Court Opinion

ID: 25288
Source: CourtListenerOpinion
Date Created: 2010-04-25 08:33:48+00
Date Added: 2024-06-11T11:49:54.148738
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                         FOR THE FIFTH CIRCUIT

                             No. 01-40422
                           Summary Calendar

FERROSTAAL INC.,

           Plaintiff-Appellant,

                                 versus

DONALD SEALE,

           Defendant-Appellee.

           Appeal from the United States District Court
                 for the Eastern District of Texas
                        USDC No. 6:00-CV-212

                           September 6, 2001

Before HIGGINBOTHAM, WIENER, and BARKSDALE, Circuit Judges.

PER CURIAM:*

     Ferrostaal Inc. appeals from the grant of summary judgment in

favor of the defendant, Donald Seale, on Ferrostaal's claim for

common-law conversion.    It argues that the district court erred in

finding there was no genuine issue of material fact as to whether

its claim against Seale in his individual capacity was preempted by

the Carmack Amendment to the Interstate Commerce Act.1

     *
      Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
     1
         49 U.S.C. § 14706 et seq.
     We review a grant of summary judgment de novo, applying the

same standard as the district court.2      We may affirm a summary

judgment on any ground raised by the movant below and supported by

the record, even if it is not the ground relied on by the district

court.3

     Ferrostaal's claim arises from a shipment of steel bars

transported in June 1997 from Texas by rail by Union Pacific

Railroad Company with an intended destination in Pennsylvania. Due

to an administrative error, the steel never left the yard after it

arrived in Fort Worth.     Fourteen months later, in December 1998,

Union Pacific found the steel in a car in the Fort Worth yard and

did not identify it as belonging to Ferrostaal.   Union Pacific told

its employee, Seale, to solicit bids on the steel, which Seale did.

Union Pacific accepted one of the bids and sold the steel in

January 1999, retaining the proceeds.     Following an unsuccessful

Carmack Amendment claim against Union Pacific filed in New York

federal district court, Ferrostaal pursues this state law tort

action against Seale individually for his actions in soliciting

bids on and selling the steel.

     It is clear under Fifth Circuit precedent that an intentional

tort claim, including a state law conversion action, against Union

     2
        Holtzclaw v. DSC Communications Corp., 255 F.3d 254, 257
(5th Cir. 2001).
     3
          Id. at 257-58.

                                  2
Pacific would be preempted by the Carmack Amendment.4         The injuries

alleged from the conversion claim result directly from the loss of

the shipped property.5

     Ferrostaal's arguments in support of its claim that the

Carmack Amendment would not apply to a conversion action against

Union Pacific are without merit.          Ferrostaal is incorrect when it

claims that the district judge in its Southern District of New York

case against Union Pacific held that the Carmack Amendment did not

apply    to   Ferrostaal's   claims   against    Union   Pacific.6   Judge

Schwartz held that the parties opted out of the Carmack Amendment's

two-year statute of limitations through a one-year limitation

period provision in the UP Exempt Circular, which the parties

contracted to have control the shipping of the steel.7           This does

not amount to a holding that the Carmack Amendment does not govern

Union Pacific's liability for the loss of Ferrostaal's property

     4
        See Moffit v. Bekan Van Lines Co., 6 F.3d 305, 306-07 (5th
Cir. 1993) (preemption of Texas state law claims of, inter alia,
intentional infliction of emotional distress, violation of the
DTPA, slander, misrepresentation, fraud, and gross negligence); see
also Chemsource, Inc. v. Hub Group, Inc., 106 F.3d 1358, 1362 (7th
Cir. 1997) ("The Carmack Amendment preempts a state law conversion
claim against a carrier or freight forwarder for loss or damage to
interstate shipments.").
     5
        See Morris v. Covan Worldwide Moving, Inc., 144 F.3d 377,
382-83 (5th Cir. 1998).
     6
        See Ferrostaal, Inc. v. Union Pac. R.R. Co., 109 F. Supp.
2d 146 (S.D.N.Y. 2000).
     7
         Id. at 149-50.

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shipped in interstate commerce as a common carrier under a receipt

or bill of lading.        Furthermore, although the steel never left

Texas in the course of Union Pacific's handling of the shipment,

the transportation of the shipment was in interstate commerce

because it is undisputed that Ferrostaal intended for the steel to

travel in interstate commerce at the time of the shipment.8

      The uncontradicted evidence on summary judgment shows that

Seale was an employee of Union Pacific acting within the scope of

his employment and pursuant to orders from his employer when he

solicited bids on Ferrostaal's steel.       Ferrostaal does not allege

that Seale appropriated the steel for his own use or gain, but

rather that Union Pacific retained the proceeds of the sale of the

steel.9    Even if there was some doubt as to whether the Carmack

Amendment would limit Union Pacific's damages for its conversion of

Ferrostaal's steel, an action arising from the loss of property

shipped in interstate commerce by a common carrier subject to the

Carmack Amendment lies only against the common carrier itself.10

A   conversion   action    against   the   common   carrier's   employee,

      8
       See Merchants Fast Motor Lines, Inc. v. Interstate Commerce
Comm'n, 5 F.3d 911, 917 (5th Cir. 1993).
      9
        Cf. Kemper Ins. Cos. v. Fed. Express Corp., 252 F.3d 509,
515 (1st Cir. 2001) (conversion exception to Carmack Amendment's
released value doctrine does not apply in the case of employee
theft or where a common carrier has not appropriated the property
for its own use or gain).
      10
        See Arnold J. Rodin, Inc. v. Atchison, Topeka & Santa Fe
Ry. Co., 477 F.2d 682, 688 (5th Cir. 1973).

                                     4
nominally in his individual capacity, is simply an attempted end-

run around the time bar on Ferrostaal's Carmack Amendment action

against Union Pacific.    We hold that, just as a state law tort

action naming Union Pacific as defendant would be preempted by the

Carmack Amendment, so, too, is Ferrostaal's conversion action

against Union Pacific's employee Seale preempted by the Amendment.11

     We therefore conclude that the district court did not err in

granting summary judgment to Seale on Ferrostaal's state law

conversion claim.   There is no genuine issue of material fact as to

whether this claim is preempted by the Carmack Amendment.

     AFFIRMED.

     11
        See Moffit, 6 F.3d at 307 (state law claims preempted in
furtherance of Carmack Amendment's goal of providing uniform,
national law as to the rights and liabilities of interstate common
carriers).

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