Anderson Trucking Svc Inc v. Eagle Underwriting Group, Inc. et al
Filing
60
RULING (see attached). For the reasons set forth in the attached Ruling, Plaintiff's 14 Motion to Dismiss Counterclaims of Defendant Ridgeway International USA, Inc. is hereby DENIED, without prejudice to reassertion upon a more complete recitation of pertinent facts. Signed by Judge Charles S. Haight, Jr. on 1/25/2018. (Kaczmarek, S.)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT
ANDERSON TRUCKING SERVICE, INC.,
Plaintiff,
v.
3:17-cv-000817 (CSH)
EAGLE UNDERWRITING GROUP, INC.,
WOODS HOLE OCEANOGRAPHIC
INSTITUTION, RIDGEWAY
INTERNATIONAL USA, INC.,
AUSTRALIAN NATIONAL MARITIME
MUSEUM,
JANUARY 25, 2018
Defendants.
RULING ON PLAINTIFF'S MOTION TO DISMISS
HAIGHT, Senior District Judge:
Plaintiff Anderson Trucking Service, Inc., ("Plaintiff") brings this action against Defendants
Eagle Underwriting Group, Inc., Woods Hole Oceanographic Institution, Ridgeway International
USA, Inc., and the Australian National Maritime Museum, seeking a declaratory judgment. The
matter involves the interrupted journey of a submarine from Woods Hole, Massachusetts, destined
for Australia. While in transit with the submarine in tow, Plaintiff's vehicle caught fire, resulting in
damage. Plaintiff seeks a declaration that it is not liable for any damage incurred by the submarine,
or, in the event it is found liable for such damage, its liability is limited. Defendant Ridgeway
International USA, Inc. ("Ridgeway") has answered Plaintiff's Complaint, and has asserted
counterclaims against Plaintiff, alleging, inter alia, that is entitled to be indemnified by Plaintiff.
Plaintiff has moved to dismiss Ridgeway's counterclaims. This Ruling resolves that motion.
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1.
Background1
Plaintiff alleges that Ridgeway, a freight forwarder, or a Non-Vessel Operating Common
Carrier ("NVOCC"), was hired by Defendant Woods Hole Oceanographic Institution ("WHOI")
and/or Defendant Australian National Maritime Museum ("ANMM") to arrange for the transport of
a "used submarine" from Woods Hole, Massachusetts to the Commonwealth of Australia. Complaint
for Declaratory Judgment, Doc. 1 ¶ 13. The submarine was to be provided without charge to ANMM
by WHOI. Id. ¶ 14. According to Plaintiff, the transport of the submarine was to be one continuous
movement "on a through, ocean, or combined transport bill of lading or waybill, subject to
Ridgeway's terms of service." Id. ¶ 15-16. Ridgeway notified Plaintiff that the value of the submarine
was five million dollars. Id. ¶ 23. Plaintiff informed Ridgeway that at the quoted price to transport
the submarine, $1600, it would not accept liability for the full value of the vessel. Id. Plaintiff told
Ridgeway that its customers should purchase insurance, and such insurance was indeed purchased
from Defendant Eagle Underwriting Group, Inc. ("Eagle"). Id. ¶ 24-5.
Plaintiff alleges that Ridgeway arranged for the transportation of the submarine. Id. ¶ 20.
With the authority to act as an agent for WHOI and/or ANMM, Ridgeway contracted with Plaintiff,
a motor carrier, to transport the submarine on its first leg of the journey, from Woods Hole to
Baltimore. Id. ¶ 21-22. The submarine was to then travel by ocean carrier from Baltimore, Maryland
to Australia. Id. ¶ 20. On July 23, 2015, according to Plaintiff, Plaintiff and Ridgeway took
possession of the submarine in Woods Hole. Id. ¶ 25. While en route on I-95 in Connecticut,
Plaintiff's trailer caught fire, allegedly damaging the submarine. Id. ¶ 26.
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The facts recounted here are derived from the allegations in Plaintiff's Complaint for
Declaratory Judgment (Doc. 1) and from Ridgeway's Answer and Counterclaims (Doc. 11).
2
On April 1, 2016, Defendants Eagle and WHOI filed a claim with Plaintiff for damage to the
submarine, in the amount of $8,307,101. Id. ¶ 27. "Upon information and belief," Eagle has at least
partially indemnified WHOI and/or ANMM for the loss, "and is fully or partially subrogated to
Woods Hole's and/or ANMM's claim against [Plaintiff] to the extent of this indemnification." Id. ¶
28.
Ridgeway denies most factual allegations in Plaintiff's Complaint, and counter-claims that
any damage to the submarine was caused solely by Plaintiff's fault, neglect, or omission, and thus,
to the extent any liability is imposed on Ridgeway for loss or damage to the cargo, Ridgeway claims
that it is entitled to indemnity from Plaintiff, plus attorney's fees, costs, and interest. Ridgeway's
Answer to Complaint and Counterclaims, Doc. 11 ¶ 31-2.
Ridgeway also claims that shortly following the fire, Ridgeway placed Plaintiff's counsel on
notice of Plaintiff's duty to preserve evidence. Id. ¶ 34. However, when Plaintiff made the trailer
available for inspection several months following the incident, Plaintiff had already destroyed
relevant evidence that Ridgeway had requested to be preserved, including "driver's logs, on-board
computer records, daily inspection reports and other maintenance records." Id. ¶ 34. Further, on
October 19, 2016, during the inspection of the trailer, Plaintiff's employee "prematurely and without
the consent and knowledge of all parties in attendance, backed off the trailer's slack adjustors in
anticipation of removing the brakes." Id. ¶ 35. This caused the length of the stroke to change,
destroying information crucial to assessing the cause of the fire. Id. Such loss of evidence has
prejudiced Ridgeway in its ability to investigate the cause of the incident and has precluded it from
mounting a full and complete defense to Plaintiff's claims, according to Ridgeway's counterclaims.
Id.
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Plaintiff filed the instant motion to dismiss Ridgeway's counterclaims, with an accompanying
memorandum of law in support of the motion ("Pl. Br."). Doc. 15. Ridgeway responded, opposing
the motion ("Def. Br."). Doc. 20. Plaintiff did not file a reply brief.
2.
Standard of Review
"On a motion to dismiss, the issue is 'whether the claimant is entitled to offer evidence to
support the claims.'" Patane v. Clark, 508 F.3d 106, 111 (2d Cir. 2007) (quoting Scheuer v. Rhodes,
416 U.S. 232, 236 (1984)). "To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to 'state a claim that is plausible on its face.'" Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) ("Iqbal") (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)
("Twombly")). This pleading standard creates a "two-pronged approach," Iqbal, 556 U.S. at 679,
based on "[t]wo working principles". Id. at 678.
First, all factual allegations in the complaint must be accepted as true and all reasonable
inferences must be drawn in the favor of the non-moving party. See id.; see also Gorman v.
Consolidated Edison Corp., 488 F.3d 586, 591-92 (2d Cir. 2007) (citation omitted). The presumption
of truth does not extend, however, to "legal conclusions" or "[t]hreadbare recitals of the elements of
a cause of action supported by mere conclusory statements[.]" Iqbal, 556 U.S. at 678. Second, "a
complaint that states a plausible claim for relief" will survive a motion to dismiss and "[d]etermining
whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires
the reviewing court to draw on its judicial experience and common sense." Harris v. Mills, 572 F.3d
66, 72 (2d Cir. 2009) (quoting Iqbal, 556 U.S. at 679) (internal quotation marks omitted). "Dismissal
under Federal Rule of Civil Procedure 12(b)(6) is appropriate when 'it is clear from the face of the
complaint, and matters of which the court may take judicial notice, that the plaintiff's claims are
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barred as a matter of law.'" Associated Fin. Corp. v. Kleckner, 480 F. App'x 89, 90 (2d Cir. 2012)
(quoting Conopco, Inc. v. Roll Int'l, 231 F.3d 82, 86 (2d Cir. 2000)).
These principles apply equally to a motion to dismiss the counterclaims of a defendant. See
Kaltman-Glasel v. Dooley, 156 F. Supp. 2d 225, 225 (D. Conn. 2001) ("In deciding a motion to
dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the Court must accept all allegations of the
counterclaims as true and construe all reasonable inferences in favor of the defendants." (citing
Connell v. Signoracci, 153 F.3d 74, 80 (2d Cir. 1998))). Indeed, "the issue on a motion to dismiss
a counterclaim is not whether the defendant will prevail, but whether defendant is entitled to offer
evidence to support [its] claims." Id. at 226 (citing Sims v. Artuz, 230 F.3d 14, 20 (2d Cir. 2000)).
3.
Discussion
Plaintiff argues that Ridgeway's counterclaims must be dismissed as they are preempted by
the Carmack Amendment, 49 U.S.C. § 14706, et seq., and/or the Carriage of Goods by Sea Act
("COGSA"), 46 U.S.C. § 30701. Specifically, Plaintiff argues that "[b]ecause Ridgeway's claims
against [Plaintiff] seek damages arising from the transportation of freight in international or interstate
commerce, they are governed exclusively" by either COGSA or the Carmack Amendment. Pl. Br.
at 2. "Accordingly, Ridgeway's claims, seeking recovery for negligence and spoliation of evidence,
are preempted and must be dismissed." Id. at 2-3. Ridgeway responds that Plaintiff has misconstrued
the nature of Ridgeway's counterclaims; that the counterclaims sound in indemnity and are
contingent in nature, and are therefore not preempted by the federal law which Plaintiff cites.2 Def.
2
Ridgeway also argues that the Court should dismiss Plaintiff's Complaint, as there is no
'actual controversy' as required by 28 U.S.C. § 2201(a). Ridgeway has since filed a motion to
dismiss, arguing for dismissal of Plaintiff's Complaint on separate grounds. The Court declines to
construe Ridgeway's opposition papers as a motion to dismiss, and will not address Ridgeway's
argument for dismissal here.
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Br. at 1-2. Thus, the sole issue before this Court is whether Defendant's counterclaims are preempted
by federal law.3
The Carmack Amendment, enacted in 1906 as an amendment to the Interstate Commerce Act
of 1887, governs the liability of common carriers for loss or damage to goods shipped or transported
in interstate commerce. See 49 U.S.C. § 14706(a)(1). The intent behind the Carmack Amendment
was to
provide interstate carriers with reasonable certainty and uniformity in assessing their
risks and predicting their potential liability. The Carmack Amendment did this both
by establishing a single uniform regime for recovery by shippers directly from the
interstate common carrier in whose care their items are damaged, and by preempting
the shipper's state and common law claims against a carrier for loss or damage to
goods during shipment.
Project Hope v. M/V IBN SINA, 250 F.3d 67, 73 n.6 (2d Cir. 2001) (internal quotation marks and
citations omitted). Thus, the Carmack Amendment "provides shippers with the statutory right to
recover for the actual loss or injury to their property caused by any of the carriers involved in the
shipment." Cleveland v. Beltman N. Am. Co., 30 F.3d 373, 377 (2d Cir. 1994) (citation omitted). To
effectuate the goal of uniformity, the Amendment's preemption force is broad. See Adams Express
Co. v. Croninger, 226 U.S. 491, 505-6 (1913) ("Almost every detail of the subject is covered so
completely that there can be no rational doubt but that Congress intended to take possession of the
subject, and supersede all state regulation with reference to it.").
"Suits under the Carmack Amendment may be brought against a carrier by any person
3
While Ridgeway's counterclaims may be vulnerable to dismissal for other reasons,
Plaintiff has not raised any other arguments, and a district court may not dismiss for failure to
state a claim based on grounds not raised by the parties. Jones v. Albany Cty. Civil Serv. Comm'n,
985 F. Supp. 280, 282 (N.D.N.Y. 1997) (citing Volvo N. A. Corp. v. Men's Int'l Professional
Tennis Council, 857 F.2d 55, 65 (2d Cir. 1988)).
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entitled to recover in the carrier's 'bill of lading,' including the buyer who was to receive the goods."
Windows, Inc. v. Jordan Panel Sys. Corp., 177 F.3d 114, 118 (2d Cir. 1999) (citations omitted). By
its very terms, the Carmack Amendment applies only to carriers and freight forwarders. See 49
U.S.C. § 14706(a)(1). It does not impose liability on brokers, and therefore, it has been held that
"Carmack's preemption of state law claims does not extend to brokers."4 JAS Forwarding (USA), Inc.
v. Owens Truckmen, Inc., No. 17-CV-03589(ADS/AYS), 2017 WL 5054715, at *5 (E.D.N.Y. Nov.
1, 2017) (collecting cases).
Further, while the Carmack Amendment preempts state and common law claims asserted by
a shipper against a carrier for damage to an item during shipment, Project Hope, 250 F.3d at 73 n.6,
it does not serve to preempt another carrier's (or a NVOCC's) claims against a carrier. See id. at 73
n.7 ("While the Carmack Amendment governs the liability of carriers to the original shipper of the
goods . . . , the situation is different regarding the liability of the two carriers inter sese . . . . Ordinary
rules of the applicable state's negligence law govern actions to determine which of two carriers is
liable to the other." (quotation marks and citation omitted)); see also Am. Foreign Ins. Ass'n v.
Seatrain Lines of Puerto Rico, Inc., 689 F.2d 295, 299 (1st Cir. 1982) ("While special rules govern
the liability of carriers to the original shippers of goods, . . . ordinary rules of negligence govern this
action to determine which of two carriers is liable for negligence which has concededly engendered
liability to the shipper." (citing the Carmack Amendment and COGSA) (collecting cases)).
In determining an entity's true status, a court does not look to how a company labels itself,
4
The Carmack Amendment defines a broker as "a person, other than a motor carrier or an
employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates
for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or
arranging for, transportation by motor carrier for compensation." 49 U.S.C. § 13102(2).
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but instead to
how it holds itself out to the world and its relationship to the shipper. Stated another
way, the law determines status according to the services offered by an entity, rather
than by its corporate character or declared purpose. The Courts look at whether the
party holds itself out to the public generally as the actual transporter of goods as well
as the services provided under the contract.
Nipponkoa Ins. Co. v. C.H. Robinson Worldwide, Inc., No. 09-CV-2365(PGG), 2011 WL 671747,
at *4 (S.D.N.Y. Feb. 18, 2011) (internal quotation marks, alterations, and citations omitted).
Ridgeway has denied Plaintiff's allegations that refer to it as a Non-Vessel Operating
Common Carrier and as a freight forwarder. Doc. 11 ¶ 8. It has denied that it arranged for or
transported the ill-fated submarine, and has further denied that the submarine was booked for transit
on a through, ocean, or combined transport bill of lading or waybill. Id. ¶ 10. The documents
attached to Plaintiff's Complaint refer variously to Ridgeway as a "Forwarding Agent" (Doc. 1-1,
Dock Receipt) and a "Freight Forwarder" (Doc. 1-2, Terms of Service). “[A] district court may grant
a motion to dismiss based on federal preemption, if the defense can easily be determined from the
pleadings.” Marentette v. Abbott Labs., Inc., 201 F. Supp. 3d 374, 377 (E.D.N.Y. 2016) (quotation
marks and citations omitted). Here, Ridgeway's counterclaims are devoid of any factual allegations
that would shed light on the nature of the relationship. Based on the pleadings, the Court cannot
determine as a matter of law that the Carmack Amendment applies.5 Accordingly, the Court cannot
5
Nor can the Court determine whether COGSA would serve to preempt Ridgeway's
counterclaims. "Congress has not clearly manifested an intent that COGSA completely preempt
state law as to shipping by sea." Greenidge v. Mundo Shipping Corp., 41 F. Supp. 2d 354, 358
(E.D.N.Y. 1999); but see Salis v. Am. Exp. Lines, 566 F. Supp. 2d 216, 220 (S.D.N.Y. 2008)
("All state law claims arising under the Bill of Lading are preempted by COGSA." (citations
omitted)), aff'd in part, vacated in part on other grounds, 331 F. App'x 811 (2d Cir. 2009).
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dismiss Ridgeway's counterclaims as preempted by the Carmack Amendment, or by COGSA.
Plaintiff's motion to dismiss Ridgeway's counterclaims on the basis of preemption is therefore
DENIED, without prejudice to reassertion upon a more complete recitation of pertinent facts.
It is SO ORDERED.
Dated: New Haven, Connecticut
January 25, 2018
/s/ Charles S. Haight, Jr.
Charles S. Haight, Jr.
Senior United States District Judge
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