United States District Court, N.D. Indiana, Hammond Division.

EMILY NILLES, as Special Administratrix of the Estate of Steve D. Nilles, deceased, Plaintiff,

v.

DS1 LOGISTICS, INC., THOMAS E. WEBB, STARLINE SOLUTIONS, INC., and C.H. ROBINSON WORLDWIDE, INC., Defendants.

CAUSE NO.: 2:22-CV-54-TLS-JPK

|

12/18/2023

JUDGE THERESA L. SPRINGMANN, UNITED STATES DISTRICT COURT

OPINION AND ORDER

*1 This matter arises out of a motor vehicle collision between Thomas E. Webb, who was operating a semi-tractor–trailer for DS1 Logistics, Inc. (DS1), and Steven D. Nilles, who was driving a motorcycle. Amazon Fulfillment Services, Inc. (Amazon) contracted with C.H. Robinson Worldwide, Inc. (CHRW) for transportation services, and CHRW subsequently brokered the freight shipment at issue to DS1. Webb was operating the semi-tractor–trailer for DS1 pursuant to the contract between CHRW and DS1 at the time of the collision that resulted in Nilles’ death. The Plaintiff alleges that CHRW is responsible for the Plaintiff’s damages by virtue of CHRW’s contract with Amazon, which the Plaintiff alleges makes CHRW vicariously liable for Webb’s negligence. Now before the Court is CHRW’s Motion to Dismiss Plaintiff’s Third Amended Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) [ECF No. 71], which is fully briefed. For the reasons below, the Court GRANTS the motion.

LEGAL STANDARD

“A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the viability of a complaint by arguing that it fails to state a claim upon which relief may be granted.” Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014) (citing Fed. R. Civ. P. 12(b)(6); Gen. Elec. Cap. Corp. v. Lease Resol. Corp., 128 F.3d 1074, 1080 (7th Cir. 1997)). When reviewing a complaint attacked by a Rule 12(b)(6) motion, a court construes the complaint in the light most favorable to the non-moving party, accepts the factual allegations as true, and draws all inferences in the non-moving party’s favor. Bell v. City of Chicago, 835 F.3d 736, 738 (7th Cir. 2016). “Factual allegations must be enough to raise a right to relief above the speculative level…on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). In reviewing a motion to dismiss, a court considers “the complaint itself” as well as “documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice.” Phillips v. Prudential Ins. Co. of Am., 714 F.3d 1017, 1019–20 (7th Cir. 2013) (quoting Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012)). Here, the Court considers the contract between CHRW and DS1, which CHRW attached to its motion to dismiss, as well as the contract between Amazon and CHRW, which the Plaintiff attached to her response brief. Both contracts are critical to and referred to in the Third Amended Complaint.

PROCEDURAL AND FACTUAL BACKGROUND

The Plaintiff filed her Complaint [ECF No. 4] in the Lake County, Indiana, Superior Court on January 31, 2022, against DS1 and Thomas E. Webb, and the case was removed to this Court on March 8, 2022. ECF No. 1. The Plaintiff filed an Amended Complaint [ECF No. 27] on January 11, 2023, adding Starline Logistics, Inc. and Starline Logistics, LLC as defendants; a Second Amended Complaint [ECF No. 36] on February 6, 2023, dropping the new defendants but adding Starline Solutions, Inc. as a defendant; and a Third Amended Complaint [ECF No. 59] on June 8, 2023, adding CHRW as a defendant. The following facts relevant to the Plaintiff’s claim against CHRW are taken from the Third Amended Complaint, the contract between Amazon and CHRW, and the contract between CHRW and DS1.

*2 At all relevant times, DS1 was an interstate motor carrier, and Webb was a truck driver operating DS1’s semi-tractor–trailer under DS1’s authority and logo. ECF No. 59, Ct. I, ¶¶ 1, 3, 4. CHRW agreed to provide transportation services to Amazon, and DS1 agreed to perform transportation and delivery services for CHRW. Id. Ct. II, ¶¶ 4, 6. On September 17, 2021, Webb was operating DS1’s semi-tractor–trailer to transport a shipment pursuant to the agreements when he turned left into Nilles, who was traveling by motorcycle, causing the accident that resulted in Nilles’ death. Id. Ct. I, ¶¶ 4, 6, 10, 13–15, Ct. II, ¶¶ 4–6.

The written agreement between Amazon and CHRW (the Amazon contract) provides that CHRW would arrange for transportation and delivery “Services” to be provided to Amazon. ECF No. 74-1, at 1. “Services” are defined to include “receiving, loading, storing, transporting, unloading and related transportation services.” Id. at 11. Section 4, titled “Representations and Warranties,” provides:

[CHRW] represents and warrants that it and its affiliates will, and that it shall contractually require subcontractors engaged by it to:

(a) perform the Services in a professional, competent and workmanlike manner in accordance with the level of professional care customarily observed by companies rendering similar services on a nationwide basis for Fortune 500 companies;

(b) meet, at a minimum, the Performance Standards;

(c) not violate or infringe any third party’s right in proprietary or confidential information in performing the Services;

(d) comply with all international and United States federal, state and local laws, rules, regulations and orders pertaining to the Services;

(e) hold, and fully comply with, all licenses, permits and approvals required by international and United States federal, state and local authorities to perform the Services;

(f) not be subject to any restriction, penalty, agreement, commitment, law, rule, regulation or order which is violated by its execution and delivery of this Agreement and performance of its obligations under this Agreement;

(g) will promptly notify Amazon of any accident, incident, or event which impairs the safety of, delays delivery of shipments, and also agrees to use reasonable care and due diligence in the protection of the goods or shipments; and

(h) have sufficient equipment (following reasonable advance notice), personnel and resources available to handle all Amazon capacity requirements.

Id. at 3–4 (emphasis added).

Section 10 of the Amazon contract is titled “Personnel; Independent Contractors.” Id. at 7. Section 10.1, titled “Project Assignments,” provides in relevant part:

All personnel furnished by [CHRW] to provide Services are either employees of [CHRW] or independent subcontractors of [CHRW] and are not employees, agents or subconsultants of Amazon….[CHRW] shall engage subcontracted carriers that will have exclusive control over is personnel, its labor and employee relations and its policies relating to wages, hours, working conditions and other employment conditions. [CHRW] will engage subcontracted carriers that will have the exclusive right to hire, transfer, suspend, lay off, recall, promote, discipline, discharge and adjust grievances with its personnel.

Id. at 7 (emphasis added). Section 10.2, titled “Subcontractors,” provides:

Notwithstanding the existence or terms of any subcontract, [CHRW] will remain responsible for the full performance of the Services. The terms and conditions of this Agreement are binding upon [CHRW’s] employees, and affiliates. [CHRW] (a) will ensure that such personnel comply with this Agreement, and (b) will be responsible for all acts, omissions, negligence and misconduct of such personnel. No bill of lading, or other document of any contracted carrier will amend or supersede the terms and conditions of this Agreement.

*3 Id. (emphasis added). Similarly, Section 11.1, titled “Assignment,” provides, in relevant part:

To the extent [CHRW] uses affiliates, subcontractors, or other third parties to perform its obligations under this Agreement, [CHRW] will cause and ensure that any such affiliates, subcontractors, or other third parties will comply with the terms of this Agreement. Notwithstanding the existence or terms of any subcontract, [CHRW] will remain responsible for the full performance of the Services.

Id.

Under the section titled “Performance Standards,” CHRW was responsible for, among other things, on-time delivery performance, scheduling deliveries, on-time pickup performance, and scheduling and attending at least monthly meetings with Amazon regarding statistical reports on its performance of the Agreement, including issues of transit time variability, shipment integrity, and loss and damage. Id. at 11–12. CHRW was also responsible for providing real time reporting, shipping data, and weekly management reports to Amazon. Id. at 12–13.

The written agreement between CHRW and DS1 (the DS1 contract) provides that CHRW is a federally registered property broker engaging DS1 to haul freight as a motor carrier. Def. Ex. A at 2, ECF No. 72-1. In Section 7, titled “Drivers and Equipment,” the DS1 contract provides that “[DS1] shall ensure that its drivers are properly trained and licensed, and are competent and capable of safely handling and transporting [CHRW’s] shipments.” Id. at 5. In Section 9, titled “Compliance with Laws,” the contract provides that DS1 is “solely responsible for any acts, omissions, and/or violations by [DS1], its employees, contractors or agents.” Id. at 6. Finally, Section 12, titled “Independent Contractor,” provides that “[DS1] is an independent contractor and shall exercise exclusive control, supervision, and direction over (i) the manner in which transportation services are provided; (ii) the persons engaged in providing transportation services; and (iii) the equipment selected and used to provide transportation services.” Id. at 8.

Count II of the Third Amended Complaint is brought against CHRW, alleging that CHRW is vicariously liable for the negligence of DS1 and Webb and makes the following allegations. ECF No. 59, Ct. II, ¶¶ 2, 14.¹ Webb was working for the “pecuniary benefit” of DS1 and CHRW, DS1 agreed to perform transportation and delivery services for CHRW, and Webb, operating the semi-tractor–trailer under DS1’s motor carrier authority, was in the performance of transportation and delivery services for the “mutual benefit” of DS1 and CHRW at the time of the incident. Id. Ct. II, ¶¶ 2, 4, 5. CHRW agreed to provide transportation and delivery services to Amazon and was in the performance of those services at the time of the incident. Id. Ct. II, ¶ 6. CHRW was responsible for the full performance of the transportation and delivery services, which were being performed by CHRW, DS1, and Webb at the time of the incident. Id. Ct. II, ¶¶ 7, 9. Also, “CHRW was responsible for all acts, omissions, negligence, and misconduct of DS1 and Webb, while DS1 and Webb were in the performance of the transportation and delivery services.” Id. Ct. II, ¶ 8. Nilles’ death was “a direct and proximate result of Defendants’ negligence, willfulness, wantonness, and/or recklessness.” Id. Ct. II, ¶ 10. Finally, “Defendants, DS1 and Webb, were acting within the course and scope of their agency with CHRW, and in furtherance of CHRW’s business interests. CHRW is vicariously liable for the negligence of Defendants, DS1 and Webb.” Id. Ct. II, ¶ 14.

ANALYSIS

*4 The Plaintiff alleges that CHRW, by virtue of its contract with Amazon, is vicariously liable for the alleged negligence of DS1 and Webb during the delivery services that resulted in Steven Nilles’ death. The elements of a negligence claim under Indiana law are “(1) a duty owed to the plaintiff by the defendant, (2) a breach of the duty, and (3) an injury proximately caused by the breach of duty.” Yost v. Wabash Coll., 3 N.E.3d 509, 515 (Ind. 2014) (quoting Pfenning v. Lineman, 947 N.E.2d 392, 398 (Ind. 2011)).² “Absent a duty there can be no negligence or liability based upon the breach.”Goodwin v. Yeakle’s Sports Bar and Grill, Inc., 62 N.E.3d 384, 386 (Ind. 2016). Whether a duty exists is a question of law for the Court. Jeffords v. BP Prods. N. Am., Inc., 963 F.3d 658, 661 (7th Cir. 2020) (citing Byrd v. Blue Ridge Rural Elec. Coop., Inc., 356 U.S. 525, 537 (1958); Dunn v. Menard, Inc., 880 F.3d 899, 906 (7th Cir. 2018)).

CHRW moves to dismiss this state law negligence claim for failure to plead a valid duty under Indiana law. Specifically, CHRW argues that the Plaintiff has failed to plead an exception to Indiana’s long-standing general rule that a principal is not liable for the acts or omissions of an independent contractor. See Bagley v. Insight Commc’ns Co., 658 N.E.2d 584, 586 (Ind. 1995) (citing Prest-O-Lite Co. v. Skeel, 106 N.E. 365, 367 (1914); City of Logansport v. Dick, 70 Ind. 65, 78 (1880)); Ryan v. TCI Architects/Eng’rs/Contractors, Inc., 72 N.E.3d 908, 914 (Ind. 2017) (citing Bagley, 658 N.E.2d at 586). Indeed, there are five exceptions to the rule, and the Plaintiff responds that she is invoking the exception “where the principal is by law or contract charged with performing the specific duty.” Bagley, 658 N.E.2d at 586 (citing Perry v. N. Ind. Pub. Serv. Co., 433 N.E.2d 44, 47 (1982)).³ “The duties associated with these exceptions are considered nondelegable, and the principal is liable for negligence of the independent contractor because the responsibilities are deemed so important to the community that the principal should not be permitted to transfer those duties to another.” Gwinn v. Harry J. Kloeppel & Assocs., 9 N.E.3d 687, 691–92 (Ind. Ct. App. 2014) (quoting Beatty v. LaFountaine, 896 N.E.2d 16, 22 (Ind. Ct. App. 2008)). The exceptions apply to lawsuits brought by employees of the independent contractor as well as by third parties, such as the Plaintiff in this case. See id. at 693 (citing Bagley, 658 N.E.2d at 587–88).

The Plaintiff argues that the Third Amended Complaint pleads sufficient facts to support a plausible claim of vicarious liability against CHRW for the negligence of DS1 and Webb based on CHRW’s contract with Amazon. Vicarious liability “is a legal fiction by which a court can hold a party legally responsible for the negligence of another, not because the party did anything wrong but rather because of the party’s relationship to the wrongdoer.” Sword v. NKC Hosps., Inc., 714 N.E.2d 142, 147 (Ind. 1999). One of several legal theories under which a party may be held vicariously liable is the nondelegable duty doctrine discussed above. Id. (listing respondeat superior, apparent or ostensible agency, and agency by estoppel as other bases for vicarious liability). The Plaintiff reasons that CHRW’s contract with Amazon creates the nondelegable duty that results in CHRW’s vicarious liability for DS1 and Webb’s negligence. In other words, the Plaintiff is not alleging that CHRW did anything wrong but rather that CHRW is responsible for DS1’s and Webb’s negligence based on CHRW’s contract with Amazon.⁴

*5 The Indiana Supreme Court has explained that this exception requires the contract to impose a “specific duty” and to “affirmatively evince[ ] an intent to assume a duty of care.” Ryan, 72 N.E.3d at 913–14; see also Shiel Sexton Co. v. Towe, 154 N.E.3d 827, 834 (Ind. Ct. App. 2020) (“Courts are to infer a contractually assumed duty that contravenes the common law presumption that a contractor has no duty only if the language of the contract ‘affirmatively evinces an intent to assume a duty of care.’ ” (quoting Stumpf v. Hagerman Constr. Corp., 863 N.E.2d 871, 876 (Ind. Ct. App. 2007))). This exception “is not triggered merely because a contractor may have a right to inspect and test the work, approve of the work and/or employees of the general contractor[,] or require the contractor to follow company safety rules.” Shawnee Constr. & Eng’g, Inc. v. Stanley, 962 N.E.2d 76, 82 (Ind. Ct. App. 2011). Rather, the “contract must provide for a specific duty of care.” Id.; see Barrett v. Barry-Wehmiller Design Grp., Inc., No. 1:19-CV-4079, 2022 WL 2805341, at *2 (S.D. Ind. May 17, 2022) (“In determining whether a duty exists, the court examine[s] whether the general contractor’s contract ‘affirmatively evinces’ an intent to assume a duty of care to the plaintiff in relation to the hazards at issue.” (cleaned up)). In Ryan, the Indiana Supreme Court explained that, while precedent from the court of appeals in similar cases can be helpful in guiding a court, the issue is “best settled by a contract interpretation analysis.” 72 N.E.3d at 916.

Accordingly, the Court turns to CHRW’s contract with Amazon to determine whether its provisions imposed a specific duty of care on CHRW for the benefit of third-party motorists for the negligence of CHRW’s independent contractors.When construing a contract, the Court must “ascertain the intent of the parties at the time the contract was made, as disclosed by the language used to express the parties’ rights and duties.” Ryan, 72 N.E.3d at 914 (citing First Fed. Sav. Bank of Ind. v. Key Markets Inc., 559 N.E.2d 600, 603 (Ind. 1990)). The contract is considered “as a whole to determine if a party is charged with a duty of care,” and the court “accept[s] an interpretation of the contract that harmonizes all its provisions.” Id. (citing Kelly v. Smith, 611 N.E.2d 118, 121 (Ind. 1993)). “A contract should be construed so as to not render any words, phrases, or terms ineffective or meaningless.” Id. (citing State Farm Fire and Cas. Co. v. Riddell Nat’l Bank, 984 N.E.2d 655, 658 (Ind. Ct. App. 2013)). Courts may not add provisions not agreed upon by contracting parties. Lake Imaging, LLC v. Franciscan All., Inc., 182 N.E.3d 203, 211 (Ind. 2022).

The Plaintiff asserts that excerpts from two provisions of the contract create a nondelegable duty. First, the Plaintiff cites a portion of Section 10.2, titled “Subcontractors,” in which CHRW agreed to “remain responsible for the full performance of the Services,” which, as she points out, include receiving, loading, storing, transporting, unloading and related transportation services. The Plaintiff also cites a portion of Section 4(a), titled “Representations and Warranties,” in which CHRW agreed to perform the “Services” in a professional, competent, and workmanlike manner and to comply with all federal, state, and local laws, rules, and regulations. The Plaintiff then reasons that “because CHRW was contractually charged with performing a specific duty, i.e. performance of the Services under the Agreement with reasonable care and in compliance with all applicable law, rules, and regulations, this was a nondelegable duty that subjects CHRW to liability for DS1 and Webb’s negligence.” ECF No. 74, p. 8.

While Section 4 and Section 10.2 address CHRW’s duty to Amazon to perform the Services, which consisted of services relating to the transportation of material goods, neither section refers to safety, third-party motorists, or personal injury accidents. Moreover, neither Section 10.2 nor any other provision of the Amazon contract provides that CHRW is responsible for the acts, omissions, negligence, and misconduct of independent contractors. Rather, Section 10.2 provides that CHRW will ensure that its own “employees and affiliates” comply with the agreement and that CHRW will be responsible “for all acts, omissions, negligence and misconduct of such personnel,” meaning CHRW’s own employees and affiliates. In contrast, Section 10.2 required CHRW to be responsible for ensuring contractually that its independent contractors were responsible for the acts and omissions of the independent contractor’s own employees and that its independent contractors would comply with the terms of the Amazon contract.⁵ And Section 10.1, which the Plaintiff does not address, provides that CHRW “shall engage subcontracted carriers that will have exclusive control over its personnel.”

*6 The only reference to “third parties” in the provisions of the Amazon contract cited by the Plaintiff is the reference in Section 4(c) to the infringement of proprietary and confidential information: “CHRW represents and warrants that it and its affiliates will, and that it shall contractually require subcontractors engaged by it to:…not violate or infringe any third party’s right in proprietary or confidential information in performing the Services….” Because the Amazon contract intended to create this specific limited duty to third parties, it is material that the contract does not contain language creating a specific duty to third party motorists or to any third party for the negligence of its subcontractors. See generally Jeffords, 963 F.3d at 663 (noting that the contract, taken as a whole, was written to protect property, not people).

Thus, based on settled contract interpretation analysis, there is no language in the Amazon contract that affirmatively evinces an intent by CHRW to assume a duty of care to third parties for the negligence of its subcontractors or independent contractors. The Plaintiff’s contention that CHRW “was…responsible for all of the acts, omissions, negligence and misconduct of DS1 and Webb during their performance of the transportation and delivery services,” ECF No. 74 at 3; see also ECF No. 59, Ct. II, ¶ 8, is not supported by her citation to Section 10.2 or the express terms of the Amazon contract.

The absence of any such language in the Amazon contract is underscored by a comparison of its terms with those of the contract at issue in Gwinn, 9 N.E.3d 687, the only nondelegable duty case cited by the Plaintiff. In Gwinn, the plaintiff was injured when a projection screen fell from the ceiling of the high school classroom where she was teaching. Id. at 688. The plaintiff filed a claim against the general contractor for the negligent installation of the screen, and the general contractor moved for summary judgment on the bases that a subcontractor had installed the screen and that the general contractor owed no duty to the plaintiff. Id. at 688–89. The trial court found no duty as a matter of law. Id. at 689. The appellate court reversed, holding that the general contractor was vicariously liable for the subcontractor’s negligence because the general contractor assumed a nondelegable duty to the plaintiff pursuant to the general contractor’s contract with the school corporation. Id. at 689, 691. The court of appeals found that the general contractor “assumed a duty to supervise the work of its subcontractors and the construction methods employed in a reasonably prudent manner and specifically assumed responsibility for the alleged negligent acts and omissions of its subcontractors.” Id. at 694. The court relied on contract language that made the general contractor “solely responsible for” and gave the general contractor “control over construction means, methods, techniques, sequences and procedures” for the work under the contract. Id. at 692. The court also relied on the contract provision that the general contractor “shall be responsible to the Owner for acts and omissions of…Subcontractors and their agents and employees.” Id.

In contrast, the Amazon contract does not give CHRW any control over the means and methods used by its subcontractors to provide the Services to Amazon. Nor does the Amazon contract contain any language making CHRW responsible for the acts and omissions of its subcontractors. Rather, as discussed above, the Amazon contract required only that CHRW “contractually require subcontractors” to be responsible for their own employees. See Section 4; see also Section 10. Although this comparison of language does not by itself decide this case, it is helpful in guiding the Court’s consideration of the contract terms. See Ryan, 72 N.E.3d at 916. The Plaintiff has identified no provision in CHRW’s contract with Amazon in which CHRW evinces an intent to be vicariously liable for the negligence of a third-party contract carrier, let alone to a class of third-party individuals, like Steven Nilles, for such negligence.

*7 As a separate argument to avoid dismissal of the claim against CHRW, the Plaintiff suggests that the Amazon contract contains provisions that evince an intent to create an agency relationship between CHRW and DS1 rather than the independent contractor relationship set forth in the DS1 contract. The Plaintiff cites general legal principles that, notwithstanding an “independent contractor” label, a contract may contain provisions evidencing an agency relationship and that whether one is an employee or an independent contractor is a question for the trier of fact. See Benante v. United Pac. Life Ins. Co., 659 N.E.2d 545, 548 (Ind. 1995). However, the Plaintiff’s argument that the Amazon contract evinces an intent to create an agency relationship between CHRW and DS1 is based solely on the same assertion made above that “CHRW expressly and unequivocally agreed to maintain a continuing obligation to be responsible for the acts and omissions of DS1 and Webb and further stated that no other document of any contracted carrier would amend or supersede these contract terms.” ECF No. 74, 10–11 (emphasis added). Again, the Amazon contract does not provide that CHRW is responsible for the acts and omissions of DS1 and Webb.

For these reasons, the Court finds as a matter of law that the Amazon contract does not affirmatively evince an intent on the part of CHRW to assume a specific duty of care to third parties, such as Steven Nilles, for the negligence of its independent contractors, such as DS1 and Webb. As a result, the Amazon contract does not constitute an exception to the general rule that a contractor is not liable for the negligence of an independent contractor. Because CHRW did not owe Steven Nilles a duty of care, the Court grants CHRW’s motion to dismiss the Plaintiff’s negligence claim against it. Because the Court finds that the Plaintiff has failed to allege a duty by CHRW, the Court does not reach CHRW’s alternate argument based on preemption.

CONCLUSION

Accordingly, the Court hereby GRANTS C.H. Robinson Worldwide, Inc.’s Motion to Dismiss Plaintiff’s Third Amended Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) [ECF No. 71] and ORDERS that the Plaintiff’s claim against Defendant C.H. Robinson Worldwide, Inc. in Count II is DISMISSED with prejudice.

SO ORDERED on December 18, 2023.

s/ Theresa L. Springmann

JUDGE THERESA L. SPRINGMANN

UNITED STATES DISTRICT COURT

All Citations

Footnotes

1. Count I brought against Webb and DS1 and Count III brought against Starline Solutions, Inc. are not challenged on the instant motion.  
2. As neither party argues otherwise, the Court applies Indiana substantive law to this contract dispute brought under the Court’s diversity jurisdiction. Jeffords v. BP Prods. N. Am., Inc., 963 F.3d 658, 661 (7th Cir. 2020) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938); Wood v. Mid-Valley Inc., 942 F.2d 425, 426–27 (7th Cir. 1991)).  
3. The five exceptions to the general rule that a principal is not liable for the acts or omissions of an independent contractor are where (1) the contract requires the performance of intrinsically dangerous work, (2) the principal is by law or contract charged with performing the specific duty, (3) the act will create a nuisance, (4) the act to be performed will probably cause injury to others unless due precaution is taken, and (5) the act to be performed is illegal. Bagley, 658 N.E.2d at 586.  
4. In its opening brief, CHRW cites and applies the three-part balancing test Indiana courts sometimes employ to determine whether a duty exists: “(1) the relationship between the parties; (2) the foreseeability of harm; and (3) public policy concerns.” Goodwin, 62 N.E.3d at 387 (citing Webb v. Jarvis, 575 N.E.2d 992, 995 (Ind. 1991)). However, the test is utilized only when “the element of duty has not already been declared or otherwise articulated.” Id. (quoting N. Ind. Pub. Serv. Co. v. Sharp, 790 N.E.2d 462, 465 (Ind. 2003)). As argued by the Plaintiff, the balancing test is unnecessary in this case because the Plaintiff has declared the element of duty based on vicarious liability through CHRW’s contract with Amazon. Cf. Richardson v. Rasulov, 1:19cv1549, 2021 WL 1429005, at *5–8 (S.D. Ind. Apr. 15, 2021) (applying the balancing test after finding that the complaint failed to allege the elements necessary for a claim of negligent selection or retention of a contractor).  
5. Although not dispositive of whether the Plaintiff has sufficiently alleged CHRW’s nondelegable duty based on the Amazon contract, the Court notes that the Plaintiff does not allege that CHRW failed to contractually require DS1 to be responsible for all acts and omissions of DS1’s employees. In fact, the contract between CHRW and DS1 imposes those very obligations on DS1, providing in Section 9 that DS1 was “solely responsible for any acts, omissions, and/or violations by [DS1], its employees, contractors or agents.” The DS1 contract also provides in Section 12 that DS1, as an independent contractor, “shall exercise exclusive control, supervision, and direction over” the provision of the transportation services, the persons engaged in those services, and the equipment used.  

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

End of Document

United States District Court for the Eastern District of Wisconsin

December 4, 2023, Decided; December 5, 2023, Filed

Case Nos. 20-C-1291; 20-C-1917; 21-C-220; 21-C-965; 23-C-538; 23-C-539; 23-C-556

Reporter

2023 U.S. Dist. LEXIS 215815 *; 2023 WL 8436321

MITCHELL TISCHAUSER, DELOS W. LUEDTKE, PADEN ROTHENBERGER, DUSTIN J. DEMITRIOU, and RONDA DEMITRIOU, Plaintiffs, v. DONNELLY TRANSPORTATION, INC., JOSUE R. HIDALGO-CLARKE, FIREBIRD TRUCKING, INC., MODE TRANSPORTATION, LLC, SYSCO CORPORATION, ACE PROPERTY & CASUALTY INSURANCE COMPANY, and STATE NATIONAL INSURANCE CO., Defendants.

Prior History: Tischauser v. Donnelly Transp. Inc., 2022 U.S. Dist. LEXIS 37366, 2022 WL 623994 (E.D. Wis., Mar. 3, 2022)

Counsel:  [*1] For Delos W Luedtke, Plaintiff (1:20-cv-01917-WCG): Jennifer Marie Rice, Timothy M Whiting, LEAD ATTORNEYS, Allison L Hostetler, Whiting Law Group Ltd, Chicago, IL; Steven L Toney, Toney Law Offices SC, Madison, WI.

For Firebird Trucking Inc, Defendant (1:20-cv-01917-WCG): Edward P Gibbons, LEAD ATTORNEY, Kyle T Geiger, Walker Wilcox Matousek LLP, Chicago, IL; Maria DelPizzo Sanders, LEAD ATTORNEY, von Briesen & Roper SC, Milwaukee, WI.

For Donnelly Transportation Inc, Defendant (1:20-cv-01917-WCG): Vincent M Casieri, Schueler Dallavo & Casieri, Chicago, IL.

For Josue Rene Hidalgo Clarke, Defendant (1:20-cv-01917-WCG): Edward P Gibbons, LEAD ATTORNEY, Kyle T Geiger, Walker Wilcox Matousek LLP, Chicago, IL; Maria DelPizzo Sanders, LEAD ATTORNEY, von Briesen & Roper SC, Milwaukee, WI; Vincent M Casieri, Schueler Dallavo & Casieri, Chicago, IL.

For Paden Rothenberger, Plaintiff (1:21-cv-00220-WCG): David J Bischmann, LEAD ATTORNEY, Miles G Lindner, Laura A Lindner, Lindner Law LLC, Milwaukee, WI.

For Donnelly Transportation Inc, Ace Property & Casualty Insurance Company, Defendants (1:21-cv-00220-WCG): Vincent M Casieri, Schueler Dallavo & Casieri, Chicago, IL.

For Josue R Hidalgo-Clarke, Defendant [*2]  (1:21-cv-00220-WCG): Maria DelPizzo Sanders, von Briesen & Roper SC, Milwaukee, WI; Vincent M Casieri, Schueler Dallavo & Casieri, Chicago, IL.

For Firebird Trucking Inc, State National Insurance Co Inc, Defendants (1:21-cv-00220-WCG): Maria DelPizzo Sanders, von Briesen & Roper SC, Milwaukee, WI.

For Dustin J Demitriou, Ronda Demitriou, Plaintiffs (1:21-cv-00965-WCG): Thomas A Perlberg, Hupy and Abraham SC, Milwaukee, WI.

For Donnelly Transportation Inc, ACE Property and Casualty Insurance Company, Defendants (1:21-cv-00965-WCG): Vincent M Casieri, Schueler Dallavo & Casieri, Chicago, IL.

For Josue R Hidalgo-Clarke, Defendant (1:21-cv-00965-WCG): Clayton L Riddle, LEAD ATTORNEY, Maria DelPizzo Sanders, von Briesen & Roper SC, Milwaukee, WI; Kyle T Geiger, LEAD ATTORNEY, Walker Wilcox Matousek LLP, Chicago, IL; Vincent M Casieri, Schueler Dallavo & Casieri, Chicago, IL.

For Firebird Trucking Inc, State National Insurance Company, Defendants (1:21-cv-00965-WCG): Clayton L Riddle, LEAD ATTORNEY, Maria DelPizzo Sanders, von Briesen & Roper SC, Milwaukee, WI; Kyle T Geiger, LEAD ATTORNEY, Walker Wilcox Matousek LLP, Chicago, IL.

For Paden Rothenberger, Plaintiff (1:23cv538): David J Bischmann, [*3]  Laura A Lindner, Miles G Lindner, LEAD ATTORNEYS, Lindner Law LLC, Milwaukee, WI USA.

For Sysco Corporation, Defendant (1:23cv538): James J Temple, Mulherin Rehfeldt & Varchetto PC, Wheaton, IL USA.

For Mode Transportation Inc, Defendant (1:23cv538): Sara M Butler, LEAD ATTORNEY, Hinshaw & Culbertson LLP, Milwaukee, WI USA.

For Delos W Luedtke, Plaintiff (1:23cv539): Timothy M Whiting, LEAD ATTORNEY, Whiting Law Group Ltd, Chicago, IL USA.

For Sysco Corporation, Defendant (1:23cv539): James J Temple, Mulherin Rehfeldt & Varchetto PC, Wheaton, IL USA.

For Mode Transportation LLC, Defendant (1:23cv539): Sara M Butler, LEAD ATTORNEY, Hinshaw & Culbertson LLP, Milwaukee, WI USA.

For Mitchell Tischauser, Plaintiff (1:23cv556): Rene J L’Esperance, LEAD ATTORNEY, L’Esperance & Feidt LLC, Hortonville, WI USA.

For Sysco Corporation, Defendant (1:23cv556): James J Temple, Mulherin Rehfeldt & Varchetto PC, Wheaton, IL USA; James J Temple, Mulherin Rehfeldt & Varchetto PC.

For Mitchell Tischauser, Plaintiff (1:20-cv-01291-WCG): Rene J L’Esperance, L’Esperance & Feidt LLC, Hortonville, WI.

For Delos W Luedtke, Consolidated Plaintiff (1:20-cv-01291-WCG): Jennifer Marie Rice, Timothy M Whiting, LEAD ATTORNEYS, [*4]  Whiting Law Group Ltd, Chicago, IL; Steven L Toney, Toney Law Offices SC, Madison, WI.

For Paden Rothenberger, Consolidated Plaintiff (1:20-cv-01291-WCG): David J Bischmann, LEAD ATTORNEY, Laura A Lindner, Miles G Lindner, Lindner Law LLC, Milwaukee, WI.

For Dustin J Demitriou, Ronda Demitriou, Consolidated Plaintiffs (1:20-cv-01291-WCG): Thomas A Perlberg, LEAD ATTORNEY, Hupy and Abraham SC, Milwaukee, WI.

For Donnelly Transportation Inc, Ace Property & Casualty Insurance Company, Defendants (1:20-cv-01291-WCG): Vincent M Casieri, Schueler Dallavo & Casieri, Chicago, IL.

For Josue R Hidalgo-Clarke, Defendant (1:20-cv-01291-WCG): Edward P Gibbons, Kyle T Geiger, Walker Wilcox Matousek LLP, Chicago, IL; Maria DelPizzo Sanders, von Briesen & Roper SC, Milwaukee, WI; Vincent M Casieri, Schueler Dallavo & Casieri, Chicago, IL.

For Firebird Trucking Inc, Defendant (1:20-cv-01291-WCG): Edward P Gibbons, Kyle T Geiger, Walker Wilcox Matousek LLP, Chicago, IL; Maria DelPizzo Sanders, von Briesen & Roper SC, Milwaukee, WI.

For State National Insurance Co Inc, Defendant (1:20-cv-01291-WCG): Clayton L Riddle, LEAD ATTORNEY, Maria DelPizzo Sanders, von Briesen & Roper SC, Milwaukee, WI; Kyle T Geiger, [*5]  LEAD ATTORNEY, Walker Wilcox Matousek LLP, Chicago, IL.

Judges: William C. Griesbach, United States District Judge.

Opinion by: William C. Griesbach

Opinion

DECISION AND ORDER GRANTING MOTIONS TO DISMISS

These consolidated cases arise out of a motor vehicle accident that occurred on January 24, 2020, on U.S. Highway 45 in the Town of Caledonia in Waupaca County, Wisconsin. Plaintiffs Mitchell Tischauser, Delos W. Luedtke, Paden Rothenberger, and Dustin J. Demitriou allege that they were seriously injured when a commercial motor vehicle (CMV) tractor and trailer combination driven by Defendant Josue R. Hidalgo-Clarke crossed the center line and collided with their vehicle. Plaintiff Ronda Demitriou claims loss of consortium due to the injuries sustained by her husband. At the time of the collision, Clarke was en route to pick up a load of products, purchased by Defendant Sysco Corporation, from Manawa, Wisconsin, and transport them to a distribution center in Front Royal, Virginia. According to Plaintiffs’ respective complaints, Clarke was employed as a driver by Defendant Firebird Trucking, Inc., and by Defendant Donnelly Transportation, Inc., and Firebird owned the truck that Clarke was driving. Defendant Sysco [*6]  worked with a broker, Defendant Mode Transportation, LLC, to hire Donnelly as the carrier. Donnelly, in turn, hired Firebird, resulting in Clarke being the CMV driver for the purpose of moving Sysco’s goods for profit. The court has jurisdiction under 28 U.S.C. § 1332, as Plaintiffs are all citizens of the State of Wisconsin, while Defendants are citizens of other States, and the amount in controversy exceeds $75,000.

Plaintiffs’ amended complaints added Sysco and Mode as defendants and asserted four claims against them: (1) negligent selection/hiring, training, or supervision; (2) agency/vicarious liability; (3) joint enterprise/venture; and (4) loss of consortium to as to Ms. Demitriou. See Luedtke 2d Am. Compl. ¶¶ 102-216 & 446-59, Dkt. No. 116; Demitriou Am. Compl. ¶¶ 49-162, 390-403 & 434-41, Dkt. No. 117; Rothenberger Am. Compl. ¶¶ 94-206 & 436-49, Dkt. No. 18; Tischauser Am. Compl. ¶¶ 109-222 & 452-59, Dkt. No. 119. Mode and Sysco moved for dismissal of Plaintiffs’ claims against them on the grounds that they are preempted by federal law, the amended complaints fail to state claims against them upon which relief can be granted under Rule 12(b)(6), and that the claims are barred by Wisconsin’s three-year [*7]  statute of limitations for personal injury actions, Wis. Stat. § 893.54(1m)(a).

On July 18, 2023, after the motions were fully briefed, the Seventh Circuit issued its decision in Ye v. GlobalTranz Enterprises, Inc., 74 F.4th 453 (7th Cir. 2023), which held that the Federal Aviation Administration Authorization Act (FAAAA), specifically 49 U.S.C. § 14501(c), preempted a claim against a freight broker to recover for negligent hiring of a motor vehicle carrier whose employee was driving a truck involved in an accident that resulted in the death of the plaintiff’s husband. In so ruling, the court held that “the plain text and statutory scheme [of the FAAAA] indicate that 49 U.S.C. § 14501(c)(1) bars Ye’s negligent hiring claim against GlobalTranz [a broker] and that the [FAAAA’s] safety exception in § 14501(c)(2)(A) does not save it from preemption.” Id. at 456, 466.

In light of the Seventh Circuit’s decision in Ye, the court held a hearing on Sysco and Mode’s motions to dismiss on August 1, 2023. At the conclusion of the hearing, the court orally granted both motions, holding that Ye was controlling as to Plaintiffs’ claims against Mode and that, while it was less clear that Ye controlled as to Plaintiffs’ claims against Sysco, the complaints failed to state any claim against Sysco and Mode. This written decision is intended to confirm the court’s ruling [*8]  from the bench. The court further concludes that Plaintiffs’ claims against Sysco are also preempted and that the claims of Plaintiffs Dustin and Ronda Demitriou are barred under the applicable statute of limitations.

LEGAL STANDARD

A motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a complaint. Kaminski v. Elite Staffing, Inc., 23 F.4th 774, 776 (7th Cir. 2022). Rule 8 requires a pleading to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To survive a motion for Rule 12(b)(6) dismissal, a complaint must contain factual allegations that “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). While a plaintiff is not required to plead detailed factual allegations, he must plead “more than labels and conclusions.” Id. Therefore, a simple, “formulaic recitation of the elements of a cause of action will not do.” Id. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Twombly, 550 U.S. at 570) (internal citations [*9]  and quotations marks omitted); see also Yasak v. Ret. Bd. of the Policemen’s Annuity & Benefit Fund of Chi., 357 F.3d 677, 678 (7th Cir. 2004).

Dismissal under Rule 12(b)(6) may also be granted “when a plaintiff’s complaint nonetheless sets out all of the elements of an affirmative defense.” Independent Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 935 (7th Cir. 2012). This includes the affirmative defense of preemption. Gravitt v. Mentor Worldwide, LLC, 289 F. Supp. 3d 877, 884 (N.D. Ill. 2018) (dismissing plaintiff’s FDA noncompliance claims as preempted under § 360k(a) on defendant’s 12(b)(6) motion); see also Ramljak v. Boston Sci. Corp., No. 20-C-1903, 2021 U.S. Dist. LEXIS 62624, 2021 WL 1209025, at *2 (N.D. Ill. March 31, 2021). Although more properly considered on a motion for judgment on the pleadings under Rule 12(c), the difference is in form only because “[a] motion for judgment on the pleadings under Rule 12(c) . . . is governed by the same standards as a motion to dismiss for failure to state a claim.” Laverty v. Smith & Nephew, Inc., 197 F. Supp. 3d 1026, 1029 (N.D. Ill. 2016) (quoting BBL, Inc. v. City of Angola, 809 F.3d 317, 325 (7th Cir. 2015)).

ANALYSIS

A. Federal Preemption

The FAAAA provides that, subject to limited exceptions, a state “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). As noted above, Ye held that this provision barred the plaintiff’s negligent hiring claim against the freight broker in that case. At the conclusion [*10]  of the hearing on Mode’s and Sysco’s motions, the court held that Plaintiffs’ claims against Mode were clearly preempted in light of the Seventh Circuit’s decision in Ye. The court did not hold at that time that Plaintiffs’ claims against Sysco were likewise preempted under the FAAAA but invited supplemental authority in support of the proposition that “the shipper, someone in the position of Sysco, would be entitled to that protection.” Tr. at 24:25-25:4. In response to the court’s invitation, counsel for Sysco pointed the court to Rowe v. New Hampshire Motor Transport Association, 552 U.S. 364, 128 S. Ct. 989, 169 L. Ed. 2d 933 (2008), and briefly explained the case’s applicability. Having given further consideration to Rowe, the court now concludes that Plaintiffs’ claims against Sysco are also preempted under 49 U.S.C. § 14501(c)(1).

The arguments Plaintiffs offered against Mode’s contention that the FAAAA preempts Plaintiffs’ claims against it are unpersuasive. As the court noted at oral argument, Ye essentially held that state tort law governing negligence actions against brokers is preempted by the FAAAA because those laws significantly impact the price and cost, as well as the regulation, of interstate trucking and interstate transportation. In Ye, the court held that the party seeking to establish preemption [*11]  “must show both that a state enacted or attempted to enforce a law and that the state law relates to broker rates, routes, or services either by expressly referring to them, or by having a significant economic effect on them.” 74 F.4th at 458 (internal quotations omitted). Ye determined that the broker in that case, GlobalTranz Enterprises, Inc., satisfied both parts of the test. First, common law tort claims have the force and effect of law. Id. at 459 (citing Northwest, Inc. v. Ginsberg, 572 U.S. 273, 281-82, 134 S. Ct. 1422, 188 L. Ed. 2d 538 (2014)). Second, the application of Illinois’ common law of negligence would have a significant economic effect on broker services:

By recognizing common-law negligence claims, courts would impose in the name of state law a new and clear duty of care on brokers, the breach of which would result in a monetary judgment. This is exactly what Ye seeks here against GlobalTranz. To avoid these costly damages payouts, GlobalTranz and other brokers would change how they conduct their services—for instance, by incurring new costs to evaluate motor carriers. Then, by changing their hiring processes, brokers would likely hire different motor carriers than they would have otherwise hired without the state negligence standards. Indeed, that is the centerpiece of Ye’s claim: [*12]  that GlobalTranz should not have hired Global Sunrise.

Id.

The court in Ye then analyzed the FAAAA’s safety exception, which provides that laws within a state’s “safety regulatory authority . . . with respect to motor vehicles” are not preempted. Id. at 460 (quoting 49 U.S.C. § 14501(c)(2)(A)). The court determined that the safety exception did not save Ye’s claim. Preliminarily, the court explained that it did not need to reach the issue of whether “a state’s tort law is part of its ‘safety regulatory authority'” because it “conclude[d] that Ye’s claims fail to satisfy the second half of the safety exception’s text”—i.e., “a common law negligence claim enforced against a broker is not a law that is ‘with respect to motor vehicles.'” Id. (quoting 49 U.S.C. § 14501(c)(2)(A)). The basis for that holding was that “the exception requires a direct link between a state’s law and motor vehicle safety,” and the court saw “no such direct link between negligent hiring claims against brokers and motor vehicle safety.” Id.

In particular, the FAAAA’s text did not support the existence of a direct link because the definition of “motor vehicle,” see 49 U.S.C. § 13102(16), does not include brokers, and there is “no mention of brokers in the safety exception itself . . . which suggests [*13]  that such claims may be outside the scope of the exception’s plain text.” Id. (citing Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 261-62, 133 S. Ct. 1769, 185 L. Ed. 2d 909 (2013)). The rest of the text of the safety exception “carefully except[s] state laws for motor vehicle safety, cargo loads, and motor carrier insurance”—but is devoid of “any reference to brokers or broker services.” Id. at 461. And “[w]hile it listed broker services in § 14501(c)(1)‘s express preemption provision, Congress declined to expressly mention brokers again in reference to states’ safety authority. Reading further, we see the same omission of brokers from § 14501(c)(2)‘s other savings provisions for ‘intrastate transportation of household goods’ and ‘tow truck operations.’ Id. § 14501(c)(2)(B), (C).” Id.

Moreover, because “Congress could have chosen to save state safety laws enforced ‘with respect to motor carriers and brokers,’ but it did not,” the court “hesitate[d] to read broker services into parts of the statute where Congress declined to expressly name them, especially when it contemplated them elsewhere within the same statutory scheme.” Id. (citing Rotkiske v. Klemm, 140 S. Ct. 355, 361, 205 L. Ed. 2d 291 (2019) (“A textual judicial supplementation is particularly inappropriate when, as here, Congress has shown that it knows how to adopt the omitted language or provision.”)). Finally, in § 14501(b), titled “Freight [*14]  Forwarders and Brokers,” Congress “directly addressed state regulation of brokers by prohibiting states from enacting or enforcing laws ‘relating to intrastate rates, intrastate routes, or intrastate services of any freight forwarder or broker.'” Id. (quoting 49 U.S.C. § 14501(b)(1)). “Following this broad preemption provision, however, Congress did not include a safety exception—another telling omission given that Congress included safety exceptions to the parallel preemption provisions for motor carriers of property (at issue here) and motor carriers of passengers.” Id. In sum, the FAAAA’s “text makes clear that Congress views motor vehicle safety regulations separately and apart from those provisions imposing obligations on brokers. And this separateness counsels a reading of ‘with respect to motor vehicles’ that requires a direct connection between the potentially exempted state law and motor vehicles. Any other construction would expand the safety exception’s scope without a clear, text-based limit.” Id. at 462 (quoting 49 U.S.C. § 14501(c)(2)(A)). Accordingly, Ye agreed with the district court that “the connection . . . between a broker hiring standard and motor vehicles” is “too attenuated to be saved under § 14501(c)(2)(A).” Id.

The instant case involves [*15]  various Wisconsin common law tort claims against Mode, a broker. Ye involved just one Illinois common law tort claim against GlobalTranz, also a broker. However, nothing in Ye suggests that either the jurisdictional provenance of a plaintiff’s tort claims or the precise nature of those tort claims should alter the outcome. Ye dealt specifically with only negligent hiring and vicarious liability claims under Illinois’ common law brought against a broker. In addition to their negligent hiring and vicarious liability claims, Plaintiffs brought Wisconsin common law tort claims for joint enterprise/venture. However, all common law claims have the force and effect of law. Id. at 459 (internal citation omitted). And each of Plaintiffs’ claims here “would have a significant economic effect on broker services,” just as the negligent hiring claim in Ye would have. Id. Accordingly, Plaintiffs’ claims against Mode are preempted by the FAAAA. Notwithstanding Plaintiffs’ contention at oral argument, see Tr. at 4:13-20, 5:23-25, & 6:06-08, Ye cannot be read to suggest that the jurisdictional provenance of a tort, or the type of tort at issue, makes a difference to that conclusion. See Ye, 74 F.4th at 458-59 (clarifying that the preemption [*16]  inquiry is properly focused on whether the state tort law that the plaintiff is attempting to enforce “would have a significant economic effect on broker services” and otherwise not making a distinction based on the tort’s jurisdictional origins or what specific tort it is). In addition, all the reasons that Ye gave for why the safety exception does not apply to brokers straightforwardly apply here. Accordingly, Plaintiffs’ tort claims against Mode are preempted by the FAAAA.

The court turns next to Sysco’s argument that the FAAAA preempts Plaintiffs’ claims against it when Ye is read in conjunction with Rowe v. New Hampshire Motor Transport Ass’n, 552 U.S. 364, 128 S. Ct. 989, 169 L. Ed. 2d 933 (2008). Rowe considered “two provisions of a Maine tobacco law, which regulate[d] the delivery of tobacco to customers within the State,” and whether they were preempted by § 14501(c)(1) of the FAAAA, which provides, in relevant part, that “a State . . . may not enact or enforce a law . . . related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.” 552 U.S. at 367-68. The first section of Maine’s tobacco law, § 1555-C, prohibited “anyone other than a Maine-licensed tobacco retailer to accept an order for delivery of tobacco.” Id. at 368 (quoting Me. Rev. Stat. Ann., Tit. 22, § 1555-C(1)). It then added that, “when a licensed retailer accepts [*17]  an order and ships tobacco, the retailer must ‘utilize a delivery service’ that provides a special kind of recipient-verification service.” Id. (quoting § 1555-C(3)(c)). Moreover, the delivery service was required to

make certain that (1) the person who bought the tobacco is the person to whom the package is addressed; (2) the person to whom the package is addressed is of legal age to purchase tobacco; (3) the person to whom the package is addressed has himself or herself signed for the package; and (4) the person to whom the package is addressed, if under the age of 27, has produced a valid government-issued photo identification with proof of age.

Id. at 368-69 (citation omitted). Violations were punishable by civil penalties. Id. at 369 (citing §§ 1555-C(3)(E) to C(3)(F) (first offense up to $1,500 and subsequent offenses up to $5,000)).

The second section, § 1555-D, prohibited “any person ‘knowingly’ to ‘transport’ a ‘tobacco product’ to ‘a person’ in Maine unless either the sender or the receiver has a Maine license.” Id. (quoting § 1555-D). It then added that a “‘person is deemed to know that a package contains a tobacco product’ (1) if the package is marked as containing tobacco and displays the name and license number of a Maine-licensed tobacco retailer; [*18]  or (2) if the person receives the package from someone whose name appears on a list of un-licensed tobacco retailers that Maine’s attorney general distributes to various package-delivery companies.” Id. (quoting § 1555-D) (emphasis in Rowe). Violations of this section were again punishable by civil penalties. Id. (citing § 1555-D(2) (up to $1,500 per violation against violator and/or violator’s employer)).

The Court held that the FAAAA preempts both provisions. Id. at 371. It explained:

We concede that the regulation here is less “direct” than it might be, for it tells shippers what to choose rather than carriers what to do. Nonetheless, the effect of the regulation is that carriers will have to offer tobacco delivery services that differ significantly from those that, in the absence of the regulation, the market might dictate. And that being so, “treating sales restrictions and purchase restrictions differently for pre-emption purposes would make no sense.” Quoting Engine Mfrs. Assn. v. South Coast Air Quality Management Dist., 541 U.S. 246, 255, 124 S. Ct. 1756, 158 L. Ed. 2d 529 (2004). If federal law pre-empts state efforts to regulate, and consequently to affect, the advertising about carrier rates and services at issue in Morales, it must pre-empt Maine’s efforts to regulate carrier delivery services themselves.

Id. at 372. Rowe‘s logic applies here. [*19]  Like Maine’s regulation of tobacco shippers, Wisconsin’s common law of torts amounts to “regulat[ion] of carrier delivery services,” see id., and imposes costs on the operations of Sysco, a shipper, that the FAAAA was intended to preempt. See Ye, 74 F.4th at 459. Accordingly, Plaintiffs’ claims against Sysco, like those against Mode, are preempted and therefore dismissed.

B. Failure to State a Claim

The court also holds that Plaintiffs’ amended complaints fail to state legally cognizable claims against both Mode and Sysco. In so ruling, the court notes that, in this circuit, the Twombly/Iqbal pleading standard controls. Under that standard, a complaint must make factual allegations that, accepted as true, state a claim to relief that is plausible on its face. See Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 570. Applying that standard to the amended complaints in this case, the court concludes that the complaints do not assert sufficient factual matter that, accepted as true, state a claim for relief that has facial plausibility. In other words, they have not pled “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570) (internal citations and quotations marks omitted).

Beginning [*20]  with negligent selection, this claim requires the plaintiff to allege that “(1) there was a wrongful act by the employee; (2) the wrongful act by the employee was a cause of injuries to the plaintiff; (3) the employer was negligent in hiring, training or supervising the employee; and (4) the employer’s negligence was a cause of the employee’s wrongful act.” See Scholz v. United States, No. 16-CV-1052, 2017 U.S. Dist. LEXIS 10951, 2017 WL 375651, at *4 (E.D. Wis. Jan. 25, 2017) (citing Miller v. Wal-Mart Stores, Inc., 219 Wis. 2d 250, 267-68, 580 N.W.2d 233 (1998)). Accordingly, there must be a “nexus” between the negligent selection by the employer and the act of the employee. Id. (citing Miller, 219 Wis. 2d at 262). In assessing that employer-employee “nexus,” the court “asks two questions with respect to causation: first, was the wrongful act of the employee a cause-in-fact of the plaintiff’s injury and, second, was the negligence of the employer a cause-in-fact of the wrongful act of the employee.” Id. In sum, the test of cause-in-fact “is whether the negligence was a ‘substantial factor’ in producing the injury.” Viasystems Techs. Corp., LLC v. Landstar Ranger Inc., No. 10-C-577, 2012 U.S. Dist. LEXIS 171133, 2012 WL 6020015, at *9 (E.D. Wis. Dec. 3, 2012) (citing Morgan v. Penn. Gen. Ins. Co., 87 Wis. 2d 723, 735, 275 N.W.2d 660 (1979)).

Here, Plaintiffs have alleged no facts suggesting that Mode and Sysco were Clarke’s employers or that their actions were a substantial factor in the accident. Clarke was the driver of the CMV, and there are no allegations that either Mode or Sysco ordered Clarke to drive unsafely, [*21]  speed, ignore traffic rules, or otherwise break the law. Id. at 18:24-20:06. Indeed, there is no allegation that either Mode or Sysco even knew Clarke would be driving. At the time of the accident, Clarke had not even picked up the Sysco shipment that he was to transport to Virginia. Absent more, Plaintiffs have failed to state a claim for negligent selection, and that claim must be dismissed.

Mode and Sysco also seek dismissal of Plaintiffs’ joint enterprise/venture claim. To constitute a joint enterprise under Wisconsin law, a party must allege “(1) an agreement, express or implied, among the members of the group; (2) a common purpose to be carried out by the group; (3) a community of pecuniary interest in that purpose, among the members; and (4) an equal right to a voice in the direction of the enterprise, which gives an equal right of control.” White v. Fincantieri Bay Shipbuilding, 569 F. Supp. 3d 794, 801 (E.D. Wis. 2021) (citing Spearing v. Bayfield Cnty., 133 Wis. 2d 165, 173, 394 N.W.2d 761 (Wis. Ct. App. 1986)); see also Restatement (Second) of Torts § 491, cmt. c (1965). “If parties engage in a joint enterprise, then each is the agent of the other, within the scope of the enterprise, and each may be held vicariously liable to one who brings a claim arising from the product of the joint venture.” Spearing, 133 Wis. 2d at 173.

Here, there are no allegations showing the existence of a common enterprise among [*22]  Defendants that shares profits. Instead, the parties entered contracts in which services were provided in return for set payment. Contractual relations of this kind do not create joint ventures or enterprises, in part, because there is no profit sharing. As the court explained during oral argument, Mode and Sysco “would have gotten paid if they would have completed the job, . . . [b]ut they would not have shared the profits. They would have been paid the rate that was agreed upon under their contract with the parties. A contract isn’t a joint enterprise. A contract requires each party to perform or to pay for performance.

Mode and Sysco also seek dismissal of Plaintiffs’ agency/vicarious liability claim. “In a negligence case, the plaintiff must prove four elements: (1) [a] duty of care on the part of the defendant; (2) a breach of that duty; (3) a causal connection between the conduct and the injury and (4) an actual loss or damage as a result of the injury.” Martindale v. Ripp, 2001 WI 113, ¶ 33, 246 Wis. 2d 67, 629 N.W.2d 698 (citation and quotation marks omitted, brackets in Martindale). “A person is generally only liable for his or her own torts.” Kerl v. Dennis Rasmussen, Inc., 2004 WI 86, ¶ 17, 273 Wis. 2d 106, 682 N.W.2d 328 (citing Lewis v. Physicians Ins. Co. of Wis., 2001 WI 60, ¶ 11, 243 Wis. 2d 648, 627 N.W.2d 484). “Under certain circumstances, however, the law will impose vicarious liability on a person who did [*23]  not commit the tortious conduct but nevertheless is deemed responsible by virtue of the close relationship between that person and the tortfeasor.” Id. That is the doctrine of respondeat superior, under which “a master is subject to liability for the tortious acts of his or her servant.” Id. at ¶ 18 (quoting Pamperin v. Trinity Mem’l Hosp., 144 Wis. 2d 188, 198, 423 N.W.2d 848 (1988); Arsand v. City of Franklin, 83 Wis. 2d 40, 45, 264 N.W.2d 579 (1978)).

Generally, a “master” is an employer, and a “servant” is an employee, and such a relationship is a prerequisite to respondeat superior vicarious liability; unless an agent is also a servant, his principal will not be vicariously liable for his tortious conduct except under certain limited circumstances. Id. at ¶¶ 18-20 (citations omitted). “The master/servant relationship is a species of agency; all servants are agents but not every agent is a servant.” Id. at ¶ 20. In general, “a master will only be liable for torts of the servant committed within the scope of the servant’s employment.” Id. at ¶ 23 (citing Scott v. Min-Aqua Bats Water Ski Club, Inc., 79 Wis. 2d 316, 320-21, 255 N.W.2d 536 (1977); Restatement (Second) of Agency § 219(1)). Whether a tortfeasor was acting within the scope of employment at the time the injury was inflicted is a question of fact for the jury to decide. Id.

An independent contractor is an example of a person who is an agent but not a servant. Id. at ¶ 24 (citing Arsand, 83 Wis. 2d at 51-52; Restatement (Second) of Agency § 2(3), cmt. b). An independent contractor is “a person who contracts with another [*24]  to do something for him but who is not controlled by the other nor subject to the other’s right to control with respect to his physical conduct in the performance of the undertaking.” Id. (quoting Restatement (Second) of Agency § 2(3); Wagner v. Cont’l Cas. Co., 143 Wis. 2d 379, 421 N.W.2d 835 (1988); Wis JI Civil 4060). Generally, an owner “is not responsible to a third person for the negligence of an independent contractor.” Wis JI-Civil 1022.6 (Liability of one employing independent contractor) (citing Brandenburg v. Briarwood Forestry Servs., LLC, 2014 WI 37, 354 Wis. 2d 413, 416-17, 847 N.W.2d 395 (2014)).

However, an owner or principal contractor must exercise ordinary care to prevent injury to third persons or damage to property if the work to be done is inherently dangerous. Id. Another exception is when the contract between the owner and the third party requires the owner to take ordinary care to prevent injury to the third party or damage to the property. Id. (citing Medley v. Trenton Inv. Co., 205 Wis. 30, 236 N.W. 713, 715 (1931)). A contract’s use of the label “independent contractor” is “not by itself dispositive; the test looks beyond labels to factual indicia of control or right to control.” Kerl, 273 Wis. 2d 106, ¶ 24 (citing Pamperin, 144 Wis. 2d at 201). “To impose vicarious liability where the requisite degree of control is lacking would not” be in keeping with the logic of the respondeat superior doctrine. Id. at ¶ 27. “If a principal does not control or have the right to control the day-to-day physical conduct of the agent, then [*25]  the opportunity and incentive to promote safety and the exercise of due care are not present, and imposing liability without fault becomes difficult to justify on fairness grounds.” Id.

Here, truck driving is not inherently dangerous. As the court explained, that exception “applies to people that deal with explosives. This [exception] applies to . . . different kind of work than simply driving a truck.” See Wis. JI-Civil 1022.6 (“Inherently dangerous work is work from which one can naturally expect harm to arise unless something is done to avoid that harm.”). As for the contractual exception, there’s no allegation here that there are contracts between Sysco and Mode and anyone else that are intended to require Mode and Sysco to take ordinary care to prevent injuries to third parties or damage to property. The general understanding of what shippers do and what brokers do would certainly suggest this isn’t the type of case where you would have that kind of liability, that kind of control.

Mode and Sysco also seek dismissal of Ms. Demitrou’s loss of consortium claim. “Claims for the loss of society, companionship, and consortium are derivative even though they technically ‘belong’ to the close relative making [*26]  the claim.” Finnegan ex rel. Skoglind v. Wis. Patients Comp. Fund, 2003 WI 98, ¶ 26, 263 Wis. 2d 574, 666 N.W.2d 797 (collecting cases). As a result, “a derivative claim for loss of consortium or loss of society and companionship does not have its own elements distinct from the negligence claim to which it attaches.” Id. at ¶ 28. Indeed, “juries are instructed that loss of consortium or loss of society and companionship are categories of damages, not separate negligence inquiries.” Id. (citing Wis. JI-Civil 1815 (Injury to spouse: loss of consortium)). Because Plaintiffs’ claims of negligent selection, joint enterprise/venture, and agency/vicarious liability against Mode and Sysco fail as a matter of law, and a loss of consortium claim is derivative of the underlying claims, Ms. Demitriou’s loss of consortium claim against them must be dismissed.

C. Statute of Limitations

Finally, at the August 1, 2023 hearing, the parties discussed the applicability of Mode and Sysco’s statute of limitations defense. In Wisconsin, “[a]n action to recover damages . . . for injuries to the person caused or sustained by or arising from an accident involving a motor vehicle” must be “commenced within 3 years” of the injury or else it is time barred. Wis. Stat. § 893.54(1m)(a). The injury-causing collision at issue in this case occurred on January 24, 2020. Accordingly, [*27]  Plaintiffs’ action is barred beginning January 24, 2023.

Wisconsin’s three-year statute of limitations on personal injury actions, Wis. Stat. § 893.54(1m)(a), does not bar all of the plaintiffs’ claims against Mode and Sysco. Plaintiffs Tischauser, Luedtke, and Rothenberger commenced state court actions against those defendants that were timely filed within the statute of limitations and consolidated with the cases presently before the court. It is the commencement of the action, not the service of the complaint, that determines whether an action falls within the statute of limitations. See Wis. Stat. §§ 801.02(1), 893.54. In this case, that rule clearly applies to Tischauser, Luedtke, and Rothenberger, each of whom filed state court actions naming Mode and Sysco as defendants on January 23, 2023. See Case No. 23-cv-556, Dkt. Nos. 1-1, 1-2; Case No. 23-cv-539, Dkt. Nos. 1-1, 1-2; Case No. 23-cv-538, Dkt. Nos. 1-1, 1-2. However, because the Demitrious did not file an action naming Mode and Sysco as defendants before January 24, 2023, the statute of limitations provides an additional reason, at least as to them, to dismiss Mode and Sysco as defendants in this action.

CONCLUSION

For the foregoing reasons, Mode’s and Sysco’s motions to dismiss [*28]  Plaintiffs’ tort claims against them because they are preempted by federal law and because they fail to state a claim upon which relief can be granted under Rule 12(b)(6) (Dkt. Nos. 142, 157 & 169) are GRANTED. Mode’s and Sysco’s motions to dismiss the claims asserted by Dustin and Rhonda Demitrou are also granted on the ground that they are barred by the statute of limitations. Accordingly, Mode and Sysco are dismissed as defendants from this action. Because claims remain as to other parties, this order is not final and judgment will not be entered. Mode and Sysco are the only named defendants in Case Nos. 23-cv-538, 23-cv-539, and 23-cv-556; therefore, those cases are terminated.

SO ORDERED Green Bay, Wisconsin this 4th day of December, 2023.

/s/ William C. Griesbach

William C. Griesbach

United States District Judge

End of Document