United States District Court, D. Massachusetts.

RICHWELL GROUP, INC. d/b/a Maxfield Seafood, Plaintiff,

v.

SENECA LOGISTICS GROUP, LLC, Defendant.

Civil Action No. 17-cv-11442-IT

|

Signed 02/20/2018

Attorneys and Law Firms

Elizabeth S. Zuckerman, Jeffrey E. Poindexter, Mary Ellen MacDonald, Bulkley Richardson & Gelinas, Springfield, MA, for Plaintiff.

Lee E. Rajsich, Rajsich & Associates, P.C., Robert D. Cohan, Cohan, Rasnick, Myerson Plaut LLP, Boston, MA, for Defendant.

Opinion

 

MEMORANDUM & ORDER

Indira Talwani, United States District Judge

 

1. Introduction

*1 Richwell Group, Inc., d/b/a Maxfield Seafood, (“Maxfield”) brings a federal claim under the Carmack Amendment, 49 U.S.C. § 14706, a common law negligence claim, and a common law breach of contract claim against Seneca Logistics Group, LLC (“Seneca”). Before the court is Seneca’s Amended Motion to Dismiss for Failure to State a Claim [#41].1 For the reasons that follow, Defendant’s motion is DENIED IN PART and taken under advisement in part.

 

 

1. Legal Standard

“To survive a motion to dismiss, 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)). In addition to the allegations in the complaint, the court will consider the documents attached to the complaint. See Stein v. Royal Bank of Canada, 239 F.3d 389, 392 (1st Cir. 2001). At this stage, a court is required to “draw all reasonable inferences in [the plaintiff’s] favor.” Evergreen Partnering Grp., Inc. v. Pactiv Corp., 720 F.3d 33, 36 (1st Cir. 2013).

 

 

III. Facts Alleged

The Amended Complaint (“Complaint”) alleges the following facts. Maxfield is a seafood importer and distributer. Compl. ¶ 5 [#18]. Maxfield entered into a Contract with Seneca on October 30, 2015. This Contract is attached as Exhibit A to the Complaint. Id. ¶¶ 9-11; Compl. Ex. A [#18-1]. According to Maxfield, the Contract “appears to enumerate certain conditions governing Seneca’s provision of at least some services to Maxfield.” Id. ¶ 10.

 

Terms in the Contract include the following. The first line states that it “is the sole governing document with respect to the brokerage of freight hereunder.” An “Authorization” clause provides that the Contract “is the complete agreement between the parties hereto and supersedes prior writings on specific lanes,” and “[c]ontradictions between the terms and conditions of this Contract and those contained in any shipment paperwork shall default in favor of those contained in this Contract.” A “Double Brokering” clause states that Seneca would “contract directly with a carrier (unless otherwise agreed to).” A “Consequential Damages” clause provides that Seneca “will not be liable under any circumstances for any special, incidental, extended or consequential damages, including, but not limited to loss or damage resulting from delay, non-delivery or damage to a shipment, loss of sales, income, interest, profits, attorney’s fees and other costs.” Finally, a “Cargo Liability” clause states that Seneca has contingent cargo insurance up to $100,000 and requires customers to declare the value of any load and provide “special notification on loads with a declared value of greater than $100,000.” It also states “[a]ll claims must be filed directly with the actual transporting carrier.”

 

*2 According to the Complaint, on or about December 14, 2016, Maxfield arranged for Seneca to pick up and transport a load of lobster. Id. ¶¶ 12, 15-16. Maxfield exchanged various documents and communications with Seneca as part of this arrangement. Id. ¶ 14. Some of the lobster was to be picked up from Preferred Freezer Services of Boston Harbor, LLC (“Preferred Freezer”), a cold-storage facility in Everett, Massachusetts. Id. ¶¶ 12, 19.

 

Unbeknownst to Maxfield, Seneca hired Ernesto Perez to transport the load of lobster. Id. ¶¶ 23-24. Perez purportedly worked as a driver for Rapid Logistics Services, Inc. (“Rapid”). Id. ¶ 26. Seneca obtained Perez’s information through a public listing offering services. Id. ¶ 25. Seneca made no efforts to vet the background or credentials of either Perez or Rapid. Id. ¶ 27. On December 15, 2016, Perez drove a truck to Preferred Freezer. Id. ¶ 19. Seneca’s Chief Executive Officer, Vincent Grandillo, verbally authorized Preferred Freezer to release the load of lobster to Perez. Id. ¶ 20. A non-negotiable bill of lading was executed listing Seneca as the carrier. Id. ¶ 17.2 Preferred Freezer released the lobster to Perez. Id. ¶ 19.

 

Grandillo informed Maxfield on December 20 that the load of lobster had been stolen and that Grandillo was unable to contact the driver. Id. ¶ 21. The next day, Grandillo reported the theft to law enforcement. Id. ¶ 22. Maxfield alleges that it suffered direct losses of $318,000, in the form of the purchase price of the lobster and lost profits on sale of the lobster. Id. ¶ 28.

 

 

1. Count I—Carmack Amendment Claim Against Seneca as a Carrier

Maxfield asserts its first claim against Seneca under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706. The Amendment imposes liability on carriers “for the actual loss or injury to the property” caused by the carrier. Id. § 14706(a)(1). The term “carrier” includes a “motor carrier[,]” which is defined as “a person providing motor vehicle transportation for compensation.” Id. §§ 13102(3), (14). The Carmack Amendment requires a “carrier providing transportation or service … [to] issue a receipt or bill of lading for property it receives for transportation.” Id. § 14706(a)(1). It then makes carriers “liable to the person entitled to recover under the receipt or bill of lading” for property losses. Id. The Carmack Amendment imposes liability on carriers, see id., but not on brokers. See Chubb Grp. of Ins. Cos. v. H.A. Transp. Sys., Inc., 243 F. Supp. 2d 1064, 1068-69 (C.D. Cal. 2002) (“[T]he Carmack Amendment does not apply to brokers.”); see also Commercial Union Ins. Co. v. Forward Air, Inc., 50 F. Supp. 2d 255, 257 (S.D.N.Y. 1999) (“The Carmack Amendment does not provide for the liability of brokers.”). Seneca argues that the Carmack Amendment’s liability provision does not apply here because under the Contract, Seneca acted as a broker rather than a carrier.

 

*3 Looking only to the Complaint and the attached materials, it is not clear whether Seneca was acting as a broker or carrier for the specific transaction underlying Maxfield’s claims. The Contract supersedes prior writings between Seneca and Maxfield. It further provides that it is the “sole governing document with respect to the brokerage of freight hereunder.” Yet this does not preclude the parties from subsequently arranging for Seneca to act as the carrier of other freight, and Maxfield alleges that it arranged, through various other documents and communications, to have Seneca pick up and transport this load of lobster. Id. ¶ 14. As Maxfield highlights, the Contract alone does not provide any terms with respect to specific shipments. Accordingly, the Contract does not definitively establish that Seneca acted as a broker in this instance.

 

Taking as true the facts alleged in the Complaint, Seneca agreed to act as the carrier, not the broker, of this load of lobster. Id. ¶ 16. According to the Complaint, Seneca held itself out to Maxfield as a carrier. As alleged, Seneca is in the business of providing transportation services and lists “trucker” in its business description on its insurance policy. Id. ¶ 8. Further, Maxfield alleges Seneca agreed to transport Maxfield’s load of lobster. Id. ¶ 16. Taking these allegations as true, as the court must do at this stage, Seneca acted as a carrier. “Whether a company is a broker or a carrier is not determined by what the company labels itself, but by how it represents itself to the world and its relationship to the shipper.” Hewlett-Packard Co. v. Brother’s Trucking Enters., Inc., 373 F. Supp. 2d 1349, 1352 (S.D. Fla. 2005); see also Lumbermens Mut. Cas. Co. v. GES Exposition Servs., Inc., 303 F. Supp. 2d 920, 921-22 (N.D. Ill. 2003) (denying summary judgment as to whether defendant was broker or carrier when company labeled itself as broker yet undertook responsibility for ensuring shipment was transported to destination). “[W]hen analyzing whether an entity operated as a broker or a carrier, courts have looked to the understanding among the parties involved, which includes consideration of how the entity held itself out.” ASARCO LLC v. England Logistics, Inc., 71 F. Supp. 3d 990, 998 (D. Ariz. 2014). Because Maxfield alleges that it hired Seneca to act as carrier and the Contract is not necessarily inconsistent with that allegation, the court denies Seneca’s motion to dismiss this count.

 

 

1. Maxfield’s Common Law Claims

Although Maxfield claims Seneca was a carrier, and thus that the Carmack Amendment applies, it has also alleged two alternative theories of liability. Count II alleges Seneca promised to provide professional services to Maxfield and was negligent in selecting and retaining Perez and/or Rapid to assist with the service Seneca promised to provide. Count III alleges Seneca breached its duties under the Contract, causing damages to Maxfield. Defendant argues both of these counts should be dismissed on preemption grounds, the negligence claim is barred by the express terms of the Contract and by the economic loss doctrine, and the contract claim is barred by the terms of the contract prohibiting recovery of the damages Maxfield seeks. At this time, the court takes Seneca’s motion to dismiss Counts II and III under advisement.

 

 

1. Conclusion

For the foregoing reasons, Seneca’s Amended Motion to Dismiss for Failure to State a Claim [#41] is DENIED IN PART and taken under advisement in part. Specifically, the motion is DENIED as to Count I and taken under advisement as to Counts II and III. Seneca shall file its answer to Maxfield’s Complaint by March 9, 2018. Seneca need not answer paragraphs 34 through 41 of the Complaint pending further order of the court.

 

IT IS SO ORDERED.

 

All Citations

Slip Copy, 2018 WL 988060

 

 

Footnotes

1

After filing its original Motion to Dismiss [#23], Seneca filed a Motion for Leave to File Corrected Motion to Dismiss and Corrected Memo, and to Withdraw Original Motion and Memo [#37]. The court allowed Seneca to withdraw its original motion to dismiss and file an amended motion to dismiss with a short supplemental memorandum addressing an additional argument. The court also permitted Maxfield to file a supplemental opposition. See Order [#39].

2

Exhibit B to the Complaint consists of non-negotiable bills of lading for three separate lobster transport orders. Id. ¶¶ 17-18; Am. Compl. Ex. B [#18-2]. Order 4297474, dated December 14, 2016, and Order 4297512, dated December 15, 2016, list Seneca as the carrier. Id. Order 4297068, dated December 8, 2016, lists “Own Instructions” as the carrier. Id. All of these documents contain what appears to be the signature of “E. Perez” on the “Rec’d By” line and a signature of another individual on the “Shipped By” line, followed by the date December 15. Id. The Complaint does not make clear whether all of the bills of lading in Exhibit B relate to the lost lobsters at issue in this case, or only some. Nor is this clear from the face of the documents. In any event, the Complaint sufficiently alleges that a non-negotiable bill of lading was executed and that this bill of lading listed Seneca as the carrier. See id. ¶ 17. At least some of the bills of lading attached to the Complaint support this factual allegation.

United States District Court, N.D. Illinois, Eastern Division.

NATALIA VOLKOVA, individually and as Trustee of the Estate of Alexandre Volkov, deceased, Plaintiff,

v.

C.H. ROBINSON COMPANY, et al., Defendants.

No. 16 C 1883

|

02/07/2018

Opinion

Judge Ronald A. Guzmán

 

MEMORANDUM OPINION AND ORDER

*1 For the reasons stated below, the Robinson defendants’ motion to dismiss certain claims [194] is granted.

 

 

STATEMENT

The Court assumes general knowledge of the facts of the case, which was filed after the decedent’s tractor-trailer crashed into another tractor-trailer, driven by defendant Dung Quoc Nguyen, who was making a U-turn in the middle of the highway. Plaintiff’s second amended complaint (“SAC”) alleges in part that Defendants C.H. Robinson Company, Inc. and C.H. Robinson Worldwide, Inc. (collectively, “Robinson”) negligently hired Antioch Transport, Inc. and its driver, Nguyen.

 

According to the SAC, Robinson is a federally-registered property broker, while Antioch is a federally-authorized motor carrier. (SAC, Dkt. # 191, ¶¶ 10, 36.) Robinson selects and contracts with motor carriers (in this instance, Antioch) to haul freight shipments for its customers. (Id. ¶¶ 35-36, 48.) Plaintiff alleges that Robinson is liable for failing to perform sufficient investigation and evaluation in hiring Antioch and Nguyen to transport the load at issue. (Id. ¶¶ 38, 40-43, 176.)

 

Robinson contends in the instant motion to dismiss that the negligent hiring claims are preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”).1

 

 

Standard

On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court assumes all factual allegations in the complaint to be true, viewing all facts and any inferences reasonably drawn therefrom in the light most favorable to the plaintiff. Parish v. City of Elkhart, 614 F.3d 677, 679 (7th Cir. 2010). The factual allegations in the complaint must be enough to raise a right to relief above the speculative level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “The complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Bonte v. U.S. Bank, N.A., 624 F.3d 461, 463 (7th Cir. 2010).

 

 

Analysis

To succeed on a cause of action regarding the negligent hiring, Plaintiff must show that Robinson negligently hired Antioch and Nguyen when Robinson knew or should have known that they were “unfit for the required contracted job so as to create a danger of harm to other third parties.” Hayward v. C.H. Robinson Co., 24 N.E.3d 48, 55 (Ill. App. Ct. 2014).

 

Under the relevant provision of the FAAAA:

a State…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 …or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.

*2 49 U.S.C. § 14501(c)(1) (emphasis added). In turn, the term “transportation” includes:

(A) a motor vehicle, vessel, warehouse, wharf, pier, dock, yard, property, facility, instrumentality, or equipment of any kind related to the movement of passengers or property, or both, regardless of ownership or an agreement concerning use; and

(B) services related to that movement, including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and interchange of passengers and property.

49 U.S.C. § 13102(23) (emphasis added).

 

In addressing preemption under the FAAAA, the Supreme Court has stated that “[t]he phrase ‘related to’…embraces state laws ‘having a connection with or reference to’ carrier ‘rates, routes, or services,’ whether directly or indirectly.” Dan’s City, 133 S. Ct. at 1778. (citations and certain internal quotation marks omitted). However, the FAAAA “does not preempt state laws affecting carrier prices, routes, and services ‘in only a tenuous, remote, or peripheral…manner.’ ” Id. (citation omitted). The Court “must examine the underlying facts of each case to determine whether the particular claims at issue ‘relate to’ [the broker’s] rates, routes or services.” Travel All Over the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1433 (7th Cir. 1996) (interpreting the ADA). The state “ ‘law must relate to carrier rates, routes, or services either by expressly referring to them, or by having a significant economic effect on them.’ ” Nationwide Freight Sys., Inc. v. Ill. Commerce Comm’n, 784 F.3d 367, 373-74 (7th Cir. 2015) (quoting Travel All Over the World, 73 F.3d at 1432). Moreover, “it is not sufficient that a state law relates to the ‘price, route, or service’ of a [broker] in any capacity; the law must also concern a [broker’s] ‘transportation of property.’ ” Dan’s City, 133 S. Ct. at 1778-79. “[F]ederal preemption is an affirmative defense upon which the defendants bear the burden of proof.” Georgia Nut Co. v. C.H. Robinson Co., No. 17 C 3018, 2017 WL 4864857, at *3 (N.D. Ill. Oct. 26, 2017) (internal citations omitted).

 

It is clear from the parties’ briefs and the Court’s independent research that there is authority supporting both sides of the preemption issue with respect to the negligent hiring claim. However, while other cases might be instructive, they do not dictate a specific result, as the Seventh Circuit has cautioned against “develop[ing] broad rules concerning whether certain types of common-law claims are preempted by the [FAAAA].” Travel All Over the World, 73 F.3d at 1431. Instead, as noted, the Court “must examine the underlying facts of each case to determine whether the particular claims at issue ‘relate to’ [broker] rates, routes or services.” Id.

 

With respect to the negligent hiring claims against Robinson, the SAC contains the following relevant allegations:

35. That for the fiscal year ending 2014 CH Robinson filed a form 10-K with the United States Securities and Exchange Commission describing their business as:

*3 ‘We are a service company. We provide freight transportation services and logistics to companies of all sizes, in a wide variety of industries. * * * We have developed global transportation and distribution networks to provide transportation and supply chain services worldwide. * * * As a third-party logistics provider, we enter into contractual relationships with a wide variety of transportation companies, and utilize those relationships to efficiently and cost-effectively transport our customers’ freight…. Depending on the needs of our customer and their supply chain requirements, we select and hire the appropriate transportation for each shipment.’

36. That despite all of the publicly available information showing that Antioch Transport, Inc. was an unsafe company on July 1, 2014, the CH Robinson Defendants executed a carrier agreement with Antioch Transport, Inc. to provide them loads to haul in interstate commerce for Robinson customers.
37. That CH Robinson’s carrier agreement with Antioch Transport, Inc. placed safety requirements on Antioch to ensure that its drivers are properly trained and licensed, are competent and capable of safely handling and transporting Robinson’s shipments, and that drivers would be dispatched in accordance with the maximum available hours of service rules promulgated by the FMCSA [Federal Motor Carrier Safety Act] while operating in the United States. Robinson also required that Antioch maintain their equipment for use in hauling Robinson loads in good operating condition and repair and in compliance with all Federal, State, Provincial/Territorial, Municipal statutes and/or regulations so that it is suitable and properly configured to safely load, transport, and unload the shipments tendered by Robinson.

(SAC, Dkt. # 191, ¶¶ 35-37.)

 

The SAC further alleges that it was Robinson’s corporate policy to not, among other things:

• Order or review carrier safety information before hiring any motor carrier to haul their loads.
• Ask any motor carrier to provide their ‘Company Safety’ report or any other available carrier or safety data.
• Ask any motor carrier to provide any information demonstrating that their drivers were actually properly trained or licensed, or competent and capable of safely handling and transporting shipments.

(Id. ¶¶ 41-42.)

 

Finally, the SAC alleges that Robinson had a duty to ensure that its drivers would not create a risk of injury, had a duty of reasonable care in selecting and hiring commercial drivers, and “had an obligation to comply with the FMSCA and the FMCSRs [Federal Motor Carrier Safety Regulations] in all respects, at all times relevant.” (Id. ¶¶ 118-120.)

 

As used in the FAAAA, “[t]he term ‘services’ is…broad, encompassing ‘all elements of the [motor] carrier service bargain.’ ” Midwest Trading Grp., Inc. v. GlobalTranz Enters., Inc., No. 12 C 9313, 2015 WL 1043554, at *3 (N.D. Ill. Mar. 5, 2015) (citation omitted). A straightforward reading of Plaintiff’s allegations demonstrates that the negligent hiring claims relate to the core service provided by Robinson – hiring motor carriers to transport shipments. See Georgia Nut Co., 2017 WL 4864857, at *3 (“While the services of a freight broker do not include the actual transportation of property, they are focused on arranging how others will transport the property; these services, therefore, fall within the scope of the FAAAA preemption.”).

 

Further, in alleging that Robinson has failed to adequately and properly perform its primary service, the negligent hiring claim directly implicates how Robinson performs its central function of hiring motor carriers, which involves the transportation of property. Therefore, because enforcement of the claim would have a significant economic impact on the services Robinson provides, it is preempted. Id. (“Enforcing state negligence laws that would have a direct and substantial impact on the way in which freight brokers hire and oversee transportation companies would hinder th[e] objective of the FAAAA[,]” which “does not allow courts to impute state-law derived rights into transportation agreements,” with the result of “expand[ing] the bargained-for rights of the agreement.”).

 

*4 Plaintiff argues that because her claim involves personal injury and not damage to property, the claim is not preempted. It is true that certain courts have found that negligence claims seeking relief for personal injury are not preempted. See, e.g., Mann v. C.H. Robinson Worldwide, Inc., Nos. 16 C 102, 16 C 104 & 16 C 140, 2017 WL 3191516, at **7-8 (W.D. Va. July 27, 2017) (concluding that negligent hiring claim based on injuries sustained in truck accident not preempted) (citing Montes de Oca v. El Paso-L.A. Limo Express, Inc., No. 14 C 9230, 2015 WL 1250139 (C.D. Cal. Mar. 17, 2015) (holding FAAAA did not preempt personal injury claim against transportation broker); Owens v. Anthony, No. 2:11-cv-33, 2011 WL 6056409, at *3 (M.D. Tenn. Dec. 6, 2011) (“The Court agrees with the numerous courts which have found that personal injury negligence claims are not preempted by the FAAAA.”); Jimenez-Ruiz v. Spirit Airlines, Inc., 794 F. Supp. 2d 344 (D.P.R. June 16, 2011) (concluding that plaintiff’s claim for personal injuries sustained while disembarking an aircraft was not preempted by the ADA)).

 

The Court, however, respectfully disagrees with the analyses of these courts to the extent that they do not faithfully apply the preemption analysis established by the Supreme Court, as described above. In essence, Plaintiff contends that a proper application of the preemption analysis should be disregarded in a case where the plaintiff is seeking relief for personal injury. (Pl.’s Reply, Dkt. # 199, ¶ 7) (“In this case, the plaintiff is the trustee of the estate of her dead husband who was traveling on I-80 when a driver [hired by] Robinson fell asleep and drove into oncoming traffic causing the subject collision….Alex Volkov did not bargain for the possibility of a horrific death caused by the negligent defendants but that is what he received.”). The Court recognizes the devastation caused by the accident and certainly sympathizes with Plaintiff. Nevertheless, the Court cannot ignore the straightforward preemption analysis as laid out by the Supreme Court, and finds instructive the analysis in Rowe v. New Hampshire Motor Transportation Association, 552 U.S. 364 (2008). In Rowe, the Supreme Court found preempted Maine statutes regulating the delivery of tobacco products in spite of the State’s argument that the laws were enacted in an “effort[ ] to protect its citizens’ public health, particularly when those laws regulate so dangerous an activity as underage smoking.” Id. at 373-74. The Supreme Court concluded that “[d]espite the importance of the public health objective, we cannot agree with Maine that the federal law creates an exception on that basis exempting state laws that it would otherwise pre-empt.” Id. at 374. The Court finds no ground in the instant case on which to depart from this reasoning.

 

Contrary to Plaintiff’s argument that a finding of preemption leaves her without a remedy, she may and has sought recourse against the carrier, Antioch, and its driver, Nguyen. Nor is Plaintiff’s reliance on § 14501(c)(2)(A), which provides that the FAAAA “shall not restrict safety regulatory authority of a State with respect to motor vehicles,” persuasive. Id. (emphasis added). Plaintiff points to no convincing authority supporting the proposition that a state common law claim for negligent hiring constitutes a safety regulation of a motor vehicle.

 

 

Conclusion

For the reasons stated herein, the Court finds that the negligent hiring claims against the Robinson defendants are preempted, and grants Robinson’s motion to dismiss those claims against it.

 

Date: February 7, 2018 ________________________________

 

 

Ronald A. Guzmán

United States District Judge

All Citations

Slip Copy, 2018 WL 741441

 

 

Footnotes

1

The preemption-clause language in the FAAAA is informed by decisions interpreting parallel language in the preemption provision of the Airline Deregulation Act of 1978 (“ADA”).

Dan’s City Used Cars, Inc. v. Pelkey, 133 S. Ct. 1769, 1778 (2013). The Court further notes that the FAAAA was amended by the ICC Termination Act of 1995 (“ICCTA”). Thus, while different courts may refer to the relevant federal law as the ADA, the FAAAA, or the ICCTA, the same analytical framework applies, and the Court uses only the FAAAA acronym in this order for ease of reference, unless otherwise indicated.