The Mason and Dixon Lines, Incorporated v. Walter Metal Fabrication, Inc
Filing
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ORDER denying as moot plaintiff's 17 Motion to Dismiss for Failure to State a Claim; and granting plaintiff's 27 Motion to Dismiss for Failure to State a Claim. Defendant's negligence counterclaim is dismissed. Signed by Judge Staci M. Yandle on 9/16/14. (ajr)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
THE MASON AND DIXON LINES,
INCORPORATED,
Plaintiff,
Case No. 13-cv-1262-SMY-DGW
vs.
WALTERS METAL FABRICATION, INC.,
Defendant.
MEMORANDUM AND ORDER
This matter comes before the Court on The Mason and Dixon Lines, Incorporated’s
(“MADL”) motions to dismiss (Docs. 17 & 27). Defendant Walters Metal Fabrication, Inc.
(“Walters”) filed responses (Docs. 19 & 31) to which MADL replied (Docs. 20 & 33). For the
following reasons, the Court denies as moot MADL’s first motion to dismiss (Doc. 17) and
grants MADL’s second motion to dismiss (Doc. 27).
1. Background
As an initial matter, the Court notes that MADL’s motion to dismiss (Doc. 17) dated
January 16, 2014 was directed at Walters’ counterclaims alleged along with Walters’ answer to
MADL’s original complaint. Since that time, MADL filed an amended complaint, and Walters
filed an answer to the amended complaint along with its counterclaims. As such, the Court
denies as moot MADL’s motion to dismiss (Doc. 17) dated January 16, 2014. The Court will
turn to address MADL’s second motion to dismiss (Doc. 27) dated April 2, 2014.
This matter arises out of a contract entered into between Walters and MADL for the
transportation of an over-dimensional shipment of goods. Walters is a metal fabrication
company located in Granite City, Illinois, that sought to transport its product, pipe spools, to a
customer located in Mont Belvieu, Texas. As such, Walters contracted with MADL to deliver
the over-dimensional load.1 MADL secured a permit for an over-dimensional shipment from the
Illinois Department of Transportation (“IDOT”).2 The permit provided for the shipment of a load
the height of 15 feet, 9 inches and provided a route the driver was required to follow when
delivering the load. On December 29, 2012, while following IDOT’s mandatory route, the driver
drove the load into the underside of the Herrin Road Bridge on Interstate Highway 57 causing
damage to the load.
On June 30, 2013, Walters filed a “Standard Form for Presentation of Loss and Damage
Claims” for $391,922.11 (Doc. 11-6). Walters’ claim was denied in a letter from Universal AmCan, Ltd.3 dated September 19, 2013 (Doc. 11-7). Thereafter, Walters demanded immediate
payment of the claim plus delay claims. Walters further claimed an offset in the amount of
$138,838.50 against transportation invoices from a separate corporation affiliate of MADL that
was not a party to the contract. MADL filed the instant action asking the Court to declare as
follows: (1) the Tariffs and Bill of Lading apply to the shipment at issue; (2) MADL’s
compliance with IDOT’s permit constitutes a force majeure relieving MADL of liability; (3)
alternatively, if the Court finds no force majeure, Walters’ recovery is limited to $100,000; and
(4) Walters’ retention of the $128,838.50 due to another corporate entity was not an allowable
set-off. Walters’ filed a counterclaim alleging both a negligence claim and a claim arising under
the Federal Carmack Amendment, 49 U.S.C. § 14706.
1
The Illinois Vehicle Code limits the height of any vehicle to 13 feet, 6 inches “from the under side of the tire to the
top of the vehicle, inclusive of load.” 615 ILCS 5/15-103.
2
Illinois requires the individual or company making the movement of a load exceeding the maximum size and
weight requirements, as specified in the Illinois Vehicle Code, to apply for a permit. 625 ILCS 5/15-301. At its
discretion, IDOT may prescribe the route which the carrier must follow when delivering the load. Id.
3
MADL does not elaborate on its relationship with Universal Am-Can, Ltd.; however, Universal Am-Can, Ltd.
appears to be a corporate affiliate of MADL.
2
MADL filed its motion to dismiss (Doc. 27) pursuant to Federal Rule of Civil Procedure
12(b)(6) arguing that Walters’ negligence claim must be dismissed for failure to state a claim.
Specifically, MADL argues that the Federal Carmack Amendment, 49 U.S.C. § 14706(a),
preempts any state law claim arising from damage to cargo during the interstate transportation of
goods by motor carrier. In its response, Walters contends that (1) the issue of whether MADL is
a motor carrier or a broker should not be determined on a motion to dismiss; (2) the Carmack
Amendment does not preempt Walters’ claims which extend beyond the damage to property; and
(3) the Carmack Amendment does not preempt any state law claims against any defendant who
is not a motor carrier.
In its reply, MADL contends that Walters admitted MADL was a motor carrier in
Walters’ counterclaim allegations. Specifically, MADL points to the following portions of
Walters’ counterclaim:
5. On November 8, 2012, Walters contracted [MADL] to haul cargo from
its facility to its customer’s facility in Baytown, Texas. []
6. [MADL] issued a bill of lading to Walters [], obtained permits from the
State of Illinois and hired a pilot car to guide the load.
7. While hauling the cargo on I-64 in Williamson County, Illinois,
[MADL] acting through its agents or employees, drove the load into the underside
of the Herrin Road bridge at 57 mph.
(Doc. 26, p. 3). The Court will consider the parties’ arguments in turn.
2. Analysis
When reviewing a Rule 12(b)(6) motion to dismiss, the Court accepts as true all
allegations in the complaint. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citing Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007)). To avoid dismissal under Rule 12(b)(6) for failure to
state a claim, a complaint must contain a “short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). This requirement is satisfied if the
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complaint (1) describes the claim in sufficient detail to give the defendant fair notice of what the
claim is and the grounds upon which it rests and (2) plausibly suggests that the plaintiff has a
right to relief above a speculative level. Bell Atl., 550 U.S. at 555; see Ashcroft v. Iqbal, 129 S.
Ct. 1937, 1949 (2009); EEOC v. Concentra Health Servs., 496 F.3d 773, 776 (7th Cir. 2007). “A
claim has facial plausibility when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129
S. Ct. at 1949 (citing Bell Atl., 550 U.S. at 556).
Finally, a litigant need not anticipate and affirmatively address defenses in its complaint
to survive a motion to dismiss. Barry Aviation Inc. v. Land O’Lakes Mun. Airport Comm’n, 377
F.3d 682, 688 (7th Cir. 2004). However, a party may “plead itself out of court by alleging (and
thus admitting) the ingredients of a defense” on the face of the complaint. U.S. Gypsum Co. v.
Ind. Gas Co., 350 F.3d 623, 626 (7th Cir. 2003).
With these standards in mind, the Court will consider whether Walters has properly
pleaded a negligence counterclaim against MADL. It is well established that the Carmack
Amendment, included within the Interstate Commerce Act, preempts state-law causes of action
for damages against a motor carrier for damaged goods. REI Transp., Inc. v. C.H. Robinson
Worldwide, Inc., 519 F.3d 693, 697 (7th Cir. 2008); see also Gordon v. United Van Lines, Inc.,
130 F.3d 282, 288 (7th Cir. 1997). However, the Carmack Amendment only preempts those
causes of actions for damages to the goods, not every conceivable cause of action associated with
the delivery of goods. Gordon, 130 F.3d at 289. The Seventh Circuit has specifically suggested
that “a carrier might be liable to a shipper under a statute prohibiting deceptive trade practices, or
a bailor might be able to recover from a bailee in tort if the claim for relief does not depend on
the existence of a contract.” Id.
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First, the Court will address Walters’ argument that the Carmack Amendment does not
preempt its claims extending beyond damage to its property. Count One clearly alleges a state
law negligence claim resulting from the damage to its goods and the resulting damages caused
by a delay in delivery of those goods. Walters does not allege a separate cause of action, such as
deceptive trade practices, that is not associated with the delivery of the goods. As such, this
argument fails.
Next, Walters’ contends that the Carmack Amendment does not preempt any cause of
action against MADL because it is not clear whether MADL is a broker, motor carrier, or freight
forwarder. If MADL is a broker, the Carmack Amendment would not preempt Walters’
negligence claim. However, if MADL is a motor carrier, Walters’ negligence claim against
MADL must be dismissed. MADL argues that Walters has pleaded itself out of court on its
negligence claim because it has alleged facts clearly describing MADL as a motor carrier, not a
broker. Thus, the Court must determine whether Walters has alleged facts conclusively
describing MADL as a carrier warranting dismissal of the negligence claim.
The Interstate Commerce Act defines the relevant concepts. A “broker” is
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. § 13012(2). A “motor carrier” is “a person providing motor vehicle transportation for
compensation.” 49 U.S.C. § 13012(14). Finally, a “freight forwarder” is
a person holding itself out to the general public (other than as a pipeline, rail,
motor, or water carrier) to provide transportation for compensation and in the
ordinary course of its business – (A) assembles and consolidates, or provides for
assembling and 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 (C) uses
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for any part of the transportation a carrier subject to jurisdiction under this
subtitle.
49 U.S.C. § 13012(8).
“Whether a company is a broker or a carrier/freight forwarder is not determined by how it
labels itself, but by how it holds itself out to the world and its relationship to the shipper.”
Lumbermens Mut. Cas. Co. v. GES Exposition Servs., Inc., 303 F. Supp. 2d 920, 921 (N.D. Ill.
2003). The distinction between a broker and a carrier is not always clear. See Neb. Turkey
Growers Coop. Ass’n v. ATS Logistics Servs., No. 4:05-cv-3060, 2005 WL 3118008, at *4 (D.
Neb. Jan. 13, 2014). One crucial distinction between a carrier and broker is the legal
responsibilities taken on by the party. 49 C.F.R. § 371.2(a). In this case, if MADL took legal
responsibility for transporting the goods, regardless of who actually delivered them, MADL is a
carrier. However, if MADL made an agreement with Walters to simply arrange for
transportation of the goods, MADL is a broker. See CGU Int’l Ins., PLC v. Keystone Lines
Corp., No. C-01-3751 SC, 2004 WL 1047982 (N.D. Cal. May 5, 2004).
Here, on a motion to dismiss, the Court must accept as true all facts as pleaded in
Walters’ counterclaim. Initially, the Court notes that in Count One of Walters’ counter-claim,
Walters’ alleges MADL is both a “freight carrier and freight broker” (Doc. 26, p. 3). This
conclusory pleading alone, however, is not sufficient to sustain Walters’ negligence claim.
Walters alleges it contracted with MADL “to haul cargo from [Walters’] facility to its customer’s
facility.” A motor carrier, not a broker, would take on the responsibility of hauling the cargo to
Walters’ customer. Walters also alleges MADL obtained permits from IDOT to transport the
over-dimensional load. Again, in line with the statutory definitions, a motor carrier, not a broker,
would undertake this task. See 625 ILCS 5/15-301 (requiring the entity transporting the goods to
make the permit application for an over-dimensional load). Thus, based on the facts pleaded in
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the counterclaim, Walters has “plead[ed] itself out of court” with respect to its negligence claim.
See U.S. Gypsum Co., 350 F.3d at 626.
3. Conclusion
For the foregoing reasons, the Court DENIES as moot MADL’s first motion to dismiss
(Doc. 17) and GRANTS MADL’s second motion to dismiss (Doc. 27).
IT IS SO ORDERED.
DATED: September 16, 2014
s/ Staci M. Yandle
STACI M. YANDLE
DISTRICT JUDGE
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