304 F. Supp. 3d 1119
D. Utah2018Background
- Delta Stone purchased a stone cutting machine shipped from New Jersey to Heber, Utah; it arrived damaged and Delta Stone alleges delivery damage caused delay and repair costs.
- Shipment chain: Embassy Cargo acted as shipper from Italy; Harbor Freight transported cargo from Port of Newark to its Newark facility; Xpertfreight arranged the inland transport as a freight broker; US Express (and its drivers Seran Salamon / Rafik Nazarov) physically picked up and delivered the machine.
- On pickup, Harbor Freight’s Invoice/Pick-up Receipt contained a release- and receipt-language; US Express’s driver added a handwritten acknowledgment accepting responsibility for damage on delivery; a marine cargo survey attributed damage to improper ratchet strap use by the US Express driver.
- Delta Stone sued asserting Carmack Amendment liability, breach of contract, negligence, and breach of insurance contract; various defendants moved to dismiss or for summary judgment.
- The court dismissed Xpertfreight from contract and negligence claims (12(b)(6) and preemption), and granted Xpertfreight summary judgment on the Carmack claim, finding it acted as a broker not a carrier; the court denied Harbor Freight’s summary judgment motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Xpertfreight is a "carrier" subject to Carmack liability | Delta Stone: documents listing Xpertfreight as "carrier" create fact issue | Xpertfreight: it negotiated/arranged transport as a broker and did not possess or transport cargo | Court: Xpertfreight is a broker, not a carrier; Carmack does not apply to brokers; summary judgment for Xpertfreight |
| Whether state-law breach/negligence claims against Xpertfreight survive | Delta Stone: contract/neg negligence claims against Xpertfreight | Xpertfreight: Carmack and ICCTA preempt state claims; no factual basis for contractual breach by Xpertfreight | Court: Claims preempted and/or dismissed; breach claim fails for lack of contract or causation |
| Whether US Express can pursue contribution/apportionment from Xpertfreight under Carmack/negligence | US Express: disputes broker status and argues Xpertfreight gave handling directions (e.g., "MUST BE TARPED") | Xpertfreight: it remained a broker; instructions do not convert role to carrier; evidence supports broker status | Court: No genuine dispute; grants Xpertfreight summary judgment on contribution/allocation claims |
| Whether Harbor Freight entitled to summary judgment limiting damages (consequential damages disallowed; $500 release applies) | Harbor Freight: damage did not occur in its control; Delta Stone failed to give notice; liability limited by $500 release | Delta Stone: consequential damages recoverable under Carmack; release/limitation not established by record / requirements not met | Court: Denied Harbor Freight’s summary judgment; consequential damages may be recoverable and release requirements not proven by Harbor Freight |
Key Cases Cited
- Brokers' Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081 (10th Cir. 2017) (Rule 12(b)(6) plausibility standard and pleading principles)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for complaints)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard; factual allegations must permit reasonable inference of liability)
- Mercer Transp. Co. v. Greentree Transp. Co., 341 F.3d 1192 (10th Cir. 2003) (elements of a prima facie Carmack Amendment claim)
- Bullocks Express Transp., Inc. v. XL Specialty Ins. Co., 329 F. Supp. 2d 1246 (D. Utah 2004) (Carmack Amendment preempts common-law negligence and contract claims)
- Chubb Group of Ins. Co. v. H.A. Transp. Sys., Inc., 243 F. Supp. 2d 1064 (C.D. Cal. 2002) (third-party documents listing a broker as carrier do not create genuine issue of fact)
- Norton v. Jim Phillips Horse Transp., Inc., 901 F.2d 821 (10th Cir. 1990) (requirements for a carrier to limit liability under bill of lading)