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Asarco LLC v. England Logistics Inc.

United States District Court, D. Arizona

December 23, 2014

ASARCO LLC, Plaintiff,
England Logistics Incorporated, et al., Defendants

Decided: December 22, 2014.

Page 991

For ASARCO LLC, a Delaware limited liability company, Plaintiff: Ali J Farhang, Roberto C Garcia, LEAD ATTORNEYS, Ryan Raymond Seidel, Farhang & Medcoff PLLC, Tucson, AZ.

For England Logistics Incorporated, a Utah corporation, CR England Incorporated, a Utah corporation, Defendants: Randy Lee Kingery, Tamara Nydell Cook, LEAD ATTORNEYS, Renaud Cook Drury Mesaros PA, Phoenix, AZ.

For Plumley Trucking Incorporated, a South Carolina corporation, Defendant: Walter Grochowski, LEAD ATTORNEY, Potts & Associates, Phoenix, AZ.

For Plumley Logistics Incorporated, a South Carolina corporation, Defendant: Cassandra K Gaines, LEAD ATTORNEY, Global Tranz Enterprises Incorporated, Phoenix, AZ; Jeffrey R Simmons, Venus G Booth, LEAD ATTORNEYS, Lewis Brisbois Bisgaard & Smith LLP - Phoenix, AZ Phoenix, AZ; Casper Fredric Marcinak, Smith Moore Leatherwood - Greenville, SC, Greenville, SC.

Page 992



This action arises from a shipment of 55 copper anodes that went missing. ASARCO alleges that in July 2011, ASARCO requested that Defendants CR England, Inc. (" CR" ) and England Logistics (" EL" ) arrange for transport of 55 copper anodes from ASARCO's facility in Hayden, Arizona, to ASARCO's facility in Amarillo, Texas (" the Shipment" ). (First Amended Complaint, (" FAC" ) ¶ ¶ 29; Doc. 101, p. 5). ASARCO alleges that CR/EL unilaterally re-brokered and/or re-assigned the Shipment to Defendant Plumley Trucking, Inc., (" PT" ) who, thereafter, re-brokered and/or assigned the Shipment through Defendant Plumley Logistics, Inc., (" PL" ) to non-party Pavlyukh Express, whose driver Andriy Kuba picked up the Shipment on July 24, 2011. (FAC, ¶ ¶ 31, 34, 37, 39). The Shipment never arrived at ASARCO's Texas facility and is still missing. (FAC, ¶ ¶ 38, 43).

ASARCO seeks relief as follows: (1) against the Plumley Defendants under the Carmack Amendment, 49 U.S.C. § 14706 (Count I); (2) alternatively, against all Defendants for negligence (Count II); (3) alternatively, against all Defendants for negligent hiring, retention, or supervision (Count III); (4) alternatively, against CR and/or EL for breach of contract (Count IV); and (5) alternatively, against the Plumley Defendants for breach of contract (Count V). Counts II through V are alleged " in the alternative and in the event the Court determines Carmack is not applicable in this case." (FAC, ¶ ¶ 64, 75, 86, 92).

Page 993

Defendants PL, PT and the England Defendants have filed separate motions seeking summary judgment. (Doc. 90 (PL's motion); Doc. 98 (PT's motion); Doc. 100 (the England Defendants' motion)). ASARCO has filed a Motion for Partial Summary Judgment (" MPSJ" ) against PL on the breach of contract claim (Doc. 101). Additionally, PT joins in PL's motion and response to ASARCO's MPSJ, and the England Defendants join in PL's and PT's argument regarding pre-emption.

The Magistrate Judge has jurisdiction over this matter pursuant to the parties' consent. See 28 U.S.C. § 636(c). For the following reasons, the Court: (1) denies in part and grants in part the motions for summary judgment filed by Plumley Logistics and Plumley Trucking; (2) denies ASARCO's Motion for Partial Summary Judgment; and (3) grants in part and denies in part the England Defendants' Motion for Summary Judgment.


For purposes of PL's Motion, it is undisputed that in July 2011, ASARCO contracted with EL to transport and/or arrange for the Shipment. (ASARCO's Controverting Statement of Facts Regarding PL's Statement of Facts and ASARCO's Additional Statement of Facts (Doc. 107), ¶ A; PL's Statement of Facts (Doc. 91), ¶ 1; PL's Controverting SOF (Doc. 109), ¶ 3). Thereafter, according to Tammy Foster, who testified that she is an employee of PL, EL contacted her for the purpose of " find[ing] a carrier to pick up the load." (Doc. 107, Exh. A, pp. 9, 49; see also id. at p. 49 (in this case the carrier PL found to pick up the load was Pavlyukh Express)).

Despite Foster's testimony that she is employed by PL, ASARCO disputes whether Foster works for PL or PT. This dispute is discussed in further detail infra.

It is undisputed that PL is authorized by the Federal Motor Carrier Safety Administration as a freight broker and does not have motor carrier authority. (Doc. 91, ¶ 5; Doc. 107, ¶ 5). It is also undisputed that PT is a federally authorized carrier. (PT's Statement of Facts (Doc. 99), & 14; ASARCO's Controverting Statement of Facts regarding PT's Statement of Facts (Doc. 113), ¶ C).

As discussed infra, PL and EL, and PT and the England Defendants, have entered into " Transportation Brokerage Agreements" , respectively.

PL argues that it acted as a broker and is, therefore, not liable under the Carmack Amendment. PL further argues that the Transportation Brokerage Agreements do not apply to the Shipment, and that ASARCO's negligence claims are pre-empted. PT argues that it had no involvement regarding the Shipment, that the Transportation Brokerage Agreements do not apply to the Shipment, and that ASARCO's negligence claims are pre-empted. CR argues that it had no involvement with the Shipment and, to any extent it did, it acted as a broker. EL and CR both argue that ASARCO's state law claims are pre-empted. ASARCO argues that PL breached the Transportation Brokerage Agreement.


Summary judgment is appropriate when there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The party seeking summary judgment " bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record]...which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotation marks and citation omitted). Once satisfied, the burden shifts to the nonmoving party to demonstrate through production

Page 994

of probative evidence that an issue of fact remains to be tried. Id. at 324. At the summary judgment stage, the court must not weigh evidence or make credibility determinations. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The nonmoving party's evidence is presumed true and all inferences are to be drawn in the light most favorable to that party. Eisenberg v. Insurance Co. of North Amer., 815 F.2d 1285, 1289 (9th Cir. 1987).

Only disputes over facts that might affect the outcome of the suit will prevent the entry of summary judgment, and the disputed evidence must be " such that a reasonable jury could return a verdict for the nonmoving party." Anderson., 477 U.S. at 248. Thus, if the record taken as a whole " could not lead a rational trier of fact to find for the nonmoving party," summary judgment is warranted. Miller v. Glenn Miller Prods., Inc., 454 F.3d 975, 988 (9th Cir. 2006) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). If the burden of persuasion at trial would be on the nonmoving party, the movant may carry its initial burden of production under Rule 56 by producing, " evidence negating an essential element of the nonmoving party's claim or defense...," or by showing, after suitable discovery, that the " nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial." Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1105-1106 (9th Cir. 2000).

Carmack Amendment Claim alleged against the Plumley Defendants

The Carmack Amendment, 49 U.S.C. § 14706, governs liability for all losses, damages or injuries to goods transported in interstate commerce. Hewlett-Packard, Co. v. Brother's Trucking Ent., 373 F.Supp.2d 1349, 1351 (S.D. Fla. 2005); Chubb Group of Insur. Co. v. H.A. Transportation Sys. Inc., 243 F.Supp.2d 1064, 1068 (C.D. Cal. 2002). The statute " subjects common carriers and freight forwarders transporting cargo in interstate commerce to absolute liability for actual loss or injury to property." KLS Air Express v. Cheetah Transportation, LLC, 2007 WL 2428294,*3 (E.D. Cal. 2007). A shipper, such as ASARCO, establishes a prima facie case of a carrier's liability under the Carmack Amendment by establishing by a preponderance of the evidence that the goods were: (1) delivered to the carrier in good condition; (2) the goods were damaged or lost while in the carrier's possession; and (3) damages. Missouri Pacific R.R. v. Elmore & Stahl, 377 U.S. 134, 138, 84 S.Ct. 1142, 12 L.Ed.2d 194 (1964); Chubb, 243 F.Supp.2d at 1068. The Carmack Amendment limits recovery to actual damages. 49 U.S.C. § 14706(a)(1).

While the Carmack Amendment applies to motor carriers and freight fowarders[1], the statute does not apply to brokers. KLS Air Express, 2007 WL 2428294, at *3; Chubb, 243 F.Supp.2d at 1069.

Page 995

Under the Carmack Amendment, a " broker" is defined as:

A person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal, or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.

49 U.S.C. § 13102(2). Federal regulations also specify that:

A broker shall not, directly or indirectly, represent its operations to be that of a carrier. Any advertising shall show the broker status of the operation.

49 C.F.R. § 371.7(b).

The Carmack Amendment defines " motor carrier" as " a person providing motor vehicle transportation for compensation." 49 U.S.C. § 13102(14). Federal regulations further clarify that:

Motor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport.

49 C.F.R. § 371.2.

The Plumley Defendants' Argument.

PL contends that the Carmack Amendment does not apply because PL is a freight broker and acted as a freight broker with regard to the Shipment, and the Carmack Amendment does not apply to brokers.

PT contends that prior to this lawsuit, no one took the position that PT had anything to do with the Shipment. PT stresses it was not the carrier, it did not accept the Shipment, did not agree to transport the Shipment or assume responsibility for the transportation of the Shipment. PT points out that Foster worked for PL and that PT and PL are separate entities.

ASARCO maintains that there are factual disputes regarding the Plumley Defendants' role regarding the Shipment.


" Whether a company is a broker or a carrier is not determined by what the company labels itself, but by how it represents itself to the world and its relationship to the shipper." Hewlett-Packard, 373 F.Supp.2d at 1352 (citation omitted); Chubb, 243 F.Supp.2d at 1070 (" '[a] carrier's status as a common carrier is determined not by reference to its authority but rather by reference to what it holds itself out to be.'" (quoting Ensco, Inc. v. Weicker Transfer and Storage Co., 689 F.2d 921, 925 (10th Cir. 1982)). " The difference between a carrier and a broker is often blurry. The crucial distinction is whether the party legally binds itself to transport, in which case it is considered a carrier. See 49 C.F.R. § 371.2(a). That is, if [the defendant] accepted responsibility for ensuring delivery of the goods, regardless of who actually transported them, then [the defendant] qualifies as a carrier. If however [the defendant] merely agreed to locate and hire a third party to transport the [shipment], then it was acting as a broker." CGU Intern. Ins., PLC v. Keystones Lines Corp, 2004 WL 1047982, *2 (N.D. Cal. May 5, 2004) (holding defendant was a broker because the agent worked for the brokering division, there was never an understanding that defendant would assume responsibility for shipping the goods, defendant never took physical possession of the goods but was merely a conduit between the shipper and the carrier, and the contract between defendant and carrier identified their roles). The focus of the court's inquiry must be on the Defendants' role in the specific transaction, and the nature of the relationship between ASARCO, EL and the Plumley Defendants. See Schramm v. Foster, 341 F.Supp.2d 536, 549 (D.Md. 2004).

Page 996

Here, PL maintains it acted solely as a broker when it arranged for Pavlyukh Express to transport the Shipment, and PT contends it had absolutely nothing to do with the Shipment. ( See Doc. 91, ¶ 11; Doc. 98, pp. 3-8; Doc. 109, ¶ 3, Doc. 91, Exh. A p.8 (Foster testified that PL " is a broker and we broker freight out to other carriers....I have customers that give me freight, and I find carriers to move that freight." )) The Plumley Defendants cite Foster's testimony that she is an employee of PL, which operates solely as a broker, and that PL never took possession of the Shipment. Foster also testified that EL agents requested PL to find a carrier to transport the Shipment. Further, a broker-carrier agreement for the Shipment identifies Pavlyukh Express as the " carrier" and PL as the " broker" . (Doc. 91, Exh. F, PL 0021-PL0023).

PL's interaction with EL is not as clear cut as PL contends. EL agents Freeman and Whitlock testified that they believed Foster worked for PT[2] and neither knew of PL or had worked with PL. ( See Doc. 107, Exh. 2, pp. 48-49, 54 (Freeman) & Exh. 3, pp. 23, 30 (Whitlock); see also Doc. 91, Exh. B, p. 50). Nor had PL " been set up as a vendor for...[EL]." (Doc. 91, Exh. B, p. 30). When Freeman " reached out to Tammy Foster with regard to this shipment" , he thought he was reaching out to PT. (Doc. 91, Exh. B, p. 54). Both Freeman and Whitlock testified that in July 2011, the only two carriers authorized to rebroker[3] EL loads were PT and Mike's Trucking and Landstar. (Doc. 91, Exh. B, p. 17 (Freeman) & Exh. C, p. 24 (Whitlock)). Freeman testified that PT was authorized to re-broker freight because " we had a really good relationship with Tammy [Foster]. She did a great job for us when she was at Landstar, and...she gave us no reason to feel that she couldn't do a good job for us at Plumley Trucking." (Doc. 91, Exh. B, pp. 17-18). When asked whether he ever understood PT to be a broker in addition to being a carrier, Freeman testified: " Well, we made that distinction when we allowed her [Foster] to subcontract loads out to other drivers." ( Id. at pp. 50-51). Freeman stated that the decision to allow PT to broker loads to other carriers was made after Foster " moved from Landstar to Plumley...." ( Id. at p. 50). Freeman also testified that at the time of the Shipment, PT was authorized by England to broker loads. ( Id. at p. 51).

Moreover, although Foster testified that EL asked her to find a carrier for the Shipment, Whitlock testified that he did not remember whether he asked her to act as a carrier ( i.e., " take this load for me" ) or to broker the load ( i.e. " find somebody that can take this load for us" ). (Doc. 107, Exh. 3, pp. 43-44; see also id. at p. 44 (Whitlock's communication with Foster would have been over the phone or through e-mail and he has no written communications with Foster regarding the Shipment.)).

Whitlock testified that when Foster informed him on July 22, 2011, that Pavlyukh Express was going to haul the Shipment, he believed that " Foster had rebrokered the load[.]" (Doc. 91, Exh. C, p. 52). Although EL must give express permission for a load to be ...

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