Morrison v. JSK Transport, Ltd.

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ILLINOIS

ROBERTA MORRISON,

Plaintiff,

v. Case No. 20–CV–01053–JPG

JSK TRANSPORT, LTD.,

BODKIN LEASING CORPORATION,

DALJINDER SINGH SANGHA,

NAVPREET SINGH MUTTI,

SIMFREIGHT SOLUTIONS,

OSPECA LAREDO,

RIORDAN LEASING, INC.,

EVERETT LOGISTICS, LLC,

TIPPITT TRUX’S & REPAIR, LTD.,

TA OPERATING, LCC, and

KUEHNE + NAGLE, INC.,

Defendants.

MEMORANDUM & ORDER

This is a personal injury case. Before the Court is Defendant Kuehne + Nagle, Inc.’s

(“K&N’s”) Motion to Dismiss, (ECF No. 42). For the reasons below, the Court DENIES K&N’s

Motion and REMANDS to the Fifth Judicial Circuit Court in Cumberland County, Illinois.

I. PROCEDURAL & FACTUAL HISTORY

In August 2020, Morrison sued the defendants in the Fifth Judicial Circuit Court for

common-law torts arising from a motor vehicle accident. (Compl. at 1, 5–28). The Complaint

includes a negligence claim against K&N, who “brokered the load being hauled by [Defendants

JSK Transport, Ltd. and Bodkin Leasing Corporation] at the time of the subject collision”:

9. [K&N] engaged in one or more of the following acts, or made

one or more of the following choices:

a. Failed to verify that the companies it assigned to haul loads

are qualified to do so in a safe manner;

b. Failed to verify that the drivers assigned to haul loads are

qualified to do so in a safe manner;

c. Failed to verify that the companies it assigned to haul loads

adequately train their drivers to do so in a safe manner;

d. Failed to verify that the drivers assigned to haul loads are

adequately trained to do so in a safe manner;

e. Failed to verify the safety record of the companies assigned

to haul loads;

f. Failed to verify the safety record of the drivers assigned to

haul loads; and

g. Allowed JSK/Bodkin to haul its trailer notwithstanding that

it knew or should have known that JSK/Bodkin lacked the

necessary skill or expertise to do so.

10. Defendant’s conduct as set forth above was negligent.

(Id. at 21). The Complaint also states that “[t]here is not complete diversity of the parties” given

that Morrison and two defendants (Everett Logistics, LLC; Tippitt Trux’s & Repair, Ltd.; and

TA Operating, LLC) are Arkansas citizens. (See id. at 3–4).

In October, K&N removed the case to this Court, asserting federal-question jurisdiction.

(Not. of Removal at 1). In brief, it argues that the negligence claim against it is “completely

preempted by the express language of” the Interstate Commerce Commission Termination Act (or

“ICCTA”), 49 U.S.C. § 14501(b), and the Federal Aviation Administration Authorization Act (or

“FAAAA”), id. § 14501(c), thus raising a federal question. (Id. at 3–5). It then moved for

dismissal. (See Mot. to Dismiss at 1–2).

II. LAW & ANALYSIS

“A civil action filed in a state court may be removed to federal court if the claim is one

‘arising under’ federal law.” Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 6 (2003) (citing

28 U.S.C. § 1441). And a civil action arises under federal law when federal law is present in the

original cause of action. See Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 153 (1908);

§ 1331. In other words, “absent diversity jurisdiction, a case will not be removable if the complaint

does not affirmatively allege a federal claim.” Anderson, 539 U.S. at 6. This so-called well-pleaded

complaint rule embodies the “paramount policies . . . that the plaintiff is master of the

complaint . . . and that the plaintiff may, by eschewing claims based on federal law, choose to have

the case heard in state court.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 389–99 (1987). Federal

defenses, on the other hand, cannot sustain federal-question jurisdiction because they are often

easily conjured and meritless, concocted by savvy attorneys to gain federal jurisdiction. See

Mottley, 211 U.S. at 153.

With that in mind, the complete-preemption doctrine is an exception to the well-pleaded

complaint rule: “[W]here Congress has completely preempted a given area of state law, a

plaintiff’s state law claim will be ‘recharacterized’ as a federal claim so that removal becomes

proper.” Hart v. Wal-Mart Stores, Inc. Assocs.’ Health & Welfare Plan, 360 F.3d 674, 678

(7th Cir. 2004). Thus “if a federal cause of action completely preempts a state cause of action any

complaint that comes within the scope of the federal cause of action necessarily ‘arises under’

federal law.” Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S.

1, 24 (1983).

When the federal statute completely preempts the state law cause

of action, a claim which comes within the scope of that cause of

action, even if pleaded in terms of state law, is in reality based on

federal law. This claim is then removable under 28 U.S.C.

§ 1441(b), which authorizes any claim that “arises under” federal

law to be removed to federal court. In the two categories of cases

where [the Supreme] Court has found complete preemption—

certain causes of action under [the Labor Management Relations

Act] and [the Employment Retirement Income Security Act]—the

federal statutes at issue provided the exclusive cause of action

for the claim asserted and also set forth procedures and

remedies governing that cause of action.

Anderson, 539 U.S. at 8 (emphasis added); e.g., Avco Corp. v. Aero Lodge No. 735, Int’l Ass’n of

Machinists & Aerospace Workers, 390 U.S. 557, 560 (1968) (“An action arising under § 302 [of

the Labor Management Relations Act] is controlled by federal substantive law even though it is

brought in state court.”).

Relevant here, the Interstate Commerce Commission Termination Act preempts state laws

relating to the prices, routes, or services of freight brokers:

[N]o State or political subdivision thereof and no intrastate agency

or other political agency of 2 or more States shall enact or enforce

any law, rule, regulation, standard, or other provision having the

force and effect of law relating to intrastate rates, intrastate routes,

or intrastate services of any freight forwarder or broker.

49 U.S.C. § 14501(b)(1).

Similarly, the Federal Aviation Administration Authorization Act preempts state laws

relating to the prices, routes, or services of freight brokers “with respect to the transportation of

property”:

[A] State, political subdivision of a State, or political authority of

2 or more States may not 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 . . . or any motor

private carrier, broker, or freight forwarder with respect to the

transportation of property.

Id. § 14501(c)(1). See generally Dan’s City Used Cars, Inc., 569 U.S. 251, 261 (2013) (“[T]he

addition of the words ‘with respect to the transportation of property’ . . . massively limits the scope

of preemption ordered by the FAAAA.”) (cleaned up).

In its Notice of Removal, K&N argues that Morrison’s state law negligence claim is

preempted by both the ICCTA and the FAAAA because the claim “relates to” its “services.” More

specifically, the Complaint alleges that K&N, a freight broker, negligently arranged for the

transportation of goods—its service. K&N therefore contends that Morrison’s negligence claim is

completely preempted by the federal statutes.

In Nationwide Freight Systems, Inc. v. Illinois Commerce Commission, the Seventh Circuit

“articulated two requirements for preemption” under the FAAAA:

First, a state must have enacted or attempted to enforce a law.

Second, that law must relate to carrier rates, routes, or services

either by expressly referring to them, or by having a significant

economic effect on them.

784 F.3d 367, 373–74 (7th Cir. 2015) [hereinafter Nationwide Freight] (cleaned up) (citing Am.

Airlines, Inc. v. Wolens, 513 U.S. 219, 228–29 (1995); Travel All Over the World Inc. v. Kingdom

of Saudi Arabia, at 1342 (7th Cir. 1996)).

As for the first requirement, K&N concedes that negligence claims could be considered an

“other provision having the force and effect of law” under the statutes. (K&N’s Mot. to Dismiss

at 5). Accord Wolens, 513 U.S.at 233 n.9 (noting that even Justice O’Connor’s dissent—which

advanced a more expansive “total preemption” not adopted by the majority—“leaves room for

personal injury claims, but only by classifying them as matters not ‘relating to [air carrier]

services’ ” under the Airline Deregulation Act); Nw., Inc. v. Ginsberg, 572 U.S. 273, 284 (2014)

(“[W]e conclude that the phrase ‘other provision having the force and effect of law’ [in the Airline

Deregulation Act] includes common-law claims.”).

And as for the second requirement, K&N suggests that permitting negligence suits against

brokers “would place a direct, substantial and adverse impact on the manner in which brokers

perform” their services and “dramatically and adversely impact the costs of [their] services and

rates.” (K&N’s Mot. to Dismiss at 9–10). Morrison, however, asserts that K&N carries a weighty

evidentiary burden under Nationwide Freight: Without more, K&N’s concerns are too “ ‘tenuous,

remote, or peripheral’ ” to establish a significant nexus between negligence claims and brokers’

rates or services. (Morrison’s Resp. to K&N’s Mot. to Dismiss at 2–5) (quoting Nationwide

Freight, 784 F.3d at 373).

This Court is hardly the first to consider whether “personal injury claims alleging

negligence by brokers in selecting motor carriers” are preempted by these statutes—indeed,

“district courts are sharply divided” on the question. See Loyd v. Salazar, 416 F. Supp. 3d 1290,

1295 (W.D. Okl. 2019); Gillum v. High Standard, LLC, 2020 WL 444371, at *3–*5 (S.D. Tex.

Jan. 27, 2020) (collecting cases). But the Ninth Circuit—the only appellate court to consider it—

found that a similar negligence claim “related to” a broker’s “services” under the FAAAA See

Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016, 1023–25 (9th Cir. 2020). Even so, the

claim was not preempted because it fell under the statute’s safety exception. See id. at 1025–29.

“This exception provides that the FAAAA ‘shall not restrict the safety regulatory of a State with

respect to motor vehicles.’ ” Id. at 1025–26 (quoting 49 U.S.C. § 14501(c)(2)(A)). (The ICCTA

contains the same exception.) See 29 U.S.C. § 14501(a)(2). According to the Ninth Circuit, “the

purposes of the FAAAA in general and the safety exception in particular” reveal that “ ‘the safety

regulatory authority of a State’ encompasses common-law tort claims”:

[I]n passing the FAAAA, Congress was primarily concerned with

the States regulating economic aspects of the trucking industry by,

for example, enacting tariffs, price regulations, and other similar

laws. Congress’s clear purpose in enacting the safety exception,

then, was to ensure that its preemption of States’ economic authority

over that industry[,] not restrict the states’ existing power over

safety. That power includes the ability to regulate safety through

common-law tort claims.

Miller, 976 F.3d at 1026 (emphasis in original) (cleaned up). Put differently, “if the preemption

provision targets a government’s exercise of regulatory authority and that provision encompasses

common-law claims, then surely the safety regulatory authority of a State also includes at least

some common-law claims.” Id. at 1027.

This Court is persuaded by the Ninth Circuit’s finding that there is “nothing in the

FAAAA’s legislative history that suggests Congress intended to eliminate this important

component of the States’ power over safety.” Id. at 1026. True enough, personal injury claims

against freight brokers could affect brokers’ services: Faced with the threat of civil liability,

brokers might be pushed to implement greater safety measures that could raise costs. At bottom,

however, Morrison is not challenging the economic aspects of trucking, like tariffs or price

regulation—her negligence claim centers on the safety of motor vehicles on the road at K&N’s

behest. While K&N argues that the safety exception is inapplicable because it does not itself

operate or maintain motor vehicles, that is a mere half-truth: It contracts with third parties to do

so. Here again, the Court agrees with the Ninth Circuit that “negligence claims against brokers that

arise out of motor vehicle accidents” have “the requisite ‘connection with’ motor vehicles” to fall

under the safety exception. Miller, 976 F.3d at 1030.

This view aligns with the Seventh Circuit’s limited application of complete preemption,

which “requires a clear showing of Congressional intent to eliminate state law entirely.” Ne. Rural

Elec. Membership Corp. v. Wabash Valley Power Ass’n, Inc., 707 F.3d 883, 895 (7th Cir. 2013);

In re Repository Techs., Inc., 601 F.3d 710, 723 (7th Cir. 2010) (“We have likewise recognized

the narrowness of the doctrine, applying complete preemption only where Congress clearly

intended completely to replace state law with federal law and create a federal forum.’ ”) (cleaned

up). Indeed, complete preemption “is a misnomer”: It “has nothing to do with preemption and

everything to do with federal occupation of a field.” Vorhees v. Naper Aero Club, Inc., 272 F.3d

398, 402 (7th Cir. 2001). Rather, it is commonly confused with “its more ordinary cousin, ‘conflict

preemption.’ ” Id. at 403. Simply put, “the fact that a federal statute creates a defense to a state law

claim does not necessarily mean that ‘Congress has, by statute, taken the subject away from state

tribunals and given it to federal courts.’ ” Id. (quoting Ceres Terminals, Inc. v. Indus. Comm’n of

Ill., 53 F.3d 183, 186 (7th Cir. 1995). Here, neither the ICCTA nor the FAAAA provides a federal

remedy that “includes the same ingredients as the state claim and provides some recovery.” See

id. at 404. Cf. Cahnmann v. Sprint Corp., 133 F.3d 484, 488 (7th Cir. 1998) (finding a breach-of-

contract claim completely preempted by the Federal Communications Act because the statute vests

the Federal Communications Commission with exclusive jurisdiction over claims related to

tariffs). Rather, they simply present a defense to the merits of Morrison’s negligence claim, and so

they cannot sustain removal. See Vorhees, 272 F.3d at 405.

III. CONCLUSION

The Court DENIES Defendant Kuehne + Nagle, Inc.’s Motion to Dismiss and REMANDS

to the Fifth Judicial Circuit Court in Cumberland County, Illinois.

IT IS SO ORDERED.

Dated: Monday, March 8, 2021

S/J. Phil Gilbert

J. PHIL GILBERT

UNITED STATES DISTRICT JUDGE