United States District Court for the Central District of California
May 8, 2024, Decided; May 8, 2024, Filed
2:23-cv-3292-DSF-PVCx
2024 U.S. Dist. LEXIS 84046 *
MINDER LLC, Plaintiff, v. REAL INTERNATIONAL SCM CORPORATION, et al., Defendants.
carrier, transport, entities, factual allegations, motion to dismiss, Allegations, pleaded, courts, district court, opposing party, sub-contracted, alteration, misconduct, discovery, factors, notice, fails
Counsel: [*1] For Marubeni Transport Service Corp., a Delaware corporation, Cross Claimant, Cross Defendant, Defendant, ThirdParty Plaintiff: Dennis A Cammarano, Cammarano Law Group, Long Beach, CA.
For Minder LLC, a Delaware limited liability company, Plaintiff: Loren W. Coe, LEAD ATTORNEY, Severson and Werson, Irvine, CA.
For Real International SCM Corporation, a California corporation, Cross Claimant, Defendant: Jeffrey C. Wang, Kathleen Alparce Vasquez, Michael York, WHGC PLC, Newport Beach, CA; Jessica Ann Crabbe, WHGC P.L.C., Newport Beach, CA.
For Steam Logistics, a Tennessee limited liability company, Cross Defendant, Defendant: Hillary Arrow Booth, Booth LLP, Los Angeles, CA; Marc S. Blubaugh, PRO HAC VICE, Benesch Friedlander Coplan and Aronoff LLP, Columbus, OH; Matthew P Farrell, Ruby H. Kazi, Benesch Friedlander Coplan and Aronoff LLP, San Francisco, CA.
Judges: Dale S. Fischer, United States District Judge.
Order DENYING Motion to Dismiss (Dkt. 84)
Defendant Steam Logistics LLC moves to dismiss Plaintiff Minder LLC’s Carmack Amendment claim in the Second Amended Complaint (SAC). The Court deems this matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78; Local Rule 7-15.
Rule 12(b)(6) allows an attack on [*2] the pleadings for failure to state a claim on which relief can be granted. “[W]hen ruling on a defendant’s motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 94, 127 S. Ct. 2197, 167 L. Ed. 2d 1081 (2007) (per curiam). Allegations contradicted by matters properly subject to judicial notice or by exhibit need not be accepted as true, Produce Pay, Inc. v. Izguerra Produce, Inc., 39 F.4th 1158, 1161 (9th Cir. 2022); and the court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.'” Id. (alteration in original) (quoting Twombly, 550 U.S. at 557). A complaint must “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. This means that the complaint must plead “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. “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. There must be “sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively . . . and factual allegations that are taken [*3] as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
Ruling on a motion to dismiss will be “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged – but it has not ‘show[n]’ – ‘that the pleader is entitled to relief.'” Iqbal, 556 U.S. at 679 (alteration in original) (quoting Fed. R. Civ. P. 8(a)(2)). “Dismissal under Rule 12(b)(6) is proper when the complaint . . . fails to allege sufficient facts to support a cognizable legal theory.” Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013).
The Court need not address Plaintiff’s argument that the motion is procedurally improper because the motion fails on the merits. The motion is premised on the idea that only a defendant who actually physically transports the cargo at issue can be liable as a “carrier” under the Carmack Amendment. This argument appears to be based entirely on a single district court case, Buchanan v. Neighbors Van Lines, 2010 U.S. Dist. LEXIS 130511, 2010 WL 4916644 (C.D. Cal. 2010). However, other than the “plain language of the statute,” Buchanan provides no support for its assertion that a defendant is liable under the [*4] Carmack Amendment only “if it actually carried the goods.” 2010 U.S. Dist. LEXIS 130511, [WL] at *6. The Court disagrees that the language of the statute obviously limits “carriers” to entities that physically carried the goods. “Carrier” is defined to include a “motor carrier,” which is “a person providing motor vehicle transportation for compensation.” 49 U.S.C. §§ 13102(3), (14). Buchanan notwithstanding, courts that have considered the issue have generally acknowledged that the term “carrier” is not limited to entities that physically carried the goods. Instead, courts have focused on whether an entity “legally binds itself to transport” and “accept[s] responsibility for ensuring delivery of the goods.” See Deibel Lab’ys of Illinois, Inc. v. Worldwide Express Operations LLC, 2021 U.S. Dist. LEXIS 195055, 2021 WL 4552142 at *1 (N.D. Cal. 2021) (discussing cases). In other words, a defendant can be liable as a carrier in some circumstances even if that defendant subcontracted out its assumed responsibility for transporting the goods at issue.
In its reply, Steam changes tack and argues that Plaintiff should be required to plead facts relating to factors some district courts have evaluated in deciding whether an entity should be considered a carrier. See id.1 While some courts have required these factors to be pleaded, the Court declines to impose this burden on Plaintiff. The SAC alleges that Steam was part [*5] of a series of subcontractors for the transport of the goods at issue. SAC ¶ 14. The SAC is pleaded in the alternative, at least in part, because it is difficult for Plaintiff, absent discovery, to know the exact relationships among the various defendants that would allow Plaintiff to discern whether any particular defendant was acting as a carrier or broker. Plaintiff has alleged that Steam “sub-contracted” with two other entities for the transport of the goods. Id. It is at least plausible that this relationship would result in Steam falling within the category of a “carrier” under the Carmack Amendment.
The motion to dismiss is DENIED.
End of Document
1 The factors are: “(1) whether the entity promised to personally perform the transport and therefore legally bound itself to transport; (2) the type of services the entity offers; (3) whether the entity held itself out to the public as the actual transporter of goods; and (4) whether the entity’s only role was to secure a third party to ship plaintiff’s goods.” 2010 U.S. Dist. LEXIS 130511, [WL] at *2.
