ROYAL INSURANCE COMPANY OF AMERICA AS SUBROGEE OF WARNER LAMBERT COMPANY,

Plaintiff,

v.

M/V MSC DYMPHNA, HER ENGINES, BOILERS, ETC. MEDITERRANEAN SHIPPING COMPANY

S.A., Cestus Paninternational, Inc. Chargres Enterprises Inc ., Defendants.

June 16, 2004.

Nicoletti Hornig Campise & Sweeney, New York, NY, James F. Campise, David Y. Loh, for Plaintiff.

De Orchis, Walker & Corsa, LLP, New York, NY, Vincent M. De Orchis, John A. Orzel, for Defendants.

MEMORANDUM ORDER

LEISURE, J.

On February 26, 2004, this Court issued an opinion and order that, among other things, denied plaintiff’s cross-motion for summary judgment. Royal Ins. Co. v. M/V MSC Dymphna, 2004 WL 369268. The Court found that COGSA’s $500 per package limitation applies in this case, but that a genuine issue of material fact remains as to what constituted a “package” in the agreement between the parties. Plaintiff now moves the Court for certification of appeal pursuant to 28 U.S.C. § 1292(a)(3) and (b). Plaintiff seeks appellate review of the Court’s determination that the bill of lading in this case does not unambiguously define “cartons” as the applicable COGSA package. Defendants oppose plaintiff’s motion. For the reasons set forth below, the Court denies plaintiff’s motion.

Discussion

The Court presumes familiarity with its prior opinion and order in this case.

“It is a basic tenet of federal law to delay appellate review until a final judgment has been entered.” Koehler v. Bank of Bermuda Ltd., 101 F.3d 863, 865 (2d Cir.1996). “Rare exceptions” to this final judgment rule are set forth in, among other things, 28 U.S.C. § 1292(a)(3) and (b), which allow for interlocutory appeals in limited circumstances. See id. The Court reviews the applicability of these sections in turn.

I. 28 U.S.C. § 1292(a)(3)

Section 1292(a)(3) of title 28 of the United States Code provides that “the courts of appeals shall have jurisdiction of appeals from … [I]nterlocutory decrees of such district courts or the judges thereof determining the rights and liabilities of the parties to admiralty cases.” The parties now dispute whether the Court’s summary judgment ruling–that a genuine issue of fact remains in dispute about what unit constitutes the COGSA “package”–determined “the rights and liabilities” of the parties. A plain reading of the statute favors neither party’s interpretation over the other’s. On the one hand, the Court’s ruling constitutes a determination about defendants’ liability, namely, that it is limited to $500 per package and that the trier of fact must decide what unit constitutes the applicable package. On the other hand, the Court’s ruling does not constitute a determination about defendants’ liability, as the Court did not address on summary judgment whether defendants are at fault for plaintiff’s loss. The statutory language of 28 U.S.C. § 1292(a)(3) could support either interpretation, depending on whether the statute properly requires a narrow or expansive construction. See Wright, Miller & Cooper, Federal Practice and Procedure, § 3927 (1996).

Courts considering the scope of 28 U.S.C. § 1292(a)(3) under similar circumstances have reached divergent conclusions. In Bucher-Guyer AG v. M/V Incortrans Spirit, 868 F.2d 734, 735 (5th Cir.1989), for example, the Fifth Circuit Court of Appeals held that “[t]he decision whether the $500 COGSA limitation on damages applies in this case is not a decision determining the rights and liabilities of the parties. In fact, if we were to hold that the $500 limit applies, we would still have to remand this case for a decision on whether the defendants were liable.” See also, e.g., Wingerter v. Chester Quarry Co., 185 F.3d 657, 669-71 (7th Cir.1998) (declining to review lower court decision denying plaintiff’s request for a jury trial because “legislative intent, general reluctance to erode the final judgment rule, and the historical origin of the statute,” all support a narrow construction of § 1292(a)(3)); Evergreen Intern. (USA) Corp. v. Standard Warehouse, 33 F.3d 420, 424 (4th Cir.1994) (noting the “universal” understanding of the statute’s limited applicability and denying appellate review because “[s]ection 1292(a)(3) was not intended to clutter the federal docket with interlocutory odds and ends”). By contrast, in Wallis v. Princess Cruises, Inc., 306 F.3d 827, 833-834 (9th Cir.2002), the Ninth Circuit Court of Appeals found that it had “jurisdiction over an interlocutory appeal under § 1292(a)(3) where … only the validity and applicability of a provision limiting liability has been determined.” The Wallis court reasoned that, “if the district court has held that a plaintiff can recover no more than $500 if actual liability is established, an economically rational plaintiff will not ordinarily pursue the case to judgment, and the correctness of the district court’s determination of applicability of the liability limitation will never be reviewed.” Id. The Wallis court read § 1292(a)(3) to account for this “practical problem posed by limitations on liability.” Id.

While the Second Circuit appears not yet to have addressed the specific issue of whether rulings on the limitation of liability under COGSA are appealable interlocutory orders, see Stolt Tank Containers, Inc. v. Evergreen Marine Corp., 962 F.2d 276, 278-279 (2d Cir.1992), the Court has ruled that § 1292(a)(3) should be construed narrowly. In Tradax Ltd. v. M.V. Holendrecht, the Court held that § 1292(a)(3) “has been narrowly construed, and basically limited to cases where there has been a determination of liability but not yet a computation of damages.” 550 F.2d 1337, 1340-42 (2d Cir.1977) (citations omitted); see Blue Water Yacht Club Assoc. v. New Hampshire Ins. Co., 355 F.3d 139, 141 (2d Cir.2004) (“[W]e have construed § 1292(a)(3) to mean that we have jurisdiction when the court below, as is customary in admiralty, has entered an interlocutory decree deciding the merits of the controversy between the parties, but has left unsettled the question of damages or other details.”).

Here, the Court declines to grant plaintiff’s motion for certification pursuant to 29 U.S.C. § 1292(a)(3). The Court reads § 1292(a)(3) narrowly, which consists with the “basic tenet of federal law to delay appellate review until a final judgment has been entered,” with the historical analysis of the statute set forth by courts in other circuits, and with Second Circuit law. The Court’s ruling on summary judgment did not “determine the rights and liabilities” of the parties within the meaning of the statute. Rather, the Court simply denied summary judgment to plaintiff on the package issue, and held that the issue involves factual disputes that must be resolved by the trier of fact. Plaintiff in this case, therefore, is not similarly situated to the plaintiff in Wallis, and does not suffer practical problems that access to appellate review alone can solve.

Plaintiff contends that the only defense conceivably available to defendants is that liability is limited to $500 per pallet in this case. Plaintiff argues that defendants have taken no active steps to meet their burden of proving their only available affirmative defense to liability, the heavy weather defense. The Court, however, will not speculate about what defenses may or may not remain available to defendants at this stage, or whether such defenses are likely to be proved. As plaintiff seeks an interlocutory appeal, it is sufficient to note at this time that defendants have not admitted liability, and that, at the very least, a genuine issue of material fact remains in dispute as to what constitutes the COGSA package. Moreover, unlike the defendants in Stolt Tank, the defendants here have not stipulated to remove from the case all issues except whether the liability limitations apply. 962 F.2d at 277. The Court therefore finds that its summary judgment ruling did not determine the rights and liabilities of the parties within the meaning of § 1292(a)(3), and declines to grant plaintiff’s motion on that ground.

II. 28 U.S.C. § 1292(b)

Section 1292(b) of title 28 of the United States Code provides that when a district judge is “of the opinion that [the district court’s] order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order.” Plaintiff notes that the Court, in its summary judgment decision, observed the “prolix litigation” in this “murky area of admiralty law,” and argues that certifying for appeal the issue of the COGSA package submerged in this murky area would be in the best interest of justice. Plaintiff’s position is that certifying appeal under § 1292(b) would lead to the resolution of an unresolved, controlling question of law, and that it would avoid protracted litigation.

Plaintiff identifies proper legal bases to certify an appeal under § 1292(b), see Klinghoffer v. S.N.C. Achille Lauro, 921 F.2d 21, 23-24 (2d Cir.1990) (“Although the resolution of an issue need not necessarily terminate an action in order to be ‘controlling,’ it is clear that a question of law is ‘controlling’ if reversal of the district court’s order would terminate the action .”); Koehler, 101 F.3d at 865 (noting that a goal of § 1292(b) is to “sav[e] trial court time by avoiding fruitless litigation”), but neither legal basis is supported by the facts in this case. First, to the extent that package litigation under COGSA is “murky,” this murkiness is attributable to the apparently common failure of shippers and carriers to fill out form bills of lading in any manner anticipated by the law. As the Court noted in its summary judgment opinion, the law applicable to the package issue in non-container cases is clear. Royal Insurance, 2004 WL 369268, at *5 n. 1 (“[T]he Second Circuit has explicitly endorsed the analysis in Seguros, which this Court applies here, as ‘sensible’ and ‘straightforward.” ‘). No controlling question of law in this case is murky, and certifying appeal on this ground is not appropriate. Cf. ABN Amro Verzekeringen BV v. Geologistics Americas, Inc., 01 Civ. 5661, 02 Civ. 1238(DC), 2003 WL 21543529, at *2 (S.D.N.Y. July 9, 2003) (certifying appeal under § 1292(b) because “[i]n contrast to liability limitation disputes under federal law, COGSA or the Warsaw Convention, this areas of state law is comparatively unsettled”).

Second, while the Court agrees with plaintiff that avoiding protracted litigation would serve the interests of the parties and the Court, it is not clear that certifying appeal would accomplish this purpose. Fault has not yet been determined in this case, and well-developed Second Circuit law shows that even the issue of what unit constitutes a package must be resolved by the trier of fact. Certifying appeal at this time, before final judgment, would not likely contribute to a more efficient resolution of this case than would denying plaintiff’s motion and proceeding with the case in this Court. The Court therefore declines to grant plaintiff’s motion on this ground.

Conclusion

For the reasons set forth above, the Court denies plaintiff’s motion for certification of appeal pursuant to 28 U.S.C. § 1292(a)(3) and (b). The parties are ordered to appear for a status conference on July 22, 2004, at 10:30 a.m.

SO ORDERED.

United States District Court,

N.D. Illinois, Eastern Division.

Christine E. SADORF, Michael Malaniuk, and Eugene Malaniuk, Plaintiffs,

v.

Richard F. VALDEZ and Caledonia Haulers, Inc., Defendants.

June 17, 2004.

MEMORANDUM OPINION AND ORDER

DARRAH, J.

Plaintiffs filed suit against Defendants, Richard F. Valdez and Caledonia Haulers, Inc., in the Circuit Court of Cook County, Illinois. Defendants removed the action to federal court based on the addition of federal claims in Plaintiffs’ First Amended Complaint. Presently before the Court is Plaintiffs’ Motion to Remand.

Plaintiffs’ Complaint, First Amended Complaint, and Defendants’ Notice of Removal support the following summary of the alleged conduct of the parties.

On April 20, 2003, Christine Sadorf was a passenger in a vehicle operated by Michael Malaniuk and owned by Eugene Malaniuk. That same day, Richard Valdez was operating a truck as an employee of Caledonia Haulers, Inc. A collision occurred between Malaniuk the truck driven by Valdez.

On May 5, 2003, Plaintiffs filed suit in the Circuit Court of Cook County, alleging two counts of negligence against the Defendants. On January 21, 2004, Plaintiffs filed a motion for leave to file its First Amended Complaint in the Circuit Court of Cook County. On January 29, 2004, Plaintiffs were granted leave to file their First Amended Complaint.

Plaintiffs’ First Amended Complaint was filed in the Circuit Court of Cook County on January 29, 2004. The First Amended Complaint included the original negligence counts and added new counts of negligent and willful and wanton entrustment and retention of Valdez against Caledonia.

On February 27, 2004, Defendants filed a Notice of Removal, removing the suit to this Court. Defendants removed the action based upon the new allegations of negligent and willful and wanton entrustment as these new allegations arose under the purview of the Federal Motor Carrier Safety Act (“FMCSA”) and Federal Motor Carrier Safety Regulations (“FMCSR”) which address driver qualifications, vehicle inspection, and vehicle maintenance.

Plaintiffs argue that Defendants filed their Notice of Removal after the required thirty-day period because the Defendants received notice that the action potentially involved the FMCSA when the original Complaint was filed or when the Plaintiffs requested discovery materials, including truck maintenance records and the log and personnel records of Valdez, or, at the latest, when the motion for leave to file the amended complaint was filed because it included a copy of the First Amended Complaint.

Pursuant to 28 U.S.C. § 1446(b),

If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable….

In a situation in which the original complaint does not disclose a ground for removal but an amended complaint does so, the thirty-day period does not begin to run until the state court grants leave for the amended complaint to be filed. See Sullivan v. Conway, 157 F.3d 1092, 1094 (7th Cir.1998) (Sullivan ). If the thirty-day period began to run by merely filing the motion for leave to amend the complaint, a party would be attempting to remove a case before such time as it is positive that a basis for removal exists. A case is removable when the papers disclose that the case is or has become removable, “not that it may sometime in the future become removable if something happens,” i.e., granting leave to file an amended complaint. Sullivan, 157 F.3d at 1094.

In the instant case, Plaintiffs seek to require the Defendants to have filed their Motion to Remand because Plaintiffs’ suit potentially involved the FMSCA. However, as stated above, a case does not become removable because the suit may, at some future time, become removable. See Sullivan, 157 F.3d at 1094. Defendants filed their Notice of Removal within thirty days of the state court’s granting Plaintiffs leave to file their First Amended Complaint. Accordingly, the Notice of Removal was timely filed.

Plaintiffs also argue that remand is proper because their negligent entrustment claims are not preempted by federal law; therefore, this Court does not have jurisdiction. Defendants argue that Plaintiffs’ negligent entrustment claims are completely preempted by the FMCSA and FMCSR or are preempted because they would conflict with, interfere with, and seriously compromise the FMCSR.

State laws regarding the same subject matter as statutes enacted by Congress may be preempted by express statutory terms. Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 51 L.Ed.2d 604 (1977) (Jones). If the federal statute does not contain express preemptive language, Congress’s intent to preempt all state law in a particular area may be inferred where the scheme of federal regulation is sufficiently complete to reasonably support the inference that Congress left no room for supplemental state regulation. See Hillsborough County v. Automated Med. Lab., Inc., 471 U.S. 707, 713, 105 S.Ct. 2371, 85 L.Ed.2d 714 (1985) (Hillsborough ).

A state law may also be preempted to the extent it actually conflicts with federal law such that compliance with both the federal and state law is impossible or when the state law conflicts with the purposes and objectives of Congress when enacting the federal law. See Hillsborough, 471 U.S. at 713; Florida Lime & Avocado Growers, Inc., 373 U.S. 132, 142-43, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963); Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941). This requires the federal court to “consider the relationship between the state and federal laws as they are interpreted and applied, not merely as they are written.” Jones, 430 U.S. at 526.

The FMCSRs are derived from primarily two statutes, 49 U.S.C. § 3102(b)(1) directs that “[t]he Secretary of Transportation may prescribe requirements for … qualifications … of employees of, and safety of operation and equipment of, a motor carrier ….” and the Secretary of Transportation is also authorized to promulgate regulations by the Motor Carrier Safety Act of 1984. In that Act, Congress directed the Secretary of Transportation to establish minimum federal safety standards for commercial motor vehicles and their operators. See 49 U.S.C. § 2505.

These statutes do not expressly preempt state law. Nor do they evince an intent to occupy the field completely. See 49 U.S.C. § 31141(f)(4) (providing that the remedies “are in addition to other remedies provided by law”); Specialized Carriers & Rigging Ass’n v. Virginia, 795 F.2d 1152, 1155 (4th Cir.1986); North Carolina Motorcoach Assoc. v. Guilford County Bd. of Educ., — F.Supp.2d —- (2004 WL 902285 (M.D.N.C. April 27, 2004)); Yellow Freight Sys., Inc. v. Amestoy, 736 F.Supp. 44, 47 (D.Vt.1990) (collectively, finding no express or “complete” preemption by FMCSA/FMCSR).

Defendants also argue that Plaintiffs’ negligent entrustment claims are preempted because, to the extent they are accepted by a factfinder, they would conflict with, interfere with, and seriously compromise the FMCSR, under which Valdez was classified as a qualified driver. Defendants identify numerous federal regulations that relate to a person’s qualifications as a motor carrier driver and the requirements of the employer to inquire and document numerous aspects of the motor carrier driver’s performance. Defendants contend that a jury’s finding of negligent entrustment or negligent hiring would conflict with federal regulations if the Defendants complied with the applicable federal regulations. However, Defendants’ contention that they fully complied with applicable federal regulations does not turn the negligent claims into federal claims. Instead, they are defenses to Plaintiffs’ negligence claims. Federal question jurisdiction cannot be based on an anticipated defense that is federal in nature. See Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987); Louisville & Nashville Ry Co. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 53 L.Ed. 126 (1908). Accordingly, the federal regulations relied upon by the Defendants do not preempt Plaintiffs’ negligence claims; and no federal question jurisdiction exists. See Fleming Co. v. Better Foods Dist. ., Inc., 2002 WL 31498990 (E.D.Pa. Nov.5, 2002) (defendant’s assertion of compliance with FMCSR amounts to defense to plaintiff’s negligence claim and cannot establish federal question jurisdiction). Furthermore, Defendants’ Notice of Removal relies solely on federal question jurisdiction; and the existence of diversity jurisdiction is not apparent in the pleadings before the Court.

For the foregoing reasons, jurisdiction does not lie in this Court; and Plaintiffs’ Motion to Remand is granted.

END OF DOCUMENT