AIG Europe Limited v. General System, Inc
1:13-cv-00216
D. MarylandJul 22, 2014Background
- AIG Europe, subrogee of Actavis, sued General System for loss of a pharmaceutical shipment that was stolen during interstate transport. General System had $100,000 cargo insurance per occurrence.
- General System impleaded TBB Global (a freight broker) and two insurance-related third-party defendants (National Insurance; Marine MGA), alleging negligence and breach of contract; the Court previously dismissed General System’s third‑party claims against TBB Global as not derivative.
- AIG amended to add TBB Global as a direct defendant, alleging TBB negligently failed to warn about inadequate insurance and to select a carrier with higher coverage or require two drivers.
- TBB moved to dismiss Count II (negligence) on preemption and other grounds; National Insurance and Marine MGA moved to strike/dismiss the third‑party complaint for improper impleader.
- The Court found the negligence claim against TBB preempted by the Interstate Commerce Commission Termination Act (ICCTA) and declined supplemental jurisdiction, dismissing Count II without prejudice.
- The Court also granted the motion to strike/dismiss claims against National Insurance and Marine MGA because the third‑party claims were not derivative of AIG’s claim and impleader was improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether AIG's state-law negligence claim against TBB is preempted by federal law (ICCTA/Carmack) | TBB owed a duty beyond selecting a carrier (warn about insurance limits, secure higher‑coverage carrier); state negligence governs | Claim concerns broker services and thus is preempted by ICCTA (and arguably by Carmack) | ICCTA preempts the Maryland negligence claim; Count II dismissed; Court declined to reach Carmack preemption question |
| Whether the court should exercise supplemental jurisdiction over the state-law claim after finding preemption | AIG urged continuation of claim in federal court | TBB argued preemption and that the state claim predominates over federal Carmack claim | Court declined supplemental jurisdiction because the state-law negligence issues substantially predominate over the federal claim |
| Whether General System properly impleaded National Insurance and Marine MGA under Rule 14 | General System argued impleader avoids multiplicity of suits and furthers Rule 14’s purpose | Third‑party defendants argued claims are not derivative of AIG’s claim and impleader is improper | Impleader was improper; third‑party claims were not derivative and were struck/dismissed |
| Whether dismissal should be with or without prejudice and whether other defenses (statute of limitations, forum selection) should be resolved now | AIG did not press for prejudice; other defenses noted | TBB sought dismissal on multiple grounds but Court focused on preemption | Count II dismissed without prejudice; Court did not decide additional defenses (statute of limitations, forum selection) |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standards; courts need not accept legal conclusions)
- Morales v. Trans World Airlines, 504 U.S. 374 (1992) (broad preemption reading for transportation statutes; "related to" standard)
- 5K Logistics, Inc. v. Daily Express, Inc., 659 F.3d 331 (4th Cir. 2011) (distinguishing brokers vs. carriers and discussing remedies under Carmack)
- Mastercraft Interiors, Ltd. v. ABF Freight Sys., 284 F. Supp. 2d 284 (D. Md. 2003) (state common-law claims can be preempted by ICCTA)
- Shao v. Link Cargo (Taiwan) Ltd., 986 F.2d 700 (4th Cir. 1993) (describing Carmack Amendment carrier liability scheme)
- United Mine Workers v. Gibbs, 383 U.S. 715 (1966) (discretion to decline supplemental jurisdiction)