CASES (2023)

Hoffman Logistics, Inc. v. Loup Logistics Co., LLC

United States District Court for the Southern District of Texas, Houston Division

August 24, 2023, Decided; August 24, 2023, Filed

CIVIL ACTION NO. H-23-1384

HOFFMAN LOGISTICS, INC., Plaintiff, v. LOUP LOGISTICS COMPANY, LLC, et al., Defendant.

Counsel: [*1] For Hoffman Logistics, Inc., a Florida corporation, Plaintiff: Hannah Elizabeth Taylor, LEAD ATTORNEY, Dana Keith Martin, Hill Rivkins, Houston, TX; Jessica Cappock, Mathis Law Group, Lakeland, FL.

For Loup Logistics Company, LLC, a foreign limited liability company formerly known as Union Pacific Railroad, Union Pacific Railroad Company, Defendants: Pamela C Hicks, LEAD ATTORNEY, Mary D. Borrego, Hicks Davis Wynn, Houston, TX.

For Southern Gulf Packaging & Logistics, LLC, a foreign limited liability company, Defendant: Charles M R Vethan, The Vethan Law Firm, Houston, TX.

Judges: Lee H. Rosenthal, United States District Judge.

Opinion by: Lee H. Rosenthal

Opinion

MEMORANDUM AND ORDER

Plaintiff, Hoffman Logistics Co., entered into a contract with Loup Logistics Co., LLC, to transport onions from Idaho to Texas. (Docket Entry No. 1 at 2). Loup issued a bill of lading to Hoffman and named Southern Gulf Packaging & Logistics, LLC as the transloader. (Id. at 3). In April 2023, Hoffman sued Loup and Southern Gulf for breach of contract under both state law and the Carmack Amendment, seeking damages and attorney’s fees. (Docket Entry No. 1).

Southern Gulf moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), and Hoffman responded. (Docket Entry Nos. 22, 25). Based on [*2] a careful review of the pleadings, the motion and response, the record, and the applicable law, the court grants Southern Gulf’s motion to dismiss as to Hoffman’s state-law claims and denies in part the motion to dismiss as to Hoffman’s Carmack Amendment claim. The reasons are explained below.

I. Background

In January 2022, Hoffman Logistics Co. contracted with Loup Logistics Co., LLC to have onions shipped from Idaho to Texas. (Docket Entry No. 1 at 2). On January 25, 2022, Partners Produce Inc. inspected the onions and found “a minimal standard roughly 2% decay.” (Id.). The bill of lading Loup issued included “parameters for the method of transportation as well as the optimum temperature for the Load.” (Id. at 3).

The onions arrived at their rail destination on February 16, 2022. The transloader, Southern Gulf, did not pick the load up for several days. (Id.). Southern Gulf was to deliver the onions to their final destination via tractor-trailer. On February 22, 2022, the onions were offloaded and the United State Department of Agriculture completed an arrival inspection. (Id.). This inspection revealed decay of up to 31%, showed that the temperature of the transport unit was higher [*3] than the temperature listed in the bill of lading, and determined that the onions were “largely spoiled and unusable.” (Id. at 4).

Hoffman notified Loup of the spoiled onions and claimed the amount of the loss. Loup denied the claim in September 2022. (Id.). In April 2023, Hoffman sued Loup and Southern Gulf, seeking damages for the spoiled onions, reimbursement for payments made to Loup, and fees associated with the shipment. (Id. at 5). Hoffman alleged that both Loup and Southern Gulf failed to timely deliver the onions and failed to ensure proper temperature regulation during the onion shipment. Southern Gulf has moved to dismiss, and Hoffman has responded. The arguments are analyzed below.

II. The Legal Standard

Rule 12(b)(6) allows dismissal if a plaintiff fails “to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Rule 12(b)(6) must be read in conjunction with Rule 8(a), which requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). Rule 8 “does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) [*4] (quoting Twombly, 550 U.S. at 555). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “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.” Id. (quoting Twombly, 550 U.S. at 556).

To withstand a Rule 12(b)(6) motion, a complaint must include “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Lincoln v. Turner, 874 F.3d 833, 839 (5th Cir. 2017) (quoting Twombly, 550 U.S. at 555). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.'” Iqbal, 556 U.S. at 678 (alteration in original) (quoting Twombly, 550 U.S. at 557). “A complaint ‘does not need detailed factual allegations,’ but the facts alleged ‘must be enough to raise a right to relief above the speculative level.'” Cicalese v. Univ. of Tex. Med. Branch, 924 F.3d 762, 765 (5th Cir. 2019) (quoting Twombly, 550 U.S. at 555). “Conversely, when the allegations in a complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency should be exposed at the point of minimum expenditure of time and money by the parties and the court.” Cuvillier v. Sullivan, 503 F.3d 397, 401 (5th Cir. 2007) (alterations omitted) (quoting Twombly, 550 U.S. at 558).

A court reviewing a motion to dismiss under Rule 12(b)(6) may consider “(1) the facts set forth in the complaint, (2) documents attached to the complaint, and (3) matters of which judicial notice may be taken under Federal Rule of Evidence 201.” Inclusive Cmtys Project, Inc. v. Lincoln Prop. Co., 920 F.3d 890, 900 (5th Cir. 2019).

III. Analysis

Southern Gulf argues that the Carmack Amendment preempts Hoffman’s state-law claim. The Carmack Amendment provides “the exclusive cause of action for loss or damages to goods arising from the interstate transportation of those goods by a [*5] common carrier.” Hoskins v. Bekins Van Lines, 343 F.3d 769, 778 (5th Cir. 2003) (emphasis added). “In actions seeking damages for the loss of property shipped in interstate commerce by a common carrier under a receipt or bill of lading, the Carmack Amendment is the shipper’s sole remedy.” Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 382 (5th Cir. 1998). The Amendment bars state-law claims for loss or damage to property shipped in interstate commerce. Applying this rule, the Fifth Circuit has held that the following state-law claims are preempted:

1) the tort of outrage, 2) intentional and negligent infliction of emotional distress, 3) breach of contract, 4) breach of implied warranty, 5) breach of express warranty, 6) violation of the Texas Deceptive Trade Practices Act sections 17.46 and 17.50, 7) slander, 8) misrepresentation, 9) fraud, 10) negligence and gross negligence, and 11) violation of the common carrier’s statutory duties as a common carrier under state law.

Hoskins, 343 F.3d at 777 (citing Moffit v. Bekins Van Lines Co., 6 F.3d 305, 306 (5th Cir. 1993)).

Hoffman claims damages caused by the spoiling of the onions in the shipment from Idaho to Texas. That shipment was under a bill of lading. (Docket Entry No. 1 at 3). Hoffman asserts state-law claims for breach of contract, negligence, violation of duty, conversion, and breach of bailment obligations. The Fifth Circuit held the first three preempted in Moffit. The Fifth Circuit has since held that the Carmack Amendment preempts [*6] conversion claims except claims for intentional conversion, Tran Enterprises, LLC v. DHL Exp. (USA), Inc., 627 F.3d 1004, 1009 (5th Cir. 2010), which Hoffman has not alleged, (Docket Entry No. 1 at 12). Claims for breach of bailment obligations are also preempted. Gulf Rice Arkansas, LLC v. Union Pac. R.R. Co., 376 F. Supp. 2d 715, 719 (S.D. Tex. 2005); Groupo Floristar, S. de R.L. de C.V. v. FFE Transp. Serv., Inc., No. 4:06-cv-2098, 2007 U.S. Dist. LEXIS 107754, 2007 WL 9751917, at *2 (S.D. Tex. Apr. 19, 2007). Hoffman’s state-law claims are preempted by the Carmack Amendment and must be dismissed. The court need not address Southern Gulf’s alternative bases for dismissing these claims.

Southern Gulf also challenges Hoffman’s Carmack Amendment breach of contract claim on the basis that “no privity existed” between Hoffman and Southern Gulf. (Docket Entry No. 22 at 9). Southern Gulf claims that because the bill of lading was between Hoffman and Loup, Southern Gulf cannot be liable if it was breached.

The Carmack Amendment imposes liability in the following situations:

A carrier providing transportation or service subject to jurisdiction under subchapter I or III of chapter 135 shall issue a receipt or bill of lading for property it receives for transportation under this part. That carrier and any other carrier that delivers the property and is providing transportation or service subject to jurisdiction under subchapter I or III of chapter 135 or chapter 105 are liable to the person entitled to recover under the receipt or bill of lading. The [*7] liability imposed under this paragraph is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States or from a place in the United States to a place in an adjacent foreign country when transported under a through bill of lading and, except in the case of a freight forwarder, applies to property reconsigned or diverted under a tariff under section 13702. . . .

49 U.S.C.A. § 14706. Liability under the Carmack Amendment is not limited to the carrier issuing a bill of lading. Liability can extend to a carrier that delivers the property if the transportation was by motor carrier and between states. Id.

Hoffman has alleged that the onions were delivered by the transloader—Southern Gulf—and that the onions were shipped from Idaho to Texas. (Docket Entry No. 1 at 2). Southern Gulf does not dispute that it is subject to jurisdiction under chapter 135. Southern Gulf acknowledges that “Hoffman’s allegations, if taken as true, establish a contractual obligation or duty owed by Defendant Southern Gulf to Hoffman to timely transload the Load and keep the goods at the contractually required temperature.” [*8] (Docket Entry 22 at 11).

Accepting Hoffman’s allegations as true for the purpose of the motion to dismiss, Hoffman has sufficiently alleged that Southern Gulf is liable under the Carmack Amendment for failing to meet its contractual requirements as a transloader, causing the onions to spoil. Southern Gulf’s motion for partial dismissal is granted as to Hoffman’s state-law claims against Southern Gulf and denied as to Hoffman’s Carmack Amendment claim.

SIGNED on August 24, 2023, at Houston, Texas.

/s/ Lee H. Rosenthal

Lee H. Rosenthal

United States District Judge

End of Document

Girardeau v. Hobbs

United States District Court for the Eastern District of Missouri, Eastern Division

August 21, 2023, Decided; August 21, 2023, Filed

Case No. 4:21-cv-01265-MTS

MARK GIRARDEAU, et al., Plaintiffs, vs. JACK ANDREW HOBBS, et al., Defendants.

Prior History: Girardeau v. Hobbs, 2022 U.S. Dist. LEXIS 13144, 2022 WL 218885 (E.D. Mo., Jan. 25, 2022)

Counsel: [*1] For Mark Girardeau, Rosemary Girardeau, Plaintiffs: Gregory Smith, LEAD ATTORNEY, FLINT LAW FIRM LLC – Paducah, Paducah, KY; Lawrence King Holcomb, LEAD ATTORNEY, FLINT LAW FIRM, LLC, Edwardsville, IL.

For Jack Andrew Hobbs, Defendant: Ryan E. Bertels, LEAD ATTORNEY, SCHREIMANN AND RACKERS LLC, Jefferson City, MO.

For Viktor Express Inc, Defendant: Kathleen S. Hamilton, LEAD ATTORNEY, Bradley M. Zaffiri, HEPLER BROOM LLC – St Louis, St. Louis, MO.

Judges: MATTHEW T. SCHELP, UNITED STATES DISTRICT JUDGE.

Opinion by: MATTHEW T. SCHELP

Opinion

MEMORANDUM AND ORDER

This matter is before the Court on the Motion to Dismiss, Doc. [120], filed by Defendant Strive Logistics, LLC (“Strive”), which seeks dismissal of both claims against it in Plaintiffs’ Third Amended Complaint. This action stems from an automobile collisions that allegedly involved a tractor-trailer driven by Defendant Stojkovic who was delivering a load pursuant to an arrangement brokered by Strive.¹ Plaintiffs bring two counts against Strive, a claim for vicarious liability in Count V and a claim for negligent hiring/selection in Count VI.

Relevant to their negligent hiring/selection claim, Plaintiffs allege that Strive was “a broker within the meaning of, and [*2] subject to, the provisions of the [Federal Motor Carrier Safety Regulations],” Doc. [115] ¶ 25, and that Strive selected Defendant Viktor Express—who employed Defendant Stojkovic—to transport the load on the tractor-trailer at the time of the collision, id. ¶¶ 27, 29. Plaintiffs allege that, at the time of the collision, Strive was “acting as a licensed freight broker for its own financial gain, negligently selected and hired Defendant Stojkovic and Defendant Viktor Express to transport a load.” Id. ¶ 54. Plaintiffs further allege that “Strive had a duty to properly exercise its discretion as a licensed freight broker in arranging for transportation of a load of goods by a fit, safe, and competent driver and/or operator” and “had a duty to properly exercise its discretion as a licensed freight broker in arranging for transportation of a load of goods by a fit, safe, and competent motor carrier.” Id. ¶¶ 55-56.

In Strive’s Motion to Dismiss now before the Court, it argues that Plaintiffs have failed to plausibly plead any claim against it. Strive further argues that the Federal Aviation Administration Authorization Act of 1992 (“FAAAA”) bars Plaintiffs’ claims against Strive, 49 U.S.C. § 14501(c)(1), and that [*3] the FAAAA’s safety exception in § 14501(c)(2)(A) does not save Plaintiffs’ claims from preemption. The Court carefully has reviewed the Third Amended Complaint, Strive’s Motion to Dismiss and Memorandum in Support, Plaintiffs’ Response in Opposition, and Strive’s Reply. In addition, the Court has reviewed Strive’s First Supplementary Citation of New Authority, Plaintiffs’ Response thereto, and Strive’s Reply. The Court also reviewed Strive’s Second Supplementary Citation of New Authority, to which Plaintiffs filed no response.

The supplementary citations of new authority fit squarely within the allegations of this case—especially Ye v. GlobalTranz Enterprises, Inc., 74 F.4th 453 (7th Cir. 2023), the second supplemental citation to which Plaintiffs filed no response. In Ye, the United States Court of Appeals for the Seventh Circuit was presented with the same question of preemption under the Federal Aviation Administration Authorization Act as to the claim for negligent hiring that is present here. 74 F.4th at 455. In that case, a widower sought to recover against a freight broker following the death of her husband in a highway accident. She claimed the freight broker negligently hired the motor carrier that employed the driver of the truck that caused the accident. The district [*4] court concluded both that the FAAAA’s express preemption provision in 49 U.S.C. § 14501(c)(1) barred the widower’s claim and that the FAAAA’s safety exception in § 14501(c)(2)(A) did not save the claim. The panel unanimously agreed with the district court and affirmed the judgment.² This Court finds Ye‘s thorough reasoning highly persuasive.

Consistent with Ye, the Court concludes that the plain text and statutory scheme indicate that 49 U.S.C. § 14501(c)(1) bars Plaintiffs’ negligent hiring/selection claim in Count VI as pleaded against Strive, and that the FAAAA’s safety exception in § 14501(c)(2)(A) does not save the claim from preemption. Ye, 74 F.4th at 466; see also Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261, 1268, 1267, 1272 (11th Cir. 2023) (concluding negligence claim against a broker for selection of the shipping carrier was barred by the FAAAA’s express preemption provision and was not saved by the FAAAA’s safety exception). Therefore, the Court will dismiss Count VI against Strive.

As to Plaintiffs’ claim against Strive for vicarious liability, Count V, the Court concludes that Plaintiffs have pleaded a plausible claim against Strive for vicarious liability that may not be preempted given Plaintiffs’ allegations that Strive performed actions beyond those typical of a mere broker. See Ye v. Glob. Sunrise, Inc., 1:18-cv-01961, 2020 WL 1042047, at *4-5 (N.D. Ill. Mar. 4, 2020) (dismissing negligent hiring claim against broker [*5] as preempted but declining to dismiss vicarious liability claim against broker at motion to dismiss stage); see also Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016, 1031 (9th Cir. 2020) (Fernandez, J., concurring in part and dissenting in part) (“[A broker] and the services it provides have no direct connection to motor vehicles or their drivers.”). Thus, the Court declines to dismiss the vicarious liability claim against Strive, Count V, at this stage.

Accordingly,

IT IS HEREBY ORDERED that Defendant Strive Logistics, LLC’s Motion to Dismiss, Doc. [120], is GRANTED in part and DENIED in part consistent with this Memorandum and Order. Count VI of the Third Amended Complaint is DISMISSED. Defendant Strive Logistics, LLC shall have the prescribed time to file its Answer to Plaintiffs’ Third Amended Complaint.

Dated this 21st day of August 2023.

/s/ Matthew T. Schelp

MATTHEW T. SCHELP

UNITED STATES DISTRICT JUDGE

End of Document

¹For a more detailed recitation of the facts, see Girardeau v. Hobbs, 4:21-cv-01265-MTS, 2022 U.S. Dist. LEXIS 191611, 2022 WL 11736738, at *1 (E.D. Mo. Oct. 20, 2022) (granting Strive’s Motion to Dismiss the Second Amended Complaint for failure to state a claim upon which relief can be granted).

²After the release of the panel’s opinion and judgment, plaintiff-appellant filed a petition for rehearing and rehearing en banc with the Court of Appeals for the Seventh Circuit. No Judge in regular active service requested a vote on the petition for rehearing en banc, and all members of the original panel voted to deny panel rehearing.