MARX COMPANIES, LLC. v. WESTERN TRANS LOGISTICS, INC.

Filing 18

OPINION filed. Signed by Judge Joel A. Pisano on 1/20/2015. (kas, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

____________________________________
:
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MARX COMPANIES, LLC, t/a
:
MARX IMPORTS
:
:
Plaintiff,
:
:
v.
:
:
WESTERN TRANS LOGISTICS, INC.
:
:
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Defendant.
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____________________________________:

Civil Action No. 14-751 (JAP)

OPINION

PISANO, District Judge.
Presently before the Court in this breach of contract action brought by plaintiff Marx
Companies, LLC (“Plaintiff” or “Marx”) is a motion to dismiss filed by defendant Western
Trans Logistics, Inc. (“Defendant” or “Western”). Defendant seeks dismissal of the matter
pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons herein, Western’s
motion is granted.
I. BACKGROUND
The following facts are taken from Plaintiff’s complaint 1 (unless otherwise specified)
and are presumed to be true for the purposes of this motion:
In February 2013, Plaintiff retained and contracted with Western for assistance in
arranging transportation of Plaintiff’s two truckloads of frozen boneless beef from Long

1

The entirety of the complaint consists of 17 numbered paragraphs.

Beach, California to Kansas City, Missouri. The complaint states the following, inter alia,
about the alleged contract:
•

“In February 2103, plaintiff … contracted with defendant to act as a

transportation broker to assist plaintiff in arranging the transportation of plaintiff’s goods.”
Compl. ¶ 5.
•

“The plaintiff and defendant contracted for defendant to arrange for the

transportation of the goods, and that plaintiff would compensate defendant for its services.”
Compl.¶ 6.
•

In this contract, defendant expressly promised to plaintiff “that it was a

responsible third party that had an extensive nationwide network of reliable carriers.” Compl.
¶ 14.
The written contract entered into by the parties was a one-page agreement entitled
“Credit Application”, the terms of which, in their entirety, read as follows:
Terms- Payment for freight invoices are to be received at remittance
address within 21 days of receipt of invoice. All past due accounts may be
subject to a service charge of up to one and one-half percent (1.5%) per
month or, if less, the maximum rate permitted by applicable law. If the
applicant breaches any term of this agreement including the payment of
moneys due pursuant to this Agreement, Applicant shall pay all costs
incurred by Seller in enforcing the terms of this Agreement including, but
not limited to, reasonable attorney’s fees, whether or not legal proceedings
are commenced. The Applicant hereby acknowledges that Seller is duly
licensed as a broker of transportation by motor carrier and is not a motor
carrier. The applicant agrees not to offset all or any part of such a claim
against any amounts due to Seller without Seller’s consent. The Seller
agrees to provide excellent communication regarding the timeline and
payment status of all claims caused by hauling carriers hired by the Seller.
The Seller agrees to negotiate claims against the hauling carrier on behalf
of the Applicant, if Applicant so chooses.

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We certify that the information on this form is correct. We fully
understand your credit terms and agree to the proper payment in
consideration of extended credit.
[dated 2/12/13 and signed by Frank Marx, President]
Defendant’s Ex. A.
Western arranged for transportation with Dew-Right Transportation, Inc. (“DRT”), a
company with which it had no prior business dealings but which it believed held the
appropriate Department of Transportation credentials. Plaintiff released the goods for
transport by DRT, but the goods were never delivered. Plaintiff claims that the goods were
stolen by DRT.
In its complaint in this action, Plaintiff alleges Defendant breached two “implied”
duties 2, namely “a duty that the defendant would act in accordance with the standards of a
professional freight brokers [sic],” Compl. at ¶ 12; and “a duty that defendant would retain
only competent, honest and reliable motor carriers to transport plaintiff’s goods,” id. at ¶ 13.
Plaintiff alleges that Defendant breached an express promise as well, specifically, “that
[Defendant] was a responsible third party that had an extensive nationwide network of reliable
carriers, id. at ¶ 14. Plaintiff contends that Defendant breached these duties/promise “by
retaining a carrier about which it had no information” and “by retaining a carrier that was not
insured.” Id. at ¶ 15, 16.
II. ANALYSIS
Defendant moves to dismiss the complaint pursuant to Federal Rule of Civil Procedure
12(b)(6), which provides for the dismissal of a complaint if the plaintiff fails to state a claim
2

On the face of the complaint, it is not entirely clear whether Plaintiff intends these to be breach of contract
claims or negligence claims. Defendant has briefed the motion both ways, but Plaintiff refers to these as
negligence claims. The Court, therefore, construes them as negligence claims for the purposes of this
motion.

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upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Under Federal Rule of Civil
Procedure 8(a)(2), a pleading must contain “a short and plain statement of the claim showing
that the pleader is entitled to relief.” This pleading standard does not require “detailed factual
allegations,” but it does require “more than labels and conclusions”; a “formulaic recitation of
the elements of a cause of action” will not suffice. Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007). Therefore, in order to withstand a motion
to dismiss pursuant to 12(b)(6), “a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662,
678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
The plausibility standard is satisfied “when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Id. The plausibility standard is not a “probability requirement,” but “it
asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. To decide if a
complaint meets this plausibility standard and therefore, survives a motion to dismiss, the
Third Circuit has required a three step analysis: (1) the Court must “outline the elements a
plaintiff must plead to ... state a claim for relief”; (2) the Court must identify “those
allegations that are no more than conclusions and thus not entitled to the assumption of truth”;
and (3) “where there are well-pleaded factual allegations, [the Court] should assume their
veracity and then determine whether they plausibly give rise to an entitlement for relief.”
Bistrian v. Levi, 696 F.3d 352, 365 (3d Cir. 2012); Santiago v. Warminster Twp., 629 F.3d
121, 130 (3d Cir. 2010).
Defendant argues that Plaintiff’s complaint should be dismissed in its entirety. First, it
argues that Plaintiff’s negligence claims fail because they are preempted by the Federal

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Aviation Administration Authorization Act (“FAAAA”), 49 U.S.C. § 14501. Second,
Defendant argues that Plaintiff’s breach of contract claim fails because the alleged promise
that was breached is not found in the parties’ written agreement.
Turning first to the preemption argument, Section 14501 reads in the relevant part
as follows:
a State ... may not enact or enforce a law, regulation, or other provision
having the force and effect of law related to a price, route, or service of
any motor carrier ... or any private motor carrier, broker or freight
forwarder with respect to the transportation of property.
49 U.S.C. § 14501(c)(1) (emphasis supplied). For purposes of this provision, “[s]tate
common law counts as an ‘other provision having the force and effect of law.’” Ameriswiss
Technology, LLC v. Midway Line of Illinois, Inc., 888 F.Supp.2d 197 (D.N.H. 2012) (quoting
Non Typical, Inc. v. Transglobal Logistics Grp. Inc., 2012 WL 1910076, at *2 (E.D. Wis.
May 28, 2012) (citing Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 233 n. 8, 115 S.Ct. 817, 130
L.Ed.2d 715 (1995); Morales v. Trans World Airlines, Inc., 504 U.S. 374, 388, 112 S.Ct.
2031, 119 L.Ed.2d 157 (1992))). The Supreme Court has held that a state law is “related to” a
carrier's rates, routes, or services, and thereby preempted, if the law has a “‘connection with or
reference to’” a carrier’s rates, routes, or services. Rowe v. New Hampshire Motor Transport
Association, 552 U.S. 364, 370, 128 S.Ct. 989, 169 L.Ed.2d 933 (2008). Further, a state law
is preempted even if its effect on rates, routes, or services is “only indirect.” Id. As to preemption, “it makes no difference whether a state law is ‘consistent’ or ‘inconsistent’ with
federal regulation. Id. The only situations where federal law does not preempt are those
where the impact of the state law is “too tenuous, remote, or peripheral” to have “pre-emptive
effect.” Rowe, 552 U.S. 371.

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Many other courts, under facts similar to the instant case, have found common law
claims against a freight broker preempted by Section 14501. For example, in the recent case
of ASARCO LLC v. England Logistics Inc., --- F.Supp.3d ----, 2014 WL 7339069 (D. Ariz.
2014), the plaintiff’s shipment of copper anodes being transported from Arizona to Texas
failed to arrive at its destination and, ultimately, was never located. Plaintiff brought claims
of negligence, among others, against the freight brokers involved with the shipment, asserting
that the brokers breached their duties by “hiring … a newly formed carrier that did not have
an established history” and by failing to “protect” the shipment and “ensure [its] delivery in
good condition.” Id. at *13. In finding the claims the preempted, the court found that holding
the broker liable for negligence “would certainly have more than a tenuous, remote or
peripheral effect on rates and services.” Id. at *15; see also AIG Europe Ltd. v. General
System, Inc., 2014 WL 3671566, *4 (D. Md. 2014) (finding §14501 preempts negligence
claim against broker who allegedly failed to select a motor carrier with sufficient insurance
because “[t]he claim clearly relates to the service provided by a broker.”).
Similarly in Ameriswiss Technology, LLC v. Midway Line of Illinois, Inc.,
888 F.Supp.2d 197 (D.N.H. 2012), the plaintiff brought a claim for negligence against the
broker who arranged for the shipment of machinery that was subsequently destroyed during
transport, alleging the broker beached its duty of care by failing to select a trustworthy carrier
to transport the machines. That court, citing a number of cases similarly holding, found that §
14501 expressly preempted plaintiff’s negligence claims against the broker. Id. at 206-07.
(citing Non Typical, Inc. v. Transglobal Logistics Group, Inc., 2012 WL 1910076, at *3 (E.D.
Wis. May 28, 2012) (judgment on the pleadings entered in favor of broker because the
plaintiff’s negligence claims were preempted by the § 14501); Chatelaine Inc. v. Twin Modal,

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Inc., 737 F.Supp.2d 638, 642–43 (N.D. Tex. 2010) (dismissing negligence claims based on
express preemption); Huntington Operating Corp. v. Sybonney Express, Inc., 2010 WL
1930087, at *3 (S.D. Tex. May 11, 2010) (entering summary judgment in favor of broker for
negligence claims, based on express preemption).
This Court likewise finds that Plaintiff’s negligence claims are preempted in the
instant case. The claims undoubtedly relate to the service of the broker and, as set forth in the
cases cited above, are therefore expressly preempted by § 14501. Consequently, Defendant’s
motion is granted as to Plaintiff’s negligence claims.
The Court turns next to Plaintiff’s breach of contract claim. In this motion, Defendant
provides a copy of the written agreement between the parties, and argues that Plaintiff’s
breach of contract claim must be dismissed because the contractual promise that was allegedly
violated is not found in the parties’ written agreement. The Court agrees that it is not.
However, in response to Defendant’s assertion, and contrary to the allegation in the complaint
that Defendant breached a “specific[] promise[]” in the contract, Compl. ¶ 14, Plaintiff now
argues that the promise at issue was “implied” and, in fact, the contractual breach was actually
of the implied covenant of good faith and fair dealing. Further, although not appearing
anywhere in the complaint, Plaintiff also claims that the allegedly breached promise actually
forms the basis of fraudulent inducement and misrepresentation claims.
There are a number of problems with Plaintiff’s contentions. First, the complaint does
not contain claims for fraudulent inducement and misrepresentation. Nor does it mention the
covenant of good faith and fair dealing. 3 Moreover, were those claims in the complaint, they
would be preempted as being outside the confines of the express contractual agreement
3

In fact, the complaint distinguishes the breach of contract claim from other claims asserting the breach of
“implied” duties allegedly arising from the parties’ agreement.

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between the parties. See Yellow Transp., Inc. v. DM Transp. Management Services, Inc., 2006
WL 2871745 (E.D. Pa. July 14, 2006) (noting that “the Supreme Court has construed the
phrase ‘enact or enforce any law’ [in § 14501] as prohibiting the enforcement of state laws,
statutes, regulations, or policies beyond the confines of the contractual agreement between
parties, such as state tort claims, which impose obligations external to the conditions to which
the parties voluntarily agreed.”) (citing American Airlines, Inc. v. Wolens, 513 U.S. 219, 232233 (1995). Therefore, the Court finds that Plaintiff has failed to plead a plausible claim, and
grants the remainder of Defendant’s motion.
III. CONCLUSION
For the reasons above, Plaintiff’s complaint is dismissed in its entirety. An
appropriate Order accompanies this opinion.

/s/ Joel A. Pisano
JOEL A. PISANO, U.S.D.J.
Date: January 20, 2015

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