United States District Court for the District of Colorado

March 1, 2024, Decided; March 1, 2024, Filed

Civil Action No. 1:23-cv-00802-RM-SBP

Reporter

2024 U.S. Dist. LEXIS 51355 *

ELIZABETH TRUJILLO and HAROLD RAMIREZ, Plaintiffs, v. MOORE BROTHERS, INC., FALCON EXPRESS, LLC, GEORGE A. MYERS, NUCOR CORPORATION, NUCOR-YAMATO STEEL COMPANY, NUCOR-VULCRAFT NORFOLK, and NUCOR LOGISTICS CENTER, INC., Defendants.

Counsel:  [*1] For Elizabeth Trujillo, Harold Ramirez, Plaintiffs: Carlo Francisco Bonavita, Peter M. Anderson, The Law Office of, Longmont, CO; Peter Michael Anderson, Peter M. Anderson, The Law Office of, Longmont, CO.

For Moore Brothers, Inc., a Nebraska corporation, Falcon Express, LLC, a Nebraska limited liability company, George A. Myers, Defendants: Paul Trafton Yarbrough, Hall & Evans LLC, Denver, CO; Brian D. Kennedy, Hall & Evans LLC, Denver, CO.

Judges: Susan Prose, United States Magistrate Judge.

Opinion by: Susan Prose

Opinion

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

Susan Prose, United States Magistrate Judge

This matter is before the court on the motion (ECF No. 28) of Defendants Moore Brothers, Inc., (“Moore Brothers”) and Falcon Express, LLC (“Falcon Express,” collectively, the “Movants”) to dismiss Counts III and IV of Plaintiffs Elizabeth Trujillo’s and Harold Ramirez’s second amended complaint (the “SAC,” ECF No. 76).¹ Respectively, Counts III and IV are claims for negligent hiring, retention, training, monitoring, supervising, and entrustment; and for negligent selection of an independent contractor. For the following reasons, this court recommends that the Motion be granted in part and denied in part.

BACKGROUND

This lawsuit stems from a motor vehicle accident that occurred on August 10, 2022, in Greeley, Colorado. In relevant part, Plaintiffs assert that Defendant George A. Myers was driving a semi-truck that struck Plaintiff Elizabeth Trujillo’s car. SAC ¶¶ 78-97. Mr. Myers is alleged to be an employee or independent contractor of Falcon Express, which owned the semi-truck, and/or Moore Brothers, which owned and maintained the flatbed trailer attached to the semi-truck. Id. ¶¶ 50-52. Plaintiffs also sue Defendants Nucor Corporation, Nucor-Yamato Steel Company, Nucor-Vulcraft Norfolk, and Nucor Logistics Center, Inc. (collectively, the “Nucor Defendants”). The Nucor Defendants are not involved in the present motion.

More specifically, the SAC alleges in relevant part that prior to the accident, the Nucor Defendants entered into an agreement with Moore Brothers, in which the latter would be its agent in transporting Nucor’s products to its customers. Id. ¶ 21. Plaintiffs allege Moore Brothers was an “incompetent and unqualified motor carrier,” id. ¶ 33, “with a history of significant maintenance issues and violations for illegal equipment that is unroadworthy,” id. ¶ 39, based on, [*3]  among other things, information publicly available from the Department of Transportation (“DOT”) concerning Moore Brothers’ history of DOT violations. Id. ¶¶ 41-44.

Plaintiffs allege, meanwhile, that prior to the accident, Moore Brothers hired or contracted with Falcon Express for Mr. Myers to drive for Moore Brothers, using the semi-truck that Falcon Express owned and under Moore Brothers’ DOT motor carrier authority. Id. ¶¶ 49, 53. They allege in relevant part that “[a]t all relevant times, Defendant Myers was an incompetent and unqualified commercial driver.” Id. ¶ 34. Plaintiffs further allege that Moore Brothers and Falcon Express had duties under DOT regulations concerning the drivers they employed (or with whom they contracted), including Mr. Myers. Id. ¶¶ 55-57. Specifically, those duties include: “ensur[ing] driver regulations are adhered to” (id. ¶ 58, citing Section 390.11 of the Federal Motor Carrier Safety Regulations) and “mandatory qualifications . . . [that] Defendants Moore Brothers, Inc. and Flacon Express must undertake before employing drivers, including George A. Myers.” Id. ¶ 59 (citing Section 391, et seq., of the same regulations). Plaintiffs further allege concerning duty:

Defendant Moore Bros., Inc. therefore had an affirmative duty to ensure [*4]  that Falcon Express, LLC and George Myers were qualified to safely and competently operate on its behalf.

This includes ensuring a driver’s past driving record was acceptable, they were competent to operate the equipment [in compliance with all safety regulations], they were medically fit to operate, and confirming their safety performance history.

Id. ¶¶ 60-61 (emphasis added).

Plaintiffs also allege that as the driver, Mr. Myers had “a duty pursuant to Section 396.13 of the Federal Motor Carrier Safety Regulations to inspect the tractor and trailer prior to operating them on the date of the crash and ensure they were in safe operating condition.” Id. ¶ 67. Plaintiffs allege that at the time of the accident, “[t]he condition of the 2013 Great Dane flatbed trailer’s brakes, and their disrepair, were apparent to the naked eye and would have been observed upon even a cursory inspection.” Id. ¶ 68.

69. Upon information and belief Defendant Myers failed to perform the necessary pre-and-post trip inspections of the tractor and trailer.

70. Defendant Myers would log these inspections in 2-5 minutes despite knowing such inspections require, at minimum, 15-20 minutes to complete.

71. Upon information and belief Defendant Moore Brothers had specific knowledge [*5]  of and authorized Myers behavior as the daily logs were transmitted to, reviewed, and kept by Defendant Moore Brothers.

SAC ¶¶ 69-71 (emphasis added).

In all, Plaintiffs bring ten claims, all sounding in negligence, against the various Defendants. Id. at 17-37. In the motion at issue, Moore Brothers and Falcon Express move to dismiss two of those claims: Count III, a negligent hiring, retention, supervision, training and entrustment claim (id. ¶¶ 144-86), and Count IV, a claim for “negligent selection of independent contractor.” Id. ¶¶ 187-98.

LEGAL STANDARDS

Under Federal Rule of Civil Procedure 12(b)(6), Defendants can move to dismiss for “failure to state a claim upon which relief can be granted.” In deciding a motion under Rule 12(b)(6), the court must “accept as true all well-pleaded factual allegations . . . and view these allegations in the light most favorable to the plaintiff.” Casanova v. Ulibarri, 595 F.3d 1120, 1124-25 (10th Cir. 2010) (quoting Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)). Nevertheless, a plaintiff may not rely on mere labels or conclusions, “and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citation omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To survive a motion to dismiss, “a complaint must [*6]  contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Id. (internal quotation marks omitted). That is, the complaint must include well-pleaded facts that, taken as true, “allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

The Twombly/Iqbal pleading standard first requires the court to identify which allegations “are not entitled to the assumption of truth” because, for example, they state legal conclusions or merely recite the elements of a claim. Id. at 679. It next requires the court to assume the truth of the well-pleaded factual allegations “and then determine whether they plausibly give rise to an entitlement to relief.” Id. In this analysis, courts “disregard conclusory statements and look only to whether the remaining factual allegations plausibly suggest the defendant is liable.” Khalik v. United Air Lines, 671 F.3d 1188, 1191 (10th Cir. 2012). The ultimate duty of the court is to “determine whether the complaint sufficiently alleges facts supporting all the elements necessary to establish an entitlement to relief under the legal theory proposed.” Forest Guardians v. Forsgren, 478 F.3d 1149, 1160 (10th Cir. 2007). “Determining whether a complaint states a plausible claim for relief will . . . be [*7]  a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.

ANALYSIS

I. Claim III: Negligent Hiring, Supervision, Retention, Training, and Entrustment

Count III alleges that Movants had several duties with respect to Mr. Myers as their employee, namely, duties “to ensure that Defendant Myers was qualified to safely operate a commercial motor vehicle, specifically the 2016 Kenworth tractor and the 2013 Great Dane trailer on their behalf,” “to use reasonable care in ensuring that the commercial vehicle would not be used in a manner which would involve an unreasonable risk of physical harm to others,” “to properly train and supervise Defendant Myers,” “to monitor and supervise the performance of Defendant Myers,” “to exercise reasonable care in hiring, retaining, training, and supervising its drivers and other employees, including Defendant George Myers,” “to exercise reasonable care in entrusting its vehicles and equipment—and any and all vehicles and equipment under its control—to responsible, competent and qualified drivers.” SAC ¶¶ 151-56. Plaintiffs allege that Movants breached those duties. Id. ¶¶ 157-82.

Claim III thus raises several [*8]  theories or types of direct negligence. The court addresses those theories separately to the extent they appear to involve separate facts or law.²

A. Negligent Hiring

Under Colorado law, “[n]egligent hiring cases are complex because they involve the employer’s responsibility for the dangerous propensities of the employee, which were known or should have been known by the employer at the time of hiring, gauged in relation to the duties of the job for which the employer hires the employee.” Raleigh v. Performance Plumbing & Heating, 130 P.3d 1011, 1016 (Colo. 2006) (emphasis added). This claim requires well-pleaded facts plausibly demonstrating that the employer owed a duty of care to persons who the employee later injured. Id. “[E]mployers of commercial drivers have a duty to investigate an applicant’s driving record, in addition to what he or she provides in response to application questions or an employment interview.” Id. at 1017. And as with any negligence claim, the plaintiff must also allege that “the defendant breached that duty,” and the breach “caused the harm resulting in damages to the plaintiff.” Keller v. Koca, 111 P.3d 445, 447 (Colo. 2005), as modified on denial of reh’g (May 16, 2005).

In this case, Movants do not challenge that Plaintiffs plausibly allege that Movants had a duty of care in hiring a [*9]  commercial driver. Rather, they argue that Plaintiffs do not plausibly allege that they knew or should have known when they hired Mr. Myers that he posed a risk of harm to the driving public.

“Antecedent knowledge” is clearly an element of negligent hiring:

In 1992, [Colorado] joined the majority of states in formally recognizing the tort of negligent hiring. Connes v. Molalla Transp. Sys., Inc., 831 P.2d 1316, 1321 (Colo.1992). Connes focused on the duty element of the tort. We posited the scope of the employer’s legal duty upon the employer’s actual knowledge at the time of hiring or reason to believe that the person being hired, by reason of some attribute of character or prior conduct, would create an undue risk of harm in carrying out his or her employment responsibilities.

Raleigh, 130 P.3d at 1016 (footnote omitted, emphasis added). “Liability results . . . not because of the relation of the parties, but because the employer antecedently had reason to believe that an undue risk of harm would exist because of the employment.” Id. at 1017 (emphasis original, quoting Restatement (Second) of Agency § 213 cmt. d (Am. L. Inst. 1958)). “The key word in this formulation, ‘antecedently,’ refers to the time of hiring.” Id.

In this case, Plaintiffs allege that Mr. Myers was an incompetent driver (SAC ¶ 34), but this is a conclusory assertion unaccompanied by [*10]  supporting facts. While Plaintiffs allege several facts concerning Mr. Myers’ alleged incompetence on the day of the accident (his mental state, health, fatigue, and failure to inspect the tractor-trailer before starting the trip that day), they do not allege any facts concerning Mr. Myers’ driving history or characteristics to support a reasonable inference that he was an incompetent driver when Movants hired him.

Plaintiffs also contend that Movants failed to ensure that Mr. Myers was qualified for the job–where “qualified” means that Mr. Myers was able to and would operate the tractor-trailer in compliance with the safety rules that applied to him as a driver under the Federal Motor Carrier regulations. SAC ¶¶ 60, 61, 62, 180. They further allege that those regulations required Movants to obtain Mr. Myers’ driving history and ascertain that he was competent to operate the equipment, medically fit to operate it, and to confirm his safety performance history. Id. ¶ 61. But in their Reply, Movants argue that it is conclusory to allege only that they did not reasonably investigate Mr. Myers, without also alleging facts concerning how they failed to do so. In other words, Movants argue [*11]  that Plaintiffs have not plausibly alleged a breach of the duty to investigate in hiring Mr. Myers. Plaintiffs do not allege, for instance, that Movants failed to obtain Mr. Myers’ driving history before hiring him, or that Movants failed to follow up on any red flags in Mr. Myers’ “response to application questions or an employment interview.”³ See Raleigh, 130 P.3d at 1017 (citing Connes, 831 P.2d at 1321).

This court respectfully agrees with Movants on this issue and concludes that Plaintiffs’ claim for negligent hiring is conclusory as to Moore Brothers and Falcon Express’s breach of their duty to investigate Mr. Myers when they hired him. Plaintiffs allege no facts plausibly demonstrating that, at the time Moore Brothers and Falcon Express hired him, Mr. Myers was an incompetent driver. Nor do Plaintiffs allege facts to support that Movants failed to reasonably investigate when they hired Mr. Myers.

Plaintiffs argue to the contrary, asserting that the “‘antecedent knowledge’ requirement Defendants cite is satisfied here given the duty to qualify and investigate conduct within the scope of the employment of the driver.” Response at 9. Plaintiffs argue that Movants had a duty to “ensure [they were] hiring a ‘safe driver who would [*12]  not create a danger to the public in carrying out the duties of the job.” Id. (quoting Connes, 831 P.2d at 1323). Plaintiffs thus appear to reason that, because Movants had a duty to ensure they hired only safe drivers, once Mr. Myers caused the accident in question, Movants must have breached that duty. This circular reasoning is incorrect.

Even Plaintiffs’ current pleading recognizes that the duty to investigate a driver’s safety before hiring him is not limitless. SAC ¶¶ 60-61 (describing the duty as one of “ensuring a driver’s past driving record was acceptable, they were competent to operate the equipment [in compliance with all safety regulations], they were medically fit to operate, and confirming their safety performance history”); ¶ 155 (“duty to exercise reasonable care in hiring,” emphasis added); ¶ 180 (“failed to reasonably investigate Defendant Myers[‘] ability to drive safely,” emphasis added).

More importantly, the Colorado Supreme Court “cautioned in Connes that the tort of negligent hiring does not function as an insurance policy for all persons injured by persons an employer hires.” Raleigh, 130 P.3d at 1017 (citing Connes, 831 P.2d at 1321). Rather, “employers of commercial drivers have a duty to investigate an applicant’s driving record, in [*13]  addition to what he or she provides in response to application questions or an employment interview.” Id. This duty does not exempt Plaintiffs from the requirement that they allege—by means of well-pleaded, nonconclusory facts—the antecedent knowledge that a negligent hiring claim requires in Colorado law, nor does it absolve them from the obligation to allege facts plausibly showing how Movants failed in their duty to investigate before hiring Mr. Myers. The court therefore recommends dismissing the portion of Claim III that alleges negligent hiring.

B. Negligent Training, Supervision and Retention

1. Negligent Retention?

As a preliminary issue, this court evaluates whether Plaintiffs’ theory of negligent retention is recognized as a separate tort under Colorado law. Neither side addresses negligent retention separately. Movants expressly discuss “retention” only with respect to Count IV, the selection-of-contractor claim. Motion at 14; Reply at 16. And Plaintiffs instead discuss retention and supervision together as a single legal theory. Response at 10 (“[a]n employer may be subject to liability for negligent supervision and retention if the employer knows or should have known that [*14]  an employee’s conduct would subject third parties to an unreasonable risk of harm,” emphasis omitted, quoting Van Osdol v. Vogt, 892 P.2d 402, 408 (Colo. App. 1994), affirmed and remanded, 908 P.2d 1122 (Colo. 1996)). As one judge in this District has put it:

It is not altogether clear that Colorado recognizes a distinct tort of negligent retention. In the few cases this Court located, Colorado courts have treated claims of negligent supervision and negligent retention as one and the same. See, e.g., Ferrer v. Okbamicael, . . . 390 P.3d 836[, 844 (Colo. 2017), superseded by statute on other grounds] (“An employer’s negligent act in hiring, supervision and retention, or entrustment . . .” (emphasis added)); Van Osdol . . ., 892 P.2d 402, 408 . . . (“An employer may be subject to liability for negligent supervision and retention if the employer knows or should have known that an employee’s conduct would subject third parties to an unreasonable risk of harm.” (emphasis added)).

Gilbert v. United States Olympic Comm., 423 F. Supp. 3d 1112, 1145-46 (D. Colo. 2019) (Arguello, J.) (emphasis in original). Judge Arguello noted that, in the recommendation she was adopting in that order, Magistrate Judge Hegarty had observed that “‘Colorado appears to treat the claims’ of negligent supervision and negligent retention ‘as the same.'” Id. at 1146. Ultimately, however, Gilbert dismissed both the negligent supervision and retention claims as barred by the statute of limitations [*15]  and did not decide whether the two are separate torts under Colorado law. In another recent case, another judge in this District treated negligent supervision and retention as a single tort at trial without discussion. See, e.g., Culp v. Remington of Montrose Golf Club, LLC, No. 18-cv-02213-RMR-KLM, 2023 WL 8810998, at *2 (D. Colo. Dec. 20, 2023) (discussing jury verdict), appeal pending.

A few years before Gilbert, Chief Judge Brimmer noted:

It appears that Colorado plaintiffs assert negligent supervision and negligent retention theories both as separate claims and as a single claim without much comment from courts. Compare Van Osdol, 892 P.2d at 408-09 (pled as separate claims), with Casey v. Christie Lodge Owners Ass’n, Inc., 923 P.2d 365, 367-68 (Colo. App. 1996) (considering whether plaintiff should be permitted to “add a claim for negligent supervision or negligent retention” (emphasis added)).

Alarid v. MacLean Power, LLC, 132 F. Supp. 3d 1299, 1309-10 (D. Colo. 2015). “[T]he two claims may arise from the same general duty of care, namely, ‘a duty to prevent an unreasonable risk of harm to third persons to whom the employer knows or should have known that the employee would cause harm.'” Id. at 1310 (quoting Keller, 111 P.3d at 448).⁴ See also Restatement (Second) of Torts (the “Restatement”) § 317 cmt. c (Am. L. Inst. 1965) (discussing negligent retention as one aspect of the overall Section 317 duty of a master “to exercise reasonable care so to control his servant”); Sandoval v. Archdiocese of Denver, 8 P.3d 598, 605 (Colo. 2000) (citing Section 317 comment c’s discussion of liability for retaining a servant in the context of negligent hiring and supervision [*16]  claim); Destefano v. Grabrian, 763 P.2d 275, 287-88 (Colo. 1988) (discussing same in context of negligent supervision claim).

In Alarid, the court did not decide whether Colorado recognizes negligent retention as a separate tort because the plaintiff pleaded different facts for negligent retention versus negligent supervision. The court held that, “regardless of how the claims are styled in the amended complaint, plaintiff has identified two distinct theories of liability and defendant has asserted no legitimate reason why plaintiff should not be able to argue both theories at trial.” Id. at 1310.

Consistent with the parties’ briefing, and with Ferrer and Van Osdol, this court addresses Plaintiffs’ claim for negligent retention together with their theory of negligent supervision.

2. Negligent Supervision, Retention, and Training

As noted above, “[a]n employer may be subject to liability for negligent supervision and retention if the employer knows or should have known that an employee’s conduct would subject third parties to an unreasonable risk of harm.” Van Osdol, 892 P.2d at 408. The Colorado Supreme Court has also framed the claim for negligent supervision as requiring the plaintiff to “prove that the defendant knew his employee posed a risk of harm [*17]  to the plaintiff and that the harm that occurred was a foreseeable manifestation of that risk.” Keller, 111 P.3d at 446. “To establish liability, the plaintiff must prove that the employer has a duty to prevent an unreasonable risk of harm to third persons to whom the employer knows or should have known that the employee would cause harm.” Id. at 448. “An employer who knows or should have known that an employee’s conduct would subject third parties to an unreasonable risk of harm may be directly liable to third parties for harm proximately caused by his conduct.” Id. (internal quotation marks omitted).

“[L]iability of the employer is predicated on the employer’s antecedent ability to recognize a potential employee’s ‘attribute[s] of character or prior conduct’ which would create an undue risk of harm to those with whom the employee came in contact in executing his employment responsibilities.” Id. (emphasis added; internal quotation marks omitted). In cases finding negligent supervision, “the duty imposed on the defendant was to take reasonable steps to prevent the foreseeable harm of a known risk.” Id. at 449. See also Raleigh, 130 P.3d at 1016 (“having hired [a person with dangerous propensities] . . . [the employer] must exercise that degree of control [*18]  over the employee necessary to avert that employee from injuring persons to whom the employer owed the duty of care”).

The standard for negligent training is essentially the same as for negligent supervision. See, e.g., Westin Operator, LLC v. Groh, 347 P.3d 606, 612 (Colo. 2015) (“A plaintiff must establish the same basic elements for a negligent hiring and training claim, which is based on the principle that a person or business conducting an activity through employees is subject to liability for harm that results from negligent conduct in employing those persons”); Martin v. Perman, No. 18-cv-00122-RM-SKC, 2019 WL 3976058, at *3 (D. Colo. April 12, 2019) (discussing same elements as to negligent hiring, supervision, and training).

In this case, Movants argue that Plaintiffs do not plausibly allege they knew or should have known before the accident of a need to supervise or train Mr. Myers (or Falcon Express) more than they did (or of a need to not retain him). Movants further argue that Plaintiffs also were required to allege how Mr. Myers (or Falcon Express) was not reasonably supervised or trained. Motion at 10.

However, the court finds that the well-pleaded facts permit the court reasonably to infer that Movants knew before the accident either (a) it was Mr. Myers’s usual practice to do cursory vehicle inspections on Moore Brothers’ [*19]  equipment, or (b) his pre-trip inspection of Moore Brothers’ trailer on the morning of the accident was cursory. As noted above, Plaintiffs allege in relevant part:

65. Defendants all had a duty under Section 390.3 and of the Federal Motor Carrier Safety Regulations to inspect vehicles and trailers, including brakes periodically and prior to daily operation.

66. Defendants Moore Bros., Inc. had a duty to systematically inspect, repair, and maintain, or cause to be systematically inspected, repaired, and maintained all motor vehicles within its control, including the tractor and trailer operated by Defendant Myers on the date of the crash.

67. Defendant Myers had a duty pursuant to Section 396.13 of the Federal Motor Carrier Safety Regulations to inspect the tractor and trailer prior to operating them on the date of the crash and ensure they were in safe operating condition.

68. The condition of the 2013 Great Dane flatbed trailer’s brakes, and their disrepair, were apparent to the naked eye and would have been observed upon even a cursory inspection.

69. Upon information and belief Defendant Myers failed to perform the necessary pre-and-post trip inspections of the tractor and trailer.

70. Defendant Myers would log these inspections in 2-5 minutes despite knowing [*20]  such inspections require, at minimum, 15-20 minutes to complete.

71. Upon information and belief Defendant Moore Brothers had specific knowledge of and authorized Myers[‘] behavior as the daily logs were transmitted to, reviewed, and kept by Defendant Moore Brothers.

72. Defendants all knowingly operated or allowed others to operate the 2013 Great Dane flatbed trailer in a condition where the brakes had deteriorated to an obvious and clear state of failure.

SAC ¶¶ 65-72 (emphasis added).⁵Plaintiffs do not allege in the SAC whether Moore Brothers had previously contracted with Falcon Express or Mr. Myers, or whether the trip of August 10, 2022, was these Defendants’ first dealing with each other. But Plaintiffs do specifically allege that Mr. Myers’ “would log these inspections” and that Moore Brothers “authorized Myers’ behavior” in this regard. Although Movants construe Plaintiffs’ related, prior allegations (in the First Amended Complaint) as limited to “the trip in which the subject accident occurred” (Motion at 2; Reply at 11), applying that argument to the SAC (particularly Paragraphs 69-71) would have the effect of construing the allegations against Plaintiffs. The court cannot do [*21]  so, but must draw all reasonable inferences in favor of Plaintiffs in ruling on a Rule 12(b)(6) motion. See, e.g., Swint v. Dish Network, No. 23-4098, 2023 WL 8074820, at *1 (10th Cir. Nov. 21, 2023) (“we accept all well-pleaded facts as true, view them in the light most favorable to the plaintiff, and draw all reasonable inferences in the plaintiff’s favor,” citing Brooks v. Mentor Worldwide LLC, 985 F.3d 1272, 1281 (10th Cir. 2021)).⁶

Either way, even if Paragraphs 69-71 are limited to the day of the accident, drawing all reasonable inferences in Plaintiff’s favor, Plaintiffs allege that Moore Brothers knew Mr. Myers conducted a cursory pre-trip inspection at least on the day of the accident.⁷ Plaintiffs further allege that Movants approved of that conduct notwithstanding the motor carrier regulations requiring detailed vehicle inspections every day before the vehicle was driven. Id. ¶¶ 63, 65, 66. Plaintiffs also allege several specific duties concerning those vehicle inspections, based on state and federal regulations–duties to “systematically inspect, repair, and maintain” their vehicles and trailers, including brakes, as to “all motor vehicles within [their] control,” and to inspect the tractor-trailer on the day of the accident “prior to operating them on [that] date.” SAC ¶¶ 63-65. In this context, the [*22]  factual allegations plausibly support the inference that Movants knew before the accident that they needed to supervise (or train) Mr. Myers with respect to his vehicle inspections, or that they knew or should have known that they should not retain him because of the deficient vehicle inspection(s).

Finally, this court takes note of Plaintiffs’ allegation that Mr. Myers’ failure to properly inspect the tractor-trailer on the day of the accident was one of the causes of that accident. They allege that the condition of the trailer’s brakes was visibly poor, to the point that Mr. Myers should not have driven the tractor-trailer that day without first having the brakes repaired. This court respectfully recommends finding that Plaintiffs’ allegations suffice to state a plausible claim of negligent supervision, retention, and training.

C. Negligent Entrustment

“[T]he doctrine of negligent entrustment is part of the law of negligence in [Colorado]. Section 308 of the Restatement [(Second) of Torts] provides guidance for our use in determining the applicability and scope of the doctrine.” Casebolt v. Cowan, 829 P.2d 352, 357 (Colo. 1992). Specifically:

It is negligence to permit a third person to use a thing or to engage in an activity which is under the control of the actor, if the actor [*23]  knows or should know that such person intends or is likely to use the thing or to conduct himself in the activity in such a manner as to create an unreasonable risk of harm to others.

Id. at 356 (quoting the Restatement § 308). In cases involving entrustment of vehicles, Colorado courts follow Section 390 of the Restatement, which is “a special application of the rule stated in section 308.” Id. at 357-58. Section 390 provides:

One who supplies directly or through a third person a chattel for the use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them.

Casebolt, 829 P.2d at 357. See also Beasley v. Best Car Buys, LTD, 363 P.3d 777, 780 (Colo. App. 2015) (applying this standard to claim that vehicle dealer should have known not to sell car to an unlicensed individual who caused an accident while driving it, injuring the plaintiff). “Only if the risk of harm resulting from the entrustment can be characterized as ‘unreasonable’ are the standards of sections 308 and 390 satisfied.” Casebolt, 829 P.2d at 359. As for the “unreasonableness” standard:

A supplier has “reason to know” that a person is likely to use the chattel in [*24]  a manner involving unreasonable risk of physical harm, and therefore a duty not to facilitate such use, when

the actor has information from which a person of reasonable intelligence or of the superior intelligence of the actor would infer that the fact in question exists, or that such person would govern his conduct upon the assumption that such fact exists.

Restatement [(2d of Torts)] § 12. The “reason to know” standard does not impose a duty upon the supplier to ascertain unknown facts.

Beasley, 363 P.3d at 780.

“The fundamental element . . . is that the entrustor must have ‘actual knowledge’ of the individual’s recklessness or incompetence or of facts from which such knowledge could reasonably be inferred.” Baker v. Bratrsovsky, 689 P.2d 722, 723 (Colo. App. 1984). As with the negligent supervision, retention and training claim, so too here Movants argue that Plaintiffs do not plausibly allege this element. Movants argue that Plaintiffs have alleged no facts plausibly showing that Movants knew or should have known at the time of entrustment that Mr. Myers was likely to drive the tractor-trailer in a manner presenting unreasonable risk to the driving public. ECF No. 28 at 12. But again, Movants do not address Plaintiffs’ well-pleaded allegation that Movants knew before the accident that Mr. Myers [*25]  was not properly inspecting his vehicles. Neither have Movants taken into account the context for those facts, namely that state and federal regulations impose specific duties concerning vehicle inspections. SAC ¶¶ 65-67; Iqbal, 556 U.S. at 679 (determining the plausibility of a claim is “a context-specific task”).

This court therefore recommends finding that these allegations suffice to state a claim of negligent entrustment.

II. Claim IV: Negligent Selection of Independent Contractor

As a preliminary issue, although Plaintiffs entitle this claim as applying to both Moore Brothers and Falcon Express, the allegations of duty and breach actually appear to be directed only to Moore Brothers. Specifically, Plaintiffs allege that Moore Brothers had “a duty to choose a competent employee and/or independent contractor.” Id. ¶ 189. Plaintiffs allege Moore Brothers breached that duty because it “failed to conduct proper investigation into Defendant Falcon Express and/or Defendant Myers[‘] fitness and ability to operate safely[,] thereby selecting an incompetent employee and/or independent contractor.” Id. ¶ 190. And Moore Brothers also “had a duty to use reasonable care in ensuring that Defendant Falcon Express would [*26]  select and/or employ drivers and other technicians, including Defendant Myers, that would not provide services in a manner which would involve an unreasonable risk of physical harm to others.” Id. ¶ 192. “Moore Brothers, Inc. is liable to Plaintiffs as a result of Defendant Falcon Express and/or Defendant Myers[‘] negligence because it was negligent in selecting a careless or incompetent company with whom to contract.” Id. ¶ 195. The claim thus appears to focus on Moore Brothers as directly liable for negligently selecting Falcon Express and indirectly liable for Falcon Express’s negligent selection of Mr. Myers as its independent contractor. Id. ¶¶ 196-98.

However, both sides’ briefing considers Claim IV as directed to both Moore Brothers and Falcon Express, see Motion at 12; Response at 8; Reply at 12-13—that is, both sides assume that Claim IV seeks to impose direct liability on Moore Brothers (for retaining Falcon Express and Mr. Myers) and on Falcon Express (for retaining Mr. Myers). This court will do likewise. Moreover, both sides treat the claim for negligent selection of contractors as analogous to the negligent hiring claim. Motion at 13 (arguing “Colorado Courts have treated [*27]  these claims as analogous to negligent hiring claims,” citing Western Stock Center, Inc. v. Sevit, Inc., 578 P.2d 1045, 1048 n.1 (1978)); Response at 7-8. In fact, Plaintiffs brief these legal theories together in a single section. Id.

As Plaintiffs correctly argue, “negligent selection of an independent contractor requires an employer to ‘use reasonable care to choose a contractor who is properly qualified to perform the work’ and ‘[i]mplicit in this duty is the requirement that sufficient inquiries must be made concerning the contractor’s ability to do the work in a competent and careful manner.'” Response at 8 (quoting Western Stock Center, 578 P.2d at 1048); see also Western Stock Center, 578 P.2d at 1048 (recognizing that, “if the activity is potentially dangerous the employer also has a duty to explore the contractor’s fitness and ability to operate safely,” and that “the employer must choose ‘a contractor who possesses the knowledge, skill, experience, and available equipment which a reasonable man would realize that a contractor must have in order to do the work which he is employed to do without creating unreasonable risk of injury to others.”) (cleaned up, quoting the Restatement § 411 cmt. a).

Just as this court has concluded that the negligent hiring claim fails for lack of factual allegations plausibly demonstrating that Movants knew or should [*28]  have known at the time they hired Mr. Myers that he was likely not a safe driver, so too the negligent selection claim should be dismissed. Plaintiffs allege no facts allowing this court to plausibly infer that Moore Brothers knew or should have known at the time of contracting that either Falcon Express or Mr. Myers were likely not able to do the work in a competent and careful manner. Nor do Plaintiffs’ allegations plausibly show that Falcon Express knew or should have known of such facts when it contracted with Mr. Myers. Accordingly, this court recommends dismissing Claim IV.

CONCLUSION

For the reasons set forth above, this court respectfully RECOMMENDS that the Motion (ECF No. 28) be granted in part and denied in part, consistent with the foregoing analysis. Claim III should be dismissed only as to negligent hiring, and Claim IV should be dismissed entirely.⁸ The court further RECOMMENDS that these claims be dismissed with prejudice.⁹

DATED: March 1, 2024

BY THE COURT:

/s/ Susan Prose

Susan Prose

United States Magistrate Judge

End of Document

---

¹ The court is treating the motion to dismiss as directed to the later-filed SAC.  [*2] See ECF No. 70 (Recommendation) at 18; ECF No. 74 at 2 n.1.

² Defendants note that Mr. Myers has admitted he “was an employee of Falcon Express, not an employee of Moore Brothers.” Reply at 4 n.1. However, since the Motion is one to dismiss under Rule 12(b)(6), this court does not consider that admission. The court addresses the claims as pleaded in the SAC.

³ Movants also argue that Plaintiffs must allege that further investigation would have found a red flag concerning Mr. Myers. This court does not reach that issue.

⁴ Some cases reflect, without comment from the court, negligent retention and hiring brought as a single claim. See, e.g., Doe v. Wellbridge Club Mgmt.. LLC, 525 P.3d 682, 684 (Colo. App. 2022); McKeon v. Bank of Am., No. 21-cv-03264-RM-KLM, 2023 WL 4136660, at *1 (D. Colo. June 22, 2023). However, neither side argues for that treatment here, and in any case, it does not appear that Colorado law has developed a separate legal standard for negligent retention versus hiring and supervision. See, e.g., Sandoval, 8 P.3d at 605; see also Ferrer, 390 P.3d at 844 (treating claims of negligent supervision and negligent retention as the same).

⁵ Paragraphs 69-71 are new to the SAC. Compare, ECF No. 22 (First Amended Complaint) ¶¶ 31-36 with ECF No. 52-2 (redline version of SAC) at 12-13. However, Plaintiffs did not mention this proposed change in their motion to amend (ECF No. 52) or reply (ECF No. 60 at 12, citing ¶¶ 69-73 but not noting these paragraphs as new). This court held that Movants “need not file a new motion to dismiss,” but that they could “seek leave to file an amended motion.” ECF No. 70 at 18. Movants did not do so. Nevertheless, as the prior briefing did not bring the addition of Paragraphs 69-71 to the court’s attention, this court respectfully recommends that if Movants object to this recommendation, they should be allowed to present arguments to the district judge concerning Paragraphs 69-71, despite not addressing those allegations with this court.

⁶ This court recognizes that, while Plaintiffs expressly allege the Nucor Defendants had a regular relationship with Moore Brothers (SAC ¶¶ 40, 232, 235), they do not allege that the Nucor Defendants had such a relationship with Falcon Express or Mr. Myers. But again, at the Rule 12 phase, the court cannot construe the SAC against Plaintiffs. The court also takes judicial notice of Plaintiffs’ motion to amend, asserting an existing relationship between Moore Brothers and Mr. Myers. ECF No. 52 at 10; ECF No. 52-6, Moore Bros. Employee’s Log Report for Mr. Myers. Movants did not dispute that assertion. ECF No. 55. The court, of course, simply notes that this is Plaintiffs’ assertion and does not resolve any factual issues concerning the alleged relationship.

⁷ This court also reasonably infers from the well-pleaded facts that Mr. Myers transmitted his pre-trip inspection log to Moore Brothers before he left that day at 5:00 a.m. SAC ¶ 85. The accident occurred at approximately 10:58 a.m. Id. ¶ 88.

⁸ Rule 72 of the Federal Rules of Civil Procedure provides that within fourteen (14) days after service of a Magistrate Judge’s order or recommendation, any party may serve and file written objections with the Clerk of the United States District Court for the District of Colorado. 28 U.S.C. §§ 636(b)(1)(A), (B); Fed. R. Civ. P. 72(a), (b). Failure to make any such objection will result in a waiver of the right to appeal the Magistrate Judge’s order or recommendation. See Sinclair Wyo. Ref. Co. v. A & B Builders, Ltd., 989 F.3d 747, 782 (10th Cir. 2021) (firm waiver rule applies to non-dispositive orders); but see Morales-Fernandez v. INS, 418 F.3d 1116, 1119, 1122 (10th Cir. 2005) (firm waiver rule does not apply when the interests of justice require review, including when a “pro se litigant has not been informed of the time period for objecting and the consequences of failing to object”).

⁹ “A dismissal under Rule 12(b)(6) is a determination on the merits, and presumptively is entered with prejudice.” Preece v. Cook, No. 13-cv-03265-REB—KLM, 2014 WL 6440406, at *1 (D. Colo. Nov. 17, 2014) (citing Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 399 n.3 (1981); Lomax v. Ortiz-Marquez, 754 F. App’x 756, 759 (10th Cir. 2018), aff’d, 140 S. Ct. 1721 (2020) (“Unless otherwise stated, dismissals under Rule 12(b)(6) are with prejudice.”). The Court notes that Plaintiffs, who are represented by counsel, have amended their claims twice.

United States District Court, E.D. Texas, Sherman Division.

Shannon TORRES, et al.

v.

Anthony MINNAAR, et al.

CIVIL NO. 4:23-CV-486-SDJ

Attorneys and Law Firms

Channy Farris Wood, Wood Law Firm, LLP, Amarillo, TX, Nicholas D. Mosser, James C. Mosser, Mosser Law PLLC, Plano, TX, for Shannon Torres, et al.

Jason Andrew Powers, Lewis Brisbois Bisgaard & Smith LLP, Houston, TX, for Anthony Minnaar, RD Trans, LLC.

Eric S. Rich, Richard Layne Rouse, Shafer Davis O’Leary & Stoker, Odessa, TX, for ARL Logistics, LLC.

Thomas Dale Farris, Pro Hac Vice, Farris Parker & Hubbard, P.C., Amarillo, TX, for Tili Logistics Corporation.

Zach T. Mayer, Van Trey Parham, III, Nader Arbabi, Mayer LLP, Dallas, TX, for J.B. Hunt Transport, Inc.

MEMORANDUM OPINION AND ORDER

SEAN D. JORDAN, UNITED STATES DISTRICT JUDGE

*1 In the late hours of October 4, 2022, Brandon Torres, a 19-year-old volunteer firefighter serving in the Texas Panhandle Volunteer Fire Department, was returning to his station with his fire chief, Curtis Brown. Anthony Minaar was traveling in the opposite direction on Texas Highway 54, driving a semi-tractor and towing a trailer. Minaar entered the oncoming lane of travel to pass an unknown tractor-trailer and collided head-on with Brown’s vehicle, killing Torres and Brown.

Torres’s parents, Shannon Torres and Jesse Torres, filed suit in Texas state court against Minaar, as well as RD Trans, ARL Logistics, LLC (“ARL”), TILI Logistics Corporation, and JB Hunt Transport, Inc. The Torres’s allege that Minaar was the employee of all Defendants and assert several state-law causes of action premised on negligence, including claims of negligence per se, negligent entrustment, negligent hiring, and gross negligence. The Torres’s assert no federal claims.

Defendant ARL filed a notice of removal, maintaining that this Court has federal question jurisdiction under 28 U.S.C. § 1331. The Torres’s challenge the propriety of removal and seek remand, contending that federal question jurisdiction is absent because there is no federal claim raised in their complaint and no other legitimate ground asserted for jurisdiction under 28 U.S.C. § 1331.

ARL resists remand, maintaining that this Court has federal question jurisdiction because the state-law negligence claims against ARL are completely preempted by the Federal Aviation Administration Authorization Act (“FAAAA”). Alternatively, ARL suggests that Plaintiffs’ negligence claims raise a significant federal issue that creates federal jurisdiction under the Grable doctrine. In Grable, the Supreme Court recognized that “in certain cases federal-question jurisdiction will lie over state-law claims that implicate significant federal issues.” Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 312, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005).

Neither of ARL’s arguments survives scrutiny. ARL’s complete preemption argument fails because, although the FAAAA may afford a preemption defense to ARL, it does not meet the prerequisites for complete preemption and therefore cannot create federal question jurisdiction. ARL’s Grable argument is equally unavailing. The doctrine applies only to a “special and small” category of cases, “typically a state-law claim premised on some component of federal law.” Mitchell v. Advanced HCS, L.L.C., 28 F.4th 580, 588 (5th Cir. 2022) (internal quotation marks and citation omitted). When, as here, the alleged “federal issue” is raised as a defense, it does not appear on the face of the Plaintiffs’ complaint and Grable does not apply.

Because there is no basis for federal question jurisdiction, this case was improperly removed and will be remanded.

I.

“Federal courts are courts of limited jurisdiction, possessing only that power authorized by Constitution and statute.” Gunn v. Minton, 568 U.S. 251, 256, 133 S.Ct. 1059, 185 L.Ed.2d 72 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994)). Thus, when a plaintiff sues in state court, a defendant can remove the suit to federal court under 28 U.S.C. § 1441(a) only if the plaintiff could have filed the suit in federal court under a jurisdiction-granting statute. See, e.g., Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (citing 28 U.S.C. § 1441(a)).

*2 One such jurisdiction-granting statute is 28 U.S.C. § 1331, which gives federal courts subject-matter jurisdiction over all claims “arising under” federal law. To determine whether a claim arises under federal law, courts apply the well-pleaded complaint rule, which provides that federal question jurisdiction exists “only when a federal question is presented on the face of the plaintiff’s properly pleaded complaint.” Caterpillar, 482 U.S. at 392 (citing Gully v. First Nat’l Bank, 299 U.S. 109, 112–13, 57 S.Ct. 96, 81 L.Ed. 70 (1936)). In cases removed from state court, “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction”—for example, if it becomes apparent that no federal question is presented on the face of the plaintiff’s complaint—the federal court must remand the case to state court. 28 U.S.C. § 1447(c).

Generally, under the well-pleaded complaint rule, a case does not arise under federal law, and thus is not removable, if the complaint does not affirmatively allege a federal claim and instead asserts only state-law causes of action. See Kramer v. Smith Barney, 80 F.3d 1080, 1082 (5th Cir. 1996) (citing Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)). As the Fifth Circuit has explained, “[t]he well-pleaded complaint rule precludes a plaintiff from predicating federal jurisdiction on an anticipated federal defense to his claim.” La. Indep. Pharm. Ass’n v. Express Scripts, Inc., 41 F.4th 473, 478 (5th Cir. 2022). Even when a plaintiff brings state-law claims that implicate federal law, “those claims cannot alone sustain federal jurisdiction.” Manyweather v. Woodlawn Manor, Inc., 40 F.4th 237, 242 (5th Cir. 2022). Likewise, a defendant cannot remove an action to federal court “unless the plaintiff pleaded a federal question on the face of his complaint.” Id.; see also Stump v. Potts, 322 F. App’x 379, 380 (5th Cir. 2009) (“It is not sufficient for the federal question to be raised in the answer or in the petition for removal.”).

II.

A.

Federal preemption “is ordinarily a federal defense to the plaintiff’s suit” and, as a result, does not support federal question jurisdiction. Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S. Ct. 1542, 1546, 95 L.Ed.2d 55 (1987); see also Caterpillar, 482 U.S. at 393 (explaining that it is “settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption”). Complete preemption is an exception to the well-pleaded complaint rule. It creates federal jurisdiction if Congress, by statute, “completely pre-empt[s] a particular area [such] that any civil complaint raising [the] select group of claims is necessarily federal in character.” Metro. Life Ins., 481 U.S. at 63–64. That happens when a federal law creates an “exclusive cause of action” and “set[s] forth procedures and remedies governing that cause of action,” such that it “wholly displaces the state-law cause of action.” Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 8, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003).

The scope of complete preemption is “narrow.” Manyweather, 40 F.4th at 243. It applies only when three conditions are met. First, federal law “creates a cause of action that both replaces and protects the analogous area of state law.” Mitchell, 28 F.4th at 585 (citation omitted). Second, Congress has empowered federal courts to hear that cause of action. Id. And third, Congress clearly intended that grant of jurisdiction to be exclusive. Id. Once those conditions are met, the party invoking federal jurisdiction must show that the plaintiff “could have brought his state-law claims under th[at] federal cause of action.” Id. (citation omitted); see also Manyweather, 40 F.4th at 243 (same).

*3 Here, ARL’s primary basis for federal question jurisdiction rests on its contention that the FAAAA completely preempts the Torres’s state-law negligence claims. But in all of its remand briefing, ARL fails to even reference the three, above-described conditions that must be met, under controlling Fifth Circuit precedent, in order to apply the complete preemption doctrine. See, e.g., Mitchell, 28 F.4th at 585; Manyweather, 40 F.4th at 243. ARL’s failure to acknowledge the conditions for application of complete preemption, much less demonstrate how the FAAAA meets those conditions as to the state-law negligence claims in this case, dooms its removal argument at the outset. “The removing party bears the burden of showing that federal jurisdiction exists and that removal was proper.” Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002) (collecting cases). Because ARL has not carried this burden, it has failed to demonstrate that removal was proper. For this reason alone, remand is warranted.

B.

Even if it had attempted to do so, ARL could not have demonstrated that the complete preemption doctrine applies in this case. Both the text of the FAAAA and its history confirm that the Act does not create any cause of action whatsoever, much less a civil enforcement remedy that replaces the Texas common law of negligence applicable here.

1.

The Court’s textual analysis of the FAAAA is informed by Supreme Court precedent on complete preemption. To begin, complete preemption is vanishingly rare. The Supreme Court has applied the doctrine to confer jurisdiction in only three instances. First, in Avco Corp. v. Machinists, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968), the Court held that Section 301 of the Labor Management Relations Act (“LMRA”) not only preempted state law, but also authorized removal of actions that sought relief under state law. Id. at 559–62. Section 301 of the LMRA, codified at 29 U.S.C. § 185, provides federal courts with jurisdiction to adjudicate certain “[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce.” As described by the Supreme Court, “[t]he necessary ground of decision [in Avco] was that the pre-emptive force of § 301 is so powerful as to displace entirely any state cause of action for violation of contracts between an employer and a labor organization.” Franchise Tax Bd., 463 U.S. at 23 (internal quotation marks omitted). The Court went on to explain that “Avco stands for the proposition that if a federal cause of action completely pre-empts a state cause of action any complaint that comes within the scope of the federal cause of action necessarily ‘arises under’ federal law.” Id. at 23–24.

Second, in Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987), the Court determined that the complete preemption doctrine applied to state common-law causes of action asserting improper processing of benefit claims under a plan regulated by the Employment Retirement Income Security Act of 1974 (“ERISA”). The Court focused on Section 502(a)(1)(B) of ERISA, which provides that a civil action may be brought by an ERISA plan participant or beneficiary “to recover benefits due” under the terms of the plan, to enforce rights under the terms of the plan, or to clarify rights and future benefits under the plan. See Metro. Life Ins., 481 U.S. at 64–66; see also 29 U.S.C. § 1132(a)(1)(B). As explained by the Court in Beneficial, there were two reasons for its decision in Metropolitan Life that complete preemption applied: (1) ERISA’s statutory text not only provided an express federal remedy for the plaintiffs’ claims, but also used jurisdictional language similar to the LMRA’s statutory language at issue in Avco, “thereby indicating that the two statutes should be construed in the same way”; and (2) ERISA’s legislative history “unambiguously” revealed an intent to treat claim processing actions subject to ERISA “as arising under the laws of the United States in similar fashion to those brought under [Section 301 of the LMRA].” Beneficial, 539 U.S. at 8 (quoting Metro. Life Ins., 481 U.S. at 65–66).

*4 Finally, in Beneficial, the Court considered whether the National Bank Act completely preempted claims asserted in state court against a national bank for allegedly charging excessive interest in violation of “the common law usury doctrine” and an Alabama statute. 539 U.S. at 3–4. The Court noted that Section 85 of the National Bank Act provides “substantive limits on the rates of interest that national banks may charge,” and Section 86 of the Act “sets forth the elements of a usury claim, provides for a 2-year statute of limitations for such a claim, and prescribes the remedies available to borrowers who are charged higher rates and the procedures governing such a claim.” Id. at 9. The Court went on to conclude that, “[i]n actions against national banks for usury,” Sections 85 and 86 of the Act “supersede both the substantive and the remedial provisions of state usury laws and create a federal remedy for overcharges that is exclusive,” even when a plaintiff relies entirely on state law. Id. at 11.

In sum, every time the Supreme Court has applied the complete preemption doctrine, it has pointed to the text of a federal statute that (1) creates a cause of action that supersedes analogous state law, (2) authorizes federal courts to hear that cause of action, and (3) that the federal statute’s grant of jurisdiction was clearly intended to be exclusive. As the Fifth Circuit has recognized, these are the prerequisites for application of the complete preemption doctrine under controlling Supreme Court precedent. See, e.g., Mitchell, 28 F.4th at 585; Manyweather, 40 F.4th at 243.

2.

Contrary to ARL’s contention, on its face the FAAAA fails to meet the prerequisites for complete preemption. ARL’s removal of this case is premised on two preemption provisions found in the FAAAA. Specifically, ARL has invoked 49 U.S.C. § 14501(c)(1), which provides that no state may “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 … or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). ARL also has invoked 49 U.S.C. § 14501(b)(1), which provides that no state may “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). Taken together, these FAAAA preemption provisions limit state authority to regulate prices, routes, and services of motor carriers, freight forwarders, and brokers.¹

But state law claims that are merely subject to ordinary preemption are not recharacterized as claims arising under federal law. See Rice v. Panchal, 65 F.3d 637, 640 (7th Cir. 1995) (applying this principle in the context of conflict preemption). As the Fifth Circuit has explained, courts and litigants must avoid confusing complete preemption with ordinary or defensive preemption. “Complete preemption gives federal courts the power to adjudicate a case in the first place … while defensive preemption is an affirmative defense that a defendant can invoke to defeat a plaintiff’s state-law claim on the merits by asserting the supremacy of federal law.” Mitchell, 28 F.4th at 585 n.2 (internal quotation marks and citations omitted).²

*5 And neither Section 14501(c)(1) nor Section 14501(b)(1), or for that matter any other provision of the FAAAA, creates any cause of action or federal question jurisdiction. See generally 49 U.S.C. § 14501. Unlike the statutory provisions of LMRA, ERISA, and the National Bank Act considered by the Supreme Court in Avco, Metropolitan Life, and Beneficial, the FAAAA includes no federal remedy or civil enforcement scheme, much less a scheme authorizing a cause of action that may be heard by federal courts. Because the FAAAA, including the preemption provisions cited by ARL, contains “no detailed, comprehensive civil enforcement scheme providing exclusive federal remedies,” Raaf v. UPS Ground Freight, Inc., No. 6:18-CV-00976-MC, 2018 WL 4609935, at *3 (D. Or. Sept. 25, 2018) (internal quotation marks and citation omitted), the statute “does not evidence Congressional intent to transfer jurisdiction over all preemption claims arising thereunder from state to federal courts,” City of Rockford v. Raymond, No. 98 C 50353, 1999 WL 218549, at *2 (N.D. Ill. Apr. 14, 1999).

3.

As explained above, see supra Part II.B.2, the complete preemption doctrine is inapplicable here because the FAAAA’s text does not create any cause of action that “both replaces and protects the analogous area of state law,” Mitchell, 28 F.4th at 585, namely the negligence claims at issue here involving personal injuries resulting from a motor vehicle accident. The history of the FAAAA confirms this result.

The FAAAA was enacted in 1994 as part of “a greater push to deregulate interstate transportation industries.” Ye v. GlobalTranz Enterprises, Inc., 74 F.4th 453, 457 (7th Cir. 2023). It was preceded by the Airline Deregulation Act of 1978 (“ADA”), Pub. L. No. 95-504, 92 Stat. 1705, which largely deregulated the domestic airline industry, and by the Motor Carrier Act of 1980, Pub. L. No. 96-296, 94 Stat. 793, which extended deregulation to the trucking industry. In the FAAAA, “Congress completed the deregulation … by expressly preempting state trucking regulation.” Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 256, 133 S.Ct. 1769, 185 L.Ed.2d 909 (2013).

Given its history as a statute extending the ADA’s and the Motor Carrier Act’s deregulation of transportation industries, it is unsurprising that the FAAAA contains preemptive language nearly identical to that in the ADA: “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 … with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1); see id. § 41713(b)(4)(A) (same with respect to “air carrier or carrier affiliated with a direct air carrier through common controlling ownership when such carrier is transporting property by aircraft or by motor vehicle”). Because FAAAA Section 14501(c)(1) tracks the ADA, courts analyze the two provisions similarly. See Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364, 370, 128 S.Ct. 989, 169 L.Ed.2d 933 (2008).³

Although the Fifth Circuit has not yet addressed whether the FAAAA completely preempts state law, it has addressed and rejected this argument in regard to the ADA’s preemption provision, which FAAAA Section 14501(c)(1) mirrors. Specifically, the Fifth Circuit has held that the ADA’s preemption clause does not provide federal question jurisdiction under the complete preemption doctrine. See Sam L. Majors Jewelers v. ABX, Inc., 117 F.3d 922, 925–26 (5th Cir. 1997) (explaining that the ADA’s text and legislative history show “no evidence that Congress intended the federal courts to have exclusive subject matter jurisdiction over the [ADA’s] preemption defenses”) (quoting Musson Theatrical, Inc. v. Federal Express Corp., 89 F.3d 1244, 1253 (6th Cir. 1996), amended on denial of rehearing, No. 95–5120, 1998 WL 117980 (Jan. 15, 1998)); see also Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 232, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995) (observing that, unlike ERISA, the ADA “contains no hint” that it is intended to channel civil actions into federal courts). For the same reason, the FAAAA, which uses the same language as the ADA, does not completely preempt state law claims. See Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71, 85, 126 S.Ct. 1503, 164 L.Ed.2d 179 (2006) (“[W]hen judicial interpretations have settled the meaning of an existing statutory provision, repetition of the same language in a new statute indicates, as a general matter, the intent to incorporate its judicial interpretations as well.”) (internal quotation marks and alteration omitted).

* * * *

*6 Complete preemption occurs only when a federal statute has “extraordinary preemptive power.” Griffioen v. Cedar Rapids and Iowa City Ry. Co., 785 F.3d 1182, 1189 (8th Cir. 2015) (citation omitted). “The ultimate touchstone guiding preemption analysis is congressional intent.” Id. (citation and internal quote omitted). The text and history of the FAAAA, as well as controlling Supreme Court and Fifth Circuit precedent, confirm that the Act does not support application of the complete preemption doctrine, particularly as to the state-law negligence claims at issue in this lawsuit.

C.

ARL has also argued in the alternative that this case raises a significant federal issue that creates federal jurisdiction under the Grable doctrine. This argument also fails.

Grable stands for the proposition that, “in certain cases federal-question jurisdiction will lie over state-law claims that implicate significant federal issues.” 545 U.S. at 312. Grable applies if: “(1) resolving a federal issue is necessary to resolution of the state-law claim; (2) the federal issue is actually disputed; (3) the federal issue is substantial; and (4) federal jurisdiction will not disturb the balance of federal and state judicial responsibilities.” The Lamar Co., L.L.C. v. Miss. Transp. Comm’n, 976 F.3d 524, 529 (5th Cir. 2020) (internal quotation marks and citations omitted). As the Fifth Circuit has observed, “[t]hese conditions are difficult to meet.” Mitchell, 28 F.4th at 588.

The Fifth Circuit has also explained that Grable is applied “in the shadow of the well-pleaded complaint rule.” Id. (citation omitted). Accordingly, courts look to the face of a plaintiff’s well-pleaded complaint to determine whether the issues it raises implicate Grable. Id. Only a “special and small” category of cases can satisfy these requirements. Id. (internal quotation marks and citations omitted). “The type of claim that creates a federal question under Grable is typically a state-law claim premised on some component of federal law.” Id. Thus, for example, a state-law negligence claim creates a federal question when it is premised on the existence of a duty established by federal law. Id.

ARL’s invocation of the FAAAA’s preemption provisions fails to implicate Grable because the relevance of these provisions is purely defensive. When a federal issue is raised “[a]s a defense, it does not appear on the face of a well-pleaded complaint.” Metro. Life Ins., 481 U.S. at 63(citation omitted). Given that the federal issues asserted by ARL under the FAAAA are neither raised nor disputed on the face of the Torres’s personal-injury complaint, Grable does not apply.⁴

D.

When a case is remanded, the court may order the removing party to pay “just costs and any actual expenses, including attorney’s fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c). The Supreme Court has clarified that, absent unusual circumstances, courts may award attorney’s fees under Section 1447(c) “only where the removing party lacked an objectively reasonable basis for seeking removal.” Martin v. Franklin Cap. Corp., 546 U.S. 132, 141, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005). This inquiry should take into consideration “the desire to deter removals sought for the purpose of prolonging litigation and imposing costs on the opposing party, while not undermining Congress’ basic decision to afford defendants a right to remove as a general matter, when the statutory criteria are satisfied.” Id. at 140.

*7 While unsuccessful, ARL had an objectively reasonable basis for seeking removal—that the FAAAA potentially preempts the Torres’s state-law claims. Therefore, the Court will not award costs or expenses to Plaintiffs.

III. Conclusion

For the foregoing reasons it is ORDERED that Plaintiffs’ Motion to Remand, (Dkt. #15), is GRANTED and this action is hereby REMANDED to the 296th Judicial District Court of Collin County, Texas.

So ORDERED and SIGNED this 26th day of February, 2024.

All Citations

Footnotes

1. The FAAAA (Federal Aviation Administration Authorization Act of 1994, Pub. L. No. 103-305, 108 Stat. 1606), was amended by the ICCTA (Interstate Commerce Commission Termination Act of 1995, Pub. L. 104-88, 109 Stat. 899). Although Section 14501(c)(1) was enacted as part of the FAAAA and Section 14501(b)(1) as part of the ICCTA, the Court references the provisions collectively as contained in the FAAAA.  
2. The Court notes that ARL primarily relies on two cases in its briefing, both of which are inapposite because they address defensive preemption, not the complete preemption doctrine: Ye v. GlobalTranz Enterprises, Inc., 74 F.4th 453 (7th Cir. 2023); and Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023).  
3. FAAAA Section 14501(b)(1) also tracks the language of the ADA. Accordingly, there is no reason treat it differently than Section 14501(c)(1) in this analysis.  
4. Defendant ARL contends that 28 U.S.C. § 1337, which gives federal courts original jurisdiction over “any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies,” also supports removal. However, this argument fails for the same reasons discussed above.  

End of Document

© 2024 Thomson Reuters. No claim to original U.S. Government Works.