Brown v. Temain, et al., 2010 WL 5391578 (N.D. Ind. 2010)
A shipper booked interstate transit of freight through broker CDN Logistics, which engaged motor carrier Sunny Express. While Sunny Express’s driver, Ionu Temain, was en route, he collided with another combo driven by Jason Brown. Brown suffered personal injuries, and sued Temain, Sunny Express and its owner, Temain, and the shipper in the Northern District of Indiana. CDN moved for summary judgment.
The court granted CDN’s motion. CDN simply had no control over or other connection with Temain, including selection of him as a driver. While CDN provided the trailer, Temain used his own tractor, and nothing implicated the trailer as a cause of the accident.
Brown tried to argue negligent entrustment, but, as CDN argued and the court agreed, nothing suggested that Temain “was incapacitated or incapable of using due care. … [E]ven assuming Temain was somehow incapacitated or incapable of using due care, there is no evidence that CDN had any knowledge … of any incapacity.” Brown also tried to argue that CDN had an obligation to insure the trailer since it provided it for interstate transportation. But so what? That doesn’t implicate CDN as a potentially liable party, and deficiency of insurance coverage wasn’t at issue.
Courts have gone in different directions regarding intermediary liability for carrier accidents, but this case presented the court with nothing as a basis to hold the broker liable. Dismissal here was appropriate under even the most expansive broker liability analysis.
Osman v. International Freight Logistics, Ltd., et al., 2011 WL 10058 (6th Cir. 2011)
Michael Osman bought a ceiling lamp made of opaline glass and brass for his New York office, and engaged surface freight forwarder International Freight Logistics (“IFL”) to arrange transit of it from Miami. IFL retained motor carrier Towne Air Freight (“TAF”) to make the haul. The lamp was destroyed in transit.
Osman sued IFL and TAF Michigan state court, and the defendants removed the action to the Eastern District of Michigan. TAF was dismissed out, but IFL was found liable to Osman for the lamp’s value. However, the trial court denied Osman’s motion for an attorney fee award.
Osman appealed to the Sixth Circuit, arguing that 49 USC §14708(d) authorizes fee awards to successful cargo claimants. IFL pointed out that this statute’s own terms, as well as a legislative note affixed to it, limit its application exclusively to household goods shippers.
But a 2001 Sixth Circuit decision held that “the legislative history does not clearly indicate that Congress intended the fee-shifting provision of section 11711(d) to apply solely to the household goods moving industry.” The trial court had asked for additional briefing on that issue, and concluded it didn’t change the result. The Sixth Circuit agreed, and affirmed. Section 11711(d) was moved to §14708(d) as part of the Interstate Commerce Commission Termination Act in 1995. In 2005, Congress enacted the Safe, Accountable, Flexible, Efficient Transportation Equity Act which defined in detail “household goods motor carrier,” and specified that provisions of Title 49 “that relate to the transportation of household goods apply only to a household goods motor carrier …” While this provision didn’t specifically abrogate the earlier Sixth Circuit decision, it’s pretty darn clear.
Additionally, IFL was a freight forwarder, and not a motor carrier. While forwarders can be liable as carriers, IFL would have to have forwarded households goods to be liable for Osman’s attorneys’ fees.
Viasystems Technologies Corporation, LLC v. Landstar Ranger, Inc. et al., 2010 WL 5173163 (E.D. Wis. 2010)
Shipper Viasystems sued a series of intermediaries and carriers to recover damages related to a damaged press shipped in interstate transit. Viasystems also apparently took umbrage at a lax investigation Landstar allegedly performed of the loss. The matter was removed to the Eastern District of Wisconsin. There, the defendants moved to dismiss Viasystems’s claims for attorneys’ fees and for defendants’ failure to undertake an investigation and respond to the shipper as mandated by 49 CFR §370.
Carmack, codified within ICCTA’s provisions governing cargo liability at 49 USC §14706, axiomatically preempts state and common law causes of action. It contains no provision for the award of attorneys’ fees. Another ICCTA provision at 49 USC §14704 does allow for fee awards when a carrier or broker “does not obey an order of the Secretary [of Transportation] or the [Surface Transportation] Board.” Viasystems argued that its fee request was pursuant to §14704. Huh? The court politely agreed with Landstar that this argument was “misplaced.”
But Wisconsin, like many states, socks insurers pretty hard when they fail to adequately investigate and respond to claims from their policyholders. Citing the Badger State’s insurance bad faith statute and the U.S. Supreme Court’s 1914 ruling in Missouri, Kansas & Texas Railway Co. of Texas v. Harris, Viasystems (mistakenly) argued that state law claims for attorneys’ fees are allowed in Carmack claims when state statutes authorize them. The court easily dismissed that one too. Hey, Landstar’s not an insurance company.
But Viasystems did carry the day in surviving summary judgment on its claim that 49 CFR §370 does indeed provide a private right of action. While the feds can come down on a carrier that shirks its investigation responsibilities, that reg, like others in its part, is interpretational and supportive of Carmack. Because Carmack provides private rights of action, it must follow that its implementation regs do as well.
Daily Express, Inc. v. Maverick Transportation, LLC, 2010 WL 5464452 (M.D. Pa. 2010)
Shipper PPG Industries wished to have a cargo of glass products transported from Pennsylvania to Massachusetts. Maverick Transportation, a licensed motor carrier, was engaged to load and secure the glass product onto carrier Daily Express’s truck. But that’s all Maverick apparently did, even though it contended it issued a bill of lading to PPG. Daily Express made the haul. During transit, the glass fell within Daily Express’s truck and broke. Both Maverick and Daily Express claimed that PPG engaged them to make the haul.
Daily Express sued Maverick in Pennsylvania state court, and Maverick removed to the U.S. District Court for the Middle District of Pennsylvania. It then moved to dismiss Daily Express’s state and common law claims as preempted by Carmack. The motion was denied.
Only motor carriers and forwarders are shielded by Carmack. All Maverick did, and apparently contemplated doing, was load the glass. A bill of lading and alleged direct relationship with the shipper notwithstanding, cargo loading does not rise to the level of motor carrier activity as defined by 49 USC §13102. True, had Maverick actually hauled the load, its loading activities may have been covered by Carmack as “related to the movement of property.” The allegations against Maverick, however, did not include Maverick actually making a transport, and evidence in the record didn’t suggest otherwise. Even though Maverick is a carrier, it wasn’t acting as one in this transaction. Carmack doesn’t apply to it here.
Tran Enterprises, LLC v. DHL Express (USA), Inc., 2010 WL 5064376 (5th Cir. 2010)
The Fifth Circuit recently affirmed a summary judgment order from the Southern District of Texas dismissing state and common law claims against motor carrier DHL based on its alleged failure to collect and remit COD charges for 21 shipments by its customer Nutrition Depot. The carrier asserted that Carmack governed the claim and preempted Nutrition Depot’s theories of liability. DHL’s Carmack-blessed, 100-buck-a-pop, limitation of liability was held effective as well.
The shipper argued that Carmack was predicated on harm to or loss of the cargo itself, which didn’t happen here. Citing U.S. Supreme Court and other Fifth Circuit precedents, the court ruled that Carmack kicks in with respect to “any failure to discharge a carrier’s duty with respect to any part of the transportation to the agreed destination.” One earlier case even addressed failure to collect COD charges in applying Carmack. This claim clearly involved such a failure. While the vast majority of case decisions address lost/damaged/delayed cargo, Carmack’s language and interpretational precedents don’t limit its applicability to such claims.
Nutrition Depot tried to argue that its claims are outside Carmack because they derive from “separate harms” apart from the contract of carriage, and pointed to how conversion claims have been allowed despite Carmack’s preemptive grasp when separate harms are alleged. However, there was no evidence of conversion by DHL in the record. The shipper only alleged it didn’t receive payment.
Fireman’s Fund Insurance Co. v. CRST Van Expedited, Inc., 2010 WL 4682367 (D. Kan. 2010)
Here’s one that might be useful when a named plaintiff hasn’t quite jumped through all hoops needed to gain the right to pursue alleged claims in a federal lawsuit. Fireman’s Fund insured a cargo of handsets that were stolen en route. The insurer paid its shipper policyholder and received a “loan receipt” before proceeding with a subrogation action against a carrier. The loan receipt provided that it could be “converted to a subrogation receipt at any time,” which would empower Fireman’s Fund to go after an ultimately responsible party, but the insurer never effected the conversion.
The carrier moved to dismiss on that ground, as well as limitation of liability arguments. The court denied the motion. Even though Fireman’s Fund was not yet the real party in interest, Fed.R.Civ.P. 17(a)(3) mandates that a court must allow the party a reasonable time “to ratify, join, or be substituted into the action.” Thus, summary judgment was not the appropriate remedy, at least not until Fireman’s Fund had a reasonable opportunity to correct its paperwork. The limitation of liability arguments required additional briefing for the court to consider.
Before proceeding, please note: If you are not a current client of Lane Powell PC, please do not include any information in this email that you or someone else considers to be confidential or secret in nature. Prior to the establishment of a lawyer-client relationship, unsolicited emails from non-clients containing confidential or secret information cannot be protected from disclosure.