Kawasaki Kisen Kaisha v. Regal-Beloit; Union Pacific Railroad v. Regal-Beloit

The Supreme Court will hear a pair of consolidated cases to determine whether an amendment to the the Interstate Commerce Act of 1887 applies to the inland rail transportation of goods in the U.S. that originate out of the country when the shipment involved an extension of the Carriage of Good by Sea Act.

The case arose in 2005 after cargo traveling from Shanghai and Hong Kong to the U.S. was allegedly damaged when the Union Pacific Corp. train derailed in Oklahoma.

Regal-Beloit Corp. and Victory Fireworks contracted with Japanese shipping company Kawasaki Kisen Kaisha to transport goods from China through the Port of Long Beach, Calif., to destinations in the midwest. The shipper took the goods to California on its own ocean liner but subcontracted with Union Pacific Railroad to take the goods inland.

The case was removed to a California federal district court only to be dismissed. The district court held that the contracts between the parties did not cover claims for cargo damage.

But on appeal in February, a three-judge panel on the 9th U.S. Circuit Court of Appeals reversed the decision, ruling that carriers could not make contracts clashing with the domestic law.

The appeals panel remanded the back to the lower court to determine whether the railway had at least initially offered the required minimum liability protections, which Union Pacific claims to have done.

On Oct. 20, the Supreme Court agreed to review the case.

Question presented: Whether the Carmack Amendment to the Interstate Commerce Act of 1887, which governs certain rail and motor transportation by common carriers within the United States, 49 U.S.C. §§ 11706 (rail carriers) & 14706 (motor carriers), applies to the inland rail leg of an intermodal shipment from overseas when the shipment was made under a “through” bill of lading issued by an ocean carrier that extended the Carriage of Goods by Sea Act, 46 U.S.C. § 30701.