United States District Court, N.D. Alabama, Middle Division.

FEDERAL INSURANCE COMPANY, Subrogee of Sierra Express Inc., Plaintiff,

v.

Kelton WRECKER d/b/a Jimmy Charles Wrecker, LLC, Defendant.

Case No.: 4:22-cv-00083-ACA

|

Signed January 8, 2024

Attorneys and Law Firms

Philip E. Miles, Law Office of Philip E. Miles, LLC, Gadsden, AL, for Plaintiff.

Paul Albert Miller, Patrick W. Franklin, Miller, Christie, & Kinney, P.C., Birmingham, AL, for Defendant.

MEMORANDUM OPINION AND ORDER

ANNEMARIE CARNEY AXON, UNITED STATES DISTRICT JUDGE

*1 A Sierra Express tractor–trailer loaded with 40,000 pounds of carpet ran off an Alabama highway. The Alabama State Troopers called Kelton Wrecker, a heavy recovery specialist company, to remove the tractor–trailer. Before Kelton Wrecker began the removal, Sierra’s owner called Kelton Wrecker to ask if it had the necessary equipment to perform the recovery. Kelton Wrecker represented that it did and began the removal. During the removal, Kelton Wrecker damaged the carpet and Sierra’s insurer, Federal Insurance Company, covered the loss of the carpets.

Federal Insurance, as subrogee of Sierra, brought this action against Kelton Wrecker for negligence and breach of an oral contract. (Doc. 7 ¶¶ 13–21). Kelton Wrecker has moved for summary judgment. (Doc. 25).

Because there are triable issues of fact as to both claims, the court DENIES the motion for summary judgment on Counts One and Two.

I. BACKGROUND

In deciding a motion for summary judgment, the court “view[s] all evidence and draw[s] all reasonable inferences in the light most favorable to the non-moving party.” Hallums v. Infinity Ins. Co., 945 F.3d 1144, 1148 (11th Cir. 2019). “The ‘facts’ at the summary judgment stage are not necessarily the true, historical facts; they may not be what a jury at trial would, or will, determine to be the facts.” Cantu v. City of Dothan, 974 F.3d 1217, 1222 (11th Cir. 2020). “[W]here there are varying accounts of what happened,” the court must “adopt the account most favorable” to Federal Insurance. Smith v. LePage, 834 F.3d 1285, 1296 (11th Cir. 2016) (quotation marks omitted). “Credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.” Phillips v. Legacy Cabinets, 87 F.4th 1313, 1320 (11th Cir. 2023) (quotation marks omitted).

A Sierra tractor–trailer hauling 40,000 pounds of carpet ran off an Alabama highway. (See doc. 26-1 at 8–10, 12, 39). The truck came to rest in the grass on the side of the highway. (See id. at 15). Thereafter, state troopers arrived at the scene. (See doc. 27-1 at 26–28).

In Alabama, if a vehicle needs to be recovered from the side of the road and the owner does not request a specific tow company, law enforcement calls a pre-approved towing company off its rotating wrecker list. (See doc. 33-13 at 2, 15). On the day of the accident, the troopers called Kelton Wrecker from the rotating wrecker list. (Doc. 27-1 at 26–28; see also doc. 26-1 at 18–19; doc. 33-2 at 23–24). Jimmy Kelton arrived at the scene, surveyed the accident, and before doing any work, spoke with Charles Burger, the owner of Sierra. (See doc. 26-1 at 19–20; see also doc. 33-2 at 32–33).

Mr. Burger was never present at the accident scene, nor were any Sierra employees other than the truck drivers involved in the accident. (Doc. 26-1 at 20–22; see id. at 14). Mr. Burger testified that he told Mr. Kelton the trailer looked like it was intact and asked if he had the right equipment to complete the recovery:

*2 [I]t looks to me like the truck and the trailer is intact. Do you have a big enough wrecker to where we can pull it straight back and get it on the road and then take it probably to your place? Do you have a pole hyster¹ that if we have to we can off load the carpet at a dock onto another trailer?

(Id. at 20). According to Mr. Burger, Mr. Kelton responded: “Oh yeah … No problem … I’ve got it handled.” (Id.). Mr. Burger expected Kelton Wrecker to tow the trailer from the shoulder of the highway to a dock where a pole hyster could be used to transfer the carpet to a different trailer. (Doc. 26-1 at 58–59).

Using a 25-ton and 50-ton wrecker, Kelton Wrecker began to tow the tractor–trailer toward the highway; but as the trailer started moving, it began to fall apart. (Doc. 27-1 at 37–38, 42, 61). To lighten the weight in the trailer, they stopped pulling the trailer and unloaded about half of the carpet with a track hoe. (Id. at 43–44, 49, 52, 110). Kelton Wrecker called another tow company for assistance and used all the recovery units they had available. (Doc. 33-2 at 49).

The parties dispute several material facts. Sierra employees testified that they did not see any trailer damage in the pictures they looked at after the accident and before Kelton Wrecker began working. (Id. at 14, 80–81; doc. 34-1 at 16, 41–42; see doc. 26-1 at 20). They also testified that the carpet was unlikely to be damaged in the accident because it was packed tightly in the trailer. (See doc. 26-1 at 43–44). And Mr. Burger testified that there are “plenty” of towing companies that have the appropriate equipment to tow the trailer to the road. (Id. at 72).

Kelton Wrecker employees testified that the trailer was damaged in at least three places before they arrived. (See doc. 33-2 at 29–30, 36). Jamison Kelton, a Kelton Wrecker employee, testified that once they started pulling the trailer the damage caused the trailer to start falling apart and it could not be towed without removing the carpet at the scene. (Id. at 39, 45–47, 63). Jamison further testified that no other truck could have pulled the trailer without removing the carpet and additional trucks would not have helped pull the trailer because it was falling apart as it was being pulled. (Id. at 48–49).

II. DISCUSSION

The court must grant summary judgment if the movant establishes “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Hellums, 945 F.3d at 1148. “[T]here is a genuine issue of material fact if the nonmoving party has produced evidence such that a reasonable factfinder could return a verdict in its favor.” Looney v. Moore, 886 F.3d 1058, 1062 (11th Cir. 2018) (quotation marks omitted).

Kelton Wrecker moves for summary judgment on the two claims asserted against it—negligence and breach of an oral contract. (Doc. 25 at 1; see also doc. 36 at 1 n.1).

1. Negligence

*3 Count One alleges Kelton Wrecker acted negligently because it owed a duty to Sierra to remove all the carpets without damaging them, it breached that duty by damaging the carpets, and Sierra was harmed as a direct and proximate result of Kelton Wrecker’s negligence. (Doc. 7 at ¶¶ 14–16). Kelton Wrecker argues it owed no duty to Sierra, and even if it did, it did not breach that duty because its conduct was reasonable. (See doc. 31 at 18–19).

Under Alabama law, to prevail on a negligence claim, a plaintiff must prove (1) the defendant owed the plaintiff a legal duty, (2) the defendant breached that duty, (3) the plaintiff suffered a loss or injury, and (4) the defendant’s breach was an actual and proximate cause of that injury. Haddan v. Norfolk S. Ry. Corp., 367 So. 3d 1067, 1072 (Ala. 2022). “A duty of care arises when it is foreseeable that harm may result if care is not exercised.” Hannah v. Gregg, Bland & Berry, Inc., 840 So. 2d 839, 857 (Ala. 2002).

Here, Federal Insurance presented evidence from which a reasonable jury could find Kelton Wrecker assumed a duty to act reasonably when it agreed to recover the trailer and that damage to the carpets was foreseeable. (See doc. 26-1 at 68–70). Federal Insurance also presented evidence that the trailer and cargo were not substantially damaged when Kelton Wrecker arrived (id. at 14; doc. 34-1 at 22), and that Kelton Wrecker did not exercise reasonable care by attempting to remove the carpets in the embankment or by using a track hoe, rather than a pole hyster, to remove the carpets (see doc. 26-1 at 58–59; 68–70). Although it is undisputed that a pole hyster could not have been used in the embankment or on the side of a road (doc. 26-1 at 59–60), a reasonable jury could find that Kelton Wrecker did not exercise reasonable care in moving the trailer to the shoulder of the highway because it did not call more, or different, towing vehicles to move the trailer (see doc. 26-1 at 60, 72; doc. 33-2 at 48).

Because Federal Insurance’s evidence creates triable issues of fact on their negligence claim, the court DENIES Kelton Wrecker’s motion for summary judgment on Count One.

2. Breach of Contract

Count Two alleges that Sierra entered an oral contract with Kelton Wrecker to remove all the carpets from the trailer without causing damage to the carpets and that Kelton Wrecker breached the contract by damaging the carpets. (Doc. 7 ¶¶ 18–20). Federal Insurance argues the oral contract was formed when Mr. Burger asked Mr. Kelton:

[I]t looks to me like the truck and the trailer is intact. Do you have a big enough wrecker to where we can pull it straight back and get it on the road and then take it probably to your place? Do you have a pole hyster that if we have to we can off load the carpet at a dock onto another trailer?

(Doc. 35 at 8–11; see doc. 26-1 at 20; doc. 7 ¶¶ 18–20) (quotation marks omitted). To which Mr. Kelton responded: “Oh yeah … No problem … I’ve got it handled.” (Doc. 26-1 at 20).

To form a contract under Alabama law, there must be (1) an offer and acceptance, (2) consideration, and (3) and mutual assent to terms essential to the formation of the contract. Ex parte Cain, 838 So. 2d 1020, 1026–27 (Ala. 2002). The trier of fact determines the terms of the oral contract. Black Diamond Dev., Inc. v. Thompson, 979 So. 2d 47, 52 (Ala. 2007).

Kelton Wrecker argues it is entitled to summary judgment because no contract was formed. (Doc. 31 at 17–18). Specifically, it argues there was no mutual assent to the contract’s essential terms because “preservation of the carpet or the moving of the carpet at the scene, were not discussed.” (Id.). But a reasonable jury could find the request for a pole hyster to unload the carpet established the preservation of the carpet as an essential term of the contract. Indeed, Mr. Kelton testified that it was always his intent and priority to try and save the cargo during a recovery, and Jamison Kelton testified that they worked as carefully as possibly to remove the carpets. (Docs. 27-1 at 37–38; doc. 33-2 at 50). And a reasonable jury could find there was adequate consideration because Federal Insurance presented evidence that Mr. Burger would have used a different recovery company if he knew Kelton Wrecker was going to use a track hoe to offload some of the carpet. (See doc. 26-1 at 26–27, 72).

*4 Because Federal Insurance has presented triable issues of fact on the breach of an oral contract claim, the court DENIES Kelton Wrecker’s motion for summary judgment on Count Two.

III. CONCLUSION

The court DENIES Kelton Wrecker’s motion for summary judgment on Counts One and Two.

DONE and ORDERED this January 8, 2024.

All Citations

Slip Copy, 2024 WL 85875

Footnotes

1. A pole hyster, which is the standard machine for moving a carpet, is a forklift with a twelve-to fifteen-foot-long pole at its end; to unload carpet safely from a trailer, the operator drives the pole hyster into the trailer from a dock, directs the pole inside the carpet roll, lifts the forklift, and backs the pole hyster out of the trailer onto the dock. (Doc. 26-1 at 56–57, 59–60). It cannot be used on rough or uneven terrain, like grass or the shoulder of a highway. (Id. at 59–60).  

End of Document

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

United States District Court, D. Nevada.

VEGAS FAB & FINISH, Plaintiff,

v.

AMG FREIGHT LLC, Defendant.

Case No. 2:23-cv-01336-MMD-NJK

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Signed January 16, 2024

Attorneys and Law Firms

David S. Lee, Lee, Landrum & Carlson, APC, Las Vegas, NV, for Plaintiff.

Bradley T Austin, Snell & Wilmer LLP, Las Vegas, NV, for Defendant.

ORDER

MIRANDA M. DU, CHIEF UNITED STATES DISTRICT JUDGE

I. SUMMARY

*1 Plaintiff Vegas Fab & Finish (“VFF”) brought this action involving a damaged interstate shipment against Defendant AMG Freight LLC (“AMG”) in Nevada state court. (ECF No. 1-2 (“Complaint”).) AMG removed the case on the basis that the Carmack Amendment, 49 U.S.C. § 14706, provides an exclusive federal remedy against carriers for goods lost or damaged during interstate shipment and thus that the District Court has original jurisdiction under 28 U.S.C. § 1441(a). (ECF No. 1.) Before the Court is Plaintiff’s motion to remand. (ECF No. 10 (“Motion”).)¹ Because the Court finds that AMG has not met its burden to establish that removal is proper, the Court grants the Motion. The Court further denies Defendant’s motions to dismiss (ECF No. 6) and to stay discovery (ECF No. 19) as moot.

II. BACKGROUND

On July 20, 2023, Plaintiff Vegas Fab & Finish filed its Complaint in the Eighth Judicial District Court in Clark County, Nevada, seeking damages against Defendant AMG Freight LLC for breach of contract, breach of the covenant of good faith and fair dealing, and negligence. (ECF No. 1-2.) Both VFF and AMG are corporations organized under Nevada law. (Id. at 2.)

VFF alleges that it entered into a contract with AMG, under which AMG agreed to ship 348 pieces of brass door inlay to Plaintiff’s client in Montreal, Quebec, Canada. (Id. at 4.) After delivery, Plaintiff’s client informed VFF that the pieces of inlay had sustained damage during transit. (Id.) VFF alleges that it reached out to AMG and was told that without VFF’s knowledge, AMG had subcontracted with ABF Freight (“ABF”) to deliver the shipment (Id.) AMG denied any responsibility for the damage. (Id.) VFF alleges that AMG inadequately insured the shipment without VFF’s consent, and that it failed to properly “deliver[ ]”, “maintain”[ ], “protect[ ]” or “entrust[ ]” the shipment. (Id. at 4-7.)

On August 28, 2023, AMG removed on the basis that the Carmack Amendment (“Carmack”) completely preempts the state law claims against it. (ECF No. 1.) VFF moved to remand. (ECF No. 10.)

III. DISCUSSION

Courts strictly construe the removal statute against removal jurisdiction, and “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The party seeking removal bears the burden of establishing federal jurisdiction. See Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006). If “a district court determines at any time that less than a preponderance of the evidence supports the right of removal, it must remand the action to the state court.” Hansen v. Group Health Coop., 902 F.3d 1051, 1057 (9th Cir. 2018).

AMG argues that removal is proper because the Carmack Amendment, 49 U.S.C. § 14706, provides an exclusively federal remedy against carriers of interstate shipments, barring VFF’s state law claims. (ECF Nos. 1, 13 at 3-4.) In its response to VFF’s Motion, AMG also argues that even if Carmack does not apply to the facts at issue, the Federal Aviation Administration Authorization Act (“FAAAA”) and the Interstate Commerce Commission Termination Act (“ICCTA”), codified at 49 U.S.C. § 14501(c)(1), also mandate exclusive federal jurisdiction. (ECF No. 13 at 4-5.) The Court considers each of AMG’s purported bases for federal jurisdiction.

A. Carmack Amendment

*2 The Court first considers AMG’s primary basis for removal—that the Carmack Amendment to the Interstate Commerce Act “completely preempts” VFF’s state law claims because the allegations in the Complaint define AMG as a “carrier” within the meaning of the statute. (ECF No. 1.) See 49 U.S.C. § 14706. The Court finds that AMG has not met its burden to establish federal jurisdiction under Carmack.

Federal district courts have “original jurisdiction of all civil actions arising under the … laws … of the United States.” 28 U.S.C. § 1331. A defendant may remove an action to federal court if the plaintiff could have initially filed the complaint in federal court. See 28 U.S.C. § 1441(a). In general, “[t]he presence or absence of federal-question jurisdiction is governed by the ‘well-pleaded complaint rule,’ which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff’s properly pleaded complaint.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). The well-pleaded complaint rule ensures that “a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption.” Id. at 393.

Under the corollary “artful pleading” doctrine, however, “a well-pleaded state law claim” may also “present[ ] a federal question when a federal statute has completely preempted that particular area of law.” Hall v. N. Am. Van Lines, Inc, 476 F.3d 683, 687 (9th Cir. 2007) (citing Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1107 (9th Cir.2000)) (emphasis added). See also Hansen, 902 F.3d at 1057 (quoting Rivet v. Regions Bank of La., 522 U.S. 470, 478 (1998)) (“[A] plaintiff may not defeat removal by omitting to plead necessary federal questions.”). A complaint that contains a “completely preempted claim may be removed to district court under § 1441.” Hall, 476 F.3d at 687. See also Lehmann v. Brown, 230 F.3d 916, 919-20 (7th Cir. 2000) (noting that “the phrase ‘complete preemption’ has caused confusion” because it is sometimes conflated with an ordinary preemption defense when it instead functions more accurately as federal occupation of the field).

As both parties in this case acknowledge, VFF presents no well-pleaded federal claim on the face of its Complaint. AMG instead argues that Carmack provides an exclusively federal remedy under the artful pleading doctrine. (ECF No. 13 at 4-5.) Carmack is among the limited number of statutes well-established to “completely preempt[ ] well-pleaded state claims.” Hall, 476 F.3d at 687 (citing Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 8 (2003)). The Amendment is intended to provide “a uniform national liability policy for interstate carriers.” Hall, 476 F.3d at 687 (quoting Hughes Aircraft Co. v. N. Am. Van Lines, Inc., 970 F.2d 609, 613 (9th Cir.1992)). It thus provides “the exclusive remedy against carriers for goods lost or damaged during an interstate shipment.” Korer v. Danita Corp., 584 F. Supp. 2d 1103, 1105 (N.D. Ill. 2008). See also Adams Express Co. v. Croninger, 226 U.S. 491, 505-06 (1913) (Carmack covers “the subject of the liability of the carrier under a bill of lading … so completely that there can be no rational doubt but that Congress intended to take possession of the subject, and supersede all state regulation with reference to it”).

To determine whether Carmack applies to the claims in this action, the Court must consider whether AMG is properly characterized as a “carrier” or as a “broker.” Carmack governs interstate carriers but does not apply to brokers. See 49 U.S.C. § 14706(a); CGU Int’l Ins., PLC v. Keystone Lines Corp., Case No. C-02-3751 SC, 2004 WL 1047982, at *1-2 (N.D. Cal. May 5, 2004).

*3 AMG argues that “[a]ccepting the Complaint and factual allegations therein as true, AMG Freight is classified as a ‘carrier.’ ” (ECF no. 13 at 4.) AMG further suggests that Plaintiff is attempting to improperly “amend” its complaint to defeat federal question jurisdiction in its Motion. (Id.) VFF argues, by contrast, that AMG should be classified as a broker outside of Carmack’s scope. (ECF No. 10 at 3-4.) It emphasizes that it never defined AMG as a carrier in the Complaint. (ECF Nos. 10, 14 at 4.) VFF also points to a letter AMG sent to VFF counsel’s office in August 2023 and argues that the letter demonstrates that AMG itself has taken the inconsistent position that it operated only as a broker in the transactions in question. (ECF No. 10 at 4.)

In practice, “[t]he difference between a carrier and a broker is often blurry.” CGU, 2004 WL 1047982 at *1-2. The distinction is “not determined by what the company labels itself, but by how it represents itself to the world and its relationship to the shipper.” ASARCO LLC v. England Logistics Inc., 71 F. Supp. 3d 990, 995 (D. Ariz. 2014) (quoting Hewlett-Packard, Co. v. Brother’s Trucking Ent., 373 F.Supp.2d 1349, 1352 (S.D. Fla. 2005)). A motor carrier is “a person providing … transportation for compensation.” 49 U.S.C. § 13102. In general, “[m]otor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this section 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.” 49 C.F.R. § 371.2(a). A broker, by contrast is “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). The “crucial distinction is whether the party legally binds itself to [the] transport” of goods—regardless of who actually transports them. See CGU, 2004 WL 1047982 at *2.

The Court finds that AMG has not adequately supported its position that AMG must be classified as a carrier. As a threshold matter, AMG’s view that the Court may consider only the allegations within the four corners of VFF’s Complaint mischaracterizes the Court’s broader power to view evidence outside the pleadings in order to rule on a motion to remand.² The Court further notes that AMG expressly states in its motion to dismiss that it “denies that it was the carrier for Plaintiff’s interstate shipment and contests many of the factual assertions in the Complaint.” (ECF No. 6 at 2.) To resolve the Motion, however, the Court need not consider the admissibility of VFF’s proposed evidence or AMG’s contradictory positions. Even considering only the Complaint, AMG fails to meet its burden. The Complaint does not clearly categorize AMG as a carrier such that any argument that AMG operated as a broker constitutes an improper “amendment.” Numerous sections plausibly indicate VFF’s belief that AMG was acting as a broker. Plaintiff alleges, for example, that “[a]fter reaching out to AMG regarding [the] damaged shipment, VFF was informed that AMG, without Plaintiff’s knowledge, had subcontracted with ABF … to deliver this shipment.” (ECF No. 1-2 at 4.) And that “[a]s a result of AMG’s actions in facilitating the delivery of VFF’s shipment to its client, VFF was forced to incur the cost of the initial delivery [and other fees].” (Id. at 5.)

*4 AMG argues that because Plaintiff alleges AMG accepted responsibility for the shipment and failed to “keep the shipment under their proper control,” Plaintiff has conceded that AMG is a carrier. (ECF No. 13 at 3-4.) But although a carrier is a party that “legally binds itself to transport,” See CGU, 2004 WL 1047982 at *2, the Court is not persuaded that the Complaint’s language alleging that AMG agreed to keep the shipment under its “watch” and failed to “facilitate” and “protect” the shipment put AMG undeniably in the carrier category. (ECF No. 1-2 at 5, 6-8.) These duties are arguably consistent with brokers’ role in “providing, or arranging for, transportation.” See 49 U.S.C § 13102(2). AMG thus oversimplifies the fundamentally “blurry” distinction between carriers and brokers, which generally depends on the factual circumstances surrounding interstate transport. See CGU, 2004 WL 1047982 (noting that courts evaluate this distinction by considering which party accepted responsibility for the goods, which party took possession of goods, and which party is listed as a carrier on the bill of lading and other documents).³ See also Quality King Distributors, 2020 WL 7260799, at *3 (noting that Carmack is not intended to indiscriminately swallow all “claims involving a separate and independently actionable harm to the shipper distinct from … damage [to a shipment]”).

AMG bears the burden of resolving ambiguities that weigh in favor of remand. See Hansen, 902 F.3d at 1057. By pointing only to inconclusive language in the Complaint despite its burden, AMG fails to overcome the strong presumption against removal.

B. FAAAA and ICCTA

AMG next argues that even if it is classified as a broker outside the scope of Carmack, the state law claims against it are nevertheless completely preempted by the FAAAA and the ICCTA. (ECF No. 13 at 4-5.) But the FAAAA does not operate in the same unique way as the Carmack Amendment. Because preemption under the FAAAA is best classified here as ordinary preemption—an affirmative defense—rather than as so-called “complete” preemption which itself creates a federal question, this issue gets to the merits of Plaintiff’s claims. The Court thus finds that it does not have jurisdiction to rule on AMG’s FAAAA preemption defense and leaves the question to the state court on remand.

An ordinary preemption defense which rests on a federal question does not make a case removable. See Caterpillar, 482 U.S. at 392 (1987). See also Elam v. Kansas City S. Ry. Co., 635 F.3d 796, 803 (5th Cir. 2011) (“Defensive preemption does not create federal jurisdiction” but merely asserts the primacy of federal law). The phrase “complete preemption,” as used in the context of the Carmack Amendment, “has caused confusion … by implying that preemption sometimes permits removal” when “[u]nfortunately ‘complete preemption’ is a misnomer, having nothing to do with preemption and everything to do with federal occupation of a field.” See Lehmann, 230 F.3d at 919-20.

The FAAAA preemption provision, amended and recodified by the ICCTA, applies to state law claims related to “price, route, or service of any motor carrier … or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). See also Mastercraft Interiors, Ltd. v. ABF Freight Sys., Inc., 284 F. Supp. 2d 284, 285 (D. Md. 2003). But most district courts treat FAAAA preemption as ordinary defensive preemption—evident in the procedural posture from which cases addressing the statute are largely decided. See, e.g., Dilts v. Penske Logistics, LLC, 769 F.3d 637, 641 (9th Cir. 2014) (“Following removal, Defendants moved for summary judgment, claiming a[n FAAAA] preemption defense”); Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016, 1021 (9th Cir. 2020) (“[Defendant] moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), arguing that the FAAAA preempts Miller’s negligence claim”); Interstate Serv. Provider, Inc. v. Jordan, Case No. 4:21-CV-267, 2021 WL 2355384, at *8 (E.D. Tex. June 9, 2021) (“[T]he cases Defendants use to argue in favor of their complete-preemption theory are inapposite, as they instead concern ordinary preemption [which is evident from their posture because] … upon a finding of complete preemption, and thereby a lack of subject matter jurisdiction, courts would have been precluded from issuing any sort of merits decision.”)⁴

*5 The Court thus interprets AMG’s position on FAAAA and ICCTA preemption as an affirmative defense that does not confer jurisdiction under 28 U.S.C. § 1441(a). AMG must properly assert this defense in state court.

IV. CONCLUSION

The Court notes that the parties made several arguments and cited to several cases not discussed above. The Court has reviewed these arguments and cases and determines that they do not warrant discussion as they do not affect the outcome of the motions before the Court.

It is therefore ordered that Plaintiff’s motion to remand (ECF No. 10) is granted.

It is further ordered that Defendant’s motions to dismiss (ECF No. 6) and to stay discovery (ECF No. 19) are denied as moot.

It is further ordered that this case is remanded and the Clerk of Court is directed to close the case.

All Citations

Slip Copy, 2024 WL 166759

Footnotes

1. AMG opposed the Motion (ECF No. 13), and VFF replied (ECF No. 14).  
2. AMG argues that “Plaintiff cannot amend its Complaint via Motion for Remand and Defendant—and Plaintiff—are limited to allegations as pleaded by Plaintiff at this stage.” (ECF No. 13 at 1 n. 1.) While it is true that in considering removal a court must “focus on the plaintiff’s complaint at the time the petition for removal was filed,” see, e.g., Steel Valley Auth. v. Union Switch & Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987), this requirement does not itself prevent courts from considering evidence outside the pleadings when ruling on a motion to remand—even in the context of federal question jurisdiction. See, e.g., Hansen, 902 F.3d at 1056-57 (suggesting that a removing party must establish federal jurisdiction by a “preponderance of evidence” in a federal preemption case under ERISA); Quality King Distributors, Inc. v. Celtic Int’l, LLC, Case No. 20-CV-2145, 2020 WL 7260799, at *2 (N.D. Ill. Dec. 10, 2020) (quoting Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 444 (7th Cir. 2009)) (finding in a case involving Carmack that where a party is “attack[ing] the complaint’s factual allegations that it was a shipper of goods, ‘[t]he law is clear that when considering a motion that launches a factual attack against jurisdiction, [t]he district court may properly look beyond the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists’ ”).  
3. VFF argues that AMG’s August letter points to AMG’s own confidence that if the Court were to access admissible factual evidence on these and other factors, it would in fact classify AMG as a broker. (ECF No. 10 at 2-4.) While the Court need not rely on the letter in this ruling, the Court again notes that AMG’s response to the Motion includes no acknowledgment of factual considerations beyond the Complaint.  
4. While some courts in other districts have found that the FAAAA completely preempts negligence claims against brokers, see, e.g., Gillum v. High Standard, LLC, Case No. SA-19-CV-1378-XR, 2020 WL 444371, at *3 (W.D. Tex. Jan. 27, 2020), the weight of authority runs counter to this position. See 29 A.L.R. Fed. 2d 563 (“Although there is some authority stating that the FAAAA completely preempts state law in certain cases … courts have generally held that the FAAAA does not completely preempt state law … and therefore have held that the mere assertion of FAAAA preemption as a defense is an insufficient basis to invoke federal question jurisdiction”).  

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