United States District Court, M.D. Georgia, Valdosta Division.

Chris PINDER, as Sole Surviving Spouse of April L. Pinder, Deceased, and as Prospective Executor of the Estate of April L. Pinder, Deceased, Plaintiff,

v.

LANCER INSURANCE COMPANY, Tristan Logistics LLC, Carlton O. Douglas, Magellan Transport Logistics, Inc., Henkel Corporation, and Wal-Mart Stores East LP, Defendants.

CASE NO.: 7:23-CV-53 (LAG)

|

Signed September 27, 2024

Attorneys and Law Firms

Briant Glen Mildenhall, Joseph A. Fried, Atlanta, GA, for Plaintiff.

Chandler L. Smith, Alpharetta, GA, for Defendant Lancer Insurance Company.

Norma Caitlin Eldred, Stephen J. Cohen, Jessica F. Hubbartt, Copeland, Stair, Valz & Lovell, LLP, Atlanta, GA, for Defendants Tristan Logistics LLC, Carlton O. Douglas.

Gillian Shannon Crowl-Parrish, Swift, Currie, McGhee & Hiers, LLP, Atlanta, GA, for Defendant Henkel Corporation.

ORDER

LESLIE A. GARDNER, CHIEF JUDGE

*1 Before the Court is Defendant Magellan Transport Logistics Inc.’s (MTL) Motion to Dismiss and Defendant Wal-mart Stores East LP’s (Wal-mart) Motion for Judgment on the Pleadings. (Docs. 54, 74). For the reasons below, Defendant MTL’s Motion to Dismiss is GRANTED and Defendant Wal-mart’s Motion for Judgment on the Pleadings is GRANTED.

BACKGROUND

On the morning of March 11, 2022, Decedent April L. Pinder was traveling South on VO Tech Drive in Irwin County, Georgia.¹ (Doc 1-1 ¶ 23). Defendant Carlton O. Douglas was driving east on Old Whitley Road in Irwin County, Georgia in a tractor trailer. (Id. ¶ 25). The two vehicles met at the intersection of Old Whitley Road and VO Tech Drive and Defendant Douglas failed to stop, as required by law. (Id. ¶¶ 25–27). The front end of Defendant Douglas’ tractor trailer struck Pinder’s vehicle which became lodged in the rear wheels of Defendant Douglas’ trailer. (Id. ¶¶ 28–29). Pinder did not survive the collision. (Id. ¶ 33).

At the time of the collision, the tractor trailer operated by Defendant Douglas was owned by Defendant Tristan Logistics. (Id. ¶ 37). Defendant Douglas was carrying cargo that he picked up in Kentucky and was transporting to Douglas, Georgia, for delivery. (Id. ¶ 40). Plaintiff alleges that Defendants MTL and Wal-Mart entered into a contract with Defendant Tristan Logistics to act as a broker and/or shipper to arrange for the delivery of the subject load, and that “[a]s part of [their] duties under this contract, … [Defendants MTL and Wal-mart] undertook to ensure the safe delivery of a load from Kentucky to Georgia.” (Id. ¶¶ 42–43). Plaintiff further alleges that Defendants MTL and Wal-mart “had control over the time, manner, and method of how Defendant Tristan Logistics and/or [Defendant] Douglas were to pick-up and deliver the subject load.” (Id. ¶ 50 (emphasis omitted)).

On November 3, 2022, Plaintiff filed an Amended Complaint in DeKalb County, Georgia. (Doc. 1 at 2). Defendant Wal-mart removed the case to the United States District Court for the Northern District of Georgia on December 7, 2022. (See Docket; Doc. 1-1). On April 26, 2023, Defendant MTL filed a Motion to Dismiss, and, on April 27, 2023, the case was transferred to this Court. (Docs. 54, 57). Plaintiff filed a Response on May 24, 2023, and Defendant MTL filed a Reply on June 6, 2023. (Docs. 72, 73). The Parties subsequently filed several documents regarding supplemental authority related to Eleventh Circuit, Seventh Circuit, and various district court cases interpreting and applying the Federal Aviation Administration Authorization Act. (Docs. 80, 82, 83, 85, and 86). On June 7, 2023, Defendant Wal-mart filed a Motion for Judgment on the Pleadings “[f]or nearly identical reasons put forth in [MTL’s] Motion to Dismiss[.]” (Doc. 74). Plaintiff filed a Response on June 28, 2023, and Defendant Wal-mart filed a Reply on July 10, 2023. (Docs. 78, 79). Thus, the Motion to Dismiss and Motion for Judgment on the Pleadings are ripe for review. See M.D. Ga. L.R. 7.3.1A.

LEGAL STANDARD

*2 To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), “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 Twombly, 550 U.S. at 570). A claim is plausible on its face if the complaint alleges enough facts to “allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted). The complaint must plead “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence” of the defendant’s liability. Twombly, 550 U.S. at 556. The Court “take[s] the factual allegations in the complaint as true and construe[s] them in the light most favorable to the plaintiffs,” but is “not required to accept the legal conclusions in the complaint as true.” Anderson, 17 F.4th at 1344–45 (citations omitted). “[A] plaintiff armed with nothing more than conclusions” cannot “unlock the doors of discovery.” Iqbal, 556 U.S. at 678–79. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements,” are insufficient to survive a motion to dismiss. Id. at 678 (citing Twombly, 550 U.S. at 555).

Rule 12(c) provides that “a party may move for judgment on the pleadings after the pleadings are closed but early enough not to delay trial.” King v. Akima Glob. Servs., LLC, 775 F. App’x 617, 620 (11th Cir. 2019) (per curiam); Carbone v. Cable News Network, Inc., 910 F.3d 1345, 1350 (11th Cir. 2018). Courts analyze motions for judgment on the pleadings using “the same standard as” motions to dismiss under Federal Rule of Civil Procedure 12(b)(6). Carbone, 910 F.3d at 1350 (citation omitted). Thus, the Court will accept all material facts in the complaint as true and “view those facts in the light most favorable to the non-moving party.” Perez v. Wells Fargo N.A., 774 F.3d 1329, 1335 (11th Cir. 2014) (citation omitted). Courts may only grant a motion for judgment on the pleadings “where there are no material facts in dispute and the moving party is entitled to judgment as a matter of law.” Id. (quoting Cannon v. City of W. Palm Beach, 250 F.3d 1299, 1301 (11th Cir. 2001)). If there is a material dispute of fact in the parties’ pleadings, the court must deny judgment on the pleadings. Id.

DISCUSSION

Both Defendants MTL and Wal-mart seek dismissal in this matter under the same principles. The Court will first address the Defendants’ motions regarding respondeat superior claims. Then the Court will address the negligence claims that Defendants argue are preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”). 49 USC § 14501(c)(1).

I. Agency/Respondeat Superior Claims

In Counts Seven and Eleven, Plaintiff seeks to impose liability on MTL and Wal-mart, respectively, under a theory of respondeat superior, generally alleging that Defendants Tristan Logistics and Douglas were agents of MTL and Wal-mart and that MTL and Wal-mart, therefore, are liable for their actions. (Doc. 1-1 ¶¶ 142–54, 225–237). Specifically, Plaintiff alleges that Defendants MTL and Wal-mart entered into a contract with Defendant Tristan Logistics to deliver a load from Kentucky to Georgia and that MTL and Wal-mart “had control over the time, manner, and method of how Defendant[s] … were to pick-up and deliver the subject load.” (Id. ¶¶ 43, 50). In support of this contention, Plaintiffs allege that Defendants Tristan Logistics and Douglas were required to check in with and provide tracking updates via “4 Kites” to MTL and Wal-mart, that Defendants Tristan Logistics and Douglas were required to provide in and out times from the pick-up facility, and that Defendant Tristan Logistics was required to submit a bill in order to receive payment from MTL and Wal-mart. (Id. ¶¶ 52–53, 56–59).

Georgia law states that “[f]or the negligence of one person to be properly imputable to another, the one to whom it is imputed must stand in such a relation or privity to the negligent person as to create the relation of principal and agent.” O.C.G.A. § 51-2-1(a). Additionally, negligence is not generally imputed when the action is committed by an independent contractor who is “not subject to the immediate direction and control of the employer.” O.C.G.A. § 51-2-4. An employer will only be liable for the acts of an independent contractor when the employer “actually excercise[s] control over the manner and means of doing the details of the work[.]” Toys “R” Us, Inc. v. Atlanta Econ. Dev. Corp., 393 S.E.2d 44, 46 (Ga. Ct. App. 1990) (quoting Bentley v. Jones, 173 S.E. 737, 739 (Ga. Ct. App. 1934)).

*3 In its Motion to Dismiss, MTL argues that Count Seven fails to state a claim because the Complaint does not include “allegations that MTL exercised sufficient control over the motor carrier and its driver to establish an agency relationship[.]” (Doc. 54-1 at 3). Likewise, Defendant Wal-mart argues that because “Plaintiff’s claim against [MTL] is identical to Plaintiff’s claim against [Wal-mart] for respondeat superior[,] … the respondeat superior claims against [Wal-mart] should be similarly dismissed.” (Doc. 74 at 2).

Plaintiff alleges that Defendants MTL and Wal-mart selected, hired, and contracted with Defendants Tristan Logistics and Douglas to pick up and deliver the load that Defendant Douglas was carrying at the time of the incident. (Doc. 1-1 ¶¶ 45–51; Doc. 78 at 3). Plaintiff further alleges that Defendants MTL and Wal-mart “direct[ed]” Defendant Douglas to pick up the load in Kentucky and required him to check in and provide tracking updates during transport. (Doc. 1-1 ¶¶ 42–59; Doc. 78 at 3–4). These allegations are not sufficient “plausibly [to] allege that [MTL or Wal-mart] ‘controlled the time, manner, and method’ of the purported agent’s activities or operations.” Gauthier v. Hard to Stop LLC, 6:20-cv-93, 2022 WL 344557, at *3 (S.D. Ga. Feb. 4, 2022), aff’d, No. 22-10774, 2024 WL 3338944 (11th Cir. July 9, 2024) (citations omitted). In order “for an employer to be liable for the negligent acts of an independent contractor, the employer must retain more than a general right to oversee the work done, but instead must retain control so that “the contractor is not entirely free to do the work in his own way.” Castleberry v. Thomas, No. 5:20-CV-396 (MTT), 2020 WL 7048280, at *3 (M.D. Ga. Dec. 1, 2020) (citation omitted). As was the case in Gauthier and Castleberry, there is no evidence that either MTL or Walmart “[told] the driver which routes to take, [provided] equipment to the driver, [provided] insurance for the driver, [or] ‘exercise[d] any control or input over the time, method and manner of [the driver’s] work and driving.’ ” Id. at *4 (sixth alteration in original) (quoting McLaine v. McLeod, 661 S.E.2d 695, 698 (Ga. Ct. App. 2008)). Instructing a driver where to pick up and drop off cargo is not enough to establish control. See id. Moreover, “[m]onitoring and checking an independent contractor’s progress, even on a frequent basis, is ‘thoroughly consistent with the relationship of the employer and independent contractor and with the mere right of the employer to insist on a certain result.’ ” Id. at *3 (quoting Kimble v. BHM Constr. Co., Inc., 388 S.E.2d 40, 41 (Ga. Ct. App. 1989)). Accordingly, Plaintiff has failed to state a claim for negligence against Defendant MTL or Wal-mart.

II. Negligence Claims

In Count Eight, Plaintiff raises a negligence claim against MTL, and in Count Twelve, Plaintiff asserts a claim for joint enterprise, negligent hiring, training, entrustment, supervision, retention, and shipping against Wal-mart. (Doc. 1-1 ¶¶ 155–173, 238–275). Both Defendants argue that these negligence claims are preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”, 49 U.S.C. § 14501(c)(1)). (Doc. 54-1 at 8–15; Doc. 74 at 1–2). Section 14501(c)(1) of the FAAAA, provides that 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 (other than a carrier affiliated with a direct air carrier covered by section 41713(b)(4)) or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.

*4 49 U.S.C. § 14501(c)(1). The FAAAA contains a safety exception providing that the above statute:

shall not restrict the safety regulatory authority of a State with respect to motor vehicles, the authority of a State to impose highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous nature of the cargo, or 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).

In Aspen American Insurance Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023), the Eleventh Circuit considered “whether the express preemption provision of the Federal Aviation Administration Authorization Act (“FAAAA”) bars … negligence claims against a transportation broker based on the broker’s selection of a motor carrier and, if it does, whether the Act’s ‘safety exception’ allows those claims to proceed.” Finding that part of a broker’s service included “arranging for the transportation of property by a motor carrier[,]” and that a crucial part of that service included “selecting the motor carrier who will do the transporting[,]” the court held that a claim for negligent hiring is exactly the service for which a broker is responsible. Id. at 1267. The court further held that the “FAAAA expressly preempt[ed] [the Plaintiff’s] claims unless they fall within one of the Act’s preemption exceptions.” Id. at 1267–68.

With regard to the safety exceptions set forth within § 14501, the court held that there are two requirements for a claim to fall under the safety exception. Those two requirements are that: “(1) the negligence standard must constitute an exercise of [the State’s] safety regulatory authority, and (2) that authority must have been exercised with respect to motor vehicles.” Id. at 1268 (internal quotations omitted) (quoting 49 U.S.C. § 14501(c)(2)(A)). The court held that the claim of negligent hiring by a broker satisfied the first element but did not satisfy the second element of the exception which the court interpreted to be limited to “state laws that have a direct relationship to motor vehicles.” Id. at 1271 (emphasis omitted). Explaining that “a mere indirect connection between state regulations and motor vehicles will not invoke the FAAAA’s safety exception[,]” the court concluded that a claim of negligent hiring by a broker did not fall under the safety exception of § 14501(c)(2)(A).² Id. at 1272.

Furthermore, that Plaintiff here seeks damages for bodily injury rather than property damages is of no consequence as the Eleventh Circuit held that “it makes little sense for the safety exception to turn on whether a plaintiff seeks damages for property loss or bodily injury—the common law negligence standard is the same no matter the damages a breach has caused.” Aspen, 65 F.4th at 1269; see Gauthier, 2024 WL 3338944, at *2 (“But the nature of the injury is not what matters for purposes of the Act’s preemption provision.”). Plaintiff’s negligence claims against MTL and Wal-mart are, therefore, preempted under 49 U.S.C. § 14501(c)(1).

CONCLUSION

*5 Accordingly, the Court GRANTS Defendant Magellan Transport Logistics Inc.’s Motion to Dismiss (Doc. 54) and GRANTS Defendant Wal-mart’s Motion for Judgment on the Pleadings (Doc. 74). Having dismissed Counts Seven, Eight, Eleven, and Twelve, the related claims for punitive damages also are DISMISSED.

SO ORDERED, this 27th day of September, 2024.

All Citations

Slip Copy, 2024 WL 4335913

Footnotes
1	On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court accepts all facts alleged in the Amended Complaint (Doc. 1-1) as true. See Fed. R. Civ. P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007); Anderson v. Wilco Life Ins., 17 F.4th 1339, 1344 (11th Cir. 2021) (citation omitted).
2	To the extent that Plaintiff cites to “[r]ecent decisions finding that the FAAAA does not preempt personal injury and wrongful death claims against freight brokers[,]” the Eleventh Circuit recently reiterated that “Aspen is binding.” Gauthier v. Hard to Stop LLC, No. 22-10774, 2024 WL 3338944, at *2 (11th Cir. July 9, 2024).

© 2024 Thomson Reuters. No claim to original U.S. Government Works.  

End of Document

United States District Court, E.D. California.

Milk Specialties Company, d/b/a Milk Specialties Global, Plaintiff,

v.

Sandair Corporation, d/b/a California Freight Sales, Defendant.

No. 2:24-cv-01310-KJM-CSK

|

Filed 10/15/2024

ORDER

*1 Defendant Sandair Corporation d/b/a California Freight Sales moves to dismiss the complaint brought by plaintiff Milk Specialties Company’s d/b/a Milk Specialties Global. Defendant’s motion argues plaintiff fails to state a claim under Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, the court denies the motion.

I. BACKGROUND

Plaintiff is a Delaware corporation that creates and manufactures specialty proteins and dairy ingredients. Compl. ¶ 1, ECF No. 1. Defendant is a California corporation that provides “multi-modal transportation, freight brokerage and warehousing.” Id. ¶ 2. As part of its business, plaintiff contracts with different shipping and logistics companies, such as defendant, to transport its products. See id. ¶¶ 5–6. Plaintiff contacted defendant and requested defendant “broker the shipment” of Milk Protein Isolate (“product”) from plaintiff’s plant in Visalia, California to one of plaintiff’s customers in Elma, New York. Id. ¶ 9. Defendant agreed and “engaged” a company named OU7 Freight to transport the product. See id. ¶¶ 9–10. However, OU7 Freight never picked up the product, and the product was never delivered to plaintiff’s customer. Id. ¶¶ 14, 18. Instead, plaintiff alleges Cencal Transport, LLC picked up the product and then OU7 Freight and/or Cencal Transport, LLC stole it. Id. ¶¶ 15, 25.

Plaintiff filed a complaint alleging negligence and promissory estoppel. See id. ¶¶ 32–43. Specifically, plaintiff alleges defendant breached its “duty of reasonable care in selecting organizations to transport the Product” when it violated industry standards by not using a software known as “the Highway System” or an equivalent to vet OU7 Freight prior to selecting the organization to transport plaintiff’s product. Id. ¶¶ 12, 34–35. According to plaintiff, defendant would not have contracted with OU7 Freight if defendant had utilized the Highway System. Id. ¶ 13. Further, plaintiff alleges defendant breached its promise to “safely and reliably transport” its product. Id. ¶ 40. Defendant now seeks to dismiss the complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Mot., ECF No. 13; Mem., ECF No. 13-1. Plaintiff opposes, see Opp’n, ECF No. 16, and defendant filed a reply, see Reply, ECF No. 18. The court submitted the matter as provided by Local Rule 230(g). Mins., ECF No. 22.

II. LEGAL STANDARD

A party may move to dismiss for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). The motion may be granted only if the complaint lacks a “cognizable legal theory” or if its factual allegations do not support a cognizable legal theory. Hartmann v. Cal. Dep’t of Corr. & Rehab., 707 F.3d 1114, 1122 (9th Cir. 2013). The court assumes all factual allegations are true and construes “them in the light most favorable to the nonmoving party.” Steinle v. City of San Francisco, 919 F.3d 1154, 1160 (9th Cir. 2019) (quoting Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995)).

*2 A complaint need only contain a “short and plain statement of the claim showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), not “detailed factual allegations,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). But this rule demands more than unadorned accusations; “sufficient factual matter” must make the claim at least plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In the same vein, conclusory or formulaic recitations elements do not alone suffice. Id. (quoting Twombly, 550 U.S. at 555).

III. ANALYSIS

In moving to dismiss, defendant makes two arguments. See generally Mot.; Mem. First, defendant contends plaintiff’s claims are “[e]ssentially [c]laims under the Carmack Amendment” and cannot be brought against defendant because defendant is not a “carrier.” Mem. at 8.¹ Second, defendant argues plaintiff’s claims are preempted under the Federal Aviation Administration Authorization Act. Id. at 10–17. The court evaluates each argument below.

A. Carmack Amendment Preemption

In 1906, Congress “superseded diverse state laws” and enacted the Carmack Amendment to the Interstate Commerce Act to create a uniform liability policy governing carriers’ liability when transporting goods across state lines. See New York, N. H. & H. R. Co. v. Nothnagle, 346 U.S. 128, 131 (1953) (discussing history of Carmack Amendment); see also Hughes Aircraft Co. v. N. Am. Van Lines, Inc., 970 F.2d 609, 613 (9th Cir. 1992) (discussing general liability under Carmack Amendment). The Carmack Amendment creates a civil cause of action against carriers responsible “for the actual loss or injury to the property.” See 49 U.S.C. § 14706. “It is well settled that the Carmack Amendment is the exclusive cause of action for interstate-shipping contract claims alleging loss or damage to property.” Hall v. N. Am. Van Lines, Inc, 476 F.3d 683, 688 (9th Cir. 2007) (citation omitted).

Defendant argues plaintiff’s claims are in fact Carmack Amendment claims, because plaintiff is alleging “loss to goods during interstate shipment.” Reply at 4. According to defendant, plaintiff’s claims should be dismissed because defendant is a “broker,” and brokers are not subject to Carmack Amendment liability. Id. at 5. A broker is defined as:

A person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent 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).

In response, plaintiff agrees defendant acted as a “broker.” Opp’n at 6; see also Compl. ¶¶ 2, 7–9, 33, 40. However, plaintiff argues the Carmack Amendment does not preempt its negligence claim.² Opp’n at 9. The court agrees with respect to both the negligence and promissory estoppel claims.

*3 Despite defendant’s argument to the contrary, the unavailability of relief under the Carmack Amendment does not bar plaintiff from bringing state law claims in connection with interstate shipments. Instead, as district courts in this circuit have found, plaintiff may proceed with its claims under state law, as it does here in diversity. See, e.g., Stage Nine Design, LLC v. Rock-It Cargo USA, LLC, No. 21-00722, 2021 WL 3847724, at *4 (E.D. Cal. Aug. 27, 2021) (noting “ ‘[b]rokers’ … are exempt from the [Carmack Amendment’s] liability scheme, and instead may only be held liable under state law”); Chubb Grp. of Ins. Companies v. H.A. Transp. Sys., Inc., 243 F. Supp. 2d 1064, 1069 (C.D. Cal. 2002) (collecting cases and clarifying “most courts hold that brokers may be held liable under state tort or contract law in connection with shipments”). But see Com. Union Ins. Co. v. Forward Air, Inc., 50 F. Supp. 2d 255, 259 (S.D.N.Y. 1999) (noting without holding “there is a strong argument that the Carmack Amendment preempts … those state law claims that are asserted against defendants whose liability is not specifically provided for in the Amendment”).

Plaintiff’s state law claims are not barred by the Carmack Amendment.

B. FAAAA Preemption

Defendant also argues that plaintiff’s negligence claim³ is preempted under the Federal Aviation Administration Authorization Act (FAAAA). See Mem. at 10–17; Reply at 6–8. Congress passed the FAAAA to (1) dispense with the competitive advantage air carriers enjoyed in comparison to motor carriers, and (2) “address the inefficiencies, lack of innovation, and lack of competition caused by non-uniform regulations of motor carriers.” California Trucking Ass’n v. Su, 903 F.3d 953, 960 (9th Cir. 2018) (citation omitted). The FAAAA preempts state laws that are “related to a price, route, or service of any … broker … with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1).

Relying on the Ninth Circuit’s decision in Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016 (9th Cir. 2020), plaintiff argues its negligent selection claim is not preempted because it “does not relate to the price, route, or service of the trucking industry.” Opp’n at 15. “To determine whether a state law has a ‘connection with’ rates, routes, or services” Miller directs a court to “ ‘examine the actual or likely effect’ of the law” to determine whether a state law has a “connection with” rates, routes or services. Miller, 976 F.3d at 1022. If the state law directs brokers to “provide a particular service to customers” the provision is preempted, whereas if the law impacts the service in only a “tenuous, remote, or peripheral … manner with no significant impact on Congress’s deregulatory objectives” it is not preempted. Id. Under this rule, plaintiff argues its claim that defendant negligently selected a motor carrier to transport its product “only imposes an affirmative duty” on defendant and “does not have any impact on the deregulation of the trucking industry.” Opp’n at 16. Therefore, plaintiff argues its negligence claim is not preempted under the FAAAA.

Contrary to plaintiff’s representation, Miller ultimately determined “when brokers arrange for transportation by motor carrier, they perform a ‘service’ within the meaning of the FAAAA.” 976 F.3d at 1025; see also Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261, 1268 (11th Cir. 2023) (finding negligent hiring claim against broker was expressly preempted by 49 U.S.C. § 14501(c)(1)); Ye v. GlobalTranz Enterprises, Inc., 74 F.4th 453, 460 (7th Cir. 2023), cert. denied, 144 S. Ct. 564 (2024) (“§ 14501(c)(1) expressly preempts” plaintiff’s state law claim against broker that was “rooted in a theory of negligent hiring”). Here, as in Miller, plaintiff is alleging defendant, a broker, negligently selected a motor carrier to transport plaintiff’s product. See generally Compl. Accordingly, plaintiff’s negligence claim is preempted under the FAAAA unless an exception applies.

*4 As relevant here, a “safety exception” provides that the FAAAA “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” 49 U.S.C. § 14501(c)(2)(A). In Miller, the Ninth Circuit analyzed this exception and determined the “safety regulatory authority of a State” includes the ability to provide for common-law tort claims, such as negligence, see 976 F.3d at 1026, finding “it appropriate to interpret the clause broadly,” id. at 1028. Further, the Ninth Circuit interpreted the statutory language “with respect to motor vehicles” to mean “a connection with motor vehicles, whether directly or indirectly.” Id. at 1030 (quotation marks and citation omitted). Based on this construction of the statute, the Ninth Circuit held that “negligence claims against brokers that arise out of motor vehicle accidents” have the requisite “connection with” motor vehicles and are therefore not preempted by the FAAAA because they fall under the safety exception. Id. at 1031.

Plaintiff argues Miller addressed circumstances analogous to the instant dispute, see Opp’n at 15, and the court agrees. In deciding the safety exception applied in Miller, the Ninth Circuit noted it had previously determined criminal history disclosure requirements for tow truck drivers had the requisite “connection with” motor vehicles, because the requirements were “genuinely responsive to the safety of other vehicles and individuals involved in the towing process.” Id. at 1030 (quoting California Tow Truck Ass’n v. City of San Francisco, 807 F.3d 1008, 1023 (9th Cir. 2015)). According to Miller, if criminal history disclosure requirements had the requisite connection with motor vehicles, then “negligence claims against brokers that arise out of motor vehicle accidents must as well: Neither directly regulates motor vehicles, but both promote safety on the road.” Id. This line of analysis applies to this case as well. Here, plaintiff seeks to hold a broker accountable for property losses sustained due to the broker’s alleged negligent selection of a motor carrier. See generally Compl. While plaintiff’s allegations arise out of property loss rather than personal injury, as was the case in Miller, plaintiff’s negligence claim is still fundamentally “genuinely responsive to the safety of other vehicles and individuals.” California Tow Truck Ass’n, 807 F.3d at 1023. As the Ninth Circuit noted previously, the safety exception is not limited to circumstances involving “ ‘on-the-road’ safety for two trucks.” Id. at 1025. Instead, it includes protecting the safety of “the individuals who interact with tow truck operators and firms.” Id. Plaintiff’s negligent selection claim seeks to promote safety by requiring brokers to vet carriers, thereby precluding the selection of carriers “who commit misconduct related to their services” such as theft. See id.; Opp’n at 15. Because protecting against theft and the conduct that can arise and harm individuals who interact with carriers engaged in theft, the safety exception applies. Accordingly, the court finds the FAAAA does not preempt plaintiff’s negligence claim, because it falls within the FAAAA’s safety exception.

Defendant urges the court to depart from the majority opinion in Miller and follow Eleventh and Seventh Circuit decisions finding the safety exception does not apply under the circumstances of this case. See Mem. at 12–15. Specifically, defendant argues the Miller court erred in two specific ways.

First, according to defendant, Miller improperly relied on a “presumption against preemption” when analyzing the safety exception in the FAAAA, “in direct conflict” with Supreme Court precedent. Mem. at 13. In Puerto Rico v. Franklin California Tax-Free Tr., the Supreme Court held if a “statute contains an express pre-emption clause, we do not invoke any presumption against pre-emption but instead focus on the plain wording of the clause, which necessarily contains the best evidence of Congress’ pre-emptive intent.” 579 U.S. 115, 125 (2016). Defendant’s arguments notwithstanding, no Supreme Court or Ninth Circuit decision has overruled Miller. At most, a Ninth Circuit decision has dropped a footnote observing the parties in one case “failed to address Franklin.” See R.J. Reynolds Tobacco Co. v. Cnty. of Los Angeles, 29 F.4th 542, 553 n.6 (9th Cir. 2022), cert. denied sub nom. R.J. Reynolds Tobacco Co. v. Cnty. of Los Angeles, California, 143 S. Ct. 979 (2023). Moreover, given the other reasons Miller gave in finding the safety exception applied, see 976 F.3d at 1026–31, and as discussed above, it is not likely a theoretical “presumptive thumb on the scale” would have altered the conclusion, see R.J. Reynolds Tobacco Co., 29 F.4th at 553 n.6 (noting parties in Miller “failed to address Franklin”).

*5 Second, defendant argues the Miller court improperly analyzed the clause “with respect to motor vehicles.” Mem. at 13. This argument is based on the Seventh Circuit’s analysis in Ye v. GlobalTranz Enterprises, Inc., 74 F.4th 453, 465 (7th Cir. 2023), cert. denied, 144 S. Ct. 564 (2024), which of course is not binding on this court. This court follows the Ninth Circuit’s decision in Miller, which explicitly clarified the meaning of “with respect to motor vehicles” as “a connection with motor vehicles, whether directly or indirectly.” Miller, 976 F.3d at 1030 (quotation marks and citation omitted).

Defendant’s motion to dismiss is denied.

IV. CONCLUSION

For the reasons set forth above, the court denies the motion to dismiss. Defendant’s “responsive pleading must be served within 14 days[.]” See Fed. R. Civ. P. 12(a)(4)(A). The Status (Pretrial Scheduling) Conference will proceed as scheduled on October 24, 2024, at 2:30 p.m. Min. Order (Sept. 23, 2024), ECF No. 23.

This order resolves ECF No. 13.

IT IS SO ORDERED.

DATED: October 12, 2024.

All Citations

Slip Copy, 2024 WL 4495150

Footnotes
1	When citing page numbers on filings, the court uses the pagination automatically generated by the CM/ECF system.
2	Plaintiff also appears to argue defendant waived any arguments regarding plaintiff’s promissory estoppel claim. See Opp’n at 16 (arguing defendant did not move to dismiss plaintiff’s promissory estoppel claim and so motion should be denied). In reply, defendant argues “it does not matter how [p]laintiff labels its claim”—it is still subject to the Carmack Amendment. Reply at 8. “Arguments raised for the first time in a reply brief are waived.” Autotel v. Nevada Bell Tel. Co., 697 F.3d 846, 852 n.3 (9th Cir. 2012). Here, defendant is not raising new arguments in reply, because it stated in its motion that plaintiff’s “cargo loss claims … are essentially claims under the Carmack Amendment.” Mem. at 8. While defendant was not consistent in its use of the word “claims” the court finds it did not waive its Carmack Amendment preemption argument with respect to promissory estoppel. However, defendant does not argue the promissory estoppel claim is preempted by the FAAAA and that argument is waived.
3	As noted above, defendant waived any argument regarding FAAAA preemption as to plaintiff’s promissory estoppel claim.

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