CASES (2023)

Taylor v. YRC, Inc.

United States District Court, D. Maryland.

TRIAX, INC., Plaintiff,

TFORCE FREIGHT, INC., Defendant.

Civil No. 1:22-cv-01693-JRR

Signed February 11, 2023

Attorneys and Law Firms

Davin Van Eyken, Diversified Law Group, Laurel, MD, for Plaintiff.

James Hetzel, Tamara B. Goorevitz, Franklin and Prokopik PC, Baltimore, MD, Thomas Martin, Pro Hac Vice, William D. Bierman, Pro Hac Vice, Price Meese Shulman and D’Arminio PC, Woodcliff Lake, NJ, for Defendant.

MEMORANDUM OPINION

Julie R. Rubin, United States District Judge

*1 This matter comes before the court on Defendant TForce Freight, Inc.’s Motion to Dismiss for Failure to State a Claim. (ECF No. 5; the “Motion.”) The court has reviewed all submissions. No hearing is necessary. Local Rule 105.6 (D. Md. 2021).

BACKGROUND¹

Plaintiff, Triax Inc., is a corporation with its principal place of business in Frederick County, Maryland. (ECF No. 3, ¶ 1.) Defendant, TForce Freight Inc., is a corporation with its principal office in Richmond, Virginia. Id. ¶ 2. This action arises from Defendant’s alleged breach of duty for failure to deliver a shipment per the terms of the Bill of Lading. Id. ¶ 26.

Plaintiff purchased a 375-pound brass separating machine from West Coast Vibratory Feeders in California for $11,000. (ECF No. 3, ¶¶ 6, 10.) The machine was set to be shipped from California on May 5, 2022. Id. ¶ 6. On May 4, 2022, Plaintiff hired Defendant, a carrier, through a third-party freight brokering service to handle the shipment. Id. ¶ 7. The freight brokering service provided Plaintiff with a Bill of Lading that identified Defendant as the carrier that would handle the shipment. Id. ¶ 8.

On May 11, 2022, Plaintiff was notified that the shipment had arrived at Defendant’s facility in Elkridge, Maryland. (ECF No. 3, ¶ 11.) Plaintiff alleges that Defendant thereafter provided conflicting information about the status of the shipment, and that, ultimately, the shipment never arrived at Plaintiff’s warehouse. Id. ¶¶ 12-13. Plaintiff has since received no information from Defendant about the whereabouts of the shipment. Id. ¶ 13. As a result, Plaintiff’s business in connection with the intended use of the machine has been impaired, resulting in financial losses.

On June 10, 2022, Plaintiff filed suit against Defendant in the Circuit Court for Frederick County. On July 8, 2022, Defendant removed the case to this court. The Complaint sets forth one count of negligence. (ECF No. 3, p. 4.) Plaintiff seeks: (i) compensatory damages in the amount of $1,007,254.32; (ii) costs and attorney’s fees; and (iii) any other relief the court deems just and proper. Id. pp. 4-5.

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6)

Defendant argues that Plaintiff’s Complaint fails to state a claim for negligence on the basis of preemption by the Carmack Amendment to the Interstate Commerce Act. (ECF No. 5-1, p. 3.)

A Rule 12(b)(6) motion “tests the legal sufficiency of a complaint. It does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)). Accordingly, a “Rule 12(b)(6) motion should only be granted if, after accepting all well-pleaded allegations in the plaintiff’s complaint as true and drawing all reasonable factual inferences from those facts in the plaintiff’s favor, it appears certain that the plaintiff cannot prove any set of facts in support of his claim entitling him to relief.” Edwards, 178 F.3d at 244 (citing Republican Party v. Martin, 980 F.2d 943, 952 (4th Cir. 1992)).

*2 “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). “Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). “A complaint that provides no more than ‘labels and conclusions,’ or ‘formulaic recitation of the elements of a cause of action,’ is insufficient.” Bourgeois v. Live Nation Ent., Inc., 3 F. Supp. 3d 423, 434 (D. Md. 2014) (quoting Twombly, 550 U.S. at 555). “The [c]ourt must be able to deduce ‘more than the mere possibility of misconduct’; the facts of the complaint, accepted as true, must demonstrate that the plaintiff is entitled to relief.” Evans v. 7520 Surratts Rd. Operations, LLC, No. 21-cv-1637, 2021 U.S. Dist. LEXIS 221041, at *4 (D. Md. Nov. 16, 2021) (quoting Ruffin v. Lockheed Martin Corp., 126 F. Supp. 3d 521, 526 (D. Md. 2015)).

ANALYSIS

I. Carmack Amendment

Defendant argues that Plaintiff’s negligence claim is preempted by the Carmack Amendment, and therefore should be dismissed for failure to state a claim. (ECF No. 5-1, pp. 4-5.)

“Federal law preempts state and common law when Congress expressly provides that the federal law supplants state authority in a particular field, or when its intent to do so may be inferred from a pervasive system of regulation which does not leave a sufficient vacancy within which any state can act.” Shao v. Link Cardo (Taiwan) Ltd., 986 F.2d 700, 704 (4th Cir. 1993). “Preemption may also be inferred where state legislation would impede the purposes and objectives of legislation enacted by Congress.” Id.

“The Carmack Amendment was enacted in 1906 as an amendment to the Interstate Commerce Act of 1887.” Id. It applies to common carriers “providing transportation or service subject to the jurisdiction of the Interstate Commerce Commission …” and requires a carrier providing transportation to issue a receipt or bill of lading for property and makes a carrier liable to the person entitled to recover under receipt or bill of lading. 49 U.S.C. § 11707(a)(1); 2 U.S.C. § 14706(a)(1). The Carmack Amendment is a “comprehensive exercise of Congress’s power to regulate interstate commerce.” 5K Logistics, Inc. v. Daily Express, Inc., 659 F.3d 331, 335 (4th Cir. 2011). It “creates ‘a national scheme of carrier liability for goods damaged or lost during interstate shipment under a valid bill of lading.’ ” Id. (quoting Shao, 986 F.2d at 704). Further, the Carmack Amendment “preempts all state or common law claims available to a shipper against a carrier for loss or damage associated with interstate shipments.” Rush Indus. v. MWP Constrs., LLC, 539 Fed. Appx. 91, 94 (4th Cir. 2013). In Adams Express Co. v. Croninger, the Supreme Court described the preemptive scope of the Carmack Amendment:

Almost every detail of the subject [of the liability of the carrier under a bill of lading] is covered so completely that there can be no rational doubt but that Congress intended to take possession of the subject and supersede all state regulation with reference to it …

The duty to issue a bill of lading and the liability thereby assumed are covered in full, and though there is no reference to the effect upon state regulation, it is evident that Congress intended to adopt a uniform rule and relieve such contracts from the diverse regulation to which they had been theretofore subject.

226 U.S. 491, 505-506 (1913).

The Court’s reasoning in Adams Express is consistently relied upon by courts to conclude that the Carmack Amendment preempts common law negligence and contract claims for goods lost or damaged by a carrier during interstate shipment under a valid bill of lading. See Shao, 986 F.2d at 708 (holding that “the Carmack Amendment preempts…. common law claims for breach of contract and negligence for goods lost or damaged by a carrier during interstate shipment”); Brentzel v. Fairfax Transfer & Storage, Inc., No. 21-1025, 2021 U.S. App. LEXIS 38522, at *15 (4th Cir. Dec. 29, 2021) (holding that “[t]he Carmack Amendment ‘preempts all state or common law remedies available to a shipper against a carrier for loss or damage to interstate shipments’ ”) (quoting N. Am. Van Lines, Inc. v. Pinkerton Sec. Sys., Inc., 89 F.3d 452, 456 (7th Cir. 1996)); Ward v. Allied Van Lines, Inc., 231 F.3d 135, 138 (4th Cir. 2000) (holding that “[t]he Carmack Amendment preempts a shipper’s state and common law claims against a carrier for loss or damage to goods during shipment.”); Pyramid Transp., Inc. v. Overdrive Specialized, Inc., No. WMN-12-1860, 2012 U.S. Dist. LEXIS 118833, at *3-4 (D. Md. Aug. 22, 2012) (holding that “[s]tate and common law claims preempted by Carmack include those of breach of contract and negligence for goods lost or damaged by a carrier during interstate shipment.”); Dominion Res. Servs. v. 5k Logistics, Inc., No. 9-CV-315, 2010 U.S. Dist. LEXIS 68162, at *10 (E.D. Va. July 8, 2010) (holding that “the Carmack Amendment does preempt state law claims against a carrier by a shipper”); Bowman v. Paul Arpin Van Lines, Inc., No. 05-CV-00062, 2005 U.S. Dist. LEXIS 38437, at *10 (W.D. Va. Dec. 30, 2005) (holding that “[t]he Camrack[sic] Amendment, 49 U.S.C. § 14706, preempts … claims for fraudulent misrepresentation and negligence and gross negligence.”).

*3 Count I is a negligence claim against Defendant, a carrier, for the loss of the bass sorting machine. (ECF No. 3, p. 4.) The negligence claim rests on the alleged breach of duty arising from Defendant’s failure to deliver the shipment per the terms of the Bill of Lading. Id. ¶ 26. Plaintiff alleges that Defendant was hired through a third-party freight brokering service and the freight brokering service provided a Bill of Lading that identified Defendant as the freight company handling the shipment. Id. ¶¶ 7, 8. As discussed above, the Carmack Amendment was intended to create a national uniform policy regarding the liability of carriers under a bill of lading for goods lost and it specifically preempts common law claims of negligence. See Shao, supra. Plaintiff’s negligence claim against Defendant for such loss directly conflicts with this policy. Id. Accordingly, Count I is preempted by the Carmack Amendment and the Motion will be granted.

II. Leave to Amend

In its response, Plaintiff requests leave to amend the Complaint. (ECF No. 8, p. 5.) Defendant does not appear to oppose an amendment (despite seeking dismissal of the Complaint with prejudice); in its Reply, Defendant asserts that, if the Complaint is dismissed, it is up to Plaintiff whether to bring a cause of action pursuant to the Carmack Amendment. (ECF No. 11, p. 3.)

Under Federal Rule of Civil Procedure 15(a) “[a] party may amend its complaint once as a matter of course.” Fed. R. Civ. P. 15(a). Once the defendant files a responsive pleading, however, “a party may amend its pleading only with the opposing party’s written consent or the court’s leave.” Id. Rule 15(a) instructs that “[t]he court should freely give leave when justice so requires.” Id.

“[L]eave to amend a pleading should be denied only when the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the amendment would have been futile.” Laber v. Harvey, 438 F.3d 404, 426 (4th Cir. 2006) (quoting Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir. 1986)). “Whether an amendment is prejudicial will often be determined by the nature of the amendment and its timing.” Id. at 427. “A common example of a prejudicial amendment is one that ‘raises a new legal theory that would require the gathering and analysis of facts not already considered by the [defendant, and] is offered shortly before or during trial.’ ” Id. (quoting Johnson, 785 F.2d at 509). The further a case progresses “before judgment [is] entered, the more likely it is that the amendment will prejudice the defendant or that a court will find bad faith on the plaintiff’s part.” Id. (citing Adams v. Gould, 739 F.2d 858, 864 (3d. Cir. 1984)). In contrast, an amendment is not prejudicial when “it merely adds an additional theory of recovery to the facts already pled and is offered before any discovery has occurred.” Id. (citing Davis v. Piper Aircraft Co., 615 F.2d 606, 613 (4th Cir. 1980)).

In view of these principles, Plaintiff may file an amended complaint no later than twenty days from entry of this opinion and accompanying order.

CONCLUSION

For the reasons set forth herein, Defendant’s Motion to Dismiss for Failure to State a Claim (ECF No. 5) is granted, however the dismissal will be without prejudice. Plaintiff may file an amended complaint no later than twenty days from entry of this opinion and accompanying order. Should Plaintiff fail to do so, the court will close this case without further notice.

A separate order follows.

All Citations

Footnotes

For purposes of adjudicating the Motion, the court accepts as true the well-pled facts set forth in the Verified Complaint at ECF No.3 (the “Complaint”).

End of Document

Superior Towing and Transport, LLC v. J.B. Hunt Transport, Inc.

2023 WL 2163467

Only the Westlaw citation is currently available.

United States District Court, D. New Jersey.

SUPERIOR TOWING AND TRANSPORT, LLC, Plaintiff,

J.B. HUNT TRANSPORT INC., et al., Defendants.

Civil Action No. 21-cv-00900-PGS-LHG

Signed February 21, 2023

Filed February 22, 2023

Attorneys and Law Firms

Timothy Donald Barrow, Grist Mill Square, Lebanon, NJ, for Plaintiff.

Anthony D. Luis, Rawle & Henderson LLP, New York, NY, for Defendants J.B. Hunt Transport, Inc., Crown Cork & Seal USA, Inc.

Stephen V. McHugh, Kent & McBride, PC, Cherry Hill, NJ, for Defendant Progressive Mountain Insurance Company.

MEMORANDUM AND ORDER

PETER G. SHERIDAN, United States District Judge

*1 This matter is before the Court on a Motion to Enforce a Judgment filed by plaintiff Superior Towing and Transport, LLC’s (“Plaintiff” or “Superior Towing”). (ECF No. 42). Superior Towing seeks to enforce a money judgment it previously obtained as to M & C Express Transport Inc. (“M & C Express”) against defendant Progressive Mountain Insurance Company (“Progressive”), the insurer of M & C Express, under the federally mandated policy endorsement (Form MCS–90).

On January 19, 2021, Superior Towing commenced the instant action against defendants J.B. Hunt Transport, Inc., M & C Express, Crown Cork & Seal USA, Inc. and Progressive. Superior Towing seeks to recover clean-up and storage costs that stem from a motor vehicle accident that occurred when an M & C Express driver lost control of a freightliner and crashed into a guard rail on I-78 in Clinton, New Jersey. At the request of the police, Superior Towing responded to the scene of the accident, and undertook clean-up services at the site. These services included towing, transporting, impounding and storing of the freightliner as well as its cargo (food grade metal lids) strewn across the highway.

Previously, Superior Towing filed a motion for default judgment against M & C Express for the clean-up charges incurred (ECF No. 17),¹ and a motion to dismiss the complaint by Progressive for failure to state a claim (ECF No. 26). As time passed, Superior Towing’s storage charges continued to grow, so the Court granted Superior Towing’s Motion for Default Judgment against M & C Express as to liability under its quantum meruit theory, but denied the motion as to damages. (ECF No. 31). Additional proof was required to determine the reasonable value of the storage charges. Contemporaneously, Progressive sought dismissal of the Complaint under Rule 12. (ECF No. 26). Progressive argued that any obligation to Superior Towing would only arise when a final judgment against M & C Express is entered. As such, Progressive asserted that the suit against it was premature.

Thereafter, Superior Towing submitted an invoice of costs incurred and a Certification by a representative of Superior Towing attesting to the reasonableness of the damages. (ECF No. 32). At oral argument, Superior Towing addressed the amount of damages against M & C Express. Progressive’s counsel did not object to the entry of the judgment against M & C Express, but instead reserved Progressive’s rights and defenses, including its right to challenge Superior Towing’s recovery of the final judgment from Progressive. (Oct. 19, 2021 Hearing T. 3:13-4:16; 7:35-8:4). The Court entered judgment in favor of Superior Towing and against M & C Express in the amount of $217,333.32 plus $402.00 in costs. (ECF No. 34). Subsequent thereto, Progressive filed its Answer to Superior Towing’s Complaint (ECF No. 41); but never asserted that it had any problem with the merits of the litigation up to and including entry of the judgment against M & C Express.

II.

*2 Superior Towing brings this motion to enforce its judgment against Progressive for failing to indemnify Superior Towing in the amount of the default judgment against M & C Express. In opposition, Progressive recognizes its obligation under Form MCS–90, but it argues that Superior Towing’s damages consist of excessive storage costs and miscellaneous administrative fees for which Progressive is not obligated to pay. To resolve the issue, Progressive requests discovery, including the deposition of a representative of Superior Towing with knowledge of the damages, a representative of the highway department with knowledge of the accident, and a representative of the New Jersey State Police Department. (ECF No. 47, Opp. Br. at 10). In addition, Progressive asserts it shall mount a defense to evaluate Superior Towing’s final judgment. (Id.) Such discovery could have been conducted earlier. Previously, the Court accepted Progressive’s theory that its obligation to Superior Towing rests on a “final judgment,” and payment was not due until one was entered; but it never clearly stated further discovery was necessary. Now that a “final judgment” has been entered, Progressive contends it has a right to defend itself against that judgment.

To enforce Superior Towing’s judgment against Progressive now without discovery would have the effect of thwarting Progressive’s ability to litigate the remaining claim against it, and to compel Progressive to make payment without the benefit of a defense or discovery. As such, the Court will deny the Motion to Enforce without prejudice, and allow Progressive to undertake discovery and defend itself in this matter.

The Court’s makes its decision to deny the Motion to Enforce reluctantly. This result is unfair and prejudicial to Superior Towing since Progressive had the opportunity to defend against the amount of the final judgment earlier. Progressive has been present in this case from its inception, but it declined to participate in the Motion for Default Judgment against its insured, M & C Express. (ECF No. 17). After the Motion for Default Judgment was granted as to liability (ECF No. 31), Progressive failed to object to the amount of the final judgment against M & C Express. Only now, at the eleventh hour after the final judgment has been entered, has Progressive challenged the final judgment. This circuitous course of action not only frustrates judicial economy, but it also forces the parties to unnecessarily expend resources. With that said, the attorney for Superior Towing may, in its discretion, apply for some appropriate relief, if any, that is just and reasonable.

ORDER

IT IS on this 21^st day of February, 2023,

ORDERED that plaintiff Superior Towing and Transport, LLC’s Motion to Enforce against defendant Progressive Mountain Insurance Company (ECF No. 42) is DENIED WITHOUT PREJUDICE; and

ORDERED that the parties shall proceed with discovery as to damages under the oversight of Magistrate Judge Goodman.

All Citations

Footnotes

The Court’s September 30, 2021 Memorandum (ECF No. 31) also granted the Motion to Dismiss by defendants Crown Cork & Seal USA, Inc. and J.B. Hunt Transport, Inc. as to Counts I and II, and denied the motion as to Count III.

End of Document