DEBRA M. BROWN, District Judge.
This personal injury action is before the Court on Cornerstone Systems, Inc.'s motion for judgment on the pleadings. Doc. #22.
On January 2, 2018, Elizabeth Finley, acting individually and on behalf of the wrongful death beneficiaries of Thomas Finley, Jr., filed a complaint in the Circuit Court of Marshall County, Mississippi, naming as defendants David Dyer, Jamac Logistics, LLC, Cornerstone Systems, Inc., RG Logistics, LLC, COFC Logistics, LLC, Interpool, Inc. d/b/a Trac Intermodal, and "John Does 1-10." Doc. #2 at 1, 10. The complaint alleged that Thomas
Dyer was, at all times pertinent to this action, an agent, employee, and/or servant of Jamac and/or Cornerstone, RG, COFC, Interpool and John Doe Defendants 1 through 10. Therefore, Jamac and/or Cornerstone, RG, COFC, Interpool and John Doe Defendants 1 through 10, are liable for Dyer's acts under the doctrine of respondeat superior.
Id. at 4.
Elizabeth's state court action was removed to this Court on April 2, 2018,
Federal Rule of Civil Procedure 12(c) authorizes a party to move for judgment on the pleadings "[a]fter the pleadings are closed—but early enough not to delay trial." A motion for judgment on the pleadings "may dispose of a case when there are no disputed material facts and the court can render a judgment on the merits based on the substance of the pleadings and any judicially noticed facts." Linicomm v. Hill, 902 F.3d 529, 533 (5th Cir. 2018) (internal quotation marks omitted). "To avoid dismissal, a plaintiff must plead sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Id. (internal quotation marks omitted). In making this determination, a court "must construe the complaint in the light most favorable to the plaintiff." Id.
At an unknown time, Cornerstone, acting as a broker, contracted with Jamac, its independent contractor, to serve as a motor carrier and transport certain freight hauled by Jamac pursuant to a Broker-Drayage Intermodal Agreement. Doc. #61 at ¶ 36; Doc. #41 at ¶ 36. Jamac, in turn, retained Dyer to drive the goods. Doc. #41 at ¶¶ 28-34. While transporting the freight, Elizabeth alleges that Dyer negligently crossed the median and struck Thomas' car, killing him. Id. at ¶¶ 13-17.
In its motion, Cornerstone argues that it is entitled to dismissal of the negligent entrustment and negligent hiring claims because such claims are preempted by the Federal Aviation Administration Authorization Act of 1994 ("FAAAA").
"Under the federal Constitution, both the National and State Governments have elements of sovereignty the other is bound to respect." City of El Cenizo v. Texas, 890 F.3d 164, 176 (5th Cir. 2018) (quotation marks omitted). However, the Supremacy Clause of the federal Constitution makes clear that federal laws "shall be the supreme Law of the Land." U.S. Const. art. VI, cl. 2. Consistent with this dictate, "Congress may preempt state legislation by enacting a statute containing an express preemption provision." City of El Cenizo, 890 F.3d at 176. Absent express preemptive language, the United States Supreme Court has "recognized at least two types of implied pre-emption: field pre-emption, where the scheme of federal regulation is so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it," and "conflict pre-emption, where compliance with both federal and state regulations is a physical impossibility or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 98 (1992) (citations and quotation marks omitted).
"Evidence of pre-emptive purpose is sought in the text and structure of the statute at issue." CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993). Where, as here, the statute contains an express preemption clause, a court must "identify the domain expressly pre-empted because an express definition of the pre-emptive reach of a statute supports a reasonable inference that Congress did not intend to pre-empt other matters." Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 541 (2001) (alterations, citations, and quotation marks omitted). To accomplish this, a court must "focus on the plain wording of the clause, which necessarily contains the best evidence of Congress' preemptive intent."
Prior to 1978, the interstate airline industry in the United States was tightly regulated by the federal government. Congress determined in 1978 that both consumers and the economy would benefit from open competition in the airline industry, especially in the areas of rates and services, and that this could be achieved by economic deregulation of the industry. As a result, the Airline Deregulation Act of 1978 (the "ADA") was enacted. To ensure that the States would not undo federal deregulation with regulation of their own, the ADA included a pre-emption provision, prohibiting the States from enforcing any law relating to rates, routes, or services of any air carrier.
Lupian v. Joseph Cory Holdings LLC, No. 17-2346, 2018 WL 4623718, at *3-4 (3d Cir. Sep. 27, 2018) (alterations, citations, and quotation marks omitted).
The FAAAA's preemption provision provides that, subject to certain exceptions, one of which is discussed in detail below:
49 U.S.C. § 14501(c)(1).
"Although § 14501(c)(1) otherwise tracks the ADA's air-carrier preemption provision, the FAAAA formulation contains one conspicuous alteration—the addition of the words `with respect to the transportation of property.'" Dan's City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 261 (2013) (citations omitted). This phrase is clarified by 49 U.S.C. § 13102(23), which defines the term "transportation" as including:
By its terms, the FAAAA preempts any "law, regulation, or other provision having the force and effect of law" which is "related to a price, route, or service" of brokers (or other covered businesses), so long as the relation to the service is "with respect to the transportation of property." See Pelkey, 569 U.S. at 261 ("Pelkey's claims escape preemption, we hold, because they are not `related to' the service of a motor carrier `with respect to the transportation of property.'"); see also Mass. Delivery Ass'n v. Coakley, 769 F.3d 11, 23 (1st Cir. 2014) ("The second phrase excludes from FAAAA preemption any state law that affects a motor carrier's prices, routes, or services outside the context of the transportation of property."). Because common law rules, such as tort claims, "fall under the scope of the FAAAA," Krauss v. IRIS USA, Inc., No. 17-778, 2018 WL 2063839, at *4 (E.D. Pa. May 3, 2018) (collecting cases); and because there is no dispute Cornerstone is a "broker"
"The phrase related to . . . embraces state laws having a connection with or reference to . . . rates, routes, or services, whether directly or indirectly." Pelkey, 569 U.S. at 260 (internal quotation marks omitted). However, "the breadth of the words `related to' does not mean the sky is the limit." Id. Rather, section 14501(c)(1) "does not preempt state laws affecting carrier prices, routes, and services in only a tenuous, remote, or peripheral manner." Id. (internal alterations and quotation marks omitted).
While it appears the Fifth Circuit has not addressed the extent to which state tort laws are "related to" "rates, routes, or services" in the context of the FAAAA, it has done so in the context of the ADA. Hodges v. Delta Airlines, Inc., 44 F.3d 334, 339-40 (5th Cir. 1995); Malik v. Cont'l Airlines, Inc., 305 F. App'x 165, 168-69 (5th Cir. 2008). Insofar as the "[t]he FAAAA's preemption provision is in pertinent part identical to the preemption provision of the ADA and is generally construed in pari materia,"
In Hodges, the Fifth Circuit held that the ADA did not preempt a "state law tort claim for physical injury based on alleged negligent operation of [an] aircraft." 44 F.3d at 335. In reaching this conclusion, the Fifth Circuit held:
Id. at 336 (alteration omitted).
Thus, Hodges distinguished between claims premised on "the operation and maintenance of aircraft," which fall outside the ADA's definition of "services," and "contractual features of air transportation" "such as ticketing, boarding procedures, provision of food and drink, and baggage handling," which do not. Id. at 336. Ultimately, the Fifth Circuit concluded that because "Hodges alleged that Delta was negligent in allowing the case of rum to be stowed in an overhead storage bin," the claim "derive[d] from the operation of the aircraft" rather than services of the air carrier and was, therefore, not preempted. Id. at 340.
Consistent with Hodges, the Fifth Circuit in Malik found that state law claims based on loss of luggage "have a connection with [the defendant's] baggage handling services," so as to warrant preemption. 305 F. App'x at 168-69. The Court reached this conclusion by once again drawing a distinction between claims deriving from (or "centered on") airline operations, which are not preempted, and those derived from "contractual features" of air services, which are preempted. See id. at 169 ("If Malik's bags had caught on fire during a plane crash, her contention might have merit. But her claims are centered on airline personnel's alleged mishandling of her bags, not damage from the way in which the plane was flown.").
Recently, in Dnow, a district judge in the Southern District of Texas considered the impact of Hodges and FAAAA preemption on a negligence claim brought against a freight broker for damages arising from a collision involving one of the broker's drivers. 2018 WL 398235, at *3-5. In evaluating preemption, the district judge noted that the claim asserted was "simply a general negligence claim about the unsafe operation of a truck," and not a claim for "negligent entrustment or negligent hiring," which "might implicitly impose constraints on the operations of a freight broker. . . ." Id. at *4. Then, relying primarily on Hodges, and Elam v. Kansas City Southern Railway, Co., 635 F.3d 796 (5th Cir. 2011), a case where the Fifth Circuit found no preemption of general negligence claims under a statute similar to the FAAAA, the district judge found no preemption of the plaintiff's claims. Id. at *4-5.
Based on the authority above, this Court concludes that a negligence claim is "related to" a "service" when the claim is "centered on" or "derives" from "a bargained-for or anticipated provision of labor from" a broker or other protected carrier. Here, Elizabeth, unlike the plaintiffs in Dnow and Hodges, does not assert a general negligence claim derived from the operation of a truck (or a plane, in the case of Hodges). Rather, Elizabeth alleges claims derived from Cornerstone's selection of a freight carrier, an action which indisputably is a "bargained-for or anticipated provision of labor" from a freight broker. See 49 U.S.C. § 13102(2) (defining "broker" as a person
As explained above, the FAAAA's preemption provision differs from the ADA's by requiring that the "price, route, or service" impacted by the law to be preempted be "with respect to the transportation of property." 49 U.S.C. § 14501(c)(1). "That phrase massively limits the scope of preemption ordered by the FAAAA" by requiring that the relevant law "concern a motor carrier's transportation of property." Pelkey, 569 U.S. at 261 (quotation marks omitted). Because the word "transportation" includes "arranging for" the transit of property, 49 U.S.C. § 13102(23), this requirement is easily met here.
Having concluded that Elizabeth's claims are "related to" a broker service with respect to transportation, preemption is appropriate unless one of the FAAAA's preemption exceptions applies. In this regard, Elizabeth urges the Court to apply the FAAAA's public safety exemption. Doc. #51 at 13-16. This exemption states that the FAAAA's preemption provision "shall not restrict the safety regulatory authority of a State with respect to motor vehicles." 49 U.S.C. § 14501(c)(2)(A). Such provision "evinces a clear purpose to ensure that the preemption of States' economic authority over motor carriers of property `not restrict' the preexisting and traditional state police power over safety, a field which the states have traditionally occupied." City of Columbus v. Ours Garage & Wrecker Serv., Inc., 536 U.S. 424, 426 (2002) (quotation marks omitted). However, because the provision is limited to those laws "with respect to motor vehicles," to fall under the exemption, a properly exercised police power over safety must also "concern" motor vehicles. See Pelkey, 569 U.S. at 261 (defining "with respect to" as "concern[ing]"); FCC v. AT&T Inc., 562 U.S. 397, 408 (2011) ("[I]dentical words and phrases within the same statute should normally be given the same meaning."). Motor vehicles are defined in the FAAAA as "a vehicle, machine, tractor, trailer, or semitrailer propelled or drawn by mechanical power and used on a highway in transportation." 49 U.S.C. § 13102(16).
Courts are divided on the question of whether negligence claims fall under the definition of "safety regulatory authority of a State," so as to come within the ambit of the exemption. Compare Huntington Operating Corp. v. Sybonney Express Inc., No. H-08-781, 2010 WL 1930087, at *3 (S.D. Tex. May 11, 2010) ("Case law interpreting § 14501(c)(2)(A) refers solely to the ability of the several states to define safety standards and insurance requirements. . . . The exception is not read to permit a private right of action.") (citing Ours Garage and Cardinal Towing & Auto Repair, Inc. v. City of Bedford, 180 F.3d 686 (5th Cir. 1999)), with Rosales v. Redco Transp. Ltd., No. 5:14-cv-129 2015 WL 9274068, at *3 (S.D. Tex. Dec. 21, 2015) ("[N]egligence claims like the ones here are part of the states' safety regulatory authority.").
"Historically, common law liability has formed the bedrock of state regulation, and common law tort claims have been described as a `critical component of the States' traditional ability to protect the health and safety of their citizens.'" Desiano v. Warner-Lambert & Co., 467 F.3d 85, 86 (2d Cir. 2006) (quoting Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 544 (1992) (Blackmun, J., concurring in part and dissenting in part)). Given this, there can be no serious dispute that common law claims arising from the negligent procurement of a trailer represent a valid exercise of the state's police power to regulate safety. Nor can there be any question that such claims, which are centered on a defendant's efforts to place trailers on the highways, concern motor vehicles so as to fall under the exemption provision. Accordingly, the Court concludes that Elizabeth's negligence claims fall within the "safety regulatory authority of a State with respect to motor vehicles" and, therefore, are not preempted.
For the reasons above, Cornerstone's motion for judgment on the pleadings [22] is
Wyeth v. Levine, 555 U.S. 555, 565 (2009) (alterations and quotation marks omitted). However, the Supreme Court recently held that invocation of a presumption against preemption was inappropriate where the statute "contain[ed] an express pre-emption clause." Puerto Rico v. Franklin Calif. Tax Free Tr., 136 S.Ct. 1938, 1946 (2016). In the wake of this decision, the viability of the presumption against preemption with regard to the FAAAA is unclear. Compare Watson v. Air Methods Corp., 870 F.3d 812, 817 (8th Cir. 2017) (no presumption against preemption in action involving analogous Airline Deregulation Act), with Lupian v. Joseph Cory Holdings LLC, No. 17-2346, 2018 WL 4623718, at *3 n.5 (3d Cir. Sep. 27, 2018) (applying presumption). This Court is inclined to believe that a presumption against preemption is no longer appropriate with respect to the FAAAA. Because the existence of a presumption would not alter this Court's decision, it need not reach the issue here.