RDK NY Inc. v. The City of New York
1:21-cv-01529
| E.D.N.Y | Jan 20, 2023Background
- RDK NY Inc. (a hemp company) and Oren Levy shipped hemp plants via FedEx Ground to Oren’s brother Ronen; a FedEx Ground driver delivered the packages to an NYPD precinct, claiming they were marijuana.
- NYPD detained Ronen (and attempted to arrest Oren), retained the packages, and allegedly refused to return them even after learning the plants were hemp.
- Plaintiffs sued FedEx Ground, FedEx, the City of New York, named and unnamed NYPD officers, and the FedEx driver in New York state court asserting negligence, conversion, trespass, tortious interference, civil‑rights claims, and related damages.
- FedEx Ground removed to federal court, asserting the Carmack Amendment completely preempted the RDK Plaintiffs’ state‑law property and negligence claims arising from the interstate shipment.
- Plaintiffs moved to remand; Ronen moved to sever (and remand) his claims. The district court denied remand and denied Ronen’s severance/remand motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Carmack Amendment completely preempts RDK Plaintiffs’ state‑law claims against FedEx Ground, making removal proper | RDK: FedEx Ground’s conduct (reporting packages as illegal) was separate from delivery and thus not covered by Carmack | FedEx Ground: Claims seek remedies for loss/non‑delivery of goods in interstate transit and are therefore completely preempted by Carmack | Court: Carmack completely preempts those state‑law tort claims because they seek recovery for non‑delivery/loss during interstate shipment; removal proper |
| Whether the court should retain supplemental jurisdiction over RDK Plaintiffs’ state‑law claims against other defendants (FedEx, driver, City, NYPD) | RDK: (did not contest jurisdiction over other defendants) | FedEx Ground/Defendants: federal claim and state claims arise from same nucleus of operative fact; retention promotes efficiency | Court: Exercised supplemental jurisdiction under 28 U.S.C. §1367; retained all related state claims |
| Whether Ronen’s claims must be severed and remanded under 28 U.S.C. §1441(c) | Ronen: His claims should be severed and remanded if others remain in federal court | Defs: Court has supplemental jurisdiction over Ronen’s claims because they arise from same facts | Court: §1441(c) severance not required because federal court has supplemental jurisdiction over Ronen’s claims |
| Whether Ronen’s claims should be severed under Fed. R. Civ. P. 21 | Ronen: Requests severance to pursue remand separately | Defs: Severance would harm judicial economy, risk inconsistent verdicts, and claims share common facts/witnesses | Court: Denied Rule 21 severance — claims arise from same transaction, share common questions, and severance would impair economy and risk inconsistent results |
Key Cases Cited
- Caterpillar Inc. v. Williams, 482 U.S. 386 (1987) (well‑pleaded complaint rule and federal‑question removal principles)
- Rivet v. Regions Bank of Louisiana, 522 U.S. 470 (1998) (complete preemption doctrine)
- Adams Express Co. v. Croninger, 226 U.S. 491 (1913) (Carmack Amendment and nationwide uniformity in interstate carrier liability)
- New York, P. & N. R. Co. v. Peninsula Produce Exch. of Maryland, 240 U.S. 34 (1916) (Carmack covers damages from failure to discharge carrier’s duty)
- Cleveland v. Beltman N. Am. Co., 30 F.3d 373 (2d Cir. 1994) (Carmack preemption of state remedies for interstate shipping loss)
- N. Am. Phillips Corp. v. Emery Air Freight Corp., 579 F.2d 229 (2d Cir. 1978) (interstate carrier loss claims constitute federal causes of action)
- Smith v. United Parcel Serv., 296 F.3d 1244 (11th Cir. 2002) (distinguishing conduct separate from delivery; but recognizing Carmack preemption for non‑delivery claims)
- Hall v. N. Am. Van Lines, Inc., 476 F.3d 683 (9th Cir. 2007) (Carmack preempts certain state claims arising from interstate carriage)