Universal Logistics Solutions, Inc. v. Global Keg Rental, LLC et al

Filing 24

OPINION & ORDER Denying Plaintiff's Motion to Enforce Carrier's Lien (Dkt. 20 ). Signed by District Judge Mark A. Goldsmith. (Sandusky, K)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
UNIVERSAL LOGISTICS
SOLUTIONS, INC.,
Plaintiff,
Case No. 17-cv-10078
v.
HON. MARK A. GOLDSMITH
GLOBAL KEG RENTAL, LLC, et al.,
Defendants.
________________________________/
OPINION & ORDER
DENYING PLAINTIFF’S MOTION TO ENFORCE CARRIER’S LIEN (Dkt. 20)
This matter is before the Court on Plaintiff Universal Logistics Solutions, Inc.’s motion
to enforce a carrier’s lien (Dkt. 20), to which Defendants Global Keg Rental, LLC and Global
Keg Rental Investments, LLC (collectively “Global Keg”) filed a response (Dkt. 19). Because
oral argument will not aid the decisional process, the motion will be decided based on the
parties’ briefing. See E.D. Mich. LR 7.1(f)(2); Fed. R. Civ. P. 78(b). For the reasons stated
below, the Court denies the motion.
I. BACKGROUND
Global Keg operates a commercial keg rental service. Defs. Resp. at 5. According to
Global Keg, it had an arrangement with NDL Keg, LLC (“NDL Michigan”), pursuant to which
NDL Michigan supplied kegs for Global Keg’s rental business. Id. at 4. It was Global Keg’s
understanding that NDL Michigan obtained the kegs from Defendant NDL Keg (Qingdao) Inc.
(“NDL China”), and that NDL China had an arrangement with Universal for the transportation
and distribution of the kegs. Id.

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On November 3, 2015, Universal and Global Keg entered into a Transportation
Agreement, whereby Global Keg agreed to pay Universal to transport certain goods (i.e., the
kegs) “by sea, air, and land.” Pl. Br. at 2; Transportation Agreement, Ex. A to Compl. (Dkt. 11).1 During the course of business, Universal provided Global Keg with numerous invoices and
bills of lading, but, according to Universal, Global Keg has failed to pay for any of the
transportation services. Id.
Universal has notified Global Keg of the outstanding balance on numerous occasions and
attempted to recover the money owed to it for the transportation and related services from Global
Keg. Id. at 5. Nonetheless, Global Keg has failed to pay. Id. As a result, Universal now claims
that it is in the position of storing and maintaining the goods at issue. Id. at 2.
II. DISCUSSION
Universal asserts that it is a carrier under Michigan law, based on the language of the
Transportation Agreement and/or the bills of lading, and that it has a “lien for the transportation
and storage charges on the goods it shipped/transported/stored for Global Keg . . . .” Pl. Br. at 6.
Universal is seeking an order “granting it the ability to sell the goods and enforce its [carrier’s]
lien pursuant to [Mich. Comp. Laws § 440.7308].” Pl. Br. at 2; see also id. at 9 (same). This
request is premised on Global Keg’s alleged breach of the Transportation Agreement for failing
to pay Universal for transportation services.
Under Michigan law, a “carrier” is defined as “a person that issues a bill of lading.”
Mich. Comp. Laws § 440.7102(1)(b). “A carrier has a lien on the goods covered by a bill of
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Global Keg claims that, “[a]t the end of 2015, Universal refused to release certain kegs to
Global Keg until it entered into a ‘Transportation Agreement’ whereby Global Keg would pay
unspecified ‘rates and charges agreed to’ for transportation of kegs.” Defs. Resp. at 4.
According to Global Keg, it was “coerced into the Transportation Agreement under duress”
because it was “[f]acing business ruination if it was unable to supply the kegs it had contracted to
rent out to its clients. . . .” Id.
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lading or on the proceeds of those goods in its possession for charges after the date of the
carrier’s receipt of the goods for storage or transportation, . . . and for expenses necessary for
preservation of the goods incident to their transportation or reasonably incurred in their sale
pursuant to law.” Mich. Comp. Laws § 440.7307. This lien may be enforced by a “public or
private sale of the goods, in bulk or in packages, at any time or place and on any terms that are
commercially reasonable, after notifying all persons known to claim an interest in the goods.”
Mich. Comp. Laws § 440.7308(1). The procedure for enforcement is found in § 440.7308(1), as
well as in Mich. Comp. Laws § 440.7201 (regarding a warehouse’s lien). Mich. Comp. Laws
§ 440.7308(7). A carrier that fails to comply with the requirements for sale under § 440.7308 is
liable for damages. Mich. Comp. Laws § 440.7308(8). If the violation is willful, the carrier is
liable for conversion. Id.
However, as Global Keg correctly points out in its response, see Defs. Resp. at 6-9,
Universal does not provide the Court with any case law to suggest the Court has the authority to
grant the relief requested in the motion. Nor does Universal provide any authority that the
enforcement of a carrier’s lien under Mich. Comp. Laws § 440.7308 requires judicial approval
beforehand. Without authority or even an argument on this issue, granting relief now would be
inappropriate.
It appears to the Court that Universal is actually requesting a declaration that it may
exercise its rights as a purported carrier to enforce a lien under Michigan law. Such relief might
be available if Universal had made the requisite showing. But, as explained below, it has not
done so.
The Declaratory Judgment Act provides that, “[i]n a case of actual controversy within its
jurisdiction, . . . any court of the United States, upon the filing of an appropriate pleading, may

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declare the rights and other legal relations of any interested party seeking such declaration,
whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a); Fed. R. Civ. P. 57
(“These rules govern the procedure for obtaining a declaratory judgment under 28 U.S.C.
§ 2201.”). The exercise of jurisdiction in a declaratory judgment action is consigned to the
court’s discretion. Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995). “The essential question
is always whether a district court has taken a good look at the issue and engaged in a reasoned
analysis of whether issuing a declaration would be useful and fair.” W. World Ins. Co. v. Hoey,
773 F.3d 755, 759 (6th Cir. 2014).
In exercising that discretion, courts consider five factors:
(1) Whether the
controversy;

declaratory

action

would

settle

the

(2) Whether the declaratory action would serve a useful
purpose in clarifying the legal relations at issue;
(3) Whether the declaratory remedy is being used merely for
the purpose of “procedural fencing” or “to provide an arena
for res judicata;”
(4) Whether the use of a declaratory action would increase
friction between our federal and state courts and improperly
encroach upon state jurisdiction; and
(5) Whether there is an alternative remedy which is better or
more effective.
Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 554 (6th Cir. 2008) (citing Grand Trunk W. R.R.
Co. v. Consol. Rail Co., 746 F.2d 323, 326 (6th Cir. 1984)).
Universal’s motion does not mention or acknowledge this five-factor test. Consequently,
Universal does not address how any of the five factors weigh in favor of the Court exercising
jurisdiction over this declaratory judgment matter at this time. As such, Universal has failed to
carry its burden for any supposed request for a declaration of its rights under Michigan law.
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Global Keg also argues that there are numerous issues that require further fact-finding in
this case, including whether Global Keg’s assent to the Transportation Agreement was the result
of duress, and whether Universal has adequately provided notice to “all persons known to claim
an interest in the goods,” as required by Mich. Comp. Laws § 440.7308(1). See Defs. Resp. at 45, 9. Again, the Court agrees.
“[W]hen ruling under the Declaratory Judgment Act, usually only purely legal issues”
that “will not be clarified by further factual development” are “fit for judicial review.” Nat’l
Rifle Ass’n of Am. v. Magaw, 132 F.3d 272, 290 (6th Cir. 1997). This is consistent with the
approach several courts have adopted in construing a party’s motion for declaratory judgment as
a “motion for summary judgment on an action for a declaratory judgment.” Kam-Ko Bio-Pharm
Trading Co. Ltd-Australasia v. Mayne Pharma (USA) Inc., 560 F.3d 935, 943 (9th Cir. 2009)
(emphasis added); Int’l Bhd. of Teamsters v. E. Conference of Teamsters, 160 F.R.D. 452, 456
(S.D.N.Y 1995) (same). The Court finds that Universal has failed to establish its entitlement to a
declaratory judgment under the appropriate summary-judgment standard, which also warrants
denial of the motion.
First, there is a potential question of fact concerning whether Global Keg was coerced
into signing the Transportation Agreement. See Answer at 10 (Dkt. 15); see also Barry Aff., Ex.
A to Answer, ¶ 4 (Dkt. 15-1) (“At the end of October 2015, Universal refused to release Global
Keg’s property — without which [Global Keg] could not remain in business — unless [Global
Keg] signed the agreement that Universal tendered and demanded to be returned. The agreement
did not provide for rates, pricing or other charges, and those terms were never agreed upon.”).
Second, there may be several questions of fact concerning whether Universal has
satisfied the notification requirement of Mich. Comp. Laws § 440.7308(1). Aside from Global

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Keg, there is no mention in the motion of whether Universal has provided notice to any other
person who may claim an interest in the goods, including the shipper of the goods — NDL
China. The notice must also contain “a statement of the amount due, the nature of the proposed
sale, and the time and place of any public sale.” Mich. Comp. Laws § 440.7308(1). However,
Universal does not mention in its motion whether the notice contained a statement regarding the
nature of the proposed sale, of the time and place of the public sale, if one is contemplated.
Given the number of issues that may require further factual development in this case, a
declaratory judgment that Universal is entitled to exercise its rights under Mich. Comp. Laws
§ 440.7308 is premature. See Wal-Mart Real Estate Bus. Trust v. Eastwood, LLC, No. 1:13-cv1348, 2015 WL 12910670, at *7 (W.D. Mich. July 27, 2015) (recognizing that awarding a
declaratory judgment would be “premature” because “there remain significant factual disputes”
surrounding those claims). A declaratory judgment is not appropriate at this time.
III. CONCLUSION
For the reasons stated above, Universal’s motion to enforce a carrier’s lien (Dkt. 20) is
denied without prejudice.
SO ORDERED.
Dated: July 28, 2017
Detroit, Michigan

s/Mark A. Goldsmith
MARK A. GOLDSMITH
United States District Judge

CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served upon counsel of record and
any unrepresented parties via the Court's ECF System to their respective email or First Class
U.S. mail addresses disclosed on the Notice of Electronic Filing on July 28, 2017.
s/Karri Sandusky
Case Manager

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