Southeastern Express Co. v. Pastime Amusement Co.

Background

A person or business sued a carrier after a moving picture film shipment arrived late and could not be shown as advertised. A jury awarded $1,500, and the South Carolina Supreme Court affirmed that award. The shipment moved interstate from Jacksonville, Florida, to Charleston, South Carolina. The carrier’s filed tariff said liability was capped at $50 for shipments of 100 pounds or less (or 50 cents per pound for heavier shipments) unless a greater value was declared; the declared value in this case was $50 and the shipping rate was based on that value. The trial court and the state high court held the tariff limit did not apply because the suit sought damages for interruption of business caused by the delay.

Reasoning

The main question was whether federal shipping law (the Carmack Amendment) controls liability for interstate shipments and whether a carrier’s tariff can limit recovery for delay. The Court said the federal statute governs and is broad enough to cover all damages resulting from a carrier’s failure to perform, including delay-related losses. The opinion explains that carriers must base rates on declared value so compensation matches the risk accepted, and that tariffs must be applied uniformly rather than allowing special deals that favor particular shippers. Applying that reasoning, the Court held the tariff’s liability cap governed and barred recovery beyond the tariff limit.

Real world impact

As a result, businesses and entertainers who suffer lost revenue from late interstate deliveries may be unable to recover more than the carrier’s posted tariff limit when the shipper declared a limited value. State court rulings that ignore the federal tariff are overridden. The Supreme Court reversed the state judgment and sent the case back for further proceedings consistent with this ruling.