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KOMATSU AMERICA CORP. v. PORTSIDE CARGO SECURING C

May 28, 1981

KOMATSU AMERICA CORP., Plaintiff, against PORTSIDE CARGO SECURING COMPANY, CONSOLIDATED RAIL CORPORATION and NEW YORK DOCK RAILWAY, Defendants.


The opinion of the court was delivered by: LASKER

Opinion

 LASKER, D.J.

 Komatsu America Corp. sues for damage to cargo resulting from a train derailment. It alleges that Consolidated Rail Corporation ("Conrail") received shipment of the cargo at Port Elizabeth, New Jersey and delivered it to Woodhaven, Michigan in damaged condition.

 Komatsu moves to strike two of Conrail's defenses and to reverse an order of Magistrate Gershon directing it to answer interrogatories related to one of those defenses.

 Counsel for the parties agreed during oral argument on the motion that since the outcome of the motion depends on what is determined as to the existence and basis of subject matter jurisdiction here, the motion may be regarded as the functional equivalent of a motion to dismiss by Conrail for lack of jurisdiction.

 Komatsu originally asserted three alternative bases of subject matter jurisdiction: (1) federal question jurisdiction arising out of the claim against Conrail under the "Carmack Amendment," 49 U.S.C. § 11707, (2) diversity of citizenship jurisdiction and (3) pendent party jurisdiction. At oral argument, counsel for Conrail withdrew the allegation of diversity jurisdiction.

 1. The Carmack Amendment

 Conrail argues that there is no federal question jurisdiction because it was a "connecting carrier" and as such may not be sued under the Carmack Amendment, 49 U.S.C. § 11707. The statute provides in relevant part:

 
"A common carrier providing transportation or service ... shall issue a receipt or bill of lading for property it receives for transportation under this subtitle. That carrier and any other common carrier that delivers the property and is providing transportation or service ... are liable to the person entitled to recover under the receipt or bill of lading. ... A delivering carrier is deemed to be the carrier performing the line-haul transportation nearest the destination but does not include a carrier providing only a switching service at the destination."

 49 U.S.C. § 11707(a)(1).

 The statute authorizes suit against either the carrier issuing the bill of lading or the delivering carrier. Since Conrail did not issue the bills of lading, *fn1" it may be sued under this section only if it was the delivering carrier. However, the statute defines a delivering carrier as the carrier who transports the cargo "nearest the destination," and Komatsu does not contend that Conrail was the final carrier in this respect.

 Komatsu does contend that "connecting" carriers are subject to suit under the Carmack Amendment. However, we find no support for this contention in the language of the statute, and the courts which have addressed the question, have concluded to the contrary. In Arnold J. Rodin, Inc. v. Atchison, Topeka and Santa Fe Railway Company, 477 F.2d 682 (5th Cir. 1973), the court upheld a verdict for the defendant railway against a shipper's claim for damage to a cargo of potatoes. Rejecting the plaintiff's contention that the final destination of the cargo was Chicago rather than Texas, the court stated,

 
"Under the Carmack Amendment the holder of the bill of lading is given a cause of action only against the receiving or delivering carrier. The purpose of the Carmack Amendment was to make the initial and delivering carriers responsible so that the lawful holder of a bill of lading does not have to search out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods. The initial or delivering carrier could then recover damages from the connecting carrier on whose line the loss or damage to the property was sustained."

 Id. at 688. Accord Season-All Industries, Inc. v. Merchant Shippers, 417 F.Supp. 998, 1003 (W.D. Pa. 1976). ...


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