The Carmack Amendment and Default Judgment

The are many aspects to the Carmack Amendment that we address on this blog, but one important aspect to any Carmack Amendment case is showing up to defend a case. If a company is properly served with a Carmack Amendment claim and fails to show up and defend it, that company runs the risk of losing the case on a default judgment.

A default judgment is a mechanism within the Federal Rules of Civil Procedure that allows a claimant to win a judgment when the other side does not show up. Fed. Rule Civ. Proc. 55. As long as the claimant in a case can meet certain requirements after filing a lawsuit, the court is required to issue a default judgment and the claimant will win the case.

Because it is a claim based on federal law filed in the federal court system, these rules about default judgment also apply to Carmack Amendment claims. And this is what happened in a recently decided federal case from the U.S. District in New Jersey, Moroccanoil, Inc. v. JMG Freight Group, LLC, No. 14-5608 (D.N.J. 2015).

Facts and Background

The fact pattern of this case is like so many that are based on the Carmack Amendment. The plaintiff accused the defendant of losing or stealing the cargo it had contracted to transport. After alleging that, the filing company showed that they dropped cargo in good condition, and that products never got to their intended destination. Once the claimant meets these basic elements of a Carmack Amendment claim, the burden shifts to the court to determine whether a default judgment is warranted.

Before the court, in this case, could enter a default judgment on the Carmack Amendment claim, it had to establish four things:

  1. that the court has jurisdiction over both the claimant and the defendant;
  2. that the defendant was properly served under the rules;
  3. that the complaint sufficiently establishes a cause of action; and
  4. that the plaintiff has adequately pleaded damages.

These are the four basic requirements that a court must run through before granting a default judgment.

There are other aspects to a default judgment under the federal rules, but these are the basics. Of course having a default judgment is not always as good as a typical judgment. Unfortunately, if a company or individual does not have the means or interest in defending an action in federal court, many times that means that they might not have the means to pay for a judgment. But that should not deter anyone from seeking out a default judgment because there are creative ways to collect on a judgment.

There are many different aspects to the Carmack Amendment, the federal rules, and federal case law that require the experience and professional ability of trucking industry attorneys. At Anderson and Yamada, P.C., we are a trucking industry law firm that can meet each of your company’s needs. If you are responsible for a trucking company, contact us. We look forward to going over your truck law needs and becoming a partner for your future.

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