United States District Court, D. Maryland.

TRIAX, INC. Plaintiff,

v.

TFORCE FREIGHT, INC., Defendant.

Civil No. 1:22-cv-01693-JRR

|

07/19/2024

Julie R. Rubin, United States District Judge

MEMORANDUM OPINION

*1 This matter comes before the court on Defendant TForce Freight, Inc.’s unopposed Motion for Summary Judgment to Limit and Cap the Damages to a Maximum of $3,000.00 Subject to Plaintiff’s Proof of Liability. (ECF No. 42; the “Motion”). The court has reviewed all papers; no hearing is necessary. Local Rule 105.6 (D. Md. 2023). For the reasons that follow, by accompanying order, the Motion will be granted.

I. BACKGROUND

Plaintiff Triax, Inc. (“Triax”) is a corporation with its principal place of business in Frederick County, Maryland, with a subsidiary that sells “once-fired” brass. (ECF No. 22 ¶¶ 2, 4.) Defendant TForce Freight, Inc. (“TForce”) is a corporation with its principal office in Richmond, Virginia. Id. ¶ 3. TForce is a common carrier engaged in interstate commerce. (ECF No. 25 at p. 1.) In its Amended Complaint, Triax alleges that, through its third-party freight brokering service, FreightCenter, it hired TForce to handle the shipment of a 375-pound brass separating machine (the “Machine”), with a purchase cost of $11,000, from California to Maryland. (ECF No. 22 ¶ 5–6, 9.) At the time of the Amended Complaint, the Machine had not arrived at Triax’s warehouse. Id. ¶ 12. Triax’s Designated Representative, Andre Purnell (“Triax’s Designated Representative”), later testified that the Machine was ultimately delivered in “approximately May of 2023.” (ECF No. 42-2 at 51:21–52:7.)

TForce’s transportation of the Machine was subject to the Bill of Lading.¹ (ECF No. 22 ¶¶ 7, ECF No. 1-3 at p. 8; ECF No. 42-3 at p. 14.) FreightCenter generated the Bill of Lading, identifying TForce as the carrier and Triax as the “Ship to Location.” (ECF No. 22 ¶ 7; ECF No. 42-3 at p. 14.) FreightCenter generated the Bill of Lading on May 4, 2022, and TForce’s representative signed it on May 5, 2022—the day that the Machine was to be shipped. (ECF No. 22 ¶ 5; ECF No. 1-3 at p. 8; ECF No. 42-3 at p. 14.) On the Bill of Lading, FreightCenter included a class designation of 77.5 and a shipment weight of 375 pounds. (ECF No. 1-3 at p. 8; ECF No. 42-3 at p. 14; ECF No. 42-2 at 71:10–72:4.) Class designation is a value assigned to the freight. (ECF No. 42-3 ¶ 15.) The Bill of Lading included a warning that “Liability Limitation for loss or damage in this shipment may be applicable,” cited to the Carmack Amendment, 49 U.S.C. § 14706(c)(1), and advised that the shipment was “RECEIVED, subject to individually determined rates…that have been agreed upon in writing between the carrier and shipper, if applicable, otherwise to the rates, classifications[,] and rules that have been established by the carrier and are available to the shipper, on request.” (ECF No. 1-3 at p. 8; ECF No. 42-3 at p. 14.) The signed Bill of Lading included a sticker stating: “LIMITATIONS OF LIABILITY APPLY, SUBJECT TO LIMITS OF LIABILITY OF THE CARRIER’S RULE TARIFF.” (ECF No. 42-3 at p. 14.)

*2 TForce maintained a “Rules Tariff” at the time of the shipment in this case (the “TForce Tariff”). (ECF No. 42-3 ¶ 3; ECF No. 42-3 at p. 9.) The TForce Tariff provides:

In an effort to provide its customers with quality service at competitive rates, certain commodities may be offered to be shipped at less than full value and TForce Freight encourages shippers to review this publication, as some Items may be subject to limitations of liability, released values or other options specific to a shipment or a commodity.

(ECF No. 42-3 at p. 9). The TForce Tariff was made available to shippers upon request. (ECF No. 42-3 ¶ 4.) It included Item 166 that identified its maximum liability per pound according to class designation. (ECF No. 42-3 at p. 11.) According to the TForce Tariff, the maximum liability for a class designation of 77.5 is $8.00 per pound. Id. It further provided that TForce, as the carrier, “will not be liable for any damages in excess of the limitations within Item 166,” and that TForce would not “be liable for any indirect, incidental, consequential, loss of profit, loss of income, special, exemplary, or punitive damages.” Id. at p. 12.

Regarding the TForce Tariff, Triax’s Designated Representative testified:

Q: Did you request a copy of the motor carrier tariff from FreightCenter

A: No.

Q: Did you request a copy of the motor carrier tariff from TForce Freight?

A: No.

Q: Based on the bill of lading, did you understand that the transportation was subject to the motor carrier tariff? A: Yes.

Q: In terms of the weight itself, was the weight that you had provided to FreighCenter, the 375 pounds?

A: Yes, that’s the weight that I provided to them. (ECF No. 42-2 at 83:21–84:13.) Triax’s Designated Representative further testified that he knew that the freight class translated to the value of the freight. Id. at 105:17–20.

Following non-delivery of the Machine, Triax filed suit against TForce on June 10, 2022, in the Circuit Court for Frederick County, Maryland. (ECF No. 1-3.) On July 8, 2022, TForce removed the case to this court. (ECF No. 1.) Following motions practice, Triax filed the Amended Complaint, the operative complaint in this action, asserting one count under the Carmack Amendment. (ECF No. 22; the “Amended Complaint”). Triax seeks: (i) monetary damages in the amount of $1,007,254.32, presumably (although ambiguously) consisting of the cost of the Machine and the cost of purchase orders that it was set to process upon receiving the Machine; (ii) pre-judgment interest and costs; and (iii) “such other, further and different relief as may be just on the premises.” Id. at p. 4. Defendant filed the instant Motion to limit available damages to a maximum of $3,000 in accordance with the Bill of Lading and TForce Tariff liability limitations referenced therein. To be clear, Defendant does not concede liability.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 56 provides that a 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(c). A material fact is one that “might affect the outcome of the suit under the governing law.” Libertarian Party of Va. v. Judd, 718 F.3d 308, 313 (4th Cir. 2013) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A genuine dispute of material fact exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. When considering a motion for summary judgment, a judge’s function is limited to determining whether sufficient evidence exists on a claimed factual dispute to warrant submission of the matter to a jury for resolution at trial. Id. at 249. Courts in the Fourth Circuit have an “affirmative obligation…to prevent factually unsupported claims and defenses from proceeding to trial.” Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 526 (4th Cir. 2003) (quoting Drewitt v. Pratt, 999 F.2d 774, 778–79 (4th Cir. 1993)). If the moving party demonstrates “an absence of evidence to support the nonmoving party’s case,” the burden shifts to the nonmoving party to “present specific facts showing that there is a genuine issue for trial.” Humphreys & Partners Architects, L.P. v. Lessard Design, Inc., 790 F.3d 532, 540 (4th Cir. 2015). “To create a genuine issue for trial, ‘the nonmoving party must rely on more than conclusory allegations, mere speculation, the building of one inference upon another, or the mere existence of a scintilla of evidence.’ ” Id. (quoting Dash v. Mayweather, 731 F.3d 303, 311 (4th Cir. 2013). “In other words, a factual dispute is genuine only where ‘the non-movant’s version is supported by sufficient evidence to permit a reasonable jury to find’ in its favor.” Id. (quoting Stone v. Univ. of Md. Med. Sys. Corp., 855 F.2d 167, 175 (4th Cir. 1988)).

*3 In undertaking this inquiry, the court considers the facts and all reasonable inferences in the light most favorable to the nonmoving party. Libertarian Party of Va., 718 F.3d at 312; see also Scott v. Harris, 550 U.S. 372, 378 (2007). The court “must not weigh evidence or make credibility determinations.” Foster v. Univ. of Md.-Eastern Shore, 787 F.3d 243, 248 (4th Cir. 2015) (citing Mercantile Peninsula Bank v. French, 499 F.3d 345, 352 (4th Cir. 2007)); see also Jacobs v. N.C. Admin. Office of the Courts, 780 F.3d 562, 569 (4th Cir. 2015) (explaining that the trial court may not make credibility determinations at the summary judgment stage).

Although the Motion is unopposed, the court’s evaluation is no less stringent than had Plaintiff filed a full-throated opposition. “[I]n considering a motion for summary judgment, the district court ‘must review the motion, even if unopposed, and determine from what it has before it whether the moving party is entitled to summary judgment as a matter of law.’ ” Robinson v. Wix Filtration Corp. LLC, 599 F.3d 403, 409 n.8 (4th Cir. 2010) (quoting Custer v. Pan Am. Life Ins. Co., 12 F.3d 410, 416 (4th Cir. 1993)). See Maryland v. Universal Elections, Inc., 729 F.3d 370, 380 (4th Cir. 2013) (same). “ ‘Although the failure of a party to respond to a summary judgment motion may leave uncontroverted those facts established by the motion,’ the district court must still proceed with the facts it has before it and determine whether the moving party is entitled to judgment as a matter of law based on those uncontroverted facts.” Robinson, 599 F.3d at 409 (quoting Custer, 12 F.3d at 416). Notably, in addition to Triax’s election not to oppose the substance of the Motion, Triax makes no Rule 56(c)(2) objection to any exhibit TForce offers in support of same—including sworn deposition testimony and documents supported by a sworn declaration from a TForce employee with personal knowledge. See FED. R. CIV. P. 56(c)(2) (“A party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence.”); FED. R. EVID. 901 (explaining that a party may supply testimony from a witness with knowledge to satisfy the requirement of authenticating an item of evidence).

III. ANALYSIS

The Carmack Amendment “creates a national scheme of carrier liability for goods damaged or lost during interstate shipment under a valid bill of lading.” ABB Inc. v. CSX Transp., Inc., 721 F.3d 135, 138 (4th Cir. 2013) (quoting 5K Logistics, Inc. v. Daily Express, Inc., 659 F.3d 331, 335 (4th Cir. 2011) (footnotes omitted)). Under the Carmack Amendment, a carrier providing transportation or service must use a “receipt or bill of lading for property it receives for transportation.” Id.; 49 U.S.C. § 14706(a)(1). The carrier is then liable to the “person entitled to recover under the receipt or bill of lading” for “the actual loss or injury of the property caused by” the receiving carrier, the delivering carrier, or any other carrier to which the property is subsequently delivered. 49 U.S.C. § 14706; Brentzel v. Fairfax Transfer & Storage, Inc., No. 21-1025, 2021 WL 6138286, at *2 (4th Cir. Dec. 29, 2021). “This includes ‘all damages resulting from any failure to discharge a carrier’s duty with respect to any part of the transportation to the agreed destination.’ As such, a plaintiff shipper can recover all reasonably foreseeable consequential damages and lost profits that are not speculative.” Rush Indus., Inc. v. MWP Contractors, LLC, 539 F. App’x 91, 95 (4th Cir. 2013) (citing Se. Express Co. v. Pastime Amusement Co., 299 U.S. 28, 29 (1936) and Am. Nat. Fire Ins. Co. ex rel. Tabacalera Contreras Cigar Co. v. Yellow Freight Sys., Inc., 325 F.3d 924, 931 (7th Cir. 2003)).

*4 While a carrier is generally liable for the actual loss of property under the Carmack Amendment, it may still “establish rates for the transportation of property…under which the liability of the carrier for such property is limited to a value established…by written agreement between the carrier and shipper if that value would be reasonable under the circumstances surrounding the transportation.” 49 U.S.C. § 14706(c)(1)(A); OneBeacon Ins. Co. v. Haas Indus., Inc., 634 F.3d 1092, 1099 (9th Cir. 2011) (same). “[A] carrier’s ability to limit [its] liability is a carefully defined exception to the Carmack Amendment’s general objective of imposing full liability for the loss of shipped goods.” Emerson Elec. Supply Co. v. Estes Express Lines Corp., 451 F.3d 179, 186 (3d Cir. 2006) (citation omitted); see ABB Inc., 721 F.3d at 139 (“The Carmack Amendment’s exception allowing for limited liability is ‘a very narrow exception to the general rule’ imposing full liability on the carrier.”) (quoting Toledo Ticket Co. v. Roadway Express, 133 F.3d 439, 442 (6th Cir. 1998)). “To overcome this default posture of full liability imposed by the Carmack Amendment, the carrier and the shipper must have a written agreement that is sufficiently specific to manifest that the shipper in fact agreed to a limitation of liability.” ABB Inc., 721 F.3d at 142. Thus, courts must “ ‘carefully scrutinize[ ]’ any alleged limitation of liability ‘to assure that the shipper was given a meaningful choice and exercised it as evidenced by a writing.’ ” Id. at 139 (quoting Acro Automation Sys. v. Iscont Shipping, 706 F. Supp. 413, 416 (D. Md. 1989)).

The Fourth Circuit has explained:

To determine whether a carrier has limited its liability consistent with the strictures of the Carmack Amendment, courts have applied a four-part test, under which carriers must: (1) provide the shipper, upon request, a copy of its rate schedule; (2) ‘give the shipper a reasonable opportunity to choose between two or more levels of liability; (3) obtain the shipper’s agreement as to his choice of carrier liability limit; and (4) issue a bill of lading prior to moving the shipment that reflects any such agreement.”²

Id. (quoting OneBeacon Ins. Co., 634 F.3d at 1099–1100 (discussing the four-step test in a case brought under 49 U.S.C. § 14706) (footnote omitted)).³ “The carrier has the burden of proving that it has complied with these requirements.” OneBeacon Ins. Co., 634 F.3d at 1099 (quoting Hughes Aircraft Co. v. N. Am. Van Lines, Inc., 970 F.2d 609, 612 (9th Cir. 1992)); see Acro Automation Sys., Inc., 706 F. Supp. at 416 (“The burden of establishing that an agreement limiting liability has been made rests with the carrier.”).

“The text of the Carmack Amendment imposes full liability on carriers, without regard to which party prepared the bill of lading.” ABB Inc., 721 F.3d at 142. Therefore, its provisions still apply when the shipper, as opposed to the carrier, drafts the applicable bill of lading. Id. Moreover, consistent with Supreme Court precedent,“[w]hen an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the carrier is limited by the liability limitation to which the intermediary and carrier agreed.” Aniedobe v. Hoegh Autoliners, Inc., No. CIV.A. AW-09-2813, 2011 WL 829139, at *4 (D. Md. Mar. 7, 2011) (quoting Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 33 (2004)) (holding that a plaintiff accepted the carrier’s limitation of liability that was incorporated into the bill of lading even though it was the plaintiff’s “forwarding agent…that negotiated the terms of the bill of lauding [sic] with” the carrier); see Sompo Japan Ins. Co. of Am. v. Norfolk S. Ry. Co., 762 F.3d 165, 185 (2d Cir. 2014) (holding that the Supreme Court’s opinion in Kirby controls in the case before it under the Carmack Amendment); Werner Enterprises, Inc. v. Westwind Mar. Int’l, Inc., 554 F.3d 1319, 1324–25 (11th Cir. 2009) (“Kirby’s teaching is not limited to maritime law. Kirby expressly derived its holding from Great Northern, a non-maritime case. Furthermore, the principles of fairness and efficiency animating the Kirby rule are not unique to the maritime context. As evidenced by the circumstances of this case, contracts for carriage on land as well as sea may involve extended chains of parties and agreements. Thus, the benefits of allowing carriers to rely on limitations of liability negotiated by intermediaries are equally as great here as under maritime law.”)

*5 In view of the foregoing, the court’s analysis turns on whether there exists any genuine dispute of material fact as to the following factors: whether Triax requested a copy of its rate schedule (and, if so, whether TForce provided it to Triax); whether TForce gave Triax, or FreightCenter as its broker, a “reasonable opportunity to choose between two or more levels of liability”; whether TForce obtained Triax’s (or FreightCenter’s) agreement to the carrier liability limit; and whether the Bill of Lading reflecting such agreement was issued prior to shipment. See ABB Inc., 721 F.3d at 139, supra.

Turning to the first factor, it is undisputed that Triax did not request TForce’s rate schedule as set forth in the TForce Tariff. As explained, supra, Triax’s Designated Representative testified that he did not request a copy of the TForce Tariff, and he understood from the Bill of Lading that the transportation was subject to the TForce Tariff. (ECF No. 42-2 at 83:21–84:13.) This is further supported by the unopposed declaration of Jennifer Turner-Acampora that the “TForce [ ] Tariff was made available to the Plaintiff and to all shippers, upon request pursuant to Federal law, namely the Carmack Amendment” and, to her knowledge, “Triax, Inc. did not request a copy of the TForce [ ] Tariff.” (ECF No. 42-3 ¶¶ 4–5.) Accordingly, there is no dispute that (a) Triax did not request a copy of the TForce Tariff (including the liability limitations incorporated in the Bill of Lading); and (b) Triax knew the Bill of Lading was subject to the TForce Tariff.

The second factor concerns whether TForce gave Triax a reasonable opportunity to choose the proper level of liability in the Bill of Lading.⁴ “A reasonable opportunity to choose between different levels of coverage ‘means that the shipper had both reasonable notice of the liability limitation and the opportunity to obtain information necessary to making a deliberate and well-informed choice.’ ” Carmana Designs Ltd. v. N. Am. Van Lines Inc., 943 F.2d 316, 320 (3d Cir. 1991) (quoting Bio-Lab, Inc. v. Pony Express Courier Corp., 911 F.2d 1580, 1582 (11th Cir. 1990)); see Chapman v. Allied Van Lines, Inc., No. 5:15-CV-00615-BR, 2018 WL 701627, at *9 (E.D.N.C. Feb. 2, 2018) (same). “The Supreme Court has made clear that this requirement contemplates not only a choice between levels of liability, but also a choice between rates, such that the rate paid by the shipper varies according to the liability borne by the carrier.” Exel, Inc. v. S. Refrigerated Transp., Inc., 905 F.3d 455, 462 (6th Cir. 2018) (citing New York, N.H. & Hartford R.R. v. Nothnagle, 346 U.S. 128, 135 (1953)). “[T]he very purpose of the requirement that the carrier provide the shipper with a choice between levels of liability is to allow the shipper to ‘obtain[ ] the lower of two or more rates of charges proportioned to the amount of the risk.’ ” Id. (quoting Adams Express Co. v. Croninger, 226 U.S. 491, 509–10 (1913)).

*6 Relevant here, “[i]n most of the cases involving shipper-drafted bills of lading, the shipper gets stuck with the liability limit it chooses because the shipper either negotiated for a lower shipping rate, or it knew it would get a discount on the full freight rate if it assigned a lower released value.” Exel, Inc. v. S. Refrigerated Transp., Inc., 259 F. Supp. 3d 767, 777–78 (S.D. Ohio), on reconsideration in part, 276 F. Supp. 3d 750 (S.D. Ohio 2017), aff’d, 905 F.3d 455 (6th Cir. 2018), and aff’d, 905 F.3d 455 (6th Cir. 2018) (citing cases); see Siren, Inc. v. Estes Express Lines, 249 F.3d 1268, 1273 (11th Cir. 2001) (“In this case, Siren drafted the bill of lading, Siren chose to use the term ‘Class 85,’ Siren did not rebut Estes’ assertion at trial that ‘Class 85’ included a limiting aspect, Siren knew ‘Class 85’ determined the freight rate charged, and Siren knew that it received a 62% discount from Estes’ full freight rate. We agree that the ‘rate of freight is indissolubly bound up with the valuation’ placed on the goods by the shipper.” (citations omitted)). “The structure and exact language of the bills of lading are important facts when analyzing the reasonable opportunity requirement.” Exel, Inc., 259 F. Supp. 3d at 778.

It is undisputed that: (a) Triax did not request the TForce Tariff and that Triax provided the weight of 375 to FreightCenter to include in the Bill of Lading. (ECF No. 42-2 at 83:16–84:13; ECF No. 42-3 ¶ 5.); b) FreightCenter generated the Bill of Lading, which included a class designation of 77.5. (ECF No. 1-3 at p. 8; ECF No. 42-3 at p. 14; ECF No. 42-2 at 71:10–72:4.); and (c) Triax knew that the Bill of Lading was subject to the TForce Tariff. (ECF No. 42-2 at 83:21–84:13.) Further, the TForce Tariff included multiple class designation options correlated with varying maximum liability limits. (ECF No. 42-3 at p. 11.) Therefore, there is no dispute that Triax had a reasonable opportunity to choose the level of liability set forth in the Bill of Lading.

The third factor turns on whether TForce obtained Triax’s agreement to the carrier liability limit. For the same reasons addressed above, there is no dispute of fact on this point. Triax admits the Bill of Lading governs the terms of the shipment and that it knew the Bill of Lading was subject to the TForce Tariff. (ECF No. 42-2 at 83:21-84:13; ECF No. 42-3 at p. 11; ECF No. 22 ¶¶ 7, 26.) Even had Triax not admitted these material facts, the Bill of Lading, which identifies the class designation as 77.5 and a shipment weight of 375 pounds, states: “Liability Limitation for loss or damages in this shipment may be applicable,” and that the shipment was “RECEIVED, subject to…the rates, classifications[,] and rules that have been established by [TForce] and are available to the shipper, on request,” and the sticker on the Bill of Lading signed by TForce visibly advises that limitations of liability apply pursuant to the TForce Tariff. (ECF No. 1-3 at p. 8; ECF No. 42-3 at p. 14.) There is no dispute, therefore, that TForce obtained Triax’s agreement to the carrier liability limit.

Finally, in analyzing the fourth factor, there is, again, no dispute that the Bill of Lading was generated on May 4, 2022, the day that Triax, through FreightCenter, hired TForce as a carrier. (ECF No. 1-3 at p. 8; ECF No. 22 ¶ 6.) The Bill of Lading was then signed by TForce’s representative on May 5, 2022, the day that shipment was scheduled to occur. (ECF No. 22 ¶ 6, 7; ECF No. 42-3 at p. 14.) Accordingly, there are no disputes of fact relevant to the final factor; and the undisputed facts favor the Motion.

In sum, there is no dispute that, consistent with the Carmack Amendment, TForce limited its liability per the Bill of Lading and the TForce Tariff. TForce’s liability, if proven, is therefore limited in accordance with the Bill of Lading, which incorporates the limitations of the TForce Tariff. FreightCenter, as Triax’s broker, selected a class designation of 77.5 and a weight of 375 pounds for shipment. (ECF No. 1-3 at p. 8; ECF No. 42-3 at p. 14.) The TForce Tariff provides that a class designation of 77.5 corresponds to a maximum liability of $8.00 per pound, and that TForce will not be liable for “any indirect, incidental, consequential, loss of profit, loss of income, special, exemplary, or punitive damages,” or “any damages in excess of the limitations” permitted according to the calculation of class designation and weight. (ECF No. 42-3 at p. 11, 60.) Thus, according to the Bill of Lading, and the limitations of liability referenced therein, Triax’s maximum recoverable monetary damages pursuant to the Carmack Amendment are capped at $3,000.00 ($8.00 multiplied by 375 pounds), subject to Triax’s proof of TForce’s liability.

IV. CONCLUSION

*7 For the reasons set forth herein, by separate order, the Motion (ECF No. 42) will be granted.

July 19, 2024 /S/__________________________

Julie R. Rubin

United States District Judge

All Citations

Slip Copy, 2024 WL 3487892

Footnotes
1	“A bill of lading ‘records that a carrier has received goods from the party that wishes to ship them, states the terms of carriage, and serves as evidence of the contract for carriage.’ ” ABB Inc. v. CSX Transp., Inc., 721 F.3d 135, 138 (4th Cir. 2013) (quoting Norfolk S. Ry. v. James N. Kirby, Pty Ltd., 543 U.S. 14, 18–19 (2004)).
2	On page 16 of its memorandum, TForce identifies the factors the court should consider in ruling on its Motion, citing to a 1992 Third Circuit decision. The court applies the Fourth Circuit precedent here, both because it is binding and because it accounts for the relevant statutory change in 1995. See ABB Inc. v. CSX Transp., Inc., 721 F.3d 135, 137– 38 (4th Cir. 2013) (explaining that, prior to 1995, carriers were obliged to file their tariffs publicly, and thus shippers were generally charged with notice of the terms but that now “tariff” is “merely a contractual term”) (citing Tempel Steel Corp. v. Landstar Inway, Inc., 211 F.3d 1029, 1030 (7th Cir. 2000)).
3	The Fourth Circuit’s decision in ABB Inc. v. CSX Transportation, Inc. concerned rail carriers, “subject to the provisions of 49 U.S.C. § 11706,” and noted that motor carriers are subject the separate provisions of the Carmack Amendment codified at 49 U.S.C. § 14706. 721 F.3d 135, 138 n.2 (4th Cir. 2013).
4	While not disputed by either party, the court briefly addresses the fact that the Bill of Lading is unsigned by Triax, or FreightCenter, in view of the requirement that there be a “sufficiently specific” written agreement that manifests the shipper’s agreement to a limitation of liability. See, supra, ABB Inc., 721 F.3d at 142. There is no dispute that the Bill of Lading is a written agreement that bound the parties. Triax asserted in its Amended Complaint that shipment of the Machine was to be conducted in accordance with the “valid terms” of the Bill of Lading, and expressly incorporated the Bill of Lading into its original complaint. (ECF No. 22 ¶¶ 7, 26; ECF No. 1-3 at p. 8.) Triax’s Designated Representative further testified that FreightCenter prepared the Bill of Lading, and FreightCenter entered the class designation of 77.5. (ECF No. 42-2 at 37:16–20; 57:20–22; 71:10–73:4; 75:2–11.)

End of Document

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United States District Court, S.D. Ohio, Western Division.

James McCarthy, Plaintiff,

v.

Krupp Moving and Storage II, LLC, Defendant.

Case No. 1:24-cv-79

|

07/15/2024

Susan J. Dlott, United States District Judge

Order Granting in Part and Denying in Part Motion to Dismiss

*1 This matter is before the Court on Defendant Krupp Moving and Storage II, LLC’s Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. 4.) Plaintiff James McCarthy hired Krupp to move his belongings from a residence in Montgomery, Ohio to a residence in Boston, Massachusetts in November 2022. McCarthy then filed this suit against Krupp asserting claims under the Carmack Amendment to the Interstate Commerce Act of 1877, 49 U.S.C § 14706, et seq., and Ohio law for Krupp’s alleged wrongful conduct during its performance of the moving contract. Krupp now moves to dismiss the second through tenth claims for relief alleged in the Complaint—the Ohio law claims—on the basis of Carmack Amendment preemption. For the reasons that follow, the Court will GRANT IN PART and DENY IN PART the Motion to Dismiss.

I. BACKGROUND

A. Factual Allegations

The well-pleaded allegations of the Complaint are assumed to be true for purposes of a Rule 12(b)(6) dismissal motion. McCarthy signed an Estimate on November 4, 2022 and then a Contract on November 15, 2022 with Krupp for Krupp to provide two trucks and five movers to pack and move the McCarthy family’s belongings from Montgomery, Ohio to Boston, Massachusetts. (Doc. 1 at PageID 2–3.) The Contract included listed charges for payment amounting to $19,044.48. (Id. at PageID 3.) Krupp promised McCarthy it would provide two 26-foot trucks for the move. (Id.)

Krupp’s movers did not follow McCarthy’s organizational system when it packed up his Ohio residence. (Id. at PageID 4–5.) Krupp provided one 26-foot truck, but the second truck was only 16-feet long. (Id. at PageID 5.) Krupp’s trucks did not have enough storage space to move all McCarthy’s belongings. (Id. at PageID 5–7.) The movers placed McCarthy’s belongings in the truck without wrapping or protecting them, resulting in multiple items becoming damaged or stained. (Id. at PageID 8–9.) Krupp charged McCarthy $21,406.53 for its services, more than $2,000 in excess of the Contract price. (Id. at PageID 10.)

B. Procedural History

McCarthy initiated this suit against Krupp on February 20, 2024. He asserted ten claims for relief:

• First: Violation of the Carmack Amendment, 49 U.S.C. § 14706, et seq.;

• Second: Breach of Contract;

• Third: Unjust Enrichment—In the Alternative;

• Fourth: Conversion;

• Fifth: Fraud;

• Sixth: Negligent Misrepresentation–In the Alternative;

• Seventh: Violation of the Ohio Consumer Sales Practices Act (“OCSPA”), Ohio Revised Code § 1345.01, et seq.;

• Eighth: Violation of the Ohio Deceptive Trade Practices Act (“ODTPA”), Ohio Revised Code § 4165.01, et seq.;

• Ninth: Negligence; and

• Tenth: Intentional Infliction of Emotional Distress. (Id. at PageID 10–17.)

Krupp now moves to dismiss the second through tenth claims for relief on the basis that all of the state law claims are preempted by the Carmack Amendment. (Doc 4.) McCarthy filed a Memorandum in Opposition, to which Krupp filed a Reply. (Docs. 5, 8.)

II. STANDARDS GOVERNING MOTIONS TO DISMISS

*2 Federal Rule of Civil Procedure 12(b)(6) allows a party to move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). To withstand a motion to dismiss, a complaint must comply with Federal Rule of Civil Procedure 8(a), which requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 677–678 (2009) (quoting Rule 8(a)(2)). It must include sufficient facts to state a claim that is plausible on its face and not speculative. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). “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.” Iqbal, 556 U.S. at 678. A district court examining the sufficiency of a complaint must accept well-pleaded facts as true, but not legal conclusions or legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678–679; DiGeronimo Aggregates, LLC v. Zemla, 763 F.3d 506, 509 (6th Cir. 2014).

III. ANALYSIS

Krupp moves to dismiss the Ohio law claims on the basis of Carmack Amendment preemption. The Sixth Circuit has explained the purpose of the Carmack Amendment and its preemption effect:

The Carmack Amendment, enacted in 1906 as an amendment to the Interstate Commerce Act, 24 Stat. 379, created a national scheme 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. 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. 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. Id.

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, Inc. v. S. Refrigerated Transp., Inc., 807 F.3d 140, 148 (6th Cir. 2015).

“It is well settled that the Carmack Amendment completely preempts a shipper’s state common law and statutory causes of action.” Renouf v. Aegis Relocation Co. Corp., 641 F. Supp. 3d 439, 446 (N.D. Ohio 2022). The Carmack Amendment “embraces the subject of the liability of the carrier under a bill of lading…so completely that there can be no rational doubt but that Congress intended to take possession of the subject and supersede all state regulation with reference to it.” Adams Express Co. v. Croninger, 226 U.S. 491, 505–506 (1913). Therefore, the Carmack Amendment governs “when damages are sought against a common carrier for failure to properly perform, or for negligent performance of, an interstate contract of carriage.” Am. Synthetic Rubber Corp. v. Louisville & N. R. Co., 422 F.2d 462, 466 (6th Cir. 1970). “All state law claims for loss or damage to property arising out of the interstate transportation of household goods are preempted.” Yonak v. United Van Lines, LLC, No. 1:23CV0092, 2023 U.S. Dist. LEXIS 100257, at *15 (N.D. Ohio June 8, 2023). The Carmack Amendment generally preempts “state law causes of actions against an interstate motor carrier for fraud, tort, intentional and negligent infliction of emotional stress, breach of contract, breach of implied warranty, breach of express warranty and state deceptive practices acts, etc.” Automated Window Mach., Inc. v. McKay Ins. Agency, Inc., 320 F. Supp. 2d 619, 620 (N.D. Ohio 2004).

*3 Despite this broad preemptive effect, McCarthy argues that his Ohio claims fall within a “very limited exception” to Carmack Amendment preemption for “state law claims that are unrelated to loss or damage to goods from interstate transport.” Yonak, 2023 U.S. Dist. LEXIS 100257, at *15. “[C]laims survive this preemption only when they are ‘separate and independently actionable harms that are distinct from the loss of, or the damage to, the goods.’ ” Next F/X, Inc. v. DHL Aviation Ams., Inc., 429 F. Supp. 3d 350, 361 (E.D. Ky. 2019) (internal quotation and citation omitted). On the other hand, claims are preempted if they “involve a failure to discharge a carrier’s duty with respect to any part of the transportation to the agreed destination.” Renouf, 641 F. Supp. 3d at 447 (internal quotation and citation omitted).

The Court will apply this precedent to determine whether each of McCarthy’s state law claims are preempted.

A. Breach of Contract (Second Claim for Relief) and Unjust Enrichment (Third Claim for Relief)

McCarthy alleges in the breach of contract and unjust enrichment claims that (1) that Krupp charged him more than the agreed-upon cost for the move and (2) that Krupp failed to provide two 26-foot trucks and therefore was unable to move certain goods. (Doc. 1 at PageID 11–12.) McCarthy cites a Northern District of Texas case for the proposition that claims for overcharges are not preempted because they are “separate and apart from the loss or damage to [ ] shipped property.” Hilgers v. VIP Moving & Storage Inc., No. 3:19-CV-1472-S, 2020 WL 7059589, at *5 (N.D. Tex. Dec. 2, 2020). Similarly, he relies primarily on a case from the District of Vermont to argue that claims arising from a carrier’s failure to accept certain goods for transportation are exempt from Carmack Amendment preemption. See Counter v. United Van Lines, Inc., 935 F. Supp. 505, 506 (D. Vt. 1996) (noting that the carrier did not issue a bill of lading and did not ship any goods).

However, McCarthy fails to address case law from district courts in the Sixth Circuit holding to the contrary. In Renouf, a Northern District of Ohio court held that a fraudulent inducement claim against a carrier for failing to honor its quote and delivery date was preempted. 641 F. Supp. 3d at 447. The court favorably cited cases from other jurisdictions holding that a claim for charging an improper rate and a claim based on a fraudulent estimate were both preempted. Id. (citing Duerrmeyer v. Alamo Moving & Storage One, Corp., 49 F. Supp. 2d 934, 936 (W.D. Tex. 1999) (improper rate) and United Van Lines, Inc. v. Shooster, 860 F. Supp. 826, 828–29 (S.D. Fla. 1992) (fraudulent estimate)). The Court finds Renouf more persuasive than Hilgers on the issue of whether a plaintiff can assert a state law claim for overcharges. Any claim for overcharges, whether sounding in contract or tort, is preempted because “it seeks damages flowing from the shipping agreement with [Krupp].” Id.

Likewise, the courts in the Eastern District of Kentucky and the Northern District of Ohio agree that claims for failing to deliver goods are preempted. The Next F/X court held that a plaintiff’s negligence claim that the carrier failed “to provide the necessary resources to effect carriage of the entirety of Next FX’s shipment” was preempted. 429 F. Supp. 3d at 362. Similarly, in Yonak, the plaintiffs alleged in part that the carrier provided a smaller truck than needed, causing them to have to leave goods behind. Yonak, 2023 U.S. Dist. LEXIS 100257, at *3–4. The district court held that claims alleging fraud and violations of the OCSPA based on these allegations arose from the interstate shipment of household goods and were preempted. Id. at *16. The allegations in Next F/X and Yonak are more analogous to this case than are those in the Counter decision cited by McCarthy. The defendant carrier in Counter did not perform the transportation contract and did not take even possession of the plaintiff’s goods because the parties had a falling out over the cost before the shipment date. 935 F. Supp. at 506, 508. Though the Carmack Amendment did not apply to the plaintiff’s claims in Counter, it does apply to preempt the breach of contract and unjust enrichment claims here for failing to deliver goods. The Court will dismiss the breach of contract and unjust enrichment claims.

B. Conversion (Fourth Claim for Relief)

*4 McCarthy alleges in the conversion claim that Krupp wrongfully denied him immediate possession of certain items of personal property because it failed to provide a sufficiently large moving truck, forcing him to leave the items behind. (Doc. 1 at PageID 13–14.) Krupp moves to dismiss the claim as preempted. The Court has already held that claims based on a carrier’s failure to provide a sufficiently large truck to transport all of a plaintiff’s goods are preempted by the Carmack Amendment. See Next F/C, 429 F. Supp. 3d at 362; Yonak, 2023 U.S. Dist. LEXIS 100257, at *3–4, 16.

McCarthy does not dispute that his conversion claim as pleaded should be preempted. Instead, he points to a case holding that “claims for ‘true conversion,’ where the carrier appropriates the property for its own use or gain, are not preempted.” Cent. Transp. Int’l, Inc. v. Alcoa, Inc., No. 06-CV-11913-DT, 2006 WL 2844097, at *4 (E.D. Mich. Sept. 29, 2006). McCarthy asks for leave to file an amended complaint if evidence of a “true conversion claim” is discovered. He has not alleged facts to support a true conversion claim in the Complaint, nor has he submitted a proposed amended complaint with a true conversion claim for the Court’s consideration. The Court will not grant leave to amend at this time based on speculation.¹ The Court will dismiss the conversion claim pleaded in the Complaint because it is preempted.

C. Fraud (Fifth Claim for Relief), Negligent Misrepresentation (Sixth Claim for Relief), OCSPA (Seventh Claim for Relief), and ODTPA (Eighth Claim for Relief)

McCarthy alleges in the fraud, negligent misrepresentation, OCSPA, and ODTPA claims that Krupp is liable for falsely stating that it could move all of his personal property from Montgomery, Ohio to Boston, Massachusetts. (Doc. 1 at PageID 14–16.) In his brief, McCarthy cites to Krupp’s allegedly broken promise to provide two 26-foot-long trucks for the move. Once again, the Court holds that that claims based on a carrier’s failure to provide a sufficiently large truck to transport all of a plaintiff’s goods are preempted by the Carmack Amendment. See Next F/C, 429 F. Supp. 3d at 362; Yonak, 2023 U.S. Dist. LEXIS 100257, at *3–4, 16.

McCarthy’s reliance on a decision to the contrary by the Supreme Court of Texas in 1980, Brown v. Am. Transfer and Storage Co., 601 S.W.2d 931 (1980), is not persuasive. The court in Brown held that a Texas Deceptive Trade Practices Act claim for misrepresentations made before the contract was signed was not preempted. Id. at 933, 938. However, the Brown decision has been heavily criticized and not followed by federal courts. See, e.g., Hayes v. Stevens Van Lines, Inc., No. 4:14-CV-982-O, 2015 WL 11023794, at *2 (N.D. Tex. Jan. 27, 2015) (“Because Plaintiffs’ DTPA state claims involve damages to goods arising from the interstate transportation of those goods by a common carrier, the Court finds that the claims should be dismissed as they are preempted by the Carmack Amendment.”); Franyutti v. Hidden Valley Moving & Storage, Inc., 325 F. Supp. 2d 775, 778 (W.D. Tex. 2004) (“Because [the Brown] holding occurred prior to many of the Supreme Court and Fifth Circuit opinions relied upon, it’s holding has limited value.”); Schultz v. Auld, 848 F. Supp. 1497, 1503 (D. Idaho 1993) (calling Brown “clearly inconsistent with decisions of the United States Supreme Court and the federal circuits to have directly addressed the issue”). This Court, likewise, will not follow Brown. The fraud, negligent misrepresentation, OCSPA, and ODTPA claims will be dismissed.

D. Negligence (Ninth Claim for Relief)

*5 In the negligence claim, McCarthy alleges that Krupp owed him a duty to exercise reasonable care in providing moving services and that Krupp breached that duty by, “among other things, backing a moving truck into a centuries old tree at [his] new house in Boston, Massachusetts.” (Doc. 1 at PageID 16–17.) Krupp’s argument to dismiss this claim is different. He asserts that McCarthy lacks standing to assert this claim or fails to plead a claim for negligence because it is not clear from the allegations whether he owns the tree in question and what damage the tree suffered. The Court will not dismiss the claim on this basis. McCarthy alleged that the tree is “at [his] new house.” (Id. at PageID 17.) He also alleges that the unspecified harm to the tree “infuriate[ed] both [him] and his new neighbors” and that he “suffered damages.” (Id. at PageID 8, 17.) These allegations are sufficient to state a plausible claim for relief for purposes of Rule 12(b)(6).

Krupp also moves to dismiss the negligence claim on the grounds of Carmack Amendment preemption. Krupp argues that preemption embraces all losses resulting from any “failure to discharge a carrier’s duty as to any part of the agreed transportation,” and the damage the tree allegedly resulted from a breach of that duty. Renouf, 641 F. Supp. 3d at 447. McCarthy, on the other hand, argues that a negligence claim for damage to an item separate from the goods shipped in interstate commerce are not preempted. Claims are not preempted “when they are separate and independently actionable harms that are distinct from the loss of, or the damage to, the goods.” Next F/X, Inc., 429 F. Supp. 3d at 361 (internal quotation and citation omitted); see also Val’s Auto Sales & Repair, LLC v. Garcia, 367 F. Supp. 3d 613, 620 (E.D. Ky. 2019) (“[T]he Carmack Amendment does not preempt state law claims that involve separate and independently actionable harms to a shipper that are distinct from the loss of, or damage to, goods that were shipped in interstate commerce.”). Neither party cites a case on point where the defendant carrier’s negligence during the transportation of household goods causes physical damage to an item of property separate from the transported goods.

The Court has found case law on point from other jurisdictions. In Gale v. Ramar Moving Syss., Inc., No. No. CCB–13–487, 2013 WL 3776983, at *2–3 (D. Md. July 16, 2013), the district court refused to dismiss negligence claims brought for damage to the plaintiff’s home and non-shipped goods. Likewise, another district court found no intent by Congress in the Carmack Amendment “to regulate damage to residences incurred during interstate shipment of goods.” Rehm v. Baltimore Storage Co., 300 F. Supp. 2d 408, 415–416 (W.D. Va. 2004). On the other hand, a district court in New Jersey did dismiss a claim for damage to the plaintiff’s residence because it resulted from the defendant carrier’s failure to properly discharge its duties under the shipping contract. Raineri v. N. Am. Van Lines, Inc., 906 F. Supp. 2d 334, 340 (D.N.J. 2012). In the absence of guidance from the Sixth Circuit, the Court is persuaded that the damage to the tree is sufficiently separate from the regulation of the interstate shipment of goods that it falls outside the zone of preemption. The Court will not dismiss the negligence claim.

E. Intentional Infliction of Emotional Distress (Tenth Claim for Relief)

Finally, McCarthy alleges that Krupp is liable for intentional infliction of emotional distress because Krupp’s failure to provide sufficiently large moving trucks forced him to have to throw away “priceless family heirlooms” that did not fit into the trucks. (Doc. 1 at PageID 17.) Krupp once again argues that the claim is preempted, but McCarthy asserts that it is not. McCarthy points out that the Eastern District of Kentucky in Next F/X cited favorably to a Seventh Circuit decision allowing an intentional infliction of emotional distress claim based on the destruction of valuable personal possession to go forward. 429 F. Supp. 3d at 361 (citing Gordon v. United Van Lines, 130 F.3d 282, 285, 289–290 (7th Cir. 1997)). The Seventh Circuit opinion in Gordon, however, does not help McCarthy here. The Seventh Circuit stated that a claim for intentional infliction of emotional distress is not preempted where it “allege[s] liability on a ground that is separate and distinct from the loss of, or the damage to, the goods that were shipped in interstate commerce.” Gordon, 130 F.3d at 289. McCarthy’s claim for intentional infliction of emotional distress explicitly is premised on the loss of his personal possessions and would be preempted under the Gordon standard. (Doc. 1 at PageID 17.) The Court will dismiss McCarthy’s claim for intentional infliction of emotional distress as preempted. See Automated Window Mach., 320 F. Supp. 2d at 620 (stating that “state law causes of actions against an interstate motor carrier for…intentional and negligent infliction of emotional [dis]tress…are pre-empted”).

IV. CONCLUSION

*6 For the foregoing reasons, Krupp’s Motion to Dismiss is GRANTED IN PART and DENIED IN PART. It is granted insofar as the second through eighth claims for relief and the tenth claim for relief are DISMISSED WITH PREJUDICE based on Carmack Amendment preemption. It is denied insofar as the ninth claim for relief is not preempted or dismissed. This case will continue forward on first claim for relief for violation of the Carmack Amendment and the ninth claim for relief for negligence.

IT IS SO ORDERED.

BY THE COURT:

S/Susan J. Dlott

Susan J. Dlott

United States District Judge

All Citations

Slip Copy, 2024 WL 3413255

Footnotes
1	McCarthy can file a motion to amend pursuant to Federal Rule of Civil Procedure 15(a)(2) if appropriate circumstances arise.

End of Document

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