Asphalt Contractors Inc v. R&J Transport Inc

CourtDistrict Court, E.D. Wisconsin
DecidedApril 5, 2021
Docket2:21-cv-00077
StatusUnknown

This text of Asphalt Contractors Inc v. R&J Transport Inc (Asphalt Contractors Inc v. R&J Transport Inc) is published on Counsel Stack Legal Research, covering District Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Asphalt Contractors Inc v. R&J Transport Inc, (E.D. Wis. 2021).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

ASPHALT CONTRACTORS INC., Plaintiff,

v. Case No. 21-C-0077

R&J TRANSPORT, INC., et al., Defendants. ______________________________________________________________________ DECISION AND ORDER Plaintiff Asphalt Contractors Inc. filed a complaint in the circuit court for Racine County, Wisconsin, against R&J Transport, Inc., and other parties. The suit concerns damage to an expensive piece of Asphalt’s machinery that occurred while R&J, a trucking company, was transporting it from Whitewater, Wisconsin, to Lake Geneva, Wisconsin. Asphalt alleges claims for negligence and breach of contract under Wisconsin law. Although the parties are not diverse, R&J and the other defendants removed the case to this court, alleging that Asphalt’s claims arise under federal law. Asphalt now moves to remand the case to state court on the ground that its claims, which concern damage to cargo that occurred during intrastate transportation, do not arise under federal law. Relatedly, R&J and its driver move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) on the ground that Asphalt’s state-law claims are preempted by federal law. I. BACKGROUND According to the allegations of the complaint, Asphalt is in the business of paving and asphalt maintenance. In the Spring of 2018, it hired R&J to transport a large piece of equipment known as a Kleemann crusher from Whitewater, Wisconsin to Otto Jacobs Company, which was located in Lake Geneva, Wisconsin. R&J was required to obtain a permit from the Wisconsin Department of Transportation to complete the trip. The complaint alleges that, although R&J obtained a permit for the trip, it mistakenly listed the destination as Geneva Earth Works (which was also located in Lake Geneva) rather than

Otto Jacobs. The permit identified a required route for the driver to take, and it listed the maximum permitted height, width, and length of the cargo. On the day of the trip, R&J’s driver, Leigh Koehler, loaded the crusher onto a low- boy trailer. According to the complaint, Koehler did this improperly, which caused the combined height of the trailer and crusher to exceed the maximum permitted height. On the way to the destination, Koehler drove under a highway overpass with insufficient clearance, which caused the crusher to strike the overpass. The impact caused significant damage to the crusher. Asphalt alleges that, had R&J sought a permit for the correct destination and followed the designated route, the accident would not have occurred because Koehler would have exited the highway before encountering the overpass.

Asphalt commenced the present action by filing a complaint against R&J, Koehler, and R&J’s insurers in the circuit court for Racine County, Wisconsin. The complaint alleges five causes of action. First, it alleges that R&J and Koehler were negligent in loading and transporting the crusher. Second, it alleges that R&J was negligent in its hiring, training, and/or supervision of Koehler. Third, it alleges that R&J breached the contract that was formed when Asphalt hired R&J to transport the crusher from Whitewater to Otto Jacobs. Fourth, it alleges an alternative claim against R&J for promissory estoppel. Finally, it alleges claims against R&J’s insurers under Wisconsin’s direct-action statute, Wis. Stat. § 632.24. 2 After they were served, the defendants, led by R&J, removed the action to this court. Because the parties are not completely diverse, removal was not based on 28 U.S.C. § 1332. Instead, the notice of removal alleges that federal jurisdiction exists under 28 U.S.C. § 1331 and statutes granting district courts jurisdiction over cases involving

federal laws regulating interstate commerce. R&J alleges that, although Asphalt’s complaint purports to contain only state-law claims for negligence and breach of contract, in fact the complaint must be deemed to arise under federal law. This is so, R&J contends, because Asphalt’s claims all boil down to a claim for damage to cargo that occurred during transportation by motor carrier. R&J contends that, in light of the long history of federal regulation (and deregulation) of the motor-carrier industry, a claim for damage to cargo must be deemed to arise under federal law, even if the cargo was damaged during intrastate transportation rather than interstate transportation. After removing the case, R&J filed a motion to dismiss Asphalt’s complaint under Federal Rule of Civil Procedure 12(b)(6). It alleges that Asphalt’s state-law claims are

preempted by federal law, specifically the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”). According to R&J, the only claim Asphalt could pursue is a claim for damage to cargo under federal common law. This alleged federal common-law claim would be identical to a claim under the Carmack Amendment, which governs claims for damage to cargo that occurs during interstate transportation. Asphalt opposes R&J’s motion to dismiss and moves to remand the case to state court. Asphalt contends that its claims do not arise under federal law because there is no federal cause of action for damage to cargo that occurs during intrastate transportation. Further, Asphalt contends that the FAAAA does not preempt its state-law claims. Asphalt 3 seeks an order awarding it the costs and attorneys’ fees it incurred as a result of the removal. II. DISCUSSION I am confronted with both a motion to remand the case to state court and a motion

to dismiss the complaint for failure to state a claim upon which relief may be granted. Because the motion to remand raises a challenge to federal subject-matter jurisdiction, I must address it before turning to the motion to dismiss, which pertains to the merits. See Bazile v. Fin. Sys. of Green Bay, Inc., 983 F.3d 274, 277–78 (7th Cir. 2020) (jurisdiction is a threshold issue that must be addressed before the merits). A. Motion to Remand The federal removal statutes provide that a case must be remanded to state court if the district court lacks subject-matter jurisdiction. 28 U.S.C. § 1447(c). In the present case, R&J contends that jurisdiction is conferred by 28 U.S.C. § 1331, which provides that “[t]he district courts shall have original jurisdiction of all civil actions arising under the

Constitution, laws, or treaties of the United States.” Whether the action “arises under” federal law is determined by the well-pleaded complaint rule, under which federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint. Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). “The rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law.” Id. Important to this case is an aspect of the well-pleaded complaint rule holding that “a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption.” Id. at 393. Also important is the “independent corollary” to 4 the well-pleaded complaint rule known as the “complete preemption” doctrine. Id.

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Asphalt Contractors Inc v. R&J Transport Inc, Counsel Stack Legal Research, https://law.counselstack.com/opinion/asphalt-contractors-inc-v-rj-transport-inc-wied-2021.