TLA Feature Articles and Case Notes

paid specifically for the implementation of a “separate, risk-related promise.”50

In Mingtai Fire & Marine Insurance Co., Ltd. v. Expeditors Intl. of Wash., Inc., 51 a shipment of laptop computers was stolen from an Expeditors’ subcontractor carrier, Forward Air, when it released the goods to a thief presenting fraudulent papers. Expeditors’ Vendor Services Agreement and Minimum Security Guidelines applied to Forward Air’s handling of the cargo. The shipper did not declare a value on the shipment or pay Expeditors a higher transportation rate.52 The District Court noted Expeditors’ sales literature describing its security procedures “fails to prove that any special precautions, particular to the transport of laptop computers or this shipment was ever discussed, contemplated, or bargained for.”53 The Court found the plaintiff subrogee and its insured shipper were:

... strangers to the “Vendor Services Agreement” and cannot avail themselves of contractual remedies for Forward Air’s putative breach. Acer was not in privity with either defendant when the terms of their contract were agreed upon. Moreover, the details of the “Vendor Services Agreement” and its “Minimum Security Guidelines” were in no way defined by, or crafted for, the cargo-specific needs of the plaintiffs’ subrogee, Acer. In fact, the plaintiffs were unaware of the existence of such an agreement until commencement of this lawsuit.54

Conclusion

The historical rationale for the deviation doctrine in maritime commerce has no relevance to inland transportation where a carrier’s fault rarely, if ever, voids a shipper’s cargo insurance. Contrasted with COGSA’s codification of unreasonable deviation in Section 4(4), the Carmack Amendment contains no similar provision. The material deviation theory is essentially incompatible with Carmack which the United States Supreme Court long ago held “comprehensive enough to embrace all damages resulting from any failure to discharge a carrier’s duty with respect to any part of the transportation to the agreed destination.”55 Shippers and carriers are free under ICCTA to opt out of Carmack’s provisions and negotiate transportation agreements for specified services under specified rates and conditions.56 Consequently, there is no need to supplement Carmack’s remedies with a judicially-fashioned doctrine based on admiralty law or the doctrine of fundamental or material contract breach.

1 Note following 46 U.S.C. Sec. 30701 (COGSA Sec. 4(4)) (“Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation, shall not be deemed to be an infringement or breach of this Act or contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom: Provided however, That if the deviation is for the purpose of loading or unloading cargo or passengers it shall, prima facie, be regarded as unreasonable”).

2 “Held covered” is an insurance industry term for acceptance by an insurer to cover a risk, including a deviation, upon notice to the insurer and payment of an agreed upon premium. Gilmore & Black, The Law of Admiralty, 66-67, 176-177 (2d Ed. 1978).

3 Id. at 177.

4 Saul Sorkin, Goods In Transit, §13.13[1] (2014).

5 Id.; Gustavus H. Robinson, Handbook of Admiralty Law in the United States, 532-538 (1939).

6 996 F.2d 1315 (1st Cir. 1993).

7 Id. at 1319.

8 Rexroth Hydraudyne BV v. Ocean World Lines, Inc., 547 F.3d 351, 364 (2d Cir. 2008) (followed B.M.A. Industries and declined to extend quasi-deviation to an alleged negligent inland misdelivery); Nippon Fire & Marine Ins. Co. Ltd. v. Skyway Freight Sys., Inc., 235 F.3d 53, 58, n. 1 (2d Cir. 2000) (noted deviation claim moot on appeal, but favorably cited Hill Constr. Corp. which rejected deviation); B.M.A. Industries, Ltd. v. Nigerian Star Line, Ltd., 786 F.2d 90, 92 (2d Cir. 1986) (declined to apply "quasi-deviation" to alleged criminal misdelivery of goods by ocean carrier's inland agent holding "non-delivery is not drastic enough a deviation" and the deviation doctrine is "not one to be extended" (emphasis added)); Tishman & Lipp, Inc. v. Delta Air Lines, 413 F.2d 1401, 1405-1406, n. 6 (2d Cir. 1969) (reaffirmed Lichten and rejected grafting maritime deviation doctrine onto air transportation); Lichten v. Eastern Airlines, Inc., 189 F.2d 939, 942 (2d Cir. 1951) (rejected fundamental breach claim upholding federal policy of uniformity of carrier liability).

9 547 F.3d at 364; Kemper Ins. Cos. v. Federal Express Corp., 115 F.Supp. 116, 125 (D. Mass. 2000) (material deviation held inapplicable to jewelry thefts by unidentified carrier employees absent a “special separate promise”).