Nature's One, Inc. v. Spring Hill Jersey Cheese, Inc.
ORDER granting 85 Motion for Summary Judgment; finding as moot 132 Motion to Strike. Signed by Judge Algenon L. Marbley on 9/29/2017. (cw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
NATURE’S ONE, INC.,
SPRING HILL JERSEY CHEESE, INC.,
Defendant/Third-Party Plaintiff, :
WD LOGISTICS, L.L.C., et al.,
Case No. 2:15-cv-2820
JUDGE ALGENON L. MARBLEY
Magistrate Judge Deavers
OPINION & ORDER
This matter is before the Court on Third-Party Defendant WD Logistics, L.L.C.’s (“WD
Logistics”) Motion for Summary Judgment (Doc. 85) and Motion to Strike Evidentiary
Submissions. (Doc. 132.) For the reasons set forth below, WD Logistics’ Motion for Summary
Judgment is GRANTED. Because WD Logistics is entitled to summary judgment even if the
Court considers the evidence WD Logistics deems improper, the Motion to Strike is MOOT.
I. FACTUAL & PROCEDURAL BACKGROUND
Plaintiff Nature’s One is a central Ohio company that develops, markets, manufactures,
and sells organic medical nutrition products, including various formula and milk products
consumed primarily by infants and children. (See Am. Compl., Doc. 17, ¶ 7.) Defendant Spring
Hill, located in Petaluma, California, is a supplier of milk products to manufacturers across the
United States. (Spring Hill Countercl., Doc. 23, ¶ 2.) In 2014, Nature’s One began purchasing
organic nonfat dry milk (“NFDM”) from Spring Hill. (Doc. 17 ¶ 9.) Nature’s One requires its
suppliers to provide it with NFDM that is free of egg allergens, and Spring Hill was aware of this
In April 2015, Spring Hill ordered five shipments of milk from Triple T Dairy
Commodities, Inc. (“Triple T”). (Am. Third-Party Compl., Doc. 34, ¶ 6.) Triple T then hired
WD Logistics1 to arrange for the milk to be transported from Texas to California. (See Doc.
34 ¶ 12.) WD Logistics hired drivers to transport the milk—this was its sole role. WD Logistics
is not an interstate motor carrier, nor did it have a contractual relationship with Nature’s One or
Spring Hill. (Honeycutt Decl. ¶¶ 4, 11.) WD Logistics did not supply, manufacture, sell, label,
distribute, or market the milk. (Id. ¶ 5.) WD Logistics did not arrange for any further shipment
of the milk after it was delivered to Spring Hill in California. (Id. ¶ 8.)
Nature’s One ultimately discovered that its milk was contaminated with egg allergens,
rendering its infant formula unfit for sale. Nature’s One therefore sued Spring Hill for damages
related to the contamination (see Doc. 34 ¶ 1), and Spring Hill brought a third-party complaint
against WD Logistics, among others. (See generally id.) Six of Spring Hill’s ten claims for
relief in its third-party complaint are brought against WD Logistics. (Id. ¶¶ 15–40.) In its first,
fourth, fifth, and sixth claims for relief, Spring Hill alleges that WD Logistics’ negligence was
the proximate cause of the milk’s contamination. (See id. ¶¶ 16, 25, 30, 39.) Spring Hill also
brings claims for indemnity and contribution against WD Logistics. (See id. ¶¶ 18–21.)
WD Logistics moves for summary judgment on Spring Hill’s third-party complaint.
(Doc. 85.) This motion is ripe and ready for adjudication. In addition, WD Logistics moves to
strike certain of Spring Hill’s evidentiary submissions in its memorandum in opposition to WD
WD Logistics is authorized by the Federal Motor Carrier Safety Administration (“FMCSA”) as a broker
to arrange motor carrier transportation for compensation. (Declaration of Drew Honeycutt (“Honeycutt
Decl.”), Ex. 1 to WD Logistics’ Mot. for Summ. J., Doc. 85-1, ¶ 3.)
Logistics’ motion for summary judgment. (See ECF No. 132.) The motion to strike, too, is ripe
for this Court’s review.
II. STANDARD OF REVIEW
Summary judgment is proper when “there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The moving
party bears the burden of proof on both points. Vaughn v. Lawrenceburg Power Sys., 269 F.3d
703, 710 (6th Cir. 2001). In determining whether this standard is met, the Court must “view the
evidence in the light most favorable to the non-moving party and draw all reasonable inferences
in its favor.” Crouch v. Honeywell Int’l, Inc., 720 F.3d 333, 338 (6th Cir. 2013). As always,
this inquiry turns on “whether ‘the evidence presents a sufficient disagreement to require
submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’”
Patton v. Bearden, 8 F.3d 343, 346 (6th Cir. 1993) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 251–52 (1986)). The mere existence of a scintilla of evidence does not suffice to
survive a motion for summary judgment; rather, there must be evidence on which a jury could
reasonably find for the opposing party. See Anderson, 477 U.S. at 251; Copeland v. Machulis,
57 F.3d 476, 479 (6th Cir. 1995).
III. LAW & ANALYSIS
WD Logistics moves for summary judgment on the grounds that Spring Hill’s state-law
claims are preempted by the Federal Aviation Administration Authorization Act (“FAAAA”)
and that they fail on the merits because WD Logistics bears no liability for the contaminated
milk. Because the Court finds that Spring Hill’s claims are preempted, it need not address the
merits of each of Spring Hill’s claims.
A. Spring Hill’s Negligence Claims Are Preempted by the FAAAA.
In 1994, Congress passed the FAAAA as part of deregulating the trucking industry. The
law preempts all state laws “related to a price, route, or service of . . . any motor carrier . . . or
broker, . . . with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). The
Supreme Court has concluded that the phrase “related to” has an “expansive sweep,” and its
ordinary meaning is broad: “to stand in some relation; to have bearing or concern; to pertain;
refer; to bring into association with or connection with.” Cerdant, Inc. v. DHL Express USA,
Inc., No. 2:08-cv-186, 2009 WL 723149, at *3 (S.D. Ohio Mar. 16, 2009) (Marbley, J.) (citing
Morales v. Trans World Airlines, 504 U.S. 374, 384–85 (1992) (interpreting the preemption
provision of the Airline Deregulation Act, after which the FAAAA’s language was patterned)).
As set forth above, WD Logistics is an authorized broker; it is not an interstate motor
carrier. (Honeycutt Decl. ¶¶ 3–4.) A broker is a “person, other than a motor carrier . . . that as a
principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation,
advertisement, or otherwise as selling, providing, or arranging for, transportation by motor
carrier for compensation.” 49 U.S.C. § 13102(2).2 The law is clear that negligence claims
against brokers are preempted under the FAAAA. See, e.g., AIG Europe Ltd. v. Gen. Sys., Inc.,
No. RDB-13-0216, 2014 WL 3671566, at *4 (D. Md. July 22, 2014) (FAAA preempted
negligence claim against broker who allegedly failed to select motor carrier with sufficient
insurance because the claim “clearly relates to the service provided by a broker); Ameriswiss
Tech., LLC v. Midway Line of Ill., Inc., 888 F. Supp. 2d 197, 206–07 (D.N.H. 2012); Huntington
By contrast, a “motor carrier” means “a person providing motor vehicle transportation for
compensation.” 49 U.S.C. § 13102(14).
Op. Corp. v. Sybonney Express, Inc., No. H-08-781, 2010 WL 1930087, at *3 (S.D. Tex. May
WD Logistics argues that, “[a]lthough Spring Hill has brought six different claims
against WD Logistics, each claim essentially alleges that WD Logistics acted negligently and
that this negligence attributed to the alleged contamination giving rise to this suit.” (Doc. 85 at
8.) In its first, fourth, fifth, and sixth claims for relief, Spring Hill alleges that WD Logistics’
negligence was the proximate cause of the milk’s contamination. (See Doc. 34 ¶¶ 16, 25, 30,
Spring Hill’s indemnity and contribution claims are also require a showing of WD
Logistics’ negligence in order to succeed. With regard to indemnity, “[i]ndemnification is not
allowed when the two parties are joint or concurrent tortfeasors and are both chargeable with
actual negligence.” Reynolds v. Physicians Ins. Co. of Ohio, 623 N.E.2d 30, 31–32 (Ohio 1993).
That is, Spring Hill could not recover on its indemnification claim if both it and WD Logistics
were negligent; in order to succeed, Spring Hill must establish WD Logistics’ negligence, that it
has been imputed to Spring Hill, and that Spring Hill has been required to pay for the effects of
that imputed negligence. See Worth v. Aetna Cas. & Sur. Co., 513 N.E.2d 253 256 (Ohio 1987).
Similarly, “if one or more persons are jointly and severally liable in tort for the same
injury or loss to person or property or for the same wrongful death, there may be a right of
contribution even though judgment has not been recovered against all or any of them.” Ohio
Rev. Code § 2307.25. For a contribution claim to go forward, there need not be a judgment
against the contribution defendant, but the contribution defendant must be “liable in tort” for the
Spring Hill claims that Litchfield v. United Parcel Serv., Inc., 136 F. Supp. 2d 756 (S.D. Ohio 2000)
stands for the proposition that state common law claims are not subject to complete preemption under the
FAAAA, and therefore its negligence claims survive. (See Doc. 119 at 5.) To the contrary, Litchfield
noted only that some types of state actions may affect “rates, routes, or services” in “too tenuous, remote
or peripheral” a manner as to have a preemptive effect, and that a conversion claim may be one such
action. See Litchfield, 136 F. Supp. 2d at 760.
injury (here, negligence) giving rise to the contribution claim. See MetroHealth Med. Ctr. v.
Hoffmann-LaRoche, Inc., 685 N.E.2d 529 (Ohio 1997). Because all of Spring Hill’s claims
against WD Logistics allege negligence in WD Logistics’ performance of its transportation
services, all of Spring Hill’s claims against it are preempted under the FAAAA.
According to Spring Hill, a genuine issue of material fact exists as to “[w]hether and to
what extent WD Logistics acted as more than a mere broker,” which precludes summary
judgment based on FAAAA preemption. (Doc. 119 at 5.) Spring Hill correctly notes that
whether a company is a broker or a carrier “is not determined by what the company labels itself,
but by how it represents itself to the world and its relationship to the shipper.” Hewlett-Packard
Co. v. Brother’s Trucking Enters., Inc., 373 F. Supp. 2d 1349, 1352 (S.D. Fla. 2005). Thus, the
mere fact that WD Logistics avers by declaration that it served only as a broker, not a motor
carrier, does not automatically entitle it to summary judgment. However, Spring Hill fails to
create an issue of material fact about WD Logistics’ status sufficient to defeat summary
judgment. Spring Hill refers to the fact that one of the shipping documents in discovery shows
that WD Logistics shares “the same principal office address” as Western Dairy Transport, a
federally licensed motor carrier that was a carrier for one of the deliveries of milk brokered by
WD Logistics. (See Doc. 119 at 3.)
But even if WD Logistics held itself out to the public as a motor carrier by way of some
relationship with Western Dairy Transport, by its plain terms, the FAAAA preempts state-law
claims “related to a price, route, or service of any motor carrier” in addition to brokers. 49
U.S.C. § 14501(c)(1) (emphasis added). It is therefore immaterial for purposes of preemption
whether WD Logistics is a broker or a motor carrier.
Moreover, WD Logistics correctly
observes that nowhere in the amended third-party complaint does Spring Hill allege any claim of
motor carrier liability against WD Logistics or that WD Logistics was holding itself out as a
motor carrier. (Doc. 131 at 8.) Because a party cannot rely on “wholly new allegations of
wrongdoing to resist a motion for summary judgment,” Spring Hill’s argument that WD
Logistics is a motor carrier rather than a broker is insufficient to defeat summary judgment for
this independent reason. Guiffre v. Local Lodge No. 1124, United Steelworkers of Am., 940 F.
2d 660 (6th Cir. 1991) (unpublished table decision); see also Stemler v. City of Florence, 126
F.3d 856, 872 (6th Cir. 1997).
B. Spring Hill’s Contract-Based Claims Against W.D. Logistics Fail.
The FAAAA does not preempt state-law breach of contract claims, but courts are
“limited to the parties’ bargain, with no enlargement or enhancement based on state laws or
policies external to the agreement.” Cerdant, 2009 WL 723149, at *4. While Spring Hill is
correct that the FAAAA does not preempt garden variety breach of contract claims, this does not
save a breach of contract claim that it did not plead. (See Doc. 34 at 9–11 (alleging contractual
relationship only between Spring Hill and Triple T).)
In an effort to save its purported breach of contract claim after failing to allege the
existence of a contract between Spring Hill and WD Logistics and to plead a breach of contract
claim against WD Logistics, Spring Hill asserts in its opposition for the first time that WD
Logistics is a third-party beneficiary of its contract with Triple T. (See Doc. 119 at 6.) As stated
above, however, a party cannot defeat summary judgment by raising novel allegations in its
opposition. Guiffre, 940 F. 2d at 660; see also Meikle v. Edward J. DeBartolo Corp., No. 00CA-58, 2001 WL 1468563, at *5 (Ohio Ct. App. Nov. 7, 2001) (dismissing third-party
beneficiary claim that was not pleaded in complaint). For these reasons, Spring Hill’s supposed
breach of contract claims against WD Logistics fail as a matter of law.
For the foregoing reasons, WD Logistics’ Motion for Summary Judgment is GRANTED.
The Motion to Strike is therefore MOOT.
IT IS SO ORDERED.
s/ Algenon L. Marbley
ALGENON L. MARBLEY
UNITED STATES DISTRICT JUDGE
DATED: September 29, 2017
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