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Krauss v. Iris USA, Inc.

United States District Court, E.D. Pennsylvania

July 31, 2018

DONALD J. KRAUSS et al., Plaintiffs,
v.
IRIS USA, INC. et al., Defendants.

          MEMORANDUM

          Gene E.K. Pratter United States District Judge.

         In this motion for reconsideration, the Court must evaluate whether newly discovered evidence warrants review of its prior ruling that a state tort claim against a freight broker was preempted by a federal shipping statute. Because the alleged new evidence does not change the Court's conclusion that the state tort claim would have a significant effect on the broker's services, the Court denies the motion for reconsideration.

         Background

         Fightback for Autism, a charity in Pennsylvania, contracted to buy 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 manner that the charity had requested. Instead, they used old pallets of the wrong size, and they dangerously stacked the pallets one on top of another. The shoddy loading damaged the Legos in transit and caused a pallet to crack during delivery, injuring a volunteer for the charity and damaging a forklift.

         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). Originally, the defendants were IRIS, the seller of the Lego baseplates; C.H. Robinson, the freight broker; and KV Load, the shipper. KV Load was dismissed from the case late last year.

         In the latest iteration of the complaint, the plaintiffs bring three counts against IRIS and C.H. Robinson. The counts sound in both tort and contract. In May 2018, the Court held that Mr. Krauss's personal-injury claim against C.H. Robinson was preempted by the Federal Aviation Administration Authorization Act, 49 U.S.C. § 14501, et seq. See Memorandum & Order, Doc. Nos. 88 & 89. The plaintiffs have filed a motion for reconsideration of that ruling on the basis of what they describe as newly discovered evidence.

         Discussion

         Under the FAAAA, a state law is preempted if it has a “significant economic effect” on a broker's rates, routes, or services. Memorandum, Doc. No. 88, at 7 (quoting Georgia Nut Co. v. C.H. Robinson Co., No. 17-3018, 2017 WL 4864857, at *3 (N.D. Ill. Oct. 26, 2017)). In this case, Mr. Krauss alleged that C.H. Robinson had carelessly selected KV Load as the freight carrier. The gravamen of Mr. Krauss's claim was that C.H. Robinson's quality-control process in selecting a risky carrier like KV Load was insufficient; a more “heightened and elaborate” process was needed. Id. at 9 (quoting Rockwell v. United Parcel Serv., Inc., No. 2:99-CV-57, 1999 WL 33100089, at *3 (D. Vt. July 7, 1999)). In May 2018, Court held that this claim was preempted because it went “to the core of what it means to be a careful broker” and would therefore have a significant effect on C.H. Robinson's services. Id.

         In the preemption opinion, the Court noted that the inquiry was “fact-specific” and couched its “narrow” ruling “in the particular circumstances of this case.” Memorandum, Doc. No. 88, at 9, 13. Seizing on this language, the plaintiffs now argue that evidence discovered after briefing and oral argument undercuts the Court's decision on preemption. Citing this new evidence, the plaintiffs have filed a motion for reconsideration. See Lazaridis v. Wehmer, 591 F.3d 666, 669 (3d Cir. 2010) (explaining that one ground for reconsideration is “the availability of new evidence”).

         The supposed new evidence falls into three categories: (1) KV Load's participation in a special carrier program offered by C.H. Robinson; (2) a notation on the website of the Federal Motor Carrier Safety Administration; and (3) other general evidence of KV Load's riskiness. Because the evidence is simply not as groundbreaking as the plaintiffs would have the Court believe, the Court denies the motion for reconsideration.

         I. C.H. Robinson's Carrier Management Program

         The first category of new evidence is a notation about KV Load in C.H. Robinson's internal computer system that was entered ten days before the accident:

2/9/2015: NO CARRIER MANAGEMENT - From branch rep WARRCHR for ROYFALE, “Please remove this carrier from PCM, ” Removed, Marked DNA

         The plaintiffs argue that this notation demonstrates that C.H. Robinson's extant processes were sophisticated enough to flag KV Load as a problematic carrier. In other words, no “heightened” process would be needed to avoid this kind of accident in the future. As a result, this argument goes, a tort claim against C.H. Robinson would have no ...


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