Transit Homes of America v. Homes of Legend

Citation173 F.Supp.2d 1185
Decision Date12 October 2001
Docket NumberNo. CV 01-BU-2035-M.,CV 01-BU-2035-M.
PartiesTRANSIT HOMES OF AMERICA, DIVISION OF MORGAN DRIVE AWAY, INC., Plaintiff, v. HOMES OF LEGEND, INC., Defendant.
CourtU.S. District Court — Northern District of Alabama
173 F.Supp.2d 1185
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.
October 12, 2001.

Page 1186

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

Gregory S. Ritchey, Richard S. Walker, Ritchey & Ritchey PA, Birmingham, AL, for defendant.

Memorandum Opinion & Order

BUTTRAM, District Judge.


In its amended complaint, Plaintiff Transit Homes of America, Division of Morgan Drive Away, Inc. ("Morgan") seeks to recover unpaid freight charges from Defendant Homes of Legend, Inc. ("HOL"). (Doc. 2). Now before the Court is HOL's motion to dismiss, filed September 7, 2001, which the Court has advised it will treat as a motion for summary judgment, as HOL appended exhibits to its motion. (Doc. 7). HOL filed a brief in support of its motion, and Morgan has filed a brief and evidence in opposition to HOL's motion. On October 9, 2001, HOL filed a motion seeking permission to file a reply to Morgan's opposition (Doc. 16), a reply brief should that motion be granted, as well as a motion to strike certain materials in Morgan's evidentiary submission. (Doc. 17). The Court concludes, however, that it lacks subject matter jurisdiction and that this action is, therefore, due to be DISMISSED, without prejudice to Morgan to refile its claim in the appropriate state court. HOL's pending motions will be deemed MOOT.

I. BACKGROUND

According to the amended complaint, the relevant facts are these: Morgan is an interstate motor carrier of property engaged in interstate commerce. HOL is a manufacturer of single-section and multi-section manufactured homes. HOL and Morgan entered into a contract, effective July 1, 1997, under which Morgan, as the carrier, agreed, among other things, to transport for HOL, as shipper, certain single-section and multi-section manufactured homes from points of manufacture at or near Boaz, Alabama, to points in the continental United States. Pursuant to the contract, Morgan provided transportation services to HOL during a period of time

Page 1187

including, but not limited to, February 28, 2000 and March 7, 2000. Shortly thereafter, Morgan submitted invoices to HOL reflecting that the total amount due and owing was $162,357.21. On April, 18, 2000, HOL made a partial payment in the amount of $53,903.53. On June 26, 2000, HOL tendered a check to Morgan in the amount of $62,229.45, claiming that same was "full and final payment of all outstanding amounts owed to" Morgan by HOL. Morgan deposited this check "under protest" and demanded that HOL pay what Morgan considered to be the balance still due, $46,224.23. HOL refused, claiming a valid accord and satisfaction. On August 13, 2001, Morgan filed the instant action in this Court, seeking a judgment for $46,224.23, the amount due under its invoice; plus interest, costs, and any other relief the Court might deem just.

II. DISCUSSION

Federal courts are courts of limited jurisdiction; thus, this Court may hear only cases that the Constitution or Congress has authorized. See, e.g., Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) (citing cases). "It follows from this principle of limited jurisdiction that a federal court has an independent obligation to review its authority to hear a case before it proceeds to the merits." Mirage Resorts, Inc. v. Quiet Nacelle Corp., 206 F.3d 1398, 1400-01 (11th Cir.2000). "Thus, even if the litigants do not question the court's jurisdiction, the court must inquire into its jurisdictional basis sua sponte." Id. at 1401.

As a threshold matter, the Court recognizes that it does not have diversity jurisdiction since the amount in controversy — $46,224.23 — does not meet the $75,000 jurisdictional prerequisite. See 28 U.S.C. § 1332(a). However, in its amended complaint, Morgan asserts that this Court has subject matter jurisdiction pursuant to both 28 U.S.C. § 1337 and 49 U.S.C. § 14101(b)(2). Where a plaintiff has affirmatively sought to recover under federal law, "[d]ismissal for lack of subject-matter jurisdiction because of the inadequacy of the federal claim is proper only when the claim is `so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy.'" Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 89, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (quoting Oneida Indian Nation of N.Y. v. County of Oneida, 414 U.S. 661, 666, 94 S.Ct. 772, 39 L.Ed.2d 73, (1974)).

Morgan seeks primarily to found jurisdiction upon 28 U.S.C. § 1337, which provides in pertinent part as follows:

(a) The district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce and protecting trade and commerce against restraints and monopolies: Provided, however, That the district courts shall have original jurisdiction of an action brought under section 11706 or 14706 of title 49, only if the matter in controversy for each receipt or bill of lading exceeds $10,000, exclusive of interest and costs.

Morgan argues that its action is "brought under 49 U.S.C. § 10101 et seq.," the Interstate Commerce Act ("ICA"). By its own terms, § 1337 provides that jurisdiction will be present with respect to actions arising under at least certain sections of the ICA. However, it is not clear exactly what section of the ICA Morgan conceives its action as arising under.

In its brief, Morgan repeatedly references the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, and emphasizes its applicability in this case. However, by its terms that section pertains only to the liability of

Page 1188

carriers for loss or damage under receipts and bills of lading. The purpose of the Carmack Amendment "is to establish uniform federal guidelines designed in part to remove the uncertainty surrounding a carrier's liability when damage occurs to a shipper's interstate shipment." Hughes v. United Van Lines, Inc., 829 F.2d 1407, 1415 (7th Cir.1987). Thus, it expressly gives a federal cause of action against carriers and uniformly establishes the limits of a carrier's liability. See 49 U.S.C. § 14706(d). HOL has not, as Morgan highlights, filed an action seeking to recover under it. However, the Carmack Amendment gives no indication whatsoever that it creates a corresponding remedy for a carrier to sue a shipper for freight charges allegedly due under a contract, which is the nature of Morgan's claim against HOL. Thus, Morgan's claim against HOL cannot be said to arise under the Carmack Amendment for purposes of 28 U.S.C. § 1337. See Kansas City Terminal Ry. Co. v. Jordon Mfg. Co., 750 F.2d 551, 552 (7th Cir.1984); Old Dominion Freight Line v. Allou Distributors, Inc., 86 F.Supp.2d 92, 94 (E.D.N.Y.2000).

Nonetheless, Morgan suggests that a court will inevitably be required to interpret the Carmack Amendment during this litigation. Morgan first notes that the Carmack Amendment is the exclusive remedy for a shipper to recover against a carrier for loss or damage. See Bear MGC Cutlery Co. v. Estes Express Lines, Inc., 132 F.Supp.2d 937, 946 (N.D.Ala.2001). Therefore, Morgan argues, the rights and procedures the amendment specifies will dictate whether HOL, as a shipper, could, because of alleged loss or damage, properly effect an offset against amounts otherwise due Morgan and whether HOL might avail itself of the defense of accord and satisfaction. More specifically, Morgan claims that in order for HOL to recover against it for any loss or damage under the Carmack Amendment, HOL had to comply with the notice-of-loss or damage requirements set forth at 49 C.F.R. § 370.3, which Morgan alleges HOL did not do. Morgan also contends that the Carmack Amendment would apply to preempt the common law defense of accord and satisfaction, which HOL has indicated that it will assert.

The problem with this position, as the Court sees it, is that whether a case is one "arising under" federal law for purposes of a jurisdictional statute "must be determined from what necessarily appears in the plaintiff's statement of his own claim in the bill or declaration, unaided by anything alleged in anticipation of avoidance of defenses which it is thought the defendant may...

To continue reading

Request your trial
9 cases
  • Arctic Exp., Inc. v. Del Monte Fresh Produce Na
    • United States
    • U.S. District Court — Southern District of Ohio
    • March 30, 2007
    ...of limitations contained in 49 U.S.C. § 14705(a)." Id. at 8. The Bankruptcy Court largely relied upon Transit Homes of Am. v. Homes of Legend, 173 F.Supp.2d 1185 (N.D.Ala. 2001) in its analysis. Transit Homes involved a carrier who sought federal jurisdiction over its claims against a shipp......
  • Intransit v. Excel North American Road Transport
    • United States
    • U.S. District Court — District of Oregon
    • March 7, 2006
    ...commonly known as the Carmack Amendment, provides for liability of carriers for loss or damage under receipts and bills of lading. Transit Homes of America, Div. Of Morgan Drive Away, Inc. v. Homes of Legend, Inc., 173 F.Supp.2d 1185, 1187-1188 (N.D.Ala.2001); 49 U.S.C. § 14706(a)(1). The C......
  • Exel, Inc. v. S. Refrigerated Transp., Inc.
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • November 5, 2015
    ...the rights of shippers suing under a receipt or bill of lading, not brokers"); cf. Transit Homes of Am., Div. of Morgan Drive Away, Inc. v. Homes of Legend, Inc., 173 F.Supp.2d 1185, 1187–88 (N.D.Ala.2001) (holding that Carmack Amendment, by its terms, makes carriers liable to shippers but ......
  • W. Home Transp., Inc. v. Hexco, LLC
    • United States
    • U.S. District Court — District of North Dakota
    • June 27, 2014
    ...neither of which appears to be applicable here.See Transit Homes of America, Div. of Morgan Drive Away, Inc. v. Homes of Legend, Inc., 173 F.Supp.2d 1185, 1188–90 (N.D.Ala.2001) (discussing the 1995 deregulation and observing that the carrier made no claim that the manufactured homes transp......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT