Phoenix Partner Julie E. Maurer, Chair of the National Cargo & Logistics Practice and co-Chair of the Transportation Practice, along with Partner Andrew Kleiner, recently achieved a favorable outcome on behalf of an interstate moving company through a motion for reconsideration of the partial denial of a motion to dismiss in the U.S. District Court for the Northern District of Ohio.
In this case, two related families, the plaintiffs, hired the interstate moving company to transport their household goods and personal property from Ohio to Florida. During transit, some of the goods were allegedly damaged, and the plaintiffs criticized the scope and quality of the moving services provided. Without filing a proper claim within nine months, per the terms of the bill of lading contract, the plaintiffs initiated a lawsuit against both the moving company and its disclosed household goods agent. The allegations included violations of the Ohio Consumer Sales Practices Act, fraud, breach of contract, and unjust enrichment. Lewis Brisbois pursued dismissal of the original complaint based on the preemption of state law claims by both the Carmack Amendment and the Federal Aviation Administration Authorization Act (FAAAA). Additionally, they contended that the disclosed household goods agent had no separate liability under 49 U.S.C. 13907 and should be dismissed.
In response to the motion to dismiss, the plaintiffs requested permission to amend the complaint. To avoid dismissal of the household goods agent, the plaintiffs' amendment aimed to mischaracterize the agent as the motor carrier, while also attempting to characterize the moving company as a broker to avoid federal preemption. The court allowed this amendment.
Lewis Brisbois filed a subsequent motion to dismiss on similar grounds as the first motion, refuting the characterization of the motor carrier as a broker and contending that only a Carmack Amendment claim against the moving company was appropriate.
After comprehensive briefing, the court's ruling partially granted and denied the motion to dismiss. It concluded that if the household goods agent was the motor carrier, the Carmack Amendment preempted all state law claims alleged against it. The court also assumed as true the allegation that the moving company acted as a broker, and ruled that the Carmack Amendment did not preempt the plaintiffs' state law claims against it acting as a broker. The court further asserted that FAAAA preemption did not apply to the plaintiffs' state law claims against the moving company, stating that the FAAAA only extended to motor carriers.
Recognizing the court's incorrect interpretation of the FAAAA, Lewis Brisbois moved the court to reconsider its ruling because it misinterpreted the preemptive scope of the FAAAA, specifically 49 U.S.C. § 14501(c). This provision establishes that the FAAAA preempts claims against both motor carriers and brokers. They argued that if the court must assume the moving company's role as a broker to be true, then based on that assumption, the plaintiffs' state law claims should be dismissed under FAAAA preemption.
The court agreed that it made an error of law in its previous order, stating "allowing it to stand would result in manifest injustice." It clarified that the FAAAA's scope encompassed brokers as well as motor carriers, leading to the dismissal of the plaintiffs' claims under the Ohio Consumer Sales Practices Act, fraud, and unjust enrichment against the moving company due to FAAAA preemption. This dismissal resulted from the plaintiffs' state law claims directly relating to the price, routes, and services of the moving company.
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