Yonak v. United Van Lines, LLC

United States District Court for the Northern District of Ohio, Eastern Division

June 8, 2023, Filed

CASE NO. 1:23CV0092

Reporter

2023 U.S. Dist. LEXIS 100257 *; 2023 WL 3900503

UNSAL YONAK ET AL., Plaintiffs, vs. UNITED VAN LINES, LLC., ET AL., Defendants.

Core Terms

carrier, transportation, household goods, preempted, state law claim, bill of lading, broker, allegations, motion to dismiss, interstate, shipping, shipper, original complaint, damages, denies, interstate transit, motor carrier, shipment, Storage, reasons, trucks

Counsel:  [*1] For Unsal Yonak, Tulin Yonak, Arzu Yonak, Marc Claus, Plaintiffs: Brian A. Brown, Kohl & Cook – Columbus, Columbus, OH; Sean M. Kohl, Kohl & Cook Law Firm, Columbus, OH; Timothy J. Cook, Kohl & Cook Law, Columbus, OH.

For J-Trac, Inc., doing business as Dearman Moving & Storage, United Van Lines, LLC, Defendants: Joseph M. Fiorello, Lewis Brisbois Bisgaard & Smith – Cleveland, Cleveland, OH.

Judges: CHRISTOPHER A. BOYKO, United States District Judge.

Opinion by: CHRISTOPHER A. BOYKO

Opinion

OPINION AND ORDER

CHRISTOPHER A. BOYKO, J:

This matter is before the Court on Defendants’ United Van Lines, LLC (“United”) and J-Trac, Inc. d/b/a Dearman Moving & Storage (“Dearman”) Amended Motion to Dismiss. (ECF # 11). For the following reasons, the Court grants, in part, and denies, in part, Defendants’ Motion.

On December 5, 2022, Plaintiffs Unsal Yonak, Tulin Yonak, Arzu Yonak and Marc Claus filed their Complaint with the Richland County Court of Common Pleas against Defendants J-Trac, Inc. d/b/a Dearman Moving & Storage (“Dearman”) and United Van Lines, LLC (“United”). Plaintiffs allege they hired Defendants to move their household goods from Ohio to Florida but the Defendants failed to deliver the goods per the parties’ written [*2]  agreement and damaged some of Plaintiffs’ property in the course of transporting Plaintiffs’ goods.

On January 17, 2023, Defendants removed the case to federal court, alleging that all Plaintiffs’ state law claims were preempted by the Carmack Amendment, a federal statute providing the exclusive remedy, with limited exceptions, for claims arising from the interstate transportation of household goods.

On January 24, 2023, Defendants filed a Motion to Dismiss and on February 14, 2023, Plaintiffs filed their First Amended Complaint, alleging a federal claim for violation of the Carmack Amendment against Defendant Dearman as well as Ohio state law claims for violation of Ohio Consumer Sales Practices Act against Dearman and United, Breach of Contract against United, Fraud against all Defendants and Unjust Enrichment against United.

Factual Allegations

According to the First Amended Complaint, Plaintiffs contracted with Defendants to move their household goods from Ohio to Boca Raton, Florida in June of 2022. Plaintiffs contacted United to perform the move. United misled Plaintiffs into believing United employees would perform the move. United informed Plaintiffs that United’s local carrier, Dearman, would move Plaintiffs’ [*3]  household goods. Unbeknownst to Plaintiffs, Dearman was neither a subsidiary of, nor owned or controlled by United. Dearman performed the move, thus, United acted solely as a broker in obtaining Dearman’s services for Plaintiffs.

Plaintiffs received an estimate from Dearman for the move that included: an inventory of the goods, packing and unpacking, specially wrapping of goods designated “fragile,” transportation and making three stops in Florida to unload household goods at the Yonaks, Marc Clauses and a storage facility. In addition, Dearman ensured Plaintiffs they would provide a truck suitable to transport all Plaintiffs’ goods, have sufficient movers to unload the household goods in Florida and that the move would be completed in Florida by 5:00 p.m. as the Yonaks’ condo association prohibited moving in after that time. Defendants provided an estimate of $14,936.89 for the move.

Problems began immediately upon the arrival of Dearman at the Yonaks’ Ohio home to move Plaintiffs’ goods on June 13, 2023. According to Plaintiffs, the truck Defendants provided was too small to transport all of Plaintiffs’ household goods, despite the parties having prepared before the move an inventory [*4]  sheet with an estimated cubic footage of the goods to be transported. As a result, Plaintiffs were forced to leave goods behind or transport the excess themselves. Next, Dearman failed to properly wrap a number of the goods, resulting in damage to the improperly wrapped goods. Upon arrival in Florida on June 17, 2022, Dearman only provided the driver and did not have any additional personnel to unload the goods until after 4:00 p.m., resulting in Dearman’s failure to have the goods unloaded before the condo-imposed 5:00 p.m. deadline. Defendants failed to assemble products at the destination that they were contractually obligated to reassemble. Plaintiffs were further forced to pay for additional movers when Dearman movers refused to deliver household goods to Claus’ condo despite it being contractually bargained-for. Plaintiffs were also compelled to move the remaining items to the storage facility as Dearman failed to do so. Defendants failed to respond to numerous attempts by Plaintiffs to resolve the disputed issues after the move and Defendants failed to inform Plaintiffs of an arbitration procedure for settling disputes. Defendants also failed to provide Plaintiffs with an itemized [*5]  inventory list that was required before a claim could be filed. Finally, Defendants charged more tariffs than were bargained for in the contract.

Defendants’ Motion to Dismiss

Defendants move to dismiss all Plaintiffs’ state law claims and claims against Defendant Dearman as they are purportedly preempted by the Carmack Amendment. According to Defendants, Dearman is not a proper Defendant as they acted merely as an agent of United. Under the Carmack Amendment at 49 U.S.C. § 13907, Dearman, as agent of United, has no separate liability. The Bill of Lading between Plaintiffs and United expressly designates Dearman as agent of United. Moreover, United is a federally registered motor carrier, not a broker as Plaintiffs allege. Thus, under applicable federal law any claims arising out of the interstate transportation of household goods are actionable solely against the carrier, which in this case is United. In addition, because the Carmack Amendment at 49 U.S.C. § 14501 completely preempts any state law claims arising from the interstate transportation of household goods, all Plaintiffs’ state law claims must be dismissed as a matter of law.

Defendants also argue that Plaintiffs’ allegations in their First Amended Complaint directly contradict the allegations made in their [*6]  original Complaint and as a result, the Court need not construe those allegations as true. In their original Complaint, Plaintiffs alleged Dearman was acting as United’s agent for the move. However, they removed this allegation in their First Amended Complaint in order to avoid Carmack Amendment preemption. Moreover, in their original Complaint, Plaintiffs directed no claims against Dearman but instead alleged their claims against Defendants in general.

The Bill of Lading identifies United as the carrier for Plaintiffs’ goods with Dearman acting as agent. However, in response to Defendants’ original Motion to Dismiss, Plaintiffs’ First Amended Complaint identified United as broker, directly contradicting their allegations in the original Complaint. Under the Carmack Amendment only United would be liable for damages Plaintiffs suffered arising from the interstate shipment of their household goods by Dearman because United, not Dearman, was the designated carrier and Dearman acted solely as an agent of United.

Because federal law provides the exclusive remedy for damages that arise out of the interstate transportation of goods, Defendants contend it preempts all Plaintiffs state law claims including its  [*7] Ohio Consumer Sales Practices Act (“OSCPA”) claims, their Breach of Contract claim and claims for Fraud and Unjust Enrichment.

Lastly, Defendants contend that the Federal Aviation Administration Authorization Act preempts Plaintiffs’ state law claims as it preempts all state law claims against carriers for the transportation of property.

Plaintiffs’ Opposition

Plaintiffs contend the new allegations in their First Amended Complaint are not the result of any intent to deceive the Court, but rather were due to meet the pleading standard of the Federal Rules of Civil Procedure. Also, the amendments were due largely to Defendants’ failure to provide Plaintiffs the full contract between the parties. Defendants falsely represented it was United that would be performing the move when, in fact, it was Dearman. This information was only discovered when Defendants attached the Bill of Lading to the Notice of Removal. Upon discovery of this information, Plaintiffs filed their First Amended Complaint to reflect the newly discovered facts.

Plaintiffs contend it was Dearman and not United that provided the moving services. United acted merely as a broker. It was Dearman, not United that provided the estimate of the moving [*8]  costs which Plaintiffs paid. It was Dearman that damaged Plaintiffs’ goods and breached the contract with Plaintiffs.

The Carmack Amendment does not preempt claims against an interstate shipping broker like United. Plaintiffs acknowledge that the Carmack Amendment preempts most state law claims against carriers. It does not matter what United held itself out as, but rather what it actually did in connection with the move. United did not do inventory, did not pack or unpack the trucks. The trucks used were not United trucks, instead, all United did was arrange for Dearman to perform the move. Thus, under the relevant definitions, United was a broker.

Plaintiffs further contend that the Carmack Amendment does not bar Plaintiffs’ state law claims against Dearman for Fraud and violations of the OSCPA because these claims concern Dearman’s deceptive advertisements, deceptive trade practices and infliction of emotional distress and are therefore, unrelated to the actual transportation of goods.

Finally, for these same reasons, Plaintiffs contend that the Federal Aviation Administration Authorization Act also does not preempt their state law claims.

STANDARD OF REVIEW

Motion to Dismiss

Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a complaint for “failure to state [*9]  a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “Under Rule 12(b)(6), a complaint may be dismissed ‘only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.'” Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S. Ct. 2229, 81 L. Ed. 2d 59 (1984)).

A claim must, “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009). Further, “the plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft, 556 U.S. 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 127 S. Ct. 1955, 167 L. Ed. 2d 929) (2017)). “To survive a motion to dismiss, [plaintiff] must allege ‘enough facts to state a claim to relief that is plausible on its face.'” Traverse Bay Area Intermediate Sch. Dist. v. Michigan Dep’t of Educ., 615 F.3d 622, 627 (6th Cir. 2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2017)).

In deciding a motion to dismiss under 12(b)(6), a court must accept as true all the factual allegations contained in the complaint. Erickson v. Pardus, 551 U.S. 89, 94, 127 S. Ct. 2197, 167 L. Ed. 2d 1081 (2007). Thus, courts must “construe the complaint in the light most favorable to the plaintiff.” Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002). However, plaintiff must provide “more than labels and conclusions . . . a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.'” Id. at 557.

When a court is presented with a Rule 12(b)(6) motion, it may [*10]  consider the complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant’s motion to dismiss so long as they are referred to in the complaint and are central to the claims contained therein. See Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001).

Carmack Amendment

The Carmack Amendment of 1906 is an amendment to the Interstate Commerce Act, which established nationally the imposition of carrier liability for loss or damages to goods transported in interstate commerce. See Adams Express Co. v. Croninger, 226 U.S. 491, 503-06, 33 S.Ct. 148, 57 L.Ed. 314 (1913). “The Amendment restricts carriers’ ability to limit their liability for cargo damage. It makes a motor carrier fully liable for damage to its cargo unless the shipper has agreed to some limitation in writing.” Exel, Inc. v. S. Refrigerated Transp., Inc., 807 F.3d 140, 148 (6th Cir. 2015) citing 49 U.S.C. § 11706(a), (c), § 14101(b). “Making carriers strictly liable relieves shippers of the burden of determining which carrier caused the loss as well as the burden of proving negligence.” Exel, 807 F.3d at 148 citing Certain Underwriters at Interest at Lloyds of London v. UPS, 762 F.3d 332, 335 (3d Cir.2014). “Carriers in turn acquire reasonable certainty in predicting potential liability because shippers’ state and common law claims against a carrier for loss to or damage were preempted. (Internal citation omitted). Section 14706(a)(1) makes the carrier liable to the person entitled to recover under the receipt or bill of lading. 49 U.S.C. § 14706(a)(1).” Exel, 807 F.3d 148.

“To set forth a prima facie case under the Carmack Amendment, a shipper must [*11]  establish the following: (1) the delivery of goods to the carrier in good condition, (2) the arrival of goods in damaged condition, and (3) the amount of damages measured by actual loss.” Renouf v. Aegis Relocation Co. Corp., No. 5:22-CV-497, 2022 U.S. Dist. LEXIS 207416, 2022 WL 16963838, at *3 (N.D. Ohio Nov. 15, 2022) (citing Mo. Pac. R.R. v. Elmore & Stahl, 377 U.S. 134, 138, 84 S. Ct. 1142, 12 L. Ed. 2d 194 (1964)).

The parties dispute which Defendants are subject to the Carmack Amendment. According to Plaintiffs’ First Amended Complaint, only Dearman is subject to the Carmack Amendment as it was at all times the carrier of Plaintiffs’ household goods. Plaintiffs’ First Amended Complaint further alleges that United is not subject to the Carmack Amendment because at all times in the transaction and transportation it merely acted as a broker. Because the Carmack Amendment does not govern the actions of brokers in interstate shipping, Plaintiffs have not asserted, nor have they provided facts that plausibly allege a Carmack Amendment claim against United.

Defendants argue that the Bill of Lading demonstrates that it was United who was the carrier and is subject to the Carmack Amendment while Dearman was United’s disclosed agent and is therefore exempt from liability under the same. The Bill of Lading, which Defendants attached to their Notice of Removal, shows that it was provided on United letterhead and identifies Dearman Moving & Storage as Agent of United.

Defendants assert that Dearman [*12]  at all times was acting as agent of United and this fact was expressly asserted by Plaintiffs in their original Complaint. It was only after Defendants moved to dismiss the original Complaint that Plaintiffs amended to expressly identify Dearman as carrier in order to circumvent their failure to assert a Carmack Amendment claim.

Plaintiffs respond that the Bill of Lading was in Defendants’ sole possession and further contend that the Bill of Lading attached to the Notice of Removal is not the entire, final agreement.

The Carmack Amendment, at 49 U.S.C.A. § 14706, reads in pertinent part: (a) General liability.–

(1) Motor carriers and freight forwarders.–A carrier providing transportation or service subject to jurisdiction under subchapter I or III of chapter 135 shall issue a receipt or bill of lading for property it receives for transportation under this part. That carrier and any other carrier that delivers the property and is providing transportation or service subject to jurisdiction under subchapter I or III of chapter 135 or chapter 105 are liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by (A) the receiving [*13]  carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States or from a place in the United States to a place in an adjacent foreign country when transported under a through bill of lading and, except in the case of a freight forwarder, applies to property reconsigned or diverted under a tariff under section 13702.

49 U.S.C. § 13907 concerning agents of carriers reads:

(a) Carriers responsible for agents.–Each motor carrier providing transportation of household goods shall be responsible for all acts or omissions of any of its agents which relate to the performance of household goods transportation services (including accessorial or terminal services) and which are within the actual or apparent authority of the agent from the carrier or which are ratified by the carrier.

There is no question that the Carmack Amendment precludes liability for agents of carriers for damage to shipped goods. However, the First Amended Complaint alleges that United was merely the broker in the action and that Dearman was the carrier. It is these relationship issues that the parties dispute and will require factual findings before the Court may decide the issue. “The Carmack Amendment precludes liability [*14]  of an agent of a motor carrier by extending the principles of agency law.” Post v. Atlas Van Lines, Inc., No. 2:06-CV-00854, 2007 U.S. Dist. LEXIS 119312, 2007 WL 9734748, at *4 (S.D. Ohio Sept. 20, 2007) citing O’Donnell v. Earle W. Noyes & Sons, 98 F.Supp.2d 60, 63 (D. Me. 2000) (“It is not the statutory language itself that shields … from liability under § 14706 … it is Noye’s status as a disclosed agent that is determinative.”).

Moreover, Plaintiff’s First Amended Complaint alleges that the Bill of Lading attached to the Notice of Removal is not the complete contract and that the actual contract governing the parties’ agreement is not before the Court. Because the Court must construe this allegation as true on a Rule 12(b)(6) Motion, the Court cannot determine the roles each party played regarding the move. Thus, the Court denies Defendants’ Motion to Dismiss Count One of Plaintiffs’ First Amended Complaint.

However, because Plaintiffs’ First Amended Complaint alleges Dearman was the carrier in regards to the transportation of Plaintiffs’ household goods, construing that allegation as true at this stage of the proceedings requires the Court to examine Plaintiffs’ state law claims for violations of the OCSPA, (Count Two) and Count Five (Fraud) against Dearman to determine if they are preempted by the Carmack Amendment.

“It is well settled that the Carmack Amendment completely preempts a shipper’s state common law and statutory [*15]  causes of action.” Renouf v. Aegis Relocation Co. Corp., No. 5:22-CV-497, 2022 U.S. Dist. LEXIS 207416, 2022 WL 16963838, at *3-4 (N.D. Ohio Nov. 15, 2022) citing Adams Express Co. v. Croninger, 226 U.S. 491, 505-06, 33 S. Ct. 148, 57 L. Ed. 314 (1913); see also Automated Window Mach., Inc. v. McKay Ins. Agency, Inc., 320 F. Supp. 2d 619, 620 (N.D. Ohio 2004). In Adams Express, the Supreme Court stated, “[a]lmost every detail of the [shipper-interstate carrier relationship] is covered so completely that there can be no rational doubt but that Congress intended to take possession of the subject, and superseded all state regulation with reference to it.” Adams Express, 226 U.S. at 505-06. Thus, the Supreme Court has expressly determined that all state law claims for loss or damage to property arising out of the interstate transportation of household goods are preempted by the Carmack Amendment. See also Moffit v. Bekins Van Lines Co., 6 F.3d 305, 306-07 (5th Cir. 1993) (State law claims preempted by the Carmack Amendment include intentional and negligent infliction of emotional distress, breach of contract, misrepresentation, fraud, negligence, and gross negligence).

Although the Carmack Amendment includes an exception for state law claims that are unrelated to loss or damage to goods from interstate transport, it is a very limited exception. “The exception is quite narrow, however, as the preemption embraces all loses resulting from any failure to discharge a carrier’s duty as to any party of the agreed transportation.” Next F/X, Inc. v. DHL Aviation Ams., Inc., 429 F. Supp. 3d 350, 361 (E.D. Ky. 2019); see also York v. Day Transfer Co., 525 F. Supp. 2d 289, 299 (D.R.I. 2007). (“Thus, to avoid [Carmack] preemption a party must allege conduct on the part of the carrier that is [*16]  independent from the shipping and transportation [and delivery] of goods at issue, and even from the claims process that may follow—something akin to an allegation of assault and injury inflicted by the carrier upon the shipper.” (citations omitted)).

Here, Plaintiffs’ state law claims against Dearman are preempted by the Carmack Amendment as both arise from loss or damage to goods shipped interstate. In their Ohio Consumer Sales Practices Act claim Plaintiffs allege that Dearman misrepresented the quality and condition of the work it would perform in the interstate shipping of Plaintiffs’ household goods and in the contract to ship the goods; failed to perform the move in a workmanlike manner and failed to deliver under the contract for interstate shipment. In short, all Plaintiffs’ claims against Dearman for violation of the OCSPA arise out of the shipment of interstate household goods and are therefore, preempted.

In addition, Plaintiffs’ Fraud claim against Dearman is also preempted as it also concerns the alleged misrepresentations arising from the shipment of interstate household goods.

Therefore, for the foregoing reasons, the Court grants in part and denies in part, Defendants’ Motion to Dismiss [*17]  claims against Dearman.

United

With regards to Plaintiffs’ claims against United, at issue is United’s role in the transaction. Plaintiffs’ First Amended Complaint alleges United acted as a broker and not as a carrier. Defendants contend that the Bill of Lading clearly describes United as the carrier. Under the Carmack Amendment, this distinction is important because the Carmack Amendment does not apply to brokers. See Exel, Inc. v. S. Refrigerated Transp., Inc., 807 F.3d 140, 149 (6th Cir. 2015) quoting Edwards Bros., Inc. v. Overdrive Logistics, Inc., 260 Ga.App. 222, 581 S.E.2d 570, 572 (2003) ( “the Carmack Amendment was enacted to protect the rights of shippers suing under a receipt or bill of lading, not brokers”). See also Total Quality Logistics, LLC v. O’Malley, No. 1:16-CV-636, 2016 U.S. Dist. LEXIS 99067, 2016 WL 4051880, at *2 (S.D. Ohio July 28, 2016). “The liability provisions within the Carmack Amendment do not apply to brokers and therefore, a broker is not a proper party in a Carmack Amendment cause of action.”

Because Plaintiffs allege that the contract provided by Defendants in the Notice of Removal is not the full agreement and that there exists in Defendants’ possession a complete contract esigned by Plaintiffs, the Court denies Defendants’ Motion with regard to Plaintiffs’ claims against United. The Court cannot make the determination until the complete contract is provided or evidence demonstrates the contract provided is the full operative agreement governing the move. In the absence of the operative agreement, the Court is unable to establish as [*18]  a matter of law, United’s role in the interstate transport of Plaintiffs’ household goods and thus, whether the Carmack Amendment applies to Plaintiffs’ claims against United.

Defendants also contend Plaintiffs’ state law claims are preempted by the Federal Aviation Administration Authorization Act but this legislation also applies solely to carriers and for the same reasons as those applying to the Carmack Amendment, the Court must resolve United’s status under the operative contract before it can determine whether Plaintiffs’ state law claims are preempted.

Therefore, for the foregoing reasons, the Court denies Defendants’ Motion to Dismiss Plaintiffs’ claims against United. Defendants may reassert their arguments at a later date upon the production of or establishment of the operative contract governing the parties’ interstate shipment of Plaintiffs’ household goods.

The Court grants Defendants’ Motion to Dismiss Plaintiffs’ state law claims at Count Two and Count Five of their First Amended Complaint directed at Dearman as these claims are preempted by the Carmack Amendment. The Court denies at this time, subject to refiling, Defendants’ Motion to Dismiss Plaintiffs’ Carmack Amendment claim against Dearman and all claims against United [*19]  as these claims are dependent on the establishment of the operative contract.

IT IS SO ORDERED.

/s/ Christopher A. Boyko

CHRISTOPHER A. BOYKO

United States District Judge

End of Document

United States District Court for the Southern District of Texas, Houston Division

June 20, 2023, Decided; June 20, 2023, Filed, Entered

CIVIL CASE NO. H-22-4282

AMRO FABRICATING CORPORATION, Plaintiff, v. ASLAN EXPRESS, LLC, and SMOKEY POINT DISTRIBUTING, LLC, Defendants.SMOKEY POINT DISTRIBUTING, LLC, Third-Party Plaintiff, v. BRUZZONE SHIPPING, INC., CORREA USA, INC., KOCH LOGISTICS, LLC, and MORRIS EXPORT aaSERVICES, Third-Party Defendants.

Core Terms

carrier, third-party, transportation, preempted, shipper, cargo, motor carrier, broker, state-law, maritime, cause of action, argues, route

Counsel:  [*1] For Amro Fabricating Corporation, Plaintiff: Charles Bryan Beverly, LEAD ATTORNEY, The Voss Law Firm, The Woodlands, TX.

For Smokey Point Distributing, LLC, Defendant, Cross Defendant: Alejandro Mendez-Roman, Thomas R Nork, Holman Fenwick Willan USA LLP, Houston, TX.

For Bruzzone Shipping, Inc., Third Party Defendant: Matthew Carl Koch, LEAD ATTORNEY, Kyle Matthew Brennan, Marwedel, Minichello & Reeb, P.C., Chicago, IL.

For Morris Export Services, Third Party Defendant: Bruce Clifford Gaible, LEAD ATTORNEY, Mehaffy Weber, Houston, TX.

For Correa USA, Inc, Third Party Defendant, Cross Claimant: Troy A Williams, Germer PLLC, Houston, TX.

Judges: Lee H. Rosenthal, United States District Judge.

Opinion by: Lee H. Rosenthala

Opinion

MEMORANDUM AND OPINION

AMRO Fabricating needed heavy equipment shipped from the Port of Houston to California. AMRO hired Smokey Point Distributing, which AMRO alleges is a motor carrier,¹ (Docket Entry No. 31 ¶ 22), to transport this equipment. (Id. ¶ 23). AMRO assumed that Smokey Point would haul the load itself, but it did not. (Id. ¶ 25). AMRO engaged Morris Export Services, which picked up the equipment from the Port, brought it to a Houston warehouse, measured it, and provided those measurements [*2]  to, among others, Smokey Point. The measurements, according to Smokey Point, were wrong. Aslan Express retrieved the equipment from Morris Export and “proceeded to drive the Equipment into a bridge located in Houston, Texas.” (Id. ¶ 31). AMRO has sued Smokey Point and Aslan—the original carrier and the carrier that ultimately transported the equipment—under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706.

After AMRO filed its original complaint, Smokey Point filed a third-party complaint against Bruzzone Shipping, Inc., Morris Export, and two other companies. Because this is a motion to dismiss, the well pleaded facts alleged in the complaint are taken as true. In Smokey Point’s version of events, the cargo collided with the bridge because AMRO, Bruzzone, Morris, and Correa USA provided Smokey Point incorrect measurements of the height of the cargo. The cargo should have been, but was not, categorized as a “high load” and subjected to additional logistical considerations, including determining whether the load was too high to travel under certain bridges on the planned route. In the third-party complaint against Bruzzone, Smokey Point seeks contribution from Bruzzone for Smokey Point’s potential liability to AMRO and asserts [*3]  claims for negligence, violations of the Texas Deceptive Trade Practices Act, and liability under the Carmack Amendment. (Docket Entry No. 8). Bruzzone has moved to dismiss. (Docket Entry No. 21). The court grants Bruzzone’s motion, for the reasons set out below.

I. The Legal Standard

Rule 12(b)(6) allows dismissal if a plaintiff fails “to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Rule 12(b)(6) must be read in conjunction with Rule 8(a), which requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). Rule 8 “does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Twombly, 550 U.S. at 555). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted lawfully.” Id. (quoting Twombly, 550 U.S. at 556).

To withstand a Rule 12(b)(6) motion, a complaint must include “more than labels and [*4]  conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Lincoln v. Turner, 874 F.3d 833, 839 (5th Cir. 2017) (quoting Twombly, 550 U.S. at 555). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.'” Iqbal, 556 U.S. at 678 (alteration in original) (quoting Twombly, 550 U.S. at 557). “A complaint ‘does not need detailed factual allegations,’ but the facts alleged ‘must be enough to raise a right to relief above the speculative level.'” Cicalese v. Univ. of Tex. Med. Branch, 924 F.3d 762, 765 (5th Cir. 2019) (quoting Twombly, 550 U.S. at 555). A court reviewing a motion to dismiss under Rule 12(b)(6) may consider “(1) the facts set forth in the complaint, (2) documents attached to the complaint, and (3) matters of which judicial notice may be taken under Federal Rule of Evidence 201.” Inclusive Cmtys Proj., Inc. v. Lincoln Prop. Co., 920 F.3d 890, 900 (5th Cir. 2019).

II. Analysis

Smokey Point’s third-party complaint is procedurally unusual because it seeks to “implead[] and tender[] Third Party Defendants Bruzzone, Koch, Morris, and Correa directly liable to [AMRO] for all such claims asserted by [AMRO] against [Smokey Point] in this civil action pursuant to Federal Rule of Civil Procedure 14(c).” (Docket Entry No. 8 ¶ 33; see also Docket Entry No. 36 at 4 (Smokey Point “is seeking that Bruzzone be held directly liable to AMRO or that AMRO be foreclosed from seeking the proportionate fault of Bruzzone/AMRO from [Smokey Point].”)). The third-party complaint also suggests [*5]  that Smokey Point seeks contribution from Bruzzone. (Id. ¶ 44). Smokey Point invokes Federal Rules of Civil Procedure 14(a)² and 14(c).

Smokey Point wants Bruzzone held directly liable to AMRO, and Rule 14(c) permits this kind of impleading. But Rule 14(c) applies only to admiralty or maritime claims, stating as follows:

(1) If a plaintiff asserts an admiralty or maritime claim under Rule 9(h), the defendant or a person who asserts a right under Supplemental Rule C(6)(a)(i) may, as a third-party plaintiff, bring in a third-party defendant who may be wholly or partly liable—either to the plaintiff or to the third-party plaintiff—for remedy over, contribution, or otherwise on account of the same transaction, occurrence, or series of transactions or occurrences.

(2) The third-party plaintiff may demand judgment in the plaintiff’s favor against the third-party defendant. In that event, the third-party defendant must defend under Rule 12 against the plaintiff’s claim as well as the third-party plaintiff’s claim; and the action proceeds as if the plaintiff had sued both the third-party defendant and the third-party plaintiff.

Id. 14(c). Although the subject matter of this dispute involves goods that were first transported by ship from Spain to Houston, neither AMRO nor Smokey Point has invoked [*6]  the court’s maritime jurisdiction. The allegations of the complaint and third-party complaint address only the overland journey of the goods within the United States. Rule 14(c) “requires the third-party plaintiff . . . to assert an action sounding [in] admiralty or maritime.” Ambraco, Inc. v. Bossclip B.V., 570 F.3d 233, 243 (5th Cir. 2009). While the court’s admiralty jurisdiction “embraces all maritime contracts,” The Eclipse, 135 U.S. 599, 608, 10 S. Ct. 873, 34 L. Ed. 269 (1890), there is no indication that this dispute involves a maritime contract. Rule 14(c) does not apply, meaning that Smokey Point cannot demand judgment for AMRO—rather than itself—against Bruzzone.

With respect to Smokey Point’s own potential claims against Bruzzone, Bruzzone argues that they must be dismissed because (1) Bruzzone is not a “motor carrier” and did not issue a bill of lading to AMRO or Smokey Point, thereby precluding Carmack Amendment liability, and (2) contribution is unavailable under the Carmack Amendment, the only potential source of Smokey Point’s liability.

In Hoskins v. Bekins Van Lines, 343 F.3d 769 (5th Cir. 2003), the Fifth Circuit held that the Carmack Amendment completely preempts state-law causes of action “for loss or damages to goods arising from the interstate transportation of those goods by a common carrier.” Id. at 778 (emphasis omitted). The Carmack Amendment provides only for carrier liability and does not impose liability on brokers. See generally 49 U.S.C. § 14706; id. [*7]  § 13102(2) (defining a “broker” as “a person, other than a motor carrier.”); Enbridge Energy, LP v. Imperial Freight Inc., No. CV H-14-2615, 2019 U.S. Dist. LEXIS 70106, 2019 WL 1858881, at *1 (S.D. Tex. Apr. 25, 2019) (“The Carmack Amendment does not govern the role of brokers with respect to interstate cargo losses and damages.”). There is no basis for Carmack Amendment liability, or apportionment under the Carmack Amendment, against Bruzzone if it is not a carrier. See 49 U.S.C. § 14706(b) (allowing a carrier subject to liability under the Carmack Amendment to recover from other carriers “over whose line or route the loss or injury occurred”); 5K Logistics, Inc. v. Daily Exp., Inc., 659 F.3d 331, 335-36 (4th Cir. 2011) (noting that “Congress explicitly chose not to extend the apportionment remedy to ‘brokers'”).

Smokey Point does not allege or argue in its opposition brief that Bruzzone is a motor carrier subject to Carmack Amendment liability. Instead, Smokey Point argues that the Carmack Amendment bars only those contribution claims asserted against “downstream wrongdoers,” and that Bruzzone is not “downstream” because it acted as an agent for the shipper, AMRO. (Docket Entry No. 36 at 4). Smokey Point argues that the Carmack Amendment does not apply if the damage to goods was caused by “the act of the shipper [it]self,” and that Bruzzone, as AMRO’s agent, is effectively “the shipper.” (Id. (citing Mo. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137, 84 S. Ct. 1142, 12 L. Ed. 2d 194 (1964)). Smokey Point argues that as a result, its state-law claims are not preempted.

Smokey Point cites Elmore & Stahl, but that case did not address preemption. [*8]  In Elmore & Stahl, the Court held:

[U]nder federal law, in an action to recover from a carrier for damage to a shipment, the shipper establishes his prima facie case when he shows delivery in good condition, arrival in damaged condition, and the amount of damages. Thereupon, the burden of proof is upon the carrier to show both that it was free from negligence and that the damage to the cargo was due to one of the excepted causes relieving the carrier of liability.

Elmore & Stahl, 377 U.S. at 138. If the carrier demonstrates that the shipper caused the cargo damage, the carrier escapes liability under the Carmack Amendment. The holding in Elmore & Stahl did not carve out causes of action from the scope of the Carmack Amendment’s preemption of state law. Instead, Elmore & Stahl “codifi[ed]” a defense previously available at common law. Id. at 137. Elmore & Stahl does not bar Smokey Point from defending itself against AMRO’s claims by showing that AMRO or its agent caused the cargo damage.

Assuming that Bruzzone is “the shipper,” state-law claims against it are preempted because they “aris[e] from the interstate transportation of [the goods in question] by a common carrier.” Hoskins, 343 F.3d at 778. The opinion in Mayflower Transit, Inc. v. Weil, Gotshal & Manges, L.L.P., 2000 U.S. Dist. LEXIS 20299, 2000 WL 34479959, at *1 (N.D. Tex. Oct. 18, 2000), is instructive. In that case, Mayflower Transit, a carrier, sued Weil Gotshal, a law firm, for breach of contract for failing [*9]  to pay transportation charges apparently related to an employee’s relocation. The law firm brought state-law counterclaims, including:

1) [F]raud by Mayflower in misrepresenting the services it would provide; 2) negligent misrepresentation of the services Mayflower would provide; 3) conversion of the Roberts’ jewelry; 4) negligence in failing to provide adequate supervision during the move, thereby enabling the conversion to take place; 5) breach of contract by failing to deliver the Roberts’ property in the proper condition and in providing adequate employees or adequate supervision of the move; 6) violations of the Deceptive Trade Practices Act . . . .

2000 U.S. Dist. LEXIS 20299, [WL] at *2. The court concluded that claims relating to the formation of the contract were preempted because they were “so closely related to the performance of the contract, and the measure of damages for such claims [is] so likely to be the loss or damage to the goods.” Id. (quoting Gordon v. United Van Lines, Inc., 130 F.3d 282, 289 (7th Cir. 1997)). The district court found all the claims preempted except the claim for conversion of jewelry, because the jewelry was apparently not intended to be shipped and was therefore not covered by the bill of lading. 2000 U.S. Dist. LEXIS 20299, [WL] at *4. Here, Smokey Point’s claims against Bruzzone allege [*10]  that Bruzzone’s conduct resulted in the damage to the goods. They are preempted.

Bruzzone argues that if it is considered to be a broker rather than a shipper, Smokey Point’s claims are preempted by another statute, 49 U.S.C. § 14501. That statute provides:

[A] State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier (other than a carrier affiliated with a direct air carrier covered by section 41713(b)(4)) or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.

Id. § 14501(c)(1). The statute exempts laws or regulations related to motor vehicle safety, insurance, the transportation of household goods, and tow truck operations. Id. § 14501(c)(2)(A)-(C).

Bruzzone cites Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023), in support of this argument. In that case, the shipper hired the defendant, Landstar, to secure the services of a motor carrier to transport cargo across state lines. Id. at 1264. Landstar turned the cargo over to a fraudster purporting to be a motor carrier. Id. The shipper’s insurer, Aspen, sued Landstar for its negligent selection of a motor carrier. Id. The appellate [*11]  court first noted the statute’s language preempting the enforcement of state laws applying common-law causes of action. Id. at 1266 (citing Nw, Inc. v. Ginsberg, 572 U.S. 273, 281-84, 134 S. Ct. 1422, 188 L. Ed. 2d 538 (2014)). The appellate court went on to find that “related to” encompassed the negligence claim at issue because the cause of action, in this context, had “a connection with, or reference to,” the price, route, or services of a broker. Id. at 1267 (citing Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364, 370, 128 S. Ct. 989, 169 L. Ed. 2d 933 (2008)). Finding that no exception applied, the appellate court affirmed the district court’s dismissal of the case based on 49 U.S.C. § 14501(c).

Aspen American Insurance is persuasive, and Smokey Point has pointed to no contrary authority. Smokey Point asserts state-law claims for negligence and DTPA violations based on allegations that Bruzzone and others provided incorrect information about the height of the load. These claims “relate[] to the price, route, or service of any . . . broker . . . with respect to the transportation of property.” 49 U.S.C. § 14501(c). The Carmack Amendment preempts these state-law claims.

III. Conclusion

The court grants the motion to dismiss the claims against Bruzzone. The dismissal is with leave to file a motion seeking to amend the third-party complaint should Smokey Point, in discovery, uncover facts materially affecting the conclusions reached in [*12]  this opinion.

SIGNED on June 20, 2023, at Houston, Texas.

/s/ Lee H. Rosenthal

Lee H. Rosenthal

United States District Judge

End of Document

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¹ Smokey Point disputes this characterization. (Docket Entry No. 36 at 2).

² In its third-party complaint, Smokey Point refers to Rule 14(b). (Id. ¶ 33). But Rule 14(b) applies to plaintiffs, not defendants seeking to file a third-party complaint. Fed. R. Civ. P. 14(b) (“When a claim is asserted against a plaintiff, the plaintiff may bring in a third party if this rule would allow a defendant to do so.”). The court assumes that Smokey Point intended to bring its complaint under Rule 14(a). Id. 14(a)(1) (“A defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it.”).