UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

FORT WAYNE DIVISION

MITSUI SUMITOMO INSURANCE )

COMPANY OF AMERICA, a/s/a )

TOSHIBA MACHINE COMPANY )

)

 Plaintiff, )

)

 v. ) CIVIL NO. 1:14cv133

)

BASIC ENTERPRISES, INC., MARUBENI )

TRANSPORT SERVICE CORP., JIT )

WAREHOUSING AND LOGISTICS, and )

MADD TRANSPORTATION, )

)

 Defendants. )

OPINION AND ORDER

This matter is before the court on a motion for partial dismissal, filed by defendant Basic

Enterprises, Inc., (“Basic”), on May 28, 2014. The plaintiff, Mitsui Sumitomo Insurance

Company of America, a/s/a Toshiba Machine Company (“Mitsui”), filed a response on June 11,

2014, to which Basic replied on June 30, 2014. This motion will be granted for the reasons set

forth below. 

Also before the court is a motion to dismiss Count II of Plaintiff’s Complaint, filed by

defendant Madd Transportation (“Madd”), on June 30, 2014. Mitsui has not responded to this

motion. During an August 8, 2014 telephonic Rule 16 preliminary pretrial conference before

Magistrate Judge Cosbey, Mitsui indicated that it had no objection to Madd’s motion to dismiss

Count II, as to Madd only. Accordingly, this motion will be granted.

Discussion

In its Complaint, Mitsui alleges that one or more of the defendants damaged a shipment
of machinery (“the Cargo”) during interstate carriage. Mitsui is basing its claims for damages to

the Cargo on the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C Section 14706,

as well as state law/common law bailment claims. In its motion for partial dismissal, Basic

alleges that Mitsui’s state law/common law claims are preempted.

The Carmack Amendment, 49 U.S.C. § 14706, governs liability for loss of or damage to

goods transported in interstate commerce. In regulated transportation of property, there still

remain three types of federally licensed entities: the motor carrier, the freight forwarder, and the

property broker. 49 U.S.C. § 14706, et seq. In Adams Express Co. v. Croninger, 226 U.S. 491

(1913), the United States Supreme Court concluded that in order to accomplish the goal of

uniformity, the Carmack Amendment preempts state law claims arising from failures in the

transportation and delivery of goods. The issue in Adams Express was “whether the operation

and effect of the contract for an interstate shipment . . . is governed by the local law of the State,

or by the acts of Congress regulating interstate commerce.” Id. at 499-500. In resolving that

issue in favor of Congressional Acts, the Adams Court explained that “[a]lmost every detail of

the subject is covered so completely that there can be no rational doubt but that [C]ongress

intended to take possession of the subject and supersede all state regulation with reference to it.”

Id. at 505-06.

This conclusion was reiterated in New York, New Haven & Hartford Railroad Co. v.

Nothnagle, 346 U.S. 128, 131 (1953) when the United States Supreme Court noted, “[w]ith the

enactment in 1906 of the Carmack Amendment, Congress superseded diverse state laws with a

nationally uniform policy governing interstate carriers’ liability for property loss.”

In Smith v. United Parcel Service, 296 F.3d 1244 (11th Cir. 2002), the Eleventh Circuit

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noted that there may be situations in which the Carmack Amendment does not preempt state law

claims, but it stressed that “separate and distinct conduct rather than injury must exist for a claim

to fall outside the preemptive scope of the Carmack Amendment.” Id. “To accomplish the goal

of uniformity, the Carmack Amendment preempts state law claims arising from failures in the

transportation and delivery of goods.” Id. at 1246. 

In Hoskins v. Bekins Van Lines, 343 F.3d 769 (5th Cir. 2003), the Fifth Circuit, relying on

the United States Supreme Court’s preemption analysis in Beneficial Nat’l Bank v. Anderson,

539 U.S. 1 (2003), concluded that “[w]e are persuaded by the preceding decisions and analysis

offered by the Supreme Court, and this Court, that Congress intended for the Carmack

Amendment to provide the exclusive cause of action for loss or damages to goods arising from

the interstate transportation of those goods by a common carrier. Accordingly, we hold that the

complete preemption doctrine applies. Because the Carmack Amendment provides the exclusive

cause of action for such claims, we find that Hoskins’ claims ‘only arise under federal law and

could, therefore, be removed under § 1441.’ ” Hoskins, at 778.

The court in Andrews v. Atlas Van Lines, Inc., 504 F. Supp. 2d 1329 (N.D. Ga 2007)

noted that “[i]t is well-established that the Carmack Amendment preempts state law claims

arising from failures in the transportation and delivery of goods.” Id. The Andrews Court held

that “Plaintiff’s claims [negligence; exemplary damages; attorneys’ fees; and, costs]

are completely preempted by the Carmack Amendment and, therefore, they necessarily arise

under federal law.” Id., at 1332.

In Hall v. North American Van Lines, Inc., 476 F.3d 683 (9th Cir. 2007), the Ninth

Circuit likewise declared, “[w]e hold that the Carmack Amendment is the exclusive cause of

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action for contract claims alleging delay, loss, failure to deliver or damage to property. Hall’s

breach of contract claim is completely preempted by the Carmack Amendment and satisfies the

minimum amount in controversy. [. . .] Because Hall’s completely preempted contract claim

presents a federal question, the district court properly denied Hall’s motion to remand, and

dismissed her contract claim on the merits.” Hall, at 688-89.

Federal common law remedies are preempted by the Carmack Amendment, unless there

are allegations of injuries separate and apart from those resulting directly from loss of shipped

property. Morris v. Covan World Wide Moving, 144 F3d 377 (5th Cir. 1998). In the present case,

defendant Basic contends that Mitsui’s state law /common law claims arise directly from

Defendants’ alleged failure in the transportation and delivery of Mitsui’s property. Defendant

Basic argues that a brief review of the Complaint leaves no doubt that the state law/ common law

bailment and other claims arise out of the Defendants’ alleged failures (damage to goods) in the

interstate transportation and delivery of the shipment and that Mitsui has not alleged that his

state law/common law claims are in any way “separate and distinct” from the Carmack claims.

In its response, Mitsui notes that Basic denies that it was a carrier of the cargo in

interstate commerce and alleges that it acted as a transportation broker. Mitsui argues that since

Basic alleges that it acted as a broker, it is not entitled to dismissal of the state law/common law

claim. Mitsui cites to Custom Cartage, Inc., v. Motorola, Inc., 1999 WL 89563 (N.D. Ill. 1999),

in which the Court noted that the Carmack Amendment is silent on the issue of broker liability

and held that the Carmack Amendment did not prohibit claims against brokers, and does not

exempt brokers from paying for their own negligence or prevent them from entering into

contracts with shippers. Id. at *3. Mitsui contends that at this point in the litigation it is

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unclear whether Basic acted as an interstate carrier or as a broker and, therefore, it is premature

to make a determination of whether preemption under the Carmack Amendment is applicable to

Mitsui’s claims against Basic.

However, as Basic notes in its reply, Mitsui has not alleged a separate and distinct harm

as a result of the alleged state law/common law bailment claim. Basic points to Hughes v. United

Van Lines, Inc., 829 F.2d 1407, 1424 (7th Cir. 1987), in which the Seventh Circuit held that

Plaintiffs’ intentional infliction of emotional distress claim was not preempted by the Carmack

Amendment only because that claim reflected a separate and independent harm. Id. In the

present case, a review of the Complaint reveals that Count I (Carmack Amendment) and Count II

(Bailment) are identical and allege the exact same injury and exact same damage amount

($80,652.05). Accordingly, as Mitsui has failed to allege a distinct injury or distinct damage

amount in Count II, this court finds that Count II is preempted by the Carmack Amendment. 

Thus, the motion for partial dismissal will be granted.

Conclusion

On the basis of the foregoing, Basic’s motion for partial dismissal [DE 11], is hereby

GRANTED.

Further, Madd’s motion to dismiss Count II [DE 23] is also hereby GRANTED.

 

 Entered: September 8, 2014.

 s/ William C. Lee 

 William C. Lee, Judge

 United States District Court

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