United States District Court for the Central District of Illinois, Peoria Division

February 25, 2022, Decided; February 25, 2022, E-Filed

Case No. 2:20-cv-02210

Reporter

2022 U.S. Dist. LEXIS 33409 *; 2022 WL 585141

THOMPSON TRACTOR CO. INC., Plaintiff, v. DAILY EXPRESS INC., Defendant.

Prior History: Thompson Tractor Co. v. Daily Express Inc., 2020 U.S. Dist. LEXIS 191664, 2020 WL 6121158 (C.D. Ill., Oct. 16, 2020)

Core Terms

bill of lading, inspection, cargo, carrier, summary judgment, generator, offload, good condition, written claim, arrived, jobsite, parties, driver, shipment, damaged, burden of proof, nonmovant, transport, delivery, insurer, cases, real party in interest, damaged condition, regulations, electronic, shipper, Dealer, argues

Counsel:  [*1] For Thompson Tractor Co Inc , Plaintiff: Michael Thomas McCracken, HORVATH & WEAVER PC, Chicago, IL.

For Daily Express Inc, Defendant: Robert Glenn Rothstein, SEATON & HUSK L.P., Vienna, VA.

Judges: JOE BILLY McDADE, United States Senior District Judge.

Opinion by: JOE BILLY McDADE

Opinion

ORDER & OPINION

This matter is before the Court on cross-Motions for Summary Judgment filed by the parties. Both Motions have been fully briefed and are ripe for review. For the following reasons, Defendant’s Motion for Summary Judgment (doc. 21) is denied, and Plaintiff’s Motion for Summary Judgment (doc. 23) is granted in part and denied in part.

Background¹

In May 2019, Plaintiff Thompson Tractor Co., Inc., purchased and agreed to deliver an industrial-grade generator manufactured by Caterpillar, Incorporated, to a third-party purchaser and solicited Defendant Daily Express, Inc., to transport the generator from the Caterpillar facility in East Peoria, Illinois, to the third-party purchaser’s jobsite in Huntsville, Alabama. (Docs. 22-1 at Ex. A; 24-1). On May 20, 2019, Dan Gladu, a driver contracted by Defendant, received the generator at the Caterpillar facility in apparent good working order and condition, as indicated by Gladu’s [*2]  signature on the bill of lading, which was issued by Caterpillar. (Doc. 3).

At some point during transport Gladu’s tractor-trailer partially left the roadway, requiring the use of a tow truck to place the tractor-trailer back onto the roadway. (Doc. 24-3 at 6-8). Gladu arrived at the Alabama jobsite on May 22, but the generator could not be offloaded on that date because the crane at the jobsite was inoperable. (Docs. 3; 22-1 at 18). At some point after arriving, Gladu was greeted by Mark Waddell, an employee of Plaintiff’s, who observed the generator while it was on Gladu’s trailer; Waddell did not note any damage thereto. (Doc. 22-1 at 22).

On May 25, the generator was offloaded, and Eleazar Torres, Jr., an employee of SBE (the electrical subcontractor for the third-party purchaser’s jobsite) conducted an offload damage inspection and signed the bill of lading without indicating any damage to the generator (docs. 3; 22-1 at 19); no employee or representative of Plaintiff was present for the offloading or the offload damage inspection (docs. 22-1 at 19-20; 24-1), and no employee or representative of Plaintiff signed the bill of lading (see doc. 3). When employees of Plaintiff returned [*3]  to the jobsite three days later,² Kevin Meadows, an employee of Plaintiff’s, conducted a damage inspection and discovered damage to the generator’s fuel tank. (Doc. 25-9).³ The cost to transport the generator back to the Caterpillar facility, repair the damage, and transport the generator back to the Alabama jobsite totaled $202,631.66.⁴ Plaintiff now seeks damages in that amount pursuant to the Carmack Amendment.

Legal Standard

“The court shall grant summary judgment if the movant shows that 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). “A genuine dispute of material fact exists ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’” Skiba v. Ill. Cent. R.R. Co., 884 F.3d 708, 717 (7th Cir. 2018) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986)). “The nonmovant bears the burden of demonstrating that such a genuine issue of material fact exists.” Aregood v. Givaudan Flavors Corp., 904 F.3d 475, 482 (7th Cir. 2018). The parties must support their assertions that a fact is disputed or cannot be genuinely disputed by citing to admissible evidence in the record. Horton v. Pobjecky, 883 F.3d 941, 948 (7th Cir. 2018).

The record is viewed in the light most favorable to the nonmovant, and the Court must draw all reasonable inferences from the evidence in the nonmovant’s favor. BRC Rubber & Plastics, Inc. v. Cont’l Carbon Co., 900 F.3d 529, 536 (7th Cir. 2018). When presented with cross-motions [*4]  for summary judgment, the Court must consider the motions separately, which necessarily means the nonmovant differs depending on the motion being considered. See Schlaf v. Safeguard Prop., LLC, 899 F.3d 459, 465 (7th Cir. 2018) (quoting Hendricks-Robinson v. Excel Corp., 154 F.3d 685, 692 (7th Cir. 1998)). This, however, does not alter the standard for reviewing a motion for summary judgment or the parties’ respective burdens.

Discussion

I. Procedural Arguments

Defendant seeks summary judgment on numerous procedural grounds. First, Defendant asserts multiple arguments challenging Plaintiff’s prudential standing to litigate the claim at bar. (Doc. 22 at 5). Second, Defendant claims Plaintiff’s prelitigation written claim was inadequate, precluding this lawsuit. (Doc. 22 at 9).

A. Prudential Standing

1. Plaintiff’s Status under the Bill of Lading

Congress enacted the Carmack Amendment to create “a nationally uniform rule of carrier liability concerning interstate shipments.” REI Transp., Inc. v. C.H. Robinson Worldwide, Inc., 519 F.3d 693, 697 (7th Cir. 2008) (REI) (quoting North Am. Van Lines v. Pinkerton Sec. Sys., 89 F.3d 452, 454 (7th Cir. 1996)). Per the Carmack Amendment, a carrier of an interstate shipment is “liable to the person entitled to recover under the receipt or bill of lading.” 49 U.S.C. § 14706(a)(1). “The ‘person entitled to recover’ can bring suit against either the delivering carrier or the originating carrier for the ‘actual loss or injury to the property caused’ by any carrier in the course of the [*5]  interstate shipment.” REI, 519 F.3d at 697 (quoting 49 U.S.C. § 14706(a)(1)). “A shipper can thus be confident that the carrier will be liable for any damage that occurs to its shipment. And a carrier can accurately gauge, and thus insure against, any liability it may face when it agrees to carry something.” Id.

Pursuant to the Carmack Amendment, the carrier is responsible for issuing a receipt or bill of lading, but “failure to issue a receipt or bill of lading does not affect the liability of a carrier.” § 14706(a)(1). Here, Defendant, the carrier, did not issue a bill of lading or receipt; rather, Caterpillar, the manufacturer of the generator, issued the bill of lading. (Doc. 3). That bill of lading identified Plaintiff (Thompson) as the “dealer” who, the undisputed facts establish, purchased the cargo from Caterpillar and arranged its shipment to the Alabama jobsite (docs. 3; 22 at 2 (Defendant’s assertion Plaintiff purchased⁵ the cargo); 25 at 3⁶ (Plaintiff’s assertion it contracted with and paid Defendant for carrier services)). In other words, Plaintiff was the owner/shipper/consignor of the cargo at issue. Shippers of cargo are generally considered persons entitled to recover under a bill of lading, as Defendant begrudgingly concedes [*6]  (doc. 28 at 2). See generally REI, 519 F.3d at 697 (“A shipper can thus be confident that the carrier will be liable for any damage that occurs to its shipment.”).

Defendant’s arguments regarding Plaintiff’s status under the bill of lading are unavailing, and the case law on which it relies is nonbinding and distinguishable. (See doc. 22 at 6-7). Firstly, it was Defendant’s responsibility to issue an accurate bill of lading or receipt for the shipment. § 14706(a)(1); see also 49 C.F.R. § 373.101. Defendant’s attempt to evade liability based on perceived inadequacies or inaccuracies in the bill of lading here thus flies in the face of justice and is an attempt to shift the consequences of its own failure to Plaintiff. Secondly, the failure to issue a bill of lading or receipt does not affect the liability of a carrier, § 14706(a)(1), so a perceived failure to expressly name the proper parties thereto cannot affect a proper party’s standing to recover. Finally, Defendant’s position that the bill of lading does not identify Plaintiff as an interested party is patently false, as discussed above.

For these reasons, Plaintiff is a person entitled to recover under the bill of lading issued here.

2. Unjust Enrichment

Defendant’s next argument is somewhat of [*7]  a theme throughout its challenge to Plaintiff’s prudential standing. It argues Plaintiff should not be permitted to proceed with its claim because it was compensated for the loss at issue by its insurer, suggesting the insurer, rather than Plaintiff, is the real party of interest; according to Defendant, Plaintiff would be unjustly enriched if it prevails on its claim. (Docs. 22 at 7; 28 at 9). This one-paragraph argument, however, cites no legal authority whatsoever and is wildly undeveloped. To obtain summary judgment, the movant must demonstrate entitlement to judgment as a matter of law. Fed. R. Civ. P. 56(a). This undeveloped and unsupported argument does not do that.

Even if the Court agreed Plaintiff’s insurer was the real party in interest, the Court could not grant summary judgment in favor of Defendant on this ground. The proper vehicle for Defendant’s argument is a motion or objection under Federal Rule of Civil Procedure 17, which states:

The court may not dismiss an action for failure to prosecute in the name of the real party in interest until, after an objection, a reasonable time has been allowed for the real party in interest to ratify, join, or be substituted into the action. After ratification, joinder, or substitution, [*8]  the action proceeds as if it had been originally commenced by the real party in interest.

Fed. R. Civ. P. 17(a)(3). Thus, the proper remedy is not summary dismissal of Plaintiff’s claim.

Motions or objections under Rule 17 must “be raised when such joinder is practical and convenient.” RK Co. v. See, 622 F.3d 846, 850 (7th Cir. 2010). Here, Defendant chose to wait until the summary judgment stage to raise its concerns—in an improper form—despite learning of the facts necessary to raise an objection during discovery or possibly earlier.⁷ And the fact it simultaneously—and erroneously⁸ — argues Plaintiff’s insurer is “forever barred” from being added as a party to this litigation (doc. 22 at 8) demonstrates its intent to engage in the type of tactical ambush the undersigned will not condone. See Wielgus v. Ryobi Techs., Inc., No. 08 CV 1597, 2012 U.S. Dist. LEXIS 54077, 2012 WL 1339489, at *3 (N.D. Ill. Apr. 18, 2012) (“Because the current motion smacks of the kind of tactical ambush that courts have warned against in the Rule 17(a) context, and because of the defendants’ unreasonable delay in bringing the motion, case-specific considerations of fairness point to the conclusion that the defendants have waived their objection under the real-party-in-interest doctrine[.]”).

For these reasons, the Court finds Defendant’s argument has been waived. Judge v. Quinn, 612 F.3d 537, 557 (7th Cir.), opinion amended on denial of reh’g, 387 F. App’x 629 (7th Cir. 2010) (“[P]erfunctory [*9]  and undeveloped arguments, and arguments that are unsupported by pertinent authority, are waived.”); see also RK Co., 622 F.3d at 850 (“Today, we too hold that ‘real party in interest’ is a defense subject to waiver.”); Allegheny Int’l, Inc. v. Allegheny Ludlum Steel Corp., 40 F.3d 1416, 1431 (3d Cir. 1994) (cited by the Seventh Circuit in RK Co. for the proposition that a Rule 17 objection raised at summary judgment is untimely).

3. Plaintiff’s Insurer’s Standing

As Plaintiff’s insurer is not party to this litigation and is not seeking to join this litigation, its standing is irrelevant and need not be discussed.

B. Written Claim Requirement

Defendant next challenges the adequacy of Plaintiff’s written claim for damage to the cargo at issue. (Doc. 22 at 9). Defendant concedes it received a written claim from Plaintiff and does not argue the claim is deficient in substance; rather, Defendant merely challenges the mode by which the written claim was delivered, arguing the electronically delivered written claim is deficient because Defendant had not previously consented to electronic delivery. (Docs. 22 at 11-12; 28 at 6).

Congress delegated to the Interstate Commerce Commission (ICC) the responsibility to enact regulations pertaining to, inter alia, issues involving motor carriers. 49 U.S.C. § 13301(a). Pursuant to this authority, [*10]  the ICC has promulgated two nearly identical regulatory provisions, both captioned “Principles and Practices for the Investigation and Voluntary Disposition of Loss and Damage Claims and Processing Salvage.” 49 C.F.R. § 370.3; 49 C.F.R. § 1005.2. Both mandate a timely written claim prior to the voluntary payment of a claim for damage to cargo covered by a bill of lading or other contract of carriage and dictate the requisite form and substance of such a claim. §§ 370.3(a), (b); §§ 1005.2(a), (b). One difference between the two regulations is that § 1005.2(b) differentiates between written and electronic communications and requires a prior agreement to receive electronic communications, whereas § 370.3(b) makes no such distinction and refers only to a “written communication.”

Defendant cites no binding authority for the proposition that an adequate written claim under either § 370.3 or § 1005.2 is a condition precedent to filing a lawsuit under the Carmack Amendment.⁹ (Doc. 22 at 10-11). Rather, Defendant cites a slew of nonbinding circuit decisions to that effect (doc. 22 at 10), and its ultimate argument—that, consistent with § 1005.2(b), there must be prior approval to receive a written claim electronically—is based on two district court cases from outside this Circuit (doc. 22 at 11 (citing Raineri v. N. Am. Van Lines, Inc., 906 F. Supp. 2d 334, 341-42 (D.N.J. 2012); and Chapman v. Allied Van Lines, Inc, No. 5:15-CV-00615, 2018 U.S. Dist. LEXIS 17073, 2018 WL 701627, at *7 (E.D.N.C. Feb. 2, 2018)).

 [*11] However, the Seventh Circuit has held § 1005.2, which is expressly limited to voluntary settlement of claims, does not apply to contested cases litigated in a court of law, Wis. Packing Co. v. Ind. Refrigerator Lines, Inc., 618 F.2d 441, 445 (7th Cir. 1980), as the undersigned noted in its Order on Defendant’s Motion to Dismiss (doc. 15 at 17-18). Any written-claim requirement must therefore appear in the bill of lading or other contract of carriage. See id. at 444-45; Ace Motors, Inc. v. Total Transp., Inc., No. 08-C-1552, 2009 U.S. Dist. LEXIS 59458, 2009 WL 2031780, at *2 (N.D. Ill. July 10, 2009) (“The Carmack Amendment, itself, neither requires written claims nor imposes any other restrictions on the form of notice.” (internal quotation marks omitted)).

Defendant’s attempt to factually distinguish Wis. Packing Co. (doc. 28 at 6) misses the mark because the case held, as a matter of law, the formalities of § 1005.2 are inapplicable to contested cases. Thus, the cases cited by Defendant holding the formalities of § 1005.2 must be honored as a condition precedent to filing a lawsuit under the Carmack Amendment are directly contrary to binding Seventh Circuit precedent. It seems Defendant attempts to sidestep this fact by emphasizing § 370.3 over § 1005.2 in its analysis. However, Defendant makes no argument that the Seventh Circuit would find § 370.3—which, identical to § 1005.2, expressly applies to voluntary settlement of claims—is binding in contested cases such as this. Even if Defendant had made such an argument, it would be unpersuasive in light of the Seventh Circuit’s analysis in Wis. Packing Co. Given the nearly identical language and purpose of the two regulations, it is highly unlikely the Seventh Circuit would find one regulation applies to contested cases and the other does not.

For these reasons, the Court finds Defendant has not [*12]  carried its burden to prove either § 370.3 or § 1005.2 is binding in this case, and its argument for summary judgment for an alleged failure to comply with the formalities of either or both regulations must therefore be rejected. If Defendant wished to mandate compliance with § 370.3 and/or § 1005.2 as a condition precedent to filing a lawsuit under the Carmack Amendment, it could have done so by complying with its statutory responsibility to issue a bill of lading reflecting the agreement between the parties.

II. Substantive Arguments

Both parties move for summary judgment on Plaintiff’s substantive claim under the Carmack Amendment.

The prima facie case under the Carmack Amendment is straightforward: a plaintiff must show (1) delivery in good condition; (2) arrival in damaged condition; and (3) the amount of damages. If the plaintiff establishes the prima facie case, the burden shifts to the defendant 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[.]

REI, 519 F.3d at 699 (internal citations and quotation marks omitted). As stated, Defendant has waived any challenge to Plaintiff’s calculation of damages, but it does challenge the adequacy of Plaintiff’s evidence to prove the first [*13]  two elements. (See doc. 22 at 12-16). Plaintiff, on the other hand, claims it has fully met its burden and is therefore entitled to summary judgment. (Doc. 24 at 6-9).

A. Delivery in Good Condition

Plaintiff’s argument as to the first element of its Carmack Amendment claim is remarkably short but effective: “As to the first element, that Plaintiff delivered the Generator to Defendant in good condition, Defendant, through its driver, admitted that it received the Generator in good condition. See Undisputed Material Facts (“UMF”) at 3-5.” (Doc. 24 at 6). The three allegations of fact cited are as follows: (1) “Defendant’s driver Dan Gladu arrived at Caterpillar to accept and transport the Generator on May 20, 2019”; (2) “Dan Gladu inspected the Generator prior to departing Caterpillar which inspection revealed no damage, structural or otherwise, to it”; and (3) “Dan Gladu noted on the Bill of Lading that he conducted an inspection of the Generator prior to departing and did not find, or indicate, any damage to it.” (Doc. 24 at 2). In support of these allegations, Plaintiff cites the bill of lading (docs. 3; 23-2) and Gladu’s deposition testimony (doc. 23-3 at 10-13).

Excepting the date on which Gladu arrived [*14]  at the Caterpillar facility,¹⁰ Defendant admits these facts, though it claims the second and third allegations are immaterial. (Doc. 27 at 2, 6-7). In support of its contention that the allegations are immaterial, Defendant argues: “Defendant driver’s inspection of the property alone, without corroboration, does not satisfy the requirement that good condition be established and proven by the Plaintiff.” (Doc. 27 at 6). Defendant continues:

The absence of a notation of damage by the transport driver on a bill of lading is immaterial to prove good condition of the property when tendered to a carrier because the burden of such proof rests with the plaintiff. Evidence of the condition of property must be advanced by the plaintiff, and must corroborate other evidence, but “good condition” cannot be “proven” by conduct taken or not taken by the carrier against which property damage is alleged.

(Doc. 27 at 6-7). These statements, which are actually substantive arguments, do not demonstrate why Plaintiff’s allegations of fact are immaterial rather than material. If anything, Defendant’s adamance that these allegations are insufficient to carry Plaintiff’s burden of proof demonstrates their materiality, [*15]  as they relate directly to a fact Plaintiff must ultimately prove.

“[A] shipper may establish by circumstantial evidence that its cargo was in good condition upon delivery to the carrier.”¹¹ Allied Tube & Conduit Corp. v. S. Pac. Transp. Co., 211 F.3d 367, 371 (7th Cir. 2000) (citing Pharma Bio, Inc. v. TNT Holland Motor Exp., Inc., 102 F.3d 914, 917 (7th Cir. 1996)). Here, Gladu signed the bill of lading indicating a damage inspection was completed at the time of loading and noting no damage to the cargo.¹² (Doc. 3). Gladu further testified in his deposition that he personally inspected the cargo once it was loaded onto his trailer and discovered no damage. (Doc. 24-3 at 5). As stated, Defendant does not dispute any of these facts, but instead suggests this evidence cannot carry Plaintiff’s burden to prove good condition at tender because Gladu “is not a representative of Plaintiff[ ] and has not been shown to have an interest adverse to” Defendant’s. (doc. 27 at 12). Defendant cites no authority, and the undersigned is unaware of any, holding Plaintiff could not simply call Gladu as a witness in its case-in-chief; Gladu’s “loyalty” is of no moment.

At minimum, Gladu’s testimony and the bill of lading constitute direct, not merely circumstantial, evidence that the cargo was tendered in good condition, and at best, they constitute an admission by Defendant, [*16]  through an agent, that Plaintiff has met its burden on this point. Either way, the evidence carries great weight. On consideration of the evidence submitted by the parties and drawing all reasonable inferences in favor of Defendant, the Court finds no evidence calling into doubt the results of Gladu’s inspection or otherwise indicating the cargo may have been damaged prior to tender.¹³ Accordingly, there is no triable issue of fact with regard to the question whether the cargo was tendered to Gladu in good condition. See Milwaukee Ctr. for Indep., Inc. v. Milwaukee Health Care, LLC, 929 F.3d 489, 493 (7th Cir. 2019) (“Summary judgment is appropriate . . . if, on the evidence provided, no reasonable juror could return a verdict in favor of” the nonmovant.) (alterations in original and internal quotation marks omitted).

B. Arrival in Damaged Condition

The parties do not dispute the fact the cargo was ultimately damaged, resulting in a $202,631.66 tab. Rather, the dispute lies in whether the cargo was damaged prior to or after delivery. According to Defendant, the damage is presumed to have occurred after delivery under the terms of the bill of lading, which mandate any damage to the cargo be noted on the bill of lading. (See doc. 3). This dispute, however, is frustrated by the fact [*17]  the bill of lading also required Plaintiff or its designee to perform an offload damage inspection and thereafter sign the bill of lading (doc. 3), which Plaintiff claims did not occur (docs. 24 at 6-7; 25 at 11-12). Because no authorized offload damage inspection occurred and because neither Plaintiff nor any designee of Plaintiff’s signed the bill of lading, Plaintiff argues Defendant cannot escape liability for the damage simply because the damage was not noted on the bill of lading. (Doc. 29 at 8).

The bill of lading here unquestionably required an offload damage inspection to be completed and/or approved by “Dealer” (Plaintiff) or a designated party.¹⁴ (Doc. 3). The undisputed facts establish Plaintiff never expressed to Defendant or its driver that it designated any party other than itself to complete the offload damage inspection or sign the bill of lading (docs. 24 at 4; 27 at 5, 15-16). And despite Defendant’s apparent argument to the contrary (doc. 27 at 15-16), Plaintiff was not required to designate any third party to assume those responsibilities; the bill of lading clearly permitted either Plaintiff or its designee to do so. (Doc. 3).

Defendant nevertheless argues [*18]  Plaintiff’s admission it is the “Dealer” referred to on the bill of lading equates to a concession that Torres’ signature on the line reserved for “Dealer or designated party” means Torres was either an agent of Dealer (Plaintiff) or its designated party. (Doc. 27 at 3). This argument is as unpersuasive as it is illogical. As it cites no authority and lacks any basis in reason, the Court summarily rejects it.

Defendant also claims Torres had apparent authority to conduct the offload damage inspection and sign the bill of lading. “Apparent authority exists when a third-party reasonably relies on the principal’s manifestation of authority to an agent. Statements by an agent are insufficient to create apparent authority.” Warciak v. Subway Restaurants, Inc., 949 F.3d 354, 357 (7th Cir. 2020) (citations omitted). While Defendant cites several factors that led Gladu to feel “comfortable” allowing Torres to perform the offload damage inspection and sign the bill of lading (doc. 27 at 16-17), none of those factors include any manifestations by Plaintiff, the alleged principal, thus precluding a finding of apparent authority. As above, Defendant’s logic is seriously flawed. One does not obtain authority to do an act by simply doing the act. Because Torres had [*19]  no authority to conduct the offload damage inspection or sign the bill of lading, Defendant’s driver breached the bill of lading by allowing him to do both.

The question then becomes: what is the consequence for this breach? The doctrine of “unclean hands” is guided by the “equitable maxim that ‘he who comes into equity must come with clean hands.’ ” Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 814, 65 S. Ct. 993, 89 L. Ed. 1381, 1945 Dec. Comm’r Pat. 582 (1945). “This maxim necessarily gives wide range to the equity court’s use of discretion in refusing to aid the unclean litigant. It is not bound by formula or restrained by any limitation that tends to trammel the free and just exercise of discretion.” Id. at 815 (internal quotation marks omitted). By arguing Defendant breached the bill of lading as it did and seeking to prevent Defendant from evading liability for the lack of a notation of damage on that bill of lading, Plaintiff effectively invokes the doctrine of unclean hands. Indeed, equity and justice do not permit Defendant to evade liability simply because no damage was noted on the bill of lading when Defendant’s driver robbed Plaintiff of the opportunity to inspect the cargo upon offloading and note any damage in direct violation of the express terms of the bill of lading. However, this wrongful [*20]  act should not wholly relieve Plaintiff of its burden to prove the cargo arrived in damaged condition, as Plaintiff suggests; that punishment is far too severe for the misconduct at issue and would result in a windfall for Plaintiff. On careful consideration, the undersigned concludes the appropriate remedy is to estop Defendant from arguing Plaintiff’s claim is barred because the bill of lading omits any notation of damage. This levels the playing field by providing a proportionate remedy for the breach while still holding Plaintiff to its burden of proof under the Carmack Amendment.

Having resolved Defendant’s breach of the bill of lading, the only remaining question is whether there is a triable issue of fact as to the second element of Plaintiff’s Carmack Amendment claim. The answer is yes, as the evidence and undisputed facts do not definitively answer the question whether the cargo arrived in damaged condition. In support of Plaintiff’s claim is the evidence that (1) the tractor-trailer partially left the roadway during transit, requiring the intervention of a tow truck (doc. 23-3 at 6-7); (2) an apparently uneventful offloading (doc. 23-1 at 4)¹⁵ and (3) the fact the cargo was noted as damaged [*21]  at Plaintiff’s first offload inspection (e.g., doc. 24-9). In favor of Defendant’s defense is Waddell’s (doc. 22-1 at 22) and Gladu’s (doc. 27-4 at 12) pre-offload inspections and Torres’ offload damage inspection (doc. 3), none of which noted any damage to the generator. To answer the decisive question, several factual disputes—including whether the damage was visible while the cargo was on the trailer and how in-depth each respective inspection was—must be resolved as well as credibility determinations, thus precluding summary judgment in favor of either party.

Conclusion

IT IS THEREFORE ORDERED that Defendant’s Motion for Summary Judgment (doc. 21) is DENIED and Plaintiff’s Motion for Summary Judgment (doc. 23) is GRANTED IN PART and DENIED IN PART. This matter shall proceed to trial solely on the question whether the cargo arrived at the Alabama jobsite in damaged condition. To that end, the parties are directed to confer and, within fourteen (14) days, submit a proposed timeline for the remainder of this case including deadlines for motions in limine, responses thereto, and the final pretrial memo and proposed jury instructions as well as proposed dates for the Final Pretrial Conference [*22]  and Jury Trial. The Court expects the Final Pretrial Conference to be set approximately two to three months from the date of this Order and the Jury Trial to be set approximately one month thereafter.

SO ORDERED.

Entered this 25th day of February 2022.

/s/ Joe B. McDade

JOE BILLY McDADE

United States Senior District Judge

End of Document

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¹ The facts in this section are undisputed unless otherwise noted.

² The cargo was offloaded during Memorial Day weekend. (Doc. 24-1).

³ Defendant challenges the admissibility of Meadows’ Affidavit (doc. 25-9), arguing his existence as a potential witness was not timely disclosed. However, Defendant’s own discovery requests indicate Meadows’ existence was disclosed during discovery, and Defendant did in fact request discovery pertaining to Meadows. (See doc. 25-1 at 5). Thus, any error is harmless, and Defendant’s request to exclude is denied. As Defendant does not cite any evidence contradicting Meadows’ observation of damage on May 28, that fact is deemed admitted. See Civil LR 7.1(D)(3)(a).

⁴ Defendant’s only challenge to Plaintiff’s damage calculation is that Plaintiff has not included evidence of lost profits (doc. 27 at 20); however, Plaintiff has not requested damages for lost profits (see doc. 24 at 4-5). As Defendant makes no other challenge to Plaintiff’s damage calculation, the Court finds any such argument is waived and the damage calculation to be admitted fact. Mack v. City of Chicago, 788 F. App’x 396, 398 (7th Cir. 2019) (“[B]y failing to raise this issue in opposition to the motion for summary judgment, [the plaintiff] waived the argument.”).

⁵ Defendant’s position that Plaintiff was not the “owner” of the cargo at all relevant times is untenable. Defendant itself alleges Plaintiff purchased the cargo, insured it, and received insurance proceeds after it was damaged (doc. 22 at 2), all of which Plaintiff admits while asserting it was, in fact, the owner (doc. 25 at 3, 6). In disputing the allegation Plaintiff owned the cargo, Defendant fails to cite any evidence contradicting Plaintiff’s ownership and instead cites Plaintiff’s answer to its request for production of documents, which indicates Plaintiff produced documents. (Docs. 28 at 2; 27-3 at 4). In light of the undisputed facts and Defendant’s failure to cite any evidence contradicting Plaintiff’s ownership of the cargo, the Court finds the fact admitted. Civil LR 7.1(D)(3)(a).

⁶ Defendant inexplicably disputes this fact and complains about the timeliness of Plaintiff’s disclosure of this fact but does not expressly object to the admissibility of the evidence or cite any evidence contradicting the alleged fact. (Doc. 28 at 3). Accordingly, the Court finds this fact admitted. Civil LR 7.1(D)(3)(a).

⁷ The evidence cited for Defendant’s allegation Plaintiff’s insurer paid Plaintiff’s claim for the damage to the cargo was a deposition taken in April 2021. (Doc. 22-1 at 2).

⁸ Defendant claims the deadline to add parties has “long since passed.” While it is true the parties’ agreed deadline to add parties was March 31, 2021 (doc. 10 at 3), the mandatory nature of Rule 17(a)(3) as well as the Court’s inherent authority to manage its docket and the requirement that leave to amend be “freely granted as justice so requires,” Fed. R Civ. P. 15(a)(2), as well as other judicial principals demonstrates amendment is not impossible, even at this late stage.

⁹ Of course, the parties may agree to such terms in a bill of lading or other contract of carriage. E.g., St. Louis, I.M. & S. Ry. Co. v. Starbird, 243 U.S. 592, 604-05, 37 S. Ct. 462, 61 L. Ed. 917 (1917). The parties here did not.

¹⁰ Defendant states Gladu arrived at the Caterpillar facility to accept the cargo on May 18, 2019, not May 20, citing the bill of lading, which indicates a May 18th arrival date and a May 20th departure date. (Docs. 27 at 6; 3).

¹¹ Defendant’s statement that “circumstantial evidence needs to be corroborative of other evidence” (doc. 22 at 14) is unsupported by the case it cites, which says nothing of the need for corroborative evidence.

¹² Defendant seems to ignore the fact that the bill of lading did contemplate a damage inspection at loading, instead focusing on the absence of an express “apparent good order” clause (doc. 22 at 15). The contemplation of a damage inspection and the requirement that any damage be noted on the bill of lading here together effectively constitute an indication that the cargo was received in “apparent good order.” Again, given it was Defendant’s statutory responsibility to issue a bill of lading, Defendant’s repeated complaints about the language in bill of lading fall flat.

¹³ Though Plaintiff does not rely on Caterpillar’s Mechanical Test Report (referred to by the parties as the “Factory Witness Test” results), it appears to indicate the cargo was operational and in good working order as of April 30, 2019, just under three weeks before Gladu received the cargo from Caterpillar (doc. 28-3), thus further supporting Plaintiff’s claim despite Defendant’s arguments to the contrary (doc. 28 at 8-9). Defendant objects to the admissibility of this document on the ground that it was not tendered during the time allotted for discovery. On careful consideration of the parties’ arguments, the Court finds the document admissible. It appears Plaintiff’s counsel believed it was included in its production of documents, and as soon as Plaintiff’s counsel became aware that it was apparently not included, counsel sent the document to Defendant’s counsel. And far from claiming harm from the delayed transmission, Defendant responds to the substance of the test in its Reply (doc. 28 at 8-9), demonstrating Plaintiff’s counsel’s error was harmless. At any rate, upon becoming aware of Plaintiff’s counsel’s apparent mistake during discovery, Defendant’s counsel should have raised the issue. Instead, Defendant’s counsel again tactically waited to raise the issue and inexplicably claimed in its Response dated December 3, 2021, the factory witness test was “apparently not done here” (doc. 27 at 13) despite receiving those test results on November 19, 2021 (docs. 28-2; 28-3). The undersigned will not tolerate gamesmanship of this type.

¹⁴ Defendant denies this fact without explaining how the language “Offload damage inspection * (completed by Dealer or designated party)” above a signature line means anything other than Plaintiff or its designee was required to sign off on an offload damage inspection. (See, e.g., doc. 27 at 5). The Court summarily rejects this undeveloped and illogical position.

¹⁵ Defendant disputes this fact on the basis it is supported by video surveillance it claims was not produced during discovery (doc. 27 at 18-19); Plaintiff states the surveillance footage was produced via email on July 1, 2021 (doc. 29 at 8). Assuming the footage was produced as alleged, Defendant’s request to exclude is denied. If, however, the footage was not produced, Defendant may raise the issue in an appropriate pretrial motion.

United States District Court for the District of New Jersey

March 1, 2022, Decided; March 2, 2022, Filed

1:21-cv-14647

Reporter

2022 U.S. Dist. LEXIS 36493 *

BMW Auto Sales, Inc., Plaintiff, v. Red Wolf Logistics, LLC; John Does 1-10, and ABC Business Entities 1-10, Defendants.

Core Terms

preempts, carrier, removal, preemption, damages, argues, state-law, amount in controversy, interstate, transportation, shipping, diversity, shipment, reasons, federal claim, courts, treble, hear

Counsel:  [*1] For BMW AUTO SALES, INC., Plaintiff: JOSEPH D LENTO, LEAD ATTORNEY, LENTO LAW GROUP, P.C., MT. LAUREL, NJ.

For RED WOLF LOGISTICS, LLC, Defendant: MARC R. JONES, CIPRIANI & WERNER PC, MOUNT LAUREL, NJ.

For RED WOLF LOGISTICS, LLC, Third Party Plaintiff: MARC R. JONES, LEAD ATTORNEY, CIPRIANI & WERNER PC, MOUNT LAUREL, NJ.

Judges: Hon. Joseph H. Rodriguez, United States District Judge.

Opinion by: Joseph H. Rodriguez

Opinion

This matter is before the Court on the motion to remand this case back to the Superior Court of New Jersey, Atlantic County [Dkt. 10] filed by Plaintiff BMW Auto Sales, Inc. (“Plaintiff”). For the reasons provided below, the Court finds that it lacks subject-matter jurisdiction over this case and will grant Plaintiff’s motion.

I. Background

Plaintiff purchased a 2020 Ford Explorer (the “Car”) from an auto auction in Grand Prairie, Texas. [Compl. ¶ 5]. The Complaint alleges that Defendant Red Wolf Logistics, LLC (“Defendant”) transported the Car to Houston, Texas and that the Car suffered $3,266.69 worth of damage during the trip. [See Compl. ¶ 7]. To recover the cost of repairing the damage to the Car, Plaintiff filed a complaint against Defendant in the Superior Court of New Jersey, Atlantic County [*2]  alleging professional negligence, breach of contract, and consumer fraud under the New Jersey Consumer Fraud Act (“NJCFA”). [See Dkt. 1]. Defendant removed the case alleging that this Court has federal question jurisdiction to hear the case under the Carmack Amendment, 49 U.S.C. § 11706, 49 U.S.C. § 14706, and 28 U.S.C. § 1446(d), and based on diversity jurisdiction under 28 U.S.C § 1332. [Dkt. 1]. Defendant filed an answer and third-party complaint against JHD Trucking, Inc. (“JHD”), alleging claims for contribution, indemnification, and liability under the Carmack Amendment. [Dkt. 3]. Defendant then filed an amended answer and third-party complaint asserting the same claims against JHD; Ryion Cooley; Quintae Conquers; Excellence Lifestyle, LLC; and Clifford Hubbard. [Dkt. 6]. The same day, Defendant voluntarily dismissed claims against JHD. [Dkt. 7]. Plaintiff filed the present motion to remand this case to the Atlantic County Superior Court arguing that the Court lacks subject-matter jurisdiction to hear the case. [Dkt. 10].

II. Analysis

“In order to remove a case to federal court, a defendant must comply with the statutory requirements of 28 U.S.C. §§ 1441 and 1446.” Meltzer v. Cont’l Ins. Co., 163 F. Supp. 2d 523, 525 (E.D. Pa. 2001). “First, the district courts of the United States must have original jurisdiction, which requires either a federal question or diversity [*3]  of citizenship of the parties.” Id. (citing 28 U.S.C. §§ 1331, 1332, 1441(a); Manos v. United Food & Com. Workers Int’l Union, 9 F. Supp. 3d 473, 478 (D.N.J. 2014). “Second, the defendant must file a notice of removal with the district court, containing ‘a short and plain statement of the grounds for removal,’ as well as ‘a copy of all process, pleadings, and orders served upon such defendant or defendants in such action.’” Meltzer, 163 F. Supp. 2d at 525 (quoting 28 U.S.C. § 1446(a)). The party seeking removal under federal statute bears the burden of demonstrating that the Court has jurisdiction to hear the case. Latzanich v. Sears, Roebuck & Co., No. 3:15-CV-2346, 2016 U.S. Dist. LEXIS 8901, 2016 WL 749055, at *2 (M.D. Pa. Jan. 25, 2016), report and recommendation adopted, No. CV 3:15-2346, 2016 U.S. Dist. LEXIS 22101, 2016 WL 727776 (M.D. Pa. Feb. 24, 2016) (quoting Samuel—Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 396 (3d Cir. 2004). Courts must construe the federal removal statutes strictly and resolve any doubts in favor of remand. Westmoreland Hosp. Ass’n v. Blue Cross of W. Pa., 605 F.2d 119, 123 (3d Cir. 1979); Wilson v. Hartford Cas. Co., 492 F. Supp. 3d 417, 423 (E.D. Pa. 2020).

Plaintiff argues that the Court lacks jurisdiction to hear this case because the Complaint—which alleges negligence, breach of contract, and violation of NJCFA—does not allege a violation of federal law. [Dkt. 10-1 at 9]. Plaintiff also argues that removal based on diversity jurisdiction is improper because Defendant has not established complete diversity among the parties and because the case does not satisfy the $75,000 amount in controversy requirement. [Dkt. 11-1 at 12-17]. See also 28 U.S.C § 1332(a); Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 419 (3d Cir. 2010) (“Complete diversity requires that, in cases with multiple plaintiffs or multiple defendants, [*4]  no plaintiff be a citizen of the same state as any defendant.”). In response, Defendant clarifies that it does not seek removal based on diversity jurisdiction. [Dkt. 11 at 6]. Instead, Defendant argues that it seeks removal based only on the Carmack Amendment. [Id.]. Defendant also argues that 49 U.S.C. § 14501(c) of the Federal Aviation Administration Authorization Act (“FAAAA”) confers jurisdiction on this Court, even though Defendant did not cite or refer to the FAAAA in its removal notice. [Dkt. 11 at 11-13]. The Court will address each of these arguments in turn.

a. Carmack Amendment

The “Carmack Amendment” is Congress’s “comprehensive” effort to create a uniform national system for “interstate carrier liability.” Certain Underwriters at Int. at Lloyds of London v. United Parcel Serv. of Am., Inc., 762 F.3d 332, 334-35 (3d Cir. 2014) (citing Pub. L. No. 59-337, 34 Stat. 584; and Pub. L. No. 74-255, 49 Stat. 543); Kotick v. Atlas Van Lines, Inc., No. CV 18-11916 (FLW), 2019 U.S. Dist. LEXIS 182130, 2019 WL 5388163, at *2 (D.N.J. Oct. 22, 2019). The Carmack Amendment generally provides that “an interstate carrier is strictly liable for damages up to ‘the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) [certain intermediary carriers].’” Id. (quoting 49 U.S.C. § 14706(a)(1)). Federal courts have original jurisdiction over Carmack Amendment claims “only if the matter in controversy for each receipt or bill of lading exceeds $10,000, exclusive of interest and costs.” 28 U.S.C. § 1337(a).

Defendant argues that the Carmack Amendment provides the sole remedies for damage sustained to the Car during [*5]  transit, and that the Carmack Amendment completely preempts Plaintiff’s state law claims. [Dkt. 11 at 9-10]. In other words, Defendant argues that the Carmack Amendment‘s preemptive force converts Plaintiff’s state law claims into federal claims over which this Court has jurisdiction.

The Court rejects Defendant’s argument for two reasons. First, the Carmack amendment does not apply here because the Complaint alleges that the Car was only shipped within Texas and does not allege that the parties intended the Car to be shipped out of Texas. While the Carmack Amendment applies to “interstate-shipping contract [and tort] claims alleging loss or damage to property,” Certain Underwriters at Interest at Lloyds of London v. United Parcel Serv. of Am., Inc., 762 F.3d 332, 336 (3d Cir. 2014) (emphasis added), the Complaint alleges a purely intrastate shipment of property. See also Sony Biotechnology, Inc. v. Chipman Logistics & Relocation, No. 17-CV-1292-AJB-WVG, 2017 U.S. Dist. LEXIS 134440, 2017 WL 3605500, at *2 (S.D. Cal. Aug. 22, 2017) (“Carmack liability applies ‘to the extent that passengers, property, or both, are transported by motor carrier—between a place in—a State and a place in another State[.]’” (quoting 49 U.S.C. § 13501(1)(A))). The Complaint does not allege, nor does Defendant argue, that either party entered the agreement intending for the Car to cross state lines. See Project Hope v. M/V IBN SINA, 250 F.3d 67, 75 (2d Cir. 2001) (“[I]f the final intended destination at the time the shipment begins is another state, the Carmack Amendment applies throughout the shipment, even as to a [*6]  carrier that is only responsible for an intrastate leg of the shipment.”); Merchants Fast Motor Lines, Inc. v. I.C.C., 528 F.2d 1042, 1044 (5th Cir. 1976) (“It is elemental that a carrier is engaged in interstate commerce when transporting goods either originating in transit from beyond Texas or ultimately bound for destinations beyond Texas, even though the route of the particular carrier is wholly within one state.”). Because the information before the Court only suggests a shipment within Texas, the Carmack Amendment does not apply.¹

Second, even if the Carmack Amendment does apply and completely preempts Plaintiff’s state-law claims, the Court still lacks jurisdiction because the Complaint does not allege damages exceeding $10,000. Though the Court’s conclusion does not require the Court to apply the complete preemption doctrine, the Court will explain this doctrine to provide context for Defendant’s arguments concerning preemption under the Carmack Amendment and the FAAAA below.

“[T]he presence of federal question jurisdiction is governed by reference to the “well-pleaded complaint” doctrine. Dawson ex rel. Thompson v. Ciba-Geigy Corp., USA, 145 F. Supp. 2d 565, 568 (D.N.J. 2001) (citing Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808, 106 S. Ct. 3229, 92 L. Ed. 2d 650 (1986)). The well-pleaded complaint doctrine makes a plaintiff the “master of the complaint,” and a defendant may remove a case filed in state court only if a federal claim exists on the face [*7]  of a plaintiff’s complaint. Id. (citing Merrell Dow Pharms., Inc., 478 U.S. at 808); Hall v. Keyes, No. 1:21-CV-04748, 2021 U.S. Dist. LEXIS 120542, 2021 WL 2660296, at *2 (D.N.J. June 29, 2021) (citations omitted). It follows that defenses grounded in federal law generally do not establish federal question jurisdiction, even if federal law preempts a state-law claim. Caterpillar Inc. v. Williams, 482 U.S. 386, 392-93, 107 S. Ct. 2425, 96 L. Ed. 2d 318 (1987).

However, “a corollary” rule known as the “complete preemption doctrine” applies where “the pre-emptive force of a [federal] statute is so ‘extraordinary’ that it ‘converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.’” Id. at 393 (quoting Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 65, 107 S. Ct. 1542, 95 L. Ed. 2d 55 (1987)). “Once an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law.” Id. (citing Franchise Tax Board of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 24, 103 S. Ct. 2841, 77 L. Ed. 2d 420 (1983)). Put differently, “[c]laims that are completely preempted are necessarily federal in character, and thus are converted into federal claims.” Mitsui O.S.K. Lines, Ltd. v. Evans Delivery Co., 948 F. Supp. 2d 406, 411 (D.N.J. 2013) (quoting In re U.S. Healthcare, Inc., 193 F.3d 151, 160 (3d Cir. 1999)).

To conclude that a federal statute completely preempts state law claims, a court must find that the federal statute in question provides an “alternative cause of action” for a plaintiff, and evinces “a clear indication of a Congressional intention to permit removal [*8]  despite the plaintiff’s exclusive reliance on state law.” Goepel v. Nat’l Postal Mail Handlers Union, a Div. of LIUNA, 36 F.3d 306, 311 (3d Cir. 1994) (citation and quotations omitted).

There is substantial authority to support Defendant’s argument that the Carmack Amendment completely preempts state-law claims preempts claims concerning damage to property incurred in interstate shipping such as those advanced here. Though the Third Circuit has not explicitly addressed the issue, it has implicitly found the Carmack Amendment satisfies both prongs required for complete preemption:

[f]or over one hundred years, the Supreme Court has consistently held that the Carmack Amendment has completely occupied the field of interstate shipping. Almost every detail of the subject is covered 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. The Court has consistently described the Amendment’s preemptive force as exceedingly broad—broad enough to embrace all losses resulting from any failure to discharge a carrier’s duty as to any part of the agreed transportation.

Certain Underwriters at Int. at Lloyds of London v. United Parcel Service of Am., Inc., 762 F.3d 332, 335-36 (3d Cir. 2014) (citations and quotations omitted).² Given Congress’s intent to “completely occupy” the field of interstate shipping and provide a uniform cause of action for disputes [*9]  arising in this field, the Fifth Circuit,³ Ninth Circuit,⁴ courts in this district,⁵ and district courts elsewhere⁶ have found that the Carmack Amendment completely preempts state-law claims concerning losses resulting from inter-state transportation. Thus, while the Third Circuit has not explicitly ruled on this issue, Defendant’s complete preemption argument is well supported.

However, the Court need not decide the complete preemption issue because, even if the Carmack Amendment completely preempts Plaintiff’s state-law claims, the Court would still lack jurisdiction. The Court can exercise jurisdiction over Plaintiff’s Carmack Amendment claim “only if the matter in controversy for each receipt or bill of lading exceeds $10,000, exclusive of interest and costs.” 28 U.S.C. § 1337(a). Because this case involves a single shipment of a single car and a single bill of lading, [see Dkt. 11 at 6], the amount in controversy must exceed $10,000 for this Court to retain jurisdiction over Plaintiff’s Carmack Amendment Claim.

Two principles are relevant in determining the amount in controversy in this case. First, “determining the amount in controversy [in a case removed from state to federal court] begins with a reading [*10]  of the complaint filed in the state court.” Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 398 (3d Cir. 2004). Second, damages for Carmack Amendment claims generally equal the difference between the value of the goods when purchased and the value of the goods when delivered, but can also include all foreseeable “losses resulting from any failure to discharge a carrier’s duty as to any part of the agreed transportation.” Mecca & Sons Trucking Corp. v. White Arrow, LLC, 763 F. App’x 222, 226-27 (3d Cir. 2019) (citations and quotations omitted).

The Complaint does not allege damages exceeding $10,000. The Complaint alleges that the Car suffered damage during transport that cost $3,266.69 to repair. [Compl. ¶ 7]. Although Plaintiff seeks treble damages under the NJCFA [see Dkt. 1 Exh. A], the Court assumes here that the Carmack Amendment preempts the NJCFA claim, and treble damages are not available under the Carmack Amendment.⁷ See 49 U.S.C. § 14706(a)(1) (“The liability imposed under this paragraph is for the actual loss or injury to the property….”); Lloyds of London, 762 F.3d at 335 (“The Carmack Amendment struck a compromise between shippers and carriers. In exchange for making carriers strictly liable for damage to or loss of goods, carriers obtained a uniform, nationwide scheme of liability, with damages limited to actual loss….”); Margetson v. United Van Lines, Inc., 785 F. Supp. 917, 921 (D.N.M. 1991) (“The award of either multiple or punitive damages is inconsistent with the legislative intent of the Carmack Amendment, which allows [*11]  recovery of only actual damages; the imposition of treble or punitive damages would impermissibly frustrate legislative intent.”); accord Cleveland v. Beltman N. Am. Co., 30 F.3d 373, 379 (2d Cir. 1994); Nichols v. Mayflower Transit, LLC, 368 F. Supp. 2d 1104, 1108 (D. Nev. 2003) (collecting cases).

Defendant argues that the amount in controversy exceeds $10,000 because Plaintiff listed a demand of $15,082.00 on the civil cover sheet filed with the Superior Court alongside the Complaint. [Dkt. 11 at 13]. The Court rejects this argument for three reasons. First, Plaintiff presumably made this demand assuming that treble damages were available under the NJCFA.⁸ But the Carmack Amendment would foreclose a treble damages award in this case, as mentioned above. Second, “[t]he amount in controversy is generally decided from the face of the complaint itself.” Rosenfield v. Forest City Enterps., L.P., 300 F. Supp. 3d 674, 677 (E.D. Pa. 2018) (citing Angus v. Shiley Inc., 989 F.2d 142, 145 (3d Cir. 1993)). Thus, the “court is not bound by [the civil cover sheet] when considering whether the jurisdictional requirement has been met.” Valley v. State Farm Fire & Cas. Co., 504 F. Supp. 2d 1, 6 (E.D. Pa. 2006). Third, Plaintiff argues explicitly that “Plaintiff simply does not seek damages in excess of $10,000.00.” [Dkt. 10-1 at 16]. Thus, the demand listed on Plaintiff’s civil cover sheet does not persuade the Court that the amount in controversy exceeds $10,000.

In sum, because the Car was only shipped within Texas, and because the amount [*12]  in controversy alleged in the Complaint does not exceed the $10,000 statutory threshold for federal jurisdiction under 28 U.S.C. § 1337(a), the Court lacks jurisdiction to hear this case under the Carmack Amendment.

b. FAAAA

Defendant alternatively argues that 49 U.S.C. § 14501(c) of the FAAA⁹ preempts Plaintiff’s state-law claims and confers jurisdiction on the Court. [Dkt. 11 at 11]. The Court rejects this argument for procedural and substantive reasons. Procedurally, Defendant did not cite or refer to the FAAAA as a “ground for removal” in its removal notice to the Court. Defendant therefore failed to comply with 28 U.S.C. § 1446(a), which the Court must construe strictly in favor of remand. Westmoreland Hosp. Ass’n, 605 F.2d at 123; see also Hunt v. Acromed Corp., 961 F.2d 1079, 1082 (3d Cir. 1992) (remanding case for technical failings in removal process even though “substantive statutory criteria for the exercise of removal jurisdiction appear to have been met”). Substantively, Defendant only argues that the FAAAA preempts Plaintiff’s state-law claims, not that the FAAAA completely preempts Plaintiff’s state-law claims. Likewise, the cases upon which Defendant relies do not address the FAAAA’s complete preemption of state law claims.¹⁰ But “[t]he difference between preemption and complete preemption is important.” Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 355 (3d Cir. 1995). “When the doctrine of complete preemption does [*13]  not apply, but the plaintiff’s state claim is arguably preempted … the district court, being without removal jurisdiction, cannot resolve the dispute regarding preemption.” Id. “It lacks power to do anything other than remand to the state court where the preemption issue can be addressed and resolved.” Id. Because Defendant fails to argue or cite authority that the FAAAA completely preempts Plaintiff’s state-law claims, Defendant does not meet its burden of establishing the Court’s subject-matter jurisdiction over this case. Latzanich, 2016 U.S. Dist. LEXIS 8901, 2016 WL 749055, at *2.

III. Conclusion

For the reasons set forth above, the Court finds that Defendant has not demonstrated that the Court has subject-matter jurisdiction over this case under the Carmack Amendment or the FAAAA. The Court will therefore grant Plaintiff’s motion and remand the case to the Superior Court of New Jersey, Atlantic County [*14]  Vicinage for further proceedings.

March 1, 2022

/s/ Joseph H. Rodriguez

Hon. Joseph H. Rodriguez, USDJ

Order

This matter having come before the Court on the Motion to Remand this case to the Superior Court of New Jersey, Atlantic County [Dkt. 10] filed by Plaintiff BMW Auto Sales, Inc.; and the Court having considered the written submissions of the parties; and for the reasons set forth in the Court’s Opinion of even date,

IT IS on this 1st day of March 2022 hereby

ORDERED that Plaintiff’s Motion to Remand [Dkt. 10] is granted; and it is further

ORDERED that the Clerk shall Remand this case to the Superior Court of New Jersey,

Atlantic County for further proceedings.

/s/ Joseph H. Rodriguez

Hon. Joseph H. Rodriguez, USDJ

End of Document

---

¹ As an exhibit to Plaintiff’s Complaint in state court, Plaintiff attached what appears to be an invoice for the work done to repair the Car. [See Dkt. 1-1 at 25]. Though difficult to read, it appears that a company located in New Jersey issued the invoice. [Id.]. While this invoice suggests that the Car eventually reached New Jersey, the parties do not allege or argue that this was the case, or that the shipment within Texas at issue here was just one “leg” of a single shipment from Texas to New Jersey. Project Hope, 250 F.3d at 75. Thus, this invoice alone does not convince the Court that the Carmack Amendment applies.

² The Third Circuit’s analysis quoted here concerns whether the Carmack Amendment barred a plaintiff’s claims under “ordinary” or “express” preemption where the court’s jurisdiction was not in question. “Ordinary” or “express” preemption is distinct from “complete” preemption. “State-law claims that are subject to express preemption are displaced and thus subject to dismissal. Claims that are completely preempted are necessarily federal in character, and thus are converted into federal claims.” In re U.S. Healthcare, Inc., 193 F.3d 151, 160 (3d Cir. 1999) (citations and quotations omitted).

³ Hoskins v. Bekins Van Lines, 343 F.3d 769, 778 (5th Cir. 2003).

⁴ Hall v. N. Am. Van Lines, Inc., 476 F.3d 683, 688 (9th Cir. 2007).

⁵ Surplus Afr. Foods, LLC v. Air France, No. CR217CV7105SDWCLW, 2017 U.S. Dist. LEXIS 223639, 2017 WL 10664134, at *4 (D.N.J. Nov. 30, 2017), report and recommendation adopted, No. CV177105SDWCLW, 2017 U.S. Dist. LEXIS 223636, 2017 WL 10664145 (D.N.J. Dec. 18, 2017); Rising Up Garden Ctr. v. Online Freight Servs., Inc., No. CV 2:16-2341 (WJM), 2016 U.S. Dist. LEXIS 84606, 2016 WL 3546582, at *2 (D.N.J. June 29, 2016); Orlick v. J.D. Carton & Son, Inc., 144 F. Supp. 2d 337, 344-45 (D.N.J.2001) (finding that state law claims for breach of contract, common law fraud, violation of NJCFA, slander of credit and punitive damages were completely preempted by Carmack Amendment).

⁶ St. Pierre v. Ward, 542 F. Supp. 3d 549, 555 (W.D. Tex. 2021); Rehman v. Basic Moving, No. CIV.A. 09-248, 2009 U.S. Dist. LEXIS 41281, 2009 WL 1392149, at *4 (W.D. Pa. May 15, 2009); Bear MGC Cutlery Co. v. Estes Exp. Lines, Inc., 132 F. Supp. 2d 937, 947 (N.D. Ala. 2001) (collecting cases) (denying motion to remand and permitting plaintiff 15 days to amend complaint to state a claim under the Carmack Amendment).

⁷ Moreover, $3,266.69 x 3 = $9,800.07, which does not exceed $10,000.00.

⁸ Plaintiff’s brief supports this assumption. [Dkt. 10-1 at 16-17].

⁹ With certain enumerated exceptions, the FAAA states that

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 … or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.

49 U.S.C.A. § 14501(c)(1).

¹⁰ E.g. Lowe v. N.H. Motor Transp. Assoc., 552 U.S. 364, 372, 128 S. Ct. 989, 169 L. Ed. 2d 933 (2008); Deerskin Trading Post Inc. v. United Parcel Service of Am. Inc., 972 F. Supp. 665, 668 (N.D. Ga. 1997).