Blanco v. Federal Express Corporation et al
Filing
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ORDER denying 10 Plaintiff's Motion to Remand. Signed by Honorable Robin J. Cauthron on 9/15/16. (lg)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
RODGER BLANCO,
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Plaintiff,
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vs.
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FEDERAL EXPRESS CORPORATION )
d/b/a FedEx Express, a foreign corporation, )
JUSTIN DIGBY, an individual, and
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MATTHEW WAINER, an individual,
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Defendants.
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Case Number CIV-16-561-C
MEMORANDUM OPINION AND ORDER
Plaintiff is suing Defendants regarding the loss of a package containing gold bars and
coins shipped via Defendant Federal Express (“FedEx”) valued at approximately $389,430.
After Plaintiff’s package did not reach its destination, FedEx informed him that part of the
package was found in a trashcan within FedEx’s facilities and FedEx was conducting an
investigation to determine what had become of the package contents. Several months later,
with no answers forthcoming from FedEx, Plaintiff contacted the Secret Service which
conducted its own investigation, resulting in Defendant Digby’s admission of guilt and his
conviction for theft of the package while employed by FedEx. Defendant Wainer was
Defendant Digby’s coworker at the time of the theft and is an alleged accomplice.
Plaintiff raises the causes of action of negligent investigation as to FedEx and
conversion as to all three Defendants. FedEx removed the case to this Court on May 26,
2016. In Plaintiff’s Motion to Remand, which is currently at issue, Plaintiff argues that
FedEx has failed to bear its burden of proof for proper removal to Federal Court. FedEx
argues that removal is proper under 28 U.S.C. § 1332(a), diversity jurisdiction, and that
Plaintiff’s claims rooted in Oklahoma state law are thinly veiled attempts of avoiding federal
question jurisdiction.
ANALYSIS
As the party invoking jurisdiction of the federal court, FedEx bears a substantial
burden of proof. In fact, there is a “presumption against its existence.” Basso v. Utah Power
& Light Co., 495 F.2d 906, 909 (10th Cir. 1974) (citing City of Lawton, Okla. v. Chapman,
257 F.2d 601 (10th Cir. 1958)). To invoke subject matter jurisdiction based on diversity of
citizenship, 28 U.S.C. § 1332(a) requires that Movant show “the matter in controversy
exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . .
citizens of different States.” If complete diversity is not present, the Court must remand.
First, the Court must examine the citizenship of the parties for purposes of diversity
jurisdiction. Plaintiff states in the Petition filed in the District Court of Oklahoma County
that he is “an individual who resides in Florida.” (Petition, Dkt. No. 1-1, Pg. 1). FedEx is
incorporated in the state of Delaware and “at all relevant times had its principal place of
business in the state of Tennessee.” (Notice of Removal, Dkt. No. 1, ¶ 3). Defendant Digby
is deemed to be a citizen of the state of Georgia even though he currently resides at a federal
correctional institution in South Carolina. The Tenth Circuit has held that “a prisoner is
presumed to be a citizen of the state of which he was a citizen before his incarceration, even
if he is subsequently incarcerated in another state.” Smith v. Cummings, 445 F.3d 1254,
1260 (10th Cir. 2006) (citing Sullivan v. Freeman, 944 F.2d 334, 337 (7th Cir. 1991)). The
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citizenship of Defendant Wainer is not at issue because he was not properly joined and
served at the time of FedEx’s Notice of Removal. Defendant Wainer has not been served at
the time of this Order. 28 U.S.C. § 1446(b)(2)(A) requires consent of only those “defendants
who have been properly joined and served.” See also Sheldon v. Khanal, 502 F. App’x 765,
769-70 (10th Cir. 2012). Therefore, Plaintiff is diverse from all Defendants, as required by
Fed. R. Civ. P. § 1332. Plaintiff also pleaded an amount in controversy in excess of $75,000.
Accordingly, this requirement is not at issue, making remand improper because diversity
jurisdiction is present.
Remand would also be improper because Plaintiff’s claims raise federal question
jurisdiction.
Federal question jurisdiction exists for “civil actions arising under the
Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. The Court is “guided
generally by the ‘well-pleaded complaint’ rule, under which a suit arises under federal law
‘only when the plaintiff’s statement of his own cause of action shows that it is based’ on
federal law.” Schmeling v. NORDAM, 97 F.3d 1336, 1339 (10th Cir. 1996) (quoting
Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152 (1908)). Additionally, the general
presumption that the federal courts are courts of limited jurisdiction applies when courts
consider asserting federal question jurisdiction. Exxon Mobil Corp. v. Allapattah Servs.,
Inc., 545 U.S. 546, 552, (2005). In accordance with these principles, the Court must closely
examine matters before it and ensure that it has the power to consider the issues raised.
First, the Court must determine whether the cause of action is governed by federal
law. The Tenth Circuit has not addressed the narrow issue of whether a claim for lost or
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stolen goods transported by a common air carrier is subject to federal question jurisdiction
by preemption of federal common law. However, this question has been answered in the
affirmative by several other circuits. The Fifth Circuit has held that a federal cause of action
is present “for freight claims against air carriers.” Sam L. Majors Jewelers v. ABX, Inc., 117
F.3d 922, 928-29 (5th Cir. 1997) (addressing whether the federal court had jurisdiction over
recovery claims for lost shipments). There, the court reasoned that because Congress did not
clearly and explicitly repeal federal common law when deregulating the airlines under the
Airline Deregulation Act of 1978 (“ADA”), 49 U.S.C. §§ 1301 et. seq., it intended to retain
the common law. In fact, the court stated that “[i]n enacting the ADA, Congress included
a savings clause that provided: ‘Nothing in this chapter shall in any way abridge or alter the
remedies now existing at common law or by statute, but the provisions of this Chapter are
in addition to such remedies.’” Sam L. Majors Jewelers, 117 F.3d at 928. Thus, “[t]his
savings clause had the effect of preserving the clearly established federal common law cause
of action against air carriers for lost shipments.” Id.
Other circuit courts have made similar holdings on this narrow issue. See Treiber &
Straub, Inc. v. United Parcel Serv., Inc., 474 F.3d 379, 383-84 (7th Cir. 2007); Nippon Fire
& Marine Ins. Co. v. Skyway Freight Sys., Inc., 235 F.3d 53, 59 (2d Cir. 2000); Read-Rite
Corp. v. Burlington Air Express, Ltd., 186 F.3d 1190, 1196 (9th Cir. 1999); First
Pennsylvania Bank, N.A. v. Eastern Airlines, Inc., 731 F.2d 1113, 1115-16 (3d Cir. 1984).
The Court is persuaded by these circuit court decisions and finds that causes of action against
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air carriers for lost shipments have been preempted by federal common law and jurisdiction
is proper with this Court.
While most case law on this issue discusses lost or damaged shipments, the Court
finds that stolen shipments will be governed by the same federal common law. Many courts
discuss stolen, presumably stolen, and lost items when applying the same common air carrier
concepts discussed above. See Bary v. Delta Airlines, Inc., No. CIV.A.CV-02-5202(DGT),
2009 WL 3260499, at *12 (E.D.N.Y. Oct. 9, 2009) (claims that jewelry allegedly stolen from
luggage while in air carrier’s possession were treated as a lost shipment and preempted by
ADA), aff’d, 553 F. App’x 51 (2d Cir. 2014); Stein Jewelry Co. v. United Parcel Serv., Inc.,
228 F. Supp. 2d 304, 305 (S.D.N.Y. 2002) (while the plaintiff alleged that diamonds from
a package were stolen, the court found that the “gravamen . . . of the plaintiff[’s] claim is that
his diamonds were lost”); Kemper Ins. Cos., Inc. v. Fed. Express Corp., 115 F. Supp. 2d 116,
120-21 (D. Mass. 2000) (explaining that “allegations of thefts notwithstanding, [the tort
claims] . . . fall into the category of lost shipments” and are preempted by the ADA), aff’d.,
252 F.3d 509 (1st Cir. 2001); Gemnet Express, Inc. v. Fed. Express Corp., No.
06 CIV.2648(DF), 2009 WL 928299, at *1, *4-*5 (S.D.N.Y. Mar. 30, 2009) (applying
federal preemption to breach of contract and negligence claims for “property lost or stolen
in the course of a Federal Express shipment”); Varga v. United Airlines, No. C 09-02278 SI,
2009 WL 2246208, at *1, *5 (N.D. Cal. July 24, 2009) (finding ADA preemption and
retaining jurisdiction when plaintiff alleged that an airline employee stole jewelry from her
checked luggage).
Contrast with Signer v. DHL Worldwide Exp., Inc., No. 065
61932-CIV-MOORE, 2007 WL 1521497, at *6 (S.D. Fla. May 22, 2007) (drawing a
distinction between lost and stolen items when applying federal preemption).
Additionally, Plaintiff argues that the claims are not proper for federal court because
they arise not out of FedEx’s air carrier status, but the company’s “conduct of voluntarily
undertaking the lead . . . in investigating criminal conduct and the recovery of Plaintiff’s
stolen property.” (Mot. to Remand, Dkt. No. 10, p. 7.) Because Plaintiff’s claims of relief
include negligence and conversion, Plaintiff would have the Court find this is a question of
state law pleaded on the face of the state court Petition. However, Plaintiff also attempts to
connect the conduct of FedEx to the lost shipment by alleging in the conversion claim that
FedEx “ratified [the] employees’ conduct” and therefore contributed to Plaintiff’s damages.
(Petition, Dkt. No. 1-1, ¶ 47.)
FedEx asserts that by making such arguments, Plaintiff is attempting to use state law
claims to recover for the lost shipment, thereby circumventing the federal common law
governing such air carrier losses. The Court must examine the entire record to determine if
the true nature of the claim is federal and if the Plaintiff has attempted to characterize the
claims through “artful pleading” as pertaining to state law. Rivet v. Regions Bank of
Louisiana, 522 U.S. 470, 475 (1998) (citation omitted). Due to the nature of the issue
presented and the recovery sought, the Court is persuaded there is indeed a federal question
now before the Court and remand would be improper.
In regard to the state law claims against Defendant Digby and Defendant Wainer, the
Court has discretion to exert supplemental jurisdiction over any state law claim that is not
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preempted if all of Plaintiff’s claims “form part of the same case or controversy.” 28 U.S.C.
§ 1367(a). The Court finds that these claims form part of the same case or controversy and
elects to exercise supplemental jurisdiction over the present case in its entirety.
For these reasons the Court finds that subject matter jurisdiction is proper with this
Court pursuant to 28 U.S.C. §§ 1332(a) and § 1331 and exerts supplemental jurisdiction in
accordance with 28 U.S.C. § 1367(a).
CONCLUSION
For the reasons set forth herein, Plaintiff’s Motion to Remand (Dkt. No. 10) is
DENIED.
IT IS SO ORDERED this 15th day of September, 2016.
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