United States District Court, N.D. Illinois, Eastern Division.

Howard KORER, Plaintiff,

v.

DANITA CORPORATION and United Parcel Services, Inc., Defendants.

No. 08 C 2837.

Nov. 6, 2008.

MEMORANDUM OPINION & ORDER

RUBEN CASTILLO, District Judge.

Howard Korer (“Plaintiff”) brought this declaratory judgment action in state court against Danita Corporation, an Illinois corporation d/b/a The UPS Store # 1661 (“Danita”), and United Parcel Service, Inc. (“UPS”) (collectively “Defendants”) alleging damage and/or loss to his property during an interstate shipment. (R. 1, Not. of Removal, Ex. 1, Compl.) UPS removed the action to this Court pursuant to the Carmack Amendment of the Interstate Commerce Act (“  Carmack Amendment”), 49 U.S.C. § 14706. Plaintiff moves to remand. (R. 10, Pl.’s Mot. to Remand.) For the reasons stated below, Plaintiff’s motion is denied.

RELEVANT FACTS

On December 14, 2007, Plaintiff visited Danita’s place of business in Buffalo Grove, Illinois, “to arrange the shipping of [a] watch to Plaintiff’s friend in Atlanta, Georgia.”(R. 1, Not. of Removal, Ex. 1, Compl. ¶ 5.) The watch was a Rolex platinum wristwatch that “Plaintiff had purchased long ago while on vacation for a price of $25,000.”(Id.  ¶ 4.) Danita’s agent asked Plaintiff if he wanted to purchase insurance for the shipment, and Plaintiff decided to insure the package for $25,000. (Id.  ¶ 7.) The small box containing the watch was then put into a larger box and sealed by Danita’s agent, and Plaintiff paid for shipping, handling, and insurance. (Id.  ¶ 8.) Several days later, the box arrived at the home of Plaintiff’s friend in Atlanta.(Id.  ¶ 10.)According to Plaintiff, when the box was opened, it was discovered that “the box had been opened in transit, the small box containing the watch had been removed and a pair of pliers had been substituted for the watch.”(Id.) When Plaintiff discovered that the watch was not in the package his friend received, he contacted Danita’s agent and filed a claim for $25,000. (Id.  ¶ 11.)Plaintiff alleges that he has since submitted all available information regarding the loss to UPS but that “Defendants have wholly failed to adjust the claim or make any monetary offer on the insurance.”(Id.  ¶ 13.)

PROCEDURAL HISTORY

On April 10, 2008, Plaintiff brought suit in the Circuit Court of Lake County against Danita and UPS. (R. 1, Not. of Removal, Ex. 1, Compl.) In his complaint, Plaintiff seeks a declaration that his shipment was insured for the extent of the coverage purchase; that the lost watch was worth at least $25,000; and that he is entitled to payment of $25,000 from the insuring entity, as well as a determination of the identity of the insuring entity.(Id. at 5.) On May 8, 2008, Danita filed a motion to dismiss the state court action. (Id., Ex. 3, Mot. to Dismiss.) Before the motion was resolved, on May 15, 2008, UPS removed the case pursuant to the Carmack Amendment.(R. 1, Not. of Removal.) UPS asserts that the Carmack Amendment exclusively governs claims alleging loss or damage to property during an interstate shipment, such that there is federal jurisdiction over this action. (Id. at 2-3.)Plaintiff moves to remand, arguing that this case is not removable because his complaint does not raise a federal question. (R. 10, Pl.’s Mot. to Remand at 2-4.)

LEGAL STANDARD

A defendant may remove “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.”28 U.S.C. § 1441(a). The party seeking removal bears the burden of establishing federal jurisdiction. Boyd v. Phoenix Funding Corp., 366 F.3d 524, 529 (7th Cir.2004). The Court must interpret the removal statute narrowly, and any doubts regarding jurisdiction are resolved in favor of remand. Wirtz Corp. v. United Distillers & Vintners N. Am., Inc., 224 F.3d 708, 715-16 (7th Cir.2000); Fischer v. Hartford Life Ins. Co., 486 F.Supp.2d 735, 738 (N.D.Ill.2007).

ANALYSIS

“The interstate shipment of goods is a complicated business.”  REI Transport, Inc. v. C.H. Robinson Worldwide, Inc., 519 F.3d 693, 695 (7th Cir.2008). To provide uniformity in the law pertaining to such shipments, Congress enacted the Carmack Amendment. Id. at 696.Foremost among the problems intended to be corrected by the Carmack Amendment were the disparate schemes of carrier liability that existed among the states, some of which allowed carriers to limit or disclaim liability, while others permitted full recovery. Id. To solve this problem, the Carmack Amendment “created a nationally uniform rule of carrier liability concerning interstate shipments.”  Id. Congress ensured the national uniformity of carrier liability in two ways: “by preempting state causes of action against carriers for damaged or lost goods; and by placing substantive limits on the rights of carriers to contract away liability.”  Id. The Carmack Amendment thus preempts state law claims and provides the exclusive remedy against carriers for goods lost or damaged during an interstate shipment. Id. at 697-98 (“The preemptive sweep of the Carmack Amendment extends to state causes of action against carriers where goods are damaged or lost in interstate commerce.”); N. Am. Van Lines, Inc. v. Pinkerton Sec. Sys., Inc., 89 F.3d 452, 456 (7th Cir.1996) (“The Carmack Amendment thus preempts all state or common law remedies available to a shipper against a carrier for loss or damage to interstate shipments.”).

In this case, Plaintiff is seeking, among other relief, a determination regarding Defendants’ liability for damages he incurred when his wristwatch was lost during an interstate shipment. (R. 1, Not. of Removal, Ex. 1, Compl. at 5.) The Carmack Amendment provides the exclusive remedy for such a claim.“[W]hen one ships a package via UPS and there is a dispute, that dispute belongs in federal court because of the Carmack Amendment.”  Treiber & Straub, Inc. v. United Parcel Serv., Inc., 474 F.3d 379, 383 (7th Cir.2007). The Court thus has jurisdiction over Plaintiff’s claim. Id.; see also  N. Am. Van Lines, 89 F.3d at 457 (determination of carrier’s liability to shipper under Carmack Amendment is question of federal law); Pierre v. United Parcel Serv., Inc., 774 F.Supp. 1149, 1151 (N.D.Ill.1991) (because shipper’s claim was preempted by Carmack Amendment, removal to federal court was proper).

Plaintiff argues that there is no federal question jurisdiction because he did not plead any federal claims in his complaint. (R. 10, Pl.’s Mot. to Remand at 2-3.) Plaintiff is correct that whether a case arises under federal law must be determined from the face of a plaintiff’s complaint, and a case may not be removed on the basis of a federal defense. Franchise Tax Bd. v. Constr. Laborers Vacation Tr., 463 U.S. 1, 9-10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983); City of Chicago v. Comcast Cable Holdings, LLC, 384 F.3d 901, 904 (7th Cir.2004). The Carmack Amendment is not a defense, however; it is a federal statute that governs resolution of the dispute over Defendants’ liability for Plaintiff’s damages incurred as a result of an interstate shipment. Plaintiff cannot “bypass” the Carmack Amendment simply by avoiding reference to it in his state complaint. See  REI Transport, Inc., 519 F.3d at 698.

It is true that “not every claim even remotely associated with the transfer of goods from one place to another is necessarily a claim for damages to the shippers’ goods” that would fall under the Carmack Amendment. Gordon v. United Van Lines, Inc., 130 F.3d 282, 289 (7th Cir.1997). The Carmack Amendment was intended to provide uniformity only as to a carrier’s liability for goods damaged in shipment, and thus does not preempt claims involving “independently actionable harms that are distinct from the loss of, or the damage to, the goods.”  REI Transport, Inc., 519 F.3d at 698.For instance, a shipper’s state law claim for intentional infliction of emotional distress against a carrier would fall outside the scope of the Carmack Amendment. Gordon, 130 F.3d at 289;see also  Ducham v. Reebie Allied Moving & Storage, Inc., 372 F.Supp.2d 1076, 1079 (N.D. Ill.2005) (if a carrier “were to hold up its consumer customer at gunpoint … nothing … would place the customer’s claim under the rubric of the Carmack Amendment”). Here, however, Plaintiff seeks a declaration that Defendants are liable for loss and/or damage incurred to his property during an interstate shipment. (R. 1, Not. of Removal, Ex. 1, Compl. at 5.) This is precisely the type of claim preempted by the Carmack Amendment. For these reasons, the Court has jurisdiction over this action.

CONCLUSION

For the reasons stated above, Plaintiff’s motion to remand (R. 10) is denied. Plaintiff is granted thirty days to file an amended complaint in this federal action. The parties are directed to reevaluate their settlement positions in light of this opinion and to exhaust all efforts to settle this case. The parties shall appear for a status on December 9, 2008, at 9:45 a.m. to set a firm litigation schedule for this case.

In order to remove a case to federal court, all defendants must either join in the petition or otherwise consent to removal. Midlock v. Apple Vacations West, Inc., 406 F.3d 453, 455 (7th Cir.2005). This requirement is not jurisdictional, however, and is subject to waiver if not raised within 30 days of removal. See28 U.S.C. § 1447(c); Midlock, 406 F.3d at 455; McMahon v. Bunn-O-Matic Corp., 150 F.3d 651, 653 (7th Cir.1998). Here, only UPS signed the notice of removal, and there is no indication that Danita either joined in the petition or otherwise consented to removal. Nevertheless, Plaintiff failed to challenge this defect, and the time for doing so has long since passed.

As Plaintiff points out, a civil action brought under the Carmack Amendment may be filed in either state or federal court. 49 U.S.C. § 14706(d)(3). Nevertheless, the salient question in determining whether an action can be removed based on federal question jurisdiction is not whether Congress intended a cause of action to be removable, but whether Congress intended the federal cause of action to be exclusive. See  Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 9-10, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003) (state claim may be removed when federal statute wholly displaces state law cause of action). As explained above, the Carmack Amendment provides the exclusive remedy for loss or damage to goods occurring during an interstate shipment, and Defendants therefore had a right to remove based on federal question jurisdiction.

Court of Appeals of Georgia.

LIBERTY MUTUAL FIRE INSURANCE COMPANY

v.

AXIS SURPLUS INSURANCE COMPANY.

No. A08A1462.

Nov. 6, 2008.

JOHNSON, Presiding Judge.

After Donnette Vaughn filed a personal injury lawsuit against John Smith for injuries she sustained in an automobile accident, a dispute arose between Axis Surplus Insurance Company and Liberty Mutual Fire Insurance Company regarding whether they were obligated to indemnify or defend Smith in connection with the lawsuit. Axis filed a complaint for declaratory judgment, Liberty filed a counter-claim, and both parties filed motions for summary judgment. The trial court granted the motion for summary judgment filed by Axis and denied the one filed by Liberty. Liberty appeals, claiming that the trial court erred in failing to consider a lease agreement between Smith and his employer in determining the intent of the parties regarding insurance coverage and that Smith was not an “insured” under the Liberty policy. We discern no error and affirm.

Summary judgment is appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.We apply a de novo standard of review to an appeal from the grant or denial of summary judgment, and we view the evidence and all reasonable inferences drawn from it the light most favorable to the nonmoving party.

So viewed, the record shows that on October 14, 2004, Smith entered into an agreement with Bennett Truck Transport, LLC, pursuant to which he exclusively leased his 1985 International 9670 truck to Bennett and used the truck to transport mobile homes or offices on its behalf. On October 29, 2004, Smith drove from his home in Douglas to pick up a mobile office trailer from Bennett’s facilities in Alma. Smith hired Vaughn and Justin Griffin to serve as escort drivers and assist him in delivering the trailer to Charleston, South Carolina.

On the return trip from Charleston, Smith hitched Vaughn’s vehicle to his truck, and Vaughn rode as his passenger. Smith remained in contact with Bennett, calling at least twice to have Bennett put funds on his Comdata card so that he could purchase gasoline. On Highway 144, approaching Baxley, Smith’s truck collided with another vehicle, and both Vaughn and Smith were injured.

At the time of the accident, Bennett had secured motor carrier liability coverage from Liberty. The Liberty policy provided coverage for the lessor of the truck as an “insured” only when the truck “is used in [Bennett’s] business as a ‘  motor carrier’ for hire.”Bennett also secured “non-trucking automobile coverage” from Axis. The Axis policy excluded from coverage any damages sustained while the truck was being “used to carry property in [Bennett’s] business or en route to or from such business purposes.”

1. Liberty claims that the trial court erred in failing to evaluate the respective insurance policies in light of a provision of the lease agreement between Smith and Bennett. Liberty asserts that the lease agreement evidences an intent that Axis and not Liberty provide coverage for liability sustained after Smith’s truck delivered its load. Such an interpretation, however, is directly contradicted by the terms of the Axis policy (which explicitly provides that no coverage is extended while the truck is “en route to or from such business purpose”), and we will not alter Axis’ contractual obligations based on a collateral agreement between Smith and Bennett.

2. Liberty also argues that Smith was not an “insured” under the Liberty policy because his truck was not being used in Bennett’s business after he dropped off the mobile office trailer in Charleston. This Court has found, however, that a lessor may remain in the trucking business, even after he has delivered his load, if he is acting within his normal “work pattern” or “operational routine” in furtherance of the interests of the lessee/ trucking company.

Liberty points to our decision in AXA Global Risks v. Empire Fire & Marine Ins. Co. to support its claim that Smith’s use of the truck was of a personal, not business, nature at the time of the accident. In AXA Global, however, the lessor had not only delivered his load, but also had “completed [his] run” by returning to the lessee/ trucking company’s yard and dropping off the empty trailer.In addition, the lessor in AXA Global did not own a personal vehicle and used the leased truck as his sole means of transportation.

Here, Smith’s normal work pattern was to pick up a mobile home or office trailer in Alma, deliver it, and then return to the Alma/Douglas area so that he would be ready for his next job. Smith’s practice was to park the truck either at Bennett’s facility in Alma or at his home in Douglas, although he acknowledged that he once parked it in Baxley. While Smith stated that he was driving “home” at the time of the collision, he had not yet reached Baxley, Alma, or Douglas when the collision occurred. In addition, Smith also owned a smaller truck that he regularly used for personal matters.

Despite Liberty’s claims, Smith’s decision to tow Vaughn’s vehicle was also part of the operational routine of the trucking business. Smith testified that it was common practice to tow the vehicles of escort drivers on the return trip in order to save on gasoline and lessen the wear on the vehicles, and Vaughn testified that she always had her vehicle towed on the return trip, regardless of whether the truck driver was Smith or someone else.

Unlike the driver in AXA Global, who had completed his business and had set off for a personal destination, Smith was still en route to the Alma/Douglas area when the accident occurred. Because Smith had not deviated from his regular work pattern or operational routine that served to benefit Bennett, we find as a matter of law that his truck was being used in Bennett’s business at the time of the collision.The trial court, therefore, properly found that Smith was an “insured” under the Liberty policy and granted summary judgment in favor of Axis.

Judgment affirmed.

BARNES, C.J., and PHIPPS, J., concur.

Merlino v. City of Atlanta, 283 Ga. 186, 657 S.E.2d 859 (2008).

Lau’s Corp. v. Haskins, 261 Ga. 491, 495(4), 405 S.E.2d 474 (1991).

See Carolina Casualty Ins. Co. v. Underwriters Ins. Co., 569 F.2d 304, 314 (5th Cir.1978); Schroeder v. Ga. Farm Bureau Mut. Ins. Co., 211 Ga.App. 302, 304(1), 439 S.E.2d 18 (1993) (“Where the language fixing the extent of the liability of the insurer is unambiguous and but one reasonable construction is possible, the court must expound the contract as made.”) (citations and punctuation omitted).

Hot Shot Express v. Assicurazioni Generali, S.P.A., 252 Ga.App. 372, 375, 556 S.E.2d 475 (2001).

251 Ga.App. 543, 554 S.E.2d 755 (2001).

Id. at 544, 554 S.E.2d 755.

Id.

Hot Shot, supra at 375, 556 S.E.2d 475.