING COMPANY, INC.,
Defendant, Appellee.
No. 99-1008
CAMAR CORPORATION,
Plaintiff, Appellee,
v.
PRESTON TRUCKING COMPANY, INC.,
Defendant, Appellant.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]
Before
Selya, Circuit Judge,
Campbell, Senior Circuit Judge,
and Lynch, Circuit Judge.
Steven R. Maher for Camar Corporation.
Wesley S. Chused with whom Looney & Grossman was on brief
for Preston Trucking Company, Inc.
August 15, 2000
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CAMPBELL, Senior Circuit Judge. Defendant-appellee
Preston Trucking Company, Inc. ("Preston") lost a load of used
marine equipment that it was transporting for plaintiff-
appellant Camar Corporation ("Camar"). Camar sued Preston for
damages under the Carmack Amendment to the Interstate Commerce
Act, 49 U.S.C. § 14706. The district court awarded summary
judgment to Camar on the issue of Preston’s liability, but
limited damages for the loss to the $215 that Camar had paid to
purchase the equipment. Camar appeals, arguing that its damages
should be $353,370, that being the amount for which it says it
could have resold the equipment. In its cross-appeal, Preston
contends that it is not liable at all under the Carmack
Amendment or, in the alternative, that its liability is limited
by the applicable tariff to a relatively inconsequential amount.
We affirm.
I.
Camar is a company headquartered in Worcester,
Massachusetts, that buys used and/or surplus naval equipment
from the United States Navy's Defense Reutilization and
Marketing Service ("DRMS"). It then refurbishes and resells
that equipment, usually to foreign governments. In the past,
Camar has resold DRMS goods to the Brazilian Navy at a very
considerable mark-up above what it paid to DRMS.
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Preston is a common carrier. During the two-year
period preceding the events of this case, Preston transported
approximately eighty shipments of freight for Camar. Camar
prepared and delivered to Preston bills of lading for those
shipments.
Around August, 1995, DRMS invited buyers to bid on used
marine equipment located at a naval depot in California. The
property was offered "as is” and prospective bidders were urged
to inspect it. It was also described as “used – good
condition.” On August 29, 1995, Camar bid $215 for 156 pieces
of equipment, including four turbines and other component parts,
that ranged in age from nine to sixteen years old. The U.S.
Navy had originally paid $275,000 to acquire the equipment.
Camar did not inspect the used equipment, nor did it review
maintenance records for it. On or about September 12, 1995,
DRMS accepted Camar’s $215 bid. Ninety days after the sale,
according to its usual practice, DRMS destroyed the maintenance
and repair records on the equipment.
Upon learning that it was the successful bidder, Camar
arranged by telephone for Preston to transport the equipment
from the Naval Supply Center in Oakland, California to Camar’s
facility in Worcester, Massachusetts. Camar sent Preston a
letter of authorization to pick up the equipment, as well as a
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copy of the DRMS Notice of Award reflecting the successful $215
bid price. Neither Camar nor Preston prepared a bill of lading
in connection with the shipment.
Preston then arranged for WestEx, Inc., the originating
carrier, to pick up the equipment in Oakland. On or about
October 11, 1995, WestEx took possession of Camar's equipment
and transferred it to Preston. Preston then lost the entire
shipment. At this time, a tariff published with the former
Interstate Commerce Commission, ICC PRES 1000-L, was in effect.
That tariff provided: “If consignor fails to declare a released
value at time of shipment, shipment will be subject to the
lowest released value herein.” As applied to “Used machinery or
parts,” the lowest released value was ten cents per pound (“the
released rate”).
On or about October 25, 1995, Camar submitted a loss
claim to Preston of $137,500. This figure represented one-half
of what the U.S. Navy had originally paid to procure the
equipment. On November 10, 1995, Preston refused to pay Camar’s
loss claim, stating that its liability was limited to ten cents
per pound or a total of $60 in accordance with the applicable
tariff.
In December, 1995, Preston asserted that it was still
searching for the missing equipment, but that it could take up
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to 120 days to locate it. Camar contacted Preston in December
and April concerning the search. On April 26, 1996, Camar filed
an action in the United States District Court for the District
of Massachusetts seeking damages of $137,500. After reviewing
its records of past sales of similar goods, Camar amended its
complaint to allege damages of $353,370, claiming it could have
sold the equipment for this sum.
The parties cross-moved for summary judgment. In
support of its motion, Camar argued that it was entitled to
summary judgment with respect to Preston's liability because
Preston admitted that it lost Camar's equipment, and that under
the Carmack Amendment, damages should be awarded for Camar's
"actual loss or injury." As to most of the equipment, Camar
contended that actual loss should be measured by what foreign
buyers had previously paid Camar for similar items.1
In opposition to Camar's motion for summary judgment
and in support of its cross-motion, Preston argued that Camar
had not established a prima facie case under the Carmack
Amendment because it could not prove "good origin condition" of
the equipment. Preston also offered two alternative arguments:
1
The summary judgment record indicates that Camar valued six
of the eight categories of equipment according to “past sales.”
It based the value of the remaining two categories of equipment
on their procurement cost.
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(1) even if Camar had made a prima facie case, its damages were
limited to the release rate of ten cents per pound (a total of
$60) based upon Preston's published tariff; and (2) even if
Camar was entitled to recover for its actual loss, the only
reliable evidence of such loss was the $215 Camar had paid for
the equipment.
The district court allowed Camar’s motion for summary
judgment in respect to Preston’s liability under the Carmack
Amendment. See Camar Corp. v. Preston Trucking Co., Inc., 18 F.
Supp.2d 112 (D. Mass. 1998). The court held that the undisputed
facts demonstrated good origin condition and arrival in damaged
-- i.e., non-existent -- condition. Because Preston did not
limit its liability for Camar's equipment, the court concluded
that it was obligated to compensate Camar for its actual loss.
The court limited the value of that loss, however, to the $215
Camar had paid to DRMS to purchase the equipment, deeming any
greater amount to be speculative. Both parties now appeal.
II.
We review orders for summary judgment de novo,
construing the record in the light most favorable to the
nonmovant and resolving all reasonable inferences in that
party's favor. See Houlton Citizens' Coalition v. Town of
Houlton, 175 F.3d 178, 184 (1st Cir. 1999).
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The 1906 Carmack Amendment to the Interstate Commerce
Act governs the liability of carriers for lost or damaged goods
in interstate commerce:
A common carrier . . . subject to the
jurisdiction of the Interstate Commerce
Commission . . . shall issue a receipt or a
bill of lading for property it receives for
transportation. . . . That carrier . . .
[is] liable to the person entitled to
recover under the receipt or bill of lading.
The liability imposed under this paragraph
is for actual loss or injury to the property
caused by (1) the receiving carrier, (2) the
delivering carrier, or (3) another carrier
over whose lines or route the property is
transported into the United States. . . .
49 U.S.C. App. §§ 10730, 11707 (repealed 1995).2 To make a prima
facie case under the Carmack Amendment, a plaintiff must show 1)
delivery to the carrier in good condition; 2) arrival in damaged
condition; and 3) the amount of damages caused by the loss. See
Missouri Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137-38
(1964); D.P. Apparel Corp. v. Roadway Express, Inc., 736 F.2d
1, 2 (1st Cir. 1984).
Camar contends that the district court erred in holding
that the purchase price it paid the DRMS for the lost goods was
the correct measure of damages. It argues that its evidence of
2These provisions were in effect at the time of the
transaction at issue. Under the ICC Termination Act of 1995,
Pub. L. No. 104-88, §§ 103, 109 Stat. 803, 907-08, the
provisions were revised and renumbered. Comparable provisions
now appear at 49 U.S.C. § 14706 (1997).
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past sales of similar goods is a reasonable measure of the
equipment’s market value. Camar insists that as Preston was
responsible for the loss and any consequent uncertainty as to
the lost goods’ value, the value should be determined in Camar’s
favor. Preston cross-appeals, arguing that the district court
erred in determining that Camar had made out a prima facie case
under the Carmack Amendment, and that in any event Preston had
limited its liability under the applicable tariff. We turn to
these points.
A. Good origin condition
In urging that Camar failed to establish a prima facie
case under the Carmack Amendment, Preston contends that Camar
did not prove good origin condition. While DRMS’s invitation
to bid described the equipment as "used--good condition,"
Preston maintains that this evidence is too vague and only
reflects the condition of the goods at the time of the sale, not
at the time Preston took control of them several weeks later.3
We find adequate evidence of good condition for
purposes of a prima facie case. The district court correctly
reasoned that the purpose of demonstrating delivery to the
carrier in “good condition” and arrival in “damaged condition”
3
DRMS is required under law to be as accurate as possible in
describing the goods it auctions. See 41 C.F.R. § 101-45.303-1.
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is to show an adverse change in the condition of the goods while
they were in the carrier's custody, thus implying that whatever
harm occurred was caused by the carrier. See Missouri Pac. R.R.
Co., 377 U.S. at 138 (stating that to rebut the prima facie
case, a carrier must attribute the loss to a different cause).
Because the terms "good" and "damaged" are
relative, Preston's suggestion that Camar
must show "good condition" in absolute terms
is unfounded. In the present case, the
parties do not dispute that a change in the
condition of the equipment occurred while
Preston had custody of it: the equipment
existed at the point of origin, was
delivered by WestEx to Preston and then
vanished in transit. In other words, the
condition of the equipment was relatively
good at the point of origin and relatively
bad (nonexistent) at the point of arrival.
Camar Corp., 18 F. Supp.2d at 115.
We agree with the district court that Camar
sufficiently demonstrated, for purposes of making out a prima
facie case, that the condition at the time Preston took
possession of the equipment was “good.”4 We affirm the grant of
summary judgment as to Preston’s liability under the Carmack
Amendment.
4While the condition of the goods in absolute terms is not
relevant at this stage of a prima facie case under the Carmack
Amendment, here it is relevant to the damages stage, discussed
infra.
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B. Limitation of liability
In its cross-appeal, Preston further contends that it
limited its liability to ten cents per pound pursuant to 49
U.S.C. App. § 10730 (repealed 1995, now contained at 49 U.S.C.
§ 14706(c)(1)(A)). The district court erred, Preston argues, in
determining that Preston did not satisfy the rules governing
limitation of liability. The court relied on factors set forth
in Anton v. Greyhound Van Lines, Inc., 591 F.2d 103, 107 (1st
Cir. 1978), which require the carrier to
1) maintain an approved tariff, 2) issue a
bill of lading prior to shipment, 3) give
the shipper an opportunity to choose between
levels of liability, and 4) demonstrate an
"absolute, deliberate and well-informed
choice by the shipper," in the form of a
written agreement subscribing to the
released value of goods.
Camar, 18 F. Supp.2d at 115 (citing Anton, 591 F.2d at 107).
Preston correctly notes that this court “disavow[ed]
the reasoning of Anton” in Hollingsworth & Vose Co. v. A-P-A
Transp. Corp., 158 F.3d 617, 620 (1st Cir. 1998). Hollingsworth
was published after the district court decided this case.
Hence, we reexamine this issue under the current case law of
this circuit.
Under the Carmack Amendment, a carrier is fully liable
for the "actual loss or injury to the property," 49 U.S.C. App.
§§ § 11707(a) (repealed 1995), unless it takes specific actions
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to limit its liability, id. § 10730(b)(1). Those actions
include (1) maintaining an appropriate tariff; and (2) obtaining
a "written declaration of the shipper or . . . written agreement
between the carrier . . . and shipper" as to the "limited" value
of the shipment. Id.; Hollingsworth, 158 F.3d at 618. Only (2)
is at issue in this case, as Preston unquestionably maintained
a valid tariff with the ICC containing a released rate.
In Hollingsworth, we rejected Anton’s apparent
requirement of a writing indicating assent to a limitation of
liability in addition to a bill of lading containing a standard
declared value blank:
It is enough that the tariff made both
coverages available, the bill of lading
afforded the shipper a reasonable
opportunity to choose between them . . . and
the shipper was a substantial commercial
enterprise capable of understanding the
agreements it signed. In our view, that is
normally enough to give this shipper a "fair
opportunity" to opt for more coverage in
exchange for a higher rate.
Id. at 621. We declined to create a universal rule, however,
that would apply as well to cases that “deviate from the
ordinary,” including those cases involving inadequate bills of
lading. Id.
Here, Preston argues that while neither party sent a
formal bill of lading, other documents effectively constituted
a bill of lading in that they contained the necessary elements,
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i.e. the names of the consignor and consignee, the number of
packages, and the description of the freight. See 49 C.F.R. §
1051.1 (1996). Preston points to two documents that Camar had
faxed to it: the Notice of Award, Statement and Release Document
from DRMS to Camar, which stated the $215 purchase price of the
equipment; and the Shipment Receipt/Delivery Pass, signed by
DRMS personnel. Furthermore, Preston argues, WestEx (presumably
as agent for Preston) issued a “receipt” for purposes of §
10730(b)(1), in that it affixed its stickers to the above
documents and obtained DRMS signatures thereon.
Even supposing that these documents amount to a bill
of lading or a receipt from the carrier, they do not evidence an
agreement affording Camar a reasonable opportunity to choose
between the regular rate and a rate reflecting a higher level of
liability. Unlike Hollingsworth, none of the relevant documents
contained a declared value blank permitting Camar to declare the
value of the equipment and invoke a different level of
liability. See id. at 621; Rohner Gehrig Co., Inc. v. Tri-State
Motor Transit, 950 F.2d 1079, 1084 (5th Cir. 1992) (bill of
lading contained no declared value blank and hence did not
provide shipper with reasonable opportunity to choose between
two or more levels of liability). Moreover, nothing else in the
documents reflects a statement by or agreement with Camar as to
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the limited value of the property. Accordingly, we conclude
that this is the sort of atypical situation noted in
Hollingsworth in which the bill of lading, or some equivalent,
does not constitute a sufficient agreement to limit liability.5
See Hollingsworth, 158 F.3d at 621. Hence, Camar’s actual loss,
not the released rate, is the proper measure of damages.
C. Camar’s actual loss
The district court determined that the $215 Camar paid
for the equipment was its value for purposes of ascertaining
Camar’s actual loss and that the evidence as to lost profits was
too speculative. Within the meaning of the Carmack Amendment,
"actual loss or injury to the property" is ordinarily measured
by the reduction in market value at destination or by
replacement or repair costs occasioned by the harm. See
Fredette v. Allied Van Lines, Inc., 66 F.3d 369, 372 (1st Cir.
1995). The Carmack Amendment incorporates common law principles
5
Preston also contends that Camar’s business sophistication
and the parties’ past practice (in which Camar provided the
bills of lading) favors a determination that Preston satisfied
its obligations under Hollingsworth. Even assuming that such
factors are relevant, see, e.g., Rohner Gehrig, 950 F.2d at
1084-85 (shipper’s sophistication irrelevant to whether shipper
had opportunity to choose between levels of liability), they do
not override the deficiencies addressed here.
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of damages, see Hector Martinez & Co. v. Southern Pac. Transp.
Co., 606 F.2d 106, 108 (5th Cir. 1979), and permits recovery of
lost profits unless they are speculative. See Pillsbury Co. v.
Illinois Cent. Gulf R. R., 687 F.2d 241, 245-46 (8th Cir. 1982);
Hector Martinez, 606 F.2d at 109; Polaroid Corp. v. Schuster's
Express, Inc., 484 F.2d 349, 351 (1st Cir. 1973).
To establish the dollar value of its loss, Camar
submitted exhibits describing each type of lost equipment and
comprising the record of its procurement and of Camar’s previous
sales of similar equipment to foreign buyers. For example, one
exhibit includes a statement as follows:
This is a bearing turbine, similar to the
four lost by Preston Trucking. . . . On July
21, 1995 Camar sold one of these to the
Brazilian Navy for $59,830. If the goods
had been delivered and Camar had been able
to sell the missing four at that price,
Camar would have earned $239,320 on the four
bearing turbines Preston lost.
Procurement history data, including the identity of the vendor
and the price paid by the U.S. government, follow. Next are
invoices and other documents reflecting the sale of the
allegedly similar equipment to the Brazilian Navy. The other
exhibits are similar, except as to two categories of equipment
in which the damages calculations are based solely on the
procurement history.
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We agree with the district court that the evidence of
past sales on this record is too speculative to form the basis
of a damages award greater than the $215 purchase price.
Camar’s evidence did not identify any prospective purchasers for
the lost used equipment at prices like those paid for the
previously sold equipment, or, indeed, at any price. In his
deposition testimony, Camar’s president, James Mercanti,
admitted that Camar had no customer for the equipment at the
time of the bid or at the time Preston lost the shipment. No
evidence of subsequent customer demand was submitted. Nor did
Camar submit evidence tending to prove that it lost any
customers or good will as a result of Preston’s loss of the
equipment.
Moreover, Camar describes the equipment it previously
sold to the foreign navies only as “similar” to the lost goods,
not identical (or even substantially similar). It is unclear
whether the same prices paid for the earlier equipment would
apply to the lost equipment. The lost equipment, moreover, had
been used by the U.S. Navy for nine to sixteen years. There was
no evidence of the effects of this use on the lost items, or the
extent or nature of this past use. Hence, we cannot know
whether the items were in a comparable condition to those
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previously sold and thus could command comparable prices.6 The
lack of essential information about the equipment’s condition is
underscored by the DRMS instructions to bidders stating that
“all property listed [in an invitation to bid] is offered for
sale ‘as is,’” and urging bidders to inspect the goods. It is
true that the listed equipment was described as being in “good
condition.” Standing alone, however, this statement does not
make up for the lack of specifics necessary to compare the value
of the lost items to that of the equipment previously sold to
the Brazilian Navy.
Hence, we think the district court did not err in
concluding that “[t]he DRMS Notice of Award indicating Camar's
purchase price of $215 is the only non-speculative evidence of
the market value of the lost equipment.” While Camar
undoubtedly meant to sell the items profitably, and while there
is evidence of past success in making profitable sales of
somewhat similar equipment, its evidence fails to provide a
reliable basis from which a factfinder could determine the
actual value of the missing equipment. The record does not
6
Camar argues that the age of the equipment did not result
in significant depreciation, because foreign governments need
items of that vintage. Whether the items depreciated or not is
irrelevant, however. The issue is whether the evidence in the
summary judgment record established Camar’s lost profits with
sufficient certainty to be recoverable.
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address Camar’s failures nor inform us as to what proportion of
used equipment purchases resulted in profitable resales. The
low price for which Camar obtained the equipment suggests,
moreover, that in the eyes of the seller and of other bidders
the market for it remained quite questionable and uncertain.
Camar argues that Polaroid, 484 F.2d 349, controls the
outcome of this case. In that case, Polaroid was allowed to
recover the dealer price for a shipment of photographic
equipment that was hijacked en route to delivery to a Polaroid
warehouse while entrusted to the defendant carrier. The
district court had found, based on the plaintiff's affidavits,
that the goods were in great demand, with nothing remaining "but
to unload the goods at the distribution center and to stock and
take orders for them." Id. at 350 (internal quotations
omitted). Noting that hijacked goods ultimately compete with
the manufacturer and that Polaroid was the sole manufacturer of
the types of products lost, we held that the plaintiff had
established “a more than reasonable likelihood that the hijacked
goods would have been sold at the claimed market price.” Id. at
352.
We are not persuaded by Camar’s analogy to Polaroid.
Here, there is little evidence of regular and consistent market
demand for the lost items at a predetermined price, or that
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Camar’s equipment was identical to that previously sold, or was
in suitable condition for immediate sale at the prices
previously obtained for similar items. In contrast to the new
and fungible photographic equipment, it remains an open question
whether there were foreign governments who still wished to buy
this particular naval equipment at prices comparable to those
previously negotiated. Polaroid was permitted to recover lost
profits that it was “on the verge of earning,” id. at 651
(internal quotations omitted); but there is little certainty in
the present record that Camar was anywhere close to earning the
amounts claimed here.
Camar contends that because Preston was responsible for
the uncertainty in the value of the equipment, it should bear
whatever harm is caused by that uncertainty. It maintains that
Preston asked Camar to wait eight months while it searched for
the goods, while in the meantime, ninety days after the sale,
DRMS purged its computer system of maintenance records. This
shows, Camar contends, that it was Preston’s fault that Camar
was left without evidence as to the condition of the goods.
We are not persuaded that the consequences of DRMS’s
purging of its records can be blamed on Preston’s conduct.
Preston lost the equipment sometime after October 11, 1995. The
record indicates that on November 10, 1995, Preston wrote to
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Camar: “Please be advised that we are currently conducting a
thorough investigation in order to locate the missing
merchandise.” On December 15, Camar stated in a letter to
Preston that Preston had “indicated that it might take up to 120
days to find the goods.” These statements fell short of
evidencing a definite assurance by Preston that it would be able
to locate the shipment, which both parties by then knew was
missing.
Camar could prudently have proceeded then and there to
gather pertinent information from DRMS, before the ninety days
had passed. While Camar doubtless hoped that Preston would
eventually find the equipment, it had reason to fear the worst
and to take steps to document its claim. Preston’s statement
was not such as to mislead Camar into taking no steps to obtain
the Navy’s information relative to the maintenance and condition
of the equipment. In any event, Preston’s responsibility for
the loss of the equipment does not relieve Camar of its
obligation to show that there was an ongoing market for the
equipment, as discussed supra. Hence, Camar retains the
responsibility to produce sufficient evidence of its lost
profits with reasonable certainty. See Bigelow v. RKO Radio
Pictures, 327 U.S. 251, 264 (1946).
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Although mathematical precision is not required in
calculating lost profits, a damages award must have a “rational
basis in the evidence." Thermo Electron Corp. v. Schiavone
Constr. Co., 958 F.2d 1158, 1166 (1st Cir. 1992) (quoting Jay
Edwards, Inc. v. New England Toyota Distrib., Inc., 708 F.2d
814, 819 (1st Cir. 1983)). We cannot conclude, given the
absence of more precise evidence as to the condition of the used
goods and the current market demand and pricing for them, that
a jury could rationally determine the dollar amount of Camar’s
lost profits in excess of $215. Hence, we affirm the district
court’s award of damages.
Affirmed.
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