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June 30, 1981


The opinion of the court was delivered by: Shadur, District Judge.


Union Carbide Corporation ("Union Carbide") sues Consolidated Rail Corporation ("Conrail") for its alleged breach of a bill of lading transportation contract. Conrail claims Union Carbide cannot recover because it failed to file a claim of damages against Conrail within the time period required by Section 2(b) of the bill of lading ("Section 2(b)"). Both parties have moved for summary judgment. For the reasons stated in this memorandum opinion and order Union Carbide's motion is granted and Conrail's is denied.


On July 16, 1976 Union Carbide delivered to Conrail a hopper carload of polystyrene plastics (the "shipment") for transportation from S. Bound Brook, New Jersey to consignee Sweetheart Plastics, Inc. ("Sweetheart") in Manchester, New Hampshire. Conrail agreed to transport the shipment pursuant to Bill of Lading No. 352388 (the "bill of lading"), Section 2(b) of which stated:

  As a condition precedent to recovery, claims must be
  filed in writing with the receiving or delivering
  carrier, or carrier issuing this bill of lading, or
  carrier on whose line the loss, damage, injury or
  delay occurred, within nine months after delivery of
  the property . . . or, in case of failure to make
  delivery, then within nine months after a reasonable
  time for delivery has elapsed. . . .

On July 22, 1976 Conrail advised Union Carbide that the shipment had been involved in a derailment. Union Carbide immediately dispatched a replacement shipment to Sweetheart. Within a few days, however, Conrail informed Union Carbide that the derailment was "not serious" and that the original shipment was back en route to Sweetheart. Believing both the original and replacement shipments would be delivered to Sweetheart, Union Carbide billed Sweetheart for two shipments.

In fact Conrail's second message was entirely false, for the derailment had caused serious damage and the first shipment was never sent on to Sweetheart. Instead Conrail turned over what remained of the shipment after the derailment to a salvor, who in turn sold the shipment (originally worth some $56,000) for $11,824. Conrail did not inform Union Carbide of the sale in advance, nor did it advise Union Carbide of the non-delivery to Sweetheart.

Union Carbide began investigating the circumstances in late February 1977 when Sweetheart refused to make payment, maintaining that it had never received the original shipment. Union Carbide asked Eastern Regional Transportation in Bound Brook to obtain a Proof of Delivery, and when none was immediately forthcoming it made several subsequent requests. Finally on July 25, 1977, having concluded that Sweetheart must be right in claiming nondelivery, Union Carbide filed a written claim (the "claim") with Conrail for loss of the shipment.

On January 31, 1978 Conrail advised Union Carbide by letter that it rejected the claim as untimely because of the year's lapse between the July 1976 notice of derailment and the July 1977 filing of the claim. Conrail concluded that the nine months plus "reasonable time for delivery," as provided in Section 2(b), had expired. Conrail's January 31, 1978 letter for the first time informed Union Carbide of the sale of the derailed shipment and offered to tender to it the proceeds of that sale (those proceeds were later paid to Union Carbide).

On October 15, 1979 Union Carbide filed this action under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 11707. It seeks to recover the difference between the shipment's alleged value ($56,376) and the proceeds of the salvage sale. Union Carbide filed its summary judgment motion June 2, 1980 and Conrail filed its cross-motion for summary judgment June 27, 1980. Those motions were fully briefed on July 14, 1980 and July 24, 1980, respectively. On April 30, 1981 this action was transferred to the docket of this Court.

Conrail's Section 2(b) Defense

Section 2(b) is copied from Section 2(b) of the Uniform Bill of Lading and tracks the language of the Carmack Amendment. That statute renders a carrier liable for any damage it causes to property it transports. In that respect the statute prohibits a carrier from providing "a shorter period for the filing of claims than nine months." Though the statute does not specify that such claims be in writing, regulations promulgated thereunder contain such a requirement. 49 C.F.R. § 1005 (1972).

There is no dispute that absent the controversy as to Union Carbide's claim, Conrail would be liable here. Conrail maintains that the language of Section 2(b) and decisions interpreting the Carmack Amendment bar recovery by Union Carbide. In support of its position Conrail cites a long line of decisions in which the nine-month requirement has been strictly enforced. See, e.g., Gooch v. Oregon S.L.R. Co., 258 U.S. 22, 42 S.Ct. 192, 66 L.Ed. 443 (1922); ...

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