Kemper Insurance Companies v. Federal Express Corp.

MEMORANDUM *

Kemper Insurance Companies (“Kem-per”), subrogee for shippers Holmes Protection Group, Inc. and Ferrari Express, Inc., appeal the district court’s partial grant of summary judgment to Federal Express Corporation (“FedEx”) in Kem-per’s action alleging breach of contract for carriage of goods.

Kemper contends that FedEx’s contractual limitation of liability is unenforceable because it restricts the value a shipper can declare, even though FedEx accepts shipments valued in excess of that value.

We apply federal common law to determine the validity of a contractual clause that limits a common carrier’s liability for shipped cargo. Read-Rite Corp. v. Burlington Air Express, Ltd., 186 F.3d 1190, 1198 (9th Cir.1999). A limited liability provision is enforceable if the contract offers the shipper reasonable notice of limited liability and a fair opportunity to purchase higher liability. Deiro v. American Airlines, Inc., 816 F.2d 1360, 1365 (9th Cir.1987).

Here, it is undisputed that the shippers failed to declare a dollar value for the goods they shipped. Because the shippers accepted the benefit of shipping their goods at a lower rate, Kemper is estopped from challenging…