M.I.S. Engineering v. U.S. Exp. Enterprises

• Decision Date: 26 June 2006
• Docket Number: No. 4:06CV3074.,4:06CV3074.
• Citation: 438 F.Supp.2d 1056
• Parties: M.I.S. ENGINEERING, a DIVISION OF RESEARCH AND DEVELOPMENT CORP., Plaintiff, v. U.S. EXPRESS ENTERPRISES, INC., Defendant.
• Court: U.S. District Court — District of Nebraska

438 F.Supp.2d 1056

M.I.S. ENGINEERING, a DIVISION OF RESEARCH AND DEVELOPMENT CORP., Plaintiff, v. U.S. EXPRESS ENTERPRISES, INC., Defendant.

No. 4:06CV3074.

United States District Court, D. Nebraska.

June 26, 2006.

COPYRIGHT MATERIAL OMITTED

Robert W. Chapin, Jr., Lincoln, NE, for Plaintiff.

Adam J. Prochaska, Harding, Shultz Law Firm, Lincoln, NE, for Defendant.

MEMORANDUM AND ORDER

KOPF, District Judge.

On November 21, 2002, the plaintiff, M.I.S. Engineering ("M.I.S."), hired the defendant, U.S. Express Enterprises, Inc. ("U.S.Xpress"),¹ to transport equipment from Buffalo, Minnesota, to Lincoln, Nebraska. M.I.S. alleges that the equipment was extensively damaged when it arrived in Lincoln the next day. M.I.S. submitted a claim for the alleged damages to U.S. Xpress on November 26, 2002, but the claim was denied on January 7, 2003. Over three years later, on February 8, 2006, M.I.S. filed suit in the District Court of Lancaster County, Nebraska, alleging that U.S. Xpress "had a duty to exercise care in transporting the goods and to deliver the good [sic] without damage," which it "failed to discharge," and also that "[t]he occurrence of damaging these goods is one[] which would not, in the ordinary course of things, happen in the absence of negligence." (Complaint ¶¶ 10, 11, and 13 (filing 1, at 4).) U.S. Xpress removed the action to this court on March 27, 2006, on the basis of federal question jurisdiction under 28 U.S.C. § 1331, and has now moved for summary judgment.

U.S. Xpress claims "that it is entitled to judgment as a matter of law because, first, Plaintiff's state law causes of action are preempted by the Carmack Amendment, 49 U.S.C. § 14706, et seq. and, second, Plaintiff's causes of action are barred by the statute of limitations provided in 49 U.S.C. § 14706(e)(1) of the Carmack Amendment." (Motion for Summary Judgment (filing 6, at 1).) "In the alternative," U.S. Xpress claims that "Plaintiff's causes of action are barred by Nebraska state statutes of limitations [of three years and two years, respectively,] Neb.Rev. Stat. §§ 25-219 [applicable to `actions upon a liability created by a federal statute . . . for which no period of limitations is provided in such statute'] and 25-226 [applicable to la] cause of action for a freight damage claim ... against a common carrier']." (Id.) M.I.S., after stating without explanation that "[t]he only issue to be determined is whether the statute of limitations has run," argues that "the plaintiff is claiming that [its] [oral] contract was breached, [a claim subject to a] four year statute of limitation[s] [under Neb.Rev.Stat. § 25-206], and that the defendant was negligen[t], [a claim subject to a] four year statute of limitations] [under Neb.Rev. Stat. § 25-207]." (Plaintiff's Brief (filing 12-1), at 2 and 4.)

A. Preemption

U.S. Xpress, after having removed this action from state court by alleging that "the United States District Court has original jurisdiction under 28 U.S.C. § 1331, in that the case arises under and pursuant to the laws of the United States" (Notice of Removal, ¶ 3 (filing 1, at 1)), is not in a very good position to argue that the action should be dismissed with prejudice because only state-law claims are alleged in the complaint. If this court lacks subject matter jurisdiction,² then the action cannot be dismissed; it can only be remanded to state court pursuant to 28 U.S.C. § 1447(c). See e.g., Lauder v. Bekins Van Lines Co., No. 4:05-CV-1132 CAS, 2005 WL 3333269, *4 (E.D.Mo. Dec.7, 2005) (plaintiff's allegations concerning the interstate transport of goods by a common carrier under a bill of lading did not plead a Carmack Amendment cause of action, but, rather, pleaded state law claims which were subject to preemption by the Carmack Amendment; because the Carmack Amendment does not completely preempt state law claims for purposes of federal removal jurisdiction, remand was required).

However, I must disagree with the district court's holding in Lauder that the Carmack Amendment does not completely preempt state-law claims for purposes of federal removal jurisdiction.³ I previously examined this jurisdictional issue in Nebraska Turkey Growers Co-op Ass'n v. ATS Logistics Services, Inc., No. 4:05CV3060, 2005 WL 3118008, *4 (D.Neb. Nov.22, 2005), and concluded that a complaint alleging a state-law claim for breach of contract also contained all of the essential elements of a Carmack Amendment claim, and thus was not subject to remand under 28 U.S.C. § 1447(c). In reaching this result, I stated:

Nebraska Turkey Growers pleaded all of the essential elements of a Carmack Amendment claim by alleging that ATS agreed to deliver the turkeys to Florida, that ATS picked up the shipment in Nebraska (as evidenced by a bill of lading that identifies ATS as the carrier), that ATS failed to make the contracted for delivery, and that Nebraska Turkey Growers thereby sustained in damages in the amount of $29,345.74. "The cases make it clear that when damages are sought against a common carrier for failure to properly perform, or for negligent performance of, an interstate contract of carriage, the Carmack Amendment governs." Fulton v. Chicago, Rock Island & P.R. Co., 481 F.2d 326, 331-32 (8th Cir.1973) (quoting American Synthetic Rubber Corp. v. Louisville & N.R.R. Co., 422 F.2d 462, 466 (6th Cir.1970). The breach-of-contract claim alleged in Nebraska Turkey Growers' original complaint is thus preempted by federal statute. See id. (holding that the Carmack Amendment has preempted suits in specific negligence by holders of bills of lading against their carriers). See also Rocky Ford Moving Vans. Inc. v. United States, 501 F.2d 1369, 1372 (8th Cir.1974) ("In adopting the Carmack Amendment, Congress intended to impose a single uniform federal rule upon the obligations of carriers operating in interstate commerce."); Woods v. Uni-group, Inc., 945 F.Supp. 1255, 1256 (E.D.Mo.1996) (stating that the majority of circuit courts have concluded that state law causes of action are preempted by the Carmack Amendment). It follows that the court has subject matter jurisdiction, and that Nebraska Turkey Growers' motion to remand the action to state court pursuant to § 1447(c) must be denied.

Id. See also Hall v. Aloha Int'l Moving Services, Inc., No. CIV 98-1217 (MD/JGL), 2002 WL 1835469, *6 (D.Minn. Aug.6, 2002) (a state law cause of action is preempted by the Carmack Amendment if the cause of action involves loss of goods or damage to goods caused by the interstate shipment of those goods by a common carrier; courts that have examined the scope of Carmack Amendment preemption have consistently held that the Carmack Amendment preempts state law under almost all circumstances); Just Take Action, Inc. v. GST (Americas) Inc., No. 04-3024 ADM/RLE, 2005 WL 1080597, *4 (D.Minn. May 6,2005) (Carmack Amendment serves as a shipper's exclusive remedy for damaged property and preempts common law causes of actions). But see Karnes v. Poplar Bluff Transfer Co., No. 1:98-CV-98 CAS, 1999 WL 1097982, *1 (E.D.Mo. Oct.27,1999) (Carmack Amendment does not give rise to complete preemption), aff'd sub nom. on other grounds, In re Atlas Van Lines, Inc., 209 F.3d 1064 (8th Cir.2000) (holding that validity of district court's § 1447(c) remand order was not subject to review on appeal).

The Carmack Amendment essentially provides that a carrier is liable for the actual loss or injury it causes to a shipper's property. Continental Grain Co. v. Frank Seitzinger Storage, Inc., 837 F.2d 836, 839 (8th Cir.1988). In an action to recover for goods lost in transit, a shipper must show the following to establish a prima facie case: (1) delivery of a quantity of goods to the carrier, (2) arrival at destination of a lesser quantity, and (3) the amount of damages. Id.

The facts alleged in the complaint in this case, if proven to be true, would establish each of these required elements. Thus, it is alleged that U.S. Xpress "is a cargo shipping business[;]" that the parties "entered into a shipping contract (or `Bill of Lading')⁴ ... on or about November 21, 2002, whereas [U.S. Xpress] agreed to transport equipment from Buffalo, Minnesota to Lincoln Nebraska[;]" that M.I.S. "delivered the goods to [U.S. Xpress] in Buffalo, Minnesota on November 21, 2002, and the goods were in good condition[;]" that [s]aid goods arrived in Lincoln, Nebraska, the destination, on November 22, 2002, and were extremely damaged;" and that "damages are estimated at $165,000.00 with a replacement value of $2,000,000.00."⁵ (Complaint, 2, 3, 4, 7, and 16 (filing 1, at 3-5).) A Carmack Amendment claim is therefore stated, and any state-law causes of action that might be asserted by M.I.S. based on these same facts are completely preempted.

B. Statute of Limitations

In claiming that M.I.S. delayed too long in filing suit, U.S. Xpress relies upon a provision of the Carmack Amendment which states that "[a] carrier may not provide by rule, contract, or otherwise ... a period of less than 2 years for bringing a civil action against it under this section." 49 U.S.C. § 14706(e)(1). U.S. Xpress admits that its "tariff and bill of lading do not incorporate the [foregoing] statutory language" (Defendant's Brief (filing 7) at 6), but it urges me to construe § 14706(e)(1) as a statute of limitations. While U.S. Xpress has found dictum in one federal district court opinion to support its argument, see Automated Window Machinery, Inc. v. McKay Ins. Agency, Inc., 320 F.Supp.2d 619, 620 (N.D.Ohio 2004) (where shipper issued a uniform straight bill of lading "which incorporated the minimum statute of limitations authorized by 49 U.S.C. § 14706(e)(1)," the shipper's lawsuit, filed more than two years after the carrier denied its claim, was barred "[b]oth under law and pursuant to the terms of ... [the] uniform straight bill of lading)", such a result is not supported by the plain language of the statute and is contrary to...