United States District Court,
S.D. New York.
SOTHEBY’S INC., Plaintiff,
v.
MODERN ART SERVICES, LTD. and David Hill, Defendants.
No. 10 Civ. 9032(RMB).
April 21, 2011.
DECISION & ORDER
RICHARD M. BERMAN, District Judge.
I. Background
On November 12, 2010, Sotheby’s, Inc. (“Sotheby’s” or “Plaintiff”) filed a complaint in New York State Supreme Court, New York County, against Modern Art Services, Ltd. (“Modern Art”), a shipping company, and David Hill, an employee of Modern Art (collectively, “Defendants”), alleging that Defendants negligently mishandled a statue in violation of New York State common law when, “[i]n anticipation of … taking delivery of the [s]tatue and initiating the shipment,” Defendants caused it “to fall to the floor of the loading dock, damaging it severely.” (Compl., dated Nov. 12, 2010, ¶¶ 12–15.)
On December 2, 2010, Defendants removed the case to this Court pursuant to 28 U.S.C. § 1441, asserting, among other things, that the Court has federal question jurisdiction under 28 U.S.C. § 1331 because the Carmack Amendment “completely preempts [Plaintiff’s] state law [claim] [as] applie[d] to the facts of this case.” (See Not. of Removal, dated Dec. 2, 2010, at 2.) On December 16, 2010, Defendants filed an amended answer, asserting, among other things, that federal common law also provides a basis for jurisdiction, completely preempting Plaintiff’s state law claim. (See Defs. Am. Ans., dated Dec. 16, 2010, ¶ 50.)
On January 19, 2011, Plaintiff moved to remand the matter to state court, arguing, among other things, that (1) the Carmack Amendment “only applies … to shipment[s] … by rail or motor carrier” and the statue was being shipped by air; and (2) “federal common law provides nothing that would warrant preemption” of Plaintiff’s claims. (See Pl. Mem. of Law in Supp. of Mot. to Remand, dated Jan. 19, 2011 (“Pl.Mem.”), at 1–2, 9.)
On February 2, 2011, Defendants filed an opposition, arguing, among other things, that (1) the Carmack Amendment applies “despite the fact that the [s]tatue was at some point going to be transported by air”; and (2) there is “complete preemption [of state law claims] by federal common law when [those] claims … involve goods lost or damaged in shipment.” (See Defs.’ Mem. of Law in Opp’n to Pl. Mot. to Remand, filed Feb. 2, 2011 (“Defs.Mem.”), at 10, 19.)
On February 9, 2011, Plaintiff filed a reply, arguing, among other things, that Defendants “wrongly conflate[ ] statements concerning the ordinary preemptive effective of federal common law in support of … the extraordinary outcome of complete preemption.” (See Pl. Reply Mem. of Law in Further Supp. of Mot. for Remand, dated Feb. 9, 2011, at 2.) The parties waived oral argument.
For the reasons stated below, Plaintiff’s motion to remand is granted.
III. Legal Standard
The presence or absence of federal question jurisdiction is governed by the well-pleaded complaint rule which “provides that federal jurisdiction exists only when the plaintiff’s own cause of action is based on federal law.” Marcus v. AT & T Corp., 138 F.3d 46, 52 (2d Cir.1998). “On a motion for remand, weighed against the ‘well pleaded complaint rule,’ defendants bear the burden of proving that federal question jurisdiction exists.” Consol. Edison Co. of N.Y., Inc. v. Entergy Nuclear Indian Point 2, LLC, No. 05 Civ. 0222, 2006 WL 929208, at(S.D.N.Y. Apr. 7, 2006). “Federal pre-emption is ordinarily a federal defense to the plaintiff’s suit. As a defense, it does not appear on the face of a well-pleaded complaint, and, therefore, does not authorize removal to federal court.” Metropolitan Life Ins. Co. v. Taylor, 481 U .S. 58, 64 (1987).
Removal based upon preemption is available “only in the very narrow range of cases where ‘Congress has clearly manifested an intent’ to make a specific action within a particular area removable .” Marcus, 138 F.3d at 54 (quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 66 (1987)). “[T]he prudent course for a federal court that does not find a clear congressional intent to create removal jurisdiction will be to remand the case to state court.” Id.
IV. Analysis
Carmack Amendment
Plaintiff argues that “the mere fact that the [s]tatue was to be sent by truck to the airport prior to its shipment by air to Hong Kong does not invoke the Carmack Amendment” which “specifically exempts the transportation of property … by an air carrier.” (Pl. Mem. at 6 (quotation marks omitted).) Defendants counter that the operative facts trigger the Carmack Amendment because “Modern Art, a motor carrier, was engaged in the interstate shipping process of the [s]tatue, when the [s]tatue … was damaged.” (Defs. Mem. at 9.)
The statue at issue was to be shipped by air to Hong Kong and, therefore, Plaintiff’s claim is not preempted, i.e., it is “not controlled by the Carmack Amendment.” Feldman v. United Parcel Serv., Inc., No. 06 Civ. 2490, 2008 WL 2540814, at(S.D.N.Y. June 25, 2008); see also Royal & Sun Alliance Ins. PLC v. Rogers Transp., 737 F.Supp.2d 154, 159 n. 31 (S.D.N.Y.2010) (The Carmack Amendment exempts “transportation of property … by motor vehicle as part of a continuous movement which, prior or subsequent to such part of the continuous movement, has been or will be transported by an air carrier.”) (citing 49 U.S.C. § 13506(a) (8)(B)); Kemper Ins. Co. v. Federal Exp. Corp., 252 F.3d 509, 514 n. 5 (1st Cir.2001) (collecting cases); (see also Pl. Mem. at 6 (“The [s]tatue was to be shipped by air from New York to Hong Kong.”); Defs. Mem. at 10 (“[T]he [s]tatue was at some point going to be transported by air.”).)
Federal Common Law
Plaintiff argues, among other things, that “federal common law provides nothing that would warrant complete preemption” and there “has been no … clear manifestation [of intent] from Congress” to make an action concerning air shipments removable. (Pl. Mem. at 8–9.) Defendants counter (unpersuasively) that Sotheby’s pleading of its claim in state law terms was “a ruse designed to prevent [Defendants] from litigating … in a federal forum” and that there is “complete preemption [of Sotheby’s state law claim] by federal common law.” (Def. Mem. at 1–2, 19.)
The Court finds that the Complaint does not on its face reveal a federal question. Marcus, 138 F.3d at 52 (“Under the well-pleaded complaint rule, the plaintiff is the matter of the complaint, free to avoid federal jurisdiction by pleading only state claims even where a federal claim is also available.”) (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987)). Plaintiff’s Complaint alleges only that Defendants mishandling of the statue “w[as] so egregiously careless, reckless, and in such wanton disregard of [the] duties [owed] to Sotheby’s as to constitute gross negligence.” (Compl. ¶¶ 15, 17); see Musson Theatrical, Inc. v. Federal Express Corp., 89 F.3d 1244, 1252 (6th Cir.1996) (“For federal jurisdiction to exist … a plaintiff’s well-pleaded complaint must raise an issue ‘arising under’ the laws of the United States.”); see also Hannibal v. Federal Express Corp., 266 F.Supp.2d 466, 469 (E.D.Va.2003).
And, “the doctrine of complete preemption is inapplicable to a well-pleaded complaint against an air carrier alleging state law claims,” Hannibal, 266 F.Supp.2d at 70, where, as here, there is no “evidence of Congress’s intent to transfer jurisdiction to federal courts.” Musson Theatrical, 89 F.3d at 1253; Marcus, 138 F.3d at 55. Absent evidence that Congress intended the federal courts to have exclusive subject matter jurisdiction over the preemption defenses to state law claims against air carriers, the Court must assume “that a state court, subject to review by writ of certiorari, can resolve such a defense as ably as could a federal district court.” Musson Theatrical, 89 F.3d at 1253 (rejecting complete preemption as a basis for subject matter jurisdiction and remanding to state court the plaintiff’s state law claims); Marcus, 138 F.3d at 52 (“[A] complaint that pleads only state law causes of action may not be removed to federal court even where Congress has chosen to regulate the entire field of law in the area in question.”); Sullivan v. American Airliens, Inc., 424 F.3d 267, 271 (2d Cir.2005).
V. Conclusion and Order
For the reasons stated herein, Plaintiff’s motion for remand [# 14] is granted. The Clerk of the Court is respectfully requested to remand this case to state court.
