A recent decision by the 3rd Circuit Court of Appeals serves as a reminder to shippers and carriers alike that they must meet legal burdens of proof when filing claims regarding the shipping and receiving of goods in interstate commerce. Unlike the economic regulations governing motor carriers' operations, these legal standards have not been deregulated.

When filing a claim, the general rule is that a shipper must establish a prima facie case against a common carrier under the Carmack Amendment to the Interstate Commerce Act. A shipper does so by proving that the cargo was in good condition on delivery to the initial carrier and that there was damage or a shortage on delivery to the consignee at destination. The shipper also must document the amount of damage or loss incurred.

When the goods are not plainly visible, such as when they are in a sealed trailer, it is not sufficient for a shipper to offer a "clean" bill of lading as evidence that the cargo was in good condition when tendered to the carrier. In such a case, the shipper must present additional, direct proof that the cargo was in good condition at that time. Even circumstantial evidence will be sufficient when that evidence is "substantial and reliable" enough "to establish by a preponderance of all the evidence the condition of the goods upon delivery" to the carrier.

The recent 3rd Circuit case concerned damage to a temperature-controlled shipment of mushroom spawn that was shown to have been at the correct temperature when it was tendered to the carrier. However, much higher temperatures were recorded when the load was transferred en route and at destination.

The court considered testimony that the driver took the temperature of the product inside the boxes at the point of origin and noted that it was 34 degrees Fahrenheit. The shipper also testified that he personally inspected one of the bags of mushroom spawn at the time of tender and found the product to be in good condition and at the proper temperature.

The court found that his testimony constituted direct evidence only for the bag that he examined "... but was [also] circumstantial evidence of the spawn's condition in the other bags, as the bags had all been stored and loaded together." The court therefore ruled that the shipper did not rely solely on a "clean" bill of lading and had met its burden of proof by presenting independent evidence of the goods' actual condition through the testimony of the shipper, the driver, and others who had taken temperatures en route.

The court also rejected the carrier's attempt to apply the terms of its tariff, which defined "cooler" service as maintaining air temperature of between 35 and 60 degrees Fahrenheit. The shipper and driver had agreed that a temperature of 35 degrees F was to be maintained. The driver wrote on the bill of lading, "Chill—34 degrees." The carrier's claims manager testified that "chill" meant "cooler" to him, but the court ruled that the driver believed that "chill" meant 34 to 37 degrees. The court resolved the ambiguity in the tariff and the bill of lading against the carrier, saying that the "extrinsic evidence" required the carrier to maintain a temperature of 34 degrees despite its contrary tariff rule.

This example reinforces the point that shippers that do not maintain comprehensive records of the condition of the goods they ship through such means as quality control inspections and loading records are inviting unrecoverable losses from loss and damage during transportation. Carriers that do not know what they are receiving from shippers are inviting unnecessary claim payments.