ELLEN LIPTON HOLLANDER, District Judge.
Dennis Danner; his son, Alexander Danner; and his son-in-law, Michael Coletta, plaintiffs, went on a hunting trip in South Africa in June 2007, during which each plaintiff killed a "trophy quality" lion.
As a result, plaintiffs filed suit against International Freight Systems of WA, LLC ("International Freight"), a customs broker and freight forwarder; Cargolux Airlines International S.A. d/b/a Cargolux Airlines International, Inc. ("Cargolux"), an all-cargo air carrier; Cargo Airport Services USA, Inc. ("CAS"), Cargolux's ground handling agent in Seattle (CAS and Cargolux are collectively referred to as the "Cargolux Defendants"); and Even Rock, Inc. d/b/a Seattle Air Cargo ("Even-Rock"),
The remaining parties have filed cross-motions for summary judgment.
In June 2007, plaintiffs participated in a two-week hunting safari at a private game reserve in South Africa, operated by Tam Safaris, a South African business. See Cargolux Motion at 2; IF Motion at 2; Danner-Cargolux Motion at 1. During the safari, each of the plaintiffs shot and killed a "trophy quality," full-maned, male lion, as well as other game. See Cargolux Motion at 2; IF Motion at 2; Danner-Cargolux Motion at 1. Mr. Danner paid all of the expenses of the trip, including airfare and accommodations for himself, his son, and his son-in-law; a $35,000 trophy fee for each lion;
On or about July 24, 2007, the Lion Trophies were packed into two crates, along with other trophies of plaintiffs' hunt. One of the crates contained one lion pelt and one skull, along with the skulls, horns, and skins of a wildebeest and a springbuck. Coletta was listed as the "client" with respect to this crate, and it was marked with his name. Alex was listed as the "client" as to the second crate, which was marked with his name. That crate contained the other two lion pelts and skulls, along with the skulls, horns, and skins of two blesbucks, a rhebok, a nyala, a caracal, and a fallow deer. See South African Professional Hunting Registers & Trophy Export Applications # # 29156 & 29157, Ex. A to Aff. of Joseph Moine at 12-13, Ex. G to IF Motion (ECF 53-9); Danner-Cargolux Motion at 2.
Plaintiffs hired Rex Freight Forwarders ("Rex"), a South African business entity that is not a party to this case, to arrange for shipment of the Lion Trophies to the United States. See Danner-Cargolux Motion at 2; IF Motion at 3; Cargolux Motion at 2. The process of clearing the Cargo for export from South Africa with various South African agencies apparently took several months. See generally Ex. A to Aff. of Joseph Moine at 9-19, Ex. G to IF Motion (ECF 53-9).
Rex hired Cargolux to transport the Cargo to the United States. See Cargolux Air Waybill, Ex. 1 to Decl. of Joseph M. Joyce, Ex. D to Cargolux Motion (ECF 54-5). The Air Waybill for the flight listed Rex as the "shipper." International Freight, which was hired by plaintiffs as their United States customs agent and freight forwarder, was listed as the "consignee." Id. The Cargo was described as two crates containing "consolidated cargo of dip & pack trophies," with a "gross weight" of 114 kilograms. Id. The following text appears in the front, upper right corner of the Air Waybill, id.:
The reverse side of the Air Waybill contained a "Notice Concerning Carriers' [sic] Limitation of Liability," which stated that the "Warsaw Convention may be applicable" and that the Warsaw Convention "in most cases limits the liability of the carrier in respect of loss, damage or delay to cargo" to certain amounts. Id. (capitalization altered). The reverse side of the Air Waybill also contained several "Conditions of Contract," including provisions purporting to limit the carrier's liability for lost or damaged cargo both in circumstances in which the Warsaw Convention applied, as well as those in which the convention was inapplicable. Id.
On the front of the Air Waybill, Rex listed the "Declared Value for Carriage" as "NDV," (i.e., no declared value). Id. The Air Waybill also contained a blank for the shipper to indicate the "Amount of Insurance," accompanied by the following instruction: "INSURANCE — If carrier offers insurance, and such insurance is requested in accordance with the conditions thereof, indicate amount to be insured in figures in box marked `Amount of Insurance'." Id. Rex listed the amount of insurance as "NIL." Id.
In November 2007, Cargolux transported the Cargo by air from Johannesburg, South Africa to Seattle, Washington. It arrived at Seattle-Tacoma International Airport ("SEA") on or about November 23, 2007. While the Cargo was awaiting clearance by United States Customs and other federal agencies for formal entry into the United States, it was placed in a bonded warehouse operated by CAS,
The parties agree that International Freight was hired by plaintiffs, upon referral from Atcheson Taxidermy (their taxidermist in Butte, Montana), to act as plaintiffs' customs broker and freight forwarder. See Danner-IF Motion at 2; IF
A "`[c]ustoms broker' means a person who is licensed ... to transact customs business on behalf of others." 19 C.F.R. § 111.1. In turn, "customs business" includes "activities involving transactions with [U.S. Customs] concerning the entry and admissibility of merchandise, its classification and valuation, [and] the payment of duties, taxes, or other charges assessed or collected by [U.S. Customs] on merchandise by reason of its importation." Id.
The parties do not dispute that International Freight's duties as a customs broker consisted, in the words of Joseph Moine, International Freight's Chief Financial Officer and corporate designee, of "clear[ing] the cargo through U.S. Fish and Wildlife and U.S. Customs," as well as the "USDA." Deposition of Joseph Moine ("Moine Dep.") at 12.
As noted, International Freight also served as a freight forwarder. A "freight forwarder is one who hires independent common or contract carriers" to transport goods for a shipper. Shippers' Co-op., Inc. v. I.C.C., 308 F.2d 888, 891 (9th Cir.1962). In other words, a freight forwarder "facilitates the movement of cargo" by, in essence, acting as a "`travel agent'" for cargo. Prima U.S. Inc. v. Panalpina, Inc., 223 F.3d 126, 129 (2d Cir.2000). According to Mr. Moine, International Freight's responsibility was to arrange for transportation of the Cargo to the taxidermist in Montana. Moine Dep. at 12; see also IF Reply at 3. However, International Freight does not physically handle or transport cargo. Moine Dep. at 27, 32, 55, 57. Rather, it hires other companies to do so. Id. at 27.
The Cargo was cleared by U.S. Fish & Wildlife as well as U.S. Customs on or about November 28, 2007.
At 7:24 p.m. on November 30, 2007, a driver, Kim Keep, signed a CAS warehouse delivery order for the Cargo, accepting receipt of the two crates. See Ex. 1 to Decl. of Roxana Alvarado, Ex. B to Cargolux Motion (ECF 54-3). In his deposition, Mr. Moine stated that he could "only assume" that Keep was a driver employed by Even-Rock. Moine Dep. at 36.
On or about December 5, 2007, Midwest Motor Express, the trucking company hired by International Freight to transport the Cargo to Atcheson Taxidermy, arrived at Even-Rock's warehouse to pick up the Cargo, but the crates could not be located. See IF Motion at 4; Moine Dep. at 41. An International Freight employee, Mary Terry, contacted other entities that had been involved with the transmission of the Cargo, including Cargolux and Rex, in an attempt to locate the Cargo, and filed a "Preliminary Notice of Claim" with CAS. See Danner-IF Motion at 3; Ex. 11 to Danner-IF Motion (ECF 55-13); Ex. 17 to Danner-IF Motion (ECF 55-19). According to Mr. Moine, however, no one from International Freight attempted to contact the driver, Kim Keep, who purportedly had picked up the Cargo from CAS's warehouse. Moine Dep. at 44-45.
Gordon Chinn, Cargolux's corporate designee, testified that Cargolux and its ground handling agents use a computer system called "E-Champ" for tracking of cargo. See Chinn Dep. at 50, 52, 54, 70. If a Cargolux package is received at the wrong destination, Cargolux or its ground handling agent at the incorrect destination can generate an "alert" in the E-Champ system associated with the package's air waybill, such that a "teletype message" would be sent to the Cargolux facility at the correct destination, and the alert would be "in the system ... every time you pull the air waybill up." Id. at 50. However, the Menzies warehouse did not generate an E-Champ alert regarding the Cargo. Id. at 96. Cargolux's first indication that Menzies had possession of the Cargo came by way of a phone call in July 2008 from Menzies, in Vancover, to Cargolux's Seattle office.
After the Cargo was located in Vancouver, International Freight coordinated its return to the United States, including its clearance through Canadian Customs. IF Motion at 4. Atcheson Taxidermy then hired a trucking company to transport the Cargo to Atcheson in Butte, Montana. Deposition of Dennis Danner at 87, Ex. A to IF Motion (ECF 53-3). The Cargo arrived at Atcheson Taxidermy in September 2008. Affidavit of Dennis Danner ¶ 13, Ex. 1 to Danner-Cargolux Motion (ECF 55-3). According to Mr. Danner, Atcheson discovered during the tanning process that two of the Lion Trophies (specifically, those of Alex and Coletta) were irreparably damaged,
This suit followed. Plaintiffs filed their original Complaint (ECF 1) on November 23, 2009. The currently operative pleading is plaintiffs' Amended Complaint (ECF 6), filed on December 18, 2009, which contains six counts: breach of contract against International Freight (Count I); negligence against International Freight (Count II); negligence against Even-Rock (Count III);
Additional facts will be included in the discussion.
Before addressing the merits, I must consider whether the Court possesses subject matter jurisdiction. Plaintiffs asserted subject matter jurisdiction on the basis of diversity of citizenship. See Amended Complaint at 2 (ECF 6); 28 U.S.C. § 1332.
All of the plaintiffs apparently are Maryland citizens. See Amended Complaint ¶¶ 1-3. If any defendant is also a Maryland citizen, complete diversity is not present. See Cent. W. Va. Energy Co. v. Mountain State Carbon, LLC, 636 F.3d 101, 103 (4th Cir.2011) ("With the exception of certain class actions, Section 1332 requires complete diversity among parties, meaning that the citizenship of every plaintiff must be different from the citizenship of every defendant.") (footnote omitted). Upon review of plaintiffs' Amended Complaint, however, it is impossible to discern the citizenship of the defendants, so as to determine whether diversity jurisdiction is satisfied.
To illustrate, as to CAS and Even-Rock, which are corporations, plaintiffs asserted only their principal places of business (the states of New York and Washington, respectively), see Amended Complaint ¶¶ 5, 7, and did not allege the states in which the defendants are incorporated. But see 28 U.S.C. § 1332(c)(1) (providing that, for purposes of diversity jurisdiction, "a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business") (emphasis added). As to International Freight, which is a limited liability company, plaintiffs alleged only that defendant's principal place of business is in Washington state. See Amended Complaint ¶ 4. However, "[f]or purposes of diversity jurisdiction, the citizenship of a limited liability company ... is determined by the citizenship of all of its members." Mountain State, supra, 636 F.3d at 103; see also Gen. Tech. Applications, Inc. v. Exro Ltda., 388 F.3d 114, 120 (4th Cir.2004).
With regard to Cargolux, the record does not make clear whether it is incorporated in a United States jurisdiction (as suggested by its alleged "d/b/a" name,
The citizenship of foreign corporations under 28 U.S.C. § 1332 has long been the subject of "unfortunate doubt" in the federal courts. 13F WRIGHT, MILLER & COOPER, FEDERAL PRACTICE & PROCEDURE § 3624, at 69 (2009, 2011 Supp.); see generally id. § 3628. A recent amendment to § 1332(c)(1) aims to resolve this doubt by providing that a corporation (whether foreign or domestic) is deemed "a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business." 28 U.S.C. § 1332(c)(1), as amended by the Federal Courts Jurisdiction and Venue Clarification Act of 2011, Pub.L. No. 112-63, 125 Stat. 758, § 102 (Dec. 7, 2011). However, the amendment applies only to cases (unlike this one) that are "commenced on or after" January 6, 2012. See id. § 105(a). In any event, plaintiffs failed sufficiently to specify Cargolux's citizenship under any standard, because they alleged only that Cargolux has its principal place of business in the state of Washington. See Amended Complaint ¶ 6.
In sum, this Court might possess diversity jurisdiction, but it is not possible to determine whether it does from plaintiffs' Amended Complaint. Nor is the uncertainty resolved by the balance of the record. To be sure, there is no affirmative suggestion in the record that any of the defendants is a Maryland citizen. Nor has any party or the Court previously raised this jurisdictional issue. Nevertheless, federal courts "have an independent obligation to determine whether subject-matter jurisdiction exists, even when no party challenges it." Hertz Corp. v. Friend, ___ U.S. ___, 130 S.Ct. 1181, 1193, 175 L.Ed.2d 1029 (2010). "No court can ignore" a jurisdictional defect, once it is discovered; "rather a court, noticing the defect, must raise the matter on its own." Wis. Dept. of Corrections v. Schacht, 524 U.S. 381, 389, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998).
However, plaintiffs' inadequate pleading of diversity jurisdiction does not create an insurmountable hurdle. This is because, as discussed, infra, some of plaintiffs' claims against Cargolux arise under federal law. Thus, the Court possesses original jurisdiction over those claims pursuant to federal question jurisdiction, see 28 U.S.C. § 1331, and, even in the absence of complete diversity, it may exercise supplemental jurisdiction over the other claims against Cargolux and the claims involving the other parties that "form part of the same case or controversy." 28 U.S.C. § 1367(a).
Summary judgment is governed by Rule 56 of the Federal Rules of Civil Procedure, which provides, in part, that a court "shall grant summary judgment if the movant
In resolving a summary judgment motion, the court must view all of the facts, including reasonable inferences to be drawn from them, in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); see also Dennis v. Columbia Colleton Med. Ctr., Inc., 290 F.3d 639, 645 (4th Cir.2002). "A party opposing a properly supported motion for summary judgment `may not rest upon the mere allegations or denials of [its] pleadings,' but rather must `set forth specific facts'" showing that there is a triable issue. Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir.2003) (quoting former Fed.R.Civ.P. 56(e)), cert. denied, 541 U.S. 1042, 124 S.Ct. 2171, 158 L.Ed.2d 732 (2004). See Celotex Corp. v. Catrett, 477 U.S. 317, 322-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The "judge's function" in reviewing a motion for summary judgment is not "to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Liberty Lobby, 477 U.S. at 249, 106 S.Ct. 2505. If "the evidence is such that a reasonable jury could return a verdict for the nonmoving party," there is a dispute of material fact that precludes summary judgment. Id. at 248, 106 S.Ct. 2505.
When, as here, more than one party has filed a motion for summary judgment, the court must consider "each motion separately on its own merits `to determine whether [any] of the parties deserves judgment as a matter of law.'" Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir.2003) (citation omitted), cert. denied, 540 U.S. 822, 124 S.Ct. 135, 157 L.Ed.2d 41 (2003). All of the "motions must be denied if the court finds that there is a genuine issue of material fact. But if there is no genuine issue and one or the other party is entitled to prevail as a matter of law, the court will render judgment." 10A WRIGHT, MILLER & KANE, FEDERAL PRACTICE & PROCEDURE § 2720, at 336-37 (3d ed. 1998, 2010 Supp.).
In this case, the Cargolux Defendants and International Freight have filed separate motions for summary judgment. Defendants seek determinations that they are not liable to plaintiffs or, in the alternative, a ruling that the amount of damages recoverable by plaintiffs is reduced as a matter of law, effectively to zero. Defendants make no arguments with respect to their cross-claims against each other.
For their part, plaintiffs only seek partial summary judgment against defendants; at this juncture, they seek judgment as to liability, but not damages. See ECF 64 at 1. Plaintiffs contend that the Court should find defendants jointly liable as a matter of law and that, "[a]s joint tortfeasors, Defendants should have the burden of sorting out their respective level of fault." Danner-IF Motion at 11.
Preliminarily, I note that no party has mentioned the issue of choice of law. Rather, the parties have briefed the issues as if substantive Maryland law governs all of plaintiffs' claims. Although they have cited persuasive authority from other states and various federal courts, and although the Cargolux Defendants contend that plaintiffs' negligence claims against them are preempted by federal law, the parties rely primarily upon Maryland law as to the substantive common law principles at issue. Setting aside the issues of
"When choosing the applicable state substantive law while exercising diversity or supplemental jurisdiction, a federal district court applies the choice of law rules of the forum state." Ground Zero Museum Workshop v. Wilson, 813 F.Supp.2d 678, 696 (D.Md.2011) (citing, inter alia, ITCO Corp. v. Michelin Tire Corp., 722 F.2d 42, 49 n. 11 (4th Cir.1983), cert. denied, 469 U.S. 1215, 105 S.Ct. 1191, 84 L.Ed.2d 337 (1985)). Maryland is, of course, the forum state of this Court. Under Maryland's choice-of-law principles, tort claims are governed by the law of the state where the alleged harm occurred ("lex loci delicto"). See, e.g., Proctor v. Washington Metropolitan Area Transit Auth., 412 Md. 691, 726, 990 A.2d 1048, 1068 (2010). And contract claims are ordinarily governed by the law of the state where the contract was made ("lex loci contractus"), unless the parties to the contract agreed to be bound by the law of another jurisdiction. See, e.g., Am. Motorists Ins. Co. v. ARTRA Group, Inc., 338 Md. 560, 573, 659 A.2d 1295, 1301 (1995). The record before me strongly suggests that the harm inflicted by the defendants' alleged negligence occurred in Seattle (or, perhaps, in Vancouver). The contract between Cargolux and plaintiffs' agent, Rex, was apparently made in South Africa. The record does not make clear where plaintiffs' contractual arrangements with International Freight were made, but Washington appears at least as plausible a location as Maryland. In sum, it is quite doubtful that Maryland substantive law ought to control any of the claims in this case.
Nevertheless, Maryland choice-of-law principles also contain guidance for courts when the parties fail to address a choice-of-law issue. In Chambco, Div. of Chamberlin Waterproofing & Roofing, Inc. v. Urban Masonry Co., 338 Md. 417, 421, 659 A.2d 297, 299 (1995), the Maryland Court of Appeals said:
Accord Felland Ltd. P'ship v. Digi-Tel Commc'ns, LLC, 384 Md. 520, 530 n. 1, 864 A.2d 1027, 1033 n. 1 (2004).
Here, the parties rely upon Maryland law and have not identified any relevant legal principles that might differ in other jurisdictions. In the absence of any analysis presented by the parties, I decline to undertake a choice-of-law analysis. See Ohio Sav. Bank v. Progressive Cas. Ins. Co., 521 F.3d 960, 962 (8th Cir.2008) ("Like the district court, we will ignore what might be a complex choice of law analysis because the parties have not identified a relevant state law conflict."); Cleaning Authority, Inc. v. Neubert, 739 F.Supp.2d 807, 820 (D.Md.2010) ("`Choice-of-law analysis becomes necessary ... only if the relevant laws of the different states lead to different outcomes.'") (citation omitted). Accordingly, except with respect to the issues of federal law that control plaintiffs' negligence claims against the Cargolux Defendants, I will resolve the parties' disputes by applying Maryland law, in accordance
In arguing that International Freight is liable as a matter of law, plaintiffs describe their contract and negligence claims as arising from the bailment of the Cargo. See Danner-IF Motion at 5. International Freight argues principally that it cannot be liable to plaintiffs for loss of the Cargo because it never took physical possession of the Cargo, nor was it obligated to do so. Therefore, it maintains that it did "not enter into a bailment relationship" with plaintiffs. IF Opp. at 6.
According to plaintiffs, International Freight was a bailee of the Cargo, and Even-Rock was International Freight's "agent." Danner-IF Motion at 6. Plaintiffs reason that International Freight used Even-Rock "on a daily basis for [International Freight's] business of transporting and warehousing cargo," and International Freight directed Even-Rock "to pick up the Cargo and take it to their warehouse at which point [International Freight] (the named consignee) had the exclusive power to control the movement of the Cargo, either by itself or through an agent trucker [International Freight] hired." Danner-IF Motion at 5-6. Rejecting this assertion, International Freight contends that Even-Rock was not its agent because, inter alia, it had no authority over the hiring or management of Even-Rock's employees; it exerted no control over Even-Rock with respect to its transportation or storage of cargo; it did not supervise Even-Rock's daily activities; and Even-Rock did not act primarily for International Freight's benefit.
Before addressing the parties' arguments, I pause to elucidate the concept of bailment.
"A bailment is `the relation created through the transfer of the possession of goods or chattels, by a person called the bailor to a person called the bailee, without a transfer of ownership, for the accomplishment of a certain purpose, whereupon the goods or chattels are to be dealt with according to the instructions of the bailor.'" Broadview Apts. Co. v. Baughman, 30 Md.App. 149, 151, 350 A.2d 707, 709 (1976) (citation omitted). Put more simply, a "bailment may be defined as the rightful possession of goods by one who is not the owner." RICHARD A. LORD, 19 WILLISTON
Under Maryland law, a bailment consists of the following elements: (1) "`an existing subject-matter'" consisting of personal property; (2) "`a contract with reference to [the property] which involves possession of it by the bailee'"; (3) "`delivery, actual or constructive,'" of the property to the bailee; and (4) "`acceptance, actual or constructive,'" of the property by the bailee. John T. Handy Co. v. Carman, 102 Md.App. 188, 201-02, 648 A.2d 1115, 1122 (1994) (quoting Gen. Refining Co. v. Int'l Harvester Co., 173 Md. 404, 414-15, 196 A. 131 (1938)) (emphasis omitted); see also PAUL MARK SANDLER & JAMES K. ARCHIBALD, PLEADING CAUSES OF ACTION IN MARYLAND § 2.20, at 73-74 (4th ed. 2008, 2010 Supp.).
A bailment relationship can arise in a variety of ways. In modern usage, there are three general categories of bailments: "`(1) for the sole benefit of the bailor; (2) for the sole benefit of the bailee; and (3) for the mutual benefit of both.'" John T. Handy, 102 Md.App. at 199-200, 648 A.2d at 1121 (quoting 8 Am. Jur.2d Bailments § 17 (1980)). Assuming, arguendo, that bailment principles apply here, plaintiffs contend, and I agree, that the alleged bailments created in this case would be bailments for mutual benefit, also known as bailments for hire. Compare, e.g., Fox Chevrolet Sales, Inc. v. Middleton, 203 Md. 158, 160-61, 99 A.2d 731, 732 (1953) ("when an automobile is delivered to one who, for a consideration, undertakes to repair it, the contract is one of bailment for hire, or for mutual benefit"); Schleisner Co. v. Birchett, 202 Md. 360, 363-64, 96 A.2d 494, 496 (1953) (holding that where employee was required as a condition of employment to keep her coat in an "executive closet" and "denied use of a locker," the relationship between the employer and employee, as to the coat, was one of "`bailment for profit, for the mutual benefit of the parties'") (citation omitted), with Mickey v. Sears, Roebuck & Co., 196 Md. 326, 330, 76 A.2d 350, 352 (1950) (holding that, where customer inadvertently left his briefcase at a store, the store "became a gratuitous bailee of the brief case").
It is "quite clear," under Maryland law, "that a mutual benefit bailment is a contract." Fisher v. Tyler, 284 Md. 100, 108, 394 A.2d 1199, 1203-04 (1978).
Of import here, "when the subject matter of a mutual bailment for hire is delivered by the bailor to the bailee, it must be returned by the bailee in substantially the same condition ordinary wear and tear excepted." Charles J. Miller, Inc. v. McClung-Logan Equip. Co., 40 Md.App. 585, 588, 392 A.2d 1153, 1155 (1978). Put another way, the "bailee in accepting possession of the bailed property assumes the duty of exercising reasonable care in protecting it." Broadview Apts., supra, 30 Md.App. at 151, 350 A.2d at 709.
When bailed property is lost or damaged, Maryland courts apply a burden-shifting procedure with respect to the burden of production in a suit against a bailee, as described by the Maryland Court of Special Appeals in McClung-Logan, 40 Md.App. at 588, 392 A.2d at 1155:
See also Stehle Equip. Co. v. Alpha Constr. & Dev. Co., 247 Md. 210, 213, 230 A.2d 654, 655 (1967) ("Once appellant proved the delivery, the bailment for hire, and the unexplained failure to return ... a prima facie case of negligence was made out."); Trans-System Serv., Inc. v. Keener, 249 Md. 369, 372, 239 A.2d 897, 898 (1968) ("the burden of proof remains upon the [bailor] to show negligence on the part of the [bailee] and ... the prima facie case established by the failure to return the bailed property simply shifts to the [bailee] the burden of going forward with the evidence showing that it was not negligent").
A bailee may be liable for negligence, but is not strictly liable for loss of bailed property. This is because a bailee for hire "is not an insurer of the safety of the property entrusted to its care, but ... owes only such care as persons of common prudence in their own situation and business usually use in the custody and keeping of similar property belonging to themselves." Trans-System, 249 Md. at 372, 239 A.2d at 898 (internal citation omitted);
In arguing that International Freight is liable for the loss of the Cargo, plaintiffs suggest that a freight forwarder is a bailee, subject to a bailee's duty of reasonable care in the safekeeping of bailed property. Although plaintiffs recognize that International Freight did not take actual physical possession of the Cargo, they contend that International Freight is vicariously liable for the alleged negligence of Even-Rock because, according to plaintiffs, Even-Rock was International Freight's "agent."
At the outset, it is important to observe that the term "freight forwarder" has more than one meaning. As the Supreme Court observed in Chicago, Milwaukee, St. Paul & Pacific Railroad Co. v. Acme Fast Freight, Inc., 336 U.S. 465, 69 S.Ct. 692, 93 L.Ed. 817 (1949), one must "distinguish between two very different kinds of `forwarders.'" Id. at 484, 69 S.Ct. 692. The Supreme Court stated, id.:
As the Supreme Court explained, Congress regulated the second type of freight forwarder, which takes actual physical possession of cargo in order to consolidate small shipments into larger lots. See id. at 485, 69 S.Ct. 692 ("The Freight Forwarder Act encompasses only the second type of forwarder described above."); 49 U.S.C. § 13102(8) (definition of "freight forwarder" in the Freight Forwarder Act, a component of the Interstate Commerce Act). However, there is no indication in the record that International Freight operated as the kind of freight forwarder that takes actual possession of cargo. Rather, the record reflects that International Freight was hired merely to arrange transportation of plaintiffs' Cargo. In the words of the Supreme Court, International
In my view, a freight forwarder of the first variety described by the Supreme Court, which does not take physical possession of cargo, is not a bailee. Thus, no bailment relationship was established if International Freight did not take or agree to take physical possession of plaintiffs' Cargo. In this regard, I am guided by the Supreme Court and by an instructive Florida appellate decision, Monroe Systems for Business, Inc. v. Intertrans Corp., 650 So.2d 72 (Fla.App.1994), which involved circumstances analogous to this case (although no party has cited it).
In Acme Fast Freight, the Supreme Court observed that an "agent-forwarder," i.e., the "original[]" type of freight forwarder whose "duties, as agent of the shipper, went no farther than procuring transportation by carrier and handling the details of shipment," was "liable to the shipper only for its own negligence, including negligence in selecting a carrier," and was not "liable for loss or damage [regardless of] whether it or an underlying carrier had been at fault." Acme, 336 U.S. at 484-85, 69 S.Ct. 692.
Monroe exemplifies the distinction made in Acme Fast Freight. In Monroe, the plaintiff was an importer of calculators manufactured in Asia. The calculators were shipped to the Port of Miami, and "Monroe hired Intertrans, a freight forwarder, to serve as its Miami agent." 650 So.2d at 73. Monroe's calculators were to be stored in warehouses in Miami, until Intertrans arranged for shipment of them in accordance with Monroe's instructions. Id. The calculators fell into two groups: (1) products imported for domestic sale in the United States; and (2) so-called "in-bond" products that were not intended to be imported into the United States, but rather would be held in bonded warehouses for later shipment to Latin America (and thus would never incur United States customs duties). Id. at 74. With respect to the calculators imported for domestic sale, Intertrans stored the calculators in its own warehouse until shipment, and "[w]hile the goods were in the warehouse, Intertrans was clearly the bailee." Id. However, Intertrans did not operate a bonded warehouse, and so "it was agreed that Intertrans would select a customs-bonded warehouse for storage of Monroe's in-bond goods.... Thus, under the agreement and operative statutes, Intertrans would never obtain physical custody of the in-bond goods because Intertrans could not legally do so." Id. To store the in-bond calculators, Intertrans selected a bonded warehouse operated by another party, IWDC, which "took its instructions from Intertrans and submitted its bills to Intertrans," who in turn billed Monroe. Id. Subsequently, Monroe's in-bond calculators were destroyed as a result of a toxic chemical fire at IWDC's warehouse. Id.
In the suit that followed, Monroe asserted two claims against Intertrans. First, Monroe alleged that Intertrans was negligent in selecting IWDC to store the goods, because Intertrans should have inspected IWDC's warehouse and discovered various alleged fire code violations at the facility. This count "went to the jury and Intertrans was exonerated." Id. at 75. Second, Monroe alleged that "Intertrans and IWDC were both bailees of the in-bond goods," and that "Intertrans was vicariously liable for the negligence of IWDC, even if Intertrans itself was entirely without fault." Id. The trial court held that Intertrans was not vicariously liable as a matter of law, and dismissed the count, prompting Monroe's appeal. Id.
As a preliminary matter, the Florida appellate court held that Intertrans was
In Monroe, Monroe hired Intertrans as Monroe's agent to secure IWDC's services as a bailee. Here, plaintiffs argue that they hired International Freight as a bailee, and International Freight in turn secured Even-Rock's services as International Freight's agent. In my view, however, the situation is the same as in Monroe: plaintiffs hired International Freight as their agent to secure the services of a bailee, which happened to be Even-Rock. In other words, International Freight was not the bailee of the Cargo; it was plaintiffs' agent in selecting a bailee. And, Even-Rock was not International Freight's agent; it was the bailee of the Cargo (hired by plaintiffs' agent, International Freight).
However, the Monroe Court did not rest its conclusion solely on the determination that Intertrans was not a bailee. The court "[a]ssum[ed] for purposes of discussion that Intertrans was the bailee of the in-bond goods," and went on to determine whether Intertrans could be held vicariously liable for IWDC's negligence. Id. at 76-77. Applying Florida bailment law (which is consistent with the Maryland bailment law I have discussed), the Monroe Court explained that a "`bailee is not an insurer of the property delivered into its keeping and is not liable for the loss of the thing bailed, except where there is a breach of the duty of the requisite degree of care.'" Id. at 77 (citation omitted). The appellate court adopted the trial court's reasoning that, "since the negligence count and the bailment count would both be governed by a negligence standard, the case should go to the jury solely under the negligence count." Id. at 75. It held, id. at 77:
In my view, the Monroe Court's analysis is equally applicable here. To be sure, there was no allegation in Monroe that Intertrans was liable on a theory that IWDC acted as Intertrans's "agent." However, applying well settled Maryland principles of agency, vicarious liability, and
Under Maryland agency law, three characteristics have "particular relevance to the determination of the existence of a principal-agent relationship: (1) the agent's power to alter the legal relations of the principal; (2) the agent's duty to act primarily for the benefit of the principal; and (3) the principal's right to control the agent." Id. at 503, 735 A.2d at 1048. As to the third factor, the Maryland Court of Appeals has explained, id. at 507-08, 735 A.2d at 1050:
In Maryland, a principal may, in some circumstances, be "`liable to third persons in a civil suit, for the ... torts, negligences, and other malfeasances, or misfeasances, and omissions of duty of his agent....'" Sanders v. Rowan, 61 Md.App. 40, 54, 484 A.2d 1023, 1030 (1984) (citations and some internal quotation marks omitted). This doctrine of vicarious liability is commonly referred to as respondeat superior, and typically arises in the employment context. See Southern Mgmt. Corp. v. Taha, 378 Md. 461, 481, 836 A.2d 627, 638 (2003) ("On a successful claim under the doctrine of respondeat superior, an employer will be held jointly and severally liable for the tortious acts committed by its employee."); Barclay v. Ports Am. Balt., Inc., 198 Md.App. 569, 577-78, 18 A.3d 932, 937 (2011) ("[T]he doctrine of respondeat superior ... holds an employer vicariously — and jointly and severally — liable for the tortious conduct of an employee, where it has been shown that the employee was acting within the scope of the employment relationship at that time.").
"Generally, a principal is vicariously liable for the negligence of its agent when the two share a master-servant relationship but not when the agent is merely an independent contractor of the principal." Hunt v. Mercy Med. Ctr., 121 Md.App. 516, 545, 710 A.2d 362, 376 (1998). In the taxonomy of agents, employee/servants, and independent contractors, a "`master is a species of principal and a servant is a species of agent,'" Green, 355 Md. at 509, 735 A.2d at 1051 (quoting RESTATEMENT (SECOND) OF AGENCY § 2 cmt. a), and there are different "species" of independent contractor: those who are agents and those "from an entirely separate genus of `non-agents.'" Brooks v. Euclid Sys. Corp., 151 Md.App. 487, 517, 827 A.2d 887, 904, cert. denied, 377 Md. 276, 833 A.2d 31 (2003). Put another way, "all masters are principals and all servants are agents, but only when the level of control is sufficiently high does a principal become a master and an agent a servant." Green, 355 Md. at 509, 735 A.2d at 1051. "`Agents who are not servants are regarded as independent contractors.'" Brooks, 151 Md.App. at 517, 827 A.2d at 904 (quoting Sanders, supra, 61 Md.App. at 50, 484 A.2d at 1028). But, "[n]ot all independent contractors are agents. `A person who contracts to accomplish something for another or to deliver something to another, but who is not acting as a fiduciary for the other, is a non-agent independent contractor.'"
Thus, the dispute between plaintiffs and International Freight as to whether Even-Rock was an "agent" of International Freight is beside the point. The question of International Freight's vicarious liability for Even-Rock's alleged negligence hinges not on agency, but on whether Even-Rock was International Freight's "servant" or, instead, an independent contractor. The distinction between a servant and an independent contractor lies in the degree of control exerted by the employer.
In Kersten v. Van Grack, Axelson & Williamowsky, P.C., 92 Md.App. 466, 608 A.2d 1270 (1992), the Maryland Court of Special Appeals explained that "`the decisive test in determining whether the relation of master and servant exists is whether the employer has the right to control and direct the servant in the performance of his work and in the manner in which the work is to be done.'" Id. at 469-70, 608 A.2d at 1272 (citation omitted) (emphasis in original). See also Balt. Harbor Charters, Ltd. v. Ayd, 365 Md. 366, 387, 780 A.2d 303, 315-16 (2001) ("`[T]he test in determining whether a person is a servant or an independent contractor is whether the employer has the right of control over the employee in respect to the work to be performed.'") (citation omitted); Hunt, supra, 121 Md.App. at 545, 710 A.2d at 376 ("The ultimate test for whether an agent is also a servant is control....").
In other words, a "servant is a person who is employed to perform ... services for another ... and who, in respect to his physical movements in the performance of the service, is subject to the other's control or right of control." Globe Indem. Co. v. Victill Corp., 208 Md. 573, 581-82, 119 A.2d 423, 427 (1956); accord Green, 355 Md. at 508-09, 735 A.2d at 1050-51. Conversely, an independent contractor is generally "`free to exercise his own judgment and discretion as to the means and assistants that he may think proper to employ about the work, exclusive of the control and direction, in this respect, of the party for whom the work is being done.'" Baltimore Harbor Charters, 365 Md. at 387 n. 15, 780 A.2d at 316 n. 15. Notably, "`[t]he reservation of some control over the manner in which work is done does not destroy the independent contractor relationship where the contractor is not deprived of his judgment in the execution of his duties.'" Brooks, 151 Md.App. at 510, 827 A.2d at 900 (quoting Schweizer v. Keating, 150 F.Supp.2d 830, 840 (D.Md. 2001)).
On the undisputed facts in the record before me, there is no indication that Even-Rock was a servant of International Freight, rather than an independent contractor. In this regard, it is salient that the two companies appear to be independent businesses. Moreover, International Freight did not exercise control over Even-Rock's selection of drivers. Indeed, International Freight's corporate designee, Joseph Moine, did not know whether Kim Keep was a driver for Even-Rock, but "assumed" so. It is undisputed that International Freight instructed Even-Rock to pick up the Cargo and hold it at Even-Rock's warehouse, but plaintiff has advanced no evidence that International Freight directed the details of how Even-Rock was to accomplish that task. The fact that International Freight frequently used Even-Rock's services did not transform Even-Rock into a servant of International Freight.
The distinction between a servant and an independent contractor is critical here, because "[g]enerally, an `employer of
Of course, an employer is liable for its own negligence "`in selecting, instructing, or supervising the contractor.'" Appiah, 416 Md. at 559, 7 A.3d at 551 (citation omitted). As the Florida court in Monroe observed, a bailee can be liable for negligence in selecting a sub-bailee. See Monroe, 650 So.2d at 77. One Maryland bailment case seems to illustrate this principle. In Goldberg v. Kunz, 185 Md. 492, 45 A.2d 279 (1946), the Court of Appeals upheld a judgment against a bailee for damage to the bailor's automobile, which had been "practically demolished" in an accident while being driven, without authorization, by the bailee's employee. Id. at 494, 45 A.2d at 280. The employee's unauthorized use of the vehicle placed the case outside the scope of respondeat superior liability, because the use was outside the scope of employment. See id. at 497, 45 A.2d at 281. Nevertheless, the Court of Appeals held the bailee liable, stating that "`[i]t was the duty of the defendant to use ordinary care to employ a trustworthy servant in charge of the garage,'" and that the bailee placed the employee "in complete charge of the garage on a Sunday," despite knowing "nothing whatever about" the employee, "who had worked for [the bailee] for only three weeks." Id. at 495-97, 45 A.2d at 280-81 (citation omitted).
Corpus Juris Secundum also supports the foregoing analysis. It states that a bailee is not liable for the negligence of independent contractors to whom the bailed property is entrusted, "in the absence of a showing of negligence in the selection of the contractor." 8 C.J.S. Bailments § 70 (2011).
Here, plaintiffs do not allege, and the record does not reflect, that International Freight was negligent in selecting Even-Rock to retrieve and store the Cargo. Therefore, even if, arguendo, International Freight was a bailee of the Cargo under plaintiffs' theory of constructive possession, it is nevertheless clear that International Freight discharged its duty of ordinary care and its obligation to arrange for transportation of the Cargo by hiring
The Cargolux Defendants' principal argument is that plaintiffs' negligence claims against them (i.e., Counts V and V I) are precluded by 49 U.S.C. § 41713(b)(1), which is the preemption provision of the Airline Deregulation Act of 1978 ("ADA"), Pub.L. No. 95-504, 92 Stat. 1705 (codified as amended in various sections of 49 U.S.C.).
The Cargolux Defendants contend that § 41713(b)(1) preempts plaintiffs' negligence claims against both Cargolux and CAS, because the claims are "related to a... service" that Cargolux provides, namely storing and accounting for cargo in connection with transporting it. Cargolux Motion at 9. The Cargolux Defendants rely, inter alia, upon an unreported decision of the Fourth Circuit, Wagman v. Federal Express Corp., 47 F.3d 1166, 1995 WL 81686 (4th Cir. Feb. 17, 1995), which they contend stands for the proposition that the ADA preempts common law tort claims against air carriers for cargo loss and damage. Although CAS, Cargolux's ground handling agent, is not an "air carrier" itself, the Cargolux Defendants argue that plaintiffs' claim against CAS is also preempted. In support, they cite two lower court decisions holding that the ADA's preemption provision applies to claims against "agents, servants and employees of an airline as well as the airline itself." Vail v. Pan Am Corp., 260 N.J.Super. 292, 616 A.2d 523, 528 (N.J.Super.Ct.App.Div.1992); see also Huntleigh Corp. v. La. State Bd. of Private Sec. Examiners, 906 F.Supp. 357, 362 (M.D.La. 1995).
In response, plaintiffs dispute that Cargolux is an "air carrier" within the meaning
Notably, the term "foreign air carrier" is separately defined. It means "a person, not a citizen of the United States, undertaking by any means, directly or indirectly, to provide foreign air transportation." 49 U.S.C. § 40102(a)(21).
Plaintiffs argue that Cargolux does not satisfy the definition of "air carrier" because it is not a "citizen of the United States" within the meaning of § 40102. Rather, plaintiffs contend that Cargolux is majority-owned by entities controlled by the Grand Duchy of Luxembourg. See Danner-Cargolux Motion at 5. Even if Cargolux is an "air carrier," plaintiffs contend that their claims against CAS are not precluded because "the storing of Plaintiffs' Cargo by CAS at CAS' warehouse was not `related to the ... service of an air carrier.'" Danner-Cargolux Motion at 5. In this connection, plaintiffs point out that, separate from the bill for air transportation of the Cargo that was paid by Rex to Cargolux, CAS invoiced International Freight (who in turn invoiced plaintiffs) for the storage of the Cargo at CAS's warehouse. See Danner-Cargolux Motion at 5-6. See also Moine Dep. at 38-39 (describing billing arrangements);
The Cargolux Defendants concede that Cargolux is a foreign air carrier, but maintain that foreign air carriers are covered by the ADA's preemption provision, despite the fact that they do not satisfy the definition of "air carrier" in 49 U.S.C. § 40102(a)(2). The Cargolux Defendants rely upon a recent decision of the Ninth Circuit, In re Korean Air Lines Co., 642 F.3d 685 (9th Cir.2011), in which the court reached that conclusion as a matter of first impression. In addition, they insist that CAS is covered by the preemption provision, notwithstanding its billing of International Freight for storage fees, because "the Air Waybill expressly provides that
Plaintiffs suggest that In re Korean Air Lines is not persuasive because, in their view, that decision disregards the "plain definitions expressly provided by Congress" in the ADA. Danner-Cargolux Reply at 1. But, they maintain that, even if Cargolux qualifies as an "air carrier," the ADA does not preempt "all tort claims relating to cargo," id. at 2, and the Cargolux Defendants' "conduct in wrongfully transporting Plaintiffs' cargo ... [to a] warehouse in a foreign country without the knowledge or consent of Plaintiffs is not an airline service" within the meaning of the ADA's preemption provision. Id. at 4.
In determining whether an airline's activity is a "service" for purposes of preemption, plaintiffs urge application of a three-part test articulated by then-District Judge Sonia Sotomayor in Rombom v. United Air Lines, Inc., 867 F.Supp. 214, 221-22 (S.D.N.Y.1994):(1) "whether the activity at issue in the claim is an airline service"; (2) "if the activity in question implicates a service, ... whether the claim affects the airline service directly or tenuously, remotely, or peripherally"; and (3) "whether the underlying tortious conduct was reasonably necessary to the provision of the service." The Rombom Court concluded: "If the tortious act did not occur during the service in question or the tortious act did not further the provision of a service in a reasonable manner, then the state tort claim should continue." Id. at 222.
I have considered the case law cited by the parties, as well as other case law uncovered in researching the matter. The Ninth Circuit's analysis in In re Korean Air Lines concerning whether the ADA's preemption provision applies to foreign air carriers is compelling, but it is ultimately unnecessary for me to resolve whether foreign air carriers are entitled to ADA preemption. This is because I conclude that, even assuming that Cargolux is an "air carrier" for preemption purposes, plaintiffs' negligence causes of action with respect to the misplacement of the Cargo are not foreclosed by the ADA's preemption provision. Rather, the case law dictates that such a claim arises under federal common law. I shall explain.
The Supreme Court has construed the ADA's preemption provision in two cases: Morales v. Trans World Airlines, Inc., 504 U.S. 374, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992), and American Airlines, Inc. v. Wolens, 513 U.S. 219, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995).
Morales arose from a declaratory judgment action initiated by certain airlines in
Although the state consumer protection provisions with respect to price advertising that were at issue in Morales are dissimilar to the common law negligence claims at issue here, Morales established several important principles. First, the Court discussed the legal landscape that existed before and after enactment of the ADA. It recounted, id. at 378-79, 112 S.Ct. 2031:
The ADA preserved federal enforcement authority over deceptive airline trade practices (initially vested in the CAB, and later in the Department of Transportation). Id. at 379, 112 S.Ct. 2031. Notably, however, as the Morales Court observed, the ADA "did not repeal or alter the saving clause in the prior law." Id. The saving clause, formerly codified in 49 U.S.C. App'x § 1506, is now codified in 49 U.S.C. § 40120(c). It states: "A remedy under this part is in addition to any other remedies provided by law."
In Wolens, supra, 513 U.S. 219, 115 S.Ct. 817, the Supreme Court again considered the scope of the ADA's preemption provision. In that case, participants in an airline's frequent flyer program filed class action suits against the airline, challenging the airline's retroactive changes to terms and conditions of the program. Id. at 222, 224, 115 S.Ct. 817. The participants asserted state common law claims for breach of contract, and also claimed that the changes to the program violated Illinois's Consumer Fraud Act. Id. at 225, 115 S.Ct. 817. In a straightforward application of Morales, the Court concluded that the plaintiffs' statutory claims were preempted by the ADA. See id. at 227-28, 115 S.Ct. 817. The Court commented: "This Illinois law, in fact, is paradigmatic of the consumer protection legislation underpinning the NAAG guidelines" that were at issue in Morales. Id. at 227, 115 S.Ct. 817.
In contrast, the Wolens Court held that the plaintiffs' common law breach of contract claims were not preempted. It reasoned: "We do not read the ADA's preemption clause ... to shelter airlines from suits alleging no violation of state-imposed obligations, but seeking recovery solely for the airline's alleged breach of its own, self-imposed undertakings." Id. at 228, 115 S.Ct. 817. The Court also remarked that the "conclusion that the ADA permits state-law-based court adjudication of routine breach-of-contract claims ... makes sense of Congress' retention of the FAA's saving clause." Id. at 232, 115 S.Ct. 817. In conclusion, the Court opined, id. at 232-33, 115 S.Ct. 817 (internal citation omitted):
Thus, the Supreme Court has clearly held that the ADA's preemption provision bars the states from directly regulating fares, routes, and services of air carriers, and also bars enforcement of state statutes of general application to the extent that they "relate to" fares, routes, and services. In contrast, the Court has indicated that state statutes that affect fares, routes, and services in only a "`tenuous, remote, or peripheral ... manner'" may not be preempted. Morales, 504 U.S. at 390, 112 S.Ct. 2031 (citation omitted). And, it has held that the ADA's preemption provision does not apply to state breach of contract suits, so long as the contract claim does not depend upon "enlargement or enhancement based on state laws or policies external to the agreement" between the plaintiff and the defendant airline. Wolens, 513 U.S. at 233, 115 S.Ct. 817. However, the Supreme Court has not commented on whether or in what degree common law tort claims, in general — or negligence claims regarding cargo loss or damage, in particular — are preempted by the ADA.
To my knowledge, the Fourth Circuit has addressed the ADA's preemption provision in a single reported opinion, which neither side has cited: Smith v. Comair, Inc., 134 F.3d 254 (4th Cir.1998). Smith involved claims under state tort law, but not claims concerning damaged or lost cargo.
In Smith, a passenger sued an airline for breach of contract, false imprisonment, and intentional infliction of emotional distress, after the airline refused to permit him to board a connecting flight (effectively detaining him at a layover airport for several hours) because its personnel at the passenger's originating airport had failed to check his identification. Id. at 256. The Fourth Circuit held that the passenger's contract claim was preempted by the ADA, because the airline "invoke[d] defenses provided by federal law" — specifically, federal regulations and directives that required inspection of passenger identification and granted airlines discretion over passenger boarding for safety reasons. Id. at 258. Addressing Wolens, the Court explained: "Wolens recognized that state contract claims escape preemption only when courts would be confined to the terms of the parties' agreement.... Because a court adjudicating [the passenger's] contract claim could not confine itself to the terms of the parties' bargain, Wolens is not controlling." Id.
Turning to the intentional tort claims, the Court stated: "To determine whether a claim has a connection with, or reference to an airline's prices, routes, or services, we must look at the facts underlying the specific claim." Id. at 259. It concluded that the passenger's tort claims were "based in part upon Comair's refusal of permission to board," and reasoned that "boarding procedures" are "[u]ndoubtedly... a service rendered by an airline." Id. Accordingly, the Court held that, "to the extent Smith's claims are based upon Comair's boarding practices, they clearly relate to an airline service and are preempted under the ADA." Id. But, it determined that the passenger's tort claims were not preempted to the extent that they were based on alleged actions other than denial of permission to board, stating, id.:
Wainwright's Vacations, LLC v. Pan American Airways Corp., 130 F.Supp.2d 712 (D.Md.2001), is also instructive. There, the district court held that a defamation claim based on derogatory remarks made by an airplane captain over the airplane's public address system was not preempted by the ADA. It reasoned that the purpose of the preemption provision was "`[t]o ensure that the states would not re-regulate what Congress had decided to de regulate,'" id. at 724 (quoting Taj Mahal Travel, Inc. v. Delta Airlines Inc., 164 F.3d 186, 191 (3rd Cir.1998)) (emphasis in original), and that the remarks at issue "were not related in more than a tenuous fashion to rates, routes, or services, and, indeed, were not necessary to carry out any regulated duty." Wainwright's, 130 F.Supp.2d at 724.
Although the foregoing cases provide guidance with respect to the scope of the ADA's preemption provision, none of them concerns tort liability for loss of or damage to cargo. As noted, the Cargolux Defendants rely on the Fourth Circuit's unreported decision in Wagman v. Federal Express Corp., supra, 47 F.3d 1166, 1995 WL 81686 (4th Cir. Feb. 17, 1995), for the proposition that such tort claims are preempted by the ADA.
In Wagman, the plaintiffs sued Federal Express, asserting claims of deceptive advertising under state consumer protection law, as well as negligence and breach of contract claims, arising out of Federal Express's failure timely to deliver to plaintiffs' attorney a package containing a signed complaint, which their attorney was to file in another case. "The complaint had to be filed the next delivery day to avoid the statute of limitations, but Federal Express delivered the package one day too late." Wagman, 1995 WL 81686, at *1. The district court granted summary judgment in favor of Federal Express as to all claims. See Wagman v. Federal Express Corp., 844 F.Supp. 247 (D.Md.1994).
On appeal, however, the plaintiffs did not press their tort or contract claims. See Wagman, 1995 WL 81686, at *1 ("On appeal, the Wagmans concede their negligence and breach of contract claims cannot survive summary judgment, but challenge the district court's entry of summary judgment on the claims based on Federal Express's allegedly deceptive advertising.") (emphasis added). Thus, the Fourth Circuit considered only whether the ADA preempted the plaintiffs' claim under state statutory consumer protection law. In light of Morales and Wolens, it held that the claim was preempted, stating: "[T]he ADA's preemption provision prohibits state regulation of airline advertising pertaining to services — such as Federal Express's overnight delivery guarantee — as well as to airline fares." Id. at *2. In so holding, and contrary to the Cargolux Defendants' suggestion, the Court did not discuss whether the ADA preempted the plaintiffs' contract and tort claims arising from the untimely package delivery. Indeed, the district court had based its summary judgment ruling as to those claims on other grounds. See Wagman, 844 F.Supp. at 249-51.
In addition to Wagman, the Cargolux Defendants cite several district court decisions (none from this circuit) to buttress
Trujillo is a fair representative of the reasoning of these cases.
I have considered Trujillo and the other district court cases cited by the Cargolux Defendants, but I do not find them persuasive. Rather, I am persuaded by a substantial body of precedent at the federal appellate level, including the seminal case of Sam L. Majors Jewelers v. ABX, Inc., 117 F.3d 922 (5th Cir.1997), which was decided after Trujillo.
The Sam L. Majors Court painstakingly traced the history of the federal common law cause of action against common air carriers for lost or damaged cargo, beginning before federal regulation, and continuing during the period of regulation and after deregulation by the ADA, explaining that "a federal common law did develop and was saved by subsequent acts of Congress." Id. at 926; see id. at 926-29. The court cited several cases from the pre-ADA period in which, "applying federal common law, federal courts found that civil actions against air carriers for lost or damaged goods arose under federal law." Id. at 927-28.
The Sam L. Majors Court cited two other post-deregulation federal appellate decisions that had previously concluded that federal common law continues to govern claims for lost or damaged air cargo. See First Pa. Bank v. Eastern Airlines, 731 F.2d 1113, 1115-22 (3d Cir.1984) (stating that airline's liability for lost cargo is "a purely judicial question for determination by application of the federal common law"); Deiro v. American Airlines, Inc., 816 F.2d 1360, 1365 (9th Cir.1987) (stating that "deregulation of air carriers in 1978 did not change the applicability or substantive content of the relevant federal common law"). Moreover, every federal circuit that has considered the issue since Sam L. Majors has likewise held that "federal common law continues to control the issue of liability of air carriers for lost or damaged shipments even after deregulation." Nippon Fire & Marine Ins. Co. v. Skyway Freight Sys., Inc., 235 F.3d 53, 59 (2d Cir.2000); see Treiber & Straub, Inc. v. UPS, Inc., 474 F.3d 379, 383-84 (7th Cir. 2007) ("We ... join our colleagues in holding that a claim for lost or damaged goods transported by a common air carrier arises under federal common law."); Read-Rite Corp. v. Burlington Air Express, Ltd., 186 F.3d 1190, 1195-98 (9th Cir.1999) ("[F]ederal common law applies to loss of or damage to goods by interstate common carriers by air."); see also Tran Enters., LLC v. DHL Express (USA), Inc., 627 F.3d 1004, 1012 n. 2 (5th Cir.2010); King Jewelry, Inc. v. Fed. Express Corp., 316 F.3d 961, 964-65 (9th Cir.2003).
It is also noteworthy that another judge of this court, in Wagman, supra, 844 F.Supp. 247, relied upon federal common law to resolve a negligence claim against an air carrier for loss of cargo, stating: "Federal law determines the liability of interstate common carriers for loss, damage, or delay of goods in transit." Id. at 249. Although Wagman predated Sam L. Majors, it relied on several cases upon which the Sam L. Majors Court also relied in reaching a similar conclusion. See id. at 249-51 (citing, inter alia, Deiro, supra, 816 F.2d 1360; First Pa. Bank, supra, 731 F.2d 1113; and N. Am. Phillips, supra, 579 F.2d 229).
Although the Fourth Circuit has not addressed these matters, I am amply persuaded by the cogent analysis presented in Sam L. Majors, the district court decision in Wagman, and the other federal appellate decisions I have cited, which hold that federal common law governs claims against air carriers for loss, damage, or delay of cargo. Therefore, the parties' contentions regarding the extent to which tort claims under state law are preempted by the ADA, and the question of whether plaintiffs' claims are "related to a ... service" of Cargolux, are not dispositive.
To be sure, in plaintiffs' negligence claims against the Cargolux Defendants (Counts V and VI), as in all of the counts in the Amended Complaint, plaintiffs do not specify whether the claims arise under federal law or the law of any particular state. Rather, they simply assert a claim for "negligence" arising from defendants' loss of the Cargo. In accordance with Sam L. Majors and its progeny, I conclude that such negligence claims are governed by, and arise under, federal common law. Therefore, I need not consider whether the ADA would preempt a complaint concerning loss of cargo that expressly and exclusively invoked state tort law. It follows that plaintiffs' negligence claims against the Cargolux Defendants are not preempted by the ADA's provision barring enforcement of "a State ... law, regulation, or
A fortuitous result of this determination is that, as noted, the Court possesses federal question jurisdiction over the negligence claim against Cargolux, and supplemental jurisdiction over the other claims in the case. See Sam L. Majors, 117 F.3d at 929 ("Because Jewelers' negligence action against Airborne arises under federal common law, we have jurisdiction over this action."). Accordingly, I need not resolve the issue of plaintiffs' inadequate pleading of diversity jurisdiction, discussed earlier.
My consideration of the other arguments made by plaintiffs and the Cargolux Defendants is hampered by the fact that much of their discussion is premised on the assumption that plaintiffs' negligence claims against Cargolux and CAS arise under state law. But, as I have explained, plaintiffs' negligence claim, at least against Cargolux, is a creature of federal common law.
Plaintiffs contend that the Cargolux Defendants' liability in both tort and contract is established as a matter of law. In this regard, they maintain that the Cargolux Defendants are liable based on principles of Maryland bailment law, discussed previously. And, citing Maryland case law, they also contend that the Cargolux Defendants are liable based on the negligence principle of res ipsa loquitur. In so arguing, plaintiffs do not address whether the bailment and res ipsa standards on which they rely are applicable in a claim against an air carrier under federal common law for lost or damaged cargo.
The Cargolux Defendants contend that, if plaintiffs' negligence claim against Cargolux is not preempted by the ADA, it is precluded by the existence of a contractual agreement between Cargolux and plaintiffs, in the form of the Air Waybill executed by plaintiffs' agent, Rex. In a similar vein, the Cargolux Defendants suggest, in a footnote, that plaintiffs' negligence claim against CAS is barred by the "economic loss rule." But, even assuming that these arguments would be correct as a matter of state law, the Cargolux Defendants have not addressed whether a state law claim for breach of contract would preclude a tort claim for loss of cargo under federal law. Nor have they discussed the operation of the economic loss rule with respect to such a federal cause of action.
In regard to plaintiffs' breach of contract claim, the Cargolux Defendants do not concede liability. Indeed, they argue strenuously that there are disputes of material fact as to their liability, discussed infra, which they argue defeat plaintiffs' motion for summary judgment. However, the Cargolux Defendants' own motion for summary judgment as to the contract claim does not rest on a contention that they are not liable for breach of contract as a matter of law. Rather, they assert that most of the damages claimed by plaintiffs were unforeseeable and therefore not recoverable.
It is difficult, therefore, to analyze properly the parties' motions. Nevertheless, I will consider the parties' arguments in the context of Maryland state law. As I shall explain, both motions will be denied.
As noted, plaintiffs claim that the liability of the Cargolux Defendants is established as a matter of law, invoking principles of bailment and res ipsa loquitur. They assert that, "[o]nce the Cargo was delivered to and accepted by Cargolux and CAS, these defendants are deemed to have assumed the duty of reasonable care in protecting the bailed property." Danner-Cargolux Motion at 8.
Even if the case were governed entirely by Maryland common law, there is no merit to plaintiffs' argument that the Cargolux Defendants' liability is established as a matter of law. As noted, Maryland bailment law contemplates a burden-shifting procedure, whereby a plaintiff may establish a prima facie case of breach of bailment by showing that the defendant had an agreement with the plaintiff regarding possession of property, that the property was delivered to the defendant, that the defendant accepted possession of the property, and that the property was "either not returned or returned in a damaged condition." McClung-Logan, supra, 40 Md. App. at 588, 392 A.2d at 1155; see also Stehle Equip., supra, 247 Md. at 213, 230 A.2d at 655; John T. Handy, supra, 102 Md.App. at 201-02, 648 A.2d at 1122.
Even if state law applied and plaintiffs established all the elements of a prima facie case under either bailment or res ipsa principles, they still would not be entitled to summary judgment as to liability. Under both res ipsa loquitur and bailment law, a plaintiff's proof of an unrebutted prima facie case does not entitle the plaintiff to judgment as a matter of law; rather, it entitles the plaintiff to present the case to the fact finder, which is permitted, but not required, to infer the defendant's liability. See, e.g., Dover, 334 Md. at 236, 638 A.2d at 765 (under res ipsa loquitur, the "jury is ... permitted, but not compelled, to infer a defendant's negligence without the aid of any direct evidence"); Johnson & Towers Baltimore, Inc. v. Babbington, 264 Md. 724, 727-28, 288 A.2d 131, 133-34 (1972) (under bailment law, the "burden is always on the bailor to establish affirmatively that [loss of bailed property] was occasioned or was not prevented by reason of some negligence on the part of the bailee," and "the question of the negligence of the bailee is ordinarily for the jury").
Moreover, it is by no means clear that plaintiffs have established a prima facie case of liability under bailment or res ipsa principles, although I need not definitively resolve that issue. The Cargo was handled by parties other than the Cargolux Defendants both before transportation to Seattle and (at least arguably, taking the facts in the light most favorable to the Cargolux Defendants) after the Cargo was purportedly surrendered to Even-Rock. Notably, clearance of the Cargo through South African agencies apparently took several months and, for all that the record shows, the mold damage to the Lion Trophies could have occurred before they were shipped out of South Africa. It is also noteworthy that the Maryland Court of Appeals has held the doctrine of res ipsa loquitur inapplicable to cases involving
For these reasons, even if the matter were entirely controlled by Maryland common law, plaintiffs' motion for summary judgment could not succeed.
The Cargolux Defendants maintain that the amount of their liability for damages is effectively zero. Primarily, the Cargolux Defendants contend that the vast majority of the damages that plaintiffs seek are "special" or "consequential" damages, which they insist are not recoverable unless the damages were foreseeable to the Cargolux Defendants.
Plaintiffs respond that the Cargolux Defendants should have been aware of the nature of the Cargo (and the damages that would follow from its loss) because the Air Waybill "clearly describes the Cargo as `Consolidated Cargo of Dip & Pack Hunting Trophies as per attached manifest.'" Danner-Cargolux Motion at 10 (quoting Air Waybill) (emphasis in original). Given that the Cargolux Defendants are in the business of shipping and handling cargo, plaintiffs reason, they "knew or should have known that ... items such as hunting trophies must be handled properly." Danner-Cargolux Motion at 10.
More important, plaintiffs contend that the "proper measure of damages in this case is replacement cost," and cite Davis v. Jackson, 264 Md. 668, 671, 287 A.2d 768, 770 (1972), for the proposition that
According to plaintiffs, the replacement costs for the Lion Trophies include the following sums, Danner-Cargolux Motion at 11:
These amounts (including trophy fees of $60,000 per lion, rather than $35,000 per lion) total $145,654.60. Plaintiffs have not submitted admissible evidence, beyond the affidavit of Mr. Danner, which is challenged by the Cargolux Defendants,
Rather than the alleged replacement-cost damages sought by plaintiffs, which the Cargolux Defendants contend are unforeseeable, the Cargolux Defendants urge that, in a cargo damage action between a shipper and a carrier, "the measure of damages is the fair market value at the port of destination of the goods in a sound condition less the fair market value of the goods in their damaged condition." Amstar Corp. v. M/V Alexandros T., 472 F.Supp. 1289, 1294 (D.Md.1979), aff'd, 664 F.2d 904 (4th Cir.1981).
The Cargolux Defendants also cite Anyangwe v. Nedlloyd Lines, supra, 909 F.Supp. 315 (D.Md.1995), and Mojica v. Autoridad de las Navieras de Puerto Rico, Civ. No. 92-2026, 1993 WL 724807 (D.P.R. May 28, 1993), but the losses for which the plaintiffs sought to recover in those cases also are not analogous to this case. In Anyangwe, the plaintiff shipped "certain personal belongings and food" from Maryland to Cameroon. 909 F.Supp. at 318. The defendant shipping companies allegedly promised plaintiff that the cargo would arrive in Cameroon in time for her wedding. Id. at 323. The cargo arrived undamaged but too late, and plaintiff sought "consequential damages ... [for] the emotional distress and pain inflicted upon her by defendants when they did not deliver her goods in time for her wedding." Id. The emotional distress damages at issue in Anyangwe are unlike the alleged costs to replace the damaged Lion Trophies.
In Mojica, the plaintiff sought to recover damages for "loss of income, suffering, [and] mental and moral anguish" due to a carrier's failure timely to transport his pickup truck from New Jersey to Puerto Rico. Mojica, 1993 WL 724807, at *2. The court disallowed the damages, stating: "It is settled law that damages which do not
Id. (quoting GOODS IN TRANSIT) (emphasis added and omitted). Notably absent from the list of special damages is replacement cost for lost cargo, which clearly is "related directly to the cargo itself."
In a recent admiralty decision, F.C. Wheat Maritime Corp. v. United States, 663 F.3d 714 (4th Cir.2011), the Fourth Circuit described market value and replacement cost as alternative measures of direct damages. The Court stated that, ordinarily, a plaintiff is "entitled to be made whole, but only in the least expensive way: market value or replacement cost, whichever is less." Id. at 721-22.
Therefore, although I do not necessarily agree with plaintiffs that all of the items of damages they seek are proper items of replacement cost, it is clear that a court may consider replacement costs as a measure of direct damages. Replacement costs do not necessarily constitute special or consequential damages. See, e.g., 21st Century Props. Co. v. Carpenter Insulation & Coatings Co., 694 F.Supp. 148, 152 n. 2 (D.Md.1988) (stating, in breach of warranty case under Maryland law against building contractor for installation of faulty roofs, "the cost of replacing the allegedly defective roofs which plaintiffs seek to recover constitutes the direct damage, not incidental or consequential damages, caused by the wrongs alleged").
A simple "market value" measurement may be inadequate here, because of the idiosyncratic nature of the Cargo. After all, the plaintiffs did not travel to South Africa to hunt the lions in order to sell the Lion Trophies to someone else, and so the Cargo's "market value" (to the extent that there is a market in the trophies of other people's hunts) means little to plaintiffs, and is likely far less than the value, in money and effort, that plaintiffs actually expended to acquire the Lion Trophies. On the other hand, the "replacement cost" of the Lion Trophies that plaintiffs urge does not simply represent the cost of obtaining new lion trophies. Rather, the alleged "replacement cost" is, in large measure, the cost of another South African safari — in essence, the cost not only of acquiring new lion trophies, but of personally doing so, by means of another vacation
In his treatise on the LAW OF REMEDIES, Professor Dan B. Dobbs articulates the problems that inhere in valuing items of idiosyncratic value, akin to the Lion Trophies at issue here:
DAN B. DOBBS, 1 LAW OF REMEDIES, § 5.16(3), at 906-08 (2d ed. 1993) ("DOBBS ON REMEDIES") (footnotes omitted).
In sum, I find both sides' measures of damages unconvincing; neither side has persuaded me that its position is legally correct. Given the current posture of the case, in which the Cargolux Defendants seek a ruling at summary judgment that plaintiffs are not entitled to any damages, and plaintiffs seek summary judgment only as to liability, but not as to damages, it is the Cargolux Defendants' burden, as the moving parties, to persuade the Court that they are "entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). When, on a motion for summary judgment, a question of law is at issue, "summary judgment may be awarded if the defendant has demonstrated a clear entitlement to judgment in its favor as a matter of law." King v. Government Employees Ins. Co., 843 F.Supp. 56, 56 (D.Md. 1994). Because the Cargolux Defendants have not done so, their motion will be denied as to this issue. However, it bears noting that at trial it will be plaintiffs' burden to present a legally sound measure of damages.
One final matter remains. As noted, the Cargolux Defendants argue that, even if they might otherwise be liable for damages, they should not be required to compensate plaintiffs to the extent that the damages are less than the approximately $47,000 in proceeds that plaintiffs have received from the Santam Limited insurance policy.
The Cargolux Defendants counter that the collateral source rule does not apply to contract claims. In support of this contention, they rely on Dennison v. Head Const. Co., 54 Md.App. 310, 321-22, 458 A.2d 868, 874-75, cert. denied, 296 Md. 653 (1983). In that case, as plaintiffs point out, the Court of Special Appeals did not hold that the collateral source rule was inapplicable to claims for breach of contract; rather, the Dennison Court held that the rule "is not applicable in workmen's compensation cases." Id. at 322, 458 A.2d at 875. Nevertheless, in so holding, the court relied on two cases from other states in which the collateral source rule was rejected in contract cases generally, on the rationale that the "`collateral source rule is punitive; contractual damages are compensatory. The collateral source rule, if applied to an action based on breach of contract, would violate the contractual damage rule that no one shall profit more from the breach of an obligation than from its full performance.'" Id. (quoting Patent Scaffolding Co. v. William Simpson Constr. Co., 256 Cal.App.2d 506, 64 Cal.Rptr. 187, 191 (1967), and citing Hubbard Broadcasting, Inc. v. Loescher, 291 N.W.2d 216 (Minn.1980)). And, more recently, the Court of Special Appeals has cited Dennison, in dictum, for the proposition that "the collateral source rule does not apply to contract cases." Weichert Co. v. Faust, 191 Md.App. 1, 10 n. 6, 989 A.2d 1227, 1232 n. 6 (2010).
As I see it, it is irrelevant whether the collateral source rule applies to contract claims under Maryland law, because plaintiffs' negligence claim under federal common law remains vital, and the collateral source rule applies to tort claims governed by federal law. See, e.g., Sloas v. CSX Transp., Inc., 616 F.3d 380, 389-90 & n. 8 (4th Cir.2010) (applying collateral source rule to Federal Employers' Liability Act negligence claim) (citing Eichel v. N.Y. Cent. Ry. Co., 375 U.S. 253, 84 S.Ct. 316, 11 L.Ed.2d 307 (1963)); Gill v. Maciejewski, 546 F.3d 557, 564-65 (8th Cir.2008) (applying collateral source rule as part of "federal common law of damages" in § 1983 case); Perry v. Larson, 794 F.2d 279, 285-86 (7th Cir.1986) (same); Hartnett v. Reiss S.S. Co., 421 F.2d 1011, 1016 n. 3 (2d Cir.1970) (stating, in admiralty tort case: "[t]he general rule in the federal courts is that the collateral source rule is applied"); Gypsum Carrier, Inc. v. Handelsman, 307 F.2d 525, 535 (9th Cir.1962) (stating, in Jones Act case, that federal
For the foregoing reasons, I will grant International Freight's motion for summary judgment and will deny plaintiffs' cross-motion for summary judgment against International Freight. Additionally, I will deny both the Cargolux Defendants' motion for summary judgment and plaintiffs' cross-motion for summary judgment against the Cargolux Defendants. Finally, I will grant plaintiffs' motion for leave to file a surreply, nunc pro tunc, and will deny the Cargolux Defendants' motion to strike. An Order implementing my rulings follows.
For the reasons stated in the accompanying Memorandum Opinion, it is, this 23rd day of February, 2012, by the United States District Court for the District of Maryland, ORDERED:
With respect to the Cargolux Defendants' summary judgment motion, I have considered the Cargolux Defendants' supporting memorandum (ECF 54-1) (collectively with the motion, "Cargolux Motion"); plaintiffs' combined memorandum in opposition to the Cargolux Defendants and cross-motion for summary judgment (ECF 55-1) ("Danner-Cargolux Motion"); the Cargolux Defendants' combined reply and opposition ("Cargolux Opp.") (ECF 60); and plaintiffs' reply ("Danner-Cargolux Reply") (ECF 62). In the Danner-Cargolux Reply, plaintiffs included further argument with respect to the Cargolux Motion, as well as reply argument in support of the Danner-Cargolux Motion — in essence, the submission was both a reply and a surreply. Pursuant to Local Rule 105.2(a), plaintiffs also filed a motion for leave to file their surreply (ECF 61), which the Cargolux Defendants opposed (ECF 65). Plaintiffs' motion for leave to file a surreply will be granted, so as to permit plaintiffs to address the case of In re Korean Air Lines Co., 642 F.3d 685 (9th Cir.2011), which the Cargolux Defendants did not cite until their reply.
In addition, the Cargolux Defendants filed a "Motion to Strike" (ECF 59), seeking to exclude from consideration various statements made by Mr. Danner in an affidavit submitted in support of the Danner-Cargolux Motion, as well as two exhibits to Mr. Danner's affidavit, on the grounds that the evidence is inadmissible hearsay, improper lay opinion testimony, and lacks foundation. Plaintiffs opposed the motion (ECF 64), and the Cargolux Defendants replied (ECF 66). I will deny the motion to strike. However, in my discussion, I will consider the parties' arguments made in connection with the motion to strike as they relate to the adequacy of plaintiffs' evidence to support and/or oppose summary judgment and, of course, will not consider the evidence to the extent that it is inadmissible. See Fed. R.Civ.P. 56(c)(2) (permitting a party at the summary-judgment stage to "object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence").
Notably, no deposition testimony or affidavit of Ms. Terry is contained in the record. Nor have the parties discussed Ms. Terry's observations regarding the timing of the pickup.
19 WILLISTON, § 53:11, at 50-51 (internal footnotes omitted) (emphasis added).
In any event, I need not resolve the Cargolux Defendants' objection to plaintiffs' assertion of a bailment theory of liability. Even assuming that bailment principles apply, plaintiffs are not entitled to summary judgment.
In my view, these assertions are specious. "[D]isputes over semantics do not create a genuine issue of material fact." Jones v. Shinseki, 804 F.Supp.2d 665, 677 (M.D.Tenn. 2011). The record is clear that Cargolux regularly ships cargo by truck to the Menzies warehouse (regardless of whether Cargolux actually operates the trucks itself), and that Menzies operates the warehouse in Vancouver at least in part as a ground handling agent for Cargolux (although Cargolux itself does not operate the warehouse). Plaintiffs have consistently alleged, and the record is undisputed, that although the Cargo was purportedly picked up from CAS by Even-Rock, the Cargo somehow appeared in a different country, in a warehouse operated by a ground handling agent of Cargolux, to which Cargolux regularly ships cargo by truck. The record contains no inconsistency or dispute as to these facts. In my view, a fact finder could infer (but would not be required to infer) from the undisputed facts that the Cargo's disappearance and subsequent reappearance in Vancouver was due to the negligence of either or both of the Cargolux Defendants. But, there is no evidence presently in the record from which a fact finder could resolve the issue of whether the Lion Trophies were damaged and, if so, causation of such damage.
Plaintiffs' reliance on Rule 803(17) of the Federal Rules of Evidence (an exception from the rule against hearsay for "[m]arket reports, commercial publications, market quotations, tabulations, lists, directories, or other published compilations, generally used and relied upon by the public or by persons in particular occupations") is unavailing. It is obvious from perusal of the exhibit that the magazine article in question was written for a casual readership, and was not "prepared with the view that [it] would be in general use by an industry or members of the public having a general need to rely on information" contained in it; nor did its publisher or author "stake their business or public reputations on the accuracy" of the information. Conoco Inc. v. Dept. of Energy, 99 F.3d 387 (Fed.Cir. 1996). Therefore, the article is unlike publications of compiled information that have been admitted under Rule 803(17), such as Bloomberg market quotes, see United States v. Masferrer, 514 F.3d 1158, 1162 (11th Cir. 2008), a real estate industry publication providing monthly lists of properties sold by date and sale price, see United States v. Cassiere, 4 F.3d 1006, 1018-19 (1st Cir.1993), or a directory of banks by routing number, see United States v. Goudy, 792 F.2d 664, 675 (7th Cir. 1986).
