Carolina Tractor And Equipment Company v. Coastal Transportation Services, Inc. et al

MOTION to Dismiss

W.D.N.C.November 9, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA CIVIL ACTION NO. 3:16-cv-00775 CAROLINA TRACTOR AND EQUIPMENT COMPANY ) ) ) ) ) ) ) ) ) ) ) ) Plaintiff, v. DEFENDANT’S PARTIAL MOTION TO DISMISS PLAINTIFF’S COMPLAINT COASTAL TRANSPORTATION SERVICES, INC. and TW3 TRANSPORTATION, LLC Defendant. COMES NOW Defendant TW3 TRANSPORTATION, LLC (hereinafter referred to as “TW3”), by and through its undersigned counsel, moves the Court to Dismiss Counts II and III of Plaintiff’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), and states as follows: 1. Plaintiff Carolina Tractor and Equipment Company by and through its agent contracted through a bill of lading with TW3 to transport a generator in interstate commerce from Griffin, Georgia to High Point, North Carolina (See Complaint , Factual Allegations, ¶¶ 2-5 at p. 2). 2. Plaintiff in its Complaint has asserted state law trespass to chattel and negligence causes of action against TW3 for alleged damage occurring to the generator as a result of interstate transportation services performed as alleged in Counts II and III in its Complaint (See Complaint, Second and Third Claims for Relief, ¶¶ 20-23, 24-27 at pp. 3-4). 3. Plaintiff’s trespass to chattel and negligence causes of action, as well as its claim for attorneys’ fees, are preempted by the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, and should be dismissed with prejudice. Case 3:16-cv-00775 Document 3 Filed 11/09/16 Page 1 of 2 4. Defendant files contemporaneously herewith a Memorandum of Law in Support of its Partial Motion to Dismiss Plaintiff’s Complaint. November 9, 2016 s/Christopher M. Kelly _______________ Christopher M. Kelly (N.C. Bar #24346) Kaitlin N. Rothecker (N.C. Bar #49694) GALLIVAN, WHITE & BOYD, P.A. One Morrocroft Centre 6805 Morrison Blvd., Suite 200 Charlotte, NC 28211 (704) 552-1712 (704) 362-4850 (FAX) ckelly@gwblawfirm.com krothecker@gwblawfirm.com Attorneys for Defendant, TW3 Transportation, LLC Case 3:16-cv-00775 Document 3 Filed 11/09/16 Page 2 of 2 1 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA CIVIL ACTION NO. 3:16-cv-00775 CAROLINA TRACTOR AND EQUIPMENT COMPANY ) ) ) ) ) ) ) ) ) ) ) Plaintiff, DEFENDANT’S MEMORANDUM OF LAW IN SUPPORT OF ITS v. PARTIAL MOTION TO DISMISS COUNTS II AND III OF COASTAL TRANSPORTATION SERVICES, INC. and TW3 TRANSPORTATION, LLC PLAINTIFF’S COMPLAINT Defendant. COMES NOW Defendant TW3 TRANSPORTATION, LLC (hereinafter “TW3”), by and through Counsel, and submits this Memorandum of Law in support of its Motion to Dismiss Counts II and III of Plaintiff’s Complaint as these Counts are preempted by the Carmack Amendment at 49 U.S.C. §14706. FACTUAL AND PROCEDURAL BACKGROUND TW3 is an interstate motor carrier authorized by the Federal Motor Carrier Safety Administration to transport goods in interstate commerce pursuant to provisions of the Interstate Commerce Commission Termination Act. On or about August 14, 2014, Plaintiff requested that Coastal Transportation Services, Inc. (hereinafter “Coastal Transportation”) arrange for transportation of its generator from Griffin, Georgia to High Point, North Carolina. Coastal Transportation subsequently arranged for TW3 to transport the generator. TW3 took possession of the generator and undertook its transport. Plaintiff contends that its generator was damaged by TW3 while in transport. Plaintiff filed its Complaint in the General Court of Justice, Superior Court for Mecklenburg County, North Carolina seeking damages in excess of $107,000.00. In its Case 3:16-cv-00775 Document 3-1 Filed 11/09/16 Page 1 of 9 2 Complaint, Plaintiff asserts two common law causes of action against TW3: trespass to chattel and negligence. TW3 now files its Partial Motion to Dismiss and asserts that the interstate transportation that TW3 provided to Plaintiff is specifically governed by 49 U.S.C. § 14706, the Carmack Amendment, which preempts these two state law claims within Plaintiff’s Complaint in their entirety. TW3 moves to dismiss with prejudice Counts II and III of Plaintiff’s Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. LEGAL STANDARD A Motion to Dismiss should not be granted unless Plaintiff can prove no set of facts in support of its claim entitling it to relief. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957). When considering a Motion to Dismiss, the Court must accept all of the Plaintiff’s allegations as true. See Scheur v. Rhodes, 416 U.S. 232, 236 (1974). Rule 8(a)(2) of the Federal Rules of Civil Procedure provides that a Complaint need only be a “short and plain statement of the claim,” and, as long as the pleadings, “give Defendant fair notice of what Plaintiffs’ claim is and the grounds upon which it rests,” the notice pleading has been satisfied. Conley v. Gibson, 355 U.S. at 47. ARGUMENT The Carmack Amendment Preempts All Common Law and State Law Claims Against a Carrier of Goods in Interstate Commerce In 1906, Congress enacted Carmack so as to create a national policy regarding an interstate carrier’s liability for property loss or damage, or delay in delivery. See New York, New Haven & Hartford Railroad Co. v. Nothnagle, 346 U.S. 128, 131 (1953). Since its enactment, Carmack has been found to have fully occupied the field of interstate carrier liability for loss or damage to goods: "Almost every detail of the subject is covered so completely that there could be no rational doubt that Congress intended to take possession of this subject, and supersede all Case 3:16-cv-00775 Document 3-1 Filed 11/09/16 Page 2 of 9 3 state regulation with reference to it . . ." See Adams Express Co. v. Croninger, 33 S.Ct. 148, 151- 52 (1913). The Fourth Circuit has held that the Carmack Amendment preempts state law and common law remedies for damages arising out of an interstate shipment. See, e.g., Ward v. Allied Van Lines, Inc., 231 F.3d 135, 138 (4th Cir. 2000) (holding that the Carmack Amendment preempts . . . state and common law claims against a carrier for loss or damage to goods during shipment); Shao v. Link, Cargo (Taiwan) Limited, 986 F.2d 700, 706-707 (4th Cir. 1993) (holding that “the Carmack Amendment was intended by Congress to create a national uniform policy regarding the liability of carriers under a bill of lading for goods lost or damaged in shipment,” and “[a]llowing a shipper to bring common law breach of contract or negligence claims against a carrier for such loss or damage conflicts with this policy,” so that where the Carmack Amendment applies, it preempts common law claims”); See also Parramore, et al. v. Tru-Pack Moving Systems, Inc., et al., 286 F.Supp.2d 643 (M.D.N.C. 2003); United Van Lines v. Homburger, 932 F.Supp. 139 (W.D.N.C. 1996). The overwhelming weight of authority throughout the federal Circuits is in favor of preemption of state law claims. See Hoskins v. Bekins Van Lines, 343 F.3d 769 (5th Cir. 2003); W.D. Lawson & Co. v. Penn Central Co., 456 F.2d 419, 421 (6th Cir. 1972); Hughes Aircraft Co. v. North American Van Lines, Inc., 970 F.2d 609, 613 (9th Cir. 1992); Underwriters of Lloyd's of London v. North American Van Lines, 890 F.2d 1112, 1113 (10th Cir. 1989); Hughes v. United Van Lines, Inc., 829 F.2d 1407, 1413 (7th Cir. 1987) cert. denied, 485 U.S. 913 (1988); Hopper Furs, Inc. v. Emery Air Freight Corp., 749 F.2d 1261, 1264 (8th Cir. 1984); Air Products and Chemicals, Inc. v. Illinois Central Gulf Freight Corp. Railroad Co., 721 F.2d 483, 486 (5th Cir. 1983); Cleveland v. Beltman North American Co., Inc., 30 F.3d 373 (2nd Cir. Case 3:16-cv-00775 Document 3-1 Filed 11/09/16 Page 3 of 9 4 1994); Intech, Inc. v. Consolidated Freightways, Inc., 836 F.2d 672 (1st Cir. 1987); Smith v. United Parcel Service, 296 F.3d 1244 (11th Cir. 2002). Carmack Amendment preemption of state law claims dates back to Adams Express v. Croninger, 226 U.S. 491 (1913), where the United States Supreme Court held that the provisions of the Interstate Commerce Act (the predecessor to the Interstate Commerce Commission Termination Act [“ICCTA”])1 supersede all the regulations and policies of a particular state and govern exclusively the liability of a carrier issuing a bill of lading for interstate transportation. Id. at 505-06. When Congress acted in this manner, the regulating power of the state ceased to exist. Id. In Adams Express, the Supreme Court held: Almost every detail of the subject is covered so completely that there can be no rational doubt that Congress intended to take possession of the subject and supersede all state regulations with reference to it. . . . But it has been argued that the non-exclusive character of this regulation is manifested by the proviso of the section, and that state legislation upon the same subject is not superseded, and that the holder of any such bill of lading may resort to any right of action against such a carrier, conferred by existing state law. This view is untenable. It would result in the nullification of the regulation of a national subject, and operate to maintain the confusion of the diverse regulation which it was the purpose of Congress to put an end to. Id. The United States Supreme Court has steadfastly maintained the sweeping, comprehensive scope of the Carmack Amendment preemption and uniformity of treatment, regardless of state laws. See, e.g., Thurston Motor Lines, Inc. v. Jordan K. Rand, Ltd., 460 U.S. 533, 535 (1983) (quoting Louisville & Nashville R.R. Co. v. Rice, 247 U.S. 201, 203 (1918)) (“‘As to interstate shipments, . . . the parties are held to the responsibilities imposed by the federal law, to the exclusion of all other rules of obligation.’”); N.Y., N.H. & H.R. Co. v. Nothnagle, 346 U.S. 128, 131 (1953); Atchison T. & S.F. Ry. v. Harold, 241 U.S. 371, 378 (1916). 1 The Carmack Amendment was not substantively changed by the ICCTA. See H.R. REP. NO. 311, 104th Cong., 1st Sess. (1995), reprinted in 1995 U.S.C.C.A.N. 833; and H.R. CONF. REP. NO. 422, 104th Cong., 1st Sess., reprinted in 1995 U.S.C.C.A.N. 907-08. Case 3:16-cv-00775 Document 3-1 Filed 11/09/16 Page 4 of 9 5 Plaintiff’s Trespass to Chattel Claim Should Be Dismissed Plaintiff’s Complaint alleges that Plaintiff is a North Carolina corporation, with its principal place of business in Mecklenburg County (Complaint, p.1, ¶1). It is further alleged that TW3 is a Georgia limited liability company, with its principal place of business in Georgia (Complaint, p.1, ¶3). Plaintiff alleges that on or about August 14, 2014 in the State of Louisiana, it negotiated with Coastal Transportation to obtain services to transport generators from Griffin, Georgia to High Point Hospital in High Point, North Carolina (Complaint, p.2, ¶2). It is alleged by Plaintiff that subsequent to its agreement with Coastal Transportation, Coastal Transportation then subcontracted or otherwise agreed with TW3 in the State of Georgia to perform Coastal Transportation’s obligations under its agreement with Plaintiff (Complaint, p.2, ¶3). Further, that on or about August 22, 2014, TW3, as carrier, and Yancey Engineered Solutions, as shipper, executed a Straight Bill of Lading for transportation of one of Plaintiff’s generators to High Point, North Carolina (Complaint, p.2, ¶4). Plaintiff alleges that during transport of its generator by TW3, the generator struck a bridge and was damaged (Complaint, p.2, ¶5). Plaintiff alleges that at the time of delivery, the generator had damage to certain components (Complaint, p.2, ¶6). Plaintiff alleges that by reason of the alleged damage to the generator by TW3, TW3 committed a trespass of Plaintiff’s chattel and has suffered damages in the amount of $107,284.96 (Complaint, p.3, ¶22-23). The Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, exclusively governs the rights, duties, and liabilities of the parties (shipper and carrier) to the interstate shipment of household goods. Carmack states in pertinent part: "A carrier providing transportation or service subject to jurisdiction under ... [49 U.S.C. 13501 or 13531][governing motor Case 3:16-cv-00775 Document 3-1 Filed 11/09/16 Page 5 of 9 6 carriers] ... shall issue a receipt or bill of lading for the property received for transportation under this part. That carrier, and any other carrier that delivers the property and is providing transportation or service subject to jurisdiction ... [49 U.S.C. 13501] ... are liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by (a) the receiving carrier; (b) the delivering carrier; or (c) another carrier over whose line or who the property is transported in the United States..." See 49 U.S.C. 14706(a)(1). In Shao v. Link, Cargo (Taiwan) Limited, 986 F.2d 700 (4th Cir. 1993), the Fourth Circuit held that the Carmack Amendment preempted the Plaintiff's state law claims. There, personal property was destroyed by fire after it was misdirected in transit. See 986 F.2d at 701. The plaintiff brought a claim, inter alia, for breach of contract and negligence against several parties involved in the interstate shipment. After a detailed discussion of the Carmack Amendment’s broad preemptive effect, the Court concluded that the Amendment preempted the Plaintiff's common law breach of contract and negligence claims stating: Today we ... conclude that the Carmack Amendment was intended by Congress to create a national uniform policy regarding the liability of carriers under a bill of lading for goods lost or damaged in a shipment. Allowing a shipper to bring common law breach of contract or negligence claims against a carrier for such loss or damage conflicts with this policy. We therefore agree that if the Interstate Commerce Commission had jurisdiction over their shipment in this case, [Plaintiff's], common law claims are preempted by the Carmack Amendment." Id. at 706-707. Here, Plaintiff’s claims against TW3 are based upon the transportation of the personal property from Georgia to North Carolina. Accordingly, the only claim available arises under the Carmack Amendment. The remaining state law and common law claims are preempted. Carmack does not permit a shipper to plead trespass to chattel or plead a variety of theories that are in essence state common law claims. See Margetson v. United Van Lines, Inc., 785 F. Supp. Case 3:16-cv-00775 Document 3-1 Filed 11/09/16 Page 6 of 9 7 917, 922 (D.NM 1991). Therefore, Plaintiff’s cause of action for trespass to chattel, a state law claim, must be dismissed with prejudice. Plaintiff’s Negligence Claim Should be Dismissed as Well In its Complaint, Plaintiff alleges that TW3 owed a duty of reasonable care (Complaint, p.4, ¶25). Plaintiff alleges that TW3 breached that duty (Complaint, p.4, ¶26). Plaintiff alleges that as a proximate cause of TW3’s negligence, Plaintiff has been damaged (Complaint, p.4, ¶27). Plaintiff’s negligence claim arises from Plaintiff’s alleged claim for loss and damage under the bill of lading contract and therefore is not an independent claim separate and distinct from the contract of carriage. See Shao v. Link, Cargo (Taiwan) Limited, 986 F. 2d 700, 706 (4th Cir. 1993). Separate and distinct activities must exist for the Plaintiff’s claim regarding alleged duties to exercise reasonable care to fall within the preemptive scope of Carmack. See Smith v. United Parcel Service, 296 F. 3d 1244, 1249 (11th Cir. 2002). No such activities exist or otherwise have been pled here. The Interstate Commerce Commission Termination Act of 1995 (ICCTA) defines regulated "transportation" to mean not only the actual physical movement of property, but all carrier services related to the movement. These services include, but are not limited to, arranging for, receipt, delivery, storage, transfer, handling, packing, unpacking, and the interchange of the party. See 49 U.S.C. § 13102(23). Plaintiff’s allegations of negligence regarding the same are within the definition of federally regulated “transportation” and ICCTA and such state law claims of negligence are therefore preempted by Federal Law. ICCTA further provides that a state may not enact or enforce any law relating to a motor carrier's price, route or service with respect to the interstate transportation of property. See 49 U.S.C. § 14501(c). ICCTA's expansive definition of regulated "transportation" and its express Case 3:16-cv-00775 Document 3-1 Filed 11/09/16 Page 7 of 9 8 preemption of state law with respect to any carrier "service" clearly reflect the supremacy of federal law over state law in the area of interstate transportation. See Smith v. Comair, Inc., 134 F.3d 254 (4th Cir. 1998); Mastercraft Interiors, Ltd. v. ABF Freight Systems, Inc., 2003 WL 22207286 (D.Md. September 17, 2003); Deerskin Trading Post, Inc. v. United Parcel Service of America, Inc., 972 F. Supp. 665, 668 (N.D. Ga. 1997). Accordingly, Plaintiff’s claim of negligence should also therefore be dismissed with prejudice. Any Claims By Plaintiff for Attorney’s Fees are Preempted The plain language of the Carmack Amendment limits recovery for loss or damage to "actual loss or injury to the property" and excludes any provision for private punitive damages. 49 U.S.C. § 14706(a)(1). Lakeshore, et al. v. Prentice, 147 U.S. 101 (1892); Cleveland v. Beltman North American Co., 30 F.3d 373 (2nd Cir. 1994); Chandler v. Aero Mayflower Transit Co., 374 F.2d 129, 137 (4th Cir. 1967); W.A. Stackpole Motor Transport, Inc. v. Malden Spinning and Dying Co., 263 F.2d 47 (1st Cir. 1968); Missouri Pacific R.R. Company v. H. Rouw Company, 258 F.2d 445 (5th Cir. 1958); Rockholt v. United Van Lines, Inc., 697 F. Supp. 383, 389 (D.Ida. 1988); Margetson v. United Van Lines, Inc., 785 F. Supp. at 921. The carrier is not responsible for special or consequential damages. See Contempo Metal Furniture of California v. East Texas Motor Freight Lines, Inc., 661 F.2d 761, 765 (9th Cir. 1981). The Carmack Amendment's "actual loss" liability standard enables both interstate carriers and shippers to assess their risks and carriers to predict their potential liability for damages. A.T. Clayton & Co. v. Missouri-Kansas-Texas R.R., 901 F.2d 833, 835 (10th Cir. 1990); Hughes v. United Van Lines, Inc., 829 F.2d at 1415; Suarez v. United Van Lines, Inc., 791 F. Supp. at 816. In its prayer for relief, Plaintiff requests this court for attorney’s fees. Such damages preempted by the Carmack Amendment. The rule consistently applied is that, in the absence of Case 3:16-cv-00775 Document 3-1 Filed 11/09/16 Page 8 of 9 9 contractual or statutory liability therefore, attorney's fees and related expenses, i.e. costs, are not recoverable as an element of damages. Neither the uniform bill of lading nor the Carmack Amendment contains such a provision and Courts have continually held that such fees are not recoverable under the Carmack Amendment. See Atlantic C.L.R. Co. v. Riverside Mills, 219 U.S. 186, 55 L.Ed. 167, 31 S.Ct. 164 (1911); Moffit v. Bekins Moving and Storage, 818 F.Supp. 178 (N.D. TX 1993) aff'd 6 F.3d 305 (5th Cir. 1993). See also Accura Systems, Inc. v. Watkins Motor Lines, Inc., 98 F.3d 874 (5th Cir. 1996). Claims for anything other than actual damages are preempted by federal law. Plaintiff’s claims for attorneys' fees in its Complaint should be dismissed with prejudice. CONCLUSION TW3 accordingly requests that this Court dismiss with prejudice Counts II and III of Plaintiff’s Complaint on the grounds that claims for trespass to chattel and negligence are preempted by the Carmack Amendment as matter of well-established federal law. Further, TW3 requests that this Court dismiss all claims by Plaintiff for any consequential damages and attorney’s fees. November 9, 2016 s/Christopher M. Kelly _______________ Christopher M. Kelly (N.C. Bar #24346) Kaitlin N. Rothecker (N.C. Bar #49694) GALLIVAN, WHITE & BOYD, P.A. One Morrocroft Centre 6805 Morrison Blvd., Suite 200 Charlotte, NC 28211 (704) 552-1712 (704) 362-4850 (FAX) ckelly@gwblawfirm.com krothecker@gwblawfirm.com Attorneys for Defendant, TW3 Transportation, LLC Case 3:16-cv-00775 Document 3-1 Filed 11/09/16 Page 9 of 9 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA CAROLINA TRACTOR AND EQUIPMENT COMPANY ) ) ) ) ) ) ) ) ) ) ) Plaintiff, v. CERTIFICATE OF SERVICE COASTAL TRANSPORTATION SERVICES, INC. and TW3 TRANSPORTATION, LLC Defendant. The undersigned hereby certifies that on November 9, 2014, he served a copy of Defendant, TW3 Transportation, LLC’s (1) Notice of Removal, (2) Answer, (3) Partial Motion to Dismiss, (4) Memorandum in Support of Partial Motion to Dismiss and (5) Notice of Filing of Notice of Removal on all known counsel of record by placing a copy in the United States Mail, with due and proper postage affixed thereto and addressed as follows: Daniel R. Hansen Christian H. Staples Shumaker, Loop & Kendrick, LLP 101 South Tryon Street, Suite 2200 Charlotte, NC 28280 Bradford H. Felder Huval, Veazey, Felder & Renegar, LLC Post Office Box 80948 Lafayette, Louisiana 70598-0948 s/Christopher M. Kelly Christopher M. Kelly Case 3:16-cv-00775 Document 3-2 Filed 11/09/16 Page 1 of 1