United States District Court,

E.D. Wisconsin.

S.C. JOHNSON & SON, INC., Plaintiff,

v.

TRANSPORT CORPORATION OF AMERICA, INC., Stevens Transport, Inc., Far Side Trucking, Inc. c/o Illinois Corporation Service, Graham Kent Pharr, Defendants.

 

No. 10–C–0681.

Sept. 30, 2011.

 

Donna M. Welch, Jeffrey L. Willian, Sarah J. Donnell, Kirkland & Ellis LLP, Chicago, IL, Mark A. Cameli, Rebecca Frihart Kennedy, Sarah A. Huck, Reinhart Boerner Van Deuren SC, Milwaukee, WI, for Plaintiff.

 

Charles K. Laplante, Edward B. Magarian, Katie C. Pfeifer, Dorsey & Whitney LLP, Minneapolis, MN, Daniel E. Reidy, James A. White, Tara A. Fumerton, Jones Day, Kenneth P. Ross, Sean Crotty, The Coleman Law Firm, Chicago, IL, for Defendants.

 

Graham Kent Pharr, Prospect Heights, IL, pro se.

 

DECISION AND ORDER GRANTING MOTIONS TO DISMISS (DOCS.21, 23, 35)

C.N. CLEVERT, JR., Chief Judge.

S.C. Johnson & Son, Inc. brought this action seeking to recover damages from defendants as a result of their involvement in an alleged bribery and kickback scheme. However, defendants Stevens Transport and Transport Corporation of America maintain that the complaint fails to state a claim and should be dismissed pursuant to Fed.R.Civ.P. 12(b)(6). Defendant Graham Kent Pharr joins them. Collectively, these defendants assert that plaintiff’s claims are preempted by federal law under the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”), now incorporated in the Interstate Commerce Commission Termination Act of 1995. Alternatively, defendants contend that Count V is barred by the statute of limitations.

 

Pharr is a pro se litigant who failed to file a formal motion to dismiss. Instead, Pharr submitted a brief in which he requests dismissal and seeks to adopt defendant Stevens Transport’s arguments as his own. (See Doc. 35.) Pro se litigants are held to a less stringent standard than their legally represented counterparts. See Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 596, 30 L.Ed.2d 652 (1972); Byers v. Basinger, 610 F.3d 980, 986 (7th Cir.2010), cert. denied, ––– U.S. ––––, 131 S.Ct. 1052, 178 L.Ed.2d 872 (2011). As a result, the court will liberally construe defendant Pharr’s brief as a motion to dismiss on the same bases as those enumerated in defendant Stevens Transport’s dismissal motion.

 

Pursuant to the court’s order dated August 4, 2011, default judgment as to liability was granted against Far Side Trucking, Inc. The court’s use of the term “defendants” in this opinion refers to Stevens Transport, Inc.; Transport Corporation of America, Inc.; and Pharr.

 

When reviewing a Rule 12(b)(6) motion to dismiss, the court “accept[s] as true all well-pled facts alleged, taking judicial notice of matters within the public record, and drawing all reasonable inferences in the plaintiff’s favor.” Adkins v. VIM Recycling, Inc., 644 F.3d 483, 493 (7th Cir.2011). Here, plaintiff alleges that defendants gave plaintiff’s employee, Milton Morris, “thousands of dollars or more in money, goods, travel, entertainment, and services.” (Compl.¶ 6.) In exchange, defendants received “favorable treatment” from Morris, which plaintiff alleges resulted in it paying defendants above-market rates, increased invoices, and for unnecessary services. In addition, defendants received more business from plaintiff. (See, e.g., id. ¶¶ 6, 20, 51, 52, 54, 60, 70.) From 1988 through October 2004, Morris worked for plaintiff as director of its Transportation Department; his responsibilities included selecting carriers and obtaining competitive rates for transportation from those carriers. (Id. ¶ 18.)

 

By the fall of 2004, plaintiff discovered “a potential ongoing pattern of corruption and racketeering” by Morris and certain carriers. (Id. ¶ 19.) In the spring of 2005, plaintiff found that defendants benefitted from their connections with Morris by receiving higher rates and charges as well as more business. (Id. ¶ 20.) Plaintiff alleges that defendants provided Morris with bribes under the guises of gambling, travel, entertainment, and cash, and that defendants received favorable treatment for doing so. (Id. ¶¶ 22, 28, 35, 51.)

 

Plaintiff brought suit against Morris in the Circuit Court of Racine County, Wisconsin, on October 18, 2004; final judgment was entered against Morris and other named defendants on June 2, 2008, for $203.8 million. (Compl.¶ 8.)

 

Plaintiff seeks damages on the basis of five state law claims: fraudulent misrepresentation by omission, civil conspiracy to violate Wis. Stat. § 134.05, civil conspiracy to commit fraud, violation of the Wisconsin Organized Crime Control Act (“WOCCA”), and aiding and abetting breach of fiduciary duty. Defendants responded to plaintiff’s allegations with their motions to dismiss.

 

To survive a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, a complaint must state a claim that is plausible. Ashcroft v. Iqbal, 556 U.S. ––––, ––––, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007). A plaintiff’s claim needs to “allege enough facts to raise its right to relief above the speculative level,” meaning that the plaintiff must “plead[ ] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”   Iqbal, 129 S.Ct. at 1949; Sullivan v. CUNA Mut. Ins. Soc’y, 683 F.Supp.2d 918, 927 (W.D.Wis.2010), aff’d, 649 F.3d 553 (7th Cir.2011). The court accepts as true all well-pleaded, meaning non-conclusory, allegations.   Sullivan, 683 F.Supp.2d at 923.

 

Defendants argue that all of plaintiff’s claims are preempted and should be dismissed. In preemption matters, the court presumes that “Congress does not intend to supplant state law.” N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654–55, 115 S.Ct. 1671, 1676, 131 L.Ed.2d 695 (1995). “[T]he purpose of Congress is the ultimate touchstone in every pre-emption case,” Wyeth v. Levine, 555 U.S. 555, ––––, 129 S.Ct. 1187, 1194, 173 L.Ed.2d 51 (2009) (internal quotations omitted), and preemption analysis begin with the text of the statutory provision at issue, N.Y. State Conference, 514 U.S. at 655. Preemption may occur expressly, such as when a federal law states explicitly that it is preempting a state law; implicitly, such as when Congress enacts a law that is so pervasive that the court assumes preemption of state laws was intended; or by conflict, when a state and federal law are at odds. See Frank Bros., Inc. v. Wis. Dep’t of Transp., 409 F.3d 880, 885–87 (7th Cir.2005).

 

Here, defendants contend that plaintiff’s claims are preempted by the FAAAA, which expressly prohibits states from “enact[ing] or enforc[ing] a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier.” 49 U.S.C. § 14501(c)(1) (2011). The language in the FAAAA is similar to that in the Airline Deregulation Act of 1978 (“ADA”). Compare 49 U.S.C. § 14501(c)(1) with 49 U.S.C. § 41713(b)(1). Consequently, courts have used interpretations of the ADA to assist them in interpreting the FAAAA. See, e. g., Rowe v. N .H. Motor Transp. Ass’n, 552 U.S. 364, 370–71, 128 S.Ct. 989, 994–95, 169 L.Ed.2d 933 (2008).

 

In Morales v. Trans World Airlines, Inc., the Supreme Court described the phrase “relating to” from the ADA as “express[ing] a broad pre-emptive purpose.” 504 U.S. 374, 383, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992). Defining the phrase in accordance with a similar provision from the Employee Retirement Income Security Act of 1974 (“ERISA”), the Court stated that “relating to” means “having a connection with, or reference to … ‘rates, routes, or services .’ “ Id. at 384 (quoting 49 U.S.C.App. § 1305(a)(1)). The state law need not expressly refer to rates, routes, or services to be preempted, but it must have a “significant impact on carrier rates, routes, or services,” meaning that generally applicable laws can be preempted. Rowe, 552 U.S. at 375 (internal quotation marks deleted). However, “federal law does not pre-empt state laws that affect rates, routes, or services in too tenuous, remote, or peripheral a manner.” Id. (internal quotations omitted). Moreover, federal law does not necessarily preempt “court enforcement of contract terms set by the parties themselves.” Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 222, 115 S.Ct. 817, 820, 130 L.Ed.2d 715 (1995). But, a party’s claim may be preempted if he or she seeks to enlarge or enhance the original terms of the parties’ bargain. See id. at 233.

 

The Seventh Circuit has set forth a two-part test that must be satisfied for a law to be preempted under the ADA or FAAAA: “(1) A state must enact or enforce a law that (2) relates to [motor carrier] rates, routes, or services, either by expressly referring to them or by having a significant economic effect upon them.” Travel All Over the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1432 (7th Cir.1996); see also United Airlines, Inc. v. Mesa Airlines, Inc., 219 F.3d 605, 609 (7th Cir.2000). For purposes of FAAAA preemption, “[s]tate common law counts as an ‘other provision having the force and effect of law’ “ and can therefore also be preempted. Mesa Airlines, 219 F.3d at 607. “States can impose their own substantive standards through the common law as well as through statutory enactments.” Travel All Over the World, 73 F.3d at 1435. Services, for purposes of the ADA and FAAAA, are defined as “generally represent[ing] a bargained-for or anticipated provision of labor from one party to another … lead[ing] to a concern with the contractual arrangement between the [motor carrier] and the user of the service.” Id. at 1433.

 

The question before the court is whether enforcement of the state laws underlying a claim asserted in the complaint in this case relates to plaintiff’s prices, routes, or services by either expressly referring to them or having a significant economic effect upon them. If the answer is yes, that claim or claims will be preempted and accordingly dismissed. Therefore, the court will address each of plaintiff’s claims in turn.

 

Plaintiff’s claims rest on various state statutory and common law theories of recovery. Though plaintiff may have been able to assert recovery in contract law, which the FAAAA is less likely to preempt, see, e.g., Wolens, 513 U.S. at 230, plaintiff expressly disclaims that it is seeking recovery under any theory of contract law (see Doc. 28 at 11 (stating that plaintiff “is not seeking to recover under any contract it had with Defendants; its allegations are not based on a breach of contract”).)

 

Defendants suggest that even if claims against motor carriers Stevens Transport and Transport Corporation of America may be preempted, the claims against Pharr, an individual, may not be because he cannot be sued under the FAAAA. Nothing in applicable FAAAA case law suggests that the availability of a viable claim under the FAAAA has any bearing on preemption analysis.

 

A. Plaintiff’s Claim of Fraudulent Misrepresentation by Omission is Preempted

Plaintiff’s claim for fraudulent misrepresentation by omission is preempted. Plaintiff alleges that defendants failed to disclose their involvement in a “long-running scheme” which resulted in plaintiff paying increased rates and in addition, for unnecessary services, amounting to fraudulent misrepresentation by omission. (See Compl. ¶ 80.) This claim has its basis in tort law, and common law tort claims are not exempt from preemption. See, e.g., Mesa Airlines, 219 F.3d at 610. Courts have dismissed claims sounding in fraud due to ADA or FAAAA preemption. See, e.g., Wolens, 513 U.S. at 228; Mesa Airlines, 219 F.3d at 611.

 

Defendants rely on the Supreme Court’s decision in Wolens for part of their preemption argument. In Wolens, the Supreme Court held that Wolens’s claims of American Airlines violating the Illinois Consumer Fraud Act were preempted.   Wolens, 513 U.S. at 228. Wolens and other plaintiffs sued American Airlines for modifications to its frequent flier program, asserting that it devalued the program credits they had accrued. Id. at 224–25. The plaintiffs sought damages, alleging that the modification to the frequent flier program violated the Illinois Consumer Fraud Act. Id. However, the Court disagreed, noting that the Act was “prescriptive” and when enforced “control[led] the primary conduct of those falling within its governance.” Id. at 227. Further, the Court observed that the National Association of Attorneys General (“NAAG”) had set forth guidelines showing that consumer protection acts, such as the Illinois Consumer Fraud Act, had the potential for “intrusive regulation of airline business practices.” Id. at 227–28. These guidelines convinced the Court that the Illinois Consumer Fraud Act “serve[d] as a means to guide and police the marketing practices of the airlines,” and that plaintiffs’ claims should be dismissed. Id. at 228.

 

The Seventh Circuit has also dismissed fraud claims on the basis of ADA preemption. See Mesa Airlines, 219 F.3d at 607, 611. In Mesa Airlines, the court held that plaintiff’s claim of fraudulent inducement was preempted by the ADA. Id. Mesa Airlines alleged that United Airlines fraudulently induced it to purchase planes and enter a contractual extension. Id. at 607. The court viewed Mesa Airlines’ claim as an attempt to replace the parties’ bargain with something else and held that the claim was preempted. Id. at 609–10.

 

Here, too, plaintiff’s claim of fraudulent misrepresentation by omission is preempted. The genesis of the claim is fraud, similar to that asserted in Wolens and Mesa Airlines, and the facts underlying the claim are particularly similar to the facts of Mesa Airlines. Like Mesa Airlines, which alleged that it was fraudulently induced to purchase planes, plaintiff here contends that it was induced through fraud, bribery, and the kickback scheme to pay defendants more money for their services. Considering the situations in Wolens and Mesa Airlines, this court finds that enforcement of plaintiff’s fraudulent misrepresentation claim would have a prescriptive effect, essentially regulating the practices of defendant carriers (as in Wolens) or would result in replacement of the parties’ original bargain with something else (as in Mesa Airlines). In either case, enforcement of plaintiff’s claim would relate to defendant carriers’ prices, routes, or services.

 

Plaintiff’s argument against preemption is not persuasive. Plaintiff submits that payment of increased rates and for unnecessary services was merely a byproduct of the fraudulent conduct, but in matters subject to preemption that is not the court’s focus. The standard set forth by the Seventh Circuit, which both parties acknowledge, is: “to be expressly preempted by the [FAAAA]: (1) A state must enact or enforce a law that (2) relates to [motor carrier] rates, routes, or services, either by expressly referring to them or by having a significant economic effect upon them.” Travel All Over the World, 73 F.3d at 1432.

 

The court notes instances where common law tort claims have been allowed to proceed. For instance, in Travel All Over the World, a travel agency sued an air carrier for defamation, slander, and fraud, among other things, stemming from an instance where the air carrier required the travel agency’s clients to repurchase tickets directly from the air carrier. 73 F.3d at 1429. The Seventh Circuit allowed claims of defamation and slander to survive, finding that they did not have a significant economic effect on rates, routes, or services. Id. at 1433. Moreover, the court allowed certain other intentional tort claims (including fraud) to go forward, but only to the extent they were based on the defamatory comments. Id . at 1434. To the extent the intentional tort claims relied on the cancellation and repurchase of tickets the claims were preempted. Id. Tort claims “based on the airline’s refusal to transport passengers who had booked their flights through Travel All … clearly ‘relate to’ the airline’s provision of services.” Id. Ultimately, any intentional tort claims related to services were preempted but those based on defamatory comments were permitted to continue. Id. at 1435.

 

Here, fraudulent misrepresentation by omission is not based on another claim that would be allowed to survive. Plaintiff claims that defendants were engaged in a long-running scheme to obtain increased rates and business from plaintiff. (See Compl. ¶¶ 72–82.) The claim of fraudulent misrepresentation by omission relates to inflated, above-market prices that the defendants allegedly received and additional services provided as a result of the long-running scheme and thereby has a connection with defendants’ prices and services. As such, plaintiff’s claim of fraudulent misrepresentation by omission is preempted.

 

The court acknowledges that other courts have held intentional tort claims not preempted, using the underlying purpose of the preemptive provision at issue to come to such a conclusion. See Aloha Airlines, Inc. v. Mesa Air Group, Inc., 2007 U.S. Dist. LEXIS 19484 *27–(D.Haw. March 19, 2007) (allowing a plaintiff’s claim of fraud to go forward, reasoning that the underlying purpose of the ADA was to “promote competition among airlines” and that preempting plaintiff’s fraud claim “would work to contravene [that] purpose”); see also Taj Mahal Travel, Inc. v. Delta Airlines Inc., 164 F.3d 186, 195 (3rd Cir.1998) (allowing a plaintiff’s claim of defamation to go forward because applying state law to the claim did “not frustrate Congressional intent”). However, the court is bound by Seventh Circuit case law, which requires the court to focus on the text of the statute rather than its underlying purpose. See Mesa Airlines, 219 F.3d at 608–09, 611 (stating that “[o]pinions such as Taj Mahal Travel, which say that state law is preempted by [the ADA] only if it ‘frustrates Congressional intent [or] imposes a state utility-like regulation on the airlines’, cannot be reconciled with Wolens ” and did not provide the court with a convincing reason to adopt that approach (citation omitted)).

 

B. Plaintiff’s Claim of Civil Conspiracy to Violate Wis. Stat. § 134.05 is Preempted

Next, the court considers plaintiff’s claim of civil conspiracy to violate Wis. Stat. § 134.05. Section 134.05 is a generally applicable bribery statute that does not apply to these defendants specifically in their capacity as motor carriers but to “[w]hoever corruptly gives, offers, or promises to an agent, employee, or servant any gift or gratuity whatever, with intent to influence the agent’s, employee’s or servant’s action in relation to the business of the agent’s, employee’s, or servant’s principal, employer, or master.” Wis. Stat. § 134.05(1). The statute does not expressly refer to prices, routes, or services.

 

When a generally applicable statute is at issue, the court must look to whether its effect on prices, routes, or services is “tenuous, remote, or peripheral” such that it should not be preempted, or whether enforcement of state law would have a “significant impact” on the prices, routes, or services. Rowe, 552 U.S. at 375 (internal quotation marks omitted). Categorization of a law as generally applicable does not mean it cannot be preempted. See Wolens, 513 U.S. at 227–28 (preempting the Illinois Consumer Fraud Act); Morales, 504 U.S. at 386. If the court is convinced that enforcement of the state law would have a significant economic effect on defendants’ prices, routes, or services, it is preempted. See Travel All Over the World, 73 F.3d at 1432.

 

The Supreme Court’s decision in Morales provides guidance. In Morales, states sought to enforce general consumer protection statutes to prevent airline fare advertisements that allegedly deceived consumers. 504 U.S. at 378. The NAAG adopted guidelines that explained how the existing general consumer protection laws would apply to airline advertising before informing the airlines that failure to comply with the guidelines could result in litigation. Id. at 379–80. In response, the airlines sued, claiming that such regulation was preempted by the ADA. Id. at 380. The Supreme Court held that state regulation of airline advertising was preempted under the ADA and found that the NAAG guidelines clearly referenced airfares. Id. at 388. The Court further found that allowing state restrictions on airline advertising would have a forbidden significant effect on fares due to the nature of advertising. Id. at 388. However, the Court was careful to point out that some laws would affect fares in “too tenuous, remote, or peripheral a manner” such that they would not be preempted, though the Court did not provide further specificity. Id. at 390 (internal quotations omitted).

 

This court is persuaded that enforcement of § 134.05 in the present case has a significant relationship with defendants’ prices, routes, or services. The complaint charges each defendant with forming a conspiracy with plaintiff’s transportation director “through which they sought to cause SC Johnson to pay Stevens, TA, and Far Side rates substantially above those in the market and to cause SC Johnson to award them business.” (Compl.¶ 84.) The relationship between the claim and defendants’ prices and services is not tenuous; instead, altering the price paid to and the amount of service from defendants was the very object of the conspiracy. Moreover, the overt acts on behalf of the charged conspiracy were defendants’ payment of bribes “[i]n exchange for … rates that exceeded competitive levels and for reimbursement above costs incurred or charges that exceeded industry standards.” (Compl.¶ 85.)

 

Section 134.05 applies, among other things, to an employee who, being authorized “to employ service or labor for his or her principal, employer, or master,” receives a commission or bonus from the person who renders such service, and to the person offering the commission or bonus. § 134.05(2)(b), (3). Thus, although this bribery statute may have general application, it covers bribes in exchange for services. Thus, the claim of civil conspiracy to commit such bribery relates to such services and servicers as well.

 

In sum, this claim is preempted.

 

C. Plaintiff’s Claim of Civil Conspiracy to Commit Fraud is Preempted

Plaintiff charges that defendants engaged in a civil conspiracy “through which they sought to cause SC Johnson to pay Stevens, TA, and Far Side rates substantially above those available in the market and to receive reimbursement for costs not actually incurred or charges that exceeded industry standards.” (Compl.¶ 90.) State law claims that make express reference to price, routes, or services are preempted. See Morales, 504 U.S. at 388 (preempting states’ attempt at regulating airline fares in part because NAAG guidelines made “express reference[s] to fares”); Travel All Over the World, 73 F.3d at 1434 (stating that some claims of intentional torts expressly referred to and, therefore, related to an airline’s services).

 

In its civil conspiracy claim, plaintiff asserts that defendants “formed a separate conspiracy with Morris through which they sought to cause SC Johnson to pay [defendants] rates substantially above those available in the market and to receive reimbursement for costs not actually incurred or charges that exceeded industry standards.” (Compl. ¶ 90 (emphasis added).) Unquestionably, these contentions relate to a price charged by defendants. As such, plaintiff’s claim for civil conspiracy to commit fraud is preempted.

 

D. Plaintiff’s Claim of Violation of the Wisconsin Organized Crime Control Act (“WOCCA”) is Preempted

Next, the court turns to the claim that defendants violated WOCCA, Wis. Stat. §§ 946.80–.88. WOCCA is similar to its federal counterpart, the Racketeer Influenced and Corrupt Organizations Act (“RICO”); the Wisconsin Court of Appeals has observed that case law interpreting RICO is persuasive authority when interpreting WOCCA. State v. Mueller, 201 Wis.2d 121, 144, 549 N.W.2d 455, 464 (Ct.App.1996). Due to these similarities, decisions interpreting RICO are instructive with regard to plaintiff’s WOCCA claim.

 

Federal courts have not dealt extensively with state law RICO or federal RICO claims in conjunction with the preemptive provision of the FAAAA or ADA. In Taj Mahal Travel, plaintiffs filed defamation and state RICO claims when the defendant airline did not honor tickets they had purchased. 164 F.3d at 188. The district court, relying on the preemption provisions of the ADA, had entered judgment against the plaintiff on a state RICO count as well as a defamation claim. Id. The plaintiff appealed the defamation claims, and the Third Circuit held that those claims were not preempted. Id. at 189, 195. The court did not address plaintiff’s state RICO claim because the plaintiff did not challenge its dismissal. Id. at 188.

 

WOCCA, like many statutes, is generally applicable in that it does not apply to the defendants in their capacity as motor carriers but rather to any person who violates Wis. Stat. § 946.83. Wis. Stat. § 946.84(1). Section 946.83 prohibits, among other things, a person employed by an enterprise from conducting the enterprise through a pattern of racketeering activity. A pattern of racketeering activity means at least three incidents of activity involving various specified crimes including Wis. Stat. §§ 134.05 (bribery), 943.89 (mail fraud), and 943.90 (wire fraud). Wis. Stat. § 946.82(3), (4). As mentioned earlier, when a generally applicable statute is at issue, the court looks to whether the statute’s effect on rates, routes, or services is tenuous, remote, or peripheral as opposed to having a significant impact on defendants’ prices, routes, or services. Rowe, 552 U.S. at 375; Travel All Over the World, 73 F.3d at 1432.

 

Plaintiff asserts that it and its Transportation Department were each an “enterprise” as defined in the statute. (Compl.¶ 96.) Plaintiff then asserts that defendants “were associated with the Transportation Department as carriers providing transportation services to SC Johnson.” (Id. ¶ 99 (emphasis added).) Further, alleges plaintiff, defendants conducted and participated in the activities of the two enterprises by directing them “to pay above-market rates and for services that were not necessary through submission of numerous invoices to SC Johnson and to award Defendants business.” (Id. ¶ 100.) Each bribe allegedly violated Wis. Stat. § 134.05 and, therefore, constituted racketeering activity. (Id. ¶ 102.) In addition, defendants submitted fraudulent invoices that violated the mail and wire fraud statutes of Wis. Stat. §§ 943.89 and 943.90 and constituted racketeering activity. (Id. ¶¶ 107, 108.) The bribes and the Transportation Department director’s action in causing S.C. Johnson to pay defendants above-market rates and for services not performed and to award defendants increased shipping business were allegedly part of a common plan designed to injure S.C. Johnson. (Id. ¶ 104.)

 

These predicate acts substantially relate to the prices charged and services provided by defendants and the prices and services paid for by plaintiff. Hence, the WOCCA claim is preempted by the FAAAA.

 

E. Plaintiff’s Claim of Aiding and Abetting Breach of Fiduciary Duty is Preempted and Time–Barred

In Wisconsin, “a person is liable in a civil action for aiding and abetting if: (1) The person undertakes conduct that as a matter of objective fact aids another in the commission of an unlawful act; and (2) the person consciously desires or intends that his conduct will yield such assistance.” Winslow v. Brown, 125 Wis.2d 327, 336, 371 N.W.2d 417, 423 (Ct.App.1985). To be preempted, enforcement of the law for aiding and abetting a breach of fiduciary duty must be found to relate to defendant’s prices, routes, or services.

 

Though other courts have dealt with breach of fiduciary duty claims in the context of ADA or FAAAA preemption, few have dealt with claims of aiding and abetting a breach of fiduciary duty. Therefore, while a case like Mesa Airlines, in which a plaintiff’s claim that defendant violated fiduciary duties that it owed plaintiff as its partner, is helpful, it is not identical. See Mesa Airlines, 219 F.3d at 607, 611.

 

Nevertheless, the claim at issue refers to defendants’ pricing and services, meaning that enforcement of the law would relate to the defendants’ pricing and services as well. The complaint asserts that defendants “assisted Morris in his breach of fiduciary duty by providing Morris with bribes and kickbacks in exchange for receipt of inflated rates and for receipt of business” and that they “intended that their provision of bribes and kickbacks would cause Morris to have SC Johnson pay inflated rates and provide them with business.” (See Compl. ¶¶ 123, 125.) Consequently, defendants’ pricing is an essential feature of a breach of fiduciary duty claim, as Morris’s job required him to obtain competitive transportation rates from carriers. (See Compl. ¶¶ 18, 123, 125.) Aiding and abetting the same claim would similarly relate to defendants’ pricing. That being so, the claim is preempted by the FAAAA.

 

Moreover, this claim is time-barred by a two-year statute of limitations for intentional torts, Wis. Stat. § 893.57. Plaintiff contends that its claim is grounded in fraud so a six-year statute of limitations applies, but the court disagrees.

 

As Stevens Transport notes in its reply brief, at the time of the alleged aiding and abetting, the statute of limitations now at issue was two years; the statute has since been amended to have a time limit of three years. 2009 Wis. Laws 120.

 

Wisconsin courts have characterized aiding and abetting as an intentional tort. See Tensfeldt v. Haberman, 2009 WI 77, 319 Wis.2d 329, 768 N.W.2d 641 (2009). As discussed above, “a person is liable [in Wisconsin] in a civil action for aiding and abetting if: (1) The person undertakes conduct that as a matter of objective fact aids another in the commission of an unlawful act; and (2) the person consciously desires or intends that his conduct will yield such assistance.” Winslow, 371 N.W.2d at 423. Breach of fiduciary duty is also classified as an intentional tort for the purpose of applying the statute of limitations. See Beloit Liquidating Trust v. Grade, 2004 WI 39, 270 Wis.2d 356, 677 N.W.2d 298 (stating that a claim of breach of fiduciary duty involves an intentional tort and that Wis. Stat. § 893.57 applies). It appears that in applying the statute of limitations to relevant claims, courts do not (as plaintiff desires) consider the underlying facts of the claim. See, e. g., Zastrow v. Journal Commc’ns, Inc., 2006 WI 72, 291 Wis.2d 426, 718 N.W.2d 51 (holding that a breach of fiduciary duty is an intentional tort and applying Wis. Stat. § 893.57 without inquiry into the underlying facts of the breach of fiduciary duty claim); McMahon v. Pa. Life Ins. Co., 891 F.2d 1251, 1255 (7th Cir.1989) (stating that “[e]ven if it mattered” that certain underlying facts were present, plaintiff’s “breach of fiduciary duty claim was properly ruled barred by Wisconsin’s two-year statute of limitations”). These decisions indicate that a claim of aiding and abetting is simply an intentional tort with a two-year statute of limitations.

 

Though plaintiff provides case law to support its argument, none of it comes from the Seventh Circuit, which this court is bound to follow, nor from Wisconsin courts. The court need not look any further than relevant Wisconsin case law and Seventh Circuit decisions interpreting Wisconsin law for the applicable limitations period. Section 893.57’s two-year statute of limitations applies. Given that plaintiff discovered (or should have discovered) defendants’ aiding and abetting by fall 2004 (at the earliest) or spring 2005 (at the latest) but did not bring suit until August 10, 2010 (five years after discovery), plaintiff’s claim of aiding and abetting breach of fiduciary duty is time barred by Wis. Stat. § 893 .57’s two-year statute of limitations.

 

CONCLUSION

For the above-stated reasons,

 

IT IS ORDERED that Stevens Transport’s, Transport Corporation of America’s, and Pharr’s motions to dismiss pursuant to Rule 12(b)(6) (Docs.21, 23, 35) are granted, and all claims against these defendants are dismissed.

 

IT IS FURTHER ORDERED that S.C. Johnson notify the court in writing within fourteen days as to whether it intends to establish damages against Far Side Trucking by affidavit or if, instead, a hearing as to damages is desired.

United States District Court,

S.D. Georgia,

Savannah Division.

Karine L. MAIER, as surviving spouse of James R. Maier and as Executrix of the Estate of James R. Maier, Plaintiff,

v.

GREEN EYES USA, INC.; Faustino Jimenez; Canal Insurance Company; Shelly, Middlebrooks & O’Leary, Inc.; Aequicap INsurance Company; K.V. Carrier Services, Inc.; Jake Kanonitz; Kannon & Kannon Insurance, Inc.; Dot Services Corp.; and Aequicap Program Administrators, Inc; Defendants.

 

No. CV409–172.

Sept. 30, 2011.

 

Cecil Clay Davis, Howard E. Spiva, Spiva Law Group, Savannah, GA, Thomas William Malone, Malone Law, Atlanta, GA, for Plaintiff.

 

Joseph H. Barrow, Barrow & Ballew, PC, Edward M. Hughes, Callaway, Braun, Riddle & Hughes, PC, T. Daniel Tucker, Brennan & Wasden, LLP, Don Smart, Smart & Harris, Savannah, GA, for Defendants.

 

ORDER

WILLIAM T. MOORE, JR., District Judge.

Before the Court is Defendants Canal Insurance Company (“Canal”) and Shelly, Middlebrooks & O’Leary, Inc.’s (“SMO”) Motion for Summary Judgment.  (Doc. 141.) For the reasons that follow, this motion is GRANTED as to all claims in Plaintiff’s complaint.

 

Throughout the remainder of this order, “Defendants” refers to Defendants Canal and SMO unless another Defendant is specifically named or all Defendants are referenced as a group.

 

Because the Court finds that this motion can be resolved without the aid of oral argument, Plaintiff’s request for such is DENIED. (Doc. 188.) See Milburn v. United States, 734 F.2d 762, 765 (11th Cir.1984) ( “It is well settled in this circuit that Rule 56[ ] does not require an oral hearing.”).

 

BACKGROUND

In this action, Plaintiff Maier filed suit against several defendants, seeking recovery for the death of James R. Maier (“Maier”)  as a result of an October 14, 2008 accident involving a tractor trailer. (Doc. 40 ¶ 1.) On that morning, Maier’s vehicle became disabled and was stopped in the northbound emergency lane of Interstate 95 (“I–95”) near Savannah, Georgia. (Id. ¶ 7.) Defendant Faustino Jiminez (“Jiminez”), employed by Defendant Green Eyes USA, Inc. (“Green Eyes”), was operating a tractor trailer and also travelling northbound on I–95. Plaintiff alleges that at approximately 6:20 a.m., the tractor trailer Defendant Jiminez was operating struck and killed Maier, “who was standing entirely within the emergency lane next to his disabled vehicle.” (Id. ¶ 9.)

 

Throughout the remainder of this order, “Maier” refers to James R. Maier and “Plaintiff” refers to Plaintiff Karine L. Maier.

 

Plaintiff generally contends that multiple Defendants in this case “undertook to perform driving record inquiries and back ground [sic] investigations on tractor trailer drivers applying for employment with” Defendant Green Eyes. (Id. ¶ 19.) This undertaking extended to performing “driving record inquiries and back ground [sic] investigations on current tractor trailer drivers for [Defendant Green Eyes] and to monitor their motor vehicle records.” (Id. ¶ 20.) Plaintiff alleges that Defendant Green Eyes neglected or reduced its own activities in this area, specifically relying on several other Defendants to perform those tasks. (Id. ¶ 21–22.)

 

As applied to this case, Plaintiff contends that Defendants “knew or should have known” that Defendant Jiminez “had a history and disposition of operating tractor trailers in a negligent and reckless manner;” “had been cited for, and convicted of, at least thirteen moving violations;” “had been involved in at least one prior tractor trailer collision, which occurred on or about April 28, 2004, and as a result of said collision, [Defendant Jiminez] received a citation for improper lane change and was subsequently convicted of said citation;” had his commercial driver’s license (“CDL”) suspended in 2005 for accumulating twelve “points” within a twelve month period; and had his CDL “disqualified for a period of One Hundered [sic] and Twenty (120) days in 2006, because he had previously been convicted of three serious traffic violations within three years.” (Id. ¶¶ 23–27.) These contentions culminate with the conclusion that Defendant Jiminez was not competent to safely operate a tractor trailer, and Defendants knew or should have known of his lack of competency prior to the fatal accident underlying this case. (Id. ¶¶ 28–29.) Plaintiff also alleges that Defendants are liable under Restatement (Second) of Torts (“Restatement”) § 324A(b) and were negligent in training and supervising Defendant Jiminez; entrusting him with a tractor trailer; and hiring, employing, and retaining him. (Id. ¶¶ 32–36.) Defendants are also alleged to have acted “with reckless and wanton disregard and a conscious indifference for the consequences of their actions.” (Id. ¶¶ 42–43.)

 

In the motion presently before the Court, Defendants argue that Plaintiff has insufficient evidence to establish a claim under any subsection of Section 324A of the Restatement, that Plaintiff’s claims are barred by federal preemption, and that Plaintiff is not entitled to seek punitive damages from either Defendant. Plaintiff has responded in opposition, and a seemingly endless volley of responsive briefing has raised other arguments, which will only be addressed if dispositive to any issue in this case. (Docs.189–90, 219, 226, 228, 233, 236, 239.)

 

ANALYSIS

I. SUMMARY JUDGMENT STANDARD

According to Fed.R.Civ.P. 56(a), “[a] party may move for summary judgment, identifying each claim or defense-or the part of each claim of defense-on which summary judgment is sought.” Such a motion must be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Id. The “purpose of summary judgment is to ‘pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.’ ” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (quoting Fed.R.Civ.P. 56 advisory committee notes).

 

Summary judgment is appropriate when the nonmovant “fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.”   Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The substantive law governing the action determines whether an element is essential. DeLong Equip. Co. v. Wash. Mills Abrasive Co., 887 F.2d 1499, 1505 (11th Cir.1989).

 

As the Supreme Court explained:

 

[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.

 

Celotex, 477 U.S. at 323. The burden then shifts to the nonmovant to establish, by going beyond the pleadings, that there is a genuine issue as to facts material to the nonmovant’s case. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991).

 

The Court must review the evidence and all reasonable factual inferences arising from it in the light most favorable to the nonmovant. Matsushita, 475 U.S. at 587–88. However, the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts.” Id. at 586. A mere “scintilla” of evidence, allegations, will not suffice. See, e.g., Tidwell v. Carter Prods., 135 F.3d 1422, 1425 (11th Cir.1998). Nevertheless, where a reasonable fact finder may “draw more than one inference from the facts, and that inference creates a genuine issue of material fact, then the Court should refuse to grant summary judgment.” Barfield v. Brierton, 883 F.2d 923, 933–34 (11th Cir.1989).

 

II. EXAMINATION OF PLAINTIFF’S CLAIMS

Defendants have moved for summary judgment as to all claims Plaintiff has asserted against them. (Doc. 142 at 3.) Plaintiff has only opposed summary judgment with respect to the counts, or by using the legal concepts, specifically discussed below.

 

The relevant rule provides that “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also S .D. Ga. L.R. 7.5 (“Unless these rules or the assigned Judge prescribes otherwise, each party opposing a motion shall serve and file a response within twenty-one (21) days after service of the motion for summary judgment. Failure to respond within the applicable time period shall indicate that there is no opposition to a motion.”). The Court concludes that on the basis of the undisputed facts in the record, Defendants are entitled to summary judgment as to all claims not expressly addressed elsewhere in this order.

 

A. Third Party Liability Under Georgia Law

Georgia has adopted Restatement § 324A to serve as the framework for imposition of third party liability. Huggins v. Aetna Cas. & Sur. Co., 245 Ga. 248, 249, 264 S.E.2d 191, 192 (1980) (“We here adopt the majority rule as stated in the Restatement 2d Torts § 324A .”). This section states that

 

One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if

 

(a) his failure to exercise reasonable care increases the risk of such harm, or

 

(b) he has undertaken to perform a duty owed by the other to the third person, or

 

(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.

 

Restatement (Second) of Torts § 324A.

 

In Georgia, a voluntary undertaking amounts to liability only if one or more of the additional requirements stated in § 324A is satisfied. U.S. Aviation Underwriters, Inc. v. United States, 530 F.Supp.2d 1315, 1319 (M.D.Ga.2007). As the parties have framed the issues, only two subsections, § 324A (a) and (c), appear to be at issue.

 

1. Plaintiff’s Claim Under Restatement § 324A(a)

Defendants argue that they are entitled to summary judgment on the Restatement § 324A(a) claim because Plaintiff is unable to demonstrate the “alleged negligence increase[d] the risk of harm.” (Doc. 142 at 17.) After careful consideration and for the reasons that follow, the Court agrees. Accordingly, Defendants’ motion is GRANTED as to Plaintiff’s § 324A(a) claim.

 

The plain language of the relevant Restatement subsection requires that the tortfeasor’s “failure to exercise reasonable care increase[ ] the risk of [ ] harm.” Restatement (Second) of Torts § 324A(a). Georgia courts have consistently held that this subsection is applicable only “when a nonhazardous condition is made hazardous through the negligence of a person who changed its condition or caused it to be changed.” BP Exploration & Oil, Inc. v. Jones, 252 Ga.App. 824, 830, 558 S.E.2d 398, 405 (2001); Adler’s Package Shop v. Parker, 190 Ga.App. 68, 71, 378 S.E.2d 323, 326 (1989); Argonaut Ins. Co. v. Clark, 154 Ga.App. 183, 185, 267 S.E.2d 797, 799 (1980). The Restatement provides an illustration to guide the interpretation of this concept:

 

A store calls B electric company to repair a defective light hanging over one of the aisles of the store. B’s workman repairs the light, but leaves the fixture so loosely attached that it falls upon and injures C, a customer in the store who is walking down the aisle. B is liable to C.

 

Restatement (Second) of Torts § 324A cmt. c, illus. 1.

 

Plaintiff has argued in opposition that Defendants “increased the likelihood of harm to Mr. Maier.” (Doc. 189 at 30.) This legal conclusion is based on a chain of events beginning in March 2008 when Defendant Jiminez was approved and found acceptable by Defendants, allegedly in contravention of Defendant Green Eye’s policy and reliance on Defendant’s review of motor vehicle records (“MVR”). (Id.) According to Plaintiff, this policy is one that Defendants applied and used as a basis for rejecting drivers on prior occasions. (Id. at 2, 267 S.E.2d 797.) Plaintiff’s argument culminates with a series of conclusory arguments, stating that

 

[h]ad Canal followed Green Eyes’ hiring criteria, even going by the three year MVR, Faustino Jiminez would not have been hired by Green Eyes and James Maier would be alive. There is clearly evidence that Shelly and Canal failed to exercise reasonable care in reviewing Jiminez’s MVR and in approving him, in contravention of the Green Eyes’ employment criteria, and that such increased the risk of harm to James Maier by allowing Jiminez to be driving the Green Eyes’ tractor-trailer up I–95 on the morning of October 14, 2008, thereby resulting in Mr. Maier’s death.

 

(Doc. 189 at 32.) Plaintiff also argues that “[d]efendants caused a driver with a deplorably bad driving record to be hired to operate one of Green Eyes’ tractor-trailers, where he was a hazard to James Maier and other motorists on the highway.” (Id. at 34, 267 S.E.2d 797 .)

 

At most, this argument appears to be one of only causation. The law, however, demands more than causation alone. Instead, it requires that the tortfeasor have actually increased the risk of harm or caused some nonhazardous condition to become hazardous. Plaintiff’s evidence stops well short of this required mark, and a brief overview of the record and Georgia law demonstrates why this is the case.

 

Several cases by Georgia state courts have applied Restatement § 324A(a) to a third party’s actions. In Dale v. Keith Built Homes, Inc., 275 Ga.App. 218, 218, 620 S.E.2d 455, 456 (2005), a child riding a skateboard was struck by a motor vehicle driven by a construction company’s employee. Although the construction company had a “no-drinking policy,” the plaintiffs contended that the construction company’s “failure to enforce” that policy “increased the risk of harm to third persons.” Id. at 219, 620 S.E.2d at 456. The plaintiffs in Dale were arguing that if the policy been properly enforced, the employee would not have been driving, and the boy would not have been struck by the truck. Id. Ergo, no accident or injuries would have resulted. Plaintiff’s claim in the instant case follows similar logic—if Defendants had enforced the policy, Defendant Jiminez would not have been driving, the accident would not have happened, and the decedent would still be alive. The Georgia Court of Appeals characterized the plaintiff’s reasoning in Dale by stating that “plaintiffs essentially argue that it was incumbent upon KBH to decrease the risk of harm to others by enforcing its no-drinking policy. This, however, is not the law: “failing to take all possible actions to prevent an occurrence is not the same as increasing the risk of occurrence.” Id. at 220, 620 S.E.2d 455, 620 S.E.2d 456–57.

 

A recent decision from this district also rejects a similar argument. In Great M. Ins. Co. v. Ruiz, 688 F.Supp.2d 1362 (S.D.Ga.2010), an insurance company pursued a subrogation action against a painter and a homeowners’ association for either causing or aggravating damages resulting from a residential fire. There, the plaintiffs alleged that the failure of a homeowner’s association “to properly monitor the security [camera] screens and establish a specific protocol for monitoring the screens increased the risk of harm to the resident.” Id. at 1379–80 (internal citation and quotation omitted). In that case, the court held that plaintiffs had not demonstrated how the association’s “alleged failings increased the risk that the fire would occur or spread beyond control.” Id. at 1379 (second emphasis added). Applied to the instant case, this further illustrates the flaw in Plaintiff’s argument. Defendants’ actions did not cause Defendant Jiminez to change from a “nonhazardous condition” to a “hazardous condition” simply by ignoring an employment policy, and their action or inaction did not “increase the risk of harm” in the sense the law requires.

 

Finally, Howell v. United States, 932 F.2d 915 (11th Cir.1991) provides another example of how Plaintiff’s proposed theory is outside the ambit of § 324A. In Howell, an FAA inspector cancelled a “check ride” with a pilot after the inspector learned the plane’s fuel was contaminated. Id. at 917. Although the director of maintenance for the plane’s owner voluntarily grounded the aircraft, a company executive ignored the problem and ordered the plane back into service. Id. Seventeen people died in the crash that followed, which was caused by a loss of power from ingestion of contaminated fuel. Id. In that case, the plaintiffs argued that the

 

FAA inspector, upon seeing the contaminated fuel two days before the crash, should have taken further action (such as, grounding the plane, issuing an official notice, or initiating an investigation into the cause of the contamination) and that his failure to do so breached a legal duty owed to the future passengers of the ill-fated plane.

 

Id. The Court also rejected this argument, concluding that

[t]he FAA inspector’s failure to ground the plane, issue a notice, or initiate an investigation did not increase the risk of harm under Georgia law. In Argonaut the Georgia Court of Appeals said that, for purposes of the section 324A “good Samaritan” doctrine, a risk is only increased when a nonhazardous condition is made hazardous through the negligence of a person who changed its condition or caused it to be changed. The FAA inspector caused no such change in the condition of this plane or its fuel.

 

Id. at 918–19 (internal quotation and citation omitted)

 

(emphasis added). Similarly in this case, Defendants’ alleged action or inaction did not change any characteristic of Defendant Jiminez, or his driving aptitude or ability. See, e.g., Smallwood v. United States, 988 F.Supp. 1479, 1482 (1997) (“[T]he OSHA inspectors caused no change to the vats by their acts or omissions. Indeed, if the vats were hazardous, they were hazardous prior to the inspections.”); BP Exploration, 252 Ga.App. at 830, 558 S.E.2d at 405 (concluding that a “failure to respond to complaints” did not “increase [ ] the risk to customers”).

 

Further, any reliance by Plaintiff on Hutcherson v. Progressive Corp., 984 F.2d 1152 (11th Cir.1993), for a claim based on this specific subsection of Restatement § 324A is misplaced. This case, while based on a seemingly analogous factual scenario, addresses only different subsections, Restatement § 324A (b)-(c). Ultimately, Plaintiff’s § 324A(a) claim suffers from an insurmountable defect. Accordingly, Defendants’ Motion for Summary Judgment (Doc. 141) is GRANTED as to this claim.

 

2. Plaintiff’s Claim Under Restatement § 324A(c)

Plaintiff has also asserted a claim against Defendants pursuant to Restatement § 324A(c), which requires, in part, that the harm be “suffered because of reliance of the other or the third person upon the undertaking.” Because Plaintiff is unable to demonstrate any genuine issue of material fact as to Defendant Green Eyes’ reliance or causation, each a required element of this claim, Defendants’ Motion for Summary Judgment (Doc. 141) must be GRANTED. Although Plaintiff and Defendants raise several arguments in support of their respective motions, the Court will only discuss those worthy of detailed analysis.

 

Defendants’ primarily argue that Plaintiff is unable to show that “the decedent’s death was caused by Green Eye’s [sic] reliance on Canal and/or Shelly’s labeling a potential driver as ‘acceptable,’ ‘unacceptable’ or ‘acceptable with a surcharge.’ “ (Doc. 142 at 20 .) In doing so, Defendants attempt to distinguish Hutcherson, 984 F.2d 1152, by claiming that the only similarity between the insurance companies involved is that both insurers defended § 324A(c) claims. Defendants claim that the insurer in Hutcherson “provided services well beyond those alleged here by Canal and/or Shelly, to Green Eyes.” (Doc. 142 at 20.)

 

Progressive, the insurer in Hutcherson, 984 F.2d 1152, 1154, provided the trucking company, TABS, Inc., with “commercial fleet insurance that included a number of safety-services, including periodic independent reviews of TABS’ drivers, intended to supplement TABS’ internal safety program.” Prior to the accident underlying that case, Progressive “requested that TABS place [the involved driver] on ‘watch status’ for six months…. [I]f additional violations were found, Progressive would ask TABS to place [the involved driver] in a non-driving capacity.” Id. Ultimately, the Eleventh Circuit reversed the district court’s grant of summary judgment as to Plaintiff’s § 324A(c) claim and remanded the case for trial. Id. at 1157–58. In Hutcherson, the Eleventh Circuit concluded that “a jury might reasonably infer that TABS did reduce its safety activities in reliance upon Progressive. The jury could reasonably infer that TABS itself would have more closely monitored its drivers absent the substantial monitoring which was provided by Progressive.” Id. at 1157 (emphasis added). However, a review of the facts of this case and the inferences that can be reasonably drawn from them, even taken in the light most favorable to Plaintiff, do not lead this Court to the same conclusion.

 

The facts in this case indicate that Defendant Canal first provided insurance coverage to Defendant Green Eyes on August 27, 2007. (Doc. 189, Attach. 22 at 101.) On October 13, 2007, Pedro E. Gonzalez, CEO of Defendant Green Eyes, sent a letter to Defendant Canal that stated, in its entirety, that “I Pedro E. Gonzalez CEO will not allow anymore drivers with at fault accidents, Major speeding or more than 2 minor violations on my policy. I wish to work together with you to be a claim free Company with an excellent safety record.” (Doc. 189 at Attach. 35 at 1.) Defendants initially approved a driver named Jose David Vicente on October 4, 2007 (Doc. 189, Attach. 17 at 74) and approved with surcharge a driver named Manuel Lopez Argullo on December 13, 2007 (Doc. 189, Attach. 33 at 1). On December 13, 2007, however, Defendants reversed their decisions approving Vicente and Argullo by letter, stating that

 

[d]ue to the violations and accidents on both attached drivers’ MVR reports and the owner’s attached memo stating he will not hire any drivers with an accident, two or more violations, etc…., we will not be able to add these drivers to the policy. Canal is already questioning his hiring practice on drivers and we do not want to push the envelope to [sic] far on this matter.

 

(Doc. 189, Attach. 36 at 1; Doc. 189, Attach. 18 at 35.) As Defendants conduct relates to Defendant Jiminez, Defendants allowed him to be added to the policy (Doc. 189, Attach. 41 at 1), even though his three-year MVR contained information that was violative of Defendant Green Eyes stated policies. (Doc. 189, Attach. 18 at 73–74.)

 

On the basis of these facts, it is obvious that a reasonable jury could conclude that Defendants undertook to apply Defendant Green Eyes’ stated employment policy, a policy that could reasonably be construed as both implicitly and explicitly implicating safety. The only realistically questionable element of Plaintiff’s claim is that of subsection (c), reliance. Under Georgia law, reliance under § 324A(c) must be shown by a “change in position.” Phillips v. Liberty Mut. Ins. Co., 813 F.2d 1173, 1175 (11th Cir.1987). This required change in position can be satisfied by evidence that “the employer had neglected or reduced its own safety program because of the [ ] survey efforts.” Bussey v. Travelers Ins. Co., 643 F.2d 1075, 1077 (5th Cir.1981); see also Phillips, 813 F.2d at 1175 (indicating that a claim can be established by showing a company “neglected or reduced its safety practices because of [an insurer’s] inspections”). In addition to direct evidence, Georgia law allows a jury to draw this conclusion based on circumstantial evidence. Phillips, 813 F.2d at 1175.

 

Plaintiff has argued that Defendant Green Eyes relied on Defendants in three ways, specifically by

 

1) changing its hiring practices after purchasing the Canal insurance policy as acknowledged by Canal in Jennifer Talbot’s October 9, 2008 email and by Shelly in the October 10, 2007 letter; 2) by failing to request MVRs on drivers, including Jiminez, in order to evaluate those MVRs according to the employment criteria set forth in Pedro Gonzalez’s October 13, 2007 letter; and, 3) by failing to send Faustino Jiminez to KV Carrier Services, Inc. for processing, despite repeated notices from KV to do so.

 

(Doc. 189 at 40.)

 

The problem with Plaintiff’s argument lies in the critical requirement of “change” in Georgia’s law of reliance, specifically as it pertains to § 324A(c). As to the first argument, the Court can find no evidence of the hiring practices that existed prior to Defendants beginning to act as Defendant Green Eyes’ insurer. Instead, the evidence only shows a poor and noncompliant safety program from the very beginning-a program that continued to be substandard before, during, and after Defendants business relationship with Defendant Green Eyes. Similarly, Plaintiffs have presented no evidence of change in any of Defendant Green Eyes’ employment practices, including MVR screening, either before or after the purportedly all-important October 13, 2007 letter or any other stage of Defendants’ involvement. The same shortcoming still exists—Defendant Green Eyes’ safety program was lacking from the very beginning.

 

Finally, Defendant Green Eyes’ failure to send Defendant Jiminez to Defendant K.V. Carrier Services, Inc. (“K.V.”) is similarly inapposite. Defendant Green Eyes did not contract with Defendant K.V. until March, 19, 2008. (Doc. 189, Doc. 42 at 1.) Defendant K.V. was hired by Defendant Green Eyes “[f]or the purpose of ensuring that Contractor is fully DOT complaint.” (Id.) Indeed, Defendant Jiminez was not “approved” until March 19, 2008, the same date that the contract with Defendant K.V. was executed. (Doc. 189, Attach. 37 at 1.) Whatever inferences could reasonably be drawn from this timeline, Plaintiff’s contention that Defendant Green Eyes was relying on Defendants for driver safety checks is certainly not one of them.

 

Contrary to the Eleventh Circuit’s conclusion in Hutcherson, this Court is not persuaded that “a jury might reasonably infer that [Defendant Green Eyes] reduce[d] its safety activities in reliance upon [Defendants].” 184 F.2d at 1157. Plaintiff simply has not shown a “change in position,” Phillips, 813 F.2d at 1175, or satisfied the causation requirement that harm be “suffered because of reliance,” Restatement (Second) of Torts § 324A(c), on Defendants. In Hutcherson, the Eleventh Circuit noted that the district court improperly “discounted evidence put forth by [the plaintiff] that [the trucking company] had reduced its own safety program in reliance on [the insurer’s] safety services.” Id. Here, there is no such evidence to discount or ignore. Plaintiffs simply have not demonstrated what different practices Defendant Green Eyes followed prior to allegedly relying on Defendants.

 

Defendants’ remaining arguments in opposition of summary judgment need not be addressed. For the reasons set forth above, Defendants’ Motion for Summary Judgment is GRANTED as to Plaintiff’s Restatement § 324A(c) claim.

 

CONCLUSION

Because Plaintiff has not demonstrated that any action by Defendants “increased the likelihood of harm” or caused a nonhazardous condition to become hazardous, Defendants are entitled to summary judgment as to Plaintiff’s claim under Restatement § 324A(a). Additionally, Plaintiff has not presented any genuine issue of material fact or shown sufficient evidence from which a jury could conclude that Defendant Green Eyes changed its position in reliance on Defendants, or that harm resulted “because of” that reliance, as required by Georgia law. Therefore, Defendants are also entitled to summary judgment as to Plaintiff’s Restatement § 324A(c) claim. Accordingly, Defendants’ Motion for Summary Judgment (Doc. 141) is GRANTED, and the Clerk of Court is DIRECTED to terminate these Defendants.

 

SO ORDERED.