Landstar Ranger, Inc. v. Triple M Logistics, Inc. An Ill. Corp.

United States District Court for the Middle District of Florida, Jacksonville Division

June 28, 2023, Filed

Case No. 3:22-CV-00056-HES-LLL

LANDSTAR RANGER, INC., A Florida corporation, Plaintiff, v. TRIPLE M LOGISTICS, INC. an Illinois corporation, Defendant.

Notice: Decision text below is the first available text from the court; it has not been editorially reviewed by LexisNexis. Publisher’s editorial review, including Headnotes, Case Summary, Shepard’s analysis or any amendments will be added in accordance with LexisNexis editorial guidelines.

Core Terms

carrier, summary judgment, shipper, motor carrier, shipment, transportation, contracts, Logistics, broker, limitation of liability, delivery order, negotiated, upstream, damages, parties, interstate, nonmoving, genuine, cargo, pound

Opinion

[*1] O R D E R

THIS CAUSE is before this Court on “Plaintiff’s Motion for Summary Judgment and Memorandum of Law in Support of Summary Judgment” (Dkt.

25), “Motion for Summary Judgment by Triple M Logistics, Inc.” (Dkt. 28), “Plaintiff’s Memorandum of Law in Opposition to Defendant’s Motion for Summary Judgment” (Dkt. 31), “Triple M Logistics’ Response in Opposition to Landstar Ranger’s Motion for Summary Judgment” (Dkt. 32), and Triple M’s “Reply to Landstar Ranger’s Response in Opposition to Triple Logistics’ Motion for Summary Judgment” (Dkt. 33). The Parties also submitted a “Joint Stipulation of Undisputed Facts” (Dkt. 24).

I. Background

Landstar Ranger, Inc. (“Landstar”) is a property broker authorized by

the Federal Motor Carrier Safety Administration to arrange for the interstate transportation of property by various motor carriers. Triple M Logistics, Inc. (Triple M) is a for-hire motor carrier authorized by the Federal Motor Carrier Safety Administration to transport property in interstate commerce.

Twenty-eight pallets of computers owned by Acer America Corporation

(“Acer”) were stolen in transit. (Dkt. 24 at ¶ 17, 40). Non-party Acer, a shipper of goods, contracted with non-party Expeditors [*2] International of Washington,

Inc. (“Expeditors”) for distribution services and agreed to transport Acer’s computers from Texas to Florida (“Acer-Expeditors Agreement”1). The Acer-Expeditors Agreement limited Expeditor’s liability to .50 cents per pound, absent a declaration of value of a shipment by Acer. (Dkt. 24 at ¶ 16). The Acer-Expeditors Agreement allowed Expeditors to subcontract its obligations. (Dkt. 24-2, ¶ 18).

Expeditors, in turn, tendered the shipment to Landstar. (Dkt. 24, ¶¶ 21, 24; Dkt. 24-5 “Expeditors-Landstar Agreement”). Landstar agreed to be

“responsible for claims for loss or damage to cargo” and limited its liability to Expeditors to $250,000.00 (Dkt. 24, ¶ 26-27). Landstar contracted with Triple M as the for-hire motor carrier (“Landstar-Triple M Agreement”). Triple M

1 The Agreement includes of the Scope of Distribution Services, Expeditor’s

North American Domestic Contract of Carriage, and the Contract of Carriage (Dkt. 24, Exs. 1-3).

limited its liability to $1 million dollars. (Dkt. 24-6, ¶11). The Landstar-Triple

M Agreement included the following integration clause:

This Agreement is the entire agreement between the parties, superseding all earlier agreements [*3] and all tariffs, rates, classifications and schedules published, filed or otherwise maintained by CARRIER. This Agreement cannot be altered or amended except in a writing signed by all parties and cannot be assigned or transferred in whole or in part. The benefits of this Agreement shall not inure to nor be available to any third party.

(Dkt. 24, ¶ 31; Dkt. 24-6, ¶ 18).

Expeditors issued a Delivery Order on August 15, 2019, which contained

a limitation of liability of $0.50 per pound unless the Shipper made a special

declaration of value. (Dkt. 24, ¶ 33-34). The Delivery Order listed Landstar as

the carrier and Triple M’s driver signed the order. (Dkt. 24, ¶38; Dkt. 24-8).

The following day, Landstar issued an air waybill designating Expeditors as

the issuing carrier’s agent, evidencing that no value was declared. (Dkt. 24,

¶32).

The freight was stolen while under Triple M’s control. Acer estimated

the total value of the cargo was $760,290.72 and the weight of the laptops was

17,370 pounds. (Dkt. 24, ¶¶34, 44). Expeditors settled the matter with Acer for

more than the limitation in the Acer-Expeditors Agreement. (Dkt 24, ¶52).

Landstar reimbursed Expeditors $160,000.00. (Dkt 24, ¶53). Acer assigned [*4]

Landstar its rights, claims, and causes of action against Triple M. (Dkt. 24, ¶

56).

In January 2022, Landstar filed a two-count Complaint against Triple M; alleging breach of contract (Count One) and liability under the Carmack Amendment (Count Two). (Dkt. 1). In October of 2022, Landstar filed a single count Amended Complaint alleging a Carmack Amendment claim. (Dkt. 22).

The Parties filed cross motions for summary judgment on the sole issue of damages. Landstar asserts it is owed $160,000.00 because Triple M is bound by the Landstar-Triple M Agreement. Triple M counters it only owes $8,685.00 in actual damages because of the $0.50 per pound limitation of liability in the Acer-Expeditors Agreement, contract of carriage, bill of lading, (collectively

“Upstream Contracts”) and the delivery order.

II. Standard of Review

A court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A factual dispute is genuine if the evidence would allow a reasonable jury to find for the nonmoving party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is “material” if it is “a legal element of the claim under the applicable substantive law which might affect the outcome of the [*5] case.” Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997).

The party moving for summary judgment bears the initial burden of showing a court, by reference to materials in the record, that there is no

genuine dispute as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A moving party meets this burden merely by “‘showing’-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party’s case.” Id. at 325. The movant, however, need not negate the other party’s claim. Id. at 323. In determining whether the moving party has met this burden, a court must view the evidence and all factual inferences in the light most favorable to the party opposing the motion.

Johnson v. Clifton, 74 F.3d 1087, 1090 (11th Cir. 1996).

Once the movant has adequately supported its motion, the nonmoving party then has the burden of showing that summary judgment is improper by offering specific facts showing a genuine dispute. Matsushita Elec. Indus. Co.v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Ultimately, there is no

“genuine [dispute] for trial” when the record could not lead a rational trier of fact to find for the nonmoving party. Id. But “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson, 477 U.S. at 247-48. The court, however, [*6] resolves all reasonable doubts in favor of the non-movant.

Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). Additionally,

“[i]t is not the court’s role to weigh conflicting evidence or to make credibility determinations; the non-movant’s evidence is to be accepted for purposes of

summary judgment.” Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742 (11th Cir. 1996).

III. Analysis

Triple M argues Landstar cannot bring a Carmack Amendment claim because Landstar acted as a broker. So, it states Landstar can assert a Carmack Amendment claim only through Acer’s assignment. Accordingly, Triple M asserts the limitation of liability in the Upstream Contracts controls ($0.50 per pound). Landstar responds because it took legal responsibility for the computers, it is considered a carrier under the Carmack Amendment, and the Landstar-Triple M Agreement controls (liability up to $1 million dollars).

The Carmack Amendment was intended “to achieve uniformity in rules governing interstate shipments, including the rules governing injury or loss to property shipped.” UPS Supply Chain Sols., Inc. v. Megatrux Transp., Inc., 750 F.3d 1282, 1285 (11th Cir. 2014). The Amendment seeks to impose uniformity by “preempt[ing] state-law claims against interstate motor carriers who

‘provide motor vehicle transportation or service subject to jurisdiction under [the Interstate Commerce Act]’ and replaces those state-law claims with its strict-liability provision.” Essex Ins. Co. v. Barrett Moving & Storage, Inc., 885 F.3d 1292, 1300 (11th Cir. 2018) (citing 49 U.S.C. § 14706(a)(1)).

The Amendment, “makes all motor carriers [*7] ‘who receive[ ], deliver[ ], or provide[ ] transportation or service’ during a shipment strictly liable to the

shipper ‘for the actual loss or injury to the property,’ regardless of which carrier had possession of the shipment at the time it was lost or damaged.” Id. at 1298 (citing 49 U.S.C. § 14706(a)(1)) (alteration in original). A motor carrier is defined as “a person providing motor vehicle transportation for compensation.”

Id. at 1300 (quoting 49 U.S.C. § 13102(14)) (emphasis in original).

Yet the Carmack Amendment does not apply to brokers. A broker is defined as “a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.”

49 U.S.C. § 13102(2). But critically:

Motor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they haveaccepted and legally bound themselves to transport.

Essex, 885 F.3d at 1300-01 (quoting 49 C.F.R. § 371.2(a)). In other words, “a party is not a broker [*8] under the Carmack Amendment if it has agreed with the shipper to accept legal responsibility for that shipment.” Id. at 1301.

To determine whether a party is a broker or a carrier is a case-specific analysis that may not be appropriate for summary judgment. Id. at 1302. But the Eleventh Circuit has explained, “the question need not always be difficult” because “[e]ven a company . . . which carries some shipments and brokers

others, can insulate itself from strict liability with respect to a particular shipment if it makes clear in writing that it is merely acting as a go-between to connect the shipper with a suitable third-party carrier.” Id.

Here summary judgment is appropriate because the plain language of the Expeditors-Landstar Agreement provides that Landstar is “responsible for claims for loss or damage to cargo . . . .” (Dkt. 24-5, ¶12(b)). Because Landstar accepted legal responsibility for the cargo, Landstar is considered a motor carrier and so the Carmack Amendment applies. Further, as Triple M concedes, Landstar can assert Acer’s Carmack Amendment claim through the assignment.

This Court must now consider what agreement governs to determine the damages. A carrier is liable “for the actual loss or injury to the property” when [*9] a shipment is lost. 49 U.S.C. § 14706(a)(1). “Actual loss or injury is ordinarily measured by any reduction in market value at the place of destination.”

Megatrux Transp., Inc., 750 F.3d at 1286. But a shipper can agree “with a carrier to limit the carrier’s liability in order to obtain a reduced shipping rate.”

Id. at 1286. To determine whether a carrier has effectively limited its liability under the Carmack Amendment the Eleventh Circuit employs a four-step inquiry:

A carrier must: (1) maintain a tariff within the prescribed guidelines of the Interstate Commerce Commission; (2) give the shipper a reasonable opportunity to choose between two or more

levels of liability; (3) obtain the shipper’s agreement as to the choice of liability; and (4) issue a receipt or bill of lading prior to moving the shipment.

Id.

Modern interstate transportation generally involves “extended chains of parties and agreements.” Id. at 1287. In recognition of these realities, courts do not require carriers to “investigate upstream contracts. They are entitled to assume that the party entrusted with goods may negotiate a limitation of liability.” Werner Enters., Inc. v. Westwind Mar. Int’l, Inc., 554 F.3d 1319, 1325 (11th Cir. 2009).

But the Eleventh Circuit has explained downstream carriers cannot benefit from upstream contracts when the carrier itself negotiates for greater liability. Megatrux, 750 F.3d at 1287. In [*10] Megatrux, logistics provider, UPS, sued the motor carrier Megatrux under the Carmack Amendment for a shipper’s stolen cargo.2Id. at 1285. The district court awarded UPS the full amount of actual loss, or $461,849.82. Id. The Eleventh Circuit affirmed and reasoned that although UPS limited its liability to the shipper in an upstream contract, Megatrux could not benefit from the limitation because it “had no knowledge of or participation in” the contract. Id. at 1287. Instead, the agreement negotiated between Megatrux and UPS where Megatrux agreed to

2 UPS agreed to pay the shipper $246,022.00 and the shipper assigned to UPS its rights, claims, and causes of action against Megatrux. Id. at 1284-85.

have full lability governed, making Megatrux fully liable. Id.; see also Werner, 554 F.3d at 1322-23 (holding a carrier’s limitation of liability with an intermediary governed, when the shipper did not request full liability coverage).

Here, the Upstream Contracts are irrelevant to Triple M because it did not participate in any of the intermediary contracts. So, the liability limitation of $0.50 per pound does not apply. Like the carrier in Megatrux, Triple M is bound by its own agreement, the Landstar-Triple M Agreement, that it negotiated with greater liability.

Triple [*11] M also cannot seek shelter in the limitation of liability in the delivery order. The law is clear, while a carrier may enforce its own limitation of liability, “it must also honor the expanded liability it negotiates.” CoyoteLogistics, LLC v. Mera Trucking, LLC, 481 F. Supp. 3d 1296, 1302 (N.D. Ga. 2020). For example, in Coyote Logistics, the court held a bill of lading a carrier received from the shipper that would give the carrier credit for reasonable salvage value did not control. Id. at 1303. Instead, the agreement between the carrier and logistics provider, permitting the shipper to deem the entire shipment unsalvageable, controlled the carrier’s liability based on the

Carmack Amendment. Id. at 1304.

The delivery order here is a one-page document, generated from Expeditors, which identifies Landstar as the carrier. (Dkt. 24-8). Triple M’s

driver signed the order. (Dkt. 24, ¶ 38). Triple M established its liability in the Landstar-Triple M Agreement and voluntarily agreed to assume more liability, up to $1 million in damages. The agreement was clear that any changes to the contract “cannot be altered or amended except in a writing signed by all parties” (Dkt. 24, ¶ 31). Triple M has shown no evidence the delivery order amended the Landstar-Triple M Agreement. Thus, the delivery order does [*12] not control.

IV.Conclusion

To allow Triple M to benefit from upstream contracts would be a windfall as it would allow it to incur less liability than agreed. It would also deprive Landstar of something it negotiated and paid for. And critically, this Court is bound to apply Eleventh Circuit precedent in Megatrux that forecloses Triple

M’s argument. Landstar submitted evidence it paid $160,000.00 in damages for the lost cargo, and thus may recover that amount from Triple M; as agreed to in the Landstar-Triple M Agreement.

Accordingly, it is hereby ORDERED:

1. “Plaintiff’s Motion for Summary Judgment and Memorandum of

Law in Support of Summary Judgment” (Dkt. 25) is GRANTED;

2. The Clerk is directed to enter Judgment in favor of Plaintiff for $160,000.00 in actual damages, plus pre and post judgment interest;

3. The “Motion for Summary Judgment by Triple M Logistics, Inc.”

End of Document