Exel, Inc. v. S. Refrigerated Transp., Inc.

Citation835 F.Supp.2d 472
Decision Date15 December 2011
Docket NumberCase No. 2:10–CV–0994.
PartiesEXEL, INC., f/u/b/o Sandoz Inc., Plaintiff v. SOUTHERN REFRIGERATED TRANSPORT, INC., Defendant.
CourtU.S. District Court — Southern District of Ohio

OPINION TEXT STARTS HERE

Kendra Lynn Carpenter, Columbus, OH, Andrew R. Spector, Robert M. Borak, Hyman Spector and Mars, LLP, Miami, FL, for Plaintiff.

Joseph W. Pappalardo, Timothy P. Roth, Gallagher Sharp, Cleveland, OH, for Defendant.

OPINION AND ORDER

JAMES L. GRAHAM, District Judge.

This case involves an interstate shipment of goods allegedly stolen or lost while in the custody of Defendant Southern Refrigerated Transport, Inc. (SRT). Pending before the court are SRT's motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) and SRT's request for an oral hearing on its motion. As set forth below, the Court grants SRT's motion for judgment on the pleadings and denies SRT's request for oral hearing.

I. Background

Exel is a freight broker (or, in its estimation, a company that “makes arrangements on behalf of its customers for the transport of cargo”). Complaint (Doc. No. 2) at ¶ 10. SRT “is a motor carrier, who provides transportation of cargo in interstate commerce.” Complaint at ¶ 7. In 2007, Exel and SRT entered into a “Master Transportation Services Agreement” (“the Agreement”) whereby SRT agreed to act as a motor carrier for the transportation of Exel's customers' cargo. Complaint at ¶ 9. Sandoz, Inc. was one of Exel's customers. Neither party has produced a copy of the Agreement to the court.

In late 2008, pursuant to the Agreement, SRT undertook to transport a shipment of Sandoz's pharmaceutical products (“the Shipment”) from Mechanicsburg, Pennsylvania to Memphis, Tennessee. Complaint at ¶ 11. The Complaint suggests that bills of lading were issued for the Shipment, see e.g., Complaint at ¶¶ 42, 43, but neither party has produced a copy of those bills of lading to the court. The SRT truck carrying the Shipment was “stolen or otherwise lost from an unsecured rest area” en route to its intended destination, and the Shipment was never recovered. Complaint at ¶ 13. Exel alleges that [t]he value of the Shipment is $8,583,671.12.” Complaint at ¶ 12. Exel further alleges that it submitted a claim to SRT (on behalf of Sandoz) for the value of the Shipment, see Complaint at ¶ 39, but that “SRT denied the claim [on the basis] that the recovery is subject to a limitation of liability found in the bills of lading issued for the shipments,” Complaint at ¶ 40.

This action was filed thereafter by “EXEL, INC. f/u/b/o [for the use and benefit of] Sandoz INC. Complaint caption (emphasis added.) Exel alleges that Sandoz “has assigned all of its rights to Exel with regard to the recovery against SRT for the lost Shipment.” Complaint at ¶ 14.

The Complaint states a claim for breach of contract (count I), breach of bailment (count II), violation of the Carmack Amendment (count III), and relief under the Declaratory Judgment Act, 28 U.S.C. § 2201 (count IV). SRT has moved for judgment on the pleadings as to counts I, II, and IV, arguing that the Carmack Amendment preempts the contract and bailment claims and that the request for declaratory relief is moot.

II. SRT's Request for Oral Hearing

The court's local rules address the procedure for obtaining oral argument regarding a pending motion:

[I]f oral argument is deemed to be essential to the fair resolution of the case because of its public importance or the complexity of the factual or legal issues presented, counsel may apply to the Court for argument. This may be done by including the phrase “ORAL ARGUMENT REQUESTED” (or its equivalent) on the caption of the motion or on a memorandum. The ground(s) for any such request shall be succinctly explained. If the Court determines argument or a conference would be helpful, the Court will notify all parties.

S.D. Ohio Civ. R. 7.1(b)(2). The caption of SRT's reply brief includes the phrase “Oral Hearing Requested,” but the brief does not explain the ground(s) for SRT's request. See generally SRT's Reply Brief in Support of Motion for Judgment on the Pleadings (Doc. No. 12). The court finds the motion suitable for disposition without oral argument and the request is therefore denied.

III. SRT's Motion for Judgment on the PleadingsA. Standard Involved

Rule 12 of the Federal Rules of Civil Procedure governs motions for judgment on the pleadings and provides, in pertinent part, [a]fter the pleadings are closed but within such time as not to delay the trial any party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c).

A motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) invokes the same standard of review as a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Vickers v. Fairfield Medical Ctr., 453 F.3d 757, 761 (6th Cir.2006). Pursuant to that standard, courts “must construe the complaint in the light most favorable to plaintiff,” League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir.2007) (citation omitted), “accept all well-pled factual allegations as true [,] id., ‘and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment.’ Fritz v. Charter Twp. of Comstock, 592 F.3d 718, 722 (6th Cir.2010) (quoting JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir.2007)).

Under Fed.R.Civ.P. 8(a)(2), a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” To satisfy this requirement and survive a Rule 12(c) motion, a complaint must supply enough facts to render a claim more than merely possible; it “must plead ‘sufficient factual matter’ to render the legal claim plausible....” Fritz v. Charter Twp. of Comstock, 592 F.3d 718, 722 (6th Cir.2010) (citing Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949–50, 173 L.Ed.2d 868 (2009)). [T]he plaintiff must provide the grounds for its entitlement to relief, Bovee v. Coopers & Lybrand C.P.A., 272 F.3d 356, 361 (6th Cir.2001), and that ‘requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action.’ Albrecht v. Treon, 617 F.3d 890, 893 (6th Cir.2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)), cert. denied,––– U.S. ––––, 131 S.Ct. 1047, 178 L.Ed.2d 866 (2011).

B. The Carmack Amendment

The Carmack Amendment to the Interstate Commerce Act is the federal statutory regime governing interstate carriers' liability for property loss. See 49 U.S.C. § 14706(a)(1). Section 14706(a)(1) provides in relevant part:

A carrier providing transportation or service ... shall issue a receipt or bill of lading for property it receives for transportation under this part. That carrier and any other carrier that delivers the property and is providing transportation or service ... are liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States....

Congress's intent in enacting the Carmack Amendment was to provide a uniform, national remedy against carriers. See e.g., REI Transport, Inc. v. C.H. Robinson Worldwide, Inc., 519 F.3d 693, 697 (7th Cir.2008). Prior to the enactment of the Carmack Amendment, disparate schemes of carrier liability existed among the states; some states permitted full recovery while others allowed carriers to limit or disclaim liability. Id. (citing Adams Express Co. v. Croninger, 226 U.S. 491, 505, 33 S.Ct. 148, 57 L.Ed. 314 (1913)). “Under this patchwork of regulation, a carrier could be ‘held liable in one court when under the same state of facts he would be exempt from liability in another’ making it ‘practically impossible for a shipper engaged in a business that extended beyond the confines of his own State ... to know ... what would be the carrier's actual responsibility as to goods delivered to it.’ REI Transport,Inc., 519 F.3d at 697 (quoting Adams Express Co., 226 U.S. at 505, 33 S.Ct. 148).

Since the enactment of the Carmack Amendment, a carrier of an interstate shipment is “liable to the person entitled to recover under the ... bill of lading” (often, the shipper) for damage to the property which occurs in transit. 49 U.S.C. § 14706(a)(1). The person entitled to recover under the bill of lading has the option to file suit against either the originating carrier or the delivering carrier for the “actual loss or injury to the property caused” by any carrier in the course of the interstate shipment. Id. A carrier held liable on a bill of lading may then recover from the carrier over whose route the loss or injury occurred. See49 U.S.C. § 14706(b); see also Tempel Steel Corp. v. Landstar Inway, Inc., 211 F.3d 1029, 1030 (7th Cir.2000) (“A shipper may look to its chosen carrier, which then bears the responsibility for seeking compensation from another carrier actually responsible for the loss.”)

Under the Amendment, the process of proof is simplified for shippers, who need only show delivery of the goods to the carrier in good condition, arrival in damaged condition, and the amount of damages caused by the loss, 1see e.g., Plough, Inc. v. Mason & Dixon Lines, 630 F.2d 468, 470 (6th Cir.1980), and for carriers seeking indemnity from other carriers, who need only present a receipt or judgment and the amount of their expenses incurred resolving the claim. See49 U.S.C. § 14706(b). “A shipper can thus be confident that the carrier will be liable for any damage that occurs to its shipment. And a carrier can accurately gauge, and thus insure against, any liability it may face when it agrees to carry something.” REI Transport, Inc., 519 F.3d at 693.

C. Preemptive Effect of the Carmack Amendment

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