Loyd v. Salazar

• Decision Date: 20 September 2019
• Docket Number: Case No. CIV-17-977-D
• Citation: 416 F.Supp.3d 1290
• Parties: Gregory LOYD, Plaintiff, v. Paul SALAZAR d/b/a RAS Trucking, et al., Defendants.
• Court: U.S. District Court — Western District of Oklahoma

416 F.Supp.3d 1290

Gregory LOYD, Plaintiff,

v.Paul SALAZAR d/b/a RAS Trucking, et al., Defendants.

Case No. CIV-17-977-D

United States District Court, W.D. Oklahoma.

Signed September 20, 2019

Daniel K. Jones, Mehry Taremi, Mills & Jones PLLC, Norman, OK, for Plaintiff.

F. Jason Goodnight, Feldman Franden Woodard & Farris, Nathaniel G. Parrilli, Franden Farris Quillin & Goodnight & Roberts, Tulsa, OK, for Defendants.

ORDER

TIMOTHY D. DeGIUSTI, Chief United States District Judge

Before the Court is Defendant AG Source, Inc.'s Motion to Dismiss Plaintiff's Amended Complaint [Doc. No. 44], filed pursuant to Fed. R. Civ. P. 12(b)(6).¹ Plaintiff has filed a timely response [Doc. No. 45] and Defendant has replied [Doc. No. 46]. Both parties have filed notices of supplemental authority [Doc. Nos. 49, 50, 51, 52].² The Motion is fully briefed and at issue.

Plaintiff brings a common law negligence action to recover damages for personal injuries suffered in a motor vehicle accident. Defendant AG Source, Inc. ("AGS") is a freight broker who allegedly selected an unsafe motor carrier, Defendant Paul Salazar d/b/a RAS Trucking, to transport property, and the carrier's employee allegedly caused the trucking accident that injured Plaintiff. AGS asserts that two federal statutes preempt any negligence claim based on its brokerage services: the Interstate Commerce Commission Termination Act (ICCTA), 49 U.S.C. § 14501(b) ; and the Federal Aviation Administration Authorization Act (FAAAA), 49 U.S.C. § 14501(c).

Standard of Decision

"To survive a motion to dismiss [under Rule 12(b)(6) ], a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ); see Robbins v. Oklahoma , 519 F. 3d 1242, 1247 (10th Cir. 2008). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. By its Motion, AGS does not challenge the sufficiency of Plaintiff's factual allegations to state a negligence claim but, instead, raises a legal challenge based on the doctrine of federal preemption. The legal sufficiency of a complaint is properly decided under Rule 12(b)(6), and federal preemption is a legal issue. See Smith v. United States , 561 F.3d 1090, 1098 (10th Cir. 2009) ( Rule 12(b)(6) ); Scarlett v. Air Methods Corp. , 922 F.3d 1053, 1061 (10th Cir. 2019) (preemption). "The party claiming preemption bears the burden of showing with specificity that Congress intended to preempt state law." Mount Olivet Cemetery Ass'n v. Salt Lake City , 164 F.3d 480, 489 n.4 (10th Cir. 1998) (citing Silkwood v. Kerr-McGee Corp. , 464 U.S. 238, 255, 104 S.Ct. 615, 78 L.Ed.2d 443 (1984) ); see Cook v. Rockwell Int'l Corp. , 618 F.3d 1127, 1143 (10th Cir. 2010).

Plaintiff's Allegations

The Amended Complaint states that Plaintiff (an Oklahoma citizen) was severely injured in a highway accident involving a semitrailer-tractor truck operated by Defendant Robiet Leon Carrazana (a Texas citizen) while employed by Defendant Salazar (a Texas citizen), whose sole proprietorship was a licensed motor carrier, U.S. DOT No. 2354708. According to Plaintiff, "Carrazana was transporting freight brokered to Salazar by [AGS]," and AGS (a Kansas citizen) is a licensed freight broker, U.S. DOT No. 228140 (MC No. 413830). See Am. Compl. [Doc. No. 33] ¶¶ 4, 8. "Prior to [AGS] brokering the load to Salazar, the U.S. Department of Transportation assigned Salazar a ‘Conditional’ rating as a motor carrier due to serious violations, including hours of service violations, record retention violations, and operating without required authority." Id. ¶ 9.

Plaintiff asserts as his "Fourth Cause of Action" a claim against AGS of "Negligent Hiring of a Motor Carrier/Negligent Brokering." Id. at 4 (ECF page numbering). Plaintiff alleges that AGS "is a freight broker whose enterprise involves selecting motor carriers as an integral part of its business" and it "owed a duty to the motoring public to select a competent motor carrier to haul the load Carrazana was transporting at the time of the accident." Id. ¶¶ 24-25. According to Plaintiff, AGS "knew or should have known that Salazar was an unsafe motor carrier, and that Salazar utilized incompetent, unsafe, and careless drivers – such as Carrazana – and Salazar regularly entrusted its vehicles to such drivers." Id. ¶ 26. Specifically, AGS "negligently, recklessly, and/or intentionally ignored Salazar's repeated unlawful and unsafe conduct, including – but, not limited to – hours of service violations and operating commercial motor vehicles unsafely." Id. ¶ 27. Plaintiff claims that AGS's "negligent hiring of Salazar by entrusting the freight to Salazar constitutes gross negligence or amounts to the wanton and reckless disregard of the rights and safety of Loyd, entitling him to both compensatory and exemplary damages." Id. ¶ 28.

Discussion

By its Motion, AGS raises a claim of "express preemption, which occurs when the language of the federal statute reveals an express congressional intent to preempt state law." See Mount Olivet Cemetery Ass'n v. Salt Lake City , 164 F.3d 480, 486 (10th Cir. 1998) ; see also US Airways, Inc. v. O'Donnell , 627 F.3d 1318, 1324 (10th Cir. 2010). The parties' arguments regarding this claim present three legal issues: 1) Whether Plaintiff's negligent brokering claim is preempted by the ITTCA, § 14501(b) ; 2) Whether the claim is preempted by the FAAAA, § 14501(c)(1) ; and if so, 3) Whether the claim is saved from preemption by a provision excepting state safety laws, § 14501(c)(2).

A. ITTCA Preemption

As part of a change in federal regulatory policy toward the transportation industry, Congress passed statutes that deregulated trucking and prevented states from imposing their own regulations. As pertinent here, the ITTCA includes the following provision:

(b) Freight forwarders and brokers.--

(1) General rule. -- Subject to paragraph (2) of this subsection [regarding Hawaii], no State or political subdivision thereof and no intrastate agency ... shall enact or enforce any law, rule, regulation, standard, or other provision having the force and effect of law relating to intrastate rates, intrastate routes, or intrastate services of any freight forwarder or broker.

49 U.S.C. § 14501(b)(1). AGS asserts that this provision protects it from state common law claims that are based on its performance of services as a freight broker.

According to the Supreme Court, "[t]he [preemption] question, at bottom, is one of statutory intent, and we accordingly begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose." Morales v. Trans World Airlines, Inc. , 504 U.S. 374, 383, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992) (internal quotations omitted). By its terms, the ITTCA preempts state laws "relating to intrastate rates, intrastate routes, or intrastate services of any freight forwarder or broker." Id. (emphasis added). AGS's preemption argument regarding this statute necessarily requires that the Court either disregard this language and extend it to interstate services of a freight broker, or find that AGS was performing intrastate services when it brokered the freight shipment in this case. See Reply Br. at 2-3.

Upon consideration, the Court finds that AGS's first argument is contrary to the Supreme Court's teaching: "Where, as in this case, Congress has superseded state [laws] by statute, our task is to identify the domain expressly preempted. To do so, we first focus on the statutory language, which necessarily contains the best evidence of Congress' preemptive intent." See Dan's City Used Cars, Inc. v. Pelkey , 569 U.S. 251, 260, 133 S.Ct. 1769, 185 L.Ed.2d 909 (2013) (internal quotations omitted). Unlike other provisions of 49 U.S.C. § 14501 – a statute regarding "Federal authority over intrastate transportation" – § 14501(b)(1) expressly limits its reach to "intrastate" rates, routes, and services. The Court views this limitation as a statement of congressional intent to preempt state laws relating only to intrastate services of a broker under § 14501(b)(1).³

Turning to AGS's intrastate services argument, the Court finds that it is unsupported by the allegations of the Amended Complaint. Plaintiff has not included in his pleading any facts that would identify the nature of AGS's brokerage services as either intrastate or interstate in nature. Plaintiff argues that they necessarily were interstate because the motor carrier, Salazar (acting through Carrazana), was transporting a freight shipment between two states. See Pl.'s Resp. Br. at 2, 4.⁴ AGS urges the Court to focus on the brokerage services themselves, and although not well articulated, AGS seems to argue that the services were performed within the state where AGS was located. See Reply Br. at 2. AGS presents no authority for any presumption or rule that a broker's services are locally performed. According to pertinent facts shown by the Amended Complaint (and not disputed by any defendant), AGS and the motor carrier selected for the shipment, Salazar, were located in different states, thus suggesting an interstate brokering transaction.

In short, the Court finds that AGS has failed to carry its burden to show that Plaintiff's negligence claim against it is preempted by § 14501(b).

B. FAAAA Preemption

Congress enacted the FAAAA to protect freight shipments from state regulations as follows:

(c) Motor carriers of property. (1) General rule. – Except as provided in paragraphs (2) and (3), a State ... may not enact or enforce a law, regulation, or other provision having the force and effect of

...