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Siemens Transformadores S.A. De C.V v. Soo Line Railroad Company

March 7, 2012

SIEMENS TRANSFORMADORES S.A. DE C.V., PLAINTIFF,
v.
SOO LINE RAILROAD COMPANY, D/B/A CANADIAN PACIFIC RAILWAY, DEFENDANT.



The opinion of the court was delivered by: Judge Joan H. Lefkow

OPINION AND ORDER

Siemens Transformadores S.A. de C.V. ("Siemens"), a manufacturer of power transformers, filed suit against Soo Line Railway Company, which does business as Canadian Pacific Railway ("Canadian Pacific"), seeking to recover damages to a transformer that Canadian Pacific carried between Eagle Pass, Texas and Ayr, Ontario. Siemens's suit is brought under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 11706 ("Carmack Amendment"), which permits a shipper to recover damages or loss from a carrier in certain circumstances. Siemens has moved for partial summary judgment on the issue of whether Canadian Pacific can assert the affirmative defense of a limitation of liability. For the reasons that follow, the motion [#23] will be granted.*fn1

BACKGROUND*fn2

Siemens is a Mexican corporation that manufactures and sells electrical power transformers. Canadian Pacific is a Minnesota corporation that provides transportation services on its rail lines.

In late 2007 or early 2008, Siemens manufactured transformer TP 765 at its Guanajuato, Mexico facility for a customer located in Ontario, Canada. Siemens contracted with Ferrocarril Mexicano, S.A. de C.V. ("Ferromex") to transport the transformer from Guanajuato to Piedras Negras, Mexico. Transportation from Guanajuato to Piedras Negras was performed under a bill of lading billed by and paid to Ferromex. Siemens also contracted with Fracht FWO, Inc. ("Fracht"), a freight forwarding company, to arrange transport from Eagle Pass, Texas (across the border from Piedras Negras) to the customer in Ontario. Fracht contracted with Canadian Pacific's subsidiary, Canadian Pacific Logistics Solutions ("CPLS"), to arrange for transportation from Eagle Pass to Ayr, Ontario. CPLS contracted with the BNSF Railway Company for transportation from Eagle Pass to Chicago, and then arranged for transportation from Chicago to Ontario using Canadian Pacific's line.

The parties have not submitted Siemens's contracts with Fracht. An email from Sven Braum at Fracht to Ricardo Zarate at Siemens that pertains to the shipment of a different transformer (TP 764) contains the following notice at the bottom:

Important Notice:

All services provided hereunder are subject to the Terms and Conditions of Service of the National Customers Broker and Forwarders Association of America Inc., available at www.frachtusa.com

Liability of Fracht FWO Inc. may be limited in accordance with said terms. (Def.'s Ex. D at ST0084.) The terms and conditions of service that are available on Fracht's website provide the following limitation on liability:

Declaring Higher Value to Third Parties. Third parties to whom the goods are entrusted may limit liability for loss or damage; the Company will request excess valuation coverage only upon specific written instructions from the Customer, which must agree to pay any charges therefore; in the absence of written instructions or the refusal of the third party to agree to a higher declared value, at Company's discretion, the goods may be tendered to the third party, subject to the terms of the third party's limitations of liability and/or terms and conditions of service. (Def.'s Ex. E ¶ 7.) Siemens did not request that Fracht negotiate full liability terms in connection with the shipment of transformer TP 765.

On February 11, 2008, CPLS sent a letter to Fracht regarding the details of the shipment from Eagle Pass to Ontario. The letter includes the following disclaimer of liability:

For transportation of goods within Canada, Canadian Pacific Railway's liability for claims involving any alleged loss, damage, or delay to the goods, and the procedures for processing such claims, shall be the same as that specified in the Railway Traffic Liability Regulations, SOR 91/488 (as amended), except that Shipper and Canadian Pacific Railway agree that:

c.) CPLS/CPR shall not be liable for loss or damage to goods which ...


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