Transit Homes of America v. Homes of Legend, Inc., CV 01-BU-2035-M.

• Decision Date: 14 November 2001
• Docket Number: No. CV 01-BU-2035-M.,CV 01-BU-2035-M.
• Parties: TRANSIT HOMES OF AMERICA, DIVISION OF MORGAN DRIVE AWAY, INC., Plaintiff, v. HOMES OF LEGEND, INC., Defendant.
• Court: U.S. District Court — Northern District of Alabama

173 F.Supp.2d 1192

TRANSIT HOMES OF AMERICA, DIVISION OF MORGAN DRIVE AWAY, INC., Plaintiff, v. HOMES OF LEGEND, INC., Defendant.

No. CV 01-BU-2035-M.

United States District Court, N.D. Alabama, Middle Division.

November 14, 2001.

Mark P. Williams, Norman Wood Kendrick & Turner, Birmingham, for plaintiffs.

Gregory S. Ritchey, Richard S. Walker, Ritchey & Ritchey PA, Birmingham, for defendants.

Memorandum Opinion & Order

BUTTRAM, District Judge.

Now before the Court in the above-styled action is a motion filed October 26, 2001 by Plaintiff, Transit Homes of America, Division of Morgan Drive Away, Inc. ("Morgan"), requesting that the Court alter or amend and "reconsider" the judgment it entered dismissing the case for lack of subject matter jurisdiction. (Doc. 19). The Court concludes that Morgan's motion is due to be DENIED.

I.

Morgan is a motor carrier that transports property interstate. In July 1997, Morgan entered into a contract with Defendant Homes of Legend, Inc. ("HOL"), who makes manufactured homes. Under this contract, Morgan agreed to transport HOL's manufactured homes from points of manufacture at or near Boaz, Alabama to points in the continental United States. Morgan brings this action against HOL seeking to recover $46,224.23 representing unpaid freight charges.

On October 12, 2001, this Court entered a memorandum opinion and order dismissing the action for lack of subject matter jurisdiction. (Doc. 18). The Court initially noted that it lacked diversity jurisdiction under 28 U.S.C. § 1332 because the requisite amount in controversy was not satisfied. The Court acknowledged that 28 U.S.C. § 1337(a) confers original jurisdiction upon the district courts over "any civil action or proceeding arising under any Act of Congress regulating commerce ...." However, the Court ultimately found that Morgan's claim does not "arise under" any such Act, nor any other federal law for purposes of 28 U.S.C. § 1331. First, the Court determined that, although issues relating to the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, might be litigated in the case, it could not be said that Morgan's claim, as a carrier against a shipper for unpaid freight charges, "arises under" that statute, which by its terms outlines only a shipper's remedy against a carrier under a receipt or bill of lading for loss or damage to the property transported. Second, responding to Morgan's assertion that subject matter jurisdiction exists by virtue of a federal right and obligation to collect unpaid freight charges, the Court reasoned that following the substantial deregulation of the trucking industry in the Mid 1990's, no such right or duty is vested in a motor carrier where, as here, there is no applicable filed tariff. Rather, the Court explained, any right that Morgan had to collect charges owed to it springs solely from its contract with HOL. Finally, Morgan asserted that such contract was expressly authorized under 49 U.S.C. § 14101(b)(1) and that subsection (b)(2) of that section conferred original jurisdiction to hear a breach of such a contract. The Court acknowledged that § 14101(b)(1) allowed the parties to contract for transportation, but the Court disagreed that § 14101(b)(2) was an affirmative grant of federal jurisdiction for purposes of 28 U.S.C. § 1337. And because the Court determined that subject matter jurisdiction was lacking, it dismissed the action and instructed Morgan that it might file its action in a state court.

II.

Morgan has filed a timely Fed. R.Civ.P. 59(e) motion to alter or amend and "reconsider" the judgment dismissing the case without prejudice. The decision whether to alter or amend a judgment pursuant to Rule 59(e) is "committed to the sound discretion of the district judge." American Home Assurance Co. v. Glenn Estess & Assocs., 763 F.2d 1237, 1238-39 (11th Cir.1985). While the Court declines to alter or amend its prior ruling, the Court recognizes that Morgan's motion contains a number of points that deserve to be addressed.

III.

A. Jurisdiction under 49 U.S.C. § 14101(b)(2)

Morgan appears to acknowledge that its claim to recover unpaid freight charges does not arise under the Carmack Amendment. Morgan still maintains, however, that its contract with HOL is authorized under 49 U.S.C. § 14101(b)(1), and that the plain language of § 14101(b)(2) confers jurisdiction upon this Court to hear a breach of contract claim. Again, the full text of § 14101 is as follows:

(1) In general. — A carrier providing transportation or service subject to jurisdiction under chapter 135 may enter into a contract with a shipper, other than for the movement of household goods described in section 13102(10)(A), to provide specified services under specified rates and conditions. If the shipper and carrier, in writing, expressly waive any or all rights and remedies under this part for the transportation covered by the contract, the transportation provided under the contract shall not be subject to the waived rights and remedies and may not be subsequently challenged on the ground that it violates the waived rights and remedies. The parties may not waive the provisions governing registration, insurance, or safety fitness.

(2) Remedy for breach of contract. — The exclusive remedy for any alleged breach of a contract entered into under this subsection shall be an action in an appropriate State court or United States district court, unless the parties otherwise agree.

49 U.S.C. § 14101.

Section 14101(a) does authorize the contract between Morgan and HOL. But this authorization alone evidences little if any Congressional intent to federalize every breach-of-contract claim involving a motor carrier subject to federal regulation. When a carrier brings a claim to recover amounts owed under a federally required filed tariff, there is no question that original jurisdiction exists under 28 U.S.C. § 1337. See Thurston Motor Lines, Inc. v. Jordan K. Rand, Ltd., 460 U.S. 533, 103 S.Ct. 1343, 75 L.Ed.2d 260 (1983). Of course, as the Court has previously explained, legislation passed in the mid-1990's substantially deregulated the trucking industry. See Whitaker v. Frito-Lay, Inc., 88 F.3d 952 (11th Cir.1996). Most motor carrier transportation is still subject to the jurisdiction of the Surface Transportation Board ("Board"), see 49 U.S.C. § 13501-08, and those motor carriers still have federal registration requirements, see 49 U.S.C. § 13901-02. Motor carriers subject to the Board's jurisdiction also retain some common carrier-like obligations, such as providing transportation on "reasonable request," and providing "safe and adequate service, equipment, and facilities." 49 U.S.C. § 14101(a). But now, only very limited types of motor carrier transportation, undisputedly not at issue in this case, are still subject to filed tariff and "reasonable" rate requirements and to prohibitions against discrimination amongst shippers. See 49 U.S.C. § 13701-02. Therefore, the great majority of transportation of property by motor carrier in this country must, of necessity, occur pursuant to the terms of private contracts of one form or another, be they receipts, bills of lading, or otherwise, between individual carriers and shippers. Accordingly the primary importance of § 14101(b)(1) is not simply that it permits contracting by carriers who are not transporting household goods. Rather, the importance of the subsection lies in its specific allowance for such carriers and parties with whom they deal expressly to contract around certain federal obligations and remedies, in particular the Carmack Amendment, established as default rules by Congress. See Stephen G. Wood, Multimodal Transportation: An American Perspective on Carrier Liability and Bill of Lading Issues, 46 Am. J. Comp. L. 403, 411 (1998); cf. Dow Chemical Co. v. Union Pacific Corp., 8 F.Supp.2d 940, 941 (S.D.Tex.1998) (remarking that similar provisions in 49 U.S.C. § 10709 applicable to rail carrier contracts was "clear[ly]" enacted for the "purpose of ... allow[ing] parties the ability to alter federal mandates, or to avoid federal control and oversight over rail contracts".)

Further, contrary to Morgan's suggestion, the plain language of 49 U.S.C. § 14101(b)(2) does not unambiguously grant a party to a contract authorized under subsection (b)(1) a virtually unfettered choice of deciding whether to bring a claim in either a state or federal court. First, subsection (b)(2) does not expressly create either a federal cause of action or federal subject matter jurisdiction. It does not say, for example, that "[a] civil action under this section may be brought in a United States district court or in a State court," as is the case with the cause of action expressly delineated in the Carmack Amendment. 49 U.S.C. § 14706(d)(3). Rather, § 14101(b)(2) states that the remedy for breach of a contract authorized under subsection (b)(1), a court action, is "exclusive." The use of such an adjective only makes sense if the primary focus of subsection (b)(2) is to stake out clearly that any remedy for breach of contract must be judicial, rather than administrative, in nature.¹ This is logical given that the Interstate Commerce Commission, the precursor to the Board, formerly had primary jurisdiction over a variety of matters relating to the relationships between carriers and shippers. See Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 304-05, 96 S.Ct. 1978, 48 L.Ed.2d 643 (1976); Taylor County Sand Co. v. Seaboard Coast Line R. Co., 446 F.2d 853, 854 (5th Cir.1971). See also 49 U.S.C. § 11101(d) (1994) (repealed) (providing that the ICC had primary jurisdiction to resolve disputes with respect to whether a motor carrier was acting in its capacity as a common carrier or contract carrier when it provided service to a particular shipper). Moreover, the Board and the Secretary of Transportation ("Secretary") still retain jurisdiction over most motor carrier...