SIEMENS ENERGY, INC., Plaintiff, v. CSX TRANSPORTATION, INC., Defendant.

 

Civil Action No. RDB-15-1072

 

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

 

2016 U.S. Dist. LEXIS 34337

 

 

March 17, 2016, Decided

March 17, 2016, Filed

 

 

COUNSEL:  [*1] For Siemens Energy Inc., Plaintiff: James O Spiker, IV, LEAD ATTORNEY, Semmes Bowen and Semmes, Baltimore, MD; Iliaura Hands, PRO HAC VICE, Miller and Williamson LLC, New Orlenas, LA; Thomas Vincent McCarron, Semmes Bowen and Semmes PC, Baltimore, MD.

 

For CSX Transportation Inc., Defendant: Philip Tucker Evans, Holland and Knight LLP, Washington, DC.

 

JUDGES: Richard D. Bennett, United States District Judge.

 

OPINION BY: Richard D. Bennett

 

OPINION

 

MEMORANDUM OPINION

Plaintiff Siemens Energy, Inc. (“Plaintiff” or “Siemens”) has brought this action against Defendant CSX Transportation, Inc. (“Defendant” or “CSXT”) pursuant to the Carmack Amendment to the Interstate Commerce Act (“Carmack Amendment”), 49 U.S.C. § 11706.1 Am. Compl., p. 1, ECF No. 10. Plaintiff alleges that two electrical transformers, owned by Siemens, were damaged during interstate carriage by CSXT. Id. at ¶¶ 2-5. Currently pending before this Court is Defendant’s Motion to Dismiss the Amended Complaint and Alternative Motion to Transfer Venue (ECF No. 15). The parties’ submissions have been reviewed, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2014). For the reasons stated herein, Defendant’s Motion to Transfer Venue (ECF No. 15) is GRANTED. Accordingly, this case will be transferred to the United States District Court for the Eastern [*2]  District of Kentucky. All pending arguments for dismissal of this action will remain pending for disposition in the transferee court.

 

1   Originally enacted in 1906, the Carmack Amendment created “a national scheme of carrier liability for goods damaged or lost during interstate shipment under a valid bill of lading.” Shao v. Link Cargo (Taiwan) Ltd., 986 F.2d 700, 704 (4th Cir. 1993). The statute imposes “something close to strict liability” on carriers, 5K Logistics, Inc. v. Daily Express, Inc., 659 F.3d 331, 335 (4th Cir. 2011) (citations omitted), but only for “the actual loss or injury to the property.” 49 U.S.C. § 14706(a)(1).

 

BACKGROUND

 

1. Factual History

In ruling on a motion to dismiss, this Court accepts the factual allegations in the complaint as true and construes those facts in the light most favorable to the plaintiff. See, e.g., Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). The facts of this case, construed in the Plaintiff’s favor, are as follows:

On or about August 23, 2012, “two electrical transformers, S/No.: D417578 and D417579, in good order and condition,” were delivered to Defendant CSX Transportation, Inc. (“CSXT”) at the Port of Baltimore, Maryland for carriage to Gallatin Steel Company (“Gallatin”), a customer of Siemens Energy, Inc. (“Siemens”), in Ghent, Kentucky. Am. Compl. at ¶ 4, ECF No. 10. The carriage of the transformers with CSXT “was arranged by Progressive Rail, Inc. (“Progressive”) [*3]  and was conducted pursuant to Bill of Lading No. 08232012-JPF-1, which was authorized by [CSXT’s] duly authorized representative.” Id. “[T]ransformer No. D417578 . . . was loaded on railcar No. QTTX No. 131202 and transformer No. D147579 on railcar No. QTTX No. 131203.” Id. at ¶ 5. Siemens was, at all material times, the owner of the two electrical transformers. Id. at ¶ 3.

Both transformers were carried to Ghent, Kentucky, but were delivered in damaged condition “as evidenced from the transformers’ impact recorders indicating that the transformers had been subjected to g-forces greater than the maximum allowed for transportation by rail, thereby causing loss to [Siemens].” Id. at ¶ 5. “[A] preliminary on-site internal inspection revealed that at least transformer No. D147578 was severely damaged, while transformer No. D147579 could not be inspected at that time and was set aside for additional inspections and testing at a later time.” Id.

“Due to the severe nature and extent of the damages to transformer No. D147578, the transformer was returned to Siemens’ manufacturing plant in Dresden, Germany where it was opened, inspected, repaired, and subsequently returned to Gallatin. Transformer No. D147579 [*4]  remained in the United States and was thoroughly inspected and tested while in storage in Gallatin[‘s] facility.” Id. at ¶ 6. “Siemens incurred substantial costs in transporting, inspecting, repairing, and storing both transformers,” which it estimates “to be approximately $1,555,824.60 plus prejudgment interest and costs of litigation.” Id. at ¶ 7, 13.

 

1. Procedural History

On April 1, 2015, Progressive filed suit against CSXT in the United States District Court for the Eastern District of Kentucky in connection with the same delivery at issue in this case. See Progressive Rail, Inc. v. CSX Transportation, Inc., No. 3:15-cv-00018 (E.D. Ky. Apr. 1, 2015); Progressive Compl., Def. Ex. B, p. 2-5, ECF No. 15-3.2 Progressive brought suit under the Carmack Amendment, alleging essentially the same facts as Siemens in this case. Id. CSXT filed an Answer and Affirmative Defenses to Progressive’s Complaint on May 22, 2015. Answer, Def. Ex. B, p. 8-14, ECF No. 15-3. That action remains pending, although the proceedings have been stayed pending resolution of the pending motion in this case. The case has been assigned to Judge Gregory Van Tatenhove. Id. at p. 7.

 

2   As will be discussed herein, two cases arising out of the delivery [*5]  at issue in this case have already been filed in the United States District Court for the Eastern District of Kentucky. Plaintiff did not reference either case in the Amended Complaint, but Defendant has appended the court filings in both of those matters to its Motion to Dismiss. See Def. Exs. B & C, ECF Nos. 15-3 & 15-4. In reviewing a motion to transfer, this Court may consider evidence outside the pleadings. Brooks-Williams v. KeyBank, Nat’l Ass’n, No. WDQ-15-559, 2015 U.S. Dist. LEXIS 169188, 2015 WL 9255327, at *1 (D. Md. Dec. 17, 2015) (citing Ancient Sun Nutrition, Inc. v. Oregon Algae, LLC, No. 1:10CV140, 2010 U.S. Dist. LEXIS 102513, 2010 WL 3719503, at *1 (W.D.N.C. Sept. 17, 2010)).

On April 17, 2015, CSXT was again sued in an action involving the same delivery at issue in this case. Kuehne + Nagle, Inc. f/u/b/o Siemens Energy, Inc. v. Rail Retrievers Logistics, LLC, et al., No. 3:15-cv-00023 (E.D. Ky. Apr. 14, 2015). Kuehne + Nagle, Inc., the party that allegedly arranged transportation of the transformers prior to their arrival in Baltimore, Maryland, raised several claims including a Carmack Amendment claim. K+N Compl., Def. Ex. C, ECF No. 15-4. That case was also assigned to Judge Van Tatenhove, but Kuehne + Nagle voluntarily dismissed that suit without prejudice on May 27, 2015.

Siemens brought this action against CSXT on April 14, 2015, [*6]  after Progressive brought its action, but prior to the Kuehne + Nagle lawsuit. Pursuant to the Carmack Amendment to the Interstate Commerce Act (“Carmack Amendment”), 49 U.S.C. § 11706, Siemens claims that the damage to the transformers “was caused by the negligence of CSXT, in failing to properly perform its carrier duties.” Id. at ¶ 8. Siemens contends that, “[p]rior to the commencement of this action,” it “became the owner of the cargo and the successor in title to the rights and interest of the holder of the bill of lading issued by [CSXT], which incorrectly names Progressive Rail, Inc. [‘Progressive”] as the shipper when Siemens is in effect the owner of the cargo and the rightful party to make this claim.” Therefore, CSXT “is responsible as a bailee to [Siemens] for failure to care for [Siemens’] cargo, which was entrusted to its care and for which it had absolute control and custody.” Id. at ¶ 10. Siemens brings this action “on behalf of and of the interest of all parties who may be or may become interested in the cargo . . . .” Id. at ¶ 12.

 

STANDARD OF REVIEW

 

1. Motion to Transfer Venue Under 28 U.S.C. § 1404(a)

28 U.S.C. § 1404(a) provides that “[fJor the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have [*7]  been brought.” 28 U.S.C. § 1404(a). The movant bears the burden of showing that a transfer is in the interest of justice. See Stratagene v. Parsons Behle & Latimer, 315 F. Supp. 2d 765, 771 (D. Md. 2004). A district court has great discretion in determining whether to transfer a case under Section 1404(a). See Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 34, 118 S. Ct. 956, 140 L. Ed. 2d 62 (1998). The decision to transfer an action under Section 1404(a) is made according to an “individualized, case-by-case consideration of convenience and fairness.” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S. Ct. 2239, 101 L. Ed. 2d 22 (1988). However, “unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed.” Collins v. Straight, Inc., 748 F.2d 916, 921 (4th Cir. 1984) (citing Gulf Oil v. Gilbert, 330 U.S. 501, 508, 67 S. Ct. 839, 91 L. Ed. 1055 (1946)).

 

ANALYSIS

In support of its Motion to Dismiss, Defendant contends (1) that Siemens lacks standing to assert a claim under the Carmack Amendment because it is not a party to the bill of lading; (2) that this Court is an improper venue under the Carmack Amendment’s venue provision; and (3) that any claims or allegations of negligence or bailment are preempted by the Carmack Amendment. Mot. to Dismiss, ECF No. 15. Alternatively, Defendant requests that this Court transfer this action to the United States District Court for the Eastern District of Kentucky. Id. For the reasons that follow, this case will be transferred to the United States District Court for the Eastern District of Kentucky. All pending arguments for dismissal of this case will remain pending for disposition in the transferee [*8]  court.

 

1. This Case Could Have Been Brought in the United States District Court for the Eastern District of Kentucky

On a Motion to Transfer, a court must first determine whether the action could have been brought in the transferee district. See Aphena Pharma Sols.-Maryland LLC v. BioZone Labs., Inc., 912 F. Supp. 2d 309, 318 (D. Md. 2012). A federal district court may exercise personal jurisdiction over a nonresident defendant3 “if two conditions [are] satisfied: (1) the exercise of jurisdiction must be authorized under the state’s long-arm statute; and (2) the exercise of jurisdiction must comport with the due process requirements of the Fourteenth Amendment.” Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003) (citing Christian Sci. Bd. of Dirs. of the First Church of Christ v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001)). Here, the parties do not dispute that the United States District Court for the Eastern District of Kentucky may exercise personal jurisdiction over CSXT. See, e.g., Pl. Response, p. 13, ECF No. 19 (This Court and the United States District Court for the Eastern District of Kentucky are “equally appropriate” forums). Kentucky’s long-arm statute provides the following:

 

A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a claim arising from the person’s:

 

1. Transacting any business in this Commonwealth;
2. Contracting to supply services or goods in this Commonwealth;
3. Causing tortious injury [*9] by an act or omission in this Commonwealth. Ky. Rev. Stat. § 454.210(2)(a)

 

 

 

 

 

 

3   CSXT “is a foreign corporation existing under the laws of the state of Florida with its principle place of business in Jacksonville, Florida.” Am. Compl. at ¶ 3, ECF No. 10.

Here, Plaintiff has alleged that CSXT contracted to transport two electrical transformers to Gallatin in Ghent, Kentucky. The present case arises out of alleged damage to those transformers during their transportation into Kentucky by agents of CSXT because of CSXT’s “fail[ure] to properly perform its carrier duties.” Am. Compl. at ¶ 8, ECF No. 10. This contact also satisfies the due process requirements for personal jurisdiction. See, e.g., Auto Channel, Inc. v. Speedvision Network, LLC, 995 F. Supp. 761, 764 (W.D. Ky. 1997) (“a defendant whose conduct in the forum is covered by the long-arm statute will necessarily have ‘purposefully avail[ed] itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.'” Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958) . . . a proper application of K.R.S. 454.210(2)(a) will simultaneously satisfy the requirements of due process.”)

Additionally, the Carmack Amendment’s venue provision provides that a civil claim may be brought “against the delivering rail carrier . . . in the judicial district in which the point of destination is located.” 49 U.S.C. § 11706(d)(2)(A)(ii). Here, the parties do not dispute [*10]  that CSXT qualifies as a delivering rail carrier and that its destination was Ghent, Kentucky. See, e.g., Mem. Supp. Mot. to Dismiss, p. 13, ECF No. 15-1 (“CSXT does not dispute that it is the delivering rail carrier . . . Siemens could have properly filed suit where its principle place of business is located (Orlando, Florida, i.e., the Middle District of Florida) [or] at the destination of the shipment (Ghent, Kentucky, i.e., the Eastern District of Kentucky) . . . .”) For these reasons, the present case could have been brought in the United States District Court for the Eastern District of Kentucky.

 

1. This Case Will Be Transferred to the United States District Court for the Eastern District of Kentucky

Having determined that a case could have been brought in the transferee forum, a court must proceed to determine if transfer is appropriate in the instant case. See, e.g., MTB Servs., Inc. v. Tuckman-Barbee Const. Co., No. RDB-12-02109, 2013 U.S. Dist. LEXIS 44941, 2013 WL 1224484, at *5 (D. Md. Mar. 26, 2013). Defendant requests that this case be transferred to the United States District Court for the Eastern District of Kentucky “because: (a) that district has a much stronger connection to the events that underlie this dispute; and (b) the Eastern District [*11]  of Kentucky is the forum for two lawsuits relating to the shipment at issue in this case, one of which was filed prior to this action and remains pending.” Mem. Supp. Mot. to Dismiss, p. 14, ECF No. 15-1. When considering a motion to transfer pursuant to 28 U.S.C. § 1404(a), this court must consider the following factors: “(1) the weight accorded the plaintiff’s choice of venue, (2) witness convenience and access, (3) convenience of the parties, and (4) the interest of justice.” MTB Servs., Inc., 2013 U.S. Dist. LEXIS 44941, 2013 WL 1224484 at *5. Here, a balancing of these factors weighs in favor of transfer.

 

1. The Weight Accorded to Siemens’ Choice of Venue

A plaintiff’s choice of forum is ordinarily “entitled to substantial weight.” Topiwala v. Wessell, No. WDQ-11-0543, 2012 U.S. Dist. LEXIS 3872, 2012 WL 122411, at *7 (D. Md. Jan. 12, 2012) (quoting Lynch v. Vanderhoef Builders, 237 F. Supp. 2d 615, 617 (D. Md. 2002)). However, a plaintiff’s choice is afforded less weight “when the chosen forum is not the plaintiff’s home or has little connection to the events giving rise to the litigation.” Id. (citing Tse v. Apple Computer, No. 05-2149, 2006 U.S. Dist. LEXIS 68451, 2006 WL 2583608, at *2 (D. Md. Aug.31, 2006)). In this case, Siemens does not allege that Maryland is its home, that its headquarters or principle place of business is located in Maryland, or even that it regularly conducts business within the State of Maryland. On the contrary, Siemens has represented that it is a Florida corporation with a manufacturing [*12]  plant in Dresden, Germany. See Am. Compl. at p. 1, ¶ 6, ECF No. 10. Furthermore, Siemens does not allege that any of its employees or agents have, at any time, entered the State of Maryland. Siemens alleges only that the two electrical transformers at issue in this case “were delivered to CSX at the port of Baltimore, Maryland for carriage . . . .” Id. at ¶ 4.

In contrast, both transformers were transported to Siemens’ customer, Gallatin, in Ghent Kentucky, where they were allegedly “delivered in a damaged condition.” Id. A “preliminary on-site internal inspection” was conducted in Ghent, Kentucky. Following that inspection, one of the transformers was returned to Dresden, Germany, “where it was opened, inspected, [and] repaired” before being returned to Ghent, Kentucky. Id. at ¶ 6. The other transformer “was thoroughly inspected and tested while in storage at Gallatin[‘s] facility.” Given that Maryland has relatively little connection to the Plaintiff or to the events giving rise to this case, the first factor supports transfer.

 

1. Witness Convenience and Access and the Convenience of the Parties

A party claiming witness inconvenience “‘has the burden to proffer, by affidavit or otherwise, [*13]  sufficient details respecting the witnesses and their potential testimony to enable the court to assess the materiality of evidence and the degree of inconvenience.” Topiwala, 2012 U.S. Dist. LEXIS 3872, 2012 WL 122411 at *7 (quoting Koh v. Microtek Int’l, 250 F. Supp. 2d 627, 636 (E.D. Va. 2003). The inconvenience of non-party witnesses is weighed more heavily than the inconvenience of party witnesses, “who are presumed willing to travel to another forum.” Id. (citing Atl. City Assocs. No. Two, LLC v. Reale, No. CCB-11-0078, 2011 U.S. Dist. LEXIS 49296, 2011 WL 1769842, at *3 (D. Md. May 9, 2011). Transfer of venue is “inappropriate” where it will merely “‘shift the balance of convenience'” from plaintiff to defendant. Id. (quoting Bd. of Trs. v. Baylor Heating & Air Conditioning, Inc., 702 F. Supp. 1253, 1258 (E.D. Va. 1988)).

Defendant has not submitted witness affidavits, but Defense counsel has indicated that “witnesses from [several] Kentucky companies are expected to testify.” Mem. Supp. Mot. to Dismiss, p. 17, ECF No. 15-1. These Kentucky companies include Edwards Moving and Rigging, Thoroughbred Contractors, LLC, Kemper Construction, LLC and Sunbelt Rentals, Inc., all companies hired by Siemens and Gallatin to assist in handling the transformers after they were delivered in Ghent, Kentucky. Id. at 16-17; Invoices, Def. Ex. D, ECF No. 15-5. Defendant avers that the “Gallatin [] witnesses alone will be significant in this case given that they attended the inspections and were [*14]  involved in evaluating the potential damage” and that “[t]he overwhelming amount of activity relevant to this action occurred in Kentucky and witnesses pertaining to such activity are based there or nearby.” Id. at 17.

Plaintiff counters that “the most significant inspections, tests and actual repairs were conducted in Dresden, Germany, not Kentucky,” and that the “surveyors and experts” based in Germany are “the most critical witnesses in this matter.” Pl. Response, p. 15, ECF No. 19. Plaintiff suggests that Baltimore is a more convenient forum for those witnesses because of its proximity to an international airport and accessibility via “the MARC and Amtrak rail systems.” Id. at 18. Additionally, Plaintiff claims that the “CSXT employees located at the Port of Baltimore may be called to testify regarding their handling of the cargo there” prior to the alleged damage and that CSXT, because it “maintains significant operations in the Port of Baltimore,” would not be inconvenienced by trying this case in this Court. Id. at 18. Furthermore, Plaintiff indicates that “the independent surveyors Mr. John Ferbend and Paul Hammes of EIMC, the company that inspected the transformers and who attended Gallatin’s facility, are [*15]  residents of New Jersey, not Kentucky” and that it will pay the expenses of any Siemens or Gallatin personnel whose presence is required at trial. Id.

Although Defendant has demonstrated that the majority of individuals with knowledge of the alleged harm reside in Kentucky, or at least outside of Maryland, Plaintiff has indicated that CSXT employees based in Baltimore, Maryland may also be called to testify. Additionally, Defendant has failed to provide the affidavits of any of its anticipated witnesses to support its claim that this Court is an inconvenient forum for them. See CoStar Realty Info., Inc. v. Meissner, 604 F. Supp. 2d 757, 770 (D. Md. 2009) (“the defendant should submit affidavits from witnesses and parties involved that explain the inconvenience and hardship he ‘would suffer if the case were heard in the plaintiff’s chosen forum.’ Dow v. Jones, 232 F. Supp. 2d 491, 499 (D. Md. 2002). Mere assertions of inconvenience or hardship, without more, are insufficient to sustain a motion to dismiss or to transfer pursuant to § 1404(a). See Dow, 232 F.Supp.2d at 499.”) Therefore, the second and third factors are not determinative.

 

1. The Interest of Justice

The interest of justice “‘encompass[es] all those factors bearing on transfer that are unrelated to convenience of witnesses and parties.'” Topiwala, 2012 U.S. Dist. LEXIS 3872, 2012 WL 122411 at *8 (quoting Cross v. Fleet Reserve Ass’n Pension Plan, 383 F. Supp. 2d 852, 857 (D. Md. 2005)). “The possibility of consolidating the action with [*16]  a pendent suit in the transferee forum is considered under this factor.” Id. “To permit a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy and money that § 1404(a) was designed to prevent.” Cont’l Grain Co. v. Barge FBL-585, 364 U.S. 19, 26, 80 S. Ct. 1470, 4 L. Ed. 2d 1540 (1960). The United States Court of Appeals for the Fourth Circuit has acknowledged that consolidating nearly identical suits in the forum in which suit was first brought, the “first-to-file principle, . . . is a rule of sound judicial administration.” See Ellicott Mach. Corp. v. Modern Welding Co., Inc., 502 F.2d 178, 181 (4th Cir. 1974). “[W]hen two nearly identical suits are pending in different federal courts, ‘the case ought to be tried in the district court in which it was first filed,’ other factors being equal.” Topiwala, 2012 U.S. Dist. LEXIS 3872, 2012 WL 122411 at *8 (quoting Ellicott, 502 F.2d at 180). This Court in Fisher v. Rite Aid Corp., No. RDB-09-1909, 2010 U.S. Dist. LEXIS 56383, 2010 WL 2332101, at *2 (D. Md. June 8, 2010) observed the following:

 

The first-to-file rule “requires substantially overlapping cases filed in separate fora to be resolved in the forum where the initial case is filed unless a balance of convenience favors the second action.” Smart Technologies, Inc. v. Polyvision Corp., 3:04-cv-545, 2004 U.S. Dist. LEXIS 29483, at *5-6 (E.D. Va. Oct. 20, 2004) (citing Ellicott Mach. Corp, 502 F.2d at 180). Due to its importance in ensuring judicial efficiency, consistency, and comity, courts have noted that the rule “should not be disregarded lightly.” [*17]  Neuralstem, Inc. v. Stemcells, Inc., 573 F. Supp. 2d 888, 900 (D. Md. 2008) (internal quotation marks omitted); see also Rite Way Crack Repair, LLC v. Guardian Crack Repair, LLC, WMN-09-1207, 2009 U.S. Dist. LEXIS 82574, at *11, 2009 WL 2923085 (D. Md. Sept. 10, 2009) (noting that the underlying principles of the first-to-file rule include the conservation of judicial resources and the parties’ time and money, and to prevent the possibility of reaching conflicting results).

 

 

Fisher, 2010 U.S. Dist. LEXIS 56383, 2010 WL 2332101 at *2.

Here, two lawsuits have already been filed against CSXT in the United States District Court for the Eastern District of Kentucky, both claiming the same damage to the same transformers in the same CSXT shipment as the Plaintiff in this case. Both actions have been brought under the Carmack Amendment and will likely involve the same legal and factual questions as this case. See, e.g., Byerson v. Equifax Info. Servs., LLC, 467 F. Supp. 2d 627, 636 (E.D. Va. 2006) (Granting motion to transfer where “[t]he class complaints [were] quite similar, involving the same provision of federal law and the same basic conduct by the same three defendants). One of those cases has since been dismissed, but the other case, Progressive’s claim against CSXT, remains and has been stayed pending resolution of Defendant’s pending motion.

In the interests of judicial economy and federal comity, and to avoid conflicting judgments4, the remaining two cases should be tried in the same court. In accordance with the first-to-file rule, that court should be the United [*18]  States District Court for the Eastern District of Kentucky, the forum in which the first lawsuit was filed. Therefore, Defendant’s Motion to Transfer (ECF No. 15) is GRANTED. This case will be transferred to the United States District Court for the Eastern District of Kentucky.

 

4   Plaintiff contends that “[n]o inconsistent rulings will be obtained here . . .” because only Siemens, the owner of the transformers, is entitled to relief. Pl. Response, p. 19, ECF No. 19. Plaintiff claims that the Progressive action pending in the transferee forum is “bound to be dismissed.” Id. In support of its Motion to Dismiss, Defendant argues that Siemens does not have standing to bring a claim under the Carmack Amendment, but contends that “Progressive clearly has standing.” Def. Reply, p. 10, ECF No. 20. Resolution of this standing dispute may impact both this case and the case already pending in the transferee court, suggesting that transfer is appropriate. In fact, Defendant has already represented that the Progressive case has been stayed “to conserve judicial and litigant time and effort pending determination of this motion.” Def. Reply, p. 11, ECF No. 20. For these reasons, the standing issue will remain pending for [*19]  resolution in that court.

 

CONCLUSION

For the foregoing reasons, Defendant’s Motion to Transfer Venue (ECF No. 15) is GRANTED. Accordingly, this case will be transferred to the United States District Court for the Eastern District of Kentucky. All presently pending arguments for dismissal of this action will remain pending for consideration in that Court.

A Separate Order Follows.

Dated: March 17, 2016

/s/ Richard D. Bennett

United States District Judge

 

ORDER

For the reasons stated in the accompanying Memorandum Opinion, IT IS this 17th day of March, 2016, HEREBY ORDERED that:

 

1. Defendant CSX Transportation Inc.’s Motion to Transfer Venue (ECF No. 15) is GRANTED;
2. This Case is transferred to the United States District Court for the Eastern District of Kentucky;
3. The Clerk of this Court transmit a certified copy of this Order, accompanying Memorandum Opinion, all Filings in this Case, and Court Records herewith to the Clerk of the Court for the United States District Court for the Eastern District of Kentucky;
4. The Clerk of this Court transmit copies of this Order and accompanying Memorandum Opinion to counsel for the parties; and
5. The Clerk of this Court close this case.

 

 

/s/ Richard D. Bennett [*20]

United States District Judge

North Carolina Rules of Appellate Procedure.

Court of Appeals of North Carolina.

Evidio J. CARRAZANA, Plaintiff,

v.

WESTERN EXPRESS, INC., Michael B. Carter, Tracie McCormick, Inc. and Glennwood D. Tyndall, Jr., Defendants.

No. COA15–1063.

|

March 1, 2016.

Opinion

 

*1 Appeal by defendants Western Express, Inc. and Michael B. Carter from order entered 16 June 2015 by Judge Marvin K. Blount, III in Wilson County Superior Court. Heard in the Court of Appeals 10 February 2015.

 

Attorneys and Law Firms

Abrams & Abrams, P.A., by Douglas B. Abrams, Noah B. Abrams, Margaret S. Abrams, Melissa N. Abrams and The Josephs Law Firm, by Adam C. Josephs, for plaintiff-appellee.

Martineau King, PLLC, by Elizabeth A. Martineau and James E. Griffin, III, for defendant-appellants Western Express, Inc. and Michael B. Carter.

TYSON, Judge.

 

Michael B. Carter and Western Express, Inc. (“Defendants”) appeal from the trial court’s order granting in part a motion to compel in favor of Evidio J. Carrazana (“Plaintiff”). We affirm.

 

 

1. Background

On 28 October 2014, Plaintiff filed a complaint against Defendants alleging Defendants were negligent with regard to a trucking accident, which had occurred on 9 October 2013. Defendant Michael B. Carter (“Carter”), a truck driver employed by Defendant Western Express (“Western Express”) had stopped his tractor-trailer in the emergency northbound lane of Interstate 95 in Wilson County, North Carolina. Plaintiff was operating his vehicle in the right, northbound lane of Interstate 95. Defendant Glennwood D. Tyndall, Jr. (“Tyndall”), a truck driver employed by Defendant Tracie McCormick, Inc., was driving a tractor-trailer northbound on Interstate 95 in the left lane.

 

Plaintiff alleges Carter negligently pulled into the right lane of the highway in front of his vehicle, without yielding Plaintiff the right of way. Plaintiff collided with the tractor-trailer driven by Carter. Plaintiff alleges Tyndall negligently operated his tractor-trailer in such a manner, which prevented Plaintiff from being able to move his vehicle into the left lane to avoid the collision. Carter was cited for an unsafe movement. Tyndall was not cited for any violation.

 

Plaintiff alleges negligence against Western Express and Tracie McCormick, the trucking companies that employ Carter and Tyndall, and claims they are vicariously liable for the negligence of Carter and Tyndall. Plaintiff also alleged Western Express was independently negligent in its hiring, training, supervision, and retention of its employees, including Carter. Plaintiff suffered catastrophic and permanent injuries as a result of the collision.

 

Plaintiff served discovery requests on all Defendants, which included the following interrogatories to Carter:

30. State the name, address, and specialty of every medical doctor, chiropractor, physical therapist, radiologist, psychiatrist or other medical practitioner who has treated you during the past ten years for any illness or injury, whether or not such illness or injury resulted from the incident in question, but excluding minor ailments such as colds, upset stomach and other temporary minor illnesses; and for each state separately the dates and reasons for being seen.

*2 31. State the name and address of every hospital to which you have been admitted during the past ten years, either on an in-patient or out-patient basis, whether or not such admission resulted from the incident in question; and with respect to each, state separately the reason for admission and the dates of stay.

32. If a blood alcohol test was performed on you following the accident in question, state the type of test performed, who performed it, where it was performed, when it was performed and the test result in terms of blood alcohol content.

 

Carter and Western Express responded to Plaintiff’s discovery requests. Carter objected to these three interrogatories on the grounds they are overly broad, seek information subject to the attorney-client privilege or work-product doctrine, are irrelevant, and not designed to lead to the discovery of admissible evidence.

 

On 15 April 2015, Plaintiff filed a motion to compel in Wilson County Superior Court. He sought an order to compel Carter and Western Express to fully answer without objection certain enumerated interrogatories contained in Plaintiff’s first interrogatories, including the three set forth, supra. The motion also sought an order to compel Carter and Western Express to provide all documents responsive to certain enumerated requests for production contained in Plaintiff’s first discovery request.

 

Plaintiff filed a memorandum of law in support of his motion to compel, and stated he is entitled to a full and complete discovery of, inter alia, Carter’s hospital records from 9 October 2013, the date of the accident. Plaintiff argued toxicology reports are relevant to show whether Carter was operating his vehicle under the influence of drugs or alcohol. Defendants filed a response to Plaintiff’s motion to compel and argued Interrogatories 30 and 31 impermissibly seek privileged medical records. Toxicology results from blood tests performed on Carter the day after the accident were produced, and the results were negative.

 

The trial court heard Plaintiff’s motion to compel on 25 May 2015. The court ordered Carter to supplement his response to Interrogatories 30, 31, and 32 by producing all medical records for the past five years pursuant to a confidentiality agreement, which limited the distribution of such documents to attorneys, expert witnesses, consultants, witnesses, and court personnel involved in this litigation. For records prior to the incident, the court allowed Carter to apply for an in camera review by the court to determine whether the records are to be produced to Plaintiff.

 

Defendants appeal from the trial court’s order on Plaintiff’s motion to compel. Subsequent to entry of the notice of appeal, the trial court entered an order, which stayed all proceedings pending the appeal.

 

 

1. Issues

Defendants argue the trial court erred by ordering Carter to respond to Interrogatories 30, 31, and 32 by producing “all medical records for the past five years.”

 

 

III. Interlocutory Appeal

*3 Plaintiff argues this Court should dismiss Defendants’ appeal on the grounds that it is interlocutory and does not affect a substantial right, and impose sanctions upon Defendants for filing a frivolous appeal. Even if the interlocutory order affects a substantial right, Plaintiff also argues Defendants have failed to preserve their right to assert the physician-patient privilege.

 

 

1. Preservation

Our Court has held “[t]he physician-patient privilege is strictly construed and the patient bears the burden of establishing the existence of the privilege and objecting to the introduction of evidence covered by the privilege.” Roadway Express, Inc. v. Hayes, 178 N.C.App. 165, 170, 631 S.E.2d 41, 45 (2006) (citation omitted). Carter objected to the interrogatories regarding his medical records in his responses to Plaintiff’s discovery, but failed to specifically cite the physician-patient privilege. Plaintiff argues, under Rule 33 of the North Carolina Rules of Civil Procedure, Carter’s failure to object on the grounds of physician-patient privilege in his interrogatory responses waived the privilege.

 

Rule 33 provides:

Each interrogatory shall be answered separately and fully in writing under oath, unless it is objected to, in which event the reasons for objection shall be stated in lieu of an answer. An objection to an interrogatory shall be made by stating the objection and the reason therefor….

N.C. Gen.Stat. § 1A–1, Rule 33 (2015). Carter asserted the privilege in response to Plaintiff’s motion to compel, which was submitted to Plaintiff and the trial court prior to the hearing.

 

Furthermore, at the hearing, Plaintiff’s counsel acknowledged Carter was asserting the physician-patient privilege. Plaintiff has argued for the first time on appeal that Carter waived the privilege under Rule 33 by failing to specifically cite the privilege in his discovery responses. Plaintiff did not make this argument before the trial court at the hearing on the motion to compel, and attempts to “swap horses between courts in order to get a better mount” on appeal. Weil v. Herring, 207 N.C. 6, 10, 175 S.E.2d 836, 838 (1934). Plaintiff’s argument that Carter waived the physician-patient privilege is overruled.

 

 

1. Affecting a Substantial Right

“An interlocutory order is one made during the pendency of an action, which does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy.” Veazey v. Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950). Generally, “orders denying or allowing discovery are not appealable since they are interlocutory and do not affect a substantial right which would be lost if the ruling were not reviewed before final judgment.” Dworsky v. Travelers Ins. Co., 49 N.C.App. 446, 447, 271 S.E.2d 522, 523 (1980).

 

The discovery order appealed from is interlocutory. Defendants concede the discovery order is interlocutory, but argue it is appealable because the order to compel Carter to produce his medical records affects a substantial right that will be lost without appeal.

 

*4 “Our appellate courts have recognized very limited exceptions to th[e] general rule [that discovery orders are not immediately appealable], holding that an order compelling discovery might affect a substantial right, and thus allow immediate appeal, if it either imposes sanctions on the party contesting the discovery, or requires the production of materials protected by a recognized privilege.” Arnold v. City of Asheville, 169 N.C.App. 451, 453, 610 S.E.2d 280, 282 (2005) (citation omitted). Our Court has determined the trial court’s order compelling discovery is immediately appealable, where it orders a party to disclose matters the party claims to be protected by the physician-patient privilege. Midkiff v. Compton, 204 N.C.App. 21, 24, 693 S.E.2d 172, 174–75, cert. denied, 364 N.C. 326, 700 S.E.2d 922 (2010).

 

The trial court’s order as it pertains to Carter’s medical records is properly before this Court for review. All other matters ruled upon by the trial court in the order on Plaintiff’s motion to compel are interlocutory and not properly before this Court. Arnold, 169 N.C.App. at 453, 610 S.E.2d at 282.

 

 

1. Appeal by Defendant Western Express

Both Carter and Western Express have appealed from the trial court’s order granting, in part, Plaintiff’s motion to compel. The physician-patient privilege belongs solely to the patient, Carter, and cannot be asserted by Western Express. Sims v. Charlotte Liberty Mut. Ins. Co., 257 N.C. 32, 38, 125 S.E.2d 326, 329 (1962) (“[T]he privilege is that of the patient.”). “It is well-settled that an appeal may only be taken by an aggrieved real party in interest.” Henke v. First Colony Builders, Inc., 126 N.C.App. 703, 704, 486 S.E.2d 431, 432 (citation omitted), disc. review denied, 347 N.C. 266, 493 S.E.2d 455 (1997). The order does not affect a substantial right of Western Express. Western Express is not an “aggrieved real party in interest,” and its appeal is dismissed. Id.

 

 

1. Physician–Patient Privilege

Defendant Carter argues the trial court abused its discretion by compelling him to disclose his privileged medical records for the “past five years.” We disagree.

 

 

1. Standard of Review

“[I]t is well established that orders regarding discovery matters are within the discretion of the trial court and will not be upset on appeal absent a showing of abuse of that discretion.” Evans v. United Servs. Auto. Ass’n., 142 N.C.App. 18, 27, 541 S.E.2d 782, 788, cert. denied, 353 N.C. 371, 547 S.E.2d 810 (2001). Defendants must “show that the trial court’s ruling was manifestly unsupported by reason, or could not be the product of a reasoned decision.” Nationwide Mut. Fire Ins. Co. v. Bourlon, 172 N.C.App. 595, 601–02, 617 S.E.2d 40, 45 (2005), aff’d per curiam, 360 N.C. 356, 625 S.E.2d 779 (2006).

 

 

1. N.C. Gen.Stat. § 8–53

Under Rule 26(b)(1) of the Rules of Civil Procedure, “[p]arties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party[.]” N.C. Gen.Stat. § 1A–1, Rule 26 (2015) (emphasis supplied). N.C. Gen.Stat. § 8–53, which establishes the statutory privilege for confidential communications between patients and their physicians, provides:

*5 No person, duly authorized to practice physic or surgery, shall be required to disclose any information which he may have acquired in attending a patient in a professional character, and which information was necessary to enable him to prescribe for such patient as a physician, or to do any act for him as a surgeon[.] … Confidential information obtained in medical records shall be furnished only on the authorization of the patient … Any resident or presiding judge in the district, either at the trial or prior thereto … may … compel disclosure if in his opinion disclosure is necessary to a proper administration of justice.

N.C. Gen.Stat. § 8–53 (2015).

 

The purpose of the physician-patient privilege is “to induce the patient to make full disclosure that proper treatment may be given, to prevent public disclosure of socially stigmatized diseases, and in some instances to protect patients from self-incrimination.” Sims, 257 N.C. at 36, 125 S.E.2d at 329. “Medical records are covered by the statute to the extent that the records contain entries made by physicians and surgeons, or [those] under their direction, that include information and communications obtained by the doctor for the purpose of providing care to the patient.” Roadway Express, 178 N.C.App. at 170, 631 S.E.2d at 45 (citing Sims, 257 N.C. at 38, 125 S.E.2d at 331).

 

The statutory privilege is not absolute. “[I]nformation may be disclosed by order of the court if in the opinion of the trial judge disclosure is necessary to the proper administration of justice.” State v. Drdak, 330 N.C. 587, 591–92, 411 S.E.2d 604, 607 (1992).

 

N.C. Gen.Stat. § 8–53 provides the trial court wide discretion in determining what is necessary for a proper administration of justice. “Judges should not hesitate to require the disclosure where it appears to them to be necessary in order that the truth be known and justice be done.” Sims, 257 N.C. at 39, 125 S.E.2d at 331 (citation and quotation marks omitted).

 

In State v. Smith, 347 N.C. 453, 461, 496 S.E.2d 357, 362, cert. denied, 525 U.S. 845, 119 S.Ct. 113, 142 L.Ed.2d 91 (1998), the defendant argued the trial court failed to specifically find that disclosure of the privileged records was “necessary to a proper administration of justice.” Id. Our Supreme Court held N.C. Gen.Stat. § 8–53 “does not require such an explicit finding. The finding is implicit in the admission of the evidence.” Id.

 

 

1. Scope of the Order

Plaintiff alleges in his complaint, inter alia, that Carter “negligently and wantonly operated the truck while his ability or alertness was impaired through fatigue, illness, or any other cause as to make it unsafe for him to operate the truck in violation of 49 C.F.R. § 392.3.” Carter was tested for the presence of drugs and alcohol in his body following the wreck. In certain situations, federal regulations require the employer of a commercial truck driver who has been involved in a crash to test the driver’s blood for the presence of alcohol within eight hours. 49 C.F.R. § 382.303(d)(1). The drivers’ blood must be tested for the presence of controlled substances within thirty-two hours. 49 C.F.R. § 382.303(d)(2). The test administered on Carter fell outside of the eight-hour window of time following the crash required under the federal regulation. 49 C.F.R. § 382.303(d)(1). The reason Western Express gave for the violation of its obligation to test drivers within eight hours of the collision was that Carter was “medically incapacitated.”

 

*6 Carter argues the trial court ordered a substantially broader disclosure than Plaintiff requested in the interrogatories. N.C. Gen.Stat. § 8–53. Plaintiff’s interrogatories requested: (1) the name, address, and specialty of any medical professional who treated Carter in the past ten years, the dates of service, and reason for the visits; (2) the name and address of any hospital where Carter had been treated during the past ten years and the reason for the treatment; and, (3) information related to any blood tests for the presence of alcohol that were performed on the day of the accident.

 

The order to compel states as follows:

3. Defendant Michael B. Carter shall supplement his response to Interrogatories # 30–32 by producing all medical records for the past five years pursuant to a confidentiality agreement limiting the distribution of such documents to attorneys, expert witnesses, consultants, witnesses, and court personnel involved in this litigation. For records prior to the incident that is the subject of this litigation, Defendant Carter may apply for in camera review by the Undersigned to determine whether such records are to be produced to Plaintiff. Plaintiff agrees that he shall direct his attorneys to return all paper or CD copies of medical records of Mr. Carter and to destroy all electronic copies of said records at the conclusion of this matter, to the extent permitted by the North Carolina Rules of Professional Conduct regarding record retention by Counsel.

 

Carter also argues the trial court abused its discretion by ordering the production of documents in response to interrogatories. No request for production of the MRIs was mentioned by Plaintiff in his motion to compel or at the hearing. Plaintiff did not request Carter produce his medical records through discovery.

 

The trial courts have wide latitude to determine what is necessary for the proper administration of justice. Sims, 257 N.C. at 39, 125 S.E.2d at 331. Although the order directing Carter to produce his medical records was broader in scope than Plaintiff’s requests on the interrogatories, Carter has not shown the order was “manifestly unsupported by reason.” Bourlon, 172 N.C.App. at 601–02, 617 S.E.2d at 45.

 

The trial court placed safeguards in the order to protect Carter’s privacy. For medical records before the accident, the trial court allowed Carter to apply for an in camera review to determine whether the records must be produced or released. The court also limited dissemination of the records and ordered their destruction upon resolution of the case. The trial court did not abuse its discretion in ordering Carter to produce his medical records for the past five years.

 

 

1. Conclusion

The interlocutory order on Plaintiff’s motion to compel affects Carter’s privileged medical records, a substantial right. Defendant Carter’s appeal is properly before this Court. Defendant Western Express has no standing to assert Carter’s physician-patient privilege. Its appeal is dismissed.

 

*7 Carter has failed to show the trial court abused its discretion in ordering him to disclose a broader scope of medical information than Plaintiff had requested in his discovery requests, motion to compel, and at the hearing. The trial court provided for an in camera review by the court and entered an order that addressed Carter’s privacy interests. The trial court’s order granting Plaintiff’s motion to compel with regard to discovery of all of Carter’s medical records for the past five years is affirmed.

 

AFFIRMED.

 

Judges CALABRIA and Judge DAVIS concur.

 

Report per Rule 30(e).