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Supreme Court Upholds Key Aspect of Intermodal Transport

June 22, 2010

NR 10-15

Contact: Karen V. Gregory, Secretary (202-523-5725)

Yesterday the U.S. Supreme Court adopted the United States' position and solidified the legal support for through bills-of-lading, a key tool in the intermodal transportation system. The Court's decision reversed the Ninth Circuit Court of Appeals in the companion cases Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corporation, No. 08-1553, and Union Pacific Railroad Company v. Regal-Beloit Corporation, No. 08-1554.

As the Court noted, a through bill-of-lading allows cargo owners to "contract for transportation across oceans and to inland destinations in a single transaction." The question before the Court was whether the Carmack Amendment to the Interstate Commerce Act of 1887 applied to the inland leg of a through bill-of-lading issued by an ocean carrier, where no domestic bill-of-lading was issued and when the ocean carrier subcontracted for rail transportation. The Court adopted the position of the United States, noted the importance of intermodal movements in the nation's transportation system, and affirmed its earlier-stated view that through bills-of-lading are essentially maritime contracts. The Court based its decision in part on the Federal Maritime Commission's oversight of the ocean carriers who issue through bills-of-lading.

Staff attorneys from the Commission's Office of the General Counsel assisted the United States with the case. The Commission's General Counsel, Rebecca Fenneman, stated, "It was our pleasure to work with the Office of the Solicitor General, and I congratulate Assistant Solicitor General Tony Yang for his hard work and superb argument in a complex case for the Court."

The Commission's Chairman, Richard A. Lidinsky, Jr., said: "During its nearly fifty-year history, the FMC has taken a lead role in facilitating efficient intermodal transportation.  So I'm pleased to see the Court recognize the importance of intermodalism for our nation's transportation system.  I'd like to thank the FMC's Office of General Counsel and Solicitor General Elena Kagan's office for their excellent work on this crucial issue."