The Tenth Circuit Court of Appeals published its opinion in Flying Phoenix Corp. v. Creative Packaging Machinery, Inc. on Tuesday, June 12, 2012.
The Tenth Circuit affirmed the district court’s decision. Petitioner, a corporation in the business of importing and reselling fireworks, purchased a machine designed to package fireworks for sale to end users from Respondent. Petitioner previously purchased a different machine from Respondent, and that machine arrived in satisfactory condition. The second machine, however, arrived severely damaged. Respondent was responsible for shipping the second machine to Petitioner. A bill of lading issued for the shipment listed Respondent as shipper, R&L Carriers as carrier, and Petitioner as consignee. “Importantly, the bill of lading limited the period for filing claims with a carrier to nine months, and limited the time for filing civil suit to two years and one day following denial of a claim.”
Petitioner filed suit against Respondent almost four years after its initial claim submitted to Respondent was denied, and nearly two years after the limitations period for filing civil suit expired. The district court held that Petitioner’s claims were brought pursuant to the bill of lading and were time-barred by the limitations period contained therein. “On appeal, Petitioner argues that the district court erred by holding that (1) its claims were based on the bill of lading, and (2) it was bound by the terms of the bill of lading even though it was not a party and did not consent. [Petitioner] acknowledges that a bill of lading existed for the shipment, but urges that (1) it was not a party to that bill of lading (but instead was listed as consignee by someone else), and (2) it had no knowledge of the bill of lading until shortly before the present lawsuit was filed.”
The Court disagreed and found that “a carrier’s failure to issue a bill of lading only precludes the carrier from contracting for limitations periods in line with § 14706(e)(1). Thus, the Carmack Amendment does not create an independent cause of action for recovery where a receipt or bill of lading issued, and [Petitioner] does not dispute that a bill of lading was issued in this case.” Additionally, Petitioner “is deemed to have accepted the terms of the bill of lading by suing under it.” Lastly, “[t]here is no suggestion in the record that [Petitioner] ever sought a copy of the bill of lading but was denied access, and it is well-established that a party may not sit idly by, making no effort to obtain obviously necessary documents, and then claim ignorance.”
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