Low, Ball & Lynch’s

WEEKLY LAW RESUME

June 16, 2005 Issue   By: Ray Coates

Torts - Attorney Fees - Property Damage Claim

Campbell v. Allied Van Lines

United States Court of Appeals, Ninth Circuit

(June 7, 2026)

The Carmack Amendment to the Interstate Commerce Act (49 U.S.C., section 14706) establishes motor carrier liability for loss or injury to property a carrier transports.  The Carmack Amendment preempts many state and common law claims against carriers in order to create a “national scheme” of carrier liability for goods lost or damaged during interstate transit.

In this case Plaintiffs Edward and Susan Campbell contracted with a number of moving companies, including Defendants Allied Van Lines and Mayflower Transit,  Inc. to transport their household goods from Arizona to Florida.  The goods were damaged during the move and the Campbells originally brought suit in state court.   Defendants removed the case to Federal District Court in Arizona on the basis of federal question jurisdiction arising out the Carmack Amendment.  A jury in District Court found in favor of Plaintiffs and awarded over $46,000.  Thereafter, the District Court granted Plaintiffs’ motion for attorneys fees of $15,400, plus costs.

On appeal to the Ninth Circuit Court of Appeals, Defendants argued that there was no statutory basis to support the award of attorneys fees.  Defendants maintained that pursuant to the Carmack Amendment,  Plaintiffs were not entitled to attorneys fees, because they did not first engage in arbitration.

Section 14708 of the Carmack Amendment sets forth that carriers must offer arbitration to shippers, such as the Campbells.  Section 14708(d) states that in any court action to resolve a dispute between a shipper of household goods and a carrier, the shipper shall be awarded reasonable attorney fees if the shipper submits a timely claim; the shipper prevails in the action and a decision resolving the dispute was not rendered through arbitration within the period set forth in the Carmack Amendment.  Defendants maintained that Plaintiffs’ refusal to participate in arbitration precluded the awarding of attorney fees. 

The Ninth Circuit disagreed and held that nothing in section 14708 limits attorney’s fees to shippers who first engage in arbitration.  Contrary to the argument of the carriers, the Court determined that the attorney fee provision applies to “any court action,” not just arbitration.  The Court also rejected the Defendants’ argument that its’ decision runs contrary to Congress’ intent to encourage arbitration.  Looking to the plain meaning of the statute, the Ninth Circuit determined that if Congress intended to limit attorneys fees to arbitration proceedings, it would have explicitly said so.   The Ninth Circuit, therefore, affirmed the District Court ruling. 

COMMENT

This decision could have a potentially negative impact on carriers, because it may encourage shippers to bypass cost-efficient arbitration and directly pursue court actions.

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