Cargo - Central Analysis Bureau

England Logistics, Inc. v. GV Champlines

United States District Court for the District of Utah

November 8, 2023, Decided; November 8, 2023, Filed

Case No. 2:22-CV-00742-TS-DAO

Reporter

2023 U.S. Dist. LEXIS 201209 *; 2023 WL 7387258

ENGLAND LOGISTICS, INC., Plaintiff, v. GV CHAMPLINES, Defendant.

Prior History: England Logistics, Inc. v. GV Champlines, Inc., 2023 U.S. Dist. LEXIS 109047, 2023 WL 4138327 (D. Utah, June 22, 2023)

Counsel: [*1] For England Logistics Inc, a Utah corporation, Plaintiff: Jeffery Scott Williams, NELSON CHRISTENSEN HOLLINGWORTH & WILLIAMS, SALT LAKE CITY, UT.

For GV Champlines, a California corporation, Defendant: Adam Darrell Goff, LEAD ATTORNEY, PLANT CHRISTENSEN & KANELL, SALT LAKE CITY, UT.

Judges: Ted Stewart, United States District Judge.

Opinion by: Ted Stewart

Opinion

MEMORANDUM DECISION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT GV CHAMPLINES’S MOTION TO DISMISS

This matter is before the Court on Defendant GV Champlines’s 12(b)(1), (6) Motion to Dismiss for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. For the reasons set forth below, the Court will grant in part and deny in part the Motion.

I. BACKGROUND

The relevant facts alleged in the Complaint are as follows. On October 27, 2020, Plaintiff England Logistics, a freight broker, and Defendant GV Champlines, a motor carrier, entered into a written agreement in which Plaintiff agreed to arrange for Defendant to transport loads of freight for Plaintiff’s customers, including.¹ In May 2021, Plaintiff arranged for Defendant to transport a load of yogurt from San Fernando, California, to the headquarters of OM [*2] Produce (“OM”) in Irving, Texas. OM is a customer of Plaintiff and the beneficial owner of the freight at issue. Defendant accepted physical possession of the load on May 18, 2021.² When the load arrived in Irving, it was “damaged such that the Load was rendered valueless and could not be sold for salvage or otherwise.”³ Plaintiff was assigned rights under the parties’ contract by OM, the beneficial owner of the cargo.⁴

The agreement between the parties included a provision that allowed Plaintiff to select litigation under certain conditions but required that the proceedings begin within 18 months of “the date of delivery or the scheduled date of delivery of the freight, whichever is later.”⁵ Section 3.3.2 of the agreement provided that the “[carrier’s] liability for any cargo damage, loss, or theft from any cause shall be determined under the Carmack Amendment, 49 U.S.C. §14706.”⁶ However, the agreement also provided that “[t]o the extent that terms and conditions herein are inconsistent with part (b) Subtitle IV of Title 49 U.S.C., [the Carmack Amendment], the Parties expressly waive all rights and remedies they may have under the Act.”⁷

Plaintiff brought this action on December 1, 2022, alleging that Defendant delivered the damaged cargo on May 18, 2021, and [*3] bringing a claim under the Carmack Amendment and a breach of contract claim.⁸

Defendant now moves to dismiss under Fed. R. Civ. P. 12(b)(1) and 12(b)(6), arguing that (1) Plaintiff fails to state a claim upon which relief can be granted because Plaintiff brought its Complaint after the deadline established in an agreement between the parties; and (2) the Court lacks subject-matter jurisdiction over both of Plaintiff’s claims because Plaintiff waived its rights provided by the federal statute under which it brought its Carmack claim, and the Court thus lacks supplemental jurisdiction over the breach of contract claim.⁹

Plaintiff argues that (1) the Complaint was timely because the two-year statute of limitations provision in the Carmack Amendment applies to Plaintiff’s claims rather than the 18-month limitation included in the Agreement; and (2) OM’s Carmack Amendment rights, which were assigned to Plaintiff, “exist separate from and are in no manner impacted by any terms of the [a]greement.”¹⁰

II. STANDARD OF REVIEW

The burden of establishing subject matter jurisdiction is on the party asserting jurisdiction.¹¹ A motion to dismiss under Rule 12(b)(1) can take one of two forms: (1) facial attacks “challeng[ing] the sufficiency of the complaint, requiring the district court [*4] to accept the allegations in the complaint as true,” or (2) factual attacks, “challeng[ing] the facts upon which subject matter jurisdiction depends.”¹² With factual attacks, “the court must look beyond the complaint and has wide discretion to allow documentary and even testimonial evidence under Rule 12(b)(1).”¹³ With facial attacks, the Court applies “the same standards under Rule 12(b)(1) that are applicable to a Rule 12(b)(6) motion to dismiss for failure to state a cause of action.”¹⁴

In considering a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6), all well-pleaded factual allegations, as distinguished from conclusory allegations, are accepted as true and viewed in the light most favorable to Plaintiff as the nonmoving party.¹⁵ Plaintiff must provide “enough facts to state a claim to relief that is plausible on its face,”¹⁶ which requires “more than an unadorned, the-defendant-unlawfully harmed-me accusation.”¹⁷ “A pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’ Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.'”¹⁸

“The court’s function on a Rule 12(b)(6) motion is not to [*5] weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff’s complaint alone is legally sufficient to state a claim for which relief may be granted.”¹⁹ As the Court in Iqbal stated, only a complaint that states a plausible claim for relief survives a motion to dismiss.

Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not shown—that the pleader is entitled to relief.²⁰

III. DISCUSSION

A. Carmack Amendment Applicability and Statute of Limitations

“The Carmack Amendment was passed by Congress to standardize inter-state transportation claims.”²¹ It “was intended to ‘supersede all the regulations and policies of a . . . state’ and ‘limit the power to exempt [a carrier] by . . . contract.'”²² Section 14101(b)(1) of Title 49 allows parties to “expressly waive any or all rights and remedies . . . covered by the contract.”²³ However, while carriers can reasonably limit the extent of their liability under the Carmack Amendment, “[t]he authorities have long held [*6] that a carrier cannot by contract exempt itself from liability for its own negligence.”²⁴

Courts have also found that the Carmack Amendment applies to and preempts certain contractual provisions.²⁵ For example, in Aluminum Products Distributors, Inc. v. Aaacon Auto Transport, Inc., the Tenth Circuit held that a clause limiting settlement of claims to arbitration in New York City in the defendant’s contract was preempted by the Carmack Amendment because “any such limitation . . . [was] declared to be unlawful and void.”²⁶ While similar cases have primarily dealt with issues like forum selection and arbitration clauses conflicting with the Carmack Amendment, the statute of limitations provision in the parties’ agreement in this case is analogous to prior court determinations.²⁷ As such, if the Carmack Amendment applies here, then its two-year statute of limitations applies rather than the eighteen-month limitation in the parties’ agreement.

When considering inconsistencies between specific and general terms in contracts, courts typically give greater weight to the more specific terms.²⁸ Specific terms carry more weight because “[a]ttention and understanding are likely to be in better focus when the language is specific or exact, and . . . [*7] the specific or exact term is more likely to express the meaning of the parties with respect to the situation than the general language.”²⁹

The agreement between Plaintiff and Defendant states that legal proceedings must be brought within eighteen months from the date of delivery or scheduled date of delivery.³⁰ The agreement generally waives any rights and remedies under the Carmack Amendment that are inconsistent with the terms of the parties’ agreement,³¹ but also expressly incorporates liability under the portion of the Carmack Amendment relating to actions brought for damages to the goods.³² The Carmack Amendment provides that “[a] carrier may not provide by rule, contract, or otherwise . . . a period of less than 2 years for bringing a civil action against it under this section.”³³

Defendant argues that the parties properly waived any rights and remedies under the Carmack Amendment because of the general waiver found in section 4.4.1 of the parties’ agreement, despite the more specific provision incorporating section 14706 of the Carmack Amendment contained in section 3.3.1. Defendant further argues that the eighteen-month limitation in the parties’ agreement should govern because “it has long been established in federal jurisdictions that contractual parties may stipulate to [*8] stricter limitations than those allowed by statutes, such as statutes of limitation.”³⁴ Plaintiff contends that, despite the waiver of rights contained in section 4.3.2, “the [a]greement does not waive the Carmack Amendment, but instead expressly referred to and incorporated [it] in regard to claims for loss or damage to goods[,]” and thus a two-year statute of limitations applies.³⁵

Because the provision applying the Carmack Amendment to liability for cargo damage is more specific than the provision expressly waiving rights under the Carmack Amendment, the Court finds that the Carmack Amendment applies to Plaintiff’s claim for damages to the cargo. The Amendment’s two-year statute of limitations thus applies, and the suit was timely filed. Defendant’s Motion to Dismiss for failure to state a claim upon which relief can be granted is denied.

B. Breach of Contract Claim

Plaintiff brings a breach of contract claim in addition to the claim under the Carmack Amendment, invoking the Court’s supplemental jurisdiction “on the grounds that this cause of action is so related to the Carmack claim . . . that they form part of the same case or controversy.”³⁶

“The Tenth Circuit has held ‘that the Carmack Amendment preempts state common law remedies against common carriers for negligent loss or damage to [*9] goods shipped under a lawful bill of lading.'”³⁷ “Other circuits are in accord.”³⁸

Because the Carmack Amendment applies here and thus “preempts state common law remedies against common carriers for negligent loss or damage to goods shipped[,]”³⁹ Defendant’s Motion to Dismiss as applied to the breach of contract claim is granted, and the breach of contract claim is dismissed. Should later developments call into question the application of the Carmack Amendment, Plaintiff may seek leave to reassert its state-law claim at that time.

IV. CONCLUSION

It is therefore

ORDERED that Defendant’s Motion to Dismiss (Docket No. 31) is GRANTED IN PART and DENIED IN PART as set forth above.

DATED this 8th day of November, 2023.

BY THE COURT:

/s/ Ted Stewart

Ted Stewart

United States District Judge

End of Document

¹Docket No. 1, at 3.

²Id. at ¶ 13.

³Id. at ¶ 15.

⁴Docket No. 37, at 1.

⁵Docket No. 1-1, at 9.

⁶Id. at 7.

⁷Docket No. 31, at 2.

⁸Docket No. 1.

⁹Docket No. 31, at 1.

¹⁰Docket No. 37, at 2.

¹¹Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974) (citation omitted).

¹²Paper, Allied-Indus., Chem. & Energy Workers Int’l Union v. Cont’l Carbon Co., 428 F.3d 1285, 1292 (10th Cir. 2005).

¹³Id.

¹⁴Muscogee (Creek) Nation v. Okla. Tax Comm’n, 611 F.3d 1222, 1227 n.1 (10th Cir. 2010).

¹⁵GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997).

¹⁶Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007).

¹⁷Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009).

¹⁸Id. (quoting Twombly, 550 U.S. at 557).

¹⁹Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).

²⁰Iqbal, 556 U.S. at 679 (internal citations and quotation marks omitted).

²¹ICON Health & Fitness, Inc. v. NVC Logistics Grp., Inc., No. 1:16-cv-00167-JNP-EJF, 2017 U.S. Dist. LEXIS 95734, 2017 WL 2656112, at *1 (D. Utah June 20, 2017) (citing Adams Express Co. v. Croninger, 226 U.S. 491, 505, 33 S. Ct. 148, 57 L. Ed. 314 (1913)).

²²2017 U.S. Dist. LEXIS 95734, [WL] at *1 (citing Adams Express Co., 226 U.S. at 505-06).

²³49 U.S.C. §14101(b)(1).

²⁴Gellert v. United Airlines, 474 F.2d 77, 80 (10th Cir. 1973) (citation omitted).

²⁵See Icon Health, 2017 U.S. Dist. LEXIS 95734, 2017 WL 2656112, at *3 (finding that “[the defendant’s] forum selection clause [was] preempted . . . [and] Carmack applie[d]”); see also Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., 561 U.S. 89, 98, 130 S. Ct. 2433, 177 L. Ed. 2d 424 (2010) (stating in dicta that “if Carmack’s terms appl[ied] . . . the [defendants] would have [had] a substantial argument that the . . . forum-selection clause . . . [was] pre-empted by Carmack’s venue provisions”).

²⁶549 F.2d 1381, 1385 (10th Cir. 1977).

²⁷See e.g., Icon Health, 2017 U.S. Dist. LEXIS 95734, 2017 WL 2656112, at *3 (holding that the Carmack Amendment preempted a forum selection clause because the Tenth Circuit’s prior ruling that a contractual arbitration clause was preempted by the Carmack Amendment “extend[ed] by analogy to the situation at hand”) (citing Aluminum Prods. Distribs., Inc., 549 F.2d at 1384-85).

²⁸Restatement (Second) Contracts § 203(c) (1981) (“In the interpretation of a promise or agreement . . . specific terms and exact terms are given greater weight than general language.”); see e.g., Bennett v. Coors Brewing Co., 189 F.3d 1221, 1232 (10th Cir. 1999) (“[S]pecific terms and exact terms . . . are given greater weight than general language.”) (quoting Restatement (Second) Contracts § 203(c)); Muzak Corp. v. Hotel Taft Corp., 1 N.Y.2d 42, 133 N.E.2d 688, 690, 150 N.Y.S.2d 171 (N.Y. 1956) (“Even if there was an inconsistency between a specific provision and a general provision of a contract . . . the specific provision controls.”).

²⁹Restatement (Second) Contracts § 203 cmt. e.

³⁰Docket No. 1-1 § 4.4.1.

³¹Id. § 4.3.2.

³²Id. § 3.3.2.

³³49 U.S.C. § 14706(e)(1).

³⁴Docket No. 31, at 4.

³⁵Docket No. 37, at 8.

³⁶Docket No. 1, at ¶ 4.

³⁷Prismview, LLC v. Old Dominion Freight Line, Inc., No. 1:21-CV-136 TS, 2022 U.S. Dist. LEXIS 5735, 2022 WL 103793, at *2 (D. Utah Jan. 11, 2022) (citing Underwriters of Lloyds of London v. N. Am. Van Lines, 890 F.2d 1112, 1121 (10th Cir. 1989) (en banc)).

³⁸Id. (citing Underwriters, 890 F.2d at 1120 (“[E]very circuit which has considered the matter … has either held or indicated it would hold that the Carmack Amendment preempts state common law remedies against a carrier for negligent damage to goods shipped under a proper bill of lading”)).

³⁹Underwriters, 890 F.2d at 1121.

Aeronet Worldwide, Inc. v. AB&M Interstate Servs., Inc.

United States District Court, N.D. New York.

AERONET WORLDWIDE, INC., Plaintiff,

AB&M INTERSTATE SERVICES, INC., MOBI EXPRESS, INC., and DOES 1–10 Defendants.

6:22-cv-01081 (BKS/TWD)

Filed 10/10/2023

Attorneys and Law Firms

Appearances:

For Plaintiff: William E. Lakis, Jr., Lakis Law Offices, PC, 145 North Franklin Turnpike, Suite 122, Ramsey, NJ 07446

MEMORANDUM-DECISION AND ORDER

Brenda K. Sannes Chief U.S. District Judge

I. INTRODUCTION

*1 Plaintiff Aeronet Worldwide, Inc. brought this action against Defendants A B & M Interstate Services, Inc., AB&M Interstate Services, Inc., AB&M Logistics, LLC, Mobi Express, Inc., and Does 1 through 10, alleging violations of 49 U.S.C. § 14706, et seq. (the “Carmack Amendment” to the Interstate Commerce Act), and related state laws. (Dkt. No. 1).¹ Defendant Mobi Express has not answered the Complaint or otherwise appeared in this action. Presently before the Court is Plaintiff’s Motion for Default Judgment against Defendant Mobi Express under Rule 55(b) of the Federal Rules of Civil Procedure. (Dkt. No. 29). For the reasons that follow, Plaintiff’s Motion is denied.

II. FACTS²

Plaintiff is a Texas corporation doing business in the state of New York. (Dkt. No. 1, ¶ 2). Defendant Mobi Express is a Pennsylvania corporation also doing business in the state of New York. (Id. ¶ 6). Plaintiff alleges that Defendants, including Defendant Mobi Express, “were at all times material herein the agents, servants, employers, and/or employees of each of the other Defendants, and each of them, as such, were acting in the course and scope of their employment and/or agency at all times relevant to this action.” (Id. ¶ 9).

In 2020, “Plaintiff’s related entities” arranged for Defendants to “transport two pallets comprised of 66 boxes containing 1,320 units of automobile part assembly kits (the “Cargo”) from Auburn, New York[,] to … Laredo, Texas[,]” under “Aeronet waybill no. 111102405.” (Id. ¶¶ 10–11, 15). “The Cargo was duly tendered in its entirety to [ ] Defendants in good order and condition,” but was “never delivered and was lost.” (Id. ¶¶ 10, 16). Plaintiff alleges that “[i]n agreeing to transport the Cargo for consideration and receiving said Cargo for that purpose, [ ] Defendants were acting as motor truck carriers and were the carriers within the meaning of 29 U.S.C. § 14706, et seq.” (Id. ¶ 17).

“The commercial invoice value of the Cargo lost was [ ] $70,189.00,” (id. ¶ 10), and Plaintiff has “already suffered principal damages in excess of [ ] [$]39,492.02” addressing “[a] disputed claim” brought against Plaintiff by certain entities with an interest in the Cargo, (id. ¶ 11). Therefore, Plaintiff alleges, “[a]s a direct and proximate result of [ ] Defendants’ breach of their statutory obligations under the Carmack Amendment, Plaintiff has suffered or will suffer principal damages in the sum of not less than [ ] [$]109,681.02.” (Id. ¶¶ 11, 18).

III. DISCUSSION

A. Procedural Requirements

*2 “Rule 55 of the Federal Rules of Civil Procedure provides a two-step process for obtaining a default judgment.” Priestley v. Headminder, Inc., 647 F.3d 497, 504 (2d Cir. 2011). First, under Rule 55(a), the plaintiff must obtain a clerk’s entry of default. Fed. R. Civ. P. 55(a) (“When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.”); see also Local Rule 55.1 (requiring a party seeking a clerk’s entry of default to “submit an affidavit showing that (1) the party against whom it seeks a judgment … is not an infant, in the military, or an incompetent person (2) a party against whom it seeks a judgment for affirmative relief has failed to plead or otherwise defend the action … and (3) it has properly served the pleading to which the opposing party has not responded.”). Second, under Rule 55(b)(2), the plaintiff must “apply to the court for entry of a default judgment.” Priestley, 647 F.3d at 505; see also Local Rule 55.2(b) (“A party shall accompany a motion to the Court for the entry of a default judgment, pursuant to Fed. R. Civ. P. 55(b)(2), with a clerk’s certificate of entry of default … a proposed form of default judgment, and a copy of the pleading to which no response has been made.”).

Here, Plaintiff has complied with the procedural requirements for obtaining a default judgment against Defendant Mobi Express. On March 7, 2023, Plaintiff requested a clerk’s entry of default under Rule 55(a), and, as required by Local Rule 55.1, Plaintiff submitted an affidavit affirming that Defendant Mobi Express (1) is not an infant, in the military, or an incompetent person; (2) was properly served; and (3) has defaulted in this action. (Dkt. No. 19, at 1–2). Plaintiff properly served Defendant Mobi Express in accordance with Federal Rule of Civil Procedure 4(h)(1)(B) by serving the Complaint on an authorized agent for Defendant Mobi Express. (Dkt. No. 5). On March 7, 2023, Plaintiff received a clerk’s entry of default against Defendant Mobi Express. (Dkt. No. 20). And, on April 7, 2023, Plaintiff moved for a default judgment against Defendant Mobi Express under Federal Rule of Civil Procedure 55(b)(2) and Local Rule 55.2(b). (Dkt. No. 29). Therefore, as the procedural requirements for entry of a default judgment are met, the Court will address liability.

B. Liability

By failing to appear in this action or respond to Plaintiff’s Complaint, Defendant Mobi Express is deemed to have admitted the factual allegations in the Complaint with respect to liability (as distinct from damages). Greyhound Exhibitgroup, Inc., 973 F.2d at 158 (“[A] party’s default is deemed to constitute a concession of all well pleaded allegations of liability”). “The decision whether to enter default judgment is committed to the district court’s discretion.” Greathouse v. JHS Sec. Inc., 784 F.3d 105, 116 (2d Cir. 2015) (citation omitted). Even where a defendant has admitted all well-pleaded facts in the complaint by virtue of default, a district court “need not agree that the alleged facts constitute a valid cause of action,” and may decline to enter a default judgment on that ground. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (quoting Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)). Indeed, the Second Circuit has “suggested that, prior to entering default judgment, a district court is ‘required to determine whether the [plaintiff’s] allegations establish [the defendant’s] liability as a matter of law.’ ” Id. (citation omitted).

Here, although Plaintiff pleads claims under both the Carmack Amendment and state law, the Carmack Amendment “preempts all state law on the issue of interstate carrier liability.” Aviva Trucking Special Lines v. Ashe, 400 F. Supp. 3d 76, 79 (S.D.N.Y. 2019)). Consequently, only the Carmack Amendment claim can be maintained.

The Carmack Amendment governs the liability of common carriers for loss or damage to goods transported in interstate commerce and creates uniform national rules that preempt all state and common law claims against carriers. See Project Hope v. M/V IBN SINA, 250 F.3d 67, 73–74, n. 6 (2d Cir. 2001); 49 U.S.C. § 14706(d). It “relieve[s] cargo owners ‘of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.’ ” Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., 561 U.S. 89, 98 (quoting Reider v. Thompson, 339 U.S. 113, 119). The statute imposes broad liability on common carriers for all losses relating to goods they transport in interstate commerce. See Windows, Inc. v. Jordan Panel Sys. Corp., 177 F.3d 114, 117–18 (2d Cir. 1999); Union Pacific R.R. v. Greentree Transp. Trucking, 293 F.3d 120, 127 (3d Cir. 2002). “Indeed, Carmack effectively codified the strict liability rule that governed the liability of common carriers at common law.” Sompo Japan Mut. Auto. Ins. Co. v. Union Pac. R.R. Co., 456 F.3d 54, 59 (2d Cir. 2006), abrogated on other grounds by Kawasaki, 561 U.S. 89 (2010).

*3 Under the Carmack Amendment, a plaintiff establishes a prima facie case by showing “delivery [to the carrier] in good condition, arrival in damaged condition, and the amount of damages.” Mo. Pac. R. Co. v. Elmore & Stahl, 377 U.S. 134, 138 (1964). For example, in Federal Insurance Co. v. CLE Transportation, Inc., the plaintiff sufficiently pleaded the elements of a claim under the Carmack Amendment by alleging that a “shipment of confections, drinks, and candy [was] initially delivered to [the defendant] in ‘good order and condition[,]’ … that [the defendant] failed entirely to deliver the bequeathed bonbons to California[,] [and that] [p]ursuant to its obligations under [an] insurance contract, [the plaintiff] [had] paid at least $96,850.35 for the losses suffered.” See No. 18-cv-11119, 2020 WL 1503455, at *2, 2020 U.S. Dist. LEXIS 55422, at *5 (S.D.N.Y. Mar. 30, 2020).

Here, Plaintiff alleges that on or about October 17, 2020, “Defendants” received the Cargo, shipped under “Aeronet waybill no. 111102405,” in “good order and condition.” (Dkt. No. 1, ¶¶ 10, 16). Plaintiff further alleges that “Defendants” failed entirely to deliver the Cargo to Laredo, Texas, where it was estimated to arrive on or about October 20, 2020. (Id.). And, finally, Plaintiff alleges that “[t]he commercial invoice value of the Cargo lost was [ ] $70,189.00,” (id. ¶ 10), and that Plaintiff has “already suffered principal damages in excess of [ ] [$]39,492.02” addressing “[a] disputed claim” brought against Plaintiff by certain entities with an interest in the Cargo, (id. ¶ 11).

While these facts resemble those in Federal Insurance Co., however, they lack specificity as to the relationships between Plaintiff and each Defendant, and Defendant Mobi Express and Defendant AB&M Interstate Services, and as to each Defendant’s role in the events giving rise to this action. In Federal Insurance Co., the plaintiff insurance company alleged that the shipper entered into a contract with a particular carrier and that that carrier received the goods to be transported. See 2020 WL 1503455, at *1, 2020 U.S. Dist. LEXIS 55422, at *1. By contrast, here Plaintiff has not alleged any particularized facts regarding Defendant Mobi Express’ role in the events giving rise to this action. It is unclear whether Plaintiff entered into a contract with Defendant Mobi Express and whether Defendant Mobi Express received the Cargo from Plaintiff. Moreover, Plaintiff has failed to plausibly allege a relationship between Defendants, instead referring to “Defendants” as a group and relying on a series of conclusory allegations. (See, e.g., Dkt. No. 1, ¶ 10 (“Defendants undertook to transport [the Cargo] from Auburn, New York[,] to … Laredo, Texas”); ¶ 9 (Defendants “were at all times material herein the agents, servants, employers, and/or employees of each of the other Defendants, and each of them, as such, were acting in the course and scope of their employment and/or agency at all times relevant to this action”); ¶ 17 (“In agreeing to transport the Cargo for consideration and receiving said Cargo for that purpose, [ ] Defendants were acting as motor truck carriers and were the carriers within the meaning of 29 U.S.C. § 14706, et seq.”)).

“ ‘[N]othing in Rule 8 prohibits collectively referring to multiple defendants where the claim alerts [the] defendants that identical claims are asserted against each defendant,’ so long as the allegations ‘provide[ ] enough information to put [each defendant] on notice of its alleged role’ ” in the misconduct at issue. Hunter v. Shanghai Huangzhou Elec. Appliance Mfg. Co., 505 F. Supp. 3d 137, 150 (N.D.N.Y. 2020) (quoting Tardibuono-Quigley v. HSBC Mortg. Corp. (USA), No. 15-cv-6940, 2017 WL 1216925, at *8, 2017 U.S. Dist. LEXIS 47982, at *22–23 (S.D.N.Y. March 30, 2017) (citations omitted)). As this Court has observed, the question is whether the allegations, even if they “refer to ‘Defendants’ collectively without distinguishing each Defendant’s particular role,” “simply ‘give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests,’ ” with “fair notice” defined as “that which will enable the adverse party to answer and prepare for trial, allow the application of res judicata, and identify the nature of the case so that it may be assigned the proper form of trial.” Id. (quoting Richards v. Johnson & Johnson, Inc., No. 17-cv-00178, 2018 WL 2976002, at *2, 2018 U.S. Dist. LEXIS 97899, at *4–5 (N.D.N.Y. June 12, 2018) (citations omitted)).

*4 Nevertheless, as discussed above, Plaintiff has not alleged any particularized facts regarding Defendant Mobi Express’ role in the events giving rise to this action. Nor has Plaintiff supplied documentary evidence in support of the same.³ Therefore, it is not clear, based on the Complaint, that Plaintiff has stated a claim against Defendant Mobi Express under the Carmack Amendment.

In any event, the Court declines to enter a default judgment against Defendant Mobi Express because Defendant AB&M Interstate Services’ continued participation in this litigation precludes Plaintiff’s request for a default judgment as to Defendant Mobi Express. See Grazette v. Rockefeller, No. 20-cv-965, 2022 WL 252631, at *2, 2022 U.S. Dist. LEXIS 16077, at *5 (S.D.N.Y. Jan. 26, 2022).

“[D]efault judgment cannot be issued where the relief requested would prejudice actively litigating defendants.” Knowles-Carter v. Feyonce, Inc., No. 16-cv-2532, 2017 WL 11567528, at *5, 2017 U.S. Dist. LEXIS 233031, at *15 (S.D.N.Y. Sept. 23, 2017) (collecting cases). “The key inquiry is whether the default judgment could result in inconsistent outcomes for similarly situated defendants.” El Omari v. Buchanan, No. 20-cv-2601, 2021 WL 465431, at *3, 2021 U.S. Dist. LEXIS 24776, at *6-7 (S.D.N.Y. Feb. 9, 2021). In some cases where non-defaulting and defaulting defendants “share a ‘closely related,’ if not identical, defense,” for instance, courts have denied a default judgment motion on the grounds that granting a default judgment against the non-defaulting defendant “would, in effect, decide the case before … the non-defaulting … Defendant had an opportunity to be heard.’ ” Known Litig. Holdings, LLC v. Navigators Ins. Co., No. 12-cv-269, 2015 WL 13636078, at *2-3, 2015 U.S. Dist. LEXIS 193205, at *7-8 (D. Conn. Feb. 11, 2015) (discussing case law).

*5 Here, Defendant AB&M Interstate Services is a named Defendant and continues to actively deny its liability, including in its Answer to the Complaint and Crossclaim against Defendant Mobi Express. (Dkt. No. 18). Moreover, both Defendants share certain common, virtually identical defenses, including that Plaintiff never delivered the Cargo to Defendants and that the Cargo did arrive in Laredo, Texas, in good order and condition. Of course, granting a default judgment as to liability against Defendant Mobi Express now would not prejudice Defendant AB&M Interstate Services’ ability to raise these defenses in its litigation with Plaintiff, since default judgments have no collateral estoppel effect against non-defaulting defendants in the same litigation. See Rivera v. Limassol Grocery, Corp., No. 16-cv-6301, 2019 WL 1320339, at *6, 2019 U.S. Dist. LEXIS 2821, at *19-21 (E.D.N.Y. Jan. 4, 2019) (discussing this principle and citing case law); Lemache v. Tunnel Taxi Mgmt., LLC, 354 F. Supp. 3d 149, 155-56 (E.D.N.Y. 2018) (same), report & recommendation adopted, 354 F.Supp.3d 149 (E.D.N.Y. 2019) (same). However, doing so would raise the prospect of inconsistent outcomes, since it is possible that, after granting a default judgment against Defendant Mobi Express based in part on its admission (through its default) that Plaintiff did deliver the Cargo to Defendants and that the Cargo did not arrive in Laredo, Texas, Defendant AB&M Interstate Services could later escape liability by proving that Plaintiff did not deliver the Cargo to Defendants, or that the Cargo did arrive in Laredo, Texas.

Furthermore, the Court perceives no meaningful prejudice to Plaintiff by reserving a formal judgment as to Defendant Mobi Express’ liability for a later stage of the case. Even if the Court were to grant Plaintiff’s request for a default judgment as to liability now, it would reserve a decision on damages for a later stage of the case, when a liability determination has been made as to the non-defaulting Defendant and a total damages award may be assessed against all Defendants together. Hunter, 505 F. Supp. 3d at 161. “Without a damages calculation to accompany the liability determination, no final judgment could be entered in [Plaintiff’s] favor, and there could be no enforceable judgment that [they] could attempt to collect.” Lemache, 354 F. Supp. 3d at 155. Moreover, because a default judgment against Defendant Mobi Express would have no collateral estoppel effect against the non-defaulting Defendant, granting such a default judgment now “does not assist [Plaintiff] in litigating the case against” Defendant AB&M Interstate Services. Id. For the foregoing reasons, the Court declines to enter a default judgment against Defendant Mobi Express at this time.

IV. CONCLUSION

For these reasons, it is hereby

ORDERED that Plaintiff’s Motion for Default Judgment (Dkt. No. 29) is DENIED without prejudice, with leave to refile after resolution of the claims against the actively litigating Defendant.

IT IS SO ORDERED.

All Citations

Slip Copy, 2023 WL 6599077

Footnotes

The claims against A B & M Interstate Services, Inc. and AB&M Logistics, LLC were dismissed by stipulation of the parties on March 9, 2023. (Dkt. No. 24).
The facts are taken from the Complaint. (Dkt. No. 1). Because Defendant Mobi Express has failed to respond to the Complaint, the well-pleaded allegations therein are deemed admitted and assumed to be true for purposes of this Motion. See Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992).
The Second Circuit has observed that a motion for default judgment may be granted based on “the factual allegations in the complaint, combined with uncontroverted documentary evidence submitted by plaintiffs” with their motion. Bricklayers & Allied Craftworkers Local 2 v. Moulton Masonry & Contr., LLC, 779 F.3d 182, 189 (2d Cir. 2015); see also, e.g., Cabrera v. 1560 Chirp Corp., No. 15-cv-8194, 2017 WL 1289349, at *11, 2017 U.S. Dist. LEXIS 33380, at *28–29 (S.D.N.Y. March 6, 2017) (applying Bricklayers and its progeny and relying on affidavit outside the complaint to find that Plaintiff met elements of a FLSA claim on a motion for default judgment), report & recommendation adopted, 2017 WL 1314123, 2017 U.S. Dist. LEXIS 53368 (S.D.N.Y. Apr. 6, 2017); Zurita v. Bergen Pizza Inc., No. 12-cv-3874, 2016 U.S. Dist. LEXIS 28170, at *8–10 (March 1, 2016) (same), report & recommendation adopted, 2016 WL 1089262, 2016 U.S. Dist. LEXIS 35938 (E.D.N.Y. March 21, 2016). This approach is also consistent with Federal Rule of Civil Procedure 55(b)(2), which establishes that “[t]o the extent that the plaintiff’s allegations are inadequate, ‘a district court has discretion … to require proof of necessary facts’ to satisfy itself that there is ‘a valid cause of action.’ ” Cent. Produce Corp. v. 32-18 M&M Corp., No. 17-cv-3841, 2018 WL 4327923, at *2, 2018 U.S. Dist. LEXIS 114731, at *5 (E.D.N.Y. July 9, 2018) (quoting Au Bon Pain, 653 F.2d at 65), report & recommendation adopted, 2018 WL 4326925, 2018 U.S. Dist. LEXIS 154092 (E.D.N.Y. Sept. 10, 2018); see also Fed. R. Civ. P. 55(b)(2) (providing that “[t]he court may conduct hearings … when, to enter or effectuate judgment, it needs to … establish the truth of any allegation by evidence”).

End of Document