Sixth Circuit.

AMERICAN ROAD SERVICE COMPANY, Plaintiff-Appellant,

v.

CONSOLIDATED RAIL CORPORATION, Defendant-Appellee.

Argued Sept. 9, 2003.

Decided and Filed Nov. 6, 2003.

OPINION

RICHARD MILLS, District Judge.

American Road Services Company (“American”) filed a subrogation action against Consolidated Rail Corporation (“Conrail”) seeking compensation for damaged property.

The district court concluded that American’s complaint was untimely and entered summary judgment for Conrail.

We AFFIRM.

I. FACTS AND PROCEDURAL BACKGROUND

Larry Krueger, a Ford Motor Company (“Ford”) employee, was stationed on an overseas work assignment in the Czech Republic. At the conclusion of his stay, his household goods and personal belongings were packed, crated, and placed in a container by Interdean, an international moving company, and shipped to port at Bremerhaven, Germany. Mark VII, an international transportation company, issued a bill of lading to Interdean and forwarded the goods overseas via Maersk Sea Lines to port at Newark, New Jersey. Conrail transported Krueger’s goods by rail to their final destination in Detroit, Michigan. Two days later, Conrail employees discovered that the 45-foot container holding Krueger’s goods had been broken into and set on fire. American, an affiliate of Ford, paid Krueger $182,587.60 for his loss.

On September 23, 1998, American notified Conrail of its intent to pursue subrogation and on January 25, 1999 gave notice of the final amount of the claim. Conrail denied the claim on June 8, 1999. [FN1] On October 18, 2000, American filed suit in district court alleging a negligence claim and a claim pursuant to the Carmack Amendment.

On March 13, 2002, the district court entered summary judgment in favor of Conrail because American’s complaint was untimely.

On appeal, American claims that the district court erred when it failed to provide American notice and an opportunity to respond before entering summary judgment sua sponte. American also claims genuine issues of material fact precluded summary judgment. Finally, American argues that the district court erred when it considered testimony of a witness who was not disclosed in accordance with Rule 26 of the Federal Rules of Civil Procedure.

II. ANALYSIS

A. Sua Sponte

American claims that the district court’s order granting judgment in favor of Conrail was inappropriate because the time for filing dispositive motions had expired. American claims that the court entered summary judgment sua sponte and did not allow American an opportunity to respond.

“The clearly established rule in this circuit is that a district court must afford the party against whom sua sponte summary judgment is to be entered ten days notice and an adequate opportunity to respond.” Yashon v. Gregory, 737 F.2d 547, 552 (6th Cir.1984). “Noncompliance with the time provision of the rule deprives the court of authority to grant summary judgment, unless the opposing party has waived this requirement, or there has been no prejudice to the opposing party by the court’s failure to comply with this provision of the rule.” Helwig v. Vencor, Inc., 251 F.3d 540, 552 (6th Cir.2001) (quoting Kistner v. Califano, 579 F.2d 1004, 1006 (6th Cir.1978)).

At the final pretrial conference, according to both parties, the district court requested that the parties brief certain dispositive issues. At the end of Conrail’s Brief, Conrail requested “the entry of judgment as a matter of law.” American responded to the issues raised and asked the court to deny Conrail’s request for judgment.

American therefore had notice, was aware of the relevant issues, had an opportunity to respond and did in fact respond to Conrail’s request for judgment as a matter of law. Accordingly, the Court rejects American’s characterization of the judgment in this case as sua sponte. [FN2]

B. Genuine Issue of Material Fact

The district court found that the Mark VII bill of lading was a through bill of lading and that the Carmack Amendment’s two-year period of limitation for filing a civil action therefore did not apply. The court then examined the Mark VII bill of lading to determine whether the time to commence a suit was limited by contract. Section XVIII of the Mark VII bill of lading states, “Carrier shall be discharged from all liability for loss of damage to goods unless suit is brought within 9 months after delivery of the goods.” Based on that language, the district court found American’s complaint, filed almost two years after the fire in the rail yard, was untimely.

American argues on appeal that the Carmack Amendment applies to this case and that a genuine issue of material fact precluded summary judgment. We review a district court’s grant of summary judgment de novo. Cherrington v. Skeeter, 344 F.3d 631, 636 (6th Cir.2003).

The Carmack Amendment was enacted in 1906 as an amendment to the Interstate Commerce Act of 1887 and addresses the liability of common carriers for goods lost or damaged during a shipment over which the Interstate Commerce Commission (“ICC”) has jurisdiction. Capitol Converting Equipment, Inc. v. LEP Transport, Inc., 965 F.2d 391, 394 (7th Cir.1992). The Amendment requires, among other things, that a carrier transporting property issue a bill of lading to the shipper, and makes the carrier liable to the one entitled to recover under the bill of lading for loss of or injury to the property.

“A bill of lading issued in a foreign country to govern a shipment throughout its transportation from abroad to its final destination in the United States, is termed a ‘through’ bill of lading.” Capitol, 965 F.2d at 394. The ICC’s jurisdiction does not extend to a shipment under a through bill of lading unless a domestic segment of the shipment is covered by a separate domestic bill of lading. See 49 U.S.C. § 10501; Swift Textiles, Inc. v. Watkins Motor Lines, Inc., 799 F.2d 697, 701 (11th Cir.1986); Capitol, 965 F.2d at 394; Shao v. Link Cargo (Taiwan) Ltd., 986 F.2d 700, 703 (4th Cir.1993).

Determining whether a shipment is governed by a through bill of lading is a question of fact. Capitol, 965 F.2d at 394. In Capitol, LEP Transport was hired by Capitol to arrange for the transportation of machinery from Italy to Chicago. The machinery never arrived and Capitol sued LEP under the Carmack Amendment. The district court held that the shipment was governed by a through bill of lading, making the Carmack Amendment inapplicable, because the bill of lading was issued in Italy, showed Chicago as the place of delivery, was prepaid and was not followed by a separate, domestic bill of lading. Id.

Here, the district court concluded that the shipment was covered by a through bill of lading because (1) the final destination was included in the bill of lading issued by Mark VII to Interdean; (2) the freight was prepaid for the entire shipment to Detroit; and (3) no separate bill of lading was issued for the trip from Newark to Detroit.

American disputes the accuracy of the district court’s findings. Specifically, American claims there is evidence Conrail issued a domestic bill of lading. That evidence is found in Conrail’s claim notes, which state that “this document does not constitute a claim within the meaning of section 2(b) of bill of lading contract.” American states that a “section 2(b)” is not listed in the bills of lading issued by Maersk or Mark VII and argues “[w]hether there is a third Conrail bill of lading that also governs the transaction is a question of fact that precludes summary judgment.”

To support a claim under the Carmack Amendment, American must present some proof that a domestic bill of lading was issued. Speculation, unsupported by facts in the record, is insufficient to create a genuine issue of material fact and falls short of what is required to survive summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (holding that “[t]he mere existence of a scintilla of evidence in support of the plaintiff’s position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff”).

Without evidence to the contrary, the Court agrees with the district court’s finding that the Mark VII bill of lading was a through bill of lading. Such a finding renders the Carmack Amendment inapplicable to the shipment at issue. [FN3]

As a result, the Mark VII bill of lading’s nine-month period of limitation controls and American’s negligence claim, filed almost two years after the goods were destroyed by fire, was too late.

AFFIRMED.

FN The Honorable Richard Mills, United States District Judge for the Central District of Illinois, sitting by designation.

FN1. Conrail denied the claim because American failed to provide a more explicit description of its claim.

FN2. Even if it were possible to characterize the grant of summary judgment as sua sponte, American suffered no prejudice, as is evident in Section B of this opinion.

FN3. American raises another issue on appeal: whether the district court abused its discretion when it considered the deposition testimony of Maersk’s claims manager, Massoud Messkoub. American argues that the testimony was inadmissible because Conrail failed to disclose Messkoub’s identity until nine months after the witness disclosure deadline. The district court relied on Messkoub’s testimony to conclude that American’s complaint was untimely even if the Carmack Amendment applied. Because the Court has concluded the Carmack Amendment is inapplicable, a ruling on whether Messkoub’s testimony was admissible is unnecessary.

E.D. Louisiana.

Katherine RUSSELL

v.

HOME STATE COUNTY MUTUAL INSURANCE COMPANY, et al

Nov. 10, 2003.

ORDER & REASONS

FALLON, J.

Before the Court is the Plaintiff’s motion to remand. For the following reasons, the motion to remand is DENIED.

I. FACTUAL AND PROCEDURAL BACKGROUND

This case arises from an auto accident that occurred on August 22, 2001 when Defendant Stephen Dell allegedly backed into Plaintiff Katherine Russell’s vehicle. According to the plaintiff, Dell was in the course and scope of his employment with Longmile Trucking Company at the time of the accident. Plaintiff filed suit in Civil District Court for the Parish of Orleans, naming as defendants Stephen Dell, Longmile Trucking Company (“Longmile”), Home State County Mutual Insurance Company (“Home State”), insurer of Longmile, and Government Employees Insurance Company (“GEICO”), plaintiff’s uninsured motorist carrier. Plaintiff sought damages for mental pain and suffering, medical expenses, and physical pain and suffering. In accordance with Louisiana law, plaintiff did not allege a specific dollar amount of damages in her state court petition. La.Code Civ. Proc. art. 893 (West 2003).

Defendant Home State first removed the case to this Court on November 21, 2002. In its Notice of Removal, Home State indicated that, under 28 U.S.C. § 1446(b), it received “other paper” that revealed the matter in controversy met the amount required to establish federal diversity jurisdiction. 28 U.S.C. § 1332(a). Counsel for the defendant sent a letter to the plaintiff’s attorney on November 7, 2002, wherein he attached a stipulation stating that the plaintiff’s damages did not exceed $75,000. The letter indicated that he would remove the case to federal court if he did not receive the signed stipulation by November 12, 2002. Plaintiff’s counsel did not sign or return the stipulation. Accordingly, defendant argued that plaintiff’s failure to return the stipulation qualified as “other paper” such that removal was proper.

Plaintiff filed a timely motion to remand arguing that the “other paper” exception did not apply. This Court agreed with plaintiff and granted the motion to remand, finding that plaintiff’s failure to return the stipulation provided by defendant did not constitute a “voluntary act” necessary to convert the letter from defense counsel into “other paper” under the statute. Russell v. Home State County Mut. Ins. Co., 244 F.Supp.2d 669, 671-72 (E.D.La.2003) (citing Addo v. Globe Life & Accident Ins. Co., 230 F.3d 759, 762 (5th Cir.2000) and S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 494 (5th Cir.1996)).

On July 2, 2003, Defendant Home State removed the action to this Court a second time. In its Notice of Removal, Home State asserts that “new information has surfaced which now indicates that the matter in controversy exceeds $75,000.00, exclusive of interest and costs, such that this action has now become removable.” (Record Doc. No. 1). Specifically, this new information consists of a settlement demand from plaintiff dated June 4, 2003 requesting $150,000 to settle all claims. According to Home State, this new information qualifies as “other paper” under 28 U.S.C. 1446(b), and its removal is timely because it was filed within thirty (30) days from the receipt of this “other paper.”

Plaintiff again filed a motion to remand claiming that the removal is defective on several counts. Namely, plaintiff argues that: 1) the settlement demand is not tantamount to the value of the case; 2) defendant’s Notice of Removal was not timely; and, 3) defendant did not have the consent of all other defendants to remove the action to this Court. Thus, the issues before the Court are whether the plaintiff’s settlement demand is sufficient to establish jurisdictional amount and whether defendants’ notice of removal was filed timely. For reasons set forth below, plaintiff’s motion for remand is DENIED.

II. LEGAL STANDARDS FOR REMOVAL

Federal courts are courts of limited jurisdiction. Chadwick v. Shell Oil Co., 828 F.Supp. 26, 27 (E.D.La.,1993). Absent another basis for federal jurisdiction, a case may be removed to federal court when the amount in controversy exceeds $75,000, and the parties are citizens of different states. 28 U.S.C. § 1332(a). It is well established that the jurisdiction of a federal court sitting in diversity is determined at the time the complaint is filed. Saunders v. Rider, 805 F.Supp. 17, 18 (E.D.La.1992). When, as in this case, the plaintiff has not pleaded with certainty a request for monetary damages, as is permissible in Louisiana (La.Code Civ. Proc. art. 893), federal jurisdiction is determined at the time of removal. Id. The removing party bears the burden of proving to a legal certainty that the plaintiff’s claim satisfies the requisite jurisdictional amount. Id. Without more compelling evidence, the defendant’s “mere assertions” as to the value of a plaintiff’s claim cannot meet the legal certainty standard. Id. at 19. Evidence of the jurisdictional amount must be clear and convincing. Id. at 18.

As a general proposition, removal is timely when filed within thirty (30) days of defendant’s receipt of the initial pleading. 28 U.S.C. § 1446(b). However, when the case as stated in the initial pleading is not removable, the defendant may file a notice of removal within thirty (30) days after the defendant’s receipt “of a copy of an amended pleading, motion, order or other paper from which it may be first asserted that the case is one which is or may become removable.” Id. (emphasis added). The removing party bears the burden of showing that federal jurisdiction exists. Saunders, 805 F.Supp. at 18.

III. ANALYSIS

Plaintiff argues that the demand letter offering to settle the case for $150,000.00 should not be construed as “other paper” under 28 U.S.C. § 1446(b) because the demand was “mere posturing” and does not reflect the honest value of the case. However, the Fifth Circuit has held that a demand letter from the plaintiff qualifies as other paper. Addo v. Globe Life and Accident Insurance Co., 230 F.3d 759 (5th Cir.2000). In Addo, the plaintiff served a post-complaint demand letter on the defendant offering to settle the suit for an amount in excess of $75,000. Id . at 760. An issue of first impression before the court, the Fifth Circuit held that a post-complaint letter concerning settlement terms which is not plainly a sham may qualify as other paper within the meaning of 28 U.S.C. § 1446(b). Id. at 762. The Addo court based its decision on the fact that the demand letter resulted from a voluntary act of the plaintiff and gave the defendant notice of changed circumstances supporting federal jurisdiction. Id.

The question before this Court, then, is whether or not plaintiff’s settlement demand is plainly a “sham.” The Court finds that plaintiff’s settlement demand is not plainly a sham and qualifies as other paper sufficient to establish jurisdictional amount under 28 U.S.C. § 1446(b). In a letter to opposing counsel dated, June 4, 2003, plaintiff offered to settle the case for $150,000.00. (Mem. in Opp. Ex. A). Plaintiff later states in a letter dated August 6, 2003, that he would prefer to litigate the case in state court where he has “gotten as much as $175,000.00” for injuries similar to the ones alleged in the instant matter. (Mem. in Opp. Ex. D). These letters indicate that plaintiff was not merely posturing, but was relaying an accurate reflection of what he believes the case to be worth. Indeed, at least one Louisiana court has awarded amounts in excess of the federal jurisdictional amount for similar injuries. Rollings v. Winn-Dixie of La., Inc., 439 So.2d 1132, 1336, n. 1 (La.App. 4th Cir.1983) (awarding nearly $175,000 for an unoperated disc).

Furthermore, plaintiff in this case should have had a heightened awareness of the defendants’ intention to remove to federal court should new information emerge establishing jurisdictional amount. Defendant removed this case once before on November 21, 2002. At that time, this Court found that the defendant could not bear its burden of proving that removal was proper. At this time, however, plaintiff provided defendant with sufficient information and removal is proper.

In the alternative, plaintiff argues that removal was untimely because the thirty (30) day time limit began to run when the plaintiff sent a medical report to the defendants on March 21, 2003. Plaintiff argues, then, that the medical report constitutes “other paper,” not the settlement demand. However, when the complaint does not clearly reveal on its face the amount in controversy, “the information supporting removal in a copy of an amended pleading, motion, order or other paper must be ‘unequivocally clear and certain’ to start the time limit running for a notice of removal under the second paragraph of section 1446(b).” Bosky v. Kroger Texas, LP, 288 F.3d 208, 210 (5th Cir.2002) (citing Chapman v. Powermatic Inc., 969 F.2d 160, 163 (5th Cir.1992).

In this case, the medical report supplied by plaintiff is essentially a narrative of plaintiff’s physical complaints and recent treatment. (Mtn. to Rem. Ex.II). It contains an invoice amounting to $630.00 and concludes with the doctor commenting that he needs more information to make a prognosis and recommendations for further treatment. The report, then, neither clearly nor certainly establishes jurisdictional amount. Thus, the clock did not begin running until defendant received the demand letter. Accordingly, removal was timely.

Lastly, plaintiff claims that the removal is defective because it lacks the consent of all the defendants. However, it is well settled that the consent of all defendants is not necessary when the non-consenting defendants have not been properly served. Miranti v.. Lee, 3 F.3d 925, 928 (5th Cir.1993); Jones v. Houston Indep. School Dist., 979 F.2d 1004, 1007 (5th Cir.1992). As the other defendants named in the case have not been served, their consent is not required for removal.

IV. CONCLUSION

For the foregoing reasons, Plaintiff’s motion to remand is DENIED.