Underwriters at Interest Under Bailee Ins. Policy No. 09RTAMIA1158 v. Seatruck, Inc.

• Decision Date: 29 March 2012
• Docket Number: Case No. 11–23680–CIV.
• Citation: 858 F.Supp.2d 1334
• Parties: UNDERWRITERS AT INTEREST UNDER BAILEE INSURANCE POLICY NO. 09RTAMIA1158 as assignee of Circuit Zone, Ltd., Plaintiffs, v. SEATRUCK, INC., and Seafreight Agencies (USA), Inc., Defendants.
• Court: U.S. District Court — Southern District of Florida

858 F.Supp.2d 1334

UNDERWRITERS AT INTEREST UNDER BAILEE INSURANCE POLICY NO. 09RTAMIA1158 as assignee of Circuit Zone, Ltd., Plaintiffs,

v.SEATRUCK, INC., and Seafreight Agencies (USA), Inc., Defendants.

Case No. 11–23680–CIV.

United States District Court, S.D. Florida.

March 29, 2012.

Michael Simon, Michael A. Monteverde, Simon, Reed & Salazar, P.A., Miami, FL, for Plaintiffs.

Robert William Blanck, Jonathan Hernandez, Blanck and Cooper, PA, Miami, FL, for Defendants.

ORDER ON PLAINTIFFS' MOTION TO REMAND FOR LACK OF SUBJECT MATTER JURISDICTION AND MOTION FOR TAXATION OF COSTS AND FEES

ROBERT N. SCOLA, JR., District Judge.

THIS MATTER is before the Court on the Plaintiffs' Motion for Remand of the instant litigation back to the Circuit Court of the Eleventh Judicial Circuit in and for Miami–Dade County Florida, and accompanying Motion for costs and fees. Having reviewed the Motion, the record, and the relevant legal authorities, it is ORDERED and ADJUDGED that the Motion for Remand (ECF No. 6) is GRANTED, and the Motion for costs and fees is DENIED.

I. FACTUAL BACKGROUND

The Plaintiffs are underwriters engaged in the business of issuing insurance policies in Florida (the “Underwriters”). They come to this action as assignees of the claims and rights of Circuit Zone, Ltd. (“Circuit Zone”), a foreign company that owned certain cargo property. Around November 2009, that cargo was in transit from the United States to Trinidad. Circuit Zone did business with FEI Logistics, Inc. (“FEI”), a freight forwarding company, as its agent to carry out the moving of the cargo. FEI engaged in the services of Defendants, SeaTruck, Inc. and Seafreight Agencies (USA), Inc. (collectively, “SeaTruck”), companies engaged in commercial cargo transport, to provide transportation of the cargo to Trinidad. In the meantime, FEI leased space for the cargo in a warehouse in Doral, Florida, that was owned and operated by Millenium Logistics (“Millenium”). The relationship between Circuit Zone, as owner of the cargo, and SeaTruck, as the carrier of the cargo, would have been governed by the terms of SeaTruck's standard bill of lading, to be issued once the cargo was loaded on board SeaTruck's vessel.

SeaTruck provided Millenium with a container, along with a confidential booking number used to reference and identify the cargo to be shipped. Around November 19, 2009, a truck driver, claiming to be a SeaTruck representative, arrived at the warehouse and provided the booking number for identification. Based on these statements and the booking number, Millenium loaded the cargo onto the driver's truck, and the truck departed with the cargo.

Shortly after the driver left the warehouse with the cargo, SeaTruck's representatives provided a second, additional tracking number and stated that Millenium should request the new number from whoever came to receive the cargo. SeaTruck allegedly issued the second number upon realizing that its security had been breached, compromising the original number. Soon after the issuance of the new tracking number, a SeaTruck driver arrived at the warehouse to receive the cargo. Of course, by that time, the cargo was no longer at the warehouse.

As it turns out, the first driver was an impostor who absconded with the cargo before anyone caught onto the ruse. As a result of the theft, Circuit Zone allegedly sustained losses valued at $289,774.37. Under an insurance policy, the Underwriters paid Circuit Zone $243,208.30 in insurance proceeds in exchange for an assignment of all of Circuit Zone's rights and claims related to the loss of the cargo.

The Underwriters filed this action in state court on September 6, 2011, raising a single claim for negligence against the SeaTruck Defendants, among others. The Defendants removed the action to this Court on October 11, 2011 based on the Carriage of Goods by Sea Act, 46 U.S.C. § 30701 et seq. (2006) (“COGSA”). The Underwriters filed an Amended Complaint, raising the same substantive claim of negligence against the current SeaTruck Defendants in separate counts. In those counts, the Underwriters allege that SeaTruck owed Circuit Zone a duty to prevent the booking number and pick-up time from being compromised, and a duty to immediately apprise the relevant parties that a security breach had occurred. The Underwriters have now moved to remand this action back to state court for lack of subject matter jurisdiction.

II. LEGAL STANDARDSa. Removal and Remand

“Federal courts are courts of limited jurisdiction.” Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 807 (11th Cir.2003). Pursuant to 28 U.S.C. § 1446(a)-(b) (2011), a defendant may remove any civil action over which federal courts have original jurisdiction to the district court for the district and division embracing the place where such action is pending, provided that none of the defendants are citizens of the State in which such action is brought. “A removing defendant bears the burden of proving proper federal jurisdiction.... Any doubts about the propriety of federal jurisdiction should be resolved in favor of remand to state court.” Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290, 1294 (11th Cir.2008) (citing Leonard v. Enter. Rent A Car, 279 F.3d 967, 972 (11th Cir.2002); Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir.1996)).

SeaTruck premises removal of this action on the presence of a federal question pursuant to 28 U.S.C. § 1331, and on 28 U.S.C. § 1337(a), which grants original jurisdiction over any civil action arising under an act of Congress regulating commerce. Both of these allegations are based on SeaTruck's claim that the Underwriters' state law claims are preempted by the COGSA.

b. COGSA

Enacted in 1936, COGSA governs all foreign trade contracts for the carriage of goods by sea to or from U.S. ports. COGSA § 13, 46 U.S.C. § 30701. COGSA requires a carrier in such contracts to issue to the cargo owner a bill of lading that contains certain terms. COGSA § 3, 46 U.S.C. 30701; Kawasaki Kisen Kaisha Ltd. v. Regal–Beloit Corp., ––– U.S. ––––, 130 S.Ct. 2433, 2440, 177 L.Ed.2d 424 (2010). “The purpose of COGSA was to achieve international uniformity and to redress the edge in bargaining power enjoyed by carriers over shipper and. cargo interests by setting out certain duties and responsibilities of carriers that cannot be avoided even by express contractual provision.” Polo Ralph Lauren, L.P. v. Tropical Shipping & Const. Co., Ltd., 215 F.3d 1217, 1220 (11th Cir.2000) (quoting Thomas J. Schoenbaum, Admiralty and Maritime Law § 8–15, at 537 (2d ed.1994)). In light of this purpose, courts in this Circuit have held that where COGSA applies to an action, it provides the exclusive remedy and completely preempts state law causes of action. Id.; see also Eurosistemas, S.A. v. Antillean Marine Shipping, Inc., No. 11–21546–CIV, 2011 WL 3878357, at *2 (S.D.Fla. Sept. 1, 2011).

By default, COGSA applies only from the time cargo is loaded onto a carrier's vessel until it is discharged. See COGSA §§ 1(e), 2–3, 46 U.S.C. § 30701; Crowley Am. Transp., Inc. v. Richard Sewing Mach. Co., 172 F.3d 781, 785 n. 6 (11th Cir.1999) (“[COGSA] governs a carrier's duty from the time of loading to the time of discharge....”); Eurosistemas, 2011 WL 3878357, at *2. However, the parties may agree in the bill of lading to extend the applicability of COGSA to the pre-loading and post-discharge period. COGSA § 7, 46 U.S.C. § 30701 (“Nothing contained in this chapter ... shall prevent a carrier or a shipper from entering into any agreement ... as to the responsibility and liability of the carrier for the loss or damage to or in connection with the custody and care and handling of the goods prior to the loading on and subsequent to the discharge from the ship....”); Eurosistemas, 2011 WL 3878357, at *2;Neutax, S.A. v. Global Freight Servs., Inc., No. 02–21943–CIV, 2002 WL 31962180, at *1 (S.D.Fla. Oct. 25, 2002) (denying remand and finding COGSA applicable where bill of lading extended applicability to pre-loading and post-discharge periods).

The prima facie evidence of a contract governed by COGSA is the bill of lading. COGSA § 4, 46 U.S.C. § 30701. In this case, it is undisputed that no bill of lading was issued. Notice of Removal 4 ¶ 5, ECF No. 1. The parties agree that this fact is not necessarily dispositive, and that in some circumstances a bill of lading that would have been issued, such as a standard bill of lading, may still bind the parties. See, e.g., Baker Oil Tools v. Delta Steamship Lines, Inc., 562 F.2d 938, 940 & n. 3 (5th Cir.1977) (applying standard bill of lading terms to relationship where bill of lading was to issue upon loading of cargo on defendant's vessel and cargo was in defendant's custody when lost); see also Interflow (Tank Container Sys.) Ltd. v. Burlington N. Santa Fe Ry. Co., No. Civ. A. H–04–2871, 2005 WL 3234360, at *5–6 (S.D.Tex. Nov. 29, 2005) (following Baker Oil and applying terms of standard, unissued bill of lading where cargo came into shipper's custody before damage occurred).

SeaTruck's standard bill of lading, attached to the Motion to Remand as Exhibit A, contains a “Clause Paramount” regarding the application of COGSA in relation to the parties' relationship. This clause provides, in relevant part:

CLAUSE PARAMOUNT The receipt, carriage, and delivery of the Goods are governed by the provisions of the transportation agreement evidence hereby and incorporated by this reference including ... the provisions of [COGSA].... Such Act and Rules shall be extended to apply to Goods moved on deck ... before the Goods are loaded on and after they are discharged from the Vessel, and throughout the entire time during which the Carrier is responsible for the Goods under the transportation agreement to the extent required by United States law.... [T]his bill of lading and said COGSA or Hague Rules shall govern the relationships between the Shipper, Consignee and every person...