United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
STEPHEN N. LIMBAUGH, JR. UNITED STATES DISTRICT JUDGE
matter is before the Court on plaintiff's motion to
remand this matter to the Circuit Court of St. Louis County,
Missouri (#9). In December 2015, Mid-America Freight
Logistics, LLC (“Mid-America”) arranged for a
shipment of frying oil from Stratas Foods to be transported
by Walters Trucking to a company in a Texas. Under
Mid-America's Motor Carrier Agreement
(“Agreement”) with Walters, Mid-America was
obligated to diligently solicit, obtain, and maintain
shipping customers to provide Walters Trucking with shipping
opportunities. In return, Walters agreed to hold harmless
Mid-America from all losses and damages arising out of any
transport of the frying oil, some of the shipment was stolen,
and the seal on some other containers was broken. The
recipient of the shipment refused delivery of the entire
shipment. However, Mid-America was contractually bound to pay
Stratas Foods $35, 928. Mid-America then demanded payment of
this amount, minus certain credits, from Walters Trucking
under the “hold harmless” clause in the
parties' Agreement. Walters refused. Mid-America filed
suit in state court for breach of the Agreement.
Trucking removed the action to this Court contending that the
Court has federal question jurisdiction pursuant to the
preemptive effect of the Carmack Amendment to the Interstate
Commerce Act. Plaintiff has moved to remand the case back to
state court because, it contends, the Carmack Amendment does
not preempt claims between a broker and a carrier, which are
based on an independent contract.
district courts may exercise removal jurisdiction only where
they would have had original jurisdiction if the suit had
been initially filed in federal court. Humprhey v.
Sequentia, Inc., 58 F.2d 1238, 1242 (8th Cir. 1995); 28
U.S.C. § 1441(a). Federal question jurisdiction exists
if “the federal question is presented on the face of
the plaintiff's properly pleaded complaint.”
Caterpillar Inc. v. Williams, 482 U.S. 386, 392
(1987). In “the ordinary case, federal preemption is
merely a defense to a plaintiff's state-law claim, and it
does not alter the jurisdiction of the federal court.”
Chapman v. Lab One, 390 F.3d 620, 625 (8th Cir.
2004) (citing Metropolitan Life Ins. Co. v. Taylor,
481 U.S. 58, 63 (1987)). Only where an area of state law has
been “completely preempted” by federal law does
the federal law provide a basis for removal of an action to
federal court. Chapman, 390 F.3d at 625.
Carmack Amendment, 49 U.S.C. § 14706, creates a uniform
rule for carrier liability when goods are shipped in
interstate commerce and preempts all state or common law
remedies available to a shipper against a carrier for loss or
damage. The notice of removal filed by Walters Trucking
asserts that the Carmack Amendment governs Mid-America's
claims because they are “based on allegations of loss
and/or damage in excess of $10, 000.00 of cargo arising out
of interstate motor vehicle transportation services.”
(#1 at ¶ 3.) Walters Trucking certainly qualifies as a
“carrier” under the Carmack Amendment. However,
plaintiff contends that it seeks to enforce only the terms of
the Agreement --- not Walters Trucking's obligations as a
carrier under the separate bill of lading. That is, plaintiff
is bringing claims for indemnity as a broker, not as a
shipper. “Other courts have recognized such claims as
separate and distinct claims outside the scope of the Carmack
Amendment.” Traffic Tech, Inc. v. Arts Transp.,
Inc., 15 C 8014, 2016 WL 1270496, at *3 (N.D. Ill. Apr.
1, 2016) (collecting cases) (citing Keystone Logistics,
Inc. v. Struble Trucking LLC, 2014 WL 6750052, at *3
(N.D. Ind. 2014); Nat'l Bankers Trust Corp. v. Peak
Logistics, LLC, 2014 WL 5343639, at *3 (W.D. Tenn.
2014); TransCorr Nat. Logistics, LLC v. Chaler
Corp., 2008 WL 5272895, at *3 (S.D. Ind. 2008);
Viasystems Techs. Corp., LLC v. Landstar Ranger,
Inc., 2011 WL 2912763, at *9 (E.D. Wis. 2011)).
Walters Trucking suggests that because the Agreement itself
“limits Mid-America's right of recovery to the
Carmack Amendment, ” then the matter is entirely
preempted by the Carmack Amendment. (#18 at 2.) However, the
Agreement refers to the Carmack Amendment in the context of
the requirement of the separate bill of lading. That portion
of the Agreement, at Paragrah 3(a), states that the carrier
“shall issue a uniform standard bill of lading
…for property it receives for transportation under
this contract and shall be liable to the person entitled to
recover under the bill of lading.” Then it goes on to
state that “failure to issue a bill of lading does not
affect the liability of the [sic] carrier's liability
shall be the same as a common carrier's liability under
[the Carmack Amendment].” The mention of the Carmack
Amendment with respect to the bill of lading has no bearing
on this matter, which involves the resolution of the
Agreement's “hold harmless” provision.
Further, the Agreement states that the carrier “shall
be liable to the person entitled to recover under the bill of
lading, ” which is taken directly from the language of
the Carmack Amendment. Under these circumstances, the
“person entitled to recover” does not include a
broker such as plaintiff here. See Exel, Inc. v. S.
Refrigerated Transp., Inc., 807 F.3d 140, 148-49 (6th
plaintiff is not seeking to recover pursuant to the bill of
lading, nor is plaintiff asserting its rights in this case as
an assignee of the shipper. See, e.g., Traffic
Tech, 2016 WL 1270496, at *3. Thus, the state law breach
of contract claims brought by plaintiff are not preempted by
the federal Carmack Amendment. This Court does not have
subject matter jurisdiction as a result, and the case must be
seeks an award of attorneys' fees and costs pursuant to
28 U.S.C. § 1447(c) (#12). “Absent unusual
circumstances, courts may award such fees only where the
removing party lacked an objectively reasonable basis for
seeking removal.” Martin v. Franklin Capital
Corp., 546 U.S. 132, 141 (2005). A party lacks an
“objectively reasonable” basis for removal where
the relevant case law forecloses the removing party's
basis for removal. See Napus Fed. Credit Union v.
Campbell, 4:10CV1403MLM, 2010 WL 3581963, at *5 (E.D.
Mo. Sept. 7, 2010), aff'd, 419 Fed.Appx. 696
(8th Cir. 2011). Although there were no Eighth Circuit cases
directly on point, the great weight of authority foreclosed
defendant's argument for removal here, and defendant
cites nothing to refute that. Plaintiff will be awarded
reasonable attorneys' fees and shall submit supplemental
a memorandum and affidavit(s) in support within 14 days.
IT IS HEREBY ORDERED that the plaintiffs
motion to remand (#9) is GRANTED.
IS FURTHER ORDERED that this matter is REMANDED to
the Circuit Court for St. Louis County, Missouri.
IS FINALLY ORDERED that the plaintiffs motion for
attorneys' fees (#12) is GRANTED; plaintiff shall submit
appropriate documentation supporting ...