Kennedy Tank & MFG. Co., Inc., and Hemlock Semiconductor Operations LLC and Hemlock Semiconductor, LLC v. Emmert Industrial Corporation d/b/a Emmert International
2017 Ind. LEXIS 1
| Ind. | 2017Background
- Kennedy (Indiana) contracted with Emmert (Oregon carrier) to transport a 280-foot process tower from Indianapolis to Hemlock in Tennessee for a base price plus unforeseen costs.
- Unanticipated bridge closure, rerouting, permits, escorts, and delays increased Emmert’s charges by $691,301.03; Emmert delivered the tower on November 11, 2011.
- Emmert sought payment for the additional charges; negotiations and arbitration discussions occurred through 2014, but Kennedy refused to pay in Sept. 2014, citing the 18‑month federal limitations period in 49 U.S.C. §14705(a).
- Emmert sued in Indiana state court for breach of contract and unjust enrichment after the federal 18‑month period expired; Kennedy moved to dismiss, asserting federal preemption of Indiana’s 10‑year limitations period.
- Trial court denied dismissal; the Indiana Court of Appeals reversed on preemption grounds; the Indiana Supreme Court granted transfer and affirmed the trial court, holding Indiana’s 10‑year statute is not preempted.
Issues
| Issue | Plaintiff's Argument (Emmert) | Defendant's Argument (Kennedy/Hemlock) | Held |
|---|---|---|---|
| Whether 49 U.S.C. §14705(a)’s 18‑month limitations period preempts Indiana’s 10‑year limitations for contract collection claims | Federal statute does not preempt state limitations; state law governs breach-of-contract collection actions | §14705(a) establishes a uniform federal limitations period that preempts longer state periods for carrier recovery of transportation charges | Indiana Supreme Court: No preemption; Indiana’s 10‑year statute stands |
| Whether physical-impossibility preemption applies because federal period elapsed | Emmert argued suits could have been filed within 18 months; no impossibility | Kennedy argued federal period bars state claim after 18 months | Court: Physical-impossibility preemption fails because it was possible to comply with both periods |
| Whether applying Indiana’s statute does “major damage” to ICCTA’s deregulatory purpose | Emmert: state limitation does not frustrate ICCTA’s purposes; Congress deregulated collection actions | Kennedy: longer state period frustrates uniformity and diligence goals of §14705(a) | Court: No major damage; ICCTA did not manifestly intend a uniform national limitations period |
| Whether equitable estoppel prevents Kennedy from asserting federal limitations (alternative) | Emmert argued settlement negotiations estopped Kennedy | Kennedy contended estoppel not applicable / waived | Court did not reach estoppel (decision resolved on preemption); trial court ruling affirmed |
Key Cases Cited
- Bond v. United States, 134 S. Ct. 2077 (presumption against preemption)
- Arizona v. United States, 132 S. Ct. 2492 (preemption requires clear federal purpose; immigration preemption example)
- Wyeth v. Levine, 555 U.S. 555 (physical-impossibility and prescription preemption principles)
- Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132 (state regulation as unlikely candidate for exclusive federal regulation)
- CSX Transp., Inc. v. Easterwood, 507 U.S. 658 (preemption requires clear and manifest congressional purpose)
- CTS Corp. v. Waldburger, 134 S. Ct. 2175 (Congress can leave state limitations intact; limits on conflict preemption)
- Medtronic, Inc. v. Lohr, 518 U.S. 470 (congressional purpose as touchstone for preemption analysis)
- Cal. Fed. Sav. & Loan Ass'n v. Guerra, 479 U.S. 272 (compliance with both federal and state law can be possible)