Cases

England Logistics, Inc. v. GV Champlines

United States District Court for the District of Utah

November 8, 2023, Decided; November 8, 2023, Filed

Case No. 2:22-CV-00742-TS-DAO

Reporter

2023 U.S. Dist. LEXIS 201209 *; 2023 WL 7387258

ENGLAND LOGISTICS, INC., Plaintiff, v. GV CHAMPLINES, Defendant.

Prior History: England Logistics, Inc. v. GV Champlines, Inc., 2023 U.S. Dist. LEXIS 109047, 2023 WL 4138327 (D. Utah, June 22, 2023)

Counsel: [*1] For England Logistics Inc, a Utah corporation, Plaintiff: Jeffery Scott Williams, NELSON CHRISTENSEN HOLLINGWORTH & WILLIAMS, SALT LAKE CITY, UT.

For GV Champlines, a California corporation, Defendant: Adam Darrell Goff, LEAD ATTORNEY, PLANT CHRISTENSEN & KANELL, SALT LAKE CITY, UT.

Judges: Ted Stewart, United States District Judge.

Opinion by: Ted Stewart

Opinion

MEMORANDUM DECISION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT GV CHAMPLINES’S MOTION TO DISMISS

This matter is before the Court on Defendant GV Champlines’s 12(b)(1), (6) Motion to Dismiss for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. For the reasons set forth below, the Court will grant in part and deny in part the Motion.

I. BACKGROUND

The relevant facts alleged in the Complaint are as follows. On October 27, 2020, Plaintiff England Logistics, a freight broker, and Defendant GV Champlines, a motor carrier, entered into a written agreement in which Plaintiff agreed to arrange for Defendant to transport loads of freight for Plaintiff’s customers, including.¹ In May 2021, Plaintiff arranged for Defendant to transport a load of yogurt from San Fernando, California, to the headquarters of OM [*2] Produce (“OM”) in Irving, Texas. OM is a customer of Plaintiff and the beneficial owner of the freight at issue. Defendant accepted physical possession of the load on May 18, 2021.² When the load arrived in Irving, it was “damaged such that the Load was rendered valueless and could not be sold for salvage or otherwise.”³ Plaintiff was assigned rights under the parties’ contract by OM, the beneficial owner of the cargo.⁴

The agreement between the parties included a provision that allowed Plaintiff to select litigation under certain conditions but required that the proceedings begin within 18 months of “the date of delivery or the scheduled date of delivery of the freight, whichever is later.”⁵ Section 3.3.2 of the agreement provided that the “[carrier’s] liability for any cargo damage, loss, or theft from any cause shall be determined under the Carmack Amendment, 49 U.S.C. §14706.”⁶ However, the agreement also provided that “[t]o the extent that terms and conditions herein are inconsistent with part (b) Subtitle IV of Title 49 U.S.C., [the Carmack Amendment], the Parties expressly waive all rights and remedies they may have under the Act.”⁷

Plaintiff brought this action on December 1, 2022, alleging that Defendant delivered the damaged cargo on May 18, 2021, and [*3] bringing a claim under the Carmack Amendment and a breach of contract claim.⁸

Defendant now moves to dismiss under Fed. R. Civ. P. 12(b)(1) and 12(b)(6), arguing that (1) Plaintiff fails to state a claim upon which relief can be granted because Plaintiff brought its Complaint after the deadline established in an agreement between the parties; and (2) the Court lacks subject-matter jurisdiction over both of Plaintiff’s claims because Plaintiff waived its rights provided by the federal statute under which it brought its Carmack claim, and the Court thus lacks supplemental jurisdiction over the breach of contract claim.⁹

Plaintiff argues that (1) the Complaint was timely because the two-year statute of limitations provision in the Carmack Amendment applies to Plaintiff’s claims rather than the 18-month limitation included in the Agreement; and (2) OM’s Carmack Amendment rights, which were assigned to Plaintiff, “exist separate from and are in no manner impacted by any terms of the [a]greement.”¹⁰

II. STANDARD OF REVIEW

The burden of establishing subject matter jurisdiction is on the party asserting jurisdiction.¹¹ A motion to dismiss under Rule 12(b)(1) can take one of two forms: (1) facial attacks “challeng[ing] the sufficiency of the complaint, requiring the district court [*4] to accept the allegations in the complaint as true,” or (2) factual attacks, “challeng[ing] the facts upon which subject matter jurisdiction depends.”¹² With factual attacks, “the court must look beyond the complaint and has wide discretion to allow documentary and even testimonial evidence under Rule 12(b)(1).”¹³ With facial attacks, the Court applies “the same standards under Rule 12(b)(1) that are applicable to a Rule 12(b)(6) motion to dismiss for failure to state a cause of action.”¹⁴

In considering a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6), all well-pleaded factual allegations, as distinguished from conclusory allegations, are accepted as true and viewed in the light most favorable to Plaintiff as the nonmoving party.¹⁵ Plaintiff must provide “enough facts to state a claim to relief that is plausible on its face,”¹⁶ which requires “more than an unadorned, the-defendant-unlawfully harmed-me accusation.”¹⁷ “A pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’ Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.'”¹⁸

“The court’s function on a Rule 12(b)(6) motion is not to [*5] weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff’s complaint alone is legally sufficient to state a claim for which relief may be granted.”¹⁹ As the Court in Iqbal stated, only a complaint that states a plausible claim for relief survives a motion to dismiss.

Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not shown—that the pleader is entitled to relief.²⁰

III. DISCUSSION

A. Carmack Amendment Applicability and Statute of Limitations

“The Carmack Amendment was passed by Congress to standardize inter-state transportation claims.”²¹ It “was intended to ‘supersede all the regulations and policies of a . . . state’ and ‘limit the power to exempt [a carrier] by . . . contract.'”²² Section 14101(b)(1) of Title 49 allows parties to “expressly waive any or all rights and remedies . . . covered by the contract.”²³ However, while carriers can reasonably limit the extent of their liability under the Carmack Amendment, “[t]he authorities have long held [*6] that a carrier cannot by contract exempt itself from liability for its own negligence.”²⁴

Courts have also found that the Carmack Amendment applies to and preempts certain contractual provisions.²⁵ For example, in Aluminum Products Distributors, Inc. v. Aaacon Auto Transport, Inc., the Tenth Circuit held that a clause limiting settlement of claims to arbitration in New York City in the defendant’s contract was preempted by the Carmack Amendment because “any such limitation . . . [was] declared to be unlawful and void.”²⁶ While similar cases have primarily dealt with issues like forum selection and arbitration clauses conflicting with the Carmack Amendment, the statute of limitations provision in the parties’ agreement in this case is analogous to prior court determinations.²⁷ As such, if the Carmack Amendment applies here, then its two-year statute of limitations applies rather than the eighteen-month limitation in the parties’ agreement.

When considering inconsistencies between specific and general terms in contracts, courts typically give greater weight to the more specific terms.²⁸ Specific terms carry more weight because “[a]ttention and understanding are likely to be in better focus when the language is specific or exact, and . . . [*7] the specific or exact term is more likely to express the meaning of the parties with respect to the situation than the general language.”²⁹

The agreement between Plaintiff and Defendant states that legal proceedings must be brought within eighteen months from the date of delivery or scheduled date of delivery.³⁰ The agreement generally waives any rights and remedies under the Carmack Amendment that are inconsistent with the terms of the parties’ agreement,³¹ but also expressly incorporates liability under the portion of the Carmack Amendment relating to actions brought for damages to the goods.³² The Carmack Amendment provides that “[a] carrier may not provide by rule, contract, or otherwise . . . a period of less than 2 years for bringing a civil action against it under this section.”³³

Defendant argues that the parties properly waived any rights and remedies under the Carmack Amendment because of the general waiver found in section 4.4.1 of the parties’ agreement, despite the more specific provision incorporating section 14706 of the Carmack Amendment contained in section 3.3.1. Defendant further argues that the eighteen-month limitation in the parties’ agreement should govern because “it has long been established in federal jurisdictions that contractual parties may stipulate to [*8] stricter limitations than those allowed by statutes, such as statutes of limitation.”³⁴ Plaintiff contends that, despite the waiver of rights contained in section 4.3.2, “the [a]greement does not waive the Carmack Amendment, but instead expressly referred to and incorporated [it] in regard to claims for loss or damage to goods[,]” and thus a two-year statute of limitations applies.³⁵

Because the provision applying the Carmack Amendment to liability for cargo damage is more specific than the provision expressly waiving rights under the Carmack Amendment, the Court finds that the Carmack Amendment applies to Plaintiff’s claim for damages to the cargo. The Amendment’s two-year statute of limitations thus applies, and the suit was timely filed. Defendant’s Motion to Dismiss for failure to state a claim upon which relief can be granted is denied.

B. Breach of Contract Claim

Plaintiff brings a breach of contract claim in addition to the claim under the Carmack Amendment, invoking the Court’s supplemental jurisdiction “on the grounds that this cause of action is so related to the Carmack claim . . . that they form part of the same case or controversy.”³⁶

“The Tenth Circuit has held ‘that the Carmack Amendment preempts state common law remedies against common carriers for negligent loss or damage to [*9] goods shipped under a lawful bill of lading.'”³⁷ “Other circuits are in accord.”³⁸

Because the Carmack Amendment applies here and thus “preempts state common law remedies against common carriers for negligent loss or damage to goods shipped[,]”³⁹ Defendant’s Motion to Dismiss as applied to the breach of contract claim is granted, and the breach of contract claim is dismissed. Should later developments call into question the application of the Carmack Amendment, Plaintiff may seek leave to reassert its state-law claim at that time.

IV. CONCLUSION

It is therefore

ORDERED that Defendant’s Motion to Dismiss (Docket No. 31) is GRANTED IN PART and DENIED IN PART as set forth above.

DATED this 8th day of November, 2023.

BY THE COURT:

/s/ Ted Stewart

Ted Stewart

United States District Judge

End of Document

¹Docket No. 1, at 3.

²Id. at ¶ 13.

³Id. at ¶ 15.

⁴Docket No. 37, at 1.

⁵Docket No. 1-1, at 9.

⁶Id. at 7.

⁷Docket No. 31, at 2.

⁸Docket No. 1.

⁹Docket No. 31, at 1.

¹⁰Docket No. 37, at 2.

¹¹Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974) (citation omitted).

¹²Paper, Allied-Indus., Chem. & Energy Workers Int’l Union v. Cont’l Carbon Co., 428 F.3d 1285, 1292 (10th Cir. 2005).

¹³Id.

¹⁴Muscogee (Creek) Nation v. Okla. Tax Comm’n, 611 F.3d 1222, 1227 n.1 (10th Cir. 2010).

¹⁵GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997).

¹⁶Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007).

¹⁷Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009).

¹⁸Id. (quoting Twombly, 550 U.S. at 557).

¹⁹Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).

²⁰Iqbal, 556 U.S. at 679 (internal citations and quotation marks omitted).

²¹ICON Health & Fitness, Inc. v. NVC Logistics Grp., Inc., No. 1:16-cv-00167-JNP-EJF, 2017 U.S. Dist. LEXIS 95734, 2017 WL 2656112, at *1 (D. Utah June 20, 2017) (citing Adams Express Co. v. Croninger, 226 U.S. 491, 505, 33 S. Ct. 148, 57 L. Ed. 314 (1913)).

²²2017 U.S. Dist. LEXIS 95734, [WL] at *1 (citing Adams Express Co., 226 U.S. at 505-06).

²³49 U.S.C. §14101(b)(1).

²⁴Gellert v. United Airlines, 474 F.2d 77, 80 (10th Cir. 1973) (citation omitted).

²⁵See Icon Health, 2017 U.S. Dist. LEXIS 95734, 2017 WL 2656112, at *3 (finding that “[the defendant’s] forum selection clause [was] preempted . . . [and] Carmack applie[d]”); see also Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., 561 U.S. 89, 98, 130 S. Ct. 2433, 177 L. Ed. 2d 424 (2010) (stating in dicta that “if Carmack’s terms appl[ied] . . . the [defendants] would have [had] a substantial argument that the . . . forum-selection clause . . . [was] pre-empted by Carmack’s venue provisions”).

²⁶549 F.2d 1381, 1385 (10th Cir. 1977).

²⁷See e.g., Icon Health, 2017 U.S. Dist. LEXIS 95734, 2017 WL 2656112, at *3 (holding that the Carmack Amendment preempted a forum selection clause because the Tenth Circuit’s prior ruling that a contractual arbitration clause was preempted by the Carmack Amendment “extend[ed] by analogy to the situation at hand”) (citing Aluminum Prods. Distribs., Inc., 549 F.2d at 1384-85).

²⁸Restatement (Second) Contracts § 203(c) (1981) (“In the interpretation of a promise or agreement . . . specific terms and exact terms are given greater weight than general language.”); see e.g., Bennett v. Coors Brewing Co., 189 F.3d 1221, 1232 (10th Cir. 1999) (“[S]pecific terms and exact terms . . . are given greater weight than general language.”) (quoting Restatement (Second) Contracts § 203(c)); Muzak Corp. v. Hotel Taft Corp., 1 N.Y.2d 42, 133 N.E.2d 688, 690, 150 N.Y.S.2d 171 (N.Y. 1956) (“Even if there was an inconsistency between a specific provision and a general provision of a contract . . . the specific provision controls.”).

²⁹Restatement (Second) Contracts § 203 cmt. e.

³⁰Docket No. 1-1 § 4.4.1.

³¹Id. § 4.3.2.

³²Id. § 3.3.2.

³³49 U.S.C. § 14706(e)(1).

³⁴Docket No. 31, at 4.

³⁵Docket No. 37, at 8.

³⁶Docket No. 1, at ¶ 4.

³⁷Prismview, LLC v. Old Dominion Freight Line, Inc., No. 1:21-CV-136 TS, 2022 U.S. Dist. LEXIS 5735, 2022 WL 103793, at *2 (D. Utah Jan. 11, 2022) (citing Underwriters of Lloyds of London v. N. Am. Van Lines, 890 F.2d 1112, 1121 (10th Cir. 1989) (en banc)).

³⁸Id. (citing Underwriters, 890 F.2d at 1120 (“[E]very circuit which has considered the matter … has either held or indicated it would hold that the Carmack Amendment preempts state common law remedies against a carrier for negligent damage to goods shipped under a proper bill of lading”)).

³⁹Underwriters, 890 F.2d at 1121.

Poston v. Velox Transp., LLC

United States District Court, D. Montana.

MICHAEL POSTON and JOANNA POSTON, individually and as guardian of Michael Poston, Plaintiffs,

VELOX TRANSPORT SOLUTIONS, LLC, JULIO SANTOS, CES HOSPITALITY, ALMO DISTRIBUTING, and DOES 1-15, Defendants,

ALMO DISTRIBUTING PENNSYLVANIA, INC., Third-Party Plaintiff,

UBER FREIGHT LLC, Third-Party Defendant.

CV 23-28-M-DWM

Filed 11/17/2023

ORDER

Donald W. Molloy, District Judge United States District Court

Introduction

*1 Michael Poston’s and Joanna Poston’s, individually and as guardian of Michael Poston, (“Plaintiffs”) initial Complaint and Demand for Jury Trial includes six claims related to a motor-vehicle collision that occurred on January 21, 2022, against Defendants Velox Transport Solutions, LLC (“Velox”), Julio Santos, CES Hospitality, Almo Distributing Pennsylvania, Inc. (“Almo”), and Does 1–5. Velox is the motor carrier that owned and operated the semi-truck and trailer involved in the collision. Santos, a Velox employee, was driving the semi-truck and trailer at the time of the collision. CES Hospitality and Almo contracted to dropship the cargo being transported by Velox. Plaintiffs are suing for damages allegedly incurred because of the highway collision. Plaintiffs also claim that CES Hospitality and Almo negligently selected Velox to ship CES Hospitality’s cargo. (See Doc. 1.)

As alleged in the Complaint, on January 21, 2022, Poston was injured when he collided with a semi-truck operated by Santos and owned by Velox on Montana Highway 2 in Flathead County. (Doc. 1.) Poston alleges Santos made an improper U-turn that caused Poston’s vehicle to collide with the semi-truck and become lodged under its trailer. (Id. at ¶ 11.) Poston suffered severe skull fractures, brain trauma, and other injuries. (Id. at ¶ 12.) Santos, the driver of the truck, plead guilty to Careless Driving Involving Death or Serious Bodily Injury in violation of Montana Code Annotated § 61-8-302. (Id. at ¶ 20.)

Almo denies liability for the collision. (Doc. 3.) In addition to denying negligence, Defendant and third-party Plaintiff Almo filed a third-party complaint against Uber Freight LLC (“Uber”) for negligence, contribution, and/or indemnity. (Doc. 3.) Almo asserts that Uber failed to conduct a proper investigation into Velox’s hiring practices, training practices, and background and safety records. (Id. at ¶ 8.) Almo seeks judgment against Uber making Uber either directly liable for any damages assessed against Almo or liable for contribution and/or indemnity. (Id. at ¶ 9.)

Uber now moves to dismiss Almo’s Third-Party Complaint under Federal Rule of Civil Procedure 12(b)(6). (Doc. 12.) Uber argues dismissal is warranted because Almo’s claims are preempted under the Federal Aviation Administration Authorization Act (the “Act”)¹ and that Almo has failed to state sufficient facts and law supporting a negligence claim. Almo responds that negligence claims are either not preempted or fall under an exception within the Act and that they have pled sufficient facts and law to support their claims. Because Almo has the better argument, Uber’s motion is denied.

Legal Standard

*2 To survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Dismissal is appropriate “where there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory.” L.A. Lakers, Inc. v. Fed. Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017) (quotation marks omitted).

Analysis

Uber argues that two independent reasons entitle them to be dismissed from this suit. First, Uber argues that state law tort claims are preempted by the Act given Uber’s position as a freight broker and any negligence claim relates to Uber’s services as a broker. Second, Uber argues that Almo failed to meet the pleading standard under Rule 8(a)(2) by not alleging facts showing Uber’s conduct was negligent. Almo disagrees arguing that highway regulations fall under the traditional state police power and, even though related to a broker’s services, they are an exception to the Act and not preempted. Almo also asserts it has presented sufficient facts and appropriately stated a claim pursuant to Rule 8(a)(2). Almo has the better argument because state tort laws fall under the safety exception of the Act and are not preempted. Almo is also correct that the facts presented are sufficient to meet Rule 8(a)(2) standards. Therefore, Uber’s motion to dismiss is denied.

I. The Act

In 1994, Congress passed the Act to deregulate the trucking industry at the state level. Congress was concerned that state regulation “impeded the free flow of trade, traffic, and transportation of interstate commerce” and “resolved to displace certain aspects of the state regulatory process.” Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 263 (2013) (internal quotation marks omitted). The Act’s “driving concern was preventing states from replacing market forces with their own, varied commands, like telling carriers they had to provide services not yet offered in the marketplace.” Ca. Trucking Ass’n v. Su, 903 F.3d 953, 961 (9th Cir. 2018) (internal citation and quotation marks omitted). In pertinent part, the Act states:

Except as provided in paragraphs (2) and (3), a State, political subdivision of a State, or political authority of 2 or more States 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 (other than a carrier affiliated with a direct air carrier covered by section 41713(b)(4)) or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.

49 U.S.C. § 14501(c)(1). The language of the Act expressly preempts any state law “related to” services provided by brokers and motor carriers. The Act did carve out a safety exception that allows states to create regulations designed to protect the safety and welfare of its residents. See § 14501(c)(2). Accordingly, the question is whether state negligence laws are included in the language found in § 1450(c)(1) and if so, does the safety exception in § 14501(c)(2) apply.

A. General Preemption

Pursuant to the Supremacy Clause of the U.S. Constitution, federal statues may expressly preempt state laws. U.S. Const. art. VI, cl. 2. Courts consider the surrounding statutory framework and Congress’s stated purposes in enacting the statute to identify the domain expressly preempted by that language. Nat’l R.R. Passenger Corp. v. Su, 41 F.4th 1147, 1152 (9th Cir. 2022). Once a court has done so, it asks whether the state law at issue falls within the scope of the preemption clause. Id. at 1152–53.

*3 The Act contains an express provision that preempts any state laws related to the services of a broker and a motor carrier. See § 14501(c)(1). In general, provisions using parallel or identical language within a statute should be interpreted similarly. See Morales v. Trans World Airlines, Inc., 504 U.S. 374, 384 (1992). While Montana has not addressed the issue of preemption regarding negligence claims against brokers, the Ninth Circuit has addressed negligence claims against motor carriers. See Dilts v. Penske Logistics, LLC, 769 F.3d 637, 646 (9th Cir. 2014). Since the preemption language in the Act addressing motor carriers is parallel to the language addressing brokers, any case law regarding preemption pursuant to the Act can be applied to both motor carriers and brokers. Morales, 504 U.S. at 384.

State laws are preempted only if they relate to the price, route, or service of a motor carrier or broker. A generally applicable state law is not “related to a price, route, or service of any motor carrier [or broker]” for purposes of preemption under the Act unless the state law “binds the carrier to a particular price, route or service.” Dilts, 769 F.3d at 646. The court in California Trucking Association, Inc. v. Bonta stated that a state law “does not have such a binding or freezing effect unless it compels a result at the level of the motor carrier’s relationship with its customers or consumers.” 996 F.3d 644, 658 (9th Cir. 2021). Therefore, a determination must be made whether the state negligence laws at issue have a “binding or freezing effect” on Uber’s relationship with its customers or consumers, i.e., Velox and Almo.

The state laws at issue have binding or freezing effects on Uber’s relationship with its customers which relates to Uber’s services as a broker. Uber’s customers are the motor carriers and shippers that use Uber’s services, i.e., its online platform. As discussed in Dilts, state enforcement actions that have an indirect effect on services can be preempted if there is a significant impact. 769 F.3d at 645. Requiring Uber to fully investigate the hiring, training, and safety practices of any motor carrier could affect Uber’s relationship with motor carriers and limit the amount of motor carriers willing to use the online platform. Thus, if there is a decrease in available motor carriers using the online platform, Uber’s ability to provide services to shippers would decrease.

Additionally, investigations into the hiring, safety, and training practices of motor carriers require time, resources, and disclosure of business information which affects the efficiency and daily practices of both brokers and motor carriers. Shippers and motor carriers that contract with Uber would be directly affected by more stringent investigations through increased requirements or potential delays in shipping. Dilts clarifies that changes in costs or business operations may indirectly affect “services” enough to warrant preemption. 769 F.3d at 646–47. Therefore, any state negligent hiring laws have a binding or freezing effect on Uber, relate to Uber’s services as a broker, and fall within the scope of the preemption clause in the Act.

B. The Safety Exception to the Act

Despite the broad preemption language in the Act, Congress did not intend to undermine state safety regulations and included § 14501(c)(2) as an exception to preemption to protect the safety interests of the state. The safety exception allows states to enact or enforce laws that fall generally within the traditional power of the state to address transportation, safety, welfare, or business rules that “do not otherwise regulate prices, routes, or services.” Dilts, 769 F.3d at 644. Section 14501(c)(2) states:

*4 Paragraph (1) [of § 14501(c)] shall not restrict the safety regulatory authority of a State with respect to motor vehicles, the authority of a State to impose highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous nature of the cargo, or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization.

The Supreme Court addressed this issue in Rowe v. New Hampshire Motor Transport Association and held that not all state regulation is preempted. 552 U.S. 364, 375 (2008). Specifically, regulation that broadly prohibits certain forms of conduct that apply to all members of the public or that only affects “rates, routes, or services in ‘too tenuous, remote, or peripheral a manner’ ” is not preempted. Id. (citing Morales, 504 U.S. at 390); see also Ward v. United Airlines, Inc., 986 F.3d 1234, 1243 (9th Cir. 2021) (explaining that safety regulations are examples of generally applicable regulations, and they are not preempted “even if employers must factor those provisions into their decisions about the prices that they set” or “if they raise the overall cost of doing business”). The Ninth Circuit also concluded that “the safety regulatory authority of a State” encompasses common-law tort claims. Miller, 976 F.3d at 1026. Miller defines the exception and reasons that “Congress intended to preserve the States’ broad power over safety, a power that includes the ability to regulate conduct not only through legislative and administrative enactments, but also though common-law damages awards.” Id. at 1020. The Miller court opined that if the preemption clause was narrowly interpreted, much of state law would be beyond the reach of the exception and would not be “consistent with both federalism concerns and the historic primacy of state regulation of matters of health and safety.” Id. at 1028 (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, (1996)). Almo argues that even if their claims are preempted, the safety exception applies. Uber asserts the safety exception only applies to motor vehicles and not brokers. Because safety regulations and standards for hiring, even if preempted, fall within the safety exception because every industry has a duty to hire individuals that meet accepted standards and safety regulations, Almo is correct.

Here, Uber seeks to escape Montana’s regulatory authority. Uber argues that any claim related to a broker’s services is expressly preempted under the Act because subsection (c)(1) is unambiguous: state laws relating to the services of a broker are preempted. Following Uber’s argument, the Act would preempt any state tort claim against not only the broker, but also the motor carrier and any entity providing services related to the transportation of property as defined by the Act. Thus, if Uber’s argument is accepted, any citizen of Montana would be left without civil recourse in the event of a traffic collision with any interstate motor carrier, which was not the intent of Congress. See Miller, 976 F.3d at 1020.

Furthermore, Uber relies upon irrelevant case law. Uber cites other circuit decisions regarding application of the safety exception in the Act to common law tort claims, but since there is clear direction from the Ninth Circuit any conflicting circuit decisions are irrelevant. (See Doc. 13.) Given the Ninth Circuit’s clear treatment of the safety exception to the Act and evidence of Congress’s intent, Almo’s negligence claims are not preempted by the Act because they involve general safety regulations that directly fall under state safety regulatory authority.

II. Pleading Standards

*5 Uber’s second argument is that Almo failed to state a negligence claim in its third-party complaint. (Doc. 13 at 17.) Almo argues that it presented sufficient factual matter to support a negligence claim. (Doc. 3.) Neither party addressed the Rule 14(a) standard that applies to third-party complaints. The parties rely on the standards set forth in Rule 8(a)(2). Almo presented sufficient factual matter to transfer full or partial liability to Uber for the underlying claims which satisfies Rule 14(a). In addition to the satisfaction of Rule 14(a) requirements, Rule 8(a)(2) is satisfied as Almo presented facts sufficient to plausibly plead that Uber may be negligent or liable to Almo. Thus, Almo did not fail to state a claim.

A. Rule 14(a)

The appropriate standard when assessing whether Almo, as a third-party plaintiff, sufficiently stated a claim must include Rule 14(a) standards. See Fed. Trade Comm’n v. Am. Evoice, Ltd., 2016 WL 7165904, at *3 (D. Mont. Aug. 9, 2016); Stewart v. Am. Intern. Oil & Gas Co., 845 F.2d 196 (9th Cir. 1988). Rule 14(a) states that “a defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it.” Fed. R. Civ. P. 14. Rule 14 requires that the third-party complaint be submitted within 14 days from service of the original answer. Id. Here, Almo alleged that Uber is liable for indemnity or contribution for all or part of the damages that may be assessed against Almo. (Doc. 3 at ¶ 9.) Almo also alleged that Uber may be directly liable to Plaintiffs for the alleged injuries. (Id. at ¶ 9.) Almo filed the Third-Party Complaint jointly with its Answer. (See Doc. 3.) Given that Almo timely filed its Third-Party Complaint on a party that may be liable to Almo for all or part of Plaintiffs’ injuries, Rule 14(a) is satisfied.

B. Rule 8(a)(2)

Assuming the veracity of Almo’s allegations in the Third-Party Complaint, Almo may be entitled to relief as there is sufficient evidence that Uber contracted with Velox to ship cargo. Uber asserts that Almo needed to present facts supporting all elements of a negligence claim, however the plausibility standard is not a “probability requirement” and courts take a context-specific approach that draws on “judicial experience and common sense.” Iqbal, at 679. Under Rule 8(a)(2) and Iqbal, a pleading that states a claim for relief must allow the court to reasonably infer that the defendant is liable for the alleged misconduct. Id. at 678.

Here, despite the brevity of Almo’s Third-Party Complaint, there are sufficient facts presented to infer that Uber may be liable to Almo and/or jointly and severally liable to Plaintiffs for the underlying claim. Uber admits that it contracted with Velox and provided services as a broker. (Doc. 3 at ¶¶ 6-7.) Without the contract between Uber and Velox, Almo could not contract with Velox to ship the cargo on January 21, 2022. Uber is within the chain of causation because Plaintiffs’ injuries stem from the results of the contract between Almo and Velox, which Uber facilitated. Therefore, Almo sufficiently presented factual matter that allows an inference to be made about Uber’s alleged liability. Almo’s claims that Uber did not verify the qualifications or hiring practices of Velox are also plausible given the existence of the contract between Uber and Velox. Due to the presence of the contract between Uber and Velox, the Court could infer that Uber has, or should have had, hiring practices to ensure that any federal or state regulations relative to the industry are followed. Because Almo pleaded plausible negligent hiring and negligence claims, the claims survive here.

Conclusion

Based on the foregoing, Uber’s Motion to Dismiss (Doc. 12) is denied.

*6 DATED this 17^th day of November, 2023.

All Citations

Slip Copy, 2023 WL 8003510

Footnotes

Plaintiffs are not alleging violations of the Federal Motor Carrier Safety Act, which would fall directly within the jurisdiction of the U.S. Department of Transportation and require administrative proceedings. See Firebaugh v. United States, 2013 WL 4048977, at *2 (D. Nev. Aug. 9, 2013) (citing 49 C.F.R. § 386.12).

End of Document