BMW Auto Sales, Inc. v. Red Wolf Logistics, LLC

• Decision Date: 01 March 2022
• Docket Number: 1:21-cv-14647
• Court: U.S. District Court — District of New Jersey
• Parties: BMW Auto Sales, Inc., Plaintiff, v. Red Wolf Logistics, LLC; John Does 1-10, and ABC Business Entities 1-10 Defendants.

BMW Auto Sales, Inc., Plaintiff, v. Red Wolf Logistics, LLC; John Does 1-10, and ABC Business Entities 1-10 Defendants.

No. 1:21-cv-14647

United States District Court, D. New Jersey

March 1, 2022

OPINION

Hon Joseph H. Rodriguez, USDJ

This matter is before the Court on the motion to remand this case back to the Superior Court of New Jersey, Atlantic County [Dkt. 10] filed by Plaintiff BMW Auto Sales, Inc. (“Plaintiff”). For the reasons provided below the Court finds that it lacks subject-matter jurisdiction over this case and will grant Plaintiff's motion.

I. Background

Plaintiff purchased a 2020 Ford Explorer (the “Car”) from an auto auction in Grand Prairie, Texas. [Compl. ¶ 5]. The Complaint alleges that Defendant Red Wolf Logistics, LLC (“Defendant”) transported the Car to Houston, Texas and that the Car suffered $3, 266.69 worth of damage during the trip. [See Compl. ¶ 7]. To recover the cost of repairing the damage to the Car, Plaintiff filed a complaint against Defendant in the Superior Court of New Jersey, Atlantic County alleging professional negligence, breach of contract, and consumer fraud under the New Jersey Consumer Fraud Act (“NJCFA”). [See Dkt. 1]. Defendant removed the case alleging that this Court has federal question jurisdiction to hear the case under the Carmack Amendment, 49 U.S.C. § 11706, 48 U.S.C. § 14706, and 28 U.S.C. § 1446(d), and based on diversity jurisdiction under 28 U.S.C § 1332. [Dkt. 1]. Defendant filed an answer and third-party complaint against JHD Trucking, Inc. (“JHD”), alleging claims for contribution, indemnification, and liability under the Carmack Amendment. [Dkt. 3]. Defendant then filed an amended answer and third-party complaint asserting the same claims against JHD; Ryion Cooley; Quintae Conquers; Excellence Lifestyle, LLC; and Clifford Hubbard. [Dkt. 6]. The same day, Defendant voluntarily dismissed claims against JHD. [Dkt. 7]. Plaintiff filed the present motion to remand this case to the Atlantic County Superior Court arguing that the Court lacks subject-matter jurisdiction to hear the case. [Dkt. 10].

II. Analysis

“In order to remove a case to federal court, a defendant must comply with the statutory requirements of 28 U.S.C. §§ 1441 and 1446.” Meltzer v. Cont'l Ins. Co., 163 F.Supp.2d 523, 525 (E.D. Pa. 2001). “First, the district courts of the United States must have original jurisdiction, which requires either a federal question or diversity of citizenship of the parties.” Id. (citing 28 U.S.C. §§ 1331, 1332, 1441(a); Manos v. United Food & Com. Workers Int'l Union, 9 F.Supp.3d 473, 478 (D.N.J. 2014). “Second, the defendant must file a notice of removal with the district court, containing ‘a short and plain statement of the grounds for removal,' as well as ‘a copy of all process, pleadings, and orders served upon such defendant or defendants in such action.'” Meltzer, 163 F.Supp.2d at 525 (quoting 28 U.S.C. § 1446(a)). The party seeking removal under federal statute bears the burden of demonstrating that the Court has jurisdiction to hear the case. Latzanich v. Sears, Roebuck & Co., No. 3:15-CV-2346, 2016 WL 749055, at *2 (M.D. Pa. Jan. 25, 2016), report and recommendation adopted, No. CV 3:15-2346, 2016 WL 727776 (M.D. Pa. Feb. 24, 2016) (quoting Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 396 (3d Cir. 2004). Courts must construe the federal removal statutes strictly and resolve any doubts in favor of remand. Westmoreland Hosp. Ass'n v. Blue Cross of W. Pa., 605 F.2d 119, 123 (3d Cir. 1979); Wilson v. Hartford Cas. Co., 492 F.Supp.3d 417, 423 (E.D. Pa. 2020). Plaintiff argues that the Court lacks jurisdiction to hear this case because the Complaint-which alleges negligence, breach of contract, and violation of NJCFA-does not allege a violation of federal law. [Dkt. 10-1 at 9]. Plaintiff also argues that removal based on diversity jurisdiction is improper because Defendant has not established complete diversity among the parties and because the case does not satisfy the $75, 000 amount in controversy requirement. [Dkt. 11-1 at 12-17]. See also 28 U.S.C § 1332(a); Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 419 (3d Cir. 2010) (“Complete diversity requires that, in cases with multiple plaintiffs or multiple defendants, no plaintiff be a citizen of the same state as any defendant.”). In response, Defendant clarifies that it does not seek removal based on diversity jurisdiction. [Dkt. 11 at 6]. Instead, Defendant argues that it seeks removal based only on the Carmack Amendment. [Id.]. Defendant also argues that 49 U.S.C. § 14501(c) of the Federal Aviation Administration Authorization Act (“FAAAA”) confers jurisdiction on this Court, even though Defendant did not cite or refer to the FAAAA in its removal notice. [Dkt. 11 at 11-13]. The Court will address each of these arguments in turn.

a. Carmack Amendment

The “Carmack Amendment” is Congress's “comprehensive” effort to create a uniform national system for “interstate carrier liability.” Certain Underwriters at Int. at Lloyds of London v. United Parcel Serv. of Am., Inc., 762 F.3d 332, 334-35 (3d Cir. 2014) (citing Pub. L. No. 59-337, 34 Stat. 584; and Pub. L. No. 74-255, 49 Stat. 543); Kotick v. Atlas Van Lines, Inc., No. CV 18-11916 (FLW), 2019 WL 5388163, at *2 (D.N.J. Oct. 22, 2019). The Carmack Amendment generally provides that “an interstate carrier is strictly liable for damages up to ‘the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) [certain intermediary carriers].'” Id. (quoting 49 U.S.C. § 14706(a)(1)). Federal courts have original jurisdiction over Carmack Amendment claims “only if the matter in controversy for each receipt or bill of lading exceeds $10, 000, exclusive of interest and costs.” 28 U.S.C. § 1337(a).

Defendant argues that the Carmack Amendment provides the sole remedies for damage sustained to the Car during transit, and that the Carmack Amendment completely preempts Plaintiff's state law claims. [Dkt. 11 at 9-10]. In other words, Defendant argues that the Carmack Amendment's preemptive force converts Plaintiff's state law claims into federal claims over which this Court has jurisdiction.

The Court rejects Defendant's argument for two reasons. First, the Carmack amendment does not apply here because the Complaint alleges that the Car was only shipped within Texas and does not allege that the parties intended the Car to be shipped out of Texas. While the Carmack Amendment applies to “interstate-shipping contract [and tort] claims alleging loss or damage to property, ” Certain Underwriters at Interest at Lloyds of London v. United Parcel Serv. of Am., Inc., 762 F.3d 332, 336 (3d Cir. 2014) (emphasis added), the Complaint alleges a purely intrastate shipment of property. See also Sony Biotechnology, Inc. v. Chipman Logistics & Relocation, No. 17-CV-1292-AJB-WVG, 2017 WL 3605500, at *2 (S.D. Cal. Aug. 22, 2017) (“Carmack liability applies ‘to the extent that passengers, property, or both, are transported by motor carrier-between a place in-a State and a place in another State[.]'” (quoting 49 U.S.C. § 13501(1)(A))). The Complaint does not allege, nor does Defendant argue, that either party entered the agreement intending for the Car to cross state lines. See Project Hope v. M/V IBN SINA, 250 F.3d 67, 75 (2d Cir. 2001) (“[I]f the final intended destination at the time the shipment begins is another state, the Carmack Amendment applies throughout the shipment, even as to a carrier that is only responsible for an intrastate leg of the shipment.”); Merchants Fast Motor Lines, Inc. v. I.C.C., 528 F.2d 1042, 1044 (5th Cir. 1976) (“It is elemental that a carrier is engaged in interstate commerce when transporting goods either originating in transit from beyond Texas or ultimately bound for destinations beyond Texas, even though the route of the particular carrier is wholly within one state.”). Because the information before the Court only suggests a shipment within Texas, the Carmack Amendment does not apply.^[1]

Second, even if the Carmack Amendment does apply and completely preempts Plaintiff's state-law claims, the Court still lacks jurisdiction because the Complaint does not allege damages exceeding $10, 000. Though the Court's conclusion does not require the Court to apply the complete preemption doctrine, the Court will explain this doctrine to provide context for Defendant's arguments concerning preemption under the Carmack Amendment and the FAAAA below.

“[T]he presence of federal question jurisdiction is governed by reference to the “well-pleaded complaint” doctrine. Dawson ex rel. Thompson v. Ciba-Geigy Corp., USA, 145 F.Supp.2d 565, 568 (D.N.J. 2001) (citing Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808 (1986)). The well-pleaded complaint doctrine makes a plaintiff the “master of the complaint, ” and a defendant may remove a case filed in state court only if a federal claim exists on the face of a plaintiff's complaint. Id. (citing Merrell Dow Pharms., Inc., 478 U.S. at 808); Hall v. Keyes, No. 1:21-CV-04748, 2021 WL 2660296, at *2 (D.N.J. June 29, 2021) (citations omitted). It follows that defenses grounded in federal law generally do not establish federal question jurisdiction, even if federal law preempts a state-law claim. Caterpillar Inc. v. Williams, 482 U.S. 386, 392-93 (1987).

However “a corollary” rule known as the “complete preemption doctrine” applies where “the pre-emptive force of a [federal] statute is so ‘extraordinary' that it ‘converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.'” Id. at 393 (quoting Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 65 (1987)). “Once an area of state law...