Opinion ID: 33235
Heading Depth: 3
Heading Rank: 1

Heading: New Process’ State Tort Law Claims

Text: In Hoskins v. Bekins Van Lines, this Court recently held that the Carmack Amendment completely preempts all state law and federal common law claims for “loss or damages to goods arising from the interstate transportation of those goods by a common carrier” and, therefore, such claims “arise[] under federal law and [can]. . . be removed under [28 U.S.C.] § 1441.” Id. at 778 (quoting Beneficial, 123 S.Ct. at 2064). In Hoskins, the plaintiff filed suit in Texas state court against the defendant common carrier for damages stemming from the loss or damage to her personal belongings that occurred during her move from Texas to Virginia. Id. at 771. The plaintiff’s original state court complaint alleged negligence, breach of contract, and Texas Deceptive Trade Practices Act claims against the defendant, but did not affirmatively present any federal claim. Id. The defendant nonetheless removed to federal court pursuant to § 1441, based on 28 U.S.C. §§ 1331 and 1337, and the Carmack Amendment because the plaintiff sought “to impose liability arising out of the interstate transportation of goods by a common carrier.” Id. On appeal, this Court ruled that 5 removal was proper because we found, based on Supreme Court and this Circuit’s precedent, that “Congress intended the Carmack Amendment to pro vide the exclusive cause of action” for such claims. Id. at 777-78. Guided by the Supreme Court’s complete preemption analysis in Beneficial, we reiterated in Hoskins that “‘the proper inquiry [in assessing the propriety of removal] focuses on whether Congress intended the federal cause of action to be exclusive rather than on whether Congress intended the cause of action to be removable . . .’” Id. at 775-76. In this case, New Process affirmatively assert ed only state-law tort and contract claims against Union Pacific, seeking relief for the damages it allegedly sustained as a result of extensive delays in Union Pacific’s interstate rail shipments of steel under bills of lading. New Process further asserts that it was designated as the consignee on the bills of lading and that its claim for damages stemmed from these shipment delays, which it contends forced it to obtain substitute products at increased costs, including increased shipping costs, loading charges, and processing and scrap costs totaling more than 1.25 million dollars in economic damages. We find that, as in Hoskins, the statelaw tort claims asserted by New Process for negligence and negligent misrepresentation constitute claims for “loss or damages to goods arising from the interstate transportation of those goods by a common carrier” under a receipt or bill of lading and thus are completely preempted because they fall within the scope of the Carmack Amendment. Therefore, New Process’ state tort claims necessarily “arise under federal law” and removal was proper under the federal removal statute, §1441. See Hoskins, 343 F.3d at 778 (citing Beneficial, 123 S. Ct. at 2064).2 2 New Pro cess co ntinues to assert that it was the intended third party beneficiary of the rail transportation contracts, and that Union Pacific breached those contracts. Thi s Circuit has yet to address whether the Carmack Amendment also completely preempts a contract-based third beneficiary claim such as that asserted by New Process. However, we reserve judgment on this question today. We do so because, as Union Pacific argued, New Process’s third party beneficiary 6