Davis v. North American Van Lines, Inc.

Decision Date08 August 1996
Docket NumberCivil Action No. G-96-023.
Citation934 F. Supp. 245
PartiesCarl DAVIS and Martha Davis v. NORTH AMERICAN VAN LINES, INC., Claeys Bros. Moving and Storage, and A-1 Freeman North American, Inc.
CourtU.S. District Court — Southern District of Texas

Mark K. Glasser, Charles C. Correll, Jr., Porter & Hedges, Houston, TX, for plaintiff.

David Charles Myers, Jackson & Walker, Dallas, TX, for defendants.

ORDER GRANTING MOTION TO REMAND

KENT, District Judge.

Plaintiffs originally filed this action in the 239th Judicial District Court of Brazoria County, Texas. Defendants then removed the action to this Court, relying upon 28 U.S.C.A. § 1332(a) (West 1993) and 28 U.S.C.A. § 1337(a) (West Supp.1996) as alternate bases for subject-matter jurisdiction. Now before the Court is Plaintiffs' Motion to Remand for lack of subject-matter jurisdiction pursuant to 28 U.S.C.A. § 1447(c) (West 1994). The Motion is GRANTED.

For purposes of deciding Plaintiffs' Motion to Remand, the Court accepts as true all relevant allegations contained in the Complaint and construes all factual ambiguities in Plaintiffs' favor. Willy v. Coastal Corp., 855 F.2d 1160, 1163-64 (5th Cir.1988); see also Kidd v. Southwest Airlines, Co., 891 F.2d 540, 542 (5th Cir.1990) ("In cases that have been removed to federal court, the plaintiff's complaint rather than the removal petition must establish federal jurisdiction."). In June of 1995, Plaintiffs solicited bids from several moving companies, including Defendant North American Van Lines, Inc. ("North American"), in preparation for a residential move from South Dakota to Texas. An agent of North American represented to Plaintiffs that the cost of shipping their goods would not exceed sixteen-thousand, nine-hundred and forty-two dollars and seventy cents ($16,942.70), that payment by personal credit card would be acceptable, and that the goods would be delivered to their ultimate destination precisely three days from the loading date. Plaintiffs were thereby induced to enter into a shipping agreement with North American.

In accordance with the terms of the shipping agreement, Plaintiffs provided North American with possession of their goods and North American properly delivered Plaintiffs' goods to the correct destination. At the time of delivery, however, Plaintiffs were unable to pay the total delivery charges in a permissible manner solely due to their reliance upon North American's previously mentioned representations, each of which proved false. North American consequently placed the goods in a storage facility, resulting in additional costs to Plaintiffs of approximately ten-thousand dollars ($10,000) beyond delivery charges.

Plaintiffs have declined to assert claims to recover for delivery overcharges, untimely delivery, improper delivery, or damage or loss of goods during delivery. Instead, Plaintiffs seek to recover strictly for the post-delivery costs of storing their goods, which the Complaint describes as corresponding to services neither requested nor desired by Plaintiffs.1 In addition to compensatory damages of this nature, Plaintiffs pray for exemplary damages, interest, costs, and attorneys fees.

The Court must remand a removed action if, at any time prior to final judgment, it appears that subject-matter jurisdiction is lacking. See 28 U.S.C.A. § 1447(c). All doubts concerning subject-matter jurisdiction must be resolved in favor of remand. See, e.g., Willy, 855 F.2d at 1164. Defendants, as the parties wishing to invoke the jurisdiction of this Court, bear the burden of establishing subject-matter jurisdiction. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 37, 66 L.Ed. 144 (1921) (stating that the defendant bears the burden of establishing subject matter jurisdiction for removed actions).

In the case at bar, Defendants advance two distinct bases for subject-matter jurisdiction. First, they contend that jurisdiction is conferred by section 1332(a), because complete diversity of citizenship exists among the parties and the requisite amount in controversy exists. Second, Defendants argue that jurisdiction is conferred by section 1337(a), because Plaintiffs state a cause of action under the Carmack Amendment to the Interstate Commerce Act ("Carmack Amendment"),2 which regulates the delivery rates charged by carriers in interstate commerce. The Court focuses its analysis accordingly. See Willy, 855 F.2d at 1164 (focusing exclusively on section 1331 as a basis for subject matter jurisdiction because the defendant did not argue that diversity of citizenship was present).

Section 1332(a) provides, in pertinent part: "The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $50,000, exclusive of interest and costs, and is between ... citizens of different States." 28 U.S.C.A. § 1332(a); see also 28 U.S.C.A. § 1447(b) (West 1994) (providing district courts with subject-matter jurisdiction over all removed cases falling within its original jurisdiction).3 Under section 1332(a), a corporation is deemed a citizen of its state of incorporation and a citizen of the state of its principal place of business. 28 U.S.C.A. § 1332(c)(1); J.A. Olson Co. v. City of Winona, 818 F.2d 401, 404 (5th Cir.1987). Complete diversity of citizenship among the parties is required for the exercise of section 1332(a) jurisdiction. Carden v. Arkoma Assocs., 494 U.S. 185, 187, 110 S.Ct. 1015, 1017, 108 L.Ed.2d 157 (1990).

In the case at bar, the Complaint avers that Plaintiffs and Defendant A-1 Freeman North American, Inc. ("A-1 Freeman") are all citizens of Texas. In arguing for complete diversity as a basis for jurisdiction, Defendants maintain that, at the time of removal, they reasonably believed A-1 Freeman to be an Oklahoma corporation having its principal place of business in Oklahoma. Defendants' prior confusion is certainly understandable, because the Complaint incorrectly asserts that A-1 Freeman is an Oklahoma corporation. In fact, A-1 Freeman is incorporated in Texas and is legally distinct from the Oklahoma corporation bearing a similar name. Regardless of Defendants' misunderstanding as to the entity being named as a Defendant in the Complaint, however, complete diversity is admittedly lacking. The Court accordingly cannot base subject-matter jurisdiction on section 1332(a).

Section 1337(a) provides, in pertinent part: "The district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce." 28 U.S.C.A. § 1337(a); see also 28 U.S.C.A. § 1447(b) (West 1994) (providing district courts with subject-matter jurisdiction over all removed cases falling within its original jurisdiction).4 A cause of action is one "arising under an Act of Congress" if, ignoring any references to anticipated defenses, a federal question appears from the well-pleaded complaint. See Caterpillar Inc. v. Williams, 482 U.S. 386, 392-93, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987) (discussing the meaning of "arising under federal law" as used in 28 U.S.C.A. § 1331 (West 1993))5; see also Powers v. South Cent. United Food & Commercial Workers Unions & Employers Health & Welfare Trust, 719 F.2d 760, 767 (5th Cir.1983) (holding that no jurisdiction exists under section 1337(a) if the Act of Congress arises strictly as a federal defense). A complaint not facially referring to federal law may nonetheless arise under federal law if the plaintiff has artfully pled in terms of state law what is actually a federal claim, or if the claim asserted is truly federal in nature because federal law preempts the entire field in which the claim is brought. E.g., Aaron v. National Union Fire Ins. Co. of Pittsburg, 876 F.2d 1157, 1161 (5th Cir.1989); see also supra note 5.

Defendants tacitly concede, and the Court independently finds, that the Complaint facially contains no reference to the Carmack Amendment or any other federal law. Instead, Defendants argue that Plaintiffs' claims are, in substance, governed exclusively by the Carmack Amendment, and that they are, in actuality, federal claims because they are within the field of claims completely preempted by the Carmack Amendment. The Court, noting no disagreement among the parties that the Carmack Amendment is "an Act of Congress regulating commerce" within the meaning of section 1337(a), see, e.g., Eazor Express v. Pennsylvania R.R. Co., 214 F.Supp. 695, 696 (W.D.Pa.1963), considers the arguments of Defendants in turn.

Defendants argue that Plaintiffs' claims are substantively governed by the Carmack Amendment because federal law exclusively regulates the rates which carriers may charge for the interstate shipment of goods. See, e.g., Security Servs., Inc. v. K Mart Corp., 511 U.S. 431, ___, 114 S.Ct. 1702, 1706, 128 L.Ed.2d 433, 439 (1994). Despite Defendants' insistence to the contrary, however, Plaintiffs simply do not challenge the shipping rates charged by Defendants. Rather, Plaintiffs seek compensation only for storage costs incurred independently of the transportation of the stored goods. The Court agrees that allegations of fraudulent calculation of delivery charges would be substantively governed by the Carmack Amendment regardless whether a false rate or a false weight is used, but the Complaint in this case does not aver that either occurred. See Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987) ("The ... plaintiff ... may avoid federal jurisdiction by exclusive reliance on state law."); see also Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25, 33 S.Ct. 410, 411-12, 57 L.Ed. 716 (1913) ("The party who brings a suit is master to decide what law he will rely upon, and therefore does determine whether he will bring a `suit arising under' a law of the United States by his declaration or bill."). The Court accordingly finds that Plaintiffs have not disguised...

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