UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

San Jose Division

Logan Anderson, Plaintiff,

v.

Mandana Pour (d.b.a. Quality Auto Transport); Reindeer Logistics, Inc. (a.k.a. Reindeer Auto Relocation); Bristol Global Mobility, Defendants.

 

Case No. 5:14–cv–01759–PSG

5:14–cv–01759Signed November 4, 2014

 

Aaron M. Dawson, Alecto Law, San Francisco, CA, for Plaintiff.

 

Gregg S. Garfinkel, Nemecek & Cole, Sherman Oaks, CA, for Defendants.

 

ORDER DENYING MOTION TO DISMISS

(Re: Docket Nos. 13)

PAUL S. GREWAL, United States Magistrate Judge

*1 Plaintiff Logan Anderson needed to get his prized 1972 Camaro from New York to California. And so he contracted with Defendant Reindeer Logistics and its carriers Mandana Pour and Bristol Global Mobility to make it so. The car eventually arrived, but it was late and significantly damaged. After Anderson complained, Reindeer offered to settle, but Anderson found the offer lacking and refused. Anderson then filed this suit, alleging that Pour had violated the Carmack Amendment to the Interstate Commerce Act and that Reindeer and Bristol are liable under California law. In response to Reindeer’s motion to dismiss based on preemption,FN1 the court holds that Anderson may pursue his claim under California law that Reindeer violated the contract’s implied covenant of good faith and fair dealing.FN2

 

FN1. See Docket No. 19.

 

FN2. See Docket No. 28.

 

I.

In enacting the Interstate Commerce Commission Termination Act of 1995, FN3 Congress continued the work of deregulation it launched with the Airline Deregulation Act of 1978.FN4 Reflecting Congress’ concern with conflicting state regulations that it saw as undue burden on interstate commerce, the ICCTA provides includes a broad preemption provision that had been part of the Federal Aviation Administration Authority Act passed by Congress in 1994.FN5 But preemption under the FAAAA and thus the ICCTA still permit state laws and claims affecting carrier services “in only a tenuous, remote or peripheral … manner.” FN6

 

FN3. 49 U.S.C. § 11501(h)(1).

 

FN4. See 92 Stat. 1705.

 

FN5. See White v. Mayflower Transit, LLC, 543 F.3d 581, 584 (9th Cir.2008); see also Smallwood v. Allied Van Lines, Inc. Case No. 09–56714, 2011 WL 4927404, at *3 (9th Cir. Oct. 18, 2011); 49 U.S.C. § 11501(h)(1). See Mastercraft Interiors, Ltd. v. ABF Freight Sys., Inc., 284 F.Supp.284, 285 (D.Md.2003); Deerskin Trading Post, Inc. v. United Parcel Service of America, Inc., 972 F.Supp. 665, 668 (N.D.Ga.1997).

 

FN6. Rowe v. New Hampshire Motor Transp. Assn., 552 U.S. 364, 371 (2008).

 

As with the FAAAA, preemption under ICCTA is codified at 49 U.S.C. § 14501(c)(1). That section provides that “a State ….may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier …. with respect to the transportation of property.” FN7 As relevant here, the ICCTA defines “transportation” as “including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and interchange of passengers and property.”

 

FN7. 49 U.S.C. § 14501(c)(1).

 

Reindeer is in the auto relocation business. Having secured a new job in California, Anderson contracted with Reindeer to ship his Camaro from New York. After a Reindeer agent picked it up from Anderson’s New York home, FN8 the Camaro arrived in California five days late. When it arrived it was “extremely damaged,” with the paint chipped in multiple places and the weather stripping hanging out of a side door. The driver who delivered the car explained that he had caused some of the damage to the vehicle.FN9 Anderson then contacted Reindeer to complain of the damage and to seek compensation. In response, Reindeer offered Anderson a total of $150.00 as “a gesture of good will” to settle the claim. After Anderson presented estimates from various body shops in amounts of approximately $25,000, Reindeer upped its offer of settlement to $1,533.92.

 

FN8. See Docket No. 1 ¶ 15.

 

FN9. Id. ¶ 21.

 

*2 Still not satisfied, Anderson sued. Anderson’s complaint alleges that Reindeer, Pour and Bristol are in a joint venture or joint enterprise and are all jointly liable for all of the conduct alleged in the complaint.FN10 According to Anderson, “per the agreement between Plaintiff and Defendant Reindeer, Reindeer agreed to facilitate any claim for damage for property caused in transit and generally to act as liaison between Plaintiff and the motor carrier.” FN11 In addition to his other claims, Anderson specifically alleges that Reindeer tortuously breached the implied duty of good faith and fair dealing by representing to Plaintiff that he was entitled to recover only a “small fraction” of what he was owed and by denying or delaying the proper administration of his claim through manipulation and bullying tactics.FN12 Anderson seeks from Reindeer both compensatory damages for repair of his car and compensation for emotional distress, as well as punitive damages.FN13

 

FN10. See id. ¶ 10

 

FN11. Id. ¶ 33

 

FN12. Id. ¶¶ 36, 38.

 

FN13. See id. at 8–9.

 

Reindeer now seeks dismissal of the tortious breach claim pursuant to Fed.R.Civ.P. 12(b)(6).

 

II.

Anderson and Reindeer consented to magistrate judge jurisdiction pursuant to 28 U.S.C. § 636(c) and Fed.R.Civ.P. 72(a).FN14 For the purposes of Reindeer’s Rule 12(b)(6) motion, unless otherwise noted, the court must draw the necessary facts from Anderson’s complaint and accept them as true. But if Anderson fails to proffer “enough facts to state a claim to relief that is plausible on its face,” the complaint must be dismissed for failure to state a claim upon which relief may be granted.FN15

 

FN14. See Docket Nos. 7, 13.

 

FN15. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible “when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Igbal, 556 U.S. 662, 663 (2009).

 

Reindeer is right that the ICCTA’s broad definition of regulated “transportation” and its express preemption of state law with respect to any carrier or broker “service” clearly reflects the supremacy of federal law over state law in the area of intrastate or interstate transportation. But in reviewing the same relevant language in the ADA, the Supreme Court has only recently emphasized that breadth “does not mean the sky is the limit.” FN16 Where exactly a plausible claim ends and the sky begins is not always clear. But here it is; Anderson has met his pleading burden.

 

FN16. Dan’s Used Cars, Inc. v. Pelkey, 133 S.Ct. 1769, 1778 (2013).

 

III.

To avoid liability under state law based on preemption under Section 14501(c)(1), a defendant must establish that a plaintiff’s claim “relates to … service of any motor carrier …. with respect to the transportation of property.” FN17 On the face of Anderson’s complaint, Reindeer’s challenge to Anderson’s tortious breach claim fails this test.

 

FN17. 49 U.S.C. § 14501(c)(1).

 

First, Anderson’s claim targets Reindeer’s actions after transportation of the Camaro was complete. The claim specifically focuses on Reindeer’s role as a liaison between Anderson and the motor carrier and his representations as liaison that Anderson was not owed any compensation.FN18 In Pelkey, the Supreme Court explained that “transportation” as used in the express preemption clause is further defined in relevant part as “services related to th[e] movement” of property.” FN19 Because Pelkey’s claims targeted activities after the movement of his property had ended, including “storage of Pelkey’s car after the towing job was done,” the claims did not involve “transportation” within the meaning of the preemption clause.FN20

 

FN18. See Docket No. 1 ¶¶ 33, 36–38.

 

FN19. See Pelkey, 133 S.Ct. at 1778.

 

FN20. Id. at 1779.

 

Here, Anderson’s tortious breach claim similarly does not target Reindeer’s activities during the Camaro’s transportation from New York. The claim instead focuses on Reindeer’s processing of Anderson’s claim after the Camaro was no longer in transit.

 

*3 Second, Reindeer’s litany of cases dismissing various state law claims as preempted by the ICCTA is unavailing.FN21 Those cases all predate Pelkey and its hard line on post-transit activities or consider the ADA, not the ICCTA, which does not include the key “with respect to the transportation of property” restriction.

 

FN21. See, e.g. Yellow Trans., Inc. v. DM Transp. Mgmt. Serv., Inc., Case No. 06DCV 1517–LDD, 2006 U.S. Dist. LEXIS 51231, 2006 WL 2871745, at *4 (E.D.Pa. July 14, 2006); Thermal Techs., Inc. v. United Parcel Serv., Inc., No. 08–CV–102–GKF–FHM, 2008 U.S. Dist. LEXIS 90243, 2008 WL 483 868 1, at *9 (N.D.Okla. Nov. 5, 2008); All World Prof’l Travel Servs., Inc. v. Am. Airlines, Inc., 282 F.Supp.2d 1161, 1169 (C.D.Cal.2003).

 

Reindeer makes much of the fact that as a transportation broker its activities were “inextricably intertwined” with the transportation of Anderson’s Camero. Under the Carmack Amendment, a “broker” is defined as “a person, other than a motor carrier … that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.” FN22 Brokers of course do not enjoy a blanket exemption under the Carmack Amendment.FN23 While it may be true that certain broker activities are exempted, Anderson pleads his claim to focus exclusively on those activities which took place after the service provided by the motor carrier ended. Under Pelkey, such pleading is enough to take the claim outside the scope of preemption under Section 14501(c)(1).

 

FN22. Chubb Group of Ins. Companies v. H.A. Transp. Systems, Inc., 243 F.Supp.2d 1064, 1069 n.4 (quoting 49 U.S.C. § 13102(2)).

 

FN23. See, e.g., Taylor v. Allied Van Lines, Case No. cv–08–1218–PHX–GMS, 2008 WL 5225809, at *3–4 (D.Ariz. Dec. 15, 2008) (“the Carmack Amendment was not intended to preempt all actions against non-carrier entities arising out of the interstate shipment of goods); Buchanan v. Neighbors Van Lines, Case No. 10–6206–PSG (RCx), 2011 WL 5005769, at *7 (C.D.Cal. Oct. 20, 2011) (holdling that plaintiff’s state law claims against broker for negligent hiring, fraud, breach of contract, and violation of California Business and Professions Code section 17200 are not preempted by federal law).

 

IV.

Reindeer’s Motion to Dismiss the Second Cause of Action is DENIED.

 

IT IS SO ORDERED.

United States District Court,

W.D. Pennsylvania.

IRENE J. KENDRICK REVOCABLE LIVING TRUST by John D. KENDRICK, Trustee, Plaintiff,

v.

SOUTH HILLS MOVERS, INC., Defendant.

 

Civil Action No. 14–204.

Signed Nov. 4, 2014.

 

Jerry W. Wienand, Wienand & Bagin, Noah Paul Fardo, Flaherty Fardo, Pittsburgh, PA, for Plaintiff.

 

James A. Wescoe, Weber Gallagher Simpson Stapleton Fires & Newby LLP, Philadelphia, PA, for Defendant.

 

OPINION

KELLY, United States Chief Magistrate Judge.

I. INTRODUCTION

*1 Pending before the Court is a Partial Motion to Dismiss Plaintiff’s Amended Complaint (ECF No. 9) filed by Defendant South Hills Movers, Inc. (“Defendant”), seeking dismissal of Plaintiff’s state law claims for breach of warranty (Count II) and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 Pa.C.S. §§ 201, et seq. (Count III). Defendant argues that these state law claims are within the broad preemptive scope of the Carmack Amendment, 49 U.S.C. § 14706, and therefore Plaintiff fails to state a legally cognizable claim for relief at Count II or Count III. Upon consideration of the Partial Motion to Dismiss, and the briefs filed in support and opposition thereto (ECF Nos. 10, 15, 16), and for the following reasons, Defendant’s Partial Motion to Dismiss (ECF No. 9) is GRANTED.

 

II. FACTUAL AND PROCEDURAL BACKGROUND

On January 3, 2014, Plaintiff commenced a civil action against Defendant in the Court of Common Pleas of Allegheny County, Pennsylvania, arising out of the interstate shipment of household goods, owned in trust, between Mount Lebanon, Pennsylvania, and Pacific Grove, California. The action was removed to this Court by Defendant on the basis that claims arising out of interstate shipment of goods are exclusively governed by federal law. Thereafter, Plaintiff filed an Amended Complaint, adding claims under the Carmack Amendment (Count I), and setting forth state law claims for breach of warranty (Count II) and the violation of Pennsylvania’s UTPCPL (Count III).

 

In the Amended Complaint, Plaintiff alleges that on or about January 4, 2012, John D. Kendrick, acting as Trustee of Plaintiff’s Trust, entered into a contract with Defendant to pack, load, transport, store, and unload household goods and personal possessions belonging to the Trust and its beneficiary, Irene Kendrick. (ECF No. 13). In entering into the contract, Kendrick selected “Option 1,” which provides that with regard to any goods damaged or destroyed while in Defendant’s custody, that Defendant will “pay [Plaintiff] for the cost of such repairs … or for the cost of such replacement.” (ECF No. 13–1, p. 4). This option is in lieu of obtaining a flat rate of 60 cents per pound per article for the replacement of any damaged or lost item.

 

Plaintiff alleges that in the course of interstate shipment, several items were either damaged or destroyed. Plaintiff submitted a timely claim for $11,924, for the cost to repair or replace the items, but Defendant has not yet complied with its obligations under the contract to remit payment.

 

II. STANDARD OF REVIEW

In assessing the sufficiency of the complaint pursuant to a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must accept as true all material allegations in the complaint and all reasonable factual inferences must be viewed in the light most favorable to the plaintiff. Odd v. Malone, 538 F.3d 202, 205 (3d Cir.2008). The Court, however, need not accept bald assertions or inferences drawn by the plaintiff if they are unsupported by the facts set forth in the complaint. See California Public Employees’ Retirement System v. The Chubb Corp., 394 F.3d 126, 143 (3d Cir.2004), citing Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997). Nor must the Court accept legal conclusions set forth as factual allegations. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

 

*2 Rather, “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id., citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986). Indeed, the United States Supreme Court has held that a complaint is properly dismissed under Fed.R.Civ.P. 12(b)(6) where it does not allege “enough facts to state a claim to relief that is plausible on its face,” id. at 570, or where the factual content does not allow the court “to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 513 U.S. 662, 678 (2009). See Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir.2008) (finding that, under Twombly, “labels and conclusions, and a formulaic recitation of the elements of a cause of action” do not suffice but, rather, the complaint “must allege facts suggestive of [the proscribed] conduct” and that are sufficient “to raise a reasonable expectation that discovery will reveal evidence of the necessary element[s] of his claim”). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.”   Iqbal, 556 U.S. at 677. “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id. at 679.

 

This Court notes that the parties rely upon the four corners of the contract. Such reliance does not require the conversion of its Motion to Dismiss into a Motion for Summary Judgment. The law is clear that in considering a Motion to Dismiss, the Court is not limited to evaluating the complaint alone; it can also consider documents attached to the complaint, matters of public record, indisputably authentic documents, Delaware Nation v. Pennsylvania, 446 F.3d 410, 413 n. 2 (3d Cir.2006), documents that form the basis of a claim, Lum v. Bank of America, 361 F.3d 217, 221 n. 3 (3d Cir.2004) (abrogation on other grounds recognized by In re Insurance Brokerage Antitrust Litigation, 618 F.3d 300, 323 n. 22 (3d Cir.2010)), and “documents whose contents are alleged in the complaint and whose authenticity no party questions,” even though they “are not physically attached to the pleading….” Pryor v. Nat’l Collegiate Athletic Ass’n, 288 F.3d 548, 560 (3d Cir.2002).

 

III. DISCUSSION

In Certain Underwriters at Interest at Lloyd’s of London v. United Parcel Service of America, Inc., 762 F.3d 332 (2014), the United States Court of Appeals for the Third Circuit unequivocally held that “the Carmack Amendment preempts all state law claims for compensation for the loss of or damage to goods shipped by a ground carrier in interstate commerce.” Id. (italics added). In reaching its unambiguous decision, the Court of Appeals reviewed the common law and statutory development of a uniform approach to interstate carrier liability for losses sustained during shipment of goods. The necessity for uniformity arose out of the uncertainty created by “such diversity in legislative and judicial holding that it was practically impossible for a carrier … to know [its potential liability] without considerable investigation and trouble.” Lloyds, 762 F.3d at 335, quoting Adams Express Co. v. Croninger, 226 U.S. 491, 505, 33 S.Ct. 148, 57 L.Ed. 314 (1913).

 

*3 Thus, the Carmack Amendment was the first federal attempt to address industry-wide uncertainty, permitting motor carriers to limit their liability by agreement in a shipment’s bill of lading:

 

The Carmack Amendment’s operation is relatively straightforward. The general rule is that an interstate carrier is strictly liable for damages up to “the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) [certain intermediary carriers].” 49 U.S.C. § 14706(a)(1). A shipper and carrier can agree to limit the carrier’s 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” in order for the shipper to obtain a reduced rate. Id. § 14706(c)(1)(A). Shippers may bring a federal private cause of action directly under the Carmack Amendment against a carrier for damages. Id. § 14706(d).

 

The Carmack Amendment struck a compromise between shippers and carriers. In exchange for making carriers strictly liable for damage to or loss of goods, carriers obtained a uniform, nationwide scheme of liability, with damages limited to actual loss-or less if the shipper and carrier could agree to a lower declared value of the shipment…. Making carriers strictly liable relieved a shipper of the burden of having to determine which carrier damaged or lost its goods (if the shipper’s goods were carried by multiple carriers along a route). It also eliminated the shipper’s potentially difficult task of proving negligence. In return, carriers could more easily predict their potential liability without closely studying the tort law of each state through which a shipment might pass. Carriers’ liability was limited to the actual value of the goods shipped-punitive damages were not available.

 

Lloyds, 762 F.3d at 335.

 

Since enactment, “[f]or over one hundred years, the Supreme Court has consistently held that the Carmack Amendment has completely occupied the field of interstate shipping.” Lloyds, at 335–36.

 

“Almost every detail of the subject is covered so completely that there can be no rational doubt but that Congress intended to take possession of the subject, and supersede all state regulation with reference to it.” Adams Express, 226 U.S. at 505–06, 33 S.Ct. 148, 57 L.Ed. 314. The Court has consistently described the Amendment’s preemptive force as exceedingly broad-broad enough to embrace “all losses resulting from any failure to discharge a carrier’s duty as to any part of the agreed transportation.” Ga., Fla. & Ala. Ry. v. Blish Milling Co., 241 U.S. 190, 196, 36 S.Ct. 541, 60 L.Ed. 948 (1916). State laws are preempted regardless of whether they contradict or supplement Carmack relief. See Charleston & W. Carolina Ry. Co. v. Varnville Furniture Co., 237 U.S. 597, 604, 35 S.Ct. 715, 59 L.Ed. 1137 (1915) (holding that a South Carolina law that imposed a $50.00 fine upon carriers that failed to timely report damage was preempted by the Amendment).

 

*4 Id. The preemptive effect of Carmack has been applied to all manner and type of claims seeking recovery for losses sustained in interstate shipping, including negligence, breach of contract, breach of fiduciary duty, fraud, conversion, misrepresentation, and claims alleging the violation of state consumer fraud statutes. Id. at 336 n. 3.

 

Limited exceptions have been recognized for “peripheral” claims based on “conduct” or “harm” apart from delay, loss, or damage to shipped property, such as intentional infliction of emotional distress. Id. at 446 n. 4 (citing Gordon v. United Van Lines, Inc., 130 F.3d 282, 289 (7th Cir.1997).FN1 It is here, in this narrow window, that Plaintiff seeks to assert its claims for breach of warranty and consumer fraud.

 

FN1. However, as recognized the United States Court of Appeals for the Ninth Circuit, in White v. Mayflower Transit, L.L.C., 543 F.3d 581, 585–86 (9th Cir.2008), “although the Seventh Circuit adopted … language focusing on harm, the Seventh Circuit’s holding in Gordon was actually motivated by the defendant’s conduct. The Seventh Circuit was troubled by the fact that the defendant lied to the plaintiff and engaged in a ‘four-month course of deception pertaining to [their] nondelivery.’ “ Such allegations of harm are not present here; rather, Plaintiff alleges only the failure to remit payment for the damage or destruction of shipped goods.

 

Plaintiff construes the contract provisions for full replacement value for damaged goods as a written warranty, the breach of which gives rise to a claim that arises “separate and distinct from the delivery of goods itself.” Plaintiff contends that the alleged breach is “conduct” arising after the damage to the property and so is not preempted. Similarly, Plaintiff contends that in failing to honor the “Full Replacement Value Protection” provided for in the contract, and for which an additional sum of money was paid, Defendant has violated the UTPCPL. However, this superficially appealing argument fails to recognize that no “harm” was suffered other than the damage or destruction of goods. As in Lloyds, Plaintiff’s claims “lie at the heart of Carmack preemption.” Accordingly, Defendant’s Partial Motion to Dismiss Plaintiff’s claims for breach of warranty and violation of Pennsylvania’s UTPCPL is GRANTED. An appropriate order follows.

 

ORDER

AND NOW, this 4th day of November 2014, upon consideration of Defendant’s Partial Motion to Dismiss Plaintiff’s Amended Complaint (ECF No. 9), and the briefs filed by the parties is support and opposition thereto, and for the reasons set forth in the accompanying Opinion,

 

IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss Plaintiff’s breach of warranty (Count II) and UTPCPL (Count III) claims is GRANTED.

 

IT IS FURTHER ORDERED that, pursuant to Rule 4(a)(1) of the Federal Rules of Appellate Procedure, if the Plaintiff wishes to appeal from this Order he or she must do so within thirty (30) days by filing a notice of appeal as provided in Rule 3, Fed. R.App. P.