Move It and Lose It! The Law for Lost and Damaged Items by Interstate Moving Companies, 0521 SCBJ, SC Lawyer, May 2021, #26

AuthorBy Rachel E. Carr
PositionVol. 32 Issue 6 Pg. 26

Move It and Lose It! The Law for Lost and Damaged Items by Interstate Moving Companies

No. Vol. 32 Issue 6 Pg. 26

South Carolina BAR Journal

May, 2021

By Rachel E. Carr

The pandemic has slowed life in many ways, but for now, the real estate market has not yet declined. Historically low interest rates, job losses, and the high cost of rent are all factors that have consumers considering new homes and big moves for 2021.

As real estate attorneys, we see clients from all over the country moving to our respective areas and that has not changed in this pandemic. There are three ways clients typically move: (1) do-it-yourself rented moving trucks, (2) portable storage units, and (3) a moving company that packs, loads, transports, and unloads household goods. The scope of this article is to discuss the people moving across state lines with third party moving companies.

As your clients anxiously push through the closing package to get the keys, they may be wondering what to do if their household goods are late or damaged by their movers. If your clients hired a moving company to move their household goods across state lines and their furniture or dishes are broken, they may not have the remedy they would anticipate.

What happens when your client’s household items are damaged by an interstate residential moving company?

In the 1990s Michael Ward was transferred from New Jersey to North Carolina for a new job and hired a moving company to load, drive, and unpack his household property.[1] A few days into the move, t he moving van driver got stuck on a railroad crossing in Morrisville, North Carolina.[2] While it sat over the train tracks, a train “rammed into its side, demolishing it and destroying or damaging almost all of the Wards’ household property.”[3]

If you have no prior knowledge or background with this issue, you may immediately think that moving companies are liable for their own negligence when transporting household possessions. However, federal law generally[4] preempts state tort and contract claims in the case of interstate moving companies.[5] Congress enacted a law that carriers of household goods are strictly liable for damage or loss to property they transport.[6] This is called the Carmack Amendment (“Carmack”), and it applies to interstate transport of goods, including household goods; it does not include intrastate shipments.[7]

The good news for a client that hired an interstate mover is that Carmack makes the carrier company strictly liable for any actual damages that result from the move.[8] The carrier company is liable “unless [they] can show that the damage was caused by (a) the act of God; (b) the public enemy; (c) the act of the shipper himself; (d) public authority; or (e) the inherent vice or nature of the goods.”[9] The carrier company acts as an insurer of the goods as part of its service to the shipper.[10] The bad news is that the liability of the carrier is potentially–and in some cases, enormously–limited.

Carrier liability history

Historically, Congress determined that interstate moving contracts were governed by the Interstate Commerce Commission (“ICC”).[11] The only recovery for lost goods was actual (depreciated) value.[12]As the household goods are used by their owner, they are worth a lower value than the true cost of replacing the goods. The ICC determined that however depreciated the cost for the consumer, it was still an expensive transaction for the moving company to take on such full protection liability.[13] Eventually, under the ICC, the company was able to offer a “released rate” which was a reduced replacement cost to the carrier company.[14] The released rate was created to lower the costs of the move for the consumer and the carrier company because the company could assume less than the full level of cargo liability protection.[15]

The ICC was abolished in December 1995 with the ICC Termination Act of 1995. An independent federal agency, the Surface Transportation Board (“STB”), was created and charged with economic regulation of various modes of surface transportation. This charge includes “adopt[ing] rules to enhance consumer protection for losses incurred on interstate household goods moves.”[16]

Statute v. contract—Determining value of lost/ damaged goods replacement value

In the absence of any writing, a carrier’s liability for household goods is...

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