Nyk Line v. Burlington Northern and Santa Fe Ry., CV 02-1081 R.

Citation222 F.Supp.2d 1176
Decision Date16 September 2002
Docket NumberNo. CV 02-1081 R.,CV 02-1081 R.
CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
PartiesNYK LINE (NORTH AMERICA), INC., Plaintiff, v. THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, K & R Transportation, Inc., and Does 1 to 10, et al. Defendants.

Law Offices of Leslie G. McMurray, Leslie G. McMurray, Valley Village, Counsel for Defendant Burlington Northern and Santa Fe Railway Company.

ORDER

REAL, District Judge.

1. INTRODUCTION

This case concerns a cargo theft occurring in transit on an interstate movement of goods by rail and motor carriers. The cargo was a load of Philip Morris cigarettes stowed within sealed container no. TRLU 5376554. As part of the intermodal movement, BNSF carried the container from its Chicago rail ramp to its Los Angeles rail ramp. The cargo was then supposed to be picked up by motor carrier K & R Transportation Co. ("K & R") and drayed to one of the NYK terminals where it would be placed on an ocean carrier for further shipment to Tokyo, Japan. Prior to BNSF's receipt of the container, NYK had contracted with BNSF to move the cigarettes from Chicago to Los Angeles on a ramp-to-ramp move subject to BNSF Intermodal Rules and Policies Guide and the International Transportation Agreement MA60. NYK contracted separately with K & R to haul the load to the Port of Long Beach from Los Angeles.

BNSF received electronic instructions (an "EDI"), that BNSF was to carry container TRLU 5376554 containing "freight of all kinds" for shipper NYK on a Plan 85 (or ramp-to-ramp) movement from BNSF's rail ramp in Chicago Illinois to BNSF's rail ramp in Los Angeles, California. BNSF was not notified that this was a load of cigarettes. BNSF was directed to carry the load as "FAK" or freight of all kinds." Another company, Total Employee Management Company ("TEMCO") was under contract with BNSF to man the out-gates at the BNSF rail yard to ensure that only drivers with certain documentation were permitted to pass through the gates with cargo in tow.

On August 22, 2001 at 09:45 hours, the train carrying the container at issue arrived at BNSF's rail ramp. At 13:25 hours, the sealed container was "deramped" (taken off of the rails and placed on a chassis). NYK had listed itself as the notify party on the shipping instructions directing BNSF to notify it when the container was ready for pick up in Los Angeles. NYK was notified by BNSF of the container's availability for pick up at 16:49 hours on August 22nd. The container was subsequently out-gated at 23:35 hours by a driver driving a K & R truck who presented NYK's confidential pick up number to the TEMCO out-gate operator. The following morning, William Byron Velasquez, the K & R driver who was assigned the day prior by K & R to pick up this load and who had since the time of that assignment the confidential pick up information, arrived at the yard and learned that the container had already been picked up. A police investigation revealed that the K & R truck used in the heist was owned by William Velasquez's nephew, Jorge Isaac Moreno, who was also a K & R truck driver, and who parked his truck on the street on August 22nd and reported it stolen the following morning on August 23rd. Velasquez had been assigned by K & R on the date that the container arrived at the rail ramp, to dray the container to Long Beach. He had been given the confidential pick up information on the load on August 22, 2002, the date on which the load arrived at the rail ramp, but decided to wait until the following day to pick up the load.

In addition to a number of BNSF Railway police agents assigned to the case, the Federal Bureau of Investigations, local cargo theft investigation units from the California Highway Patrol, Los Angeles Police Department and the Los Angeles County Sheriff's Department were all placed on notice of the theft. A reward was authorized by BNSF for the arrest and conviction of the person or persons responsible for the theft. Reward posters were developed and widely distributed. In addition, a broadcast using a nation-wide law enforcement computer system was sent to numerous western U.S. law enforcement agencies advising of the theft and missing merchandise. The load of cigarettes was never recovered.

NYK contracted with Philip Morris to transport this container (among others) from Norfolk Virginia to Tokyo Japan via Los Angeles. NYK indemnified Philip Morris for the loss in an amount in excess of $424,735.83. NYK sued BNSF and K & R in subrogation for the amount paid. NYK subsequently named TEMCO as a defendant.

BNSF filed a Motion for Summary Judgment or Partial Summary Judgment asking that the court dismiss plaintiffs' complaint against it, or alternatively, that the court summarily adjudicate certain facts in BNSF's favor.

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The United States Supreme Court has described the standard in summary judgment motions as the same as in a motion for a directed verdict under F.R.C.P. Rule 50(a). Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986).

"... If the defendant in a run-of-the-mill civil case moves for summary judgment or proof of a material fact, the judge must ask himself not whether he thinks the evidence unmistakably favors one side or the other but whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented. The mere existence of a scintilla of evidence in support of plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff. The judge's inquiry therefore unavoidably asks whether a reasonable jury could find by a preponderance of the evidence that the plaintiff is entitled to a verdict`whether there is (evidence) upon which a jury can properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed ... (Emphasis added.)'"

Id.

Upon a showing that there is no genuine issue of material fact as to a particular claim or defense, the court may grant summary judgment in the party's favor "upon all or any part thereof." Fed. Rule Civ. Pro. 56(a),(b); see Wang Labs. v. Mitsubishi Electronics America, Inc., 860 F.Supp. 1448, 1450 (C.D.Ca.1993). The standards in granting partial summary judgment are the same as for summary judgment. American Nurses' Ass'n v. Illinois, 783 F.2d 716, 729 (7th Cir.1986). The law applied to the evidence submitted herewith entitles BNSF to summary judgment against NYK.

2. PREEMPTION

BNSF argues that all of NYK's claims are state law causes of action which are preempted by The Carmack Amendment 49 U.S.C. § 11706. The decisions of federal courts are controlling in freight claim suits involving interstate shipments. Adams Express Company v. Croninger, 226 U.S. 491, 33 S.Ct. 148, 57 L.Ed. 314 (1913). In 1906, Congress enacted the Carmack Amendment as part of the former Interstate Commerce Act. Former 49 U.S.C. § 11707, currently 49 U.S.C. § 11706 (governing rail movements) and § 14706 (governing motor carrier movements) (hereinafter referred to as "Carmack"). The Carmack Amendment preempts all state common law claims and constitutes the exclusive avenue for recovery in any suit brought against an interstate carrier for loss or damage to the transported goods. Missouri Pacific Railroad Co. v. Elmore & Stahl, 377 U.S. 134, 137, 84 S.C. 1142, 1144, 12 L.Ed.2d 194 (1964). Carmack constitutes the exclusive remedy against an interstate carrier of goods for loss or damage to transported cargo such that all state law causes of action are absolutely preempted by Carmack. Adams Express Co. v. Croninger, 226 U.S. 491 [57 L.Ed. 314, 33 S.Ct. 148] (1913); Pietro Culotta Grapes, Ltd. v. Southern Pacific Transp. Co., 917 F.Supp. 713, 716 (E.D.Ca.1996); Hughes Aircraft Co. v. North American Van Lines (9th Cir.1992) 970 F.2d 609; Southeastern Express Co. v. Pastime Amusement Co. (1936) 299 U.S. 28, 29, [57 S.Ct. 73, 81 L.Ed. 20] (Negligence claim preempted.); Rini v. United Van Lines, Inc. (1st Cir. 1997) 104 F.3d 502, 504-506 (Carmack preempts all state law claims, including negligence); Arnell v. Mayflower Transit, Inc. (D.Nev.1997) 968 F.Supp. 521, 523-524 (Carmack preempts breach of contract and negligence claims.); Pierre v. United Parcel Service, Inc., 774 F.Supp. 1149 (N.D.Ill.1991)(Negligence, breach of contract, bailment claims preempted by Carmack.); Harrah v. Minnesota Mining and Mfg. Co. (D.N.J.1992) 809 F.Supp. 313, 318 (Claims for misdelivery or non-delivery are preempted by Carmack); see Waldrous, Inc. v. B.P.T. Air Freight Forwarding, Inc. et al., 1990 U.S. Dist. LEXIS 2592 at *4 (a shipper's indemnity claims are also preempted by the Carmack Amendment.)

In its First Amended Complaint, NYK pleads five causes of action against BNSF: (1) Negligence (1st cause of action), (2) Equitable Indemnity (2nd cause of action), (3) Breach of Contract (4th cause of action) (4) Breach of Bailment (5th cause of action), (5) Breach of Contract/Third Party Beneficiary (7th cause of action). Nowhere in its First Amended Complaint is there any reference to The Carmack Amendment nor to federal law. Instead, NYK complains that BNSF was "negligent", that BNSF "breached its contract," with NYK, that it "breached its contract" with K & R, and that BNSF breached its "bailment" duties and owes it an equitable indemnity. All of those claims are state law causes of action which are absolutely preempted by the Carmack Amendment entitling BNSF to summary judgment against NYK as a matter of law. Intercargo Insurance Company v. Burlington Northern Santa Fe Railroad, et al., 185...

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