American Railway Express Co. v. Levee
Headline: Court enforces interstate carrier’s $50 liability limit for small shipments, blocking a state rule that treated failed deliveries as full-value conversions and allowed larger recoveries.
Holding: The Court held that a carrier’s contract limiting liability to $50 for shipments of 100 pounds or less is enforceable under federal law governing interstate transport, and state rules cannot defeat that limit.
- Allows carriers to enforce agreed $50 limits on interstate small shipments.
- Prevents state rules from shifting the burden of proof to carriers.
- Limits shippers’ recovery to contract value unless they show special facts.
Summary
Background
A Louisiana resident sued a carrier to recover the full value of a trunk and its contents, a shipment of one hundred pounds or less, after the carrier did not deliver it. The carrier’s receipt used the usual Interstate Commerce Commission form saying the shipper agreed the carrier would not be liable for more than fifty dollars for any shipment of 100 pounds or less. At trial the carrier relied on that contract limit, but the state trial court applied Louisiana Civil Code Article 2754 and required the carrier to prove the loss was caused by accidental, uncontrollable events, and awarded the plaintiff $863.75. The Louisiana Court of Appeal agreed, and the state Supreme Court declined further review, leaving the appeal court decision as the state's final ruling.
Reasoning
The legal question was whether federal rules for interstate shipping allow a carrier to enforce an agreed low-value limit, or whether a state rule could force broader liability. The Court said the federal law governing interstate commerce gives effect to the carrier’s stipulation and that a local rule shifting the burden of proof to the carrier would narrow that federal protection. The Court explained that the form of the lawsuit or local procedural rules cannot be used to evade the federally valid contract term, and therefore reversed the state-court judgment.
Real world impact
The decision confirms that carriers in interstate transport can rely on agreed valuation limits for small shipments, unless the shipper proves facts taking the case outside the contract’s protection. State courts may not apply local rules to defeat those federal contract limits. This affects shippers, carriers, and anyone handling interstate deliveries of low-value, small parcels.
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