Chisesi Brothers Meat Packing Company, Inc. v. Transco Logistics, Co., et al

Filing 21

ORDER AND REASONS granting in part and denying in part 7 Motion to Dismiss Party. The plaintiff's state law claims for negligence and breach of contract against Transco are DISMISSED with prejudice, but the Carmack Amendment claim remains pe nding. The plaintiff has leave to amend its complaint within 14 days from the date of this Order. FURTHER ORDERED that the hearing date for Travelers motion to dismiss is hereby continued to June 14, 2017, to be heard on the papers. Signed by Judge Martin L.C. Feldman on 5/18/2017. (clc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CHISESI BROTHERS MEAT
PACKING COMPANY, INC.

CIVIL ACTION

V.

NO. 17-2747

TRANSCO LOGISTICS CO.,
ET AL.

SECTION "F"
ORDER AND REASONS

Before the Court are two motions to dismiss: (1) Transco
Logistics, Inc.’s and Transco Logistics, LLC’s (Transco) Rule
12(b)(6) motion to dismiss and (2) Travelers Property Casualty
Company of America’s Rule 12(b)(6) motion to dismiss. For the
following

reasons,

Travelers’

motion

Trancso’s
is

motion

CONTINUED,

is

to

GRANTED

allow

IN

for

PART

and

supplemental

briefing.
Background
This
Metalquimia

case

arises

Movistick

out
5500

of

an

interstate

Boneless

Injector

shipment
machine

of

a

(the

injector) from New Jersey to Louisiana.
Chisesi Brothers purchased the injector, which is a complex
and specialized piece of equipment that is extremely limited in
supply in the United States. On or about February 22, 2016, Transco
transported the injector in a truck from its location in New Jersey
to the Chisesi plant in Jefferson Parish, Louisiana.

1

Chisesi alleges that the injector was in good condition before
Transco loaded it onto the truck for delivery to Chisesi. However,
Chisesi contends that when the injector arrived at its plant, the
injector was severely damaged and missed several component parts.
Chisesi alleges that the injector was negligently dropped
during the loading, unloading, or transportation of the injector,
all while in the care, custody, and control of Transco. This
negligent

handling

caused

Moreover,

Chisesi

alleges

extensive
that

damaged

Transco

to

engaged

the
in

injector.
even

more

wrongful conduct when it unloaded the injector at its plant.
Chisesi contends that this caused additional component parts to
break or become damaged during the unloading process at Chisesi’s
plant.
Chisesi obtained an estimate to repair the injector from a
local

construction

company,

Diversified

Construction,

in

the

amount of $125,867. After contacting the broker who arranged for
the injector’s transportation, the broker informed Chisesi that
Transco held liability insurance with Travelers. This insurance
policy allegedly covers the type of loss sustained by Chisesi; the
broker provided Chisesi with the information to pursue a claim
with

Travelers.

After

receiving

multiple

repair

estimates,

Travelers allegedly failed to make any offer of settlement to
Chisesi within 30 days of receiving the repair estimates.

2

Chisesi originally filed its petition for damages in the 24th
Judicial District Court in Jefferson Parish, Louisiana against
Transco, and against Travelers under the Louisiana Direct Action
Statute (LDAS). It alleged claims against Transco and Travelers
for negligence and breach of contract and brought a claim against
Travelers for bad faith in failing to make a written offer to
settle with Chisesi within 30 days of proof of loss. The case was
removed to this Court. Transco now moves this Court to dismiss the
plaintiff’s

complaint,

contending

that

the

Carmack

Amendment

preempts the plaintiff’s claims against it. Travelers also moves
the Court to dismiss the plaintiff’s claims against, contending
that the plaintiff’s claims are preempted by the Carmack Amendment
and that the plaintiff has not properly established a right of
action under Louisiana’s Direct Action statute.
I.
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows
a party to move for dismissal of a complaint for failure to state
a claim upon which relief can be granted.

Such a motion is rarely

granted because it is viewed with disfavor.

See Lowrey v. Tex. A

& M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser
Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d
1045, 1050 (5th Cir. 1982)).
Under Rule 8(a)(2) of the Federal Rules of Civil Procedure,
a pleading must contain a "short and plain statement of the claim
3

showing that the pleader is entitled to relief."

Ashcroft v.

Iqbal, 556 U.S. 662, 678-79 (2009) (citing Fed. R. Civ. P. 8).
"[T]he

pleading

'detailed

factual

standard

Rule

8

allegations,'

announces

but

it

does

demands

not
more

require
than

an

unadorned, the-defendant-unlawfully-harmed-me accusation." Id. at
678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
Thus,

in

considering

a

Rule

12(b)(6)

motion,

the

Court

"accepts 'all well-pleaded facts as true, viewing them in the light
most favorable to the plaintiff.'"

See Martin K. Eby Constr. Co.

v. Dall. Area Rapid Transit, 369 F.3d 464 (5th Cir. 2004) (quoting
Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999)).

But, in

deciding whether dismissal is warranted, the Court will not accept
conclusory allegations in the complaint as true.
at 1050.

Kaiser, 677 F.2d

Indeed, the Court must first identify allegations that

are conclusory and thus not entitled to the assumption of truth.
Iqbal, 556 U.S. at 678-79.

A corollary: legal conclusions "must

be supported by factual allegations." Id. at 678.

Assuming the

veracity of the well-pleaded factual allegations, the Court must
then determine "whether they plausibly give rise to an entitlement
to relief." Id. at 679.
"'To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.'"

Gonzalez v. Kay, 577 F.3d

600, 603 (5th Cir. 2009) (quoting Iqbal, 556 U.S. at 678) (internal
4

quotation marks omitted).

"Factual allegations must be enough to

raise a right to relief above the speculative level, on the
assumption that all the allegations in the complaint are true (even
if doubtful in fact)."
footnote omitted).

Twombly, 550 U.S. at 555 (citations and

"A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw the
reasonable

inference

misconduct alleged."

that

the

defendant

is

liable

for

the

Iqbal, 556 U.S. at 678 ("The plausibility

standard is not akin to a 'probability requirement,' but it asks
for more than a sheer possibility that a defendant has acted
unlawfully.").

This is a "context-specific task that requires the

reviewing court to draw on its judicial experience and common
sense."

Id. at 679.

"Where a complaint pleads facts that are

merely consistent with a defendant's liability, it stops short of
the line between possibility and plausibility of entitlement to
relief." Id. at 678 (internal quotations omitted) (citing Twombly,
550 U.S. at 557).

"[A] plaintiff's obligation to provide the

'grounds' of his 'entitle[ment] to relief'" thus "requires more
than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do."

Twombly, 550 U.S. at

555 (alteration in original) (citation omitted).
In deciding a motion to dismiss, the Court may consider
documents that are essentially "part of the pleadings."

That is,

any documents attached to or incorporated in the plaintiff's
5

complaint that are central to the plaintiff's claim for relief.
Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th
Cir. 2004) (citing Collins v. Morgan Stanley Dean Witter, 224 F.3d
496, 498-99 (5th Cir. 2000)).

Also, the Court is permitted to

consider matters of public record and other matters subject to
judicial notice without converting a motion to dismiss into one
for summary judgment.

See United States ex rel. Willard v. Humana

Health Plan of Tex. Inc.,

336 F.3d 375, 379 (5th Cir. 2003).

II. Transco’s Motion to Dismiss
A. The Carmack Amendment
The Carmack Amendment to the Interstate Commerce Act defines
the parameters of carrier liability for loss and damage to goods
transported under interstate contracts of carriage. The intent was
to bring uniform treatment to the carrier-shipper relationship. As
it relates to the issues before this Court, the Amendment states:
A carrier providing transportation or service . . . shall
issue a receipt or bill of lading for property it
receives for transportation under this part. 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. The liability imposed under
this paragraph is for the actual loss or injury to the
property caused by (A) the receiving carrier, (B) the
delivering carrier, or (C) another carrier over whose
line or route the property is transported in the United
States . . . . Failure to issue a receipt or bill of
lading does not affect the liability of a carrier. A
delivering carrier is deemed to be the carrier
performing the line-haul transportation nearest the
destination but does not include a carrier providing
only a switching service at the destination.
6

49 U.S.C. § 14706(a)(1). In response, the Supreme Court interpreted
and defined the Carmack Amendment in the broadest terms in the
seminal case:
Almost every detail of [interstate common carriers] 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. . . . [W]hen Congress act[s] in such a
way to manifest a purpose to exercise its conceded
authority, the regulating power of the state cease[s] to
exist.
Adams Express Co. v. Croninger, 226 U.S. 491, 505-06 (1913).
Therefore, any claim that arises out of loss or damage to property
that was transported in interstate state commerce is governed by
the

Carmack

Amendment;

all

state

and

common

law

claims

are

preempted. See id.
Following

the

Supreme

Court’s

instruction,

this

Circuit

instructs that the Carmack Amendment’s broad scope preempts all
state law claims, whether they contradict or supplement remedies
under the Amendment. See Hoskins v. Bekins Van Lines, 343 F.3d
769, 778 (5th Cir. 2003) (“We are persuaded by the preceding
decisions and analysis by the Supreme Court, and this Court, that
congress

intended

for

the

Carmack

Amendment

to

provide

the

exclusive cause of action for loss or damages to goods arising
from the interstate transportation of those goods by a common
carrier.”) (emphasis in original); Rouquette v. N. Am. Van Lines,
No. 14-290, 2014 WL 5213850, at *2 (E.D. La. Oct. 14, 2014)
7

(dismissing

the

plaintiff’s

state

law

claims

because

the

plaintiff’s exclusive remedy is under the Carmack Amendment).
B. Chisesi’s Claims Against Transco
Transco moves the Court to dismiss the plaintiff’s claims
against it. Transco contends that the Carmack Amendment preempts
the plaintiff’s negligence and breach of contract claims. In
response, the plaintiff contends that its complaint pleads a viable
Carmack Amendment claim. Specifically, the plaintiff submits that
a complaint need not explicitly invoke the Carmack Amendment in
order to successfully plead a federal Carmack Amendment claim. It
contends that it is sufficient that the plaintiff satisfies the
elements required to plead a prima facie Carmack Amendment claim.
As such, the plaintiff submits that while it does not specifically
invoke

the

Carmack

Amendment

language,

the

facts

pled

are

sufficient to survive this motion to dismiss. The Court agrees.
“In order to state a claim for relief under the Carmack
Amendment, Plaintiff must allege (1) that [it] delivered [the]
goods to Defendant in good condition, (2) that the goods were
either not delivered or were delivered in damaged condition, and
(3) the amount of [its] damages.” Rouquette, 2014 WL 5213850, at
*2. In Rouquette, the court held that despite alleging state court
claims

in

the

complaint,

the

plaintiff

still

satisfactorily

alleged the elements under the Carmack Amendment. See id. at *12. Similarly, the plaintiff contends that its complaint should not
8

be dismissed, instead the Court should construe its complaint as
alleging a prima facie Carmack Amendment claim and grant leave to
amend the complaint.
The

Court

acknowledges

that

the

plaintiff’s

state

court

claims against Transco are undoubtedly preempted by the Carmack
Amendment. The Court also construes the plaintiff’s complaint to
allege a prima facie Carmack Amendment claim. First, the plaintiff
contends that Transco received the injector undamaged; next, the
plaintiff contends that the injector was damaged when delivered to
its plant and that further damages ensued during the unloading
process; finally, the plaintiff contends that its damages amount
to nearly $100,000. See Rouquette, 2014 WL 5213850, at *2. On this
record, the complaint is sufficient to plead a prima facie Carmack
Amendment claim against Transco. Accordingly, the Court dismisses
the plaintiff’s state court claims, but the Carmack Amendment claim
remains pending, and plaintiff has leave to amend its complaint.
III. Travelers’ Motion to Dismiss
Travelers moves to dismiss the plaintiff’s claims against it
under two theories: (1) The petition fails to state a claim upon
which relief can be granted because the plaintiff’s claims are
preempted by the Carmack Amendment; and (2) The plaintiff has not
established a right of action against Travelers pursuant to the
LDAS.

9

In response, Chisesi contends that the Carmack Amendment does
not preclude its LDAS claims because the LDAS reverse preempts the
Carmack

Amendment

under

the

McCarran-Ferguson

Act.

Further,

Chisesi submits that it does validly state an LDAS cause of action
in its complaint against Travelers. Chisesi finally submits that
the Carmack Amendment does not preempt its bad faith claim against
Travelers.
At this stage in the proceeding, the Court construes the
complaint in favor of the plaintiff and appreciates that Rule
12(b)(6) motions are viewed with disfavor. See Martin, 369 F.3d
464; Lowrey, 117 F.3d at 247. Finding that the plaintiff carries
its burden to “raise a right to relief above the speculative
level,” the Court cannot, without supplemental briefing, determine
whether the plaintiff’s claims are legally precluded such that
dismissal is appropriate. 1 Twombly, 550 U.S. at 555.
IT

IS

ORDERED:

that

Travelers

and

Chisesi

shall

submit

simultaneous supplemental briefing, no later than May 31, 2017, on
the following issues:

1

The Court admits that on the face of the complaint, the plaintiff
alleges valid LDAS claims against Travelers such that it carries
part of its pleading burden. However, Travelers has raised a
question of whether the plaintiff’s claims against it are legally
precluded. The submitted briefs are inadequate for the Court to
make a determination of whether the claims are legally precluded.
The Court therefore, continues the hearing date of this motion
instead of denying or granting the motion. The Court maintains
that this question is proper for determination through a motion to
dismiss because it is a legal question before the Court.
10

•

•
•

•

Provide the Court with legal support on how the Court should
treat Louisiana’s unique Direct Action Statute in the context
of Carmack Amendment, and whether the understanding that the
Amendment applies only to “carriers” is affected by Louisiana’s
statute.
Provide the Court with legal support on the applicability of
the McCarran-Ferguson Act to the Carmack Amendment and the LDAS.
In light of the Court’s holding that Chisesi has only a federal
Carmack Amendment claim against Transco, provide the Court with
analysis on what effect, if any, this has on the claims Chisesi
could potentially have against Travelers if the LDAS is found
not to be preempted.
Provide the Court with additional briefing on whether the
Carmack Amendment preempts Chisesi’s bad faith claim against
Travelers.
IT IS FURTHER ORDERED: that the hearing date for Travelers’

motion to dismiss is hereby continued to June 14, 2017, to be heard
on the papers.
IT IS FURTHER ORDERED: that Transco’s motion to dismiss is
hereby GRANTED IN PART. The plaintiff’s state law claims for
negligence and breach of contract against Transco are DISMISSED
with prejudice, but the Carmack Amendment claim remains pending.
The plaintiff has leave to amend its complaint within 14 days from
the date of this Order.

New Orleans, Louisiana, May 18, 2017

______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

11