TALLAHASSEE – The Florida Supreme Court has given another shot to an artist who accused UPS of stealing her art and selling it to a third party.
Ivana Vidovic Mlinar appealed to the Supreme Court after lower courts dismissed her claims against UPS, which argued that a federal law that protects cargo carriers from liability for goods that are damaged or lost en route. The federal law, called the Carmack Amendment, preempts state claims.
The Supreme Court had to decide whether Carmack was intended to protect carriers accused of stealing the lost cargo, Michelle Otero Valdés, an attorney in the Miami office of Chalos & Co., told the Florida Record.
“The court was being asked by a carrier, who is used to being shielded from a lawsuit by asserting federal preemption over state law causes of action, to uphold a decision of a lower court which arguably would have allowed UPS to steal cargo from a customer, deny they are customers, hide the stolen goods and then sell them via a third party,” Otero Valdés said.
The court determined Mlinar could sue UPS in state court, allowing it to go to trial. Otero Valdés thinks the court made the right decision, though it was surprising.
“Up until this decision, previous theft cases all found that the carrier was entitled to limit its liability under the Carmack Amendment,” she said.
In 2005, Mlinar, a painter, shipped two valuable works to New York through a retailer called Pak Mail, which ships via UPS. The package arrived at its destination, but not the paintings. From the way the package was cut open, it was clear the contents were stolen. Months after reporting the loss, Mlinar got $100 from Pak Mail. UPS had said it couldn't help her because technically she wasn’t its customer – the retailer was.
Two years later, a man from Missouri called Mlinar to ask about the value of one of the paintings, which he said he had purchased at an auction by a company called Cargo Largo, which is UPS’ lost goods contractor. The man, Aaron Anderson, later acquired the second painting and attempted to sell both online.
Mlinar sued UPS, Pak Mail, Cargo Largo and Anderson, alleging that UPS took the contents of her container “based on their nature, probable worth and lack of insurance,” according to court documents. She claims UPS then sold the paintings to Cargo Largo. On top of the theft of the paintings, Mlinar claims the defendants profited from criminal activity and violated her copyright. She also accuses UPS of using deceptive trade practices because the packing store gave her a UPS receipt, making it seem like she was a UPS customer.
“It was UPS’ position that the courts have always accepted the argument that Congress, in passing the Carmack Amendment, intended to preempt state law claims related to theft. However, the justices drew a distinction between this case and other theft cases, which deal with dishonest employees and find that the carrier is entitled to the preemption under the Carmack Amendment,” Otero Valdés said. “Here the allegation involved a scheme by UPS’ own management and, the court noted, was not a one-time occurrence.”
She went on to say that this ruling will be limited in its impact. She noted a comment by Justice Barbara Pariente, who said, “The conspiracy is taking the goods. Instead of being sent back to the rightful owner, they’re sold. That idea that there is intentional conduct after the misdelivery that further prevents the rightful owner from obtaining the property seems to be outside the scope of what congress could’ve possibly intended to protect carriers from. How could that be according to any public policy we would want to encourage?”
So, the decision would apply to a future case when it doesn’t involve the actions of an employee and, instead, demonstrates a corporate policy, Otero Valdés said.