Bertram v. Progressive Se. Ins. Co.
| Decision Date | 13 July 2021 |
| Docket Number | CASE NO. 2:19-CV-01478 |
| Parties | LAUREN BERTRAM v. PROGRESSIVE SOUTHEASTERN INSURANCE CO ET AL |
| Court | U.S. District Court — Western District of Louisiana |
Before the Court is "Defendant Blue-Grace Logistics LLC's FRCP 12(b)(6) Motion to Dismiss" (Doc. 98) wherein Blue-Grace Logistics LLC ("Blue-Grace) moves to dismiss Plaintiffs' state law negligence claims asserted in Plaintiffs' Third Amended Complaint. Blue-Grace maintains that these claims are preempted under the provisions of the Federal Aviation Administration Authorization Act ("FAAAA"), 49 U.S.C. § 14501.
In their Third Amended and Restated Complaint,1 Plaintiffs, Lauren Bertram, C B, Julian Bertram and Alexander Bertram, allege the following which is relevant to the instant Motion to Dismiss:
On or about July 16, 2019, at approximately 6:30 p.m., Stephen Duane Bertram was driving in the westbound lane of Interstate Highway 10. At that same time, Defendant Justin Chong was operating a Freightline tractor towing a trailer and traveling east on Interstate 10.2 The tractor experienced a blow-out of the front driver's side tire causingChong to lose control of the truck and trailer. The truck and trailer crossed the solid yellow line ultimately entering the westbound travel lanes and oncoming traffic, striking a vehicle driven by Zachary N. Flessner and then Mr. Bertram's vehicle.3 Mr. Bertram sustained fatal injuries that resulted in his demise at the scene.4
Defendant Blue-Grace is a freight broker operating under the terms of a Motor Carrier Truckload Transport Agreement ("Empire-Blue Grace Agreement"); Blue-Grace acted as a freight broker for Empire National, Inc. ("Empire").5 As a freight-broker, Blue Grace was responsible for arranging for the transportation of paper product that Empire/Mr. Chong, the truck driver was hauling in the tractor-trailer at the time of the accident.6
The Third Amended Complaint alleges that Blue-Grace: (1) negligently investigated, selected, and hired Empire; (2) failed to exercise ordinary care in investigating Empire's competence to transport goods in a commercial vehicle on the public roadways; and (3) failed to exercise ordinary care in selecting Empire to transport goods in a commercial motor vehicle on the public roadways.7
Federal Rule of Civil Procedure 12(b)(6) allows dismissal of a complaint when it fails to state a claim upon which relief can be granted. The test for determining the sufficiency of a complaint under Rule 12(b)(6) is that "a complaint should not be dismissedfor failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Hitt v. City of Pasadena, 561 F.2d 606, 608 (5th Cir. 1977) (per curium) citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99 (1957).
Subsumed within the rigorous standard of the Conley test is the requirement that the plaintiff's complaint be stated with enough clarity to enable a court or an opposing party to determine whether a claim is sufficiently alleged. Elliot v. Foufas, 867 F.2d 877, 880 (5th Cir. 1989). The plaintiff's complaint is to be construed in a light most favorable to plaintiff, and the allegations contained therein are to be taken as true. Oppenheimer v. Prudential Securities, Inc., 94 F.3d 189, 194 (5th Cir. 1996). In other words, a motion to dismiss an action for failure to state a claim "admits the facts alleged in the complaint, but challenges plaintiff's rights to relief based upon those facts." Tel-Phonic Servs., Inc. v. TBS Int'l, Inc., 975 F.2d 1134, 1137 (5th Cir. 1992).
"In order to avoid dismissal for failure to state a claim, a plaintiff must plead specific facts, not mere conclusory allegations . . ." Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir. 1992). "Legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th Cir. 1995). "[T]he complaint must contain either direct allegations on every material point necessary to sustain a recovery . . . or contain allegations from which an inference fairly may be drawn that evidence on these material points will be introduced at trial." Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th Cir. 1995).
Under Rule 8 of the Federal Rules of Civil Procedure, the pleading standard does not require a complaint to contain "detailed factual allegations," but it "demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955 (2007). A complaint that offers "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Id. Nor does a complaint suffice if it tenders "naked assertion[s]" devoid of "further factual enhancement." Id., at 557, 127 S.Ct. 1955.
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Id., at 570, 127 S.Ct. 1955.
Blue-Grace is a freight broker who arranged for Empire to transport jumbo rolls of paper in the tractor-trailer that was involved in the accident that caused Mr. Bertram's death. Plaintiffs allege that Blue-Grace: (1) negligently investigated, selected, and hired Empire; (2) failed to exercise ordinary care in investigating Empire's competence to transport goods in a commercial vehicle on the public roadways; and (3) failed to exercise ordinary care in selecting Empire to transport goods in a commercial motor vehicle on the public roadways.8
To summarize, Plaintiffs claim that the motor carrier selected by Blue-Grace was reckless, incompetent, and unqualified. Blue-Grace argues that Plaintiffs' claims seekrelief under state negligence laws that have an effect on the prices, routes, and services of freight brokers. Blue-Grace maintains that Plaintiffs' claims are preempted by the FAAAA because they are directly related to and have a significant economic impact on the core services performed by a freight broker, namely selecting motor carriers to transport shipments. Therefore, Blue-Grace moves to dismiss Plaintiffs' Third Amended Complaint with prejudice as preempted under the provisions of the FAAAA, 49 U.S.C. § 14501. Both parties acknowledge that the Fifth Circuit has not addressed the issue of FAAAA preemption of state law claims in personal injury actions, noting that federal courts that have addressed FAAAA preemption challenges in the context of negligence claims against brokers are divided.
The first group of courts found no FAAAA preemption of personal injury claims against brokers based on the conclusion that negligent hiring claims are not sufficiently "related to" the services of a broker. See, e.g., Scott v. Milosevic, 372 F. Supp. 3d 758, 769 (N.D. Iowa 2019); Mann v. C.H. Robinson Worldwide, Inc., 2017 WL 3191516, at *7 (W.D. Va. July 27, 2017). The second group of courts rejected FAAAA preemption of common law negligence claims based on the safety regulatory exception. See, e.g., Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016 (9th Cir. 2020); Lopez v. Amazon Logistics, Inc., 458 F. Supp. 3d 505, 512 (N.D. Tex. 2020); Popal v. Reliable Cargo Delivery, Inc., 2021 WL 1100097 (W.D. Tex. Mar. 10, 2021); Grant v. Lowe's Home Ctr., 2021 WL 288372, at *3 (D.S.C. Jan. 28, 2021). Finally, the third group of courts have found that negligence claims against freight brokers are preempted under the FAAAA and do not fall within the safety exception. See, e.g., Gillum v. High Standard, LLC et al., 2020WL 444371 (W.D. Tex. Jan. 27, 2020); Loyd v. Salazar, 2019 WL 4577108, at *4 (W.D. Okla. Sept. 20, 2019); Creagan v. Wal-Mart Trans., LLC, 354 F. Supp. 3d 808, 812 (N.D. Ohio 2018).
The FAAAA provides as follows:
49 U.S.C. § 14501(c)(1). The FAAAA was enacted in an effort to avoid "a State's direct substitution of its own governmental commands for 'competitive market forces' in determining (to a significant degree) the services that motor carriers will provide." Rowe v. New Hampshire Motor Transp. Ass'n, 552 U.S. 364, 368, 372 128 S.Ct. 989 (2008). The preemption language of the FAAAA directly mirrored the earlier Airline Deregulation Act ("ADA") and in interpreting identical provisions of those two statutes, the Supreme Court held that the FAAAA's preemption must also be read broadly. Id. at 370.
The FAAAA defines "transportation" as "services related to the movement" of property, "including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and interchange of passengers and property." Dan's City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 261, 133 S.Ct. 1769 (2013) (quoting 49 U.S.C. § 13102(23)(B)).
"In all pre-emption cases ... we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996); City of Columbus v. Ours Garage & Wrecker Serv., Inc., 536 U.S. 424, 432, 122 S.Ct. 2226, 2232 (2002). Consequently, there are limits to the FAAAA's preemption. Pelkey, 569 U.S. at 260.
"The principal purpose of the FAAAA was 'to prevent States from undermining...
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