Phoenix Specialized Cargo Team Prevails On Motion To Dismiss Third-Party Claims Under FAAAA Preemption
Phoenix, Ariz. (January 6, 2021) - Phoenix Partner and Co-Chair of Lewis Brisbois’ Transportation Practice Julie E. Maurer and Associate James M. Duncan recently prevailed on a motion to dismiss a motor carrier’s third-party claims when the U.S. District Court for the District of New Jersey agreed that the carrier lacked standing to sue under the Carmack Amendment and that its remaining equitable claims were preempted under the Federal Aviation Administration Authorization Act (FAAAA).
In this matter, the plaintiff insurer pursued a subrogation claim against multiple motor carriers and transportation services providers regarding computer chip manufacturing equipment that was allegedly damaged during transit in the United States prior to shipment overseas. Lewis Brisbois filed a motion to dismiss on behalf of one of those motor carriers, and the plaintiff voluntarily dismissed all claims as to that carrier, with prejudice.
However, nearly two years later, one of the carriers that remained in the case filed a third-party complaint against the carrier previously represented by Lewis Brisbois, asserting a Carmack claim and state law claims of negligence, contribution, and indemnity. Ms. Maurer and Mr. Duncan filed a motion to dismiss all claims against the dismissed carrier, arguing that the third-party plaintiff carrier had no standing to sue under the Carmack Amendment, and that the FAAAA preempted the state law equitable claims and claim of negligence.
In its opposition, the moving carrier argued that because it was listed as both shipper/consignor and as consignee on several bills of lading allegedly related to the plaintiff’s claims, the carrier was entitled to sue under the Carmack Amendment. In their reply, Ms. Maurer and Mr. Duncan countered that regardless of whether the carrier was listed as a shipper on a bill of lading, the carrier was not, and never claimed to be, an entity with a beneficial interest in the goods shipped.
The court granted the motion to dismiss and ordered that all claims against the carrier represented by Lewis Brisbois be dismissed with prejudice. In doing so, the court agreed that as a motor carrier hired to load, transport, and repackage goods, the carrier lacked standing as a party entitled to recover under the receipt or bill of lading for the actual loss or injury to property. The court also ruled that because the state law equitable claims and claims of negligence against the carrier all hinged on alleged negligence in performing motor carrier services, they were preempted under the FAAAA as “relating to a price, route, or service of any motor carrier . . . with respect to the transportation of property.”