United States District Court,

N.D. California.

Mark HELLINSKI, Plaintiff,

v.

UNITED VAN LINES, and Does 1 through 10, Roe Corporations 11 through 20, Roe

Copartnerships 21 through 30, inclusive, Defendants.

Aug. 18, 2004.

ORDER GRANTING MOTION TO DISMISS STATE-LAW CLAIMS

ALSUP, J.

In this interstate-shipment case, defendant United Van Lines moves to dismiss plaintiff’s state-law claims on the ground they are preempted by the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 14706. This order GRANTS the motion.

The relevant facts set forth in the complaint are assumed true on this motion. On July 2, 2003, plaintiff Mark Hellinski entered into a contract with defendant for the transportation of his household goods and furnishings from Portland, Maine to San Francisco, California. Once the shipment arrived in San Francisco, plaintiff unpacked and took inventory of his property. He found three items missing, including a Gibson guitar, an Artemide lamp and a key to his car’s trunk. Other items like a sofa, a bed and mattress, a chair, a picture frame and a television set had been damaged. A bottle of face wash had also spilled. Plaintiff submitted a claim for these items to defendant on September 24, 2003 (Compl.Exh. A). He sought compensation in the amount of $21,440 for his losses (ibid.).

On December 22, 2003, defendant responded that it had investigated the merits of plaintiff’s claim and determined that he was only entitled to $1,905, less the $500 deductible on an insurance policy worth $60,000 that plaintiff had purchased to cover the shipment at issue (id. at Exh. B). Included with defendant’s letter was a check in the amount of $1,405, tendered as a full and final settlement of plaintiff’s claim for damages (except as to plaintiff’s sofa, which defendant continued to investigate) (ibid.). Plaintiff did not cash the check (id. ¶ 12).

Instead, plaintiff commenced the instant action on April 26, 2004, in San Francisco Superior Court alleging that defendant had failed to carry and deliver plaintiff’s goods pursuant to the provisions of the parties’ bill of lading. The complaint asserts four claims. The first seeks relief under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 14706, as well as California Civil Code Section 2194. The remaining three claims are for negligence, tortious breach of contract and conversion. Defendant removed the case to this Court on June 7, 2004. It now seeks to dismiss certain claims on federal preemption grounds.

The Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 14706, was passed by Congress in 1906 and established a uniform national liability policy for interstate carriers. New York, New Haven & Hartford Railroad Co. v. Nothnagle, 346 U.S. 128, 131, 73 S.Ct. 986, 97 L.Ed. 1500 (1953). Indeed, within years of the amendment’s enactment, the United States Supreme Court in Adams Express Co. v. Croninger, 226 U.S. 491, 33 S.Ct. 148, 57 L.Ed. 314 (1913), defined the amendment’s preemptive effect in the broadest terms:

Almost every detail of the subject 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.

Id. at 505-06. As such, the amendment completely preempts state-law claims, whether founded in tort or contract, against interstate carriers based on loss or damage to shipped goods. Ibid; Hughes Aircraft Co. v. North American Van Lines, Inc., 970 F.2d 609, 613-14 (9th Cir.1992) (noting that the shipper in that case “wisely concedes that federal law preempts any state common law action against … a common carrier”). Accordingly, the Carmack Amendment provides the exclusive remedy for an action for damages against a delivery carrier.

In the present case, plaintiff offers little resistance to the inescapable conclusion that his claims based on state law, e.g., California Civil Code Section 2194, negligence, tortious breach of contract and conversion, cannot go forward in light of the preemptive breath of the Carmack Amendment. Given that the state claims seek no relief for harm sustained independent from the loss or damage to plaintiff’s goods, the claims must be DISMISSED.

With that said, plaintiff’s first claim for relief does invoke the Carmack Amendment, which provides in relevant part that:

A carrier providing transportation or service … 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 … [is] liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property …

49 U.S.C. 14706(a). Plaintiff has alleged legally sufficient facts to support a claim for damages against defendant for the actual loss or injury to plaintiff’s property under federal law. Plaintiff, for instance, asserts that he delivered his property in good condition to defendant for shipment from Maine to California, that all of his property was itemized, that he purchased a policy of insurance with “full value protection,” and that some of plaintiff’s goods and furnishings upon arrival were damaged or not delivered at all. This federal claim thus survives.

Plaintiff maintains that another question remains–that is, “whether his recovery will at the time of trial be limited by the provisions of 49 U.S.C. § 14706 to the extent that he may not be able to recover the exemplary and punitive damages he has requested in addition to his actual losses” (Opp.3). Plaintiff, however, is mistaken.

The plain language of the Carmack Amendment provides that a shipper’s sole remedy is limited to the “actual losses or injury to the property” transported. 49 U.S.C. 14706. To allow plaintiff to seek relief greater than that permissible under the Carmack Amendment would undermine the certainty that Congress intended to provide in cases such as this one. Although the Ninth Circuit has not directly spoken on this damage issue, most circuit courts have persuasively rejected punitive damages under the Carmack Amendment. See, e.g., Smith v. United Parcel Service, 296 F.3d 1244, 1247-49 (11th Cir.2002). Gordon v. United Van Lines, Inc., 130 F.3d 282, 287 (7th Cir.1997); Morris v. Covan Worldwide Moving, Inc., 144 F.3d 377, 383 (5th Cir.1998) Cleveland v. Beltman North American Co., Inc., 30 F.3d 373, 379 (2d Cir.1994). Plaintiff points to no authority to the contrary. His claim for punitive damages is thus also preempted.

At the hearing on this matter, plaintiff’s counsel nonetheless requested that he be allowed leave to amend his complaint and allege a claim for punitive damages. No such amendment will be allowed. Based on the authorities cited above and the clear language of the Carmack Amendment, an amendment on this ground would be futile. As this case goes forward, the focus will be on whether plaintiff can prove his claim of actual loss or injury, and the amount thereof, under applicable federal law.

IT IS SO ORDERED.

Supreme Judicial Court of Maine.

STATE of Maine

v.

CORNHUSKERS MOTOR LINES, INC.

Submitted on Briefs: June 24, 2004.

Decided: Aug. 2, 2004.

DANA, J.

Cornhuskers Motor Lines, Inc. appeals from a judgment of the Superior Court (Cumberland County, Humphrey, D.C.J.) finding it guilty of two counts of making false reports of its driver’s activities pursuant to 29-A M.R.S.A. § 558(1) (Supp.2003) (Class E), [FN1] which criminalizes violations of 49 C.F.R. § 395.8(e) (2003). On appeal, Cornhuskers contends that sections 558(1) and 395.8(e) do not impose strict liability on carriers for their drivers’ violations, and the Superior Court improperly allowed toll receipts to be entered into evidence over a hearsay objection. We disagree and affirm the judgment.

I. BACKGROUND

In November, 2002, a motor carrier inspector with the Maine State Police stopped a truck driven by an employee of Cornhuskers Motor Lines, Inc. Upon request, the driver produced his logbook and his toll and fuel receipts for inspection. The inspector noticed discrepancies between the toll receipts and the logbook entries and concluded that the driver had falsified his logbook in violation of 49 C.F.R. § 395.8(e), a federal regulation adopted by the Bureau of State Police pursuant to 29-A M.R.S.A. § 555(2) (1996 & Supp.2003). After being issued two tickets for these violations, the driver pled nolo contendere to both counts and the State subsequently filed two complaints against the driver’s employer, Cornhuskers Motor Lines, Inc., for the same offenses.

II. DISCUSSION

A. Statutory Construction

We review the interpretation of a statute de novo. State v. McLaughlin, 2002 ME 55, ¶ 5, 794 A.2d 69, 72.

Title 29-A M.R.S.A. § 558(1) reads, in relevant part, “[a] person commits a Class E crime if that person violates or knowingly permits a violation of this subchapter or a rule adopted pursuant to this subchapter.” One of the rules “adopted pursuant to this subchapter” [FN2] is 49 C.F.R. § 395.8(e) (2003), which reads:

(e) Failure to complete the record of duty activities of this section or § 395.15, failure to preserve a record of such duty activities, or making of false reports in connection with such duty activities shall make the driver and/or the carrier liable to prosecution.

While finding that Cornhuskers violated section 395.8(e), [FN3] the trial court made a specific finding that there was no evidence to suggest that Cornhuskers knowingly permitted its driver to falsify his records. Since the driver, rather than Cornhuskers, made the false report, Cornhuskers is guilty of violating section 395.8(e) if the regulation imposes strict liability on carriers for their drivers’ violations. We conclude that it does.

At trial, Cornhuskers agreed with the Superior Court’s conclusion that the “and/or” language of section 395.8(e) imposes derivative liability on carriers for their drivers’ false reports in connection with duty activities. On appeal, Cornhuskers changes its position and argues that section 395.8(e) does not impose strict liability on the carrier for its drivers’ violations. We agree with Cornhuskers’ earlier position that “[the court’s] analysis under 395.8(e) is correct … and, if [you were] sitting across the street [i.e. in Federal Court], you would be well justified in finding the defendant guilty.” The Regulatory Guidance issued by the Federal Motor Carrier Safety Administration supports the trial court’s conclusion that the federal regulation imposes strict liability on carriers for their drivers’ falsifications of their records of duty status. In response to the question, “What is the carrier’s liability when its drivers falsify records of duty status?,” the guidance provides: “A carrier is liable both for the actions of its drivers in submitting false documents and for its own actions in accepting false documents. Motor carriers have a duty to require drivers to observe the FMCSRs.” Regulatory Guidance for Federal Motor Carrier Safety Regulations, 62 Fed.Reg. 16370, 16426 (April 4, 1997).

Cornhuskers alternatively claims that, even if the federal regulation imposes strict liability on carriers, when Maine made a violation of the federal regulation a violation of state law, through 29-A M.R.S.A. § 558(1), it changed the carrier’s liability from derivative to one requiring a “knowing” violation with the inclusion of the “knowingly permits” language. Cornhuskers’ interpretation would be correct if section 558(1) simply stated that a person is guilty if that person knowingly permits a violation of a rule adopted pursuant to this subchapter. Instead, the statute provides that a person is guilty of a crime if that person “knowingly permits” a violation of a rule adopted pursuant to the subchapter, or if that person “violates” the rule adopted pursuant to the subchapter.

Cornhuskers argues that the above interpretation of section 558(1) renders superfluous the “knowingly permits” language. Cornhuskers contends that in order for the “knowingly permits” language to have meaning, it necessarily imposes a mens rea component on anyone not directly violating the regulation. We disagree.

We interpret criminal statutes “as being free from unnecessary and superfluous language.” State v. Tauvar, 461 A.2d 1065, 1067 (Me.1983). The “knowingly permits” language is not superfluous for two reasons. First, 29-A M.R.S.A. § 558(1) applies to a number of federal regulations, not just 49 C.F.R. § 395.8(e), and some of those regulations are directed exclusively at drivers. [FN4] In such cases, the carrier violates the regulation only if it knowingly permits the violation. Second, even in a case when the carrier is liable for the actions of its drivers, the “knowingly permits” language allows the state to prosecute the driver’s direct supervisor, if it can establish that the supervisor knowingly permitted a violation of the regulation.

B. Hearsay Objection

We review the admission or refusal to admit evidence for an inappropriate exercise of discretion. State v. Shuman, 622 A.2d 716, 718 (Me.1993). At trial, Cornhuskers objected to the introduction of the toll receipts, contending that since they were being offered to prove that the driver falsified his logs in violation of section 395.8(e), they were inadmissible hearsay. The court admitted the receipts as admissions by a party-opponent pursuant to M.R. Evid. 801(d)(2).

To qualify as an admission by a party-opponent, a statement must be offered against a party and must be “a statement by the party’s agent or servant concerning a matter within the scope of the agency or employment … made during the existence of the relationship ….” M.R. Evid. 801(d)(2)(D). When the driver handed over the toll receipts to the motor carrier inspector, the toll receipts became non-verbal statements offered by the driver. See M.R. Evid. 801(a)(2) (“A ‘statement’ is … nonverbal conduct of a person, if it is intended by the person as an assertion.”); see also Field & Murray, Maine Evidence, § 801.5 at 407 (2000 ed. 1999) (Admissions by party-opponent “may be oral or written or manifested by some action or even by silence.”). The trial court also found that at the time the driver provided the receipts to the inspector he was in the employ of Cornhuskers.

To determine whether an agent is acting within the scope of his or her employment, we look to the Restatement (Second) of Agency:

(1) Conduct of a servant is within the scope of employment if, but only if:

(a) it is of the kind he is employed to perform;

(b) it occurs substantially within the authorized time and space limits; [and]

(c) it is actuated, at least in part, by a purpose to serve the master ….

RESTATEMENT (SECOND) OF AGENCY § 228(1) (1958). See Mahar v. StoneWood Transp., 2003 ME 63, ¶ 14, 823 A.2d 540, 544. The driver here was acting within the scope of his employment because he was performing his job for Cornhuskers at the time, and because handing over log books and supporting documents such as toll and fuel receipts is a task that drivers are required to perform as part of their employment pursuant to the Federal Motor Carrier Safety Regulations. See 49 C.F.R. § 395.8(k)(2) (2003) (“The driver shall retain a copy of each record of duty status for the previous 7 consecutive days which shall be in his/her possession and available for inspection while on duty.”). The driver’s toll receipts are statements made by an agent of Cornhuskers, during the existence of the employment relationship, “concerning a matter within the scope of the agency or employment” and therefore they qualify as admissions by a party-opponent.

The entry is:

Judgment affirmed.

FN1. Title 29-A M.R.S.A. § 558(1) has since been amended by P.L.2003, ch. 452, § § Q-9, Q-10 (effective July 1, 2004), codified at 29-A M.R.S.A. § 558(1) (Supp.2003).

FN2. 9 C.M.R. 16 222 004-2 § 2(A) (2001).

FN3. The Superior Court based this finding on its understanding that section 395.8(e) provides that carriers can be held liable for their drivers’ false reports of duty activities. The court noted that this interpretation comports with the Maine statute on the criminal liability of organizations for crimes committed by their employees. Title 17-A M.R.S.A. § 60(1)(B) (1983) provides that an “organization is guilty of a crime when … [t]he conduct or result specified in the definition of the crime is engaged in or caused by an agent of the organization while acting within the scope of his office or employment.”

FN4. See, e.g., 49 C.F.R. § 395.8(f)(1) (2003) (“Drivers shall keep their records of duty status current to the time shown for the last change of duty status.”).