Certain Underwriters at Lloyds v. CSX Transp., Inc.

• Decision Date: 11 February 2022
• Docket Number: Case No. 20-cv-0795-SPM
• Citation: 585 F.Supp.3d 1154
• Parties: CERTAIN UNDERWRITERS AT LLOYDS, Plaintiffs, v. CSX TRANSPORTATION, INC., Evansville Western Railway, Inc., and Paducah & Louisville Railway, Inc., Defendants.
• Court: U.S. District Court — Southern District of Illinois

585 F.Supp.3d 1154

CERTAIN UNDERWRITERS AT LLOYDS, Plaintiffs,
v.
CSX TRANSPORTATION, INC., Evansville Western Railway, Inc., and Paducah & Louisville Railway, Inc., Defendants.

Case No. 20-cv-0795-SPM

United States District Court, S.D. Illinois.

Signed February 11, 2022

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Robert S. Crowder, Pro Hac Vice, Joanna Maxwell, Pro Hac Vice, Tressler LLP, Los Angeles, CA, Andrew S. Chamberlin, Scottie Forbes Lee, Ellis & Winters, LLP, Greensboro, NC, for Plaintiffs.

Charles J. Swartwout, Emily C. O'Connor, Reifers Holmes & Peters, LLC, Belleville, IL, Scott L. Winkelman, Pro Hac Vice, Daniel William Wolff, Pro Hac Vice, Eryn Howington, Pro Hac Vice, Jameyson Price, Pro Hac Vice, Jeffrey Poston, Pro Hac Vice, Marie Sage Dennis, Pro Hac Vice, Crowell & Moring LLP, Washington, DC, Allison E. Lee, Mullican & Hart, P.C., Tulsa, OK, Andrew J. Steif, Jared J. Burns, Pro Hac Vice, Kathleen L. Wubker, Pro Hac Vice, Abel Bean Law, P.A., Jacksonville, FL, Henry Little Kitchin, Jr., McGuireWoods LLP, Wilmington, NC, for Defendant CSX Transportation, Inc.

Charles J. Swartwout, Emily C. O'Connor, Reifers Holmes & Peters, LLC, Belleville, IL, Scott L. Winkelman, Pro Hac Vice, Daniel William Wolff, Pro Hac Vice, Eryn Howington, Pro Hac Vice, Jameyson Price, Pro Hac Vice, Jeffrey Poston, Pro Hac Vice, Marie Sage Dennis, Pro Hac Vice, Crowell & Moring LLP, Washington, DC, Allison E. Lee, Mullican & Hart, P.C., Tulsa, OK, Andrew J. Steif, Jared J. Burns, Pro Hac Vice, Abel Bean Law, P.A., Jacksonville, FL, Henry Little Kitchin, Jr., McGuireWoods LLP, Wilmington, NC, for Defendant Evansville Western Railway, Inc.

MEMORANDUM AND ORDER

McGLYNN, District Judge:

Pending before the Court is a Motion for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure filed by defendant Paducah & Louisville Railway, Inc. ("PAL") (Doc. 243). Having been fully informed of the issues presented, this Court GRANTS the Motion for Summary Judgment in its entirety.

RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Certain Underwriters at Lloyds ("Lloyds") commenced the present action to recover damages associated with the derailment of a train while under care of defendant CSX Transportation, Inc. ("CSX"). Lloyds sues as a subrogee for National Railway Equipment Company ("NRE") to recover the value associated with the loss of four (4) locomotives. In September 2018, NRE sold these locomotives to a customer in Guinea and arranged rail transport on Evansville Western Railway, Inc. ("EVWR") via a booking website known as PALConnect. Smith Dep.: 14, 28–30. EVWR transported the locomotives from Mount Vernon, Illinois to Evansville, Indiana, at which point CSX took custody of the locomotives to continue their transport to Wilmington, NC. Id. at 41. While in North Carolina on September 16, 2018, the CSX train carrying the locomotives derailed because of water on the tracks from Hurricane Florence. Id. at 14, 112.

While not named in Lloyds's initial Complaint (Doc. 1) or its First Amended Complaint (Doc. 84), PAL was added in the Second Amended Complaint filed on February 16, 2021 (Doc. 131). That complaint included six (6) claims for relief including liability under the Carmack Amendment to the Interstate Commerce Act ( 49 U.S.C. § 11706, "Carmack"), two violations of the Uniform Bills of Lading Act ( 49 U.S.C. §§ 80110, 80111 ), negligence and related claims, conversion, and, against PAL, specifically, breach of contract to deliver goods (Doc. 131, ¶¶ 62–95). Defendants CSX, EVWR, and PAL all filed Motions

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for Summary Judgment (Docs. 239, 242, and 243). Lloyds subsequently filed its own Motion for Summary Judgment and a Response in Opposition to PAL's Motion for Summary Judgment (Docs. 251, 266).

Oral argument was held before the Court on January 18, 2022. At that time, PAL argued that it should not be a party to the case at all, arguing that it was not subject to this Court's personal jurisdiction via established Supreme Court precedent or Illinois's long-arm statute and that, even if it were, it should be excluded from liability as it was neither a party to any of the contracts nor did it provide any services as a rail carrier within Carmack's definition. Hr'g Tr.: 69–78, Jan. 18, 2022. Lloyds contested both arguments, first arguing that personal jurisdiction was proper because PAL and EVWR were inextricably connected within the same corporate infrastructure and, second, that the use of PALConnect to book freight shipment on EVWR fit the definition of a "service" under § 11706(a) of Carmack. Id. at 78–85. For a more extensive description of the factual and procedural background of this case, see Docs. 239, 242, 243, 251, and 266.

APPLICABLE LAW AND LEGAL STANDARDS

The 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." Spurling v. C & M Fine Pack, Inc. , 739 F.3d 1055, 1060 (7th Cir. 2014) (quoting Fed. R. Civ. P. 56(a) ). Once the moving party has set forth the basis for summary judgment, the burden then shifts to the nonmoving...