1. How could King have avoided paying the seller and having damaged statues?

2. What important principles does the case set out for interstate shipments?

3. Does it make any difference that the artwork was for personal use and not part of a commercial transaction?

Yehouda Hanasab, president and sole shareholder of King Jewelry, Inc., bought a pair of marble and brass statues with candelabras from Elegant Reflections, a purveyor of jewelry and object d’art located in Florida, for $37,500.00. Elegant Reflections was to ship the goods to King under FOB place of shipment terms. Elegant Reflections hired Raymond Reppert, a “professional packager and crater” with 12 years’ experience, to package, crate, and ship the statues and candelabras to King. Reppert packaged and crated the statues with directional markings and signs stating “Fragile—Handle with Care.” Reppert paid FedEx $684.50 (transportation charge in the amount of $485.04, declared value charge in the amount of $185.00, and fuel surcharge in the amount of $14.55) to ship the candelabras. However, both candelabras were broken in transit, something King discovered when they arrived in King’s offices. FedEx’s airbill limits damages to $500. King sought recovery from Elegant and/or FedEx and Reppert.

JUDICIAL OPINION

CHAPMAN, United States Magistrate Judge … Federal Express is a federally certified all-cargo air carrier operating under the authority granted it by the Federal Aviation Administration. “State law regulating the scope of air carrier liability for loss or damage to cargo is preempted by the Airline Deregulation Act of 1978.”

As the Ninth Circuit has held: Under established federal common law, if a carrier wishes to enforce a limited liability provision, its contract must offer the shipper (1) reasonable notice of limited liability, and (2) a fair opportunity to purchase higher liability. Limited liability provisions are prima facie valid if the face of the contract (or, in this case, air waybill) recites the liability limitation and “the means to avoid it.” The burden then shifts to the shipper to prove that it did not have a “fair opportunity” to purchase greater liability coverage. The reverse side of the King airbill sets forth the terms and conditions of shipping under the King airbill, and by those terms and conditions, specifically incorporates FedEx’s Service Guide.

The terms and conditions of the King airbill provide for limitations on FedEx’s liability, and specifically limit “items of extraordinary value” to $500.00. Further, “items of extraordinary value” are defined to “include shipments containing such items as artwork, jewelry, furs, precious metals, negotiable instruments, and other items listed in our Service Guide.” It is inconceivable that a professional packager and crater such as Mr. Reppert had not previously shipped with FedEx and was not aware of the terms and conditions of shipment through FedEx. Moreover, since Mr. Reppert was acting as the agent for Elegant Reflections, a purveyor of antiques and objets d’art, and he had been informed that shipment of the statues with $37,000.00 insurance was unavailable through two of FedEx’s competitors, United Parcel Service and Emery Worldwide, Mr. Reppert’s interest should have been piqued about FedEx’s terms of shipment, and he should have requested a copy of the Service Guide to expressly read the liability provisions regarding shipments of antiques or objets d’art. ………………………..