Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-06994/USCOURTS-cand-3_06-cv-06994-4/pdf.json

Nature of Suit Code: 450
Nature of Suit: Interstate Commerce
Cause of Action: 28:1331 Fed. Question

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

HOTAN CORPORATION,

Plaintiff,

 v.

BARRY A. PRATER, BAP LOGISTICS,

INC., and DOES 1–100, inclusive,

Defendants. /

No. C 06-06994 WHA

ORDER DENYING DEFENDANT

BAP LOGISTICS’ MOTION FOR

SUMMARY JUDGMENT

INTRODUCTION

In this cargo loss and fraud case, plaintiff Hotan Corporation seeks actual damages

resulting from the loss of a shipment of CD-ROM discs and punitive damages from defendants

Barry Prater and BAP Logistics, Inc. Defendant BAP now moves for summary judgment,

claiming that the Carmack Amendment does not apply to brokers like BAP, defendants were

not alter egos, and Hotan is not entitled to punitive damages. For the reasons stated below,

defendant’s motion for summary judgment is DENIED.

ANALYSIS

One of the main issues is whether BAP was acting as a “carrier” under the Carmack

Amendment. This order finds that there is a disputed issue of material fact as to whether BAP

was acting as a carrier. On BAP’s own pre-printed bill of lading, BAP was listed as a carrier. 

Case 3:06-cv-06994-WHA Document 60 Filed 10/22/07 Page 1 of 3
United States District Court

For the Northern District of California

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This fact alone would be sufficient to warrant a jury determination that BAP was acting as a

carrier.

On the assumption that BAP was a carrier, the next issue is whether plaintiff complied

with the written notice requirement of 49 C.F.R. 1005.2. That provision, however, required that

the written notice be filed within the time limitations specified in the bill of lading. The bill of

lading in our case failed to provide any such time limitations. The Carmack Amendment states

that a carrier may not require a period of less than two years for bringing a civil action against it

under this section. 49 U.S.C. 14706(e). Therefore, the filing of the complaint itself within the

two-year limitation period is sufficient notice. Defendant contends that the bill of lading

incorporated by reference the Uniform Bill of Lading. The case law relied upon for this

proposition is shrouded in mystery. On this record and briefing, the Court is unwilling to accept

this proposition as a leap of faith.

In the alternative, even if the Carmack Amendment does not apply (because BAP is

deemed to be a broker and not a carrier), plaintiff contends that it was defrauded into believing

that BAP was a carrier and that plaintiff would get the benefit of the Carmack Amendment. The

Court is unwilling to decide this legal issue without the benefit of better briefing and an

evidentiary record at trial.

With respect to the alter ego claim, the fifteen-factor test in Associated Vendors, Inc. v.

Oakland Meat Co., Inc., 210 Cal.App.2d 825, 837–40 (1962), is sufficiently satisfied that a jury

in this case could reasonably conclude that Mr. Prater was the alter ego of BAP. It would be

wrong to immunize him from liability as a matter of law at this stage.

Plaintiff also seeks punitive damages. The defense argues that punitive damages are not

permitted under the Carmack Amendment. This argument is reached only if the Carmack

Amendment applies in this case — i.e., if it were deemed that BAP was a carrier. If the

Carmack Amendment does not apply, however, because BAP was not a carrier, then Hotan’s

common law fraud claim remains in the case and punitive damages are available to plaintiffs. 

Therefore, we have to wait and see whether BAP is held as a “carrier.”

Case 3:06-cv-06994-WHA Document 60 Filed 10/22/07 Page 2 of 3
United States District Court

For the Northern District of California

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CONCLUSION

For the foregoing reasons, defendant BAP’s motion for summary judgment is DENIED.

IT IS SO ORDERED.

Dated: October 22, 2007. 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:06-cv-06994-WHA Document 60 Filed 10/22/07 Page 3 of 3