Shao v. Link Cargo (Taiwan) Ltd., 92-1533

Citation986 F.2d 700
Decision Date22 February 1993
Docket NumberNo. 92-1533,92-1533
Parties, 24 Fed.R.Serv.3d 1481 Ting-Hwa SHAO, Plaintiff-Appellant, v. LINK CARGO (TAIWAN) LIMITED; Abacus Transports and Forwarder, Limited; Inhouse Trucking Company; International Warehouse Distribution Corporation; MICC Venture, A Florida Joint Venture/General Partnership; Sea Horse Container Lines; Western Overseas Corporation, Defendants-Appellees. and Groat Brothers, Incorporated, Defendant.
CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)

Frederic Willard Schwartz, Jr., Washington, DC, argued for plaintiff-appellant.

Steven A. Fein, Hyman & Kaplan, P.A., Miami, FL, argued (Edoardo Meloni, on brief), for defendants-appellees.

Before MURNAGHAN, NIEMEYER, and HAMILTON, Circuit Judges.

OPINION

NIEMEYER, Circuit Judge:

Ting-Hwa Shao contracted with Link Cargo (Taiwan) Ltd. and Abacus Transports and Forwarder, Ltd., in Taipei, Taiwan, to have his personal belongings shipped from Taiwan to Baltimore, Maryland. The goods were transported by ship to Long Beach, California, where a customs number was assigned to the shipment, and then forwarded, inadvertently, to a warehouse in Miami, Florida. On September 3, 1988, a fire destroyed the warehouse and Shao's goods. Over two years later Shao filed suit in the District of Maryland to recover the damages, alleging negligence and breach of contract. He named as defendants Link Cargo, Abacus Transports, and six other parties who were involved in the transportation and storage of his goods. Only three defendants were served, and after one was voluntarily dismissed for not having been involved, 1 only Sea Horse Container Lines, which the complaint alleges arranged for the loading of the goods onto a ship in Taiwan, and Western Overseas Corp., which acted as customs broker in Long Beach, remain as parties.

On the motion of the defendants who were served, the district court ruled that plaintiff's common law claims were preempted by the Carmack Amendment, 49 U.S.C. § 11707, and then barred by the statute of limitations contained in 49 U.S.C. § 11706(c)(1). The court dismissed the claims against the remaining defendants for lack of service, pursuant to Federal Rule of Civil Procedure 4(j) and Maryland Rule 103(8)(a).

On appeal Shao contends that the Carmack Amendment does not preempt state common law remedies for the negligent loss of shipped goods and in any event that the two-year statute of limitations applied by the court would not be applicable to a Carmack Amendment claim. He also contends that the court abused its discretion in dismissing the remaining defendants and that he should be allowed to "continue to search for and properly serve them."

At oral argument on appeal, Sea Horse and Western Overseas conceded Shao's argument that the statute of limitations from 49 U.S.C. § 11706(c)(1) does not apply to a claim under the Carmack Amendment. In a radical departure from the position taken in their brief, however, they contended for the first time that the Carmack Amendment did not apply at all because the shipment originated outside of the United States and beyond the jurisdiction of the Interstate Commerce Commission. In view of the new argument, Sea Horse and Western Overseas contended that the preemption issue need not be reached. The problem presented by the new issue is compounded because this case was decided essentially on the complaint, and the record contains few, if any, of the facts necessary for a proper resolution of the issues now raised.

While we conclude that the district court correctly ruled that the Carmack Amendment would preempt common law claims in connection with shipments covered by a United States bill of lading, the factual circumstances of this case are not sufficiently developed to determine whether this shipment was governed by the Carmack Amendment. We therefore remand the case for determination of this threshold jurisdictional issue. We also conclude that if the Carmack Amendment does, in fact, govern this transaction, the statute of limitations contained in § 11706(c)(1) does not apply. Finally, we affirm the district court's dismissal of the defendants not served.

I

The record in this case consists essentially of the complaint filed by Ting-Hwa Shao to recover $250,000 in damages occasioned by the loss of his personal belongings in the Miami fire. Only two documents have been made part of the record, a Western Overseas manifest of goods prepared for the purpose of obtaining a customs number in Long Beach, California, and a paper directing release of the goods from a Miami warehouse for shipment to Baltimore because the shipment had been "mistakenly sent to Miami."

The complaint, which asserts jurisdiction based on diversity of citizenship under 28 U.S.C. § 1332, alleges that plaintiff retained Chang-Jye Liou, purportedly an agent for Link Cargo and Abacus Transports, to arrange for the shipment of ten cartons of personal effects from Taipei, Taiwan, to Baltimore, Maryland. It alleges that the goods were loaded onto a ship on June 1, 1988, (under the auspices of Sea Horse), and off-loaded in Long Beach, California, where the shipment was given a customs number. The complaint further alleges that the defendant Groat Brothers, Inc. (now dismissed from the case) contracted to transport the shipment "in bond" to Baltimore, where it would be cleared for customs, but that the shipment was instead delivered by mistake to a Miami, Florida warehouse, where it was destroyed by fire. The complaint also alleges that the defendants who were involved in the shipment and storage of the goods were negligent and in breach of their contract "to choose appropriate carriers, to prepare proper and correct documentation and to transport the shipment to Baltimore." Finally, the complaint alleges that two defendants (who have not been served) were negligent in storing or permitting the storage of the goods with hazardous materials in the warehouse in Miami. Sea Horse and Western Overseas are not alleged to have participated in the negligence involving the warehouse storage.

On motions of Sea Horse, Western Overseas, and Groat Brothers, the district court ruled that the Carmack Amendment, 49 U.S.C. § 11707, preempted the plaintiff's state common law claims, and that the complaint, although couched in terms of common law rights, sufficiently stated a claim under the federal statute. The court then found that the plaintiff's Carmack Amendment claim was barred by 49 U.S.C. § 11706(c)(1), which requires a claimant to file with the Interstate Commerce Commission within two years of the date a claim accrues under 49 U.S.C. § 11705(b)(2) (which governs liability for damages sustained by a person as a result of an act or omission of a carrier). Finally, pursuant to Federal Rule of Civil Procedure 4(j) and Maryland Rule 103(8)(a), the district court dismissed the unserved defendants for the plaintiff's failure, notwithstanding repeated extensions given by the court, to serve them with process.

II

In the proceeding before the district court, the defendants Sea Horse and Western Overseas and the now-dismissed defendant Groat Brothers argued that the Carmack Amendment preempted plaintiff's common law claims, an assertion with which the district court agreed. That issue is the principal one briefed and argued by the parties on appeal and is the threshold question for reaching other issues under the Carmack Amendment. While it would appear obvious that we must address the question, doubt is created by the contention of Sea Horse and Western Overseas, first advanced at oral argument, that the Carmack Amendment does not apply at all because the shipment originated outside of the United States. That contention was not made in the district court nor was it briefed before us. Because the issue is jurisdictional and could be dispositive, we address it first.

The Carmack Amendment applies to common carriers "providing transportation or service subject to the jurisdiction of the Interstate Commerce Commission under subchapter I, II, or IV of chapter 105 of this title...." 49 U.S.C. § 11707(a)(1). The ICC's jurisdiction does not extend, however, to shipments from a foreign country to the United States unless a domestic segment of the shipment is covered by a separate domestic bill of lading. See 49 U.S.C. §§ 10501, 10521, 10561; Reider v. Thompson, 339 U.S. 113, 117-18, 70 S.Ct. 499, 501-02, 94 L.Ed. 698 (1950); Capitol Converting Equip., Inc. v. LEP Trans., Inc., 965 F.2d 391, 394 (7th Cir.1992); Swift Textiles, Inc. v. Watkins Motor Lines, 799 F.2d 697, 701 (4th Cir.1986), cert. denied, 480 U.S. 935, 107 S.Ct. 1577, 94 L.Ed.2d 768 (1987).

Although the fact that this shipment originated from outside the United States is apparently undisputed, the record is too sparse for us to determine whether the shipment is subject to the jurisdiction of the ICC and thus governed by the Carmack Amendment. No evidence appears in the record to show whether any domestic bill of lading was issued to cover the domestic segment of the shipment. Indeed, even the original contract documents have not been made available. Accordingly, we must vacate the judgment in favor of Sea Horse and Western Overseas and remand the case against them to the district court to determine this threshold question.

III

Because we are remanding this case, leaving open the possibility that a domestic bill of lading may have been issued, we believe we must proceed to reach the preemption issue decided by the district court and appealed by Shao.

Federal law preempts state and common law when Congress expressly provides that the federal law supplants state authority in a particular field, or when its intent to do so may be inferred from a pervasive system of regulation which does not leave a sufficient vacancy within which any state can act. See Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91...

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