Southern Intermodal Logistics v. D.J. Powers Co.
| Decision Date | 18 March 1998 |
| Docket Number | No. CV 496-209.,CV 496-209. |
| Citation | 10 F.Supp.2d 1337 |
| Parties | SOUTHERN INTERMODAL LOGISTICS, INC., Plaintiff, v. D.J. POWERS COMPANY, INC., The Yang Ming Line, and Solar International Shipping Agency Inc., Defendants. |
| Court | U.S. District Court — Southern District of Georgia |
Walter Charlton Hartridge, II, D. Michael Conner, Edgar Pomeroy Williams, Carlton Edward Joyce, Bouhan, Williams & Levy, Savannah, GA, M. Brice Ladson, John Gregory Odom, Ladson & Suthers L.L.P., Savannah, GA, for Southern Intermodal Logistics.
Inman Gregory Hodges, Patricia Tanzer Paul, Oliver, Maner & Gray, Savannah, GA, Kim T. Stephens, Blasingame, Burch, Garrard & Bryant, Athens, GA, Edward Donald Tolley, Cook, Noell, Tolley & Aldridge, Athens, GA, Edward M. Joffe, Sandler, Travis & Rosenberg, Miami, FL, for D.J. Powers Co., Inc.
Robert Edward Spears, Jr., Hunter, Maclean, Exley & Dunn, Savannah, GA, for Rob Spears.
Robert Strudwick Glenn, Jr., Hunter, Maclean, Exley & Dunn, Savannah, GA, for The Yang Ming Line, Solar International Shipping Agency, Inc.
Plaintiff Southern Intermodal Logistics, Inc. ("SIL"), an interstate motor carrier, brought this Georgia RICO-based action against several defendants for conspiring to extort from SIL illegal kickbacks to defendant D.J. Powers Company, Inc. ("Powers"). SIL contends that Powers and its co-conspirators wanted it to pay Powers the kickback for each container of cargo that SIL hauled from an ocean freight port of entry ("POE") to a K-Mart Corporation inland distribution center.
Because this case is fact-heavy and compels a rigorous examination of Georgia RICO law, the Court will first illuminate the cast of characters. During all relevant times, Powers served as K-Mart Corporation's customs house broker. Defendant The Yang Ming Line ("YM") is a foreign steamship line that carried K-Mart Corporation's ("K-Mart's") ocean freight to POEs. Defendant Solar International Shipping Agency, Inc. ("Solar") was YM's U.S. general agent in charge of YM's U.S. business, including solicitation business and delivery of import cargo. Solar, in turn, executed its duties for YM in Savannah, Georgia and Wilmington, North Carolina through the Carolina Shipping Company ("Carolina"), an independent steamship agent.
Defendants Powers, YM, and Solar now move for summary judgment. SIL opposes the motions, contending that fact issues preclude summary judgment. This Court applies the summary judgment principles explained in Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742-43 (11th Cir.1996) and Cohen v. United American Bank of Cent. Fla., 83 F.3d 1347, 1349 (11th Cir.1996).
SIL began doing business with YM around 1986 or 1987, Hogan dep. vol. I at 286,1 and later became a YM "house carrier."2 Hosey Aff. ¶ 4 (doc. # 187 Exh. F). During 1990 and 1991, SIL handled between 85% to 100% of YM's freight, see id.; McNair Aff. ¶ 8 (doc. 187 Exh. E), and serviced YM's K-Mart account. Id.
K-Mart operated a main international distribution center in Savannah until 1991. Carter 2/25/97 dep. at 121. In March of that year, K-Mart opened a new international distribution center in Ocala, Florida, Abraham Aff. ¶ 5 (doc. # 187 Exh. U), and maintained yet another distribution center in Newnan, Georgia. Carter 7/25/97 dep. at 121. SIL hauled containers first from Savannah to Newnan and later to Newnan and Ocala. Abraham Aff. ¶ 5; Hosey Aff. ¶ 4; McNair Aff. ¶ 8. SIL and YM, however, never expressly agreed to any particular level of hauling volume. Hogan dep. vol. I at 137-39, 289.
Although Powers had already been brokering overland freight transportation, it decided to augment this area of its business by forming what it called a "Domestic Transportation Department" ("DTD") in 1990. Carter 7/24/97 dep. at 25. It hired Marsha Herb to serve as its DTD director. Herb dep. at 19. The DTD signed SIL up as a motor carrier in 1990 under Powers' "Interstate Contract for Trucking Services" (hereafter, "Interstate Contract"). Doc. # 187 Exh. 42.
Significantly, while SIL and Powers had engaged in past dealings (i.e., in 1988), see doc. # 145 at 18 n. 30; # 190 at 49, Powers was not involved in putting SIL together with YM. Doc. # 190 at 49-51 (undisputed). And, when SIL entered into the 1990 SIL/Powers Interstate Contract, SIL was already hauling freight for YM.
In any event, what the Interstate Contract stated and what the parties actually intended to do is not in complete alignment. For example, the Interstate Contract obligated SIL to transport goods provided by Powers at a scheduled rate, doc. # 187 Exh. 42 ¶ 1, and also pay Powers an "administrative fee" to offset the cost associated with generating bills of lading. Id., last attachment. Yet, Powers has never claimed that as the fee's purpose because Powers has never prepared any bills of lading. Herb insists that the fee was intended to cover the cost of "overhead of having clerical and admin people" and "basic day-to-day operations." Herb dep. at 37. On top of all that, the record remains unclear whether Powers actually brokered any new hauling business for SIL under the Interstate Contract.
SIL points to that background in focusing the Court's attention on a March or April, 1991 telephone call from Herb to Hogan, during which she asked him to voluntarily relinquish the K-Mart account. He refused. Hogan dep. vol. I at 141-42. Herb then called back a day or two later and, on behalf of Powers, requested that SIL pay it a commission.3 Id. at 142. She claimed that Powers was "in a position" to request it from SIL, though she did not cite to the contract's "administrative fee" provision, or any other legal basis to support that contention. Id.
Hogan refused Herb's "request" since SIL, after all, was already hauling K-Mart's freight for YM as YM's house trucker. Id. Powers thus had done nothing to justify the commission Herb now requested. In fact, Hogan concluded that any commission would be illegal. Id. at 143. When he pointed this out to Herb, she implied that Powers would influence K-Mart into pressuring YM to stop using SIL. Id.; Hogan dep. vol. II at 39-40.
Clearly no pushover, Hogan contacted both Mike Collins (Carolina) and Lloyd Seow (Solar) to report Herb's actions. Hogan dep. vol. I at 146. He specifically informed Seow that he considered both the commission and Herb's threats to be illegal. Id. at 149. Seow responded that Hogan should ignore Herb because it was Solar — not Powers — who routed the freight, and SIL was doing a good job.4 Id. Collins also told Hogan not to worry about Herb's calls. Id. at 150.
But Hogan did not stop worrying. He next contacted Robert Frederick, Northeast Intermodal Director of Transportation for "Senator Line,"5 another ocean carrier that transported containers for K-Mart and used SIL for that purpose. Hogan asked Frederick whether Herb had approached him about terminating its use of SIL for Senator Line's K-Mart freight. Id. at 150; Frederick Aff. ¶ 4 (doc. # 187 Exh. K). Frederick responded "no" but agreed to inform Hogan if she did. Id.
Hogan met with Herb in April or May, 1991. At that time, she repeated her commission request, and he repeated his contention as to its illegality. Hogan dep. vol. I at 159.6 Sometime after that meeting, Hogan called Seow (Solar) again. This time Seow disclosed that Herb had called Solar. Hogan dep. vol. II at 41. Likewise, Hogan also called Collins (Carolina) about Herb's continuing threats and demands. Hogan dep. vol. I at 286. According to Hogan, Collins conceded that Herb had been pressuring YM in New York about SIL. Hogan dep. vol. II at 42.
Succumbing to Herb's pressure, Collins told Hogan that SIL should just pay Powers the commission because Hogan dep. vol. I at 285.7
Daniel Mitchell (SIL's Vice President) recalls a meeting in early to mid May of 1991 between himself, Hogan, and Collins. There Collins again urged SIL to "go along" with the commission because otherwise YM "was concerned" that it might lose the K-Mart business.8 Mitchell Aff. ¶ 8 (doc. # 187 Exh. S). Specifically, Collins was "concerned" that Powers could influence K-Mart to use a different ocean carrier than YM. Id.
In conjunction with her initial call to Hogan, Herb and other Powers employees began soliciting businesses, including K-Mart, for the domestic motor vehicle operations to be conducted by Powers' DTD. Herb dep. at 77-80; K. Peterson dep. at 34. To that end, Kay Peterson, another Powers employee, made several telephone calls to K-Mart's Linda (no relation) Peterson and Shirley Pinkett to explain Powers' DTD. K. Peterson dep. at 33-37. Powers also sent Linda Peterson, who was K-Mart's transportation chief, a follow-up solicitation letter advertising its DTD services. Doc. # 187 Exh. 99.
That letter came from Richard Carter, Powers' President, and it requested that Peterson sign an attached letter endorsing Powers' DTD program so Powers could then send it on to K-Mart's ocean carriers. Id. The letter would be quite useful to Powers; while it did not obligate K-Mart to use Powers' designated trucking companies, nevertheless Powers would be able to use it to "inform" ocean carriers that K-Mart had asked Powers to perform all of its tracking and tracing services. Id. In that way, Powers could use the letter to induce the carriers to "cooperate" with it. Id. Powers therefore would be in a position to influence which trucking haulers the carriers should use.
Evidently recognizing no upside for itself, K-Mart decided not to get involved with Powers' DTD program. L. Peterson dep. at 86. So, Peterson declined to sign the letter. Id.
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