Va. Int'l Terminals v. Va. Elec. & Power Co.
| Decision Date | 22 May 2014 |
| Docket Number | Civil Case No. 4:13–CV–118. |
| Citation | 21 F.Supp.3d 599 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | VIRGINIA INTERNATIONAL TERMINALS, Plaintiff, v. VIRGINIA ELECTRIC AND POWER COMPANY, et al., Defendants. |
Thomas S. Berkley, Dustin M. Paul, John M. Ryan, Vandeventer Black LLP, Norfolk, VA, for Plaintiff: Virginia International Terminals.
Kenneth Abrams, Richard J. Cromwell, McGuire Woods LLP, Richmond, VA, Rebecca L. Dannenberg, Robert G. Rothstein, Franklin & Prokopik PC, Herndon, VA, Joshua M. Hoffman, Cunningham & Associates, Arlington, VA, for Defendants: Virginia Electric and Power Company, et al.
This matter is before the Court on Defendant Virginia Power and Electric Company, d/b/a Dominion Virginia Power's (“Dominion” or “Defendant”) Motion to Dismiss for lack of subject matter jurisdiction (“Motion”), Doc. 17, pursuant to Federal Rule of Civil Procedure 12(b)(1). On March 24, 2014, the Court held a hearing on the instant Motion. Doc. 27. After careful consideration of the parties' briefs and hearing oral argument, the Court FOUND that it lacked subjected matter jurisdiction, GRANTED Defendant's Motion, and now sets forth its reasoning below.
In the Amended Complaint, Virginia International Terminals, Inc. (“VIT” or “Plaintiff”) alleges the following facts: Plaintiff is a nonprofit and non-stock Virginia Corporation, and is an independent contractor that operates marine terminals in Hampton Roads for the benefit of the Virginia Port Authority, a political subdivision of the Commonwealth of Virginia. Doc. 16, ¶ 1. Defendant Dominion is a Virginia Corporation that provides electricity to Virginia customers. Defendant Lockwood Brothers, Inc. (“Lockwood” or collectively “Defendants”) is also a Virginia Corporation, and is a common freight carrier.
The instant cause of action arose from events that took place on March 10, 2012, when Dominion's gas turbine rotor (the “Rotor”) was damaged during the unloading process at the Newport News Marine Terminal (“Terminal”). Doc. 16, ¶ ¶ 24–25. Dominion contracted and entered into an agency relationship with Lockwood to transport, unload, and store the Rotor at Dominion's request. Doc. 16, ¶ 23. Unfortunately, during the unloading process at the Terminal, the Rotor was damaged when the VIT dockside crane's spreader bar and hook made contact with it. Doc. 16, ¶ 24.
Defendants believe VIT is liable for the damage to the Rotor, as they claim that the accident was caused by VIT's negligence in operating the crane. Doc. 16, ¶ 26. Plaintiff, however, alleges that prior to the accident, VIT made its Schedule of Rates (“Rates”) available via its website to Defendants, and that absent an express, actual contractual agreement between VIT, Dominion, and Lockwood, the Rates formed the basis of the contractual relationship between the parties. Doc. 16, ¶ 20.
VIT emphasizes the fact that the Rates specifically state that VIT “assumes no liability for loss or damage to equipment, freight, or cargo handled or transshipped through VIT,” Doc. 16, ¶¶ 15–17. The Rates further state that “in no case shall VIT be liable for a sum in excess of $500.00 per package or non-packaged objects unless the shipper, ... prior to the commencement of such services or use of such facilities, declares a higher value and pays to VIT, ... [beyond the service charges] a premium computed at one percent (1%) of the declared value of ... [the]non-packaged object.” (emphasis added) Id. Following the accident, VIT offered Defendants the sum of $500.00 as recompense for the damage to the Rotor, but Defendants maintain VIT is liable for the full amount of the damage.2 Accordingly, Plaintiff filed this action preemptively seeking a declaratory judgment from the Court that 1) the parties' relationship on March 10, 2012 was subject to VIT's Schedule of Rates; 2) that the limitation of liability provision in VIT's Schedule of Rates is valid and applicable to the March 10, 2012 Rotor accident; and that 3) the indemnity provision in VIT's Schedule of Rates is valid, and that no other non-contractual indemnity exists between the parties. Doc. 16 at 8.
Plaintiff filed the Complaint in this action on June 28, 2013. Doc. 1. By consent of all parties, the time for filing responsive pleadings was extended to September 18, 2013, on which Defendant Dominion filed a motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim for which relief can be granted, Doc. 11, and Defendant Lockwood filed a motion to dismiss for failure to state a claim, Doc. 13. Plaintiff mooted Defendants' motions by filing an Amended Complaint on October 2, 2013. Doc. 16. Dominion then filed the instant Motion, Docs. 17, to which Plaintiff responded in opposition on October 23, 2013, Doc. 21, and Dominion replied on October 29, 2013. Doc. 22. On November 6, 2013, Dominion filed a request for a hearing on its Motion, Doc. 23, and Lockwood filed a mirroring request on the following day, Doc. 24.
In addition to the instance case, these same parties are also presently parties to a matter pending before the Chesterfield County (VA) Circuit Court, docketed as Case No. CL 13–2110. In that state court proceeding, filed July 29, 2013, Dominion, as Plaintiff, seeks recovery for damages against both Lockwood and VIT in eight counts based upon theories of breach of contract, negligence, bailment, and express indemnity; Dominion further seeks attorney fees pursuant to an alleged contractual provision. Doc. 20 at 2.
Federal district courts are courts of limited subject matter jurisdiction. United States ex rel. Vuyyuru v. Jadhav, 555 F.3d 337, 347 (4th Cir.2009) (citing Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005) ). They may exercise “only the jurisdiction authorized them by the United States Constitution and by federal statute.” Id. (citing Bowles v. Russell, 551 U.S. 205, 127 S.Ct. 2360, 168 L.Ed.2d 96 (2007) ). Accordingly, this Court must determine first whether it has jurisdiction over the claims at issue. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94–95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (quoting Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed. 462 (1884) ) (“The requirement that jurisdiction be established as a threshold matter ‘spring[s] from the nature and limits of the judicial power of the United States' and is ‘inflexible and without exception.’ ”). “The objection that a federal court lacks subject-matter jurisdiction ... may be raised by a party, or by a court on its own initiative, at any stage in the litigation....” Arbaugh v. Y & H Corp., 546 U.S. 500, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006) (citing Fed.R.Civ.P. 12(b)(1) ). A court must “presume ... that a case lies outside its limited jurisdiction unless and until jurisdiction has been shown to be proper.” United States v. Poole, 531 F.3d 263, 274 (4th Cir.2008) (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) ) (emphasis in original).
“On a motion to dismiss pursuant to Rule 12(b)(1), the party asserting jurisdiction has the burden of proving subject matter jurisdiction.” Richmond, Fredericksburg & Potomac R.R. v. United States, 945 F.2d 765, 768 (4th Cir.1991). Having filed the instant action—thereby seeking to invoke the jurisdiction of the Court—Plaintiff bears the burden of proving that this Court has subject matter jurisdiction. Id. When a defendant attacks “the sufficiency of the complaint, the court must accept all of the complaints factual allegations as true,” similar to an evaluation pursuant to Rule 12(b)(6). Allen v. Coll. of William & Mary, 245 F.Supp.2d 777, 782–83 (E.D.Va.2003). “Because subject-matter jurisdiction focuses on the court's power to hear the claim, however, the court must give the plaintiff's factual allegations closer scrutiny when resolving a Rule 12(b)(1) motion....” Jin v. Ministry of State Sec., 475 F.Supp.2d 54, 60 (D.D.C.2007). Subject-matter jurisdiction can never be waived. Arbaugh, 546 U.S. 500, 126 S.Ct. 1235 (2006) ; see also Fed.R.Civ.P. 12(h)(3).
Plaintiff asserts that this Court has subject matter jurisdiction as a federal question, pursuant to 28 U.S.C. § 1331, and as a case “arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies ...,” pursuant to 28 U.S.C. § 1337. Doc. 21. Though what is required to prove the existence of a contract is a matter of state law, see Sunrise Continuing Care, LLC v. Wright, 277 Va. 148, 154, 671 S.E.2d 132 (2009) (), VIT argues that marine terminals operators, like itself, are subject to a tightly-controlled regulatory scheme imposed by the federal government through the Shipping Act of 1984 and the Ocean Shipping Reform Act of 1998 (“Shipping Acts”). These are statutes subject to 28 U.S.C. § 1337 ; therefore, according to VIT, the terms of the contract between itself and Lockwood, (and Dominion), are controlled by federal law. Doc. 21 at 5.
First and in support of its argument that there is an over-arching federal regulatory scheme that gives this Court jurisdiction, VIT asserts that it is a “Marine Terminal Operator” as defined in 46 U.S.C. § 40102(14), and as such, is required to publish a Schedule of Rates, 46 C.F.R. § 525.3(a).3 VIT also claims that pursuant to federal regulation, its Rates are enforceable “as an implied contract between the marine terminal operator and the party receiving the services rendered by the marine terminal operator, without proof that such party has actual knowledge of the provisions of the applicable terminal schedule.” See 46 C.F.R. § 525.2(a)(2). Federal Regulations state...
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