Omnitech Robotics, Inc v. Sterling Moving & Storage, Inc. et al

Filing 22

MEMORANDUM. Signed by Judge William M Nickerson on 6/28/12. (mps, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

OMNITECH ROBOTICS, INC. et al.

*
*
v.
*
* Civil Action WMN-12-576
STERLING MOVING & STORAGE INC. *
et al.
*
*
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
MEMORANDUM
This action arises out of the interstate transport of
property.

Plaintiffs Omnitech Robotics, Inc. and David Parrish

develop and manufacture advanced robotic components for
machinery, including unmanned ground vehicles.

Plaintiffs

allege that they entered into a contract with Sterling Moving &
Storage, Inc. (SMS), North American Van Lines, Inc. (NAVL) and
Specialized Transportation, Inc. (STI) (acting as a
subcontracted employee or agent for SMS and NAVL) for the
purposes of moving Plaintiffs’ business property from
Queenstown, Maryland to Kimberly, Idaho.
Plaintiffs contend that Defendants expressly agreed to use
specific packing and transport methods required to avoid
damaging Plaintiffs’ property.

These methods purportedly

required Defendants to move racks of small robotics parts and
laboratory equipment as they were packed in the laboratory and
to hold the property and inventory in a locked trailer, for
which Plaintiffs paid a specific premium to SMS.

Additionally,

Defendants were required to secure insurance to provide coverage
for property damaged, lost or stolen during the move.
Plaintiffs allege that, contrary to the agreement and to
the standards of reasonable care, Defendants unpacked and
disassembled Plaintiffs’ shelves and racks, put the inventory
into cardboard boxes, and exposed the parts to electrostatic
discharge.

Defendants also allegedly failed to secure

insurance.

Plaintiffs also claim Defendants damaged a sign and

conference table and stole a set of loading ramps belonging to
Plaintiffs.

These actions allegedly caused complete destruction

and loss of part of the inventory and complete disarray,
requiring over 150 hours of labor to reassemble the shelves and
to sort and restore the remaining inventory.
Plaintiffs originally filed a complaint in the Circuit
Court for Anne Arundel County for breach of contract, breach of
bailment agreement, fraud, negligent misrepresentation,
negligence, conversion, breach of warranty, and violation of the
Maryland Consumer Protection Act.

Defendants then removed the

action to this Court and NAVL filed a motion to dismiss, arguing
that Plaintiffs’ claims are preempted by the Carmack Amendment,
49 U.S.C. § 14706.
motion.

ECF No. 11.

ECF No. 12.

STI moved to join in that

Plaintiffs subsequently filed an Amended

Complaint, alleging violations of the Carmack Amendment, fraud,

2

and negligent misrepresentation.1

In response, STI has filed a

motion to dismiss the negligent misrepresentation claim, arguing
that it is preempted by the Carmack Amendment.2

Plaintiffs did

not oppose this motion.
“Federal law preempts state and common law when Congress
expressly provides that the federal law supplants state
authority in a particular field . . . .”

Shao v. Link Cargo

(Taiwan) Limited, 986 F.2d 700, 704 (4th Cir. 1993).
Alternatively, it will preempt state law “when [Congress’]
intent to do so may be inferred from a pervasive system of
regulation which does not leave a sufficient vacancy within
which any state can act.”

Id.

The question presented in this

motion is whether the Carmack Amendment created such a pervasive
system.
The Carmack Amendment was enacted in response to
difficulties assessing the liability of shippers engaged in the
interstate transportation of goods.
Croninger, 226 U.S. 491, 505 (1913).

Adams Express Co. v.
These difficulties arose

1

Plaintiffs’ filing of an Amended Complaint technically moots
these two motions. The Court will grant the relief requested in
NAVL’s motion, at least as to the state law claims reasserted
against it in the Amended Complaint.
2

In its motion to dismiss, STI also contends that the negligent
misrepresentation claim fails to state a claim against STI.
There is no need to address this allegation, however, as the
claim will be dismissed on the basis of preemption.
3

because of inconsistent legislative and judicial holdings.

Id.

The amendment served to regulate these inconsistencies by
imposing a uniform standard of liability on a carrier for “loss
or injury to the property” that it transports.

49 U.S.C. §

14706(a)(1)(2005).
“The United States Supreme Court has long interpreted the
Carmack Amendment as manifesting Congress' intent to create a
national scheme of carrier liability for goods damaged or lost
during interstate shipment . . . .”

Shao, 986 F.2d at 704.

The

Court has held that, in terms of the liability of a carrier
under the Carmack Amendment, “[a]lmost 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.”

Adams, 226 U.S. 491 at 505-506.

Therefore, “[e]very

circuit court that has considered the issue has [concluded] . .
. that the Carmack Amendment preempts a shipper's state and
common law claims . . .”

Shao, 986 F.2d at 705.

Circuit has reached this same conclusion.

The Fourth

See Ward v. Allied

Van Lines, Inc., 231 F.3d 135, 138 (4th Cir. 2000) (citing Shao,
986 F.2d at 705).
State and common law claims preempted by Carmack include
those of breach of contract and negligence for goods lost or
damaged by a carrier during interstate shipment.
4

Shao, 986 F.2d

at 705.

Preempted claims also include those for negligent

misrepresentation.

See Taylor v. Mayflower Transit Inc., 22 F.

Supp. 2d 509, 510 (W.D.N.C. 1998) (citing Moffit v. Bekins Van
Lines Co., 6 F.3d 305, 306-7 (5th Cir. 1993); see also Hughes v.
United Van Lines, 829 F.2d 1407, 1412 n. 5 (7th Cir. 1987)
(holding that various common law claims, including a claim for
negligent misrepresentation, were preempted by the Carmack
Amendment).

The claim of fraud asserted in Count II is also

preempted.

See Smith v. UPS, 296 F.3d 1244, 1248 (11th Cir.

2002); see also Richter v. North Am. Van Lines, Inc., 110 F.
Supp. 2d 406, 411 (D. Md. 2000).
Accordingly, Defendant STI’s Motion to Dismiss the
negligent misrepresentation claim will be GRANTED.

_____ /s/__
William M. Nickerson
Senior United States District Judge

DATED: June 28, 2012

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