2020 WL 1139560

United States District Court, E.D. California.
ACCESS BIOLOGICALS, LLC, Plaintiff,
v.
XPO LOGISTICS, LLC, Defendant.
No. 2:19-cv-01964-JAM-DB
|
Signed 03/06/2020
|
Filed 03/09/2020
Attorneys and Law Firms
Joel Mallord, Joseph J. Ybarra, Huang Ybarra Gelberg & May LLP, Los Angeles, CA, for Plaintiff.
Ognian Anguelov Gavrilov, Gavrilov & Brooks, Sacramento, CA, Robert Mark Borak, PHV, Spector Rubin P.A., Miami, FL, for Defendant.

ORDER DENYING DEFENDANT’S MOTION TO DISMISS OR TRANSFER
JOHN A. MENDEZ, UNITED STATES DISTRICT JUDGE
*1 Access Biologicals, LLC (“Access”) filed suit against XPO Logistics, LLC (“XPOL”) in September 2019. Compl., ECF No. 1. Access alleges XPOL’s improper delivery of an order of fetal bovine serum amounted to negligence, a breach of contract, and a violation of the Carmack Amendment, 49 U.S.C. § 14706. Compl. ¶¶ 18-59. Access raised these claims on its own behalf and as Life Technology, Inc.’s (“LTI”) assignee. Id.

XPOL filed a motion to dismiss or transfer Access’s suit.1 Mot. to Dismiss or Transfer (“Mot.”), ECF No. 9. XPOL argues each claim arises under a February 2, 2016 contract it entered with LTI. Mot. at 5. This contract incorporated a forum selection clause by way of XPOL’s “Standard Terms and Conditions.” Id. XPOL contends this clause required Access to file its suit in North Carolina. Id. at 5-6. Access filed an opposition to XPOL’s motion, ECF No. 18, and XPOL filed a reply, ECF No. 21. Because XPOL’s reply introduced new evidence and raised new legal arguments, the Court granted Access’s request to file a surreply. See Plf.’s Ex parte Application, ECF No. 25; Feb. 10, 2020 Minute Order, ECF No. 26; see also Plf.’s Surreply, ECF No. 27.

The Court finds XPOL failed to show that its February 2, 2016 contract with LTI covered the shipment of fetal bovine serum at issue here. XPOL similarly fell short of identifying any other basis for subjecting Access to the forum selection clause contained in XPOL’s terms and conditions. For these reasons, the Court denies XPOL’s motion to dismiss or transfer venue.

I. BACKGROUND
In October 2016, Access purchased 1200 liters of fetal bovine serum from LTI, to be delivered to Access’s contractor J.R. Scientific. Compl. ¶ 10. LTI then hired XPOL to transport the order from LTI’s facility in Grand Island New York to J.R. Scientific in Woodland, California. Compl. ¶ 11.

On January 6, 2017, XPOL’s subcontractor picked up the order at LTI’s facility and began the cross-country delivery. Compl. ¶ 14. The subcontractor arrived in Woodland, California six days later. Compl. ¶15. The parties dispute exactly what happened to the shipment en route, but ultimately, the USDA ordered that the entire order be destroyed. See Compl. ¶¶ 14-15; Mot. at 3. Access contends the destruction of their order resulted in a $298,935 loss. Compl. ¶ 15. LTI filed a claim with XPOL to recoup this loss, but XPOL denied it. Compl. ¶ 16. LTI then assigned its claims to Access. Compl. ¶ 17.

II. OPINION

A. Analysis
Forum selection clauses “are prima facie valid and should be enforced unless enforcement is shown by the resisting party to be ‘unreasonable’ under the circumstances.” M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). A motion to dismiss premised upon the enforcement of a forum selection clause amounts to a Rule 12(b)(3) motion to dismiss for improper venue. Arugueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996). Rule 12(b)(3) motions, unlike Rule 12(b)(6) motions, do not require courts to accept all of the allegations in the complaint as true. Id. (citing Carnival Cruise Lines v. Shute, 499 U.S. 5858 (1991)). Indeed, a party opposing the enforcement of a forum selection clause must generally produce “some evidence … to establish fraud, undue influence, overweening bargaining power, or such serious inconvenience in litigating the selected forum so as to deprive that party of a meaningful day in court.” Argueta, 87 F.3d at 324 (quoting Pelleport Investors, Inc. v. Budco Quality Theaters, Inc., 741 F.2d 273, 280 (9th Cir. 1984), abrogated on other grounds by Powerpex Corp. v. Reliant Energy Services, Inc., 551 U.S. 224, 235-36 (2007) (emphasis in original)). Here, however, Access avoids this heavy burden of production because XPOL failed to identify a forum selection clause that covers Access’s claims.

*2 As Access argues, “[i]n resolving a motion to transfer involving a forum-selection clause, ‘[t]he threshold issue is whether the forum-selection clause applies to Plaintiff’s claims.” Opp’n at 4 (quoting Henry v. Cent. Freight Lines, Inc., No. 2:16-cv-00280-JAM-EFB, 2017 WL 4517836, at *2 (E.D. Cal. Oct. 10, 2017)). XPOL contends its February 2016 contract with LTI sets forth the agreed-upon terms for the January 2017 shipment from Grand Island to Woodland. Mot. at 5-6. In support of this position, XPOL focuses on a single sentence within the agreement: “Except as modified herein, any transportation or logistics services provided by XPOL are subjected to XPOL’s standard terms and conditions ….” Id. at 5 (citing Ex. A to Perry Decl., ECF No. 19). XPOL’s standard terms and conditions, in turn, contain a forum selection clause requiring the parties to file suit in North Carolina “in the event of any disagreement or dispute.” Mot. at 5-6 (quoting Ex. A. to Perry Decl. at 16). XPOL contends its shipment from LTI’s Grand Island facility to J.R. Scientific plainly falls within the category of “any transportation or logistics services.” Mot. 3-4.

Access urges the Court to, instead, interpret the sentence XPOL identified in context of the broader document. Opp’n at 4-6. The Court finds Access’s method of contract interpretation is the proper one. See Lennar Mare Island, LLC v. Steadfast Insurance Co., 176 F. Supp. 3d 949, 955 (E.D. Cal. 2016). Using this approach, the relevant portion of the contract reads:
Purpose:
The standard operating procedures of this document have been established between Life Technologies and XPOL to define agreed best practices for the administration and transportation of Life Technologies’ shipments as shown in Schedule 1.
Scope:
XPOL will arrange with third party independent contractor licensed motor carriers (“Carriers”) for truckload transportation of Life Technologies’ shipments, in the laneways specified in Schedule 1, for the rates and terms specified therein, in accordance with the requirements set out herein. Life Technologies’ shipments shall be transported as “exclusive use” shipments, meaning no other shippers’ freight may be transported in the same trailer at the same time as Life Technologies’ shipments. Except as modified herein, any transportation or logistics services provided by XPOL are subject to XPOL’s standard terms and conditions …. Current version at Effective Date is attached as Schedule 2.
Ex. A to Perry Decl. at 1. The Schedule 1 attachment lists two laneways—one between Grand Island, NY and Chester, NY; the other between Grand Island, NY and Charlottetown, PE. Id. at 3.

The February 2016 contract’s plain language states that the purpose of the agreement was to “define agreed best practices for the administration and transportation of Life Technologies’ shipments as shown in Schedule 1.” Ex. A to Perry Decl. at 1. Schedule 1 does not include a laneway between Grand Island, NY and Woodland, CA. The Court would have to adopt an unnecessarily strained reading of the contract to find that its terms nonetheless govern this unenumerated route. The more natural interpretation of the seemingly-broad language XPOL identifies is that any transportation or logistics services provided by XPOL for the laneways listed in Schedule 1 are subject to XPOL’s terms and conditions. Accordingly, the Court finds that the forum selection clause incorporated into the February 2, 2016 contract does not apply to any claims arising out of XPOL’s January 2017 shipment to Woodland, CA.

The Rate Confirmation Sheet XPOL discusses in its reply brief does not alter the Court’s conclusion. See Reply at 3-4. After LTI hired XPOL to transport Access’s order of fetal bovine serum to California, XPOL sent LTI a Rate confirmation Sheet. Id. This form included a disclosure purporting to subject “any transportation brokerage and/or other transportation intermediary-related services provided by XPO” to the company’s “Customer Standard Terms and Conditions.” Ex. A to Supp. Perry Decl., ECF No. 22. Although it is not entirely clear from the reply, XPOL seems to argue that this disclosure either (1) reinforces the notion that the February 2016 contract bound the January 2017 shipment to XPOL’s terms and conditions; or (2) provides an independent contractual basis for subjecting the January 2017 shipment to XPOL’s terms and conditions. See Reply at 3-5. The Court does not find either argument persuasive.

*3 First, as Access argues, the fact that the February 2016 contract and the Rate Confirmation Sheet for the January 2017 order both reference XPOL’s terms and conditions does little to suggest the 2016 contract governed the 2017 shipment. The sheet does not reference the February 2016 contract or any of the laneways listed in Schedule 1 of that agreement. The Court lacks any basis for viewing these two distinct arrangements as one. Second, the Rate Confirmation Sheet does not stand as its own contract. XPOL maintains that, based on its terms and conditions, LTI agreed to be bound by XPOL’s terms and conditions when it tendered the fetal bovine serum to XPOL’s subcontractor. Reply at 4-5 (quoting Ex. A to Perry Decl. at 5). Tautologically, this argument uses standards set forth in XPOL’s terms to determine that LTI was bound by XPOL’s terms. The Court is not convinced.

XPOL’s central critique is that Access is trying to have its cake and eat it too—that Access claims the February 2016 contract to invoke its benefits but then disavows the agreement to avoid its obligations. But the Court does not find any indication that Access’s suit flows from rights the February 2016 contract created. Because XPOL failed to identify a forum-selection clause that applies to Access’s claims, the Court denies XPOL’s Rule 12(b)(3) motion.

B. Page Limits
The Court’s Order re Filing Requirements (“Order”), ECF No. 4-2, limits memoranda in support of and opposition to motions to dismiss to fifteen pages. Order at 1. It limits reply memoranda to five pages. Id. A violation of the Order requires the offending counsel (not the client) to pay $50.00 per page over the page limit to the Clerk of Court. Id. Moreover, the Court does not consider arguments made past the page limit. Id. XPOL’s brief exceeded the page limit by three pages. XPOL’s counsel must therefore send a check payable to the Clerk for the Eastern District of California for $150.00 no later than seven days from the date of this Order.

III. ORDER
For the reasons set forth above, the Court DENIES XPOL’s motion to dismiss or transfer Access’s suit.

IT IS SO ORDERED.

All Citations
Slip Copy, 2020 WL 1139560

Footnotes

1
This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for February 11, 2020.

2020 WL 1289761

United States District Court, S.D. Ohio, Western Division.
TIFFANY BROWN, Plaintiff,
v.
TOTAL QUALITY LOGISTICS, LLC., Defendant.
Case No. 1:19-cv-574
|
03/18/2020

Karen L. Litkovitz, United States Magistrate Judge, UNITED STATES DISTRICT COURT, TIFFANY BROWN, Case No. :-cv-, Plaintiff, McFarland, J., Litkovitz, M.J.

ORDER AND REPORT AND RECOMMENDATION
Proceeding pro se, plaintiff Tiffany Brown brings this breach of contract action against defendant Total Quality Logistics (“TQL”). This matter is before the Court on defendant’s motion for judgment on the pleadings, or alternatively motion to dismiss (Doc. 5),1 plaintiff’s response in opposition (Doc. 7), and defendant’s reply memorandum (Doc. 12). This matter is also before the Court on two of plaintiff’s motions to receive service by email through the electronic case filing system (Docs. 2, 8) and plaintiff’s motion to access the electronic case filing system (Doc. 9).

I. Facts
Plaintiff filed her complaint in this Court on July 15, 2019. (Doc. 1). In her complaint, plaintiff alleges the following:
Plaintiff’s company, Tribute Contracting LLC, used the Defendant’s services on October 2017 for deliveries [sic] their substantial government contract. Plaintiff has signed a contract with Defendant. The first shipment arrived on time with the first supplier. The first shipment for 2nd supplier was one day late. This shipment caused the contract to be cancelled by the government agency. This has caused substantial financial damages to my client as the total value of the contract was $155 million. There has also been significant reputational damage that [h]as affected my client’s ability to conduct business in the industry. Plaintiff’s company received extremely negative press and is currently fighting an [sic] 7 year disbarment of irreputable harm personally as well professional[ly].
(Doc. 1 at 4). Based on these facts, plaintiff brings a breach of contract claim against TQL for the late delivery.2 Plaintiff states that she suffered $155 million in damages from the cancelled government contract, which she alleges was cancelled due to the late delivery. (Id.). Plaintiff attaches the following documents to her complaint: (1) a document from the Federal Emergency Management Agency (“FEMA”) terminating Tribute’s government contract due to late delivery of approved heater meals (Exhibit A), (2) an email between plaintiff and a TQL representative about the late delivery (Exhibit B), (3) a shipper/broker transportation agreement between Tribute and TQL (Exhibit C), and (4) a record showing that both plaintiff and Tribute are disbarred from receiving government contracts (Exhibit D). (Doc. 1-1).

II. TQL’s Motion to Dismiss (Doc. 5)

A. Standard
In deciding a motion to dismiss under Rule 12(b)(6), the Court must accept all factual allegations as true and make reasonable inferences in favor of the non-moving party. Keys v. Humana, Inc., 684 F.3d 605, 608 (6th Cir. 2012) (citing Harbin-Bey v. Rutter, 420 F.3d 571, 575 (6th Cir. 2005)). Only “a short and plain statement of the claim showing that the pleader is entitled to relief” is required. Id. (quoting Fed. R. Civ. P. 8(a)(2)). “[T]he statement need only give the defendant fair notice of what the…claim is and the grounds upon which it rests.” Id. (quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007) (internal quotation marks omitted) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A plaintiff must “plead factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

The Court must hold pro se pleadings to less stringent standards than those prepared by attorneys and must liberally construe them when determining whether they fail to state a claim. See, e.g., Martin v. Overton, 391 F.3d 710, 712 (6th Cir. 2004). However, the Sixth Circuit has recognized that the Supreme Court’s liberal construction case law has not had the effect of “abrogat[ing] basic pleading essentials” in pro se suits. Wells v. Brown, 891 F.2d 591, 594 (6th Cir. 1989).

B. Resolution
Defendant moves to dismiss plaintiff’s complaint under Fed. R. Civ. P. 12(b)(6) for three reasons. First, defendant argues that plaintiff fails to state a valid claim for relief against TQL because there is no privity of contract between plaintiff, Tiffany Brown, and TQL. (Doc. 5 at 5-7). Second, defendant argues that any potential claims arising out of Tribute’s relationship with TQL are compulsory counterclaims that plaintiff failed to litigate in a prior state court lawsuit and is therefore barred from asserting in this case. (Id. at 7-9). Third, defendant contends that under the Carmack Amendment, claims for late delivery, loss, or damage to cargo must be pursued against the motor carrier and not TQL since it is a freight broker. (Id. at 9-11).

As an initial matter, Ohio law governs plaintiff’s claim for breach of contract in this diversity action. See Equitable Life Assur., Soc. of U.S. v. Poe, 143 F.3d 1013, 1016 (6th Cir. 1998) (in actions brought in federal court invoking diversity jurisdiction, a court must apply the same substantive law that would apply if the action had been brought in a state court of the jurisdiction where the federal court is located) (citing Erie R.R. v. Tompkins, 304 U.S. 64 (1938)). To maintain a cause of action for breach of contract, Ohio law requires privity of contract. In Ohio, “privity of contract between parties…is a fundamental prerequisite to bringing suit for the breach of a contract.” Mark-It Place Foods, Inc. v. New Plan Excel Realty Tr., 804 N.E.2d 979, 990 (Ohio Ct. App. 2004). See also Cincinnati, H. & D. R. Co. v. Metro. Nat. Bank, 42 N.E. 700 (Ohio 1896). Ohio does not recognize any remedy or action in contract for two parties that lack privity. See Mahalsky v. Salem Tool Co., 461 F.2d. 581, 584 (6th Cir. 1972).

In ruling on a Rule 12(b)(6) motion to dismiss, the Court primarily considers the allegations in the complaint but may also consider exhibits attached to the complaint. Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001). Here, Exhibit C of plaintiff’s complaint shows the existence of a shipper/broker transportation agreement between Tribute and TQL for TQL to provide brokerage services for transportation of Tribute’s freight. (Doc. 1-1 at 7-13). Plaintiff’s company—not plaintiff herself—is a party to the contract at issue. Although plaintiff signed the agreement (Doc. 1-1 at 13), she did so in her capacity as the owner of Tribute. The Court therefore agrees with defendant that the contract attached to the complaint shows that there is no privity of contract between plaintiff and TQL.

In her brief in opposition, plaintiff argues that “Tribute Contracting LLC, is a single member LLC, so the persona of Tribute Contracting LLC and Plaintiff are intertwined.” (Doc. 7 at 4). This argument is unavailing. “[A] corporation is a distinct legal entity, separate and apart from the natural individuals who formed and own it.” Chafflose Corp. v. 3 M Innovation, No. 1:10-cv-2178, 2010 WL 4318872, at *1 (N.D. Ohio Oct. 27, 2010) (citations omitted). A corporation is a separate legal entity from its shareholders, even where the corporation has only one shareholder. Springfield v. Palco Invest. Co., Inc., 992 N.E.2d 1194, 1211 (Ohio Ct. App. 2013). “Because a corporation is a separate entity from its directors and officers, causes of action belonging to the corporation may not be litigated by the officers for their own benefit.” Chafflose Corp., 2010 WL 4318872, at *1. In her capacity as the owner of Tribute, plaintiff has no standing to bring a cause of action against TQL for breach of contract. Moreover, plaintiff’s argument that she is a third-party beneficiary to the contract between Tribute and TQL is equally unavailing. Under Ohio law, a third-party may recover damages from a contract only when the third-party is the intended beneficiary of the contract. G.R.P.L. Ents. Inc. v. Sethi, No. 09 MA 205, 2010 WL 5550680, at *2 (Ohio Ct. App. Dec. 16, 2010). To be an intended third-party beneficiary, the contract “must have been entered into directly or primarily for the benefit of that person.” Id. (internal citation omitted). Given that a corporation is a separate legal entity from its owners, “a party is not considered a third-party beneficiary merely because [s]he is a shareholder of one of the contracting parties.” Id. at *3. As the owner of Tribute, plaintiff is therefore not an intended third-party beneficiary to the contract between Tribute and TQL.

In sum, plaintiff cannot maintain this action against TQL because no privity of contract exists between plaintiff, as the owner of Tribute, and TQL. While Tribute may bring a breach of action against TQL under its corporate identity, plaintiff has no standing to bring such a claim on behalf of Tribute. Rowland v. California Men’s Colony, 506 U.S. 194, 202 (1993) (no one other than a licensed attorney can represent a corporation in federal court). Therefore, defendant’s motion to dismiss (Doc. 5) should be granted.3

III. Conclusion
Based on the foregoing, it is RECOMMENDED that:
1. Defendant’s motion to dismiss (Doc. 5) be GRANTED and this case be CLOSED on the docket of this Court.

It is ORDERED that:
1. Plaintiff’s motions to receive service by email through the electronic case filing system (Docs. 2, 8) are DENIED as MOOT.
2. Plaintiff’s motion to access the electronic case filing system (Doc. 9) is DENIED as MOOT.
Date: 3/18/2020 s/Karen L. Litkovitz

Karen L. Litkovitz

United States Magistrate Judge

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO WESTERN DIVISION

TIFFANY BROWN, Case No. 1:19-cv-574 Plaintiff, McFarland, J.

Litkovitz, M.J.

vs.

TOTAL QUALITY LOGISTICS, LLC, Defendant.

NOTICE
Pursuant to Fed. R. Civ. P. 72(b), WITHIN 14 DAYS after being served with a copy of the recommended disposition, a party may serve and file specific written objections to the proposed findings and recommendations. This period may be extended further by the Court on timely motion for an extension. Such objections shall specify the portions of the Report objected to and shall be accompanied by a memorandum of law in support of the objections. If the Report and Recommendation is based in whole or in part upon matters occurring on the record at an oral hearing, the objecting party shall promptly arrange for the transcription of the record, or such portions of it as all parties may agree upon, or the Magistrate Judge deems sufficient, unless the assigned District Judge otherwise directs. A party may respond to another party’s objections WITHIN 14 DAYS after being served with a copy thereof. Failure to make objections in accordance with this procedure may forfeit rights on appeal. See Thomas v. Arn, 474 U.S. 140 (1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).

All Citations
Slip Copy, 2020 WL 1289761

Footnotes

1
The Court will apply the Rule 12(b)(6) motion to dismiss standard to defendant’s motion. A motion for judgment on the pleadings is premature without an answer filed by defendant. See Fed. R. Civ. P. 12(c) (“After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.”).

2
In her memorandum in opposition to defendant’s motion to dismiss, plaintiff states that her claim is for breach of contract. (Doc. 7 at 1).

3
The Court declines to consider defendant’s second and third grounds for dismissal—that plaintiff failed to assert a compulsory counterclaim in state court and that plaintiff’s claims must be pursued against the motor carrier under the Carmack Amendment. The facts of plaintiff’s complaint and the attachments thereto clearly show that there is no privity of contract between plaintiff and TQL such that plaintiff cannot maintain a breach of contract claim against TQL.