National Hispanic Circus, Inc. v. Rex Trucking, Inc.
2005 WL 1484773, 414 F.3d 546 (2005)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under the Carmack Amendment, the full replacement cost of goods is a proper measure of a shipper's 'actual loss' when the goods are unique or custom-made, and the shipper reasonably purchases replacements after the carrier fails to deliver, even if the original goods are later recovered.
Facts:
- The National Hispanic Circus, Inc. ('the Circus') hired Mason & Dixon Lines, Inc. ('Mason') to transport its circus equipment, including its custom-made bleachers.
- While in transit to Chicago, one of Mason's seven trailers, containing half of the Circus's bleachers, went missing.
- As a result, the Circus was forced to rent smaller, temporary replacement bleachers for its shows.
- Believing the original bleachers were permanently lost, the Circus ordered new, custom-made bleachers from Italy several weeks later for a total cost of $123,604, which it paid for in advance.
- Approximately three months after their disappearance, Mason located the trailer with the original bleachers in Arkansas.
- By the time the original bleachers were found, the Circus had already paid in full for the new replacement set.
Procedural Posture:
- The National Hispanic Circus sued Mason & Dixon Lines, Inc. in the United States District Court for the Southern District of Texas under the Carmack Amendment.
- Mason asserted a counterclaim for unpaid freight charges on the trailers that were successfully delivered.
- A jury trial was held, resulting in a verdict awarding damages to the Circus for rental costs, the purchase of new bleachers, and lost ticket sales, and awarding damages to Mason on its counterclaim.
- Mason filed a renewed motion for judgment as a matter of law and, in the alternative, a motion for a new trial.
- The district court granted Mason's motion in part by striking the jury's award for lost ticket sales as too speculative but denied the remainder of the motions.
- The court entered a final judgment for the Circus after offsetting the two awards.
- Mason (appellant) appealed the district court's judgment to the U.S. Court of Appeals for the Fifth Circuit.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Under the Carmack Amendment, is the full replacement cost of custom-made goods a proper measure of damages when the carrier temporarily loses the goods, and the shipper reasonably purchases replacements before the original goods are found?
Opinions:
Majority - Wiener, Circuit Judge
Yes. Under the Carmack Amendment, replacement cost is a legitimate measure of damages when it more accurately reflects the shipper's actual loss than the traditional market value standard. The amendment's goal is to compensate a shipper for its 'actual loss or injury to the property.' While the ordinary measure of damages for delayed delivery is the difference in market value, this rule is not exclusive and does not apply when another method better compensates the plaintiff. In this case, the bleachers were custom-made and essential for the Circus's business. Given that the Circus had no reason to believe the bleachers would be recovered, its decision to purchase new ones was reasonable mitigation. Awarding only the rental cost or diminution in value would not fairly compensate the Circus for the actual loss it incurred—the full cost of the replacement bleachers it was forced to buy.
Analysis:
This decision clarifies the flexibility of the 'actual loss' standard for damages under the Carmack Amendment, particularly for unique or specialized goods. It establishes that courts are not rigidly bound by the default market-value-difference formula and can award full replacement costs where circumstances warrant. The ruling underscores that a shipper's reasonable, mitigating actions, such as purchasing replacements for seemingly lost goods, can shift the financial burden of that decision to the breaching carrier. This precedent gives shippers of custom goods greater protection and certainty in recovering their true losses resulting from a carrier's failure to deliver.
Unlock the full brief for National Hispanic Circus, Inc. v. Rex Trucking, Inc.