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January 31, 2017

Carmack Amendment Extended to Tanker Cleaning Services

On January 30, 2017, the 5th Circuit Court of Appeals extended the protections of the federal Carmack Amendment to truck tanker cleaning services. Heniff Transportation Systems, LLC v. Trimac Transportation Services, Inc., No. 16-40553 (5th Cir. Jan. 30, 2017). Heniff was hired by Huntsman to transport chemicals from Texas to Illinois. Huntsman required the tanker-trailer to be thoroughly cleaned with a “kosher wash.” Trimac was hired to perform the cleaning, which was not done properly. Contaminated chemicals from the load in turn contaminated other chemicals on delivery and also damaged equipment. Heniff brought both state and federal law claims against Trimac. The district court dismissed the state law claims on the basis that the federal Carmack Amendment preempted state law claims. The federal 5th Circuit Court of Appeals affirmed, holding a tanker wash was a service related to movement of property in interstate commerce and thus subject to the Carmack Amendment.

The reasoning is as follows: the Carmack amendment establishes the standard for imposing liability on a motor carrier for damage to property transported in interstate commerce. It preempts state law and is meant to establish uniform guidelines, providing the exclusive cause of action for damage to goods arising in interstate transportation of goods by a common carrier. The statute has broad reach. The operative term “carrier” is defined as “a motor carrier, a water carrier, and a freight forwarder.” “Motor carrier” is defined as “a person providing motor vehicle transportation for compensation.” The term “transportation” “includes” “equipment of any kind related to the movement of passengers or property,” as well as “services related to that movement, including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and interchange of passengers and property.” Thus, one who provides motor-vehicle-related “services related to [the] movement [of passengers or property in interstate commerce],” provides a “service subject to [the] jurisdiction” of the Carmack Amendment, and any state law claims asserting “loss or damages to goods” in connection to those services are preempted by the Amendment. [Statutory cites omitted] The court held that cleaning the tanker-trailer was such a service.

The court rejected Heniff’s arguments: (1) that cleaning was dissimilar to the other examples of services provided in the statute; and (2) that Trimac was never a party to the bill of lading and the bill of lading was not actually issued until after the wash. The statute uses the word “including” when referring to various types of services and it is irrelevant that the bill of lading had not been issued based on the statutory wording. It also did not matter to the court that Trimac had no knowledge of the upcoming shipment to be made in the particular tanker it was washing and whether or not the shipment was going to be used for transport of goods across state lines. All that matters is that the claims fall with the “jurisdiction” of the Carmack Amendment.