## Facts

- Marquette Cement Manufacturing Company shipped bulk cement by rail from Cowan, Tennessee, to a customer in Chattanooga, Tennessee.
- Two divisions of Vulcan Materials in Chattanooga received different cement types from Marquette:
  - Concrete Pipe Division received air-entrained cement.
  - Rock Products Division received non-air-entrained cement and added its own air-entraining agent.
- Marquette loaded an L&N hopper car with air-entrained cement and prepared a bill of lading naming Concrete Pipe Division (1111 Oak Street, Chattanooga) as consignee.
- The bill of lading identified the product as air-entrained cement but listed a routing inconsistent with Marquette’s usual routing for that consignee.
- The railroad misdelivered the shipment to Rock Products Division (2001 Rossville Boulevard, Chattanooga) rather than to the consignee on the bill of lading.
- Rock Products, believing the cement was its usual non-air-entrained cement, added an air-entraining agent and used the resulting concrete in projects; the concrete proved defective and required removal and replacement.
- Plaintiffs sought damages for the cement’s value, freight charges, and downstream costs tied to replacing defective concrete and related testing.

## Issues

1. Whether a rail carrier is liable under the Carmack Amendment for misdelivery when it delivers to an entity other than the consignee named on the bill of lading.
2. Whether the Carmack Amendment permits recovery of consequential damages (construction removal/replacement and testing costs) resulting from misdelivery, absent special notice making such damages reasonably foreseeable.

## Decision

- The court held the carrier liable under the Carmack Amendment for misdelivery because delivery did not conform to the bill of lading.
- The court awarded damages limited to the value of the misdelivered cement and associated freight charges.
- The court denied recovery for construction removal/replacement costs and testing expenses as remote consequential damages not reasonably foreseeable to the carrier based on the information provided.

## Legal Principles

- The Carmack Amendment imposes liability on a carrier for the “actual loss or injury to the property” arising from failure to transport and deliver according to the bill of lading, including misdelivery.
- Direct, shipment-related damages ordinarily include the value of the goods and freight charges tied to the shipment.
- Consequential damages are recoverable only if they were within the parties’ contemplation at contracting and were reasonably foreseeable to the carrier, typically requiring notice of special circumstances.
- Product description on a bill of lading, without evidence the carrier understood the special risk or intended use, may be insufficient to charge the carrier with foreseeability of unusual downstream losses.

## Conclusion

The court found the railroad liable for misdelivery under the Carmack Amendment but limited recovery to direct loss (cement value and freight), refusing to shift construction rework and testing costs to the carrier absent notice and reasonable foreseeability of those consequences.


Marquette Cement Mfg. Co. v. Louisville & Nashville R.R. Co., 281 F. Supp. 944 (E.D. Tenn. 1967)