2020 WL 635905

United States District Court, N.D. Illinois, Eastern Division.
ROBERT and KAREN BRUNNER, Plaintiffs,
v.
BELTMANN GROUP INCORPORATED, Defendant.
Case No. 1:19-cv-03396
|
02/11/2020

Hon. Steven C. Seeger

MEMORANDUM OPINION AND ORDER
*1 This case is about an interstate move gone wrong, and the question is whether it belongs in federal court. The dispute starts where the story ends: many of Plaintiffs’ household goods were lost or destroyed during their move from the Midwest to New England.

In 2012, Robert and Karen Brunner (the two Plaintiffs) moved out of Illinois. Defendant Beltmann Group packed their household items, shipped them to its storage facility in Illinois, and stored them for six years. In the meantime, the Brunners lived in New York City, and eventually moved to Vermont in 2018. North American Van Lines, a non-party, then shipped their possessions from Beltmann’s storage facility in Illinois to the Brunners’ new home in Vermont. Unfortunately, some of their belongings arrived damaged, and some did not arrive at all.

The Brunners filed a common law breach of contract claim against Beltmann in Illinois state court for the loss of their household goods. See Complaint (“Cplt.”) at 22–23 (Dckt. No. 1-1). Beltmann removed the case to federal court on the grounds that the claim was preempted by the Carmack Amendment, a federal statute that provides an exclusive federal remedy for damage to goods in interstate shipments.

Plaintiffs now move to remand. For the following reasons, Plaintiffs’ motion to remand is denied.

Background
Robert and Karen Brunner left Illinois and moved to the East Coast in 2012. Before leaving the state, the Brunners arranged for North American Van Lines and its servicing agent, Beltmann Group, to move their belongings across the country. In 2012, Beltmann gave the Brunners an estimate for the packing, storage, and delivery of their goods. See Def.’s Resp. to Pls.’ Mot. to Remand (“Def.’s Response”) at 3 (Dckt. No. 15). The estimate recognized that the Brunners were moving from Illinois to “Bethlehem, PA.” See Exhibits to Def.’s Response, Ex. A at 2 (Dckt. No. 15-2). So, from the very first interaction, Beltmann contemplated an interstate move.

The parties ultimately entered into a contract, known as the bill of lading. See id., Ex. B at 5. The contract contemplated that Beltmann would handle the first part of the cross-country journey. The bill of lading required Beltmann to pack the Brunners’ household goods at their Illinois home, ship them to its facility in a nearby Chicagoland suburb, and store them pending further instructions. Id. Like the estimate, the bill of lading contemplated an eventual shipment from the Illinois storage facility to a to-be-determined address in “Bethlehem, PA.” Id.

Once the Brunners finalized their new address, North American Van Lines would ship the goods from Beltmann’s Illinois storage facility to the Brunners’ Pennsylvania home. See id., Ex. A at 2 (Dckt. No. 15-2); Def.’s Aff. of Michael Harvey (“Harvey Aff.”) at 3–4 (Dckt. No. 15-1). The specific address was up in the air, but the interstate character of the shipment was not. Everyone understood that the goods – like the Brunners – were leaving Illinois.

As planned, Beltmann packed the goods at the Brunners’ house in Illinois, transported them to its storage facility in Illinois, and provided “storage-in-transit,” awaiting the specific Pennsylvania address from the Brunners. See Harvey Aff. at ¶¶ 15–16 (Dckt. No. 15-1). Storage “in transit” means that “the shipper and Beltmann intend for the storage to be temporary before delivery to a final destination.” Id. at ¶ 14. “In transit” took longer than one might expect: the Brunners’ possessions sat in storage until 2018, six long years. See Def.’s Response at ¶¶ 18–20 (Dckt. No. 15). But the household belongings remained in transit nonetheless – no one viewed the storage facility as the final destination.

*2 The Brunners apparently had a change of heart about moving to Pennsylvania. Instead, the Brunners moved to New York City, and they did not seek delivery of their items during their time in New York. See Pls.’ Mot. to Remand at ¶ 2 (Dckt. No. 12). The Brunners do not say why. Maybe there wasn’t enough space in New York.

In 2018, the Brunners moved to Vermont and asked Beltmann for an estimate to ship their possessions to their new home in the Green Mountain State. See Harvey Aff. at ¶ 17 (Dckt. No. 15-1). That 2018 estimate – which bears both Beltmann and North American Moving Company logos in the letterhead – contemplates the Vermont destination. See Exhibits to Def.’s Response, Ex. C at 8 (Dckt. No. 15-2). The estimate states that Beltmann would be the originating agent for the Vermont move, and that Hanover Transfer & Storage would be the Destination Agent. Id.

The 2018 estimate is the last piece of paper in the record about the final leg of the journey (before the move took place, that is). There was no new bill of lading. Instead, the original bill of lading from 2012 apparently governed the move in 2018, even though the move took place years later.

In March 2018, North American Van Lines picked up the items and shipped them to the Brunners’ new home in Vermont. See Pls.’ Mot. to Remand at ¶¶ 12–13 (Dckt No. 12). Their belongings did not arrive all in one piece. Some of their possessions suffered “damage[ ]” along the way. See Cplt. at ¶ 6 (Dckt. No. 1-1). Some of their belongings never made it at all. Id.

The carrier, North American Van Lines, “took responsibility for the damage to the Brunners’ personal property in transit from Western Springs, Illinois to West Dover, Vermont,” and paid the Brunners for the damage to those goods. Pls. Mot. to Remand at ¶¶ 6–7 (Dckt. No. 12). North American Van Lines reviewed its shipping records, including a detailed listing of the items it picked up from the Beltmann storage site, and agreed to pay for the damage to items that it received from Beltmann in good condition. See Pls.’ Mot. to Remand, Ex. A at 45 (Dckt. No. 12). Ultimately, North American Van Lines paid the Brunners $4,225 for damage that occurred on its watch. Id. North American Van Lines recommended that the Brunners reach out to Beltmann for the rest of the loss. Id.

The Brunners later sued Beltmann for $34,700, the alleged balance of the damages, plus fees and costs. See Cplt. at 1–2 (Dckt. No. 1-1). They filed a complaint against Beltmann in the Circuit Court of Cook County, alleging breach of contract for lost and damaged household goods. On May 20, 2019, Defendant removed the case to federal court on the grounds that the Carmack Amendment preempts Plaintiffs’ common law breach of contract claim. See Notice of Removal at 2 (Dckt. No. 1). Plaintiffs filed a petition for remand, arguing that the Carmack Amendment does not apply. See generally Pls.’ Mot. for Remand (Dckt. No. 12).

Analysis

I. The Carmack Amendment Preempts State Law Claims.
At first glance, the complaint may not seem to belong in federal court. Diversity jurisdiction does not apply. The parties are diverse, but the amount in controversy (less than $35,000) is far below the statutory minimum of $75,000+. See 28 U.S.C. § 1332(a).

Federal question jurisdiction does not leap from the pages of the complaint, either. See 28 U.S.C. § 1331. “Under the longstanding well-pleaded complaint rule…a suit ‘arises under’ federal law ‘only when the plaintiff’s statement of his own cause of action shows that it is based upon [federal law].’ ” Vaden v. Discover Bank, 556 U.S. 49, 60 (2009) (quoting Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152 (1908)). Federal defenses and federal counterclaims don’t count. See Vaden, 556 U.S. at 60; Holmes Grp., Inc. v. Vornado Circulation Sys., Inc., 535 U.S. 826, 831 (2002). Here, the Brunners did not purport to bring a federal cause of action. Instead, they filed a breach of contract claim against Beltmann under state law. See generally Cplt. at 1–2 (Dckt. No. 1-1).

*3 If the analysis ended there, so would this case (in federal court, anyway). But federal question jurisdiction can arise from complete preemption. A complaint “purporting to rest on state law, we have recognized, can be recharacterized as one ‘arising under’ federal law if the law governing the complaint is exclusively federal.” Vaden, 556 U.S. at 61. That is, a complaint that advances only a state law claim may belong in federal court if federal law completely occupies the field. Id.; see also City of Chicago v. Comcast Cable Holdings, LLC, 384 F.3d 901, 905 (7th Cir. 2004) (“The name is misleading because the doctrine is unrelated to preemption but deals with occupation of the field….”); Lehmann v. Brown, 230 F.3d 916, 919–20 (7th Cir. 2000) (“State law is ‘completely preempted’ in the sense that it has been replaced by federal law – but this happens because federal law takes over all similar claims, not because there is a preemption defense.”).

Under the complete preemption doctrine, “[w]hen a plaintiff has asserted a cause of action under state law that has been judicially declared to be completely preempted by federal law, that claim – no matter how it may have been set out in the complaint or characterized by the plaintiff – is necessarily federal, and will be recharacterized as federal, thereby permitting removal.” 14C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3722.1 (4th ed. 2019). In those cases, “federal law does not merely preempt a state law to some degree; rather, it substitutes a federal cause of action for the state cause of action, thereby manifesting Congress’s intent to permit removal.” Id. at § 3722.2.

If there is complete preemption of a state law claim, the Court will “recharacterize the plaintiff’s cause of action as a federal claim for relief, making removal proper on the basis of federal-question jurisdiction.” Id. So, even when a complaint alleges only state law claims, if Congress has occupied that field “so comprehensively that it has left no room for supplementary state legislation,” the claims may be removed to federal court because the federal law “converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.” Di Joseph v. Standard Ins. Co., 776 Fed. Appx. 343, 347 (7th Cir. 2019) (finding ERISA completely preempted state law claims); see also Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 67 (1987) (citing 28 U.S.C. § 1331) (holding that a lawsuit that raised only preempted state law claims was necessarily federal in character by virtue of the “clearly manifested intent of Congress,” and thus arose under the laws of the United States).

Courts apply the complete preemption doctrine narrowly. See In re Repository Techs., Inc., 601 F.3d 710, 723 (7th Cir. 2010) (citing Adkins v. Illinois Cent. R.R. Co., 326 F.3d 828, 835 (7th Cir. 2003)); see also 16 James Wm. Moore et al., Moore’s Federal Practice § 107.75 (3d ed. 2019) (“Application of the complete preemption doctrine is the rare exception rather than the rule.”). The Supreme Court has recognized complete preemption in a handful of areas, including sections of the Employee Retirement Income Security Act, the Labor Management Relations Act, possession of tribal lands, and the National Bank Act. See 16 James Wm. Moore et al., Moore’s Federal Practice § 107.75 (3d ed. 2019) (citing cases).

One of the statutes that completely preempts state law claims is the Carmack Amendment. “[F]ederal courts have held particular claims to be completely preempted by statutes including…the Carmack Amendment to the Interstate Commerce Act.” See 14C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3722.2 (4th ed. 2019) (citing cases); see also Korer v. Danita Corp., 584 F. Supp. 2d 1103, 1105 (N.D. Ill. 2008) (holding that removal was proper because the Carmack Amendment preempted the shipper’s state law claim for an item lost in an interstate shipment); Pierre v. United Parcel Serv., Inc., 774 F. Supp. 1149, 1150–51 (N.D. Ill. 1991) (holding that removal was proper because the Carmack Amendment preempted the state law claim).

*4 “The Carmack Amendment governs liability of a common carrier to a shipper for loss of, or damage to, an interstate shipment.” North American Van Lines, Inc. v. Pinkerton Sec. Sys., Inc., 89 F.3d 452, 455 (7th Cir. 1996). The provisions create a uniform rule of carrier liability for interstate shipments by imposing strict liability on carriers. A carrier that provides transportation or service is liable for loss or injury to property:
A carrier providing transportation or service subject to jurisdiction under [the jurisdictional statutes] shall issue a receipt or bill of lading for property it receives for transportation under this part. That carrier and any other carrier that delivers the property and is providing transportation or service subject to jurisdiction under [the jurisdictional statutes] are liable to the person entitled to recover under the receipt or bill of lading. The 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….Failure to issue a receipt or bill of lading does not affect the liability of a carrier.
49 U.S.C. § 14706(a)(1) (emphasis added).

The Carmack Amendment creates a federal cause of action for loss or injury to property. A plaintiff must show three simple points: “(1) delivery in good condition; (2) arrival in damaged condition; and (3) the amount of damages.” REI Transport, Inc. v. C.H. Robinson Worldwide, Inc., 519 F.3d 693, 699 (7th Cir. 2008) (quoting American Nat’l Fire Ins. Co. v. Yellow Freight Sys., 325 F.3d 924, 929 (7th Cir. 2003)). Once a plaintiff makes this prima facie showing, the burden shifts to the defendant to show “that it was free from negligence and that the damage to the cargo was due to one of the excepted causes relieving the carrier of liability.” Id.

Before Congress enacted the Carmack Amendment, the market for interstate shipment of goods was plagued by disparate state schemes that led to unpredictable liability for carriers. See REI Transport, 519 F.3d at 697. Carrier liability “was a matter either of common law, whether state or federal (at least until Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L.Ed. 1188 (1938)), or of state positive law.” North American Van Lines, 89 F.3d at 456 (citing Adams Express Co. v. Cronginger, 226 U.S. 491, 504 (1913)).

To provide uniformity, the statute limits the carrier’s liability to the “actual loss or injury to the property damaged en route.” 49 U.S.C. § 14706(a)(1). And “a shipper” – meaning a person whose goods are transported by a carrier – “cannot bypass these limits by filing a state suit for the damaged goods unless the claim seeks to remedy a ‘separate and independently actionable harm.’ ” REI Transport, 519 F.3d at 698 (quoting North American Van Lines, 89 F.3d at 458) (citation omitted). But the statute does not apply to intrastate transportation: it applies to transportation “between a place in…a State and a place in another State.” 49 U.S.C. § 13501(1)(A).

The Carmack Amendment preempts state law claims that a shipper might advance against a carrier for lost or damaged goods shipped across state lines. See REI Transport, 519 F.3d at 697 (citing Adams Express Co. v. Croninger, 226 U.S. 491, 505–06 (1913)). In Adams Express, the Supreme Court recognized that Congress intended “to take possession of the subject” and prescribe uniform rules governing uniform liability of carriers to shippers regarding interstate shipments. Adams Express, 226 U.S. at 505–06; see also North American Van Lines, 89 F.3d at 456. Congress also sought to “relieve shippers of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.” S.C. Johnson & Son, Inc. v. Louisville & Nashville R.R. Co., 695 F.2d 253, 257 (7th Cir. 1982) (quoting Reider v. Thompson, 339 U.S. 113, 119 (1950)).

*5 As the Seventh Circuit has recognized, the Carmack Amendment “preempts all state or common law remedies available to a shipper against a carrier for loss or damage to interstate shipments.” See North American Van Lines, 89 F.3d at 456; see also REI Transport, 519 F.3d at 697–98 (7th Cir. 2008) (“The preemptive sweep of the Carmack Amendment extends to state causes of action against carriers ‘where goods are damaged or lost in interstate commerce.’ ”) (citation omitted).

In fact, the Courts of Appeals on this question are “unanimous[ ].” See Certain Underwriters at Interest at Lloyds of London v. United Parcel Serv. of America, Inc., 762 F.3d 332, 336 (3d Cir. 2014). “Courts of Appeals from the First, Second, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits have consistently held that the Carmack Amendment is the ‘exclusive cause of action for interstate-shipping contract [and tort] claims alleging loss or damage to property.’ ” Id. (citation omitted). All of those Circuits have “dismissed state and common law claims for breach of contract, negligence, conversion and every other action for loss of or injury to a shipment of goods.” Id.

Even so, Congress did impose a roadblock to removal. A claim under the Carmack Amendment “may not be removed to any district court of the United States unless the matter in controversy exceeds $10,000, exclusive of interest and costs.” 28 U.S.C. § 1445(b). This case easily clears that jurisdictional hurdle, with over $34,000 in alleged losses.

II. The Carmack Amendment Applies to this Case.
The Carmack Amendment preempts state law claims, so the question becomes whether the federal statute applies to the Brunners’ claims. Plaintiffs make two arguments against applying the Carmack Amendment here. First, they argue that Beltmann was not a “carrier” within the meaning of the Act, and thus the Act does not govern its conduct. Second, they argue that all of Beltmann’s conduct took place exclusively in Illinois, and the statute does not reach intrastate conduct.

A. Beltmann’s Status as a “Carrier.”
The Carmack Amendment imposes liability on a “carrier” for the loss or injury to goods. See 49 U.S.C. § 14706(a)(1). The Brunners argue that Beltmann was not a “carrier” at all. In their view, Beltmann acted as a broker, not a carrier, and thus the Act does not apply.

Deciding whether Beltmann was a “carrier” requires the Court to peel three layers of statutory definitions. The Carmack Amendment defines “carrier” to mean “water carrier, a motor carrier, and a freight forwarder.” 49 U.S.C. § 13102(3). A “motor carrier,” in turn, is defined as a “person providing motor vehicle transportation for compensation.” 49 U.S.C. § 13102(14). And “transportation” includes both “a motor vehicle…related to the movement of passengers or property” and “services related to that movement, including arranging for, receipt, delivery,…storage, handling, [and] packing” of passengers and property. 49 U.S.C. § 13102(23) (emphasis added); see also Mitsui Sumitomo Ins. Grp. v. Navistar Inc. et al., 2014 WL 1245290, at *2 (N.D. Ill. 2014) (citing 49 U.S.C. § 13102 to conclude that defendant Navistar, which provided packaging for the purposes of shipping, was a carrier).

The parties agree that Beltmann stored, shipped, handled, and packed Plaintiffs’ goods. See Pls.’ Mot. to Remand at ¶ 1 (Dckt. No. 12) (stating that personal property was “packed and stored” by Beltmann); Cplt. at ¶ 1 (Dckt. No. 1-1) (Beltmann agreed to “provide packing services, storage service, and then to deliver plaintiffs’ household goods to plaintiffs at an out of state location”); Cplt. at ¶ 3 (“defendant packed up plaintiffs’ household goods and provided a descriptive inventory list to plaintiffs”); Cplt. at ¶ 4 (“Defendant stored plaintiffs’ household goods in Roselle, Illinois up until March 2018”); Def.’s Response at ¶ 5 (“As part of the interstate transaction, Beltmann provided packing, transportation, and temporary storage services under North American Van Lines (‘NAVL’) interstate motor carrier authority”). Beltmann thus qualifies as a “carrier” as defined by the plain language of the statute. The Act expressly applies to the “storage, handling, [and] packing” of property. 49 U.S.C. § 13102(23). That’s what Beltmann did.

*6 Plaintiffs incorrectly suggest that intrastate haulers cannot qualify as a “carrier.” Under the Carmack Amendment, a person can qualify as a “carrier” even if it is responsible for only a short, intrastate portion of a longer interstate shipment. See Codan Forsikring A/S v. ConGlobal Indus., Inc., 315 F. Supp. 3d 1085, 1091 (N.D. Ill. 2018) (finding defendant was a “carrier” where it transported the cargo for “only…a limited distance, and only intrastate”); Fireman’s Fund Ins. Co. v. Reckart Logistics, Inc., 2011 WL 4062508, at *3 n.1 (N.D. Ill. 2011); Project Hope v. M/V IBN SINA, 250 F.3d 67, 75 (2d Cir. 2001) (“if the final intended destination at the time the shipment begins is another state, the Carmack Amendment applies throughout the shipment, even as to a carrier that is only responsible for an intrastate leg of the shipment.”). It is enough if Beltmann handled a leg – even an intrastate leg – on an interstate journey.

The Brunners also argue that Beltmann should be considered a broker, instead of a carrier. Pls.’ Reply at 1–2 (Dckt. No. 16). Liability under the Carmack Amendment does not extend to brokers. See Sompo Japan Ins. Co. of America v. B&H Freight, Inc., 177 F. Supp. 3d 1084, 1087 (N.D. Ill. 2016) (the Carmack Amendment does not preempt a claim against brokers); Traffic Tech, Inc. v. Arts Transp., Inc., 2016 WL 1270496, at *3 (N.D. Ill. 2016) (“Other courts have recognized such claims [seeking indemnity as a broker] are separate and distinct claims outside the scope of the Carmack Amendment.”). So, if Beltmann acted as a broker, and only as a broker, the Carmack Amendment would not apply.

A broker “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). When distinguishing between a broker and a carrier, the Court must determine “if a defendant’s actions were limited to arranging transport or if the defendant indicated that it would exert ‘some measure of control’ over the shipment.” Dabecca Natural Foods, Inc. v. RD Trucking, LLC, et al., 2015 WL 2444505, at *4 (N.D. Ill. 2015) (citation omitted). The Court must also determine whether the defendant “took legal responsibility for transporting the goods, regardless of who actually delivered them.” Id. (quoting The Mason and Dixon Lines, Inc. v. Walters Metal Fabrication, Inc., 2014 WL 4627715, at *3 (S.D. Ill. 2014)).

Beltmann did more than merely arrange for transportation of these goods. Indeed, Beltmann took physical custody of the belongings and thus exerted control over the shipment. See Cplt. at ¶¶ 3–4 (Dckt. No. 1-1) (Defendant “packed up plaintiffs’ household goods,” and “stored plaintiffs’ household goods,” and Plaintiffs allege that Beltmann’s handling of the goods caused harm); Pls.’ Mot. to Remand at ¶ 1 (Dckt. No. 12) (Plaintiffs seek damages from Beltmann for loss of property “that had been packed and stored by Beltmann”). After all, that’s the whole point of this lawsuit. The Brunners claim that Beltmann took possession of their belongings, but the belongings did not cross the country safe and sound.

B. The Number of Shipments
Second, the Brunners recycle their interstate argument and argue that there were two shipments, not just one. The first leg (in 2012) took place between two suburbs in Illinois. The second leg (in 2018) took place between Illinois and Vermont. Plaintiffs argue that Beltmann only played a role in the 2012 leg, and all of it was intrastate. As the Brunners see it, the goods merely moved between Chicagoland suburbs, so Beltmann did not participate in an interstate shipment.

*7 The question is whether the journey that started in 2012 involved one or two shipments. If the Illinois leg of the journey was its own shipment, then the Carmack Amendment would not apply because it was purely intrastate. See 49 U.S.C. § 13501(1)(A) (providing that the Carmack Amendment applies to transportation between “a place in…a State and a place in another State”).

But the Brunners’ belongings embarked on an interstate voyage from day one. In fact, Plaintiffs’ own complaint admits that Beltmann agreed in 2012 to play a role in a cross-country shipment. “Defendant agreed to provide packing services, storage service, and then to deliver plaintiffs’ household goods to plaintiffs at an out of state location.” See Cplt. at ¶ 1 (Dckt. No. 1-1) (emphasis added).

The 2012 bill of lading contemplated that Beltmann would play an important part in an interstate shipment.1 Under the bill of lading, Beltmann provided the packing services, moved the goods to its storage facility, and stored the goods. See Harvey Aff. at ¶¶ 11–15 (Dckt. No. 15-1). Then, North American Van Lines eventually delivered the goods to the Brunners’ new home in another state. While the ultimate destination changed from Pennsylvania to Vermont, the interstate character of the shipment did not.

When multiple carriers are responsible for different legs of a generally continuous shipment, courts look to the “intended final destination of the shipment as that intent existed when the shipment commenced.” See Project Hope v. M/V IBN SINA, 250 F.3d 67, 74 (2d Cir. 2001). “The nature of a shipment is not determined by a mechanical inspection of the bill of lading nor by when and to whom title passes but rather by the essential character of the commerce, reflected by the intention formed prior to shipment, pursuant to which property is carried to a selected destination by a continuous or unified movement.” Id. (quoting Swift Textiles, Inc. v. Watkins Motor Lines, Inc., 799 F.2d 697, 699 (11th Cir. 1986)).

From the very beginning, everyone involved in the move knew the end-game: the Brunners were leaving the state, and so were their household goods. Everyone knew that the goods wouldn’t stay in the Beltmann’s storage facility. And they wouldn’t stay in Illinois, either. Once the Brunners provided the out-of-state address, North American Van Lines would ship the goods from Illinois to Pennsylvania. The move was always interstate.

*8 It might be a different story if the Brunners had gotten their hands on the goods after they arrived in the Chicagoland storage facility and before shipping them to Vermont. Courts have found separate shipments where the shipper received the goods and had a chance to examine them before reshipping them. See S.C. Johnson & Son, 695 F.2d at 257–58 (finding that a shipment from Kentucky to Wisconsin was separate from the one returning the same goods to Kentucky because the original bill of lading did not contemplate that the goods would be returned to their original destination). But the Brunners never took possession of the goods between shipments. The goods left their home in Illinois, and arrived in Vermont years later, without a reunion with their owners in the meantime.

Courts have divided a delivery into two separate shipments when the shipper signed contracts with two separate carriers, and the first carrier finished its job before the second carrier took over. See Eddie Bauer v. Focus Transp. Servs., 881 F. Supp. 1174, 1179 (N.D. Ill. 1995) (finding two shipments when plaintiff had separate contracts with two carriers: the bill of lading contemplated plaintiff’s Ohio facility as its “Final Stop,” and a separate bill of lading governed the trip to Illinois). Here, no one considered the Beltmann storage facility to be the final stop – it was always considered a stop along the way. And there was only one bill of lading, too. So Beltmann, like the goods themselves, was along for the entire ride.

Even if one views the 2018 leg as a separate shipment, the claim against Beltmann could still fall under the Carmack Amendment. First, Beltmann provided both storage and handling related to the movement of the property at the outset of the 2018 move. After all, the 2018 move began by picking up the goods from Beltmann’s facility. As a result, Beltmann meets the statutory definition of a carrier. See 49 U.S.C. § 13102(23); Cplt. ¶ 4 (Defendant stored property until March 2018); Exhibits to Def.’s Resp., Ex. C at 8 (Defendant listed as Origin Agent of 2018 move). Second, the record suggests that Beltmann may have played an even more significant role. The Brunners attached a document to their Motion to Remand that lists Beltmann as the hauler from Illinois to Vermont. See Pls.’ Mot. to Remand, Ex. A at 49 (Dckt. No. 12). Specifically, the claim settling agent sent an email to Beltmann titled “CLAIM NOTIFICATION,” which details the Brunners’ claim against Beltmann. Id. It lists Beltmann as Hauler 1 and Hauler 2, with “Hanover Transfer & Storage” in Hanover, New Hampshire as the destination en route to Vermont.

Editor’s Note: Tabular or graphical material not displayable at this time.

Id. At the very least, the document suggests that Beltmann played a role in the interstate move in 2018.

Conclusion
Plaintiffs’ claim falls squarely within the bounds of the Carmack Amendment. The Carmack Amendment completely preempts state law claims for loss or damage to goods shipped in interstate commerce. See North American Van Lines, Inc., 89 F.3d at 456 (“The Carmack Amendment thus preempts all state or common law remedies available to a shipper against a carrier for loss or damage to interstate shipments.”). That’s what this case is all about. The Brunners seek damages for the loss of their belongings during a cross-country move.

The motion to remand is denied. Plaintiffs have leave to amend their complaint to expressly invoke the Carmack Amendment by February 28, 2020.

Date: February 11, 2020

Steven C. Seeger

United States District Judge
All Citations
Slip Copy, 2020 WL 635905

Footnotes

1
The original 2012 bill of lading appears to be the operative – and only – bill of lading. There is no other bill of lading before the Court. See Pls.’ Mot. to Remand at 120 (Dckt. No. 12); Harvey Aff. at 5–6 (Dckt. No. 15-1). The Brunners suggest it is the operative bill of lading in their motion to remand. See Pls.’ Mot. to Remand at 3 (Dckt. No. 12) (citing to the 2012 bill of lading to argue that Beltmann is not a carrier here). North American Van Lines and Beltmann both appear on that bill of lading: North American Van Lines issued it, but it refers to Beltmann’s services throughout. It lists Beltmann as a North American Servicing Agent, as “1 Hauler,” and Beltmann’s agent code – “19840” and “1984” – appears multiple times on the bill of lading. See Pls.’ Mot. to Remand at 120–21 (Dckt. No. 1); Def.’s Response at ¶ 13 (Dckt. No. 15). A Beltmann employee signed the addendum to the bill of lading, “North American Van Lines Statement of Additional Services.” Exhibits to Def.’s Response at 6 (Dckt. No. 15-2) (signature of agent includes “1984”). And the bill of lading indicates “in transit” storage by “19840,” again, the code for Beltmann. Id. at 5.

2020 WL 618581

United States District Court, E.D. Pennsylvania.
LOUIS M. MARSON JR., INC., d/b/a Greenwood Mushrooms
v.
ALLIANCE SHIPPERS, INC.
CIVIL ACTION NO. 19-1330
|
Filed 02/10/2020
Attorneys and Law Firms
John V. Rafferty, Gawthrop Greenwood, P.C., West Chester, PA, for Louis M. Marson Jr., Inc.
Frank C. Botta, The Lynch Law Group LLC, Cranberry Township, PA, for Alliance Shippers, Inc.

MEMORANDUM
Padova, J.
*1 Plaintiff brings this action pursuant to the Carmack Amendment, 49 U.S.C. § 14706, and state law to recover losses it incurred as a result of the delayed delivery of a shipment of mushrooms from its location in Kennett Square, Pennsylvania to several locations around Atlanta, Georgia. Defendant has moved for summary judgment as to all of Plaintiff’s claims. For the following reasons, we grant the Motion in part and deny it in part.

I. FACTUAL BACKGROUND
On Tuesday, July 17, 2018, Plaintiff texted Alan Sweis, a Logistics Account Executive for Defendant, and asked him whether Defendant could cover Plaintiff’s Atlanta, Georgia run during the coming weekend. (Pl.’s Ex. B at 8; Sweis Aff. (Def.’s Mem. Ex. 1) ¶ 2.) “Sweis confirmed that Alliance would be able to deliver that run.” (Pl.’s Ex. B at 8.) On the morning of Friday, July 20, 2018, Plaintiff emailed Sweis and told him that Plaintiff “will need you to do the normal Saturday run tomorrow.” (Pl.’s Exs. D, E; Sweis Aff. ¶¶ 2, 11.) “ ‘The normal Saturday run’ included transportation of goods from Plaintiff to various locations within the State of Georgia.” (Sweis Aff. ¶ 13.) Sweis had arranged “the normal Saturday run” for Plaintiff approximately thirteen times prior to July 20, 2018. (Id.) Sweis was not able to complete arrangements for the July 21, 2018 shipment on the 20th, so he texted Matt Marson, a representative of Plaintiff, to let him know that he would “be up tomorrow at 5 to work on it.” (Def.’s Reply Ex. 1.) On July 21, 2018, Defendant entered into an agreement with KG’s South East Trucking LLC (“KG’s”) to transport Plaintiff’s shipment of mushrooms to Georgia. (Sweis Aff. ¶ 17; Def.’s Mem. Ex. 2.) Plaintiff’s shipment was supposed to be delivered to three locations in the Atlanta area on Sunday, July 22, 2018 and three additional locations in the Atlanta area on Monday, July 23, 2018. (Pl.’s Ex. E.) However, the shipment was delayed because the truck broke down and the original driver abandoned the load. (Pl.’s Exs. J, M; Sweis Aff. ¶ 26.) A new driver picked up the trailer on Tuesday, July 24, 2018 and attempted to deliver the mushrooms to Plaintiff’s customers. (Pl.’s Exs. H, N; Sweis Aff. ¶ 26.) However, the customers rejected delivery; one customer explained that the mushrooms were “2 days late with a 4 day shelf life” and were “starting to go bad in some areas.” (Pl.’s Ex. N; Sweis Aff. ¶ 27.)

The Complaint alleges one claim against Defendant under the Carmack Amendment, 49 U.S.C. § 14706 (Count I) and, in the alternative, two claims under Pennsylvania law, a claim for breach of contract under Pennsylvania common law (Count II) and a claim for violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 Pa. Stat. Ann. § 201-1, et seq. (Count III). Plaintiff seeks to recover its actual losses of $39,689.01 (the value of the mushrooms in the July 21, 2018 shipment to Atlanta, Georgia) and $3,157.05 (the cost of replacement goods purchased by one of its customers to cover the goods that were not timely delivered), as well as its attorney’s fees.1

II. LEGAL STANDARD
*2 Summary judgment is appropriate “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). An issue is “genuine” if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is “material” if it “might affect the outcome of the suit under the governing law.” Id.

“[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the nonmoving party bears the burden of proof on a particular issue at trial, the movant’s initial Celotex burden can be met simply by “pointing out to the district court” that “there is an absence of evidence to support the nonmoving party’s case.” Id. at 325. After the moving party has met its initial burden, the adverse party’s response “must support the assertion [that a fact is genuinely disputed] by: (A) citing to particular parts of materials in the record …; or (B) showing that the materials [that the moving party has] cited do not establish the absence … of a genuine dispute.” Fed. R. Civ. P. 56(c)(1). Summary judgment is appropriate if the nonmoving party fails to respond with a factual showing “sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322. In ruling on a summary judgment motion, we consider “the facts and draw all reasonable inferences in the light most favorable to … the party who oppose[s] summary judgment.” Lamont v. New Jersey, 637 F.3d 177, 179 n.1 (3d Cir. 2011) (citing Scott v. Harris, 550 U.S. 372, 378 (2007)).

III. DISCUSSION

A. Count I – The Carmack Amendment
Defendant moves for summary judgment as to Plaintiff’s Carmack Amendment claim on two grounds. Defendant first argues that it is not subject to liability under the Carmack Amendment because it acted as a broker in connection with Plaintiff’s July 21, 2018 shipment. Defendant also argues that it is entitled to summary judgment with respect to the Carmack Amendment claim, even if the Carmack Amendment applies in this case, because Plaintiff cannot establish that it was damaged by the late delivery of its produce.

1. Application of the Carmack Amendment
Defendant argues that it cannot be liable to Plaintiff under the Carmack Amendment for damages related to the July 21, 2018 shipment because it acted as a broker rather than a motor carrier with respect to that shipment. Defendant relies on Essex Insurance Company v. Barrett Moving & Storage, Inc., 885 F.3d 1292 (11th Cir. 2018). The Eleventh Circuit noted in Essex that, if the defendant “was a ‘motor carrier,’ the Carmack Amendment applies, state-law claims are preempted, and [defendant] is strictly liable for the damage sustained by the [product] during transportation…. If [defendant] was a ‘broker,’ the Carmack Amendment does not apply….” Id. at 1299; see also Factory Mut. Ins. Co. v. One Source Logistics, LLC, Civ. A. No. 16-6385, 2017 WL 2608867, at *7 (C.D. Cal. May 5, 2017) (stating that the Carmack Amendment does not “apply to brokers”); Sompo Japan Ins. Co. v. B&H Freight, Inc., 177 F. Supp. 3d 1084, 1087 (N.D. Ill. 2016) (noting that “brokers are not liable under the Carmack Amendment”); Total Quality Logistics, LLC v. O’Malley, Civ. A. No. 16-636, 2016 WL 4051880, at *2 (S.D. Ohio July 28, 2016) (“The liability provisions within the Carmack Amendment do not apply to brokers and therefore, a broker is not a proper party in a Carmack Amendment cause of action.” (citation omitted)); Olympus Dairy USA Corp. v. Pavil Assocs., Inc., Civ. A. No. 12-1897, 2013 WL 6493482, at *2 (E.D.N.Y. Dec. 6, 2013) (“The ‘Carmack amendment imposes liability on “carriers” [and freight forwarders] but not on “brokers,” as those terms are defined by the statute….’ ” (first alteration in original) (quoting Nipponkoa Ins. Co., Ltd. v. C.H. Robinson Worldwide, Inc., Civ. A. No. 09-2365, 2011 WL 671747, at *3 (S.D.N.Y. Feb. 18, 2011))) (add’l citation omitted). Defendant maintains that it acted solely as a broker with respect to the July 21, 2018 shipment because it only arranged for the shipment of Plaintiff’s produce and KG’s transported the produce to Atlanta.

*3 The United States Court of Appeals for the Third Circuit has explained that “[u]nder the Carmack Amendment to the Interstate Commerce Act of 1887, a carrier is liable for damages incurred during a shipment of goods, whereas a broker—someone who merely arranges for transportation—is not liable.” Tryg Ins. v. C.H. Robinson, Worldwide, Inc., 767 F. App’x 284, 285 (3d Cir. 2019) (citing 49 U.S.C. § 14706). “The definition of ‘carrier’ includes ‘motor carriers,’ which are defined as ‘person[s] providing motor vehicle transportation for compensation.’ ” Id. at 286 (alteration in original) (citing 49 U.S.C. § 13102(3), (14)). “The term ‘transportation’ is then defined to include ‘services related to’ (including ‘arranging for’) the movement of property.” Id. (quoting 49 U.S.C. § 13102(23)). “Thus, the definition of ‘carrier’ encompasses entities that perform services other than physical transportation.” Id. “[I]n determining whether a party is a carrier or a broker, the crucial question is whether the party has legally bound itself to transport goods by accepting responsibility for ensuring the delivery of the goods.” Id. at 286-87 (citing Essex Ins. Co., 885 F.3d at 1301). “If an entity accepts responsibility for ensuring the delivery of goods, then that entity qualifies as a carrier regardless of whether it conducted the physical transportation.” Id. at 287 (emphasis added). “Conversely, if an entity merely agrees to locate and hire a third party to transport the goods, then it is acting as a broker.” Id. (citations omitted). “This distinction ‘tracks longstanding common-law rules’ and derives from the ‘commonsense proposition that when a party holds itself out as the party responsible for the care and delivery of another’s property, it cannot outsource its contractual responsibility by outsourcing the care and delivery it agreed to provide.’ ” Id. (quoting and citing Essex Ins. Co., 885 F.3d at 1301). “In sum, if a party has accepted responsibility for transporting a shipment, it is a carrier.” Id. (emphasis added).

When we analyze whether an entity acted as a carrier or a broker, we “look to how the party acted during the ‘specific transaction’ at issue, which includes ‘the understanding among the parties involved [and] consideration of how the entity held itself out.’ ” Richwell Grp., Inc. v. Seneca Logistics Grp., LLC, Civ. A. No. 17-11442, 2019 WL 3816890, at *3 (D. Mass. Aug. 14, 2019) (quoting ASARCO LLC v. England Logistics Inc., 71 F. Supp. 3d 990, 998 (D. Ariz. 2014)) (additional citations omitted). “[C]ourts have found that a party is a carrier in a ‘specific transaction’ if it takes responsibility for a shipment, whether or not it performed the actual transportation or labels itself as a broker.” Id. (citing Tryg, 767 F. App’x at 287; Essex Ins., 885 F.3d at 1302; ASARCO, 71 F. Supp. 3d at 998; Lumbermens Mut. Cas. Co. v. GES Exposition Servs., 303 F. Supp. 2d 920, 921 (N.D. Ill. 2003)). Thus, “ ‘[w]hether a company is a broker or a carrier is not determined by what the company labels itself, but by … its relationship to the shipper.’ ” Id. (first alteration in original) (quoting Hewlett-Packard Co. v. Brother’s Trucking Enters., Inc., 373 F. Supp. 2d 1349, 1352 (S.D. Fla. 2005)). “Further, the licenses that [the defendant] holds, its previous transactions with [the plaintiff], and its label in the Contract are not dispositive to its role during this specific transaction.” Id. (citations omitted). In Richwell, the court found that that defendant was a carrier even though it did not carry the load (lobsters) itself, but “handled the route, the packing, the coordination of travel and release of the lobster[s] to another party without any involvement from [the shipper], rather than acting as the ‘go-between’ to connect [the shipper] and [the third-party that supplied the truck and driver] to complete the shipment.” Id. at *4 (citing Essex Ins. Co., 885 F.3d at 1302; 49 US.C. 13102(23)). The Richwell court concluded that the defendant “did not broker an agreement between a carrier and [the shipper]” because the defendant “and no other entity, arranged for all of the details relating to the pickup of the load of lobster.” Id. Specifically, the defendant “engaged the driver and truck on the morning of the scheduled pickup,” the shipper “had no knowledge of who would be transporting the load of lobster, and [the defendant]’s representatives were the sole point of contact for the individuals who claimed to work for [the company that supplied the truck and driver].” Id.

*4 Because the analysis of whether defendant is a carrier or a broker is fact specific, it may not be appropriate for summary judgment. Essex, 885 F.3d at 1302 (“This is necessarily a case-specific analysis, and as a result, summary judgment might not be appropriate in many cases.” (citing Nipponkoa Ins. Co., 2011 WL 671747, at *5)). Nonetheless, even a company that “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. However, “[w]here no such writing exists, … the operative inquiry is this: pursuant to the parties’ agreement, with whom did the shipper entrust the cargo?” Id.

The record contains no writing that clearly states that Defendant acted as a broker with respect to the July 21, 2018 shipment. Defendant relies, instead, on the Affidavit of Alan Sweis to support its position that it acted solely as a broker in connection with Plaintiff’s July 21, 2018 shipment. Sweis was Alliance’s contact with Plaintiff and arranged for KG’s to provide motor carrier services for the shipment of Plaintiff’s goods to locations in Georgia on July 21, 2018. (Sweis Aff. ¶¶ 3, 4.) He made arrangements for a total of 14 shipments for Plaintiff between May 8, 2018 and July 21, 2018 (including the July 21 shipment). (Id. ¶ 6.) In each instance, Sweis arranged for carriers other than Alliance to take Plaintiff’s shipments. (Id. ¶ 7.) Sweis asserts that he only provided brokerage services for Plaintiff and that he “was very clear in [his] representations that Alliance Shippers, Inc. was serving as a broker to arrange a motor carrier to be engaged to transport Plaintiff’s mixed-load of goods pursuant to Plaintiff’s specific requirements.” (Id. ¶ 8.) Sweis states that, on July 20, 2018, he received an email from Plaintiff asking for the “normal Saturday Run,” the transportation of goods from Plaintiff to various locations in Georgia. (Id. ¶¶ 11, 13.) Sweis responded by text that he “would try to secure a driver/pickup for his shipment at his requested rate.” (Id. ¶ 11.) KG’s later accepted the rate and agreed to provide motor carrier services for Plaintiff’s shipment to Georgia. (Id. ¶ 17.)

As part of his work for Alliance, Sweis tracked the location of his customer’s load and communicated that information to his customer once in the morning, he would also provide a second update in the early afternoon if requested. (Id. ¶ 23.) On July 21, 2018, Marson requested numerous updates of the location of Plaintiff’s shipment, which Sweis attempted to provide using “Macro Point.” (Id. 24.) However, at one point, KG’s driver disconnected from Macro Point and Sweis could no longer track the load using that system. (Id.) Sweis also contacted KG’s driver by telephone to provide updates to Marson. (Id. ¶ 25.) During the course of the shipment, KG’s driver abandoned the load and KG’s had to find a second driver. (Id. ¶ 26.)

Plaintiff maintains that Alliance acted as a carrier with respect to the July 21, 2018 shipment because it took responsibility for that shipment. Plaintiff relies on Defendant’s website, which expresses its “Commitment to the Perfect Shipment®.” (Pls.’ Ex. A.) The website says that Alliance “ha[s] dedicated [itself] to providing The Perfect Shipment® to our customers” and that “The Perfect Shipment® means: Pick up the shipment on time[;] Deliver the shipment at the time requested[;] Deliver the shipment without exception[;] Provide an accurate freight bill.” (Id.) Defendant also states on its website that it “measures all shipment activity from pickup to destination” and that “[t]his information is then reported and reviewed with our selected carriers to identify transportation events unique to each shipper. Our proprietary state-of-the art tracking system, has more than 60 distinct checkpoints ensuring on-time pickup and delivery.” (Id.)

*5 Plaintiff also cites to evidence that it “was not advised that KG’s Southeast Trucking, LLC (“KG’s”) would be involved in the transaction until significantly after the delivery window [for its goods] was missed” and “Plaintiff has never spoken to a representative from KG’s.” (Pl.’s Ex. B at 10-11.) Plaintiff also points out that the invoice it received from Alliance billed it for “transportation services” from Greenwood Mushrooms to Atlanta and does not mention KG’s. (Pl.’s Ex. L.) Plaintiff further points to evidence that Sweis assured Greenwood that Alliance would take care of the delivery and evidence that Sweis assured Plaintiff that if he couldn’t find a carrier on Friday evening (the 20th), he would be up at 5 a.m. on the 21st to work on it, and later confirmed via text that Alliance would deliver the Saturday load to Atlanta. (Pl.’s Ex. B at 8-9.)

We conclude that Plaintiff has satisfied its burden on summary judgment of “citing to particular parts of materials in the record,” Fed. R. Civ. P. 56(c)(1)(A), that establish the existence of a genuine issue of material fact regarding whether Defendant acted as a broker with respect to Plaintiff’s July 21, 2018 shipment. Specifically, Plaintiff has cited to record evidence that Defendant “engaged the driver and truck on the morning of the scheduled pickup” and Plaintiff “had no knowledge of who would be transporting the [mushrooms], and [the defendant]’s representatives were the sole point of contact for the individuals who claimed to work for [the company that supplied the truck and driver].” Richwell, 2019 WL 3816890, at *4. Plaintiff has also cited to record evidence that could establish that Defendant “legally bound itself to transport [Plaintiff’s] goods by accepting responsibility for ensuring the delivery of the goods.” Tryg, 767 F. App’x at 287 (citing Essex Ins., 885 F.3d at 1301). Specifically, Plaintiff has cited the representations made by Defendant on its website regarding its “Commitment to the Perfect Shipment” and Sweis’s statements in his Affidavit that he repeatedly checked on the location of Plaintiff’s shipment after it was picked up by KG’s and communicated the results of those checks to Plaintiff. Accordingly, we conclude that there is a genuine issue of material fact regarding whether Defendant acted as a broker with respect to Plaintiff’s July 21, 2018 shipment of mushrooms to the Atlanta area and, consequently, whether Defendant may be subject to liability under the Carmack Amendment in connection with the July 21, 2018 shipment.

2. Damages
Defendant also argues that, even if it could be subject to liability under the Carmack Amendment in this case, it is entitled to summary judgment with respect to Count I because Plaintiff cannot establish damages. “To recover under the Carmack Amendment, a plaintiff must first establish a prima facie case by proving the following three elements: ‘(1) delivery of the goods to the initial carrier in good condition, (2) damage of the goods before delivery to their final destination, and (3) the amount of damages.’ ” Mecca & Sons Trucking Corp. v. White Arrow, LLC, 763 F. App’x 222, 225 (3d Cir. 2019) (quoting Paper Magic Grp., Inc. v. J.B. Hunt Transp., Inc., 318 F.3d 458, 461 (3d Cir. 2003)). “To establish the damaged condition of the goods upon delivery, a plaintiff must present direct or circumstantial evidence that is ‘sufficient to establish by a preponderance of all the evidence the condition of the goods upon delivery.’ ” Id. (quoting Beta Spawn, Inc. v. FFE Transp. Servs., Inc., 250 F.3d 218, 225 (3d Cir. 2001)). “For the purpose of a Carmack Amendment claim, damages are ordinarily measured by ‘the difference between the market value of goods at the time of delivery, and the time when they should have been delivered.’ ” Id. at 226 (quoting Paper Magic, 318 F.3d at 461). “The market value may be determined by the invoice price, or the contract price, less any recovered value from salvage or resale.” Id. (quotations omitted).

*6 Defendant argues that Plaintiff cannot establish the damaged condition of the goods because Plaintiff directed its customers to reject the mushrooms prior to their arrival and before anyone had an opportunity to inspect the mushrooms, thus making it impossible to determine the salvage value of the mushrooms at the time of delivery. (See Sweis Aff. ¶¶ 28-29 (stating that Marson told Sweis he was having the receivers reject the goods and that “no reasonable inspection of any of the mixed-load goods was ever performed prior to rejecting the mixed-load of goods”).) Plaintiff, however, maintains that the mushrooms in the July 21, 2018 shipment had no salvage value because they had begun to spoil by the time they reached their destinations, two days after they were supposed to be delivered. Plaintiff relies on an email from Restaurant Depot stating that it had rejected the mushrooms because they had begun to spoil. (Pl.’s Ex. N.) This email includes a picture of the mushrooms. (Id.) Plaintiff contends that, because its mushrooms were spoiled and had no salvage value at the time of delivery, its damages are determined by the invoice price of the spoiled mushrooms and its cost to cover the replacement mushrooms. See Mecca & Sons Trucking, 763 F.3d at 227 (concluding that the invoice price of the damaged goods was the “proper amount of damages” where the damaged goods had no salvage value).

We conclude that Plaintiff has satisfied its burden on summary judgment of “citing to particular parts of materials in the record,” Fed. R. Civ. P. 56(c)(1)(A), specifically the email from the Restaurant Depot stating that the mushrooms had begun to spoil, that establishes the existence of a genuine issue of material fact regarding the amount of damages it suffered due to the late delivery of its mushrooms. As we have also concluded that there is a genuine issue of material fact regarding whether Defendant may be subject to liability under the Carmack Amendment in connection with the July 21, 2018 shipment, we deny the Motion for Summary Judgment with respect to Plaintiff’s Carmack Amendment claim in Count I of the Complaint.

B. Counts II and III – The State Law Claims
Defendant argues that Plaintiff’s state law claims should be dismissed because they are preempted by federal law, specifically the preemption provisions of the Interstate Commerce Commission Termination Act, 49 U.S.C. § 14501(b) (“ICCTA”) and the Federal Aviation Administration Authorization Act (“FAAAA”), 49 U.S.C. § 14501(c)(1); as well as the Carmack Amendment.

1. The ICCTA and the FAAAA
The ICCTA preemption provision states as follows:
no State or political subdivision thereof and no intrastate agency or other political agency of 2 or more States shall enact or enforce any law, rule, regulation, standard, or other provision having the force and effect of law relating to intrastate rates, intrastate routes, or intrastate services of any freight forwarder or broker.
49 U.S.C. § 14501(b)(1). The FAAAA’s preemption provision similarly states that:
a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier (other than a carrier affiliated with a direct air carrier covered by section 41713(b)(4)) or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.”
49 U.S.C. § 14501(c)(1). Defendant argues that these Acts preempt Plaintiff’s common law breach of contract and UTPCPL claims. See Alpine Fresh, Inc. v. Jala Trucking Corp., 181 F. Supp. 3d 250, 256 (D.N.J. 2016) (stating that “the ICCTA expressly preempts state law claims as to brokers with respect to motor carrier arrangements” (citing Phoenix Ins. Co. Ltd. v. Norfolk S. R.R. Corp., 2014 WL 2008958, at *16-17 (D.N.J. May 16, 2014)); see also id. at 257 (concluding “that the express prohibition against state regulation of ‘intrastate services of any … broker,’ and ‘related to a price, route or service of any … broker,’ ” precluded state law claims for negligence and breach of bailment (alterations in original) (citations omitted)); Krauss v. IRIS USA, Inc., Civ. A. No. 17-778, 2018 WL 2063839, at *5 (E.D. Pa. May 3, 2018) (concluding that common law claims against broker for negligent hiring (of the carrier) arising from dangerous loading of merchandise by carrier hired by broker were preempted by the FAAAA because the claim arose from the broker’s core service, i.e., “hiring motor carriers to transport shipments” (quotation omitted)).

*7 “However, the FAAAA and ICCTA do not preempt routine breach of contract claims.” Hartford Fire Ins. Co. v. Dynamic Worldwide Logistics, Inc., Civ. A. No. 17-553, 2017 WL 3868702, at *3 (D.N.J. Sept. 5, 2017) (citing Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 229-230 (1995)); Lyn–Lea Travel Corp. v. Am. Airlines, 283 F.3d 282, 287 (5th Cir. 2002); Huntington Operating Corp. v. Sybonney Express, Inc., Civ. A. No. H–08–781, 2009 WL 2423860, at *1 (S.D. Tex. Aug. 3, 2009); Chatelaine, Inc. v. Twin Modal, Inc., 737 F. Supp. 2d 638, 643 (N.D. Tex. Aug. 20, 2010); see also AMG Resources Corp. v. Wooster Motor Ways, Inc., Civ. A. No. 15-3716, 2019 WL 192900, at *4 n.7 (D.N.J. Jan. 14, 2019) (recognizing that the ICCTA and FAAAA do not preempt “routine[ ] breach of contract claims” (citing Mrs. Ressler’s Food Prods. v. KZY Logistics, LLC, Civ. A. No. 17-2013, 2017 WL 3868703, at *3 (D.N.J. Sept. 5, 2017)); Hartford Fire Ins., 2017 WL 3868702, at *3). We conclude, accordingly, that the ICCTA and FAAAA do not preempt Plaintiff’s alternative claim for breach of contract under Pennsylvania common law in Count II.

Defendant relies on Rowe v. New Hampshire Motor Transport Association, 552 U.S. 364 (2008), to support its argument that the FAAAA preemption provision applies to preempt state consumer fraud laws such as the UTPCPL. The Supreme Court noted in Rowe that it had previously examined an identical preemption provision in the Airline Deregulation Act of 1978 (“ADA”) and found that the ADA preempted “States from enforcing their consumer-fraud statutes against deceptive airline-fare advertisements.” 552 U.S. at 371 (citing Morales v. Trans World Airlines, Inc., 504 U.S. 374, 391 (1992); American Airlines, Inc. v. Wolens, 513 U.S. 219, 226-228 (1995)). The Rowe Court instructed that the preemption provision of the FAAAA should be interpreted in the same way as the preemption provision of the ADA. Id. at 370. We conclude, therefore, that the FAAAA preempts state consumer protection laws such as the UTPCPL to the extent that they have “ ‘a connection with, or reference to,’ carrier ‘rates, routes, or services,’ ” even if the “state law’s effect on rates, routes, or services ‘is only indirect.’ ” Id. (quoting Morales, 504 U.S., at 384, 386).

Plaintiff contends that the FAAAA does not preempt its UTPCPL claim because this claim does not seek compensation for the damage to its shipment, but challenges misrepresentations allegedly made by Defendant in connection with its “Commitment to the Perfect Shipment.”2 However, the Plaintiff’s UTPCPL claim alleges that Defendant violated the UTPCPL claim because it did not deliver Plaintiff’s goods on time, notwithstanding its representations in its “Commitment to the Perfect Shipment” that it would do so. We conclude that Plaintiff’s UTPCPL claim pertains to Defendant’s services as a carrier or broker related to the transportation of property and is therefore preempted by the FAAAA, which preempts state laws that relate to a service provided by a motor carrier “with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). Consequently, we grant the Motion for Summary Judgment with respect to Plaintiff’s UTPCPL claim in Count III of the Complaint.

2. The Carmack Amendment
*8 Defendant also argues that it is entitled to summary judgment as to Plaintiff’s breach of contract claim because that claim is preempted by the Carmack Amendment. “There can be no doubt that ‘[t]he Carmack Amendment generally preempts separate state-law causes of action that a shipper might pursue against a carrier for lost or damaged goods.’ ” Sompo Japan Ins. Co. of Am. v. B&H Freight, Inc., 177 F. Supp. 3d 1084, 1086 (N.D. Ill. 2016) (alteration in original) (quoting REI Transport v. C.H. Robinson Worldwide, Inc., 519 F.3d 693, 697 (7th Cir. 2008)). However, “[b]ecause brokers are not liable under the Carmack Amendment, it does not preempt a claim for failing to perform whatever duties they might have under state law.” Id. at 1087. See also Heliene, Inc. v. Total Quality Logistics, LLC, Civ. A. No. 18-799, 2019 WL 4737753, at *2 (S.D. Ohio Sept. 27, 2019) (concluding that, because the Carmack Amendment does not mention brokers, it “does not preempt state law claims against brokers” and noting that the “ ‘overwhelming majority’ of courts who have considered this issue have reached the same conclusion” (listing cases)). We conclude, accordingly, that if the trier of fact finds that Defendant is a broker rather than a carrier with respect to Plaintiff’s July 21, 2018 shipment, Plaintiff’s alternative breach of contract claim is not preempted by the Carmack Amendment. As we have also concluded that Plaintiff’s alternative claim for breach of contract under Pennsylvania common law is not preempted by the ICCTA and FAAAA, we deny Defendant’s Motion for Summary Judgment as to Count II of the Complaint.

IV. CONCLUSION
For the reasons stated above, we grant Defendant’s Motion for Summary Judgment with respect to Count III of the Complaint and we deny it with respect to Counts I and II. An appropriate order follows.

All Citations
Slip Copy, 2020 WL 618581

Footnotes

1
Defendant has filed a Counterclaim, seeking the payment of unpaid invoices in the amount of $14,491.00 and its attorney’s fees incurred in obtaining the payment of those invoices. Defendant has not moved for summary judgment with respect to its Counterclaim.

2
Plaintiff asserts in its Memorandum that its UTPCPL claim also seeks damages for Defendant’s alleged mismanagement of its investigation and response to Plaintiff’s claim for compensation in connection with the July 21, 2018 shipment. However, Count III of the Complaint does not mention this mismanagement and Plaintiff’s Memorandum does not explain the basis of a UTPCPL claim arising from such mismanagement. We conclude, accordingly, that Plaintiff’s UTPCPL claim in Count III of the Complaint pertains only to Defendant’s “Commitment to the Perfect Shipment.”