CGI Logistics, LLC v. Martinez
| Docket Number | Civil Action 5:23-CV-43 |
| Decision Date | 22 September 2023 |
| Parties | CGI LOGISTICS, LLC, Plaintiff, v. GERARDO MARTINEZ, FAST LOGISTIK USA, LLC, AND VGR LOGISTICS, LLC Defendants |
| Court | U.S. District Court — Southern District of Texas |
AMENDED REPORT AND RECOMMENDATIONS OF THE UNITED STATES MAGISTRATE JUDGE
Before the Court are Defendants' Motion to Dismiss for Failure to Join Required Parties, (Dkt. No. 7), and Motion to Dismiss for Forum Non Conveniens, (Dkt. No. 9).[1] The District Court referred the above motions to the undersigned Magistrate Judge for a Report and Recommendations pursuant to 28 U.S.C. § 636(b).
On February 8, 2023, Plaintiff CGI Logistics, LLC (“Plaintiff CGI”) filed an Original Complaint in the 111th District Court in Webb County, Texas against Gerardo Martinez, Fast Logistik USA, LLC, and VGR Logistics, LLC (collectively referred to as “Defendants”), asserting claims of fraud and negligent misrepresentation, unlawful brokerage activity, breach of contract, common law liability, and negligence. (Dkt. No. 1-1). On April 20, 2023, Fast Logistik USA, LLC (“Fast Logistik”) was served with the lawsuit. (Dkt. No. 1 at 1). On April 26, 2023, Fast Logistik timely filed a Notice of Removal, asserting federal question subject matter jurisdiction. (Id.). Martinez and VGR Logistics, LLC (“VGR”) each filed a Notice of Consent to Removal on April 27, 2023, and April 28, 2023, respectively. (Dkt. Nos. 2, 3, 4).
On May 4, 2023, Plaintiff CGI filed its First Amended Complaint. (Dkt. No. 5). In the First Amended Complaint, Plaintiff CGI alleges that on September 2, 2022, Plaintiff CGI and/or its affiliate Cargo Group International Logistics (“CGI Parent”) and Fast Logistik entered into a contract (the “CGI-Fast Logistik Contract”) for the transportation of several shipments of cargo. (Id. at 2). The CGI-Fast Logistik Contract was signed by Fast Logistik's representative, Martinez. (Id.). Under the CGI-Fast Logistik Contract, Plaintiff CGI would broker shipments of cargo to Fast Logistik, and Fast Logistik would transport the cargo. (Id. at 3-4). Fast Logistik was required to obtain insurance to pay for any loss or damage to the cargo during the transportation, and Fast Logistik was prohibited from “double brokering.” (Id. at 24).
In or around October of 2022, Plaintiff CGI brokered and arranged for Fast Logistik to transport several shipments of cargo for Plaintiff CGI's customer, Colgate. (Id. at 3). Three shipments of the cargo were lost during transport (the “Lost Cargo”). (Id.). Plaintiff CGI made a claim to Fast Logistik and requested that Fast Logistik have their insurance pay for the Lost Cargo. (Id. at 4). Martinez then admitted that Fast Logistik did not transport the shipments and that Fast Logistik did not obtain cargo insurance. (Id.). Martinez knew that Fast Logistik was not a licensed motor carrier; Fast Logistik would not transport the shipments; and Fast Logistik did not have and would not procure the agreed upon insurance. (Id.). Instead, Fast Logistik brokered the shipments to VGR, and VGR then arranged for another motor carrier to transport the cargo. (Id. at 3). VGR purportedly hired Rone Transportes, S.A. de C.V. (“Rone Transportes”), to transport the Lost Cargo. (Id.).
Fast Logistik and Martinez refused to pay for the lost cargo. (Id. at 4). The lost shipments resulted in cargo loss damages of approximately $105,989.32. (Id.). Plaintiff CGI is equitably subrogated to the rights of the cargo owner by involuntary payment of Defendants' debt to the cargo owner, and Plaintiff CGI was also assigned any rights of CGI Parent.[2] (Id.). Plaintiff CGI seeks to hold Defendants liable for cargo loss damages, and Fast Logistik and Martinez liable for attorney's fees and civil penalties. (Id. at 8).
On May 11, 2023, Defendants filed the instant Motion to Dismiss for Failure to Join Required Parties, and Motion to Dismiss for Forum Non Conveniens, to which Plaintiff CGI filed a response. (Dkt. Nos. 7, 9, 18, 19).
In the Motion to Dismiss for Failure to Join Required Parties, Defendants argue that Plaintiff CGI sued Defendants for claims that belong to Colgate Palmolive and CGI's parent/affiliate. (Dkt. No. 7 at 1). Defendants further argue that Plaintiff CGI failed to join Rone Transportes, the party that actually took the cargo from Colgate Palmolive. (Id. at 2). Plaintiff CGI argues in response that Colgate Palmolive, as a subrogor, CGI Parent, as an assignor, and Rone Transportes, as a joint tortfeasor, are not required parties in this lawsuit. (Dkt. No. 18 at 4-7). Plaintiff CGI further argues that even if they were required, the Court should not dismiss the lawsuit because Defendants have not shown that they cannot be joined. (Id. at 7-9).
In the Motion to Dismiss for Forum Non Conveniens, Defendants argue that Mexico is a more appropriate forum to resolve this lawsuit. (See Dkt. No. 9). Defendants state that Plaintiff CGI hired Fast Logistik to obtain transportation of three trailers with Colgate Palmolive's cargo from San Jose Iturbide, Mexico, to Nuevo Laredo, Mexico. (Id. at 1). Then, through VGR, Fast Logistik obtained the services of Rone Transportes to transport the cargo. (Id. at 2). Rone Transportes picked up the cargo at Colgate Palmolive's premises in San Jose Iturbide, Mexico. (Id.). Contact was lost that same day while the units were in Matehuala, Mexico, and the cargo was not received in Nuevo Laredo. (Id.). Defendants are unaware if Colgate-Palmolive ever recovered the cargo. (Id.). Attached to the motion is a “Declaration Under Penalty of Perjury” signed by Gerardo Martinez, stating, “I declare under the penalty of perjury that the foregoing is true and correct.” (Id. at 7).
In response to the motion, Plaintiff CGI argues that Defendants have not met their burden to show that Mexico is a more appropriate forum for this lawsuit. (Dkt. No. 19). Attached to the response are several exhibits, to include: Affidavit of Kassandra Galvan (Exhibit 1), Broker-Carrier Agreement (Exhibit 1A), Colgate Palmolive (Exhibit 1B), Certificate of Formation of CGI Logistics LLC (Exhibit 2), Certificate of Formation of Fast Logistik (Exhibit 3), 2022 Public Information Report of Fast Logistik (Exhibit 4), Affidavit of Process Server (Exhibit 5), Certificate of Formation of VGR Logistics (Exhibit 6), Attorney Letter dated November 9, 2022 (Exhibit 7), Attorney Letter dated April 28, 2023 (Exhibit 8), Fast Logistik Invoices (Exhibit 9).
Federal Rule of Civil Procedure 12(b)(7) permits a party to move for dismissal on the grounds that the plaintiff failed to join a party under Federal Rule of Civil Procedure 19. Fed. Civ. P. R. 12(b)(7). Rule 19 “provides for the joinder of all parties whose presence in a lawsuit is required for the fair and complete resolution of the dispute at issue.” Mora v. Lowe's Companies, Inc., No. 5:19-CV-107, 2020 WL 13441544, at *1 (S.D. Tex. Oct. 4, 2020) (quoting HS Res., Inc. v. Wingate, 327 F.3d 432, 438 (5th Cir. 2003)). Rule 19 “further provides for the dismissal of litigation that should not proceed in the absence of parties that cannot be joined.” Ameriprise Fin., Inc. v. Bailey, 3:12-CV-04290-P, 2013 WL 1947475, at *2 (N.D. Tex. May 13, 2013) (quoting Wingate, 327 F.3d at 438)).
Under Rule 19(a)(1), there are three ways a party may be required to be joined, if feasible:
Fed. R. Civ. P. 19(a)(1); see also Premium Plastics v. Seattle Specialty Ins. Services, Inc., 2012 WL 1029528 (S.D. Tex. Mar. 26, 2012). The party moving for joinder has the initial burden of demonstrating that an absent party is required, and if “an initial appraisal of the facts indicates that a possibly necessary party is absent, the burden of disputing this initial appraisal falls on the party who opposes joinder.” Hood ex. Rel Mississippi v. City of Memphis, 570 F.3d 625, 628 (5th Cir. 2009).
In determining whether the joinder of a party is required under Rule 19, the Court must apply a two-step inquiry. Id. First, the court determines whether an absent party should be joined under the requirements of Rule 19(a)(1). Id. If the court determines that an absent party should be joined but cannot be joined, the court turns to Rule 19(b) to determine whether “in equity and good conscience, the action should proceed among the existing parties or should be dismissed.” Id. at 633. “In its joinder analysis, the court accepts the allegations in the complaint as true.” Broadcast Music, Inc. v. Armstrong, No. EP-13-CV-0032-KC, 2013 WL 3874082 (W.D. Tex. July 24, 2013) (citing Indian Harbor Ins. Co. v. KB Lone Star, Inc., H-11-CV-1846, 2012 WL 1038658, at *2 (S.D. Tex. Mar. 27, 2012).
The doctrine of forum non conveniens allows courts to decline jurisdiction “presuppose[ing] at least two forums in which the defendant is amenable to process” and provides the criteria to choose between the two forums. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 506-07 (1947). When performing the forum non conveniens factor-based analysis, the “ultimate inquiry is where trial will best serve the convenience of the parties and the ends of justice.” Koster v. (American) Lumbermens...
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