Hisense USA Corporation v. Central Freight Lines, Inc.

Filing 38

MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 8/6/2015:Mailed notice(wp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

HISENSE USA CORP.,
Plaintiff,
v.

Case No. 14 C 7485
Judge Harry D. Leinenweber

CENTRAL TRANSPORT, LLC,
Defendant.

MEMORANDUM OPINION AND ORDER
This case concerns a lost pallet of computer tablets and a
carrier’s resulting liability under the Carmack Amendment.

The

carrier, Defendant Central Transport LLC (“Central”), has moved
for partial summary judgment limiting its liability to $82.23
[ECF No. 18], and Plaintiff Hisense USA Corp. (“Hisense”) has
moved for leave to withdraw or amend its admission to Request to
Admit No. 3 [ECF No. 22].
Motions are denied.
June

10,

2015

For the reasons stated herein, both

Pursuant to this Court’s instruction at the

hearing,

Central

is

awarded

$1,631.25

in

attorneys’ fees incurred in responding to Hisense’s Motion.
I.

BACKGROUND

Before summarizing the factual background of this case, the
Court

must

address

certain

responses

Hisense

Central’s Local Rule 56.1(a)(3) statement.

has

made

to

Hisense frequently

responds that it “lacks sufficient knowledge to admit or deny”

certain
denied.

information

and

that

such

information

is

therefore

(See, Pl.’s Resp. to Def.’s L.R. 56.1(a)(3) Stmt. of

Facts, ECF No. 28, ¶¶ 7, 11–12, 15–25.)

Denials of this type

are improper and constitute an admission.

McGuire v. United

Parcel Serv., 152 F.3d 673, 675 (7th Cir. 1998) (“An answer that
does not deny the allegations in the numbered paragraph with
citations to supporting evidence in the record constitutes an
admission.”); Smith v. Lamz, 321 F.3d 680, 683 (7th Cir. 2003)
(“[M]ere
inadequate

disagreement
if

material.”).

made

with

without

the

movant’s

reference

to

asserted
specific

facts

is

supporting

Because the facts of this case are undisputed, the

Court draws the following information from Central’s statement
of facts.
Hisense

manufactures

and

sells

electronic

retailers across North America, including Walmart.

goods

to

When Walmart

discovered that four pallets of computer tablets it received
were

defective,

Hisense.

With

it

made

Hisense’s

arrangements

to

authorization,

return
Walmart

the

goods

arranged

to
for

Central to transport all four pallets from its Johnstown, New
York return center to Hisense’s El Paso, Texas facility.
On January 28, 2014, Central arrived at Walmart’s return
center to pick up a trailer containing the pallets.

Central

accepted the goods under a bill of lading that Walmart prepared,
identifying the goods as electronics, and specifying that “All
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shipments are hereby released to the value at which the lowest
freight charges apply.”

Consistent with Central’s practice, the

driver placed a “PRO sticker” on the bill of lading and signed
the bill to indicate receipt.

The PRO sticker denoted that

Central was receiving the goods “Subject to NMFC 100, CTII Rules
Tariff

[the

“Rules

Tariff”],

49

USC

14706

and

49

CFR

370.”

After Central affixed the sticker, Walmart signed the bill of
lading.

Although Hisense argues that “it is impossible to know

exactly

when

the

PRO

sticker

was

affixed

to

the

[bill

of

lading],” (Pl.’s Resp. at 4), Central has established, through
the

declaration

of

Andrea

Bouchard,

(Ex.

D

to

Def.’s

Mem.,

ECF No. 20-4), that its driver placed the sticker on the bill of
lading at the time the shipment was received and before Walmart
signed.
On February 4, 2014, Central arrived with the trailer in El
Paso.

Hisense alleges that one pallet containing 715 tablets

weighing

822.25

pounds

receipt to this effect.

was

missing,

and

signed

a

delivery

The delivery receipt contained an image

of the bill of lading, including the PRO sticker.
According
rules,

to

charges,

Central,
and

transportation services.

the

Rules

provisions

Tariff

pertaining

sets
to

forth

the

Central’s

It is available to all customers upon

request and can also be found on Central’s website.

Item 780 of

the Rules Tariff defines certain goods — including computers —
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as

“Restricted

Commodities”

and

limits

Central’s

liability to $0.10 per pound per piece.

maximum

Under the National

Motor Freight Classification (“NMFC”), of which Central is a
member,

tablets

are

encompassed

within

the

definition

of

“computers.”
Item 783 of the Rules Tariff sets forth a procedure by
which a shipper may request a higher liability level.
Hisense

nor

Walmart

ever

requested

liability

Neither

higher

than

Central’s standard maximum for restricted commodities.
II.

LEGAL STANDARD

Summary judgment is appropriate when “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”
facts

are

those

that

affect

FED. R. CIV. P. 56(a).
the

outcome

of

the

Material
lawsuit.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

A

genuine

a

dispute

exists

“if

the

evidence

is

such

that

reasonable jury could return a verdict for the nonmoving party.”
Id.

The moving party may meet its burden by showing “there is

an absence of evidence to support the nonmoving party’s case.”
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).

If the

moving party satisfies its initial burden, the non-moving party
must demonstrate with evidence “that a triable issue of fact
remains on issues for which [it] bears the burden of proof.”
Knight v. Wiseman, 590 F.3d 458, 463–64 (7th Cir. 2009).
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The

judge’s

role

at

summary

judgment

is

not

credibility determinations or weigh the evidence.
Haupert, 481 F.3d 543, 550 (7th Cir. 2007).
whether

a

construes

genuine
all

issue

of

evidence

nonmoving party.

in

material
the

light

fact

make

Washington v.
In determining

exists,

most

to

the

favorable

Court

to

the

Bellaver v. Quanex Corp., 200 F.3d 485, 491-92

(7th Cir. 2000).
III.
A.

ANALYSIS

Central’s Motion for Partial Summary Judgment

Hisense brings its claim pursuant the Carmack Amendment,
which allows shippers to recover for actual loss and damage that
occurs during interstate transport.

See, 49 U.S.C. 14706(a)(1).

The bill of lading, which serves as the transportation contract
between

shipper

and

carrier,

Kawasaki

Kisen

Kaisha,

Ltd.

v.

Plano Molding Co., 696 F.3d 647, 652 (7th Cir. 2012), identifies
Hisense as the consignee.

As the consignee, Hisense “stands in

the shoes” of Walmart, its authorized shipper.

See, Valerus

Compression Servs., L.P. v. Lone Star Transp., LLC, No. 10-C517, 2011 WL 3566865, at *4 (E.D. Wis. Aug. 15, 2011).
Carriers

may

limit

their

liability

under

the

Carmack

Amendment if they:
(1) maintain an appropriate tariff pursuant to 42
U.S.C.
§
13710(a)(1);
(2)
obtain
the
shipper’s
agreement as to her choice of liability; (3) give the
shipper a reasonable opportunity to choose between two

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or more levels of liability; and (4) issue a receipt
or bill of lading prior to moving the shipment.
Opp v. Wheaton Van Lines, Inc., 231 F.3d 1060, 1063 (7th Cir.
2000)

(citations

omitted).

Before

its

abolishment

in

1995,

carriers were required to file their tariffs with the Interstate
Commerce Commission.

See, Tempel Steel Corp. v. Landstar Inway,

Inc., 211 F.3d 1029, 1030 (7th Cir. 2000).
U.S.C.

§ 13710(a)(1),

request,

“a

they

written

classification,

need

or

rules,

only

provide

electronic

and

Today, under 42

practices

copy
upon

shippers,
of

the

which

upon
rate,

any

rate

applicable to a shipment, or agreed to between the shipper and
the

carrier,

refer

to

habit.”
The

is

these

based.”
standard

The

shipping

contract

terms

industry
as

continues

tariffs

to

“out

of

maintains

an

Tempel, 211 F.3d at 1030.
parties

do

not

dispute

that

Central

appropriate tariff which is available online and upon request,
or that Central properly issued a bill of lading.

At issue is

whether Central obtained Hisense’s agreement to the liability
limitation contained in the Rules Tariff.
the

liability

limitation

was

According to Central,

incorporated

into

the

bill

of

lading by reference — this occurred through the PRO sticker,
which

specifically

provision

the

bill

cited
of

the

lading

Rules
that

Tariff,
the

and

shipment

the
was

general
received

“subject to the classification and lawfully filed tariffs in

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affect [sic].”
released

to

Moreover, by specifying that the shipment was

the

value

“at

which

the

lowest

freight

charges

apply,” Walmart indicated its “knowledge of the varying rates
and liability limitations contained in the tariff.”

(Def.’s

Reply,

“actual

ECF

No.

30,

at

11.)

Hisense

counters

that

notice” of a liability limitation is required for the limitation
to

be

enforceable,

and

that

it

cannot

be

provided

by

mere

reference to a tariff, or established by formulaic language on
the Walmart-prepared bill of lading.
Tempel
addresses

is

the

whether

only
a

Seventh

Circuit

liability

case

limitation

that

directly

contained

in

a

carrier’s tariff can be incorporated into a bill of lading by
reference, or whether “actual notice” of the limitation is also
required.

In Tempel, a carrier was charged with transporting a

large machine press into Mexico.

Id. at 1029.

When an accident

occurred on Mexican soil, damaging the press, the carrier sought
to

invoke

the

liability

limitation

contained

in

its

tariff,

which provided that the carrier could not be held liable “for
any loss or damage to a shipment within the country of Mexico.”
Id. at 1030.

The carrier argued that the tariff applied because

the bill of lading stated that the press was received “subject
to the classifications and tariffs in effect.”

Id.

The Seventh

Circuit rejected this argument, noting that the bill of lading
made no specific reference “by number or other identifier” to
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the carrier’s tariff.

Id.

Even if it had, the court went on,

“actual notice is necessary for a limitation of liability to be
enforced.” Id. at 1031 (citing Hughes v. United Van Lines, Inc.,
829 F.2d 1407, 1419-20 (7th Cir. 1987)).
Since Tempel, a number of courts have drawn a distinction
between shipper- and carrier-prepared bills of lading.

In the

case of shipper-prepared bills of lading, these courts have held
that general principles of contract law bind the shipper to the
bill’s terms, even if the shipper lacks “actual knowledge of the
limiting aspect of those terms.”
Lines,

249

F.3d

1268,

1274

Siren, Inc. v. Estes Express

(11th

Cir.

2001)

(holding

that

shipper’s reference to “Class 85” in bill of lading resulted in
limitation
knowledge

of
of

liability,
that

term’s

even

though

shipper

“liability-limiting

lacked

actual

attribute”);

see

also, AIM Controls, LLC v. USF Reddaway, Inc., No. H-08-CV-1662,
2008 WL 4925028, at *3 (S.D. Tex. Nov. 17, 2008) (collecting
cases and holding that shipper’s signature on shipper-prepared
bill of lading after carrier had affixed a sticker referencing
tariff resulted in limitation of liability).
Consistent

with

this

“[t]he

traditional

mandate

incorporation

Reply, ECF No. 30.)

rules
of

line
of

of

cases,

contract

Central’s

tariff

Central

urges

that

interpretation . . .
terms.”

(Def.’s

Central relies on Valerus, a case from the

Eastern District of Wisconsin, in which the court held that a
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shipper-prepared bill of lading referencing “tariffs in effect”
subjected the shipper to the liability limitations contained in
the carrier’s tariff:
If [the shipper] was not referencing and incorporating
[the carrier’s] classifications and tariffs, whose was
it incorporating? Once again, it bears mention that a
bill of lading is in essence a contract, and general
principles of contract interpretation are applied when
construing it.
Among those principles is the rule
that
ambiguities
are
construed
against
the
drafter. . . . Here, the only reasonable construction
of the bill of lading is that it referenced and
incorporated the classifications and tariffs of the
carrier.
Valerus, 2011 WL 3566865, at *4 (citations omitted).
However, there was more to the bill of lading in Valerus
than a mere reference to “tariffs in effect.”

Although the bill

of lading incorporated the carrier’s tariff, it also contained
specific language limiting the carrier’s liability.

The bill of

lading explicitly noted that certain classes of goods may be
subject

to

liability

limitations,

and

in

such

cases,

it

was

essential for the shipper to declare the maximum value of the
shipment on the bill of lading “to ensure assessment of the
correct transportation charges.”

Id. at *2.

Despite this clear

instruction on the shipper’s own form, the shipper left blank
the space where value could be declared.

Id.

Hisense relies on Hillenbrand, a case from the Southern
District of Indiana, in which the court held that a shipperprepared “shipping order” failed to provide actual notice of the
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liability

limitation

contained

in

the

carrier’s

tariff.

Hillenbrand Indus., Inc. v. Con-Way Transp. Servs., Inc., No. NA
00-0255CBS, 2002 WL 1461687, at *6 (S.D. Ind. June 19, 2002).
Like the bill of lading in this case, the shipping order recited
that

the

“applicable

tariff”

was

in

effect

and

carrier-affixed sticker identifying that tariff.

included

a

Id. at *1.

The court held that the shipping order’s vague reference to the
“applicable tariff,” even combined with the sticker, did not
show

that

the

shipper

had

“actual

notice”

liability limitation, as Tempel requires.

of

the

carrier’s

Id. at *6.

The court also analyzed the carrier’s receipt, which, in
contrast

to

tariff.

the

Id. 7.

shipping

order,

“clearly

incorporate[d]”

the

In fine print, the receipt specified that

“[t]he terms and conditions of the [NMFC] Series 100 uniform
straight bill of lading . . . shall apply subject to exceptions
in the carrier's tariffs, pricing schedules, terms, conditions,
and rules.”

Id. at *2.

It further provided that articles

subject to the NMFC “shall be considered released at the lowest
released

or

declared

value

stated

therein,”

value was declared on the bill of lading.
the

Court

found

that

the

receipt

unless

Id.

provided

no

a

higher

Nevertheless,
evidence

of

agreement because the shipper had not signed it and it did not
include a space where value could be declared.

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Id. at *7.

It

is

carrier’s

clear

tariff

from
can

actual

the

be

above

cases

incorporated

notice

and

that

into

a

agreement

even
bill

is

though
of

a

lading,

evidence

of

required

under

Tempel.

See, Hillenbrand, 2002 WL 1461687, at *5 (identifying

notice and agreement as “overarching concerns”); see also, H.
Kramer & Co. v. CDN Logistics, Inc., No. 13 CV 5790, 2014 WL
3397161, at *4 (N.D. Ill. July 11, 2014) (“The critical inquiry
under Tempel is whether the shipper has ‘actual notice,’ and
that question cannot be answered merely by looking to whether
the bill of lading refers to a tariff.”).

Both the bill of

lading in Valerus and the receipt in Hillenbrand successfully
incorporated
limitation

the

was

carrier’s

enforceable,

tariff.
there

In
was

Valerus,

also

some

where

the

evidence

of

agreement — the shipper opted not to declare a value in the
space

provided.

In

Hillenbrand,

where

the

limitation

was

unenforceable, such evidence was lacking — the shipper had not
signed the receipt and there was no space to declare a value.
Here, the Court finds that the Rules Tariff is incorporated
into the bill of lading.

The undisputed facts show that:

(1)

the bill indicated that the shipment was received subject to the
“tariffs

in

affect

[sic]”;

(2)

sticker

indicating

that

Rules

parties

signed

bill

of

the

Central’s

Tariff

lading.

driver

applied;
As

the

and
court

affixed
(3)

a

both

asked

in

Valerus, “If [the shipper] was not referencing and incorporating
- 11 -

[the

carrier’s]

incorporating?”

classifications

and

tariffs,

whose

was

it

Valerus, 2011 WL 3566865, at *4.

Nevertheless, under Tempel, mere reference to the tariff is
insufficient to limit liability.

Instead, the bill of lading

must contain additional language that demonstrates notice and
agreement.

Here, the bill of lading makes no mention of a

liability limitation and contains no blank in which to declare
value.
has

The only evidence of notice and agreement that Central

presented

“released

to

apply.”

is

Walmart’s

that

value

the

indication
which

lowest

According

at

to

the

Central,

“[t]his

the

shipment

freight

explicit

was

charges
language

reflects Walmart’s knowledge of the varying rates and liability
limitations

contained

in

the

tariff

and,

further,

reflects

Walmart’s deliberate decision to obtain freight rates based on
the

lowest

possible

No. 30,

at

11.)

reading

of

the

liability

The
bill

judgment, however.

Court
of

limit.”

cannot

lading

(Def.’s

conclude

entitles

that

Central

Reply,
this
to

ECF

broad

summary

Central has failed to present sufficient

evidence showing how Walmart’s request for the “lowest freight
charges”

equates

Accordingly,
evidence
liability

that

to

because
Hisense

limitation,

agreement
Central
had

has

notice

Central’s

Judgment is denied.
- 12 -

to
not
of

Motion

limited

liability.

presented

sufficient

and
for

consented
Partial

to

the

Summary

B.

Hisense’s Motion for Leave to Withdraw or Amend Admission
On June 3, 2015, Hisense moved for leave to withdraw or

amend its admission to Request to Admit No. 3, in which it
indicated that the bill of lading attached to the request was a
true and correct copy of the bill of lading under which Central
had

accepted

Withdraw

was

shipment.
its

The

realization

basis
that

for
the

Hisense’s
bill

Motion

attached

to

to
the

request to admit included Central’s PRO sticker, while the bill
it had filed with the Complaint did not.
On June 10, 2015, the Court agreed to extend briefing on
Central’s Motion for Partial Summary Judgment so Hisense could
conduct

additional

discovery

regarding

the

discrepancy.

The

Court indicated that it would assess attorneys’ fees against
Hisense if it failed to uncover evidence showing that the bill
of lading under which Central received the goods did not include
the

PRO

sticker.

Hisense

has

produced

no

such

evidence.

Indeed, as a result of its additional discovery efforts, Hisense
ultimately learned that “Walmart possessed a bill of lading that
contained the PRO Sticker.”
The

Court

has

(Pl.’s Reply, ECF No. 34, ¶ 10.)

reviewed

Central’s

request

for

attorneys’

fees incurred in responding to Hisense’s Motion and finds its
request for $1,631.25 — reflecting 7.25 hours of attorney time
at

a

rate

of

$225

per

hour

—

reasonable.

Accordingly,

as

indicated at the June 10, 2015 hearing, the Court agrees to
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award Central attorneys’ fees in this amount.

Hisense’s Motion

for Leave to Withdraw or Amend its Admission is denied.
IV.

CONCLUSION

For the reasons stated herein, Central’s Motion for Partial
Summary Judgment [ECF No. 18] is denied.

Hisense’s Motion for

Leave to Withdraw or Amend its Admission to Request to Admit
No. 3 [ECF No. 22] is denied.

Central is awarded $1,631.25 in

attorneys’ fees incurred in responding to Hisense’s Motion.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
Dated:8/6/2015

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