Important Double Payment Holdings

1.      Southern Freight v. LG Elec., U.S.A., Inc., No. 05-A-13469-3 [2005-2007 Fed. Carr. Cases] held that the secondary carrier could independently seek recovery against the shipper under the presumption of shipper liability.

2.      Ranger Transportation v. Wal-Mart Store, 903 F.2d II85 (8th Cir. 1990) held the court concluded that Wal-Mart would have to pay Ranger the amounts it had already paid to a third party after Ranger had notified Wal-Mart not to pay the third party since that party was not paying Ranger. Despite the notice from Ranger, however, Wal-Mart continued to make payment to the third party. In those circumstances the court held Wal-Mart liable.

3.      Oak Harbor Freight Lines, Inc. v. Sears Roebuck & Co., 513 F.3d 949 (9th Cir. 2008) held that an agreement between a broker and carrier did not absolve the shipper of liability under the bills of lading even where the broker expressly agreed to be liable for the shipper’s freight charge

4.      Harms Farms Trucking v. Woodland Container , 2006 WL 3483920 at *3 (D. Neb. 2006) the court held the consignee (Kawasaki) liable to the motor carrier for the entire remaining balance of freight charges, even though Kawasaki had already paid $27,000 to the shipper.

5.      Excel Transportation Services, Inc. vs. CSX Lines, LLC , 280 F.2d 617, 619 (S.D. Tex. 2003) the court held that when the shipper paid the forwarder, but the forwarder did not pay the carrier. the shipper fell under none of the legally-recognized exceptions to the obligation to pay the carrier and was liable for the carrier's unpaid charges.

6.      Spedag Americas, Inc. v. Peters Hospitality and Entertainment Group LLC. et al., 2008 WL 3889551 (SD Fla. 2008). Spedag entered into a contract with freight forwarder Transworld Freight Systems whereby Transworld agreed to pay carrier. Transworld agreed to bill and collect freight charges from Peters and Polaroid and to forward such payments to Spedag. Peters and Polaroid promptly paid the freight charges to freight forwarder Transworld, however, after a time the freight forwarder stopped remitting payment to Spedag. Eventually Transworld filed for bankruptcy having collected some $850,000 from Peters and Polaroid which Transworld had not remitted to freight carrier Spedag. The District Court granted summary judgment in favor of Spedag on the issue of "double liability", holding both consignees liable to the carrier for freight charges and leaving only the question of the amount of damages which Peters and Polaroid must pay to a jury.

7.      Missouri Pacific Railroad Co. V. Center Plains Industries, Inc., 720 F.2d 818, 819 (5th Cir. 1983) held that payment of freight charges is the original responsibility of the shipper. The responsibility may be shifted to a third party, generally the consignee of the shipment. But the transfer of this responsibility must be clearly established by agreement between the parties or circumstances surrounding the receipt and transportation of the goods. 

8.      Strachan Shipping Co. v. Dresser Industries, Inc., 701 F.2d 483 (5th Cir. 1983) the court held that bills of lading marked prepaid did not relieve a shipper of liability unless the shipper could demonstrate that the carrier released it.  The shipper could not prove this and had to double pay.

9.      Contship Container Lines, Inc. v. Howard Industries, Inc., 309 F.3d 910 (6th Cir. 2002) held that a contract does exist between shippers and carriers and that a shipper may be liable even though it has paid the broker already. Contship also makes it clear that putting the broker's name on the bill of lading instead of the actual carrier's name does not absolve the shipper from liability to the carrier for the freight charges.

10.  Hawkspere Shipping Company, Ltd. V. Intamex, S.A., 330 F.3d 225 (4th Cir. 2003) concluded that shippers are responsible for payment to the actual motor carrier transporting the freight when (for whatever reason) the freight intermediary fails to pay the motor carrier.

11.  National Shipping Co. Of Saudi Arabia v. Omni Lines, 106 F.3d 1544 (11th Cir. 1997) held the shipper liable for double payment.  The court explained that that the bill of lading is a contract between the carrier and the shipper and the carrier has a contractual right to expect payment pursuant to that bill. Should the shipper wish to avoid liability for double payment, it must take precautions to deal with a reputable [intermediary] or to contract with the carrier to secure its release.

12.  Oak Harbor Freight Lines, Inc. v. Sears Roebuck & Co., 513 F.3d 949 (9th Cir. 2008) held that where the shipper paid the third party but the third party never paid the carrier. Ultimately the shipper was responsible to pay the carriers even though they had proof of payment to the third party. They were ruled to make double payment on these freight charges.

13.  Central States Trucking Company v. J.R. Simplot Company, 965 F.2d 431 (7th Cir. 1992) held that a member of a not-for-profit shippers' association (which was a broker) was liable for freight charges to a carrier where the association (broker), which contracted with that carrier and which has already received payment from the shipper became insolvent before paying the carrier.  The court struck down the shipper’s estoppel argument and held that the shipper failed to prove that the carrier made any misrepresentation on which it relied to its detriment.