United States District Court, New Jersey.

TOKIO MARINE AMERICA INSURANCE COMPANY, a/s/o Itochu Logistics (USA) Corporation, Plaintiff,

v.

JAN PACKAGING, et al., Defendants.

Civil Action No.: 17-7491 (JLL)

|

Signed 12/04/2017

Attorneys and Law Firms

Laurence J. Rabinovich, Barclay Damon LLP, New York, NY, for Plaintiff.

Thomas C. Martin, William D. Bierman, Price Meese Shulman & D’Arminio, P.C., Woodcliff Lake, NJ, for Defendants.

 

 

OPINION

JOSE L. LINARES, Chief District Judge

*1 This matter comes before the Court by way of Defendant Jan Packaging’s (“Defendant”) Motion to Dismiss Plaintiff Tokio Marine American Insurance Company’s (“Plaintiff”) Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 11). Plaintiff has submitted Opposition, and Defendant submitted a reply. (ECF Nos. 18, 19). The Court has considered the parties’ submissions and decides this matter without oral argument pursuant to Rule 78 of the Federal Rules of Civil Procedure. For the reasons stated herein, Defendant’s Motion to Dismiss Plaintiff’s Amended Complaint is hereby denied.

 

 

BACKGROUND1

This case concerns the shipment of computer chip manufacturing equipment (“the equipment”) which was damaged in transit. (ECF No. 7 (First Amended Complaint (“FAC”)) ¶ 12).2 The equipment was sold by Intel Corporation to Hangzhou Silan Integrated Circuit Company, Ltd. (“Silan”), a company headquartered in China. (Id.). Silan hired Kingpoint Technology Limited (“KPT”) to oversee shipment of the equipment from the United States to China. (Id. ¶ 13). KPT in turn hired Itochu Logistics (USA) Corporation (“Itochu”) to arrange shipment of the equipment from Massachusetts to New Jersey, and to arrange re-packaging of the equipment in New Jersey prior to shipping the equipment to China. (Id. ¶ 14). Itochu assumed KPT’s responsibility for ensuring that the equipment was delivered in good condition, and took out an insurance policy with Plaintiff. (Id. ¶¶ 15, 16). Pursuant to the insurance policy, Plaintiff covered Itochu’s liability for any damage to the property caused by others who had assumed responsibility for the delivery of the equipment in good condition. (Id. ¶ 16).

 

Itochu hired Defendant to transport the equipment from Massachusetts to New Jersey, and to then repackage the equipment for its shipment to China.3 (Id. ¶¶ 17, 25). Plaintiff asserts that the equipment was delivered to the care, custody, and control of Defendant in good condition but the equipment was damaged by the time it arrived in New Jersey. (Id. ¶¶ 18–20). Plaintiff further asserts that the equipment was damaged while in Defendant’s care as a result of Defendant’s negligence. (Id. ¶ 20). KPT sued Itochu for the damage and, under Plaintiff’s insurance policy, Plaintiff paid KPT $504,840 to settle the claim. (Id. ¶¶ 22, 30). Accordingly, Plaintiff brought this action under federal and state law to recover the settlement payments, as well as costs of suit and other relief. Defendant now moves to dismiss Plaintiff’s Amended Compliant.

 

 

LEGAL STANDARD

*2 To withstand a motion to dismiss for failure to state a claim, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim of 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.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556).

 

To determine the sufficiency of a complaint under Twombly and Iqbal in the Third Circuit, the court must take three steps: first, the court must take note of the elements a plaintiff must plead to state a claim; second, the court should identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth; finally, where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief. Connelly v. Lane Constr. Corp., 809 F.3d 780, 787 (3d Cir. 2016) (citations omitted). “In deciding a Rule 12(b)(6) motion, a court must consider only the complaint, exhibits attached to the complaint, matters of the public record, as well as undisputedly authentic documents if the complainant’s claims are based upon these documents.” Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010).

 

 

ANALYSIS

Both parties concede that Plaintiff’s claims are controlled by the Carmack Amendment to the Interstate Commerce Act (“Carmack Amendment”), codified in 49 U.S.C. § 14706. (ECF No. 11-1 at 3; ECF No. 18 at 2). Under the Carmack Amendment, a carrier must receive formal written notice of the damaged cargo within a timeframe specified by the carrier but that cannot be less than nine months. 49 U.S.C. § 14706. Here, Defendant’s tariff provided a notice requirement of nine months. (ECF No. 11-2 at Ex. C). The parties agree that Plaintiff had until late September 2016 to provide Defendant with formal written notice of the damage caused to the equipment. (ECF No. 11-1 at 14; ECF No. 18 at 5).4 In its brief, Defendant asserts that no notice was provided and therefore Plaintiff’s Amended Complaint is time barred. (ECF No. 11-1 at 14–15). Defendant’s assertion was based on the affidavit of its Chief Financial Officer who claimed Defendant never received notice. (ECF No. 11-2 at ¶¶ 8–9). However, Plaintiff attached in its Opposition a letter sent by Plaintiff’s Counsel to Defendant which was dated June 1, 2016 and that claimed to “place [Defendant] on formal notice of claim for all losses and claims associated with the referenced shipment.” (ECF No. 18-4). Viewing these facts in a light most favorable to Plaintiff, the Court concludes that Plaintiff’s letter sufficiently shows that Defendant was provided with timely formal notice.

 

Furthermore, Plaintiff’s Amended Complaint provides sufficient factual allegations to support a claim under the Carmack Amendment. “To establish a prima facie case against a common carrier under the Carmack Amendment … a plaintiff must prove the following three elements: ‘(1) delivery of the goods to the initial carrier in good condition, (2) damage of the goods before delivery to their final destination, and (3) the amount of damages.’ ” Beta Spawn, Inc. v. FFE Transp. Servs., 250 F.3d 218, 223 (3d Cir. 2001) (citing Conair Corp. v. Old Dominion Freight Line, Inc., 22 F.3d 529, 531 (3rd Cir. 1994)). Here, Plaintiff’s Amended Complaint alleges that Defendant was hired to transport cargo in interstate commerce, (FAC ¶ 17); that the cargo was given to Defendant in good condition, (FAC ¶ 18); that the cargo was damaged by the time it arrived in New Jersey, (FAC ¶ 19); and that Plaintiff was required to pay KPT a settlement of $504,840, (FAC ¶ 22). At this stage in the litigation, these allegations are sufficient to withstand Defendant’s Motion to Dismiss. See Hartford Fire Ins. Co. v. Dynamic Worldwide Logistics, Inc., No. 17-553, 2017 U.S. Dist. LEXIS 142926, at *5–6 (D.N.J. Sept. 5, 2017) (stating that the dismissal of plaintiff’s Carmack Amendment claims would be inappropriate when the complaint identifies the defendant as a motor carrier who received the cargo in good condition but failed to deliver the cargo to its destination in the same condition). Therefore, the Court denies Defendant’s Motion to Dismiss Plaintiff’s Amended Complaint.

 

*3 Though Plaintiff has sufficiently alleged a claim under the Carmack Amendment, the Court finds that Plaintiff’s state law claims must be dismissed on preemption grounds. As previously mentioned, Plaintiff concedes in its Opposition that its claims are controlled by the Carmack Amendment. (ECF No. 18 at 2). Therefore, to the extent that Plaintiff’s Amended Complaint alleges state law claims, the Court concludes that same are hereby dismissed and that Plaintiff will continue this litigation under the Carmack Amendment.

 

 

CONCLUSION

For the aforementioned reasons, Defendant’s Motion to Dismiss is hereby denied. An appropriate order follows this opinion.

 

All Citations

Slip Copy, 2017 WL 6021858

 

 

Footnotes

1

This background is derived from Plaintiff’s Complaint, which the Court must accept as true at this stage of the proceedings. See Alston v. Countrywide Fin. Corp., 585 F.3d 753, 758 (3d Cir. 2009).

2

Plaintiff initially brought this action on September 26, 2017. (See ECF No. 1 (“Compl.”)). Subsequently, Plaintiff amended the complaint on September 29, 2017. (See FAC). Therefore, the relevant pleadings for this case will be taken from FAC.

3

As a preliminary matter, the Court notes that there are several defendants in this case who were hired to transport the equipment and who allegedly committed the culpable conduct. (FAC at Count I, Count II). However, this Opinion will discuss those facts only as they are relevant to the moving defendant.

4

Plaintiff’s Amended Complaint is devoid of the dates in which the alleged conduct underlying this action occurred, but in the interest of expedient justice the Court refers to the parties’ declarations to determine the appropriate timeframe Plaintiff had to provide notice.

 

 

United States District Court,

E.D. Michigan, Southern Division.

METALFORM SERVICES, LLC and, GWS Logistics, Plaintiffs,

v.

J.J. & ASSOCIATES, INC., Defendant.

Civil Action No. 17-CV-12407

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Signed 12/07/2017

Attorneys and Law Firms

April Kreger, Kristen Kreger, Livonia, MI, for Plaintiffs.

Roderick Joseph-Morton Fracassi, Plunkett Cooney, Detroit, MI, for Defendant.

 

 

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS

BERNARD A. FRIEDMAN, SENIOR UNITED STATES DISTRICT JUDGE

*1 This matter is before the Court on defendant’s motion for judgment on the pleadings [docket entry 11]. Plaintiffs have responded. Defendant has not replied, and the time to do so has expired. Pursuant to E.D. Mich. LR 7.1(f)(2), the Court shall decide this motion without a hearing.

 

 

FACTS

Plaintiff Metalform transports and assembles heavy machinery. Am. Compl. ¶ 2. Plaintiff GWS Logistics provides transportation services. Id. ¶ 3. In October 2016, ICE Industries contracted with Metalform to disassemble a machine press in Montgomery, Alabama and transport it to and reassemble it in Grenada, Mississippi. Id. ¶ 16. Metalform subcontracted with GWS to transport the press. Id. ¶ 18. GWS further subcontracted—using transportation broker TCM Transport—with defendant J.J. & Associates to transport the 1,200-ton press crown. Id. ¶ 19.1 Plaintiffs allege that the subcontract identifies Metalform as a customer. Id. ¶¶ 19–20.

 

In February 2017, J.J. and GWS executed a bill of lading—signed by a J.J. employee—stating that J.J. would transport the press crown to Grenada, Mississippi. Id. ¶¶ 64–65. The press crown was loaded undamaged onto J.J.’s truck. Id. ¶ 68. During transport, however, the press crown’s connecting arms were damaged. Id. ¶ 22. Metalform determined that the press crown “lost a significant portion of surface during transportation which was critical to the integrity of the connecting arms.” Id. ¶ 24. ICE industries made an insurance claim on the machinery for $124,736. Id. ¶ 25. As a result of the delay in assembly, plaintiffs sustained business expenses, damages, and costs. Id. ¶ 76.

 

Plaintiffs filed the instant action in Macomb County Circuit Court in May 2017. Defendant removed it to this Court in July. Plaintiffs amended their complaint in September.

 

 

LEGAL STANDARD

When deciding a motion for judgment on the pleadings under Fed. R. Civ. P. 12(c), the Court applies the same standard it would to decide a motion to dismiss under Fed. R. Civ. P. 12(b)(6). Albrecht v. Treon, 617 F.3d 890, 893 (6th Cir. 2010). The Court must “construe the complaint in the light most favorable to the plaintiff, accept all the factual allegations as true, and determine whether the plaintiff can prove a set of facts in support of its claims that would entitle it to relief.” Shane v. Bunzl Distrib. USA, Inc., 200 Fed.Appx. 397, 401 (6th Cir. 2006).

 

 

DISCUSSION

1. Counts I–IV: State Law Claims

Plaintiffs’ first four counts assert claims based on violations of Michigan common law: breach of contract, negligence, promissory estoppel, and negligent entrustment. The Carmack Amendment, 49 U.S.C. § 14706, preempts state-law claims against interstate carriers. See Exel, Inc. v. S. Refrigerated Transp., Inc., 807 F.3d 140, 148 (6th Cir. 2015) (holding that “state and common law claims against” interstate carriers are “preempted” by the Carmack Amendment). Thus, to successfully pursue a claim arising from an interstate shipping contract, a person must sue under the Carmack Amendment. In the instant case, J.J.—a carrier—transported the press crown from Alabama to Mississippi. Because plaintiff’s state-law claims are against an interstate carrier, they are preempted by the Carmack Amendment.

 

 

1. Count V: Carmack Amendment

*2 Plaintiffs also seek relief under the Carmack Amendment. J.J. argues, first, that because plaintiffs are “brokers” under the Carmack Amendment, they cannot state a claim for relief. The Carmack Amendment provides relief only to interstate carriers, not transportation brokers. Id. at 148–49. A “broker” is a principal or agent who “sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.” 49 U.S.C. § 13102(2).

 

Discovery may reveal that plaintiffs are brokers. But taking plaintiffs’ allegations as true—as the Court must in deciding a motion under Rule 12(c)—the Court can reasonably infer that plaintiffs are not brokers under the Carmack Amendment. Plaintiffs allege that they are in the business of transporting, rigging, installing, and rebuilding heavy machinery. See, e.g., First Am. Compl. ¶ 3, 5, 11–12. Plaintiffs nowhere allege that they are brokers. Indeed, by their own description, they are more like motor carriers than brokers. See 49 U.S.C. § 13102(14) (defining a motor carrier as a “person providing motor vehicle transportation for compensation”).

 

J.J. argues, second, that plaintiffs do not state a claim for relief because they fail to allege actual damages. To state a claim under the Carmack Amendment, a plaintiff must establish, among other things, that the defendant’s actions caused its damages. Delta Research Corp. v. EMS, Inc., No. 04-600046, 2005 WL 2090890, at *2 (E.D. Mich. Aug. 29, 2005). Under the Carmack Amendment, a carrier is liable to any person who is named on the pertinent bill of lading and for any injury to property that occurred during transportation. 49 U.S.C. § 14706(a)(1). A carrier is liable “for all losses resulting from any failure to discharge a carrier’s duty.” Am. Synthetic Rubber Corp. v. Louisville & N. R.R. Co., 422 F.2d 462, 466 (6th Cir. 1970) (quotation marks omitted). This includes damages “for delay in delivery.” Id.

 

Plaintiffs allege facts sufficient for the Court to reasonably infer that defendant is liable for actual damages. As plaintiffs were customers on J.J.’s subcontract, they were entitled to recover under the bill of lading and, thus, also entitled to seek damages. The Court must interpret “actual damages” broadly to encompass “all damages.” Am. Synthetic, 422 F.2d at 466. Plaintiffs allege that their total damages are $250,000—twice the price of the press crown. This additional damage, plaintiffs say, arose partly from plaintiffs having to wait for the replacement press crown before reassembling the press—i.e., damages from a delay in delivery.

 

In sum, at this stage of the proceedings, the Court cannot grant defendant’s judgment on the pleadings either on the grounds that plaintiffs are brokers or that they did not suffer actual damages. Accordingly,

 

IT IS ORDERED that defendant’s motion for judgment on the pleadings is granted in part and denied in part as follows: the motion is granted as to Counts I–IV, but denied as to Count V.

 

All Citations

Slip Copy, 2017 WL 6048819

 

 

Footnotes

1

The Court understands the press crown to be the press’s topmost piece.