Robert Burton Associates, Inc. v. Preston Trucking Company, Inc.

149 F.3d 218 (3rd Cir. 1998)
  • Opinion Date: July 10, 1998

COMMON CARRIERS; DAMAGES—The value of a lost shipment is its sales price unless the carrier can prove that the shipper did not lose any sales.

A shipper brought this action against a carrier under the Carmack Amendment (49 U.S.C. Sec. 14706) for loss of merchandise in transit. The carrier conceded liability; damages were the only issue. Here, the carrier picked up eighty-one cases of cigarette papers from the shipper in New Jersey. The eighty-one cases were not delivered. Neither party could account for the whereabouts of the shipment. A replacement shipment was delivered to the shipper’s customer for which the shipper received full payment. The issue presented was whether the damages in this case should be the market value of the goods or the replacement cost of the goods.

The District Court ruled in favor of the shipper and awarded damages based on the market value of the goods. It reasoned that the shipper was a volume seller and could have sold the replacement goods to another customer and gained an additional profit. The Third Circuit reversed the District Court and remanded the case. It noted that a shipper is generally entitled to collect the contract price of goods lost in transit but this method may be discarded if there are other more accurate means to determine its loss. It held that on remand, the carrier would have the burden of proving that the loss of the eighty-one cases did not cause the shipper to lose a sale. If this could be proven, then the replacement value of the goods would be applied. Otherwise, the market value of the goods would be the measure of damages.