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American Cyanamid Co. v. New Penn Motor Exp.

filed: November 4, 1992; As Corrected November 8, 1992.


On Appeal from the United States District Court for the Eastern District of Pennsylvania. (D.C. Civil No. 91-7101)

Before: Greenberg, Nygaard, and Higginbotham, Circuit Judges

Author: Greenberg


GREENBERG, Circuit Judge.



This matter is before this court on appeal from an order entered April 15, 1992, dismissing this case for lack of subject matter jurisdiction without prejudice to the appellant American Cyanamid Company pursuing its claim in a state court. We will affirm.

The facts on which Cyanamid relies and which we will treat as not being in essential dispute are as follows. Cyanamid, through its Lederle Laboratories Division, manufactures DTP, a vaccine for immunization of infants and children against diphtheria, tetanus, and pertussis. Not surprisingly, care must be taken to preserve the vaccine which cannot be sold if frozen. 21 C.F.R. § 620.6(g). On February 6, 1989, Cyanamid contracted with the appellee, New Penn Motor Express, Inc., a motor carrier, pursuant to Cyanamid's own written bill of lading, to deliver a sealed shipment of 7,000 vials of DTP from Cyanamid's facility in Pearl River, New York, to the United States Defense Department Depot in Mechanicsburg, Pennsylvania. Cyanamid's bill of lading included a "released value" clause, in conspicuous dark type stating that "the agreed or declared value of the property is hereby specifically stated by [Cyanamid] to be not exceeding $1.65 per pound or any higher value permitted by RRO-972 or $.50 per pound, whichever value results in the lowest transportation charges." Since the DTP weighed 1,260 pounds, this released value provision in itself set a value of $2,084 for the DTP, the released property.*fn1 The bill of lading also contained a printed provision in dark type reading "drugs or medicines, N.O.I.B.N." followed by specific instructions for the delivery reading in conspicuous type "protect from freezing," "must be delivered by 2/8/89," "packed in wet ice," "notice to consignee," "do not refrigerate in transit," "do not freeze," and "after inspection, upon arrival, store between 2-8c (35-46f)."

The bill of lading was accepted by New Penn on February 6, 1989, when it picked up the DTP and signed a receipt reciting "rush . . . must be delivered 2/8/89" and "protect from freezing." New Penn did not comply with the instructions in the bill of lading and, notwithstanding the winter season, did not protect the DTP from freezing. Rather, according to Cyanamid, New Penn permitted the vaccine to sit in an unheated, uninsulated trailer while it gathered enough other goods to justify sending a truck to the Mechanicsburg Depot.*fn2 When New Penn delivered the DTP on February 10, 1989, it was worthless, having been destroyed by the cold.

On September 29, 1989, Cyanamid submitted a claim to New Penn for $53,936.75 for its loss, but New Penn rejected the claim. Thereafter, Cyanamid brought this action for the contract price of the DTP, $908,040, in a complaint that did not explain the striking difference between the amount of the claim and the contract price. Cyanamid asserted that there was federal question jurisdiction under 28 U.S.C. § 1331, diversity jurisdiction under 28 U.S.C. § 1332, and jurisdiction under 18 U.S.C. § 1337(a), as this case was being brought under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 11707, and the matter in controversy exceeds $10,000, exclusive of interest and costs.

After answering, New Penn moved for a partial summary judgment limiting its liability to $2,084 in accordance with the released value of the DTP in the bill of lading, but on March 17, 1992, the district court entered an order denying the motion. The order recited that New Penn could limit its liability if it gave Cyanamid "a reasonable opportunity to choose between full or limited levels of carrier liability," and if it issued "a receipt or bill of lading . . . before the freight [was] transported." However, the order stated that New Penn might have intentionally deviated from the bill of lading and in those circumstances could be estopped from relying on the released value limitation. Furthermore, the court, citing National Semiconductor Corp. v. Commercial Lovelace Motor Freight, Inc., 560 F. Supp. 908 (N.D. Ill. 1983), held that there were facts in dispute regarding the reasonableness of the limitation of liability in light of the circumstances surrounding the transportation.

Thereafter, New Penn successfully moved for reconsideration. Upon reconsideration, in an order entered on April 15, 1992, the district court succinctly recited that Cyanamid's "damages are limited to . . . $2,084.00 pursuant to . . . the bill of lading" and that even if Cyanamid "can establish an intentional deviation from the terms of the bill of lading, the limitation on [New Penn's] liability would still apply." The court cited Deiro v. American Airlines, Inc., 816 F.2d 1360 (9th Cir. 1987), and Rocky Ford Moving Vans, Inc. v. United States, 501 F.2d 1369 (8th Cir. 1974), as support for its holding. Thus, it dismissed the case, as the $10,000 jurisdictional threshold in 18 U.S.C. § 1337(a) had not been met. Cyanamid appeals from the order of April 15, 1992.



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