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Adams Express Company v. E. H. Croninger

Supreme Court of the United States
226 U.S. 491 (1913)
ELI5:

Rule of Law:

The Carmack Amendment to the Interstate Commerce Act creates a uniform federal liability scheme for interstate carriers, thereby preempting all state laws that regulate a carrier's ability to limit its liability to a value agreed upon with the shipper in exchange for a lower rate.


Facts:

  • E. H. Croninger delivered a package containing a diamond ring to Adams Express Company for shipment from Cincinnati, Ohio, to Augusta, Georgia.
  • The bill of lading issued by Adams Express Company, and accepted by Croninger, stated that the shipping rate was based on a declared value not exceeding $50.
  • The contract stipulated that the company would not be liable for more than $50 unless the shipper declared a greater value.
  • Croninger did not declare a value greater than $50 and paid a lower rate based on this valuation, rather than the higher rate required for the ring's actual value of $125.
  • The package was lost in transit.

Procedural Posture:

  • E. H. Croninger sued Adams Express Company in a Kentucky state trial court to recover the full $125 value of the lost ring.
  • Adams Express Company answered, asserting its liability was limited to the $50 declared value under the shipping contract and federal law.
  • The trial court sustained Croninger's demurrer to the answer, rejecting the liability limitation defense.
  • The Court of Appeals of Kentucky, the state's highest court, affirmed the trial court's judgment.
  • Adams Express Company (as plaintiff in error) brought the case to the Supreme Court of the United States for review.

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Issue:

Does the Carmack Amendment to the Interstate Commerce Act of 1906 supersede a state law that prohibits common carriers from contractually limiting their liability for loss or damage to an interstate shipment?


Opinions:

Majority - Mr. Justice Lurton

Yes. The Carmack Amendment to the Interstate Commerce Act supersedes state law regarding a carrier's liability for interstate shipments. Congress acted to create a single, uniform federal rule to govern interstate carrier liability, thereby occupying the field and displacing the diverse and conflicting regulations of the states. While the amendment forbids contracts that exempt a carrier from liability for its negligence, a fair and open agreement that limits liability to an agreed-upon value in exchange for a lower shipping rate is not an unlawful exemption. Citing the precedent in Hart v. Pennsylvania Railroad, the court found such agreements are valid because the shipper is estopped from claiming a higher value after receiving the benefit of a reduced rate. Therefore, the contractual limitation is enforceable under the paramount federal law.



Analysis:

This landmark decision solidified the doctrine of federal preemption in the field of interstate commerce and transportation. By interpreting the Carmack Amendment as creating a comprehensive and uniform regulatory scheme, the Court effectively eliminated the patchwork of state laws governing carrier liability. This ruling provided legal certainty and predictability for both national carriers and shippers, ensuring that liability rules would not change as goods crossed state lines. The case establishes that when Congress legislates so thoroughly on a subject of interstate commerce, it demonstrates an intent to occupy the field and supersede any state regulation on the matter.

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