Navigators Mgmt., Co. v. Michael's Cartage, Inc.

• Decision Date: 24 March 2016
• Docket Number: No. 15 C 8006,15 C 8006
• Parties: NAVIGATORS MANAGEMENT, COMPANY, INC., as assignee of Peddinghaus Corporation, Plaintiffs, v. MICHAEL'S CARTAGE, INC., Defendant.
• Court: U.S. District Court — Northern District of Illinois

NAVIGATORS MANAGEMENT, COMPANY, INC.,as assignee of Peddinghaus Corporation, Plaintiffs, v. MICHAEL'S CARTAGE, INC., Defendant.

No. 15 C 8006

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

March 24, 2016

Magistrate Judge Jeffrey Cole

MEMORANDUM OPINION AND ORDER

INTRODUCTION

This case began in the Circuit Court of Cook County, Illinois. The state court Complaint alleged Michael's Cartage Company, of Bradley, Illinois, was liable for damage to a metal fabricating machine that occurred when Michael's truck hit a bridge overpass on its way to drop off the machine at a Canadian Pacific Railroad terminal in Bensenville Illinois. [Dkt. #1, Ex. 1].¹ A Bill of Lading (No.269027), which "records that a carrier has received goods from the party that wishes to ship them, states the terms of carriage, and serves as evidence of the contract for carriage, G & P Trucking Co., Inc. v. Zurich American Ins. Co., 123 F.Supp.3d 804 (D.S.C.2015), was attached as Exhibit A to the Complaint.² It reflected that the "Consignee" was "Challenger Overseas" "c/o CP [Canadian Pacific] Rail," in Bensenville IL. [Dkt. #1, Ex. 1, Ex. A].

The defendant filed a Notice of Removal, which alleged that the machine was to be transported by rail from Illinois to a port in Montreal, Canada and then shipped by an ocean carrier to its ultimate destination in Russia. [Dkt. #1 at 2, ¶5]. Removal jurisdiction was based on 28 U.S.C. §1331 (federal question jurisdiction), 49 U.S.C. §14706 (the 'Carmack Amendment'), and 28 U.S.C. §1445(b)(removal where Carmack Amendment claim exceeds $10,000). Id. at ¶4.³ The Carmack Amendment subjects motor carriers to absolute liability for "actual loss or injury to property" when transporting cargo in interstate commerce. 49 U.S.C. § 14706(a)(1). The State law Complaint made no mention of the Carmack Amendment.

The Notice of Removal alleged that removal was proper when a federal statute (here, the Carmack Amendment) completely preempts the state law cause of action, even if pleaded in terms of state law. Id. at ¶8. Attached to the Notice was a "Through Bill Of Lading." A Through Bill of Lading covers both the ocean and inland portions of the transport in a single document. Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., 561 U.S. 89, 94 (2010); Norfolk So. Ry. Co. v. James N. Kirby, Pty. Ltd., 543 U.S. 14 (2004). The Through Bill of Lading showed the Consignee as the Solnechogorskiy Seal Structures Plant, LLC in Moscow, Russia. See Dkt. 18, Ex. A, pp. 2-3. It was offered by the defendant in support of its statement in the Notice of Removal that the machinery was to be transported by rail from Illinois to a port in Montreal, Canada, and then by "an ocean liner to its ultimate destination in Russia." See Dkt. #18 at 3, ¶8. The Through Bill of Lading did not name Michael's. It merely showed the "place of initial receipt" as Bradley.

Given a federal court's obligation to ensure that jurisdiction exists, McCready v. White, 417F.3d 700, 702 (7th Cir.2005); Wise v. Wachovia Securities, LLC, 450 F.3d 265, 267 (7th Cir.2006); Smoot v. Mazda Motors of America, Inc., 469 F.3d 675, 678 (7th Cir. 2006), I asked the parties to brief the issue of whether we had subject matter jurisdiction. They have done so. [See Dkt. #18, 20, 21].

A.

It is a commonplace that the plaintiff is generally considered the "master of his complaint," and thus may plead whichever causes of action it chooses. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Where potential remedies exist under both state and federal law, a plaintiff may choose to proceed only under state law and avoid federal court jurisdiction. Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987); Carpenter v. Wichita Falls Independent School District, 44 F.3d 362, 366 (5th Cir.1995). However, "if Congress 'so completely preempt[s] a particular area'" any civil complaint raising this select group of claims is necessarily federal in character. Arana v. Ochsner Health Plan, 338 F.3d 433, 437 (5th Cir.2003)(en banc), cert. denied, 540 U.S. 1104(2004)(citing Metropolitan Life Insurance Company v. Taylor, 481 U.S. 58, 63-64 (1987).

Equally unexceptional is the principle that the presence or absence of federal-question jurisdiction is governed by the "well-pleaded complaint rule." It provides that federal jurisdiction exists only when a federal question either is presented on the face of the plaintiff's properly pleaded complaint, Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475 (1998); Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987); Lovern v. Gen. Motors Corp., 121 F.3d 160, 162-63 (4th Cir.1997) or through a "subsequent paper," in the State court proceeding, such as an Answer, Amended Complaint, or discovery response, etc. See Walker v. Trailer Transit, Inc., 727 F.3d 819, 824 (7th Cir. 2013); Akin v. Ashland Chem. Co., 156 F.3d 1030, 1036 (10th Cir. 1998).

An exception to this rule is the "artful pleading" doctrine which prevents a plaintiff from avoiding federal jurisdiction by "artfully pleading" a state claim for what is essentially a federal claim. The artful pleading doctrine allows removal where federal law completely preempts a plaintiff's state-law claim. Rivet, 522 U.S. at 475; Bastien v. AT&T Wireless Servs., Inc., 205 F.3d 983, 986 (7th Cir. 2000).⁴ Out of respect for the limited jurisdiction of the federal courts and the rights of states, the removal statute should be strictly construed, and any doubts should be resolved against removability. Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 32 (2002); In re Methyl Tertiary Butyl Ether Prod. Liab. Litig., 488 F.3d 112, 124 (2nd Cir. 2007); Her Majesty the Queen v. City of Detroit, 874 F.2d 332, 339 (6th Cir.1989).

A plaintiff may not defeat removal by omitting to plead necessary federal questions in a complaint. Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 22 (1983); Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 22 (1983); Burda v. M. Ecker Co., 954 F.2d 434, 438 (7th Cir.1992); Franciscan Skemp Healthcare, Inc. v. Central States Joint Bd. Health and Welfare Trust Fund, 538 F.3d 594, 596-97 (7^th Cir. 2008); 14A C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure: Jurisdiction 2d § 3722 (1985).⁵

Since a plaintiff may not frame his action under state law and omit federal questions that are essential to recovery, a federal court may, in some situations, look beyond the plaintiff's characterization of a claim to determine whether the claim truly arises under federal law. See, e.g., Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 397 n. 2 (1981). If a court concludes that a plaintiff has "artfully pleaded" claims in this fashion, it may uphold removal even though no federal question appears on the face of the plaintiff's complaint.

The parties do not dispute that the Carmack Amendment completely preempts the field of state or common law remedies for loss or damage to interstate shipments. See N. Am. Van Lines, Inc. v. Pinkerton Sec. Sys., Inc., 89 F.3d 452, 456 (7th Cir. 1996); Hughes v. United Van Lines, Inc., 829 F.2d 1407, 1415 (7th Cir. 1987); REI Transport, Inc. v. C.H. Robinson Worldwide, Inc., 519 F.3d 693, 695 (7th Cir.2008). But the Plaintiff insists that it had the right to and did plead only a state law breach of contract/breach of duty claim. But that takes too narrow a view of that pleading which includes as Exhibit A, a bill of lading which is a part of the Complaint for all purposes under federal and state law. Fed.R.Civ.P. 10(c); E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 778 (7thCir. 2007); Stonegate Properties, Inc. v. Piccolo, 2016 WL 312084, at *4 (Ill.App. 1st Dist. 2016).

Exhibit A reflects that Michael's Cartage was transporting the machine to "CP Railway Chicago" in Bensenville, Illinois, for delivery to Challenger Overseas, whose business would certainly appear to be overseas shipping by sea and air. Without more, this would lead one to believe that this was not an merely an intrastate - or even a domestic - shipment. This is confirmed by the "Through Bill of Lading" the Defendant has attached to its Notice of Removal and which shows that the Consignee was the Solnechogorskiy Seal Structures Plant, LLC in Moscow, Russia. See Dkt. 18, Ex. A, pp. 2-3. This was offered by the defendant in support of its statement in the Notice of Removal that the machinery was to be transported by Michael's to" CP Rail Chicago" in Bensenville and then by rail from Illinois to a port in Montreal, Canada, and then by an ocean liner to its ultimate destination in Russia.

Although citing no authority that would permit consideration of evidence from the party seeking removal that was not a part of the state court record, the defendant insists that federal court may look to such evidence to ascertain whether a plaintiff has artfully plead his suit so as to couch a federal claim exclusively in terms of a state law claim, and that the Through Bill of Lading shows the plaintiff's "artful pleading" in stark relief. [Dkt.#1 at 2, ¶5; Dkt. #18 at 2, ¶4]. While inferentially objecting to this document, the plaintiff offers no authority that would prevent its usage. There is merely resort to the well pleaded complaint doctrine. And that is not enough.

"The federal courts have given the reference to 'other paper' in [28 U.S.C. §1446(b)(C)(3)] an embracive construction and have included a wide array of documents within its scope." 14C Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3732(3d ed. and Supp.2009).⁶ But their permissiveness has not been limitless. Generally, "courts have interpreted the 'other paper' term ... to apply to papers and documents filed in or involved in the state court from which removal is sought. Dahl v. R.J. Reynolds Tobacco Co., 478 F.3d 965, 969 (8th Cir. 2007); Holston v. Carolina Freight Carriers Corp., 936 F.2d 573...