Opinion ID: 312241
Heading Depth: 1
Heading Rank: 1

Heading: fulton's appeal as to soo

Text: 9 As noted above, Fulton's amended complaints naming Soo as a defendant pleaded causes of action against Soo both under the Carmack Amendment and in common law negligence, but the trial court declined to submit the Carmack issue to the jury. While we are directed to no precise statement in the record that this ruling stemmed from a conclusion the court possessed in personam jurisdiction as to the negligence count but not as to the Carmack claim, that apparently was the court's decision because the only reason pressed by Soo to pretermit submission of the claim to the jury was its contention the court lacked in personam jurisdiction. 3 Indeed, since Soo clearly comes within the plain language of the Carmack Amendment even if it was not itself negligent, 4 personal jurisdiction is the only theory we can ascribe to support the ruling. Accordingly, we turn to that question. 10 Fulton made service pursuant to Rule 4(e), Fed.R.Civ.P., by utilizing the provisions of the Missouri long arm statute, Sec. 506.500 V.A.M.S. That statute provides: 11 506.500. Actions in which outstate service is authorized 12 1. Any person or firm, whether or not a citizen or resident of this state, or any corporation, who in person or through an agent does any of the acts enumerated in this section, thereby submits such person, firm, or corporation, and, if an individual, his personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any of such acts: 13 (1) The transaction of any business within this state; 14 (2) The making of any contract within this state; 15 (3) The commission of a tortious act within this state; 16 (4) The ownership, use, or possession of any real estate situated in this state; 17 (5) The contracting to insure any person, property or risk located within this state at the time of contracting. 18 2. Only causes of action arising from acts enumerated in this section may be asserted against a defendant in an action in which jurisdiction over him is based upon this section. 19 Soo contends that because it made and performed this contract outside Missouri and owns no Missouri trackage the only long arm provision possibly applicable to this case is Sec. 506.500(1)(3): The commission of a tortious act within this state [Missouri]. Soo then advances two alternative arguments why this subsection is also inapplicable. 20 First, Soo submits the language of the subsection limits its application to actions occurring within the boundaries of Missouri. Pointing out that its allegedly tortious conduct-loading the railcars -occurred in Minnesota, Soo concludes the provision is inapplicable. 21 Second, Soo aserts Fulton's common law negligence claim is preempted by the Carmack Amendment, leaving only his Carmack count as stating a viable claim. Soo then asserts the Carmack count rests on the interstate contract of carriage, that it therefore sounds in contract rather than tort, and therefore that Sec. 506.500(1)(3) is inapplicable. 22 In addition, Soo contends that even if Sec. 506.500 is not inapplicable by its own interpretation, the exercise of personal jurisdiction in this case would contravene due process because Soo does not have the required minimum contacts with Missouri. We shall discuss these seriatim. 23 First, Judge Duncan was clearly correct in holding that Missouri caselaw construes the phrase commission of a tortious act within this state to include extraterritorial acts producing actionable consequences in Missouri. Missouri ex rel. Deere & Co. v. Pinnell, 454 S.W. 2d 889 (Mo.Sup.Ct.1970) (en banc); Missouri ex rel. Apco Oil Co. v. Turpin, 490 S.W.2d 400 (Mo.App.1973). Accord, Buckley v. New York Post Corp., 373 F. 2d 175 (2nd Cir. 1967); Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961); Ehlers v. United States Heating & Cooling Mfg. Corp., 267 Minn. 56, 124 N.W.2d 824 (1963). Contra, Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 15 N.Y.2d 443, 209 N.E. 2d 68, 78-81, cert. denied, sub nom, Estwing Mfg. Co. v. Singer, 382 U.S. 905, 86 S.Ct. 241, 15 L.Ed.2d 158 (1965). It is therefore irrelevant to the statute's applicability that Soo's overt activity was confined to Minnesota. 24 As to Soo's second alternative argument, we agree that the Carmack Amendment has preempted suits in specific negligence by holders of bills of lading against their carriers. American Synthetic Rubber Corp. v. Louisville & N. R. R. Co., 422 F.2d 462, 468 (6th Cir. 1970).Congress must be deemed to have determined that the rule laid down and the means provided to enforce it are sufficient and that no other regulation is necessary. Its power to regulate such commerce and all its instrumentalities is supreme; and, as that power has been exerted, state laws have no application. They cannot be applied in coincidence with, as complementary to or as in opposition to, federal enactments which disclose the intention of Congress to enter a field of regulation within its jurisdiction. Missouri Pac. R. R. Co. v. Porter, 273 U.S. 341, 345-346, 47 S.Ct. 383, 385, 71 L.Ed. 672 (1927). 25 See especially Adams Express Co. v. Croninger, 226 U.S. 491, 33 S.Ct. 148, 57 L.Ed. 314 (1913). See also New York, N. H. & H. R. R. Co. v. Nothnagle, 346 U.S. 128, 73 S.Ct. 986, 97 L.Ed. 1500 (1953); Southeastern Express Co. v. Pastime Amusement Co., 299 U.S. 28, 57 S.Ct. 73, 81 L.Ed. 20 (1936); Chicago & N. Ry. Co. v. C. C. Whitnack Produce Co., 258 U.S. 369, 42 S.Ct. 328, 66 L.Ed. 665 (1922); Atchison, T. & S. F. Ry. Co. v. Harold, 241 U.S. 371, 36 S.Ct. 665, 60 L.Ed. 1050 (1916); Atchison, T. & S. F. Ry. Co. v. Robinson, 233 U.S. 173, 34 S.Ct. 556, 58 L.Ed. 901 (1914); Boston & M. R. R. v. Hooker, 233 U.S. 97, 34 S. Ct. 526, 58 L.Ed. 868 (1914); W. D. Lawson & Co. v. Penn Central Co., 456 F.2d 419 (6th Cir. 1972). We regard the Lawson decision as squarely in point with this case on the preemption issue. But see Litvak Meat Co. v. Baker, 446 F.2d 329 (10th Cir. 1971). 26 The cases make it clear that when damages are sought against a common carrier for failure to properly perform, or for negligent performance of, an interstate contract of carriage, the Carmack Amendment governs. American Synthetic Rubber Corp. v. Louisville & N. R. R. Co., supra, 422 F.2d at 466. 27 However, it does not follow as a consequence of finding Fulton's common law suit preempted that the remainder of Soo's second jurisdictional argument is well taken. Indeed, there are two alternative and independent lines of reasoning yielding the conclusion that the Missouri long arm statute nevertheless applies to Fulton's Carmack claim. 28 First, contrary to Soo's contention, it is not necessary to characterize the Carmack claim as a cause of action in tort for the statute to apply. Concededly, Sec. 506.500(1)(3) is limited to service upon one who has committed tortious conduct, and subsection (2) does limit service to a cause of action arising from that conduct; but it does not follow that the cause of action must sound in tort. The statute says it applies to any cause of action arising from the doing of such acts and the Missouri courts have construed that phrase literally. 29 In Missouri ex rel. Apco Oil Co. v. Turpin, supra, 490 S.W.2d 400 (Mo. App.1973), a retailer defending a products liability action brought a third party complaint against the manufacturer for indemnity and served process pursuant to Sec. 506.500. The manufacturer sought to quash service on the grounds, inter alia, that while a consumer suit against it for the negligent manufacture would sound in tort, the suit for indemnity did not and therefore fell without the coverage of Sec. 506.500(1)(3). The Missouri Court of Appeals, St. Louis Division, rejected this contention, Judge Simeone saying: 30 It is really immaterial for the purposes of the 'long arm statute' whether the tortious act is deemed committed against General Woodcraft [the consumer] or Apco [the retailer] for the reason that the statute authorizes extraterritorial service whenever a tortious act is committed 'within this state' and the cause of action arises from its commission. . . . It is really of no significance as to what the cause of action is between Apco and Noury [the manufacturer] as long as that cause of action arises from the commission of a tortious act in Missouri.490 S.W.2d at 405, 407 (emphasis supplied). 31 Clearly then the cause of action under Carmack need not be characterized as tort to come within Sec. 506.500(1)(3) so long as it arises from the commission of a tortious act. It is true, of course, that the preemption of common law claims against carriers makes the tortious act relied on here not actionable as a common law tort, but that is not a material problem. In view of the thrust of the Apco opinion, we think it sufficient that Soo's conduct gives rise to a cause of action in damages. 32 Furthermore, even if Sec. 506.500(1)(3) were applicable only if the cause of action sued on sounded in tort, we think it would apply to Fulton's Carmack claim because such a claim does indeed sound significantly in tort. It is of course true that the relationship between a shipper and carrier is initiated by the contract of carriage and it is equally true the relationship is highly analogous to bailment. But it is clear the liability of the carrier does not rest upon these factors. The duty of the carrier is erected by the statute, not by the contract, and the parties are not free to alter that duty by their contract. Thus, the liability arises not from breach of the contract but from breach of the statutory duty, and [w]here a contractual relationship exists between persons and at the same time a duty is imposed by or arises out of the circumstances surrounding or attending the transaction, the breach of the duty is a tort. 52 Am.Jur. Sec. 26 p. 379. See also id. at Secs. 27-28. 33 Indeed, the nature of the carrier's duty under the Carmack Amendment sounds in negligence. The carrier's duty in the carriage of cargo is due care, see e. g., Watson Bros. Transp. Co. v. Feinberg Kosher Sausage Co., 193 F.2d 283 (8th Cir. 1951); Seaboard Air Line R. R. Co. v. Lake Region Packing Assoc., 211 So.2d 25 (Fla.App.), cert. denied, 221 So.2d 748 (Fla.1968); it cannot exculpate itself from loss or responsibility due to negligence, Missouri, K. & T. Ry. Co. v. Harriman, 227 U.S. 657, 672, 33 S.Ct. 397, 401, 57 L.Ed. 690 (1913); the carrier bears a heavy burden of proof akin to res ipsa loquitur because it has peculiarly within its knowledge the facts which may relieve it of liability, Missouri Pac. R. R. Co. v. Elmore & Stahl, 377 U.S. 134, 143-144, 84 S.Ct. 1142, 12 L.Ed.2d 194 (1964); Lux Art Van Serv., Inc. v. Pollard, 344 F.2d 883 (9th Cir.), cert. denied, 382 U. S. 837, 86 S.Ct. 85, 15 L.Ed.2d 80 (1965), but it is liable under the statute only for damage caused by it and therefore can escape liability by proving the damage was due to an excepted cause and that it was free from negligence. . . . Missouri Pac. R. R. Co. v. Elmore & Stahl, supra, 377 U.S. at 138, 84 S.Ct. at 1145. Thus, 34 [d]espite the divergent language in the various cases, it is clear that the duty therein sought to be imposed on the common carrier with respect to transportation and delivery of goods is based on the law of negligence. Seaboard Air Line R. R. Co. v. Lake Region Packing Assoc., supra, 211 So. 2d at 27-28. 35 Accord, United States v. Reading Co., 289 F.2d 7 (3rd Cir. 1961); Skulina, Liability of a Carrier for Loss and Damage to Interstate Shipments, 17 Cleve-Mar.L.Rev. 251, 255 (1968). See Watson Bros. Transp. Co. v. Feinberg Kosher Sausage Co., supra. Accordingly, a cause of action under the Carmack Amendment sounds in tort. 36 In sum, we hold, independently and alternatively, that for service under Sec. 506.500(1)(3) to be effective it is not necessary that the cause of action pleaded sound in tort, and that even if it were, this Carmack cause of action would be covered because it sounds in tort. Therefore, the service here was statutorily authorized. We turn then to the question whether exercise of the jurisdiction conferred by that statute is constitutionally permissible in this case. 5 37 The precise question now posed is the constitutionality of exercising personal jurisdiction over a foreign corporation whose only contact with the forum state is a single extraterritorial act causing actionable consequences within the forum state. The constitutional question, of course, is governed by the three leading Supreme Court cases, Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); International Shoe Co. v. Washington, 326 U. S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). 38 In International Shoe the Court broke with the past and laid down this now familiar rule, 39 [D]ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' 40 326 U.S. at 316, 66 S.Ct. at 158. The Court also held the minimum contacts criteria . . . cannot be simply mechanical or quantitive, . . . [but] must depend rather upon the quality and nature of the activity. . . . Id. at 319, 66 S.Ct. at 160. Accordingly, the Court said, 41 the commission of some single or occasional acts of the corporate agent in a state sufficient to impose an obligation or liability on the corporation, . . . because of their nature and quality and the circumstances of their commission, may be deemed sufficient to render the corporation liable to suit. 42 Id. at 318, 66 S.Ct. at 159. 43 The Court followed this holding in McGee, where it approved service upon a nonresident insurance company whose only contact with the forum state was sending a form of reinsurance to, and receipt of premiums from, its one policyholder in the state whom it acquired when it absorbed his original insurer. Then in Hanson, the Court added a caveat: 44 [I]t is a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts. Those restrictions are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States. 45 357 U.S. at 251, 78 S.Ct. at 1238. 46 Taking these three cases together, we reject Soo's contention the exercise of jurisdiction upon a single act is constitutionally impermissible. 47 [I]t would not be difficult to extrapolate from the McGee decision and opinion a general principle that the due process clause imposes no bar to a state's asserting personal jurisdiction, of course on proper notice, in favor of a person within its borders who suffers damage from the breach of a contract the defendant was to perform there or a tort the defendant committed there. . . . [S]uch a doctrine would not seem to violate basic notions of fair play. . . . Indeed, when [as here,] the operative facts have occurred where the plaintiff sues, the convenience of both parties would often be served by a trial there. . . . Unfairness inconsistent with notions of fair play occurs only when a defendant is 'compelled to defend himself in a court of a State with which he has no relevant connection.' And inflicting harm within a state would appear to meet whatever further constitutional requirement may arise from [the] 'territorial limitations on the power of the respective States' [referred to in] Hanson v. Denckla. Buckley v. New York Post Corp., supra, 373 F.2d at 181 (Friendly, J.) (citations omitted). 48 Accord, Southern Machine Co. v. Mohasco Industries, Inc., supra; Elkhart Engineering Corp. v. Dornier Werke, 343 F.2d 861, 865-868 (5th Cir. 1965); Missouri ex rel. Deere & Co. v. Pinnell, supra; Missouri ex rel. Birdsboro Corp. v. Kimberlin, 461 S.W.2d 292 (Mo.App. 1970). Cf. Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091 (1927) (motorist's single act). 49 Bearing in mind the injunction of International Shoe that we judge the contacts qualitatively rather than quantitatively, we find no difficulty in holding Soo's role as initiating carrier provides the requisite minimum contacts. As initiating carrier, Soo knew the cargo would traverse Missouri and the derailment occurred there allegedly through Soo's negligence. Surely this provides a relevant connection with Missouri. Furthermore, the fairness of a Missouri forum is shown by the fact it is the situs of the accident. Indeed, the Texas District Court transferred the cause to Missouri pursuant to 28 U.S.C. Sec. 1404 and the Missouri court then declined a similar transfer to Minnesota. The dual test of constitutionality is therefore met. 50 In sum, we find the district court had personal jurisdiction over Soo for the Carmack claim, the service of process being statutorily and constitutionally valid. It was therefore error not to submit that count to the jury. Accordingly, we reverse and remand for retrial of Fulton's Carmack claim against Soo. In view of the fact that all of Fulton's other assignments of error vis-a-vis Soo relate to the common law count now held preempted, we pretermit discussion of those contentions.