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Volume 17, Edition 5 cases

Genusa v. Asbestos Corp. Ltd.

United States District Court,

M.D. Louisiana.

Louis GENUSA

v.

ASBESTOS CORPORATION LIMITED, et al.

 

Civil Action No. 13–794–JJB–RLB.

Signed May 8, 2014.

 

John F. Dillon, John F. Dillon, PLC, Folsom, LA, Frank J. Swarr, David Ryan Cannella, Mickey P. Landry, Philip Charles Hoffman, Landry, Swarr & Cannella, LLC, New Orleans, LA, for Louis Genusa.

 

Kay Barnes Baxter, Swetman Baxter Massenburg, Kaye N. Courington, Jeffrey M. Burg, William J. Sommers, Jr., Courington, Kiefer & Sommers LLC, New Orleans, LA, for Defendants.

 

RULING AFFIRMING AND ADOPTING MAGISTRATE JUDGE RECOMMENDATIONS

JAMES J. BRADY, District Judge.

*1 This matter is before the court on the Plaintiff Louis Genusa’s Motion (doc. 9) to Sever and Remand. In his Report and Recommendations (doc. 80), the Magistrate Judge found that the motion to sever and remand should be granted, with this Court retaining jurisdiction over the Defendant Baton Rouge Marine Contractors, Inc.’s claims against International Longshoreman’s Association (“ILA”), AFL–CIO, South Atlantic & Gulf Coast District, ILA, AFL–CIO, and Local 3033, ILA, AFL–CIO. Subsequently, multiple objections were filed. (Docs.82, 83, 85, 88).

 

After reviewing the Report and Recommendations and the parties’ respective briefings on the matter, the Court hereby AFFIRMS and ADOPTS the Magistrate Judge’s Report and Recommendations (doc. 80). Consistent with it, the Court declines to exercise supplemental jurisdiction over the relevant claims pursuant to 28 U.S.C. § 1367(c). Accordingly, the Court GRANTS the Plaintiff Louis Genusa’s Motion (doc. 9) to Sever and Remand. The Court SEVERS all of Plaintiff Louis Genusa’s claims against the defendants, as well as Baton Rouge Marine Contractors, Inc.’s third-party claims against McKoin Trucking. Furthermore, the Clerk of Court’s office shall TERMINATE Documents 19, 20, 32, 38, 42, 43, and 52, as they are now moot.

 

NOTICE

RICHARD L. BOURGEOIS, JR., United States Magistrate Judge.

Please take notice that the attached Magistrate Judge’s Report has been filed with the Clerk of the United States District Court.

 

In accordance with 28 U.S.C. § 636(b)(1), you have fourteen (14) days after being served with the attached Report to file written objections to the proposed findings of fact, conclusions of law and recommendations therein. Failure to file written objections to the proposed findings, conclusions, and recommendations within 14 days after being served will bar you, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions of the Magistrate Judge which have been accepted by the District Court.

 

ABSOLUTELY NO EXTENSION OF TIME SHALL BE GRANTED TO FILE WRITTEN OBJECTIONS TO THE MAGISTRATE JUDGE’S REPORT.

 

MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION

This matter is before the court on referral from the district judge of the plaintiff’s motion to sever and remand. This action was removed by International Longshoreman’s Association (“ILA”), AFL–CIO, South Atlantic & Gulf Coast District, ILA, AFL–CIO, and Local 3033, ILA, AFL–CIO (collectively, the “Unions”) after the defendant Baton Rouge Marine Contractors, Inc. (“BRMC”) filed a Third Party Demand against the Unions. (R. Doc. 1). The Unions removed this action under 28 U.S.C. § 1441(c), which provides for removal of a civil action where federal and state law claims are joined. The Unions allege that removal of the entire action is proper because BRMC’s Third Party Demand raises federal questions under 28 U.S.C. § 1331.

 

*2 Plaintiff Louis Genusa, Jr. (“Genusa”) filed a motion to sever and remand under 28 U.S.C. § 1441(c)(2) on the basis that his tort claims do not raise any federal questions. (R. Doc. 9). Genusa’s motion is opposed by some of the defendants in the original action on various grounds. (R. Docs.30, 31, 32, 33, 35, 36, 37, 49). The Unions filed a motion in support of Genusa’s motion. (R. Doc. 34). Genusa replied to the defendants’ oppositions. (R. Doc. 51).

 

I. Background and Procedural History

Genusa worked as a longshoreman, truck loader, warehouse worker, and in other positions from 1963 to 1998 for various transportation companies at the Port of Baton Rouge in Port Allen, Louisiana. He allegedly contracted malignant mesothelioma from asbestos exposure while conducting such work. On June 19, 2013, Genusa filed suit against the miners, manufacturers, sellers, suppliers and distributors of asbestos products,FN1 as well as his employers, their executive owners, and owners of the premises on which he worked,FN2 in the 18th Judicial District Court, West Baton Rouge Parish, Louisiana. (R. Doc. 1–2 at 18–30, “Petition”). The following employer and premise defendants have submitted briefs regarding the pending motion to remand:

 

• Baton Rouge Marine Contractors (“BRMC”), n/k/a Ports America Baton Rouge, Inc.

 

• Port of Greater Baton Rouge a/k/a Greater Baton Rouge Port Association (“GBRPA”)

 

• SSA Gulf, Inc. f/k/a Ryan Walsh (“SSA/Ryan”)

 

• Ramsay Scarlett & Company (“Ramsay”)

 

• Louisiana Insurance Guaranty Association (“LIGA”), liability insurer for insolvent employer Louisiana Stevedores

 

In the Petition, Genusa alleges claims for negligence, failure to warn, strict liability, breach of express and implied warranty, and negligent infliction of emotional distress based on Louisiana law. (R. Doc. 1–2 at 18–27).

 

On October 23, 2013, BRMC filed a Third Party Demand seeking contribution or indemnity from the Unions on the theory that they breached contractual duties to warn Genusa and BRMC of the dangers of asbestos exposure. (R. Doc. 1–2 at 10–17, “TPD”). In the Third Party Demand, BRMC alleges that the Unions had a “contractual relationship” with Genusa, and in consideration for Genusa’s dues, the Unions promised him better working conditions and to promote his health. (TPD, ¶ V). BRMC further alleges that the Unions had a duty to warn Genusa about the dangers of asbestos, a duty to warn BRMC about the dangers of asbestos, and a duty to protect Genusa’s health and safety. (TPD, ¶ V). The Third Party Demand also includes allegations against McKoin Trucking Company, L.L.C. f/k/a McKoin trucking Company, Inc. (“McKoin Trucking”) for indemnity and contribution. (TPD, ¶ VII). BRMC alleges that McKoin Trucking exposed Genusa to asbestos cargo and is liable to both Genusa and BRMC “in the event BRMC is liable to plaintiff for any sum pursuant to the same theories of liability asserted against BRMC and other defendants.” (TPD, ¶¶ VII–X).

 

*3 On November 12, 2013, the Unions timely removed the action under 28 U.S.C. § 1441(c). (R. Doc. 1). In the Notice of Removal, the Unions allege that BRMC’s third-party demand requires interpretation of both collective bargaining agreements and labor organization constitutions under Section 301(a) of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185(a). The Unions allege that Section 301(a) completely preempts BRMC’s claims under state law, providing this court with federal question jurisdiction under 28 U.S.C. § 1331.

 

On December 16, 2013, Genusa filed a motion to sever and remand his state law claims in accordance with 28 U.S.C. § 1441(c)(2) on the ground that his claims are separate and independent from the third-party claims removed by the Unions and they do not raise any questions of federal law. (R. Doc. 9). The Unions filed a memorandum in support of severance and remand of Genusa’s claims. (R. Doc. 34). Repeating their position in the Notice of Removal, the Unions argue that Genusa’s claims are separate and independent from BRMC’s third-party claims against them.

 

BRMC opposes Genusa’s motion to sever and remand on the basis that Genusa’s claims are not “separate and independent” from the third-party claims. As discussed above, BRMC argues that the entire action should be remanded. (R. Doc. 35). GBRPA adopts the opposition of BRMC, and further requests the court to defer on ruling on Genusa’s motion to sever and remand until after consideration of BRMC’s motion to remand the entire action. (R. Doc. 36). In reply, Genusa argues that BRMC wrongly asserts that its third-party demands are inseparable from Genusa’s claims.

 

LIGA, SSA/Ryan, and Ramsay oppose Genusa’s motion to sever and remand on the basis that the court should retain jurisdiction over Genusa’s claims, which they argue falls under this court’s admiralty jurisdiction and are governed by the procedures and remedies of the Longshore and Harbor Workers’ Compensation Act (“LHWCA”), 33 U.S.C. § 901, et seq. In particular, LIGA argues that Genusa’s employment with Louisiana Stevedores (for which LIGA is legal successor) occurred on vessels situated over navigable waters. LIGA argues that although Genusa’s admiralty action was not independently removable, now that it has been removed, the court should exercise jurisdiction over Genusa’s claims as they relate to his employment for Louisiana Stevedores. (R. Doc. 30–31). In the alternative, LIGA requests that the plaintiff’s claims against it be dismissed prior to remand on the basis that the state court lacks subject matter jurisdiction over claims governed exclusively by the LHWCA. Similarly, SSA/Ryan opposes Genusa’s motion to remand, relying on arguments found in its motion for partial summary judgment, which claims that the stevedore employers have immunity from Genusa’s state tort claims under the LHWCA. (R. Doc. 32–33). Ramsay Scarlett joined in the opposition filed by SSA/Ryan. (R. Doc. 37, 49). In reply, Genusa argues that LHWCA exclusivity does not apply because (1) the LHWCA does not apply to pre–1972 land-based injuries sustained by longshoremen, (2) Genusa’s state law tort claims accrued in the 1960s when he was first exposed, and (3) Genusa’s work was not exclusively on floating vessels. (R. Doc. 51).

 

*4 On December 19, 2013, the Unions moved to dismiss BRMC’s Third Party Demand. (R. Doc. 19, 20). In response, on January 9, 2014, BRMC filed an Amended Third Party Demand that purportedly removes allegations that could be interpreted as giving rise to a federal question. (R. Doc. 45). On January 13, 2014, BRMC filed a motion to remand the entire action based upon its allegations in its amended third-party complaint, which BRMC argues remove any “confusion” regarding whether there is a federal question under 28 U.S.C. § 1331. (R. Doc. 48). Although the court is not currently addressing BRMC’s motion to remand, the arguments presented in the briefing by BRMC and the Unions are relevant for determining whether the action was properly removed.

 

BRMC argues that the Unions improperly removed this action because its Third Party Demand alleges only state law contribution claims that do not require interpretation or application of Deep Sea Agreements, collective bargaining agreements, or labor organization constitutions, and therefore do not raise a federal question. BRMC argues that under the well-pleaded complaint rule the affirmative defense of federal preemption does not create a federal question. BRMC acknowledges, however, that the LMRA completely preempts state law and, accordingly, federal question jurisdiction is properly exercised where a defendant raises an affirmative defense of preemption under Section 301(a) of the LMRA. Nevertheless, BRMC argues that complete preemption does not apply to its contribution claims against the Unions because they are based on an alleged breach of state-law duties owed by the Unions to Genusa. BRMC further claims that its amended Third Party Demand (R. Doc. 45) removes any and all allegations of contractual relationships that could arguably raise a federal question. Accordingly, BRMC requests the court to exercise its discretion and remand for lack of subject matter jurisdiction under 28 U.S.C. § 1331.

 

In opposition, the Unions argue that the court has subject matter jurisdiction under 28 U.S.C. § 1331 because they have raised a defense under Section 301(a) of the LMRA, which completely preempts any state law action. The Unions further argue that BRMC cannot defeat the proper removal of the action by amending away the basis for the court’s subject matter jurisdiction. Finally, the Unions argue that even as amended, BRMCs’ Amended Third Party Demand states a claim under § 301 of the LMRA and is preempted by the federal duty of fair representation.

 

II. Law & Analysis

 

A. Removal to Federal Court pursuant to 28 U.S.C. § 1441(c)(1)

 

1. Proper Removal by Third Party Defendants

 

Although not addressed by the parties, the Court must first determine whether the third party defendants may remove this action under 28 U.S.C. § 1441. Most courts have limited section (c) to removal only by defendants, not third-party defendants. See, e.g., Pulaski v. Curry, 301 F.3d 456, 461 (6th Cir.2002) (“we conclude that neither § 1441(a) nor § 1441(c) provides third-party defendants with the right to remove a case to federal court); Lewis v. Windsor Door Co., 92 F.2d 729, 732–33 (8th Cir.1991); Thomas v. Shelton, 740 F.2d 478, 487–88 (7th Cir.1984).

 

*5 The Fifth Circuit, however, follows a minority view, allowing third-party defendants to remove under subsection (c) under limited circumstances. See Carl Heck Engineers, Inc. v. Lafourche Parish Police Jury, 622 F.2d 133, 135 (5th Cir.1980) (superseded by statute on other grounds). In the instant case, BRMC asserts in its Third Party Demand that it is “entitled to indemnity and/or contribution” from the third-party union defendants based on a “contractual relationship with plaintiff.” (TPD, ¶¶ IV–V). Consistent with Heck, this third-party indemnity claim based on a contractual obligation is removable by a third-party defendant in accordance with 28 U.S.C. § 1441(c). FN3

 

In contrast, BRMC’s third-party “contribution and/or indemnity” claims against McKoin Trucking are not based on contractual obligations. BRMC alleges that McKoin Trucking exposed Genusa to asbestos cargo and is liable to both Genusa and BRMC “in the event BRMC is liable to plaintiff for any sum pursuant to the same theories of liability asserted against BRMC and other defendants.” (TPD, ¶ ¶ VII–X). Because its third-party claims against McKoin Trucking are based on the same theories of liability asserted against BRMC by Genusa, these third-party claims against McKoin Trucking are not separate and independent from Genusa’s claims. See Noland v. Energy Resources Technology, Inc., No. 12–cv–330, 2013 WL 177446 (S.D.Tex. Jan.16, 2013) (citing In re Wilson Indus ., Inc., 886 F.3d 93, 96 (5th Cir.1989). Accordingly, the court will analyze whether to sever and remand BRMC’s third-party claims against McKoin Trucking in this Report and Recommendation.

 

2. BRMC’s Claims against the Unions arise under the laws of the United States.

This court has original subject matter jurisdiction “of all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Nevertheless, because federal courts are courts of limited jurisdiction, it is presumed that a suit removed to federal court lies outside this limited jurisdiction. Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir.2001). The party seeking removal bears the burden of demonstrating that a federal question exists. Gutierrez v. Flores, 543 F.3d 248, 251 (5th Cir.2008). A federal question exists “if there appears on the face of the complaint some substantial, disputed question of federal law.” In re Hot–Hed, Inc., 477 F.3d 320 (5th Cir.2007) (quoting Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 366 (5th Cir.1995)).

 

Whether a case is removable upon the basis of federal question jurisdiction is to be determined by the allegations of the plaintiff’s “well-pleaded complaint” as of the time of removal. See Medina v. Ramsey Steel Co., Inc., 238 F.3d 674, 680 (5th Cir.2001). Because the plaintiff is the master of his complaint, even where both federal and state remedies are available on a given set of facts, there will be no basis for removal on federal question jurisdiction if the plaintiff elects in the state court petition to proceed exclusively under state law. Avitts v. Amoco Production Co., 53 F.3d 690, 693 (5th Cir.1995). Under the well-pleaded complaint rule, the defense of federal preemption does not create federal question jurisdiction. See Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (“[I]t is now settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption, even if the defense is anticipated in the plaintiff’s complaint, and even if both parties concede that the federal defense is the only question truly at issue .”); New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 328–29 (5th Cir.2008) (“The well-pleaded complaint rule focuses on whether the plaintiff has affirmatively alleged a federal claim, thus providing a basis for federal jurisdiction; anticipated or potential defenses, including defenses based on federal pre-emption, do not provide a basis for federal question jurisdiction.”) (citations omitted).

 

*6 The complete preemption doctrine, however, creates a narrow exception to the well-pleaded complaint rule, allowing removal of an otherwise unremovable state court action where Congress has “so completely preempt[ed] a particular area that any civil complaint raising this select group of claims is necessarily federal in character.” See Johnson v. Baylor Univ., 214 F.3d 630, 632 (5th Cir.2000) (quoting Metro Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)). Unlike ordinary preemption, complete preemption is jurisdictional in nature, and “[a]s such, it authorizes removal to federal court even if the complaint is artfully pleaded to include solely state law claims….” Johnson, 214 F.3d at 632 (quoting Heimann v. Nat’l Elevator Indus. Pension Fund, 187 F.3d 493, 500 (5th Cir.1999)).

 

Section 301 of the LMRA completely preempts disputes arising out of collective bargaining agreements. Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Trust for S. California, 463 U.S. 1, 22–24, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) (citing Avco Corp. v. Machinists, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968)). In determining whether a state tort claim is preempted by Section 301, the court must determine whether the tort action “confers nonnegotiable state-law rights on employers or employees independent of any right established by contract, or, instead, whether evaluation of the tort claim is inextricably intertwined with consideration of the terms of the labor contract.” Allis–Chalmers Corp. v. Lueck, 471 U.S. 202, 213, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985). State tort law is preempted by Section 301 of the LMRA if it “purports to define the meaning of the contractual relationship.” Id. In other words, a tort claim brought under state law is preempted if the application of state law “requires the interpretation of a collective bargaining agreement.” Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 413, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988). Accordingly, the court must determine whether BRMC’s third-party claims arising out of work-place safety are “inextricably intertwined” with the collective bargaining agreement, and therefore, preempted under Section 301 of the LMRA. If BRMC’s third-party claims require an interpretation of the collective bargaining agreement, the Unions’ removal of this action was proper and the court has subject-matter jurisdiction under the doctrine of complete preemption.

 

In Int’l Bhd. of Elec. Workers v. Hechler, 481 U.S. 851, 107 S.Ct. 2161, 95 L.Ed.2d 791 (1987), a Union member claimed that her union had breached its duty to provide the plaintiff with a safe workplace. The union member alleged that “pursuant to contracts and agreements entered into by and between the union and Florida Power,” and “pursuant to the relationship by and between” the union and the union member, the union owed her a duty to ensure she “would not be required or allowed to take undue risks in the performance of her duties which were not commensurate with her training and experience.” Hechler, 481 U.S. at 853. The Supreme Court concluded that because the plaintiff’s state-law negligence claim was based on the union member’s allegation “that the union owed a duty of care to provide her with a safe workplace,” and the union could assume such a duty through a contractual arrangement, questions of contract interpretation would underlie any finding of tort liability. Id. at 860. Because the claims required an interpretation of the union bargaining agreements to determine whether such a duty existed, Section 301 of the LMRA preempted the union member’s claims and therefore removal was proper. Id. at 862.

 

*7 Similarly, in United Steelworkers v. Rawson, 495 U.S. 362, 110 S.Ct. 1904, 109 L.Ed.2d 362 (1990), the plaintiffs brought wrongful death claims on behalf of union employees killed in a mining accident. The plaintiffs alleged that the deaths were caused by the fraudulent and negligent acts of the union in negligently performing mine inspections it had agreed to conduct, inadequately training safety committee members on safety issues, and failing to uncover obvious and discoverable deficiencies in mine safety. Id. at 370. The Supreme Court held that “[i]f the Union failed to perform a duty on connection with inspection, it was a duty arising out of the collective-bargaining agreement signed by the Union as the bargaining agent for the miners,” which was clearly governed by federal law. Id. at 374–75.

 

Here, BRMC seeks contribution or indemnification from the Unions on the basis that the Unions breached a contractual duty to warn both Genusa and BRMC of the dangers of asbestos. The court must interpret the collective bargaining agreement between BRMC and the Unions to determine whether such a duty existed. Rawson, 495 at 369–70; Hechler, 481 U.S. at 853. Furthermore, to the extent BRMC alleges that this “contractual relationship” arises out of the union constitutions, those claims are preempted under Section 301 as well because union constitutions are contracts within the meaning of the LMRA. See Woodell v. Int’l Bhd. of Elec. Workers, Local 71, 502 U.S. 93, 101, 112 S.Ct. 494, 116 L.Ed.2d 419 (1991).

 

In arguing that its state law claims are not preempted under the LMRA, BRMC relies primarily on a Fifth Circuit decision involving an action by an employee against his employer under La.Rev.Stat. § 23:13. See McKnight v. Dresser, 676 F.3d 426, 431 (5th Cir.2012). The Fifth Circuit held that Louisiana employers have an independent state-law duty to ensure workplace safety separate from any duty imposed on the employers by a collective bargaining agreement. Accordingly, the employers could not remove the action on the basis of complete preemption under Section 301 of the LMRA. Similarly, in Miles v. Melrose, 882 F.2d 976 (5th Cir.1989), the Fifth Circuit held that the union had a duty under general maritime law to warn an employer about the violent propensities of a union member who stabbed a co-worker. Id. at 991. Because general maritime law created a duty for the union to warn the employer, there was no need for interpreting the collective bargaining agreement, and, accordingly, there was no complete preemption under Section 301 of the LMRA. Id. The facts of neither McKnight nor Miles are applicable to this action because BRMC has alleged that the source of the Unions’ duties is contractual in nature.FN4

 

Based on the foregoing, the Union’s removal of this action under 28 U.S.C. § 1441(c) was proper, as the court has federal question jurisdiction over BRMC’s claims under 28 U.S.C. § 1331.

 

B. Severance and Remand pursuant to 28 U.S.C. § 1441(c)(2)

*8 Genusa moves the court to sever its claims from the Third Party Demand and remand Genusa’s claims pursuant to 28 U.S.C. § 1441(c)(2). The removal statute, in pertinent part, provides the following with regard to the removal of actions with both federal law and state law claims:

 

(c) Joinder of Federal law claims and State law claims.—(1) If a civil action includes—

 

(A) a claim arising under the Constitution, laws, or treaties of the United States (within the meaning of section 1331 of this title), and

 

(B) a claim not within the original or supplemental jurisdiction of the district court or a claim that has been made nonremovable by statute, the entire action may be removed if the action would be removable without the inclusion of the claim described in subparagraph (B).

 

(2) Upon removal of an action described in paragraph (1), the district court shall sever from the action all claims described in paragraph (1)(B) and shall remand the severed claims to the State court from which the action was removed….

 

28 U.S.C. § 1441(c). To the extent Genusa’s claims are not “within the original or supplemental jurisdiction of the district court” or “made nonremovable by statute,” the court must sever those claims and remand them to state court under § 1441(c)(2). The issue before the court, therefore, is whether and to what extent Genusa’s claims: (1) are not within the court’s original jurisdiction; (2) are not within the court’s supplemental jurisdiction; or (3) are claims that have been made unremovable by statute. 28 U.S.C. § 1441(c)(1)(B).

 

1. Original Jurisdiction

 

(a) 28 U.S.C. § 1333 (Admiralty Jurisdiction)

 

Federal district courts have original jurisdiction over any “civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.” 28 U.S.C. § 1333(1). FN5 LIGA is the only defendant to characterize this action, albeit fleetingly, as an “admiralty” action in its opposition to Genusa’s motion to sever and remand. (R. Doc. 31 at 2).FN6 Historically, admiralty jurisdiction would depend solely on whether the alleged tort occurred on navigable waters. See Executive Jet Aviation, Inc. v. City of Cleveland, 409 U.S. 249, 253, 93 S.Ct. 493, 34 L.Ed.2d 454 (1972). In Executive Jet Aviation, the court concluded that “there has existed over the years a judicial, legislative, and scholarly recognition that, in determining whether there is admiralty jurisdiction over a particular tort or class of torts, reliance on the relationship of the wrong to traditional maritime activity is often more sensible and more consonant with the purposes of maritime law than is a purely mechanical application of the locality test.” Id. at 261. Applying this inquiry into the “relationship of the wrong to traditional maritime activity,” the Supreme Court concluded that “there is no federal admiralty jurisdiction over aviation tort claims arising from flights by land-based aircraft between points within the continental United States.” Id. at 274. The Supreme Court later extended this inquiry into traditional maritime activity into contexts not involving aircraft. Foremost Ins. Co. v. Richardson, 457 U.S. 668, 674, 102 S.Ct. 2654, 73 L.Ed.2d 300 (1982) ( “[C]omplaint alleging a collision between two vessels on navigable waters properly states a claim within the admiralty jurisdiction of the federal courts.”

 

*9 Accordingly, to determine whether it has original jurisdiction pursuant to 28 U.S.C. § 1333, a federal district court must now inquire into both whether the location of the injury occurred on navigable waters or whether an injury suffered on land was caused by a vessel on navigable water (the “locality” test) and whether the alleged harms had a significant relationship to traditional maritime activities (the “connection” test). Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 534, 115 S.Ct. 1043, 130 L.Ed.2d 1024 (1995). The Supreme Court has provided an exclusive two-pronged inquiry for determining whether the connection test is satisfied: (1) the court must first “assess the general features of the type of incident involved to determine whether the incident has a potentially disruptive impact on maritime commerce” and (2) the court must also “determine whether the general character of the activity giving rise to the incident shows a substantial relationship to traditional maritime activity.” Id. (internal quotations and citations removed) (quoting Sisson v. Ruby, 497 U.S. 358, 363–65, 110 S.Ct. 2892, 111 L.Ed.2d 292 (1990)).

 

Here, Genusa’s claims meet the locality test, at least in part. The locality test looks to “whether the tort occurred on navigable water or whether injury suffered on land was caused by a vessel on navigable water.” See Abt v. Dickson Equipment Co., Inc., 251 Fed. App’x (5th Cir.2007) (quoting Grubart, 513 U.S. at 534). Genusa does not dispute that he did his stevedoring work both on floating vessels on the Mississippi River, a navigable waterway, and on the land. (See R. Doc. 51 at 9–10). Although it is not clear whether Genusa was on “navigable water” when he was first exposed to asbestos, because Genusa alleges that at least some of his exposure to asbestos occurred on navigable waters, the court concludes the locality test has been satisfied at least with regard to any alleged exposures suffered on navigable waters. See Coleman v. Slade Towing Co., 759 F.Supp. 1209, 1213 (S.D.Miss.1991); see also Conner v. Alfa Laval, Inc., 799 F.Supp.2d 455, 466 (E.D.Pa.2011) (“[I]n the case of asbestos-related disease arising from work on or around ships, the Court concludes that the locality test is satisfied as long as some portion of the asbestos exposure occurred on a vessel on navigable waters.”).

 

The court has more difficulty, however, determining that Genusa’s claims have a significant relationship to traditional maritime activity and therefore satisfy the connection test. In an action decided before Grubart, the Fifth Circuit outlined “four factors to be considered in determining the existence of a substantial maritime relationship: the functions and roles of the parties; the types of vehicles and instrumentalities involved; the causation and the type of injury; and traditional concepts of the role of admiralty law.”   Woessner v. Johns–Manville Sales Corp., 757 F.2d 634, 639 (5th Cir.1985) (citing Kelly v. Smith, 485 F.2d 520 (5th Cir.1973)). Based upon these Kelley factors, the Fifth Circuit concluded that an asbestos insulation installer’s claims against asbestos manufacturers did not bear a significant relationship to traditional maritime activities, even though approximately 60% of the plaintiff’s work over four decades had been done insulating ships in shipyards, dry dock areas, and on navigable waters. Consistent with this analysis, a similar conclusion would be supported in the current case. The Grubart decision, however, expressly abrogates the use of the four factors announced in Kelley for determining whether the connection test was satisfied.   Grubart, 513 U.S. at 544–45; Coats v. Penrod Drilling Corp., 61 F.3d 1113, 1119 (5th Cir.1995). By extension, the holding in Woessner is put in question.

 

*10 More recent decisions outside of this Circuit have determined that the Sisson/Grubart factors for the connection test are satisfied in asbestos actions where the plaintiffs performed a substantial or primary portion of their work on navigable waters or on dry-docked ships. See, e.g., Carasug v. Crane Co., 956 F.Supp.2d 1178 (D.Haw.2013) (asbestos claims by pipefitter and nuclear engineer who performed 75% of his work on dry-docked ships met both prongs of connection test); Conner, 799 F.Supp.2d at 468–69 (asbestos claims by Navy sailors who spend the bulk of their time on ships met both prongs of connection test). The court in Conner also held, however, that the work of predominately land-based shipyard workers did not have a potentially disruptive impact on maritime commerce and, accordingly, lacked a necessary component of the connection test resulting in a conclusion that maritime jurisdiction did not apply. See Conner, 799 F.Supp.2d at 469.

 

The Petition in this matter does not allege that Genusa performed any work on ships on navigable waters or drydocks:

 

Plaintiff worked from 1963 until retirement in 1988 for various transportation companies at the Port of Baton Rouge in Port Allen, Louisiana, located in the Parish of West Baton Rouge. He worked as a longshoreman, truck loader, warehouse worker and other positions. Throughout this time period he was injuriously exposed to asbestos dust from cargos, repair operations, product inspections, sack sewing and repair, and truck loading, as well as from asbestos-containing insulation on the premises and various pieces of heavy equipment. He also worked at the Sharp Station Warehouse in the City of Baton Rouge where he also handled asbestos. During this time Plaintiff was required to unload trucks and load rail cars with asbestos which was packaged and packed in a manner that was inherently unsafe resulting in maximal dust exposures to Plaintiff.

 

(Petition, ¶ 3). At a video deposition, however, Genusa stated that he unloaded ships while working with SSA/Ryan and Louisiana Stevedores. (R. Doc. 33–1 at 3–5). The court must decide, therefore, whether injuries to longshoremen who remove cargo from docked ships are likely to disrupt maritime commerce.

 

The court finds that the reasoning in Conner, which refused to find admiralty jurisdiction to asbestos claims raised by a predominately land-based worker, to be persuasive. “[S]uch workers are more removed from maritime commerce” and “the prospect of injuries to predominantly land-based workers is less likely to disrupt maritime commerce” because such workers are not necessary for ships to operate on the navigable waters. See Conner, 799 F.Supp.2d at 468. Accordingly, the court finds that it does not have original admiralty jurisdiction over Genusa’s claims under 28 U .S.C. § 1333.

 

(b) Longshore and Harbor Workers’ Compensation Act

The defendants also suggest Genusa’s claims raise issues of federal law that would provide this court with original jurisdiction based upon LHWCA exclusivity under 33 U.S.C. § 905(a). The Fifth Circuit has foreclosed the argument that this court has federal question jurisdiction under 28 U.S.C. § 1331 based on a theory of complete preemption under the LHWCA. See Aaron v. Nat’l Union Fire Ins. Co. of Pittsburg, Pa., 876 F.2d 1157, 1164–65 (5th Cir.1989) (doctrine of complete preemption does not apply to claims under the LHWCA); see also Abt. v. Dickson Equipment Co., Inc., No. G–06–129 (S.D.Tex. June 22, 2006) (“Jurisdiction does not arise under the Longshore and Harbor Workers’ Compensation Act (“LHWCA”) because § 905(b) cannot be used as a vehicle for invoking the Court’s admiralty and maritime jurisdiction….”).

 

*11 The arguments raised by LIGA and SSA/Ryan regarding the application of federal law to Genusa’s claim turn on statutory changes to the LHWCA. Prior to 1972, the LHWCA only applied to injuries on the navigable waters of the United States or on dry docks. The 1972 amendments expanded LHWCA coverage to include injuries occurring on “any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel.” 33 U.S.C. § 903. The Louisiana Supreme Court has interpreted this grant of LHCWA coverage as providing concurrent jurisdiction over “land-based” claims added by the 1972 amendments. See Poche v. Avondale Shipyards, Inc., 339 So.2d 1212 (La.1976). Accordingly, if a worker has a land-based injury covered by the 33 U.S.C. § 903, he or she may still chose to pursue remedies under Louisiana law in lieu of the LHWCA. Id. Because Genusa’s first alleged exposure to asbestos occurred in the 1960s, the parties dispute whether Genusa’s claims are governed under the LHWCA based upon the changes in the 1972 amendments. This dispute does not address whether Genusa’s claims invoke the court’s admiralty jurisdiction under the locality and connection tests discussed in Sisson and Grubart.

 

LIGA, SSA/Ryan, and Ramsay also suggest that now that the case is in this court, Genusa’s claims against them should be dismissed rather than remanded on the basis that both this court and the state court lack jurisdiction in light of their LHWCA preemption defenses. These defendants rely on a Fourth Circuit opinion in which the plaintiff had (1) first filed a protective worker’s compensation claim with the Department of Labor under the LHWCA and (2) then filed a negligence suit in Maryland state court under the Federal Employers’ Liability Act (“FELA”), 45 U.S.C. § 51 et seq. See CSX Transportation, Inc. v. Shives, 151 F.3d 164, 171 (4th Cir.1998). In Shives, the defendants removed the claims on the basis that the plaintiff “was engaged in maritime employment and therefore entitled only to workers compensation under the LHWCA” and sought to dismiss the action so that the administrative claim could proceed before the Department of Labor. Id. at 166. In determining that removal was improper under the FELA, the court determined that the plaintiff was engaged in “maritime employment” as defined by the LHWCA and that his negligence claims were covered by the LHWCA. Because the plaintiff had already filed an administrative proceeding before the Department of Labor, neither the federal district court nor the state court had jurisdiction over the plaintiff’s negligence claims under 33 U.S.C. § 921. Accordingly, the Fourth Circuit concluded that the district court should not have remanded the action, but should have dismissed it altogether.

 

Here, Genusa has not sought recovery under the LHWCA by filing a protective worker’s compensation claim with the Department of Labor. Instead, Genusa has brought tort claims in Louisiana state court and the defendants have raised preemption defenses under the LHWCA. As stated above, the Fifth Circuit has held that the defense of preemption under the LHWCA does not provide this court with original jurisdiction. See Aaron, 876 F.2d 1157.FN7 Even if this case was in the same procedural posture as Shives, the Fifth Circuit would require the court to remand the improperly removed claims even though the state court lacks jurisdiction. See In Re Dutile, 935 F.2d at 63. The state court would then have to dismiss the remanded action if the plaintiff attempted to pursue it in state court. See id. at 63 n. 2.

 

*12 In conclusion, the court does not have jurisdiction over Genusa’s claims under the LHWCA and there is no basis preventing the court from remanding Genusa’s claims to the state court, which has jurisdiction over Genusa’s claims.

 

2. Supplemental Jurisdiction under 28 U.S.C. § 1367

As discussed above, the court has original jurisdiction over the BRMC’s claims against the Unions under 28 U.S.C. § 1331. The court will, therefore, “have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367. See Carnegie–Mellon Univ. v. Cohill, 484 U.S. 343, 349, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988) (“[A] federal court has jurisdiction over an entire action, including state-law claims, whenever the federal-law claims and state-law claims in the case ‘derive from a common nucleus of operative fact’ and are ‘such that [a plaintiff] would ordinarily be expected to try them all in one judicial proceeding.” (quoting United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966)) (alteration in original)).

 

The parties have not directly briefed whether the court has supplemental jurisdiction over Genusa’s claims.FN8 Genusa filed suit against various manufactures, employers, and premises owners after developing mesothelioma, purportedly caused by his occupational exposure to asbestos while working at the Port of Baton Rouge. The Third Party Demand asserts indemnity and contribution from the Unions based upon certain contractual agreements, namely the collective bargaining agreements and the union constitutions. See Carl Heck Engineers, Inc., 622 F.2d at 136 (where a third-party demand seeks contractual indemnity separate from the underlying obligation owed by the defendant to the plaintiff, that claim is separate and independent from the plaintiff’s claim). The Fifth Circuit has found that the exercise of supplemental jurisdiction over contractual indemnity claims is proper where made by the plaintiff. See, e.g., Honeywell Int’l, Inc. v. Phillips Petroleum Co., 415 F.3d 429, 434 (5th Cir.2005) (where district court had federal question jurisdiction when plaintiff’s action commenced, it also had supplemental jurisdiction over plaintiff’s contractual indemnity claims, even if the federal claims later ceased to present a viable theory of recovery). But the basis of this court’s original jurisdiction is the application of the complete preemption doctrine under the LMRA to third-party claims. The court is, therefore, in a procedural posture of having properly removed third-party claims for indemnity and contribution before it, but no original jurisdiction over the underlying tort action. This action, therefore, is distinguishable from the action where the court exercises supplemental jurisdiction over third-party claims.

 

Based on the procedural posture of this action, and the Fifth Circuit’s holding in Heck, the court finds no basis for exercising supplemental jurisdiction over any of Genusa’s claims or BRMC’s third-party claims against McKoin Trucking. The Unions removed this action under 28 U.S.C. § 1441(c)(1), which presupposes that they also removed other claims “not within the original or supplemental jurisdiction of the district court or a claim that has been made nonremovable by statute.” 28 U.S.C. § 1441(c)(1)(B). This also carries certain significant procedural ramifications, in that a removal under § 1441(c)(2) only requires defendants against whom “a claim arising under the Constitution, laws, or treaties of the United States (within the meaning of [28 U.S.C. § 1331]” to join in or consent to the removal. 28 U.S.C. § 1441(c)(2); see also Henry v. Independent American Sav. Ass’n., 857 F.2d 995, 999 (5th Cir.1988) (former version of 28 U.S.C. § 1441(c) only requires consent of defendants whose claims are “separate and independent” from the claims brought against the other defendants). The only parties who joined in or consented to the removal are the Unions. (R. Doc. 1 at 3).

 

*13 The Fifth Circuit has not decided whether the “separate and independent” analysis in Heck survives in the context of determining whether to sever and remand claims for lack of original or subject matter jurisdiction under § 1441(c). Without further guidance from the Fifth Circuit regarding the impact of the 2011 amendments on the removal of third-party claims under § 1441(c), and in the absence of any challenge to the removal of this action under § 1441(c) as opposed to § 1441(a), the court follows the reasoning in Heck. See Carl Heck Engineers, Inc., 622 F.2d 133. The court lacks supplemental jurisdiction over BRMC’s third-party claims against the Unions because they are separate and independent from Genusa’s claims and BRMC’s third-party claims against McKoin Trucking. See Carnegie–Mellon University v. Cohill, 484 U.S. 343, 354, 108 S.Ct. 614, 98 L.Ed.2d 720, (1988) (interpreting former version of 28 U.S.C. § 1441(c) as “not directly applicable to suits involving pendent claims, because pendent claims are not ‘separate and independent’ within the meaning of the removal statute.”);   Certain Underwriters at Lloyd’s, London & Other Insurers Subscribing to Reinsurance Agreements F96/2922/00 & No. F97/2992/00 v. Warrantech Corp., 461 F.3d 568, 579 (5th Cir.2006) (finding that claim for which court has original jurisdiction is “separate and independent” from claim based on state law precludes an exercise of supplemental jurisdiction); see also Lanford v. Prince George’s Cnty., MD, 175 F.Supp.2d 797, 803 (D.Md.2001) (“Because the claims against [certain defendant] cannot properly be addressed in federal court under supplemental jurisdiction, they are before the court only because Defendants may remove an action containing a separate and independent claim under 28 U.S.C. § 1441(c).”).

 

If the district judge finds supplemental jurisdiction over this action under 28 U.S.C. § 1367(a), the undersigned nevertheless recommends remanding this action pursuant to 28 U.S.C. § 1367(c). In Crocker v. Borden, 852 F.Supp. 1322, 1329–30 (E.D.La.1994), the court faced a similar procedural posture as in the instant action. In Crocker, workers brought state law claims against various defendants arising out of alleged asbestos exposure at Avondale Shipyards. Some of the defendants brought a third-party contribution action against Westinghouse Electric Corporation, the manufacturer of marine turbines for the U.S. Navy, on the theory that the plaintiffs’ exposure to asbestos in the marine turbines contributed to their damages. Westinghouse removed the entire action under the federal officer removal statute, 28 U.S.C. § 1442(a)(1). The plaintiffs sought severance and remand of the claims in their main demand, as they had not asserted any claims against Westinghouse. The court found that it had supplemental jurisdiction over the plaintiffs’ main demand, but then concluded that it should decline supplemental jurisdiction under 28 U.S.C. § 1367(c). Crocker, 852 F.Supp. at 1329–30.

 

*14 In determining whether to exercise its supplemental jurisdiction over the plaintiffs’ claims, the Crocker court considered the fact that the plaintiffs had trial dates pending in state court for nearly three years and a trial date had been set for approximately one month from the date of the ruling. Id. at 1330. Furthermore, none of the plaintiffs had asserted claims against the third-party defendant, Westinghouse, which had removed the action. Id. Despite opposition from Westinghouse, after considering “the policies of judicial economy, convenience, and fairness to the parties,” the court severed and remanded the plaintiff’s main claims and declined to exercise supplemental jurisdiction. Id. The court held that state claims substantially predominated over the lone federal claim under § 1367(c)(2) and fairness demanded remand for trial under § 1367(c)(4). Id.

 

Here, the removal occurred just over two months before the scheduled trial, Genusa chose to litigate in state court, the plaintiff’s main demand asserts only state law claims, the lone federal claims are BRMC’s third-party demands against the Unions, and the removing parties, the Unions, do not oppose severance and remand. Furthermore, Genusa suffers from malignant mesothelioma and would like to proceed with trial in state court, his chosen forum. (R. Doc. 9–1 at 1). Accordingly, if the court concludes that it has supplemental jurisdiction over Genusa’s claims, it should nevertheless decline to exercise such jurisdiction and remand all of Genusa’s claims to state court. Similarly, if the court concludes that it has supplemental jurisdiction over BRMC’s third-party claims against McKoin Trucking, it should nevertheless decline to exercise such jurisdiction and remand those claims to state court.

 

3. Removability of Admiralty Actions

The third set of claims that shall be remanded pursuant to 28 U.S.C. § 1441(c)(2) are those made non-removable by statute. With no supporting analysis, LIGA states in its opposition to Genusa’s motion to sever and remand that “an admiralty action filed in state court is not removable solely because it might have been filed in federal court….” (R. Doc. 31 at 2). The 2011 amendments to 28 U.S.C. § 1441 removed the statutory basis for the Fifth Circuit’s conclusion (under the former version of the statute) that admiralty actions were non-removable. Accordingly, this court has held that the current version of 28 U.S.C. § 1441 allows removal of general maritime claims without requiring an additional source of federal jurisdiction. See Garza v. Phillips 66 Co., No. 13–742–SDD, 2014 WL 1330547 (M.D.La. Apr.1, 2014); Harrold v. Liberty Ins. Underwriters, Inc., No. 13–762–JJB–SC, 2014 WL 688984 (M.D.La. Feb.20, 2014); Bridges, 2013 WL 6092803; see also Ryan v. Hercules Offshore, Inc., 945 F.Supp.2d 772 (S.D.Tex.2013); but see Coronel v. AK Victory, No. C13–2304JLR, 2014 WL 820270 (W.D.Wash. Feb.28, 2014) (removal was improper under the current version of 28 U.S.C. § 1441 because district court did not have any original jurisdiction over seaman’s general maritime claims in light of the “savings to suitors” clause). Nevertheless, having concluded that Genusa’s action does not evoke this court’s admiralty jurisdiction, the court need not address severance and remand on the basis that Genusa’s action was made non-removable by statute.

 

III. Conclusion

*15 In conclusion, the Unions properly removed this action pursuant to 28 U.S.C. § 1441(c). Genusa’s claims against the defendants, and BRMC’s third-party claims against McKoin Trucking, are severable from BRMC’s third-party claims against the Unions, and must be remanded pursuant to 28 U.S.C. § 1441(c). The undersigned will address BRMC’s motion to remand (R. Doc. 48) in another Report and Recommendation.

 

RECOMMENDATION

It is the recommendation of the magistrate judge that Genusa’s motion to sever and remand (R. Doc. 9) be GRANTED. Genusa’s claims against the defendants, and BRMC’s third-party claims against McKoin Trucking, should be severed from BRMC’s third-party claims against the Unions and remanded to the 18th Judicial District Court, West Baton Rouge Parish, Louisiana.

 

FN1. The Manufacturer/Distributor defendants include Asbestos Corporation, Ltd., CSR LTD., f/k/a Colonial Sugar, South African Marine Corporation, Ltd., and Industrial Development Corporation of South Africa, Ltd. (Petition, ¶ 2). These defendants have not filed briefing in this action.

 

FN2. The Employer/Premise defendants include Baton Rouge Marine Contractors n/k/a Ports America Baton Rouge, Inc.; Ralph Hill, executive Officer of BRMC; Michael “Buddy” Quade, Executive Officer of BRMC; SSA Gulf, Inc. f/k/a Ryan Walsh; Frank Beason, Jr., Executive Officer of Ryan Welch; Ramsay Scarlett & Company; Gerald Chustz, Executive Officer of Ramsay Scarlett; Ernest Levering III, Executive Officer of Ramsay Scarlett; Liberty Mutual Insurance Company; Port Of Greater Baton Rouge a/k/a Greater Baton Rouge Port Association; and Louisiana Insurance Guarantee Association. (Petition, ¶ 2).

 

FN3. The “separate and independent” language in 28 U.S.C. § 1441, on which Heck was decided, was removed from Section 1441(c) in the 2011 amendments. The former version of Section 1441, in pertinent part, read as follows:

 

(c) Whenever a separate and independent claim or cause of action within the jurisdiction conferred by section 1331 of this title is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters in which State law predominates.

 

28 U.S.C. § 1441(c) (version prior to Dec. 7, 2011 amendments) (emphasis added). None of the parties have questioned whether the analysis in Heck survives the 2011 amendments. See Certain Underwriters at Lloyd’s London v. Art Crafting, Inc., No. 12–5078, at * 17 (E.D.N.Y. Jan. 10, 2014) (questioning whether the rationale for the minority view allowing third-party defendant removal under 28 U.S.C. § 1441(c) survives the 2011 amendments).

 

FN4. Following the district judge’s ruling on the instant motion to remand, the undersigned will submit a Report and Recommendation regarding BRMC’s motion to remand (R. Doc. 48) and analyze whether the Amended Third Party Demand (R. Doc. 45) removes the basis for this court’s jurisdiction, and, if so, whether discretionary remand of the remaining claims is warranted. See Hook v. Morrison Milling Co., 38 F.3d 776, 780 (5th Cir.1994) (propriety of removal is determined by looking to the complaint as it existed at the time removal was filed, regardless of post-removal amendments).

 

FN5. Federal district courts have exclusive jurisdiction over certain admiralty actions, such as those brought in rem, for which state law does not provide a remedy. See In re Dutile, 935 F.2d 61 (1991). This court’s exclusive jurisdiction under 28 U.S.C. § 1333 is not implicated by Genusa’s claims.

 

FN6. SSA/Ryan and Ramsay focus only the alleged federal nature of this claim based on LHWRA preemption. (R. Docs.33, 37). BRMC and GBRPA focus on arguments that Genusa’s claims are not “separate and independent” from BRMC’s third-party claims. (R. Docs.35, 36)

 

FN7. Similarly, the Shives decision has been interpreted as precluding a theory of removal based on complete preemption under the LHWCA. See Nordan v. Blackwater Security Consulting, LLC, 382 F.Supp.2d 801, 810–811 (E.D.N.C.2005).

 

FN8. Genusa argues that because its claims are “separate and independent” from the third-party claims brought by BRMC against the Unions, its claims must be severed and remanded to the state court. (R. Doc. 9). In their Notice of Removal and subsequent briefing, the Unions support severance and remand of Genusa’s claims on the same basis. (R. Docs.1, 34). Genusa also argues that if this court has supplemental jurisdiction over its claims, it should nevertheless remand the action under 28 U.S.C. § 1367(c). (R. Doc. 9–1 at 7–9). Furthermore, BRMC opposes Genusa’s motion to sever and remand by relying on a “separate and independent” analysis. (R. Doc. 35).

UPS Supply Chain Solutions, Inc. v. Megatrux Transp., Inc.

United States Court of Appeals,

Eleventh Circuit.

UPS SUPPLY CHAIN SOLUTIONS, INC., Plaintiff–Appellee Cross Appellant,

v.

MEGATRUX TRANSPORTATION, INC., Defendant–Appellant Cross Appellee.

 

No. 13–10517.

May 8, 2014.

 

Scott W. McMickle, Kevin P. Branch, Scott William Zottneck, McMickle Kurey & Branch, LLP, Alpharetta, GA, for Plaintiff–Appellee Cross Appellant.

 

Robert E. Spears, Jr., Erin Aube Lerner, The Spears & Robl Law Firm, LLC, Decatur, GA, for Defendant–Appellant Cross Appellee.

 

Appeals from the United States District Court for the Northern District of Georgia. D.C. Docket No. 1:10–cv–00375–CAP.

 

Before WILSON, Circuit Judge, and MIDDLEBROOKS,FN* and ALBRITTON,FN** District Judges.

 

MIDDLEBROOKS, District Judge:

*1 This case involves a pirated shipment of disk drives, two logistics contracts, and application of the Carmack Amendment, 49 U.S.C. § 14706, a federal law regulating the interstate transportation of goods. It requires us to address the ability of intermediaries to negotiate limitations on liability, the sufficiency of proof of loss, and the scope of federal preemption with respect to a third-party logistic company’s contract-based claim for attorney’s fees.

 

I. Background

On September 18, 2009, a shipment of new and refurbished disk drives owned by Seagate Technology, LLC (“Seagate”) was stolen while in transit. Although the identities of the thieves are not known, the cargo is presumed to have been stolen by drivers posing as employees of Stallion Carrier Corporation (“Stallion”). Unbeknownst to Seagate, and without authorization of its logistics provider, UPS Supply Chain Solutions, Inc. (“UPS”), Stallion had been subcontracted by the defendant, Megatrux Transportation, Inc. (“Megatrux”), to transport the disk drives from Los Angeles, California to McAllen, Texas.

 

Seagate had contracted with UPS to provide transportation, custom brokerage services, and warehousing and freight management services on an exclusive basis throughout the Americas for air, land, or sea. The Global Logistics Service Provider Agreement (“GLSPA”) between Seagate and UPS allowed UPS to subcontract obligations under the contract to third parties, and limited the liability of UPS and its subcontractors to $100,000, except where the loss was due to gross negligence. The GLSPA was effective December 19, 2008, and continued until terminated by the parties.

 

UPS, in turn, had a non-exclusive contract with Megatrux for Megatrux to provide ground transportation services to UPS and its customers. However, pursuant to the Master Transportation Services Agreement (“MTSA”) between UPS and Megatrux, dated August 14, 2009, Megatrux was not allowed to subcontract its work to others without the consent of UPS.FN1 Despite this prohibition and without informing UPS, Megatrux subcontracted with individuals it thought to be associated with Stallion, a company it had not previously used, to haul the Seagate disk drives.

 

The MTSA between UPS and Megatrux contains several other provisions pertinent here. Section 10.1 provides:

 

Liability. Full liability for risk of delay, loss or damage to cargo transported under this Agreement shall at all times remain with Carrier while such items are in Carrier’s possession, custody, or control, or the possession, custody or control of Subcontractors, and Carrier’s liability for such delay, loss or damage shall be the Customer’s actual loss or injury without regard to salvage, including delivery and freight handling charges.

 

(MTSA, at 8). Section 15, entitled “INDEMNIFICATION,” provides in pertinent part:

Carrier shall indemnify and hold harmless UPS and its affiliates, and its or their officers, directors, employees and agents, from and against any and all loss, expense, damage, injury or claim, including attorneys’ fees [ ], resulting from or occurring in connection with (a) the Services or any of Carrier’s activities in connection with its performance of its obligations under this Agreement, including, without limitation, Carrier’s use of UPS’s or its customer’s equipment; and (b) any breach of this Agreement….

 

*2 (MTSA, at 10). Section 20.9 states in relevant part:

Entire Agreement; Amendment. This Agreement, including all Incorporated Documents, sets forth the full and complete understanding of the parties with respect to the matters herein and supersedes any and all prior or contemporaneous agreements or understandings, written or oral, between the parties as to the subject matter of this Agreement. Any terms and conditions printed on transportation documents such as bills of lading or delivery receipts will not change or supersede the terms of this Agreement, and such documents will operate solely as receipts.

 

(MTSA, at 13) (italicized emphasis added). Finally, Section 20.10 provides: “Each Services Recipient is an intended third[-]party beneficiary of Carrier’s obligations and liabilities under this Agreement and, as such, shall have the right to enforce this Agreement to the same extent as UPS.” (MTSA, at 13).

 

After the load was stolen, UPS agreed to pay Seagate $246,022 and, as consideration for payment by UPS, Seagate assigned to UPS its rights, claims, and causes of action against Megatrux and others arising out of the loss. Pursuant to the assignment, all sums recovered in excess of $246,022, less reasonable attorney’s fees, should be payable to Seagate. Seagate reserved any rights, if any may continue to exist, to make further recovery from UPS. UPS then sued Megatrux for liability pursuant to the Carmack Amendment; breach of the MTSA contract, including its indemnification requirements; and negligence. UPS subsequently amended its complaint to add a claim for attorney’s fees pursuant to a Georgia statute pertaining to vexatious litigation, as well as a claim for punitive damages pursuant to a Georgia statute allowing such in cases of willful misconduct or fraud.

 

Following a bench trial, the district court found in favor of UPS, concluding that under the Carmack Amendment, UPS was entitled to recover the full amount of the actual cargo loss, an amount totaling $461,849.82. The court concluded that the state law claims for breach of contract and negligence were preempted by the Carmack Amendment. The court also denied UPS’s claim for attorney’s fees under the indemnity provision in the MTSA, concluding that an award of attorney’s fees would allow for an award higher than the plaintiff’s actual loss or injury, an outcome inconsistent with the Carmack Amendment. In addition, the court found that UPS was not entitled to fees under the Georgia statute because there had been a bona fide dispute between the parties.

 

On appeal, Megatrux argues that the district court erred in failing to limit damages to $100,000 pursuant to the provisions of the GLSPA or, alternatively, to $32,213.68 pursuant to the bills of lading. Megatrux also argues that the court erred in accepting customs invoices, photographs, and the condition of the disk drives that were recovered by Seagate’s investigators after the theft as sufficient proof of the condition and contents of the stolen shipment. In its cross appeal, UPS contends that the Carmack Amendment does not preempt its claim for attorney’s fees pursuant to the indemnification provisions of the MTSA.

 

II. Standard of Review

*3 [1] On an appeal following a bench trial, we review the district court’s legal conclusions de novo and findings of fact for clear error.   Mitchell v. Hillsborough Cnty., 468 F.3d 1276, 1282 (11th Cir.2006). The clear error standard is highly deferential, and “[a] factual finding is clearly erroneous when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” Morrissette–Brown v. Mobile Infirmary Med. Ctr., 506 F.3d 1317, 1319 (11th Cir.2007) (internal quotation marks omitted).

 

III. Discussion

A.

[2] The Carmack Amendment was adopted to achieve uniformity in rules governing interstate shipments, including the rules governing injury or loss to property shipped. Adams Express Co. v. Croninger, 226 U.S. 491, 506, 33 S.Ct. 148, 152, 57 L.Ed. 314 (1913).FN2 The Carmack Amendment is a strict liability statute. When a shipper shows delivery of goods to a carrier in good condition and non-delivery or delivery in a damaged condition, there arises a prima facie presumption of liability. See Chesapeake & O. Ry. Co. v. A.F. Thompson Mfg. Co., 270 U.S. 416, 422–23, 46 S.Ct. 318, 70 L.Ed. 659 (1926); A.I. G. Uruguay Compania de Seguros, S.A. v. AAA Cooper Transp., 334 F.3d 997, 1003 (11th Cir.2003) (citing Fine Foliage of Fla., Inc. v. Bowman Transp., Inc., 901 F.2d 1034, 1037 (11th Cir.1990)).

 

A carrier of property in interstate commerce that loses a shipment is generally liable “for the actual loss or injury to the property caused by” the carrier. 49 U.S.C. § 14706(a)(1). “Actual loss or injury” is ordinarily measured by any reduction in market value at the place of destination. See, e.g., Chicago, M. & St. P. Ry. Co. v. McCaull–Dinsmore Co., 253 U.S. 97, 40 S.Ct. 504, 64 L.Ed. 801 (1920).

 

However, an exception to the general rule of full liability for loss exists where a shipper agrees with a carrier to limit the carrier’s liability in order to obtain a reduced shipping rate. The Carmack Amendment permits a carrier to limit its liability “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.” 49 U.S.C. § 14706(c)(1)(A). In addition to a declaration or agreement, the statute requires the carrier to 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.” Id. § 14706(c)(1)(B); see also id. § 13710.

 

[3] We use a four-step inquiry to determine whether a carrier has effectively limited its liability under the Carmack Amendment. A carrier must: (1) maintain a tariff within the prescribed guidelines of the Interstate Commerce Commission; (2) give the shipper a reasonable opportunity to choose between two or more levels of liability; (3) obtain the shipper’s agreement as to the choice of liability; and (4) issue a receipt or bill of lading prior to moving the shipment. Sassy Doll Creations, Inc. v. Watkins Motor Lines, Inc., 331 F.3d 834, 838–39, 841 (11th Cir.2003); see also Werner Enters., Inc. v. Westwind Maritime Int’l, Inc., 554 F.3d 1319, 1326 (11th Cir.2009). FN3

 

*4 In Werner, relying on the Supreme Court’s decision in Norfolk Southern Railway Company v. Kirby, we recognized today’s economic reality that interstate transportation often involves extended chains of parties and agreements. There we held that a carrier need not investigate upstream contracts between the shipper and the intermediary with whom the carrier is dealing, but, instead, is entitled to assume that an intermediary entrusted with goods may negotiate a limitation of liability. Werner, 554 F.3d at 1325.

 

Like this case, Werner involved a stolen shipment. The shipper, Nextel, arranged through intermediaries to have Werner, a common carrier, transport cell phones from a Motorola plant in Florida to a customs broker in Texas. Id. at 1321–32. Nextel insured the full value of the phones through its insurance company, Ace. Id. at 1321.

 

Nextel used Westwind Maritime to arrange transportation of the phones. Westwind in turn arranged for transportation of the phones through Transpro Logistics, which entered into a Broker Transportation Agreement with Werner.   Id. at 1322. The Agreement incorporated Werner’s tariff and indicated that unless full coverage was requested, a maximum of $200,000 liability per truckload would apply. Id. at 1322–23. Nextel never requested full liability coverage from Westwind, Westwind never requested full liability coverage from Transpro, which never invoked the full Carmack liability provision of Werner’s tariff. Id. at 1323. We held that the limitation incorporated in the Brokerage Transportation Agreement between Werner and Transpro controlled regardless of the fact that Nextel had no actual knowledge of the limitation and no opportunity to negotiate the limitation. Id. at 1328.

 

[4] This case is the mirror image of Werner. Instead of agreeing to a partial limitation, UPS, acting as intermediary for Seagate, negotiated the MTSA with Megatrux which requires full liability for risk of loss. We see no reason to depart from the rationale of Kirby and Werner where the intermediary negotiates for full liability rather than partial. Presumably, the rate agreed to by Megatrux would have been premised on full liability. The existence of liability limitations in the upstream contract between Seagate and UPS-a contract that Megatrux had no knowledge of or participation in-is irrelevant. See id. at 1325.FN4

 

In short, Megatrux failed to show that the shipper was given a reasonable opportunity to choose between two or more levels of liability or that it had obtained agreement to any level below the Carmack Amendment’s default measure of full liability. See Sassy Doll Creations, Inc., 331 F.3d at 842. We therefore affirm the district court’s finding of full liability.

 

B.

Megatrux also argues that the district court erred in concluding that UPS sufficiently established the contents of the stolen trailer. The district court relied on customs invoices,FN5 photographs of the subject shipment in the back of the thieves’ trailer, and 368 disk drives that were recovered by Seagate’s investigators to conclude that UPS provided sufficient evidence of the condition and contents of the subject shipment.FN6

 

*5 [5] An element of a prima facie Carmack Amendment claim is proving that the cargo was delivered to the carrier in good condition. A.I. G. Uruguay Compania de Seguros, S.A. v. AAA Cooper Transp., 334 F.3d 997, 1003 (11th Cir.2003) (citations omitted). “When the shipment was lost, destroyed, or damaged to such extent that it is impossible to tell what was contained in the shipment, then the question is not only the original condition of the shipment, but also the contents of the shipment.” Id. at 1005 (emphasis in original). Thus, we have required direct evidence of the “contents and condition of the shipment to prove a prima facie case.” Id. “[D]ocuments cannot suffice for prima facie proof of contents in sealed containers…. [T]he established rule requir[es] the plaintiff to supplement documentary evidence with some form of direct evidence of the contents of a sealed container.” Id. (internal quotation marks and citations omitted).

 

The district court relied upon AAA Cooper in finding that UPS met its burden. In that case, the plaintiff (an insurer subrogated to the interests of the shipper) sought to establish its claim regarding several shrink-wrapped pallets of Motorola cell phones by introducing packing invoices automatically generated by a serial-number scanner as follows:

 

When the particular phones to be packaged to fill the order are selected, their serial numbers are scanned into the Motorola system, and that record follows the order from station to station as it proceeds toward shipment. These serial numbers appear automatically on the invoice generated before the shipment leaves the facility. This record is made contemporaneously with the “sealing” of the phones inside the cartons that directly and without inference identifies the contents of that carton, even though we have no testimony of the individual responsible for scanning the phones or the supervisor, if any, with responsibility over the process by which the phones are scanned.

 

Id. at 1007. We held that such automated records were “direct” evidence sufficient to satisfy the plaintiff’s burden to show the contents of the shipment. Specifically, we noted:

When business records are routinely and systematically made contemporaneously with the packing and packaging of a particular shipment, and these documents clearly identify the specific contents of those shipments, then we perceive no problem in accepting that proof as the type able to meet the shipper’s burden. It is especially so where, as here, there is no incentive for the shipper to falsify the packing lists.

 

Id. at 1007–08.

 

[6] We find no clear error in the district court’s determination that the customs invoices, photographs, and recovered disk drives provided sufficient evidence of the condition and contents of the stolen shipment. The customs invoices were generated contemporaneously with shipment, carried penalties for falsification, and Seagate paid duties based upon their contents.

 

C.

*6 On cross appeal, UPS contends that Carmack preemption does not cover UPS’s claim for the recovery of its attorney’s fees pursuant to Section 15 of the MTSA, which is set forth above. UPS argues that it is pursuing its attorney’s fees based upon the separate right of indemnity in the MTSA-not pursuant to the Carmack Amendment on assignment from Seagate. The district court found that “because the plaintiff’s breach of contract claim is preempted by the Carmack Amendment, its request for attorney’s fees pursuant to that claim is also preempted.” (Trial Ct. Order, at 13).

 

[7] The district court’s holding is understandable because we have characterized the preemptive effect of the Carmack Amendment to be quite broad. “The Carmack Amendment embraces ‘all losses resulting from any failure to discharge a carrier’s duty as to any part of the agreed transportation.’ “ Smith v. United Parcel Serv., 296 F.3d 1244, 1249 (11th Cir.2002) (quoting Ga., F. & A. Ry. Co. v. Blish Milling Co., 241 U.S. 190, 196, 36 S.Ct. 541, 544, 60 L.Ed. 948 (1916)). “[S]eparate and distinct conduct rather than injury must exist for a claim to fall outside the preemptive scope of the Carmack Amendment.” Id. We have not previously considered, however, whether an intermediary’s contract-based indemnity claim for attorney’s fees is preempted.FN7

 

State laws are preempted when they conflict with federal law. Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363, 372, 120 S.Ct. 2288, 147 L.Ed.2d 352 (2000). This includes cases where “compliance with both federal and state regulations is a physical impossibility,” Fla. Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142–143, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963), and where the state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941). “What is a sufficient obstacle is a matter of judgment, to be informed by examining the federal statute as a whole and identifying its purpose and intended effects.” Crosby, 530 U.S. at 373, 120 S.Ct. at 2294.

 

Our analysis of the preemptive scope of the Carmack Amendment begins with Adams Express Company v. Croninger, 226 U.S. 491, 506, 33 S.Ct. 148, 152, 57 L.Ed. 314 (1913). A shipper hired a common carrier to ship a diamond ring from Ohio to Georgia. The ring was lost. The bill of lading said that charges for delivery were based on the value of the shipment, that value was to be declared by the shipper, and that failure to declare the value would result in a rate based on a value of $50. The shipper had not declared a value. Nonetheless, he brought suit in a Kentucky state court for the full value of the ring. Under Kentucky law, a contract to limit the shipper’s recovery to a declared value was invalid. The shipper prevailed.

 

The issue before the Supreme Court was whether a contract for interstate shipment, as evidence by the bill of lading, was governed by “the local law of the state, or by the acts of Congress regulating interstate commerce.” Id. at 500, 33 S.Ct. at 149. Before the Carmack Amendment, the liability of common carriers for an interstate shipment of property was governed by either “the general common law”—as pronounced by state and federal courts—or the statutory laws of the states. Id. at 504, 33 S.Ct. at 151. Because of the various laws that might apply in a dispute arising from an interstate shipment, it was impossible for shippers and carriers to determine their risks and obligations with any reasonable certainty. Id. at 505, 33 S.Ct. at 151–152. The Carmack Amendment “made an end to this diversity, for the national law is paramount and supersedes all state laws as to the rights and liabilities and exemptions created by such transactions.” Id. at 505, 33 S.Ct. at 152. FN8

 

*7 Although the amount of money at issue serves as a quaint reminder of a distant past, a Supreme Court decision decided the year after Croninger provides significant guidance. In Missouri, Kansas, & Texas Railway Company of Texas v. Harris, 234 U.S. 412, 34 S.Ct. 790, 58 L.Ed. 1377 (1914), a shipper recovered $3.50 for loss of freight by a railroad, but the judgment included an award of $10.00 in attorney’s fees awarded pursuant to a Texas statute. The railroad argued that the law was preempted by the Carmack Amendment.

 

The Supreme Court disagreed: “[T]he Texas statute … does not in anywise either enlarge or limit the responsibility of the carrier for the loss of property intrusted [sic] to it in transportation, and only incidentally affects the remedy for enforcing that responsibility.” Id. at 420. “The local statute … does not at all affect the ground of recovery, or the measure of recovery; it deals only with a question of costs….” Id. at 421–422.

 

The following year in a decision by Justice Holmes, the Court considered a South Carolina law which imposed a $50 penalty for failure to pay claims in a timely manner. Charleston & W. Carolina Ry. Co. v. Varnville Furniture Co., 237 U.S. 597, 35 S.Ct. 715, 59 L.Ed. 1137 (1915). The Court distinguished its attorney’s fee holding in Harris in finding the South Carolina statute preempted:

 

But, apart from the effect being only incidental, the ground relied upon was that the [Texas] statute did not “in any way enlarge the responsibility of the carrier” for loss or “at all affect the ground of recovery, or the measure of recovery” [ ]. The South Carolina act, on the other hand, extends the liability to losses on other roads in other jurisdictions, and increases it by a fine difficult to escape. It overlaps the Federal act in respect of the subjects, the grounds, and the extent of liability for loss.

 

Id. at 603, 35 S.Ct. at 716 (quoting Harris, 234 U.S. at 420).

 

The distinction between affecting liability for losses as opposed to the expense of recovery was again the focus of Justice Holmes in Dickinson v. Stiles, 246 U.S. 631, 38 S.Ct. 415, 62 L.Ed. 908 (1918). That case involved a claim that a lien authored by a Minnesota statute for attorney’s fees was invalid because of preemption by an act of Congress relating to the liability of carriers by railroad to their employees. The Court rejected the claim as follows:

 

[C]ases that declare that the acts of Congress supersede all state legislation on the subject of the liability of railroad companies to their [employees] have nothing to do with the matter. The Minnesota statute does not meddle with that. It affects neither the amount recovered nor the persons by whom it is recovered, nor again the principles of distribution. It deals only with a necessary expense of recovery. Congress cannot have contemplated that the claims to which its action gave rise or power would be paid in all cases without litigation, or that suits would be tried by lawyers for nothing, yet it did not regulate attorney’s fees. It contemplated suits in state courts and accepted state procedure in advance. We see no reason why it should be supposed to have excluded ordinary incidents of state procedure.

 

*8 Id. at 632–33, 38 S.Ct. at 416 (internal citations omitted).

 

Since these early Supreme Court decisions there is surprisingly sparse case law pertaining to preemption of claims for attorney’s fees. With respect to state statutes providing for attorney’s fees in freight cases, only two circuits have dealt with the issue. The Tenth Circuit relied upon Harris in holding that an Oklahoma attorney’s fee statute does not “substantively enlarge the responsibility of the carrier,” and therefore is not preempted by the Carmack Amendment. See A.T. Clayton & Co., Inc. v. Missouri–Kansas–Texas R.R. Co., 901 F.2d 833, 835 (10th Cir.1990). The court found the statute “incidental to and consistent with the overall purpose of the Carmack Amendment since it promotes settlement, encourages small well-founded claims, and discourages unnecessary litigation.” Id.FN9

 

The analysis becomes more muddled by a series of decisions involving a Texas statute, which ironically was a successor to the statute found to be not preempted by the Supreme Court in Harris. The Texas law, which has since been repealed, provided that if a claim for lost or damaged freight was not paid within thirty days, then recovery would include, in addition to the claim and costs, a reasonable attorney’s fee. In Thompson v. H. Rouw Co. ., 237 S.W.2d 662 (Tex.Civ.App.1951), the Court of Civil Appeals of Texas considered application of the statute to an interstate shipment of carrots delivered to a carrier in Texas to be delivered to Missouri. After a series of diversions, the carrots ended up being delivered to Pennsylvania in a deteriorated condition.   Id. at 664.

 

The Texas court distinguished Harris on two grounds: first, that in Harris, the statute had been applied to an interstate shipment when the goods were damaged within the state of Texas; and second, that the predecessor statute permitted only a nominal or limited fee on small claims. Concluding that shippers should not have the privilege of shopping among the states for forums that would allow additional recovery, the Court of Civil Appeals disallowed the claim for attorney’s fees. Id. at 666. “Texas can not [sic] extend the interstate carrier’s liability for losses, and certainly not to losses on other roads in other states.” Id.

 

Application of the Texas attorney’s fee statute then arose in connection with a Fifth Circuit decision, Strickland Transportation Company, Inc. v. American Distributing Company, 198 F.2d 546 (5th Cir.1952). The case itself was relatively straightforward. The plaintiff was a distributor of pinball machines and agreed to sell ten machines to an out-of-state buyer for $3,000. Id. at 548. The machines were not to be inspected or delivered until they were paid for. The machines traveled from Texas to South Carolina. Id. Upon arrival, the driver for the connecting carrier did not ask for payment and it was not tendered, but nevertheless five of the fifteen crates were unloaded on the sidewalk in front of the purchaser’s place of business. Id. The purchaser’s employees were able to see that there was a hole in one of the machines, some of the crates were broken, and the machines seemed dirty and scraped along their side. Id. The remaining ten crates were never unloaded, but the purchaser’s employees rejected the entire shipment and told the driver to reload the unloaded crates, which he did. Id. The rejected shipment was returned to the connecting carrier’s warehouse where it remained at the time of trial. Id.

 

*9 The shipper sued the carrier, alleging that the unloading of the five crates constituted delivery in violation of the terms of the bill of lading, which required payment first, and, together with the unauthorized inspection, caused damage in the amount of the unpaid purchase price. Id. The trial court found in favor of the shipper and the carrier appealed. Id. at 548–49.

 

The Fifth Circuit reversed, concluding that, even assuming an unauthorized inspection, “we are clear to the opinion that there was no such delivery or the conversion thereof as to make the carrier liable for the value of the goods.” Id. at 549. The court held that the shipper could not reject return of the goods and recover their full value, but could only hold the carrier responsible for any actual damage. Id. at 548–49.

 

Before considering the merits of the appeal, however, the Fifth Circuit requested briefs of the parties in a preliminary per curiam opinion that is quoted within the Strickland opinion. See id. at 546–47. The case had been removed from Texas state court and the question was whether the amount in controversy exceeded the $3,000 exclusive of costs necessary for removal jurisdiction. The unpaid purchase price being sought was $3,000 and the amended complaint sought that amount together with $1,000 in attorney’s fees pursuant to the Texas attorney’s fee statute. Stating that since the Texas Court of Civil Appeals had held that the Texas statute could not extend the carrier’s liability for loss, and because claimed attorney’s fees could not be considered for jurisdictional purposes where there is no legal basis for recovery, the Fifth Circuit concluded that “it is apparent to a legal certainty that the suit cannot involve the amount necessary to confer jurisdiction on the district court.” Id. at 547. The Court indicated that since jurisdiction must affirmatively appear from the record, it could not presume that the face of the complaint disclosed the necessary jurisdictional amount and the case should have been remanded. Id. Nevertheless, at the urging of the parties, and since the Court would have original jurisdiction had the case been filed in federal court, the Fifth Circuit proceeded to its merits determination. Id.

 

It is necessary to carefully scrutinize Strickland because, despite the Supreme Court’s decision in Harris and any inferences we might draw from its reasoning, we are obligated to follow our own prior precedent. See Offshore of the Palm Beaches, Inc. v. Lynch, 741 F.3d 1251, 1256–57 (11th Cir.2014); Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981); see also Atl. Sounding Co., Inc. v. Townsend, 496 F.3d 1282, 1284 (11th Cir .2007). The question then becomes: what is Strickland ‘s holding?

 

[8][9] “The holdings of a prior decision can reach only as far as the facts and circumstances presented to the Court in the case which produced that decision.” United States v. Hunter, 172 F.3d 1307, 1310 (11th Cir.1999) (Carnes, J., concurring). Moreover, the prior precedent rule does not require us to follow language of the accompanying opinion which is unnecessary to the decision. Id.; see also McDonald’s Corp. v. Robertson, 147 F.3d 1301, 1315 (11th Cir.1998) (Carnes, J., concurring) (explaining why “dicta in our opinions is not binding on anyone for any purpose”).

 

*10 Strickland does not discuss Carmack preemption, much less the scope of that preemption; its holding, if there is any holding at all,FN10 is that the amount necessary for removal jurisdiction was not apparent on the face of the complaint by operation of a Texas state court decision construing a Texas statute. The rationale of the Texas Court of Civil Appeals in declining to apply Harris, while it may have been persuasive to the Fifth Circuit’s result, is not part of Strickland Court’s holding.FN11

 

[10] Moreover, this case does not require us to decide whether a state’s attorney’s fee statute survives Carmack preemption. Instead, we consider the enforcement of an indemnity clause in an ongoing contract between a logistics company and a motor carrier. The question therefore is whether UPS’s claim for indemnification arising from the MTSA falls within the Carmack Amendment’s field of implied preemption. We conclude that it does not.

 

We have previously said that “situations may exist in which the Carmack Amendment does not preempt all state and common law claims.” Smith, 296 F.3d at 1248. Significantly, both the Supreme Court in Kirby and our decision in Werner point out that a cargo owner retains the right to sue an intermediary who fails to protect itself by negotiating a liability limitation. See Kirby, 543 U.S. at 35; Werner, 554 F.3d at 1325. Does it not follow that an intermediary should be able to seek indemnification from a counterparty that ignores its obligations under contract, thereby exposing the intermediary to suit?

 

As the Supreme Court has held, attorney’s fees do not enlarge or limit the responsibilities of the carrier for loss of property. Nor does a claim for attorney’s fees pose an obstacle to the accomplishment of the Amendment’s purpose.

 

That is decidedly so in the context presented here. “A remedy confined to a contract’s terms simply holds parties to their agreements….” Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 229, 115 S.Ct. 817, 824, 130 L.Ed.2d 715 (1995). “The stability and efficiency of the market depend fundamentally on the enforcement of agreements freely made, based on needs perceived by the contracting parties at the time.” Id. at 230 (quoting Br. for United States as Amicus Curiae 23). In the American Airlines case, the Supreme Court found that the Airline Deregulation Act of 1978 preempted a state law consumer fraud statute, but allowed an individual breach-of-contract action to proceed: “We do not read the ADA’s preemption clause, however, to shelter airlines from suits alleging no violation of state-imposed obligations, but seeking recovery solely for the airline’s alleged breach of its own, self-imposed undertakings.” Id. at 228; see also Cipollone v. Ligett Grp., Inc., 505 U.S. 504, 526, 112 S.Ct. 2608, 2622, 120 L.Ed.2d 407 (1992) (plurality opinion) (“a common-law remedy for a contractual commitment voluntarily undertaken should not be regarded as a ‘requirement … imposed under State law ’ within the meaning of [the Cigarette Labeling and Advertising Act]”); Gaines Motor Lines, Inc. v. Klaussner Furniture Indus., Inc., 734 F.3d 296, 306–07 (4th Cir.2013) (motor carrier’s breach of contract claim against shipper for unpaid freight charges not preempted by the Interstate Commerce Commission Termination Act).

 

*11 A carrier that agrees to indemnify an intermediary for attorney’s fees faces no more of an obligation than it has expressly chosen to assume. Enforcement of a self-imposed undertaking poses no risk of patchwork regulation or different demands in different jurisdictions .FN12

 

Finally, the purpose of the indemnification clause of the MTSA was not for transportation of a specific item of freight, but rather in connection with ongoing business dealings between two sophisticated parties. It governs a commercial relationship and extends beyond any particular shipment of goods. UPS does not seek indemnification pursuant to a bill of lading or the Carmack Amendment; rather, it seeks indemnification pursuant to its separate and ongoing agreement with Megatrux. Specifically, UPS alleges that by subcontracting with Stallion, Megatrux was in direct violation of express terms of the MTSA. If proven, this breach would be separate and distinct from the loss of cargo and would have exposed UPS to legal jeopardy with its customer; caused UPS to make payment to Seagate; required expenditure of attorney’s fees to effect recovery; and triggered the indemnification provisions of the contract. The district court erred in finding UPS’s claim for indemnification of attorney’s fees to be preempted by the Carmack Amendment.

 

IV. Conclusion

For the foregoing reasons, we AFFIRM the district court’s ruling that Megatrux bears full liability for Seagate’s actual loss of $461,849.42 and its finding that UPS sufficiently proved the contents of the subject shipments. We REVERSE the determination that UPS’s claim for attorney’s fees under the indemnification clause of the MTSA is preempted and REMAND for further proceedings consistent with this opinion.

 

FN* Honorable Donald M. Middlebrooks, United States District Judge for the Southern District of Florida, sitting by designation.

 

FN** Honorable W. Harold Albritton III, United States District Judge for the Middle District of Alabama, sitting by designation.

 

FN1. Section 5.5 of the MTSA provides in pertinent part:

 

Subcontractors. Carrier shall not cause or permit any other person or entity to perform any of Carrier’s obligations hereunder or cause or permit any shipment tendered hereunder to be transported by any other third-party carrier, in “substituted service” or other modes of transportation (each referred to herein as a “Subcontractor” and, collectively, as the “Subcontractors”) without the prior written consent of UPS.

 

(MTSA, at 5).

 

FN2. As a preliminary note, neither party has appealed application of the Carmack Amendment to the lost cargo, and Megatrux does not appeal its legal liability for the stolen shipment-only the amount of that liability. We therefore assume without deciding that the Carmack Amendment is applicable to the cargo claim.

 

However, a portion of the disk drives were shipped by sea from Malaysia to the Port of Los Angeles and then to UPS’s facility in Carson, California. The Intermodal Waybill indicates that the cargo was to be shipped from Penang, Malaysia, to Carson California, and then to McAllen, Texas. The remainder were shipped by air freight from Singapore, Thailand, and China to Los Angeles, California, and then transferred to a DSD facility in Los Angeles. The Waybills indicate the cargo was to be shipped from Singapore, Thailand, and China to Los Angeles and then to McAllen, Texas. The cargo was picked up by the rogue drivers on September 16, 2009, in Los Angeles to be transported to McAllen, Texas. Because the cargo was to be shipped from Asia to Texas under one logistical plan created by UPS, application of the Carmack Amendment may be uncertain. See Kawasaki Kisen Kaisha Ltd. v. Regal–Beloit Corp., 561 U.S. 89, 130 S.Ct. 2433, 177 L.Ed.2d 424 (2010); Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 125 S.Ct. 385, 160 L.Ed.2d 283 (2004); CNA Ins. Co. v. Hyundai Merchant Marine Co., Ltd., No. 12–6118, 2014 WL 1227776 (6th Cir. Mar.26, 2014); Altadis USA, Inc. v. Sea Star Line, LLC, 458 F.3d 1288 (11th Cir.2006); Norfolk S. Ry. Co. v. Sun Chem. Corp., 318 Ga.App. 893, 735 S.E.2d 19 (Ga.Ct.App.2012).

 

FN3. The first prong has been largely eliminated by statutory changes that abolished the Interstate Commerce Commission and replaced it with the Surface Transportation Board. Instead, carriers are now required to provide shippers on request with a written or electronic copy of the rates, classifications, rules, or practices applicable to the shipment or agreed to between the shipper and carrier. See Werner, 554 F.3d at 1326 n. 6.

 

FN4. In its litigation-inspired request to apply the GLSPA’s limitation provision, Megatrux ignores that it is tempered by additional liability for gross negligence or willful misconduct. UPS argues that this standard is met by the deliberate violation of the prohibition on subcontracting and entrusting the cargo to strangers. The district court did not reach this issue because of its finding that the full liability requirement of the MTSA represented the shipper’s choice of liability under the third prong of the Sassy Doll inquiry.

 

FN5. These customs invoices were the main evidence relied on by the district court. The court noted that “[t]hese customs invoices were made contemporaneously with the staging, packing, and packaging of the subject shipment and such invoices were relied upon by Seagate in the orderly administration of its business.” (Trial Ct. Order, at 9).

 

FN6. The court noted that the photographs and the recovered disks were “strong corroborating evidence indicating that the customs invoices are accurate and trustworthy.” (Trial Ct. Order, at 7).

 

FN7. UPS describes itself as offering an array of services including transportation and freight, contract logistics, customs brokerage, consulting services, and industry solutions. See UPS Supply Chain Solutions, http://www.ups-scs.com (last visited Apr. 7, 2014). In its briefing, UPS categorizes itself as a “freight intermediary,” (Appellee’s Reply Br. for Cross Appeal, at 11), and says that, with respect to its dealings with Megatrux, it acted as a “freight broker.” (Trial Doc. 106, at 2); see also 49 U.S.C. § 13102(2) (defining “broker”). Megatrux claims UPS acted as a “freight forwarder” and not as a “broker.” (Appellant’s Br., at 5; Trial Doc. 108, at 5); see also 49 U.S.C. § 13102(8) (defining “freight forwarder”).

 

A third-party logistics company may conduct multiple activities that are integrated to meet the needs of its customers and the crucial inquiry is in what capacity it is acting during any particular transaction. See Camp v. TNT Logistics Corp., 553 F.3d 502, 507 (7th Cir.2009). The district court made no finding with respect to this dispute and we likewise find it unnecessary to our resolution.

 

FN8. The Supreme Court also considered the scope and application of the Amendment’s savings clause, which provides: “Except as otherwise provided in this part, the remedies provided under this part are in addition to remedies existing under another law or common law.” 49 U.S.C. § 15103. The savings clause, explained the Court:

 

was evidently only intended to continue in existence such other rights or remedies for the redress of some specific wrong or injury, whether given by the interstate commerce act, or by state statute, or common law, not inconsistent with the rules and regulations prescribed by the provisions of this act…. [I]t could not in reason be construed as continuing in a shipper a commonlaw right the existence of which would be inconsistent with the provisions of the act. In other words, the act cannot be said to destroy itself.

 

Croninger, 226 U.S. at 507, 33 S.Ct. at 152.

 

FN9. Relying on the Supreme Court’s holding in Harris, state courts in Oklahoma, Idaho, Nevada, and Oregon have also determined that a generally applicable attorney’s fee statute is not preempted by the Carmack Amendment. See AME, Inc. v. Consolidated Freightways, 783 P.2d 499 (Okla.Civ.App.1989); Pac. Intermountain Express Co. v. Leonard E. Conrad, Inc., 88 Nev. 569, 502 P.2d 106 (Nev.1972); Rungee v. Allied Van Lines, Inc., 92 Idaho 718, 449 P.2d 378 (Idaho 1968); Troute v. Aero Mayflower Transit Co., Inc., 78 Or.App. 564, 718 P.2d 745 (Or.1986).

 

FN10. Since the Fifth Circuit, after the jurisdictional briefing, decided that it had original jurisdiction, proceeded to address the merits, it mattered not at all to the disposition of the appeal whether the jurisdictional amount appeared on the face of the amended complaint at the time of removal. Accordingly, all of the Court’s comments about the issue are arguably dicta. See McDonald’s Corp., 147 F.3d at 1314–15 (Carnes, J., concurring).

 

FN11. Since Strickland, the Fifth Circuit has addressed application of the Texas attorney’s fee statute in interstate freight cases on three occasions. In Missouri Pacific Railroad Company v. Center Plains Industries, Inc., 720 F.2d 818 (5th Cir.1983), without discussing preemption, the Fifth Circuit found “the [Strickland ] decision disallowing recovery of attorney’s fees in freight damage suits to be persuasive.” Id. at 819. In Farmland Industries, Inc. v. Andrews Transport Co., 888 F.2d 1066 (5th Cir.1989), another case where the Carmack Amendment was not discussed, the Fifth Circuit allowed attorney’s fees under the Texas statute in a breach of contract action. In Accura Systems, Inc. v. Watkins, 98 F.3d 874 (5th Cir.1996), the Fifth Circuit reversed and vacated an award of attorney’s fees “[i]n light of” the Strickland holding. Id. at 877. The court also references a lower court decision distinguishing the Tenth Circuit’s decision in Clayton “because the Oklahoma state courts, unlike the Texas state courts, have held that the state attorney’s fee statute is not preempted by the Carmack Amendment.” Id.

 

FN12. While no federal appellate decision has addressed this issue, several courts have held that indemnity contracts between brokers and carriers are not preempted by the Carmack Amendment. See, e.g ., Exel, Inc. v. S. Refrigerated Transport, Inc., No. 2:10–cv–994, 2012 WL 3064106 (S.D.Ohio July 27, 2012); InTransit, Inc. v. Excel N. Am. Road Transport, Inc., 426 F.Supp.2d 1136 (D.Or.2006); Edwards Bros., Inc. v. Overdrive Logistics, Inc., 260 Ga.App. 222, 581 S.E.2d 570 (Ga.Ct.App.2003); but see Dominion Res. Servs., Inc. v. 5k Logistics, Inc., No. 3:09–cv–315, 2010 WL 679845 (E.D.Va. Feb.24, 2010).

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