United States District Court for the Eastern District of North Carolina, Western Division

October 31, 2022, Decided; October 31, 2022, Filed

NO. 5:22-CV-218-FL

Reporter

2022 U.S. Dist. LEXIS 197807 *; 2022 WL 16550316

ESTATE OF MADISON ROSE MERGL by and through David Mergl, Administrator, Plaintiff, v. TIFFANY VICTORIA LEE, a Maryland Resident; LARRY BEDDINGFIELD; LARRY BEDDINGFIELD & SONS TRUCKING, a North Carolina sole proprietorship; BUTTERBALL LLC, North Carolina limited liability corporation; KENNEDY BROTHERS LOGISITICS, INC., a North Carolina Corporation; and KENNEDY BROTHERS, INC., a North Carolina Corporation, Defendants.

Core Terms

removal, preemption, preempted, brokers, supplemental jurisdiction, attorney’s fees, district court, federal court, state law, joined, federal jurisdiction, plaintiff’s claim, preemption clause, federal question, cause of action, transportation

Counsel:  [*1] For Estate of Madison Rose Mergl, by and through David Mergl, Administrator, Plaintiff: Eric Laurence Doggett, LEAD ATTORNEY, Strickland Law, Goldsboro, NC.

For Tiffany Victoria Lee, a Maryland Resident, Defendant: Samuel H. MacRae, LEAD ATTORNEY, MacRae Law Firm, PLLC, Wilmington, NC.

For Larry Beddingfield, Larry Beddingfield & Sons Trucking, a North Carolina sole proprietorship, Defendants: Christopher M. Kelly, LEAD ATTORNEY, Gallivan, White & Boyd, P.A., Charlotte, NC.

For Butterball LLC, North Carolina limited liability corporation, Defendant: Claude Rob Wilson, LEAD ATTORNEY, Hedrick Gardner Kincheloe & Garofalo LLP, Charlotte, NC; F. Marshall Wall, LEAD ATTORNEY, Cranfill Sumner & Hartzog LLP, Raleigh, NC; James C. Thornton, LEAD ATTORNEY, Cranfill Sumner & Hartzog LLP, Raleigh, NC; Preston William Rollero, Brown Law LLP, Raleigh, NC.

For Kennedy Brothers Logistics, Inc., a North Carolina Corporation, Defendant, Cross Claimant: Pardis Camarda, Rountree Losee LLP, Wilmington, NC; Geoffrey A. Losee, Rountree Losee LLP, Wilmington, NC.

For Kennedy Brothers, Inc., a North Carolina Corporation, Defendant, Cross Claimant: Elizabeth Hayes Overmann, McAngus Goudelock & Courie, PLLC, Raleigh, [*2]  NC.

For Larry Beddingfield, Cross Defendant: Christopher M. Kelly, LEAD ATTORNEY, Gallivan, White & Boyd, P.A., Charlotte, NC.

For Larry Beddingfield & Sons Trucking, a North Carolina sole proprietorship, Cross Defendant: Christopher M. Kelly, LEAD ATTORNEY, Gallivan, White & Boyd, P.A., Charlotte, NC.

Judges: LOUISE W. FLANAGAN, United States District Judge.

Opinion by: LOUISE W. FLANAGAN

Opinion

ORDER

This matter is before the court on plaintiff’s motion to remand. (DE 28). The issues raised have been briefed fully, and in this posture, are ripe for ruling. For the following reasons, plaintiff’s motion to remand is granted.

STATEMENT OF THE CASE

Plaintiff initiated this tort action in the Superior Court Division for Wayne County, North Carolina March 9, 2022. The dispute arises out of a collision that occurred between a motor vehicle driven by defendant Tiffany Victoria Lee (“Lee”) and a commercial tractor-trailer driven by defendant Larry Beddingfield (“Beddingfield”). Plaintiff asserts personal injury and wrongful death claims against all defendants under state law.¹

Defendant Kennedy Brothers Logistics, Inc. (“KBL”) removed the action to this [*3]  court May 31, 2022, asserting that the court has original jurisdiction over plaintiff’s claims against it as they are preempted by the Federal Aviation Administration Authorization Act (“FAAAA”). The notice provides that defendants Kennedy Brothers, Inc., Beddingfield, and Butterball, LLC (“Butterball”) joined in removal, but defendant Lee did not.

Plaintiff thereafter filed the instant motion to remand the case for failure to obtain the timely consent of defendant Lee. Plaintiff also requests that the court require KBL to pay reasonable attorneys’ fees pursuant to 28 U.S.C. § 1447. Defendant KBL responded in opposition, and plaintiff replied.

STATEMENT OF FACTS

Defendant KBL is an authorized broker certified by the United States Department of Transportation, and in that capacity brokered the weekly transportation of defendant Butterball’s poultry product by defendant Beddingfield from Mount Olive, North Carolina to Pageland, South Carolina. (Compl. (DE 1-2) ¶¶ 113-14). On one such trip, driving westbound along Highway 55 at 12:48 a.m. on March 13, 2020, defendant Beddingfield in a commercial tractor-trailer struck a vehicle driven by defendant Lee. (Id. ¶¶ 11, 13, 32). The force of the impact caused [*4]  defendant Lee’s vehicle to travel over 150 feet and overturn. (Id. ¶ 33). Plaintiff’s decedent was ejected from defendant Lee’s vehicle, and died at the scene of the collision as a result of the injuries she sustained. (Id. ¶¶ 34-35).

COURT’S DISCUSSION

A. Motion to Remand

1. Standard of Review

In any case removed from state court, “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).² “The burden of establishing federal jurisdiction is placed upon the party seeking removal.” Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). “Because removal jurisdiction raises significant federalism concerns, [the court] must strictly construe removal jurisdiction.” Id. “If federal jurisdiction is doubtful, a remand is necessary.” Id.; see Palisades Collections LLC v. Shorts, 552 F.3d 327, 336 (4th Cir. 2008) (recognizing the court’s “duty to construe removal jurisdiction strictly and resolve doubts in favor of remand”).

2. Analysis

It is undisputed that defendant KBL did not obtain unanimous consent from co-defendants for removal. Plaintiff argues that under 28 U.S.C. § 1446(b) removal is thus improper, and remand required. Defendant KBL contends 28 U.S.C. § 1441(c), and not 28 U.S.C. § 1446(b), applies, and under 28 U.S.C. § 1441(c) it is not obligated to obtain consent from the other defendants.

“Section 1446 of Title [*5]  28 describes the appropriate removal procedure to invoke federal jurisdiction and requires the defendant seeking removal to file a timely notice of removal stating the grounds for removal with the appropriate federal district court.” Barbour v. In’l Union, 640 F.3d 599, 605 (4th Cir. 2011) (en banc), abrogated on other grounds by 28 U.S.C. § 1446(b)(2)(B). “The Supreme Court has construed [§ 1446(b)] to include a ‘unanimity requirement,’ such that all defendants must consent to removal.” Mayo v. Bd. of Educ. of Prince George’s Cty., 713 F.3d 735, 741 (4th Cir. 2013). Thus, under § 1446(b), if any defendant properly joined and served does not consent to removal, the action cannot be removed, and remand is required. See id.

28 U.S.C. § 1441(c) creates an exception to the unanimity requirement, providing:

(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).

28 U.S.C. § 1441(c). “Only defendants against whom a claim described in paragraph (1)(A) has been asserted are required to join in or consent to the removal under paragraph (1).” 28 U.S.C. § 1441(c)(2). Thus, under § 1441(c), where a [*6]  claim under federal question jurisdiction, as described under subparagraph (A), is joined with a claim not within the federal court’s jurisdiction, as described under (B), only those defendants against whom a claim under federal question jurisdiction is asserted need join in the removal. 28 U.S.C. § 1441(c)(1). Thereafter, pursuant to § 1441(c)(2), the court must sever and remand the claims over which the court lacks jurisdiction. 28 U.S.C. § 1441(c)(2).

a. Federal Question Jurisdiction Under 28 U.S.C. § 1441(c)(1)(A)

In its notice of removal, defendant KBL contends plaintiff’s claims against it are preempted by the FAAAA and so arise under federal law, thereby satisfying 28 U.S.C. § 1441(c)(1)(A). The court disagrees.

The presence or absence of federal-question jurisdiction “is governed by the well-pleaded complaint rule, which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff’s properly pleaded complaint.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S. Ct. 2425, 96 L. Ed. 2d 318 (1987). The well-pleaded complaint rule “makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law.” Id. “[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, [*7]  and even if both parties concede that the federal defense is the only question truly at issue.” Id. at 393.

“There does exist, however, an independent corollary to the well-pleaded complaint rule, known as the complete pre-emption doctrine.” Id. The complete preemption doctrine is triggered when “the pre-emptive force of a statute is so extraordinary that it converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.” Id. “Unlike ordinary preemption, which does not create federal subject matter jurisdiction, complete preemption has the effect of transforming a state-law cause of action into one arising under federal law because Congress has occupied the field so thoroughly as to leave no room for state-law causes of action at all.” Johnson v. Am. Towers, LLC, 781 F.3d 693, 702 (4th Cir. 2015); Caterpillar, 482 U.S. at 392 (“Once an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law.”).

“[C]omplete preemption only applies in a very narrow range of cases.” Johnson v. Am. Towers, LLC, 781 F.3d 693, 701 (4th Cir. 2015). Its limited applicability is evidenced by the fact that the Supreme Court has found only three statutes to have the [*8]  requisite extraordinary preemptive force to support complete preemption, none of them applicable here. See id.; Marcus v. AT&T Corp., 138 F.3d 46, 54 (2d Cir. 1998) (listing the three areas in which the Supreme Court has applied the complete preemption doctrine). For the complete preemption doctrine to apply, Congress must “clearly manifest[] an intent to make causes of action . . . removable to federal court.” Johnson, 781 F.3d at 701.

“[T]he sine qua non of complete preemption is a pre-existing federal cause of action that can be brought in the district courts.” Id. at 702. “Indeed, the Supreme Court has emphasized that for the purposes of complete preemption, the preempting statute must provide ‘the exclusive cause of action’ for claims in the area that the statute preempts.” Id. (quoting Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 9, 123 S. Ct. 2058, 156 L. Ed. 2d 1 (2003) (emphasis in original)). For instance, in finding that § 502 of the Employment Retirement Income Security Act of 1974 (“ERISA”) completely preempted state law, the Supreme Court of the United States found it significant that the Act “set forth a comprehensive civil enforcement scheme” as “[t]he policy choices reflected in the inclusion of certain remedies and the exclusion of others under the federal scheme would be completely undermined if [participants] were free to obtain remedies under state law that Congress rejected in ERISA.” Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54, 107 S. Ct. 1549, 95 L. Ed. 2d 39 (1987) (“The [*9]  six carefully integrated civil enforcement provisions found in § 502(a) of the statute as finally enacted . . . provide strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly.” (emphasis in original)).

Turning to the statutory language, which “necessarily contains the best evidence of Congress’ pre-emptive intent,” Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 260, 133 S. Ct. 1769, 185 L. Ed. 2d 909 (2013), the FAAAA includes an express preemption clause relevant to brokers such as KBL,³ providing:

(1) General rule.—Except as provided in paragraphs (2) and (3), a State, political subdivision of a State, or political authority of 2 or more States 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 . . . , broker, or freight forwarder with respect to the transportation of property

49 U.S.C. § 14501(c)(1) (hereinafter the “FAAAA preemption clause”).

The language of the FAAAA preemption clause tracks the preemption clause included in the Airline Deregulation Act of 1978 (“ADA”), with “one conspicuous alteration—the addition of the words ‘with respect to the transportation of property.'” Dan’s City Used Cars, Inc., 569 U.S. at 261. “That phrase massively limits the scope of preemption ordered by the FAAAA.” Id. [*10]  Further limiting its scope, the FAAAA preemption clause must also be read in conjunction with its statutory exception, which instructs that it “shall not restrict the safety regulatory authority of a State with respect to motor vehicles” (hereinafter, “the safety exception”). 49 U.S.C. § 14501(c)(2)(A).

Considering these limitations, the statutory text of the FAAAA contains no clear Congressional intent to engulf the entire area of personal injury and wrongful death claims involving transportation brokers and motor carriers. The absence of such language “takes on added significance in light of Congress’s failure to provide any federal remedy for persons injured by such conduct.” Hodges v. Delta Airlines, Inc., 44 F.3d 334, 338 (5th Cir. 1995) (concluding the same with respect to the ADA). “It is difficult to believe that Congress would, without comment, remove all means of judicial recourse for those injured by illegal conduct.” Id. In sum, Congress has not clearly manifested an intent to make personal injury and wrongful death claims against brokers removable to federal court. See Johnson, 781 F.3d at 701. Accordingly, plaintiff’s claims are not completely preempted.

In arguing to the contrary, defendant KBL relies upon Gillum v. High Standard, LLC, No. SA-19-CV-1378-XR, 2020 U.S. Dist. LEXIS 14820, 2020 WL 444371 (W.D. Tex. Jan. 27, 2020), a removal case in which the [*11]  court held that the FAAAA completely preempts negligent brokering claims. Gillum’s analysis, however, fails to distinguish between complete preemption and ordinary preemption, and draws upon ordinary preemption principles in its complete preemption analysis. Tellingly, the two Supreme Court cases on which it relies when outlining the complete preemption doctrine, Rowe v. New Hampshire Motor Transp. Ass’n, 552 U.S. 364, 370, 128 S. Ct. 989, 169 L. Ed. 2d 933 (2008) and Dan’s City Used Cars, Inc., 569 U.S. at 261, dealt with ordinary preemption in actions that were originally filed in federal court. Gillum, 2020 U.S. Dist. LEXIS 14820, 2020 WL 444371, at *2-3. As complete preemption is a “jurisdictional doctrine” and “[o]rdinary preemption simply declares the primacy of federal law,” the court declines to follow Gillum’s reliance on ordinary preemption principles. Johnson, 781 F.3d at 702 (“Complete preemption and ordinary preemption on the merits are not as close kin jurisprudentially as their names suggest.”).⁴

Pursuant to the foregoing, plaintiff’s claims against defendant KBL are not completely preempted by the FAAAA for the purposes of federal question jurisdiction.⁵ As defendant KBL thus fails to satisfy 28 U.S.C. § 1441(c)(1)(A), 28 U.S.C. § 1446 is instead applicable, and defendant was required to secure the consent of all [*12]  other defendants to remove this case. Because it did not, remand is required.

b. Supplemental Jurisdiction Under 28 U.S.C. § 1441(c)(1)(B)

In addition, and in the alternative, defendant KBL has not demonstrated that a further requirement under § 1441(c)(1)(B) has been satisfied, namely that all remaining claims are not “within the original or supplemental jurisdiction of the district court.” 28 U.S.C. § 1441(c)(1)(B).

Federal courts can exercise “supplemental jurisdiction over all claims that are so related to claims in the action within [the court’s] original jurisdiction that they form part of the same case or controversy.” 28 U.S.C. § 1367(a). Claims form part of the same case or controversy when they “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.” Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 349, 108 S. Ct. 614, 98 L. Ed. 2d 720 (1988).

Here, plaintiff’s claims all arise out of the same vehicular collision, and liability of each defendant hinges in the first instance upon the determination of liability as to defendants Lee and Beddingfield. Defendant KBL does not contend otherwise, asserting that the “matter should not be severed nor any portion of it remanded as it must be considered by the Court in its entirety.” (Def. KBL’s Resp. (DE 34) at [*13]  12). Accordingly, in addition to lack of complete preemption under the FAAAA, removal under § 1441(c) is independently foreclosed because the remaining state law claims asserted would come within the court’s supplemental jurisdiction. 28 U.S.C. § 1441(c)(1)(B); see, e.g., Kovalev v. Callahan Ward 12th St. LLC, 548 F. Supp. 3d 498, 503 (E.D. Pa. 2021) (joining “a majority of courts which have found that the Jurisdiction and Venue Clarification Act foreclosed the possibility of removal under § 1441(c) when state law claims would otherwise come within the court’s supplemental jurisdiction”).

In sum, where 28 U.S.C. § 1441(c) is inapplicable and defendant KBL did not obtain unanimous consent as required by 28 U.S.C. § 1446(b), its removal was procedurally defective, and remand is required.

B. Motion for Attorneys’ Fees

“An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c).

Absent unusual circumstances, courts may award attorney’s fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal. Conversely, when an objectively reasonable basis exists, fees should be denied. In applying this rule, district courts retain discretion to consider whether unusual circumstances warrant a departure from the rule in a given [*14]  case. For instance, a plaintiff’s delay in seeking remand or failure to disclose facts necessary to determine jurisdiction may affect the decision to award attorney’s fees. When a court exercises its discretion in this manner, however, its reasons for departing from the general rule should be faithful to the purposes of awarding fees under § 1447(c).

Martin v. Franklin Capital Corp., 546 U.S. 132, 141, 126 S. Ct. 704, 163 L. Ed. 2d 547 (2005).

In addressing a request for attorney’s fees in the context of remand, the United States Court of Appeals for the Fourth Circuit has looked to whether removing defendants “provided detailed arguments and ‘comprehensively briefed the issues arising from their removal, including with reference to a wide range of case law.'” Common Cause v. Lewis, 956 F.3d 246, 257 (4th Cir. 2020) (quoting Common Cause v. Lewis, 358 F. Supp. 3d 505, 515 (E.D.N.C. 2019)). The Fourth Circuit also has looked to whether “[w]ithin our Circuit, indeed within North Carolina, there is precedent for a defendant to remove . . . litigation to federal court under the” basis advanced in the notice of removal. Id.

There is some case precedent supporting defendant KBL’s contention that 28 U.S.C. § 1441(c)(1) is applicable to the instant action. See, e.g., Gillum, 2020 U.S. Dist. LEXIS 14820, 2020 WL 444371, at *5-6 (supporting that defendant satisfied 28 U.S.C. § 1441(c)(1)(A)); Moore v. City of Phila., No. 12-cv-3823, 2012 U.S. Dist. LEXIS 122786, 2012 WL 3731818 (E.D. Pa. Aug. 29, 2012) (supporting that defendant satisfied 28 U.S.C. § 1441(c)(1)(B)). While the court declines to adopt the reasoning of that precedent for the reasons set [*15]  forth herein, where the United States Court of Appeals for the Fourth Circuit has not yet weighed in on the issues, the court cannot say defendant KBL “lacked an objectively reasonable basis for seeking removal” based upon them. Martin, 546 U.S. at 141.

CONCLUSION

Pursuant to the foregoing, plaintiff’s motion to remand, (DE 28), is GRANTED. This case is REMANDED pursuant to 28 U.S.C. § 1447(c) to the General Court of Justice, Superior Court Division for the County of Wayne, North Carolina, for further proceedings. The clerk is DIRECTED to close this case and to transmit a certified copy of this order to the clerk of the General Court of Justice, Superior Court Division, Wayne County, North Carolina, and to file in this case a copy of the clerk’s transmittal letter with certified copy of the instant order.

SO ORDERED, this the 31st day of October, 2022.

/s/ Louise W. Flanagan

LOUISE W. FLANAGAN

United States District Judge

End of Document

---

¹ A motion to remand also is pending in the related case The Estate of Ann Eva Wray et al. v. Kennedy Brothers Logistics, Inc. et al., E.D.N.C. 5:22-CV-70-FL arising out of the same vehicular collision. That motion, raising similar arguments, is addressed by separate order.

² Internal citations and quotation marks are omitted from all citations unless otherwise specified.

³ Based on the allegations in the complaint, KBL is a broker governed by the FAAAA. (See Compl. (DE 1-2) ¶¶ 111-114); 49 U.S.C. § 13102(2) (defining a broker as one who “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”).

⁴ Gillum’s holding also is contrary to decisions by other district courts in this circuit that have considered whether the FAAAA preempts common-law negligent selection claims. See, e.g., Taylor v. Sethmar Transportation, Inc., No. 2:19-CV-00770, 2021 U.S. Dist. LEXIS 196230, 2021 WL 4751419, at *16 (S.D.W. Va. Oct. 12, 2021) (not preempted under safety exception); Grant v. Lowe’s Home Ctrs., LLC, No. 5:20-02278-MGL, 2021 U.S. Dist. LEXIS 16332, 2021 WL 288372, at *3-4 (D.S.C. Jan. 28, 2021) (not preempted under safety exception); Vitek v. Freightquote.com, Inc., No. JKB-20-274, 2020 U.S. Dist. LEXIS 73544, 2020 WL 1986427, at *2-4 (D. Md. Apr. 27, 2020) (not preempted because not “related to” broker services); Gilley v. C.H. Robinson Worldwide, Inc., No. 1:18-cv-00536, 2019 U.S. Dist. LEXIS 52549, 2019 WL 1410902, at *3-5 (S.D. W. Va. Mar. 28, 2019) (not preempted because not “related to” broker services, and under safety exception); Mann v. C.H. Robinson Worldwide, Inc., No. 7:16-cv-00102, 2017 U.S. Dist. LEXIS 117503, 2017 WL 3191516, at *5-8 (W.D. Va. July 27, 2017) (not preempted because not “related to” broker services, and under safety exception).

⁵ The court does not reach the question of whether the FAAAA preemption clause may still be asserted as a defense to some or all of plaintiff’s claims. See Johnson, 781 F.3d at 702 (distinguishing between complete preemption and ordinary preemption).

United States District Court for the Eastern District of Pennsylvania

October 24, 2022, Decided; October 24, 2022, Filed

Civil No. 5:21-cv-04062-JMG

Reporter

2022 U.S. Dist. LEXIS 193305 *; 2022 WL 14228982

VICTOR HUGO SILVESTRE GARCIA, Plaintiff, v. S&F LOGISTICS, et al., Defendants.

Prior History: Garcia v. S&F Logistics, 2022 U.S. Dist. LEXIS 116926, 2022 WL 2392029 (E.D. Pa., July 1, 2022)

Core Terms

discovery, depositions, sanctions, responses, orders, willful, meritoriousness, alleges, factors, default judgment, nonappearance, plaintiff’s claim, tractor trailer, violations, default, personal responsibility, dilatoriness, supplemental, courts, weighs

Counsel:  [*1] For Victor Hugo Silvestre Garcia, Plaintiff: EDWARD CIARIMBOLI, LEAD ATTORNEY, FELLERMAN & CIARIMBOLI, KINGSTON, PA; MALORIE J. PEACOCK, Cowen Rodriguez Peacock, San Antonio, TX; MICHAEL R. COWAN, ROBERT M. DISQUE, III, COWEN RODRIGUEZ PEACOCK, SAN ANTONIO, TX.

For S&F Logistics, LLC, John McCollum, Defendants: Paige L Baldwin, ROBERT JAMES COSGROVE, Wade Clark Mulcahy, Philadelphia, PA.

For ARGONAUT INSURANCE COMPANY, Movant: DANIEL DAVID KREBBS, MARSHALL DENNEHEY WARNER COLEMAN & GOGGIN, PHILADELPHIA, PA.

Judges: JOHN M. GALLAGHER, United States District Court Judge.

Opinion by: JOHN M. GALLAGHER

Opinion

MEMORANDUM OPINION

GALLAGHER, J.

I. OVERVIEW

Plaintiff moved for discovery sanctions due to Defendants’ failure to comply with the Court’s discovery orders. Defendants John McCollum and S&F Logistics, LLC. have failed to appear for depositions, never supplemented discovery responses, and have been uncooperative with their own counsel for months of this litigation. The Court finds sanctions are warranted. Default judgment on liability is entered against Defendants.

II. BACKGROUND

Plaintiff Victor Hugo Silvestre Garcia alleges claims of negligence arising from a tractor trailer accident. Plaintiff brings suit against Defendants [*2]  John McCollum, S&F Logistics, LLC., and John Doe(s).¹ Plaintiff submits Defendant S&F Logistics employed Defendant McCollum to operate tractor trailers at the time of the accident.

Plaintiff contends he drove a motor vehicle north on I-76. ECF No. 1-1 ¶ 39. Defendant McCollum drove a tractor trailer on the same stretch of I-76 as Plaintiff. Id. ¶ 38. Plaintiff submits he “acted in a safe, prudent, and reasonable manner” while driving down the highway. Id. ¶ 44. On the other hand, Plaintiff alleges Defendant McCollum “abruptly and without warning rearended” him as he drove. Id. ¶ 39. Plaintiff contends the accident resulted from Defendant McCollum’s “reckless, car[e]less, and negligent” operation of the tractor trailer, such that he “left such a small distance between himself and the car in front of him that he could not stop before colliding with Plaintiff’s vehicle.” Id. ¶ 42. At the time of the collision, Defendant McCollum acted under the supervision and employment of Defendant S&F Logistics and within the scope of his employment. Id. ¶ 15, 16. Defendant S&F Logistics also owned the tractor trailer driven by Defendant McCollum in the collision. Id. ¶¶ 14, 18.

As a result of the tractor [*3]  trailer accident, Plaintiff alleges he “suffered permanent injuries . . . [such as]: [d]isc herniations in the cervical spine with radiculopathy ultimately requiring a cervical fusion surgery; disc herniations in the lumbar spine; disc protrusions in the thoracic spine; [and] bilateral intrascapular pain[.]” Id. ¶ 43.

Plaintiff brings three claims against Defendants. First, Plaintiff alleges Defendant S&F Logistics is vicariously liable and acted “negligen[tly], careless[ly], and reckless[ly]” concerning the actions of their employee, Defendant McCollum.² Next, Plaintiff claims Defendant S&F Logistics negligently and recklessly hired, supervised, and retained Defendant McCollum. Id. at 14. Plaintiff alleges Defendant S&F Logistics is liable for Defendant McCollum’s actions because the accident took place within the course of Defendant McCollum’s employment.³ And Defendant S&F Logistics “knew or should have known that Mr. McCollum had an unsafe history of motor vehicle violations [] and criminal violations.” Id. ¶ 63. Lastly, Plaintiff alleges the two unknown broker and shipping entities negligently or recklessly hired, supervised, and retained Defendant S&F Logistics.⁴

The Parties began the discovery process in 2021. Plaintiff noticed the depositions of Defendant McCollum and a 30(b)(6) corporate representative of Defendant S&F Logistics for March 21, 2022. ECF No. 46 at 1. Neither Defendant McCollum nor Defendant S&F Logistics’ corporate representative attended their respective noticed deposition. Id.

On June 7, 2022, Plaintiff moved to compel the depositions of Defendant S&F Logistics and [*5]  Defendant McCollum. See ECF Nos. 32, 33. Plaintiff also moved to compel discovery responses from Defendants McCollum and S&F Logistics, including interrogatory responses and production responses and requests. See generally ECF No. 34. On June 22, 2022, this Court granted Plaintiff’s Motions to compel depositions and ordered Defendant McCollum and a corporate representative from Defendant S&F Logistics to be deposed within twenty-one (21) days. ECF No. 41. The Court also granted Plaintiff’s Motion to compel discovery responses and ordered Defendants to supplement their responses to Plaintiff’s requests for production of documents and interrogatories within twenty-one (21) days. Id.

In violation of this Court’s Order, Defendants failed to provide additional responses to Plaintiff’s discovery requests. Defendants McCollum and S&F Logistics also failed to appear for depositions—by the Court’s deadline and to this day.

Plaintiff then filed a Motion for Sanctions against Defendants.⁵ Plaintiff contends “Defendants’ multiple violations of the Court’s Order can only be considered willful.” ECF No. 46 at 3. Plaintiff also argues “Defendants’ conduct has prevented the disclosure of facts essential [*6]  to an adjudication on the merits, [so] Plaintiff would be unfairly prejudiced if he were required to proceed to trial.” Id. Therefore, Plaintiff requests the Court enter default judgment against Defendants McCollum and S&F Logistics. Id.

Counsel for Defendants do not dispute Defendant McCollum and a corporate representative of Defendant S&F Logistics failed to appear for depositions despite the Court’s Order. ECF No. 48 ¶ 14. Moreover, counsel for Defendants admit their “difficulties establishing and maintaining communication with both McCollum and a representative on behalf of S&F” since early March of 2022. Id. ¶ 13. Nevertheless, while counsel for Defendants acknowledge nonappearance for depositions is a “handicap[,]” they contend “it is . . . not a case-dispositive handicap.” Id. ¶ 21. Counsel for Defendants argue Defendants initially provided adequate information to Plaintiffs because Defendants “provided the insurance carrier with information and documentation detailing the incident.” Id. ¶ 14. So counsel for Defendants contends any prejudice resulting from Defendants’ nonappearance could be rectified by lesser sanctions than entering default judgment. More [*7]  specifically, Defendants contend the Court should preclude Defendants from contesting negligence liability because their violations of discovery orders “do[] not impede [Plaintiff] Garcia’s ability to establish the evidence necessary to provide Garcia’s allegations of causation and extent of his injuries.” Id. ¶ 26.

The Court held a telephone conference on September 7, 2022 to address Defendant McCollum and Defendant S&F Logistics’ failures to appear and supplement discovery. See ECF No. 50. Counsel for Defendants again acknowledged the difficulty of communicating with Defendant McCollum and representatives from Defendant S&F Logistics.

III. STANDARD

“Generally, trial courts have wide discretion in fashioning remedies, including sanctions, where appropriate in the event of discovery disputes or violations of orders.” McNulty v. Middle E. Forum, No. 19-5029, 2020 U.S. Dist. LEXIS 244356, 2020 WL 7769737, at *2 (E.D. Pa. Dec. 30, 2020) (citation omitted). Where a party “fails to obey an order to provide or permit discovery,” a court “may find a party in civil contempt and impose sanctions.” FED. R. CIV. P. 37(b)(2)(A)(i)-(vii); Grant Heilman Photography, Inc. v. Pearson Educ., Inc., No. 11-4649, 2018 U.S. Dist. LEXIS 88835 at *6 (E.D. Pa. May 29, 2018).

A court may issue sanctions ranging from rendering a default judgment to “prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence.” [*8]  FED. R. CIV. P. 37(b)(2)(A)(i)-(vii). See also Wolfson-Verrichia Group v. Metro Commer. Real Estate, No. 508-cv-4997, 2012 U.S. Dist. LEXIS 203807 at *13 (E.D. Pa. Jan. 9, 2012) (“[a]ppropriate sanctions for violation of a court order or Rule 26 disclosure obligations may include staying further proceedings until the order is obeyed, prohibiting the disobedient party from introducing certain evidence, directing that certain facts be taken as established for purposes of the action, or even striking the pleadings in whole or in part.”). “The choice of an appropriate sanction generally is committed to the sound discretion of the district court.” DiGregorio v. First Rediscount Corp., 506 F.2d 781, 788 (3d. Cir. 1974).

In deciding whether sanctions precluding a party of their right to proceed with or defend against a claim are warranted, the U.S. Court of Appeals for the Third Circuit instructs district courts to consider the following factors: “(1) the extent of the party’s personal responsibility; (2) the prejudice to the adversary; (3) whether there has been a history of dilatoriness; (4) whether the conduct of the party or attorney was willful or in bad faith; (5) the effectiveness of alternative sanctions; and (6) the meritoriousness of the claim or defense.” Ramada Worldwide, Inc. v. Anita Nguyen, LLC, No. 11-921, 2012 U.S. Dist. LEXIS 53855 at *6-7 (D. N.J. Jan. 10, 2012) (citing Poulis v. State Farm & Casualty Co., 747 F.2d 863, 868 (3d Cir. 1984)). See also Royette v. Russell, 2022 U.S. Dist. LEXIS 59295 at *6 (D. V.I. Jan. 21, 2022). And dismissal, while available, “must be a sanction of last, not first, resort.” Rawls v. Gibbs, 741 F. App’x 108, 109 (3d Cir. 2018) (internal quotation marks and citation omitted).

IV. DISCUSSION [*9] 

In their Motion for Sanctions, Plaintiff requests the Court strike Defendants’ pleadings in whole and render default judgment against them because Defendants failed to comply with discovery obligations. Specifically, Plaintiff finds each Defendant: (1) violated the Court’s Order compelling additional discovery responses by July 13, 2022; (2) failed to appear for properly noticed depositions; and (3) failed to comply with the Court’s Order mandating Defendants’ appear within twenty-one (21) days of the signing of the Order. ECF No. 46-1 at 3. Plaintiff finds these violations are willful. Id. Plaintiff also asserts Defendants’ nonappearance and failure to supplement discovery prevented the disclosure of facts essential for adjudication on the merits—resulting in unfair prejudice to the Plaintiff. Id.

Counsel for Defendants rebuts that although Defendants did not show up for depositions, they previously informed Plaintiff of insurance carrier information detailing the incident. ECF No. 48 ¶ 14. So, although counsel for Defendants have had difficulties establishing and maintaining communication with both Defendants, they argue Defendants provided Plaintiff with sufficient information to [*10]  prevent prejudice. Id. ¶¶ 14-15. Therefore, Defendants contend a lesser sanction than default would suffice. As an alternative to default, Defendants suggest precluding Defendants from contesting negligence liability. Id. ¶ 26.

In Poulis v. State Farm & Casualty Co., the U.S. Court of Appeals for the Third Circuit put forward factors district courts shall consider when deciding whether sanctions precluding a party of their right to proceed with or defend against a claim are warranted. 747 F.2d 863, 868 (3d Cir. 1984). Thus, to consider whether sanctions are appropriate against Defendants, this Court must address the following factors: “(1) the extent of the party’s personal responsibility; (2) the prejudice to the adversary; (3) whether there has been a history of dilatoriness; (4) whether the conduct of the party or attorney was willful or in bad faith; (5) the effectiveness of alternative sanctions; and (6) the meritoriousness of the claim or defense.” Ramada Worldwide, Inc. v. Anita Nguyen, LLC, No. 11-921, 2012 U.S. Dist. LEXIS 53855 at *6-7 (D. N.J. Jan. 10, 2012) (citing Poulis, 747 F.2d at 868). But the U.S. Court of Appeals for the Third Circuit has found “it is not necessary that all of the [Poulis] factors point toward a default.” Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912, 919 (3d Cir. 1992). The Court considers these factors in seriatim.

“The first factor asks whether the party himself, as opposed to the party’s counsel, bears personal [*11]  responsibility for the action or inaction.” Cox v. UPS, 753 Fed. Appx. 103, 105 (3d Cir. 2018) (internal quotation marks and citation omitted). Here, the parties are personally responsible for their nonappearance and lack of communication. While counsel has promptly acted throughout the course of this litigation, the parties themselves have been consistently absent for over six months. Counsel for Defendants admit difficulties in establishing and maintaining communication since March 8, 2022. And Defendants present no evidence anyone other than the Defendants are responsible. Thus, this factor weighs in favor of Plaintiff’s request for default.

As to the second factor, “[p]rejudice . . . includes deprivation of information through noncooperation with discovery, and costs expended obtaining court orders to force compliance with discovery.” Adams v. Trs. of N.J. Brewery Emps.’ Pension Tr. Fund, 29 F.3d 863, 874 (3d Cir. 1994) (citation omitted). “[P]rejudice is not limited to ‘irremediable’ or ‘irreparable’ harm.” Briscoe v. Klaus, 538 F.3d 252, 259 (3d Cir. 2008) (citations omitted). “It also includes ‘the burden imposed by impending a party’s ability to prepare effectively a full and complete trial strategy.” Id. (citing Ware v. Rodale Press, Inc., 322 F.3d 218, 222 (3d Cir. 2003)). As noted above, Plaintiffs argue they have been deprived of necessary information. It is likely Defendants absence has prejudiced Plaintiff, as [*12]  Defendants have not appeared for depositions, nor have they supplemented responses to Plaintiff’s request of production and interrogations. See Beale v. Wetzel, No. CV 13-15 ERIE, 2016 U.S. Dist. LEXIS 153920, 2016 WL 6573854, at *2 (W.D. Pa. Nov. 7, 2016) (finding a plaintiff had been prejudiced by their inability to depose a defendant in the action). Defendants’ absence particularly impact Plaintiff’s claims of negligence, vicarious liability, and negligent hiring because Defendant McCollum allegedly caused the collision at issue while working for Defendant S&F Logistics. Without Defendants additional information to support Plaintiff’s claims and inform their trial strategy, Plaintiff faces prejudice. This factor also weighs in favor of Plaintiff.

Turning to the third factor, to engage in “a history of dilatoriness” consists of “[e]xtensive or repeated delay or delinquency…such as consistent non-response to interrogatories, or consistent tardiness in complying with court orders.” Adams v. Trustees of the N.J. Brewery Employees’ Pension Trust Fund, 29 F.3d 863, 874 (3d Cir. 1994). Defendants have been consistently absent and hard-to-reach since March 8, 2022. They missed noticed depositions in March of 2022. The Court then compelled their appearance at depositions and their production of supplemental discovery responses. Defendants violated the Court’s Orders by failing to appear at their [*13]  depositions and failing to supplement their discovery within the Court’s deadlines. It is significant defense counsel recognizes their clients’ lack of responsiveness. See Drozd v. Padron, No. 3:13-CV-2523, 2015 U.S. Dist. LEXIS 14186, 2015 WL 507167, at *7 (M.D. Pa. Feb. 6, 2015). And although defense counsel attempts to limit Defendants’ violations to their deposition nonappearances, Defendants have consistently refused to effectively communicate with counsel, failed to appear at depositions, and violated the Court’s orders compelling both their attendance at depositions and supplemental responses. See id. (finding consistent refusal to communicate with counsel and failure to appear at scheduled depositions a sufficient history of dilatoriness). This factor weighs in favor of Plaintiff.

Analyzing the fourth factor, where a party’s conduct lacks a “reasonable excuse,” courts consider the conduct willful. See Ramada Worldwide, Inc., 2012 U.S. Dist. LEXIS 53855 at *9 (finding willfulness where “[t]here is no evidence to suggest that the failure to produce discovery or comply with court orders resulted from inadvertence, neglect, or mistake.”); Harrington v. All Am. Plazas, Inc., No. 08-3848, 2010 U.S. Dist. LEXIS 67583 at *9-10 (D. N.J. July 7, 2010) (“Courts find willfulness and bad faith where no reasonable excuse for the conduct in question exists.”). Defendants have not presented evidence showing their nonappearance [*14]  and failure to fulfill the Court’s Orders occurred for any reason other than their own intent. Nothing has been offered to explain their conduct. Cf. Poulis, 747 F.2d at 868-69 (finding plaintiff’s counsel’s behavior was not willful because, although he missed deadlines, no evidence suggested his delays occurred for any reason other than his and his wife’s poor health); Emerson v. Thiel Coll., 296 F.3d 184, 191 (3d Cir. 2002) (finding bad faith because the conduct went beyond mere negligence or inadvertence). It is likely Defendants act willfully as they are uncooperative with their own counsel and have failed to appear for numerous months. This factor also weighs in Plaintiff’s favor.

The fifth factor requires the court to evaluate the effectiveness of alternative sanctions. Poulis, 747 F.2d at 869. “Where an attorney has caused the delay and noncompliance in proceedings, it would not be justified to dismiss an action.” Weinhofer v. Weis Markets, Inc., No. 15-CV-05002, 2016 U.S. Dist. LEXIS 179640, 2016 WL 7474480, at *7 (E.D. Pa. Dec. 29, 2016) (citing Emerson, 296 F.3d at 191). Here, Defendants fail to appear for depositions nor provide supplemental discovery responses despite the Court’s Orders. Their behavior has persisted for numerous months and continues despite a quickly approaching trial date. The Court has no reason to expect a change in Defendants conduct moving forward. Moreover, Defendants fail to maintain communication [*15]  with their own counsel. The personal failures of the parties—not their counsel—prevent Plaintiff from accessing information necessary to prove their claims. Therefore, the Court finds the most effective sanction is to preclude Defendants from contesting liability as to the claims against them.

Lastly, under Poulis, a claim has merit when the allegations in the pleadings “would support recovery by the plaintiff.” Poulis, 747 F.2d at 870. “The meritoriousness factor is neutral and not dispositive.” Weinhofer, 2016 U.S. Dist. LEXIS 179640, 2016 WL 7474480, at *7 (citing Emerson, 296 F.3d at 192). Plaintiffs have only made facially meritorious claims. It is difficult to address the sixth factor as the limited factual discovery offered by Defendants frustrates an assessment on the meritoriousness of Plaintiff’s claim their injuries were caused, in whole or in part, by Defendants’ negligence. See Harrington, 2010 U.S. Dist. LEXIS 67583 at *12 (declining “to address the sixth and final Poulis factor” where party’s “failure to defend itself properly in this action makes an evaluation of the merits impossible.”); see also Weinhofer, 2016 U.S. Dist. LEXIS 179640, 2016 WL 7474480, at *7 (E.D. Pa. Dec. 29, 2016) (failing to determine the meritoriousness of plaintiff’s claim based on the evidence on the record). So the Court is unable to ascertain whether or not Plaintiffs’ claims may be considered meritorious.

In sum, the Court’s analysis shows that [*16]  all but one Poulis factor weighs in Plaintiff’s favor. The factors that clearly favor Plaintiff are Defendants’ personal responsibility for their nonappearance, the prejudicial impact on Plaintiff, Defendants’ history of dilatoriness, Defendants’ willfulness, and the lack of alternative sanctions. The only factor that is not in favor of Plaintiff is the meritoriousness of Plaintiff’s claims at this time. “While ‘no single Poulis factor is dispositive,’ [the U.S. Court of Appeals for the Third Circuit] ha[s] made it clear that ‘not all of the Poulis factors need be satisfied in order to dismiss a complaint'” or enter default. Briscoe v. Klaus, 538 F.3d 252, 263 (3d Cir. 2008) (internal citations omitted). The Court finds five of six Poulis factors provide an adequate foundation to enter default on liability against Defendants.⁶

V. CONCLUSION

For the reasons discussed above, the Court concludes Plaintiff’s Motion for Sanctions (ECF No. 46) is properly granted in part. Pursuant to Federal Rule of Civil Procedure 37(b)(2)(A)(vi), default judgment on liability is entered against Defendants. The Court will separately issue a scheduling order regarding proceeding on the issue of damages under Federal Rule of Civil Procedure 55(b)(2). An appropriate order will be filed simultaneously with this action. BY THE COURT:

/s/ [*17]  John M. Gallagher

JOHN M. GALLAGHER

United States District Court Judge

ORDER

AND NOW, this 24th day of October, 2022, upon consideration of Plaintiff’s Motion for Sanctions (ECF No. 46), IT IS HEREBY ORDERED as follows:

1. Plaintiff’s Motion for Sanctions (ECF No. 46) is GRANTED IN PART. The Court enters default judgment on liability against Defendant John McCollum and Defendant S&F Logistics, LLC.

2. The Court will separately issue a scheduling order regarding proceeding on the issue of damages under Federal Rule of Civil Procedure 55(b)(2).

BY THE COURT:

/s/ John M. Gallagher

JOHN M. GALLAGHER

United States District Court Judge

End of Document

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¹ Plaintiff sues two John Does, designations of fictitious persons and/or entities acting as both the shipper and the broker of the load Defendant McCollum hauled at the time of the collision. ECF No. 1-1 ¶¶ 5, 6.

² Id. ¶ 57. Specifically, Plaintiff alleges Defendant S&F Logistics is vicariously liable for Defendant McCollum’s following actions, inter alia:

Failing [*4]  to maintain proper and adequate control of his Tractor Trailer; [f]ollowing too closely; [f]ailing to keep his eyes on the road at all times; . . . [f]ailing to have his Tractor Trailer under such control that it could be readily stopped, turned aside or the speed thereof slackened upon the appearance of danger; . . . [t]raveling at an excessive rate of speed under the circumstances; [v]iolating the applicable rules, regulations and laws pertaining to the safe and proper operation of motor vehicles and/or tractor trailers; . . . [f]ailing to timely and properly apply his brakes; . . . [v]iolating both the written and unwritten policies, rules, guidelines and regulations of S&F Logistics, LLC; . . . [and] driv[ing] in a fatigued condition.

Id.

³ Id. ¶ 16. Plaintiff further alleges Defendant S&F Logistics “negligen[tly], careless[ly], and/or reckless[ly]” employed Defendant McCollum by, inter alia: failing to properly train, monitor, and supervise its employees, including Mr. McCullum; continuing to employ Mr. McCollum despite a propensity to commit driving violations; and failing to provide any remedial steps concerning Mr. McCollum’s record of unsafe and reckless driving. Id. ¶ 65.

⁴ Id. at 18-25. At the time Plaintiff filed his Motion for Sanctions, the shipper and broker identities remain unknown. Plaintiff did not address the shipper and broker entities in their Motion for Sanctions. See ECF No. 46.

⁵ See generally ECF No. 46. The Court notes Plaintiff moves for sanctions concerning Defendant John McCollum and Defendant S&F Logistics. See supra note 4.

⁶ The Court notes “[a] consequence of the entry of a default judgment is that “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990) (citing 10 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2688 at 444 (2d ed. 1983)). “If the damages are not for a ‘sum certain or for a sum which can be computation be made certain,’ the ‘court may conduct such hearings or order such references as it deems necessary and proper.'” Id. (internal citations omitted).