Medallion Transport & Logistics LLC v. Superior Choice Logistics Inc

Filing 12

ORDER GRANTING DEFENDANT'S re 9 MOTION TO TRANSFER THIS CASE TO THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS. Signed by Chief Judge J. Daniel Breen on 12/12/14. (Breen, J.)[Transferred from Tennessee Western on 12/12/2014.]

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
EASTERN DIVISION
MEDALLION TRANSPORT &
LOGISTICS LLC,
Plaintiff,
v.

No. 14-1196

SUPERIOR CHOICE LOGISTICS, INC.,
Defendant.
_____________________________________________________________________________
ORDER GRANTING DEFENDANT'S MOTION TO TRANSFER THIS CASE
TO THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS
_____________________________________________________________________________
This diversity action was brought by the Plaintiff, Medallion Transport & Logistics LLC,
("Medallion"), on September 2, 2014 against the Defendant, Superior Choice Logistics, Inc.
("Superior"), alleging breach of contract and misrepresentation under North Carolina law. The suit
stems from a tractor-trailer accident that occurred in Jackson, Tennessee in which a cargo of
chemicals caught fire and was destroyed. Before the Court is Superior's motion to dismiss the
complaint pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure or, in the alternative,
for transfer of venue to the United States District Court for the Northern District of Texas. (D.E.
9.)
Rule 12(b)(3) permits the court to dismiss a complaint for improper venue. Fed. R. Civ. P.
12(b)(3). In ruling on such a motion, the court must draw all reasonable inferences in favor of the
plaintiff. Diggs v. Paragon Mgmt. Group, Inc., No. 1:13-cv-343, 2014 WL 1302504, at *1 (E.D.
Tenn. Mar. 28, 2014).
Generally speaking, whether venue is improper is governed by 28 U.S.C. § 1391. Atl.

Marine Constr. Co., Inc. v. United States Dist. Ct. for W. Dist. of Texas, 134 S. Ct. 568, 577 (2013).
The statute states that, "[e]xcept as otherwise provided by law . . ., this section shall govern the
venue of all civil actions brought in district courts of the United States[.]" 28 U.S.C. § 1391(a)(1).
In general, "[a] civil action may be brought in
(1)

a judicial district in which any defendant resides, if all defendants are
residents of the State in which the district is located;

(2)

a judicial district in which a substantial part of the events or omissions giving
rise to the claim occurred, or a substantial part of property that is the subject
of the action is situated; or

(3)

if there is no district in which an action may otherwise be brought as
provided in this section, any judicial district in which any defendant is
subject to the court's personal jurisdiction with respect to such action.

28 U.S.C. § 1391(b). "When venue is challenged, the court must determine whether the case falls
within one of the three categories set out in § 1391(b). If it does, venue is proper; if it does not,
venue is improper, and the case must be dismissed or transferred under [28 U.S.C.] § 1406(a)." Atl.
Marine Constr., 134 S. Ct. at 577. Section 1406(a) provides that "[t]he district court of a district in
which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the
interest of justice, transfer such case to any district or division in which it could have been brought."
28 U.S.C. § 1406(a).
It is the position of the Defendant that this district is not a proper venue under § 1391(b) on
the grounds that it is not a Tennessee corporation, a substantial part of the events complained of -the contract negotiations and misrepresentations -- did not occur in this district, and the action could
have been brought in Texas, where Superior is incorporated and was solicited by Medallion to ship
the destroyed goods.
The Plaintiff does not challenge Superior's assertions. Rather, it focuses on the "except as
2

otherwise provided by law" language of § 1391, arguing exclusively that, because this lawsuit
involves the liability of a motor carrier for damage to freight, the venue provisions of the Carmack
Amendment apply. Indeed, as alluded to above, "[§] 1391 governs 'venue generally,' that is, in cases
where a more specific venue provision does not apply." Atl. Marine Constr., 134 S. Ct. at 577 n.2.
The Carmack Amendment, enacted in 1906 as an amendment to the Interstate Commerce Act of
1887, imposes liability upon common carriers for "actual loss or injury to . . . property" during
interstate transport. 49 U.S.C. § 14706(a)(1); Osman v. Int'l Freight Logistics, Ltd., 405 F. App'x
991, 992 (6th Cir. 2011). The amendment's venue provision states that "[a] civil action under this
section may be brought against the carrier alleged to have caused the loss or damage, in the judicial
district in which such loss or damage is alleged to have occurred." 49 U.S.C. § 14706(d)(2). As the
loss or damage occurred in Tennessee, the argument goes, venue in this Court is appropriate.
However, Plaintiff has asserted only state law claims in this case. It has cited no caselaw
indicating that the Carmack Amendment's venue provision applies to cases in which a claim
thereunder has not been pled. The Court is, therefore, unpersuaded that § 14706(d)(2) has any
application here.
If venue lies in this district, it must do so pursuant to § 1391(b)(2). "[O]nly those acts or
omissions with substantial, rather than tangential, connections to a plaintiff's claims can establish
venue." Reilly v. Meffe, 6 F. Supp. 3d 760, 765-66 (S.D. Ohio 2014). "Substantiality is intended
to preserve the element of fairness so that a defendant is not haled into a remote district having no
real relationship to the dispute." Cottman Transmission Sys., Inc. v. Martino, 36 F.3d 291, 294 (3d
Cir. 1994).
Medallion, a transport and logistics company located in North Carolina, alleges that it

3

entered into a broker-carrier agreement with Superior, a commercial freight concern, on June 3, 2014
for the shipment by tractor-trailer of a load of chemicals for the production of foam from Houston,
Texas to West Chester, Pennsylvania. Plaintiff avers that, as part of the agreement, Superior
represented to Medallion that it had proper cargo insurance coverage when it did not. It is
undisputed that the only event occurring in this district was the accident that caused the loss. It is
the opinion of the Court that, under the facts of this case, the location of the loss is tangential to the
contract and misrepresentation claims asserted by the Plaintiff. See Cont'l Ins. Co. v. Securi Enter.,
Inc., No. CV 09-3731(ILG)(VVP), 2010 WL 3702559, at *3 (E.D.N.Y. Aug. 16, 2010) (court found
significant that automobile accidents giving rise to claims against an insurance policy themselves
were not at issue in plaintiff's contract claim alleging misrepresentations made with respect to
procurement of the policy; therefore, the location of those accidents was irrelevant when
determining proper venue under § 1391(b)(2)), report & recommendation adopted 2010 WL
3619704 (E.D.N.Y. Sept. 9, 2010). As venue in this district is improper, and in the interest of
justice, this action is TRANSFERRED to the United States District Court for the Northern District
of Texas.1
IT IS SO ORDERED this 12th day of December 2014.
s/ J. DANIEL BREEN
CHIEF UNITED STATES DISTRICT JUDGE

1

The Plaintiff does not assert that this case could not have been brought in the Northern
District of Texas. See 28 U.S.C. § 1406(a).
4