Nos. 08-1553 and 08-1554
In the Supreme Court of the United States
KAWASAKI KISEN KAISHA LTD., ET AL., PETITIONERS
REGAL-BELOIT CORPORATION, ET AL.
UNION PACIFIC RAILROAD COMPANY, PETITIONER
REGAL-BELOIT CORPORATION, ET AL.
ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE SUPPORTING PETITIONERS
Counsel of Record
Assistant Attorney General
EDWIN S. KNEEDLER
Deputy Solicitor General
ANTHONY A. YANG
Assistant to the Solicitor
MICHAEL JAY SINGER
KELSI BROWN CORKRAN
Department of Justice
Washington, D.C. 20530-0001
The United States will answer the following ques tions:
1. Whether a forum-selection clause contained in an international "through" bill of lading for the carriage of goods from a non-adjacent foreign country to an in land point in the United States is unenforceable under the Carmack Amendment (Carmack), 49 U.S.C. 11706, 14706, where the through bill was issued by an ocean carrier that transported the goods by sea to a United States port and subcontracted with a rail carrier to con duct the inland portion of the transportation in the United States by railroad.
2. Whether a rail carrier that provides railroad transportation that the Surface Transportation Board has exempted from regulation under 49 U.S.C. 10502 may contract out of Carmack's requirements under 49 U.S.C. 10709.
In the Supreme Court of the United States
KAWASAKI KISEN KAISHA LTD., ET AL., PETITIONERS
REGAL-BELOIT CORPORATION, ET AL.
UNION PACIFIC RAILROAD COMPANY, PETITIONER
REGAL-BELOIT CORPORATION, ET AL.
ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE SUPPORTING PETITIONERS
INTEREST OF THE UNITED STATES
This case concerns a contract for the transportation of goods from a foreign country, which was performed by sea and rail carriage. The Federal Maritime Com mission (FMC) and the Surface Transportation Board (STB) exercise regulatory authority over international maritime shipping and railroad transportation, respec tively. The Department of Transportation is responsible for establishing the Nation's overall transportation policy. And the Department of State supervises the Na tion's international commitments.
A bill of lading is a contractual document that re cords a common carrier's receipt of goods from the party shipping them and states the terms of carriage. See Norfolk S. Ry. v. James N. Kirby, Pty Ltd., 543 U.S. 14, 18-19 (2004) (Kirby). This case concerns a "through bill of lading" (through bill)-i.e., a bill of lading issued by a carrier that does not itself intend to deliver the goods to their final destination and, instead, "contract[s] to carry to destination" at least in part "through the agency of other and independent carriers." See Atlantic Coast Line R.R. v. Riverside Mills, 219 U.S. 186, 187, 196-197 (1911). Multiple federal statutes have long reg ulated bills of lading in maritime and non-maritime con texts.
1. a. In 1893, Congress enacted the Harter Act, 46 U.S.C. 30701 et seq., to regulate bill-of-lading provisions that had unduly "limit[ed] * * * the liability of [a] ves sel and her owners." H.R. Rep. No. 2218, 74th Cong., 2d Sess. 7 (1936) (1936 House Report). That Act generally requires that water carriers "engaged in the carriage of goods to or from any port in the United States" issue a bill of lading upon request, prohibits certain contract terms affecting the carrier's liability, and establishes defenses to liability. 46 U.S.C. 30702-30706.
The Harter Act served as a model for the Hague Rules of 1921, which were adopted with minor modifica tions by international convention in 1924 "to establish uniform ocean bills of lading to govern the rights and liabilities of carriers and shippers inter se in interna tional trade." Robert C. Herd & Co. v. Krawill Mach. Corp., 359 U.S. 297, 301 & n.5 (1959); see International Convention for the Unification of Certain Rules Relating to Bills of Lading, done Aug. 25, 1924, 51 Stat. 233, 120 L.N.T.S. 155. In 1936, Congress implemented the Hague Rules by enacting the Carriage of Goods by Sea Act (COGSA), ch. 229, 49 Stat. 1207 (46 U.S.C. 30701 note).
COGSA requires, inter alia, that water carriers "issue to the shipper a bill of lading" with specified contents; "properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried"; and "exercise due diligence" to provide a seaworthy and properly manned, equipped, and supplied ship. COGSA § 3(1)-(3). COGSA defines carriers' rights and immunities with respect to "liabil[ity] for loss or dam age"; prohibits contractual terms "relieving the carrier or the ship from liability for loss or damage" arising from certain forms of negligence; and requires shippers to give carriers notice of any loss or damage within three days of delivery and to bring suit within one year. COGSA §§ 3(6) and (8), 4.
COGSA "appl[ies] to all contracts for carriage of goods by sea * * * between the ports of the United States and ports of foreign countries," from "the time when the goods are loaded on to the time when they are discharged from the ship." COGSA §§ 1(e), 13. COGSA thus partially "supersede[d]" the Harter Act "in respect of foreign commerce by sea," S. Rep. No. 742, 74th Cong., 1st Sess. 5 (1935), but left "any other [applicable] law" operative in foreign commerce regarding "the du ties, responsibilities, and liabilities of the ship or car rier" before "the goods are loaded" and "after the time they are discharged from the ship," COGSA § 12, and left the Harter Act generally operative in domestic com merce. See COGSA § 13; 1936 House Report 7.
Section 7 of COGSA states that COGSA does not "prevent a carrier or shipper from entering into any agreement * * * as to the responsibility and liability of the carrier or the ship" for loss or damage "prior to the loading on and subsequent to the discharge from the ship." COGSA § 7. Section 7 thus "gives the option of extending [certain COGSA terms] by contract" to cover "the entire period in which [goods] would be under [a carrier's] responsibility, including [a] period of inland transport" by an entity acting as an ocean carrier's agent in through transportation. Kirby, 543 U.S. at 29. International through bills thus frequently include what is known as a "Himalaya Clause" to permit "downstream parties expected to take part in the contract's execution [to] benefit from [COGSA's] liability limitations." See id. at 20 & n.2.
b. The FMC "regulates ocean shipping between the United States and foreign countries," Landstar Express Am., Inc. v. FMC, 569 F.3d 493, 494 (D.C. Cir. 2009), under the Shipping Act of 1984, 46 U.S.C. 40101 et seq., which establishes a "regulatory process for the common carriage of goods by water in * * * foreign commerce." 46 U.S.C. 40101(1). The Shipping Act of 1984, inter alia, governs "through transportation" between "a United States port or point and a foreign port or point" by a "common carrier" that uses a "vessel operating on the high seas or the Great Lakes" for at least part of a through transportation to or from the United States, if that carrier holds itself out to the public as providing the transportation and "assumes responsibility" for the transportation from the "port or point of receipt" to "the port or point of destination." 46 U.S.C. 40102(6) and (25). Such carriers must publish the "through rate" for each of their "through transportation route[s]," which must include (but need not separately state) any amount that the carrier pays "to an inland carrier for the inland portion of [the] through transportation." 46 U.S.C. 40102(11) and (24), 40501(a)(1).
2. a. Congress's regulation of land-based bills of lading, like its water-based counterpart, responded to carrier practices in the 19th and early 20th centuries. To avoid liability for damage to goods occurring on oth ers' lines during through transportation, rail carriers adopted the "practice * * * of refusing to make a spe cific agreement to transport to points beyond [their] own line[s]." Riverside Mills, 219 U.S. at 199-200. That practice imposed upon shippers seeking compensation for lost or damaged goods "the difficult, and often im possible, task, of determining on which of the several connecting lines the damage occurred." Missouri, Kan. & Tex. Ry. v. Ward, 244 U.S. 383, 387 (1917). Carriers additionally employed contractual terms in bills of lad ing limiting their liability and restricting the time within which shippers could present claims. Cummins Amend ment, 33 I.C.C. 682, 683, 686-687, 690-691 (1915); H.R. Rep. No. 1341, 63d Cong., 3d Sess. 1-2 (1915).
In 1906, Congress amended the Interstate Com merce Act (ICA), ch. 104, 24 Stat. 379, by enacting the Carmack Amendment (Carmack) to impose on "the ini tial carrier unity of responsibility for the [entire] trans portation," Ward, 244 U.S. at 386, when "receiving prop erty for transportation from a point in one State to a point in another State." Carmack, ch. 3591, § 7, 34 Stat. 595. In 1915, Congress extended Carmack to the trans portation of property "from any point in the United States to a point in an adjacent foreign country." In 1927, Congress extended liability under Carmack to in clude not only the initial ("receiving") carrier as under prior law, but also the carrier "delivering" the goods "nearest to the point of destination." See 49 U.S.C. 20(11) (1976). In 1920, 1927, and 1940, Congress further revised Carmack to address circumstances in which property is damaged during transit while "in the custody of a carrier by water," providing that both "the liability of [the water] carrier" and the "liability of the initial or delivering carrier" "shall be determined by the bill of lading of the carrier by water and by and under the laws and regulations applicable to transportation by water." Ibid. Carmack is now codified at 49 U.S.C. 11706 and 14706.1
Under Carmack, a "rail carrier providing transporta tion or service subject to the jurisdiction of the [STB] under [Part A of Subtitle IV of Title 49] shall issue a receipt or bill of lading for property it receives for trans portation under [Part A]." 49 U.S.C. 11706(a). Both that receiving rail carrier and the carrier that "delivers the property" are "liable to the person entitled to re cover under the receipt or bill of lading" for "the actual loss or injury to the property" caused either by "the re ceiving rail carrier," the "delivering rail carrier," or "another rail carrier over whose line or route the prop erty is transported in the United States or from a place in the United States to a place in an adjacent foreign country when transported under a through bill of lad ing." Ibid.2
Carmack provides that a "rail carrier may not limit or be exempt from [such] liability" except as provided in Section 11706(c)(2) or (3), and states that any provision in a "receipt, bill of lading, contract, or rule" that consti tutes a "limitation of liability or of the amount of recov ery * * * is void." 49 U.S.C. 11706(c)(1). Carmack similarly prohibits a rail carrier from providing by "con tract" or otherwise "a period of less than 9 months for filing a claim against it" and "a period of less than 2 years for bringing a civil action." 49 U.S.C. 11706(e). Finally, and of particular significance in this case, Car mack specifies that a "civil action" under Carmack "may only be brought" against a rail carrier in certain federal district courts or state courts. 49 U.S.C. 11706(d)(2).
b. The STB, which replaced the Interstate Com merce Commission (ICC) in 1996, regulates "rail carri ers" under Part A of Subtitle IV of Title 49, 49 U.S.C. 10101-11908. See 49 U.S.C. 10501-10502. Regulated rail carriers must, inter alia, provide transportation sub ject to STB Part-A jurisdiction "on reasonable request" at reasonable rates (to the extent required by 49 U.S.C. 10707(b)) and reasonable terms. 49 U.S.C. 10702, 11101(a) and (e). However, "rail carriers providing transportation subject to [Part-A] jurisdiction" are sepa rately authorized to enter into contracts to provide rail services. 49 U.S.C. 10709(a). "A contract that is autho rized by [Section 10709], and transportation under such contract," are "not subject to [Part A]," and a contract ing party "shall have no duty in connection with the ser vices provided under the contract other than those duties specified by * * * the contract." 49 U.S.C. 10709(b) and (c)(1). This provision effectively allows a carrier and shipper to avoid regulation (including Carmack) by contractual agreement.
In addition, the STB may exempt a rail carrier or a type of transportation or service from "the application in whole or in part of" Part A of Subtitle IV. 49 U.S.C. 10502(a). That authority specifically includes the power to "exempt transportation that is provided by a rail car rier as part of a continuous intermodal movement." 49 U.S.C. 10502(f). Invoking that authority, the agency "exempt[ed] from the requirements" of Part A any trailer-on-flatcar and container-on-flatcar service pro vided by a rail carrier "as part of a continuous inter modal freight movement." 49 C.F.R. 1090.2. No exemp tion, however, may "operate to relieve any rail carrier from an obligation to provide contractual terms for lia bility and claims which are consistent with the provi sions of [S]ection 11706," i.e., Carmack. 49 U.S.C. 10502(e).
3. a. Respondents are cargo owners that contracted with petitioner Kawasaki Kisen Kaisha, Ltd. (K-Line) for the through transportation of goods from China to destinations in the Midwestern United States. Pet. App. 2a & n.1.3 K-Line issued through bills of lading to each shipper. Those bills authorized K-Line to subcontract the carriage "on any terms whatsoever"; designated COGSA as the law governing the carriers' responsibility during the "entire" carriage; and included a Himalaya Clause permitting each subcontractor to "have the bene fit of all provisions" of each bill. Id. at 2a, 6a-7a. Each bill also stated that "any action [under the bill] or in con nection with Carriage of Goods shall be brought before the Tokyo District Court in Japan, to whose jurisdiction [the shipper] irrevocably consents." Id. at 5a.
K-Line used its own ocean vessel to transport respon dents' goods from China to Long Beach, California, and, through its United States agent, subcontracted with petitioner Union Pacific Railroad for inland transporta tion to the ultimate destinations. Pet. App. 3a. It is un disputed that the rail transportation had been exempted from Part-A regulation under the exemption for continu ous intermodal freight movement. Id. at 27a-28a. The contract between K-Line and Union Pacific incorporated terms from Union Pacific's "Master Intermodal Trans portation Agreement" (MITA), including a provision stating that the contract was "made under 49 U.S.C. § 10709." Id. at 7a.
b. Respondents filed separate lawsuits in state court, alleging that their property was damaged in a train derailment while en route to the Midwest. Pet. App. 7a. The lawsuits were removed to district court, which dismissed the actions based on the Tokyo forum- selection clause in each through bill. Id. at 36a-47a.
c. The Ninth Circuit reversed and remanded. Pet. App. 1a-35a. The court first held that Carmack, rather than COGSA, governed K-Line's bills of lading. Id. at 11a-26a. It reasoned that, although Carmack "[b]y its terms" applies to a "rail carrier providing transportation or service subject to the [STB's Part-A] jurisdiction," an "ocean carrier" such as K-Line may qualify as a "rail carrier." Id. at 12a-13a, 16a (quoting 49 U.S.C. 11706(a)).
The court further held that Carmack applies to the inland portion of import shipments from a foreign coun try on a through bill of lading issued overseas. Pet. App. 17a-19a. Relying on Ninth Circuit precedent, the court found "Carmack's reach [to be] coextensive with the [STB's] jurisdiction." Id. at 18a. That conclusion, the court explained, was not altered by the parties' "con tractual extension of COGSA" to the inland portion of the transit. Id. at 19a-26a. The court reasoned that while Section 7 of COGSA does not prevent the parties from "extending COGSA's protections" to transporta tion occurring after goods are discharged from a ship, "other law"-specifically Carmack-might negate such an extension. Id. at 21a-22a, 25a; see COGSA § 12.
The court of appeals recognized that Carmack's de fault rules may be displaced under 49 U.S.C. 10502(e) or 10709. Pet. App. 26a-35a. Section 10502(e) applies to "exempt" railroad transportation like that at issue here and permits rail carriers to "offer alternative terms" for such transportation, but the court held that a carrier may do so only if it "first offer[s] the shipper the option of full Carmack protections, presumably at a higher rate." Id. at 28a (citation omitted). The court found the record insufficient to determine whether K-Line offered such terms to respondents. Id. at 33a-35a.
The court held that K-Line and Union Pacific could not enter into a contract for railroad transportation un der Section 10709, which removes such contracts from Part-A requirements. Pet. App. 29a-33a. The court rea soned that Section 10709's contracting provisions apply to "transportation subject to [STB] jurisdiction," 49 U.S.C. 10709(a), and permit "agreement[s] for nonex empt transportation"; but that where, as here, the STB has exempted transportation from Subtitle IV of Title 49, the Subtitle's provisions, "includ[ing] § 10709," are inapplicable. Pet. App. 29a, 32a.
4. In September 2009, the United States became a signatory to the United Nations Convention on Con tracts for the International Carriage of Goods Wholly or Partly by Sea (the Rotterdam Rules), G.A. Res. 63/122, Annex, U.N. Doc. A/RES/63/122 (Dec. 11, 2008). If rati fied by the President with the advice and consent of the Senate, the Rotterdam Rules would alter the liability regime for international through transportation involv ing the United States when the transportation is partly by sea and partly by land. See id. at 8-11 (Arts. 12, 17, 18(d)).
SUMMARY OF ARGUMENT
1. The Ninth Circuit erred in concluding that Car mack displaces the Tokyo forum-selection provision in K-Line's through bills of lading.
a. Carmack does not apply to import carriage from non-adjacent foreign countries. Carmack's purpose is to impose upon the initial or delivering carrier responsibil ity for damage caused by any connecting carrier that participates in the transportation of that property. Car mack's text expressly limits that liability to transporta tion within the United States or "from a place in the United States to a place in an adjacent foreign country." 49 U.S.C. 11706(a)(3) (emphasis added). That language reflects the longstanding limitations on Carmack's scope.
In 1915, Congress expanded Carmack beyond wholly domestic transportation to reach transportation "from" the United States "to" an "adjacent foreign country." See 49 U.S.C. 20(11) (1976). The ICC promptly deter mined that Carmack did not apply to through carriage to or from non-adjacent foreign countries, an interpre tation that became a fixture in the Nation's foreign com merce over the ensuing decades. The ICC and the courts similarly long ago concluded that Carmack does not apply to through import transportation originating in even adjacent foreign countries. That limitation re flects concerns for comity with neighboring nations and reflects cooperative practices of the ICC and Canadian regulators before 1915. Carmack's limited scope was not altered when Congress enacted the ICA into positive law, expressly without substantive change, in 1978.
b. In any event, Carmack does not govern the through transportation in this case because Carmack governs transportation by a "rail carrier." K-Line is an ocean carrier, not a rail carrier. A "rail carrier" is a per son that "provid[es] common carrier railroad transpor tation for compensation," 49 U.S.C. 10102(5), by con ducting rail operations. An ocean carrier like K-Line that subcontracts with a rail carrier for railroad trans portation performs a function fundamentally different from that of the rail carrier actually providing the trans portation. The Ninth Circuit's holding that an ocean carrier becomes a "rail carrier" by subcontracting for railroad transportation to complete the inland leg of international through transportation would substantially disrupt the regulatory regime.
c. Because Carmack does not apply to K-Line's bill- of-lading obligations, it does not govern any part of the international through transportation in this case. Car mack's animating purpose is to create in the initial and delivering carriers unity of responsibility for the entire transportation. It does not apply in the import context when the initial carrier is an ocean carrier that contracts for through transportation from overseas points to in land destinations. Thus, Carmack does not render un lawful the forum-selection clause in K-Line's bills of lad ing.
2. If the Court nonetheless concludes that Carmack applies to the international through transportation here, the Ninth Circuit correctly concluded that a rail carrier like Union Pacific engaged in rail transportation ex empted from regulation under 49 U.S.C. 10502 cannot be relieved from all Carmack obligations by executing a contract for rail transportation under 49 U.S.C. 10709. Union Pacific cannot rely on Section 10709 in this case because the STB's exemption of intermodal carriage rendered Part A, which includes Section 10709, inappli cable. Union Pacific, however, complied with whatever Carmack obligations it had by offering K-Line the op tion of Carmack-compliant terms. For that reason as well, the Ninth Circuit's judgment should be reversed.
I. THE CARMACK AMENDMENT DOES NOT PRECLUDE ENFORCEMENT OF THE FORUM-SELECTION CLAUSE IN K-LINE'S THROUGH BILLS OF LADING
A. Carmack Does Not Apply Either To Carriage Between The United States And Non-Adjacent Foreign Countries Or To Imports From Any Foreign Country
Carmack's current text reflects the longstanding limitations on Carmack's scope. Congress initially ap plied Carmack to transportation between points within the United States-i.e., wholly interstate transporta tion. In 1915, Congress enacted a limited extension of Carmack into foreign commerce, applying it to common carriers "subject to the provisions of [the ICA] receiving property for transportation * * * from any point in the United States to a point in an adjacent foreign country." 49 U.S.C. 20(11) (1976) (emphasis added); Act of Mar. 4, 1915, ch. 176, § 1, 38 Stat. 1197. That text plainly ex cluded both carriage between points in the United States and non-adjacent foreign countries and imports from all foreign countries. The ICC and courts have long recognized those restrictions, and Congress has not since altered Carmack's geographic reach.
1. a. Two months after Congress amended Carmack in 1915, the ICC concluded that Carmack's text demon strated that it did not apply to "export and import ship ments to and from foreign countries not adjacent to the United States." Cummins Amendment, 33 I.C.C. 682, 693 (1915). The Commission carried that interpretation forward in 1919, when it "prescribed uniform forms of bills of lading" for rail carriers. See Illinois Steel Co. v. Baltimore & Ohio R.R., 320 U.S. 508, 509-510 (1944) (citing Bills of Lading, 52 I.C.C. 671 (1919)). In addition to prescribing a uniform domestic through bill, the ICC prescribed a uniform "through bill of lading" for regu lated carriers that joined with ocean carriers in conduct ing export through transportation "to nonadjacent for eign countries." Bills of Lading, 52 I.C.C. at 726-727.4 The export bill included a provision limiting each car rier's liability to loss or damage "occurring on its own road or its own water line or its portion of the through route" before the "property has been delivered to the next carrier" during "the inland service to the port of export." Id. at 690, 731. The ICC explained that the "essential character" of such inland transportation on an international through route is "that of 'foreign com merce'" and found it "evident" from the statutory text that Congress did not "inten[d] * * * to make [Car mack] applicable to traffic to a nonadjacent foreign coun try." Id. at 683, 729 (citation omitted). The Commission accordingly held that Carmack did not displace the carri ers' "common law right" to insist on a liability-limiting contractual provision for their "inland service to the port of export" while en route to "non-adjacent foreign coun tries." Id. at 690, 732.
In the Transportation Act, 1920, ch. 91, § 441, 41 Stat. 497, Congress confirmed the ICC's authority to "prescribe the form of [the] through bill of lading" and established procedures to facilitate export through transportation to overseas foreign countries. See 49 U.S.C. 25 (1934) (repealed 1940); cf. United States v. Alaska S.S. Co., 253 U.S. 113 (1920). Consistent with the ICC's order, Congress also directed that no rail car rier shall "be liable [for] * * * the shipment after its delivery to the vessel." 49 U.S.C. 25(4) (1934) (repealed 1940).
The ICC promptly revised its "through export bill of lading for shipments to nonadjacent foreign countries"; "adhere[d]" to its conclusion that Carmack does not ap ply to the inland portion of such shipments; and pre scribed a uniform through bill which included the same provision limiting a carrier's liability to loss or damage "occurring on * * * its portion of the [inland] through route" to the port of export. Export Bill of Lading, 64
I.C.C. 347, 351, 354 (1921); id. App. D (Pt. I, § 2(b)). That uniform bill of lading was required for use in the United States for the ensuing four decades, and its premise that Carmack did not apply to the inland leg of transportation to non-adjacent foreign countries thus became a fixture in the Nation's foreign commerce. See 49 C.F.R. 31.4, 31.6 (1963); 49 C.F.R. 31.13 (1938) (uni form export bill). Although the ICC in 1966 rescinded the regulation that made use of its uniform export bill mandatory, see 31 Fed. Reg. 14,945 (1966), the ICC did not alter its interpretation of Carmack reflected in the uniform bill.5
Like the ICC, this Court concluded that Carmack "does not apply" to "bills of lading affecting liability of railroads for loss of property" during "an interstate in land route to a seaport * * * for ocean carriage to a non-adjacent foreign country." Missouri Pac. R.R. v. Porter, 273 U.S. 341, 345 (1927). That limitation, Porter explained, constrained Carmack's reach but did not re strict the ICC's broader jurisdiction to regulate bills of lading (to ensure "just and reasonable" terms) for "all carriers" and "all transportation subject to the Act." Id. at 345 (holding that ICC's authority preempted state law).
b. Carmack has long embodied another restriction on its application: even with respect to adjacent coun tries, Carmack only applies to transportation to, not from, such countries.
"For reasons of international comity, regulation of carriers in foreign commerce has often been less strin gent than that of carriers in domestic commerce." Trailer Marine Transp. Corp. v. FMC, 602 F.2d 379, 397 n.77 (D.C. Cir. 1979) (citing United States v. Pennsylva nia R.R., 323 U.S. 612, 621-622 (1945)). And, although Congress has authority to regulate the issuance of bills of lading in foreign countries and liability of carriers for carriage of property to the United States, see Knott v. Botany Mills, 179 U.S. 69, 74-75 (1900), Congress de cided not to do so in Carmack.
Such an application of authority would risk intruding upon the regulatory prerogatives of neighboring nations, which might similarly attempt to exercise their author ity over commerce originating in the United States, all in derogation of the inter-sovereign cooperation that is often essential to productive trade partnerships. In deed, before Congress extended Carmack to carriage "from" the United States "to" adjacent foreign countries in 1915, the ICC and its Canadian counterpart had de veloped an "efficient working arrangement" based on the understanding that Canadian authorities would reg ulate rates for transportation from Canada to the United States and the ICC would regulate exports from the United States to Canada. See Heated Car Serv. Regula tions, 50 I.C.C. 620, 622-623 (1918); International Paper Co., 33 I.C.C. 270, 274-275 (1915). That arrangement presumably influenced Congress's choice to honor the regulatory authority of adjacent foreign countries by limiting Carmack's reach in foreign commerce to export traffic.
The Second Circuit in Sompo incorrectly concluded that Carmack covers both import and export traffic with foreign countries. See Sompo Japan Ins. Co. of Am. v. Union Pac. R.R., 456 F.3d 54, 64-68 (2d Cir. 2006); cf. Pet. App. 18 (citing Sompo). Sompo reasoned that Carmack's text before its codification in 1978 (see pp. 13-14, supra) covered such traffic because that text should be construed in the same way as similar "'from . . . to' language" in Section 1 of the ICA, which Gal veston, Harrisburg, & San Antonio Railway v. Wood bury, 254 U.S. 357 (1920), interpreted as vesting "the ICC [with] jurisdiction over transportation in foreign commerce regardless of whether the transportation originated in the United States." 456 F.3d at 65-66. Sompo misread Woodbury.
Woodbury addressed whether the ICA applied when luggage was lost on the inbound portion of round-trip transportation between Canada and Texas. At the rele vant time (1917), Section 1 of the ICA stated that the ICA applied to "any common carrier . . . engaged in the transportation of passengers or property . . . from any place in the United States to an adjacent foreign country." Woodbury, 254 U.S. at 359 (citation omitted). The Court reasoned that the textual focus on the carrier meant that the ICA's application turned on "the field of the carrier's operation" and "not the direction of the movement." Id. at 359-360. A carrier regulated by the ICA because it is "engaged in transportation by rail to an adjacent foreign country," the Court explained, also is normally "engaged in transportation * * * from that country to the United States," and, for that reason, tar iffs filed pursuant to the ICA governed the carrier's lia bility notwithstanding that the loss occurred during transportation from an adjacent foreign country. Ibid.
Carmack's structure was fundamentally different and more limited. It contained two distinct conditions for its application: The initial carrier had to be "subject to the provisions of [the ICA]," and it had to "receiv[e] property for transportation" (as relevant here) "from any point in the United States to a point in an adjacent foreign country." 49 U.S.C. 20(11) (1976). The first re quirement, like Woodbury, focused on the type of carrier and its field of operations. But the second turned on the direction of the specific "transportation" at issue. Wood bury's carrier-focused rationale did not speak to the latter inquiry, which unambiguously limited Carmack to export transportation.
The courts that addressed the question before 1978 thus were nearly uniform in concluding that imports did not qualify as transportation "from" the United States "to" an adjacent foreign country under Carmack, and that Woodbury did not resolve the question. See Alwine v. Pennsylvania R.R., 15 A.2d 507, 511-513 (Pa. Super. Ct. 1940); see also, e.g., Sklaroff v. Pennsylvania R.R., 184 F.2d 575, 575 (3d Cir. 1950) (per curiam) (following Alwine); Strachman v. Palmer, 177 F.2d 427, 429 (1st Cir. 1949) (same); Reider v. Thompson, 176 F.2d 13, 15 (5th Cir. 1949) (same), rev'd on other grounds, 339 U.S. 113 (1950). But see Goldburg v. Delaware, Lackawanna & W. R.R., 40 N.Y.S.2d 44, 46-48 (Mun. Ct. 1943). The ICC had likewise long held that Carmack does not gov ern import carriage "from points in an adjacent foreign country to points in the United States," Heated Car Serv. Regulations, 50 I.C.C. at 623.
In Reider v. Thompson, 339 U.S. 113 (1950), the Court addressed Carmack's application to the land por tion of the transit of goods shipped from Argentina to New Orleans by ocean carrier and then by rail from New Orleans to Boston. The Court noted that "[t]here was no through bill of lading from Buenos Aires to Boston"; rather, "[t]he contract for ocean transportation terminated at New Orleans," and there was a "new, sep arate, and distinct domestic contract of carriage" and distinct domestic bill of lading for the land transporta tion to Boston. Id. at 117. In those circumstances, the Court concluded that the discussion of Carmack in Porter did not control, id. at 116 n.1, and held that Carmack applied to the land transportation. The Court emphasized, however, that it did "not * * * determine" whether a domestic transportation of goods imported under a "through bill of lading" would be subject to Carmack. Id. at 117-118 (discussing Alwine).
c. In 1978, Congress reenacted the ICA into positive law against the long interpretive history described above. Act of Oct. 17, 1978 (ICA Codification), Pub. L. No. 95-473, § 1, 92 Stat. 1337. Carmack's revised text states in its first sentence that it applies to a rail carrier providing "transportation or service subject to the juris diction of" the STB under Part A6 when the carrier receives property for transportation under Part A. 49 U.S.C. 11706(a). Although that sentence omits the phrase "adjacent foreign country," 49 U.S.C. 20(11) (1976), that omission does not alter the longstanding rule that Carmack does not govern transportation be tween places in the United States and non-adjacent for eign countries.
To the contrary, Section 11706(a) as a whole demon strates that that limitation was retained. Carmack es tablishes "unity of responsibility for the transportation to destination," Missouri, Kan. & Tex. Ry. v. Ward, 244 U.S. 383, 386-387 (1917), by making the initial carrier (and now the delivering carrier) liable for damages "caused by it or any other carrier in the course of the transportation." Northern Pac. Ry. v. Wall, 241 U.S. 87, 92 (1916); accord Atlantic Coast Line R.R. v. Riverside Mills, 219 U.S. 186, 206-207 (1911). Carmack expressly provides, however, that the receiving and delivering car riers' liability for damage caused by a connecting carrier attaches only to transportation "in the United States or from a place in the United States to a place in an adja cent foreign country." 49 U.S.C. 11706(a)(3) (emphases added). That textual limitation, when read in light of Carmack's purpose, reflects Congress's continued intent to restrict Carmack to the carriage of goods between places in the United States and for export to an adjacent foreign country.
Any doubt on this score is dispelled by the terms of the 1978 codification itself. Courts do not "infer that Congress, in revising and consolidating the laws, in tend[s] to change their effect, unless such intention is clearly expressed." Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 227 (1957); see John R. Sand & Gravel Co. v. United States, 552 U.S. 130, 135-136 (2008). And here, Congress specifically directed in the ICA codification statute itself that the revised text "may not be construed as making a substantive change in the law." ICA Codification § 3(a), 92 Stat. 1466; see Bur lington N. R.R. v. Oklahoma Tax Comm'n, 481 U.S. 454, 457 n.1 (1987).
The legislative history similarly emphasized that the revision "makes no substantive change in the law," ex plained that courts would construe the "codification stat ute" accordingly, and concluded that the revision would not "impair the precedent value of earlier judicial deci sions and other interpretations." H.R. Rep. No. 1395, 95th Cong., 2d Sess. 9-10, 195-196, 213 (1978); see id. at 8 (Law Revision Counsel's explanation that, "[e]ven if the language used in the codification appears to make a substantive change, the courts will look to the predeces sor statute and legislative history" to interpret the codi fication).
The Ninth Circuit ignored the text of Section 11706(a)(3) quoted above and the terms of the 1978 codi fication making clear that it effected no substantive change. See Pet. App. 17a-18a; Neptune Orient Lines, Ltd. v. Burlington N. & Santa Fe Ry., 213 F.3d 1118, 1119 (9th Cir. 2000). Even the Second Circuit decision cited by the panel (Pet. App. 18a) recognized that Con gress "intended to leave the law substantively un changed" and implied that the omission of the phrase "adjacent foreign country" in the first sentence of Sec tion 11706(a) should not alter Carmack's reach. Sompo, 456 F.3d at 64, 68 n.13.7 Read correctly, in light of its long history, Carmack does not apply to transportation between places in the United States and non-adjacent foreign countries of the kind at issue here. See Bills of Lading, 9 I.C.C.2d at 1140 n.6.
B. K-Line Is A Water Carrier In Foreign Commerce, Not A"Rail Carrier" Subject To Carmack
Even if Carmack applied to import transportation from non-adjacent foreign countries, K-Line is an ocean common carrier rather than a "rail carrier providing transportation or service subject to the [STB's] jurisdic tion" and therefore is not subject to Carmack. 49 U.S.C. 11706(a).
A "rail carrier" is "a person providing common car rier railroad transportation for compensation." 49 U.S.C. 10102(5). "Rail carriers" have long been under stood as limited to entities that themselves "conduct rail operations" and hold themselves out to the public as providing such transportation. See, e.g., Association of P&C Dock Longshoremen, 8 I.C.C.2d 280, 290 & n.21 (1992) (citing cases); see also, e.g., United States v. Cali fornia, 297 U.S. 175, 181-183 (1936) (status as common carrier by rail turns on whether entity provides "rail transportation," the "essential elements" of which are "the receipt and transportation, for the public, for hire, of [rail] cars"); Rexroth Hydraudyne B.V. v. Ocean World Lines, Inc., 547 F.3d 351, 363-364 (2d Cir. 2008) (discussing cases); American Orient Express Ry. v. STB, 484 F.3d 554, 556-557 (D.C. Cir. 2007).
That understanding is reflected in the ICA's illustra tive definition of "transportation," which "includes" items "related to the movement of passengers or prop erty" (e.g., locomotives, vehicles, vessels) and "services related to that movement." 49 U.S.C. 10102(9). A per son providing "railroad transportation" is thus most nat urally understood to be an entity that has "some form of direct involvement in the movement of passengers or property" by railroad. Rexroth, 547 F.3d at 362.8
In contrast, an ocean common carrier that contracts with a connecting rail carrier to carry goods on an inland route "perform[s] a function that is fundamentally dif ferent from that of a rail carrier that actually does the transporting." Rexroth, 547 F.3d at 362. Indeed, as Rexroth explains (ibid.), the Ninth Circuit's contrary approach would create tension within the ICA's statu tory scheme. The ICA regulates, inter alia, transporta tion by a "freight forwarder," which the ICA defines in pertinent part as "a person holding itself out to the gen eral public (other than as a * * * rail * * * carrier) to provide transportation of property" by using ICA- regulated carriers in the ordinary course to provide "any part of the transportation." 49 U.S.C. 13102(8). If contracting for rail services would transform a freight forwarder into a "rail carrier," a freight forwarder that uses a rail carrier to provide transportation presumably could not hold itself out as something other than a "rail carrier."
The Ninth Circuit found it significant that the STB has jurisdiction over "transportation by a rail carrier" "by railroad and water" when under an "arrangement for a continuous carriage or shipment," 49 U.S.C. 10501(a)(1). See Pet. App. 13a, 16a. That provision, however, in fact undermines the court's holding. The current version of this provision gives the STB Part-A jurisdiction only over a "rail carrier" engaged in such transportation. 49 U.S.C. 10501(a)(1). And the prior (pre-1995) version makes clear that a "rail carrier" is indeed only a rail carrier, because it gave the agency jurisdiction over both a "rail carrier" and a "water com mon carrier" when they participated in a joint transpor tation arrangement. 49 U.S.C. 10501(a)(1) (1994); see 49 U.S.C. 1(1)(a) (1976); see ICC v. Goodrich Transit Co., 224 U.S. 194, 207-209 (1912) (explaining that under the prior version of the statute "carriers by water" were subject to ICA regulation "when engaged in carrying on traffic under joint rates with railroads"); Trailer Ma rine Trans. Corp., 602 F.2d at 383-386. Indeed, Con gress continues to distinguish between rail carriers and water carriers in a variety of contexts. Compare 49 U.S.C. 10703 (requiring regulated "[r]ail carriers" to "establish through routes * * * with water carri ers") with 49 U.S.C. 13102(26), 13521(a)(1) and (b), 13701(a)(1)(B) (STB's Part-B jurisdiction over water carriers and through routes).9
The Ninth Circuit's holding that an oceangoing "wa ter carrier" is a "rail carrier" subject to STB jurisdiction under 49 U.S.C. 10501(a)(1)(B) would substantially dis rupt Congress's regulatory regime. The Shipping Act of 1984 specifically contemplates FMC regulation of ocean carriers that use through routes with rail carriers, see pp. 4-5, supra; Rexroth, 547 F.3d at 357, and both the ICC and the FMC have determined that an ocean car rier providing international "through transportation with inland carriers" remains solely under the FMC's regulatory authority. See 46 C.F.R. 520.1(a); Improve ment of TOFC/COFC Regulations, 3 I.C.C.2d 869, 883 (1987) (FMC regulates tariffs of ocean carriers provid ing container service with rail transportation). If an "ocean carrier" is a "rail carrier," as the Ninth Circuit held, the STB's authority would significantly expand and the FMC's continuing authority to regulate water carri ers in this through-carriage context would be in doubt, because the STB's jurisdiction over "transportation by rail carriers * * * is exclusive," 49 U.S.C. 10501(b).
C. Carmack Does Not Apply To Union Pacific Because K-Line's Bill Of Lading Governs The Entire Through Transportation
Because Carmack does not apply to K-Line's bill of lading for international through transportation, it im poses no obligation on Union Pacific or any other con necting carrier that subcontracted with K-Line to per form part of that transportation.
Carmack's text reflects that the initial carrier has a duty to issue a single bill of lading that will govern the entire through transportation. It provides that a rail carrier "shall issue a receipt or bill of lading for prop erty it receives for transportation"; specifies that "[t]hat rail carrier" is "liable to the person entitled to recover under the receipt or bill of lading"; renders the carrier liable for property damage caused by it, "the delivering carrier," or "another rail carrier" over whose line the property was transported; and entitles "[t]he rail carrier issuing the receipt or bill of lading" to recover from the carrier causing the loss. 49 U.S.C. 11706(a) and (b) (em phases added).
That focus on "the" bill of lading issued by the re ceiving rail carrier is also reflected in this Court's deci sions, which explain that Carmack "requires the receiv ing carrier to issue a through bill of lading," St. Louis, Iron Mountain & S. Ry. v. Starbird, 243 U.S. 592, 595, 604 (1917), and thereby makes "the receiving carrier * * * responsible for the whole carriage," Ward, 244 U.S. at 387. Carmack's purpose is "to create in the ini tial carrier unity of responsibility for the transportation to destination" by treating the carriers participating in that transportation "as one system" in which all connect ing carriers "become in effect mere agents, whose duty it is to forward the goods under the terms of the con tract made by their principal, the initial carrier." Id. at 386-388; accord Wall, 241 U.S. at 92.10 Although Car mack now also imposes liability on the delivering car rier, its focus remains on the single course of transpor tation under the single through bill of lading.
It follows that "[t]he bill of lading, required to be issued by the initial carrier * * * , 'governs the entire transportation,'" "fixes the obligations of all participat ing carriers," Galveston Wharf Co. v. Galveston, Harris burg & San Antonio Ry., 285 U.S. 127, 135 (1932) (cita tion omitted), and "contain[s] the entire contract upon which the responsibilities of the parties rest." Star bird, 243 U.S. at 597. A "connecting carrier * * * may not vary the terms of the through bill," Galveston Wharf Co., 285 U.S. at 135-136, and will "not become an initial carrier" simply by issuing its own bill "unless the so- called second bill of lading represents the initiation of a new shipment." Mexican Light & Power Co. v. Texas Mexican Ry., 331 U.S. 731, 733-734 (1947).
Thus, when an international import shipment is des tined for an inland place in the United States, whether Carmack applies on the inland leg of the carriage turns on where the obligation of carriage originated. Reider, 339 U.S. at 117. If the international contract of carriage ended at the border such that a new, domestic bill is required for interstate inland carriage, then the inland carriage will constitute a new shipment initiated by a domestic receiving carrier and will be subject to Carmack. See id. at 117-118. By contrast, if the car rier's undertaking to transport property to the inland point arose under a through bill issued overseas, Carmack does not apply. See pp. 13-26, supra.11 In this case, K-Line's international through bills of lading were for transportation to inland destinations. Pet. App. 2a, 4a-5a. Carmack therefore has no application to the in land portion of the carriage or to Union Pacific's role as a connecting carrier for that carriage.
Because Carmack does not govern the through trans portation in this case, Carmack does not invalidate the parties' forum-selection agreement embodied in K-Line's bills of lading for respondents' shipments. Those bills permissibly adopted COGSA as the law gov erning liability for the entire carriage, included a Himalaya Clause permitting Union Pacific to benefit from the contract, see Norfolk S. Ry. v. James N. Kirby, Pty Ltd., 543 U.S. 14, 29-32 (2004), and included a forum-selection clause of the type valid under COGSA. See Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 534, 541 (1995). Both K-Line and Union Pacific therefore are contractually entitled to en force the terms to which respondents agreed in the through bills, including the Tokyo forum-selection clause. That result reflects the nature of the parties' contract and commerce in this case as "essentially mari time." Kirby, 543 U.S. at 24.
II. RESPONDENTS COULD NOT CONTRACT OUT OF CAR MACK'S LIABILITY PROVISIONS UNDER 49 U.S.C. 10709
A. If the Court agrees that Carmack does not apply to, and thus could not invalidate the forum-selection clause in, K-Line's bills of lading, the judgment of the court of appeals should be reversed. However, if the Court concludes that Carmack applies to the inland por tion of the international through transportation here, the Ninth Circuit was correct in holding that respon dents could not avoid Carmack by executing contracts for railroad services under 49 U.S.C. 10709. Consistent with 49 U.S.C. 10502(e), respondents were required to make Carmack-compliant terms available to the party seeking rail services.
Pursuant to 49 U.S.C. 10502(a) and (f), the STB has "exempt[ed] from the requirements of [Subtitle IV of Title 49]" any trailer-on-flatcar and container-on-flatcar service provided by a rail carrier "as part of a continu ous intermodal freight movement." 49 C.F.R. 1090.2. That exemption, however, does not "relieve any rail car rier from an obligation to provide contractual terms for liability and claims which are consistent with the provi sions of [Carmack]." 49 U.S.C. 10502(e). Under Section 10502(e), a rail carrier providing exempt transportation must offer the shipper the option of contractual terms for liability and claims consistent with Carmack, pre sumably at a higher rate, and may enter into a contract with different terms only if the shipper does not select that option. Pet. App. 28a-29a; see Sompo, 456 F.3d at 60; cf. New York, New Haven & Hartford R.R. v. Nothnagle, 346 U.S. 128, 135 (1953).
That requirement to offer Carmack-compliant terms is unaffected by Section 10709 for at least two reasons. First, Section 10502(e) specifies contractual terms that the carrier must offer before a contract for carriage is made, whereas Section 10709 specifies the effect of such a contract after it has been executed. See, e.g., 49 U.S.C. 10709(b) and (c)(1). Nothing in Section 10709 relieves a rail carrier providing exempted transportation of whatever obligation it has to make Carmack-compli ant terms available to a shipper.
Second, the STB exemption at issue here, 49 C.F.R. 1090.2, broadly exempts the intermodal rail transporta tion presently at issue from the application of Part-A requirements (which include Section 10709). When the STB exempts a particular type of traffic under Section 10502, the traffic is, absent an express limitation set forth in the exemption itself, no longer subject to any part of the ICA except as provided in Section 10502(e) (Carmack) and 10502(g) (employee protection). The exemption applicable here for intermodal rail transpor tation includes no such express limitation with respect to Section 10709. Therefore, Union Pacific could not properly enter into a contract under Section 10709 to relieve it of its obligations under Section 10502(e).12
The STB's interpretation of its exemption advances important policy considerations. When a rail carrier offers to provide non-exempt transportation under a Section 10709 contract, the entity seeking to obtain such transportation may choose between a contract that places the transportation outside Part-A regulation and the common-carrier rate and terms set by the carrier in accordance with Part-A regulation (including Carmack). That option to obtain regulated rates and terms is a sig nificant protection for shippers that would lack suffi cient bargaining power in negotiations. Cf. H.R. Conf. Rep. No. 1430, 96th Cong., 2d Sess. 100 (1980).
Section 10502(e), by contrast, applies to transporta tion that has been exempted from regulation, and the carrier therefore has no obligation to make common- carrier rates and terms available to shippers. But Con gress wanted shippers to be able to retain Carmack protections, and therefore imposed on the carrier an obligation to "provide"-to offer-contractual terms for liability and claims that are consistent with Carmack. The STB's exemption ensures that such carriers cannot avoid that obligation under Section 10709. It would, at least, be anomalous "for [Section] 10502 to permit a cer tain category of rail contracts to offer specific rates and terms but require an initial offer of full Carmack liabil ity" and yet for "[Section] 10709 to permit the same cat egory of rail contracts to offer specific rates and terms with no such requirement." Pet. App. 31a-32a (internal quotation marks, ellipses and citation omitted).
B. Union Pacific correctly contends (Br. 44-50) that, if Carmack applies in this context, Union Pacific com plied with it by offering Carmack-compliant terms to K-Line. Requiring rail carriers that subcontract to per form the inland leg of international through transporta tion to locate and offer Carmack terms directly to the shipper would impose an unworkable regime and under mine a significant benefit of through transportation by requiring negotiations between shippers and connecting carriers (like Union Pacific) that function as agents of the initial carrier (K-Line) in performing the carriage. That burdensome consequence of the Ninth Circuit's ruling simply underscores the conclusion that Carmack has no application to international through carriage like that at issue in this case.
The judgment of the court of appeals should be re versed.
Assistant Attorney General
EDWIN S. KNEEDLER
Deputy Solicitor General
ANTHONY A. YANG
Assistant to the Solicitor
MICHAEL JAY SINGER
KELSI BROWN CORKRAN
1 Carmack was enacted as Paragraphs 11 and 12 of Section 20 of the ICA. See 49 U.S.C. 20(11) and (12) (1976). Congress extended Car mack to motor carriers (in 1935) and freight forwarders (in 1942) when it brought such transportation under the ICA. See 49 U.S.C. 319, 1013 (1976). In 1978, Congress enacted the relevant portion of Title 49 into positive law and placed Carmack in 49 U.S.C. 10730 and 11707 (1994). In 1995, Carmack's provisions were moved to 49 U.S.C. 11706 (rail car riers) and 14706 (motor carriers, freight forwarders, and water car riers).
2 If the receiving or the delivering carrier is held liable, it is "entitled to recover from the rail carrier over whose line or route the loss or in jury occurred." 49 U.S.C. 11706(b).
3 Because the insurer respondents are subrogated to insured cargo owners that contracted with K-Line, we refer to all respondents as if they are cargo owners. All references to "Pet. App." are to the petition appendix in No. 08-1553.
4 The "through bill of lading" was actually a "divisible bill" constitut ing a rail-carrier bill for carriage to the port (which was "not a contract * * * for shipment beyond") and an ocean-carrier bill for carriage from that port. Great N. Ry. v. Sullivan, 294 U.S. 458, 460-461 n.2 (1935) (citation omitted); see Bills of Lading, 52 I.C.C. at 730; cf. Pennsylvania v. ICC, 561 F.2d 278, 281-285 (D.C. Cir. 1977) (discussing ICC policy governing international through rates based on combination rates for inland and ocean carriage from 1906 to 1976).
5 The ICC's uniform "domestic" bill of lading remained applicable to interstate carriage and export carriage "to points in adjacent foreign countries," Domestic Bill of Lading & Live Stock Contract, 64 I.C.C. 357, 364 (1921), and did not contain provisions limiting carrier liability in a manner prohibited by Carmack, Bills of Lading, 52 I.C.C. at 708- 711. See 49 C.F.R. 1035.1(c) (1992) (prescribing uniform bill when a bill is "required" under ICA § 20); 49 C.F.R. 31.1(b) (1938).
In 1993, the ICC revised its domestic-bill-of-lading regulations to "clarify the[ir] terms" and "remove obsolete references." 58 Fed. Reg. 60,797 (1993); see 49 C.F.R. 1035.1(a). The ICC emphasized that this revision does "not affect" Carmack's bill-of-lading provisions, which apply to goods carried between United States points or "exported to adjacent foreign countries." Bills of Lading, 9 I.C.C.2d 1137, 1139-1140 nn.5-6 (1993) (citing ICC precedent).
6 Part-A jurisdiction encompasses certain transportation in the United States "between" a place in "the United States and a place in a foreign country." 49 U.S.C. 10501(a)(1)(B) and (2)(F).
7 Sompo nevertheless "f[ou]nd [it]sel[f] bound" by circuit precedent that failed to address Carmack's original text. 456 F.3d at 68 n.13 (cit ing Project Hope v. M/V IBN SINA, 250 F.3d 67, 74-75 (2d Cir. 2001)).
8 The ICA's definition of "railroad" includes various items "used by or in connection with a railroad," such as a bridge or intermodal equip ment. 49 U.S.C. 10102(6).
9 The distinction between rail and water carriers is longstanding. For instance, after the ICC concluded in 1919 that Carmack prohibited domestic water carriers participating in rail-water through transporta tion from using bill-of-lading provisions limiting their liability as permitted under maritime law, Bills of Lading, 52 I.C.C. at 723-726, Congress amended Carmack to provide that the liability of a "carrier by water" for damage caused "while [property] is in [its] custody" is governed by laws "applicable to transportation by water." Transporta tion Act, 1920 § 437, 41 Stat. 494 (49 U.S.C. 14706(c)(2)); see 49 U.S.C. 11707(c)(2) (1994).
10 That approach reflected the standard industry practice underlying through transportation whereby "[t]he receiving carrier makes the rate and the route" by selecting "connecting carriers" to build a continuous route to destination. Riverside Mills, 219 U.S. at 199. Congress under stood that "the initial carrier [would have] a through route connection with the secondary carrier" and, if held liable under Carmack, could easily obtain reimbursement from the carrier responsible for the damage because both of their businesses would depend on continued cooperation. Id. at 200-201 (quoting legislative history).
11 Several courts of appeals have correctly held Carmack inapplicable to the inland leg of international carriage governed by a through bill of lading for delivery to inland United States destinations. See Altadis USA, Inc. v. Sea Star Line, LLC, 458 F.3d 1288, 1291-1294 (11th Cir. 2006) (citing Fourth, Sixth, and Seventh Circuit decisions), cert. dis missed, 549 U.S. 1189 (2007). Those courts also suggest that Carmack would apply if a separate, domestic bill governed the inland leg. Ibid. But see Sompo, 456 F.3d at 61-63. We understand those decisions to indicate correctly that, if transportation under an international bill ends at the border, as in Reider, Carmack requires a new bill for the subse quent interstate carriage and governs that separate, domestic ship ment.
12 Because the STB's exemption renders Section 10709 inapplicable, this case presents no opportunity to consider whether a carrier furnish ing exempt transportation is statutorily ineligible to invoke Section 10709, as the Ninth Circuit held, see Pet. App. 29a, 31a-33a, or whether, instead, the STB could modify the scope of its exemption to enable rail carriers to enter into Section 10709 contracts for the transportation of otherwise exempt traffic, so long as they also provide terms for liability consistent with Carmack.
Although the government's petition-stage amicus brief in Kirby indicated that Section 10709 contracts could apply to exempted traffic and thereby displace Carmack's "liability rules," U.S. Br. at 11 n.4, 12, Kirby, supra, (No. 02-1028), that portion of the brief involved an ancil lary point and did not reflect full consideration of the legal issue now squarely presented in this case.