United States District Court for the Northern District of Texas, Dallas Division

August 19, 2022, Decided; August 19, 2022, Filed

CIVIL ACTION NO. 3:21-CV-2526-B

Reporter

2022 U.S. Dist. LEXIS 148787 *; 2022 WL 3579895

EMMY VON DER AHE and THOMAS VON DER AHE, Plaintiffs, v. 1-800-PACK-RAT, LLC and ZIPPY SHELL INC., Defendants.

Prior History: Ahe v. 1-800-Pack-Rat, LLC, 2022 U.S. Dist. LEXIS 62931 (N.D. Tex., Apr. 5, 2022)

Core Terms

preempted, good faith, damages, insurance contract, motion to dismiss, interstate, deceptive, practices, insurance business, cause of action, common law duty, shipment

Counsel:  [*1] For Emmy Von Der Ahe, Thomas Von Der Ahe, Plaintiffs: Gwen E Bhella, LEAD ATTORNEY, Calhoun, Bhella & Sechrest, LLP, Dallas, TX.

For 1-800-Pack Rat LLC, Zippy Shell Inc, Defendants: Vic H Henry, LEAD ATTORNEY, Davinder Jassal, Emileigh Stewart Hubbard, Henry Oddo Austin & Fletcher PC, Dallas, TX.

Judges: JANE J. BOYLE, UNITED STATES DISTRICT JUDGE.

Opinion by: JANE J. BOYLE

Opinion

MEMORANDUM OPINION AND ORDER

Before the Court is Defendants 1-800-Pack-Rat, LLC and Zippy Shell Inc. (collectively, Zippy Shell)’s Motion to Dismiss Plaintiffs’ Amended Complaint (Doc. 12). For the following reasons, the motion is GRANTED.

I.

BACKGROUND

This case is about a moving contract gone wrong. The Court has detailed Plaintiffs Thomas Von Der Ahe (Tommy) and his mother Emmy Von Der Ahe (Mrs. Von Der Ahe)(collectively, the Von Der Ahes)’ factual allegations in its prior Memorandum Opinion and Order and does not repeat them here. See generally Von Der Ahe v. 1-800-Pack-Rat, LLC, 2022 U.S. Dist. LEXIS 62931, 2022 WL 1018398, at *1-2 (N.D. Tex. Apr. 5, 2022). Relevant to the present motion, after the Court granted Zippy Shell’s motion to dismiss all claims in the Von Der Ahes’ original petition¹ as either preempted by the Carmack Amendment or insufficiently pleaded, the Von Der Ahes filed an amended complaint asserting a claim under the Carmack Amendment and three state law claims: (1) [*2]  violation of the DTPA, (2) common law breach of the duty of good faith, and (3) deceptive practices under the Texas Insurance Code. Doc. 10, Am. Compl., ¶¶ 29-78. Zippy Shell filed the instant motion to dismiss the state law claims.² Doc. 12, Defs.’ Mot. Dismiss. The Motion has been fully briefed and is ripe for review. The Court considers it below.

II.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 8(a)(2), a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Rule 12(b)(6) authorizes a court to dismiss a plaintiff’s complaint for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). In considering a Rule 12(b)(6) motion to dismiss, “[t]he court accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). But the court will “not look beyond the face of the pleadings to determine whether relief should be granted based on the alleged facts.” Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999).

To survive a motion to dismiss, plaintiffs must plead “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). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009). “A claim has facial plausibility when the plaintiff [*3]  pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “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.” Id. (quoting Twombly, 550 U.S. at 556). When well-pleaded facts fail to meet this standard, “the complaint has alleged—but it has not shown—that the pleader is entitled to relief.” Id. at 679 (quotation marks and alterations omitted).

III.

ANALYSIS

The Von Der Ahes plead the following Texas-law claims: (1) violation of the DTPA, (2) common law breach of the duty of good faith, and (3) deceptive practices under the Texas Insurance Code. Doc. 10, Am. Compl., ¶¶ 29-78. Zippy Shell moves to dismiss each of these as preempted by the Carmack Amendment. See Doc. 12, Defs.’ Mot. Dismiss, 6. The Court considers each in turn.

A. The DTPA Claim Is Preempted

The Von Der Ahes bring a DTPA claim based on Zippy Shell’s alleged misrepresentations (1) during the storage phase of the parties’ relationship, and (2) in a separate contents-protection policy insurance contract (the Contents Protection Plan). See Doc. 10, Am. Compl., ¶¶ 37-49. The Von Der Ahes assert that [*4]  these claims are based on “separate harms” and not preempted. Doc. 13, Pls.’ Resp., 1, 6. The Court finds that a DTPA claim on these bases is preempted by the Carmack Amendment.³

First: the storage phase. In its first Memorandum Opinion and Order, the Court explained why the Von Der Ahes’ claims arising out of the storage phase are preempted by the Carmack Amendment. Von Der Ahe, 2022 U.S. Dist. LEXIS 62931, 2022 WL 1018398, at *4-6 (explaining that “the Von Der Ahes’ ‘fixed and persisting intent . . . at the time of shipment’ was an interstate shipment of the goods from Alabama to multiple locations in Texas” and that the latter, intrastate phases of the move, including storage in between the Texas deliveries, were therefore part of the larger interstate shipment). For the same reason, the Court finds that a DTPA claim based on storage-phase misrepresentations is preempted.

Second: the separate Contents Protection Plan contract. “[T]he Carmack Amendment . . . provide[s] the exclusive cause of action for loss or damages to goods arising from the interstate transportation of those goods by a common carrier.” Hoskins v. Bekins Van Lines, 343 F.3d 769, 778 (5th Cir. 2003) (emphasis omitted). However, some courts have acknowledged situations in which a carrier may be liable to a shipper for “separate harms” that are distinct from the loss or damage [*5]  to goods. See Gordon v. United Van Lines, Inc., 130 F.3d 282, 289 (7th Cir. 1997) (citing Rini v. United Van Lines, Inc., 104 F.3d 502, 506 (1st Cir. 1997)(recognizing a claim for intentional infliction of emotional distress)). The Fifth Circuit has considered an exception for a plaintiff who “alleges injuries separate and apart from those resulting directly from the loss of shipped property,” but has not yet recognized a cause of action under this standard. Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 382 (5th Cir. 1998)(citing Rini, 104 F.3d at 506-07).

Here, the Von Der Ahes seek compensatory damages, “including economic damages, out of pocket damages, cost of mitigation, lost time, and mental anguish damages,” as well as punitive damages under the DTPA, attorneys’ fees, court costs, and pre- and post-judgment interest, based in part on misrepresentations made in the purportedly separate contract for the Contents Protection Plan. Doc. 10, Am. Compl., ¶¶ 45-49; Doc. 13, Pls.’ Resp., 12. Specific to the Contents Protection Plan, they allege that “when Plaintiffs made claims . . ., Defendants refused to provide [the] protection” it represented the policy provided. Id. ¶ 45. Zippy Shell argues that all of the Von Der Ahes’ pleaded damages—even those arising from the Contents Protection Plan—are directly based on the loss of property shipped in interstate commerce, because but for the loss or damage [*6]  to their goods, the Von Der Ahes would not have a claim under the policy and therefore the DTPA. See Doc. 14, Defs.’ Reply, 4.

The Court finds that even assuming that the Contents Protection Plan contract was separate from the contract for interstate shipment of goods, the injuries based on that plan are not “separate and apart” from the loss of those goods. See Morris, 144 F.3d at 379, 382-83 (“The compensatory damages are for lost wages and emotional suffering incurred by the Morrises as a result of the destruction of their household goods. The punitive damages are to punish Covan for any egregious conduct in the course of discharging its duties under the shipping contract.”); St. Pierre, 542 F. Supp. 3d at 555; Neal v. Allied Van Lines, Inc., 2007 U.S. Dist. LEXIS 23016, 2007 WL 831835, at *1 (W.D. Tex. Mar. 13, 2007). Thus, the Von Der Ahes’ DTPA claim based upon misrepresentations regarding the Contents Protection Plan is preempted.

Therefore, the Court DISMISSES WITH PREJUDICE the Von Der Ahes’ Texas DTPA claim.

B. The Insurance-Related Claims Are Preempted

The Von Der Ahes also bring two insurance-related claims based on Zippy Shell’s alleged failure to comply with the Contents Protection Plan: one under Texas common law and another under the Texas Insurance Code. Doc. 10, Am. Compl., ¶¶ 50-78. The Court analyzes each claim in turn below and finds [*7]  them preempted.

1. Common Law Duty of Good Faith

The Von Der Ahes first allege that the Contents Protection Plan was an “insurance contract” and that Zippy Shell breached the common law duty of good faith that arises from the “special relationship” an insurance contract creates between an insurer and the insured. Doc. 10, Am. Compl., ¶¶ 51-52 (citing Arnold v. Nat’l Cnty. Mut. Fire Ins. Co., 725 S.W.2d 165, 167 (Tex. 1987)). Zippy Shell argues that the Von Der Ahes’ claim should be dismissed because it relies on a legal conclusion that the Contents Protection Plan is an insurance contract and because the Contents Protection Plan is not a separate insurance contract, but part of the same contract for interstate shipment that is preempted under the Carmack Amendment. Doc. 14, Defs.’ Reply, 9; Doc. 12, Defs.’ Mot. Dismiss, 17.

Assuming without deciding that the Contents Protection Plan is an insurance contract, the Court finds that this claim based on the common law duty of good faith is preempted because the injury alleged is not separate and apart from the loss or damage to their goods. See Morris, 144 F.3d at 382. That is, but for the damage to and loss of goods, the Von Der Ahes would have no cause of action for breach of the duty of good faith based on the Contents Protection Plan. See id.

Therefore, [*8]  the Court DISMISSES WITH PREJUDICE the Von Der Ahes’ Texas common law duty of good faith claim.

2. Texas Insurance Code

The Von Der Ahes also bring a claim under Texas Insurance Code § 541.151. Doc. 10, Am. Compl., ¶¶ 70-78. Under this statute, a person or entity “engaged in the business of insurance” may be liable to another for unfair or deceptive trade practices. Tex. Ins. Code Ann §§ 541.151, 541.002. The statute does not define what it means to be “engaged in the business of insurance.” Tex. Ins. Code Ann. § 541.002.

The Von Der Ahes allege that Zippy Shell sold them an insurance policy—the Contents Protection Plan—thereby engaging in the business of insurance. Doc. 10, Am. Compl., ¶ 72. Zippy Shell argues that it merely provided claims-handling services, which does not make it an insurance provider or engaged in the business of insurance. Doc. 12, Defs.’ Mot. Dismiss, 17-18. Moreover, Zippy Shell points to other cases in which courts have rejected plaintiffs’ attempts to avoid preemption by re-framing an insurance-related claim against a motor carrier as a separate insurance claim. Id. at 14 (citing Harris v. United Parcel Serv., Inc., 2015 U.S. Dist. LEXIS 178522, 2015 WL 13918141, at *2 (C.D. Cal. July 9, 2015)).

Assuming without deciding that Zippy Shell engaged in the business of insurance by selling the Contents Protection Plan and that the Texas Insurance Code provides a private [*9]  cause of action against Zippy Shell for deceptive practices, the Court finds that this claim is preempted for the same reasons as the claims discussed above—lack of a separate injury.⁴ See Morris, 144 F.3d at 382. The Von Der Ahes’ claim for deceptive practices, although arising out of the Texas Insurance Code, is not materially different from the preempted DTPA claim. Cf. Harris, 2015 U.S. Dist. LEXIS 178522, 2015 WL 13918141, at *2.

Therefore, the Court DISMISSES WITH PREJUDICE the Von Der Ahes’ Texas Insurance Code claim.

IV.

CONCLUSION

In sum, for the reasons stated above, the Court GRANTS Zippy Shell’s Motion to Dismiss Plaintiff’s Amended Complaint(Doc. 12) and DISMISSES WITH PREJUDICE the Von Der Ahes’ claims for violation of the DTPA, breach of the Texas common law duty of good faith, and deceptive trade practices under the Texas Insurance Code, as well as for attorneys’ fees based on these claims.

SO ORDERED.

SIGNED: August 19, 2022.

/s/ Jane J. Boyle

JANE J. BOYLE

UNITED STATES DISTRICT JUDGE

End of Document

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¹ The Von Der Ahes’ original petition asserted state-law claims for breach of contract, common-law fraud, negligent misrepresentation, fraud by non-disclosure, conversion, Texas Deceptive Trade Practices Act (DTPA) violations, breach of the duty of good faith, and breach of the prompt payment statute. Doc. 1-2, Pls.’ Orig. Pet., ¶¶ 29-80.

² Zippy Shell does not move to dismiss the Von Der Ahes’ Carmack Amendment claim. See Doc. 12, Defs.’ Mot. Dismiss.

³ In its first Memorandum Opinion and Order, the Court granted leave to re-plead DTPA claims based on false, misleading, or deceptive practices occurring prior to the contract for interstate shipment of goods. See Von Der Ahe, 2022 U.S. Dist. LEXIS 62931, 2022 WL 1018398, at *6-7 (citing Brown v. Am. Transfer & Storage Co., 601 S.W.2d 931, 938 (Tex. 1980)). Zippy Shell argues that Brown was decided before the Fifth Circuit’s blanket preemption of DTPA claims in Moffit v. Bekins Van Lines Co., 6 F.3d 305, 307 (5th Cir. 1993), has been disregarded by courts in the Northern District of Texas and the Fifth Circuit, and should be likewise disregarded by this Court. Doc. 12, Defs.’ Mot. Dismiss, 10-12; see, e.g., St. Pierre v. Ward, 542 F. Supp. 3d 549, 554 (W.D. Tex. 2021) (stating that in deciding whether DTPA claims were preempted by the Carmack Amendment, “[t]he Court is bound by Fifth Circuit law—not Texas state law”); Franyutti v. Hidden Valley Moving & Storage, Inc., 325 F. Supp. 2d 775, 777 n.1 (W.D. Tex. 2004) (“Because [Brown] occurred prior to many of the Supreme Court and Fifth Circuit opinions relied upon, [its] holding has limited value.”); Mayflower Transit, Inc. v. Weil, Gotshal & Manges, L.L.P., 2000 U.S. Dist. LEXIS 20299, 2000 WL 34479959, at *3 (N.D. Tex. Oct. 18, 2000) (“Although Defendants’ reliance on Brown is understandable, and though this argument may be logical, this Court must follow federal case law in reaching its decision and the Fifth Circuit’s holding in Moffit is controlling in this case.”).

The Von Der Ahes claim that some of the misrepresentations underlying their DTPA claims are precontractual and potentially within the exception identified by Brown. Doc. 13, Pls.’ Resp., 7-8 (identifying the allegations in Doc. 10, Am. Compl., ¶ 44(a)—(c) as pre-contractual). However, the Court finds that each of these paragraphs, read in context, refers to misrepresentations made in the contract(s) at issue or as part of the contracting process—not to separate pre-contractual conduct. See Doc. 10, Am. Compl., ¶ 44(a)—(c). Further, as explained in this Section, the Court finds that no separate injury exists for these allegedly precontractual misrepresentations. So, the Court does not decide whether Brown might establish an exception to Moffit‘s holding.

⁴ The Von Der Ahes do not respond to Zippy Shell’s additional argument that the McCarran-Ferguson Act, 15 U.S.C. § 1012(b), which ensures that a federal law does not encroach on states’ authority to regulate the business of insurance, does not establish an exception to Carmack Amendment preemption for these insurance-based claims. Doc. 12, Defs.’ Mot. Dismiss, 15 (citing Prince v. United Van Lines, Inc., 1997 U.S. Dist. LEXIS 23702, 1997 WL 53121, at *3 (N.D. Tex. Feb. 4, 1997)); see Doc. 10, Am. Compl.; Doc. 13, Pls.’ Resp. The Court therefore does not address this argument.

United States District Court for the District of New Jersey

August 25, 2022, Decided; August 25, 2022, Filed

Civil Action No. 21-12809

Reporter

2022 U.S. Dist. LEXIS 152984 *; 2022 WL 3681258

BEECHER’S HANDMADE CHEESE, LLC, Plaintiff, v. NEW SOUND TRANSPORTATION LLC, and RAY S.F., INC., d/b/a Freezpak Logistics, Defendants.

Notice: NOT FOR PUBLICATION

Core Terms

carrier, transportation, allegations, shipment, cheese, breach of contract, motion to dismiss, interstate

Counsel:  [*1] For BEECHER’S HANDMADE CHEESE, LLC, Plaintiff: TIMOTHY DONALD BARROW, GRIST MILL SQUARE, LEBANON, NJ.

For NEW SOUND TRANSPORTATION LLC, Defendant: MARC I. KUNKIN, LEAD ATTORNEY, CASEY & BARNETT LLC, NEW YORK, NY.

For RAY S.F., INC., doing business as, FREEZPAK LOGISTICS, Defendant: GEORGE W. WRIGHT, NARINDER S. PARMAR, LEAD ATTORNEYS, GEORGE W. WRIGHT & ASSOCIATES, LLC, HACKENSACK, NJ.

Judges: John Michael Vazquez, United States District Judge.

Opinion by: John Michael Vazquez

Opinion

John Michael Vazquez, U.S.D.J.

This matter arises out of a trucking accident. Presently before the Court is the motion of Defendant Ray S.F., Inc. d/b/a Freezpak Logistics (“Freezpak”), to dismiss Plaintiff’s Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). D.E. 51. The Court reviewed all submissions in support and in opposition¹ and considered the motion without oral argument pursuant to Federal Rule of Civil Procedure 78(b) and Local Civil Rule 78.1(b). For the reasons discussed below, the motion to dismiss the Amended Complaint is DENIED. The Court also orders additional briefing as to the scope of the Carmack Amendment‘s preemptive effect.

I. BACKGROUND²

Plaintiff is a Washington-state limited liability company. D.E. 48 (“AC”) ¶ 1. Plaintiff contacted Freezpak to arrange a shipment of 17 pallets’ worth (or 877 cases) of cheese from [*2]  a facility in South Plainfield, New Jersey to Burien, Washington; the transportation was to start on May 7 or 8, 2020. Id. ¶¶ 10, 13. Freezpak, a New Jersey corporation, is registered as a “transportation property broker” under the Federal Motor Carrier Safety Administration. Id. ¶¶ 3, 6 (citing 49 U.S.C. § 13904). Plaintiff informed Freezpak that the cheese had to be transported in a cooled truck at a temperature between thirty-four and thirty-nine-degrees Fahrenheit. Id. ¶ 10. The bill of lading reflected as much. Id. ¶ 13. Plaintiff did not communicate with any other entity to arrange the shipment; Plaintiff avers that Freezpak “took responsibility for the transportation of the subject cargo[.]” Id. ¶ 12.

Defendant New Sound Transportation, LLC (“NST”), received the shipment in South Plainfield on May 8, 2020. Id. ¶ 13. The cheese was loaded into the specialized trailer called for in the bill of lading. Id. On May 14, 2020, the truck was involved in an accident near Billings, Montana. Id. ¶ 14. The cheese was loaded into another truck and brought to an NST warehouse in Fife, Washington. Id. Freezpak informed Plaintiff of the accident, and the cheese was inspected at the Fife warehouse. Id. ¶¶ 15, [*3]  16. The cheese had superficial blemishes but otherwise appeared to have weathered the crash. Id. However, Defendants were unable to produce records that the cheese was kept at the necessary temperature throughout the trip either before or after the accident, and Plaintiff assumes that the cheese must have been exposed to harmfully high temperatures because of the accident. Id. ¶¶ 16-20. As a result, the cheese effectively became damaged goods, and Plaintiff realized a loss of $243,433.46 when Plaintiff sold it for salvage value on October 24, 2020. Id. ¶¶ 22-23.

Plaintiff commenced this action on June 21, 2021. D.E. 1. Plaintiff filed the operative Amended Complaint on May 24, 2022. D.E. 48. The Amended Complaint brings claims under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 101, et seq., against both Defendants. AC ¶¶ 27-29. It also brings a claim for breach of contract against Freezpak. Id. ¶¶ 30-32. The current motion to dismiss followed. D.E. 51.

II. STANDARD OF REVIEW

Freezpak moves to dismiss the Amended Complaint for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). For a complaint to survive dismissal under Rule 12(b)(6), it must contain sufficient factual matter to state a claim that is plausible on its [*4]  face. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). A claim is facially plausible “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. Further, a plaintiff must “allege sufficient facts to raise a reasonable expectation that discovery will uncover proof of her claims.” Connelly v. Lane Constr. Corp., 809 F.3d 780, 789 (3d Cir. 2016). In evaluating the sufficiency of a complaint, district courts must separate the factual and legal elements. Fowler, 578 F.3d at 210-211 (3d Cir. 2009). A court “must accept all of the complaint’s well-pleaded facts as true.” Id. at 210. However, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice” to state a plausible claim. Feingold v. Graff, 516 F. App’x 223, 226 (3d Cir. 2013) (quoting Iqbal, 556 U.S. at 678).

In evaluating the sufficiency of a complaint, a district court must accept all factual allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). A court, however, is “not compelled to accept unwarranted inferences, unsupported conclusions or legal conclusions disguised as factual allegations.” Baraka v. McGreevey, 481 F.3d 187, 211 (3d Cir. 2007). If, after viewing the allegations in the complaint most favorable to the plaintiff, it appears that no relief could be granted under any set of facts consistent with [*5]  the allegations, a court may dismiss the complaint for failure to state a claim. DeFazio v. Leading Edge Recovery Sols., No. 10-2945, 2010 U.S. Dist. LEXIS 131357, 2010 WL 5146765, at *1 (D.N.J. Dec. 13, 2010).

III. ANALYSIS

A. Interstate Commerce Act Claims

The Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706 (the “Carmack Amendment“), governs the field of interstate shipping. See Certain Underwriters at Int. at Lloyds of London v. UPS of Am., Inc., 762 F.3d 332, 335 (3d Cir. 2014). Pursuant to the Carmack Amendment, “a carrier is liable for damages incurred during a shipment of goods, whereas a broker—someone who merely arranges for transportation—is not liable.” Tryg Ins. v. C.H. Robinson Worldwide, Inc., 767 F. App’x 284, 285 (3d Cir. 2019) (footnote omitted). “To establish a prima facie case against a carrier under the Carmack Amendment, a shipper must prove (1) delivery of goods to the initial carrier in good condition, (2) damage of the goods before delivery to their final destination, and (3) the amount of the damages.” Mrs. Ressler’s Food Prods. v. KZY Logistics LLC, 675 F. App’x 136, 140 (3d Cir. 2017) (internal quotation omitted).

Plaintiff alleges that NST is a carrier and that Freezpak “has acted as a de facto carrier in taking responsibility for the transportation of interstate shipments for Plaintiff[.]” See AC ¶ 4 (NST), ¶ 7 (Freezpak). Freezpak argues that it is not subject to the Carmack Amendment because Plaintiff has not plausibly alleged that Freezpak acted as an interstate carrier. D. Br. at 5-7. Plaintiff accuses Freezpak of putting form over substance and maintains that courts treat brokers as carriers for Carmack Amendment claims when [*6]  those parties “accept[] responsibility for ensuring the delivery of goods.” Plf. Opp’n at 6 (quoting Tryg, 767 F. App’x at 287).

The question of whether a party has accepted such responsibility is ultimately one of fact. E.g., Tryg, 767 F. App’x at 286 (deciding question after bench trial). At the motion to dismiss stage, “[i]t is inappropriate . . . to make any factual determinations regarding the precise nature of [Freezpak’s] business status and/or activities as to the transactions at issue.” Hartford Fire Ins. Co. v. Dynamic Worldwide Logistics, Inc., No. 17-553, 2017 U.S. Dist. LEXIS 142926, 2017 WL 3868702, at *2 (D.N.J. Sept. 5, 2017) (rejecting defendant’s argument that Carmack Amendment did not apply because defendant was a freight broker and not a “carrier” and denying motion to dismiss).

In addition, Plaintiff’s allegations are sufficiently alleged. The Amended Complaint outlines the negotiations between the parties and alleges that Freezpak assumed responsibility for the shipment. See AC ¶¶ 7, 12. It sufficiently alleges that there was an agreement, the date of transport, the conditions of transport (maintaining the required the temperature), the pick-up location, and the delivery location. Id. ¶¶ 10-13. And, as noted, Plaintiff indicates that it only dealt with Freezpak. Id. ¶ 12. Plaintiff has plausibly pled that Freezpak is subject to carrier liability.³

B. State Law Claim

Plaintiff [*7]  also brings what appears to be a state-law claim against Freezpak for breach of contract. AC ¶¶ 30-32. Specifically, Plaintiff alleges that Freezpak breached their agreement by failing to properly arrange transportation for Plaintiff’s cheese. Id. ¶ 31. Freezpak argues that Plaintiff’s breach-of-contract claim is better understood as a breach-of-warranty claim, but that, in any event, the AC does not plausibly allege such a claim. D. Br. at 10.

To state a claim under New Jersey law for breach of contract,⁴ a party must plausibly allege four elements:

[F]irst, that the parties entered into a contract containing certain terms; second, that plaintiffs did what the contract required them to do; third, that defendants did not do what the contract required them to do, defined as a breach of the contract; and fourth, that defendants’ breach, or failure to do what the contract required, caused a loss to the plaintiffs.

Goldfarb v. Solimine, 245 N.J. 326, 245 A.3d 570, 577 (N.J. 2021) (quoting Globe Motor Co. v. Igdalev, 225 N.J. 469, 139 A.3d 57, 64 (N.J. 2016)). The Amended Complaint contains sufficient facts to state a claim for breach of contract. For the same reasons that Plaintiff plausibly alleges a Carmack Amendment claim, it also sufficiently alleges a breach of contract count. AC ¶¶ 10-13. Plaintiff has sufficiently alleged an agreement [*8]  and sufficient certain terms of the agreement, including when and where the carrier was to pick up the shipment, the size of the shipment, the conditions under which the shipment had to be made, and the location to which the shipment was to be delivered. Id.

However, the Court has a separate concern that was not raised by either party. “For over one hundred years, the Supreme Court has consistently held that the Carmack Amendment has completely occupied the field of interstate shipping.” Certain Underwriters, 762 F.3d at 335. The Third Circuit has observed “that the Carmack Amendment preempts all state law claims for compensation for the loss of or damage to goods shipped by a ground carrier in interstate commerce.” Id. at 333. Preemption extends to claims for breach of contract under state common law. Id. at 336. In light of this potential issue, the Court instructs the parties to submit additional briefing as to whether Plaintiff’s claim for breach of contract claim is preempted by the Carmack Amendment.

IV. CONCLUSION

For the reasons set forth above, Freezpak’s motion is DENIED. However, the Court will order additional briefing on whether Plaintiff’s claim for breach of contract is preempted by the Carmack Amendment. An appropriate Order accompanies this Opinion.

Dated: August 25, 2022

/s/ John [*9]  Michael Vazquez

John Michael Vazquez, U.S.D.J.

ORDER

John Michael Vazquez, U.S.D.J.

For the reasons set forth in the accompanying Opinion, and for good cause shown,

IT IS on this 25th day of August, 2022,

ORDERED that Freezpak’s motion to dismiss, D.E. 51, is DENIED; and it is further

ORDERED that no later than September 16, 2022, Plaintiff and Freezpak shall each submit a brief as to whether Plaintiff’s claim for breach of contract is preempted by the Carmack Amendment. Each party may also submit a response to the other’s brief no later than September 23, 2022.

/s/ John Michael Vazquez

John Michael Vazquez, U.S.D.J.

End of Document

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¹ Freezpak’s brief in support of its motion to dismiss, D.E. 51-1 (“D. Br.”); Plaintiff’s opposition to the motion to dismiss, D.E. 54 (“Plf. Opp’n”); Freezpak’s reply, D.E. 56 (“D. Rep.”).

² The factual background is taken from the Amended Complaint (“AC”), D.E. 48. When reviewing a motion to dismiss, the Court accepts as true all well-pleaded facts in the complaint. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009).

³ Plaintiff alternatively argues that Freezpak can still be held liable as a broker for negligently hiring NST. Plf. Opp’n at 3-4. The Court does not reach this argument because of its ruling that Plaintiff has plausibly pled a claim against Freezpak. The Court notes, however, that there do not appear to be sufficient allegations in the AC to support a negligent hiring claim. The Court adds that Plaintiff fails to indicate whether this alternative argument refers to a Carmack Amendment or common law claim.

⁴ Plaintiff asserts that the Court has jurisdiction over the Carmack Amendment claim under 28 U.S.C. § 1337(a) and supplemental jurisdiction under 28 U.S.C. § 1367. AC ¶ 8. Neither party, however, performs a choice of law analysis, and neither party analyzes the breach of contract claim in terms of its legal elements. The Court notes that while Plaintiff invokes the Court’s supplemental jurisdiction, the Court may have diversity jurisdiction, 28 U.S.C. § 1332, as the parties appear to be completely diverse and the amount in controversy appears to be over $75,000. However, whether the Court exercised diversity jurisdiction or supplemental jurisdiction, its choice of analysis would be the same.

“In a case based on federal question jurisdiction where a court is exercising supplemental jurisdiction over state law claims, the federal court applies the choice of law rules of the forum state.” Carlton v. Choicepoint, Inc., No. 08-5779, 2009 U.S. Dist. LEXIS 109522, 2009 WL 4127546, at *5 (D.N.J. Nov. 23, 2009). New Jersey, the forum state here, utilizes the “most significant relationship” test to determine the applicable substantive law. See, e.g., Maniscalco v. Brother Int’l Corp., 793 F. Supp. 2d 696, 704 (D.N.J. 2011); Mills v. Ethicon, Inc., 406 F. Supp. 3d 363, 373 (D.N.J. 2019). The test consists of two prongs. The first prong requires that a court assess the potentially applicable laws to determine if there is a conflict between the laws at issue. Maniscalco, 793 F. Supp. 2d at 704. Where no conflict exists, the Court applies the forum state’s law. Id. Neither party indicates that the law of a state other than New Jersey should apply. As a result, the Court applies New Jersey law.