Totran Transportation Services, Ltd v. Fitzley, Inc

Filing 29

MEMORANDUM AND ORDER denying Ragat's 16 Motion to Dismiss based on preemption; granting Ragat's 20 Motion to Dismiss based on forum non conveniens. (Signed by Judge George P. Kazen) Parties notified. (dmorales)

O UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS LAREDO DIVISION TOTRAN TRANSPORTATION SERVICES, § § LTD, § § Plaintiff, § VS. § § FITZLEY, INC, § Defendant and Third-Party § § Plaintiff, § § VS. § § TRANSPORTES RAGAT, SA DE CV § § Third-Party Defendant.

CIVIL ACTION NO. L-08-125

MEMORANDUM AND ORDER Plaintiff Totran Transportation Services, Ltd. filed this diversity action against Defendant/Third-Party (Docket No. 1.) a Canadian Plaintiff

Fitzley, Inc. ("Fitzley"). original Complaint, Totran,

According to the entered an

company,

agreement with the owner of industrial gas heater equipment to transport the equipment from Canada to San Luis Potosi, Mexico. (Docket No. 1, 5.) Totran, directly or otherwise, presumably Totran then

brought the equipment as far as Laredo, Texas.

contracted with Fitzley, a Laredo, Texas company, to transport the equipment to Tamazunchale, San Luis Potosi, Mexico, but the equipment was allegedly Fitzley damaged a in Mexico. (Docket No. 8,

¶¶ 5.4-5.5.) 1 / 10

filed

third-party

complaint

alleging

state-law claims of negligence and breach of contract against Third-Party Defendant Transportes Ragat, SA de CV ("Ragat"), a Mexican Mexico. company Fitzley hired to transport the equipment in

(Docket No. 8.)

Pending before the Court are Ragat's (Docket Nos.

two motions to dismiss the third-party complaint. 16, 20.)

Fitzley has failed to respond to either motion.1

Ragat first moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), claiming Fitzley's state-law claims

are preempted by the Carmack Amendment, 49 U.S.C. § 14706 et seq. (Docket No. 16.) Ragat also moves to dismiss based on

forum non conveniens.

(Docket No. 20.) I. Background

Ragat provides affidavit and documentary evidence that is uncontested by Fitzley. According to that evidence, on

September 22, 2006, Ragat received a load of unassembled heaters2 in its yard in Nuevo Laredo, Mexico. Garcia Decl. ¶ 3.) (Docket No. 20, Ex. A,

Although Fitzley has asserted that, "to the

best of [its] knowledge," Ragat picked up the load in Laredo, it

Defendant Fitzley did file a response to a motion for summary judgment filed by Totran, but that motion is not addressed in this Memorandum.
2

1

Though Totran's complaint (Docket No. 1, transportation of one heater, the evidence including the bill of lading, indicates multiple unassembled heaters. (Docket No. discrepancy does not affect resolution of the

at 5) alleges the provided by Ragat, Ragat transported 20, Ex. B.) That present motions.

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offered belief.

no

valid

summary

judgment

evidence

to

support

that

(Docket No. 8 ¶ 5.3.)

Fitzley hired Ragat to transport

the load from Nuevo Laredo to Tamazunchale and deliver it to consignee, Gesscada, S.A. de C.V ("Gesscada"). ¶ 4.) Ragat issued bill of lading 14376 to cover the carriage. (Garcia Decl. ¶ 4.) The Mexican bill of lading is in Spanish; (Docket No. 20, Ex. B.) in the the box "Remite," "Destino" (Garcia Decl.

Ragat's translation is uncontested. Fitzley's translated name as and address is

found Under

"sender."

Id.

heading

("destination") is Gesscada's name and address in Tamazunchale. Id. The total price for the transportation is $1600. Id. The

bill of lading contains a damages limitation referencing Mexican law. Id. On or about September 24, 2006, the truck hauling the load was involved in an accident in Mexico, roughly one hundred Ragat

kilometers outside of Tamazunchale.

(Garcia Decl. ¶ 5.)

made arrangements for the load to be placed on another trailer and ultimately delivered to Gesscada. Id.

II. Discussion A. Motion to Dismiss State-law Claims as Preempted by Carmack The Carmack Amendment establishes liability for a motor

carrier which provides transportation between states within the

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United States, and between the United States and an adjacent foreign lading." country "when transported under a through bill of

See 49 U.S.C. § 14706; see also Apparel Prod. Servs.

v. Ind. Transp., Civil Action Nos. L-08-26, L-08-62, 2009 WL 890275 (S.D. Tex. March 28, 2009). Courts have defined a

through bill of lading as a bill of lading in which a carrier agrees to transport goods from a point of origin to a designated point of destination, even though different carriers may perform a portion of the contracted shipment. See, e.g., Commercial

Union Ins. Co. v. Sea Harvest Seafood Co., 251 F.3d 1294, 1302 (10th Cir. 2001). Whether a particular document is a through

bill of lading is a question of fact, Union Pac. R.R. Co. v. Greentree Transp. Trucking Co., 293 F.3d 120, 127 (3rd Cir.

2002), to be determined by examining various factors, such as the final destination designated on the document, the conduct of the shipper and the carriers, and whether the connecting

carriers were compensated by the payment made to the initial carrier or by separate consideration from the shipper, Seguros Comercial Americas, S.A. de C.V. v. Am. President Lines, Ltd., 910 F. Supp. 1235, 1239 (S.D. Tex. 1995), vacated on other

grounds, 105 F.3d 198 (5th Cir. 1996). The Laredo, goods Mexico. were delivered Decl. to Ragat's The factory bill in of Nuevo lading,

(Garcia

§ 3.)

according to the deposition testimony, only covers the goods'

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transit between Nuevo Laredo and Tamazunchale. only for that portion of the journey.

The payment is

As such, the bill of

lading is not a through bill of lading covering transportation from a point of origin within the United States to a point of destination in an adjacent foreign country. Instead, it covers

transportation wholly in Mexico, to which the Carmack Amendment is not applicable. Because Carmack does not apply to a wholly

Mexican carriage, Fitzley's state-law claims are not preempted. B. Motion to Dismiss for Forum Non Conveniens A federal court sitting in diversity applies the federal law of forum non conveniens in deciding a motion to dismiss in favor of a foreign country. DTEX, LLC v. BBVA Bancomer, S.A., A forum non conveniens

508 F.3d 785, 794 (5th Cir. 2007).

analysis begins with determining whether there is an available and adequate alternative forum. the case and the Id. parties Id. can A forum is available when come within that forum's

jurisdiction.

A forum is adequate if it will not deprive

the parties of all remedies or treat them unfairly, even though they may not enjoy all the benefits of an American court. at 796. Once an alternative forum is available, a court then Id.

determines which forum is best suited to the litigation. 794.

Id. at

To make this determination, the Court considers whether

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certain private or public factors weigh in favor of dismissal. Id. The private interest factors include: the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining willing, witnesses; possibility of view of [the] premises, if view would be appropriate to the action; all other practical problems that make trial of a case easy, expeditious and inexpensive . . . enforceability of judgment[; and whether] the plaintiff [has sought to] "vex," "harass," or "oppress" the defendant. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508

(1) (2) (3) (4)

Id.

(quoting

(1947)). The public interest factors include: (1) (2) (3) the administrative difficulties flowing from court congestion; the local interest in having local controversies resolved at home; the interest of having a trial of a diversity case in a forum that is familiar with the law that must govern the action; the avoidance of unnecessary problems in conflicts of law, or in application of foreign law; and the unfairness of burdening citizens in an unrelated forum with jury duty.

(4) (5)

Id.

The ultimate inquiry is where the trial will best serve the Id. Ragat's

convenience of the parties and the interests of justice. Mexico is an adequate alternative forum.

unchallenged expert in Mexican law attests that this dispute comes within the jurisdiction of the federal courts in Mexico. (Docket No. 20, Ex. C., Peña Decl. 1­4.) available. Thus, the forum is

It is adequate because both Fitzley and Ragat have Id. at 7­8.

access to remedies in the Mexican federal courts.

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This is consistent with other Fifth Circuit cases finding Mexico an adequate forum. DTEX, LLC, 508 F.3d at 796; Vasquez v.

Bridgstone/ Firestone, Inc., 325 F.3d 665, 672 (5th Cir. 2003) (finding Mexico an adequate forum despite limits on damages); Gonzalez v. Chrysler Corp., 301 F.3d 377, 383 (5th Cir. 2002) (affirming dismissal of suit against American automobile

manufacturer on basis of forum non conveniens in case arising from accident in Mexico). Ragat factors. makes arguments as to the first three private

The first private factor, relative ease of access to The goods were picked up in Nuevo (Garcia including and those

evidence, favors dismissal.

Laredo, and the transportation was entirely in Mexico. Decl. those ¶¶ 3­5.) made by Documents the concerning after the the accident, accident

authorities

documenting the condition of the merchandise when it arrived, are also in Mexico. (Garcia Decl. ¶ 7.) The witnesses are all

in Mexico, including those picking up the goods, witnessing the accident, handling the merchandise, and observing the condition of the merchandise when it arrived in Tamazunchale. Decl. ¶ 6.) The second factor involves the availability of compulsory process for unwilling witnesses and the cost of attendance for willing witnesses. As noted above, a majority of the witnesses Travel to a court in Mexico will be less (Garcia

are located in Mexico.

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cumbersome than travel to the United States. extent that any witnesses are unwilling to

Further, to the testify, Mexican

courts offer a procedure to compel cooperation. The third factor also favors dismissal.

(Peña Decl. 7.) While it is

unclear that a visit to the accident site would be helpful, the site's location in Mexico can only support dismissal. In sum,

the private interest factors favor dismissing this case in favor of a Mexican forum. If the private interest factors favor dismissal, a court need not consider the public interest factors. See Baumgart v.

Fairchild Aircraft Corp., 981 F.2d 824, 837 (5th Cir. 1993). Nevertheless, Ragat raises the public factors, and the Court will consider them briefly. The Mexican Southern first forum. District factor, Ragat of court congestion, evidence second heavily showing highest favors that number a the of

provides had

Texas

the

criminal filings in the federal system in 2008, behind only the Western District of Texas. (Docket No. 20, Ex. E.) The Laredo

Division alone is on pace for the filing of approximately three thousand criminal felony cases before the end of 2009. The second factor, the local interest in having localized controversies decided at home, again favors dismissal. As

discussed above, any losses or damages arose in Mexico while a Mexican carrier was on Mexican territory transporting goods

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under a Mexican bill of lading.

Mexico has a strong interest in

having this matter resolved in its courts, under its laws. Finally, Mexican law. the "most this case likely requires the application of

For both tort and contract claims, Texas follows significant relationship test" set out in the

Restatement (Second) of Conflict of Laws §§ 6, 145, and 188. DTEX, LCC, 508 F.3d at 802. Relevant contacts to take into

account in a tort case include: (a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicile, residence, nationality, place of

incorporation and place of business of the parties; and (d) the place where the relationship, if any, between the parties is centered. Outside of Restatement Fitzley's (Second) in of Conflict all of Laws § 145.

location

Laredo,

other

contacts

favor a Mexican forum. The relevant contacts in a contract case include: (a) the place of contracting, (b) the place of negotiation, (c) the

place of performance, (d) the location and the subject matter of the contract, and (e) the domicile, residence, nationality,

place of incorporation and place of business of the parties. Restatement (Second) of Conflict of Laws § 188. silent on place of contracting or negotiation. The record is However, the

place of performance is clearly in Mexico, as is the subject

9 / 10

matter

of

the

contract.

Mexico

has

the

most

significant

relationship to this case, and Mexican law will likely apply. Conclusion For the reasons outlined above, the Court DENIES Ragat's motion to dismiss based on preemption (Docket No. 16), and

GRANTS Ragat's motion to dismiss based on forum non conveniens (Docket No. 20.) DONE at Laredo, TX, this 18th day of September, 2009.

____________________________________ George P. Kazen Senior United States District Judge

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