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stating that in deciding whether DTPA claims were preempted by the Carmack Amendment, “[t]he Court is bound by Fifth Circuit law-not Texas state law”
Summary of this case from Von Der Ahe v. 1-800-Pack-Rat, LLCOpinion
No. 5:20-CV-1481-DAE
2021-06-02
John ST. PIERRE and Charles McCain, Plaintiffs, v. Roger WARD, San Antonio, Inc. d/b/a Ward North American, Molly Creswell, and Hanna McRee, Defendants.
Robert W. Loree, Loree & Lipscomb, San Antonio, TX, for Plaintiffs. Emileigh Stewart Hubbard, Vic Houston Henry, Henry Oddo Austin and Fletcher PC, Dallas, TX, for Defendants.
Robert W. Loree, Loree & Lipscomb, San Antonio, TX, for Plaintiffs.
Emileigh Stewart Hubbard, Vic Houston Henry, Henry Oddo Austin and Fletcher PC, Dallas, TX, for Defendants.
ORDER (1) DENYING MOTION TO REMAND; (2) GRANTING DEFENDANTS’ MOTIONS TO DISMISS; AND (3) DISMISSING PLAINTIFFS’ CLAIMS WITHOUT PREJUDICE
David Alan Ezra, Senior United States District Judge
Before the Court are John St. Pierre and Charles McCain's ("Plaintiffs") Motion to Remand (Dkt. # 11) filed on February 1, 2021, and Defendants Roger Ward ("WARD") and Molly Creswell's ("Creswell") (collectively, "Defendants") Motions to Dismiss (Dkts. ## 20, 21) filed on February 12, 2021. Pursuant to Local Rule CV-7(h), the Court finds these matters suitable for disposition without a hearing. After careful consideration of the memoranda filed in support of and against the motions, the Court, for the reasons that follow, DENIES the motion to remand (Dkt. # 11) and GRANTS the motions to dismiss (Dkts. ## 20, 21).
McRee is still named in the caption of this lawsuit. However, Plaintiffs do not appear to bring any claims against McRee in their Third Amended Complaint. (Dkt. # 10.) Plaintiffs do not make any allegations against her nor do they list her a party. (Id. ) The Court thus dismisses all claims against McRee.
BACKGROUND
This case concerns an insurance dispute arising out of Plaintiffs’ interstate move from Louisiana to Texas. (Dkt. # 10.)
The following facts are taken from Plaintiffs’ Third Amended Complaint. (See id. ) John St. Pierre and his common-law spouse, Charles McCain, previously resided in Saint Bernard, Louisiana where St. Pierre was employed with Valero. (Id. ) In early 2019, Valero promoted St. Pierre to a corporate position in San Antonio, Texas, which required Plaintiffs to relocate from Louisiana to San Antonio. (Id. ) Valero contacted its mobility broker to find a moving company to move Plaintiffs’ belongings, and the broker informed Plaintiffs about WARD's services. (Id. )
Before entering into a contract with WARD, Plaintiffs spoke with Creswell, the Customer Service Coordinator at WARD, numerous times over the phone. (Id. ) She told Plaintiffs that an additional insurance policy (the "Additional Policy") was available for purchase that would provide $60,800 of additional coverage for Plaintiffs’ personal property. (Id. ) Creswell offered Plaintiffs this additional policy for $243.20. (Id. ) According to Plaintiffs, "Creswell specifically represented that this [a]dditional [p]olicy would provide insurance coverage for their personal property and belongings above and beyond the insurance coverage for the move based on the estimated weight." (Id. )
On April 5, 2019, Creswell emailed Plaintiffs that they had $117,600 worth of insurance coverage for the move, but the Additional Policy would cover an additional $60,800 for the move. (Id. ) According to Plaintiffs, they purchased the Additional Policy based on Creswell's representations. (Id. ) Plaintiffs claim that they requested for a copy of the policy numerous times, but Defendants never gave them one. (Id. ) After some of Plaintiffs’ personal property—including the cremated ashes of McCain's grandfather—were allegedly lost or damaged, Defendants refused to provide any benefits under the Additional Policy. (Id. ) Plaintiffs believe that WARD never procured the Additional Policy. (Id. )
Plaintiffs filed suit in Bexar County district court on December 4, 2020. (See Dkts. ## 1, 1-2.) They filed an amended petition in state court on December 7, 2020, alleging that Defendants violated the Texas Deceptive Trade Practices Act ("DTPA"). (Dkt. # 1-2.) Defendants removed the case on December 31, 2020, contending that this Court has federal question jurisdiction because the Carmack Amendment completely preempts Plaintiffs’ DTPA claims. (Dkt. # 1.)
The matters before the Court are Plaintiffs’ motion to remand (Dkt. # 11) and Defendants’ motions to dismiss (Dkts. ## 20, 21). All three motions are fully briefed and ripe for review.
LEGAL STANDARDS
I. Motion to Remand
The federal removal statute, 28 U.S.C. § 1441(a), allows a defendant to remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). Accordingly, a defendant may only remove a case over which the district court has original jurisdiction, either due to diversity of citizenship or the existence of a federal question. 28 U.S.C. § 1441(a) ; Halmekangas v. State Farm Fire & Casualty Co., 603 F.3d 290, 294–95 (5th Cir. 2010). In order to remove a case on diversity grounds, "the diverse defendant must demonstrate that all of the prerequisites of diversity jurisdiction contained in 28 U.S.C. § 1332 are satisfied." Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 572 (5th Cir. 2004) (en banc), cert. denied, 544 U.S. 992, 125 S.Ct. 1825, 161 L.Ed.2d 755 (2005).
On a motion to remand, the removing party bears the burden of establishing that one of these bases of jurisdiction exists and that the removal was not procedurally defective. Shearer v. Sw. Serv. Life Ins. Co., 516 F.3d 276, 278 (5th Cir. 2008). Since removing an action duly filed in state court creates issues concerning federalism, "doubts regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction." African Methodist Episcopal Church v. Lucien, 756 F.3d 788, 793 (5th Cir. 2014) (quoting Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir. 2000) ); see Frank v. Bear Stearns & Co., 128 F.3d 919, 922 (5th Cir. 1997).
II. Motion to Dismiss
Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a complaint for "failure to state a claim upon which relief can be granted." To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). In analyzing whether to grant a 12(b)(6) motion, a court accepts as true "all well pleaded facts" and views those facts "in the light most favorable to the plaintiff." United States ex rel. Vavra v. Kellogg Brown & Root, Inc., 727 F.3d 343, 346 (5th Cir. 2013) (citation omitted). A court need not "accept as true a legal conclusion couched as a factual allegation." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.
ANALYSIS
I. Motion to Remand
The parties agree that the complete preemption doctrine is the only basis for jurisdiction here. The issue is whether the Carmack Amendment completely preempts Plaintiffs’ DTPA claims. The Court finds that it does.
The complete preemption doctrine recognizes that the preemptive force of some federal statutes is so strong that "it converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule," such that removal is possible. GlobeRanger Corp. v. Software AG, 691 F.3d 702, 705 (5th Cir. 2012). In other words, the complete preemption doctrine is a "narrow" exception to the well-pleaded complaint rule. Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 5, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003) ; Elam v. Kan. City S. Ry. Co., 635 F.3d 796, 803 (5th Cir. 2011).
Complete preemption must be distinguished from defensive preemption (i.e., "conflict preemption" or "ordinary preemption"). Complete preemption establishes federal subject matter jurisdiction over a state law claim, whereas defensive preemption is an affirmative defense that a defendant can invoke "to defeat a plaintiff's state-law claim on the merits by asserting the supremacy of federal law." Spear Mktg., Inc. v. BancorpSouth Bank, 844 F.3d 464, 467 n.3 (5th Cir. 2016) (quoting Cmty. State Bank v. Strong, 651 F.3d 1241, 1261 n.16 (11th Cir. 2011) ). "[C]omplete preemption is less common and more extraordinary than defensive or ordinary preemption." Elam, 635 F.3d at 803 (quoting New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 331 (5th Cir. 2008) ).
The Carmack Amendment imposes liability on carriers for the actual loss or injury to property transported through interstate commerce. 49 U.S.C. § 14706 ; see Distribuidora Mari Jose, S.A. de C.V. v. Transmaritime, Inc., 738 F.3d 703, 706 (5th Cir. 2013). "[C]laims under the Carmack Amendment function like strict liability claims, allowing shippers to collect from carriers regardless of fault, so that shippers need not locate a particular negligent carrier ‘from the often numerous carriers handling an interstate shipment of goods.’ " Cioppa v. Schultz, No. SA-16-CV-747-XR, 2016 WL 6652764, at *3 (W.D. Tex. Nov. 10, 2016) (quoting Transmaritime, 738 F.3d at 706 ).
The Carmack Amendment completely preempts Plaintiffs’ DTPA claims. In Hoskins v. Bekins Van Lines, 343 F.3d 769 (2003), the Fifth Circuit held that the Carmack Amendment completely preempted a plaintiff's DTPA claims and explained that "Congress intended for the Carmack Amendment to provide the exclusive cause of action for loss or damages to goods arising from the interstate transportation of those goods by a common carrier." Id. at 778.
The Fifth Circuit also explained,
We are cognizant of the fact that 28 U.S.C. § 1445 prohibits removal of Carmack claims ‘unless the matter in controversy exceeds $10,000.’ We are equally aware that Carmack claims may be brought, and adjudicated, in state court.... Although both of these facts may have been relevant to an analysis of whether Congress intended for Carmack claims to be removable, they have no bearing on the salient issue today, i.e. whether Congress intended the Carmack Amendment to provide the exclusive cause of action for claims for loss or damage to goods arising from the interstate transportation of those goods by a common carrier.
Hoskins v. Bekins Van Lines, 343 F.3d 769, 778 n.7 (5th Cir. 2003). Although Plaintiffs attempt to distinguish the cases on which Defendants rely, those distinctions do not move this case outside the scope of the Carmack Amendment's sweeping preemptive force.
The Court is bound by Fifth Circuit law—not Texas state law, as Plaintiffs suggest. (Dkt. # 22 at 2 ("Plaintiffs will show that they have alleged only a cause of action under state law under the controlling authority of Brown v. American Transfer & Storage Company, 601 S.W.2d 931 (Tex. 1980).").) Plaintiffs also rely on a district court case from 2001 for the proposition that "the complete preemption doctrine ... does not apply to the Carmack Amendment." Lamm v. Bekins Van Lines, 139 F. Supp. 2d 1300, 1313 (M.D. Ala. 2001). However, as the Fifth Circuit discussed in Hoskins, the legal landscape surrounding the complete preemption doctrine has shifted since the early 2000s. 343 F.3d at 775–76 (explaining that the legal landscape has shifted the focus away from Congress's intent concerning removability and towards Congress's intent that the federal action be exclusive).
The Court is mystified by Plaintiffs’ failure to cite Hoskins in either their motion to remand or their reply, particularly given that Defendants cite the case multiple times in their response. (See Dkts. ## 11, 22.) By failing to cite Hoskins, Plaintiffs have also failed to provide any convincing argument why the distinctions between this case and the cases on which Defendants rely move this case outside the preemptive scope of the Carmack Amendment under Hoskins. The Court also finds Plaintiffs’ reliance on inapplicable federal regulations unpersuasive.
Because Plaintiffs’ claims are completely preempted by the Carmack Amendment, the Court has subject matter jurisdiction. Accordingly, the Court denies Plaintiffs’ motion to remand.
II. Motions to Dismiss
In their motions to dismiss, WARD and Creswell assert defensive preemption. In other words, they maintain that Plaintiffs’ claims should be dismissed because their DTPA claims are preempted by the Carmack Amendment. The Court agrees.
The Court evaluates Defendants’ "defensive preemption" arguments in this section, rather than complete preemption (a jurisdictional doctrine), which was discussed above with respect to Plaintiffs’ motion to remand.
Creswell provides other potential grounds for dismissal in her motion, but the Court will not address them because Plaintiffs’ claims are preempted.
The Fifth Circuit has held that a purpose of the Carmack Amendment was to "substitute a paramount and national law as to the rights and liabilities of interstate carriers subject to the Amendment." Moffit v. Bekins Van Lines Co., 6 F.3d 305, 306 (5th Cir. 1993) (quoting Air Prods. & Chems. v. Ill. Cent. Gulf R.R., 721 F.2d 483, 486 (5th Cir. 1983) ). In Moffit, the plaintiffs brought claims for: (1) tort of outrage; (2) intentional and negligent infliction of emotional distress; (3) breach of contract; (4) breach of implied warranty; (5) breach of express warranty; (6) violation of the Texas Deceptive Trade Practices Act; (7) slander; (8) misrepresentation; (9) fraud; (10) negligence and gross negligence; and (11) violation of statutory duties as a common carrier under state law. Id. The district court granted the defendant's motion for summary judgment, holding that the Carmack Amendment preempted all of the plaintiffs’ state law claims. Id. The Fifth Circuit explained the lack of legal uniformity in interstate transportation prior to the passage of the Carmack Amendment and affirmed the district court's decision because holding otherwise "could only lead to the morass that existed before the Carmack Amendment." Id. at 307 (discussing Adams Express Co. v. Croninger, 226 U.S. 491, 33 S.Ct. 148, 57 L.Ed. 314 (1913) ). The Fifth Circuit has also recognized the broad reach of the Carmack Amendment more recently, stating that "[t]he purpose of the Amendment is to establish [ ] uniform federal guidelines designed in part to remove the uncertainty surrounding a carrier's liability when damage occurs to a shipper's interstate shipment." Heniff Transp. Sys., LLC v. Trimac Transp. Servs., Inc., 847 F.3d 187, 190 (5th Cir. 2017) (quoting Distribuidora, 738 F.3d at 706 ). Moreover, the Fifth Circuit has repeatedly held that the Carmack Amendment "provide[s] the exclusive cause of action for loss or damages to goods arising from the interstate transportation of those goods by a common carrier." Id. (citing Hoskins, 343 F.3d at 778 ).
Courts in this district have uniformly recognized the sweeping preemptive force of the Carmack Amendment. See Cioppa, 2016 WL 6652764, at *3 ; Neal v. Allied Van Lines, Inc., No. A 06 CA 1008 SS, 2007 WL 831835, at *1 (W.D. Tex. Mar. 13, 2007). In Neal, the shipper alleged that the motor carrier violated the DTPA by selling her "supplemental insurance" and then "disallow[ing] certain of [her] claims for damaged goods, allegedly ... in violation of the ‘supplemental insurance’ contract." 2007 WL 831835, at *1. The district court granted the defendant's motion to dismiss, holding that preemption of the Carmack Amendment "extends to claims based on an interstate carrier's sale of supplemental insurance." Id.; see also Hanlon v. UPS, 132 F. Supp. 2d 503, 504 (N.D. Tex. 2001) (holding that the Carmack Amendment preempts claims for "fraudulently collecting an insurance fee and operating as an insurance company without authorization").
Plaintiffs also may not seek attorney's fees because they are not recoverable under the Carmack Amendment. Accura Sys., Inc. v. Watkins Motor Lines, Inc., 98 F.3d 874, 876 (5th Cir. 1996) ("[A]ttorney's fees authorized by state law are not available in Carmack Amendment actions."); Univ. Chill LLC v. Saia Motor Freight Line, LLC, No. SA-14-CA-902-FB, 2014 WL 12589581, at *2 (W.D. Tex. Nov. 14, 2014).
Because Plaintiffs’ DTPA claims are preempted by the Carmack Amendment, the Court grants Defendants’ motions to dismiss without prejudice.
CONCLUSION
Based on the foregoing, the Court DENIES Plaintiffs’ Motion to Remand (Dkt. # 11) and GRANTS Defendants’ motions to dismiss (Dkts. ## 20, 21). Accordingly, Plaintiffs’ claims are hereby DISMISSED WITHOUT PREJUDICE .