California Rules of Court, rule 8.1115, restricts citation of unpublished opinions in California courts.

Court of Appeal, Second District, Division 3, California.

Francisco LOPEZ, et al., Plaintiffs and Appellants,

v.

METROGISTICS LLC, Defendant and Respondent.

B322681

Filed May 1, 2023

APPEAL from a judgment of the Superior Court of San Bernardino County, John M. Pacheco, Judge. Reversed. (San Bernardino County Super. Ct. No. CIVDS1909599)

Attorneys and Law Firms

Martinian & Associates, Arash H. Zabetian; The Yarnall Law Firm and Delores Yarnall, for Plaintiffs and Appellants.

Horvitz & Levy, Lacey L. Estudillo and Jeremy B. Rosen; Parker Stanbury, John D. Barrett, Jr.; Tseng & Associates and Jennifer T. Tseng, for Defendant and Respondent.

Opinion

HEIDEL, J.^*

*1 Francisco Lopez, Mayra Hernandez, and Francisco Hernandez¹ appeal the grant of a motion for summary judgment in favor of Metrogistics LLC on their complaint alleging negligence and other related claims against David Alcala, Melchor Auto Transport, Inc., Carmax Auto Superstores California, LLC, Carmax Auto Superstores West Coast, Inc., and Metrogistics, among others, stemming from a traffic accident where Alcala’s tractor-trailer struck Lopez, causing him injuries. This appeal solely concerns the scope of liability of Metrogistics, a federally licensed freight broker that made the shipping arrangements leading to the accident, as well as several related matters.

On appeal, plaintiffs contend that: triable issues of fact remain as to whether Metrogistics owed plaintiffs a nondelegable duty because its role in the transaction leading to the incident was that of a motor carrier—rather than a mere broker—under the operative federal statutes and regulations governing interstate freight shipping, as well as whether Metrogistics was otherwise vicariously liable as Alcala’s employer; Metrogistics’s summary judgment motion did not raise and negate every theory of liability asserted in plaintiffs’ complaint; striking plaintiffs’ expert declaration opining that Metrogistics’s business practices were inconsistent with that of a broker was an abuse of discretion; denying mandatory judicial notice of relevant federal law was erroneous; and, the court further erred when it partially granted and partially denied plaintiffs’ motions to compel additional discovery and denied plaintiffs a continuance of the summary judgment hearing to take that additional discovery. Metrogistics counters, in pertinent part, that it did not owe plaintiffs a nondelegable duty because it was acting, at most, as a freight broker during the transaction that led to the incident.

We reverse. The ambiguities in Metrogistics’s contract with the shipper and other evidence make clear that triable issues remain as to whether Metrogistics acted as a motor carrier and accordingly owed plaintiffs a nondelegable duty. In light of this conclusion, we decline to reach the parties’ other contentions.

FACTUAL AND PROCEDURAL BACKGROUND

I. Metrogistics LLC

Metrogistics is a Missouri-based limited liability company. As early as 2016, Metrogistics was licensed as a freight broker with interstate operating authority from the United States Department of Transportation (DOT) and the Federal Motor Carrier Safety Administration (FMCSA). Its work as a freight broker entailed arranging for the transportation of automobiles between shippers or customers and licensed motor carriers.

Metrogistics also purports to ship cars. To that end, it has at various times held itself out as a “nationwide carrier” and has disseminated advertising depicting tractor trailers with Metrogistics’s contact information affixed to the side. It has also registered and litigated trademarks relating to the transportation of vehicles, and its website references Metrogistics “transportation services.”

II. Metrogistics’s service agreement with Autonation, Inc.

*2 In August 2016, Metrogistics contracted with Autonation, Inc. to provide transportation services for Autonation’s western region. In the written contract captioned “Metrogistics Transportation Pilot Western Region,” Metrogistics agreed to “provide service to the AUTONATION western region,” “meet accepted delivery standards set forth by AUTONATION,” provide for “delivery” within designated time frames and under designated rates, and provide insurance for general liability and Autonation’s cargo “[i]n addition to the Cargo coverage held by each contracted carrier.” Metrogistics was to be “paid directly” for these services. The contract does not specify whether Metrogistics is a “carrier” or a “broker.”

III. Metrogistics contracts Autonation shipment to Melchor

In a May 10, 2018 written contract titled “Broker-Carrier Agreement,” Metrogistics (the designated “broker”) agreed to “assign[ ]” certain orders for freight transportation services to a “contract” carrier and “independent contractor,” defendant Melchor, a federally licensed motor carrier with operating authority from the FMCSA. The contract required Melchor to obtain liability and workers’ compensation insurance with a Metrogistics-approved insurer with Metrogistics named as both an “additional insured,” and as “an alternative employer” on those policies. Metrogistics would pay Melchor directly and Melchor agreed never to compete with Metrogistics. The contract also required that Melchor call ahead for pickup and delivery, take down and verify specific information, notify Metrogistics of scheduling changes, and notify Metrogistics within two hours of pickup and delivery.

On July 31, 2018, Metrogistics agreed to deliver Autonation’s vehicles from Autonation’s facility in Phoenix, Arizona to its auction site in Gardena, California. Metrogistics required that Melchor use only a Metrogistics-issued bill of lading (BOL). The BOL contained similar instructions regarding the manner of the pickup, the shipment, delivery, and the paperwork and reporting required thereafter. Melchor then assigned Alcala to the job.

IV. The incident and the instant action

On August 1, 2018, Alcala was driving westbound on the 60 freeway in Riverside, California when he lost control of his truck, swerved off the roadway, and collided with Lopez and his vehicle, causing physical injuries to Lopez and his wife Mayra. At the scene, Alcala identified himself and provided Melchor’s number as his business phone. Melchor contacted Metrogistics several hours later to inform Metrogistics about the accident.

In March 2019, plaintiffs filed the instant action against Alcala, Melchor, Carmax Auto Superstores California, LLC, Carmax Auto Superstores West Coast, Inc., and Does 1 through 100 for negligence and negligent infliction of emotional distress. The complaint was later amended to add an additional claim and name Metrogistics as a party.

V. Metrogistics’s motion for summary judgment

In March 2020, Metrogistics moved for summary judgment as to all plaintiffs and causes of action. Metrogistics argued that, as a matter of law, it was not directly or vicariously liable for Alcala’s negligence and that plaintiffs’ remaining claims were derivative of their negligence claim. Metrogistics alleged that Alcala worked for independent contractor Melchor, and was not an employee of Metrogistics. Because Metrogistics at most acted as a “broker” rather than a carrier, it could not be held vicariously liable for Alcala’s actions. Further, Metrogistics breached no duty that caused plaintiffs’ injuries.

In support of its motion, Metrogistics submitted a declaration from Alan Naes, Metrogistics’s treasury manager, who declared that he is “familiar” with the “relevant contacts and communications,” is “specifically familiar” with the execution and performance of the broker-carrier agreement between Metrogistics and Melchor, and “observe[s] and participate[s] in the day-to-day transportation broker business operations of Metrogistics.” Naes averred that Metrogistics operated as a licensed freight broker under the FMCSA by “arranging for” vehicle pickups from “shippers/customers to be transported by over 500 licensed, permitted carrier[s].” Naes declared that Victor Melchor, acting for Melchor, reviewed a “load board,” saw that Autonation’s vehicles were available for shipment, determined that it could do the job safely, and then contacted Metrogistics and requested that Metrogistics assign it to transport Autonation’s cars from Arizona to California. Naes further averred that all contact and communication between Metrogistics and Melchor was through Victor Melchor—Metrogistics’s “only authorized” contact at Melchor. According to Naes, there was “no contract, agreement, deal, or understanding” between Metrogistics and Alcala; Metrogistics did not supervise Alcala’s work as a licensed commercial driver; and Metrogistics did not pay Alcala for transporting the vehicles.

*3 Metrogistics also included the broker-carrier agreement between Metrogistics and Melchor, Metrogistics’s broker license, and Melchor’s motor carrier permit. Additionally, Metrogistics appended discovery responses showing that Melchor had a valid DOT motor carrier permit, that Alcala was working for Melchor as an independent contractor, that Alcala was driving a tractor trailer leased by Melchor at the time of the accident, and that Alcala contacted Victor Melchor after the accident. Finally, Metrogistics submitted police reports listing Melchor as the motor carrier and employer of Alcala (without mention of Metrogistics), as well as documents showing that Melchor had agreed to transport vehicles for another company around the time of the collision.

VI. Plaintiffs’ summary judgment opposition

In May 2020, plaintiffs filed an opposition to Metrogistics’s summary judgment motion. Plaintiffs argued, among other things, that Metrogistics owed plaintiffs a nondelegable duty because Metrogistics acted as a motor carrier rather than a broker under the Federal Motor Carrier Safety Regulations (FMCSR). In support of their opposition, plaintiffs included a declaration of their motor-safety expert (a former DOT Special Agent), who explained how and why Metrogistics’s representations, advertising, contracts, and conduct, including its non-compliance with federal “broker” regulations, both generally and regarding the subject shipment, were inconsistent with its claim to broker status. Plaintiffs also submitted the August 2016 service agreement between Metrogistics and Autonation; the “ ‘broker-carrier agreement’ ” between Metrogistics and Melchor; Metrogistics’s BOL relating to this matter, identifying Melchor as the “[c]arrier”; Metrogistics’s promotional materials; and excerpts from Metrogistics’s website, including blog posts, job announcements, and client testimonials. Plaintiffs also requested judicial notice of the above-described trademarks and trademark complaint, as well as various trucking regulations in the Code of Federal Regulations (C.F.R.).

VII. Metrogistics’s reply brief in support of summary judgment

In June 2020, Metrogistics filed a reply brief in support of summary judgment asserting that much of plaintiffs’ evidence was “irrelevant” because it involved “different people, different places, and different times.” Metrogistics objected to plaintiffs’ expert declaration as unreliable, speculative, and otherwise improper.

VIII. The trial court’s decision

On July 14, 2020, the court issued a tentative ruling granting Metrogistics’s summary judgment motion. The tentative ruling held that Metrogistics’s contractual relationship with Melchor was only as a broker, and therefore “not the employer/principal of Alcala” and not vicariously liable for Alcala’s negligence. The court elaborated that there was no evidence that Metrogistics accepted the goods being transported and plaintiffs’ evidence did not require the conclusion that Metrogistics was acting as a common carrier. The court intended to grant judicial notice of the 2017 trademark complaint and two Metrogistics trademarks, but deny judicial notice of one of the federal trucking regulations (without ruling on the remaining regulations). The court also intended to sustain Metrogistics’s objection to plaintiffs’ expert’s entire declaration.

After hearing arguments from the parties, the trial court issued an order adhering to its tentative ruling granting summary judgment in its entirety. Plaintiffs timely appealed.²

DISCUSSION

A. Standard of review

The applicable standard of review of a ruling on a motion for summary judgment is well established. “The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).)

*4 The moving party “bears the burden of persuasion that there is no triable issue of material fact and that [it] is entitled to judgment as a matter of law.” (Aguilar, supra, 25 Cal.4th at p. 850; see Code of Civil Procedure, § 437c, subd. (c).) A defendant moving for summary judgment must “ ‘show[ ] that one or more elements of the cause of action … cannot be established’ by the plaintiff.” (Aguilar, at p. 853.) A defendant meets its burden by presenting affirmative evidence that negates an essential element of a plaintiff’s claim. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) Alternatively, a defendant meets its burden by submitting evidence “that the plaintiff does not possess, and cannot reasonably obtain, needed evidence” supporting an essential element of its claim (Aguilar, at p. 854), or that “there is a complete defense to that cause of action.” (Castellon v. U.S. Bancorp (2013) 220 Cal.App.4th 994, 997).

On appeal from a summary judgment ruling, we review the record de novo and independently determine whether triable issues of material fact exist. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767; Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 334.) We resolve any evidentiary doubts or ambiguities in favor of the party opposing summary judgment. (Saelzler, at p. 768.)

“In performing an independent review of the granting of summary judgment, we conduct the same procedure employed by the trial court. We examine (1) the pleadings to determine the elements of the claim, (2) the motion to determine if it establishes facts justifying judgment in the moving party’s favor, and (3) the opposition—assuming movant has met its initial burden—to ‘decide whether the opposing party has demonstrated the existence of a triable, material fact issue.’ ” (Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 630.) “We need not defer to the trial court and are not bound by the reasons in its summary judgment ruling; we review the ruling of the trial court, not its rationale.” (Ibid.)

B. Summary judgment was inappropriate because there were triable issues of fact regarding whether Metrogistics owed plaintiffs a nondelegable duty

The nondelegable duty doctrine is an exception to the general rule that one who hires an independent contractor is not liable for the negligence of that independent contractor or its employees. (SeaBright Ins. Co. v. US Airways, Inc. (2011) 52 Cal.4th 590, 600–601.) Nondelegable duties “ ‘arise in situations in which, for reasons of policy, the employer is not permitted to shift the responsibility for the proper conduct of the work to the [independent] contractor.’ ” (Bowman v. Wyatt (2010) 186 Cal.App.4th 286, 316.) A nondelegable duty may arise when a statute or regulation requires specific safeguards or precautions to ensure others’ safety. (Evard v. Southern California Edison (2007) 153 Cal.App.4th 137, 146.) The nondelegable duty doctrine applies to highway common carriers. (Eli v. Murphy (1952) 39 Cal.2d 598, 600.) As another panel of this Division recently stated, this is because when an entity operates as a “carrier,” it “ ‘engage[s] in a “business attended with considerable risk” [citations], and the Legislature has subjected it’ ” to “ ‘regulatory power … to protect the safety of the general public,’ ” and its duties are therefore nondelegable. (Vargas v. FMI, Inc. (2015) 233 Cal.App.4th 638, 650.) Thus, in a situation involving two alleged carriers, the nondelegable duty doctrine ensures that, if a subcontractor carrier’s insurance coverage is inadequate to cover a loss, the primary carrier’s policy can step in to ensure the plaintiff is made whole. (Gamboa v. Conti Trucking, Inc. (1993) 19 Cal.App.4th 663, 668.)

*5 Federal statutes and regulations applicable to interstate motor carrier operations govern the analysis here. (See, e.g., Millsap v. Federal Express Corp. (1991) 227 Cal.App.3d 425, 434–435 [applying federal motor carrier statute to define scope of alleged carrier’s duty]; Serna v. Pettey Leach Trucking, Inc. (2003) 110 Cal.App.4th 1475, 1487 [similar]; Vargas v. FMI, Inc., supra, 233 Cal.App.4th at p. 664 [similar].) Under the federal Motor Carrier Act of 1980 (MCA), a “ ‘motor carrier’ means a person providing motor vehicle transportation for compensation.” (49 U.S.C. § 13102(14).) The MCA defines a “broker” 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.” (Id., § 13102(2), italics added.) A person may provide transportation as a motor carrier, or service as a broker, only if registered according to the MCA. (49 U.S.C. § 13901(a); see id., § 13902.)

Relatedly, the FMCSA regulates carriers and brokers engaged in interstate commerce and has promulgated regulations distinguishing brokers from motor carriers. (See 49 C.F.R. §§ 371.2–371.13 (2023); see also id., § 350.105.) The FMCSR further define a “[b]roker” as a “person who, for compensation, arranges, or offers to arrange, the transportation of property by an authorized motor carrier.” (Id., § 371.2(a) (2023).) Motor carriers “are not brokers within the meaning of [part 371.2(a)] when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport.” (Ibid.) “Brokerage or brokerage service” means “the arranging of transportation or the physical movement of a motor vehicle or of property.” (Id., § 371.2(c).)

The line between “motor carrier” and “broker” is often “a blurry one,” and it is common in practice for shipping companies to perform both roles simultaneously or with respect to only certain subcomponents of a given shipment. (Essex Insurance Co. v. Barrett Moving & Storage, Inc. (11th Cir. 2018) 885 F.3d 1292, 1300 (Essex).)³ The consensus among courts, however, is that the “key distinction is whether the disputed party accepted legal responsibility to transport the shipment.” (Id. at p. 1301; see id. fn. 4 [collecting cases].) Such a rule is grounded in the “common law of bailment,” or the “time-honored” legal principle that “when a party holds itself out as the party responsible for the care and delivery of another’s property, it cannot outsource its contractual responsibility by outsourcing the care and delivery it agreed to provide.” (Id. at p. 1301.)

Whether an entity qualifies as a broker or carrier is “necessarily a case specific analysis” and generally not conducive to summary judgment. (Essex, supra, 885 F.3d at p. 1302.) The answer to the question may, in some cases, be easily answered by the alleged carrier’s contract with the shipper. Even an entity that, in practice, carries some shipments and brokers others may “insulate itself from strict liability with respect to a particular shipment if it makes clear in writing that it is merely acting as a go-between to connect the shipper with a suitable third-party carrier.” (Ibid.) If not, however, “the question will depend on how the party held itself out to the world, the nature of the party’s communications and prior dealings with the shipper, and the parties’ understanding as to who would assume responsibility for the delivery of the shipment in question.” (Ibid. [discussing screenshots of alleged carrier’s website and prior communications and dealings between the parties as relevant to analysis].) In the end, the operative question is “with whom did the shipper entrust the cargo?” (Ibid.)

*6 The record in this case does not provide a simple answer to that question. We thus conclude that, assuming for argument’s sake that Metrogistics met its initial burden of providing sufficient facts justifying judgment in its favor, plaintiffs nonetheless demonstrated that there were triable issues of fact as to whether Metrogistics was acting as a carrier (rather than a broker), and therefore owed plaintiffs a nondelegable duty.

We turn first to the contract between Metrogistics and the shipper (Autonation) and assess whether Metrogistics made “clear in writing that it is merely acting as a go-between to connect the shipper with a suitable third-party carrier.” (Essex, supra, 885 F.3d at p. 1302.) It did not.

The Autonation agreement—executed nearly two years prior to the incident and ambiguously captioned “Metrogistics Transportation Pilot Western Region”—provided that Metrogistics would provide “delivery” services to Autonation’s Western region. The word “broker” does not appear in the agreement. The agreement specified time frames and rates and that Metrogistics would provide general liability insurance “[i]n addition to the Cargo coverage held by each contracted carrier.” While Metrogistics suggests that the agreement’s mention of a “contracted carrier” supports the conclusion that the parties contemplated subcontracting out Autonation’s deliveries to another carrier, this language hardly precludes Metrogistics from contracting out some jobs but not others, or acting as a carrier at the same time as its subcontractor. The parties reasonably appear to have contemplated these alternatives given the presence of language also requiring that Metrogistics obtain insurance and be paid directly for delivery services. In sum, the Autonation agreement does not make “clear” that Metrogistics’s role in the immediate transaction was only that of a broker, rather than a carrier. (Essex, supra, 885 F.3d at p. 1302.) If anything, the agreement suggests that Metrogistics was, in fact, entrusted to deliver Autonation’s cargo with respect to at least some contemplated transactions.

We therefore must consider the remaining evidence to ascertain who assumed legal responsibility for the shipment. That evidence also points both ways.

On the one hand, Metrogistics proffered a declaration from its treasury director (Alan Naes) describing Metrogistics’s conduct with respect to the shipment at issue and claiming Metrogistics only acted as a broker during the transaction.⁴ Metrogistics also submitted evidence that Alcala’s tractor trailer was leased by Melchor, that traffic and collision reports listed Melchor as the motor carrier, that Alcala contacted Melchor first after the accident, and that Melchor had agreed to transport vehicles for another company around the same time. Metrogistics also furnished copies of its broker license,⁵ Melchor’s motor carrier permit, and the written “broker-carrier agreement” between Melchor and Metrogistics, which designated Metrogistics as the broker and Melchor the contract carrier.

*7 On the other hand, plaintiffs furnished the BOL, on Metrogistics’s letterhead, containing instructions to the designated “carrier” Melchor regarding how the pickup, shipment, and delivery were to be carried out, as well as the paperwork and reporting required thereafter. Plaintiffs also submitted, among other things, promotional materials, blogs, client testimonials, and website screenshots marketing Metrogistics’s carrier services, including a 2013 video in which one of Metrogistics’s founding partners advertises Metrogistics’s abilities to handle shipments as a “nationwide carrier” over images of a tractor-trailer appearing to bear Metrogistics’s contact information. Plaintiffs also provided copies of trademarks and pleadings from prior trademark litigation suggesting that Metrogistics was transacting business as a motor carrier; none of those materials state Metrogistics was also acting as a broker.⁶

A closer parsing of the evidence only confirms that summary judgment was unwarranted. For instance, Metrogistics suggests that Melchor’s designation as the “carrier” in the BOL and broker-carrier agreement (as well as Metrogistics’s designation as the “broker” in the latter agreement) establishes that Metrogistics only contracted to provide broker services for this particular transaction. Again, however, the labels the parties assign themselves do not control the inquiry. (See, e.g., Ensco, Inc. v. Weicker Transfer and Storage Co. (10th Cir. 1982) 689 F.2d 921, 925 [because parties often attempt to contract around motor carrier liability, carrier’s status “is determined not by reference to its authority but rather by reference to what it holds itself out to be”]; Essex, supra, 885 F.3d at p. 1301, fn. 4 [similar, collecting cases].) Indeed, other components of the broker-carrier agreement suggest Metrogistics was acting as a carrier at least in some sense, including contractual provisions that Melchor obtain insurance with a Metrogistics-approved insurer (while naming Metrogistics as an “additional insured” and “alternative employer” on the policies), that Metrogistics pay Melchor directly, that Melchor not compete with Metrogistics, and that Melchor call ahead for pickup and delivery, take down and verify specific information, notify Metrogistics if estimated pick up or drop off dates change, and notify Metrogistics within two hours of pickup and delivery. Similarly, the BOL, a document commonly generated by a carrier (BII Finance Co. v. U-States Forwarding Services Corp. (2002) 95 Cal.App.4th 111, 119–120), was generated by Metrogistics and, despite listing Melchor as the carrier, also contained specific instructions regarding Melchor’s performance, as well as penalty provisions.

The parties quarrel over the applicability of several federal district court cases denying summary judgment where triable issues remained regarding a defendant business entity’s “broker” or “carrier” status. (See, e.g., Hewlett–Packard Co. v. Brother’s Trucking Enterprises, Inc. (S.D. Fla. 2005) 373 F.Supp.2d 1349; Just Take Action, Inc. v. GST (Americas) Inc. (D. Minn. May 6, 2005, Civ. A. No. 04–3024 ADM/RLE) 2005 U.S.Dist. Lexis 8432; Louis M. Marson Jr., Inc. v. Alliance Shippers, Inc. (E.D. Pa. 2020) 438 F.Supp.3d 326.) But a review of these cases only highlights that the broker-carrier inquiry almost always hinges on the particular facts of each case, focusing not just on the relevant contractual language but the parties’ conduct and communications, and is ill-suited for a summary proceeding. (Essex, supra, 885 F.3d at p. 1302; see Hewlett Packard Co., at p. 1352 [various ways alleged carrier exhibited control over transaction, including assurance of coverage and specifying manner of transit, precluded summary judgment]; Just Take Action, Inc., at p. 14 [same, where alleged carrier assured coverage, drafted BOL, and directed how and when the shipment would take place]; Louis M. Marson Jr., Inc., at pp. 332–334 [same, based upon alleged carrier’s representations on its website, among other things].)

*8 Therefore, given the fact-intensive nature of the inquiry, the ambiguity of the writings at issue (including, most prominently, the Autonation agreement), as well as the other contradictory evidence we have discussed above, we have no firm conviction that Autonation did not entrust to Metrogistics the cargo whose allegedly negligent transportation led to plaintiffs’ injuries. In other words, there were triable issues of fact as to whether Metrogistics assumed legal responsibility for Autonation’s shipment (Essex, supra, 885 F.3d at pp. 1301–1302), and thereby owed plaintiffs a nondelegable duty as a motor carrier (Eli v. Murphy, supra, 39 Cal.2d at pp. 599–600). We thus conclude that the trial court erred in granting summary judgment. (See, e.g., Aguilar, supra, 25 Cal.4th at p. 856 [successful summary judgment motion must leave no room for conflicting inferences with respect to material facts, and not require weighing evidence or factfinding].) In light of this conclusion, we decline to reach the parties’ alternative contentions.

DISPOSITION

The judgment is reversed and the matter remanded for further proceedings consistent with this opinion. Francisco Lopez, Mayra Hernandez, and Francisco Hernandez are entitled to their costs on appeal.

We concur:

EDMON, P. J.

LAVIN, J.

All Citations

Footnotes

* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.  

1. We collectively refer to the Lopez-Hernandez family as plaintiffs.  
2. In August 2022, by order of the Supreme Court of California, plaintiffs’ appeal was transferred from the Fourth District Court of Appeal, Division Two, to the Second District Court of Appeal.
3. Thus, while the definitions of “broker” and “motor carrier” are “mutually exclusive” under the relevant regulations (Morales v. OK Trans, Inc. (S.D.Tex., Jan. 3, 2023, Civ. A. No. 2:19-CV-00094) 2023 U.S. Dist. Lexis 44748, 7, fn. 5), the relevant cases suggest that multiple entities may qualify as a “broker” or “carrier” during a given transaction, and the parties here have not argued otherwise. (See, e.g., Missouri, Kansas & Texas Railway Co. v. Ward (1917) 244 U.S. 383, 388 [purpose of federal scheme is to hold “initial carrier” liable for damage caused by other carriers “whose duty is to forward the goods under the terms of the contract made by their principal, the initial carrier”].)   
4. Plaintiffs assert for the first time on appeal that Naes’s declaration was not admissible due to a lack of personal knowledge and competence because Naes claimed personal knowledge of Metrogistics’s business relationship with Melchor but then Metrogistics disavowed Naes’s knowledge relative to this specific shipment to avoid Naes’s deposition. In their reply brief, plaintiffs invoke the law of judicial estoppel to underscore the inadmissibility of Naes’s testimony. However, Code of Civil Procedure section 437c, subdivision (d) specifies that objections to declarations based upon personal knowledge and competence “ ‘if not made at the hearing, shall be deemed waived.’ ” (Rodriguez v. E.M.E., Inc. (2016) 246 Cal.App.4th 1027, 1045 & fn. 11.) Moreover, we may also decline to consider arguments asserted in the first instance in a reply brief. (Raceway Ford Cases (2016) 2 Cal.5th 161, 178 [arguments raised for first time in reply brief generally waived].) Plaintiffs suggest, citing Zavala v. Arce (1997) 58 Cal.App.4th 915, 925, that a finding of waiver would be inappropriate because we are obligated to “reassess” the moving papers to determine if the moving party is entitled to judgment as a matter of law. However, no part of Zavala purports to usurp the clear statutory command requiring a finding of waiver here.  
5. To the extent Metrogistics suggests its federal broker license controls whether it owes plaintiffs a nondelegable duty, we disagree. Setting aside that the evidence—including Naes’s declaration—does not preclude the possibility that Metrogistics was also licensed as a carrier, the relevant focus is the nature of the entity’s activities (and whether they satisfy the relevant regulatory definitions under the licensure scheme), not whether the entity conducting those activities is actually complying with the relevant regulations. (See Serna v. Pettey Leach Trucking, Inc., supra, 110 Cal.App.4th at p. 1486 [nondelegable duty rule examines whether “a carrier who undertakes an activity (1) which can be lawfully carried on only under a public franchise or authority and (2) which involves possible danger to the public is liable to a third person for harm caused by the negligence of the carrier’s independent contractor” (italics added)]; Mass v. Braswell Motor Freight Lines, Inc. (9th Cir. 1978) 577 F.2d 665, 667 [common carrier status is determined according to the services offered by an entity, rather than by its corporate character or declared purpose]; see also Klein v. Leatherman (1969) 270 Cal.App.2d 792, 795 [“One truck upon the highway tends to be like any other. It is difficult to discern wherein classification of the operation on the highway as a privilege under franchise, or as a right under a permit, changes the degree of protection required.”].)  
6. Metrogistics concedes it “portrayed itself as being a carrier” in these other contexts, but contends there is no connection between this evidence and the services it actually provided to Autonation during the instant transaction. However, it is well established that such materials—while not alone dispositive—may reliably demonstrate how a “party h[o]ld[s] itself out to the world.” (Essex, supra, 885 F.3d at p. 1302 [screenshots of alleged carrier’s website and prior communications relevant to analysis].) Requiring a direct connection between the advertising and the transaction in question would virtually undo the rule permitting consideration of such advertising, because advertisements are not typically, in our estimation, tailored to a precise customer and transaction.  

© 2023 Thomson Reuters. No claim to original U.S. Government Works.  

End of Document

United States District Court, E.D. Arkansas,

Delta Division.

Joan LYLES, as Executrix of the Estate of John Robert Curry, Deceased, Plaintiff

v.

Charles Lee WREN, Jr., Individually; William Cameron, Individually; Little Ditch Farms, LLC; PT Corporation, d/b/a PT Brokers; Barry Mitchell; John Does I-V; Jane Does I-V; and Black and White Partnerships I-V, Defendants

CASE NO. 2:23CV00051 – JM

Signed May 9, 2023

Attorneys and Law Firms

Kevin Wayne Cole, Paul D. Waddell, Waddell, Cole & Jones, PLLC, Jonesboro, AR, for Plaintiff.

Deborah S. Denton, Anderson, Murphy & Hopkins, LLP, Little Rock, AR, for Defendants Charles Lee Wren, Jr., William Cameron, Little Ditch Farms LLC.

Michael G. Smith, William Johnson Ogles, Wright, Lindsey & Jennings, Little Rock, AR, for Defendants PT Corporation Inc, Barry Mitchell.

ORDER

JAMES M. MOODY JR., UNITED STATES DISTRICT JUDGE

*1 Pending is Plaintiff’s motion to remand this negligence action to state court. (ECF No. 12). Separate Defendants PT Corporation, Inc. d/b/a PT Brokers (“PT Corporation”) and its agent Barry Mitchell (collectively “PT”) filed a response, and the matter is ripe for determination. After the motion to remand was filed, PT filed a motion to dismiss (ECF No. 17), prompting Plaintiff to file a Second Amended Complaint (ECF No. 21). PT has filed a motion to dismiss the Second Amended Complaint as well. (ECF No. 27). As a threshold matter, the Court must determine whether it has subject matter jurisdiction.

Background

This case arises out of a fatal accident that occurred on October 12, 2021 in Crittenden County, Arkansas. The complaint alleges that Defendant Charles Lee Wren was driving a tractor-trailer rig on Interstate 55 when it crossed the median and collided head-on with the vehicle driven by John Robert Curry, who died in the accident. Wren had been hired by Defendants William Cameron and Little Ditch Farms, LLC (“collectively LDF”) to transport freight pursuant to an agreement between motor carrier LDF and PT Corporation, a federally licensed freight broker. LDF owned the tractor, and PT Corporation owned the trailer. Plaintiff alleges that PT Corporation leased or loaned the trailer to non-party Cargill Feed and Nutrition, Inc. (“Cargill”) to use in the transport of Cargill’s cargo. At the time of the accident, Wren had already completed delivery of a load to Cargill and was pulling the unloaded trailer.

Plaintiff filed a complaint in Crittenden County Circuit Court on March 27, 2022 and an amended complaint a year later naming PT for the first time. PT filed a notice of removal asserting federal question jurisdiction created by the preemption provisions of the Federal Aviation Administration Authorization Act (“FAAAA”), 49 U.S.C. § 14501. In her motion to remand, Plaintiff argues that her negligence claims fall within the Act’s safety exception.

All of Plaintiff’s claims are based on Arkansas common law negligence. At the time of removal there were two claims against the PT defendants: negligent entrustment of the trailer and vicarious liability for the negligence of Wren and Mitchell. With her Second Amended Complaint, Plaintiff added a negligence claim against PT based on the condition of the trailer.

Standard for Removal

A case can be removed from state court to federal court only if the case could have originated in federal court. Baker v. Martin Marietta Materials, Inc., 745 F.3d 919, 923 (8th Cir. 2014). The parties are not diverse for purposes of diversity jurisdiction. Under the well-pleaded complaint rule, federal question jurisdiction exists “only when a federal question is presented on the face of the plaintiff’s properly pleaded complaint” and not when there is only “the potential applicability of a defense arising under federal law.” Minnesota by Ellison v. Am. Petroleum Inst., 63 F.4th 703, 709 (8th Cir. 2023). There are two exceptions to this rule: “when the state-law claims (1) are completely preempted by federal law or (2) necessarily raise a substantial, disputed federal question.” Ibid. In its opposition to the motion to remand, PT argues that both exceptions apply.

*2 The burden is on the removing party to establish federal subject matter jurisdiction. Moore v. Kansas City Pub. Sch., 828 F.3d 687, 691 (8th Cir. 2016). All doubts must be resolved in favor of remand. Mensah v. Owners Ins. Co., 951 F.3d 941, 943 (8th Cir. 2020).

The FAAAA

The FAAAA was enacted by Congress in 1994 in an effort to avoid “a State’s direct substitution of its own governmental commands for ‘competitive market forces’ in determining (to a significant degree) the services that motor carriers will provide.” Rowe v. New Hampshire Motor Transp. Ass’n, 552 U.S. 364, 368 (2008). The Act “expressly bars states from ‘enact[ing] or enforc[ing] a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier …, broker, or freight forwarder with respect to the transportation of property.’ ” Aspen Am. Ins. Co. v. Landstar Ranger, Inc., No. 22-10740, 2023 WL 2920451, at *3 (11th Cir. Apr. 13, 2023) (quoting 49 U.S.C. § 14501(c)(1)). The express preemption clause is limited by the safety exception which 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). The Supreme Court has found that the “clear purpose” of the exception “is to ensure that its preemption of States’ economic authority over motor carriers of property … “not restrict” the preexisting and traditional state police power over safety.” City of Columbus v. Ours Garage & Wrecker Serv., Inc., 536 U.S. 424, 439 (2002).

Complete Preemption

A determination of complete preemption requires a finding that “Congress intended a federal statute to provide ‘the exclusive cause of action for the claim asserted and also set forth procedures and remedies governing that cause of action.’ ” Minnesota at 710 (quoting Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 8 (2003)). Absent a replacement federal cause of action, there is “an exceptionally strong presumption against complete preemption.” Johnson v. MFA Petroleum Co., 701 F.3d 243, 252 (8th Cir. 2012). The Eighth Circuit has recently cautioned that “[c]omplete preemption is very rare” and has been applied to only three statutes by the Supreme Court.¹ Minnesota at 710. “The exclusive, federal cause of action is ‘the hinge on which the door to the federal courthouse swings.’ ” Griffioen v. Cedar Rapids & Iowa City Ry. Co., 785 F.3d 1182, 1190 (8th Cir. 2015) (quoting Gil Seinfeld, The Puzzle of Complete Preemption, 155 U. Pa. L.Rev. 537, 567 (2007)).

Complete preemption is not to be conflated with a defense of preemption which the Eighth Circuit has called “ordinary preemption.” Griffioen at 1190. Nor should it be confused with express preemption. The court explained in Griffioen that an “express preemption provision may be a key factor in determining the extent of the statute’s ordinary preemption, as well as Congress’s intent to completely preempt some claims, but it does not address removal or explicitly provide for federal-question jurisdiction over all preempted state-law claims.” Griffioen at 1190.

*3 The parties agree that neither the U.S. Supreme Court nor the Eighth Circuit Court of Appeals has addressed whether negligence claims involving personal injury against a broker are completely preempted by the FAAAA. PT urges the Court to adopt the reasoning from a district court case out of the Fifth Circuit, Gillum v. High Standard, LLC, No. SA-19-CV-1378-XR, 2020 WL 444371 (W.D. Tex. Jan. 27, 2020). That case also arose out of a motor vehicle accident in which the plaintiff made state negligence claims against the freight broker. After analyzing several district court cases showing “two diverging lines of cases,” on the preemption issue, the Texas district court held that the negligence claims against a broker were “completely preempted” by the FAAAA and denied the plaintiff’s motion to remand. The court’s analysis, however, was more in line with an ordinary preemption analysis than a complete preemption analysis. The line of cases the court found “most persuasive” did not arise in the context of complete preemption as a basis for federal jurisdiction but rather discussed ordinary preemption in the context of motions to dismiss.²

Plaintiff, on the other hand, directs the Court to an opinion out of the Ninth Circuit Court of Appeals—Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016 (9th Cir. 2020)³—for its holding that while a motorist’s negligence claims against a freight broker for negligent selection of a motor carrier was “related to” broker services, it was saved from preemption by the safety exception. However, subject matter jurisdiction was not an issue before the Ninth Circuit. It considered ordinary preemption in the context of a motion for judgment on the pleadings, not a motion to remand. Another recent circuit court decision decided after the briefing in this case was completed—Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023)—came down on the opposite side of the preemption issue from Miller. In Aspen, the Eleventh Circuit also found that the FAAAA preempted the plaintiff’s negligent selection of a carrier claim against a broker and that it satisfied the first prong of the safety exception in that it was “genuinely responsive to safety concerns.” However, Aspen held that the claim was not “with respect to motor vehicles” as required by the second prong of the safety exception. The facts in Aspen did not stem from a motor vehicle accident with personal injury, but rather out of the theft of cargo by someone fraudulently claiming to represent the broker’s chosen motor carrier. Aspen at *2. Since neither of the two circuit courts that have addressed the scope of the express preemption provision of the FAAAA have done so in the context of a complete preemption analysis, they do not guide this Court’s decision.

After considering the cases cited by the parties and many other district court opinions that have addressed the issue, the Court is persuaded that Plaintiff’s negligence claims fall under the FAAAA’s safety exception and are thus not completely preempted. See Est. of Wray by & through Wray v. Kennedy Bros. Logistics, Inc., No. 5:22-CV-70-FL, 2022 WL 16550315 *4 (E.D.N.C. Oct. 31, 2022) (“[T]he statutory text of the FAAAA contains no clear Congressional intent to engulf the entire area of personal injury and wrongful death claims involving transportation brokers and motor carriers.”); Moyer v. Simbad LLC, No. 2:20-CV-5405, 2021 WL 1215818 (S.D. Ohio Jan. 12, 2021), report and recommendation adopted, No. 2:20-CV-5405, 2021 WL 1209469 (S.D. Ohio Mar. 31, 2021); Morrison v. JSK Transp., Ltd., No. 20-CV-01053-JPG, 2021 WL 857343 (S.D. Ill. Mar. 8, 2021); Grant v. Lowe’s Home Centers, LLC, No. CV 5:20-02278-MGL, 2021 WL 288372 (D.S.C. Jan. 28, 2021); and White v. Scotty’s Contracting & Stone, LLC, No. 1:21-CV-00161-GNS, 2022 WL 4588417 (W.D. Ky. Sept. 29, 2022).

*4 PT has not made any argument that the FAAAA provided a replacement cause of action for Plaintiff’s negligence claims arising from a motor vehicle accident, the absence of which, as noted above, creates “an exceptionally strong presumption against complete preemption.” PT also has not directed the Court’s attention to any legislative history that indicates Congressional intent “to displace the application of state tort law to personal physical injury inflicted” by brokers. Hodges v. Delta Airlines, Inc., 44 F.3d 334, 338 (5th Cir. 1995) (finding the Airline Deregulation Act, which tracks the FAAAA preemption clause, did not completely preempt state law).⁴ The Court finds that PT has not met its burden of establishing subject matter jurisdiction on the basis of complete preemption.

“When the doctrine of complete preemption does not apply, but the plaintiff’s state claim is arguably preempted under [the statute], the district court, being without removal jurisdiction, cannot resolve the dispute regarding preemption. It lacks power to do anything other than remand to the state court where the preemption issue can be addressed and resolved.” Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 355 (3d Cir. 1995).

Substantial Federal Question

The second exception to the well-pleaded complaint rule—the existence of a substantial, disputed federal question in state law claims—applies only to a “special and small category” of cases. Minnesota at 711 (quoting Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 699 (2006)). To qualify under this exception, also called the Grable⁵ doctrine, the removing party must establish that a federal issue is: “(1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.” Gunn v. Minton, 568 U.S. 251, 133 (2013).

PT argues the following in support of its Grable argument:

(1) Plaintiff’s right to relief necessarily depends on the resolution of a substantial question of federal law, i.e., the appropriate standard of care when selecting motor carriers.

(2) Plaintiff’s allegations invoking state law negligence claims represent a dispute as to the effect and breadth of federal law as it concerns freight brokers.

(3) The federal issue is substantial because if Plaintiff is correct that state law applies, freight brokers by necessity must conform to a patchwork of state-law based duties of care when selecting motor carriers to haul freight through intrastate commerce in multiple states.

(4) To the extent this Court may enforce the intent of Congress to constrain the power of the states to regulate the interstate/intrastate transportation of goods as expressly provided by the FAAAA, this does not disrupt the federal/state balance approved by Congress.

(ECF No. 20 at 4).

As to the first Grable requirement, the federal issue must be a “necessary” or “essential element” of one of the plaintiff’s claims. Minnesota at 711. PT has failed to “point to the specific elements of [the plaintiff’s] state law claims” that would require a determination of a federal issue. See Cent. Iowa Power Co-op. v. Midwest Indep. Transmission Sys. Operator, Inc., 561 F.3d 904, 914 (8th Cir. 2009). In fact, there are no elements of Plaintiff’s claims that rely on a determination of the FAAAA’s express preemption provision. The argument that Plaintiff’s “right to relief” depends on the resolution of the preemption issue it has raised does not equate to a determination that this issue is an “essential element” of Plaintiff’s claim. It has been settled law since 1887 when Congress amended the removal statute “that a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption[.]” Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987). As the Grable issues are conjunctive, the Court need not address the remining three parts of the test.

Conclusion

*5 The Court finds that it does not have subject matter jurisdiction over this controversy, and Plaintiff’s motion to remand (ECF No. 12) is GRANTED. In the absence of jurisdiction, the Court does not address the remaining motions. The Clerk is directed to remand this action to the Circuit Court of Crittenden County, Arkansas forthwith.

IT IS SO ORDERED this 9th day of May, 2023.

All Citations

Footnotes

1. Citing: § 301 of the Labor Management Relations Act, Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 560–61 (1968); § 502(a) of ERISA, Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 66, (1987); and §§ 85 and 86 of the National Bank Act, Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 10-11 (2003).  
2. Gillum at *5 (citing Georgia Nut Co. v. C.H. Robinson Co., No. 17 C 3018, 2017 WL 4864857 (N.D. Ill. Oct. 26, 2017); Volkova v. C.H. Robinson Co., No. 16 C 1883, 2018 WL 741441 (N.D. Ill. Feb. 7, 2018); Creagan v. Wal-Mart Transportation, LLC, 354 F. Supp. 3d 808 (N.D. Ohio 2018); and Krauss v. IRIS USA, Inc., No. CV 17-778, 2018 WL 2063839 (E.D. Pa. May 3, 2018)).  
3. Abrogated on other grounds by R.J. Reynolds Tobacco Company v. County of Los Angeles, 29 F.4th 542, 553 n.6 (9th Cir. 2022).  
4. “The language of the FAAAA preemption clause tracks the preemption clause included in the [ADA] with ‘one conspicuous alteration—the addition of the words ‘with respect to the transportation of property’ [which] phrase massively limits the scope of preemption ordered by the FAAAA.’ ” See Wray at *4 (quoting Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 261 (2013)).  
5. Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 312, (2005); Minnesota at 711.

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