The United States District Court for the Southern District of New York recently granted a Motion for Summary Judgment in part by ordering that the plaintiff’s damages for lost items were capped at the items’ listed declared value, pursuant to the Federal Carmack Amendment, 49 U.S.C. §14706(d). In Ikegwuoha v. Art Village Gallery a/k/a Urevbu Contemporary, et al., the District Court found that despite a demand price of $9,500,000, the plaintiff’s damages for his lost artwork from a national courier services provider were limited to the declared value of $1,000.00 for the shipment of four pieces of art, which was consistent with the federal law.
The plaintiff in Ikegwuoha, a Nigeria-based artist, was involved in a commemorative art exhibition between March and April of 2018 wherein he shipped five pieces from Nigeria to a local art gallery in Tennessee through a courier services provider with a declared value of $277.00 for use during the 2018 exhibition. Following the exhibition, after one of the plaintiff’s pieces sold, the remaining four were, at the request of the plaintiff, returned via a different national courier services provider chosen by the plaintiff. When shipping the plaintiff’s artwork to his virtual office in New York, at his request, the art gallery set a declared value of $1,000.00 for the returned pieces. When the shipped artwork arrived at the plaintiff’s virtual office, however, the office’s policy prohibited large scale packages and therefore, the package was refused. Thereafter, the plaintiff’s artwork allegedly did not complete its return transit to the art gallery.
The plaintiff initiated litigation in New York State Supreme Court for alleged negligence of the courier in allegedly misplacing the plaintiff’s artwork during shipment, which lawsuit was ultimately removed to the Southern District of New York, as the Carmack Amendment “governs lost or damaged goods transported by motor carriers in interstate commerce.” Following the conclusion of discovery, defense counsel moved for summary judgment on behalf of the defendant courier, seeking in part to cap any potential damages at the declared value price of $1,000.00.
The District Court found that the purpose of the Carmack Amendment was to provide a “uniform regime for recovery by shippers directly from the interstate common carrier in whose care their items are damaged…” The District Court further found that the national courier services provider can limit its liability “to a value established by written or electronic declaration of the shipper… if the value would be reasonable under the circumstances surrounding the transportation.” Therefore, the District Court concluded that any liability of the national courier services provider was capped at the agreed-upon declared value of $1,000.00, which was the only sum required to be reimbursed to the plaintiff for the allegedly lost artwork.
From a defense perspective, Ikegwuoha is a lesson for all involved to consider all available remedies in matters involving interstate commerce and transportation, including the Carmack Amendment, designed to protect courier services in defense of suits for allegedly damaged or lost goods. The Carmack Amendment also allows the matter to be heard in Federal Court, a traditionally more favorable venue for defendants, while limiting the exposure on liability to a specific declared sum for any items lost or damaged during shipment. Upon commencement of any potential Carmack Amendment litigation, it is crucial to determine whether a declared value for the items allegedly lost or damaged has been stated before making an appropriate application to the District Court to limit liability and cap the damages sought.