Regal-Beloit Revisited in the Reverse

Yaakov U. Adler | Essay

In its landmark 2010 decision in Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., the United States Supreme Court held that the Carriage of Goods by Sea Act (COGSA or Act), and not the Carmack Amendment (Carmack or Amendment), governed the inland rail segment of an inbound (overseas import) multimodal shipment under a through bill of lading. In the opinion drafted by Justice Kennedy, the Court expressly declined (parenthetically) to answer the question of what happens in the reverse context, that is, where cargo is lost or damaged on the inland rail segment of an outbound (overseas export) multimodal shipment under a through bill of lading.

Regal-Beloit thereby introduced substantial uncertainty for parties to the multimodal transport industry. Over the last four years, lower courts have grappled with the question Regal-Beloit left open. Most courts have applied COGSA. At least one court, however, chose to apply Carmack. Importantly, there is little consensus among the courts addressing this issue with regard to the reasoning applied. This Article will examine those lower court opinions dealing with the “reverse Regal-Beloit” scenario and will argue that the interests of uniformity in maritime law, industry efficiency, and predictability for both land and ocean carriers beckon COGSA’s application.