2019 WL 4450639

United States District Court, S.D. New York.
HARTFORD FIRE INSURANCE CO., a/s/o Klearwall Industries, Inc., Plaintiff,
v.
MAERSK LINE, a division of the A.P. Moller-Maersk Group, ALBATRANS INC., SAPSAN LLC and XYZ CORP., Defendants.
18-cv-121 (PKC)
|
Filed 09/17/2019

OPINION AND ORDER
P. Kevin Castel United States District Judge
*1 Plaintiff Hartford Fire Insurance Co. (“Hartford”) brings this action as the subrogee of its insured, Klearwall Industries, Inc. (“Klearwall”). Klearwall ordered a shipment of windows from Munster Joinery in Cork, Ireland. Defendant Maersk Line (“Maersk”) transported the shipment by ocean vessel to Port Newark in New Jersey, where defendant Sapsan LLC (“Sapsan”) accepted the shipment and transported it by truck to Connecticut. While in Sapsan’s custody, the shipment passed through New York. The windows allegedly arrived to Klearwall’s facility in Connecticut in a damaged and unusable condition. Hartford brings claims under the Carriage of Goods by Sea Act, 46 U.S.C. § 30701, et seq. (“COGSA”), the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, and a claim for common-law breach of contract. It seeks $306,760.02 in damages, plus interest.

In its Answer, defendant Maersk brings cross-claims against Sapsan and Albatrans Inc. (“Albatrans”), the freight-forwarding company that retained Sapsan. (Docket # 53.) Maersk alleges that any damage to the windows was caused in whole or in part by Sapsan and/or Albatrans, and that they should be required to indemnify Maersk and/or make contribution to Maersk in the event that Maersk is found liable.

Sapsan moves to dismiss Hartford’s claims and Maersk’s cross-claims pursuant to Rules 12(b)(2) and 12(b)(6), Fed. R. Civ. P. (Docket # 49.) It urges that the Second Amended Complaint (the “Complaint”) does not allege a prima facie case of personal jurisdiction or plausibly allege a claim for breach of contract or COGSA liability. After the motion was filed, the Court granted Hartford’s application to take limited jurisdictional discovery as to Sapsan. In its opposition memo, Hartford “agrees” that the COGSA and breach-of-contract claims against Sapsan should be dismissed, and that any liability on the part of Sapsan is governed exclusively by the Carmack Amendment. (Docket # 60 at 1.) However, Hartford maintains that Sapsan is subject to personal jurisdiction in New York.

For the reasons that will be explained, Hartford has not met its burden of demonstrating New York’s specific personal jurisdiction over Sapsan pursuant to CPLR 302(a)(1) or general personal jurisdiction pursuant to CPLR 301. Sapsan’s motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) will therefore be granted.

BACKGROUND.
On or before February 23, 2017, Klearwall entered into an agreement with Munster Joinery for the purchase of certain windows. (Compl’t ¶ 9.) Klearwall contracted with Albatrans, a freight forwarder, to arrange transport of the windows from Ireland to its eventual destination in Virginia. (Compl’t ¶ 10.) The shipment was to be made by ocean carrier and truck. (Compl’t ¶ 11.)

Maersk is engaged in the business of transporting goods by ocean carrier. (Compl’t ¶ 5.) The windows were tendered to Maersk in good order and condition pursuant to Maersk’s bills of lading. (Compl’t ¶ 12.) Maersk tendered the shipment to Sapsan at the Port Newark Container Terminal in New Jersey. (Compl’t ¶ 13; Nilsen Dec. ¶ 9.) On or about March 2 or 3, 2017, Sapsan delivered the shipment to a warehouse in Stratford, Connecticut, where Klearwall discovered that the windows were damaged and unusable. (Compl’t ¶ 15.) According to the Complaint, while in transit, the shipment sustained damage in excess of $306,760.02. (Compl’t ¶ 14.)

*2 In Count Three, Hartford brings a claim under the Carmack Amendment against Sapsan only, alleging that its failure to deliver the shipment of windows in good order constituted a breach of the contract of carriage. (Compl’t ¶¶ 25-28.)

In support of its motion, Sapsan submitted a declaration from Sapsan’s owner, Yulian Nilsen, which described Sapsan’s activities in New York. (Docket # 52.) As noted, the Court granted Hartford’s application to conduct limited jurisdictional discovery as to Sapsan. (Docket # 57.) A transcript of Nilsen’s deposition is attached to Hartford’s opposition papers. (Docket # 61-1.)

SAPSAN’S RULE 12(b)(2) MOTION IS GRANTED.

A. Rule 12(b)(2) Standard.
On a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating the court’s personal jurisdiction over the defendant. Penguin Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 34-35 (2d Cir. 2010). The complaint’s allegations are assumed to be true, and the plaintiff need only make a prima facie showing of personal jurisdiction. Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d 81, 85 (2d Cir. 2013) (per curiam).

A district court may rely on affidavits without converting a Rule 12(b)(2) motion into a motion for summary judgment. Id. at 86. The court should construe any pleadings and affidavits in the light most favorable to the plaintiff and resolve all doubts in its favor. Id. at 85. However, courts should “not draw argumentative inferences in the plaintiff’s favor” or “accept as true a legal conclusion couched as a factual allegation.” In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 659, 673 (2d Cir. 2013) (quotation marks omitted). A court has “considerable procedural leeway” on a Rule 12(b)(2) motion, and may decide it on the basis of affidavits alone, permit discovery in aid of the motion, or conduct an evidentiary hearing. Dorchester, 722 F.3d at 84. “After discovery, the plaintiff’s prima facie showing, necessary to defeat a jurisdiction testing motion, must include an averment of facts that, if credited by the trier, would suffice to establish jurisdiction over the defendant. At that point, the prima facie showing must be factually supported.” Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990) (citations omitted).

Personal jurisdiction may be exercised over any defendant “who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located.” Rule 4(k)(1)(A), Fed. R. Civ. P. If a plaintiff establishes a factual predicate for jurisdiction under the laws of the forum state – here, New York – then the court must consider whether the exercise of jurisdiction is consistent with due process. Walden v. Fiore, 571 U.S. 277, 283 (2014).

B. Discussion.

1. Hartford Has Made Not Out a Case that Sapsan Is Subject to Specific Personal Jurisdiction Pursuant to CPLR 302(a)(1).
Hartford urges that New York has specific jurisdiction over Sapsan pursuant to New York’s long-arm statute, CPLR 302(a)(1). “Specific jurisdiction … depends on an affiliation between the forum and the underlying controversy, principally, activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (quotation marks and alteration omitted). CPLR 302(a)(1) provides that “a court may exercise personal jurisdiction over any non-domiciliary … who in person or through an agent: 1. transacts any business within the state or contracts anywhere to supply goods or services in the state ….” The cause of action, however, must “aris[e] from” the transaction of business or the supply of goods and services within the state. Id. “By this ‘single act statute … proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant’s activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted.’ ” Deutsche Bank Sec., Inc. v. Montana Bd. of Investments, 7 N.Y.3d 65, 71 (2006) (quoting Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467 (1988)).

*3 A two-part test governs whether a defendant is subject to jurisdiction under CPLR 302(a)(1). First, a court “determine[s] if defendant purposefully availed itself of the privilege of conducting activities in the state by transacting business in New York.” D & R Global Selections, S.L. v. Bodega Olegario Falcon Pineiro, 29 N.Y.3d 292, 297-98 (2017) (quotation marks omitted). “A non-domiciliary defendant transacts business in New York when on his or her own initiative, the non-domiciliary projects himself or herself into this state to engage in a sustained and substantial transaction of business. The primary consideration is the quality of the non-domiciliary’s New York contacts. As relevant here, purposeful availment occurs when the non-domiciliary seeks out and initiates contact with New York, solicits business in New York, and establishes a continuing relationship.” Id. at 298 (citations, quotation marks and alterations omitted). It is appropriate to consider whether an out-of-state defendant’s activities in New York relate to a “major aspect” or “principal reason” of its business. Deutsche Bank, 7 N.Y. 3d at 72.

Second, “the claim must arise from [the] business transaction or from the contract to supply goods or services ….” D & R Global, 29 N.Y.3d at 297. This means that “the plaintiff’s cause of action must have an ‘articulable nexus’ or ‘substantial relationship’ with the defendant’s transaction of business here.” Id. at 298-99. “At the very least, there must be ‘a relatedness between the transaction and the legal claim such that the latter is not completely unmoored from the former, regardless of the ultimate merits of the claim.’ ” Id. at 299 (quoting Licci v Lebanese Can. Bank, SAL, 20 N.Y.3d 327, 339 (2012)). “This inquiry is relatively permissive and an articulable nexus or substantial relationship exists where at least one element arises from the New York contacts rather than every element of the cause of action pleaded. The nexus is insufficient where the relationship between the claim and transaction is too attenuated or merely coincidental.” Id. (quotation marks and citation omitted).

In support of its Rule 12(b)(2) motion, Sapsan has submitted a declaration from Yulian Nilsen, who states that he is the owner and managing member of Sapsan. (Nilsen Dec. ¶ 1.) Nilsen states that Sapsan operates out of his home in Wallington, New Jersey and that it leases a yard in Elizabeth, New Jersey. (Id. ¶ 3.) Nilsen states that Sapsan’s vehicles are registered in the State of New Jersey and driven by independent contractors. (Id. ¶ 4.) He states that Sapsan does not maintain bank accounts in New York or own real property in New York, but that it pays highway use taxes to the State of New York. (Id. ¶¶ 5-7.)

Nilsen states that since approximately February 2017, Sapsan has transported, on average, two containers per month belonging to Klearwall from the Port Newark Container Terminal in New Jersey to a warehouse in Stratford, Connecticut. (Id. ¶ 9.) He states that Sapsan was hired to do so by defendant Albatrans, which operates as a freight forwarder. (Id. ¶¶ 8-10.) Albatrans is a New York corporation with its principal place of business in Jamaica, Queens. (Smith Dec. Ex. G.) In his deposition, Nilsen testified that Sapsan did not enter into formal written contracts with Albatrans, and instead conducted business with it on “an individual basis.” (Nilsen Dep. 13.) He explained that Albatrans would e-mail him with a rate request, he responded with Sapsan’s rate, and Albatrans would then retain Sapsan for a transport job. (Id. 13-15.) In addition to Sapsan’s work with Albatrans, Nilsen testified that it performs services for two other New York-based freight forwarders, BNX Shipping and Kay International. (Id. 15-16.)

In the case of the damaged Klearwall shipment, Albatrans hired and paid Sapsan. (Id. 28-29.) Nilsen testified that Sapsan picked up the shipment at the Port Newark Container Terminal for delivery to Blatchford Transportation in Stratford, Connecticut, and that Sapsan transported the shipment by road through New York. (Id. 49-50.) Nilsen testified:
*4 Q. And to deliver those goods from New Jersey to Connecticut, did Sapsan drive through New York, or its truckers?
A. Yes, yes, you would have to cross over George Washington Bridge or Whitestone Bridge to get into Connecticut.
(Id. 50-51.)

In his deposition, Nilsen testified that Sapsan generally transports ocean containers from ports in New York and New Jersey. (Id. 18.) He testified that “[m]ost” of those ports are in New Jersey and that “occasionally” Sapsan retrieves containers from a port in Staten Island. (Id. 18-19.) He testified that Sapsan “sometimes” conducts deliveries in New York and “sometimes” retrieves containers in New York. (Id. 27-28.) He testified:
Q. And you pick up goods within the state of New York?
A. Yes, import, export. You deliver goods for import and you pick up goods when it’s an export.
(Id. 47.)

Counsel also reviewed with Nilsen an MT-903 highway-use tax return filed with the State of New York by Sapsan. (Id. 44-47; see also Smith Aff’t Ex. E.) Nilsen confirmed that for the year of 2017, Sapsan reported that its vehicles traveled 23,166 miles on New York roads. (Nilsen Dep. 44-46; Smith Aff’t Ex. E.) For the first six months of 2018, Sapsan vehicles traveled 12,570 miles on New York roads. (Id. 46-47.)

The Court concludes that Hartford has satisfied the first prong of CPLR 302(a)(1), and has made a prima facie case that Sapsan has transacted business in New York. Its purposeful acts include delivering shipments within New York; retrieving containers from a port in Staten Island; and traveling a monthly average of approximately 2,000 miles over New York roadways. Sapsan has purposefully projected itself into New York, and its ongoing business with Albatrans demonstrates “the purposeful creation of a continuing relationship with a New York corporation.” D & R Global, 29 N.Y.3d at 298.

However, on the second prong, the Court concludes that Hartford has not made out a prima facie case that its claimed injuries arose from Sapsan’s agreement with Albatrans to “supply goods or services in the state.” CPLR 302(a)(1). The Carmack Amendment claim is directed to Sapsan’s alleged failure to deliver the shipment from New Jersey to Connecticut in good order and condition. (Compl’t ¶ 27 (“Defendant’s failure to deliver the shipment of windows in good order and condition constitutes a breach of the contract of carriage between Plaintiff and Defendant.”).)1 A plaintiff makes out a prima facie case of Carmack Amendment liability by showing “1) delivery to the carrier in good condition; 2) arrival in damaged condition; and 3) the amount of damages caused by the loss.” Project Hope v. M/V IBN SINA, 250 F.3d 67, 73 n.6 (2d Cir. 2001).2

Here, the delivery to Sapsan was made in New Jersey, and the shipment arrived in Connecticut. As Nilsen acknowledged, the shipment moved through New York while in Sapsan’s custody. (Nilsen Dep. 50-51 (“Yes, yes, you would have to cross over George Washington Bridge or Whitestone Bridge to get into Connecticut.”).) However, Hartford does not allege in the Complaint, or urge following jurisdictional discovery, that Klearwall’s cargo was actually damaged in New York. Physical transport through New York, standing alone, does not demonstrate that the claim “aris[es] from” a contract “to supply goods or services in the state ….” CPLR 302(a)(1). See, e.g., Copterline Oy v. Sikorsky Aircraft Corp., 649 F. Supp. 2d 5, 14 (E.D.N.Y. 2007) (the retention of a New York freight forwarder by a Finnish corporation to transport equipment from Connecticut to Finland did not give rise to jurisdiction under CPLR 302(a)(1)). As Judge Glasser aptly said in Copterline, the cargo’s passage through New York “was merely a pit stop en route to Finland.” Id. Similarly, William Sys., Ltd. v. Total Freight Sys., Inc., 27 F. Supp. 2d 386, 388 (E.D.N.Y. 1998), declined to exercise jurisdiction pursuant to CPLR 302(a) where “New York’s only connection to this matter is the incidental passage of the freight through New York on its way from New Jersey to Connecticut.”

*5 Hartford has not demonstrated that any element of its claim under the Carmack Amendment has an “articulable nexus” or “substantial relationship” to a New York transaction. D & R Global, 29 N.Y.3d at 298-99; see also Licci, 20 N.Y.3d at 341 (“[W]here at least one element [of the cause of action] arises from the New York contacts, the relationship between the business transaction and the claim asserted supports specific jurisdiction under the statute.”). The Court therefore concludes that Hartford has not made out a prima facie case that Sapsan is subject to specific jurisdiction under CPLR 302(a)(1).

2. Hartford Has Not Made Out a Case that Sapsan Is Subject to General Personal Jurisdiction Pursuant to CPLR 301.
Hartford separately urges that Sapsan is subject to general personal jurisdiction in New York pursuant to CPLR 301. For the reasons that will be explained, the Court concludes that Hartford has not made out a prima facie case that Sapsan’s affiliations with New York are so continuous and systematic that it is essentially “at home” in the state.

“General jurisdiction in New York is provided for in CPLR 301, which allows a court to exercise ‘such jurisdiction over persons, property, or status as might have been exercised heretofore.’ ” Aybar v. Aybar, 169 A.D.3d 137, 143 (2d Dep’t 2019). Historically, CPLR 301 allowed for the exercise of general jurisdiction over a foreign corporation that had engaged in “such a continuous and systematic course of ‘doing business’ here that a finding of its ‘presence’ in this jurisdiction [was] warranted.’ ” Id. (quoting Landoil Res. Corp. v. Alexander & Alexander Servs., Inc., 77 N.Y.2d 28, 33 (1990)).

After the Supreme Court’s guidance on due process in Daimler AG v. Bauman, 571 U.S. 117, 139 (2014), however, New York exercises general personal jurisdiction only if “the corporation’s affiliations with the state ‘are so “continuous and systematic” as to render them essentially at home in the forum State.’ ” Aybar, 169 A.D.3d at 144 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)); see also Qudsi v. Larios, 173 A.D.3d 920, 922 (2d Dep’t 2019) (under “modern jurisprudence,” New York typically exercises general jurisdiction only over individuals domiciled in New York and corporations that are either incorporated or have a principal place of business in New York); Brown v. Lockheed Martin Corp., 814 F.3d 619, 627 (2d Cir. 2016) (“except in a truly ‘exceptional’ case, a corporate defendant may be treated as ‘essentially at home’ only where it is incorporated or maintains its principal place of business — the ‘paradigm’ cases.”).

Defendant Sapsan is a limited liability company. The only member of Sapsan identified by the parties is Mr. Nilsen, who is domiciled in New Jersey. (Nilsen Dec. ¶¶ 1, 3.) Sapsan was formed under New Jersey law in 2009. (Id. ¶ 1.) It operates out of Nilsen’s home in New Jersey and its only other physical premises is a yard located in Elizabeth, New Jersey. (Id. ¶ 3.) There is no assertion that Sapsan maintains a permanent physical presence in New York or that it was formed under New York law.

Hartford urges that Sapsan is subject to general personal jurisdiction because it operates in a 250-mile radius, which would encompass New York (Nilsen Dep. 21-22); that Sapsan sometimes “operates” from a terminal in Staten Island (id. 18); that it works with freight forwarders based in New York, including Albatrans, BNX Shipping and Kay International (id. 15-16); that it performs pickups and deliveries for New York customers (id. 27-28, 41); that its insurance agent is located in Staten Island (id. 9-11, 55); and that it pays highway use taxes to New York and uses New York roads extensively (id. 26-28, 44-47).

*6 These contacts do not render Sapsan “essentially at home” in New York. Hartford has pointed to evidence that Sapsan has frequent business dealings in New York and that its agents are physically present in the state to retrieve or deliver shipments. As a trucking company, those contacts are not “truly ‘exceptional.’ ” Brown, 814 F.3d at 627. If the frequent retrieval and delivery of shipments to New York, using New York roads, were sufficient to confer general jurisdiction, private shipping firms might be deemed “at home” in any number of states. But “[a] corporation that operates in many places can scarcely be deemed at home in all of them.” Daimler, 571 U.S. at 139 n. 20; see also Sonera Holding B.V. v. Cukurova Holding A.S., 750 F.3d 221, 226 (2d Cir. 2014) (“even a company’s ‘engage[ment] in a substantial, continuous, and systematic course of business’ is alone insufficient to render it at home in a forum.”) (quoting Daimler, 571 U.S. at 138). Hartford has not pointed to activities by Sapsan sufficient to demonstrate that it is “at home” in New York.

Hartford also points out that Sapsan has designated an agent in the State of New York to accept service of process on its behalf pursuant to regulation under the Federal Motor Carrier Act, 49 U.S.C. § 13304(a), 49 C.F.R. § 366.4 (“FMCA”). Some authorities have held that the designation of an agent pursuant to the FMCA acts as a consent to general personal jurisdiction. See, e.g., Ocepek v. Corporate Transport, Inc., 950 F.2d 556 (8th Cir. 1991); Falzon v. Johnson, 2012 WL 4801558 (E.D.N.Y. Sept. 11, 2012), R & R adopted, 2012 WL 4798670 (E.D.N.Y. Oct. 9, 2012). Following Daimler, however, courts have concluded that the appointment of an agent to accept service of process, when required by regulation or statute, does not effect a broad consent to jurisdiction. See, e.g., Brown, 814 F.3d at 623 (“by registering to transact business and appointing an agent under the Connecticut statutes … [defendant] did not consent to the … exercise of general jurisdiction over it. A more sweeping interpretation would raise constitutional concerns ….”); Hegemann v. M & M Am., Inc., 2018 WL 4502181, at *6 (D. Vt. Sept. 20, 2018) (designation of agent under the FMCA is not a consent to general personal jurisdiction) (citing Brown); Aybar, 169 A.D.3d at 147-52 (foreign corporation’s appointment of an agent to accept service of process, as required by New York Business Corporation Law, was not a consent to general personal jurisdiction). The Court concludes that Sapsan’s designation of an agent to accept service of process on its behalf does not effect a consent to general personal jurisdiction in New York.

The Court therefore concludes that Hartford has not made out a case that Sapsan is subject to general personal jurisdiction in New York pursuant to CPLR 301.

CONCLUSION.
Sapsan’s motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) is GRANTED. Because the Court does not have personal jurisdiction over Sapsan, it does not reach its motion to dismiss Maersk’s cross-claims pursuant to Rule 12(b)(6). The Clerk is directed to terminate the motion. (Docket # 49.)

SO ORDERED.

All Citations
Slip Copy, 2019 WL 4450639

Footnotes

1
No party has identified or alleged the existence of a contract between Klearwall and Sapsan.

2
If a prima facie case is made, the carrier is liable unless it proves one of five affirmative defenses: “acts of God, the public enemy, the act of the shipper himself, public authority, or the inherent vice or nature of the goods.” Id.

2019 WL 4387339

United States District Court, S.D. New York.
AVIVA TRUCKING SPECIAL LINES et al., Plaintiffs,
v.
Darnell M. ASHE, Sr. et al., Defendants.
18-cv-11180 (JGK)
|
Signed September 13, 2019
Attorneys and Law Firms
Jonathan Lee Leitman, Law Offices of Jan Meyer & Associates, P.C., Teaneck, NJ, for Plaintiffs.
Teresa H. Dooley, Hill Rivkins LLP, New York, NY, for Defendants.

OPINION AND ORDER
JOHN G. KOELTL, District Judge:
*1 Thunder Bay Regional Health Sciences Center (“Thunder Bay”), which was insured by Aviva Trucking Special Lines (“Aviva”), contracted with the defendant Farber Specialty Vehicles (“Farber”) to transport Thunder Bay’s bus carrying a custom medical unit from Canada to New York. Farber, in turn, contracted with Bennett Truck Transport, LLC and Bennett DriveAway to drive the bus from Farmingdale, New York to Reynoldsburg, Ohio. Bennett employed Darnell M. Ashe, Sr. who drove the vehicle and Ashe allegedly damaged the bus by driving it negligently on the FDR Drive in New York City. The plaintiff Aviva, for itself and as subrogee for its insured, Thunder Bay, now sues Farber and the three Bennett defendants under various state law claims for the damage to the bus. The Bennett defendants move to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, preempts the state law claims. The plaintiff Aviva for itself and as subrogee for Thunder Bay and defendant Farber argue that the contract between Farber and the Bennett defendants waived the Carmack Amendment and therefore the state law claims are not preempted.

For the following reasons, the motion to dismiss the state law claims is denied.

I.
In deciding a motion to dismiss pursuant to Rule 12(b)(6), the allegations in the complaint are accepted as true, and all reasonable inferences must be drawn in the plaintiff’s favor. McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). The Court’s function on a motion to dismiss is “not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient.” Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir. 1985). The Court should not dismiss the complaint if the plaintiff has stated “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, 167 L.Ed.2d 929 (2007). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

While the Court should construe the factual allegations in the light most favorable to the plaintiff, “the tenet that a court must accept as true all of the allegations contained in the complaint is inapplicable to legal conclusions.” Id. When presented with a motion to dismiss pursuant to Rule 12(b)(6), the Court may consider documents that are referenced in the complaint, documents that the plaintiff relied on in bringing suit and that are either in the plaintiff’s possession or that the plaintiff knew of when bringing suit, or matters of which judicial notice may be taken. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002).

II.
The following facts alleged in the Complaint are accepted as true for the purposes of ruling on the motion to dismiss.

*2 The plaintiff Aviva is in the business of automobile insurance. Its insured, Thunder Bay, contracted with Farber sometime prior to February 19, 2016 to have Farber transport Thunder Bay’s Prevost VIP-45 bus equipped with a custom medical unit, from Canada to New York for refurbishment. Compl. ¶¶ 10-13. Shortly thereafter, Farber subcontracted with Bennett DriveAway, a trade name for a division of Bennett Truck Transport, LLC, to drive the plaintiff’s bus from Farmingdale, New York to Reynoldsburg, Ohio. Id. ¶ 14.

Farber signed a standard rate Confirmation Sheet prepared by Bennett DriveAway, which included attached Terms and Conditions. Nwaneri Decl. Exs. B, C. Clause 8 of the Terms and Conditions reads: “Contract Carrier: This contract service is designed to meet the distinct needs of the customer and the parties expressly waive all rights and obligations allowed by 49 U.S.C. 14101 to the extent [they] conflict with the terms of this contract.” Id. at Ex. C. Clause 11 reads: “Governing Law/Jurisdiction: This contract shall be deemed to have been accepted in McDonough, Georgia and shall be governed by and construed under the laws of the State of Georgia. All disputes arising hereunder shall be heard exclusively in the State Court of Henry County, Georgia and the parties hereby consent and submit thereto.” Id.

On or about February 23, 2016, Mr. Ashe was driving the plaintiff’s vehicle towards an underpass at the entrance to the FDR Drive in New York City. Compl. ¶¶ 16-17. As a result of Mr. Ashe’s allegedly negligent driving, the vehicle struck the overpass and was damaged. Id. ¶ 20.

On October 10, 2018, the plaintiff filed suit in the Supreme Court of New York, New York County. Dkt. No. 4-1. On November 30, 2018, the defendants removed the case to this Court, invoking the Court’s diversity jurisdiction under 28 U.S.C. § 1332(a), as well as its jurisdiction under 28 U.S.C. § 1337(a) and 49 U.S.C. § 14706, the Carmack Amendment to the Interstate Commerce Act. Pet. of Removal ¶¶ 10-13.

The Bennett defendants filed the current motion to dismiss pursuant to Rule 12(b)(6) on the grounds that the state law claims in the Complaint are preempted by the Carmack Amendment. The plaintiff and Farber oppose the motion to dismiss on the grounds that the contract between Farber and the Bennett defendants waived the Carmack Amendment.

III.
The plaintiff and Farber acknowledge that, in general, the Carmack Amendment preempts all state law claims, but allege that Clauses 8 and 11 of the Terms and Conditions of the contract between the Bennett defendants and Farber waived the Carmack Amendment. If the parties waived the Carmack Amendment, then the state law claims are not preempted. Thus, the operative question at this stage is whether the contract between Farber and Bennett, specifically Clauses 8 and 11 of the Terms and Conditions, constitutes a valid waiver of the Carmack Amendment.

A.
The Carmack Amendment to the Interstate Commerce Act requires that “[a] carrier and any other carrier that deliver[ ] the property and is providing transportation or service subject to jurisdiction under [49 U.S.C. § 13501] are liable to the person entitled to recover under the receipt or bill of lading.” 49 U.S.C. § 14706(a)(1). The Amendment further specifies that “liability imposed under this paragraph is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States or from a place in the United States to a place in an adjacent foreign country when transported under a through bill of lading.” Id. The Amendment covers interstate transports that are made “by motor carrier,” which is defined as “a person providing motor vehicle transportation for compensation.” 49 U.S.C. § 13102(14); see 49 U.S.C. § 13501(1)(A). The Carmack Amendment authorizes suits “brought against a delivering carrier in a district court of the United States or in a State court.” 49 U.S.C. § 14706(d)(1).

*3 The Carmack Amendment preempts all state law on the issue of interstate carrier liability. See Adams Express Co. v. Croninger, 226 U.S. 491, 505-06, 33 S.Ct. 148, 57 L.Ed. 314 (1913) (“Almost every detail of the subject is covered so completely that there can be no rational doubt but that Congress intended to take possession of the subject, and supersede all state regulation with reference to it.”). The Carmack Amendment was meant “to provide interstate carriers with reasonable certainty and uniformity in assessing their risks and predicting their potential liability,” which it accomplished “by establishing a single uniform regime for recovery by shippers directly from the interstate common carrier in whose care their items are damaged and by preempting the shipper’s state and common law claims against a carrier for loss or damage to goods during shipment.” Project Hope v. M/V IBN SINA, 250 F.3d 67, 73 n.6 (2d Cir. 2001) (quotation marks and alterations omitted).

Thus, in the first instance, the Carmack Amendment covers any claims arising out of the shipment of the plaintiff’s vehicle by Farber and its subcontractors, the Bennett defendants, from New York to Ohio because the shipment was an interstate shipment and was made by motor carrier, namely by a motor vehicle. Without more, the Carmack Amendment preempts the plaintiff’s state law claims for the “actual loss or injury to the property caused by” the defendant carriers. 49 U.S.C. § 14706(a)(1).

B.

1.
However, parties to a shipping contract may validly waive the Carmack Amendment if they, “in writing, expressly waive any or all rights and remedies under [the part of the United States Code governing the liability of carriers that includes the Carmack Amendment] for the transportation covered by the contract.” 49 U.S.C. § 14101(b)(1).

A waiver is effective when it expressly appears on the face of the contract provision in question. In Sanofi-Aventis U.S., LLC v. Great Am. Lines, Inc., No. 10-2023, 2016 WL 4472949, at *2-3 (D.N.J. Aug. 22, 2016), the contract provision that the court found to be a valid waiver of the Carmack Amendment read as follows: “Pursuant to 49 U.S.C.A. § 14101(b)(1), the parties expressly waive any and all provisions under the ICC Termination Act of 1995, U.S. Code Title 49, Subtitled IV, Part B, and the regulations thereunder to the extent such provisions conflict with the terms of the Transportation Contract or the parties’ course of performance hereunder.” Similarly, in Smithfield Beef Group-Tolleson, Inc. v. Knight Refrigerated, LLC, No. CV 08-1923, 2009 WL 1651289, at *2 (D. Ariz. June 12, 2009), the provision read: “WHEREAS, the parties expressly waive any and all rights and remedies under the ICC Termination Act for the transportation provided hereunder pursuant to 49 U.S.C. § 14101(b)(1).” In both cases, the courts found that the contract provisions were express waivers of the Carmack Amendment and enforced those waivers.

On the other hand, courts have refused to imply waivers of the Carmack Amendment from contract provisions that were not express waivers. See, e.g., McKesson Corp. v. Longistics Transp., Inc., No. 09cv250, 2010 WL 11564989, at *7 (E.D.N.C. Nov. 4, 2010) (choice of law provision not an express waiver of the Carmack Amendment); MidAmerican Energy Co. v. Start Enters., Inc., 437 F. Supp. 2d 969, 973 (S.D. Iowa 2006) (same); Central Transp. Int’l, Inc. v. Alcoa, No. 06cv11913, 2006 WL 2844097, at *3 (E.D. Mich. Sept. 29, 2006) (same); Phillips 66 Co. v. Smith Tank & Equip. Co., No. 4:17cv0388, 2018 WL 4334007, at *3 (S.D. Tx. July 31, 2008) (arbitration clause not an express waiver of the Carmack Amendment).

2.
In this case, while Clause 11 – the choice of law provision – is not an express waiver of the Carmack Amendment, it is plain that Clause 8 expressly waives the Carmack Amendment by stating that “[t]his contract service is designed to meet the distinct needs of the customer and the parties expressly waive all rights and obligations allowed by 49 U.S.C. 14101 to the extent [they] conflict with the terms of this contract.” Nwaneri Decl. Ex. C. Clause 8 is substantially similar to the waivers found valid in Sanofi-Aventis and Smithfield Beef. The most natural reading of this clause is that “the parties expressly waive all rights and obligations allowed [to be waived by] 49 U.S.C. 14101 to the extent they conflict with the terms of this contract.” Those “rights and obligations” include the Carmack Amendment.

*4 The Bennett defendants raise several points to argue for the first time in the reply brief that Clause 8 is an ineffective waiver. Generally, “a court should not consider arguments that are raised for the first time in a reply brief.” Clubside, Inc. v. Valentin, 468 F.3d 144, 159 n.5 (2d Cir. 2006) (Sotomayor, J.). In any event, the Bennett defendants’ arguments are without merit.

First, the Bennett defendants argue that Clause 8 is ineffective because it does not refer to the “ICC Termination Act,” “Carmack,” or “49 U.S.C. § 14706.” However, the inclusion of such “magic words” is unnecessary for a provision to constitute an effective waiver. All that is necessary is that the Carmack Amendment be “expressly waive[d].” 49 U.S.C. § 14101(b)(1). The provision in § 14101(b)(1) that authorizes express waivers refers to the rights and remedies “under this part,” which is to say the part of the United States Code relating to carriers that includes 49 U.S.C. § 14706, the Carmack Amendment. The waiver provision in this case, like the waiver provisions found effective in Smithfield Beef and Sanofi-Aventis, contains an express reference to § 14101(b)(1), and therefore is similarly effective.

The Bennett defendants next argue that there is no express waiver of the Carmack Amendment because Clause 8 waives only “rights” and “obligations,” and does not mention “remedies” under the Carmack Amendment. Reply, at 3. No case supports such an argument, and there is no reasonable basis to ignore the express waiver of rights and obligations in Clause 8 simply because it did not include the word “remedies.”

The Bennett defendants also cite Smithfield Beef, a case in which the court was called to decide whether, notwithstanding the existence of an express waiver, references to the Carmack Amendment in at least five places throughout the parties’ contract had the effect of reviving the Carmack Amendment. The court held that there was an effective waiver of the Carmack Amendment as a whole, but that the parties had then reincorporated selectively certain aspects of the Carmack Amendment. Smithfield Beef, 2009 WL 1651289, at *2-*3. The Bennett defendants point to no similar resuscitation of any specific parts of the Carmack Amendment in the contract between Farber and the Bennett defendants.

Next, the Bennett defendants argue that Clause 8 is not an effective waiver because although it purports to waive “all rights and obligations allowed by 49 U.S.C. § 14101,” it does so only “to the extent they conflict with the terms of this contract,” and there is no conflict between the Carmack Amendment and the Confirmation Sheet. Reply, at 5. However, there is a conflict to the extent that the Carmack Amendment preempts state law causes of action that otherwise would be permitted under the contract, for example state claims maintained under Clause 11. Moreover, in Sanofi-Aventis, the court construed a similarly worded provision, and found that there was a valid waiver notwithstanding limiting language in the contract that purported to waive the Carmack Amendment “to the extent that [the Carmack Amendment conflicts] with the terms of the Transportation Contract or the parties’ course of performance hereunder.” Id. at *2 (some alterations omitted). In Sanofi-Aventis, the court held that the limiting language did not undermine the validity of the waiver, but rather that it indicated that the Carmack Amendment was waived as a whole subject to default rules of the Carmack Amendment written specifically elsewhere in the parties’ contract. Id.

*5 Finally, reading Clause 8 as an effective waiver of the Carmack Amendment prevents the Clause from becoming meaningless surplusage in the contract. See Smithfield Beef, 2009 WL 1651289, at *2 (choosing one interpretation of a contract containing a purported Carmack Amendment waiver over another “given the general rule that a contract must be interpreted ‘to give meaning to all of its terms, presuming that every provision was intended to accomplish some purpose, and that none are deemed superfluous.’ ”) (quoting Allen v. Honeywell Ret. Earnings Plan, 382 F. Supp. 2d 1139, 1165 (D. Ariz. 2005)). The Bennett defendants have suggested no reasonable interpretation of Clause 8 that does not include a waiver of the Carmack Amendment.

CONCLUSION
The Court has considered all of the arguments of the parties. To the extent not specifically addressed, the arguments are either moot or without merit. For the reasons explained above, the motion by the Bennett defendants to dismiss the plaintiff’s causes of actions as pre-empted by the Carmack Amendment is denied. The clerk is directed to close docket number 29.

SO ORDERED.
All Citations
— F.Supp.3d —-, 2019 WL 4387339