United States District Court,
S.D. Texas,
Houston Division.
HUNTINGTON OPERATING CORP.; dba Texas International Import Export, Plaintiff,
v.
SYBONNEY EXPRESS, INC.; dba J.P. Transports, Inc., et al, Defendants.
Civil Action No. H-08-781.
May 11, 2010.
ORDER
MELINDA HARMON, District Judge.
Pending before the Court is Defendant Transport Direct Corp. d/b/a Custom Direct Logistics’ (“Custom”) motion for partial summary judgment (Doc. 53), as well as Plaintiff Huntington Operating Corp. d/b/a Texas International Import Export’s (“Huntington”) response (Doc. 55). Upon review and consideration of this motion and the relevant legal authority, and for the reasons explained below, the Court finds that Defendant Custom’s motion for partial summary judgment (Doc. 53) should be granted.
I. Background and Relevant Facts
This case concerns the theft of a shipment of perfume in transit from Florida to Texas. Plaintiff Huntington employed Defendant Custom, a transportation broker, to arrange the shipment. (Doc. 23 at 3-4.) Custom in turn employed Sybonney Express, Inc. d/b/a Sybonney Express (“Sybonney Express”), a motor carrier, to pick up the cargo in Miami, Florida, and deliver it to Huntington in Houston, Texas. (Id.) On or about April 29, 2006, the shipment was stolen, along with the tractor-trailer, from a truck stop in Pasco County, Florida. (Id.) Huntington brought suit against Custom because, according to Huntington, Custom was responsible for ensuring that Sybonney Express had adequate insurance to cover the cargo. The tractor-trailer in question was allegedly not covered by the insurance policy, however, due to a clerical error.
According to Huntington, Custom failed to ensure adequate insurance coverage when selecting Sybonney Express. (Doc. 26 at ¶ 7.) Furthermore, Huntington contends that Custom failed to disclose information regarding Sybonney Express’ licensure history that would have been “critical” in Huntington’s decision to accept Custom’s choice of Sybonney Express. (Id.) Additionally, Huntington asserts that Custom assured Huntington that it was not necessary to procure additional insurance and that the insurance coverage maintained by Sybonney Express was “more than sufficient” to cover the perfume shipment in the event of a loss. (Id.)
According to Custom, it followed standard operating procedures in ensuring that Sybonney Express had adequate insurance for the shipment. (Doc. 21 Exh. B at ¶ 5.) In his sworn affidavit, Joseph Lepro, Operations Manager for Custom, stated that Custom received from Sybonney Express a Certificate of Liability Insurance. (Id.; see also Doc. 21 Exh. B-3.) Custom further confirmed the existence of the insurance policy on the Federal Motor Carrier Safety Administration (“FMCSA”) website at http://li-public.fmcsa.gov. (Id.; see also Doc. 21 Exh. B-2 at 1.) Lastly, Custom verbally confirmed the existence of cargo coverage as stated in the Certificate of Liability Insurance, contacting by phone Mack Schumate (“Schumate”), the agent for KBS Insurance Group and Sybonney Express’ insurance agent. (Id.) However, when Huntington made a claim for the stolen shipment from the insurance carrier, it was denied. (Doc. 23 at 4.) The insurance carrier denied the claim because the vehicle transporting the perfume shipment was “not scheduled specifically in the cargo insurance policy issued.” (Id.)
Defendant Custom previously moved for summary judgment (Doc. 21) and, after this Court’s ruling (Doc. 43), the remaining claims are for violations of the Texas Deceptive Trade Practices Act (“TDTPA”), negligence, negligent misrepresentation, and breach of contract. Custom now moves for partial summary judgment (Doc. 53), urging the Court to dismiss all remaining claims except that for breach of contract because they are preempted by 49 U.S.C. § 14501(c)(1), titled “Federal authority over intrastate transportation”. Huntington responds that its claims fall under the statutory exception to preemption of state law claims carved out by 49 U.S.C. § 14501(c)(2)(A).
II. Standard of Review
“A party against whom relief is sought may move, with or without supporting affidavits, for summary judgment.” Fed.R.Civ.P. 56(b). A party moving for summary judgment must inform the court of the basis for the motion and identify those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, that show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The substantive law governing the suit identifies the essential elements of the claims at issue and therefore indicates which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The initial burden falls on the movant to identify areas essential to the nonmovant’s claim in which there is an “absence of a genuine issue of material fact.” Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir.2005). If the moving party fails to meet its initial burden, the motion must be denied, regardless of the adequacy of any response. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994) (en banc ). Moreover, if the party moving for summary judgment bears the burden of proof on an issue, either as a plaintiff or as a defendant asserting an affirmative defense, then that party must establish that no dispute of material fact exists regarding all of the essential elements of the claim or defense to warrant judgment in its favor. Fontenot v. Upjohn, 780 F.2d 1190, 1194 (5th Cir.1986) (the movant with the burden of proof “must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in [its] favor”) (emphasis in original).
III. Discussion
“Except as provided in paragraphs (2) and (3), a State … may not enact or enforce a law … related to a … service of any … broker … with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). Defendant Custom reads this provision as preempting all claims founded in state statute or common law, except for breach of contract. In response, Plaintiff Custom points out that the federal statute “shall not restrict … 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[.]” 49 U.S .C. § 14501(c)(2)(A).
The provisions of 49 U.S.C. § 14501, entitled “Federal authority over intrastate transportation,” closely parallel those found in the Airline Deregulation Act of 1978 (“ADA”), codified at 49 U.S.C. § 41713(b)(4)(A) and 49 U.S.C. § 41713(b)(4)(B)(i). Courts have thus interpreted the preemptive scope of 49 U.S.C. § 14501(c) in accordance with case law addressing the ADA. See, e.g., Deerskin Trading Post, Inc. v. United Parcel Serv. of Am., Inc., 972 F.Supp. 665 (N.D.Ga.1997); Yellow Transp., Inc. v. DM Transp. Mgmt. Servs. Inc., 2006 WL 2871745 at 2 (E.D.Pa. July 14, 2006).
The Supreme Court held that the ADA broadly preempts state law claims other than breach of contract. Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992). Fifth Circuit case law has also held that claims for violation of the Texas Deceptive Trade Practice-Consumer Protection Act against an air carrier for loss of packages was preempted by the ADA. Sam L. Majors Jewelers v. ABX, Inc., 117 F.3d 922, 931 (5th Cir.1997). In short, 49 U.S.C. § 14501 broadly preempts state law claims that would regulate interstate transportation of goods. See Vieira v. United Pacel Serv., Inc., 1996 WL 478686 (N.D. Cal. Aug 5, 1996); Rockwell v. United Parcel Serv., Inc., 1999 WL 33100089 (D.Vt. July 17, 1999).
The statutory exception on which Plaintiff Huntington relies, 49 U.S.C. § 14501(c)(2)(A), is unavailing. Case law interpreting § 14501(c)(2)(A) refers solely to the ability of the several states to define safety standards and insurance requirements. City of Columbus v. Ours Garage & Wrecker Service, Inc., 536 U.S. 424 (2002); Cardinal Towing & Auto Repair, Inc. v. City of Bedford, Tex., 180 F.3d 686 (5th Cir.1999). The exception is not read to permit a private right of action.
IV. Conclusion
Accordingly, it is hereby ORDERED that Defendant Custom’s motion for partial summary judgment (Doc. 53) is GRANTED. Plaintiff Huntington’s claims for violations of the Texas Deceptive Trade Practices Act, negligence, and negligent misrepresentation are dismissed, leaving only the breach of contract claim for trial.
