Zumba Fitness, LLC v. ABF Logistics, Inc. et al
MEMORANDUM OPINION AND ORDER denying 35 Motion to Strike ; Granting in Part and Deferring in Part 25 Motion for Partial Summary Judgment; finding as moot 28 Motion for Partial Summary Judgment; denying 31 Motion for Partial Summary Judgment. See order for specifics. Signed by Honorable Timothy L. Brooks on August 30, 2016. (src)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FORT SMITH DIVISION
ZUMBA FITNESS, LLC
CASE NO. 2:15-cv-02151
ABF LOGISTICS, INC., d/b/a
ABF MULTIMODAL, INC., and
QUICK COOL TRANSPORT, LLC
ABF LOGISTICS, INC., d/b/a
ABF MULTIMODAL, INC
QUICK COOL TRANSPORT, LLC
MEMORANDUM OPINION AND ORDER
Now pending before the Court are cross-Motions for Partial Summary Judgment
filed by Defendant ABF Logistics, Inc. ("ABF Logistics") (Doc.
Fitness, LLC ("Zumba") (Doc.
25), and Plaintiff Zumba
31 ), and a Motion to Strike filed by Zumba (Doc. 35). The
motions have been fully briefed and are ripe for decision. For the reasons stated herein,
Zumba's Motion to Strike (Doc.
Summary Judgment (Doc.
35) is DENIED. ABF Logistics' Motion for Partial
25) is GRANTED IN PART and the Court DEFERS RULING
in part. Zumba's Amended Motion for Partial Summary Judgment (Doc.
31) is DENIED.1
This case involves a shipment of fitness apparel and DVDs that was stolen en
route from Miami to Orlando for a fitness convention and trade show. Zumba is a Florida
LLC with its principal place of business in Hallandale Beach, Florida. It is a widely-
In addition, Zumba's original Motion for Partial Summary Judgment (Doc. 28) is
known global lifestyle and fitness brand that provides products and services-most
notably its dance fitness program-to customers worldwide. ABF Logistics is an
Arkansas corporation with its principal place of business in Fort Smith, Arkansas. It is a
wholly owned subsidiary of ABF Logistics II, Inc., which in turn is a wholly owned
subsidiary of ArcBest Corporation. ArcBest also has a wholly owned subsidiary called
ABF Freight Services, Inc. According to its website, ABF Logistics "provides third-party
logistics services including brokerage, intermodal, ocean transport, transportation
management, warehousing and household moving." (Doc.
27-2, p. 27). And, when
"shipments do not fit on ABF vans or need special equipment," its d/b/a ABF
Multimodal, Inc., "offers alternative options from a network of reliable carriers." Id. at
Quick Cool Transport, LLC ("Quick Cool") defaulted in this case, but is apparently a
Florida LLC with its principal place of business in Hialeah, Florida.
In June of
2014, Zumba sought to transport certain goods from Miami, Florida to
Orlando, Florida for a fitness convention at the Orlando Convention Center. Working
with Ozburn-Hessey Logistics, LLC ("OHL")-a company it uses for warehousing and
related services-Zumba engaged ABF Logistics to arrange the transportation of five
freight trailers from Miami to Orlando. ABF Logistics then engaged Oliva Delivery Corp.
("Oliva") and Gemcap Trucking to effect the transportation of the goods. The goods
It is somewhat unclear to the Court whether the shipment included five or six trailers.
The Complaint alleged five, (Doc.
23, � 16), and one email from Heidy Hernandez of
OHL lists five pickup times for the trailers. (Doc. 27). However, another email from
Hernandez lists six pickup times, id., and ABF's Statement of Undisputed Facts
vacillates between listing "five" and "six" as the correct number of trailers. (Doc. 27, ��
12-15). Whether there were five or six trailers involved is ultimately unimportant to the
Court's decision, but the Court will continue to use the figure "five" to avoid confusion.
were to be picked up on August 8, 2014 at OHL's Miami warehouse, and transported to
Orlando in time for August 11, 2014.
On August 7, 2014, a representative from Oliva informed ABF Logistics that it
could not provide a truck for one of the five shipments. David Moore of ABF Logistics
then contacted Quick Cool to see if it could take Oliva's place in transporting one of the
corresponding with Bill of Lading 426306509 ("BOL 509"). Quick Cool's driver, however,
ended up with Bill of Lading 426306506 ("BOL 506"). Both BOLs are signed by Alfredo
Munoz, an employee of a company called lnfoSonic, Inc. that was located at OHL's
Miami warehouse at the time. Both BOLs also identify Oliva as the carrier.
The shipment transported by Quick Cool never made it to Orlando. Instead, the
driver of the truck parked in a BJ's Wholesale parking lot, and the truck was stolen. It
was later found unlocked and unsecured, with all of its contents removed. On October
17, 2014, Zumba filed a claim with ABF Logistics, indicating a $464,874.94 loss. In a
letter dated October 23, 2014, an employee of ABF Freight named Christopher A.
Boatright denied Zumba's claim, relying on a $5.00 per pound or $100,000 per trailer
limitation of liability provision found in the bill of lading.
Zumba then filed a Complaint (Doc. 1) in this Court on August 3, 2015, seeking a
declaration of its rights under the bill of lading, and alleging breach of contract against
ABF Logistics and Quick Cool. It later filed an Amended Complaint (Doc. 23) adding a
negligence claim against both Defendants. ABF Logistics answered both (Docs. 8, 24),
To clarify why an employee of ABF Freight, and not ABF Logistics, was handling
Zumba's claim, the bottom of the letter states that "ABF Freight is a cargo claim
processing agent for ABF Multimodal, Inc. and merely manages all claims in relation to
cargo loss and damage for Multimodal Customers." (Doc. 27-7).
generally denying the claims against it and filing a cross claim against Quick Cool. The
Court held a Case Management Hearing with the parties on December 21, 2015.
Therein, the Court noted a "fundamental disagreement as to whether, how and to what
extent this dispute is governed by the 'Carmack Amendment' [49 U.S.C. § 14706]."
(Doc. 19, p. 2) (Interim Case Management Order). The parties agreed that "the scope
and expense of the litigation can be best managed by focusing on this 'threshold issue,'
prior to engaging in full merits and damages discovery." Id. Accordingly, the Court set
interim deadlines for discovery and dispositive motions related to the threshold issue of
whether, how, and to what extent the Carmack Amendment applies in this case.
Pursuant to those deadlines, ABF Logistics filed its Motion for Partial Summary
Judgment (Doc. 25) on July 6, 2016. Exhibit C to the Statement of Facts filed
contemporaneously with that Motion is an affidavit of Alfredo Munoz, (Doc. 27-3), which
Zumba has moved to strike (Doc. 35). Zumba filed its Motion for Partial Summary
Judgment on July 6, 2016 (Doc. 28), and filed an Amended Motion for Partial Summary
Judgment (Doc. 31) a day later. All three motions are ripe for decision.
SUMMARY JUDGMENT LEGAL STANDARD
A party moving for summary judgment must establish both the absence of a
genuine dispute of material fact and its entitlement to judgment as a matter of law. See
Fed. R. Civ. P. 56; Matsushita Elec. Indus. Co.
Zenith Radio Corp., 475 U.S. 574,
586-87 (1986); Nat'/ Bank of Commerce of El Dorado, Ark.
Dow Chem. Co., 165 F.3d
602 (8th Cir. 1999). The same standard applies where, as here, the parties have filed
cross-motions for summary judgment. When there exists no genuine issue as to any
material fact, "summary judgment is a useful tool whereby needless trials may be
avoided, and it should not be withheld in an appropriate case." United States
581 F.2d 698, 703 (8th Cir. 1978). Each motion should be reviewed in its own right,
however, with each side "entitled to the benefit of all inferences favorable to them which
might reasonably be drawn from the record." Wermager
F.2d 1211, 1214 (8th Cir. 1983); see also Canada
Cormorant Twp. Bd., 716
Union E/ec. Co., 135 F.3d 1211,
1212-13 (8th Cir. 1998). In order for there to be a genuine issue of material fact, the
non-moving party must produce evidence "such that a reasonable jury could return a
verdict for the nonmoving party." Allison
Cir. 1994) (quoting Anderson
Flexway Trucking, Inc., 28 F.3d 64, 66 (8th
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
Zumba's Motion to Strike
Zumba asks the Court to strike the affidavit of Alfredo Munoz, which is attached
to ABF Logistics' Statement of Facts. (Doc. 27-3). It asserts two bases for striking the
affidavit. First, Zumba contends that ABF Logistics failed to disclose Munoz as a
potential witness in its Rule 26 disclosures. Alternatively, Zumba suggests that Munoz'
affidavit is internally inconsistent with ABF's Statement of Facts and the positions it has
taken in this matter, and must be stricken for those substantive reasons. ABF Logistics
admits that it did not specifically identify Munoz in its Rule 26 disclosures, but counters
that the following statement from its disclosures satisfies Rule 26: "In addition to the
foregoing [list of potential witnesses], ABF reserves the right to use as witnesses any
persons . . . identified as persons with knowledge or potential witnesses by any party in
discovery." (Docs. 38, pp. 4-5; 35-1, p. 3; 35-1, p. 7). In OHL employee Cari Cassia's
deposition, that argument continues, she identified Munoz as the signee of the bill(s) of
lading at issue in this case,bringing him within the scope of the aforementioned clause.
Alternatively,ABF Logistics submits that any failure to disclose Munoz was substantially
justified and was harmless, and that there are no substantive issues with his affidavit
that would warrant striking it.
Federal Rule of Civil Procedure 26(a)(1 )(A)(i),"Initial Disclosures," provides that
a party must disclose "the name and, if known, the address and telephone number of
each individual likely to have discoverable information-along with the subjects of that
information-that the disclosing party may use to support its claims or defenses,unless
the use would be solely for impeachment." Rule 26(e) then provides that "[a] party who
has made a disclosure under Rule 26(a) ... must supplement or correct its disclosure
or response . . . if the party learns that in some material respect the disclosure or
response is incomplete or incorrect, and if the additional or corrective information has
not otherwise been made known to the other parties during the discovery process or in
writing." Finally,under Rule 37(c)(1 ) "[i]f a party fails to provide information or identify a
witness as required by Rule 26(a) or (e),the party is not allowed to use that information
or witness to supply evidence on a motion . . . unless the failure was substantially
justified or is harmless."
To be sure, best practice would have been for ABF Logistics' counsel to
supplement his initial disclosures to specifically identify Munoz. Nonetheless, ABF
Logistics' actions were consistent with Rule 26. Under Rule 26(e), a party must
supplement or correct its initial disclosures only "if the additional or corrective
information has not otherwise been made known to the other parties during the
discovery process or in writing." Ironically, a case provided to the Court by Zumba
illustrates how Rule 26(e) applies favorably to ABF Logistics in the instant case. In
Logan's Roadhouse, Inc., 2014 WL 6871196 (S.D. Miss. Dec. 3, 2014), the
court declined to strike an affidavit because the moving party "knew [the witness's]
identity and his alleged role in the events leading to this lawsuit throughout the entire
discovery period." Id. at 1. While the non-moving party in Green did more to notify his
opponent of the witness, the principle carries to the instant case. Cari Cassio was the
first witness deposed by the parties, see Doc. 30-3, p. 8, and she discussed Munoz'
involvement in the case at length, id. pp. 6-7. Moreover, Munoz signed the bill(s) of
lading at issue in this case. (Docs. 27-1, p. 4; 30-4, p. 4). It would stretch credulity to
assume that Zumba's counsel was unaware of Munoz' identity and his role in the events
leading to this lawsuit.
But even if ABF Logistics' counsel's failure to supplement its initial disclosures
violated Rule 26, that failure was substantially justified and harmless. In evaluating a
failure to disclose, courts should consider "the reason for noncompliance, the surprise
and prejudice to the opposing party, the extent to which allowing the information or
testimony would disrupt the order and efficiency of the trial, and the importance of the
information or testimony." Wegener
Johnson, 527 F.3d 687, 692 (8th Cir. 2008); see
Med. Labs. of E. Iowa, Inc., 880 F. Supp. 2d 946, 956 (N.D. Iowa 2012)
(applying the Wegener factors and finding that a failure to disclose was substantially
justified and harmless).
The Court's analysis focuses on the first two Wegener factors. As to the reason
for noncompliance, ABF Logistics' counsel "believed Mr. Munoz has been disclosed by
Zumba's witness in discovery and that no further disclosure of Mr. Munoz was
necessary." (Doc. 38, p. 4). This was certainly a reasonable assumption for counsel to
draw, and it serves as a factor against striking the affidavit. Next, as discussed above,
there is no surprise or prejudice to Zumba. Munoz was identified early on in the
discovery process, and Zumba was well aware of his role in the events leading up to the
case. Far from coming out of left field, Munoz is a witness positioned squarely within the
infield diamond. Moreover, including Munoz' affidavit as an exhibit to ABF Logistics'
Motion does not prejudice Zumba because all of the material information contained in
the affidavit is also found in Cossio's uncontroverted deposition testimony. Indeed,
given Cossio's deposition, Munoz' affidavit has no effect on the outcome of the parties'
cross-Motions for Partial Summary Judgment.
Finally, Munoz' affidavit is not "internally inconsistent with ABF's Statement of
Facts and the positions it has taken in this matter." (Doc. 35, p. 3). Zumba offers two
examples that supposedly show an internal inconsistency. The first is that ABF
Logistics' Statement of Facts claims "the driver was given [BOL 506] by Alfredo Munoz,"
(Doc. 27, 1f 17 (citing to Munoz' affidavit)), yet "nowhere in the Affidavit does Mr. Munoz
state that he was the one who gave the driver the Bill of Lading." (Doc. 35, 1J 10). This
minor discrepancy between the exact phraseology of Munoz' affidavit and
Logistics' Statement of Facts does not create an internal inconsistency anywhere near
sufficient to warrant striking the affidavit: The exact manner in which the bill(s) of lading
changed hands from Munoz to the drivers is simply unimportant to the Court's
adjudication of the instant Motions for Partial Summary Judgment.
Zumba's second example similarly does not evince an internal inconsistency. It
argues that because Munoz-who signed the relevant bill(s) of lading-identifies
himself as neither an employee of Zumba or OHL, his affidavit is inconsistent with ABF
Logistics' argument that Zumba is bound by the bill(s) of lading. This is certainly a legal
argument that Zumba has made, but Zumba's disagreement with ABF Logistics about
the legal consequences of Munoz' involvement does nothing to render his affidavit
inconsistent with ABF Logistics' position. To the contrary, as the Court will discuss
below, that position is quite consistent.
In sum, Zumba's Motion to Strike (Doc. 35) is DENIED. ABF Logistics did not
violate Rule 26, and even if it did, its failure to disclose was substantially justified and
harmless. Munoz' affidavit also is not internally inconsistent with any of ABF's positions.
Finally, the Court notes that the inclusion of Munoz' affidavit in these proceedings does
not affect the Court's adjudication of the parties' Motions for Partial Summary Judgment.
Applicability of the Carmack Amendment to ABF Logistics
Having disposed of Zumba's Motion to Strike, the Court turns its attention to the
parties' cross-Motions for Partial Summary Judgment. As noted above, the parties have
a fundamental disagreement about the applicability of the Carmack Amendment to this
case. This disagreement manifests itself in two forms. First, the parties disagree on
whether the Carmack Amendment is at all applicable to Zumba's claims against ABF
Logistics. Second, assuming it is applicable, the parties disagree on whether a limitation
of liability provision included in the relevant pricing schedule and bill(s) of lading
complies with the Carmack Amendment. The Court finds that the Carmack Amendment
does not apply to Zumba's claims against ABF, so it does not reach the second part of
the parties' dispute.
Carmack Amendment Legal Principles
The Carmack Amendment provides, in relevant part, that "[a] carrier providing
transportation or service ...shall issue a receipt or bill of lading for property it receives
for transportation ....That carrier and any other carrier that delivers the property and is
providing transportation or service ...are liable to the person entitled to recover under
the receipt or bill of lading." 49 U.S.C. § 14706(a)(1). "The purpose of the
Amendment was to relieve shippers of the burden of searching out a particular negligent
carrier from among the often numerous carriers handling an interstate shipment of
Thompson, 339 U.S.113, 119 (1950).A carrier may, however, limit its
liability under certain circumstances by establishing
rates for the transportation of property ... under which the liability of the
carrier for such property is limited to a value established by written or
electronic declaration of the shipper or by written agreement between the
carrier and shipper if that value would be reasonable under the
circumstances surrounding the transportation.
49 U.S.C.§ 14706(c)(1)(A).
Crucially, it is well established that the Carmack Amendment applies to carriers
and freight forwarders, not brokers.E.g., Chemsource, Inc.
Hub Group, Inc., 106 F.
1358, 1361 (7 th Cir. 1997) ("The Carmack Amendment . . . imposes liabi lity . . . on
'carriers' and 'freight forwarders."'); Hewlett-Packard Co.
Inc., 373 F. Supp.2d 1349, 1352
Brother's Trucking Enters.,
(S.D. Fla.2005) ("The Carmack Amendment governs
carriers, not brokers."); Lumbermens Mut. Gas. Co.
F. Supp.2d 920, 921
GES Exposition Servs., Inc., 303
(N.D. Ill. 2003) ("[T]he question is whether GES was a broker (in
which case it is not liable under the amendment) or a carrier or freight forwarder (in
which case it is liable).").The Carmack Amendment defines "Broker " as "a person, other
than a motor carrier or an employee or agent of a motor carrier, that as a principal or
advertisement, or otherwise as selling, providing, or arranging for, transportation by
motor carrier for compensation."
49 U.S.C. § 13102(2). The term "Carrier" means "a
motor carrier, a water carrier, and a freight forwarder." Id. at
13102(3). "Motor Carrier,"
in turn, is defined as "a person providing motor vehicle transportation for compensation."
13102(14). And, a "Freight Forwarder" is
a person holding itself out to the general public . . . to provide
transportation of property for compensation and in the ordinary course of
(A) assembles and
consolidating, shipments and performs or provides for break-bulk and
distribution operations of the shipments;
(8) assumes responsibility for the transportation from the place of receipt
to the place of destination; and
(C) uses for any part of the transportation a carrier subject to jurisdiction
under this subtitle.
13102(8). A pertinent federal regulation adds (and simplifies):
Broker means a person who, for compensation, arranges, or offers to
arrange, the transportation of property by an authorized motor carrier.
Motor carriers, or persons who are employees or bona fide agents of
carriers, are not brokers within the meaning of this section when they
arrange or offer to arrange the transportation of shipments which they are
authorized to transport and which they have accepted and legally bound
themselves to transport.
49 C.F.R. § 371.2.
The question facing this Court, then, is whether ABF Logistics was a broker or a
carrier or freight forwarder. "The difference between a carrier and a broker is often
blurry." CGU Intern. Inc., PLC
Keystone Lines Corp.,
2004 WL 1047982, at *2 (N.D.
Cal. May 5, 2004). Relying on 49 C.F.R. § 371.2, some courts have described the
"crucial distinction" between the two as "whether the party legally binds itself to
transport." ASARCO LLC v. England Logistics Inc., 71 F. Supp. 3d 990, 995 (D. Ariz.
2014). That is, "if the defendant accepted responsibility for ensuring delivery of the
goods, regardless of who actually transported them, then the defendant qualifies as a
carrier." Id. (alterations omitted) (quoting CGU, 2004 WL 1047982, at *2). On the other
hand, if "the defendant merely agreed to locate and hire a third party to transport the
shipment, then it was acting as a broker." Id. (alterations omitted). This inquiry generally
rests on "how [the company] holds itself out to the world and its relationship to the
shipper." Lumbermens, 303 F. Supp. 2d at 922; ASARCO, 71 F. Supp. 3d at 995
("Whether a company is a broker or a carrier is not determined by what the company
labels itself, but by how it represents itself to the world and its relationship to the
shipper." (quoting Hewlett Packard, 373 F. Supp. 2d at 1352));
Travelers Ins. v.
Panalpina Inc., 2010 WL 3894105, at *5 (N.D. Ill. Sept. 30, 2010) (stating that the
"carrier" or "broker" analysis "focuses on the nature of the relationship between [the
parties], not the label put on [the carrier's or broker's] services").4
4 The Court notes some disagreement in the case law about whether the relevant
inquiry is how the party "held itself out" to the world generally, or to the shipper
specifically. Compare Lumbermans, 303 F. Supp. 2d at 922, with Active Media Servs.,
Inc. v. GAG Am. Cargo Corp., 2012 WL 4462031, at *3 (S.D.N.Y. Sept. 26, 2012)
(declaring that "entities that hold themselves out to be carriers may be subject to carrier
liability, but only if they hold themselves out as carriers in the specific transaction at
issue" (emphasis in original)). This is a dispute the Court need not resolve, as either
way, ABF Logistics did not hold itself out as a carrier.
The Relationship Between Zumba and ABF Logistics: Documents and
The first step in the Court's analysis will be examining the relationship between
Zumba and ABF Logistics. Of tremendous consequence to the Court's disposition are
the voluminous references in documents and communications between the parties
describing ABF Logistics as a broker, and distinguishing it from carriers. Cf. CGU, 2004
WL 104798 2 at *2 (finding party to be a broker in part because the relevant contract
identified it as "the broker" and another party as "the carrier"); Paul Arpin Van Lines, Inc.
v. Universal Transp. Servs., Inc., 988 F.2d
29 2 (1st Cir. 1993) (distinguishing
between a "broker" and a "household goods agent" based on the language of the
relevant contract).For example, both BOL 506 and 509 identify "Oliva Delivery Corp" as
the "carrier. (Docs. 27-1, p.4; 30-4, p. 4).Both state that "for payment, carriers should
bill" ABF Multimodal. Id. Both detail ABF Multimodal's cargo liability limitation, and then
state "Carrier's cargo liability shall be as set forth" in a separate document. Id. Perhaps
most importantly, both BOLs contain the following provision:
ABF Multimodal, Inc. ("ABF Multimodal") performs transportation services
under this bill of lading as a licensed Property Broker and your agent.
Carrier(s) hired by ABF Multimodal to perform services for you are your
and only a non-agent independent contractor to ABF
Multimodal. Cargo has been received in good order, except as noted ...
which ABF Multimodal agrees to arrange for you to be carried to
destination by carrier(s).
Id. (emphasis added).
The pricing schedule "used by ABF Multimodal for this shipment," Doc. 29, 1J 9
(citing Doc. 27-1, p. 6), contains identical language. (Doc. 27-1, p. 6). The tariff
ABF Multimodal Account Manager Scott Sharpe's affidavit declares that the pricing
schedule attached to his affidavit-"Pricing Schedule#: DPK2 2116 24"-was the pricing
applicable to the transaction-Tariff MM-100-distinguishes ABF Multimodal as a
broker, rather than a carrier, no less than 15 times. E.g., (Doc. 27-1, p. 11) (ABF
Multimodal "is a property broker of transportation services . ..") ; id. ("ABF Multimodal
provides transportation brokerage services . . .") ; id. at 12 (The Bill of Lading "shall
schedule he sent to Zumba "for the shipment at issue in this case." (Doc.27-1,pp. 6).
ABF Logistics states the same in its Statement of Facts. (Doc. 27,1J 9). In its Response
to ABF Logistics' Statement of Facts, Zumba appears to not dispute that DPK2211624
is the relevant pricing schedule, stating: "The pricing schedule has been supplied to the
Court and has the terms provided; however, those terms do not comply with the
Carmack Amendment . ... (Doc. 37, 1J 9 (emphasis added)). However, in the
Statement of Facts accompanying its own Motion for Partial Summary Judgment,
Zumba references a pricing schedule with the number "NT72212124-E," which does not
contain the above-quoted language.
To the extent that this creates an issue of fact about which pricing schedule applies,the
Court finds that it is not an issue of material fact.
Regardless of which pricing schedule
applies, the totality of the documentary evidence, actions of the parties, and manner in
which ABF Logistics (and, more importantly, ABF Multimodal) "held itself out " to Zumba
and the public establishes that no reasonable jury could find ABF Logistics to be a
carrier or freight forwarder under the Carmack Amendment.
Zumba contends that the Court should not consider the tariff because "it was never
provided to Zumba," and although it was "'made available upon request' within the
terms of the pricing schedule," that scheme of "reference to another document is
disallowed by the Carmack Amendment. (Doc. 36, p.4). As to the latter part of
Zumba's argument, its assumption that the Carmack Amendment applies is a classic
example of circular reasoning. The entire purpose of looking to the documents that
define the parties' relationship is to determine whether the Carmack Amendment
applies. As one of the documents that define the parties' relationship, the tariff is of
course probative of whether ABF Logistics was a broker or a carrier.
With respect to Zumba's point that the tariff was never provided to it, the pricing
schedule explicitly states: "By accepting service hereunder, you agree to the terms,
conditions,and pricing contained in the ...MM-100 Series tariff (available upon request
or at abfmultimodal.
com)." (Doc. 27-1, p. 7). BOLs 506 and 509 contained materially
27-1, p. 4; 30-4, p. 4). The Court will not ignore the terms of a
document so clearly incorporated into the parties' agreement simply because Zumba
failed to read it.
See Bryton Dairy Prods., Inc. v. Harborside Refrigerated Servs., Inc.,
Supp. 977, 984 (N. Ill. 1997) (rejecting argument that party "had never been
made aware of 'Terms and Conditions of Service' printed in small type " on invoices,
because its "asserted ignorance [was] no basis for declining to apply " a term of the
govern shipments arranged by ABF Multimodal.") (emphasis added); id. at 14
(Customers may be liable for "any such charges imposed on ABF Multimodal by the
transporting carrier."); id. at 15 ("ABF Multimodal or the carrier shall not be liable . . . . ");
at 16 ("ABF Multimodal may assist the claimant in filing claims with the transporting
carrier. "). Finally, in an email chain leading up to the August 8, 2014 pickup date,
Multimodal Account Manager Scott Sharpe wrote, "[t]he deliveries are also all set with
the carriers, " and
"we will let the carrier know[,] we have two carriers doing all of these
for us, " and "[t]he deliveries are also all set with the carriers." (Doc. 27-2, pp. 30, 33, 34
In noting the overwhelming number of references to ABF Multimodal as a broker
and other parties as carriers, the Court is cognizant that "[w]hether a company is a
broker or a carrier is not determined by what the company labels itself . . . . "ASARCO,
71 F. Supp. 3d at 995. However, a party's bare assertion that it is a broker rather than a
carrier is highly distinguishable from repeated contractual references to a party's role
and identity in a transaction. Compare Travelers Ins., 2010 WL 3894105, at *6
(discounting company president's testimony that it was a "broker"), with CGU, 2004 WL
1047982, at *2 (relying on references to "broker" and "carrier" in the contract). This is so
because the purpose of the Court's inquiry is to determine the relationship of the
parties. Looking to how the parties were described in the documents that governed their
(and in communications between the parties) has tremendous probative
value towards that end.
The Relationship Between Zumba and ABF Logistics: The Parties' Conduct
The way the parties' relationship is described on paper is not the sole factor in
defining the nature of that relationship. The Court must also look to how the parties
actually conducted themselves throughout the transaction in question. This inquiry only
supports what the aforementioned documents so strongly suggest: ABF Logistics was a
First, ABF Logistics did not supply the trucks or the drivers to transport Zumba's
shipment. This fact alone is not outcome-determinative, as "[o]ne is not precluded from
being a motor carrier by the mere fact that none of its own motor vehicles are used in
the transporting of goods. " Custom Cartage, Inc.
Motorola, Inc., 1999 WL 9655686, at
*8 (N. D. Ill. Oct. 15, 1999). But, it is a factor that when taken together with others
suggests that ABF Logistics was acting as a broker.
Second, ABF Logistics had no role in packing or loading Zumba's goods. See
Lumbermans, 303 F. Supp. 2d at 921 (finding a question of fact as to whether the
defendant was a carrier or broker in part because it "packed and loaded the equipment
onto [the] truck"); Delta Research Corp.
EMS, Inc., 2005 WL 2090890, at *6 (E.D.
Mich. Aug. 29, 2005) (finding a question of fact in part because the alleged carrier
agreed to "load and supply trucking, " and handled the "specialized lifting and loading"
for a piece of equipment). In fact, ABF Logistics "never took physical possession" of the
goods at all. CGU, 2004 WL 1047982, at *2. The trucks were loaded at OHL's Miami
warehouse, entirely by OHL's employees (and Alfredo Munoz). (Doc. 30-3, pp. 6-7)
Third, Zumba and OHL instructed ABF Logistics as to the pickup times at OHL's
Miami warehouse. Heidy Hernandez of OHL emailed Scott Sharpe of ABF Logistics on
August 6, 2014, to tell him that "the appt. times are 10, 11, 12, 1, 2, & 3 pm." (Doc. 27-2,
p. 30); see also id. at 33 (Hernandez instructing Sharpe to "please schedule the truckers
to arrive as follows: 9 am, 10 am, 11 am, 2 pm and 3 pm"). That OHL and Zumba, not
ABF Logistics, controlled the pickup times-along with the pickup location and the
physical packaging and loading-evinces that ABF Logistics had a low degree of control
over the actual transportation of Zumba's goods. See Hewlett-Packard, 373 F. Supp. 2d
at 1352 (considering the measure of control exerted over the transportation process as
a factor in the carrier-or-broker analysis). This, in turn, is evidence that ABF Logistics
did not "accept responsibility for ensuring delivery of the goods," but rather "agreed to
locate and hire a third party to transport the shipment." CGU, 2004 WL 1047982, at *2.
Fourth, Zumba and OHL were well-aware that third-party carriers would be
transporting the goods. This fact was referenced repeatedly in documents and emails,
and would have been known to OHL personnel through their first-hand observations
during the scheduled pickups. Again, while this fact is not wholly dispositive of ABF
Logistics' status, it is relevant to the relationship of the parties, and how ABF Logistics
held itself out to Zumba and OHL. See Delta Research Corp., 2005 WL 2090890, at *6
(shipper's president's testimony that he was unaware "that someone other than [the
alleged carrier] would actually transport [the equipment]" helped create a genuine issue
of material fact).
The Relationship Between Zumba and ABF Logistics: Zumba's
Taken together, the four factors discussed above compliment the written
descriptions of the parties' relationship to show definitively that the nature of their
relationship was one of a broker and a shipper, not a carrier and a shipper. Zumba
offers several arguments to undermine this conclusion, but none achieve their intended
purpose.Two are worth discussing in some detail.
Zumba's main counterargument revolves around ABF Logistics' alleged failure to
disclose Quick Cool as the transporter of the eventually stolen truck. As a result of
Quick Coal's undisclosed status, Zumba argues, Quick Cool must be considered an
agent of ABF Logistics. It then follows that ABF Logistics was an "agent of a motor
carrier," and thus not a broker under the Carmack Amendment.49 U.S.C.§ 13102(2).
This argument fails for two reasons. First, the Court disagrees that Quick Cool
was undisclosed to Zumba. OHL was "extremely busy" on August
2014, when the
trucks arrived to pick up Zumba's shipment. (Doc. 30-3, p. 6) (Cossio
Accordingly, OHL "authorized" Munoz to sign off on the shipments, even though he
wasn't an OHL employee. Id. 7 Munoz, acting as OHL's agent, who was in turn acting as
The key part of Cassia's deposition reads as follows:
Q: ... So is it always the case that when [a bill of lading] says, ["]shipper,
OHL,["] that it would be someone associated with OHL who is signing that
A: Someone that's in the warehouse at that time; that's correct.
Q: Okay. In this case, it just so happened to be someone [Munoz] who
worked for lnfo Sonics?
A: That's in our facility; correct.
Zumba's agent, interacted with Quick Coal's driver and signed off on the shipment that
Quick Cool picked up. Id. at 6-7; (Doc. 27-3) (Munoz Dep.). This included copying "the
person's driver's license," signing bill(s) of lading under the "shipper signature" field,
marking the relevant "seal" and "trailer" numbers, and noting the truck's time of arrival.
(Doc. 27-3). Acting as an agent to OHL, Munoz signed off on Quick Cool picking up
Zumba's goods, despite the bill(s) of lading referring to "Oliva Delivery Corp" as the
carrier, (Docs. 27-1, p. 4; 30-4, p. 4), and despite ABF Multimodal's "Shipper's Loading
Instructions," which state: "Please confirm that this carrier requesting the load is the
carrier named on the bill of lading. If someone other than the named carrier is
requesting this load, please call 877-279-8090 immediately," (Doc. 27-1, p.
Even if, despite OHL's grant of authority to Munoz, Quick Cool could somehow
be considered "undisclosed" as to Zumba, the fact that a carrier's identity may be
undisclosed does not de facto transform a broker into a carrier for purposes of the
Carmack Amendment. See Active Media Servs., 2012 WL 4462031, at *4 ("That AMS
was not told the name of the carrier does not negate the fact that AMS retained AWIS
for a particular purpose."). The cases relied on by Zumba for the opposite proposition
Q: So how does that work? How is he acting on behalf of OHL?
A: Well, we're a small operation and we had lnfoSonics in-house as well
as our team. If we have an overflow of merchandise coming in and out, at
times he would come over and just help, meaning he's not interacting
directly, indirectly with the freight and giving us some support.
Q: In that case, would he be authorized then to deal with the carrier?
A: In that particular case, he was authorized to actually sign off.
Id. at 7.
are readily distinguishable. In
Travelers, 2010 WL 3894105, the court found the
defendant to be a carrier not because it failed to disclose the identity of a third-party
carrier, but because it failed to notify the shipper that it would be using a third-party
carrier at all. Id. at 5 ("Panalpina never knew about the second Delivery Order or
Buckley's role in transporting the containers." (emphasis added)).
Zumba also assigns more weight to Titan Transp., Inc. v. O.K. Foods, Inc., 2013
Ark. App. 33, than it can bear. This is so for two reasons. First, Titan Transportation
involved questions of Arkansas common law,not the Carmack Amendment or any other
provision of federal law. Second, even assuming (without deciding) that Arkansas law
would be the applicable state law to determine whether an agency relationship existed
between ABF Logistics and Quick Cool, Titan Transportation would not support a
positive finding.That case states:
Although it is well established that a broker cannot be held personally
liable to the third party upon a contract for a disclosed principal, and if the
third party knew, or had sufficient knowledge to create an inference, that
the broker was acting for another, then the broker is not liable. [B]ut, if he
does not disclose his principal nor the fact that he is acting as a broker
and deals personally,then he is liable ....
Id. at *2 (first emphasis added, second emphasis in original). In Titan Transportation,
Titan "did not disclose that it was merely a broker," but instead "held itself out to be a
carrier." Id. at 3. The same cannot be said of ABF Logistics. The instant case is also
distinguishable from Titan Transportation because, here, the identity of the carrier did
not remain undisclosed so that the supposed-broker could "maximize its profit on the
transaction." Id. at 4. Rather, the previously identified carrier -Oliva Delivery Corp.informed ABF Logistics the day before it was supposed to pick up the shipment that it
was one truck short. The change in identity of the carrier was made by ABF Logistics at
the last minute, in an attempt to benefit its agent, Zumba, not itself.
Zumba's other counterargument is that a number of responsibilities assumed by
ABF Logistics indicate that it was acting as a carrier. For this, Zumba relies on HewlettPackard and Custom Cartage. Both cases are distinguishable and, more importantly in
this Court's view, stretch the definition of "carrier" too far. For example, Custom Cartage
lists as one factor indicating that a party was a carrier, not a broker, the party's
"discretion to hire whom it chose to ship the goods." 1999 WL 965686, at *8. Of course,
selecting carriers to transport goods for a shipper is exactly what brokers are supposed
to do. Similarly, the Hewlett-Packard Court relied on the defendant's statements that it
could provide value through "consistent and timely transit times with quality carriers"
and that it asked its "teams to run an average of 50mph" as indicia of being a carrier,
not a broker. 373 F. Supp. 2d at 1352. In this Court's view, promising to select prompt,
reliable carriers "might make [a party] a responsible broker, but it does not make it a
carrier." Active Media Servs., 2012 WL 4462031, at *4.
ABF Logistics Did Not "Hold Itself Out" as a Carrier
Having concluded that ABF Logistics was a broker based on the nature of the
relationship between the parties, the Court also believes it appropriate to determine
whether ABF Logistics "[held] itself out to the world" as a carrier. Lumbermens, 303 F.
Supp. 2d at 922. In arguing that it did, Zumba relies on statements from ABF.com. See
Doc. 30-2, p. 2. The website differentiates ABF Freight from ABF Logistics, and then
under the latter's heading states:
ABF Logistics is a sister company to ABF Freight and provides third-party
transportation management, warehousing and household moving. We
have the skill and the will to build and deliver seamless, customized
supply chain solutions powered by advanced technology with access
through a single point of contact.
the website describes the company as offering
"comprehensive end-to-end transportation and logistics solutions to a broad customer
base." Id. Another section of the website states:
ABF Logistics, an ArcBest cornpany and a sister company to ABF Freight,
offers third-party logistics services including brokerage, intermodal, ocean
shipping, transportation management, warehousing and household goods
moving. We cover all your needs in one place with inclusive shipping and
moving services, utilizing ground, air and ocean channels.
Id. at 3. Yet another section of the website, which ABF Logistics includes as an exhibit
to its Motion for Partial Summary Judgment, focuses on the services of ABF Multimodal
In relevant part,
that section states:
is offered in
association with ABF Logistics, an ArcBest company. When shipments do not fit on ABF
vans or need special equipment, ABF Multimodal offers alternative options from a
network of reliable carriers." (Doc.
(emphasis added). The website then lists
three steps a customer can take to obtain ABF Multimodal's services. The second step
is the most relevant: "Submit your quote. By requesting a quote, ABF Multimodal will
seek out the best price and service provider for your shipments." Id. (first emphasis in
original, second emphasis added).
The descriptions of ABF
Logistics' services are entirely unremarkable for
purposes of this lawsuit. The website states that ABF Logistics provides a number of
listed "logistics services" including (most pertinently) brokerage. Neither lists "truck" or
"trailer" or "ground" or "road" carrier services. And, even if the references to "intermodal"
or "ocean transport" could broadly be interpreted as references to carrier-like services,
both are far outside the scope of the services sought by Zumba in this case, which in
this Court's view decreases their relevance. Nor does ABF Logistics' claim of offering
"comprehensive end-to-end transportation and logistics solutions" indicate that it is a
30-2, p. 2). The Court will not lay inference upon inference to find that
advertisements promoting broad and vague categories of services like "transportation"
solutions and "logistics" solutions create questions of material fact about whether ABF
Logistics was a carrier.
More importantly, the bill(s) of lading, pricing schedule, and tariff in this case all
refer specifically to ABF
Multimodal. This makes the section of ABF's website
dedicated to its Multimodal entity the most relevant to determining how the company
"held itself out." That section unambiguously describes ABF Multimodal's services as
being broker-like in nature.
ABF Logistics Was Not a Freight Forwarder
Finally, Zumba contends that even if ABF Logistics was not a carrier under the
Carmack Amendment, it was a freight forwarder.
To prove that a defendant is a Freight
Forwarder, a plaintiff must show each of the following:
[the person held itself] out to the general public ... [as providing]
transportation of property for compensation and in the ordinary course of
consolidating, shipments and performs or provides for break-bulk and
distribution operations of the shipments;
(B) assumes responsibility for the transportation from the place of receipt
to the place of destination; and
In addition, Zumba named ABF Multimodal as a "d/b/a" in this case.
(C) uses for any part of the transportation a carrier subject to jurisdiction
under this subtitle.
49 U.S.C. § 13102(8);
(A) above, the
106 F.3d at 1361.9 "With respect to clause
Court has held that the term 'assembles and consolidates'
means the assembly or consolidation of less than carload quantities into carload
106 F.3d at 1361 (citing
Acme Fast Freight, Inc.,
Chicago, Milwaukee, St. Paul & Pac.
336 U.S.465, 467 (1949)). The Supreme Court has
elaborated upon its understanding of what a freight forwarder does in some detail:
Forwarders utilize common carriers by rail and motor truck to transport
goods owned by others. They solicit and obtain many small shipments,
from various points within an area, and cause them to be carried in less
There are at least three different interpretations of this definition that can be
extrapolated from the case law. Under the broadest interpretation, the phrase "holding
itself out to the general public " modifies the remainder of the definition, such that a
plaintiff need only show that a defendant holds itself out to offer the enumerated
v. United States, 342 F. Supp.1266, 1269
(D.N.J. 1972) ("To qualify as a 'freight forwarder' one need not actually perform all of the
services. See Metro. Shipping Agents of Ill.
functions authorized under [the definition].As long as a party proffers all of the services
...it will qualify as a 'freight forwarder."' (emphasis in original)).Another interpretation
is that the phrase "holding itself out to the general public " modifies only the clause "to
provide transportation of property for compensation," such that a plaintiff must show that
a defendant actually performs the enumerated services. Accord Bryton Dairy Prods.,
991 F. Supp. at 982 ("Whether an entity will be considered a freight forwarder as to a
particular shipment for which it does not perform all the freight forwarder services may
depend on the frequency with which its other brokerage/forwarding work involves
providing all the freight forwarder services.").A more narrow interpretation suggests that
the services must be provided in the actual transaction at issue.See Pac. Austral Party,
lntermodal Exp., Inc.,
1990 WL 141010, at *2 (N.D. Ill. Sept. 26, 1990) ("That
Amendment applicable, since that statute requires both that such services be provided
in the particular instance at issue and that those services have been provided in the
ordinary course of business.").
While the Court believes the second interpretation to be the most consistent with sound
principles of statutory interpretation, it applies the first interpretation in the instant case,
as ABF Logistics cannot be found to be a freight forwarder under even the broadest
understanding of the statute.
than truck-load or carload lots to a concentration center within the area.
There they are assembled by the forwarder for further transportation in
truck-load or carload
Although the forwarder gives owners of
individual small shipments his own contract corresponding in form to
through bills of lading and assumes responsibility for safe through
carriage, the forwarder customarily arranges for the pickup, assembly and
transportation of the shipments by carriers for hire. And the forwarders,
not the owners of the goods, select the carriers and route the shipments.
Upon arrival of a truck-load or carload of the assembled small shipments
at a distribution center, the bulk shipment is broken up, the forwarder
separates and takes possession of the original small shipments and
where necessary, their further carriage to their various final
destinations in the area served by the particular distribution point. In this
final carriage of the small shipment to its ultimate destination,
forwarder again utilizes carriers for hire to move these less than truck-load
or carload lots. Thus, forwarders may use the service of carriers to
assemble shipments of less than truck-load or carload lots at their
concentration center, to transport the assembled truck-load or carloads to
a distribution center and to carry the broken up small shipments beyond
their break-bulk distribution center.
310 U.S. 344, 345-46 (1940)
(emphases added). In plainer terms, a freight forwarder: (i) collects a number of small
shipments from a particular area; (ii) combines them to make one big shipment; (iii)
arranges transportation of the big shipment to a central location; (iv) breaks the big
shipment back down into a number of small shipments; and (v) arranges transportation
for the small shipments to reach their intended destinations.
Zumba has failed to present any evidence that ABF Logistics either operated as
a freight forwarder in this particular case, or generally held itself out to the general
public to be a freight forwarder. First, it cannot be seriously contended that ABF
Logistics acted as a freight forwarder in this case. Applying the first prong of the statute
and the Supreme Court's description thereof, ABF Logistics performed none of the
services customarily performed by a freight forwarder.
It did not arrange for the
consolidation of several small shipments into a large truck-sized shipment; instead,
Zumba's shipment filled five trucks. It did not break a shipment down at a central
location; instead, the shipments were to be transported directly to their final destination.
Second, the only evidence Zumba offers to suggest that ABF Logistics held itself
discussed supra in Section 111(8)(5). None of those statements declare or even suggest
that ABF Logistics provided freight-forwarding services. If anything, they suggest the
opposite. ABF Freight operates a "less-than-truckload" network, and ABF Multimodal
solicits shipments that "do not fit on ABF vans," to broker out to third parties. (Doc.
Thus, while freight forwarders accept small shipments and combine them
into large shipments, ABF Multimodal holds itself out as taking large shipments that
ABF Freight cannot accommodate, and finding third parties that can.
7. Applicability of the Carmack Amendment to ABF Logistics: Summary
To summarize the Court's lengthy analysis, the Carmack Amendment does not
apply to this case because ABF Logistics was a broker-not a shipper or carrier-for
purposes of that statute. Both the relevant documents and the parties' respective
actions show that their relationship was one between a broker and a shipper. And, ABF
Logistics did not "hold itself out" as a carrier. It also did not actually perform the services
of, or hold itself out to be, a freight forwarder. Zumba's arguments to the contrary are
unavailing, and in particular its argument that Quick Cool was an undisclosed third party
is inaccurate given the status of Alfredo Munoz as an agent of OHL's. Finally, even if it
were accurate, it would not change the nature of the parties' relationship for purposes of
the Carmack Amendment.
The Parties' Remaining Arguments
Three pending questions remain unresolved in this case. First, the parties both
contest whether ABF
Logistics effectively limited its liability under the Carmack
Amendment, assuming that Amendment applies. There is no need for the Court to
reach this question, as it has already determined that the Carmack Amendment does
not apply in this case. Second, ABF Logistics argues that, assuming the Carmack
Amendment applies, Zumba's breach of contract and negligence claims are preempted
by it. Again, since the Court has now determined that the Amendment does not apply, it
need not reach this question. Third, ABF Logistics argues that, regardless of the
applicability of the Carmack Amendment, Zumba's negligence claim is preempted by
Given that the focus of the cross-Motions for Partial Summary Judgment was the
applicability of the Carmack Amendment, the third issue is one that was hardly briefed
by the parties. ABF Logistics dedicated only a short paragraph to the issue in its Brief in
Support of Motion for Partial Summary Judgment (Doc. 26, pp. 11-12), and Zumba
included only two paragraphs of analysis in its Response (Doc. 36, pp. 12-13). The
Court's initial review of the case law reveals a split on the question of whether the
ICCTA preempts state negligence actions against brokers. Compare ASARCO LLC
preemption), with Works
71 F. Supp.
Ariz. 2014) (finding
Landstar Ranger, Inc., 2011 WL 9206170
(G.D. Cal. April
13, 2011) (not finding preemption). And, there is apparently no Eighth Circuit precedent
on the matter. Given the Court's ruling that the Carmack Amendment does not apply,
the question of ICCTA preemption is now of central importance to Zumba's case.
Accordingly, the Court will defer ruling on the question at this time, and invite the parties
to submit supplemental briefing, as outlined below.
For the reasons stated herein, Zumba's Motion to Strike (Doc. 35) is DENIED.
ABF Logistics' Motion for Partial Summary Judgment (Doc. 25) is GRANTED IN PART
and the Court DEFERS RULING in part. As to the question of whether the ICCTA
preempts Zumba's negligence claim, the Court invites ABF Logistics to supplement its
Motion (Doc. 25) with a brief not to exceed 10 pages in length. The brief shall be
submitted no later than 30 days from the entry of this Order. Zumba may supplement its
Response (Doc. 36) with a brief not to exceed 10 pages in length, no later than 14 days
after ABF Logistics files its supplement. ABF Logistics may then submit a reply brief not
to exceed 5 pages in length, no later than 7 days after Zumba supplements its
Response Brief. Finally, Zumba's Motion for Partial Summary Judgment (Doc. 28) is
MOOT, and its Amended Motion for Partial Summary Judgment (Doc. 31) is DENIED.
IT IS SO ORDERED on this 30 day of A
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?