August 2007

From the editors of CCH's Transportation products, here are summaries of the important recent developments in the area for the past month.  Complete coverage of these issues, and many more, appear in our print and electronic products, including: Aviation Law Reporter, Commercial Aircraft Transactions, Issues in Aviation Law and Policy, Federal Carriers Reporter, Federal Motor Carrier Safety Administration Decisions, and Motor Carrier Liability.

If you have comments or suggestions concerning the information provided or the format used, please feel free to contact me directly at aaron.broaddus@wolterskluwer.com.

Hot Topics

Congress Considers Aviation System Funding Options
With the current authorization for the Federal Aviation Administration, the Airport and Airway Trust Fund, and the fuel and ticket taxes that provide revenue for the trust fund all due to expire at the end of the current fiscal year, Congress is weighing options for funding the nation's aviation system going forward. A large part of the debate centers on how to finance the new GPS-based “NextGen” air traffic control system. At a July 12 hearing of the Senate Finance Committee, Chairman Max Baucus (D-Mont.) said the amount of money remaining in the Trust Fund is less than $2 billion, and that roughly half of the Trust Fund's revenues come from passenger ticket taxes. The post-9/11 downturn in revenue came as no surprise, Baucus noted but, at the same, time it “argues for a more predictable stream of revenue to fund the aviation system.” The Committee will be working to fund an air traffic system that is “fair, reliable, and efficient, ”Baucus added. Ranking Committee member Charles E. Grassley (R-Iowa) said that, as the Committee evaluates the funding options, it will need to make decisions “over the funding responsibilities that should be allocated to all participants to include the passengers, the airlines, and owners and operators of the aviation inventory across the nation.”

High Court to Rule on Preemption of State's Tobacco Delivery Law
The U.S. Supreme Court has agreed to decide whether the Federal Aviation Administration Authorization Act of 1994 (FAAAA) preempts states from exercising their historic public health police powers to regulate carriers that deliver tobacco to children, and to require shippers of tobacco to utilize carriers that provide age verification. The Attorney General of Maine filed a petition for certiorari with the High Court after a federal appellate panel ruled that the FAAAA preempts two provisions of a Maine statute regulating and restricting the sale and delivery of tobacco products purchased via the Internet or other electronic means [see New Hampshire Motor Transp. Ass'n v. Rowe, CCH Federal Carriers Reporter ¶84,440].

According to the appeals panel, recognizing an exception for police power enactments, which the state had argued for, would swallow the rule of preemption because most state laws are enacted pursuant to this authority, the court reasoned, adding that FAAAA's text and legislative history focus on the effect of a state's law on carriers, and not on the state's objective in passing the law. Thus, the imposition of a purpose-related limitation on FAAAA preemption would create an impermissible gap between the scope of preemption under FAAAA and the Airline Deregulation Act of 1978 that FAAAA's drafters had sought to avoid, the court said. Based upon this analysis, the court determined that the statutory provisions were preempted because they expressly referenced carrier services and affected their timeliness and effectiveness, and because they dictated procedures for locating such packages in the delivery chain, requiring changes to the carrier's uniform package-processing procedures. USSCt Dkt. No. 06-457, June 25, 2007.

Aviation News

Congress Denies TSA Workers Collective Bargaining Rights
Democratic lawmakers dropped a provision from homeland security legislation that would have given airport screeners the right to collectively bargain with the Transportation Security Administration. Senate Majority Leader Harry Reid (D-Nev.) and House Speaker Nancy Pelosi (D-Cal.) agreed to Republican demands to eliminate the collective bargaining language from the legislation, which would implement recommendations from the 9/11 Commission. The move clears the way for House and Senate negotiators to proceed to conference on the measure to work out the differences between the legislation passed by each of the two chambers. TSA welcomed the development. “We appreciate the decision by Congress to eliminate the collective bargaining provision for the Transportation Security Administration from the 9/11 bill,” the agency said in a statement. “TSA will continue to vigorously pursue activities in support of active employee engagement and a participative workforce.” The Bush Administration had threatened to veto the bill if it contained collective bargaining rights for airport screeners.

Convention Governs, Preempts State Law Air Crash Claims
State law claims for the death of an airline passenger as a result of the crash of Comair flight 5191 in Lexington, Kentucky, were preempted by the Montreal Convention to the extent the Convention was applicable under the facts of the case, a federal district court ruled. The flight crashed during the passenger's round-trip from the U.S. with an agreed stopping place in St. Lucia. Noting that the U.S. is a signatory to the Convention, but that St. Lucia had signed neither the treaty nor its predecessors, the court nonetheless ruled that the Convention governed the action. According to the court, the Convention's plain language includes within its scope a round-trip ticket from the U.S. with an agreed stopping place within another state, even if that state is not a signatory to the Convention. The court then held that the Convention preempts all state law causes of action, and that a cause of action pursuant to the Convention is the exclusive remedy available for plaintiffs' claims against the carrier. Air Crash at Lexington, Ky., Aug. 27, 2006 (EDKy) 32 Avi. 15,235.

Suit to Compel Cabin Crew Health Measures Fails
A U.S. appeals court affirmed the dismissal of an action by two labor unions to compel increased government regulation of airline flight attendants' working conditions. The unions had sought a declaratory judgment that the Federal Aviation Administration, by allegedly having failed to exercise its asserted authority to protect the occupational safety and health of airline crewmembers, had forfeited its jurisdiction to regulate the occupational health and safety of flight attendants during flights. The unions also had sought a writ of mandamus to compel the federal agency governing occupational safety and health to set and enforce flight attendant safety standards. The appeals panel ruled that the unions could not properly bring the action in federal court because they had failed to pursue any administrative remedies with the agencies prior to filing the action. Both FAA and the Occupational Safety and Health Administration have broad authority to establish standards and regulations in their respective domains, and both permit interested parties to participate in the regulatory process by petitioning for new standards or regulations, the court noted. Because the unions could have petitioned the agencies directly for the relief sought, they failed to exhaust their administrative remedies, the court concluded. Ass'n of Flight Attendants—CWA v. Chao (DCCir) 32 Avi. 15,276.

Applicability of GARA Exception Is for Jury to Decide
In a products liability action stemming from the crash of a small aircraft, a federal court found genuine issues of material fact as to whether the manufacturer of the aircraft's propeller had knowingly misrepresented, concealed, or withheld information from the Federal Aviation Administration concerning the propeller's operating limits. Even though the propeller had been installed more than 18 years before the crash, the plaintiffs argued that the 18-year statute of repose contained in the General Aviation Revitalization Act of 1994 did not bar their suit because they had satisfied GARA's “knowing misrepresentation or concealment or withholding” exception. The manufacturer, whose first motion for summary judgment had been denied, claimed that additional evidence it had obtained in discovery had resolved all of the previously identified genuine issues of material fact. However, the court found that the additional evidence did not resolve whether the manufacturer knowingly had misled FAA as to the propeller's stress limit, and that evidence of efforts by the manufacturer to correct a misrepresentation by asking FAA to impose operating limits did not cure the initial misrepresentation as a matter of law. Robinson v. Hartzell Propeller Inc. (EDPa) 32 Avi. 15,279.

Communication/Navigation Rule Updates Effective Soon
A new Federal Aviation Administration final rule that updates the agency's communication and navigation operating regulations is set to take effect on August 6, 2007. As previously reported, the new rule allows flexibility in accommodating technological advances and facilitates the transition from ground-based aircraft navigation to newer reference sources, such as the Global Positioning System. Designed to increase the efficiency of the National Airspace System (NAS), the rule clarifies airspace terminology, harmonizes certain terminology with that used by the International Civil Aviation Organization, and removes the “middle marker” as a required component of instrument landing systems.

Benefits Action Against Bankrupt Carrier Was a “Major” Dispute
A federal district court had subject matter jurisdiction to adjudicate a dispute over severance benefits between a bankrupt Brazilian air carrier and a group of its laid-off unionized employees in the U.S. The carrier had argued that the action constituted a “minor dispute” subjecting it to compulsory arbitration under the Railway Labor Act because an interpretation of the savings clause in the parties' collective bargaining agreement would allow the carrier to avoid its obligation to pay the benefits by subjecting the claim to the terms of its Brazilian reorganization plan. The court disagreed. In a prior ruling, the court had determined that the dispute was “major” because the CBA's terms were clear and unambiguous as to the benefits to which the employees were entitled. The court also found that no interpretation of the CBA was necessary to determine the applicability and effect of the Brazilian reorganization plan. Int'l Ass'n of Machinists and Aerospace Workers v. Varig, S.A. (SDNY) 32 Avi. 15,231.

Civil Penalty Affirmed for Pilot's Uncertificated Operation
The National Transportation Safety Board had properly affirmed a civil penalty against an individual who lacked an airman certificate while piloting an uncertificated two-passenger powered parachute in a careless manner, a federal appeals court ruled in an unpublished opinion. The petitioner argued that the regulations cited against him were inapplicable because his solo flight had rendered the aircraft an “ultralight vehicle” under the regulations. However, the court found that the Board's decision was not arbitrary, capricious, an abuse of discretion, or contrary to law, and that the Board's reasonable interpretation of the relevant regulations to exclude the petitioner's two-seat aircraft from the ultralight category warranted judicial deference. Hopkins v. Blakey (8thCir) 32 Avi. 15,257.

Unplanned Layover Was No “Accident”
The rerouting of an international airline flight that resulted in a layover did not constitute an “accident” for the purposes of establishing liability under the Warsaw Convention, a federal district court ruled. As the court noted, under the Convention, an accident is an unexpected or unusual event or happening that is external to the passenger, and not the passenger's own internal reaction to the usual, normal, and expected operation of the aircraft. The plaintiff, who allegedly contracted deep vein thrombosis as a result of his flight, asserted that the unplanned rerouting of his flight triggered the carrier's liability. However, the court found no authority holding that a layover, preplanned or otherwise, triggers such liability. In addition, common experience would indicate that a layover is not an unexpected event in the context of international air travel, the court opined. Although an unplanned stopover could comprise a link in a chain of events causing injury, the court held that the passenger had failed to show any genuine issue regarding causation. Although the passenger argued that the layover had prolonged the amount of time that he had been forced to sit, evidence showed that it actually had shortened the flight and afforded the passenger more time to walk and exercise than had the flight not been interrupted. In re Deep Vein Thrombosis Litig. (NDCal) 32 Avi. 15,309.

TSA Lifts Ban on Lighters, Expands Breast Milk Exception
In an effort to concentrate resources on detecting threats from explosives, the Transportation Security Administration will stop enforcing the ban on many cigarette lighters in airline passengers' carry-on luggage. As of August 4, butane and other common lighters will be allowed, although the ban on torch lighters will continue. The U.S. had been the only nation in the world to prohibit lighters from carry-ons. The 22,000 lighters that TSA collects each day represent approximately 85 percent of all prohibited items surrendered at checkpoints nationwide. According to the agency, field surveys show that the greater the numbers of items that security officers are required to identify and evaluate, the more difficult it is to detect any one item. As a result, aviation security is better served if the officers are focused on detecting explosives, firearms, and other deadly devices, rather than searching for such lesser threats as lighters, TSA concluded. TSA also is modifying the procedures associated with carrying breast milk through security checkpoints. Mothers flying with or without their child will be permitted to bring breast milk in quantities greater than three ounces, as long as it is declared for inspection at the security checkpoint.

DOT Seeks Comments on Airline Bumping Rule
The Department of Transportation is asking for public comment on several proposals that would affect regulations governing airline oversales, or “bumping,” including a possible increase in the maximum compensation for passengers bumped from oversold flights. First adopted in 1962, the bumping rules were designed to balance the rights of passengers with the needs of air carriers to minimize the effect of passengers with reservations who do not take their flights. DOT is seeking comments on five proposals:

• Increasing the $200 compensation limit to $624 and the $400 limit to $1,248;
• Increasing the compensation limits to $290 and $580, respectively;
• Doubling the compensation limits to $400 and $800;
• Eliminating all compensation limits and making compensation equal to the value of the ticket with the payment doubling for longer delays;
• or leaving the current limits in place.
  

Surface Transportation News

Carmack Liability Extends to All Carriers Involved in Movement
In an action stemming from damage to an interstate shipment of goods, a carrier's motion to dismiss and a shipper's motion for summary judgment both were denied by a federal district court. The shipper had hired a carrier to transport goods from Wisconsin to New Jersey. The carrier then arranged for another carrier to transport the goods. The goods were damaged while in transit. The shipper filed suit against both carriers, claiming that it was entitled to summary judgment under the Carmack Amendment.

The first carrier asserted that the shipper had no claim against it since it had not accepted delivery of the goods, issued a bill of lading, or provided the transportation. The shipper countered, noting that the carrier had agreed to transport the goods from Wisconsin to New Jersey, had arranged for another carrier to move the shipment, and was entitled to payment for those services. According to the court, liability under the Carmack Amendment extends beyond the carrier that actually transports a shipment to any and all carriers who provide transportation or services related to the movement of the goods for compensation. Based on this interpretation and the facts presented, the court ruled that the carrier was acting as a motor carrier for purposes of Carmack liability related to the movement of the shipper's goods. Thus, its motion to dismiss was denied.

The second carrier argued that summary judgment was not warranted because questions related to the condition of the property upon delivery to the carrier existed. The shipper claimed that the bill of lading established that the property was delivered in good condition. The court disagreed with the shipper, holding that the bill of lading alone was not sufficient to prove delivery in good condition. In order to establish a prima facie case, the shipper was required to show more. Accordingly, the shipper's summary judgment motion was denied. Land O'Lakes, Inc. v. Superior Serv. Transp. of Wisc., Inc. (EDWis) ¶84,498.

Construction of Rail System Is Exempt from State Regulation
The Surface Transportation Board (STB) issued a declaratory order, ruling that the proposed construction of an interstate high speed passenger rail system between California and Nevada would not be subject to state permit and land use requirements. The company sought a determination that the proposed construction of its rail system would be subject to the exclusive jurisdiction of the STB, and not to state and local environmental review and land use and other permitting requirements.

Pursuant to federal statute, the STB has jurisdiction over ``transportation by rail carrier.'' As such, to be subject to STB jurisdiction and qualify for federal preemption, the activities must involve transportation provided by a rail carrier. In support of its request, the petitioner stated that it intended to carry passengers by rail in interstate transportation. Furthermore, it claimed that it intended to provide the transportation as a common carrier, offering services to the general public. Based on the facts presented, the STB found that the proposed construction project clearly involved transportation by a rail carrier. Accordingly, the STB determined that it would have exclusive jurisdiction over the planned new track, facilities, and operations; therefore, state permitting and land use requirements applicable to other non-rail projects would be preempted. DesertXpress Enters., LLC Petition for Declaratory Order (STB) ¶37,238.

Goods Receiver Not Liable for Money Damages in Private Action
A federal district court ruled that a group of independent owner-operators were not entitled to recover monetary damages from a receiver of property alleged to have violated a federal statute prohibiting the coercion of drivers into paying for professional unloading services. The owner-operators filed an action against the receiver for declaratory and injunctive relief, along with a claim for restitution. The suit claimed that the receiver had violated federal law by requiring drivers to provide proof-of-insurance coverage in excess of the statutory minimum if a driver wished to unload his own trucks. This effectively precluded drivers from doing so because most could not afford the additional insurance. The owner-operators also alleged that they were coerced into hiring unloading services because they were denied access to the warehouse and were not provided with the equipment necessary to unload the palletized goods themselves.

The receiver challenged the drivers' claims, contending that it had eliminated the excess insurance coverage requirements, arguing that the use of palletized grocery products was a standard practice in the industry, and asserting that drivers were free to bring and use their own equipment to unload the pallets. Based on the evidence presented, the court concluded that summary judgment on the declaratory relief claim was not appropriate because there were genuine issues of material fact related to the reasonableness of the insurance requirements and standard industry practices. Thus, both the drivers' and the receiver's motions were denied. As to the injunctive relief, the court granted the owner-operators' request to enjoin the receiver from future violations.

Finally, on the issue of restitution, the court held that the remedies available under the applicable statute make violators liable to the government for civil penalties, allow private actions for injunctive relief, and hold carriers and brokers liable for damages sustained by a person resulting from an act or omission of the carrier or broker in violation of the statute. As a result of this interpretation, a receiver of goods who violates the statute can be enjoined in a private action or subject to a government action, but may not be sued for a monetary award by a private party. Thus, based on the plain language of the statute, the owner-operators were not entitled to restitution from the receiver. OOIDA v. Supervalu, Inc. (DMinn) ¶84,496.

Effective Date Delayed for Revocation of Antitrust Immunity
The effective date of a decision revoking the antitrust immunity currently granted to twelve motor carrier rate bureaus was delayed for four months by the Surface Transportation Board (STB). The original decision was to have taken effect on September 4, 2007. However, various parties filed petitions seeking to delay the effective date for up to one year. The petitioners asserted that additional time was needed to prepare for the termination of the antitrust immunity because the current four-month implementation period happened to correspond with their peak business season. Additionally, they argued that no interests would be harmed if the extension was granted.

In response, a number of shipper associations filed oppositions to many of the extension requests, raising concerns that the bureaus would engage in harmful activities during an extended implementation period. While the agency recognized that some bureaus might have problems developing and implementing revised business models within the original four-month time frame, it did not agree that an additional 12 months was required to effectively prepare. As a result, STB extended the effective date to January 1, 2008, providing the bureaus with an additional four months to prepare for the loss of antitrust immunity. Motor Carrier Bureaus Periodic Review Proceeding (STB) ¶37,239.

Motor Carrier Regulations Revised to Conform to SAFETEA-LU
In order to conform to statutory directives contained in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), the Federal Motor Carrier Safety Administration (FMCSA) issued a final rulemaking amending various regulatory program requirements under its control. The action was undertaken to ensure that the regulations administered by FMCSA are consistent with the applicable statutes and can be applied and enforced. The affected regulations govern the following:

· State compliance plans under the Motor Carrier Safety Assistance Program;

· Withholding of Federal-aid highway funds based on state noncompliance with the Commercial Driver's License Program;

· Intrastate operations of interstate motor carriers;

· Civil penalties and disqualifications for violations of out-of-service orders;

· Civil penalties for denial of access to records and property and for violations of statutes and regulations governing hazardous materials transportation;

· Exemption from the Federal hours-of-service regulations for operators of commercial motor vehicles engaged in certain defined operations;

· Exemption of drivers of propane service or pipeline emergency vehicles during emergency conditions requiring immediate response; and

· Interstate transportation of household goods.

A notice and comment period was not required for this rulemaking, since the agency had no discretion with respect to the implementation of the SAFETEA-LU provisions. Persons wishing to file petitions for reconsideration must do so no later than September 4, 2007, which is the effective date of the rulemaking. For further information, contact: Frederic L. Wood, telephone: (202) 366-0834. 72 FR 36760, July 5, 2007.

Emergency Response Telephone Number Changes Proposed
In an effort to preserve the effectiveness of the emergency response system for hazardous materials transportation, the Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued a proposed rulemaking that would amend the shipping paper requirements for certain hazardous materials shipments. Under the existing regulations, hazardous materials shipments must be accompanied by shipping papers and other documentation used to communicate to transport workers and emergency responders the hazards associated with a specific shipment. The information contained on shipping documents must include: the immediate hazards to health; risks of fire or explosion; immediate precautions to be taken in the event of an accident; initial methods of handling spills in the absence of fire; preliminary first aid measures; and an emergency response telephone number.

Problems with the existing regulations have been uncovered as a result of a growing trend in the use of emergency response service providers. Currently, shippers are not required to indicate that the emergency number provided is for an emergency response service, nor is the shipper required to identify itself on the shipping paper. Without the name of the party that arranged for the emergency response service, the service provider may be unable to access specific information provided by the shipper or quickly gather information specific to the material involved in an accident. As a result of these issues, the agency has proposed changes that would require an offeror of hazardous materials that uses an emergency response service provider to include a notation to that effect on the shipping paper, and identify itself by name or contract number. This information will enable the service provider to quickly identify the shipment so that accurate and timely information about hazardous materials involved in transportation accidents or other emergencies can be communicated to transportation workers and emergency response personnel.

Written comments on the proposal are due on or before August 31, 2007, and should refer to Docket No. RSPA-2006-26322. Send comments to the Docket Management System, U.S. Department of Transportation, Dockets Operations, M-30, Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE, Washington, DC 20590-0001. For further information, contact: Joan McIntyre, telephone: (202) 366-8553. 72 FR 35961, July 2, 2007.

Indiana Time Zone Boundary Change Proposed
The Department of Transportation (DOT) is seeking comments on a proposal to relocate the boundary between the eastern and central time zones in Knox, Daviess, Martin, Pike, and Dubois Counties at the request of the counties' commissioners. If adopted, the counties would move from the Central time zone to the Eastern time zone. Under the Standard Time Act of 1918, the Secretary of Transportation is authorized to modify the time zone boundaries in the United States. Any changes to the time zone boundaries must be made with ``regard for the convenience of commerce and the existing junction points and division points of common carriers engaged in interstate or foreign commerce.''

Under DOT procedures, the rulemaking process for a time zone boundary change must begin with a petition filed by the highest elected official in the affected area. The request made by the counties' commissioners satisfied that requirement and established a prima facie case for review. As such, DOT is proposing the change and seeking comments from interested parties. If the boundary is changed, the effective date would be Sunday, November 4, 2007. 72 FR 39593, July 19, 2007.

STB Proposes Changes to its Released Rate Authorization
The Surface Transportation Board (STB) is accepting comments on proposed revisions to its released rate authorizations under which motor carriers are allowed to limit their liability to consumers for loss of or damage to household goods during transportation. The three proposed changes are intended to enhance the protection of consumers whose household goods are damaged or lost by motor common carriers. The amendments under consideration would require: (1) all shipping documents to include full value protection estimates; (2) a written waiver of full value protection on a separate document; and (3) the resetting of the assumed or minimum valuation for a shipment to more closely align that amount with the replacement value of the goods.

Written comments are due on or before July 30, 2007. Send an original and ten copies of any comments, referring to Amendment No. 5 to Released Rate Decision No. MC-999, to the Surface Transportation Board, 395 E Street, SW, Washington, DC 20423-0001. For further information, contact: Lawrence C. Herzig, telephone: (202) 245-0282. 72 FR 33556, June 18, 2007.

Claim Against Consignor for Unpaid Freight Charges Allowed
A motor carrier hired by a broker to carry goods in interstate transportation was entitled to seek payment for unpaid freight charges from a consignor after the broker failed to satisfy the payment obligations, a state court ruled. LG Electronics USA, Inc. (LGE or consignor) had entered into a transportation contract with USA Motor Express (USAM or broker) in the latter's capacity as a motor common carrier, for the interstate transportation of property. USAM, in its purported capacity as a property broker, then contracted with Southern Freight (Southern) to provide the actual transportation of the consignor's goods. All of the shipments transported by Southern were moved pursuant to bills of lading issued by LGE. Each bill of lading identified the carrier and provided that the carrier was ``any person or corporation in possession of the property under the bill of lading.'' Furthermore, each bill of lading contained a provision stating that if the shipment was to be delivered to a consignee without recourse on the consignor, the consignor was required to sign a statement on the bill of lading. The non-recourse provision was executed on two of the sixty-nine bills of lading at issue.

Pursuant to the transportation agreement, Southern billed USAM at agreed-upon rates within seven days of each shipment. USAM then would issue payment to Southern within fifteen days. After some time, USAM began making payments late and eventually stopped making payments altogether. During this time, USAM continued to receive payments from LGE. Due to the nonpayment of the freight charges, Southern stopped providing transportation services and reissued the outstanding freight bills to LGE. LGE refused to pay the outstanding charges, which led to Southern filing suit to recover the unpaid charges.

Based upon applicable case law and the evidence presented, the court concluded that the bills of lading issued by LGE amounted to contracts between Southern and LGE, pursuant to which the carrier had a contractual right to expect payment. Additionally, neither the agreement between LGE and USAM, nor the agreement between USAM and Southern, had any effect on LGE's liability or barred Southern from seeking recovery against LGE. Accordingly, Southern was entitled to judgment in the amount of $68,750, plus pre-judgment interest in the amount of $7,924.14. The amount covered the freight charges for the sixty-seven bills of lading for which the non-recourse provision had not been executed. Southern Freight, Inc. v. LG Elec. U.S.A., Inc. (GaSuperCt) ¶84,500.

STB Amends Released Rates Authorization for HHG Carriers
The released rates authorization for household goods (HHG) carriers was amended by the Surface Transportation Board (STB) to conform to statutory changes in the standard liability of motor carriers for damages to, and loss of, household goods during transportation. Prior to the enactment of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), the standard level of liability for household goods carriers was the depreciated value of the goods, unless the carrier effectively limited its liability by offering ``released rates'' in compliance with the terms and procedures mandated by the STB. After SAFETEA-LU was enacted, the carrier's standard or default liability was changed from the actual (depreciated) value of lost or damaged goods to the replacement value of the goods.

In order to conform with the statutory mandate, the STB was required to amend the terms of its currently authorized released rate. Specifically, the adopted modification provides that, when a HHG motor carrier fails to obtain a shipper's signature or initials indicating receipt of the brochure describing the carrier's liability for loss of, or damage to, cargo, the carrier will be liable for the replacement value of the goods lost or damaged. The revised released rates authorizations for HHG carriers take effect today. Released Rates of Motor Common Carriers of Household Goods (STB) ¶37,235.