Michaela Bohemia, LLC v. FedEx Freight, Inc.

• Decision Date: 19 January 2023
• Docket Number: 1:21-cv-463
• Parties: MICHAELA BOHEMIA, LLC, Plaintiff, v. FEDEX FREIGHT, INC., et al, Defendants.
• Court: U.S. District Court — Southern District of Ohio

MICHAELA BOHEMIA, LLC, Plaintiff,
v.
FEDEX FREIGHT, INC., et al, Defendants.

No. 1:21-cv-463

United States District Court, S.D. Ohio, Western Division, Cincinnati

January 19, 2023

ORDER AND OPINION

MATTHEW W. MCFARLAND JUDGE UNITED STATES DISTRICT COURT

This case is before the Court on Defendant FedEx Freight, Inc.'s Motion to Dismiss the Complaint (Doc. 5), Defendant FedEx Freight, Inc.'s Motion to Dismiss Count 1 of Plaintiff's Amended Complaint (Doc. 9), as well as Defendant Total Quality Logistics, LLC's Motion to Dismiss (Doc. 11). Plaintiff filed a joint response in opposition to each motion (Doc. 12), to which Defendants filed separate replies (Docs. 13 & 15). Thus, this matter is ripe for review. For the reasons below, Defendant FedEx Freight, Inc.'s Motion to Dismiss Count 1 of Plaintiff's Amended Complaint (Doc. 9) is GRANTED and Defendant Total Quality Logistics, LLC's Motion to Dismiss (Doc. 11) is DENIED. Additionally, Defendant FedEx Freight, Inc.'s Motion to Dismiss the Complaint (Doc. 5) is hereby DENIED AS MOOT.^[1]

1

FACTS

Plaintiff Michaela Bohemia, LLC is a Florida corporation that sells skin care products. (Am. Compl., Doc. 8, ¶ 1.) On June 6, 2019, Plaintiff entered into an agreement ("Agreement") with Defendant Total Quality Logistics, LLC ("TQL") to arrange for the transportation of skincare products in Missouri to Plaintiff's warehouse in Florida. (Id. at ¶ 6.) The skincare products to be shipped were valued at $671,471. (Id.) A representative of TQL allegedly communicated to Plaintiff that the company had $500,000 in liability insurance. (Id. at ¶ 23.) Plaintiff, relying on this alleged statement, did not obtain its own liability insurance. (Id. at ¶ 24.)

TQL contracted with Defendant FedEx Freight, Inc. ("FedEx") to pick up Plaintiff's skincare products in Missouri and transport them to Florida. (Am. Compl., Doc. 8, ¶ 8.) When the products were delivered, a representative of Plaintiff documented that only seven of the eight pallets containing the skincare products had arrived. (Id. at ¶ 10.) Additionally, the representative noted that some of the products were damaged. (Id.) In total, Plaintiff allegedly suffered $211,279 in damages due to either lost or damaged skincare products. (Id.)

Plaintiff originally brought this action in the Common Pleas Court of Clermont County. (See Notice of Removal, Doc. 1-1.) The case was then removed on July 12, 2021. (See id., Doc. 1.) Following removal, Plaintiff filed the Amended Complaint. (See Am. Compl., Doc. 8.) Plaintiff brings claims against both TQL and FedEx for breach of contract, a claim of promissory estoppel against TQL, and a violation of the Carmack Amendment to the Interstate Commerce Act ("ICA") against FedEx. (Id. at ¶¶ 12-35.)

2

FedEx seeks to dismiss the breach of contract claim against it pursuant to Fed.R.Civ.P. 12(b)(6). FedEx argues that the Carmack Amendment to the ICA preempts Plaintiff's breach of contract claim. Similarly, TQL seeks to dismiss all claims against it pursuant to Fed.R.Civ.P. 12(b)(6). TQL argues that § 14501(c)(1) of the ICA preempts both of Plaintiff's state law claims against it. Alternatively, TQL argues that Plaintiff failed to sufficiently plead its claims of breach of contract and promissory estoppel against TQL. Each argument is discussed in turn.

LAW

The Federal Rules of Civil Procedure allow, upon motion, the dismissal of a complaint "for failure to state a claim upon which relief can be granted." Fed. R. Civ. R. 12(b)(6). A Rule 12(b)(6) motion to dismiss tests the plaintiff's cause of action as stated in a complaint. Golden v. City of Columbus, 404 F.3d 950,958-59 (6th Cir. 2005). Courts accept a complaint's factual allegations as true and must construe such allegations "favorably to the pleader." United States v. Royal Geropsychiatric Serus., 8 F.Supp.2d 690,693 (N.D. Ohio 1998). Courts are not bound to do the same for a complaint's legal conclusions. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, surviving a motion to dismiss is a matter of pleading sufficient factual content. 16630 Southfield Ltd. P'ship v. Flagstar Bank, F.S.B., 727 F.3d 502,504 (6th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662,683 (2009)). A claim for relief must be "plausible on its face." Iqbal, 556 U.S. at 678. That is, the complaint must lay out enough facts for a court to reasonably infer that the defendant wronged the plaintiff. 16630 Southfield, 727 F.3d at 502. A complaint that lacks such plausibility warrants dismissal. Iqbal, 556 U.S. at 678.

3

ANALYSIS

I. The Carmack Amendment to the ICA Preempts Plaintiff's Breach of Contract Claim against FedEx.

"The Carmack Amendment was enacted in 1906 as an amendment to the [ICA to address] the liability of common carriers for goods lost or damaged during a shipment. ..." Exel, Inc. v. S. Refrigerated Transp., Inc., No 2:10-cv-994, 2012 WL 3064106, at *10 (S.D. Ohio July 27, 2012) (citing 49 U.S.C. § 14706; Shao v. Link Cargo (Taiwan) Limited, 986 F.2d 700, 704 (4th Cir. 1993)). It provides shippers with a cause of action against carriers for loss sustained in connection with the transit of property. 49 U.S.C. § 14706(a)(1). Additionally, the Carmack Amendment provides the exclusive remedy against an interstate common carrier for breach of a carriage contract. Adams Express Co. v. Croninger, 226 U.S. 491,505-06 (1913).

The Carmack Amendment preempts any state law claim that a shipper brings against a common carrier regarding cargo loss. Adams, 226 U.S. at 505-06. Because "[a]lmost every detail of the subject [of the transportation of goods through interstate commerce] is covered so completely" by the Carmack Amendment, "there can be no rational doubt but that Congress intended to take possession of the subject, and supersede all state regulation with reference to it." Id.; see also Exel, Inc. v. S. Refrigerated Transp., Inc., 807 F.3d 140,148 (6th Cir. 2015) ("The Carmack Amendment. . . created a national scheme of carrier liability for loss or damages to goods transported in interstate commerce."). The scope of this preemptive power extends to a shipper's breach of contract claims against a common carrier. Schneider Elec. USA, Inc. v. Landstar Inway, Inc., No. 1:ll-cv-801, 2012 WL1068170 (S.D. Ohio Mar. 29, 2012).

4

Thus, the Carmack Amendment preempts Plaintiff's breach of contract claim against FedEx. The ICA defines a "carrier" as a motor carrier, water carrier, or freight forwarder. 49 U.S.C. § 13102(3). A "motor carrier," in turn, is "a person providing motor vehicle transportation for compensation." 49 U.S.C. § 13102(14). FedEx falls within the definition of a motor carrier-Plaintiff has admitted as much in its Complaint. (Am. Compl., Doc. 8, ¶ 27.) Plaintiff is the shipper of the skincare products. See Great West. Cas. Co. v. Flandrich, 605 F.Supp.2d 955, 964 (S.D. Ohio 2009). Plaintiff's claims against FedEx relate to cargo loss that occurred during interstate transportation. Because the Carmack Amendment preempts any state breach of contract claim by a shipper against a common carrier regarding cargo loss, that statute preempts Plaintiff's breach of contract claim against FedEx. Great W. Cas. Co. v. Flandrich, 605 F.Supp.2d 955 (S.D. Ohio 2009) (breach of contract claim brought by shipper's insurer against carrier preempted).

Plaintiff relies on Exel, Inc. v. Southern Refrigerated Transport, Inc. to argue that the Carmack Amendment does not preempt a shipper's state law claims against a common carrier. 2012 WL 3064106. The court in Exel, however, found that the Carmack Amendment does not preempt...