Hot Recent Cases in Motor Carrier Law - July 2007
by Steven W. Block
Separate communications and documents aren’t enough: you gotta check the box!
Walters v. DHL Express, 2007 WL 1431869 (C.D. Ill. 2007)
Plaintiff Walters arranged for his ex-wife, Choate, to ship five boxes of personal stuff (CDs, DVDs, clothing, papers, photos) interstate with DHL. Choate signed a DHL bill of lading that limited the carrier’s liability to $100 per package or actual value unless a box was checked next to “shipment value protection” and a dollar amount inserted. Choate didn’t check the box.
But before DHL fetched the freight, Walters called DHL requesting insurance coverage. He was told to speak with the DHL driver when he arrived, which Walters did, whereupon he was told to fax an authorization letter to DHL requesting coverage. Again Walters followed instructions to the T. Of course, the freight was delivered damaged and short.
DHL sought to limit its liability, and moved for summary judgment. The Central District of Illinois federal court agreed, and dismissed the claim. The bill of lading’s integration clause rendered Walters’ calls and fax inadmissible parole evidence, an argument Walters – for reasons unknown – declined to even address in his briefing. The court further found that a fax cannot modify a bill of lading that contains all essential elements of a contract of carriage. Choate was Walter’s fully authorized agent; the shipper could have protected himself by instructing her to check the box. Lastly, the shipper could have used DHL’s automated system to request full coverage, an option he failed to take – again for unknown reasons.
Consumer fraud claim doesn’t trump Carmack’s dominion, and booking agents aren’t liable for freight damage.
Berryman v. Wheaton Van Lines, Inc., 2007 WL 1296762 (D. N.J. 2007)
Shipper Berryman sued carrier Wheaton when her household goods arrived damaged after interstate transit. She booked the haul through Davi & Valenti Movers (DVM), and paid an additional amount for insurance coverage and selected a full replacement value liability option on Wheaton’s bill of lading. She originally filed in New Jersey state court, but the carrier removed the matter to the Garden State’s federal court, and soon moved to dismiss the shipper’s state and common law claims.
These included the usual mispleaded allegations, such as breach of contract, breach of the covenant of fair dealing, and negligent infliction of emotional distress. Tucked in the list was a claim for breach of New Jersey’s Consumer Fraud Act. Berryman apparently saw the light, and fought only to keep the latter state-law allegation alive. Drawing on decisions that preserve causes of action independent from the actual cargo loss, the plaintiff shipper urged that Carmack doesn’t preempt a consumer fraud claim based on failure to procure or provide insurance. The court looked to a number of other decisions (and the absence of any counter-authority), to conclude that this type claim, which is encompassed by bill of lading terms, still falls under Carmack’s dominion.
No biggie for plaintiffs’ claims against Wheaton; she can just refile alleging Carmack. But she’d also sued DVM. The court dismissed claims against the booking agent with prejudice, finding it to have operated for a disclosed principal and had not entered into the contract on its own behalf. Moreover, Carmack says carriers are responsible for the acts of their agents.
Dealer’s choice: a plaintiff shipper’s selection of venue holds when two locales are proper.
Lamex Foods, Inc. v. Blakeman Transportation, Inc., 2007 WL 1456010 (S.D. Tex 2007)
Minnesota-based shipper Lamex booked transit of a cargo of pork loin ribs from Houston to Grand Prairie, Texas through Fort Worth broker Blakeman with carrier Morning Express. No bill of lading or other shipping documentation was issued. The spare ribs were stolen in Houston, and the shipper sought to recover some 129 grand. Lamex sued in the Southern District of Texas, which sits in Houston.
Blakeman sought to transfer the matter to the Northern District of Texas. That court has venue over Grand Prairie (where the freight was supposed to be delivered), was where most witnesses and documents were located, and was the venue specified in Blakeman’s Terms and Conditions (which sit quietly in some file cabinet).
Going through a nice summary of venue issues in the transportation context, the court denied Blakeman’s motion to transfer. First of all, the court noted, the absence of shipping documentation incorporating Blakeman’s Terms and Conditions renders their venue selection clause irrelevant. The court did note that such clauses typically are enforceable.
Public and private factors determine whether a plaintiff’s venue selection is proper. Convenient access to evidence and witnesses, availability of compulsory process, travel costs, other practicality issues are private factors. The defendants urged persuasively that most convenience and accessibility points supported North District of Texas venue, and the difficulty imposed on a Minnesota company in either venue was equal. But the court found that defendants hadn’t demonstrated that “all relevant witnesses” were in northern Texas. Moreover, there were few crucial documents (e.g., no shipping documentation), and what there was could be sent by email or discussed by phone.
Public factors include such concerns as court dockets, local interest in the subject matter, familiarity of the forum with applicable law, and conflict of laws issues. The court found the two subject venues equal in that analysis.
Pleading essentials of a Carmack claim isn’t necessary.
Atlantic Mutual Insurance Co. v. ACH Food companies, Inc., et al, 2007 WL 1668068 (C.D. Ill. 2007)
Shipper Victory Wholesale Grocers purchased a cargo of corn oil for shipment from Illinois to its facility in Colorado. The supplier, ACH Food Companies, retained forwarder Arnold Logistics, and Victory engaged motor carrier Jones Trucking. The oil was stolen, and Victory’s subrogated insurer filed suit against Arnold Logistics and Jones.
Plaintiff alleged Carmack liability against both defendants, but apparently didn’t allege in its complaint that Arnold Logistics was a freight forwarder or carrier, or that the bill of lading identified Victory as the buyer, seller or other interested party. The court agreed these elements were necessary to a successful Carmack action (and that a plaintiff must ultimately prove them), but couldn’t find any basis to dismiss a claim as defective for failure to specifically plead them. Thus, while many a complaint has been nixed for failure to allege Carmack, at least one court has confirmed that nothing beyond an allegation of Carmack jurisdiction is necessary.
A package left on a deliveree’s front porch trips up the FAAAA.
Kuehne v. United Parcel Service, Inc., 2007 WL 1828802 (Ind. App. 2007)
Pam Kuehne mail ordered a home spa, which UPS delivered and left on her front porch. Ms. Kuehne was unaware of the delivery, and tripped over the package when she left her home. She sued UPS for the resulting personal injuries in Indiana state court, alleging state and common law theories of recovery.
UPS sought to dismiss Ms. Kuehne’s claims, asserting that the Federal Aviation Administration Authorization Act and Carmack Amendment preempted the state-law claims. The court denied UPS’ dispositive motion.
True, FAAAA has been held to have broad preemptive effect inasmuch as it specifically trumps state laws that relate to “price, route or servicing of motor carriers.” But previous decisions involved freight loss or allegations that would affect the general processing of transportation. Here, we had a personal injury claim – traditionally the realm of state law – on an issue that would impact only how a carrier leaves freight. Unlike other areas in which FAAAA preemption has been enforced, that statute does not provide personal injury claimants a remedy. Thus, the court could not conclude that Congress meant to make a federal case out of this type claim.
Whether mandatory insurance and failure to provide equipment violates the Norris-LaGuardia Act is a question of fact.
Owner-Operator Independent Drivers Association v. Supervalu, Inc., 2007 WL 1576120 (D.Minn. 2007)
The Norris-LaGuardia Act, 49 USC 14103, prohibits requiring or coercing truckers to allow others to unload their trucks when they want to do so themselves. Supervalu, a grocery retailer, implemented a program requiring its freight to be palletized, and mandated that truckers carry insurance higher than the statutory minimum if they wanted to “lump,” or unload, their trailers. When carriers arrived at Supervalu’s docks, they were not provided specialized equipment needed to lump. Supervalu had contracted exclusively with a service to provide lumping at its docks.
Truckers, backed by OOIDA, saw this as a violation of Norris-LaGuardia, and sued to enjoin the practice. Both sides moved for summary judgment. The court addressed the motions piecemeal.
The insurance coverage requirement is not ipso facto a violation of the act. Questions of fact remain as to whether the requirement was reasonable and in keeping with industry standards. In other words, higher risk at this shipper’s facility might justify more insurance. Supervalu nixed the higher coverage condition before litigation began, but a violation still could be found. Similarly, whether or not Supervalu’s failure to provide offloading equipment may or may not be reasonable under the circumstances, and only the trier of fact can make the call.
The court agreed with Supervalu that nothing suggested the shipper would “harass or retaliate against” the drivers, and refused to issue preliminary injunctive relief on that ground. The court tossed out OOIDA’s claims for monetary restitution, finding nothing in the statute or interpretative decisions that authorized that relief. The court refused to strike Supervalu’s defense that the drivers had been paid for any lumping services performed, as a reasonable interpretation of the statute might be that payment to the driver is enough (although the court stops short of actually ruling so).
Lastly, class certification was granted, ensuring this dispute will go at least another round. Stay tuned.