ULTRA LOGISTICS, INC. v. CODY KEYS TRUCKING, LLC et al
OPINION. Signed by Magistrate Judge Edward S. Kiel on 2/17/2021. (lag, )
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 1 of 17 PageID: 187
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
ULTRA LOGISTICS, INC.,
Case No. 19–cv–19315–ESK
CODY KEYS TRUCKING, LLC, et
THIS MATTER comes before the Court on plaintiff Ultra Logistics, Inc.’s
(Ultra Logistics) motion for summary judgment pursuant to Federal Rule of Civil
Procedure (Rule) 56(a) (Motion).
(ECF No. 21.) Defendants Cody Keys
Trucking, LLC (Cody Keys) and Northland Insurance Company (Northland) filed
opposition to the Motion (ECF No. 23), and Ultra Logistics filed a reply brief in
further support of the Motion (ECF No. 24).
For the following reasons, the
Motion is DENIED.
This case stems from bags of chips from Frito-Lay allegedly damaged in
transit.1 Cody Keys provided freight services to Ultra Logistics under a BrokerCarrier Agreement executed on September 7, 2017 (Carrier Agreement).
No. 1-1 ¶ 6.) Under a separate contract with Ultra Logistics entered on
November 7, 2018 (Rate Agreement), Cody Keys agreed to transport the bags of
chips from Phoenix, Arizona to Frankfort, Indiana.
(Id. ¶¶ 16, 17, 19.) An
addendum to the Rate Agreement required Cody Keys’ driver to take a “low
Frito-Lay, Inc. (Frito-Lay) is not a party to this action.
(ECF No. 1-1.)
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 2 of 17 PageID: 188
altitude driving route” because “high altitudes can cause the … bags to burst.”
(Id. ¶ 18.)
Ultra Logistics alleges the bags of chips “were in good condition when Cody
[Keys] took control [of] them in Phoenix[.]” (Id. ¶ 20.) However, according to
the complaint, “the truck owned and operated by Cody [Keys] … [failed to] follow
the … low altitude driving route … [and] the … bags burst as a result[.]”
After reimbursing Frito-Lay for the damaged bags, Ultra Logistics
obtained an assignment of Frito-Lay’s claim against Cody Keys.
(Id. ¶ 23.)
Ultra Logistics filed its complaint against Cody Keys and Northland in the
Superior Court of New Jersey on September 19, 2019.
(ECF No. 1-1.) The
complaint asserts three causes of action: (i) liability under the Carmack
Amendment, pursuant to 49 U.S.C. §§ 13501 and 14706, against Cody Keys (count
one); (ii) breach of contract against Cody Keys (count two); and (iii) violation of
the implied covenant of good faith and fair dealing against Northland (count
three).2 (Id. pp. 2–6.)
Defendants removed this matter to this Court on October
24, 2019, pursuant to 28 U.S.C. §§ 1332 and 1441.
(ECF No. 1.)
After the Motion was fully briefed, the parties consented to a magistrate
judge’s authority to conduct all proceedings in this matter.
(ECF Nos. 25, 26.)
Based on certain deficiencies in the parties’ original submissions, I entered a text
order on January 15, 2021 directing the parties to file declarations with
authenticated, legible exhibits, and instructing Cody Keys to file declarations
complying with 28 U.S.C. § 1746.3 (ECF No. 27.)
Pursuant to the text order,
The complaint identifies Northland as Cody Keys’ insurance carrier under a
commercial general liability policy. (ECF No. 1-1 ¶¶ 29, 30.) Ultra Logistics claims it
is a certificate holder or additional insured under Cody Keys’ policy with Northland, and
alleges Northland breached a duty of good faith and fair dealing owed to Ultra Logistics.
(Id. ¶¶ 31, 34.) Essentially, Ultra Logistics seeks coverage under the Northland policy
for the loss. (Id. ¶¶ 35, 36.) However, neither the moving brief nor the reply brief
discuss count three of the complaint.
In support of its opposition to the Motion, Cody Keys originally filed a
certification of Brad Linder with the following jurat: “I understand that if any of the
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 3 of 17 PageID: 189
revised declarations were filed by Ultra Logistics on January 22, 2021 (ECF No.
28), and by Cody Keys and Northland on January 29, 2021 (ECF No. 29),
The question before me is whether Ultra Logistics is entitled to judgment as
a matter of law pursuant to Rule 56(a) in the purported absence of any disputed
material fact as to Cody Keys’ liability for the damaged bags of chips.
least several disputed material facts persist, summary judgment is not
appropriate, and the Motion will be denied.
ULTRA LOGISTICS’ POSITION
Ultra Logistics argues summary judgment should be granted as to count
one—violations of the Carmack Amendment, 49 U.S.C. § 14706, against Cody
Keys—because there is no factual dispute that the bags of chips were damaged in
transit while in Cody Keys’ custody.
(ECF No. 21-2 p. 4 (“It is … beyond dispute
that when [Cody Keys] delivered the [bags] to … Frankfort, [they] had
popped[.]”).) Ultra Logistics asserts that, since the Carmack Amendment
imposes liability on a common carrier for loss of or damage to goods in an
interstate commerce shipment, it is entitled to summary judgment as to count
(Id. pp. 8, 9.)
Ultra Logistics notes that Cody Keys’ driver “chose to take a
route that deviated from the low altitude route specifically prescribed by” FritoLay in the Addendum to the Rate Agreement.
(Id. p. 9; ECF No. 1-1 ¶ 18.)
Thus, according to Ultra Logistics, there is no factual dispute that the bags were
damaged in transit while in the custody of Cody Keys.
Ultra Logistics further argues that summary judgment should be granted
as to count two—breach of contract against Cody Keys—because Cody Keys’
failure to deliver the bags in good condition was a breach of the Rate Agreement.
(ECF No. 21-2 pp. 10, 11.)
Ultra Logistics claims it is thus entitled to
statements made by me herein are willfully false I am subject to punishment.”
No. 23-1 p. 3.)
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 4 of 17 PageID: 190
reimbursement of the contract price of $3,100.
(Id.) It also seeks attorney’s
fees under the Carrier Agreement because “Cody Keys’ unquestioned liability for
th[e] loss has been established.”
(Id. pp. 11, 12.) However, Ultra Logistics fails
to discuss whether summary judgment as to count three—violation of the implied
covenant of good faith and fair dealing against Northland—is appropriate.
such, the Motion seeks summary judgment as to counts one and two only.
In support of the Motion, Ultra Logistics relies on the October 7, 2020 and
January 21, 2021 declarations of Patrick Bachmann, the Operations Manager
and Head of Human Resources at Ultra Logistics.
(ECF No. 21-3; ECF No. 28
pp. 1–5.) According to Bachmann, Frito-Lay contacted Ultra Logistics in
November of 2018 to arrange for the shipment of the bags of chips from Phoenix
(ECF No. 28 ¶ 4.) By the time Ultra Logistics selected Cody Keys
as its carrier, the Carrier Agreement and Rate Agreement (along with the
Addendum) were in effect.
(Id. ¶¶ 5, 6, 8, 9.) The Addendum provides that
“[a]ny deviation from th[e] prescribed route may result in damage to the contents
of this load and result in a cargo claim against your company.”
(Id. p. 17.)
Cody Keys issued a Bill of Lading when it picked up the bags for shipment.4
(Id. ¶ 11.)
The Bill of Lading indicates that the shipment consisted of 1,260 cases
of “assorted snack foods” on 38 pallets.
(Id. p. 21.)
The Bill of Lading also
indicates as follows: “This is to verify that the [subject bags] are properly
classified, described, packaged, marked and labeled, and are in proper condition
(Id. pp. 21, 29.) According to Bachmann, “[s]hortly after
Cody Keys delivered the subject goods to Frito[-]Lay in Frankfort, … Frito[-]Lay
… reported a claim [to Ultra Logistics] in the amount of $37,701.60 … Cody Keys’
The bill of lading “operates as both the receipt and the basic transportation
contract between the shipper/consigner and the carrier, and its terms and conditions are
binding.” EF Operating Corp. v. Am. Bldgs., 993 F.2d 1046, 1050 (3d Cir. 1993). The
bill of lading is a contract, and thus, subject to general principles of contract law. Id.
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 5 of 17 PageID: 191
driver did not take the specified Low Altitude Route” and “the bags had blown …
as a result[.]” (Id. ¶ 14.)
Bachmann conducted an investigation to determine how the bags were
(Id. ¶ 15.)
As part of his investigation, he contacted a “Macropoint”
vendor to track the carrier route by tracing the driver’s cellular phone.
also used a program called “Milemaker” to track the route taken by Cody Keys’
(Id.) When Bachmann compared the log of the actual route taken by
the driver with the Addendum, he determined that the driver deviated from the
(Id. ¶ 16.) The driver’s detour elevated the bags to “an
altitude higher than any location noted … in the Addendum[.]”
Bachmann avers that no one from Ultra Logistics had any conversation with Cody
Keys’ driver or dispatcher about any deviation from the prescribed route.
CODY KEYS’ POSITION
In opposition to the Motion, Cody Keys claims there are several factual
(ECF No. 23.)
First, Cody Keys notes that the bags of chips were in
sealed cartons when they were loaded onto Cody Keys’ trailer.
(Id. p. 4 ¶ 1.) As
such, the condition of the goods could not be inspected by Cody Keys when Cody
Keys took delivery. Second, Cody Keys’ driver followed the prescribed route out
of Phoenix into southern New Mexico, but then contacted Ultra Logistics for
permission to deviate from the route to avoid heavy traffic in Dallas-Fort Worth,
(Id. p. 4 ¶¶ 2, 3.)
Thus, according to Cody Keys, any deviation was
known to and approved by Ultra Logistics.
Third, Cody Keys claims that the
elevations of the approved detour never exceeded the highest elevation of the
prescribed “low altitude” route.5 (Id. p. 4 ¶¶ 4, 5.) Therefore, Cody Keys raises
Bachmann testified at his deposition that, in comparing the “prescribed route”
under the Carrier Agreement with the “actual route” taken by Cody Keys’ driver,
Bachmann found that the two routes were “pretty close.” (ECF No. 23-2 p. 10 at 30:18
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 6 of 17 PageID: 192
a question of whether the deviation even caused damage to the bags.
Cody Keys points out that Frito-Lay signed a “clear” Bill of Lading once the bags
were delivered at Frankfort.
(Id. p. 4 ¶ 6.) Cody Keys also argues that Ultra
Logistics cannot “use a prima facie case [under the Carmack Amendment] to
obtain summary judgment.”
(Id. p. 5.) It submits it “has presented evidence
that it was not negligent in the carriage of the goods sufficient … to create a
question of fact to preclude summary judgment.”
(Id. pp. 5, 6.)
In support of its opposition, Cody Keys relies on the original certification
and refiled certification of Brad Linder.6 (ECF No. 23-1; ECF No. 29-1.) Linder
is the Cody Keys truck driver who transported the bags of chips.
¶¶ 1, 2.)
(ECF No. 29-1
Linder states he “was unable to inspect any of the individual bags”
because “the bags themselves were contained in sealed cardboard cartons[.]”
(Id. ¶ 3.)
He transported the bags to Frankfort “via a specified low altitude
route” (id. ¶ 4) to a point “near El Paso, Texas.”
(Id. ¶ 5.) He then “contacted
[Ultra Logistics] and asked permission to alter the route” to avoid heavy traffic.
(Id.) Linder states he was granted permission to use the alternate route.
¶ 6.) He claims the load was accepted, and a “clear” Bill of Lading was signed
upon arrival at Frankfort.
(Id. ¶ 8.)
I previously entered a text order on January 15, 2021, which directed Ultra
Logistics to submit legible, authenticated Exhibits in support of the Motion, and
instructed Cody Keys to file declarations with the appropriate jurat required under 28
U.S.C. § 1746. (ECF No. 27.) While Cody Keys filed an attorney declaration
authenticating certain exhibits (ECF No. 29-2), Cody Keys failed to file a declaration of
Brad Linder with the appropriate jurat. Cody Keys is, once again, directed to file a
declaration as to Brad Linder complying with 28 U.S.C. § 1746, within seven days of this
Opinion and accompanying Order. If Cody Keys fails to timely submit a compliant
declaration, the Opinion and the Order will be revisited.
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 7 of 17 PageID: 193
DISCUSSION AND ANALYSIS
Under Rule 56(c), summary judgment is appropriate if the moving party
demonstrates there are no genuine issues of material fact, and the materials in
the record establish the movant is entitled to judgment as a matter of law.
Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986); see also Fed.R.Civ.P.
56(c)(1)(A) (providing that “materials in the record” include depositions,
documents, electronically stored information, affidavits or declarations,
admissions, interrogatory answers, or “other” materials).
A factual dispute is
“genuine” if a reasonable trier of fact could find in favor of the non-moving party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
A fact is “material” if
a dispute over that fact “might affect the outcome of the suit under the governing
The “mere existence of some alleged factual dispute between the parties will
not defeat an otherwise properly supported motion for summary judgment; the
requirement is that there be no genuine issue of material fact.”
Id. at 247–48.
The Court “may not make credibility determinations or engage in any weighing
of the evidence” in deciding a summary judgment motion.
Marino v. Indus.
Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (quoting Anderson 477 U.S. at 255).
“[I]nstead, the non-moving party’s evidence ‘is to be believed and all justifiable
inferences are to be drawn in his favor.’”
The party moving for summary judgment bears the initial burden of
demonstrating that no genuine issue of material fact exists.
U.S. at 323.
Celotex Corp., 455
“When the moving party has the burden of proof at trial, that party
must show affirmatively the absence of a genuine issue of material fact: it must
show that, on all the essential elements of its case on which it bears the burden
of proof at trial, no reasonable [trier of fact] could find for the non-moving party.”
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 8 of 17 PageID: 194
In re Bressman, 327 F.3d 229, 238 (3d Cir. 2003) (quoting United States v. Four
Parcels of Real Prop., 941 F.2d 1428, 1439 (11th Cir. 1991)).
Once the moving party meets its initial burden, the party opposing the
motion must establish that a genuine issue as to a material fact exists.
Cent. Power & Light Co. v. Lacey Twp., 772 F.2d 1103, 1109 (3d Cir. 1985).
However, the opposing party must present “more than a scintilla of evidence
showing that there is a genuine issue[.]”
Woloszyn v. Cty. of Lawrence, 396 F.3d
314, 319 (3d Cir. 2005) (citation and quotations omitted).
that there is some metaphysical doubt as to the material fact” will not defeat
summary judgment. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 586 (1986).
The opposing party cannot rest on mere allegations.
Transfer, Inc. v. Carrier Express, Inc., 54 F.3d 1125, 1130–31 (3d Cir. 1995).
Rather, summary judgment is properly denied where the opposing party “has
created a genuine issue of material fact … [by] provid[ing] sufficient evidence to
allow a [trier of fact] to find in its favor at trial.”
Gleason v. Norwest Mortg. Inc.,
243 F.3d 130, 138 (3d Cir. 2001); see also Fed.R.Civ.P. 56(e) (requiring the nonmoving party to “set out specific facts showing a genuine issue for trial”).
THE CARMACK AMENDMENT
The Carmack Amendment governs liability for loss, damage, or injury to
property transported in interstate commerce.
See Se. Express Co. v. Pastime
Amusement Co., 299 U.S. 28, 29 (1936); see also 49 U.S.C. § 14706(a)(1).
Carmack Amendment to the Interstate Commerce Act makes interstate carriers
strictly liable to the shipper for damages to the property they transport unless
they can prove certain defenses.”
Alterra Am. Ins. Co. v. Daily Express, Inc., No.
15-03665, 2017 WL 3891960, at *3 (D.N.J. Sept. 5, 2017) (citations omitted).
establish a prima facie case against a carrier under the Carmack Amendment, a
shipper must prove ‘(1) delivery of goods to the initial carrier in good condition,
(2) damage of the goods before delivery to their final destination, and (3) amount
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 9 of 17 PageID: 195
of the damages.’”
Paper Magic Grp., Inc. v. J.B. Hunt Transp., Inc., 318 F.3d
458, 461 (3d Cir. 2003) (quoting Beta Spawn, Inc v. FFE Transp. Servs., Inc., 250
F.3d 218, 223 (3d Cir 2001)).
“In other words, … a carrier … is liable for damage
to goods transported by it, unless it can show the damage was caused by
interference by human forces outside the control of either the shipper or the
Am. Home Assurance Co. v. RAP Trucking, Inc., No. 09-80020, 2010
WL 547479, at *3 (S.D. Fla. Feb. 9, 2010).
“In establishing what type of
condition the goods arrived in, a claimant must provide reliable evidence, direct
or circumstantial, that proves the condition of the goods by a preponderance of
Penske Logistics, Inc. v. KLLM, Inc., 285 F.Supp.2d 468, 474
(D.N.J. 2003) (citing Beta Spawn, 250 F.3d at 225).
“Once the plaintiff establishes a prima facie case under the Carmack
Amendment, the ‘burden shifts to the carrier to prove that it was free from
negligence and that the damage was caused solely by’ one of several possibilities,
including ‘an act of the shipper himself.’”
Alterra, 2017 WL 3891960, at *5
(quoting Beta Spawn, 250 F.3d at 226). There are five “excepted clauses” which
operate to relieve a carrier from liability in the absence of its own negligence: (1)
act of God; (2) act of public enemy; (3) act of shipper itself; (4) act of public
authority; and (5) inherent vice or nature of the goods.
& Stahl, 377 U.S. 134, 137 (1964).
Mo. Pac. R. Co. v. Elmore
As to the act-of-shipper exception, “[w]here
the shipper, rather than the carrier, secures the load, a carrier can still be liable
for any resulting damage if the shipper’s negligent work was ‘obvious or apparent’
to the carrier.”
Alterra, 2017 WL 3891960, at *6 (quoting United States v.
Savage Truck Line, Inc., 209 F.2d 442, 445 (4th Cir. 1953)).
exceptions to carrier Carmack Amendment liability do not include third party
negligence; intervening criminal conduct; assumption of the risk or break in the
chain of proximate cause.”
RAP Trucking, 2010 WL 547479, at *5 (citing Malone
v. Mayflower Transit, Inc., 819 F.Supp. 724 (E.D. Tenn. 1993)).
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 10 of 17 PageID: 196
negligence causation and defense doctrines have no play in Carmack Amendment
Count One: Liability Under the Carmack
I find that Ultra Logistics has not established a prima facie case under the
Carmack Amendment since at least several genuine issues of material fact
Thus, Ultra Logistics is not entitled to summary judgment as to count
To establish a prima facie case under the Carmack Amendment, Ultra
Logistics must prove (1) delivery of the goods to Cody Keys in good condition, (2)
damage of the goods before delivery at Frankfort, and (3) the amount of the
Paper Magic, 318 F.3d at 461.
Delivery of the Bags to Cody Keys in “Good Condition”
There is a factual dispute over whether the goods were delivered to Cody
Keys in “good condition” when Cody Keys took custody of the bags in Phoenix.
The Carrier Agreement provides that “[e]ach incident of transportation … shall
be evidenced by a written Bill of Lading showing the kind and quality of
Commodity received and delivered by Carrier at the loading and unloading
(ECF No. 28 p. 11 ¶ 14.) “Such receipt shall be prima facie
evidence of receipt of such property in good order and condition, unless such
Commodity is not readily observable[.]”
(Id.) The Bill of Lading indicates that
the shipper—identified as non-party “Shearers Phoenix”—loaded the trailer. 7
(Id. p. 21.)
The Bill of Lading contains the shipper’s certification that the bags
of chips were “properly detailed, described, packaged, marked and labeled, and
… in proper condition[.]”
(Id.) However, Cody Keys’ truck driver, Linder,
states he “was unable to inspect any of the individual bags” because “the bags
According to Frito-Lay’s assignment, however, the trailer transported by Cody
Keys was “loaded by” Frito-Lay. (ECF No. 21-3 p. 27.) As such, it remains unclear
whether Shearers Phoenix or Frito-Lay is the “shipper” for the subject bags of chips.
The relationship, if any, between Shearers Phoenix and Frito-Lay has not been
addressed by the parties in briefing.
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 11 of 17 PageID: 197
themselves were contained in sealed cardboard cartons[.]”
(ECF No. 29 ¶ 3.)
Thus, the condition of the bags at the time Cody Keys took custody of the
shipment is disputed.
Importantly, “[t]he jurisprudence on Carmack Amendment claims …
imposes different evidentiary thresholds for demonstrating good condition
depending on whether the freight was in a sealed container or an unsealed
container when tendered to the initial carrier.”
Nat’l Union Fire Ins. Co. of
Pittsburgh, PA v. Schneider Nat’l Carriers, Inc., No. 15-01401, 2018 WL 6573471,
at *5 (D.N.J. Sept. 25, 2018).
“When freight is in an unsealed container, a bill of
lading that recites the shipment’s contents and states that they were received by
the carrier in good condition will satisfy the first element of a Carmack
Amendment action.” Id. (citing Beta Spawn, 250 F.3d at 225).
“reasoned that heightened proof is not required when the shipment … is in an
unsealed container because the carrier has the ability to ascertain the nature and
condition of the shipment before taking delivery.”
Id. (citing A.I.G. Uruguay
Compania de Seguros, S.A. v. AAA Cooper Transp., 334 F.3d 997, 1003 (11th Cir.
2003) (holding that where shipment is in a sealed container, a bill of lading
without more is insufficient to establish a prima facie Carmack Amendment
By contrast, when the cargo is in a sealed container—as in this case—the
goods are “neither visible nor open to inspection,” and “a bill of lading, by itself,
is not sufficient to establish the condition of the goods.”
Beta Spawn, 250 F.3d
As such, where a shipment is delivered to the carrier in a sealed
container, plaintiff “cannot rely solely on the bill of lading to establish the
condition” of the goods, but instead must present “other reliable evidence …
which is ‘sufficient to establish by a preponderance of all the evidence the
condition of the goods upon delivery.’”
Beta Spawn, 250 F.3d at 225 (quoting
Pillsbury Co. v. Ill. Cent. Gulf R.R., 687 F.2d 241, 244 (8th Cir. 1982)).
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 12 of 17 PageID: 198
Here, Ultra Logistics relies exclusively on the face of the Bill of Lading in
seeking to make a prima facie case under the Carmack Amendment.
to Ultra Logistics’ Statement of Material Facts, when Cody Keys picked up the
bags, a Bill of Lading indicating the goods were “properly classified, described,
packaged, marked and labeled, and are in proper condition for transportation”
(ECF No. 21-1 p. 3 ¶¶ 8, 9.) “Thus,” according to Ultra
Logistics, “the [bags] were in good condition at the time when Cody Keys picked
them up … in Phoenix[.]”
However, the shipment was sealed when tendered to Cody Keys.
the Bill of Lading, alone, “is not sufficient to establish the condition of the goods.”
Beta Spawn, 250 F.3d at 225.
Without other “reliable evidence,” I cannot
conclude that Ultra Logistics has established a prima facie case under the
Paper Magic, 318 F.3d at 461.
On this basis, the
Motion will be denied.
Damage to the Bags before Final Destination
There is also a factual dispute over whether the bags of chips were damaged
while in transit from Phoenix to Frankfort.
To establish a prima facie case
under the Carmack Amendment, Ultra Logistics must also prove damage to the
goods before delivery to their final destination.
Paper Magic, 318 F.3d at 461.
According to Ultra Logistics’ Statement of Material Facts, “[s]hortly after Cody
Keys delivered the subject goods to … Frankfort, … Frito[-]Lay contacted Ultra
[Logistics] and reported a claim[.]”
(ECF No. 21-1 p. 4 ¶ 11.) “In reporting this
claim, Frito[-]Lay … indicated that Cody Keys’ driver did not take the specified
Low Altitude Route and … the bags had blown seals as a result[.]”
There is a genuine factual dispute with regard to the second element of Ultra
Logistics’ Carmack Amendment claim.
Even if Cody Keys’ driver had deviated
from the prescribed route without permission, the parties dispute whether the
bags were damaged while in transit from Phoenix to Frankfort.
states he could not inspect the bags because they were contained in sealed
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 13 of 17 PageID: 199
(ECF No. 23-1 ¶ 3.)
Second, Linder states that the bags were
“accepted” by Frito-Lay at Frankfort.
(Id. ¶ 8.) Linder’s statements “[are] to be
believed” and all justifiable inferences should be drawn in Cody Keys’ favor.
Anderson, 477 U.S. at 255.
A trier of fact could conclude that Frito-Lay’s
acceptance of the delivery indicated that the bags were in good condition as
Third, Frito-Lay did not discover “visual damage” to the bags until
December 6, 2018—almost one month after Cody Keys delivered the bags.
No. 28 p. 23.) According to Ultra Logistics, “[i]n reporting th[e] claim, Frito[-]Lay
… indicated that Cody Keys’ driver did not take the specified Low Altitude Route
and … the bags had blown seals as a result[.]”
(ECF No. 21-1 p. 4 ¶ 11.) But
the “Packaging Condition Check” section of Frito-Lay’s Claim Form indicates that
the original shrink wrap was no longer intact.
(ECF No. 28 p. 23.)
Form also indicates that the product was not taped, or, not “under shrink wrap”
(Id.) Contrary to Ultra Logistics’ contention, the documentary
evidence appears to indicate that Frito-Lay did not discover blown bag seals.
Rather, Frito-Lay appears to have discovered compromised shrink wrap and
shoddy taping efforts almost one month after Cody Keys’ delivery was accepted
Thus, a trier of fact could conclude that the damage happened
either before, or after, Cody Keys’ transportation of the goods between November
8 and November 11, 2018.
As such, Ultra Logistics has not satisfied the second
element of its Carmack Amendment claim at this juncture.
summary judgment in favor of Ultra Logistics as to count one of the complaint
will be denied.
Count Two: Breach of Contract
Ultra Logistics also claims that, because Cody Keys “did not fulfill its
obligations under the [sic] Rate Agreement[,] as it delivered the subject goods in
a damaged condition … [Cody Keys committed] a breach of contract[.]”
No. 21-2 p. 10.)
“A party alleging a breach of contract satisfies its pleading
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 14 of 17 PageID: 200
requirement if it alleges (1) a contract; (2) a breach of that contract; and (3)
damages flowing therefrom; and (4) that the party performed its own contractual
Video Pipeline, Inc. v. Buena Vista Home Entm’t, Inc., 210 F.Supp.2d
552, 561 (D.N.J. 2002) (citations omitted).
However, neither party has addressed the issue of whether Ultra Logistics’
Carmack Amendment claim (count one) preempts its breach of contract claim
The Carmack Amendment is “comprehensive enough to embrace all
damages resulting from any failure to discharge a carrier’s duty with respect to
any part of the transportation to the agreed destination[.]”
Se. Express, 299 U.S.
The Carmack Amendment “preempts all state or common law remedies
available to a shipper against a carrier for loss or damage to interstate
N. Am. Van Lines, Inc. v. Pinkerton Sec. Sys., Inc., 89 F.3d 452, 456
(7th Cir. 1996).
Courts of Appeals across federal circuits “have dismissed state
and common law claims for breach of contract, negligence, conversion and every
other action for loss of or injury to a shipment of goods.”
at Interest at Lloyd’s of London v. UPS of Am., Inc., 762 F.3d 332, 336 n. 3 (3d Cir.
2014) (collecting cases).
The Carmack Amendment’s preemptive force has been
described as “exceedingly broad—broad enough to embrace ‘all losses resulting
from any failure to discharge a carrier’s duty as to any part of the agreed
Id. at 335 (citing Ga., Fla. & Ala. Ry. v. Blish Milling Co., 241
U.S. 190, 196 (1916)).
The Third Circuit has held that state law breach of
contract and negligence claims against a carrier for loss of or damage to goods are
See Lewis v. Atlas Van Lines, Inc., 542 F.3d 403, 407–08 (3d Cir.
Notably, the Carrier Agreement between Ultra Logistics and Cody Keys
specifically provides that Cody Keys’ “liability for any cargo damage, loss or theft
from any cause shall be determined under the Carmack Amendment 49 U.S.C. §
(ECF No. 21-1 p. 5 ¶ 16; ECF No. 28 p. 11 ¶ 15.)
As such, this dispute
is governed by the Carmack Amendment, which effectively preempts Ultra
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 15 of 17 PageID: 201
Logistics’ breach of contract claim (count two).
See Schneider, 2018 WL
6573471, at *4 (“…the parties agree that, although the Complaint asserts a claim
for breach of contract, the claim actually arises under the … Carmack
The issue of preemption has not been raised or briefed by the parties.
based on the terms of the Carrier Agreement, and in light of the preemption
doctrine, I am satisfied that Ultra Logistics is not entitled to summary judgment
in its favor as to count two.
See Lloyd’s of London, 762 F.3d at 336 (common law
claims deemed preempted since property was lost “while it was in transit”).
Accordingly, summary judgment as to count two will be denied.
As an aside, there is a disputed issue of fact as to whether Cody Keys
obtained Ultra Logistics’ approval to deviate from the prescribed route so that
Cody Keys’ driver could avoid traffic in Texas.
Ultra Logistics claims permission
to deviate was never given, while Cody Keys maintains it was. (ECF No. 21-2
p. 9; ECF No. 23 p. 4 ¶ 3.) In essence, Ultra Logistics argues that, since Cody
Keys deviated from the prescribed route, the bags could only have been damaged
while in Cody Keys’ custody, thus rendering Cody Keys liable under the Carmack
Amendment and establishing Ultra Logistics’ prima facie case.
asserts that permission to deviate from the prescribed route effectively relieves it
of any and all Carmack Amendment liability.
Each party misses the mark.
Ultra Logistics ignores the motion record,
which indicates that the bags could not be inspected when Cody Keys took
custody, and, that Frito-Lay discovered evidence of cargo tampering one month
after the delivery was accepted.
Even if Cody Keys’ deviation was never
authorized, a trier of fact could nevertheless conclude that the bags were
I encourage the parties to meet and confer to enter into an appropriate
stipulation dismissing count two of the complaint.
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 16 of 17 PageID: 202
damaged before Cody Keys took custody in Phoenix, or after delivery was
completed at Frankfort.
Cody Keys appears to misapprehend the elements of a Carmack
Amendment claim. Paper Magic, 318 F.3d at 461.
Cody Keys was never
immunized from Carmack Amendment liability merely because Ultra Logistics
purportedly approved Cody Keys’ deviation from the prescribed route.
Furthermore, Cody Keys does not dispute that its potential liability for delivering
the bags in damaged condition “shall be determined under the Carmack
Amendment 49 U.S.C. § 14706[.]”
(ECF No. 21-1 p. 5 ¶ 16; ECF No. 28 p. 11 ¶ 15.)
However, since questions as to when and how damage to the bags, packaging,
shrink wrap, and taping occurred still persist, summary judgment at this
juncture is not appropriate.
Ultra Logistics has not made a prima facie case as
to count one, which also preempts count two.
The Motion will be denied.9
Count Three: Implied Covenant of Good
Faith and Fair Dealing
Ultra Logistics does not style its Motion as one for summary judgment as to
only counts one and two of the complaint, yet advances no position regarding
whether summary judgment as to count three is appropriate.
Logistics has not sought summary judgment as to its claim against Northland, I
will not consider the issue.
Ultra Logistics’ request for attorney’s fees under the Carrier Agreement for Cody
Keys’ “unquestioned liability” is likewise denied. (ECF No. 21-2 pp. 11, 12.)
Case 2:19-cv-19315-ESK Document 30 Filed 02/17/21 Page 17 of 17 PageID: 203
For the reasons stated, the Motion is DENIED.
A separate Order
accompanies this Opinion.
/s/ Edward S. Kiel
EDWARD S. KIEL
UNITED STATES MAGISTRATE JUDGE
Date: February 17, 2021
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?