Tuesday, October 18, 2011

Smallwood v. Allied Van Lines (9th Cir. - Oct. 18, 2011)

You're living in San Diego.  You decide to move to the UAE.  Why?  I have no idea.  San Diego is pretty darn nice.  Presumably for the money.

You can't exactly drive a U-Haul with all your stuff to the UAE.  So you hire Allied Van Lines.  You also (smartly) don't intend on living in the UAE forever.  So when Allied comes to your house, you show them one group of boxes that are to be shipped to the UAE and another group that are to be put into storage.  Makes sense.

Allied messes up.  It ships both groups of boxes to the UAE.  Bummer.  But easily solved, right?  Just ship the second group of boxes back.

One problem.  One of those boxes were full of guns and ammunition.  To which the UAE responded, shall we say, harshly.  Imprisoning you for 11 days and charging you with gun smuggling.  A crime that the UAE (understandably) frowns upon.  Then moved to deport you from the UAE.

So you do what any good American would do.  You sue Allied Van Lines.  Which then responds in the way common to any good American corporation.  By moving to compel arbitration of the dispute.  In Dubai.  As required by a small snippet of one of the forms they sent you to sign (even though it doesn't look like a contract).  On the theory -- rightly enough -- that an arbitration in Dubai will be much more of a hassle to you, and more favorable to the moving company on the merits, than a lawsuit in the U.S.

The Ninth Circuit has to decide whether that arbitration agreement is invalid under the Carmack Amendment.  No, not Carnac.  Carmack.  Less well-known than the other (fictional) guy.  A Senator remembered in posterity only because of this particular amendment to the federal law about common carriers.  Plus the fact that he was shot and killed on the streets of Nashville and was allegedly "one of the most racist politicians in Tennessee history."  Which is saying something.  (Here's the statute of Carmack in front of the Tennessee State Capitol.  Notice the absence of a frilly Carnac hat.)

The Ninth Circuit holds that the arbitration provision is invalid.  So Smallwood gets to sue in San Diego.  Affirming Judge Moskowitz, who's pretty smart and who held the same thing below.

See.  You should never leave San Diego.

Lesson learned.