What can you do if your item gets lost in shipment or shows up trashed?
 
If you have an item shipped by a "common carrier" (UPS, FedEx, USPS etc.) and they lose it or damage it in the transporting process that carrier is responsible.  The question is "just how responsible are they?" and the answer is "it depends upon the Carmack Amendment".  "Huh?" you ask, "What's the Carmack Amendment?"

Early last century shipping was just getting started. Companies were trying to move large quantities of goods by rail and highway across the country. They found themselves confronted by totally different laws every time they crossed a state line. Every state had it's own laws governing liability. It was a complex mess! Subsequently, a US Senator named Carmack introduced a federal law called the Carmack Ammendment proposing a single set of rules to govern the liability of any public carrier who lost or damaged goods they were transporting. Now, instead of multiple state laws specifying liability we have one single federal statute governing the rights and liability of "common carriers".

Subsequently, you can't hold common carriers responsible for breach of contract or negligence if they lose or damage your goods. You can only sue carriers under the terms of the Carmack Amendment as that federal statute sent all the State laws governing carrier liability down the tubes. If you want to see the text of the Carmack Amendment you can find it in Title 49 of the United States Code at section 14706 et. seq. Your local librarian can probably help you find it if and when you need a copy. (The abbreviated citation to the statute is 49 U.S.C. á14706 et. seq.)

Here's basically what the Carmack Amendment requires. The "common carrier" (UPS for example)  and the shipper (you) complete a contract called a bill of lading when transportation is being arranged for under this subtitle. The carrier is then liable to the person specified as entitled to recover under the receipt or bill of lading (you).  The liability imposed under this paragraph is for the actual loss or injury to the property_caused by the receiving carrier, the delivering carrier and/or any other carrier involved in the transporting . . .under a through bill of lading.

However, the Carmack Amendment allows common carriers to limit their liability for loss or damage to goods in that contract you develop with them.  The carriers vary the amount they assume liability for but it is typically about $100.  The carrier is not going to pay you more than that $100 limit either if they lose or destroys your item regardless of how valuable it might be. Further, there is absolutely nothing you can do about it as you cannot sue them except under the terms specified in the Carmack Amendment!

The Carmack Amendment requires carriers to offer us some benefits in return for their right to limit their liability. They offer us the opportunity to pay a "declared value premium" on the contract of carriage (known as a "Bill of Lading").  This "declared value premium" is what most folks erroneously call "insurance".  However, it's not insurance. We are simply paying them a premium to assume "liability" beyond the amount they have limited themselves to. 

The "declared value premium" we pay increases in direct proportion to the value we declare the package to be worth. For example, UPS currently charges 35 cents for each $100 incremental increase in declared value above the first $100. 

It is not correct to call the "declared value" charge "insurance". The bottom line is you must declare your package to be worth something and pay the carrier the required declared value premium or there is virtually NOTHING you can do if they lose or trash your item. That's the law! No matter what.... you cannot bring any other type of claim against that carrier as that Carmack Amendment provides your EXCLUSIVE remedy......

However, if you HAVE paid the carrier a declared value premium that carrier will have a serious problem evading liability equal to that declared value in court if they do in fact lose or damage your item.

The following steps are meant to help guide you through the process of getting your money from a common carrier who has lost or damaged your shipment.

Filing a Claim
The first step is to call the carrier that delivered the goods and notify them of the damage. Most contracts of carriage provide that the carrier be immediately notified of any damage to the contents of a package and given the opportunity to inspect the claimed damage. (You can't expect to get relief under the Carmack Amendment unless you comply with your own bill of lading and permit the carrier to inspect the parcel. The federal regs require that you file a claim with the carrier within nine months and allow them to undertake their own investigation of the claim. However, don't wait nine months to file your claim. Get the damages on record with the carrier as soon as practicable. Most carriers will typically get back to you with a report within a few days and will usually offer you reasonable compensation for damaged items if the package was in fact lost or damaged in transit.

In instances where the carrier doesn't pay, you may have to bring the carrier to court.

Who files the claim when something is lost or damaged?
The Carmack Amendment protects anyone with a "beneficial interest" in the shipment. Subsequently, you don't have to be the one with the bill of lading in your hand to be the one who files a claim against a carrier. You can be the person to whom the shipment was intended for delivery.  The person who shipped the item OR the person who was supposed to receive the item has the ability to bring a claim against the carrier.

Typically, the shipper is the one to bring the claim simply because he or she hired the carrier and has the "bill of lading" in hand.  Article 2 of the Uniform Commercial Code ("U.C.C."), (which is adopted in some form in all the states), allows parties to a sales contract to shift the risk of loss however they choose. Any provision made between buyer and seller prior to shipment about who has risk of loss is acceptable. (See section 2-509 of the Uniform Commercial Code).

The seller typically refunds the buyer's money when the risk of loss remains with the seller during the shipment process. That seller then makes the claim against the carrier under the Carmack Amendment or files suit if the carrier declines to reimburse the seller for the damages. If the parties to sale decided that the risk of loss shifted to the buyer as soon as the seller delivered the instrument to the carrier, the buyer is not be entitled to a refund from the seller. The buyer is in that case the one who is the one responsible for bringing the claim for damage against the carrier and filing suit under the Carmack Amendment if need be.

Picking out the right court.
If you have been reasonable and the carrier will not settle your claim to your satisfaction you may take them to court. If you've got a lawyer friend by all means contact them for advice. If not you can bring them to court without a lawyer.

Every state has a state court "system" or hiearchy.
A. There is an "appellate court" --- (that's one where the decisions of lower courts get reviewed by judges who are supposed to know more and their decisions either get upheld or reversed) ---
B. There are "trial courts" --- (that's one where criminal and civil cases get heard for the first time and decided upon). The really big cases are usually heard by what is called "superior" court while smaller cases are typically decided in "district courts" of your state.
C. Finally, within the district court system of each state, there is a "small claims" division.
The "small claims" court is NOT a separate court ordinarily, but a special session of district court. It is designed to handle very small and simple cases quickly. Results in small claims court are quick in coming whereas it may take over a year just to get a trial date set for a bigger case in district or superior court.

Small claims cases are limited to cases that involve approximately $2500 in damages or less. The limit varies from state to state and possibly from county to county within your own state. Your local Clerk of Court can tell you. There are no juries in small claims cases and decisions are made by a judge or a court clerk. If the case involves particularly significant damages it may be worth your while to retain a lawyer to prosecute your claim but it sure isn't absolutely necessary.

What to Tell The Judge in a Small Claims Court.  You start by telling the judge the basic facts of your case and then explaining what you know about the Carmack Amendment. The Carmack Amendment is not something lawyers and judges study so YOU may well know more about the Carmack Amendment than a lawyer or the judge. To help you explain your case bring a copy of the Carmack Amendment with you and give it to the judge.  (Title 49 of the United States Code at section 14706 et. seq)

Also specific "legal points" should be made to the judge so keep the following in mind in presenting your case in small claims court.

1. State Law Is Preempted by the Carmack Amendment  The first law point to make to the Judge is the fact that the Carmack Amendment is the exclusive remedy for any party (shipper or recipient) aggrieved by damage or loss to goods shipped via a bill of lading. All other claims or legal theories for recovery under state law (such as breach of contract or negligence claims) are "preempted" by the Carmack Amendment. Preemption is a phrase that refers to the Constitutional doctrine that states cannot enact laws that conflict with federal laws and that, when Congress has evidenced an intention to occupy the entire field of an area of law with its own legislation, states cannot even enforce their own laws that relate to the same topic.

The point here is to make sure the judge is aware that the ONLY law that applies and the only rules that he or she need examine in deciding your case are the rules that govern the application of the Carmack Amendment. If the judge wants proof that you know what you're talking about refer him or her to a Supreme Court case entitled Missouri Pacific Railroad Company v. Elmore & Stahl, 377 U.S. 134 (1964).  Bring a copy of this case to court with you and give a copy to the judge so as to leave them no room for doubt.

2. Jurisdiction.  It is actually very unusual to apply federal law in a small claims proceeding. Subsequently  the judge may be confused about whether he or she has the right or "jurisdiction" to hear your claim. If so point out to the judge that the text of the Carmack Amendment itself specifies that private claims (such as yours) can be brought either in a Federal District Court or in any state court of competent jurisdiction. (If the amount of your claim is within the limits of your state's small claims rules, you should be fine). Refer the judge to 49 United States Code section 14706(d) if he or she has any question about jurisdiction as this is the section of the Carmack Amendment that says you can bring claims in either state or federal court.

3. The "Strict Liability" Standard of the Carmack Amendment This will probably be the most important point you will make with the Judge. "Strict Liability" means that a party cannot escape liability for its actions when certain facts are shown.  The Supreme Court has specifically stated that the Carmack Amendment imposes upon common carriers "strict liability" for damages or loss to parcels in the carrier's care. Again, you should refer the judge to the Missouri Pacific case above as support for this "Strict Liability" proposition.

4. The Plaintiff's Prima Facie Case.  In order to prove that the carrier is "strictly liable" as described above you will need to prove your "prima facia case" (pronounced PR-EYE-MA FASHIA). Loosely translated, the "prima facie case" is simply the "essential elements" of your claim. According to the Missouri Pacific case identified above, once you prove the essential elements you are almost certain to win. To prove your "prima facie case" (essential elements) you need to show the following three things:

1. That the goods (item) was delivered to the common carrier in good condition;
2. That the goods (item) arrived in damaged condition or not at all.
3. How much the damages are (The item was worth $3000 when shipped but $1000 in damaged condition . . . thus your damages are $2000).

There is no perfect way to prove these three things. You do your best to tell your story.

1.  To prove the item at issue was in good condition when it was delivered to the common carrier you simply testify that, when you dropped the piece off at UPS, FedEx, DHL, etc. the item was in mint shape. You might bring along photos of the equipment showing its condition prior to shipping and you can get affidavits from your buddies who saw the item and can aver to its condition. If you are not the shipper get a written statement or affidavit from that shipper saying the item was in good/excellent/pristine condition when he or she put it in the hands of the carrier.

2.  To prove that the gear arrived in damaged condition you need only bring in the damaged goods. If there is damage that is not visible to the item you may need to somehow clearly explain the nature of the injury to the judge, but in most cases the damage will be self evident. You should also bring the packing materials. If the box in which the gear was packaged does not show any visible damage you may need to explain to the judge that the item can be severely damaged when dropped even though the box shows no signs of abuse.

3.  To prove the amount of your damages you will need to testify (1) about the value of the item before it was shipped and (2) its current value. You should bring along any appraisals you might have and copies of the various price guides (The Vintage Guitar Magazine Price Guide and the Orion Blue Books are typically accepted as "learned treatise" on the values of instruments in cases against a common carrier).

The carrier may offer you the cost of repair as compensation and may decline to pay the diminished value of a repaired vintage instrument. In such a case it is up to you to somehow explain to a judge why it is that a $5000 item that only required a $300 repair is is now worth no more than $2500.  Judges, jurys, and customer reps from your carrier will probably not understand why a repaired guitar is worth so much less than a pristine example so it will be up to you to educate the judge on this subject. Bring whatever books, research and articles you have on the subject to court with you knowing that if you give a reasonably understandable explanation you should collect the difference between the full amount of the item's diminished value.

Once you prove the three things above to the satisfaction of the judge you should win (provided the court applies the federal law the way it is supposed to).

5. A Helpful Presumption There is an additional point that you might want to make with respect to the first element of your "prima facie case" --- proving that the goods were in good condition when the carrier got them. Any time a common carrier issues to a shipper what is known as a "clean bill of lading" the law PRESUMES that the goods were in good condition when the carrier got them. For example, if you bring an item to a common carrier in an unsealed box and you ask the carrier to box up the item and/or seal the box the carrier can see the item. If he does not make any notation as to the condition of the goods on the contract you have what is called a "clean bill of lading". The law PRESUMES that the contents of the package were in good condition because the carrier had every chance to see them and did not indicate that the goods were less than in good condition. Subsequently it's obviously best to show the contents of a package to carriers before boxing them up and sealing them. This rule only applies when the carrier has the opportunity to inspect the package contents before it is finally sealed and given over to them for delivery. Any time this type of factual situation can support application of this rule, your case against the carrier is stronger. For cases that describe this rule about the above described "presumption" you can look up and print out copies of the following cases. Centennial Insurance Company v. M.V. Constellation Enterprise, 639 Federal Supplement 1261 (Southern District of New York 1986) and Caribbean Produce Exchange v. Sea Land Service, 415 Federal Supplement 88 (District of Puerto Rico 1976).

6. Circumstantial Evidence is Appropriate.  Sometimes the carrier accepts a box that is already sealed and has no chance to inspect the item. Here pictures of before and after will help in proving both that the item was in good condition when the common carrier took possession AND that it was damaged when it reached its final destination.  You can rely on circumstantial evidence. The case that supports relying on circumstantial evidence is entitled Fine Foliage of Florida v. Bowman Transportation, 910 Federal Reporter 2nd 1024 (11th Circuit 1990).

7. Sue Everybody  The Carmack Amendment makes ALL carriers involved in delivering your gear liable for any damage sustained or loss occurring during shipment. Most sellers send their items via a large commercial carrier like UPS, FedEx or DHL and once a package is left with them it stays with them until it is delivered. However, sometimes common carriers engage OTHER carriers to handle the item along the line. If several carriers are involved they are all liable for ANY damage or loss to the shipment. That is SPECIFIC so you don't have to try to figure out when and where the parcel got damaged so as to sue the carrier who had control when actual damage occurred. All are liable so they can fight amongst themselves as to who should bear the brunt of the liability. Some dealers who buy and sell in very large volumes may use common carriers like trucking firms for large shipments and these carriers may sub-contract all or a part of the job. Just remember that the Carmack Amendment protects you against any and all common carriers who touched your goods on the way from point A to point B.

8. You Can't Change The Carmack Amendment A common carrier cannot put anything in a contract for carriage (bills of lading) that contradicts or differs from the rules in the Carmack Amendment. If they try to enforce provisions that contradicts the Carmack Amendment such a provision is "void as against public policy". That's what lawyers refer to as a "nullity." The Fine Foliage case referred to above supports this proposition. This rule prevents common carriers from trying to get around its own liability under the federal law by inserting contract language or provisions federal law says shouldn't be there.

9. The Carrier's Defenses. Once you prove the three parts of your "prima facie" case you are as close to having an open and shut case as you can get. Still, there are some limited defenses available to carriers. The defenses that might apply are known as the "act of shipper" defense, the "act of God" defense and the "act of public enemy" defense.

The "act of shipper defense" may apply if the common carrier can prove that you did something that was so mind boggling stupid the package at issue was destined to show up broken. For example, if you don't protect a fragile glass item inside a steel shipping box expect to lose your right to recover under the "act of shipper" defense. Find out what the basic packaging requirements are for items you propose to ship and follow them so as to avoid this problem.

Secondly, if the box gets whisked away by a tornado the carrier will raise a defense that the damage was the result of an "act of God".

Finally, if a civil war breaks out and the truck carrying your package becomes a target the carrier will defend against your claim by saying that the damage was the result of an act of a "public enemy."

If the facts warrant seek the advice of a lawyer.

10. Consumer Protection Laws  Most every state has laws designed to protect consumers. Some of these laws are copies of the Federal Trade Commission Act, also known as "mini FTC acts" in various states. Consumer protection laws generally provide legal claims to anyone who has been "injured" by an "unfair or deceptive" business practice. The Carmack Amendment "preempts" state laws that might otherwise apply to a carrier's failure to deliver a package in good condition (breach of contract or negligence) but your state's consumer protection statutes may well apply in certain instances since they are there to prevent unfair business practices. In such case you might successfully argue that you should be entitled to relief under these consumer protection laws if the common carrier dealt with your claim for relief in an unfair or deceptive way.

It is possible that you might well have two claims with the first being your Carmack Amendment claim for failing to deliver the package in good condition and the second being a consumer protection claim for being treated deceptively and unfairly by the carrier AFTER it had lost or damaged your package.

That's probably more about shipping than you wanted to know but the time may well come when you need to know it.

Packing and Shipping Tips
How to Adjust Necks and set Intonation for proper playing action.
How to Set UP electric Guitars.
Taking Care of Guitar Finish
Fretboard care and Treatment (Fret Polishing, etc.)
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