Mason & Dixon Intermodal v. Lapmaster International LLC
2011 U.S. App. LEXIS 903
| 9th Cir. | 2011Background
- MDII, a motor carrier, transported oversized Japanese machines from Oakland to Fremont under ITG’s arrangements; the dispatch stated standard equipment though the freight was oversized.
- ITG, a broker, arranged MDII’s delivery after WEST failed to note dimensions; ITG was told the freight was in gauge but later acted on a standard shipment dispatch.
- MDII used standard flat racks for the oversized machines, leading to two separate, identical accidents when machines struck the 23rd Avenue overpass.
- Hartford Insurance paid Lapmaster $820,554.92 for damages; ITG settled with Lapmaster and Hartford for a total of $150,000.
- The district court ruled the ITG-Lapmaster-Hartford settlement was in good faith under California Civil Procedure Code §§ 877 and 877.6, barring MDII’s claims against ITG; MDII appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether state settlement law preempts Carmack Amendment claims. | MDII asserts Carmack preemption overrides state good faith settlement. | Lapmaster/Hartford/ITG maintain state law governs good faith settlements absent Carmack conflict. | California §§ 877 and 877.6 apply; no preemption by Carmack. |
| Whether Carmack preemption conflicts with California settlement law. | Carmack aims for uniform liability, conflicting with varying state settlement rules. | Settlement law should not enlarge or limit carrier liability; it is compatible. | Settlement law does not conflict with Carmack; preemption does not apply. |
| Whether MDII and ITG are joint tortfeasors for purposes of §§ 877 and 877.6. | MDII argues not joint tortfeasors due to Carmack liability. | MDII and ITG are jointly liable to Lapmaster/Hartford; settlement applies to both. | They are joint tortfeasors for purposes of equitable indemnity under § 877. |
| Whether the ITG-Lapmaster-Hartford settlement satisfied the good faith requirements. | MDII contends settlement was not in good faith given ITG’s exposure. | District court properly considered factors and ITG’s liability cap; settlement was good faith. | Settlement satisfied Tech-Bilt factors and was in good faith. |
Key Cases Cited
- Adams Express Co. v. Croninger, 226 U.S. 491 (1906) (premises Carmack preemption of carrier liability for interstate damage)
- Southeastern Express Co. v. Pastime Amusement Co., 299 U.S. 28 (1936) (uniform liability policy; reasonableness of rates and risk)
- Charleston & W.C. Ry. Co. v. Varnville Furniture Co., 237 U.S. 597 (1915) (Carmack preempts state law claims for damages in interstate carriage)
- Hughes Aircraft Co. v. N. Am. Van Lines, Inc., 970 F.2d 609 (9th Cir. 1992) (Carmack preempts state tort and contract actions against a carrier for damage to goods)
- Missouri-Kansas-Texas Ry. Co. v. Harris, 234 U.S. 412 (1914) (state attorneys’ fees statute upheld when not enlarging or limiting carrier liability; settlement-public policy)
- A.T. Clayton & Co., Inc. v. Missouri-Kansas-Texas, R. Co., 901 F.2d 833 (10th Cir. 1990) (limits on fees; accord with Carmack preemption principles)
- Osumi v. Sutton, 151 Cal.App.4th 1355 (Cal. App. 2007) (California public policy favoring settlement supports § 877 application)