Court Opinion

ID: 4523981
Source: CourtListenerOpinion
Date Created: 2020-04-09 16:00:27.437388+00
Date Added: 2024-06-11T08:42:56.745803
License: Public Domain

United States Court of Appeals
                           For the Eighth Circuit
                      ___________________________

                              No. 18-3502
                      ___________________________

                                 Michael Fergin

                      lllllllllllllllllllllPlaintiff - Appellant

                      Ace American Insurance Company

                             lllllllllllllllllllllPlaintiff

                                          v.

                               Westrock Company

                            lllllllllllllllllllllDefendant

              Magnum LTL, Inc.; XPO; Magnum Dedicated, Inc.

                     lllllllllllllllllllllDefendants - Appellees
                                      ____________

                   Appeal from United States District Court
                    for the District of Nebraska - Omaha
                                ____________

                        Submitted: December 10, 2019
                            Filed: April 9, 2020
                               ____________

Before SMITH, Chief Judge, LOKEN and GRASZ, Circuit Judges.
                              ____________
SMITH, Chief Judge.

        The Carmack Amendment requires certain common carriers to “issue a receipt
or bill of lading for property.” 49 U.S.C. § 14706(a)(1). They are then “liable to the
person entitled to recover under the . . . bill of lading” “for the actual loss or injury to
the property.” Id. For over a century, the Supreme Court has found that, where it
applies, the Amendment preempts shippers’ state-law claims. See Adams Express Co.
v. Croninger, 226 U.S. 491, 505–06 (1913). In two orders, the district court held that
the Amendment preempted the state-law personal injury claim of Michael Fergin (a
third party). We reverse.

                                     I. Background
       Michael Fergin is employed by Becton Dickinson, Inc. (BD). BD purchased
cardboard boxing materials from Westrock. Westrock hired XPO and Magnum
(collectively, “the defendants”) to ship those materials to BD. XPO stored the goods
in a warehouse and, upon Westrock’s order, loaded the goods into a trailer. Magnum
Dedicated, Inc. (collectively with Magnum LTL, Inc., “Magnum”) picked up the trailer
and transported it to BD.

       On February 18, 2013, BD received delivery of the cardboard boxes. Because
of a lack of space at the loading dock, the driver took the trailer containing the boxes
to a storage lot. The next day, Fergin, a BD employee, drove the trailer from the storage
lot to a vacant dock. Before backing the trailer into the dock, Fergin had to open the
trailer’s doors. As he opened the left door, a stack of cardboard boxes fell out and
struck Fergin, causing him to fall to the ground. The fall fractured Fergin’s shoulder.

                                            -2-
       Fergin filed suit against Westrock1 in Nebraska state court. The case was
removed to federal court. In his second amended complaint, Fergin also brought a
single negligence claim against the defendants for damages related to his bodily injury.

       Magnum moved for summary judgment, arguing that the Carmack Amendment
preempted Fergin’s state-law claim. The Amendment requires a carrier under the
jurisdiction of the Transportation Act to issue a bill of lading for property it receives
for transport and makes the carrier liable for damages resulting from its transportation
or service. The carrier’s liability is “to the person entitled to recover under the receipt
or bill of lading.” 49 U.S.C. § 14706(a)(1). The Supreme Court has noted that “[t]he
words of the statute are comprehensive enough to embrace all damages resulting from
any failure to discharge a carrier’s duty with respect to any part of the transportation
to the agreed destination.” Se. Express Co. v. Pastime Amusement Co., 299 U.S. 28,
29 (1936) (per curiam) (internal quotations omitted).

       The district court opined that “[c]ircuit court decisions examining Carmack
preemption of personal injury claims generally fall under one of two theories—those
that look to the harm alleged and those that look to the carrier’s conduct.” Fergin v.
Westrock Co., No 8:16-cv-26, 2018 WL 3032551, at *3 (D. Neb. June 15, 2018). The
court concluded that our circuit precedent indicates an “endorsement of the
conduct-based approach.” Id. at *4 (citing Fulton v. Chi., Rock Island & Pac. R.R.,
481 F.2d 326, 332 (8th Cir. 1973)). Based on the “causal proximity between
Magnum[’s] . . . conduct, the damage to the cardboard, and Fergin’s injuries,” the
court found that the Carmack Amendment preempted Fergin’s claim. Id. The court,
therefore, granted Magnum’s motion for summary judgment. Id. at *6.

       Relying on the district court’s decision, XPO filed a motion for summary
judgment, arguing that it was also a carrier under the Carmack Amendment. The

       1
           Westrock is no longer a party in the case.

                                             -3-
district court found that XPO satisfied the relevant statutory definitions. Fergin v.
XPO, No. 8:16-cv-26, 2018 WL 5810496, at *4 (D. Neb. Nov. 6, 2018). The district
court concluded that XPO—like Magnum—was a carrier for purposes of the Carmack
Amendment. Id. Thus, the Amendment preempted Fergin’s claim against XPO. Id.
Fergin appeals both rulings.

                                      II. Discussion
      Fergin’s appeal hinges on whether the Carmack Amendment preempts Fergin’s
personal injury claim. Textually, it does not. The Amendment provides:

      A carrier providing transportation or service . . . shall issue a receipt or
      bill of lading for property it receives for transportation under this part.
      That carrier and any other carrier that delivers the property and is
      providing transportation or service . . . are liable to the person entitled to
      recover under the receipt or bill of lading. The liability imposed under
      this paragraph is for the actual loss or injury to the property caused by
      (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier
      over whose line or route the property is transported in the United States
      . . . when transported under a through bill of lading . . . .

49 U.S.C. § 14706(a)(1) (emphases added). The Amendment’s text only limits claims
brought by “the person entitled to recover under the receipt or bill of lading” and to
only apply to “the actual loss or injury to the property.” Id. Fergin is not entitled to
recover under the bill of lading,2 and his claim is for his own personal injury, not loss
to BD’s property. Therefore, based on the text alone, the Carmack Amendment does
not preempt Fergin’s claim.

      2
       Because we find that the Carmack Amendment does not apply for a different
reason, we need not reach the defendants’ argument otherwise.

                                           -4-
       The defendants do not argue otherwise. Rather, they claim that case law has
expanded the Amendment’s preemptive effect. Even assuming that is so, we find that
case law has not expanded that effect so far as to preempt Fergin’s claim.

       In Croninger, the Supreme Court described the Amendment’s preemption of
common law:

       [T]he legislation supersedes all the regulations and policies of a particular
       state upon the same subject . . . . 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.
226 U.S. at 505–06. The Court in Croninger only discussed “the liability of the carrier
under a bill of lading.” Id. at 505 (emphasis added). Croninger says nothing about the
liability of carriers to third parties physically injured during the execution of the bill of
lading. It had no reason to: The plaintiff there, a party to the bill of lading, sought
damages for his loss of property. Id. at 492–93. Specifically, he shipped a diamond
ring, which was never delivered. Id. at 492. When he brought suit to recover the full-
market value, the carrier argued that the bill of lading, which stated that “the shipper
agrees that the value of said property is not more than $50, unless a greater value is
stated herein,” limited the damages. Id. at 493. The Court found that the Amendment
preempted the plaintiff’s common law claim, and so the bill of lading controlled. Id.
at 508–13.

       In short, Croninger involved the parties to a bill of lading and dealt with damage
or loss to the property shipped. The Court’s preemptive language does not address
personal injury claims by third parties.

                                             -5-
       To date, the Court has not held that the Carmack Amendment preempts a state-
law personal injury. In fact, in one case, the Court held that the Carmack Amendment
did not create a substantial federal question in a personal injury case. Chi., Rock Island
& Pac. Ry. Co. v. Maucher, 248 U.S. 359, 363 (1919). There, the plaintiff was injured
during a train crash and brought suit against the railroad. Id. at 362. The Court found
that the Carmack Amendment did not apply because it “deals only with the shipment
of property. Its language is so clear as to leave no ground for the contention that
Congress intended to deal with the transportation of persons.” Id. at 363. “Furthermore
plaintiff was not even a passenger on the railway. His claim rests not upon a contract
of carriage, but upon the general right of a human being not to be injured by the
negligence of another.” Id.

       The Court’s language in Maucher reinforces the view that “the Carmack
Amendment deals only with the shipment of property.” Id. (emphasis added). Fergin
alleges physical injury caused by negligent loading of the cardboard shipment and its
placement on a broken pallet. After the shipment was delivered, it fell on Fergin.
Fergin’s claim involves more than damage to a shipment of property—it involves a
personal injury that arose after completion of the shipment to someone other than a
party to the bill of lading. Fergin’s claim rests “upon the general right of a human being
not to be injured by the negligence of another,” “not upon a contract of carriage.” Id.
Fergin’s claim is not preempted by the Amendment.

       The defendants imply that the Supreme Court has abrogated Maucher. Since
Maucher, the Supreme Court described the Carmack Amendment as “comprehensive
enough to embrace all damages resulting from any failure to discharge a carrier’s duty
with respect to any part of the transportation to the agreed destination.” Se. Express
Co., 299 U.S. at 29 (internal quotation omitted). Seizing on this language, the
defendants argue that Fergin’s claim is preempted because it is based on “damage[]
resulting from a[] failure to discharge a carrier’s duty with respect to a[] part of . . .
transportation.” Id. (internal quotation omitted).

                                           -6-
      We disagree. The context of the cited language does not suggest that the
Carmack Amendment preempts personal injury claims, even those that arise out of the
transportation of property. The question in Southeastern Express was whether the
Carmack Amendment applied, which would limit the damages that accrued as the
result of a delayed delivery to those available under a declared-value clause. Id. at
28–29. The Court found that the Carmack Amendment preempted the property claims.
Id. at 29–30. The sentence immediately following the cited language indicates the
case’s actual holding: “The statute thus applies to damages caused by delay in making
delivery.” Id. at 29 (emphasis added). Considering the context, we decline to read the
court’s language as broadly as the defendants prefer.

      Further, the language actually predates the Maucher decision. It first appeared
in New York, Philadelphia, & Norfolk Railroad v. Peninsula Produce Exchange of
Maryland, 240 U.S. 34, 38 (1916), decided three years before Maucher. That
undercuts the implication that its later quotation in Southeastern Express abrogated
Maucher’s holding so as to extend its reach to personal injury suits.

      We conclude the Supreme Court has not abandoned its dicta in Maucher. No
Supreme Court case has held that the Carmack Amendment preempts personal injury
claims by third parties. The defendants assert, however, that “[t]he analysis i[n]
Maucher has been superseded by the ‘harmed-based’ and ‘conduct-based’ approaches
of preemption under the Carmack Amendment.” Appellee XPO’s Br. at 21.

      The district court accurately described those approaches:

             Circuit court decisions examining Carmack preemption of personal
      injury claims generally fall under one of two theories—those that look to
      the harm alleged and those that look to the carrier’s conduct.

                                         -7-
             Under the harm-based approach, a personal injury claim is not
      preempted when the plaintiff alleges separate and independently
      actionable harms that are distinct from the loss of, or the damage to, the
      goods. While under the conduct-based approach, the only claims that
      escape preemption are those based on conduct separate and distinct from
      the delivery, loss of, or damage to goods.

Fergin, 2018 WL 3032551, at *3 (cleaned up). The court determined that this court
“endorse[d] . . . the conduct-based approach.” Id. at *4 (citing Fulton, 481 F.2d at
332). Given the “causal proximity between Magnum Defendants’ conduct, the damage
to the cardboard, and Fergin’s injuries,” the court held that the Amendment preempted
Fergin’s claim. Id.

       Our sister circuits appear to have only applied the harm-based and
conduct-based approaches to a limited class of claims—intentional infliction of
emotional distress claims by shippers arising out of the delivery of property. See White
v. Mayflower Transit, L.L.C., 543 F.3d 581, 584–86 (9th Cir. 2008); Smith v. United
Parcel Serv., 296 F.3d 1244, 1248–49 (11th Cir. 2002); Gordon v. United Van Lines,
Inc., 130 F.3d 282, 288–90 (7th Cir. 1997); Rini v. United Van Lines, Inc., 104 F.3d
502, 505–07 (1st Cir. 1997); Moffit v. Bekins Van Lines Co., 6 F.3d 305, 306–07 (5th
Cir. 1993). None found that they applied to a third party’s personal injury claim.

        Further, Fulton did not endorse the conduct-based approach as to personal injury
claims. Fulton involved damage to property. 481 F.2d at 329. There, a shipper’s
equipment was damaged during transport. Id. at 328. Admittedly, we described the
Carmack Amendment’s scope broadly: “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.”
Id. at 332 (internal quotations omitted). But like the Court’s language discussed above,
that language is dicta if it is interpreted to extend to personal injury claims by persons
not a party to the bill of lading. We have defined dicta as “a judicial comment made

                                           -8-
while delivering a judicial opinion, but one that is unnecessary to the decision in the
case and therefore not precedential.” Passmore v. Astrue, 533 F.3d 658, 661 (8th Cir.
2008) (cleaned up). Fulton involved shippers and carriers, and the damages were for
property loss. Therefore, any application of our statement to a third-party personal
injury claim would render it “a judicial comment . . . that is unnecessary to the decision
in the case and therefore not precedential.” Id. (cleaned up).

        The defendants argue that we should, nonetheless, apply the conduct-based
approach to this case. In support, they cite an unpublished district court opinion.
Krauss v. IRIS USA, Inc., No. 17-778, 2017 WL 5624951 (E.D. Penn. Nov. 22, 2017).
In Krauss, a poorly packed shipment of Legos cascaded onto a volunteer who unloaded
them, causing him severe injuries. Id. at *2. The court applied the conduct-based
approach, reasoning that its application complied with the Amendment’s text, the
Supreme Court’s language in New York, Philadelphia & Northfolk Railroad, the
Carmack Amendment’s “goals of national uniformity and predictability in carrier
liability,” and other district court decisions. Id. at *6–7. As a consequence, the court
found the plaintiff’s claims preempted. Id. at *7.

      We disagree with Krauss’s analysis. Perhaps dispositive, as discussed above, the
text of the Amendment indicates that its scope is limited “to the person entitled to
recover under the receipt or bill of lading” and liability that “is for the actual loss or
injury to the property.” 49 U.S.C. § 14706(a)(1). Because Fergin was neither a person
entitled to recover under a bill of lading nor suing for loss to the cardboard box
shipment, application of the conduct-based approach would extend the Amendment
beyond its text. We decline to do that here.

                                           -9-
      In summary, the Carmack Amendment does not preempt Fergin’s state-law,
personal injury claim as he was not party to the bill of lading.3

                                 III. Conclusion
      For the foregoing reasons, we reverse the grants of summary judgment and
remand for further proceedings.
                       ______________________________

      3
        This finding renders XPO’s argument that it is a carrier under the Amendment
irrelevant. Even if XPO were a carrier, the Carmack Amendment would not preempt
the claim against it. In addition, the briefs discuss whether the Federal Aviation
Administration Act preempts Fergin’s claim and whether the defendants owed Fergin
a duty under Nebraska law. Because those issues were briefed but not passed on by the
district court below, we decline to consider them for the first time on appeal. See
GEICO Cas. Co. v. Isaacson, 932 F.3d 721, 724 (8th Cir. 2019) (“When a district
court fails to address a matter properly presented to it, we ordinarily remand to give the
court an opportunity to rule in the first instance.”).
                                          -10-