United States District Court, W.D. North Carolina,

Statesville Division.

SAACKE NORTH AMERICA, LLC, Plaintiff,

v.

LANDSTAR CARRIER SERVICES, INC., Defendant.

 

Civil Action No. 5:11CV107–RLV.

Dec. 18, 2012.

 

Christopher D. Mauriello, Shannon Rae Fitzpatrick, Mauriello Law Offices, P.C., Cornelius, NC, for Plaintiff.

 

Casper Fredric Marcinak, III, Smith Moore Leatherwood, LLP, Greenville, SC, for Defendant.

 

Memorandum and Order

RICHARD L. VOORHEES, District Judge.

*1 THIS MATTER is before the Court upon Defendant Landstar Carrier Services, Inc.’s Motion for Partial Summary Judgment (Doc. 13), and Plaintiff Saacke North America, LLC’s opposing Motion for Partial Summary Judgment (Doc. 15), as well as all related memoranda and exhibits.

 

I. Background & Procedural History

This dispute stems from a loss sustained by Plaintiff Saacke North America, LLC (“Saacke”), in connection with the interstate shipment of freight from Illinois to North Carolina by Defendant Landstar Carrier Services, Inc. (“Landstar”). Saacke, a North Carolina corporation, is “in the business of the manufacture and sale of tools and machines.” (Am. Compl., ¶¶ 1, 6; Hallman Aff ., ¶ 4) Landstar, a Delaware corporation with its principal place of business in Florida, is “in the business of the commercial transportation of goods and materials.” (Am.Compl., ¶¶ 2, 7)

 

In September 2010, Saacke attended an International Machinists’ Trade Show (“IMTS”) in Chicago, Illinois, sponsored by Global Experience Specialists (“GES”). (Am.Compl., ¶ 9) Timothy Hallman (“Hallman”), Saacke Member–Manager, and Mark Wortsman (“Wortsman”), Application and Sales Engineer, represented Saacke at the event. (Hallman Aff., ¶ 2, 14; Wortsman Aff., ¶¶ 2, 3)

 

Before the trade show concluded, Hallman contacted a shipping broker from Davidson, North Carolina, M.I. Logistics (“MIL”), to arrange for the transportation of Saacke’s commercial goods and equipment from the trade show back to Saacke’s place of business in Mooresville, North Carolina.FN1 (Hallman Aff., ¶¶ 6–8; Am. Compl., ¶ 13) In arranging for return transport, Hallman dealt with MIL representative, Bernie Manion (“Manion”). (Hallman Aff., ¶ 9) MIL selected Landstar as the carrier to transport the Saacke goods. (Hallman Aff., ¶ 10; Wortsman Aff., ¶ 7) Hallman avers that prior to shipment, MIL—not GES or Landstar—provided Saacke with a rate quote for the costs of the shipment of the freight.FN2 (Hallman Aff., ¶ 11)

 

FN1. Saacke’s freight is described as “seven (7) pallets / crates weighing a total of 16,360 pounds.” (Am.Compl., ¶ 13) The record does not reflect how Saacke transported its goods to Illinois in the first place.

 

FN2. Saacke does not produce any documentary evidence of the MIL rate quote.

 

According to Saacke, GES required a bill of lading in order to move Saacke’s goods from the trade show floor to the trade show shipping area.FN3 (Hallman Aff., ¶ 16; Wortsman Aff., ¶ 4) GES prepared and presented a bill of lading to Wortsman (“GES bill of lading”) on September 19, 2010, which Wortsman signed off on on Saacke’s behalf. (Wortsman Aff., ¶ 6) Wortsman indicated on the GES bill of lading that the goods were to be transported “VIA: other carrier” (i.e., Landstar) to their ultimate destination. (Wortsman Aff., ¶¶ 5, 6) Shipping was scheduled for September 21, 2010. (Am. Compl., ¶ 8; Wortsman Aff., ¶ 8) According to Saacke’s evidence, the GES bill of lading was entered into between GES and Saacke for the sole purpose of handling Saacke’s goods while the trade show was underway. (Hallman Aff., ¶¶ 21, 22; Wortsman Aff., ¶¶ 4–7)

 

FN3. “A “bill of lading” is a contract that records that a carrier has received goods from the shipping party, states the terms of carriage, and is evidence of a contract for carriage. A bill of lading also is a receipt for goods to be transported, and usually contains the description, quantity and condition of the goods, their classification and, traditionally, reference to the carrier’s filed “tariff.” “ ABB, Inc. v. CSX Transportation, Inc., EDNC Case No.: 5:08CV25–F, Doc. 105, March 22, 2012 Order at 4.) (internal citation omitted).

 

At some point between September 19th and 21st, Landstar picked up the Saacke freight from the GES trade show shipping area and placed the goods on a tractor-trailer for transport to Mooresville, North Carolina. (Wortsman Aff., ¶ 8) According to Charles Smith, Landstar’s Director of Cargo Claims, Saacke, presumably through GES, provided the GES bill of lading to Landstar’s driver, who signed the bill and maintained it until delivered to Wortsman in North Carolina upon delivery.FN4 (C. Smith Decl., ¶¶ 1–5).

 

FN4. It does not appear that Saacke had any employee physically present for the pick-up of its goods (or that Wortsman physically handed over the GES bill of lading to the Landstar driver). Landstar implies that GES acted as an agent of Saacke in producing the GES bill of lading to the Landstar driver at pick up. The question arises as to why the GES bill of lading was produced to the Landstar driver at all if the GES bill of lading was solely for the purpose of moving the Saacke freight to the shipping area.

 

*2 Hallman and Wortsman were both in attendance when the Landstar tractor-trailer arrived at Saacke’s place of business in North Carolina. (Hallman Aff., ¶ 26; Wortsman Aff., ¶ 10) Upon delivery of the Saacke freight, a second bill of lading, or “the Landstar bill of lading,” was produced by the Landstar driver and given to Wortsman. (Hallman Aff., ¶¶ 13, 24; Wortsman Aff., ¶¶ 9, 15, 17; Def.’s Response to Interrogatories, ¶¶ 5(a)-(c)). It is undisputed that Saacke was missing one of the seven pallets or crates which Landstar was responsible for.FN5 (Hallman Aff., ¶ 27; Wortsman Aff., ¶ 11)

 

FN5. The lost pallet contained goods such as “computers, electronic equipment and other items of value.” (Hallman Aff., ¶ 30) According to the Plaintiff’s Notice of Intent to File Carrier Claim, Saacke’s estimated total loss was $184,663.27. (Compl, Exh. A)

 

There is a discrepancy concerning the completion of the Landstar bill of lading. According to Saacke, while in Mooresville, the Landstar driver filled out a blank Landstar bill of lading that he had with him in the tractor-trailer and wrote out the “shorted one crate” notation. (Hallman Aff., ¶ 28; Wortsman Aff., ¶¶ 12, 13) According to Landstar, Driver Carl Daniels entered information on the Landstar bill of lading prior to the shipment of goods, on September 20, 2010, in McCormick Place, Chicago, Illinois, and Wortsman made the “shorted one crate” notation after delivery.FN6 (Def.’s Response to Interrogatories, ¶ ¶ 5(a)-(d)). This factual dispute is not material because under either version of the facts, the Landstar bill of lading was not presented to Saacke before shipment.

 

FN6. In other words, Landstar contends that its driver entered everything on the form except the consignee’s printed name and signature and the notation “shorted one crate,” which Landstar concedes was handwritten by Wortsman.

 

Despite the missing pallet, Saacke paid Landstar in full for the costs associated with shipping the freight to North Carolina. (Am. Compl., ¶ 12; Answer to Am. Compl., ¶ 12) Saacke submitted a claim for cargo loss to Landstar, which Landstar denied. (Am. Compl ., ¶ 16; Answer to Am. Compl., ¶ 16)

 

On July 11, 2011, Saacke initiated litigation against Landstar in the General Court of Justice, Superior Court Division, Iredell County, North Carolina. (Doc. 1 / Case No. 11–CVS–2136 (the “State Court Action”). Saacke’s Complaint originally alleged causes of action asserting breach of contract, negligence, and violation of the North Carolina Unfair and Deceptive Trade Practices Act., N.C. Gen.Stat. § 75–1.1. (Doc. 1 / Exh. A)

 

On August 5, 2011, Landstar filed a timely Notice of Removal asserting federal subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337, 1441(a) and (b), and 1445(b). (Doc. 1) In the Notice of Removal, Landstar asserted that a federal question was presented pursuant to the Carmack Amendment to the Interstate Commerce Act (“Carmack”), 49 U.S.C. § 14706 et seq., that Saacke’s state law claims were barred by the doctrine of complete preemption, and that the federal court had exclusive jurisdiction over the controversy.FN7 (Id., ¶¶ 5, 6).

 

FN7. Carmack preempts a shipper’s common law or state law remedies that would otherwise serve to increase a carrier’s liability “beyond the actual loss or injury to the property.” (Pl.’s Mem. In Supp., 2) (quoting Patricia Alvarez & Marc Yellin, Where to Start When Faced With a Motor Carrier Claim: The Carmack Amendment, For the Defense Magazine of the Defense Research Institute (2010) (citing 49 U.S.C. § 14706 (2005)); see also Shao v. Link Cargo (Taiwan), Ltd., 986 F.2d 700 (4th Cir.1993) ( Carmack Amendment completely preempts state law claims arising from damaged goods moved by a common carrier in interstate commerce); Taylor v. Mayflower Transit, Inc., 22 F.Supp.2d 509 (W.D.N.C.1998)(same).

 

On August 22, 2011, Saacke amended its Complaint to assert a single statutory claim pursuant to subsection (d) of Carmack, 49 U.S .C. § 14706, for the “loss of [ ] goods consigned under a bill of lading to Defendant Landstar, an authorized interstate motor carrier .” FN8 (Doc. 3 / Am. Compl., ¶¶ 1–21)

 

FN8. Landstar cites the ICC Termination Act, 49 U.S.C. § 13101 et. seq., and the Carmack in support of its assertion that the federal court has “exclusive” jurisdiction. (Notice of Removal, ¶ 6) However, the federal and state courts have concurrent jurisdiction over a civil action brought pursuant to the Carmack. See 49 U.S .C. § 14706(d)(3) (“Jurisdiction of courts.—A civil action under this section may be brought in a United States district court or in a State court.) Landstar may have meant to refer to the exclusive nature of the remedy under the Carmack.

 

*3 In April 2012, both parties moved for partial summary judgment. (Docs.13–17)

 

Upon the parties’ joint motion, the Pretrial Order & Case Management Plan was amended on March 15, 2012 to incorporate a stay of all other deadlines pending the Court’s legal determination concerning Defendant Landstar’s affirmative defense asserting limitation of liability. (Doc. 11)

 

II. Standard of Review

Summary judgment is appropriate only “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) (2010). In order to support or oppose a summary judgment motion, a party is required to cite to “materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, … admissions, interrogatory answers, or other materials;” or show “that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” FED.R.CIV.P. 56(c)(1); Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (applying former version of Rule 56); Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (same). A genuine issue exists only if “the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Anderson, 477 U.S. at 248; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). In conducting its analysis, the Court views the evidence in the light most favorable to the non-moving party. Celotex Corp., 477 U.S. at 325.

 

When considering cross-motions for summary judgment, the court “examines each motion separately, employing the familiar [Rule 56(c) ] standard.”   Desmond v. PNGI Charles Town Gaming, L.L.C., 630 F.3d 351 (4th Cir.2011) (internal citations omitted); Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir.2003) (Court reviews each motion separately on its own merits “to determine whether either party deserves judgment as a matter of law”) (internal citations omitted). When considering each individual motion, the court must take care to “resolve all factual disputes and any competing, rational inferences in the light most favorable” to the party opposing the motion.   Rossignol, 316 F.3d at 523 (internal citation omitted).

 

III. Discussion

The legal issue presented by the parties’ competing motions for partial summary judgment is whether Landstar’s liability is limited pursuant to the Carmack Amendment’s exemption to carrier liability for the shipper’s actual loss.FN9

 

FN9. Landstar does not concede liability but explains that, “if it is found liable, its liability must be limited in accordance with the contractual terms.” (Def.’s Mem. In Supp., at 5 n. 1.)

 

“The Carmack Amendment was enacted in 1906 as an amendment to the Interstate Commerce Act of 1887.” Ward v. Allied Van Lines, Inc., 231 F.3d 135, 138 (4th Cir.2000). Carmack, which codified the common law of carriers, makes a carrier liable “for the actual loss or injury to the property” it transports. 49 U.S.C. § 14706(a)(1); Ward, 231 F.3d at 138; Rankin v. Allstate Ins. Co ., 336 F.3d 8, 9 (1st Cir.2003) ( Carmack imposes near strict liability upon carriers). Carmack’s effect is to “create a national scheme of carrier liability for goods damaged or lost during interstate shipment under a valid bill of lading.” “ Id. (quoting Shao v. Link Cargo (Taiwan) Ltd., 986 F.2d 700, 704 (4th Cir.1993)); 5K Logistics, Inc. v. Daily Express, Inc., 659 F.3d 331, 335 (4th Cir.2011) ( Carmack’s national scheme strikes “a precise balance between the rights of shippers and carriers”).

 

*4 While carrier liability for actual loss is considered the default rule, Carmack permits a carrier to limit liability by contract. 49 U.S.C. § 14706(c)(1)(A) and (B) FN10; see e.g., ABB, Inc. v. CSX Transportation, Inc., EDNC Case No.: 5:08CV25–F, Doc. 105, March 22, 2012 Order.) (analyzing limited liability claim under corresponding statutory exception for rail carriers). In order for the Carmack to limit a carrier’s liability, the carrier must:

 

FN10. Subsection 14706(c)(1) addresses the ability of motor carriers to limit liability:

 

(A) Shipper waiver.—Subject to the provisions of subparagraph (B), a carrier providing transportation or service … may … establish rates for the transportation of property … under which the liability of the carrier for such property is limited to a value established by written or electronic declaration of the shipper or by written agreement between the carrier and shipper if that value would be reasonable under the circumstances surrounding the transportation.

 

(B) Carrier notification.—If the motor carrier is not required to file its tariff with the Board, it shall provide … to the shipper, on request of the shipper, a written or electronic copy of the rate, classification, rules, and practices upon which any rate applicable to a shipment, or agreed to between the shipper and the carrier, is based. The copy provided by the carrier shall clearly state the dates of applicability of the rate, classification, rules, or practices.

 

1) give the shipper a reasonable opportunity to choose between two or more levels of liability; 2) obtain a shipper’s agreement as to his choice of liability; and 3) issue a bill of lading prior to moving the shipment that reflects the agreement.

Arco Automation Syss., Inc. v. Iscont Shipping Ltd., 706 F.Supp. 413, 415 (D.Md.1989) (including requirement that the carrier maintain a tariff in compliance with ICC requirements, which are no longer applicable as a result of the ICC Termination Act of 1995); see also Chandler v. Aero Mayflower Transit Co., 374 F.2d 129, 135 (4th Cir.1967) (applying former version of Carmack and explaining that “arrangements limiting liability contravene a strong public policy expressed in the common law within a carefully defined exception to the general thrust of … the ICC placing on the carrier absolute liability for damage.”); Hansa Meyer Transport GmbH & Co., KG v. Norfolk Southern Ry., Co., 2008 WL 2168760, *10 (D.S.C. May 20, 2008) (describing the exception as the Fourth Circuit’s “fair opportunity” doctrine). Given Carmack’s objective, agreements purporting to limit liability must be “carefully scrutinized.” See Anton v. Greyhound Van Lines, Inc., 591 F.2d 103 (1st Cir.1978). It is the carrier’s burden to show that the requisite criteria are satisfied and, therefore, that liability is properly limited. Arco Automation Syss., Inc., 706 F.Supp. at 416.

 

Landstar contends that Saacke’s recovery is “subject to a released rate pursuant to the bills of lading, the published pricing, and [Landstar’s] Tariff.” (Answer to Am. Compl. ¶ 25). Saacke denies that any limitation to full recovery applies. The undersigned first considers the bills of lading and the effect of each with respect to Landstar’s liability.FN11

 

FN11. Saacke concedes that “[t]he express terms of the contractual agreement were set forth in the bill of lading(s) governing the shipment of said goods as well as in the implied contractual obligations in use of the trade at issue (goods transportation) and recognized in law.” (Am.Compl., ¶ 11)

 

A. GES Bill of Lading

Landstar’s primary position is that liability is limited by the terms and conditions of the GES bill of lading, which caps liability at $100.00 for one lost pallet. (Answer to Am. Compl. ¶ 29). It is undisputed that the GES bill of lading was completed prior to the shipment of the Saacke goods. A review of the GES bill of lading shows that it was prepared on September 19, 2010, and signed by Wortsman on the same day. (Pl.’s Exh. C) The bill reflects that the Saacke goods are to depart “FROM” the IMTS event at McKormick Place, Chicago, Illinois, and go “TO” Saacke in Mooresville, North Carolina. (Id.) Consistent with the Wortsman Affidavit, the section entitled “SHIP VIA:” shows a blank (unchecked) box for “GES Logistics” and a checked box for “Other Carrier” with the handwritten “Landstar” on the blank line. (Id.) The “DATE / TIME LOADED” is shown as “9/21/10.” There are miscellaneous terms below the description of the goods, which include a handwritten “shorted 1 pallet” notation. (Id.) In fine print, the GES bill of lading reads in pertinent part:

 

*5 “NOTE 2: LIABILITY IS LIMITED TO $0.50 PER POUND PER PACKAGE, $100.00 PER PACKAGE, OR $1,500.00 PER OCCURRENCE, WHICHEVER IS LESS.”

 

(Id.) Immediately below Note 2 is “NOTE 3,” which allows for a specific or excess “Declared Value” to be written in—“Excess Declared Value is available from GES, for shipments moving via GES Logistics.” (Id.) (emphasis provided). The “Declared Value” line is blank, as is the box below it that reads:

“CHECK HERE IF REQUESTING EXCESS DECLARED VALUE ($2.00 PER $100 .00 OF EXCESS VALUATION WILL BE ASSESSED, $100.00 MIN CHG.)”

 

(Id.) Therefore, the GES bill of lading only gave Saacke the option of declaring an excess value “for shipments moving via GES Logistics,” which was not the carrier option selected.

 

Saacke contends that liability cannot be limited because Landstar failed to provide Saacke with a reasonable opportunity to select a higher rate in exchange for greater protection. See e.g., Chandler, at 134 (“The shipper necessarily may ‘agree in writing’ only after he has had the opportunity to inspect the written terms.”) (internal citations omitted). According to Saacke, neither Hallman or Wortsman was provided an option concerning the level of liability or designated replacement value for any damaged or lost freight. (Hallman Aff., ¶¶ 12, 25, 29; Wortsman Aff., ¶¶ 16, 17). Hallman avers that he would never have agreed to limit liability or otherwise agreed to the replacement value now being asserted by Landstar. (Hallman Aff., ¶ 30)

 

With respect to this inquiry, the following factors have been deemed relevant:

 

1) Whether the provision providing the limitation was specifically brought to the shipper’s attention;

 

2) The shipper’s sophistication;

 

3) The shipper’s abundant experience;

 

4) The shipper’s extensive prior dealings with the carrier;

 

5) Whether the shipper drafted the shipping contract;

 

6) Whether the shipper directly negotiated the terms of the shipping contract; and

 

7) Whether the provision [setting forth] the limitation was specifically produced in the bill of lading.

 

ABB, Inc. v. CSX Transportation, Inc., EDNC Case No.: 5:08CV25–F, Doc. 105, March 22, 2012 Order at 8–9 n. 9 (internal citations omitted).FN12 As a whole, the factors tend to weigh in Saacke’s favor. First, there is no evidence that the limitation of liability Landstar asserts was specifically brought to the attention of Saacke via Hallman or Wortsman. Rather, the evidence is that Hallman was provided a rate quote for shipment from a third party shipping broker, MIL, as opposed to GES or Landstar.FN13 As for level of sophistication, Hallman claims that Saacke (nor Hallman personally) has never “been in the trucking business or any business related to the shipping or transportation of freight or goods,” yet Saacke’s business is described as “worldwide.” (Hallman Aff., ¶¶ 4, 5) The shipper’s sophistication is neutral given that both of the parties here are corporations and, presumably, possess relatively equal bargaining power. The only evidence pertaining to the shipper’s experience is that Hallman avers that trade show sponsors like GES, in his past experience, are known to require a bill of lading for movement of goods in preparation for shipping or outbound transport. (Hallman Aff., ¶ 16) Hallman’s representation is consistent with the uses for a bill of lading described, infra, as well as the GES Logistics document in evidence. Landstar’s remark that Saacke’s claim is “patently absurd” is not supported by any evidence or legal authority.FN14 In addition, there is no evidence that Saacke and Landstar have any prior dealings, which supports Wortsman’s contention that he was unaware of the potential legal effect of signing off on either bill of lading. Wortsman states that he did not “consider[ ] or underst[and] the LANDSTAR bill of lading to be contractual in nature, especially as related to any limitation of liability of LANDSTAR or as to the replacement value of any of the freight shipped….” (Wortsman Aff., ¶ 17) Saacke did not draft either of the bills of lading even though Wortsman added information to the bill of lading provided him by GES. See Sassy Doll v. Watkins Motor Lines, Inc., 331 F.3d 834, 839 (11th Cir.2003) (in this context, shipper “prepares” or “drafts” bill of lading when shipper actually creates the bill of lading as opposed to filling in blanks on a bill of lading created by the carrier). There is no evidence that Saacke directly negotiated any terms of the shipping contract. Indeed, both of the bills of lading were non-negotiable, standardized, preprinted forms generated by GES and Landstar respectively. To the extent terms of the shipping contract were negotiable, negotiations would have been conducted indirectly, through MIL or GES. Finally, while the GES bill of lading expressly purports to limit liability—a factor that would favor Landstar—the GES limitation (or the shipper’s option to declare an excess value) only pertains to goods being shipped via GES Logistics.

 

FN12. This case is currently on appeal to the Fourth Circuit Court of Appeals. See ABB, Inc. v. CSX Transportation, Inc., COA No.: 12–1674. Notably, the Appellant’s [ABB’s] brief contends that the Fourth Circuit’s decision will have a “far-reaching impact on all shippers and carriers, and will determine whether the Carmack Amendment’s procedures for ensuring there is a full agreement to a limitation of liability are upheld….” ABB, Inc., Appellant’s Brf., 2012 WL 3096713.

 

FN13. While the parties do not address it, it appears from the Landstar bill of lading that the “Shipper’s Bill of Lading No.” does not match the number on the GES bill, which tends to support Saacke’s contention concerning MIL and undermine Landstar’s agency argument. In the top right-hand corner of the Landstar bill of lading, beside the typewritten “Shipper’s Bill of Lading No.” is a handwritten seven-digit number: “0035473.” The only comparable seven-digit number on the GES bill of lading is typed and in an enclosed box: “3008582.”

 

FN14. Landstar argues, without any factual or legal support, that this representation by Saacke is “patently absurd.” (Def.’s Mem. In Opp’n, at 9.) However, Landstar’s opposition brief to Saacke’s motion includes a copy of a document entitled, “GES Logistics Terms and Conditions of Contract,” which expressly disclaims GES liability for loss or damage to goods in various circumstances. (Id. / Exh. 1 § VI) For example, the GES contract disclaims liability for goods that are not packaged properly for movement to and from the trade show floor and for goods left unattended during the show and until the loading of the outbound goods. (Id. / Exh. 1 § VI(a), (e)) Significantly, GES states that it will not be liable for goods either received at the outset without proper documentation or left on the show floor after the show closing deadline with or without a bill of lading signed by the customer (i.e., Saacke). (Id. / Exh. 1 § VI(b), (g))

 

*6 For all of these reasons, the Court concludes that Landstar’s liability cannot be limited by the terms of the GES bill of lading.

 

B. Landstar Bill of Lading

Under the Landstar bill of lading, Landstar’s liability could not exceed $2,107.00.FN15 However, Landstar cannot rely on the Landstar bill of lading to limit its liability because the Carmack requirements are not met. See 49 U.S.C. § 14706(c)(1)(A) and (B). Aside from any factual dispute regarding Saacke’s “fair opportunity” to elect more coverage, the Landstar bill was not produced to Saacke prior to shipment. The bill itself reveals that there is no signature in the designated location for “Shipper” on the day of pick-up. (Pl.’s Exh. B) In the section of the Landstar bill of lading entitled, “Carrier Pick-up Certification,” the document indicates that “Carrier Pick-up” occurred on September 20, 2010.(Id.) The section entitled, “Shipper Certification,” is blank. (Id.) In the section entitled, “Receiver Certification,” and in connection with the consignee’s signature (Saacke), there is no date adjacent to the signature of Wortsman on behalf of Saacke. (Id.) As already discussed, supra, it is undisputed that Wortsman did not see the Landstar bill of lading until the goods were delivered to North Carolina. For this reason, the Landstar bill of lading does not limit Landstar’s liability.

 

FN15. The Landstar limitation (or released value) is as follows: “$1.00 per pound / $50,000 per truckload shipment for shipments of used goods, not to exceed the actual loss.” Because the cargo lost weighed 2107 pounds, Landstar contends that its liability cannot exceed $2,107.00. (Def.’s Mem. In Supp., at 11.) As an alternative to limiting Landstar liability to $100.00, provided for by the GES bill of lading, Landstar asks the Court to issue a ruling limiting Landstar’s liability to $2,107.00 pursuant to the Landstar bill of lading.

 

C. Alleged Agency Relationship Between Saacke and GES

Landstar finally claims that GES acted as Saacke’s agent (i.e., shipping agent) in arranging for the return shipment of the goods.FN16 (C. Smith Decl., ¶ 4; Def.’s Mem. In Supp., at 7 n. 2.) Consequently, Landstar seeks to hold Saacke to a higher burden as a purported “drafter” of the GES bill of lading. (Def.’s Mem. In Supp., at 7–9.) There is no dispute that GES did not actually arrange for return shipment on Saacke’s behalf.FN17

 

FN16. Landstar refers the Court to Saacke’s Amended Complaint, which states:

 

“On or about September 19, 2010, Plaintiff SAACKE, LLC contracted and consigned both directly and / or indirectly through a third party known as Global Experience Specialists (GES) with the Defendant LANDSTAR, INC. to transport materials (shipping date September 21, 2010) belonging to Plaintiff SAACKE, LLC ….“

 

(Am.Compl., ¶ 8)

 

FN17. Rather, Hallman made the shipping arrangements through MIL and MIL’s Manion provided Hallman with the applicable rate quotes.

 

In light of the GES bill of lading, the relationship between Saacke and GES was also governed by contract. Landstar produces a standard form GES Logistics Contract, which provides in pertinent part:

 

It is Customer’s [Saacke’s] responsibility to complete accurate paperwork for shipping and to ensure Customer Goods are properly labeled. If Customer Goods remain on the floor after the show closing deadline, GES has the right to remove the Customer Goods. GES is authorized by Customer to proceed in the manner chosen by Customer on the Order of Material Handling Services / Straight Bill of Lading, if one has been completed, or otherwise, to ship Customer Goods at the discretion of GES and at Customer’s expense. GES shall incur no liability for such shipment….

 

(Def.’s Mem. In Opp’n, Exh. 1 § VI(g)). As a result of the GES bill of lading, and GES’s attendant contract terms, GES was authorized by Saacke to proceed with outbound shipping of its freight “in the manner chosen by the Customer.” (Id.) Therefore, it appears that GES was, in fact, responsible for the movement of Saacke’s goods from the trade show floor to the shipping area and likely also present for the physical transfer of Saacke’s goods from the shipping area to Landstar.

 

*7 Nonetheless, Saacke was still fully responsible for its own shipping arrangements. Indeed, GES’s function was to proceed in accordance with the arrangements made by Saacke. Viewing the evidence in the light most favorable to Saacke (the non-moving party with respect to this sub-issue), the GES Logistics’ contract reference to the governing bill of lading did not grant GES authority to alter the shipping arrangements decided on by Saacke. In other words, there is nothing in the record to indicate that the GES representative present during the physical transfer of Saacke’s goods was tasked with examining Landstar’s bill of lading or declaring an excess value upon pick up. Given Congress’s objective in enacting the Carmack, the Court concludes that, under these facts, there is insufficient evidence in the record to find, as a matter of law, that GES was Saacke’s agent for the purpose of agreeing to limit liability.

 

D. Landstar’s Tariff

Lastly, the Court considers whether Landstar’s Tariff dictates a different result. The term “tariff” is commonly used to refer to “common carrier pricing arrangements” or “published rates” governed by Carmack.FN18 ABB, Inc., Order at 4, n. 3 (citing Babcock & Wilcox Co. v. Kansas City Southern Ry. Co., 557 F.3d 134 (3rd Cir.2009)). Although the term “tariff” is still used, a tariff simply refers to a carrier’s standard contract terms, which “have no effect apart from their status as contracts.” Tempel Steel Corp. v. Landstar Inway, Inc., 211 F.3d 1029, 1030–31 (7th Cir.2000) (rejecting carrier’s contention that its tariff disclaimed all liability for casualties in Mexico; explaining that such a result would be contrary to Carmack and that the shipper had no actual notice that the carrier sought to limit liability.)

 

FN18. “Until 1995 tariffs had legal effect; the filed-rate doctrine made it impossible for shippers and carriers to contract around them. The ICC Termination Act, 109 Stat. 803 (1995), abolished the tariff filing requirement and the filed-rate doctrine….” Tempel Steel Corp., 211 F.3d at 1030 (internal citations omitted). The filed-rate doctrine meant that “provisions in tariffs usually governed whether shippers had actual, constructive, or no notice….” Id., at 1031.

 

In this case, it is undisputed that the “Landstar Ranger Inc. Rules Tariff Series LRGR100B 3/10/2008 was in effect and applied to the shipment of goods at issue….” (Def.’s Responses to Interrogatories, ¶ 1). Rule 410 of the Tariff, entitled “BILL OF LADING,” provides:

 

Landstar Ranger, Inc. is a participant in the National Motor Freight Classification 100 Series (The NMFC). Unless otherwise agreed to in a written Transportation Agreement signed by an officer of Landstar Ranger, all motor carriage performed by Landstar Ranger shall be subject to the terms and conditions of the @ (N) Uniform Straight Bill of Lading as shown in the currently effective NMFC 100 Series. Unless such an approval is provided by Landstar Ranger, the shipper’s Bill of Lading shall not amend the terms and conditions of carrier’s Bill of Lading except for provisions which relate to origin, destination, commodity and weight.

 

(Pl.’s Mem. In Supp., Exh. 6 / Tariff at 5.) (emphasis provided). The Landstar Tariff directs the reader to the terms and conditions of the Uniform Straight Bill of Lading utilized by Landstar, which was not provided to Saacke prior to delivery. (Exh. 6 / Tariff at 5 .) The Tariff also expressly provides that, absent Landstar’s approval, “the shipper’s Bill of Lading shall not amend the terms and conditions of carrier’s Bill of Lading.” FN19 (Id.)

 

FN19. While the Tariff identifies exceptions for “provisions relating to origin, destination, commodity and weight,” none of the exceptions apply here.

 

*8 Saacke contends that by seeking to rely on the GES bill of lading, Landstar is disregarding the terms of its own tariff, as well as violating common law principles of good faith and fair dealing. (Pl.’s Mem. In Supp., at 5, 15–16.) Pointing to the Tariff language limiting the effect of a shipper’s bill of lading, Saacke contends that Landstar must be bound by its Tariff, or its own standard contract terms. In other words, Saacke argues that Landstar cannot rely on the shipper’s bill of lading to limit liability. Because the Court has already reached the same conclusion—that the GES bill of lading does not control—Landstar’s Tariff has no impact on the issues presented.FN20

 

FN20. Landstar actually represents that the Tariff language cited by Saacke is “wholly irrelevant ” given that 1) the tariff provision relied on by Saacke only applies where two bills of lading have inconsistent terms; 2) Saacke claims that the Landstar bill of lading “is of no effect because it was not issued until after transportation of Saacke’s goods”; and 3) under Saacke’s theory of the case, there are no competing terms in separately issued bills of lading to trigger the tariff. (Def.’s Mem. In Supp., at 11.)

 

IV. Order

IT IS, THEREFORE, ORDERED that Plaintiff Saacke’s Motion for Partial Summary Judgment is hereby GRANTED and Defendant Landstar’s Motion for Partial Summary Judgment is hereby DENIED.

 

IT IS FURTHER ORDERED that the parties shall provide the Court with a Status Report no later than Friday, January 18, 2013.

United States District Court,

N.D. California.

MITSUI O.S.K. LINES, LTD., Plaintiff,

v.

SEAMASTER LOGISTICS, INC., Summit Logistics International, Inc., American Global Logistics, LLC, Kesco Container Line, Inc., Kesco Shipping, Inc., and Does 1 through 20, Defendants.

 

Nos. 10–cv–5591–SC, 11–cv–2861–SC.

Dec. 19, 2012.

 

Conte C. Cicala, James Barton Nebel, Flynn, Delich & Wise, San Francisco, CA, Erich Paul Wise, Flynn, Delich & Wise, Long Beach, CA, for Plaintiff.

 

Katharine Essick, Eric Danoff, Kirk B. Freeman, Matthew Alan Mallet, Law Offices of Kirk B. Freeman, San Francisco, CA, Benjamin I. Fink, Neal F. Weinrich, Berman, Fink, Van Horn, P.C., Atlanta, GA, for Defendants.

 

ORDER RE: MOTION FOR PARTIAL SUMMARY JUDGMENT

SAMUEL CONTI, District Judge.

I. INTRODUCTION

*1 Now pending before the Court is the motion of Defendant American Global Logistics, LLC (“Defendant” or “AGL”) for partial summary judgment against Plaintiff Mitsui O.S.K. Lines, Ltd. (“Plaintiff” or “MOL”). ECF No. 123 (“Mot.”).FN1 The motion is fully briefed and, pursuant to Civil Local Rule 7–1(b), suitable for decision without oral argument. ECF Nos. 133 (“Opp’n”), 144 (“Reply”). As set forth below, AGL’s motion is GRANTED IN PART and DENIED IN PART.

 

FN1. On December 7, 2012, the Court consolidated Case Nos. 10–cv–5591–SC and 11–cv–2861–SC for trial. This Order cites to the latter case’s docket.

 

II. BACKGROUND

The following background facts are undisputed. The Shipping Act of 1984, 46 U.S.C. §§ 40101 et seq. (“Shipping Act”), regulates both vessel-operating common carriers (“VOCC”) and non-vesseloperating common carriers (“NVOCC”). VOCCs operate ships that carry cargo over water between the United States and foreign countries for pay. See 46 U.S.C. §§ 40102(6), (17). NVOCCs hold themselves out as common carriers but do not themselves operate vessels; they use VOCCs to carry cargo over water and hence are shippers in their relationships to VOCCs. See id. § 40102(16). VOCCs and NVOCCs may enter into service contracts whereby the NVOCC, as shipper, commits to shipping a certain amount of cargo over a period of time and the VOCC, as carrier, commits to giving the shipper a certain rate and service level. See id. § 40102(20). NVOCCs can also enter into service-contract-style arrangements between themselves. See 46 C.F.R. §§ 531.1 et seq.

 

In addition to ocean shipping, both VOCCs and NVOCCs sometimes contract to carry cargo overland. Carriage by truck or other means either to or from a port—that is, for the non-ocean portion of the carriage—is referred to as “inland carriage” or “drayage.” Carriage that includes both an inland and an ocean move is called “through carriage” or “through transport.” See 46 U.S.C. § 40102(25). Because VOCCs and NVOCCs can carry cargo over both land and water, they may offer carriage from port to port, from “door to door” (that is, from a shipment’s inland point of origin to its inland destination), or in combinations thereof.

 

Plaintiff MOL is a VOCC. All the named Defendants are NVOCCs. The claims and allegations pertinent to the motion at bar relate to shipments MOL undertook from southern China to the United States on behalf of AGL, as well as Defendants SeaMaster Logistics, Inc. (“SeaMaster”) and Summit Logistics International, Inc. (“Summit”). See generally SAC ¶¶ 20–44.FN2 MOL alleges that Defendants, individually and in conspiracy with each other, misrepresented the points of origin and/or delivery for thousands of shipments, that MOL was obliged to pay for the inland carriage for these shipments, and that the inaccurate representations caused MOL to overpay for trucking moves that either never occurred or were shorter than represented. See id. ¶¶ 24–25.

 

FN2. On December 7, 2012, the Court denied MOL’s motion to file a Third Amended Complaint. ECF No. 160. Hence, Plaintiff’s operative pleading is the Second Amended Complaint. ECF No. 72 (“SAC”). The SAC names additional defendants and asserts other claims against non-AGL parties, but those claims and allegations do not bear on AGL’s motion.

 

MOL alleges wrongdoing in both China and the United States. In China, numerous shipments allegedly were represented to have originated in Shenzhen when they actually originated, for contractual purposes, at the port of egress.FN3 Id. ¶ 24. The parties refer to this as the “Shenzhen trucking” scheme or arrangement, as will the Court. In the United States, numerous shipments allegedly were represented to require delivery further away than the actual delivery address. Id. ¶ 25. MOL alleges that AGL used a company called Expedited to make these deliveries. Id. ¶ 27. AGL denies wrongdoing.

 

FN3. The parties sometimes refer to a port as the “container yard” or “CY.”

 

*2 It is undisputed that, for at least 600 of the challenged shipments, AGL was the consignee or “notify party,” while SeaMaster was the shipper with respect to MOL. Minck Decl. ¶ 5.FN4 For these shipments, a U.S. buyer would hire AGL to move goods (for example, furniture) from their place of manufacture in China to the buyer’s facility in the United States. See Briles Dep. 23:10–23. AGL, in turn, had a Sales Agency and Destination Agent Agreement with SeaMaster, under which AGL, as “sales” or “destination agent,” would secure shipments for SeaMaster and SeaMaster would arrange carriage for those shipments from China to the United States under its (that is, SeaMaster’s) service contract with MOL or another VOCC. See Briles Dep. 30:2–4; Rosenberg Dep. 65:10–16; Pl.’s Ex. 143 (Sales Agency and Destination Agent Agreement (“Agr.”)). SeaMaster and AGL’s Agreement identifies SeaMaster as the principal in their relationship, see Agr., but the parties sometimes refer to SeaMaster as the “overseas agent,” see, e.g., Briles Dep. 44:13–24, apparently in contrast to AGL’s role as destination (that is, domestic) agent. Nearly all of AGL’s customers—99 percent—ordered “FOB port” service, meaning that the Chinese seller was responsible for delivery of the goods to the Chinese port, and AGL’s customer (hence, AGL) only took possession of the goods once they were loaded on the ship in China. See Briles Dep. 23:10–11; Rosenberg Dep. 32:12–14.

 

FN4. Warrin Minck (a senior internal auditor for MOL’s American division), Benjamin I. Fink (counsel for AGL), and Conte C. Cicala (counsel for MOL) submitted declarations in connection with the motion at bar. ECF Nos. 123–1 (“Fink Decl.”), 134 (“Minck Decl.”), 135 (“Cicala Decl.”). Among other materials, Fink and Cicala both included excerpts of transcripts of the depositions of Chad Rosenberg (AGL’s chief executive officer) and James Joseph Briles III (AGL’s chief operating officer). Fink Decl. Ex. A–1, Cicala Decl. Ex. B (“Rosenberg Dep.”); Fink Decl. Ex. A–2, Cicala Decl. Ex. A (“Briles Dep.”). Cicala included as part of the Rosenberg Deposition excerpt various exhibits referenced in that deposition, labeled as “Plaintiff’s Exhibits.”

 

AGL’s booking of a shipment under the foregoing arrangement would commence when the Chinese seller notified SeaMaster-not AGL-that goods ordered by AGL’s customer, the U.S. buyer, were ready for shipment. See Briles Dep. 44:13–45:20. Every day, SeaMaster’s offices in China would prepare and send to AGL via email a spreadsheet showing new bookings, called the “daily routing guide.” Id. The daily routing guide contained information pertaining to the shipment’s contents, destination, and port of departure, as well as a recommended routing method and, usually, applicable rates. Id. 43:15–18, 44:13–24, 46:11–47:7. However, with one exception not relevant here, it did not contain information about the shipment’s inland point of origin, i.e., the location of the Chinese manufacturer. Id. 47:8–20, 65:20–66:–8.

 

Inland origin information was contained, however, in bills of lading for the shipments. Two sets of bills of lading were created for each shipment. As VOCC, MOL issued a “master” bill of lading which would be provided to MOL’s customers, the NVOCCs-that is, SeaMaster and AGL. See Rosenberg Dep. 102:3–103:5. SeaMaster issued a “house” bill of lading which MOL would not receive. See id.; Minck Decl. ¶ 8. Both sets of bills of lading refer to the shipment’s point of origin as the “place of receipt” and the shipment’s final destination as the “place of delivery.” E.g., Pl.’s Ex. 145. For the shipments involved in the alleged Shenzhen trucking arrangement, the master bill of lading would indicate a place of receipt of “Shenzhen—Door,” while the house bill of lading would show the place of receipt to be the Chinese port (for instance, Yantian). See Briles Dep. 67:1–7, 68:16–69:17; Rosenberg Dep. 102:3–103:5; see also, e.g., Pl.’s Exs. 145–48 (examples of MOL’s master and SeaMaster’s house bills of lading). As stated above, MOL declares that its records list AGL as consignee on at least 600 such shipments. Minck Decl. ¶ 5. AGL received copies of both sets of bills of lading by Federal Express or a similar delivery service. Briles Dep. 53:11–54:4.

 

*3 The SAC asserts the following five claims against AGL (as well as SeaMaster and Summit): (1) intentional misrepresentation and (2) conspiracy to intentionally misrepresent, or, in the alternative, (3) negligent misrepresentation; and civil RICO violations under 18 U.S.C. § 1962(c) and (5) 18 U.S.C. § 1962(d). AGL’s motion for partial summary judgment seeks judgment in its favor on three different grounds. First, AGL seeks dismissal of all claims to the extent they are premised on AGL’s alleged misrepresentations made in the course of the alleged Shenzhen trucking scheme. Second, AGL seeks dismissal of all claims premised on AGL’s alleged participation in a conspiracy. Third, AGL seeks dismissal of Plaintiff’s RICO claims. See Mot. at 3. AGL does not move for summary judgment with respect to allegedly misrouted U.S. inland carriage.

 

III. LEGAL STANDARD

Entry of summary judgment is proper “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). Summary judgment should be granted if the evidence would require a directed verdict for the moving party.   Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “A moving party without the ultimate burden of persuasion at trial-usually, but not always, a defendant—has both the initial burden of production and the ultimate burden of persuasion on a motion for summary judgment.” Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Companies, Inc., 210 F.3d 1099, 1102 (9th Cir.2000). “In order to carry its burden of production, the moving party must either produce evidence negating an essential element of the nonmoving party’s claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial.” Id. “In order to carry its ultimate burden of persuasion on the motion, the moving party must persuade the court that there is no genuine issue of material fact.” Id. Summary judgment, however, is inappropriate “for resolving claims that depend on credibility determinations.” Earp v. Ornoski, 431 F.3d 1158, 1170 (9th Cir.2005).

 

IV. DISCUSSION

 

A. Misrepresentation

 

1. Intentional Misrepresentation

 

Under California law,FN5 the elements of intentional misrepresentation (that is, fraud) are: “(1) a misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (or scienter); (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damage.” Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal.4th 979, 990, 22 Cal.Rptr.3d 352, 102 P.3d 268 (Cal.2004) (quoting Lazar v. Superior Court, 12 Cal.4th 631, 638, 49 Cal.Rptr.2d 377, 909 P.2d 981 (Cal.1996)).

 

FN5. AGL acknowledges in a footnote that the parties have not briefed choice-of-law issues. Mot. at 11 n. 7. Both sides then proceed to argue MOL’s non-federal claims using California law without further discussion of choice of law. The parties have thus acquiesced to the application of California law for the non-federal claims. See Hatfield v. Halifax PLC, 564 F.3d 1177, 1184 (9th Cir.2009).

 

AGL argues that there is no evidence that it ever made false representations to MOL about inland trucking movements, concealed any facts about them, or even knew about such movements, and that therefore MOL cannot prove the element of scienter. AGL emphasizes the testimony of its executives Rosenberg and Briles, both of whom claim to have learned of the Shenzhen trucking arrangement only when this lawsuit was filed. Rosenberg Dep. 50:1–8, 104:4–7; Briles Dep. 67:14–19. AGL also offers the declaration of Jerry Huang, a SeaMaster executive, who asserts that he never discussed the Shenzhen trucking arrangement with anyone at AGL and that he “ha[s] no information that AGL learned of the [a]rrangement through AGL’s business relationship with SeaMaster.” Huang Decl. ¶¶ 3–4. AGL also points to Rosenberg and Briles’s testimony to the effect that no one at AGL noticed the discrepancy between the master and house bills of lading or that MOL’s master bill of lading stated the place of receipt to be an inland “door” rather than, as one would expect for FOB port service, the outgoing port. Rosenberg Dep. 102:11–103:5, 103:17–104:3; Briles Dep. 67:1–12.FN6

 

FN6. AGL also emphasizes deposition testimony by MOL’s chief executive officer, Masaru Satose. Fink Decl. Ex. C (“Satose Dep.”). AGL characterizes Satose as having “confirmed” that AGL was unaware of the Shenzhen trucking arrangement. Mot. at 8. Satose’s testimony, however, merely evinces Satose’s unfamiliarity with AGL. See Satose Dep. 170:4–7 (Satose stating “No” when asked if he is “familiar with AGL” or “know[s] anything about AGL”). As Satose concedes, he did not know whether AGL participated in trucking movements in China. Id. 172:16–19. That hardly “confirms” AGL’s lack of participation. Satose’s testimony neither implicates nor exonerates AGL.

 

*4 The Court concludes that it cannot enter summary judgment for AGL on the basis of the denials of Briles, Huang, and Rosenberg because doing so would require the Court to make a determination of their credibility. “[S]ummary judgment is singularly inappropriate where credibility is at issue.” S.E.C. v. M & A W., Inc., 538 F.3d 1043, 1055 (9th Cir.2008) (quoting S.E.C. v. Koracorp Indus., Inc. ., 575 F.2d 692, 699 (9th Cir.1978)). Such issues are appropriately resolved only after a trial or evidentiary hearing. Id. Here, the Court has no reason to doubt the credibility of Briles, Huang, or Rosenberg, but neither has the Court had an opportunity to examine them and gauge their veracity.

 

AGL also argues that it is entitled to summary judgment on MOL’s fraud claim because AGL never made any affirmative representation to MOL regarding the place of receipt for shipments implicated in the Shenzhen trucking arrangement; thus, AGL argues, MOL cannot establish the element of misrepresentation. MOL indicates, however, that it rests its fraud claim on a theory of nondisclosure and concealment, specifically, AGL’s nondisclosure and alleged concealment of the discrepancy in the two sets of bills of lading. Opp’n at 8–9.

 

Ordinarily, nondisclosures are not actionable under California law unless a confidential or fiduciary relationship between the parties gives rise to an affirmative duty to disclose. See Goodman v. Kennedy, 18 Cal.3d 335, 346–47, 134 Cal.Rptr. 375, 556 P.2d 737 (Cal.1976); 5 Witkin, Summary 10th (2005) Torts § 794. However, even in the absence of such a relationship, a duty to disclose can arise “when the defendant ha[s] exclusive knowledge of material facts not known to the plaintiff” or “when the defendant actively conceals a material fact from the plaintiff.” Jones v. ConocoPhillips, 198 Cal.App.4th 1187, 1199, 130 Cal.Rptr.3d 571 (2011), review denied (Nov. 30, 2011) (alteration in original) (internal quotation marks omitted). Neither party disputes that AGL had both sets of bills of lading, that MOL had only one, and that AGL did not affirmatively notify MOL of the discrepancy between the two. MOL frames this nondisclosure as an act of concealment or suppression. SAC ¶ 64; Opp’n at 8, 8 n. 6. Under California law, the elements of fraudulent concealment are:

 

(1) the defendant concealed a material fact; the defendant was under a duty to disclose the fact to the plaintiff; (3) the defendant concealed or suppressed the fact with an intent to defraud; (4) the plaintiff was unaware of the fact and would have acted if he or she had known about it; and (5) the concealment caused the plaintiff to sustain damage.

 

Williamson v. Gen. Dynamics Corp., 208 F.3d 1144, 1156 n. 3 (9th Cir.2000).

 

MOL identifies AGL’s false positive assertion as an assertion that the shipments originated from “Shenzhen—Door” when in fact they did not, and AGL’s concealment as its failure to disclose that the drayage in China consisted of container yard moves rather than shipments from inland factories. Uncontroverted evidence strongly suggests that the daily routing guide received by AGL from SeaMaster does not identify the shipment’s point of origin. Briles Dep. 47:8–20, 65:20–66:–8. Thus, the claim of nondisclosure and concealment must be premised on the mismatched bills of lading.

 

*5 The Court observes that the fact that the bills of lading contained a mismatch may not be enough to establish AGL’s actual knowledge of the mismatch. AGL, after all, denies having read the bills of lading and offers testimony that it had no reason to do so. Briles Dep. 68:16–69:7; Rosenberg Dep. 103:17–104:3. MOL suggests that constructive knowledge of the bills of ladings’ contents may be imputed to AGL.FN7 However, the leading California cases addressing the “exclusive knowledge” species of nondisclosure appear to involve actual knowledge of the undisclosed facts, as opposed to merely constructive knowledge.FN8 MOL has not cited any case standing for the proposition that a party has a duty to disclose facts of which it has only constructive knowledge. Neither does MOL say how constructive knowledge could satisfy California law’s requirement that the defendant know the materiality of the omitted fact. See Goodman, 18 Cal.3d at 347, 134 Cal.Rptr. 375, 556 P.2d 737.

 

FN7. See Opp’n at 9–10 (stating that “accurate information reflecting both the origin and destination of each shipment was contained in the NVOCC house bill of lading” and concluding that “AGL clearly knew that the ‘Shenzhen door’ place of receipt reflected in MOL’s bill of lading was false”); see also id. at 16–18 (arguing, in the context of MOL’s negligent misrepresentation claim, that AGL had constructive knowledge of the contents of the bills of lading).

 

FN8. See De Spirito v. Andrews, 151 Cal.App.2d 126, 130–31, 311 P.2d 173 (Cal.Ct.App.1957); Lingsch v. Savage, 213 Cal.App.2d 729, 735–37, 29 Cal.Rptr. 201 (Cal.Ct.App.1963); Massei v. Lettunich, 248 Cal.App.2d 68, 72–73, 56 Cal.Rptr. 232 (Cal.Ct.App.1967); Goodman v. Kennedy, 18 Cal.3d 335, 347–48, 134 Cal.Rptr. 375, 556 P.2d 737 (Cal.1976); Wells v. John Hancock Mut. Life Ins. Co., 85 Cal.App.3d 66, 70–73, 149 Cal.Rptr. 171 (Cal.Ct.App.1978); Magpali v. Farmers Group, Inc., 47 Cal.App.4th 1024, 482 (Cal.Ct.App.1996); see also 5 Witkin, Summary 10th (2005) Torts § 796.

 

MOL comes closer to the mark when it cites regulations promulgated by the Federal Maritime Commission to implement provisions of the Shipping Act. See Opp’n at 5–6. As MOL notes, these regulations provide, in pertinent part:

 

(e) False or fraudulent claims, false information. No licensee shall prepare or file or assist in the preparation or filing of any claim, affidavit, letter of indemnity, or other paper or document concerning an ocean transportation intermediary transaction which it has reason to believe is false or fraudulent, nor shall any such licensee knowingly impart to a principal, shipper, common carrier or other person, false information relative to any ocean transportation intermediary transaction.

 

(f) Errors and omissions of the principal or shipper. A licensee who has reason to believe that its principal or shipper has not, with respect to a shipment to be handled by such licensee, complied with the laws of the United States, or has made any error or misrepresentation in, or omission from, any export declaration, bill of lading, affidavit, or other document which the principal or shipper executes in connection with such shipment, shall advise its principal or shipper promptly of the suspected noncompliance, error, misrepresentation or omission, and shall decline to participate in any transaction involving such document until the matter is properly and lawfully resolved.

 

46 C.F.R. § 515.31(e)-(f) (emphases added). These regulations put licensees like AGL under an affirmative obligation to refrain from preparing documents containing false information (provided the licensee has reason to believe it is false) and refrain from imparting false information (provided that is done knowingly), as well as to point out errors, misrepresentations, or omissions in, inter alia, bills of lading (provided the licensee has reason to believe the document contains such inaccuracies). AGL’s response appears to be that it did not know, and had no reason to know, of any falsities or omissions in the bills of lading. However, that position rests on Briles and Rosenberg’s denials that AGL read or knew the contents of the bills of lading. As explained above, the Court cannot credit those denials without impermissibly making a credibility determination.

 

*6 The parties raise a number of other, ancillary arguments and matters in connection with this claim, but the Court need not address them.FN9 AGL’s motion for summary judgment on this claim is ultimately premised on the credibility of Briles and Rosenberg’s denials and, because the Court cannot rely on credibility determinations to enter summary judgment, the Court DENIES AGL’s motion for partial summary judgment as to MOL’s claim for intentional misrepresentation in connection with the Shenzhen trucking arrangement.

 

FN9. Among the ancillary matters raised by the parties is an arbitration award first discussed by MOL in its opposition, and further discussed by AGL in its reply. MOL objected to AGL’s discussion of the arbitration award on the ground that AGL should not be permitted to raise new arguments on reply. ECF No. 151. AGL filed a response to the objection. ECF No. 162. Because the Court disposes of the instant motion without needing to refer to the matters that are subject of MOL’s objection (matters that the Court finds largely irrelevant), the objection is moot and hence OVERRULED.

 

2. Negligent Misrepresentation

Negligent misrepresentation differs from fraud in that it “does not require scienter or intent to defraud.” See Small v. Fritz Companies, Inc., 30 Cal.4th 167, 173–74, 132 Cal.Rptr.2d 490, 65 P.3d 1255 (Cal.2003) (quoting Gagne v. Bertran, 43 Cal.2d 481, 487–488, 275 P.2d 15 (Cal.1954)). Negligent misrepresentation

 

encompasses “[t]he assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true” and “[t] he positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true.”

 

Id. at 174, 132 Cal.Rptr.2d 490, 65 P.3d 1255 (quoting Cal. Civ.Code §§ 1710(2), 1572(2)) (alterations in original; citations omitted). In California, negligent misrepresentation further differs from intentional misrepresentation in that, while certain nondisclosures may support a claim for intentional misrepresentation, a negligent misrepresentation claim requires a “positive assertion,” and hence “omissions”—that is, nondisclosures—cannot give rise to liability for negligent misrepresentation. Lopez v. Nissan N. Am., Inc., 201 Cal.App.4th 572, 596, 135 Cal.Rptr.3d 116 (Cal.Ct.App.2011), reh’g denied (Dec. 30, 2011), review withdrawn (Mar. 14, 2012); Wilson v. Century 21 Great W. Realty, 15 Cal.App.4th 298, 306, 18 Cal.Rptr.2d 779 (Cal.Ct.App.1993). This difference makes an admittedly counterintuitive result possible under California law: The same failure to disclose may support a claim for intentional misrepresentation but not negligent misrepresentation. FN10

 

FN10. Cf. Lopez, 201 Cal.App.4th at 596, 135 Cal.Rptr.3d 116 (noting that claim for negligent misrepresentation cannot be based on an omission, but claim for intentional misrepresentation can); Oakland Raiders v. Oakland–Alameda Cnty. Coliseum, Inc., 144 Cal.App.4th 1175, 1184, 51 Cal.Rptr.3d 144 (Cal.Ct.App.2006) (torts of intentional and negligent misrepresentation are “separate and distinct”).

 

In the case at bar, MOL argues that language in MOL’s bill of lading and waybills resulted in AGL’s being liable in tort for the truth of the information contained in those bills of lading. The argument relies on three provisions in MOL’s combined transport bill of lading. First, the bill of lading defines “Merchant” to include the “Consignee” of goods shipped under that bill. Minck Decl. ¶ 9, Ex. A at 1. There is no dispute that AGL was listed as the consignee and notify party on many of the shipments implicated in the Shenzhen trucking arrangement. Second, the bill of lading states that that “[a] ll of the [p] ersons coming within the definition of Merchant … shall be jointly and severally liable to the Carrier for the due fulfillment of all obligations of the Merchant in this Bill of Lading.” Minck Decl. ¶ 9, Ex. A at 6. Third, the bill of lading states that the “Merchant warrants to the Carrier [i.e., to MOL] that the particulars relating to the Goods as set out overleaf have been checked by the Merchant on this Bill of Lading and that such particulars and any other particulars furnished by or on behalf of the Shipper are accurate and correct.” Minck Decl. ¶ 9, Ex. A at 6–7. In summary, the bill of lading purports to impose joint and several liability on non-shippers like AGL for representations made by shippers like SeaMaster. MOL asks the Court to conclude that this language makes AGL responsible for the false “positive assertions” of fact that made their way into the master bills of lading.

 

*7 MOL cites a number of cases addressing the binding effect of bills of lading on consignees like AGL, Opp’n at 5 n. 4, but the Court finds them inapplicable to the matter of tort liability. The cases speak to different legal issues than the one presented here, for instance, whether language like that contained in MOL’s waybills can support joint and several liability for unpaid freight charges, whether the shipping rates set forth in tariffs are enforceable in contract, or whether the terms in a short-form bill of lading may incorporate the terms of a long-form bill of lading. That is, all of the cases address points of contract law. The Court finds no support in those cases, however, for the proposition that the language in MOL’s bill of lading can result in joint and several liability in tort. Neither has MOL marshaled any authority to demonstrate that a failure to comply with the Federal Maritime Commission regulations discussed in the previous section can support liability in tort (assuming for the sake of argument that AGL did so fail).

 

In the absence of any evidence that AGL itself positively but inaccurately asserted the place of receipt for the shipments implicated in the Shenzhen trucking arrangement, California law entitles AGL to summary judgment on MOL’s negligent misrepresentation claim.FN11

 

FN11. The Court held to the contrary in Mitsui O.S.K. Lines, Ltd. v. Allied Transp. Sys. (USA), Inc., 10–5586 SC, 2011 WL 5861642, at *5–6 (N.D.Cal. Nov.22, 2011). In that case, however, the moving party did not distinguish between intentional and negligent misrepresentation.

 

Accordingly, AGL’s motion for summary judgment is GRANTED with respect to the negligent misrepresentation claim.FN12

 

FN12. In the absence of evidence of any positive assertion by AGL, the Court need not, and does not, reach MOL’s argument that the rate AGL received on the shipments implicated in the Shenzhen trucking arrangement should have alerted it that it was getting a deal “too good to be true.” See Opp’n at 18.

 

B. Conspiracy

In addition to its misrepresentation claims against AGL, MOL also asserts a claim for conspiring to commit fraud. SAC ¶¶ 68–73. MOL names Seamaster and Summit in this claim, in addition to AGL. Id. Under California law, civil “[c]onspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration.” Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal.4th 503, 510–11, 28 Cal.Rptr.2d 475, 869 P.2d 454 (Cal.1994). Thus, a claim for civil conspiracy rests on the “commission of an actual tort.” Id. at 511, 28 Cal.Rptr.2d 475, 869 P.2d 454. Assuming such a tort occurs, the elements of civil conspiracy under California law are: “[1] formation and operation of the conspiracy, [2] wrongful act or acts done pursuant thereto, and [3] damage.”   Cnty. of Marin v. Deloitte Consulting LLP, 836 F.Supp.2d 1030, 1045 (N.D.Cal.2011) (citing Mosier v. S. California Physicians Ins. Exch., 63 Cal.App.4th 1022, 1048, 74 Cal.Rptr.2d 550 (Cal.Ct.App.1998)).

 

Here, AGL seeks summary judgment as to MOL’s claim that it conspired in the Shenzhen trucking fraud on the ground that MOL has produced no evidence that AGL knew of or participated in such a conspiracy. MOL responds by citing to excerpts of the deposition testimony of Jerry Huang, the SeaMaster executive. Cicala Decl. Ex. C. (“Huang Dep.”) 226:4–237:11. In his deposition, Huang appeared to admit to knowledge of the Shenzhen trucking arrangement. However, although Huang discussed in his deposition various interactions between Summit, Seamaster, an MOL employee named Michael Yip (whom MOL claims participated in the fraudulent scheme), and a trucking company called Rainbow, Huang never mentioned AGL. MOL asks the Court to read Huang’s deposition testimony as an admission of the existence of a conspiracy to defraud MOL and then to infer from AGL’s identification on bills of lading as consignee and notify party that AGL knew of and participated in the conspiracy. MOL is entitled to favorable reasonable inferences, but that is a leap too far. Essentially, AGL carried its initial burden of production by showing that MOL lacks sufficient evidence to establish the “knowledge and participation” element of its conspiracy claim. See Nissan Fire & Marine, 210 F.3d at 1102. MOL therefore must “produce enough evidence to create a genuine issue of material fact.” Id. at 1103. The only evidence MOL has produced as to AGL’s awareness of the conspiracy is evidence which does not mention AGL at all. At best, MOL produces evidence of a conspiracy involving similarly situated, but different, parties. This mere “scintilla” of evidence is not enough to avoid summary judgment. See Anderson, 477 U.S. at 252.

 

*8 Accordingly, the Court GRANTS AGL’s motion for summary judgment as to MOL’s claim for conspiracy to commit fraud in connection with the Shenzhen trucking scheme.

 

C. RICO

The civil RICO statute provides:

 

It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.

 

18 U.S.C. § 1962(c). “To state a claim under § 1962(c), a plaintiff must allege ‘(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.’ ” Odom v. Microsoft Corp., 486 F.3d 541, 547 (9th Cir.2007) (quoting Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985)).

 

Though the parties submit arguments pertaining to each element of MOL’s § 1962(c) claim, the Court concludes that it need proceed no further than the first element, “conduct.” “The conduct requirement under § 1962(c) means that ‘[i]n order to “participate, directly or indirectly, in the conduct of such enterprise’s affairs,” one must have some part in directing those affairs.” Eclectic Properties E., LLC v. The Marcus & Millichap Co., C–09–00511 RMW, 2012 WL 713289, at *6 (N.D.Cal. Mar.5, 2012) (alteration in original) (quoting Reves v. Ernst & Young, 507 U.S. 170, 179, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993)). Under this “operation and management” test, first articulated in Reves, “[s]imply performing services for the enterprise does not rise to the level of direction, whether one is ‘inside’ or ‘outside,’ ” that is, part or not part of the enterprise. Walter v. Drayson, 538 F.3d 1244, 1249 (9th Cir.2008).

 

Here, MOL offers insufficient evidence to raise a triable issue of material fact as to whether AGL had “some part in directing” the enterprise. MOL points to “the historical relationship of the participants in the [alleged] fraudulent activity,” and submits evidence that Huang and Rosenberg, now executives of SeaMaster and AGL, respectively, had business dealings from 1998 to 2006, as executives of companies called Hecny and Global Link, respectively. Opp’n at 20 (citing Rosenberg Dep. 12:11–13:19, 14:4–8). MOL describes AGL as having hired SeaMaster in 2008 to perform substantially the same role that Hecny performed for Global Link. Id. at 20–21 (citing Rosenberg Dep. 43:25–44:12; Pl.’s Ex. 143).FN13 MOL then describes a “parallel” enterprise involving Defendants Kesco and Summit, but not AGL. Id. at 21. MOL notes that SeaMaster is part of the Summit group of companies. Id.

 

FN13. Rosenberg himself, however, did not come to work for AGL until 2009 and thus was not employed by AGL at the time AGL hired SeaMaster through Huang, as MOL itself notes. Opp’n at 14 (citing Rosenberg Dep. 41:18–25). MOL asserts, without citing to evidence, that “Global Link’s former management team, now operating AGL, clearly continued [Global Link’s] fraudulent schemes relating to MOL shipments.” Id.

 

None of this explains how AGL has “some part in directing” the enterprise’s affairs. At most, it suggests that AGL may have been part of an enterprise. But merely being part of the enterprise is not enough. See Walter, 538 F.3d at 1249. Even providing services that benefit the enterprise is not enough. See Univ. of Maryland at Baltimore v. Peat, Marwick, Main & Co., 996 F.2d 1534, 1539 (3d Cir.1993); see also Baumer v. Pachl, 8 F.3d 1341, 1345 (9th Cir.1993) (citing Univ. of Maryland with approval). In short, even if the Court assumes that AGL participated in the asserted RICO enterprise, MOL offers no evidence that AGL had any part in operating or managing it. In considering what activities satisfy Reves’s “operation and management” test, the Ninth Circuit has looked at whether a party: gives or takes direction in the enterprise; “occup[ies] a position in the chain of command” of the enterprise; “knowingly implements decisions” of the enterprise; or is “indispensable to achievement of the enterprise’s goal.” See Walter, 538 F.3d at 1249. MOL offers no evidence on these points. MOL relies on evidence of the existence of a longstanding business relationship between a principal of AGL and a principal of SeaMaster. That is not enough to establish RICO “conduct.” The considerations raised in the Court’s discussion of MOL’s conspiracy claim also apply here. See Section IV.B supra. MOL’s evidence suggests, at best, a parallel enterprise involving companies similarly situated to, but different from, AGL.

 

*9 MOL makes much of the conduct of Global Link, a now-defunct entity formerly helmed by Rosenberg which is not a party to this lawsuit. See Opp’n at 13–14. MOL asserts that evidence pertaining to Global Link is admissible under Federal Rule of Evidence 404(b)(2) to show “motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake[,] or lack of accident.” Opp’n at 14 n. 10. Assuming without deciding that (1) the evidence would be admissible for that purpose and (2) that the evidence establishes that Rosenberg used Global Link to commit RICO violations against MOL, it still would not show that Rosenberg or AGL directed any RICO enterprise in this case.

 

MOL cites two out-of-circuit cases for the proposition that “[i]t is not necessary to prove that every member of the enterprise participated in or knew about all of its activities.” Opp’n at 20 (internal quotation marks omitted) (citing United States v. Cagnina, 697 F.2d 915, 922 (11th Cir.1983); United States v. Rastelli, 870 F.2d 822, 827–28 (2d Cir.1989)). That proposition holds in the situations where it applies, but this is not one of those situations. The cited discussions in Cagnina dealt with the requirements for alleging the existence of an enterprise—a separate consideration from showing “conduct” under Reves’s “operation and management” test. Rastelli addressed what the government must prove in a criminal RICO case to prove a RICO conspiracy (as compared to the non-conspiracy civil claim arising under § 1962(c)). Neither case addresses the issue of “conduct” that is relevant here.

 

In conclusion, MOL has not carried its burden of showing a triable issue of material fact as to the “conduct” requirement of its § 1962(c) claim. Accordingly, the Court GRANTS AGL’s motion for partial summary judgment as to that claim.

 

MOL also asserts a § 1962(d) claim against, inter alia, AGL. Section 1962(d) simply proscribes conspiring to commit RICO violations and thus depends on the viability of an underlying RICO claim. See Howard v. Am. Online Inc., 208 F.3d 741, 751 (9th Cir.2000). None being present here, AGL is entitled to summary judgment as to MOL’s § 1962(d) claim. The absence of evidence of conspiracy also supports entry of summary judgment on this claim. See Section IV.B supra. Accordingly, the Court GRANTS AGL’s motion for partial summary judgment as to MOL’s § 1962(d) claim.

 

V. CONCLUSION

For the foregoing reasons, the Court PARTIALLY GRANTS and PARTIALLY DENIES the motion of Defendant American Global Logistics, LLC for partial summary judgment. Plaintiff Mitsui O.S.K. Lines, Ltd.’s claims for negligent misrepresentation, conspiracy to intentionally misrepresent, civil RICO violations, and civil RICO conspiracy are DISMISSED as to AGL. Plaintiff’s claim for intentional misrepresentation remains undisturbed as to AGL.

 

IT IS SO ORDERED.