United States District Court, D. New Jersey.

FEDERAL INSURANCE COMPANY, Plaintiff,

v.

SECURE CARGO CORPORATION, Defendant.

 

Civil No. 12–851 (RBK/AMD).

March 25, 2013.

 

James A. Saville, Jr., Hill, Rivkins & Hayden, LLP, Perth Amboy, NJ, for Plaintiff.

 

OPINION

KUGLER, District Judge.

*1 This matter arises out of Plaintiff Federal Insurance Company’s (“Plaintiff”) claims against Secure Cargo Corporation (“Defendant”) for negligent interstate shipping of goods. Currently before the Court is Plaintiff’s motion for default judgment under Federal Rule of Civil Procedure 55(b)(2) (Doc. No. 6). For the reasons stated herein, the Court will grant Plaintiff’s motion and direct Plaintiff to appear for a hearing to determine a proper award of damages.

 

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORYFN1

 

FN1. As a consequence of the Clerk of Court’s entry of default against Defendant on June 5, 2012, and for purposes of deciding the instant motion for default judgment, the Court accepts as true the factual allegations in Plaintiff’s Complaint, save those relating to the amount of damages. United States v. Pinsky, No. 10–2280, 2011 WL 1326031 at *2 (D.N.J. Mar.31, 2011) (citing Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir.1990)).

 

In February 2011, Win Transport Incorporated, a transportation broker not a party to this litigation, entered into a Carrier–Broker agreement with Defendant in which Defendant agreed to transport frozen seafood cargo from Mullica Hill, New Jersey to Miami, Florida and frozen meat cargo from Pennsauken, New Jersey to Miami, Florida. Id. ¶¶ 4–5. On February 25, 2011, Win took possession of this cargo in good order in New Jersey. Id. ¶ 6. However, when the goods arrived at their Florida destination, they were not in the same good order and condition. Id. ¶ 8. From these facts, Plaintiff concludes that Defendant was negligent in its handling of this cargo, and that it breached its duties and obligations as a common carrier and bailee. Id. ¶ 9.

 

Plaintiff, a transportation insurer, reimbursed Win for its losses relating to this shipment. Id. ¶ 1. Consequently, it became subrogated to Win’s rights and brought suit on February 13, 2012 to recover from Defendant. Plaintiff issued a summons on Defendant on April 19, 2012 (Doc. No. 4). On June 5, 2012, having received no response from Defendant, Plaintiff sought, and subsequently received, the Clerk of Court’s entry of Default under Federal Rule of Civil Procedure 55(a) (Doc. No. 5). Shortly thereafter, Plaintiff filed the instant motion for default judgment (Doc. No. 6).

 

II. DISCUSSION AND ANALYSIS

Federal Rule of Civil Procedure 55(b)(2) FN2 allows the Court, upon a plaintiff’s motion, to enter default judgment against a defendant that has failed to plead or otherwise defend a claim for affirmative relief. While the decision to enter default judgment is left principally to the discretion of the district court, there is a well-established preference in this Circuit that cases be decided on the merits rather than by default whenever practicable.   Hritz v. Woma Corp., 732 F.2d 1178, 1180–81 (3d Cir.1984). Consequently, the Court must address a number of issues before deciding whether a default judgment is warranted in the instant case. If it finds default judgment to be appropriate, the Court’s next step is to determine a proper award of damages.

 

FN2. Throughout this opinion, the Court will refer to the Federal Rules of Civil Procedure simply as the “Rules.”

 

A. Appropriateness of Default Judgment

 

i. The Court’s Jurisdiction

 

First, the Court must determine whether it has both subject matter jurisdiction over Plaintiff’s cause of action and personal jurisdiction over Defendant. U.S. Life Ins. Co. in City of New York v. Romash, No. 09–3510, 2010 WL 2400163 at *1 (D.N.J. June 9, 2010). Verifying the Court’s jurisdiction is of particular concern where, as here, the defaulting party has failed to make any sort of appearance or submit any responsive communication to the Court.

 

*2 In this case, Plaintiff appears to assert state law negligence and breach of contract claims against Defendant. However, the Complaint also seeks relief under a federal statute involving the interstate shipment of goods, 49 U.S.C. § 11706. Compl. ¶ 3. Consequently, the Court has federal question subject matter jurisdiction over Plaintiff’s claims and supplemental jurisdiction over any state law claims. See 28 U.S.C. § 1331; 28 U.S.C. § 1367(a).

 

In addition, the Court must consider whether it may exercise personal jurisdiction over Defendant. Sitting in New Jersey, the Court may exercise personal jurisdiction over an out of state defendant only to the extent authorized by the state’s long arm statute. Fed.R.Civ.P. 4(k)(1)(A). The New Jersey statute, however, is “intended to extend as far as is constitutionally permissible.” DeJames v. Magnificence Carriers, Inc., 654 F.2d 280 (3d Cir.1981). Thus, the Court applies general principles of federal constitutional law in order to determine whether it may exercise jurisdiction over Defendant.

 

The exercise of personal jurisdiction over a non-resident defendant is dependent upon that defendant establishing “certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Telcordia Tech Inc. v. Telkom SA Ltd., 458 F.3d 172, 177 (3d Cir.2006) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). When a defendant establishes such minimum contacts, the Court may exercise so-called “specific personal jurisdiction” over that defendant for claims arising out of those contacts. Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 149 (3d Cir.1992). In determining whether specific personal jurisdiction exists in a given claim, the principal inquiry is whether the defendant, by some affirmative act, has “purposely avail[ed] itself of the privilege of conducting activities within the forum state.” Grand Entertainment Group, Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 482 (3d Cir.1993) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)).

 

In this case, Defendant sent its carriers into New Jersey in order to fulfill its CarrierBroker Agreement with Win. See Compl. ¶ 9. This is the sort of affirmative act demonstrating that Defendant “purposely avail[ed] itself of the privilege of conducting activities within the forum state.” See Grand Entertainment Group, 988 F.2d at 482. Further, the instant cause of action arises out of these very contacts. The Court may therefore exercise personal jurisdiction over Defendant.

 

ii. Entry of Default

Second, the Court must ensure that the entry of default under Rule 55(a) was proper. Rule 55(a) directs the Clerk of Court to enter a party’s default when that party “against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise.” In this case, Defendant was properly served with a summons and complaint on April 19, 2012 (Doc. No. 4). Thereafter, they failed to respond to the Complaint within twenty-one days of service as required under Rule 12(a). Plaintiff attested to these facts in an affidavit attached to its request for default (Doc. No. 5). Accordingly, the Clerk’s entry of default under Rule 55(a) was appropriate.

 

iii. Plaintiff’s Cause of Action

*3 Third, the Court must determine whether Plaintiff’s Complaint states a proper cause of action against Defendant. In conducting this inquiry, the Court accepts as true a plaintiff’s wellpleaded factual allegations while disregarding its mere legal conclusions. See Directv, Inc. v. Asher, No. 03–1969, 2006 WL 680533 at *1 (D.N.J. Mar.14, 2006) (citing 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2688, at 63 (3d ed.1998)).

 

As stated above, although Plaintiff appears to state common law claims for negligence and breach of contract, its Complaint also references 49 U.S.C. § 11706. While this statute is inapplicable to the instant dispute because it involves liability for rail carriers rather than motor carriers, the Court, giving Plaintiff the benefit of the doubt, understands the Complaint to state a claim under 49 U.S.C. § 14706, known as the Carmack Amendment.FN3

 

FN3. The Court surmises that Plaintiff may have made a typographical error in its Complaint. It reaches this conclusion with greater confidence upon noting that Carmack Amendment actions are the exclusive avenue for relief for the type of injury that Plaintiff alleges, given that this federal statute preempts related state law claims. See Lewis v. Atlas Van Lines, Inc., 542 F.3d 403, 407–08 (3d Cir.2008); see also Orlick v. J.D. Carton & Son, Inc., 144 F.Supp.2d 337, 345 (D.N.J.2001) (observing that the Carmack Amendment preempts state law causes of action involving “loss of goods or damage to goods caused by the interstate shipment of those goods by a common carrier”) (citing Adams Express Co. v. Croninger, 226 U.S. 491, 505–06, 33 S.Ct. 148, 57 L.Ed. 314 (1913)).

 

The Carmack Amendment establishes a carrier’s liability for the actual loss or injury it causes to property received for transport. 49 U.S.C. § 14706(a)(1). In order to state a claim under this statute, a plaintiff must show: “(1) delivery of the goods to the initial carrier in good condition, (2) damage of the goods before delivery to their final destination, and (3) the amount of damages.” Beta Spawn, Inc. v. FFE Transportation Services, Inc., 250 F.3d 218, 223 (3d Cir.2001).

 

In this case, the Court finds that Plaintiff’s Complaint states a valid Carmack Amendment claim against Defendant. The factual allegations in the Complaint are as follows:

 

1. Defendant entered into an agreement with Win to transport certain cargo from New Jersey to Florida on February 18, 2011. Compl. ¶ 4.

 

2. Win took possession of this cargo in good order and condition on February 25, 2011. Id. ¶¶ 6–7.

 

3. The cargo was not delivered to the recipients in Florida in the same good order and condition as when it was received. Id. ¶ 8.

 

4. Plaintiff sustained damages as a result in the amount of $173,307.63.

 

The Court finds that these allegations are just enough to state a claim under 49 U.S.C. § 14706(a)(1).

 

iv. Emcasco factors

Fourth, and lastly, the Court must consider the so-called Emcasco factors when determining whether to enter default judgment. The Court considers: (1) whether the defaulting party has a meritorious defense; (2) the prejudice suffered by the plaintiff seeking default; (3) the defaulting party’s culpability in bringing about default. Bridges Financial Group, Inc. v. Beech Hill Co., Inc., No. 09–2686, 2011 WL 1485435 at *3 (D.N.J. Apr.18, 2011) (citing Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 F.R.D. 171, 177 (D.N.J.2008) (citing Emcasco Ins. Co. v. Sambrick, 834 F.2d 71, 74 (3d Cir.1987)). In this case, all three of these factors militate in favor of granting a default judgment. First, there is no indication that Defendant has a cognizable defense to Plaintiff’s allegations of negligent transport. See Hill v. Williamsport Police Dept., 69 Fed. App’x 49, 52 (3d Cir.2003) ( “Because the defendants had not yet filed an answer, the District Court was unable to evaluate whether they had a litigable defense, [rendering this first] factor … inconclusive.”). Second, because Defendants have wholly failed to answer the Complaint or otherwise appear, Plaintiff suffers prejudice if it doesn’t receive a default judgment because it has no alternative means of vindicating its claim against the defaulting party. See Directv v. Asher, No. 03–1969, 2006 WL 680533 at *2 (D.N.J. Mar.14, 2006). Third, the Defendants’ failure to respond permits the Court to draw an inference of culpability on their part. See Surdi v. Prudential Ins. Co. of Am., No. 08–225, 2008 WL 4280081 at *2 (D.N.J. Sept.8, 2008). Thus, the Emcasco factors weigh in favor of entering default judgment.

 

v. Conclusion

*4 In light of the foregoing analysis, the Court finds that Plaintiff is entitled to a default judgment against Defendant.

 

B. Damages

Plaintiff seeks actual damages of $173,307.63, plus interest. Pl.’s Statement of Damages (Doc. No. 6). It has failed, however, to submit any documentation supporting this figure. As the Court is not bound to accept as true Plaintiff’s allegations concerning damages, Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir.1990), it will have to determine a proper award at a later hearing. See Fed.R.Civ.P. 55(b)(2)(B).

 

III. CONCLUSION

For the reasons stated above, the Court will grant Plaintiff’s motion for default judgment and direct Plaintiff to appear for a hearing to determine a proper award of damages. An appropriate order shall issue today.

United States District Court,

M.D. Tennessee,

Nashville Division.

Michael DAVIS

v.

NORTH AMERICAN VAN LINES, INC.

 

No. 3:12–1035.

March 25, 2013.

 

Michael Davis, Franklin, TN, pro se.

 

J. Matthew Kroplin, Kenneth M. Bryant, Stites & Harbison, PLLC, Nashville, TN, for North American Van Lines, Inc.

 

REPORT AND RECOMMENDATION

JULIET GRIFFIN, United States Magistrate Judge.

*1 TO: Honorable Todd J. Campbell, District Judge

 

By Order entered October 11, 2012 (Docket Entry No. 3), this action was referred to the Magistrate Judge, pursuant to 28 U.S.C. § 636 and Rule 72 of the Federal Rules of Civil Procedure, for entry of a scheduling order, decision on all pretrial, nondispostiive motions, and a report and recommendation on any dispositive motions.

 

Presently pending is the Defendant’s motion to dismiss (Docket Entry No. 5). For the reasons set out below, the Court recommends that the motion be granted and this action be dismissed.

 

I. BACKGROUND

The Plaintiff filed this action pro se in the General Sessions Court for Williamson County, Tennessee, on September 6, 2012, against North American Van Lines. In a manner which is typical of many pro se plaintiffs, the Plaintiff alleged facts purporting to show an injury caused by the Defendant but failed to assert any actual legal cause of action. The General Sessions Civil Warrant filed by the Plaintiff asserts:

 

Missing or stolen moving box (# 33) valued at $15,377.00 which was supposed to be delivered on 2/12/12. Previously attempted to resolve dispute with moving company with no results.

 

See Docket Entry No. 1–1.

 

On October 10, 2012, the Defendant removed the action to this Court, pursuant to 28 U.S.C. § § 1331 and 1337, on the basis of federal question jurisdiction contending that the action, which was brought against a motor-carrier for damages based on an act of interstate commerce and seeks in excess of $10,000.00, is governed by the laws of the United States. See Docket Entry No. 1. Five days later, the Defendant filed a Motion to Dismiss (Docket Entry No. 5) asserting that the action involves the interstate shipment of the Plaintiff’s household goods pursuant to a Bill of Lading (Docket Entry No. 5–1). As such, the Defendant argues that any state and common law claims asserted by the Plaintiff are preempted by the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, and that the Plaintiff’s sole remedy is limited to that provided by the Carmack Amendment. See Defendant’s Memorandum of Law (Docket Entry No. 6).

 

By Order entered November 27, 2012 (Docket Entry No. 7), the Court gave the Plaintiff a deadline of January 4, 2013, to respond to the Motion to Dismiss. On January 4, 2013, the Plaintiff filed a letter with the Court in which he stated, “I would like to continue my actions against NA Van Lines per their motion to dismiss. Please provide the next actions I need to take to pursue this issue.” See Docket Entry No. 10.

 

By Order entered January 28, 2013 (Docket Entry No. 11), the Court advised the Plaintiff that his letter was too vague and unresponsive to the Defendant’s motion to be viewed as an actual response to the motion to dismiss. Nonetheless, the Court, in recognition of the Plaintiff’s pro se status, took the Defendant’s motion under advisement in order to allow the Plaintiff to file an amended complaint that more clearly set out the facts of his action and his specific legal cause(s) of action. The Court gave the Plaintiff a deadline of February 8, 2013, to file his amended complaint, and specifically warned the Plaintiff that his failure to file an amended complaint as ordered by the Court shall be construed by the Court as an admission by the Plaintiff that his action is preempted by the Carmack Amendment and should be dismissed.

 

*2 The Plaintiff has not filed an amended complaint as ordered by the Court nor taken any type of other action in response to either the Court’s January 28, 2013, Order or the Defendant’s motion to dismiss.

 

II. STANDARD OF REVIEW

A motion to dismiss filed under Rule 12(b)(6) of the Federal Rules of Civil Procedure is reviewed under the standard that the Court must accept as true all of the factual allegations contained in the complaint, resolve all doubts in the plaintiff’s favor, and construe the complaint liberally in favor of the pro se plaintiff. See Kottmyer v. Maas, 436 F.3d 684 (6th Cir.2006); Boswell v. Mayer, 169 F.3d 384, 387 (6th Cir.1999); Morgan v. Church’s Fried Chicken, 829 F.2d 10, 11–12 (6th Cir.1987). However, although the complaint need not contain detailed factual allegations, the plaintiff must provide the grounds for his entitlement to relief and this “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action.”   Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (abrogating Conley v. Gibson, 355 U.S. 41 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). See also Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

 

The factual allegations supplied must be enough to show a plausible right to relief. Twombly, 550 U.S. at 555–61. More than bare assertions of legal conclusions are required to withstand a motion to dismiss and the complaint must contain either direct or inferential allegations respecting all of the material elements to sustain a recovery under some viable legal theory. Id.; Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436–37 (6th Cir.1988). The Court need not accept as true legal conclusions or unwarranted factual inferences. See Gregory v. Shelby Cnty., 220 F.3d 433, 446 (6th Cir.2000); abrogated in part on other grounds, Buckhannon Bd. & Care Home, Inc. v. West Va. Dep’t of Health & Human Res., 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001). A complaint does not “suffice if it tenders ‘naked assertions’ devoid of ‘further factual enhancement.’ ” Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 557).

 

III. CONCLUSIONS

The Plaintiff’s failure to file an amended complaint as ordered by the Court requires dismissal of his action for two reasons. First, the Plaintiff’s failure to comply with a specific directive of the Court indicates a failure to prosecute on his part. Rule 16(f)(1) of the Federal Rules of Civil Procedure provides that “on motion or on its own, the Court may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party … (C) fails to obey a scheduling or other pretrial order.” Pursuant to Rule 37(b)(2)(A)(v), the Court may dismiss an action as a sanction. It is also well-settled that federal trial courts have the inherent power to manage their own dockets, Link v. Wabash R.R. Co., 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1961), and Rule 41(b) of the Federal Rules of Civil Procedure permits the Court to dismiss an action upon a showing of a clear record of delay, contumacious conduct, or failure to prosecute by the plaintiff. See Carter v. City of Memphis, Tennessee, 636 F.2d 159, 161 (6th Cir.1980). Dismissal of the action with prejudice is appropriate in light of the Plaintiff’s conduct of ignoring the directives of the Court.

 

*3 Second, by failing to file an amended complaint or an actual response to the Defendant’s motion to dismiss, the Plaintiff has not shown that his complaint should not be dismissed. Given the cursory and vague nature of the complaint filed by the Plaintiff in state court, the Defendant has asserted a valid defense that the Plaintiff raises only claims that are preempted from consideration by the Carmack Amendment. See W.D. Lawson & Co. v. Penn Central Co., 456 F.2d 419, 421 (6th Cir.1972); American Synthetic Rubber Corp. v. Louisville & N.R. Co., 422 F.2d 462, 466 (6th Cir.1970). The Plaintiff has not addressed this issue in any manner. Furthermore, in accordance with the January 28, 2013, Order, by his failure to file an amended complaint, the Plaintiff is deemed to have admitted that this action is preempted by the Carmack Amendment and should be dismissed.

 

RECOMMENDATION

Based on the foregoing, the Court respectfully RECOMMENDS the Motion to Dismiss (Docket Entry No. 5) be GRANTED and that this action be DISMISSED WITH PREJUDICE.

 

ANY OBJECTIONS to this Report and Recommendation must be filed with the Clerk of Court within fourteen (14) days of service of the Report and Recommendation upon the party and must state with particularity the specific portions of this Report and Recommendation to which objection is made. Failure to file written objections within the specified time can be deemed a waiver of the right to appeal the District Court’s Order regarding the Report and Recommendation. See Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985); United States v. Walters, 638 F.2d 947 (6th Cir.1981).