Certain Underwriters at Interest at Lloyds of London v. United Parcel Serv. of Am., Inc.

Plaintiffs, the third-party insurers of a shipping service for coins and special metals, invoked their subrogation rights and alleged that several of the service’s shipments, worth a total of $150,000, were lost or stolen by United Parcel Service of America, Inc. (UPS) or its employees. Plaintiffs brought state law claims against UPS in federal district court, alleging true and fraudulent conversion, among other claims, premising subject matter jurisdiction solely upon the complete diversity of the parties. The district court dismissed the complaint for failure to state a claim, holding (1) the Carmack Amendment preempted all of Plaintiffs’ state law claims, and (2) the exception recognized by some courts when the common carrier has committed a “true conversion” of goods does not permit an action based on state law but rather abrogates the limitation of liability for causes of action brought under the Amendment itself. The Third Circuit affirmed, holding (1) the Carmack Amendment preempts all state law claims for compensation for the loss of or damage to goods shipped by a ground carrier in interstate commerce; and (2) the “true conversion” exception vitiates the liability limiting features in the Amendment and is not an exception to the Amendment’s preemptive scope. View "Certain Underwriters at Interest at Lloyds of London v. United Parcel Serv. of Am., Inc." on Justia Law