CASES (2023)

Pruitt v. Hansen & Adkins, Inc.

United States District Court for the Middle District of Alabama, Northern Division

July 12, 2023, Decided; July 12, 2023, Filed

CIVIL CASE NO. 2:23-cv-167-ECM (WO)

MICHAEL G. PRUITT, et al., Plaintiffs, v. HANSEN & ADKINS, INC., et al., Defendants.

Core Terms

preemption, preempted, brokers, freight, state-law, transportation, legislative history, negligent hiring, attorney’s fees, motor carrier, state law, removal, state court, federal-question, courts, intent of congress, freight broker, remedies, intend, objectively reasonable, personal injury, federal court, federal law, persuasive, preemptive, stemming, hiring

Counsel: [*1] For Michael G. Pruitt, II, Individually and on Behalf of Minor Child, J.P., Donna M. Pruitt, Individually and on Behalf of Minor Child, J.P., Alicia Tucker, On Behalf of Minor Child, H.T., Plaintiffs: Patrick Lamont Hays, Jr, LEAD ATTORNEY, The Hays Law Firm, LLC, Greenville, AL.

For Hansen & Adkins, Inc., Hansen & Adkins Auto Transport, Inc., Royal Truck Leasing LLC, Hansen & Adkins Auto Logistics, Inc., James B. Woodfork, Defendants: Brandi Branton Frederick, Richard Wayne Lewis, LEAD ATTORNEYS, Austill Lewis Pipkin & Maddox PC, Birmingham, AL; Joseph Edward Bishop Stewart, LEAD ATTORNEY, Austill Lewis Pipkin & Maddox, Alabama, Birmingham, AL; William Eugene Pipkin, Jr., LEAD ATTORNEY, Austill, Lewis & Pipkin, Mobile, AL.

For Mamuye Ayane Takelu, Defendant: Jannea Suzanne Rogers, LEAD ATTORNEY, Adams & Reese LLP, Mobile, AL; Blake T. Richardson, Adams and Reese LLP, Mobile, AL.

For Samsara, Inc., Defendant: Scott Burnett Smith, LEAD ATTORNEY, Hunter Wade Pearce, Bradley Arant Boult Cummings LLP, Huntsville, AL; Charles Andrew Stewart, III, Bradley Arant Boult Cummings LLP, Montgomery, AL.

For Volvo Group North America, LLC, doing business asVolvo Trucks North America, Defendant: James [*2] MacDonald Russell, Jr., LEAD ATTORNEY, J. MacDonald Russell, Jr., Greenville, AL; John Calhoun Morrow, LEAD ATTORNEY, Burr & Forman LLP, Birmingham, AL.

For MoLo Solutions, Inc., Defendant: Joel Hartley Pearson, LEAD ATTORNEY, Ball, Ball, Matthews & Novak, Montgomery, AL.

For Arcbest Corporation, Defendant: Dennis Oscar Vann, Jr., Thomas Lee Oliver, II, William Charles Johnson, LEAD ATTORNEYS, Carr Allison, Birmingham, AL.

Judges: EMILY C. MARKS, CHIEF UNITED STATES DISTRICT JUDGE.

Opinion by: EMILY C. MARKS

Opinion

MEMORANDUM OPINION and ORDER

I. INTRODUCTION

Now pending before the Court is the Plaintiffs’ motion to remand. (Doc. 26). On February 27, 2023, the Plaintiffs sued various defendants in the Circuit Court of Butler County, Alabama, for claims stemming from a traffic accident. (Doc. 26-2 at 4-39). Relevant to this motion, the Plaintiffs sued Defendant MoLo Solutions, LLC (“MoLo”), for negligently or wantonly hiring a tractor-trailer operator to haul freight for its clients (Count XIV) and for vicarious liability (Count XV). MoLo removed the case to this Court, asserting federal-question jurisdiction and supplemental jurisdiction. (Doc. 1). MoLo argues this Court has federal jurisdiction because the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”), 49 U.S.C. § 14501(c)(1), completely [*3] preempts state-law negligent hiring claims against freight brokers. (Id. at 9-10). The Plaintiffs moved to remand the case back to state court. (Doc. 26). After careful consideration of the motion, briefs, and applicable law, the Court finds that this case is due to be remanded back to state court.¹

II. STANDARD OF REVIEW

Though a plaintiff is the master of his claim, his power is not plenary. Instead, a defendant may remove from state court to federal court any “action[] that originally could have been filed” in that federal court. Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S. Ct. 2425, 96 L. Ed. 2d 318 (1987) (citing 28 U.S.C. § 1441). Federal courts, however, are courts of limited jurisdiction—they possess only the power authorized by the Constitution and statute. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S. Ct. 1673, 128 L. Ed. 2d 391 (1994). Courts should presume that a case lies outside this limited jurisdiction, with the party asserting federal jurisdiction bearing the burden of establishing the contrary. Id. When a plaintiff properly moves to remand a removed case, any questions or doubts as to jurisdiction are to be resolved in favor of returning the matter to state court. Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Finally, a court must evaluate its jurisdiction as of the time of removal. Ehlen Floor Covering, Inc. v. Lamb, 660 F.3d 1283, 1287 (11th Cir. 2011).

III. FACTS AND PROCEDURAL HISTORY

This matter arises from a tragic vehicular accident that occurred [*4] on July 19, 2021. The adult Plaintiffs in this case attempted to rescue children from a van that caught on fire as a result of this accident. Unable to do so, all Plaintiffs, including the minor children, witnessed the fire engulf the van and kill its eight minor occupants. The accident occurred when a tractor-trailer driven by Mamuye Takelu (“Takelu”) crashed into the back of a vehicle driven by Candice Gulley (“Gulley”), who was transporting the eight minors. Takelu was driving a tractor-trailer owned by Asmat Investment, LLC (“Asmat”), and he was hauling a load under MoLo’s motor carrier authority. MoLo arranged to have the load hauled by Takelu on the day of the accident. All eight minors in Gulley’s vehicle died as a result of the accident. The Plaintiffs, who allegedly witnessed the fire, filed this lawsuit in the Circuit Court of Butler County, Alabama.

In their complaint filed in state court, among claims against other defendants, the Plaintiffs sued MoLo for negligently hiring Takelu and Asmat to haul freight (Count XIV) and for vicarious liability as the motor carrier for the driver allegedly causing the accident (Count XV). These claims, along with all other claims in the [*5] complaint, were brought under state law. MoLo removed the case, arguing that this Court has federal-question jurisdiction and supplemental jurisdiction because the Plaintiffs’ claims against it are completely preempted by § 14501(c)(1) of the FAAAA. The Plaintiffs, on the other hand, argue that even if the claims are subject to ordinary preemption under § 14501(c)(1), as a federal defense, ordinary preemption does not confer federal-question jurisdiction. The parties also dispute whether the Plaintiffs are entitled to recover attorney’s fees and costs incurred in responding to MoLo’s removal of the case.

IV. DISCUSSION²

A. Complete Preemption

MoLo contends that this Court has jurisdiction because the FAAAA completely preempted all state-law negligent hiring claims against freight brokers. MoLo argues, the Court has federal-question jurisdiction, which requires that the action “aris[e] under the Constitution, laws, or treaties of the United States.” See 28 U.S.C. § 1331. In deciding whether a federal question exists, courts apply the well-pleaded complaint rule, which looks only to the face of the complaint rather than to any defense asserted by the defendant. See Caterpillar, 482 U.S. at 392.

The Plaintiffs do not raise any federal issues on the face of the complaint. [*6] However, an exception to the well-pleaded complaint rule is the “complete preemption” doctrine. Id. at 393. Complete preemption occurs in the rare instance that Congress so “completely preempt[ s] a particular area that any civil complaint . . . is necessarily federal in character.” Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 67, 107 S. Ct. 1542, 95 L. Ed. 2d 55 (1987). Complete preemption is jurisdictional in nature and focuses on whether Congress intended to make a plaintiff’s cause of action federal and removable even though the complaint only pleads state-law claims. Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1281 (11th Cir. 2005).

MoLo argues that the Plaintiffs’ claims are completely preempted under the FAAAA because the claims against MoLo regarding its hiring of Takelu and Asmat directly relate to its service as a freight broker for the transportation of property. The FAAAA 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 . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). MoLo asks the Court to interpret the phrase “rate, route, or service” broadly to completely preempt state-law negligent hiring claims against freight brokers. (Doc. [*7] 29 at 21).

However, MoLo focuses much of its argument on the contention that § 14501(c)(1) of the FAAAA preempts the state-law negligence claims against it under ordinary preemption principles. An ordinary preemption defense cannot provide grounds for removal. See Cmty. State Bank v. Strong, 651 F.3d 1241, 1261 n.16 (11th Cir. 2011). Complete preemption is a jurisdictional doctrine, and thus “is distinct from ‘ordinary’ or ‘defensive’ preemption,” which “allows a defendant to defeat a plaintiff’s state-law claim on the merits by asserting the supremacy of federal law as an affirmative defense.” Id. Ordinary preemption, however, does not create federal jurisdiction. See id. In other words, “a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption, even if the defense is anticipated in the plaintiff’s complaint, and even if both parties concede that the federal defense is the only question truly at issue.” Caterpillar, 482 U.S. at 393. A state-law claim may be subject to ordinary preemption by a federal statute “but not completely preempted for jurisdictional purposes.” Ammedie v. Sallie Mae, Inc., 485 F. App’x 399, 402 (11th Cir. 2012) (citing Cotton, 402 F.3d at 1281).

Therefore, the cases upon which MoLo relies concerning ordinary preemption do not support its complete preemption argument. See, e.g., Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364, 128 S. Ct. 989, 169 L. Ed. 2d 933 (2008); Am. Trucking Ass’ns, Inc. v. City of Los Angeles, 569 U.S. 641, 133 S. Ct. 2096, 186 L. Ed. 2d 177 (2013); Smith v. Comair, Inc., 134 F.3d 254 (4th Cir. 1998); McCarter v. Ziyar Express, Inc., 2023 U.S. Dist. LEXIS 4552, 2023 WL 144844 (N.D. Ohio Jan. 10, 2023); Ga. Nut Co. v. C.H. Robinson Co., 2017 U.S. Dist. LEXIS 177269, 2017 WL 4864857 (N.D. Ill. Oct. 26, 2017); Deerskin Trading Post, Inc. v. United Parcel Serv. of Am., Inc., 972 F. Supp. 665 (N.D. Ga. 1997). Likewise, the cases cited [*8] by MoLo that ruled on ordinary preemption at the motion to dismiss stage are not informative on the jurisdictional question before the Court. See, e.g., Volkova v. C.H. Robinson Co., 2018 U.S. Dist. LEXIS 19877, 2018 WL 741441 (N.D. Ill. Feb. 7, 2018); Krauss v. IRIS USA, Inc., 2018 U.S. Dist. LEXIS 74922, 2018 WL 2063839 (E.D. Pa. May 3, 2018); Krauss v. Iris USA, Inc., 2018 U.S. Dist. LEXIS 127660, 2018 WL 3632107 (E.D. Pa. July 31, 2018); Creagan v. Wal-Mart Transp., LLC, 354 F. Supp. 3d 808 (N.D. Ohio Dec. 12, 2018); Loyd v. Paul Salazar, 416 F. Supp. 3d 1290 (W.D. Okla. Sept. 20, 2019); Estate of Flanagan v. BNSF Ry. Co., 2021 U.S. Dist. LEXIS 262586, 2021 WL 9667999 (S.D. Iowa Nov. 19, 2021); Gauthier v. Hard to Stop, LLC, 2022 U.S. Dist. LEXIS 20564, 2022 WL 344557 (S.D. Ga. Feb. 4, 2022); Lee v. Werner Enters., Inc., 2022 U.S. Dist. LEXIS 200848, 2022 WL 16695207 (N.D. Ohio Nov. 3, 2022).

Complete preemption, rather, is “a rare doctrine.” Cmty. State Bank, 651 F.3d at 1261 n.16. The Supreme Court has applied the doctrine “to only three federal statutes: § 301 of the [Labor-Management Relations Act], the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132, and §§ 85 and 86 of the National Bank Act.” Atwater v. Nat’l Football League Players Ass’n, 626 F.3d 1170, 1176 n.7 (11th Cir. 2010). Moreover, the Supreme Court cautioned “that complete preemption can be found only in statutes with ‘extraordinary’ preemptive force.” Geddes v. Am. Airlines, Inc., 321 F.3d 1349, 1353 (11th Cir. 2003) (citing Caterpillar, 482 U.S. at 393; Metro. Life, 481 U.S. at 65). The three statutes wherein the Court has found complete preemption evidenced the “extraordinary preemptive force” required to manifest “the clearly expressed intent of Congress.” Id.

Three main factors are critical to finding complete preemption. First, the “touchstone of the federal district court’s removal jurisdiction is . . . the intent of Congress.” Metro. Life, 481 U.S. at 66. Second, the federal law at issue must not simply preempt the state-law claim; it must also “displace” the state-law claim with a federal cause of action. Id. at 64. Third, the federal law at issue must be similar to the jurisdictional grant provisions of the Employee Retirement Income Security Act (“ERISA”) and the Labor-Management Relations Act (“LMRA”), two of the statutes in which the Supreme Court held complete preemption. [*9] Id. at 65; see also Blab T.V. of Mobile, Inc. v. Comcast Cable Comms., Inc., 182 F.3d 851, 856 (11th Cir. 1999) (“[C]omplete preemption occurs only when a federal cause of action features jurisdictional language that closely parallels that of section 301 of the LMRA as well as an express statement within the legislative history that Congress intends for all related claims to arise under federal law in the same manner as section 301.”).

Therefore, courts must first “identify the domain expressly pre-empted” by Congress. Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 260, 133 S. Ct. 1769, 185 L. Ed. 2d 909 (2013) (citation omitted). This task requires courts to “focus first on the statutory language, which necessarily contains the best evidence of Congress’ pre-emptive intent.” Id. (quotations and citation omitted). The Eleventh Circuit has also looked to the legislative history for the federal law at issue. See Blab T.V., 182 F.3d at 857. As an example of clear congressional intent to completely preempt state laws, ERISA’s legislative history unambiguously described Congress’ intent to treat employee retirement actions “as arising under the laws of the United States in similar fashion to those brought under section 301 of the Labor-Management Relations Act of 1947.” Metro. Life, 481 U.S. at 65-66 (citing H.R. REP. NO. 93-1280, at 327 (1974)).

The Supreme Court in Rowe has already identified the domain expressly preempted by the statute relevant to this case. The FAAAA preempted state trucking regulation because Congress found “state governance [*10] of intrastate transportation of property had become unreasonably burdensome to free trade, interstate commerce, and American consumers.” Dan’s City Used Cars, 569 U.S. at 256 (alteration adopted) (quotation and citation omitted) (quoting Rowe, 552 U.S. at 370). The phrase “related to a price, route, or service of any motor carrier” in § 14501(c), the Court held, embraced state laws that have “a connection with or reference to carrier rates, routes, or services, whether directly or indirectly.” Id. at 260 (quotations omitted).

The Eleventh Circuit recently held that a state-law negligent hiring claim is connected to a freight broker’s services regarding the transportation of property, and such a claim is thus preempted by the FAAAA. See Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023). Selecting a carrier to transport shipments, according to Aspen, “is precisely the brokerage service that” a negligence hiring claim against a freight broker challenges: the broker’s “allegedly inadequate selection of a motor carrier to transport . . . shipment.” Id. at 1267. An allegation of negligence “against a transportation broker for its selection of a motor carrier to transport property in interstate commerce” relates to a freight broker’s “core transportation-related services.” Id. at 1268. Accordingly, Aspen held that a plaintiff’s state-law negligent [*11] hiring claim against a freight broker is preempted—according to ordinary preemption principles—by § 14501(c)(1) of the FAAAA.

While Aspen may inform this Court as to the standard for ordinary preemption under § 14501(c)(1), it does not dictate the conclusion on the jurisdiction matter before the Court. Indeed, the court in Aspen evaded a complete preemption determination altogether, clarifying that because it already had “federal jurisdiction in [the] case because of the parties’ diverse citizenship, [it took] no position on whether § 14501(c)(1) satisfies the standard for complete preemption.” 65 F.4th at 1266 n.1. And so, the Court finds no conclusion in Aspen as to whether Congress intended the FAAAA to have such an “‘extraordinary’ preemptive force” that it completely preempts state-law negligent hiring claims against freight brokers. Geddes, 321 F.3d at 1353; see also Lyles v. Wren, 2023 U.S. Dist. LEXIS 81258, 2023 WL 3318695, at *4 (E.D. Ark. May 9, 2023) (finding that since the Aspen court did not “address[] the scope of the express preemption provision of the FAAAA . . . in the context of a complete preemption analysis, [it] do[es] not guide this Court’s decision); Malone v. Russell, 2023 U.S. Dist. LEXIS 98028, 2023 WL 3854265, at *3 (N.D. Tex. June 6, 2023) (finding the same); Ruff v. Reliant Transp., Inc., 2023 U.S. Dist. LEXIS 91472, 2023 WL 3645719, at *2 (D. Neb. May 25, 2023) (finding the same); Estate of Peterson by Peterson v. Rodriguez, 2023 U.S. Dist. LEXIS 105540, 2023 WL 4053599, at *3 (D. Kan. June 16, 2023) (“The fact that a federal statute may expressly preempt a state law, however, does not render a state-law claim removable to federal court.”). The Court finds the last two [*12] factors of the complete preemption analysis more indicative of Congress’ intent on whether § 14501(c)(1) of the FAAAA completely preempts the claims here.

A court’s second task in complete preemption analysis is to determine whether Congress introduced federal remedies for the underlying claims. Metro. Life, 481 U.S. at 64; Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 144, 111 S. Ct. 478, 112 L. Ed. 2d 474 (1990) (holding relevant to complete preemption analysis is whether the federal statute “set[s] forth a comprehensive civil enforcement scheme”). The Supreme Court noted in Ingersoll-Rand that § 502(a) of ERISA completely preempted state laws by providing the exclusive remedy for employee retirement rights guaranteed by ERISA. Id. According to the Court, Congress’ policy choice in “the inclusion of certain remedies and the exclusion of others under the federal scheme” provided “strong evidence that Congress did not intend to authorize other remedies” under state law. Id. Therefore, “the exclusive remedy provided by § 502(a)” in ERISA was precisely the kind of special feature that warranted complete preemption in that case. Id. (alteration adopted).

There is no “special feature” providing for a federal cause of action in the FAAAA for injuries stemming from freight brokers’ negligent acts. Congress’ decision not to provide express remedies for the Plaintiffs’ negligence [*13] claims against MoLo, as a freight broker, “provides compelling evidence that Congress did not intend to completely preempt this area of law.” Hentz v. Kimball Transp., Inc., 2018 U.S. Dist. LEXIS 193952, 2018 WL 5961732, at *4 (M.D. Fla. Nov. 14, 2018); cf. Hodges v. Delta Airlines, Inc., 44 F.3d 334, 338 (5th Cir. 1995) (en banc) (noting that Congress’ failure to provide remedies in the ADA for injuries stemming from negligent acts “takes on added significance” because it is “difficult to believe that Congress would, without comment, remove all means of judicial recourse for those injured by illegal conduct”). Therefore, the lack of express federal remedies in the FAAAA for the claims in this case indicates that Congress did not intend to completely preempt personal injury negligence claims against freight brokers stemming from accidents involving tractor-trailers.

The third and final task for the Court is to compare the jurisdictional grant in the FAAAA to the grants in ERISA and the LMRA. In Blab T.V., the Eleventh Circuit held that Congress did not intend the Cable Act, 47 U.S.C. § 532, to completely preempt state laws because nowhere in the legislative history or the statute’s language did Congress indicate the Cable Act carried the same preemptive power as § 301 of the LMRA. Blab T.V., 182 F.3d at 857. The Blab T.V. court looked to the Supreme Court’s analysis of ERISA. In Metropolitan Life, the Supreme Court found congressional intent to [*14] completely preempt state law because, in part, ERISA’s legislative history expressly indicated Congress intended the statute to created federal-question jurisdiction “in like manner as § 301 of the LMRA.” Metro. Life, 481 U.S. at 66. The Conference Report on ERISA stated the purpose for the civil enforcement provision of ERISA, § 502(a): “All such actions in Federal or State courts are to be regarded as arising under the laws of the United States in similar fashion to those brought under section 301 of the Labor-Management Relations Act of 1947.” Id. at 65-66 (emphasis omitted).

The Eleventh Circuit in Blab T.V. held that the omission of this provision in the legislative history of the Cable Act indicated Congress did not intend it to completely preempt state law. 182 F.3d at 857. The legislative history and the words of the Cable Act did not contain a grant of federal-question jurisdiction similar to that found in ERISA or the LMRA. Though not dispositive, the omission of “any indication in the Cable Act’s legislative history that [its] jurisdictional language [was] intended to function in the same manner as section 301 of the LMRA” was important to finding against complete preemption. Id. Similarly, MoLo does not point the Court to a provision in the FAAAA granting federal-question jurisdiction as in § 301 of the LMRA, and the Court cannot find one. Like the Court in Blab T.V., this Court finds “the absence [*15] of such a statement in the legislative history to be a persuasive argument against finding complete preemption in this case.” Id.

Finally, MoLo cites to only two federal court decisions that found complete preemption under similar circumstances; decisions which this Court finds unpersuasive. See, e.g., Gillum v. High Standard, LLC, 2020 U.S. Dist. LEXIS 14820, 2020 WL 444371 (W.D. Tex. Jan. 27, 2020); Zamorano v. Zyna LLC, 2020 U.S. Dist. LEXIS 82289, 2020 WL 2316061 (W.D. Tex. May 11, 2020) (providing the same analysis as the Gillum decision). MoLo asserts that Gillum is directly on point as to whether negligence hiring claims against freight brokers stemming from traffic accidents are preempted by § 14501(c)(1) of the FAAAA. The Gillum court first noted that there was “neither persuasive nor binding authority from any circuit court” on this matter, and that “federal district courts [were] sharply divided on how to apply these guiding principles to personal injury claims alleging negligence by brokers in selecting motor carriers for the transportation of property.” 2020 U.S. Dist. LEXIS 14820, 2020 WL 444371, at *3. After it noted the diverging lines of cases, the court found that negligent hiring claims against freight brokers “go to the core of what it means to be a careful freight broker and, as a such, they are preempted.” 2020 U.S. Dist. LEXIS 14820, [WL] at *5 (quotation and citation omitted). The court then found, based on this ordinary preemption analysis, that the plaintiff’s [*16] “negligence and gross negligence claims against the freight broker [were] completely preempted by the FAAAA.” 2020 U.S. Dist. LEXIS 14820, [WL] at *6.

This Court finds the Gillum decision and its progeny unpersuasive for two reasons. First, the Gillum court did not satisfactorily consider the distinction between ordinary and complete preemption. See Estate of Peterson, 2023 U.S. Dist. LEXIS 105540, 2023 WL 4053599, at *4 (“While the court in Gillum discussed the complete preemption doctrine, the court’s decision was based on an ordinary preemption analysis and courts have declined to find the decision persuasive on that basis.”); Estate of Mergl v. Lee, 2022 U.S. Dist. LEXIS 197807, 2022 WL 16550316, at *4 (E.D.N.C. Oct. 31, 2022) (“Gillum‘s analysis, however, fails to distinguish between complete preemption and ordinary preemption, and draws upon ordinary preemption principles in its complete preemption analysis.”). Specifically, the two Supreme Court cases on which Gillum relies for its complete preemption analysis dealt with ordinary preemption. See, e.g., Rowe, 552 U.S. at 370; Dan’s City Used Cars, 569 U.S. at 261. Therefore, like the Eleventh Circuit’s decision in Aspen, while Gillum‘s reasoning may be persuasive regarding ordinary preemption, it is not persuasive in determining whether the Plaintiffs’ negligent hiring claim against MoLo is completely preempted under the FAAAA.

Second, this Court disagrees with Gillum‘s conclusion, after discussing [*17] the divergent case law on whether the FAAAA preempts personal injury negligence claims against freight brokers, “that a conflict of authority renders retaining jurisdiction the better approach.” Popal v. Reliable Cargo Delivery, Inc., 2021 U.S. Dist. LEXIS 57592, 2021 WL 1100097, at *3 (W.D. Tex. Mar. 10, 2021) (disagreeing with the Gillum court’s complete preemption analysis). The Gillum court predicated its approach to complete preemption, in part, on the fact that there had been no decision from any circuit discussing the issue. However, when faced with any questions or doubts as to whether to retain jurisdiction, as the Gillum court faced here, a court should resolve the dispute in favor of returning the matter to state court rather than retaining jurisdiction. See Burns, 31 F.3d at 1095. Accordingly, this Court declines to following the reasoning in Gillum.

Given the doubts as to whether Congress intended § 14501(c)(1) of the FAAAA to completely preempt state-law negligent hiring claims against freight brokers, the Court finds there is no federal-question jurisdiction here.³ See Estate of Peterson, 2023 U.S. Dist. LEXIS 105540, 2023 WL 4053599, at *5 (“[T]he statutory text of the FAAAA contains no clear Congressional intent to include claims involving personal injury as a result of broker negligence.”); Estate of Wray by and through Wray v. Kennedy Bros. Logistics, Inc., 2022 U.S. Dist. LEXIS 197815, 2022 WL 16550315, at *4 (E.D.N.C. Oct. 31, 2022) (“[T]he statutory text of the FAAAA contains no clear Congressional intent to [*18] engulf the entire area of personal injury and wrongful death claims involving transportation brokers and motor carriers.”); Moyer v. Simbad LLC, 2021 U.S. Dist. LEXIS 64158, 2021 WL 1215818, at *6 (S.D. Ohio Jan. 12, 2021) (finding the defendant “failed to identify ‘clear congressional intent’ for the FAAAA to engulf the entire area of personal injury and wrongful death claims involving transportation brokers and motor carriers”). And because complete preemption is the only grounds on which MoLo removed this case (doc. 1 at 9-10), the Court remands the case back to state court.

B. Attorney’s Fees

The Plaintiffs request that, in conjunction with a remand order, the Court award attorney’s fees based on the lack of an objectively reasonable basis for removal. A district court 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 generally “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.” Bauknight v. Monroe County, 446 F.3d 1327, 1329 (11th Cir. 2006) (citing Martin v. Franklin Cap. Corp., 546 U.S. 132, 141, 126 S. Ct. 704, 163 L. Ed. 2d 547 (2005)). A district court retains the “discretion to consider whether unusual circumstances warrant a departure from the rule in a given case. [*19] 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.” Martin, 546 U.S. at 141. “There is no presumption in favor of awarding attorney’s fees and costs under Section 1447(c).” MSP Recovery Claims, Series LLC v. Hanover Ins. Co., 995 F.3d 1289, 1296 (11th Cir. 2021).

The Court finds that MoLo had an objectively reasonable basis for seeking removal. Neither the Eleventh Circuit nor the Supreme Court has weighed in on this complete preemption matter. At least some case precedent, albeit nonbinding, supports MoLo’s contention that 28 U.S.C. § 1441(c)(1) is applicable to this action due to complete preemption. See, e.g., Gillum, 2020 U.S. Dist. LEXIS 14820, 2020 WL 444371, at *5-6 (finding defendant satisfied 28 U.S.C. § 1441(c)(1)(A)); Zamorano, 2020 U.S. Dist. LEXIS 82289, 2020 WL 2316061 (finding the same). While the Court declines to adopt the reasoning of these decisions for the reasons stated above, the Court cannot say MoLo “lacked an objectively reasonable basis for seeking removal” based upon those decisions. Martin, 546 U.S. at 141. Therefore, the Plaintiffs’ request for attorney’s fees is due to be denied.

V. CONCLUSION

Accordingly, for the reasons stated, and for good cause, it is

ORDERED as follows:

1) The Plaintiffs’ motion to remand (doc. 26) is GRANTED.

2) The Plaintiffs’ motion for attorney’s fees (doc. 26) is DENIED.

3) This action is REMANDED to the Circuit Court of Butler [*20] County, Alabama.

4) The Clerk of the Court is DIRECTED to take the appropriate steps to effectuate the remand.

DONE this 12th day of July, 2023.

/s/ Emily C. Marks

EMILY C. MARKS

CHIEF UNITED STATES DISTRICT JUDGE

End of Document

¹Also pending before the Court are other motions. Because the Court concludes that it does not have jurisdiction over this matter, it does not have jurisdiction to rule on any of the other motions.

²Also pending before the Court are three separate cases stemming from this traffic accident. Like this case, those cases come before the Court on MoLo’s complete preemption removal argument. Because the arguments in all four cases are similar regarding whether the state-law negligence claims against MoLo are completely preempted, the Court’s analysis across the four cases is also similar.

³The Court makes no determination as to whether the Plaintiffs’ claims against MoLo run afoul of ordinary preemption principles. Because the Court has “concluded that [it] lack[s] jurisdiction under the complete preemption doctrine, [it] necessarily must avoid further consideration of these issues, which go directly to the merits of [the Plaintiffs’] claims.” Blab T.V., 182 F.3d at 859.

Landstar Ranger, Inc. v. Triple M Logistics, Inc. An Ill. Corp.

United States District Court for the Middle District of Florida, Jacksonville Division

June 28, 2023, Filed

Case No. 3:22-CV-00056-HES-LLL

LANDSTAR RANGER, INC., A Florida corporation, Plaintiff, v. TRIPLE M LOGISTICS, INC. an Illinois corporation, Defendant.

Notice: Decision text below is the first available text from the court; it has not been editorially reviewed by LexisNexis. Publisher’s editorial review, including Headnotes, Case Summary, Shepard’s analysis or any amendments will be added in accordance with LexisNexis editorial guidelines.

Core Terms

carrier, summary judgment, shipper, motor carrier, shipment, transportation, contracts, Logistics, broker, limitation of liability, delivery order, negotiated, upstream, damages, parties, interstate, nonmoving, genuine, cargo, pound

Opinion

[*1] O R D E R

THIS CAUSE is before this Court on “Plaintiff’s Motion for Summary Judgment and Memorandum of Law in Support of Summary Judgment” (Dkt.

25), “Motion for Summary Judgment by Triple M Logistics, Inc.” (Dkt. 28), “Plaintiff’s Memorandum of Law in Opposition to Defendant’s Motion for Summary Judgment” (Dkt. 31), “Triple M Logistics’ Response in Opposition to Landstar Ranger’s Motion for Summary Judgment” (Dkt. 32), and Triple M’s “Reply to Landstar Ranger’s Response in Opposition to Triple Logistics’ Motion for Summary Judgment” (Dkt. 33). The Parties also submitted a “Joint Stipulation of Undisputed Facts” (Dkt. 24).

I. Background

Landstar Ranger, Inc. (“Landstar”) is a property broker authorized by

the Federal Motor Carrier Safety Administration to arrange for the interstate transportation of property by various motor carriers. Triple M Logistics, Inc. (Triple M) is a for-hire motor carrier authorized by the Federal Motor Carrier Safety Administration to transport property in interstate commerce.

Twenty-eight pallets of computers owned by Acer America Corporation

(“Acer”) were stolen in transit. (Dkt. 24 at ¶ 17, 40). Non-party Acer, a shipper of goods, contracted with non-party Expeditors [*2] International of Washington,

Inc. (“Expeditors”) for distribution services and agreed to transport Acer’s computers from Texas to Florida (“Acer-Expeditors Agreement”1). The Acer-Expeditors Agreement limited Expeditor’s liability to .50 cents per pound, absent a declaration of value of a shipment by Acer. (Dkt. 24 at ¶ 16). The Acer-Expeditors Agreement allowed Expeditors to subcontract its obligations. (Dkt. 24-2, ¶ 18).

Expeditors, in turn, tendered the shipment to Landstar. (Dkt. 24, ¶¶ 21, 24; Dkt. 24-5 “Expeditors-Landstar Agreement”). Landstar agreed to be

“responsible for claims for loss or damage to cargo” and limited its liability to Expeditors to $250,000.00 (Dkt. 24, ¶ 26-27). Landstar contracted with Triple M as the for-hire motor carrier (“Landstar-Triple M Agreement”). Triple M

1 The Agreement includes of the Scope of Distribution Services, Expeditor’s

North American Domestic Contract of Carriage, and the Contract of Carriage (Dkt. 24, Exs. 1-3).

limited its liability to $1 million dollars. (Dkt. 24-6, ¶11). The Landstar-Triple

M Agreement included the following integration clause:

This Agreement is the entire agreement between the parties, superseding all earlier agreements [*3] and all tariffs, rates, classifications and schedules published, filed or otherwise maintained by CARRIER. This Agreement cannot be altered or amended except in a writing signed by all parties and cannot be assigned or transferred in whole or in part. The benefits of this Agreement shall not inure to nor be available to any third party.

(Dkt. 24, ¶ 31; Dkt. 24-6, ¶ 18).

Expeditors issued a Delivery Order on August 15, 2019, which contained

a limitation of liability of $0.50 per pound unless the Shipper made a special

declaration of value. (Dkt. 24, ¶ 33-34). The Delivery Order listed Landstar as

the carrier and Triple M’s driver signed the order. (Dkt. 24, ¶38; Dkt. 24-8).

The following day, Landstar issued an air waybill designating Expeditors as

the issuing carrier’s agent, evidencing that no value was declared. (Dkt. 24,

¶32).

The freight was stolen while under Triple M’s control. Acer estimated

the total value of the cargo was $760,290.72 and the weight of the laptops was

17,370 pounds. (Dkt. 24, ¶¶34, 44). Expeditors settled the matter with Acer for

more than the limitation in the Acer-Expeditors Agreement. (Dkt 24, ¶52).

Landstar reimbursed Expeditors $160,000.00. (Dkt 24, ¶53). Acer assigned [*4]

Landstar its rights, claims, and causes of action against Triple M. (Dkt. 24, ¶

56).

In January 2022, Landstar filed a two-count Complaint against Triple M; alleging breach of contract (Count One) and liability under the Carmack Amendment (Count Two). (Dkt. 1). In October of 2022, Landstar filed a single count Amended Complaint alleging a Carmack Amendment claim. (Dkt. 22).

The Parties filed cross motions for summary judgment on the sole issue of damages. Landstar asserts it is owed $160,000.00 because Triple M is bound by the Landstar-Triple M Agreement. Triple M counters it only owes $8,685.00 in actual damages because of the $0.50 per pound limitation of liability in the Acer-Expeditors Agreement, contract of carriage, bill of lading, (collectively

“Upstream Contracts”) and the delivery order.

II. Standard of Review

A court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A factual dispute is genuine if the evidence would allow a reasonable jury to find for the nonmoving party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is “material” if it is “a legal element of the claim under the applicable substantive law which might affect the outcome of the [*5] case.” Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997).

The party moving for summary judgment bears the initial burden of showing a court, by reference to materials in the record, that there is no

genuine dispute as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A moving party meets this burden merely by “‘showing’-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party’s case.” Id. at 325. The movant, however, need not negate the other party’s claim. Id. at 323. In determining whether the moving party has met this burden, a court must view the evidence and all factual inferences in the light most favorable to the party opposing the motion.

Johnson v. Clifton, 74 F.3d 1087, 1090 (11th Cir. 1996).

Once the movant has adequately supported its motion, the nonmoving party then has the burden of showing that summary judgment is improper by offering specific facts showing a genuine dispute. Matsushita Elec. Indus. Co.v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Ultimately, there is no

“genuine [dispute] for trial” when the record could not lead a rational trier of fact to find for the nonmoving party. Id. But “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson, 477 U.S. at 247-48. The court, however, [*6] resolves all reasonable doubts in favor of the non-movant.

Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). Additionally,

“[i]t is not the court’s role to weigh conflicting evidence or to make credibility determinations; the non-movant’s evidence is to be accepted for purposes of

summary judgment.” Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742 (11th Cir. 1996).

III. Analysis

Triple M argues Landstar cannot bring a Carmack Amendment claim because Landstar acted as a broker. So, it states Landstar can assert a Carmack Amendment claim only through Acer’s assignment. Accordingly, Triple M asserts the limitation of liability in the Upstream Contracts controls ($0.50 per pound). Landstar responds because it took legal responsibility for the computers, it is considered a carrier under the Carmack Amendment, and the Landstar-Triple M Agreement controls (liability up to $1 million dollars).

The Carmack Amendment was intended “to achieve uniformity in rules governing interstate shipments, including the rules governing injury or loss to property shipped.” UPS Supply Chain Sols., Inc. v. Megatrux Transp., Inc., 750 F.3d 1282, 1285 (11th Cir. 2014). The Amendment seeks to impose uniformity by “preempt[ing] state-law claims against interstate motor carriers who

‘provide motor vehicle transportation or service subject to jurisdiction under [the Interstate Commerce Act]’ and replaces those state-law claims with its strict-liability provision.” Essex Ins. Co. v. Barrett Moving & Storage, Inc., 885 F.3d 1292, 1300 (11th Cir. 2018) (citing 49 U.S.C. § 14706(a)(1)).

The Amendment, “makes all motor carriers [*7] ‘who receive[ ], deliver[ ], or provide[ ] transportation or service’ during a shipment strictly liable to the

shipper ‘for the actual loss or injury to the property,’ regardless of which carrier had possession of the shipment at the time it was lost or damaged.” Id. at 1298 (citing 49 U.S.C. § 14706(a)(1)) (alteration in original). A motor carrier is defined as “a person providing motor vehicle transportation for compensation.”

Id. at 1300 (quoting 49 U.S.C. § 13102(14)) (emphasis in original).

Yet the Carmack Amendment does not apply to brokers. A broker is defined as “a person, other than a motor carrier or an employee or agent of 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.”

49 U.S.C. § 13102(2). But critically:

Motor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they haveaccepted and legally bound themselves to transport.

Essex, 885 F.3d at 1300-01 (quoting 49 C.F.R. § 371.2(a)). In other words, “a party is not a broker [*8] under the Carmack Amendment if it has agreed with the shipper to accept legal responsibility for that shipment.” Id. at 1301.

To determine whether a party is a broker or a carrier is a case-specific analysis that may not be appropriate for summary judgment. Id. at 1302. But the Eleventh Circuit has explained, “the question need not always be difficult” because “[e]ven a company . . . which carries some shipments and brokers

others, can insulate itself from strict liability with respect to a particular shipment if it makes clear in writing that it is merely acting as a go-between to connect the shipper with a suitable third-party carrier.” Id.

Here summary judgment is appropriate because the plain language of the Expeditors-Landstar Agreement provides that Landstar is “responsible for claims for loss or damage to cargo . . . .” (Dkt. 24-5, ¶12(b)). Because Landstar accepted legal responsibility for the cargo, Landstar is considered a motor carrier and so the Carmack Amendment applies. Further, as Triple M concedes, Landstar can assert Acer’s Carmack Amendment claim through the assignment.

This Court must now consider what agreement governs to determine the damages. A carrier is liable “for the actual loss or injury to the property” when [*9] a shipment is lost. 49 U.S.C. § 14706(a)(1). “Actual loss or injury is ordinarily measured by any reduction in market value at the place of destination.”

Megatrux Transp., Inc., 750 F.3d at 1286. But a shipper can agree “with a carrier to limit the carrier’s liability in order to obtain a reduced shipping rate.”

Id. at 1286. To determine whether a carrier has effectively limited its liability under the Carmack Amendment the Eleventh Circuit employs a four-step inquiry:

A carrier must: (1) maintain a tariff within the prescribed guidelines of the Interstate Commerce Commission; (2) give the shipper a reasonable opportunity to choose between two or more

levels of liability; (3) obtain the shipper’s agreement as to the choice of liability; and (4) issue a receipt or bill of lading prior to moving the shipment.

Id.

Modern interstate transportation generally involves “extended chains of parties and agreements.” Id. at 1287. In recognition of these realities, courts do not require carriers to “investigate upstream contracts. They are entitled to assume that the party entrusted with goods may negotiate a limitation of liability.” Werner Enters., Inc. v. Westwind Mar. Int’l, Inc., 554 F.3d 1319, 1325 (11th Cir. 2009).

But the Eleventh Circuit has explained downstream carriers cannot benefit from upstream contracts when the carrier itself negotiates for greater liability. Megatrux, 750 F.3d at 1287. In [*10] Megatrux, logistics provider, UPS, sued the motor carrier Megatrux under the Carmack Amendment for a shipper’s stolen cargo.2Id. at 1285. The district court awarded UPS the full amount of actual loss, or $461,849.82. Id. The Eleventh Circuit affirmed and reasoned that although UPS limited its liability to the shipper in an upstream contract, Megatrux could not benefit from the limitation because it “had no knowledge of or participation in” the contract. Id. at 1287. Instead, the agreement negotiated between Megatrux and UPS where Megatrux agreed to

2 UPS agreed to pay the shipper $246,022.00 and the shipper assigned to UPS its rights, claims, and causes of action against Megatrux. Id. at 1284-85.

have full lability governed, making Megatrux fully liable. Id.; see also Werner, 554 F.3d at 1322-23 (holding a carrier’s limitation of liability with an intermediary governed, when the shipper did not request full liability coverage).

Here, the Upstream Contracts are irrelevant to Triple M because it did not participate in any of the intermediary contracts. So, the liability limitation of $0.50 per pound does not apply. Like the carrier in Megatrux, Triple M is bound by its own agreement, the Landstar-Triple M Agreement, that it negotiated with greater liability.

Triple [*11] M also cannot seek shelter in the limitation of liability in the delivery order. The law is clear, while a carrier may enforce its own limitation of liability, “it must also honor the expanded liability it negotiates.” CoyoteLogistics, LLC v. Mera Trucking, LLC, 481 F. Supp. 3d 1296, 1302 (N.D. Ga. 2020). For example, in Coyote Logistics, the court held a bill of lading a carrier received from the shipper that would give the carrier credit for reasonable salvage value did not control. Id. at 1303. Instead, the agreement between the carrier and logistics provider, permitting the shipper to deem the entire shipment unsalvageable, controlled the carrier’s liability based on the

Carmack Amendment. Id. at 1304.

The delivery order here is a one-page document, generated from Expeditors, which identifies Landstar as the carrier. (Dkt. 24-8). Triple M’s

driver signed the order. (Dkt. 24, ¶ 38). Triple M established its liability in the Landstar-Triple M Agreement and voluntarily agreed to assume more liability, up to $1 million in damages. The agreement was clear that any changes to the contract “cannot be altered or amended except in a writing signed by all parties” (Dkt. 24, ¶ 31). Triple M has shown no evidence the delivery order amended the Landstar-Triple M Agreement. Thus, the delivery order does [*12] not control.

IV.Conclusion

To allow Triple M to benefit from upstream contracts would be a windfall as it would allow it to incur less liability than agreed. It would also deprive Landstar of something it negotiated and paid for. And critically, this Court is bound to apply Eleventh Circuit precedent in Megatrux that forecloses Triple

M’s argument. Landstar submitted evidence it paid $160,000.00 in damages for the lost cargo, and thus may recover that amount from Triple M; as agreed to in the Landstar-Triple M Agreement.

Accordingly, it is hereby ORDERED:

1. “Plaintiff’s Motion for Summary Judgment and Memorandum of

Law in Support of Summary Judgment” (Dkt. 25) is GRANTED;

2. The Clerk is directed to enter Judgment in favor of Plaintiff for $160,000.00 in actual damages, plus pre and post judgment interest;

3. The “Motion for Summary Judgment by Triple M Logistics, Inc.”

End of Document