Kaiser v. Fed Ex Cargo Claims Dept
| Decision Date | 21 September 2017 |
| Docket Number | Court File No. 17-cv-1716 (JRT/LIB) |
| Parties | Duane Kaiser, Plaintiff, v. Fed Ex Cargo Claims Dept., Defendant. |
| Court | U.S. District Court — District of Minnesota |
This matter came before the undersigned United States Magistrate Judge pursuant to two orders of referral, [Docket Nos. 10 and 19], made in accordance with the provisions of 28 U.S.C. § 636(b)(1)(B), and upon Defendant's Motion to Dismiss, [Docket No. 6], and Plaintiff's Motion to Remand to State Court, [Docket No. 12]. This Court held a Motion Hearing on August 17, 2017, and Defendant's Motion to Dismiss, [Docket No. 6], and Plaintiff's Motion to Remand to State Court, [Docket No. 12], were taken under advisement thereafter. (See, Minute Entry, [Docket No. 24]).
For the reasons set forth below, the Court recommends that Defendant's Motion to Dismiss, [Docket No. 6], be DENIED as moot, and Plaintiff's Motion to Remand to State Court, [Docket No. 12], be GRANTED.
Plaintiff Duane Kaiser purchased two outboard motors from a seller in Florida, who shipped the motors to him in Minnesota by Defendant Fed Ex. . Plaintiff alleges that the motors were damaged during shipping; as a result, on December 30, 2016, he filed a pro se claim in Minnesota State Conciliation Court. . Plaintiff sought $10,000 plus filing fees and costs of $75.2 (Id.). The Statement of Claim Plaintiff filed to initiate his case in Conciliation Court was a fill-in-the-blank form, on which Plaintiff stated:
The Defendant(s) owe(s) me $10,000, plus filing fees and costs of $75.00, for a total of $10,075.00 because on or about ___ (state month and year) the following event occurred (briefly describe the event): I purchased 2 2013 350 hp mercury verado motor they were damaged in shipping. FedEx refuses to acknowledge any responsibility[.]
([Docket No. 1-1], 1).
A conciliation hearing was held on April 12, 2017, and on April 25, 2017, Judge John G. Melbye issued an Order entering Judgment in Plaintiff's favor in the amount of $10,000 plus fees of $75. . In the written Order, Judge Melbye noted that the repair estimate for the engines was $10,534.98 plus labor and the declared value of the engines at was $40,000, but found Defendant liable only "for the amount stated in the complaint"—$10,000. (Id. at 21).
On May 17, 2017, Defendant removed the case to Minnesota State District Court for a de novo trial by jury, pursuant to Minn. Stat. Ann. § 491A.02, Subd. 6. (Id. at Exh. F, [Docket No. 15], 24).
On May 23, 2017, Defendant removed the case from the Minnesota State District Court to this Court.3 (Notice of Removal, [Docket No. 1]). As grounds for removal, Defendant asserts that Plaintiff's state-law claim is completely preempted by the Carmack Amendment to the Interstate Commerce Commission Termination Act, 49 U.S.C. § 14706, et seq., and therefore, this Court has jurisdiction and the action is subject to removal to federal court. (Id. at 2).
Two days later, on May 25, 2017, Defendant filed the present Motion to Dismiss, [Docket No. 6]. It argues that this action must be dismissed because Plaintiff attempts to recover damages under state law which are only available under federal law, due to the complete preemption by the Carmack Amendment. (Mem. in Supp., [Docket No. 7], 1-2).
On June 23, 2017, Plaintiff—through counsel he obtained after the removal to this Court—filed the Motion to Remand to State Court, [Docket No. 12], which is now before this Court. Plaintiff argues that applicable federal law precludes removal of this matter, as he is not seeking more than $10,000. (Mem. in Supp., [Docket No. 14], 5-6). Plaintiff also argues that the removal was untimely. (Id. at 6-7). Finally, Plaintiff's counsel requests an award of costs and attorney's fees. (Id. at 8-9).
Although it was filed second, this Court addresses the Motion to Remand, [Docket No. 12], before addressing the Motion to Dismiss, [Docket No. 6], because if the Motion to Remand is granted, it will render the Motion to Dismiss moot. See, Alliance Energy Servs., LLC v. Kinder Morgan Cochin LLC, 80 F. Supp. 3d 963, 964, 973 (D. Minn. 2015) ().
A party opposing removal may bring a motion requesting that the federal court remand the case back to state court. 28 U.S.C. § 1447(c). The district court shall remand the case back to state court if it determines that the court lacks subject matter jurisdiction. Id., Martin v. Franklin Capital Corp., 546 U.S. 132, 134 (2005). On a motion to remand, the party seeking removal and opposing remand bears the burden of demonstrating federal jurisdiction by a preponderance of the evidence. In re Prempro Prods. Liab. Litig., 591 F.3d 613, 620 (8th Cir. 2010); In re Bus. Men's Assur. Co. of Am., 992 F.2d 181, 183 (8th Cir. 1993). The federal court should resolve any doubt as to the propriety of removal in favor of remand. Prempro, 591 F.3d at 620; Bus. Men's Assur., 992 F.2d at 183. "In addition to the notice of removal and its exhibits, to determine whether there is jurisdiction, the court may consider documents submitted after the notice of removal as well as those attached to subsequent motions." Guggenberger v. Starkey Labs., Inc., No. 16-cv-2021, 2016 WL 7479542, at *5 (D. Minn. Dec. 29, 2016).
In re Trusts Established under the Pooling and Servicing Agreements Relating to the Wachovia Bank Commercial Mortgage Trust Commercial Mortgage Pass-Through Certificates, Series 2007-C30, et al., ___ F. Supp. 3d ___, 2017 WL 991044, *4 (D. Minn. 2017).
"A defendant may remove 'only state-court actions that originally could have been filed in federal court.'" Smith v. Local Union No. 110, Intern. Brotherhood of Electric Workers, 681 F. Supp. 2d 995, 997 (D. Minn. 2010) (quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987)). "It is to be presumed that a cause lies outside [a federal court's] limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction." (Citations omitted). Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994).
The Carmack Amendment and now "governs the terms of bills of lading issued by domestic [motor] carriers." See, Kawasaki Kisen KaishaLtd. v. Regal-Beloit Corp., 561 U.S. 89, 96-97 (2010). "The Carmack Amendment 'essentially provides that a carrier is liable for the actual loss or injury it causes to a shipper's property.'" (Citation omitted.) Union Pacific Railroad Company v. Beemac Trucking, LLC, 929 F. Supp. 2d 904, 913 (D. Neb. 2013); see, also, 49 U.S.C. § 14706(a) ().
Although Plaintiff's claim was brought on state-law grounds in Conciliation Court, Defendant argues that actions such as the present one for damage arising during the interstate transportation of freight cannot be brought on state law grounds because the Carmack Amendment completely preempts this field of the law. (Mem. in Supp. of Dismissal, [Docket No. 7], 2). This interpretation has been adopted by several Courts, including the United States District Court, District of Minnesota.4
Generally speaking, federal and state courts have concurrent jurisdiction over Carmack Amendment claims. See, 49 U.S.C. § 14706(d)(1) ();49 U.S.C. § 14706(d)(3) (). However, pursuant to 28 U.S.C. § 1337:
(a) The district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies: Provided, however, That the district courts shall have original jurisdiction of an action brought under [the Carmack Amendment], only if the matter in controversy for each receipt or bill of lading exceeds $10,000, exclusive of interest and costs.
(Emphasis added.) Therefore, even assuming that the Carmack Amendment does operate to completely preempt state-law-based claims based upon damage to freight during interstate transportation, it does so only for claims over $10,000.
In support of his Motion to Remand, [Docket No. 12], Plaintiff argues that the "amount in controversy" in the present case "does not exceed '10,000, exclusive of interest and costs.'" (Mem. in Supp., [Docket No. 14], 6).
Defendant disagrees, arguing that "the amount in controversy now exceeds $10,000.00." (Mem. in Opp., [Docket No. 22], 4). Defendant argues that Judge Melbye's statement in his Conciliation Court Order that "Plaintiff submitted photos and a repair estimate for $10,534,98" was an indication that Plaintiff presented evidence in Conciliation Court "establishing damages exceeding $10,000.00." (Id.). Defendant further asserts that Judge Melbye only awarded Plaintiff $10,000 because Judge Melbye was limited in awarding damages to the amount claimed in Plaintiff's Statement of Claim to the Conciliation Court but that limitation is negated by the removal of the Conciliation Court case action to State district court for a de novo trial, because proceedings in State district court are governed by the Minnesota Rules of Civil Procedure, which provide in relevant part that a plaintiff may recover an award in excess of that pled...
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