2019 WL 2003872

United States District Court, S.D. Ohio, Western Division,
at Dayton.
ALLEN LUND COMPANY, LLC, Plaintiff,
v.
CAPTAIN FREIGHT, LLC, Defendant.
Case No. 3:18-cv-357
|
Signed 05/06/2019
|
Filed 05/07/2019
Attorneys and Law Firms
Marc S. Blubaugh, Kelly E. Mulrane, Benesch, Friedlander, Coplan & Aronoff, LLP, Columbus, OH, for Plaintiff.
Todd Evan Bryant, Troy, OH, for Defendant.

ENTRY AND ORDER GRANTING DEFENDANT’S MOTION FOR RELIEF FROM JUDGMENT AND DIRECTING CLERK TO VACATE BOTH THE ENTRY OF DEFAULT AND DEFAULT JUDGMENT
THOMAS M. ROSE, UNITED STATES DISTRICT JUDGE
*1 This case is before the Court on the Motion for Relief from Judgment (Doc. 16) filed by Defendant Captain Freight, LLC (“Captain Freight”). Plaintiff Allen Lund Company, LLC (“Allen Lund”) filed a brief in opposition to Captain Freight’s motion. (Doc. 17.) This matter is now ripe for the Court’s review. For the reasons discussed below, the Court GRANTS the Motion for Relief from Judgment.

I. BACKGROUND
On October 31, 2018, Allen Lund filed its Complaint. In the Complaint, Allen Lund alleges that Captain Freight caused damage to a racing boat when the boat was unloaded from one trailer and reloaded onto another trailer during a cross-country journey. Allen Lund makes two claims: liability under the Carmack Amendment and breach of contract.

Muslim Abbasov is the owner, founder, incorporator, and statutory agent of Captain Freight, an Ohio limited liability company. When Mr. Abbasov formed the company, he used his brother’s home address of 1120 Senna Street, Tipp City, Ohio as the LLC’s registered address, and that is the address listed with the Ohio Secretary of State for Mr. Abbasov as Captain Freight’s statutory agent. Mr. Abbasov had lived at that address at least at the time of incorporation, but has since moved out — without updating the address for himself as Captain Freight’s statutory agent. Captain Freight had also registered that same address as its business address with the Federal Motor Carrier Safety Administration, and it used that same address for its business correspondence for some time.

On November 1, 2018, a summons was issued to “Captain Freight, LLC c/o Muslim Abbasov, Statutory Agent” at the 1120 Senna Street address, and another summons was issued nine days later to Captain Freight at the same address. Mr. Richard D. Stevens attested that he served Amina Apatova with both the Summons and Complaint for Captain Freight and for “Captain Freight, LLC c/o Muslim Abbasov, Statutory Agent,” and that Ms. Apatova accepted service.1 (Doc. 17-8.) Additionally, Allen Lund requested that a Summons issue to “All American Agents of Process,” which was Captain Freight’s BOC-3 designated agent for service of process in Ohio.

On December 5, 2018, executed Summons for both “Captain Freight, LLC c/o Muslim Abbasov, Statutory Agent” and Captain Freight were filed with the Clerk. (Docs. 5, 6.) Two days later, an executed Summons for Captain Freight, LLC c/o All American Agents of Process” was filed with the Clerk. (Doc. 8.) On January 11, 2018, after Captain Freight’s answer deadline for service on All American Agents of Process, Allen Lund applied to the clerk to enter a default against Captain Freight. (Doc. 9.) On January 14, 2019, the Clerk made an Entry of Default. (Doc. 10.)

Allen Lund later filed a motion for default judgment, which this Court granted on February 19, 2019. (Docs. 12, 13.) On February 22, 2019, Allen Lund filed a Certificate of Judgment with the Miami County Court of Common Pleas. (Doc. 17-12.) Allen Lund issued several bank garnishments in its Miami County action in March of 2019. (Id.)

*2 On March 19, 2019, Captain Freight filed the Motion for Relief from Judgment that is now before the Court. (Doc. 16.) In an affidavit attached to the motion, Mr. Abbasov testified that: (a) by November 2018, Captain Freight was no longer active; (b) Ms. Apatova (his sister-in-law) is not connected to Captain Freight in any way; (c) Ms. Apatova was not on speaking terms with him at the time that she allegedly received the summons; (d) Ms. Apatova never gave him a copy of the summons or complaint or otherwise made him aware of this lawsuit; (e) All American Agents of Process never served him with any summons or complaint, and he has not heard anything from All American Agents of Process since Captain Freight’s motor carrier license was deactivated (before November 2018); and (f) the first time that he became aware that there was a lawsuit against Captain Freight was the week before Captain Freight filed the motion at issue, when he found out that Captain Freight’s bank account was being garnished because of the default judgment. (Doc. 16-1.)

In its motion, Captain Freight asserts that Mr. Abbasov was never personally served with the Summons or Complaint, and that Mr. Abbasov only became aware of this lawsuit when his bank called him to alert him that Captain Freight’s account was being frozen because of a garnishment. (Doc. 16.) Captain Freight also stated in its motion that, if given the opportunity, it will assert valid defenses to Allen Lund’s claims, a counterclaim for non-payment, and a third-party claim against the company that loaded the boat in question onto the transport frame. (Id. at PAGEID #54, 61). Captain Freight moves for relief from judgment, i.e., to set aside the default judgment, pursuant to Fed. R. Civ. P. 60(b)(1), (4), and (6). (Id. at PAGEID #53.)

II. ANALYSIS

A. Framework for Motion for Relief from Judgment Under Rule 60(b)
“In considering a motion to set aside entry of a judgment by default a district court must apply Rule 60(b) equitably and liberally to achieve substantial justice.” United Coin Meter Co. v. Seaboard Coastline R.R., 705 F.2d 839, 844-45 (6th Cir. 1983) (internal quotation marks removed). “Judgment by default is a drastic step which should be resorted to only in the most extreme cases.” Id. at 845. “Since the interests of justice are best served by a trial on the merits, only after a careful study of all relevant considerations should courts refuse to open default judgments.” Id. at 846, citing Rooks v. Am. Brass Co., 263 F.2d 166, 169 (6th Cir. 1959) (per curiam). “Any doubt should be resolved in favor of the petition to set aside the judgment so that cases may be decided on their merits.” Id. Additionally, “the court should construe all ambiguous or disputed facts in the light most favorable to the defendant, [and] any doubt should be resolved in favor of the defendant.” INVST Fin. Grp. v. Chem-Nuclear Sys., 815 F.2d 391, 398 (6th Cir. 1987) (internal quotation marks omitted). The Sixth Circuit has called default judgment a “harsh sanction” and stressed that “[t]rials on the merits are favored in federal courts.” United Coin Meter, 705 F.2d at 846.

Where a court has entered judgment on a default, a court may set aside that judgment in accordance with the grounds laid out in Rule 60(b). Thompson v. Am. Home Assurance Co., 95 F.3d 429, 432 (6th Cir. 1996). Where Rule 60(b) is invoked to set aside a default judgment, the court must both (1) find that one of the specific requirements of Rule 60(b) is met, and (2) consider the Fed. R. Civ. P. 55 equitable factors as enumerated in United Coin Meter. Thompson, 95 F.3d at 433. Rule 60(b) provides in pertinent part:
“(b) Grounds for Relief from a Final Judgment, Order, or Proceeding. On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; … (4) the judgment is void; … or (6) any other reason that justifies relief.”2
Fed. R. Civ. P. 60(b). The three equitable factors enumerated in United Coin Meter are (1) whether culpable conduct of the defendant led to the default; (2) whether the plaintiff will be prejudiced by setting aside the judgment; and (3) whether the defendant has a meritorious defense. United Coin Meter, 705 F.2d at 845; Thompson, 95 F.3d at 432.

*3 Regarding the first equitable factor, “[t]o be treated as culpable, the conduct of a defendant must display either an intent to thwart judicial proceedings or a reckless disregard for the effect of its conduct on judicial proceedings.” Thompson, 95 F.3d at 433, quoting INVST Fin. Grp., 815 F.2d at 399. “Carelessness is not enough.” Orrand v. Osmic Erectors, No. 97-3124, 1998 WL 45486, at *2, 1998 U.S. App. LEXIS 1318, at *6 (6th Cir. Jan. 27, 1998).

Regarding the second equitable factor, “[m]ere delay in satisfying a plaintiff’s claim, if it should succeed at trial, is not sufficient prejudice to require denial of a motion to set aside a default judgment.” United Coin Meter, 705 F.2d at 845. “[T]he delay must result in tangible harm such as loss of evidence, increased difficulties of discovery, or greater opportunity for fraud or collusion.” Thompson, 95 F.3d at 433-34.

Regarding the third equitable factor, “if any defense relied upon states a defense good at law, then a meritorious defense has been advanced.” United Coin Meter, 705 F.2d at 845. “The key consideration is to determine whether there is some possibility that the outcome of the suit after a full trial will be contrary to the result achieved by the default.” INVST Fin. Grp., 815 F.2d at 399 (internal quotation marks omitted).

B. The Court Will Set Aside the Default Judgment Against Captain Freight, in Accordance with Rule 60(b) and Sixth Circuit Precedent
Although much of the parties’ briefing concerned whether Allen Lund properly served Captain Freight, the Court finds grounds to set aside the default judgment regardless of whether there was valid service. In its opposition brief, Allen Lund argued that “Captain Freight fails to assert any facts or advance any legal argument relating in any way to Fed. R. Civ. P. 60(b)(1), or (6), and, as a consequence, Allen Lund has drafted its opposition only towards the arguments actually raised pursuant to Fed. R. Civ. P. 60(b)(4).” (Doc. 17 at PAGEID #64.) The Court disagrees that Captain Freight failed to assert any facts or advance any legal argument relating in any way to Fed. R. Civ. P. 60(b)(1) or (6).

The overriding factor in the Court’s decision is its interest in trying this case on its merits, in accordance with the Sixth Circuit’s guidance set forth above (supra II. A.). See Thompson, 95 F.3d 429 (affirming decision to set aside default judgment where, despite the possibility that the defendant had been properly served, the defendant asserted that it was not notified of the pendency of the suit and that it had a defense). Applying the framework from Thompson, as well as the mandate from United Coin Meter to resolve any doubt in favor of setting aside the judgment, the Court finds that Captain Freight’s motion should be granted.

First, looking to the Rule 60(b) determination, Captain Freight established surprise under subsection (1). Thompson, 95 F.3d at 433 (defendant corporation “clearly established surprise, as its agent attested that American Home was unaware that a lawsuit had been filed until after the default judgment had been entered”). As discussed above, Captain Freight was not aware of the litigation until the week before filing the present motion, after the default judgment had been entered. Allen Lund does not show otherwise. As in Thompson (which likewise involved a defendant corporate entity), “assuming arguendo that service of process … was [valid or] acceptable in these circumstances, the lack of actual notice of a lawsuit is a sufficient reason for the district court to set aside a judgment under Rule 60.” Thompson, 95 F.3d at 433, citing Rooks, 263 F.2d at 168 (where process was properly served at defendant’s residence but was never received by the named defendant but rather was passed by his wife to his business manager, who mistook it for a suit involving defendant’s corporation, default judgment was properly set aside).

*4 Next, regarding the first of the Rule 55 equitable factors enumerated in United Coin Meter, Captain Freight demonstrated no “intent to thwart judicial proceedings or a reckless disregard for the effect of its conduct on judicial proceedings.” Thompson, 95 F.3d at 433. Mr. Abbasov testified in his affidavit that the first time he became aware of the lawsuit was the week before Captain Freight filed the motion at issue, when he found out that Captain Freight’s bank account was being garnished because of the default judgment. (Doc. 16-1 at PAGEID #60-61.) “Carelessness is not enough” to find culpable conduct, and Captain Freight’s haste in acting to set aside the default judgment counters a finding that “culpable conduct” led to the default here. Orrand, 1998 WL 45486, at *2, 1998 U.S. App. LEXIS 1318, at *6.

Regarding the second factor, there is no indication of prejudice to Allen Lund beyond delay, which is insufficient. Thompson, 95 F.3d at 433-34. Regarding the third factor, Captain Freight says that, if given the opportunity, it will assert valid defenses, a counterclaim for non-payment, and a third-party claim against the company that loaded the boat in question onto the transport frame. (Doc. 16 at PAGEID #54, 61.) As referenced above, the Sixth Circuit has said that “[a]ny doubt should be resolved in favor of the petition to set aside the judgment so that cases may be decided on their merits.” United Coin Meter, 705 F.2d at 846. Given the allegations and claims at issue, Captain Freight’s arguments and defenses concerning the merits of Allen Lund’s claims could be successful, and it is in the interest of justice that Captain Freight have an opportunity to defend against the claims. Id. at 845 (finding “meritorious defense” where defendant argued that a third party had damaged the property during transportation of personal property). The Court finds that “there is some possibility that the outcome of the suit after a full trial will be contrary to the result achieved by default.” INVST Fin. Grp., 815 F.2d at 399 (emphasis added).

Therefore, the Court finds that Captain Freight’s motion for relief from judgment should be granted and that the default and default judgment against Captain Freight should be set aside. Fed. R. Civ. P. 60(b). Although the Court sympathizes with Allen Lund given its extensive efforts to properly serve Captain Freight and Captain Freight’s careless failure to update its service address, the interests of justice call for the default judgment to be set aside and the case to proceed on its merits.3 United Coin Meter, 705 F.2d at 846.

III. CONCLUSION
For the reasons stated above, the Court GRANTS Defendant Captain Freight’s Motion for Relief from Judgment (Doc. 16). The Court directs the Clerk to vacate both the Entry of Default (Doc. 10) and the Default Judgment (Doc. 13.). Given the circumstances, and that the Court may grant relief on “just terms,” vacating the default judgment is conditioned on Captain Freight’s agreement to accept service on its attorney. Fed. R. Civ. P. 60(b); Nature’s First, Inc. v. Nature’s First Law, Inc., 436 F. Supp. 2d 368, 377 (D. Conn. 2006) (vacating default judgment and requiring defendant to accept service on its attorney). Allen Lund shall serve Captain Freight’s attorney with the Complaint, Captain Freight’s attorney shall accept service of the Complaint, and Captain Freight will then have 14 days from service to file an Answer or otherwise respond to the Complaint.

DONE and ORDERED in Dayton, Ohio, this Monday, May 6, 2019.

All Citations
Slip Copy, 2019 WL 2003872

Footnotes

1
This is disputed by Ms. Apatova. (Doc. 16-2.)

2
Fed. R. Civ. P. 60(b)(6) “applies in exceptional or extraordinary circumstances which are not addressed in the first five numbered sections of the rule.” Thompson, 95 F.3d at 433 (internal quotation marks omitted).

3
It should go without saying that Captain Freight should, at the very least, update its agent/registrant information with the State of Ohio.

2019 WL 2110575

United States District Court, S.D. Alabama, Southern Division.
SAMUEL L. ROLLASON, et al., Plaintiffs,
v.
ITX, LLC, et al., Defendants.
CIVIL ACTION NO. 1:18-cv-482-TFM-N
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Filed 05/14/2019

MEMORANDUM OPINION AND ORDER
TERRY F. MOORER UNITED STATES DISTRICT JUDGE
*1 Pending before the Court is Plaintiffs’ Motion to Remand Unitrin Auto and Home Insurance Company Case to Baldwin County Circuit Court. Doc. 9, filed January 18, 2019. Plaintiffs request the Court remand this action pursuant to 28 U.S.C. § 1447 to the Baldwin County Circuit Court. Id. at 1. Also pending before the Court is Defendant ITX, LLC’s (“ITX”) Motion to Dismiss (Doc. 2, filed November 15, 2018), in which Defendant ITX requests the Court to dismiss, pursuant to Fed. R. Civ. P. 12(b), Plaintiffs’ state law claims because they are preempted by the Carmack Amendment to the I.C.C. Termination Act, 49 U.S.C. § 14706. Having considered the motions and relevant law, the Court finds the motion to remand is due to be denied and the motion to dismiss is due to be granted in part and denied in part.

I. PROCEDURAL BACKGROUND
Defendant ITX removed this matter to this Court from the Baldwin County Circuit Court on November 15, 2018, pursuant to 28 U.S.C. §§ 1441 and 1446, based on diversity and federal question jurisdiction. See Doc. 1 at 1. In Plaintiffs’ Amended Complaint, they bring claims of breach of contract (Counts 1 and 6), negligence and wantonness (Count 2), misrepresentation (Count 3), suppression (Count 4), and bad faith (Counts 5 and 7) against Defendants All State Van Lines Relocation, Inc. (“All State Van Lines”); ITX; Relo Van Lines, LLC (“Relo”); and Unitrin Auto and Home Insurance Company (“Unitrin”). Doc. 1-1.

On November 15, 2018, Defendant ITX filed its Motion to Dismiss (Doc. 2) to which Plaintiffs filed their response (Doc. 10) and Defendant ITX filed its reply (Doc. 13). On January 18, 2019, Plaintiffs filed their motion to remand and supporting brief (Doc. 9) to which Defendant Unitrin Auto and Home Insurance Company filed its opposition (Doc. 12). The motions are fully briefed and ripe for review and the Court finds oral argument unnecessary.

II. STANDARD OF REVIEW

A. Motion to Remand
Federal courts have a strict duty to exercise jurisdiction conferred on them by Congress. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716, 116 S. Ct. 1712, 1720, 135 L. Ed. 2d 1 (1996). However, federal courts are courts of limited jurisdiction and possess only that power authorized by the Constitution and statute. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S. Ct. 1673, 1675, 128 L. Ed. 2d 391 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (1994). Defendant, as the party removing this action, has the burden of establishing federal jurisdiction. See Leonard v. Enterprise Rent a Car, 279 F.3d 967, 972 (11th Cir. 2002) (citing Williams v. Best Buy Co., 269 F.3d 1316, 1318 (11th Cir. 2001)). Further, the federal removal statutes must be construed narrowly and doubts about removal must be resolved in favor of remand. Allen v. Christenberry, 327 F.3d 1290, 1293 (11th Cir. 2003) (citing Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir. 1996)); Burns, 31 F.3d at 1095 (citations omitted).

B. Motion to Dismiss – Fed. R. Civ. P. 12(b)(6)1
*2 Pursuant to Fed. R. Civ. P. 12(b)(6) a defendant may move to dismiss a complaint on the basis that the plaintiff has failed to state a claim upon which relief may be granted. See FED. R. CIV. P. 12(b)(6). To survive a motion to dismiss, a plaintiff must plead “only enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974, 167 L. Ed. 2d 929 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ [Twombly, 550 U.S.] at 570, 127 S. Ct. [at] 1955. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. at 556, 127 S. Ct. [at] 1955.”). Since a Fed. R. Civ. P. 12(b)(6) motion questions the legal sufficiency of a complaint, in assessing the merits of a Fed. R. Civ. P. 12(b)(6) motion, the court must assume all the factual allegations set forth in the complaint are true. See, e.g., United States v. Gaubert, 499 U.S. 315, 327, 111 S. Ct. 1267, 1276, 113 L. Ed. 2d 335 (1991); Powell v. Lennon, 914 F.2d 1459, 1463 (11th Cir. 1990); but see also Iqbal, 556 U.S. at 678, 129 S. Ct. at 1949 (“[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. [Twombly, 550 U.S.] at 555, 127 S. Ct. [at] 1955.”). Moreover, all factual allegations are to be construed in the light most favorable to the plaintiff. See, e.g., Brower v. County of Inyo, 489 U.S. 593, 598, 109 S. Ct. 1378, 1382, 103 L. Ed. 2d 628 (1989). Obviously, therefore, a district court may not resolve factual disputes when adjudicating a motion to dismiss. Page v. Postmaster Gen. and Chief Exec. Officer of the U.S. Postal Serv., 493 F. App’x 994, 995 (11th Cir. 2012) (citing, among other cases, Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990) (indicating that, under Fed. R. Civ. P. 12(b)(6), the existence of disputed material facts precludes a district court from granting a motion to dismiss)). “ ‘When considering a motion to dismiss … the court limits its consideration to the pleadings and all exhibits attached thereto.’ ” Thaeter v. Palm Beach Cty. Sheriff’s Office, 449 F.3d 1342, 1352 (11th Cir. 2006) (quoting Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000) (per curiam)); see also Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1215-16 (11th Cir. 2012) (“Because the Ellis law firm’s dunning letter and enclosed documents were attached to the Reeses’ complaint as an exhibit, we treat them as part of the complaint for Rule 12(b)(6) purposes.”).

III. DISCUSSION AND ANALYSIS
Since the motion to dismiss and motion to remand both address the preemption of Plaintiffs’ claims by the Carmack Amendment, the Court will first address Plaintiffs’ motion to remand to analyze whether the Court has jurisdiction over this matter.

A. Motion to Remand
In Plaintiffs’ motion to remand, they present in five (5) paragraphs different arguments in support of their motion, which the Court will address in turn. The Court notes Plaintiffs neither cite to any legal authority to support their arguments nor explain how their arguments address this Court’s jurisdiction,2 so the Court will construe their arguments to the best of its abilities. Additionally, insofar as Plaintiffs do not challenge this Court’s subject matter jurisdiction, their motion to remand is untimely pursuant to 28 U.S.C. § 1447(c) because their motion was filed sixty-four (64) days after the notice of removal was filed, which is outside the prescribed thirty (30) days to file a motion to remand that does not address the Court’s subject matter jurisdiction.3

In paragraph one (1), Plaintiffs argue the Court does not have jurisdiction to set aside a default judgment that was entered by the state court. Doc. 1, ¶ 1.
As a general rule, when a case is removed to federal district court under original jurisdiction the federal court treats everything done in the state court as if it had in fact been done in the federal court. Savell v. S. Ry. Co., 93 F.2d 377, 379 (5th Cir. 1937). Therefore, assuming an error occurred in the state court, a federal district court “may dissolve or modify injunctions, orders, and all other proceedings which have taken place in state court prior to removal.” Maseda v. Honda Motor Co., Ltd., 861 F.2d 1248, 1252 (11th Cir. 1988).
*3 Salery v. U.S., 373 F. App’x 29, 31 n.1 (11th Cir. 2010).4 If this Court has jurisdiction, it clearly has to the authority to set aside a default judgment that was previously entered by a state court. Consequently, Plaintiffs’ first argument fails.

In paragraph two (2), Plaintiffs argue Defendant Unitrin did not request this action be removed from state court to this Court. Doc. 1, ¶ 2. Pursuant to 28 U.S.C. § 1446(b)(2), the nonremoving defendants filed their consents to removal, which were attached to the Notice of Removal. Doc. 1-3. Therefore, Plaintiffs’ second argument fails.

In paragraph three (3), Plaintiffs argue Defendant Unitrin has not requested this Court to set aside the default judgment that was entered by the state court. Doc. 1, ¶ 3. This is clearly inaccurate since Defendant Unitrin filed its Application to Set Aside Default Judgment on November 20, 2018. Doc. 5. Plaintiffs also fail to establish how this argument relates to this Court’s jurisdiction. Therefore, Plaintiffs’ third argument fails.

In paragraphs four (4) and five (5), Plaintiffs argue Defendant ITX removed this matter because the claims are preempted by the Carmack Amendment, 49 U.S.C. § 14706, the Carmack Amendment does not apply to Defendant Unitrin, and the claims against Defendant Unitrin should be severed and remanded to the state court. Doc. 1, ¶¶ 4-5.

Defendant ITX argues this Court has jurisdiction based on diversity of citizenship5 and a federal question.

As to the Court’s federal question jurisdiction, Defendant ITX argues Plaintiffs’ claims arise out of the interstate transportation of household goods by a common carrier, which is governed exclusively by the provisions of the Carmack Amendment and preempts Plaintiffs’ state law claims.
A civil action filed in a state court may be removed to federal court if the claim is one ‘arising under’ federal law. [28 U.S.C.] § 1441. To determine whether the claim arises under federal law, we examine the “well pleaded” allegations of the complaint and ignore potential defenses: “[A] suit arises under the Constitution and laws of the United States only when the plaintiff’s statement of his own cause of action shows that it is based upon those laws or that Constitution. It is not enough that the plaintiff alleges some anticipated defense to his cause of action and asserts that the defense is invalidated by some provision of the Constitution of the United States.” Louisville v. Nashvill R. Co. v. Mottley, 211 U.S. 149, 152, 29 S. Ct. 42, 53 L. Ed. 126 (1908); see Taylor v. Anderson, 234 U.S. 74, 34 S. Ct. 724, 58 L. Ed. 1218 (1914).
*4 Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 6, 123 S. Ct. 2058, 2062, 156 L. Ed. 2d 1 (2003). This Court has previously ruled complete preemption applies in a Carmack Amendment context. U.S. Aviation Underwriters, Inc. v. Yellow Freight Sys., Inc., 296 F. Supp. 2d 1322, 1338 (S.D. Ala. Dec. 22, 2003); Dees v. Coleman Am. Moving Servs., Inc., 2017 WL 4838845, 2017 U.S. Dist. LEXIS 177321 (S.D. Ala. Oct. 26, 2017).

In the First Amended Complaint, Plaintiffs claim they employed Defendants to “transport their furniture and other wares, including fine antiques and works of art, from Santa Fe, New Mexico, to their home in Daphne, Alabama.” Doc. 1-2, at 78. When the household items arrived on June 5, 2017, “much of the furniture, fine antiques and art pieces were broken and damaged in the approximate sum of Seventy Thousand ($70,000.00) Dollars.” Id.

The Carmack Amendment covers motor carriers, 49 U.S.C. § 14706, which is defined as “a person providing motor vehicle transportation for compensation,” 49 U.S.C. § 13102, and has been applied in this Court in the context of the transportation of goods by carriers in interstate commerce, see U.S. Aviation Underwriters, Inc., 296 F. Supp. 2d 1322; Dees, 2017 WL 4838845, 2017 U.S. Dist. LEXIS. District courts have original jurisdiction over actions brought under the Carmack Amendment if the “matter in controversy for each receipt or bill of lading exceeds $10,000,” 28 U.S.C. § 1337(a), and such an action against a arrier for a loss may be brought in the “judicial district in which such loss or damage is alleged to have occurred,” 49 U.S.C. § 14706(d)(2). Based on Plaintiffs’ well pleaded allegations in their First Amended Complaint, the Court finds their claims arise under the Carmack Amendment and this Court has jurisdiction over those claims. Therefore, Defendants have met the heavy burden of removal and the motion to remand is denied.

B. Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6)
As the Court has found the Carmack Amendment completely preempts Plaintiffs’ state law claims, the Court now turns to the Motion to Dismiss. Doc. 2. In that motion, Defendant ITX requests the Court dismiss all of Plaintiffs’ claims against it. Id. at 4. However, the matter is not as simple as Defendant ITX suggests. While Defendant ITX cites to United States Aviation Underwriters, Inc., it fails to acknowledge the later-found analysis in the same case which discussed the dismissal and survival of Carmack Amendment claims. Id. at 1335-39. In short, the preemption doctrine under the Carmack Amendment does not result in Plaintiffs’ claims simply going poof with no surviving case. Rather, the state law claims are due to be dismissed with prejudice as being preempted by the Carmack Amendment and the preemption claim itself (though not technically plead) still survives. See generally id.. In short, the information originally pled in the state law claims of bad faith, breach of contract, misrepresentation, negligence and wantonness, and suppression now survive as a Carmack Amendment claim.

“In other words, through the magic of ‘jurisdictional alchemy’ (to quote Justice Scalia’s dissent in Beneficial [Nat’l Bank v. Anderson, 539 U.S. 1, 123 S. Ct. 2058, 156 L.Ed.2d 1 (2003)] ), [the Plaintiffs’] state law claims morph into a federal Carmack Amendment claim, there being ‘no such thing’ as a state law claim against a common carrier for damage to goods in interstate transportation.” U.S. Aviation Underwriters, Inc., 296 F. Supp. 2d at 1339. “Thus, though it may be invisible to the naked eye, [the Plaintiffs’] Carmack Amendment claim does exist.” Id.

*5 Therefore, the motion to dismiss is due to be granted in part and denied in part. The motion is due to be granted to the extent the previously asserted state law claims of bad faith, breach of contract, misrepresentation, negligence and wantonness, and suppression are dismissed with prejudice, and the motion is due to be denied to the extent the claims survive as a Carmack Amendment claim.6

CONCLUSION
Based on the foregoing analysis, Plaintiffs’ motion to remand (Doc. 9) is hereby DENIED. The motion to dismiss (Doc. 2) is GRANTED in part and DENIED in part. The motion to dismiss is GRANTED to the extent the previously asserted state law claims of bad faith, breach of contract, misrepresentation, negligence and wantonness, and suppression are DISMISSED WITH PREJUDICE. The motion to dismiss is DENIED to the extent the claims survive as Carmack Amendment claim.

DONE and ORDERED this the 14th day of May 2019.

All Citations
Slip Copy, 2019 WL 2110575

Footnotes

1
Defendants only state they move to dismiss Plaintiffs’ claims pursuant Fed. R. Civ. P. 12(b), but it is clear from Defendants’ motion the standard is Fed. R. Civ. P. 12(b)(6).

2
Plaintiffs’ jurisdictional argument can be found in their response to the motion to dismiss. Doc. 10.

3
That alone is sufficient to deny the motion to remand. Even if the motion to remand were timely, it still fails.

4
In this Circuit, “[u]npublished opinions are not considered binding precedent, but they may be cited as persuasive authority.” 11th Cir. R. 36-2 (effective Dec. 1, 2014); see also Henry v. Comm’r of Soc. Sec., 802 F.3d 1264, 1267 n.1 (11th Cir. 2015) (per curiam) (“Cases printed in the Federal Appendix are cited as persuasive authority.”).

5
At present, the details of Defendant ITX’s Notice of Removal are insufficient to clearly establish diversity jurisdiction based on diversity because it does not indicate the full citizenship of the corporate parties. See 28 U.S.C. § 1332(c)(1) (“[A] corporation shall be deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business.”). Defendant ITX pleads the State of incorporation for each of the corporate defendants, but does not plead the principal place of business for those defendants. Nor do Plaintiffs, in their First Amended Complaint, plead the principal place of business for the corporate defendants.

6
Defendant ITX does not argue the claim under the Carmack Amendment fails to survive a Fed. R. Civ. P. 12(b)(6) motion to dismiss.