Transportation Law Test 1

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1. Rail Roads have an obligation to provide?

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a. Service without discrimination
b. Furnish turns upon reasonable requests
c. Serve the public

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2. Options available to a shipper with regards to railroad damages.

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a. Attorney fees
b. STB Award.
i. The STB ruled that a shipper may only challenge the rate over the entire route from origin to destination and not just the portion over which it has no competitive alternative.

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3. Burden of proof governing freight damage.

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a. If there is a short Bill of Lading (B/L) (meaning there is damage on the delivery) the responsibility is for the carrier.

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4. Objectives of the carmack when enacted

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a. Adopt a uniform standard of liability.
b. Codify liability for full actual loss.
c. Create joint and several liabilities for carriers.
d. Require a uniform contract of carriage.
e. End of conflict in state courts.
f. Prohibit limitations of liability.
g. Provide uniform time limits. Prescribe suit venue.
h. Apply the laws governing water carriers.
i. Apply liability provisions to re-consigned shipments.
j. Exclude switching carriers from provisions.
k. Provide for the use of ff b/l’s
l. Original/delivering carrier to be indemnified by connecting carrier where loss occurred.

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5. Limitation of liability under carmack

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requires the carrier to establish a released rate. Written declaration by the shipper. Must be written agreement.

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6. General ruling of adams Vs. continger case

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a. By a fair, open, just and reasonable agreement limit the amount recoverable by a shipper in cases of loss or damage to an agreed value made for the purpose of obtaining the lower of two or more rates or charges proportioned to the amount of the risk.

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7. Carmack amendment contained?

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a. a uniform system of carrier liability that would provide certainty to both carrier and shipper by enabling the carrier to assess its risk and predict its potential liability for damages.
b. Although the railroads assume full value liability, railroads may limit their liability by providing a “released rate” or more clearly stated, a rate under which the goods are released at a value established by written declaration of the shipper or by a written agreement between the shipper and the carrier.
c. 49 USC 11706 (rail) 14706 motor carrier.

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8. Railroads offering the limited liability rate must receive:

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a. Permission of the STB
b. 20 day notice
c. They have to offer the value rate to the shipper.

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9. Common law defenses are to carmack?

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a. The carrier or party in possession of any of the property on bill of lading shall be liable as at common law for any loss, with the exceptions:
b. Act of God
c. The Public Enemy
d. The Authority of Law
e. The act or default of the shipper or owner
f. Inherent Vice

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10. Differences between interstate and intrastate shipements.

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a. Intrastate – within one state’s borders. ( Houston to Dallas)
b. Interstate – between two or more states and/or a foreign country. (Houston to N.O.)
c. Generally interstate shipments have jurisdiction in federal

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11. Become generally familiar with the decision tree. The decision tree is about logistical, regulatory, and economical decisions

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14. Rail rate has to be proven to be reasonable if the rail is shown to have dominance over a product.

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12. Grainge movement

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a. Farmers organized against the railroad and its practices.
b. Railroads attempted to corner the grain market.
c. Railroads controlled the grain elevators.
d. Railroads cheated on weights.
e. Railroads cut back service.
f. Railroads charged more for short trips than long trips.
g. Railroads gave government officials free trips
h. Railroads gave special treatment to some farmers and not to others.

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13. Decision in Gibbons Vs. Ogden

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a. The Supreme Court held that “commerce” embraced navigation; for without navigation there could not be in many instances any exchange or commercial transaction between citizens of the various states or with foreign nations; that according, the operation between New Jersey and New York was commerce. Thus the exclusive franchise was invalid.

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20. Generally the progression of a regulation through the rule making, comment period, enactment, etc…

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1. Proposed rulemakings are published in the federal register
2. Comment period for input by interested parties
3. Final rule as entered into law
4. Implementation phase is normally some lead time before the final rule becomes law
5. Effective date is when the rule becomes law.

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21. Elkins Act – what is it?

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1. Called the anti-rebate act
2. Made the receiving of a rebate unlawful
3. Made departure from the published rate a misdemeanor
4. Made carrier corporation liable for actions, not just personnel

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22. Purpose of the Motor Carrier Act of 1980

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1. This act was designed to reduce unnecessary regulation by the federal government in the trucking industry
2. Transferred the enforcement of financial responsibility requirements for truckers to the Bureau of Motor Carrier Safety, U.S. Department of Transportation

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23. Effects of the rail staggers act

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1. Permitted railroads to negotiate contracts, allowed rate flexibility, and defined maximum rates.
2. Railroads were permitted to determine where they ran trains and how much to charge
3. The act was named for Congressman Harley Staggers (D-WV), who Chaired the House Interstate and Foreign Commerce Committee

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“Filed rate” doctrine, what is it?

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1. 1935-1994 Common carriers were required to file rates in tariffs
2. Shippers were charged with constructive notice of these tariffs

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25. Main purpose of the Motor Carrier Act of 1935

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1. Purpose was to protect industry from predatory pricing and uncontrolled competition
2. ICC was charged with establishing regulations
3. Rates were published by carriers and their regional collective rate-making Bureaus and Conferences
4. Anti-trust immunity was granted to bureaus and conferences
5. Motor carrier rules and practices were required to be reasonable and non-discriminatory
6. Motor carriers had the burden of proving a need under the “public convenience and necessity” test for new carriers

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26. Individually determined rate, what is it?

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1. Allowed carriers to keep negotiated rates in their office as opposed to filing them with the government agency as they did before; however, they must provide the rates to the shipper if requested.

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27. What is the truth in billing act requiring?

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1. Carriers are required to disclose on the freight bill the actual rates, charges or allowances applying to the shipment
2. This requires carriers to, for example, disclose when a volume discount is in effect

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28. What goes into the classification ACT of the NMFC?

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a. All commodities have a rating based on density, weights and zones between origin and destination
b. Rated based on density, liability, stowability, and handling
c. Additional bases are value per pound, perishability, susceptibility to damage, susceptibility to combustion, susceptibility to theft and susceptibility to damage other freight
d. Provides for maximum limitation of liability of $50 per pound regardless of actual value

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29. Section 7 (Non-Recourse Clause)

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1. If Shipper executes (initials) a non-recourse clause on the Bill of Lading, Shipper is relieved of liability for freight charges
2. Carrier is taken to have agreed to look only to the consignee for payment of freight charges

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30. How the estopel defense is utilized?

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1. Carrier’s actions have placed the shipper or consignee in a compromised position and to hold them liable would be an inequitable result
2. Defense was utilized originally in Davis v. Akron Feed and Milling Co. in 1924. Said that consignee is not able to be double billed by broker

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31. The General set of slides covering shipment types and liability

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1. Where shippers hire companies to pay freight bills and freight bill paying companies fail to pay carrier
2. Shippers not protected by estoppel from double freight charge liability
3. Freight Charge Co. held to be agent of Shipper
4. Brokers-entity that arranges for transportation
a. Shippers double freight charge liability depends on law of agency (fact intensive)
b. If Broker an agent of Carrier, no double liability
c. If Broker an agent of Shipper, yes, shipper has double liability
5. Freight Forwarder-issues a b/l, consolidates shipment, considered carriers
a. Shippers double freight charge liability depends on law of agency (fact intensive)
b. Cases usually are in favor of Shipper because the shipper usually pays on the freight forwarders bill of lading
6. Ocean Freight Forwarders-arrange for ocean shipments, do not issue b/l, not assume freight damage liability
7. Determined under agency law, shipper usually held to double liability but fact intensive

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32. Legal options of a carrier if he doesn’t receive payment from the shipper

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1. Does not have to turn over that shipment until he is paid
2. Allowed to sell it at market price

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33. Bill of lading is a contract of carriage

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34. A Receipt of delivery
is Found on a Pro Sticker (Carrier addition to a “shipper’s bill of lading”)

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48) A carrier is a virtual insuratre of the goods: T/F

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True

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47) What are pro stickers?

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• Carrier addition to a “shipper’s bill of lading”
• Usually purports to render driver’s signature only acknowledging receipt of freight
• May purport to incorporate carrier’s tariff

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46) What is contract reformation?

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• Equitable power of a court to reform a written instrument when it does not express the intended agreement of the parties due to a mutual mistake
• Requires clear and convincing evidence that the contract does not express the intention of the parties and that the mistake was mutual

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45) What is a 3rd party beneficiary?

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Intended Beneficiaries are
• Identified in contract;
• have a relationship with promisee; and
• will receive performance directly from promisor
• UP vs. Novus case pg. 76 3rd party must be INTENDED/named

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44) Good faith, what is it?

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• faithfulness to an agreed common purpose
• Most contracts good faith claims are preempted by Carmack Amendment

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43) 4 common law requirements for a contract:

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1. File an application with FMCSA
2. File evidence of the proper insurance
3. Designate an agent for the service of legal process
4. Comply with the FMCSA’s safety regulations

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42) Cash On Delivery - COD Mean?

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•
A type of transaction in which payment for a good is made at the time of delivery. If the purchaser does not make payment when the good is delivered, then the good will be returned to the seller.

Payment can be made by cash, certified check or money order, depending on what is stipulated in the shipping contract.
•
Allows both the seller and the buyer of the product to minimize the risk of fraud or default.

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41) Southern Pacific vs. Metals case dealt with carrier lanes

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40) On an interstate shipment, look to federal law. True

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39) The carrier can limit value to .60 centers a Pound

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• NMFC-Problems and Liability Limits
• Provides for maximum limitation of liability of $50 per pound regardless of actual value
• Future shippers now ship “FAK”, NMFC is dubious

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38) Household goods carriers, then still regulated, only tariff rate.

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• Under entry requirements. They are all now FMCSA based, and all heavy truck operators must get a DOT number
• No more fitness test

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37) Constructive notice is utilizing rules from the tariff?

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Under the Filed Rate Doctrine, Chapter 7.
• 1935-1994 Common carriers were required to file rates in tariffs
• Shippers were charged with constructive notice of these tariffs
• Motor Carrier Act 1980 repealed strict entry requirements for motor carriers caused:
• 1. Operating authorities became worthless
• 2. Flood of competition; rate wars

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36) Non-Negotiable BOL also known as a straight bill of lading.

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• A negotiable bill of lading is defined in the Bills of Lading Act. Also known as an order bill of lading. They are considered documents of title of goods
• Are not regulated by federal, state or international law, except that railroads are required to comply with 49 CFR, which requires railroads to use a straight bill of lading.