Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-01292/USCOURTS-casd-3_17-cv-01292-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1446oc Notice of Removal - Other Contract

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SONY BIOTECHNOLOGY, INC.,

Plaintiff,

v.

CHIPMAN LOGISTICS AND 

RELOCATION, et al., 

Defendants.

Case No.: 17-CV-1292-AJB-WVG

ORDER GRANTING DEFENDANT’S 

MOTION TO DISMISS AND 

SETTING AN OSC RE DISMISSAL

(Doc. No. 9)

Presently before the Court is Defendant Chipman Logistics and Relocation’s 

(“Chipman”) motion to dismiss Plaintiff Sony Biotechnology’s (“Sony”) complaint 

pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. No. 9.) Sony 

opposes the motion. (Doc. No. 12.) Having reviewed the parties’ arguments in light of 

controlling authority, and pursuant to Local Civil Rule 7.1.d.1, the Court finds the matter 

suitable for decision without oral argument. Accordingly, the Court instructs the Clerk to 

VACATE the hearing date currently set for October 5, 2017. For the reasons set forth 

below, the Court GRANTS the motion.

BACKGROUND

This dispute centers on damage to cargo that Chipman transported for Sony.

Specifically, Sony agreed with Defendant S&M Moving (“S&M Moving”) for S&M 

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Moving to transport a spectral analyzer (“analyzer”) from Seattle, Washington to San 

Diego, California. (Doc. No. 1 at 9 ¶ 4.)1 The analyzer was in good order and condition 

when Defendants picked it up in Seattle for carriage to San Diego. (Id.) Sony believes that 

Defendant Airways Freight Corp. (“Airways”) carried the analyzer from Washington to 

California, and Chipmen effected local delivery at the University of California, San Diego 

(“UCSD”). (Id.) When the analyzer was delivered at UCSD, it was severely damaged. (Id.

¶ 5.) As a result of the damage, Sony had to repair the analyzer, which cost approximately 

$125,716.00. (Id.)

On May 19, 2017, Sony instituted this lawsuit in San Diego Superior Court against 

Chipman, Airways, and S&M Moving (collectively, “Defendants”) by filing the operative 

complaint, alleging causes of action for Carmack liability pursuant to 49 U.S.C. § 14706, 

breach of contract of carriage, bailment, negligence, and unlawful brokerage pursuant to 

49 U.S.C. § 14916(c)(2). (Doc. No. 1 at 2 ¶¶ 1–2.) Chipman removed the action to this 

Court on June 23, 2017, on the basis of federal question jurisdiction. (Id. ¶ 4.) On June 30, 

2017, Airways answered the complaint and filed a cross claim against Chipman and S&M 

Moving. (Doc. Nos. 5, 6.) Chipman filed the instant motion to dismiss on July 14, 2017. 

(Doc. No. 9.) Sony filed an opposition, Chipman filed a reply, and with the Court’s 

permission, Sony filed a sur-reply. (Doc. Nos. 12, 15, 18.) This order follows.

LEGAL STANDARD

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6)2tests the 

legal sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A 

pleading must contain “a short and plain statement of the claim showing that the pleader is 

entitled to relief . . . .” Fed. R. Civ. P. 8(a)(2). Plaintiffs must also plead, however, “enough 

facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 

 

1 The Court cites to the blue CM/ECF-generated document and page numbers located at 

the top of each page.

2 All references to “Rule” are to the Federal Rules of Civil Procedure.

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U.S. 544, 570 (2007). The plausibility standard thus demands more than a formulaic 

recitation of the elements of a cause of action or naked assertions devoid of further factual 

enhancement. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Instead, the complaint “must 

contain sufficient allegations of underlying facts to give fair notice and to enable the 

opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 

2011).

In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the 

truth of all factual allegations and must construe them in the light most favorable to the 

nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996). The 

court need not take legal conclusions as true “merely because they are cast in the form of 

factual allegations.” Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987) (quoting 

W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). Similarly, “conclusory 

allegations of law and unwarranted inferences are not sufficient to defeat a motion to 

dismiss.” Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th Cir. 1998).

Where dismissal is appropriate, a court should grant leave to amend unless the 

plaintiff could not possibly cure the defects in the pleading. Knappenberger v. City of 

Phoenix, 566 F.3d 936, 942 (9th Cir. 2009).

DISCUSSION

Only three of Sony’s five causes of action are alleged against Chipman: Carmack 

liability, bailment, and negligence. (See Doc. No. 1 at 10–12.) Chipman seeks to dismiss 

the two state law claims. (See Doc. No. 9-1 at 8.) Its argument is straightforward: the federal 

Carmack Amendment to the Interstate Commerce Act preempts state law claims in the area 

of interstate transport; accordingly, Sony’s state law claims must be dismissed. (Id. at 4–

8.)3In its opposition, Sony does not dispute that if the Carmack Amendment applies, its 

 

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In its reply, Chipman argues, for the first time, that 49 U.S.C. § 14501 also preempts “all 

claims except for breach of contract claims, brought by shippers and consignees against 

motor carriers, brokers, or freight forwarders.” (Doc. No. 15 at 5–6.) Because this argument 

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bailment and negligence claims are preempted. (Doc. No. 12 at 4.) Rather, Sony asserts it 

is unknown whether the analyzer was carried from Washington to California by truck or 

by air. (Id.) If the former, Carmack controls, and Sony’s state law claims will be dismissed. 

(Id. at 4–5.) If the latter, Carmack does not apply, and the state law claims are not subject 

to dismissal as preempted. (Id.) Accordingly, Sony asserts it properly pled alternative 

theories to ensure it did not waive any potential claims. (Id. at 5–7.)

Congress enacted the Carmack Amendment in 1906 as a response to the varying and 

diverse state laws addressing liability to shippers for carriers who transported goods across 

state lines. See Adams Express Co. v. Croninger, 226 U.S. 491, 505 (1913). The scheme of 

the Carmack Amendment is “comprehensive enough to embrace responsibility for all 

losses resulting from any failure to discharge a carrier’s duty as to any part of the agreed 

transportation[.]” Ga., Fla., & Ala. Ry. Co. v. Blish Milling Co., 241 U.S. 190, 196 (1916).

The Carmack Amendment imposes strict liability for “actual loss or injury to 

property.” 49 U.S.C. § 14706(a). Carmack liability applies “to the extent that passengers, 

property, or both, are transported by motor carrier—between a place in—a State and a place 

in another State[,]” 49 U.S.C. § 13501(1)(A), and only to the interstate transport of cargo 

by “carriers” and “freight forwarders,” id. § 14706(a). 

Here, there is no dispute that Chipman is a carrier and/or freight forwarder within 

the meaning of the Carmack Amendment. The heart of the contention lies in the manner of 

interstate transfer. At this juncture, it is unknown whether the analyzer was transported 

from Washington to California via air or motor carriage. (Doc. No. 12 at 4.) It is probable 

that once the analyzer reached San Diego, Chipman effected local delivery via motor 

carriage to UCSD. According to Sony, if it is discovered that Airways transported the 

 

was not raised in its motion to dismiss, the argument is waived. Architectureart, LLC v. 

City of San Diego, No. 15-cv-1592-BAS-NLS, 2016 WL 1077124, at 3 *3 (S.D. Cal. Mar. 

18, 2016); see also Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007) (finding district 

court did not commit clear error in failing to consider arguments raised for the first time on 

reply because it “need not consider arguments raised for the first time in a reply brief”).

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analyzer interstate by air, the intrastate use of motor carriage to get the analyzer to its 

ultimate destination does not fall within the ambit of the Carmack Amendment. (Id. at 4–

5.)

Chipman disagrees. According to Chipman, whether a truck shipment is properly 

characterized as interstate or intrastate depends not on where the shipment takes place, but 

rather on “the intent the parties formed prior to shipment.” (Doc. No. 15 at 3.) Because 

Sony alleges in its complaint that “the contract was plainly intended to be an interstate 

transaction,” the entire shipment must be considered interstate for purposes of the Carmack 

Amendment. (Id.)

The Court agrees with Chipman. “It is well settled that the Carmack Amendment is 

the exclusive cause of action for interstate-shipping contract claims alleging loss or damage 

to property” and thus completely preempts such claims. Hall v. N. Am. Van Lines, Inc., 476 

F.3d 683, 688 (9th Cir. 2007). Whether transportation is interstate or intrastate under the 

Interstate Commerce Act “is determined by the essential character of the commerce, 

manifested by the shipper’s fixed and persisting transportation intent at the time of the 

shipment, and is ascertained from all of the facts and circumstances surrounding the 

transportation.” S. Pac. Transp. Co. v. I.C.C., 565 F.2d 615, 617 (9th Cir. 1977). “Neither 

continuity of interstate movement nor isolated segments of the trip can be decisive” in 

determining whether a transaction falls within the ambit of the Interstate Commerce Act. 

N.Y., N.H. & Hartford Ry. Co. v. Nothnagle, 346 U.S. 128, 130 (1953). Accordingly, “the 

Carmack Amendment applies to the inland leg of a shipment even if that leg is fully 

intrastate.” Chubb Grp. of Ins. Cos. v. H.A. Transp. Sys., Inc., 243 F. Supp. 2d 1064, 1068 

n.3 (C.D. Cal. 2002) (citing Project Hope v. M/V IBN Sina, 250 F.3d 67, 70–71, 73 (2d 

Cir. 2001)); see also Travelers Indem. Co. of Conn. v. Colma Drayage, Inc., No. 09-3118 

SC, 2010 WL 934076, at *2 n.1 (N.D. Cal. Mar. 15, 2010) (same).

Taking the allegations of the complaint as true, on May 18, 2016, Sony entered into 

an agreement with Defendants to transport the analyzer from Seattle, Washington to San 

Diego, California. (Doc. No. 1 at 9 ¶ 4.) Sony believes Airways carried the analyzer from 

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Washington to California, and Chipman delivered it from there to its final destination at 

UCSD. (Id.) For purposes of the instant inquiry, it matters not whether the analyzer was 

transported interstate by air or truck. That the analyzer was transported interstate at all 

renders the entire shipment subject to the Carmack Amendment, even if the transportation 

by truck occurred “fully intrastate.” Chubb Grp. of Ins. Cos., 243 F. Supp. 2d at 1068 n.3.

In other words, “that a segment of the transportation performed by Defendant[] was 

intrastate does not alter the essential interstate character of the contract.” Smallwood v. 

Allied Pickfords, LLC, No. 08cv2196 BTM (RBB), 2009 WL 3247180, at *8 (S.D. Cal. 

Sept. 29, 2009). Accordingly, to the extent Sony seeks relief for the damage to the analyzer 

that occurred during transportation, the Carmack Amendment governs. The Court therefore 

GRANTS Chipman’s motion and DISMISSES the state law claims of bailment and 

negligence as alleged against Chipman. Because there are no facts Sony can allege to take 

the claims outside the purview of the Carmack Amendment, the dismissal is WITHOUT 

LEAVE TO AMEND.

CONCLUSION

Based on the foregoing, the Court GRANTS Chipman’s motion to dismiss, (Doc. 

No. 9), and DIMISSES the bailment and negligence causes of action WITHOUT LEAVE 

TO AMEND as alleged against Chipman. Under the Court’s analysis, the bailment and 

negligence causes of action also fail as to Defendant’s Airways, and S&M Moving. Based 

thereon, the Court is issuing an Order to Show Cause why the bailment and negligence 

causes of action to Defendant’s Airways, and S&M Moving should not be dismissed. The 

hearing in this matter is set for September 5, 2017 at 4:00 PM in Courtroom 4A. 

IT IS SO ORDERED.

Dated: August 22, 2017

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