Case Explained: FinalOpinion in case# 23-2422

Court: United States Court of Appeals for the Seventh Circuit Filed: 2026-06-25 The Seventh Circuit affirmed the district court’s grant of summary judgment in favor of Evansville Western Railway, Inc. (EVWR) and its denial of Lloyd’s motion for judgment as a matter of law against CSX Transportation, Inc., holding that both carriers validly limited their liability under the Carmack Amendment, 49 U.S.C. § 11706. The court applied the three-prong test established in *Nipponkoa Ins. Co. v. Atlas Van Lines, Inc.*, requiring a carrier to (1) provide a reasonable opportunity to choose between liability levels, (2) obtain the shipper’s agreement to a specific choice, and (3) issue a receipt or bill of lading prior to shipment. The court distinguished the case from *ABB Inc. v. CSX Transportation, Inc.*, finding that unlike the plaintiff in *ABB*, NRE’s logistics manager had actual knowledge of the carriers’ publicly available price lists and affirmatively elected lower rates associated with liability caps ($25,000 per item for EVWR and $10,000 per item for CSX) because NRE maintained its own insurance. Regarding the sufficiency of the written agreement, the court determined that the Standard Transportation Commodity (STC) Code 3741110 included in the bills of lading was an ambiguous contractual term. Applying standard principles of contract law, the court utilized extrinsic evidence, specifically the parties’ seventeen-year course of dealing and the shipper’s testimony, to conclude that the code objectively manifested NRE’s intent to select the limited liability rates. The court ruled that this evidence was sufficient to establish a binding agreement on the liability caps as a matter of law for EVWR and provided a rational basis for the jury’s verdict in favor of CSX. Consequently, Lloyd’s recovery is limited to the maximum liability amounts specified in the shipping contracts ($25,000 per locomotive for EVWR and $10,000 per locomotive for CSX) plus prejudgment interest, and the district court’s judgment is final. Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.