United States District Court, E.D. North Carolina, Western Division
TERRENCE W. BOYLE CHIEF UNITED STATES DISTRICT JUDGE.
cause comes before the Court on plaintiffs motion to remand
and defendant's motion to compel arbitration and stay
proceedings. The appropriate responses and replied have been
filed, and a hearing was held before the undersigned on July
17, 2019, at Raleigh, North Carolina. For the reasons that
follow, plaintiffs motion to remand is denied and
defendant's motion to compel arbitration and stay
proceedings is granted.
case concerns a load of salt transported by defendant
Tidewater to plaintiff Mount Olive Pickle. Tidewater is a
motor carrier located in Fayetteville, North Carolina which
transports, among other things, food-grade salt for Cargill,
Inc. to a number of purchasers using dedicated trailers. The
salt arrived at Tidewater by rail from Cargill's salt
production facilities in other states, including New York.
Tidewater transferred the salt from the rail car to a
dedicated trailer and then transported the salt by tractor
trailer to Cargill's purchasers, here Mount Olive Pickle.
The salt was then pumped via a closed system directly from
Tidewater's trailer into Mount Olive Pickle's
lixator, a chamber that creates the brine for the pickling
process. On some occasions extra salt was also pumped from
the Tidewater truck to a salt pad that Mount Olive Pickle
used to increase the salinity of the pickling brine if
needed. Mount Olive Pickle ordered salt directly from Cargill
by providing it with a purchase order number and a requested
delivery date. Cargill then issued a bill of lading to
Tidewater, which then transferred salt from the railcars to
its dedicated trailers and delivered the salt to Mount Olive
Friday, September 29, 2017, Mount Olive Pickle discovered
small transparent and white plastic pellets in its lixator
and on the salt pad. As it had been unaware that the salt had
been contaminated with plastic pellets, Mount Olive Pickle
used the salt in its pickling process and contaminated its
consumable pickle products. Mount Olive Pickle notified
Cargill of its discovery, and Cargill notified Tidewater.
During a meeting between the three, Mount Olive Pickle
discovered that Tidewater also transports plastic pellets of
the same type found in Mount Olive Pickle's equipment out
of its Fayetteville depot.
lawsuit ensued and was filed by Mount Olive Pickle in Wayne
County, North Carolina Superior Court on February 8, 2019.
[DE 1-6]. Mount Olive Pickle's complaint alleges a single
count of negligence. On March 14, 2019, Tidewater removed the
action to this Court on the basis of its federal question
jurisdiction. [DE 1]. Specifically, Tidewater contends that
Mount Olive Pickle's claim arises from the transportation
of goods by motor carrier involving interstate commerce, and
the claim for negligence is preempted and governed by the
Carmack Amendment, 49 U.S.C. § 14706.
Motion to remand.
first question before this Court is whether the instant
action arises under federal law such that federal
jurisdiction exists. Removal of a civil action from state
court is only proper where the federal district courts would
have original jurisdiction, 28 U.S.C. § 1441, and it is
the burden of the removing party to show that jurisdiction
lies in the federal court. Dixon v. Coburg Dairy,
Inc., 369 F.3d 811, 816 (4th Cir. 2004) (en banc).
Federal district courts have original jurisdiction over
"all civil actions arising under the Constitution, laws,
or treaties of the United States." 28 U.S.C. §
1331. Generally, whether the district courts have federal
question jurisdiction "is governed by the
'well-pleaded complaint rule,' which provides that
federal jurisdiction exists only when a federal question is
presented on the face of the plaintiffs properly pleaded
complaint." Caterpillar Inc. v. Williams, 482
U.S. 386, 392 (1987). But district courts also have federal
question jurisdiction over state law claims that are
completely preempted by federal law. See Lontz v.
Tharp, 413 F.3d 435, 439- 440 (4th Cir. 2005).
Carmack Amendment to the Interstate Commerce Act of 1887
"addresses the liability of common carriers for goods
lost or damaged during a shipment over which the Interstate
Commerce Commission has jurisdiction[and creates a] national
scheme of carrier liability for goods damaged or lost during
interstate shipment under a valid bill of lading."
Shao v. Link Cargo (Taiwan) Ltd., 986 F.2d 700, 704
(4th Cir. 1993); see also 49 U.S.C. §
13501(1)(A). The Carmack Amendment "provide[s] the
exclusive cause of action for claims arising out of
the interstate transportation of goods by a common
carrier." Hoskins v. Bekins Van Lines, 343 F.3d
769, 776 (5th Cir. 2003) (emphasis in original). Because
claims implicating the Carmack Amendment are completely
preempted, removal under 28 U.S.C. § 1441 is
appropriate. Id. at 778.
the Carmack Amendment governs Mount Olive Pickle's
negligence claim depends on whether the nature of the
shipment at issue was inter-or-intrastate.
Whether transportation is interstate or intrastate is
determined by the essential character of the commerce,
manifested by shipper's fixed and persisting
transportation intent at the time of the shipment, and is
ascertained from all of the facts and circumstances
surrounding the transportation.
S. Pac. Transp. Co. v. I.C.C, 565 F.2d 615, 617 (9th
Cir. 1977) (citation omitted). "[I]f the final intended
destination at the time the shipment begins is another state,
the Carmack Amendment applies throughout the shipment, even
as to a carrier that is only responsible for an intrastate
leg of the shipment." Project Hope v.
M/VIBNSINA, 250 F.3d 67, 75 (2d Cir. 2001).
is no dispute that Cargill's salt that Tidewater
transported to Mount Olive Pickle was transported from New
York to North Carolina and therefore traveled in interstate
commerce in order to reach North Carolina. Mount Olive Pickle
contends that, however, the conduct at issue here involved
only the intrastate shipment of Cargill's salt
from Tidewater's depot in Fayetteville, North Carolina to
Mount Olive Pickle's facility in Mount Olive, North
Carolina. In support, Mount Olive Pickle relies on its
complaint which references only salt that is transported from
a third-party vendor to Mount Olive Pickle Company by
Tidewater by truck, [DE 1-6] Compl. ¶¶ 5, 7, and a
bill of lading which shows a shipment originating in
Fayetteville and terminating in Mount Olive. [DE 14-3] Bowen
Decl. Ex. 2. Mount Olive Pickle further contends that the
intent of Cargill, the shipper, was not fixed until the final
destination of the salt was identified, and that Cargill
could not form such intent until Mount Olive Pickle placed an
order for salt, which would then be shipped from
Tidewater's depot to Mount Olive. In other words, in
Mount Olive Pickle's view, Cargill shipped its salt ...