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The Rogak Report: 05 Apr 2005 ** Motor Carriers - Property Claims **

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  • Lawrence Rogak
    UPS NOT LIABLE FOR LOSS OF PACKAGE OF RARE COINS Soomekh v. United Parcel Service Inc., NYLJ 4/05/05 (District Court, Nassau County 2005) (FAIRGRIEVE, j)
    Message 1 of 1 , Apr 5 7:40 AM
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      UPS NOT LIABLE FOR LOSS OF PACKAGE OF RARE COINS

      Soomekh v. United Parcel Service Inc., NYLJ 4/05/05 (District Court,
      Nassau County 2005) (FAIRGRIEVE, j)

      Plaintiff sued to recover $3,276.99, the value of gold plated silver
      coins shipped on March 19, 2004 from California to the plaintiff's
      home located in Great Neck, New York. UPS moved for summary judgment.

      In support of its motion, UPS submitted the affidavit of the Security
      Manager for the Long Island District New York facility of UPS. UPS is
      a common carrier which entered into an agreement with "The Box Store"
      on March 9, 2004, to ship a package from California to Great Neck.
      The Box Store is an authorized shipping outfit where "customers can
      tender packages for transportation through UPS or other carriers." In
      this case the package was shipped via UPS. The affidavit states that
      UPS "did not know what was in the package when Mr. Amidi shipped it."
      UPS contended that its records demonstrate that the package was left
      at plaintiff's door. This type of delivery is referred to as
      a "driver release" which is "appropriate pursuant to the terms of the
      UPS Tariff."

      UPS contended that it cannot be held liable for the allegedly lost
      package because:

      (1) package was shipped through an Authorized Shipping Outlet and so
      UPS has no direct relationship with plaintiff, and (2) coins, such as
      the Iranian gold-plated silver coins shipped herein, are
      considered "articles of unusual value" which may not be shipped via
      UPS pursuant to the terms of the UPS Tariff.

      UPS submitted the Tariff which governs this transaction
      entitled "General Tariff Containing the Classifications, Rules, and
      Practices for the Transportation of Property," effective July 14,
      2003. Tariff item 1090 is cited as barring a direct action by
      plaintiff:

      "AUTHORIZED SHIPPING OUTLETS

      UPS Authorized Shipping Outlets or Commercial Counters (collectively
      referred to within this Item as "ASOs") are independently owned and
      operated businesses and are not agents of UPS. UPS assumes no
      liability other than to the ASO, as the shipper of the package, for
      lost, damaged, or delayed packages sent via the ASO. Any such
      liability to the ASO is subject to the limitations set forth in the
      applicable UPS Tariff or Service Guide. All inquiries regarding
      packages shipped via ASOs must be directed to the ASO. UPS will deal
      solely with the ASO in all matters concerning packages shipped via an
      ASO, including but not limited to: tracking/tracing requests; claims
      and guarantees; C.O.D. preparation and remittance; return of
      undeliverable packages and letters; proper packaging and labeling;
      and billing. Even if UPS responds directly to ASO customers regarding
      tracking requests, UPS will not be liable to those who shipped
      packages via the ASO. The ASO agrees not to ship any articles that
      UPS does not accept for transportation. ASOs shall indemnify and hold
      harmless UPS in any action against UPS arising from the loss, damage,
      or delay of a package shipped via the ASO."

      Tariff item 460 is cited as barring any claim for the 40 silver gold
      plated coins because these items are articles of unusual value; this
      provision states:

      "DEFINITION OF ARTICLES OF UNUSUAL VALUE, WHICH ARE NOT ACCEPTED BY
      UPS FOR TRANSPORTATION

      Shippers are prohibited from shipping articles of unusual value via
      UPS. Articles of unusual value shall be deemed to include, but are
      not limited to:

      (1) Coins (except pennies and nickels, and except proof and mint sets
      of United States coins tendered by United States mints of a face
      value not to exceed $2.41), currency, postage stamps, negotiable
      instruments (except checks), money orders, unset precious stones, and
      industrial diamonds.

      (2) Any article which contains more than fifty percent by weight of
      gold, silver, or platinum or any combination thereof in raw form,
      bullion, balls, bars, grains, strip, sheet, wire, chain, ingots and
      the scrap of these metals.

      (3) Any package having a value of more than $50,000.

      UPS will not be liable for any loss of, or damage to, articles of
      unusual value."

      The Court held that the Carmack Amendment governs the liabilities of
      the parties to this dispute and bars all state claims. The purpose of
      the Carmack Amendment is to provide a uniform system to adjudicate
      all claims involving shipping of goods in interstate commerce and
      preempts all state claims.

      The Carmack Amendment, enacted in 1906, "governs the liability of
      common carriers for loss or damage to goods shipped or transported in
      interstate commerce." Specifically, the Carmack Amendment "subjects
      a motor carrier transporting cargo in interstate commerce to absolute
      liability for loss to the cargo unless the carrier limits its
      liability by meeting certain requirements." The purpose of the
      Carmack Amendment is to "provide interstate carriers with reasonable
      certainty and uniformity in assessing their risks and predicting
      their potential liability." As such, the Carmack Amendment
      establishes a "single uniform regime for recovery by shippers
      directly from the interstate common carrier in whose care their items
      are damaged . . . and by pre-empting the shipper's state and common
      law claims against a carrier for loss or damage to goods during
      shipping."

      "It is thus well settled that Congress clearly intended the Carmack
      Amendment to preempt all state law claims against interstate carriers
      for loss or damage to goods during shipping. Almost every detail of
      the subject is covered so completely that there can be no rational
      doubt that Congress intended to take possession of the subject, and
      supersede all state regulation with reference to it. Congress
      intended for the Carmack Amendment to provide the exclusive cause of
      action for loss or damages to goods arising from the interstate
      transportation of those goods by a common carrier."

      "This Court further holds that plaintiff cannot recover the value of
      the gold plated silver coins because UPS Tariff Section 460
      specifically excludes coins from being shipped, and said coins
      constitute 'articles of unusual value.' The Tariff specifically
      states that UPS is not liable for loss of articles of unusual value.
      Thus, plaintiff is precluded from recovering the loss of the coins
      shipped."

      "Based upon the foregoing, plaintiff's state law claims are preempted
      by the Carmack Amendment and plaintiff cannot recover the value of
      the coins based upon the restrictions of the Tariff applicable
      herein. Plaintiff's action is dismissed with prejudice. Plaintiff's
      claims are preempted by the Carmack Amendment. There cannot be any
      recovery because the coins are articles of unusual value specifically
      excluded under Item 460 of the Tariff."

      Larry Rogak
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