Court Opinion

ID: 2964504
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:26:38.157033+00
Date Added: 2024-06-11T11:42:55.524918
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 95-2334

                                      JANE RINI,

                                Plaintiff - Appellee,

                                          v.

                               UNITED VAN LINES, INC.,

                                Defendant - Appellant.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                    [Hon. Michael A. Ponsor, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                               Torruella, Chief Judge,
                                          ___________

                         Coffin and Campbell, Circuit Judges.
                                              ______________

                                _____________________

               Daniel  J.  Gleason,  with   whom  Terry  L.  Wood,  Nutter,
               ___________________                _______________   _______
          McClennen  & Fish,  LLP, Wesley  S. Chused, Lisa  Sternschuss and
          _______________________  _________________  _________________
          Looney & Grossman were on brief for appellant.
          _________________
               George W. Wright, Michael  J. Rush and Kenneth E.  Siegel on
               ________________  ________________     __________________
          brief  for American  Movers Conference,  Association  of American
          Railroads and American Trucking Associations, amicus curiae.
               John P.  Pucci,  with  whom Jeanne  M.  Kaiser  and  Fierst,
               ______________              __________________       _______
          Mitchell & Pucci were on brief for appellee.
          ________________

                                 ____________________

                                   January 17, 1997
                                 ____________________

                    TORRUELLA, Chief Judge.   Plaintiff-appellee Jane  Rini
                    TORRUELLA, Chief Judge.
                               ___________

          ("Rini") hired defendant-appellant United Van Lines ("United") to

          move her belongings from South Carolina to Massachusetts.  Rini's

          household items were packed on August 20, 1990, and loaded into a

          moving  van  the  next day.    Her  belongings  arrived at  their

          destination on August 27,  but certain items were missing.   Rini

          proceeded  to file a claim with United.  Following an acrimonious

          attempt to settle the  claim, Rini filed a complaint  in district

          court  on December 22, 1992.  The complaint included claims under

          the Carmack  Amendment to the Interstate Commerce  Act, 49 U.S.C.

            11707  (1992),1 as  well  as state  law  claims of  negligence,

          misrepresentation, use of unfair  and deceptive acts in violation

          of Mass. Gen. L. ch. 93A, and intentional infliction of emotional

          distress.   See Rini v. United  Van Lines, 903 F.  Supp. 224, 225
                      ___ ____    _________________

          (1995).

                    The  jury  found for  Rini  on  the Carmack  Amendment,

          negligence, and misrepresentation  claims in connection with  the

          claims process.  See Rini, 903 F. Supp. at  230.  On the claim of
                           ___ ____

          intentional infliction of emotional  distress, the jury found for

          United.   Id.  The district court  found that United, in handling
                    ___

          Rini's claim, had willfully violated chapter 93A.  Id. at 232-33.
                                                             ___

          Damages  were awarded  in the  amount of  $50,000 on  the Carmack

          claim and a  total of $300,000 on the state law claims.  Id. 234-
                                                                   ___

                              
          ____________________

          1  There have been amendments to the Carmack Amendment since 1990
          when the events  at issue in  this case took  place.   Throughout
          this  opinion,  references  will  be made  to  the  pre-amendment
          statute.

                                         -2-

          35.  In addition, Rini was awarded attorney's fees in the  amount

          of $146,950,  costs in the  amount of $7,359.60,  and prejudgment

          interest in  the amount of  $100,000.   See Memorandum  Regarding
                                                  ___

          Plaintiff's  Motion for Attorney's  Fees, Costs, and Pre-Judgment

          Interest, Nov. 1, 1995.  This appeal by United ensued.

                    We must determine whether the state law claims on which

          Rini prevailed are  preempted by  the Carmack  Amendment.   These

          claims are  for negligence,  misrepresentation, and  violation of

          Mass. Gen. L. ch. 93A.

                       I.  Preemption and the Carmack Amendment
                       I.  Preemption and the Carmack Amendment

                    The  Carmack Amendment to  the Interstate Commerce Act,

          49 U.S.C.    11707, passed  in 1906 as  part of the  Hepburn Act,

          ch. 5391, 34  Stat. 584,  governs the  liability of carriers  for

          lost  or damaged goods.   The relevant portions  of the Amendment

          are:

                      A  common carrier  . .  . subject  to the
                      jurisdiction  of the  Interstate Commerce
                      Commission . . . shall issue a receipt or
                      a bill of lading for property it receives
                      for transportation . .  . .  That carrier
                      . . .  and any other common  carrier that
                      delivers  the  property and  is providing
                      transportation or service subject  to the
                      jurisdiction  of the Commission . . . are
                      liable  to the person entitled to recover
                      under the receipt or bill of lading.  The
                      liability imposed under this paragraph is
                      for actual loss or injury to the property
                      caused by (1)  the receiving carrier, (2)
                      the  delivering  carrier, or  (3) another
                      carrier  over  whose lines  or  route the
                      property is transported  into the  United
                      States . . . .

          49 U.S.C.   11707.

                                         -3-

                    Article VI  of the United States  Constitution provides

          that the laws of the  United States "shall be the supreme  Law of

          the Land," notwithstanding contrary state laws.  U.S. Const. art.

          VI,   2.   It is settled, therefore, "that  all conflicting state

          provisions be without effect."   Maryland v. Louisiana, 451  U.S.
                                           ________    _________

          725, 746 (1981).  When faced with a preemption question, however,

          consideration  "starts with  the  assumption  that  the  historic

          powers of the States [are] not to be superseded  by . . . Federal

          Acts  unless  that  [is]  the   clear  and  manifest  purpose  of

          Congress."  Rice  v. Santa Fe Elevator  Corp., 331 U.S.  218, 230
                      ____     ________________________

          (1947).

                      Such  a purpose  [to displace  state law]
                      may be  evidenced in  several ways.   The
                      scheme  of federal  regulation may  be so
                      pervasive  as  to  make   reasonable  the
                      inference that Congress left no  room for
                      the States to supplement  it.  Or the Act
                      of Congress  may touch  a field  in which
                      the federal interest is so  dominant that
                      the  federal  system will  be  assumed to
                      preclude enforcement of state laws in the
                      same  subject.    Likewise,   the  object
                      sought to  be obtained by the federal law
                      and the character of  obligations imposed
                      by it may reveal the same purpose.

          Id.   Finally, a  state statute is  void to the  extent it  is in
          ___

          conflict with a federal statute.  Maryland, 451 U.S. at 747.
                                            ________

                    In determining the scope of Carmack preemption, we look

          to the intent of Congress and  the purpose of the Amendment.  Our

          inquiry  into the  intent  of  Congress  is made  more  difficult

          because the  Carmack Amendment was adopted  without discussion or

          debate.  40  Cong. Rec. 7075  (1906).  It  is accepted,  however,

          that the  principal  purpose  of the  Amendment  was  to  achieve

                                         -4-

          national uniformity in the liability assigned to carriers.  "[I]t

          is evident that  Congress intended  to adopt a  uniform rule  and

          relieve such contracts from the diverse regulation to  which they

          had  been theretofore subject."   Adams Express Co. v. Croninger,
                                            _________________    _________

          226  U.S.  491, 506  (1912).   The  importance of  uniformity has

          frequently  been stressed  in subsequent Supreme  Court opinions.

          See, e.g., New York, N.H.  & Hartford R.R. Co. v.  Nothnagle, 346
          ___  ____  ___________________________________     _________

          U.S. 128, 131 (1953); Atchison, Topeka  & Santa Fe Ry. v. Harold,
                                ________________________________    ______

          241 U.S. 371, 378 (1916).

                    The foundation for Carmack preemption analysis is Adams
                                                                      _____

          Express,  in which  the Supreme  Court considered  the preemptive
          _______

          scope of the Carmack Amendment, concluding:

                      That the legislation  supersedes all  the
                      regulations and policies of  a particular
                      state upon the same subject  results from
                      its general character.   It embraces  the
                      subject of  the liability of  the carrier
                      under  a bill  of  lading which  he  must
                      issue,  and  limits his  power  to exempt
                      himself by rule, regulation, or contract.
                      Almost every  detail  of the  subject  is
                      covered so completely  that there can  be
                      no  rational  doubt  but   that  Congress
                      intended  to  take   possession  of   the
                      subject,   and    supersede   all   state
                      regulation with reference to it.

          Adams Express, 226 U.S. at 505-06.  The Court stated further that
          _____________

          to  allow state regulations  to affect the  liability of carriers

          "would  be to  revert  to the  uncertainties  and diversities  of

          rulings which led to the amendment."  Id. at 506.
                                                ___

                    The  preemptive effect  of the  Carmack  Amendment over

          state law  governing damages for the loss  or damage of goods has

          been reiterated by  the Supreme Court in  many cases and  is well

                                         -5-

          established.   See,  e.g.,  Southeastern Express  Co. v.  Pastime
                         ___   ____   _________________________     _______

          Amusement  Co.,  299 U.S.  28  (1936)  (claim of  negligence  for
          ______________

          failure to deliver  a film  on time is  preempted); Charleston  &
                                                              _____________

          Western Carolina Ry. Co. v. Varnville Furniture Co., 237 U.S. 597
          ________________________    _______________________

          (1915) (state  statute  imposing a  penalty  for failure  to  pay

          claims to a shipper within 40 days is preempted).

                    Unfortunately, the  Supreme Court  case  law  does  not

          provide clear guidance  on the reach of the  preemption doctrine.

          In  particular, the Court has  not clarified the  extent to which

          state law provisions pertaining to the claims process, as opposed

          to the shipping of goods, are preempted.  Two cases, however, are

          instructive.  First, in Missouri, Kansas, & Texas Railway Company
                                  _________________________________________

          of  Texas v. Harris, 234 U.S. 412  (1914), the Court considered a
          _________    ______

          Texas  statute  that  allowed  for  the  recovery  of  reasonable

          attorney's  fees in cases where  the value of  the claims did not

          exceed  two hundred  dollars.   The Court  held that  because the

          state statute at issue "had a broad sweep which only incidentally

          includes  claims rising  out of  interstate commerce,  it follows

          that it  cannot be held to  constitute a direct burden  upon such

          commerce."  Id. at 416.   For this reason, the statute  was ruled
                      ___

          to  be valid and able  to exist alongside  the Carmack Amendment.

          The important distinction made  by the Court was that  "the Texas

          statute  . .  . does  not  anywhere either  enlarge or  limit the

          responsibility of  the carrier for the loss of property intrusted

          to it in transportation, and only incidentally affects the remedy

          for  enforcing that responsibility."   Id. at  420.  Furthermore,
                                                 ___

                                         -6-

          "[t]he  local statute . . . does not  at all affect the ground of

          recovery,  or the  measure  of recovery;  it  deals only  with  a

          question  of costs,  respecting which  Congress has  not spoken."

          Id. at 421-22.
          ___

                    Second,  in Varnville,  the  Court ruled  that a  South
                                _________

          Carolina  statute  that imposed  a fine  of  $50 on  carriers for

          failure to  pay within 40 days for damage to goods transported in

          interstate  commerce  was  preempted by  the  Carmack  Amendment.

          Varnville,  237  U.S. at  603.   The  Court determined  that "the
          _________

          special regulations  and policies  of particular states  upon the

          subject  of  the  carrier's  liability  for  loss  or  damage  to

          interstate shipments, and the  contracts of carriers with respect

          thereto,  have been superseded."  Id. at  603.  The state statute
                                            ___

          before  the  Court was  found to  "overlap[]  the Federal  act in

          respect of the subjects, the grounds, and the extent of liability

          for loss."  Id.
                      ___

                    These  two cases  are  of particular  relevance to  the

          instant  case  because the  state laws  at  issue did  not govern

          claims arising directly out of damage to goods.  Like the instant

          case, both  Harris and   Varnville  consider state  remedies that
                      ______       _________

          relate  to the claims process.   The distinction  between the two

          cases was made in Varnville, where the Court stated that:
                            _________

                      [i]t   is  true  that   in  [Harris]  the
                                                   ______
                      inclusion  of  the  attorney's  fee,  not
                      exceeding   $20,   in   the  costs   upon
                      judgments  for  certain small  claims was
                      upheld,  although  incidentally including
                      some  claims  arising  out of  interstate
                      commerce.    But  apart  from  the effect
                      being only incidental, the  ground relied

                                         -7-

                      upon was that the statute did not 'in any
                      way  enlarge  the  responsibility of  the
                      carrier' for  loss or 'at all  affect the
                      ground  of  recovery, or  the  measure of
                      recovery'.   The  South Carolina  Act, on
                      the other hand, extends the  liability to
                      losses   on   other   roads    in   other
                      jurisdictions, and increases it by a fine
                      difficult to escape.

          Id. at 603 (citations omitted).
          ___

                    The lesson from these cases is  that state statutes are

          preempted  by the Carmack Amendment  if they "in  any way enlarge

          the responsibility  of the carrier for loss  or at all affect the

          ground of recovery, or the measure of recovery."  Id.
                                                            ___

                    The  Carmack   Amendment   and  the   set  of   federal

          regulations  that  complement  it   cover  not  only  the  actual

          transport of goods, but they also govern the claims process.  For

          example,  the Amendment itself  provides that a  carrier "may not

          provide . . . a period of less than 9 months for filing a claim .

          . . and a period of less than 2 years for bringing a civil action

          against it under this section."  49 U.S.C.   11707(e).2

                    In light of  the Court's holding in  Varnville, we find
                                                         _________

          that  all state laws that  impose liability on  carriers based on
                                                                   ________
                              
          ____________________

          2     See  also  49  C.F.R.      1005.2-1005.5.    These  federal
                _________
          regulations govern the filing of claims,   1005.2, acknowledgment
          of  claims,    1005.3, investigation  of  claims,    1005.4,  and
          disposition  of claims,   1005.5.   Failure to  comply with these
          federal regulations subjects the carrier  to sanctions.  See Zola
                                                                   ___ ____
          v. I.C.C., 889 F.2d 508, 509 (3d Cir. 1989); Aaacon Auto Transp.,
             ______                                    ____________________
          Inc. v. I.C.C., 792 F.2d  1156, 1158 (D.C. Cir. 1986).   Although
          ____    ______
          "the mere existence of a federal regulatory or enforcement scheme
          . .  . does not  by itself  imply preemption of  state remedies,"
          English v. General Elec. Co.,  496 U.S. 72, 87 (1990), the  above
          _______    _________________
          federal regulations  indicate that  the claims process  is within
          the scope  of the  shipper-carrier relationship that  the federal
          government seeks to regulate.

                                         -8-

          the  loss or damage of shipped goods  are preempted.  A state law
          ____________________________________

          "enlarges  the responsibility of the  carrier for loss  or at all

          affects  the ground of recovery, or the measure of recovery," id.
                                                                        ___

          at 603,  where, in the  absence of an  injury separate and  apart

          from the loss  or damage of goods, it increases  the liability of

          the carrier.   Preempted state law claims, therefore, include all

          liability  stemming  from  damage  or loss  of  goods,  liability

          stemming  from the claims  process, and liability  related to the

          payment  of claims.   Thus, the  forty day  limit for  payment at

          issue  in Varnville is preempted.   On the  other hand, liability
                    _________

          arising from separate harms  -- apart from the loss or  damage of

          goods --  is not preempted.   For example, if an  employee of the

          carrier  assaulted and  injured the  shipper, state  law remedies

          would not  be  preempted.   Similarly,  a claim  for  intentional

          infliction of  emotional distress alleges  a harm to  the shipper

          that is  independent from  the loss  or damage  to goods  and, as

          such, would not be preempted.3

                                   II.  Application
                                   II.  Application

                              
          ____________________

          3   We are aware  that our holding  today conflicts with  certain
          previous decisions  of the District  Court of Massachusetts.   In
          particular, we note that the cases of Sokhos v. Mayflower Transit
                                                ______    _________________
          Inc.,  691 F. Supp. 1578 (D. Mass  1988), and Mesta v. Allied Van
          ____                                          _____    __________
          Lines,  695 F. Supp. 63  (D. Mass. 1988),  allowed certain claims
          _____
          that  would  be preempted  under the  decision  that we  lay down
          today.  To the  extent these decisions are inconsistent  with our
          holding, they  do not represent the  law of the circuit.   We are
          also aware that our own decision in Fredette v. Allied van Lines,
                                              ________    ________________
          66  F.3d 369 (1st Cir. 1995), involved both Carmack Amendment and
          state  law claims.   Id.  at 372.   That  case did  not, however,
                              ____
          address  the  preemption  issue  and,  therefore,  offers  us  no
          guidance.

                                         -9-

                    In the instant  appeal, the state  law claims at  issue

          all stem  from the  loss of  goods.   The alleged negligence  and

          misrepresentation took  place in the  course of settling  a claim

          for damages stemming from the move.   Rini suffered no harm other

          than the loss  of goods and, therefore, her state  law claims are

          preempted  by the Carmack Amendment.   Had Rini  prevailed on her

          claim for intentional infliction  of emotional distress, it would

          not have been preempted.  Because the three state claims at issue

          in  this  appeal involve  no injury  save  the loss  of property,

          however, we find them to be preempted.

                    Our conclusion is consistent with the view taken by the

          Second Circuit in Cleveland v. Beltman North American Company, 30
                            _________    ______________________________

          F.3d 373 (2d Cir. 1994), cert denied,  115 S. Ct. 901 (1995).  In
                                   ___________

          that  case, the  court described  the plaintiffs'  allegations as

          follows:

                      In   handling  plaintiffs'   claims,  the
                      moving  company --  in  a deliberate  and
                      determined     effort    to     frustrate
                      plaintiffs'  collection  of  damages  for
                      their  losses  --  was  guilty  of  foot-
                      dragging  and stonewalling.   It  did not
                      deal fairly  and in good  faith with  the
                      couple.

          Id.  at 374.   The  claim addressed  by the  court was  a federal
          ___

          common law claim for breach of  an implied covenant of good faith

          and  fair dealing in the claims process, damages from which "were

          to be exclusive of damages awarded for actual loss under the bill

          of lading."   Id. at  376.   The Second Circuit  held that  there
                        ___

          could be no federal common law  claim for a breach of the implied

          covenant of  good faith  and fair dealing.   Id.  at 379.   In so
                                                       ___

                                         -10-

          deciding, the court concluded  that "[a] claim for breach  of the

          implied covenant of good  faith and fair dealing resulting  in an

          award  of punitive damages could  well thwart one  of the primary

          purposes  of  the Carmack  Amendment;  that is,  to  provide some

          uniformity in the disposition  of claims brought under a  bill of

          lading."  Id.  Although Cleveland dealt with an  issue of federal
                    ___           _________

          common law, the  same reasoning implies  that state law  remedies

          for loss or damage to goods would be preempted.

                    The  instant case  presents  the same  question as  did

          Cleveland.  We face a plaintiff  who has been ill-treated in  her
          _________

          attempts  to  settle her  claim  with  United.   As  a  result of

          United's  unfair  practices,  the  jury  found  for  Rini on  the

          negligence and misrepresentation counts and the trial judge found

          for Rini on the use of unfair and deceptive acts count.  Like our

          sister circuit before us, we note that although "[i]t may be that

          Congress'  enforcement  scheme  does  not  provide  a  sufficient

          deterrent  to the  type of  conduct  defendants employed  in this

          case," id.  at 379, we find that the federal scheme has preempted
                 ___

          negligence, misrepresentation, and chapter 93A claims.

                    Finally,  we  note   that  our  ruling   preserves  the

          uniformity  of  the  federal  scheme by  protecting  the  federal

          government's  exclusive  jurisdiction  over  the  shipper-carrier

          relationship,  the importance  of which  has been  underscored on

          numerous occasions.4   "The purpose of [the Carmack Amendment] is

          to  establish  uniform federal  guidelines  designed  in part  to
                              
          ____________________

          4  See supra pp. 4-5.
             ___ _____

                                         -11-

          remove  the uncertainty  surrounding a  carrier's liability  when

          damage occurs  to a  shipper's interstate  shipment."   Hughes v.
                                                                  ______

          United Van Lines, Inc., 829 F.2d 1407, 1415  (7th Cir. 1987); see
          ______________________                                        ___

          also Cleveland, 30 F.3d  at 379 (stating that one  of the primary
          ____ _________

          purposes of the Carmack Amendment is to provide uniformity in the

          disposition of claims brought  under a bill of lading).   Because

          the  Carmack  Amendment was  intended  to  provide uniformity  to

          claims for the loss or damage to goods, the goal of uniformity is

          not  frustrated by the allowance of state law claims for injuries

          that are separate and distinct from such loss or damage.

                                   III.  Conclusion
                                   III.  Conclusion

                    For  the  foregoing  reasons,  the  conclusion  of  the

          district  court regarding  the preemptive  effect of  the Carmack

          Amendment  is reversed.   In  light of  our ruling,  the district
                        ________

          court's judgment  as to costs, fees and prejudgment interest must

          be revisited.  The case is remanded to the district court for the
                                     ________

          entry of an order with  respect to damages and a ruling  on fees,

          costs, and interest consistent with this decision.

                                         -12-