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08-1553 KAWASAKI KISEN KAISHA V. REGAL-BELIOT CORP. DECISION BELOW: 557 F.3d 985 CONSOLIDATED WITH 08-1554 FOR ONE HOUR ORAL ARGUMENT. CERT. GRANTED 10/20/2009 QUESTION PRESENTED: Whether the Carmack Amendment to the Interstate Commerce Act of 1887, which governs certain rail and motor transportation by common carriers within the United States, 49 U.S.C. §§ 11706 (rail carriers) & 14706 (motor carriers), applies to the inland rail leg of an intermodal shipment from overseas where the shipment was made under a "through" bill of lading issued by an ocean carrier that extended the Carriage of Goods by Sea Act, 46 U.S.C. § 30701 Note, to the inland leg, there was no domestic bill of lading for rail transportation, and the ocean carrier privately subcontracted for rail transportation. LOWER COURT CASE NUMBER: 06-56831
The U.S. Supreme Court case Kawasaki Kisen Kaisha Ltd. et al. v. Regal-Beloit Corp., et al., 2009, revolved around a dispute over the interpretation of the Carriage of Goods by Sea Act (COGSA) and its application to multimodal transportation contracts that involve both sea and land segments in international shipping arrangements. Regal-Beloit Corporation had contracted with an intermediary for shipment of goods from China to Wisconsin via ocean carrier Kawasaki Kisen Kaisha Ltd ("K" Line). The cargo was damaged while on a train in Oklahoma during the inland leg of transit, leading Regal-Beloit to sue "K" Line under COGSA which limits carriers' liability. However, "K" Line argued that their bills of lading extended COGSA's terms inland as per Himalaya Clause - thus limiting their liability even during land transport - whereas plaintiffs contended that Carmack Amendment should apply instead which would increase carriers' potential liabilities. In a 7-2 decision, the Supreme Court ruled in favor of "K" Line stating that parties can contractually extend COGSA’s rule displacing package limitation rules beyond “tackle-to-tackle” period (loading onto or discharge from ship), thereby validating through bills extending such clauses into domestic legs within multimodal shipments.
In the dissenting opinion for Kawasaki Kisen Kaisha Ltd. et al. v. Regal-Beloit Corp., Justice Ginsburg, joined by Justices Stevens and Breyer, argued that the majority's decision was inconsistent with previous rulings and international law principles regarding maritime commerce. The dissenters believed that a bill of lading should not be able to override U.S statutory provisions designed to protect domestic shippers from foreign carriers' attempts to limit their liability through contractual agreements. They contended that such contracts undermine American policy interests in maintaining fair competition among carriers and ensuring adequate compensation for lost or damaged goods during transport within U.S borders.