American Cyanamid shipped 7,000 vials of DPT—a vaccine for immunization of infants and children against diphtheria, pertussis, and tetanus—from its Pearl River, New York, facility to the U.S. Defense Department depot in Mechanicsburg, Pennsylvania, by New Penn Motor Express, a common carrier. Cyanamid’s bill of lading included a “release value,” which stated the value of the property was declared as not exceeding $1.65 per pound. Cyanamid’s shipment weighed 1,260 pounds. The bill of lading accepted by New Penn on picking up the DPT vaccine on February 6 also clearly stated that the shipment contained drugs and clearly warned to “protect from freezing.” The bill further recited “rush … must be delivered by February 8, 1989.” New Penn permitted the vaccine to sit in an unheated uninsulated trailer while it gathered enough other merchandise to justify sending a truck to Mechanicsburg. The DPT vaccine was delivered on February 10 in worthless condition, having been destroyed by the cold. New Penn admitted it owed $2,079 in damages pursuant to the bill of lading ($1.65 1,260 lbs.).

Cyanamid claimed that the actual loss was much greater, $53,936.75. It stated that because New Penn breached its contract with Cyanamid, it could not invoke the benefits of that same contract, namely, the release value clause.

Was it ethical for New Penn to hold the vaccine while waiting for enough merchandise to justify the trip? How would you decide the case? [American Cyanamid Co. v New Penn Motor Express, Inc., 979 F2d 301 (3d Cir)]

498 Part 3 Sales and Leases of Goods Appendix