United States District Court, E.D. Pennsylvania
DONALD J. KRAUSS et al., Plaintiffs,
IRIS USA, INC. et al., Defendants.
E.K. Pratter United States District Judge.
motions to dismiss and for summary judgment in this
interstate shipping case present questions of federal
preemption and litigation management. On both scores, the
Court draws mixed conclusions.
preemption: the Court concludes that the Federal Aviation
Administration Authorization Act preempts personal injury
claims against defendant C.H. Robinson, the freight broker in
this case. But the Court also concludes that defendant IRIS,
the seller of goods that caused the injury in this case,
cannot find solace or sanctuary in FAAAA preemption.
litigation management: the Court concludes that a contract
claim against the broker should survive, notwithstanding a
partial stipulation of dismissal. The Court further concludes
that several plaintiffs, originally included in the lawsuit
“out of an abundance of caution, ” do not belong
in the case because they were not privy to any contract and
because their alleged damages are duplicative of the main
Fightback for Autism, a charity in Pennsylvania, contracted
to buy a mass quantity of Legos from IRIS, a seller in
Wisconsin. IRIS hired a freight broker, C.H. Robinson, which
in turn hired a carrier, KV Load, to deliver the Legos. But
the seller (IRIS) and carrier (KV Load) did not load the
Legos in the safe arrangement that the charity had requested.
Instead, they used old pallets of the wrong size, dangerously
stacking the pallets on top of one another. The shoddy
loading damaged the Legos in transit and caused a pallet to
crack during unloading, which injured a volunteer for the
charity and damaged his forklift as well.
The plaintiffs are a cluster of charities (Fightback, JC
Rehab, and CGB Rehab), the charities' President and CEO
(Cindy G. Brillman), and the injured volunteer (Donald J.
Krauss). The defendants are IRIS, the seller of the Lego
baseplates; C.H. Robinson, the freight broker; and KV Load,
Opinion. Last year, the Court granted the partial
motion to dismiss of the carrier KV Load on the ground that
the common law claims were preempted by the Carmack Amendment
to the federal interstate shipping law. See Krauss v.
IRIS USA, Inc., No. 17-778, 2017 WL 5624951 (E.D. Pa.
Nov. 22, 2017). The Carmack Amendment limits a carrier's
liability to the “actual loss or injury” of the
goods in transit, see 49 U.S.C. § 14706(a)(1),
meaning that the carrier, KV Load, was not liable for
common-law claims for Mr. Krauss's personal injuries or
for the damage to the forklift. The parties then settled
their remaining claims against KV Load, who has been
dismissed from the case.
in the Current Complaint. In the latest iteration of
the complaint, the five plaintiffs bring three counts against
the remaining two defendants - Lego seller IRIS and freight
broker C.H. Robinson. The counts against each defendant are:
1. Negligence. (As against the freight broker, C.H. Robinson,
this count is specifically for negligent hiring of
the carrier, KV Load.)
2. Negligent Infliction of Emotional Distress.
3. Breach of Contract.
broker C.H. Robinson has filed a motion to dismiss and seller
IRIS has filed a motion for summary judgment. For the reasons
that follow, the Court grants in part and denies in part both
of C.H. Robinson's Motion to Dismiss
recounting the standard of review, the Court grants in part
and denies in part C.H. Robinson's motion to dismiss.
First, the Federal Aviation Administration Authorization Act
preempts claims for personal injuries brought against C.H.
Robinson. Second, the contract claim against C.H. Robinson
survives because Fightback for Autism was a third-party
beneficiary of Robinson's contract with IRIS and KV Load.
Standard of Review
12(b)(6) motion to dismiss tests the sufficiency of a
complaint. To survive a motion to dismiss, the plaintiff must
plead “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 (2009). Specifically, “[f]actual
allegations must be enough to raise a right to relief above
the speculative level.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). The question is not
whether the claimant “will ultimately prevail . . . but
whether his complaint [is] sufficient to cross the federal
court's threshold.” Skinner v. Switzer,
562 U.S. 521, 530 (2011) (citation and internal quotation
evaluating the sufficiency of a complaint, the Court adheres
to certain well-recognized parameters. For one, the Court
“must consider only those facts alleged in the
complaint and accept all of the allegations as true.”
ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir.
1994). Also, the Court must accept as true all reasonable
inferences emanating from the allegations, and view those
facts and inferences in the light most favorable to the
nonmoving party. See Revell v. Port Auth., 598 F.3d
128, 134 (3d Cir. 2010).
admonition does not demand that the Court ignore or even
discount reality. “[T]he tenet that a court must accept
as true all of the allegations contained in a complaint is
inapplicable to legal conclusions. Threadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Ashcroft, 556
U.S. at 678. If a claim “is vulnerable to 12(b)(6)
dismissal, a district court must permit a curative amendment,
unless an amendment would be inequitable or futile.”
Phillips v. County of Allegheny, 515 F.3d 224, 236
(3d Cir. 2008).
The FAAAA preempts personal injury claims against C.H.
case, the remaining claims are not for damage to the Legos.
Instead, they are for injuries to Mr. Krauss and for damage
to the forklift. C.H. Robinson (the freight broker) argues
that these latter claims are preempted by the Federal
Aviation Administration Authorization Act, 49 U.S.C. §
summarizing the framework and general scope of FAAAA
preemption, the Court concludes that the FAAAA preempts Mr.
Krauss's personal injury claim against C.H. Robinson.
FAAAA Preemption - Framework
preemption provision of the FAAAA provides that no state may:
enact or enforce a law, regulation, or other provision having
the force and effect of law related to a price, route, or
service of any motor carrier . . . broker, or freight
forwarder with respect to the transportation of property.
49 U.S.C. § 14501(c)(1).
FAAAA's preemption provision was modeled on similar
language in the Airline Deregulation Act of 1978, which had
already been interpreted by the Supreme Court in Morales
v. Trans World Airlines, Inc., 504 U.S. 374 (1992).
See Rowe v. New Hampshire Motor Transp. Ass'n,
552 U.S. 364, 368 (2008). The ADA's preemption provision
bars state laws “related to a price, route, or service
of an air carrier that may provide air transportation.
See 49 U.S.C. § 41713(b)(1). For purposes of
statutory interpretation, “when judicial
interpretations have settled the meaning of an existing
statutory provision, repetition of the same language in a new
statute indicates, as a general matter, the intent to
incorporate its judicial interpretations as well.”
Rowe, 552 U.S. at 370 (quoting Merrill Lynch,
Pierce, Fenner & Smith Inc. v. Dabit,547 U.S. 71,
85 (2006)). Because the Congress that passed the ...