Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_04-cv-00352/USCOURTS-azd-4_04-cv-00352-0/pdf.json

Nature of Suit Code: 450
Nature of Suit: Interstate Commerce
Cause of Action: 28:1446 Petition for Removal- Property Damage (P.I.)

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

KPX, L.L.C., an Arizona limited liability

company, 

Plaintiff, 

vs.

Transgroup Worldwide Logistics, Inc., a

Washington corporation; Transgroup

Express, Inc., a Washington corporation, 

Defendants. 

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CV 04-352 TUC DCB

ORDER

On reconsideration, this Court affirms its determination that a private cause of action

exists pursuant to 49 U.S.C. § 14704(a)(2) for KPX to sue Transgroup for damages resulting

from Transgroup's issuance of an airbill and transporting goods by motor vehicle, without any

prior or subsequent movement by air carrier and without meeting any of the requisites for the

exempt motor carrier transport of the goods in violation of 49 U.S.C. § 13506(8).

Section 14704(a)(2) provides: "A carrier or broker providing transportation or service

subject to jurisdiction under chapter 135 is liable for damages sustained by a person as a result

of an act or omission of that carrier or broker in violation of this part." It is undisputed that

Transgroup is subject to jurisdiction under chapter 135, therefore, KPX has a private cause of

action against Transgroup for damages resulting from violations of the Interstate Commerce

Act, the part covering Motor Carrier Transportation: 49 U.S.C. § 13101 et seq..

The Court directs the parties to its detailed discussion of Owner-Operator Driver's Ass'n

v. New Prime, Inc., 192 F.3d 778 (8th Cir. 1999), which is the subject of Transgroup's Motion

for New Trial/Alteration of Judgment. (Order filed December 1, 2005, at 6-10.) Additionally,

Case 4:04-cv-00352-DCB Document 53 Filed 02/21/06 Page 1 of 4
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the Court finds helpful a district court decision by the Southern District of Texas: Tayssoun

Transportation , Inc. v. Universal AM-CAN, Ltd., 2005 WL 1185811 (S.D. Tex., April 20,

2005). "Because Congress would not enact a meaningless provision of law, § 14704(a)(2)

clearly provides a private cause of action for something, the question is what Congress intended

when it created a remedy for damages sustained as a result of an action 'in violation of this

part.'" Id. at 14 (emphasis in original). The Texas district court, like the circuit court in New

Prime, was unpersuaded by arguments that subsection (1) limited the scope of subsection (2)

49 U.S.C. § 14704(a). The court rejected the assertion that § 14704(a)(2) pertains only to

damages associated with violations of agency orders. "Rather, the statute provides for a private

right of action for claims by persons injured by carriers through violations of the provisions of

Part B of the Transportation Code, which governs motor carriers and others. See 49 U.S.C.A.

Part B, 13101 et seq." Id. at 14. The court found that there was a private right of action for a

damage claim against a carrier for violations of corresponding Truth-in-Leasing regulations. 

Discussing New Prime, the court noted that its conclusion was contrary to Renteria v.

K & R Transportation, Inc., 1999 WL 33268638 (C.D. Cal. February 23, 1999), where the

Ninth Circuit refused to allow a private damages action for violations of Truth-in- Leasing

regulations, "but Renteria has been overruled by implication on this point by the Ninth Circuit

in Owner-Operator Indep. Drivers Ass'n v. Swift Transp. Co., 367 F.3d 1108, 1110 (9th Cir.

2004) ('When Congress abolished the [Interstate Commerce] Commission in 1995, it placed

enforcement responsibility with the owner-operators by enacting a statute that provides a

private right of action . . ..')." Tayssoun at 15. Because of Swift, this Court follows New Prime.

Transgroup is correct that the cases all involve Truth-in-Leasing provisions, but this

coincidence is no reason to correspondingly limit the private cause of action afforded in §

14704(a)(2) to damages for violations of Truth-in-Leasing statutes or regulations. The express

language of subsection 2 includes no such limitation and the case law suggests no such

distinction.

The Court has reviewed its Order issued on December 1, 2005, and notes that its analysis

stopped short of making its conclusion clear that KPX had a private cause of action under 49

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U.S.C. § 14704(a)(2) to proceed against Transgroup for damages related to the improper

issuance of the airbill by Transgroup in violation of 49 U.S.C. § 13506(8).

The Court held that: "Here, the Plaintiff has standing to bring a private cause of action

against Transgroup because KPX's damages resulted directly from the challenged bill of

lading/airbill, . . ." (Order at 9.) As noted on page one of the Order, "the Court lacks original

jurisdiction over the Carmack Amendment claim, [codified as 49 U.S.C. § 14706], because the

amount in controversy under the bill of lading does not exceed $10,000.00." 28 U.S.C. §

1337(a). Therefore, the claim attacking Transgroup's bill of lading, brought pursuant to §

14706, being dismissed for lack of jurisdiction, the analysis should have continued regarding

the airbill claim. It continues here. 

"The purpose of the $10,000.00 amount in controversy limitation to jurisdiction is to

prevent the abuse of the federal judicial process by overloading the federal courts with small

freight claims." Pillsbury Company v. Atchison, Topeka and Santa Fe Railway Company, 548

F. Supp. 28, 29-30 (Kansas 1982). The jurisdictional amount in controversy limitation does

not, however, apply to any of KPX's claims other than those brought pursuant to 49 U.S.C. §

14706. cf., Old Dominion Freight Line v. Allou Distributors, Inc., 86 F. Supp. 2d 92, 93 (E.D.

N.Y. 2000). It does not prevent KPX from seeking relief for violations of other provisions of

the Interstate Commerce Act, Part B, which governs motor carriers: 49 U.S.C. § 13101 et seq.

Section 14704(a)(2) provides a private right of action for KPX to sue Transgroup for any

damages related to the issuance of the airbill without meeting the requirements for the motor

carrier exemptions provided in 49 U.S.C. § 13506(8).

This is the violation alleged in Count III of KPX's Complaint, upon which summary

judgment was granted in its favor.

Because the Court affirms its finding that 14704(a)(2) provides a private cause of action

for KPX against Transgroup, the Court affirms it ruling that attorney fees are properly awarded

under 14704(e). The above clarification serves to correct any confusion created by the

misstatement in the section of the Order addressing attorney fees that they were based on the

"Carmack Amendment violations alleged in Plaintiff's Complaint, . . .." (Order at 18.)

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Accordingly,

IT IS ORDERED that the Motion for New Trial (Rule 59)/Motion for Relief from

Judgment (Rule 60) (document 46) is DENIED.

IT IS FURTHER ORDERED that the Order of December 1, 2005, (document 44) shall

be amended to clarify the basis for this Court's jurisdiction and entry of judgment for Plaintiff.

DATED this 15th day of February, 2006.

Case 4:04-cv-00352-DCB Document 53 Filed 02/21/06 Page 4 of 4