Miller v. Costco Wholesale Corp.

• Court: District Court, D. Nevada
• Decided: February 22, 2022
• Docket: 3:17-cv-00408
• Status: Unknown

Opinion

3 UNITED STATES DISTRICT COURT

4 DISTRICT OF NEVADA

5 * * *

6 ALLEN MILLER, Case No. 3:17-cv-00408-MMD-CLB

7 Plaintiff, ORDER v. 8 COSTCO WHOLESALE CORP., et al., 9 Defendants. 10

11 I. SUMMARY 12 Plaintiff Allen Miller sued Defendant C.H. Robinson Worldwide, Inc. (“CHR”) for 13 negligently hiring an unfit motor carrier to transport a shipment, which led to an accident 14 that severely injured Miller. (ECF No. 32 at 3, 7.) Before the Court is CHR’s Motion for 15 Summary Judgment (ECF No. 124 (“Motion”)).1 CHR requests summary judgment 16 because Miller failed to establish, as a matter of law, that CHR breached its duty of care 17 and that CHR’s conduct was the proximate cause of the accident. (Id. at 6.) Because 18 there are genuine issues of material fact as to both the breach and proximate cause 19 issues, and as further explained below, the Court will deny the Motion. 20 II. BACKGROUND2 21 CHR is a freight broker that contracts with motor carriers to transport shipments 22 for clients. (ECF Nos. 32 at 7, 124 at 6.) CHR entered into a contract with RT Service 23 (“RT”), an unrated motor carrier in 2014. (ECF Nos. 124 at 15, 129 at 10.) In 2016, CHR 24 hired RT to deliver a shipment for Costco from Sacramento, California to Salt Lake City, 25 Utah. (ECF Nos. 124 at 17-18, 129 at 13.) On December 8, 2016, Ronel Singh, on behalf 26 27 1Miller filed a response (ECF No. 129) and CHR filed a reply (ECF No. 133) to the 28 Motion. 2 at 17.) Although road conditions were icy and snowy that day, Ronel Singh drove in an 3 unsafe manner. (Id. at 17-18.) Ronel Singh alleged that he encountered some black ice 4 and his truck overturned, blocking the westbound lanes. (ECF Nos. 124 at 17-18, 129 at 5 6.) Miller was driving westbound on I-80 and could not avoid the semi-truck. (ECF No. 6 129 at 13.) He became lodged and pinned under the tractor-trailer and suffered significant 7 injuries, which rendered him a quadriplegic. (ECF Nos. 32 at 3, 129 at 13.) 8 Miller subsequently brought this lawsuit against CHR and various other 9 Defendants. He specifically asserted two claims against CHR in the Amended 10 Complaint—vicarious liability and negligent hiring. (ECF No. 32 at 6-7.) CHR previously 11 filed a motion for judgment on the pleadings.3 (ECF No. 59.) In his response to that, Miller 12 agreed to dismiss the vicarious liability claim without prejudice.4 (ECF No. 70 at 1-2.) CHR 13 then filed the Motion, requesting summary judgment in its favor on Miller’s remaining 14 negligent hiring claim against CHR. (ECF No. 124 at 1.) 15 III. LEGAL STANDARD 16 “The purpose of summary judgment is to avoid unnecessary trials when there is 17 no dispute as to the facts before the court.” Nw. Motorcycle Ass’n v. U.S. Dep’t of Agric., 18 18 F.3d 1468, 1471 (9th Cir. 1994) (citation omitted). Summary judgment is appropriate 19 when the pleadings, the discovery and disclosure materials on file, and any affidavits 20

21 3The Court previously granted CHR’s motion for judgment on the pleadings because the Court found that Miller’s common law negligence claim was preempted by 22 the Federal Aviation and Administration Authorization Act. (ECF No. 84.) The Ninth Circuit reversed the Court’s decision, and the order was vacated. (ECF No. 105.) CHR 23 subsequently submitted a Petition for Writ of Certiorari to the U.S. Supreme Court regarding the Ninth Circuit’s reversal and remand. (ECF No. 123.) That petition is 24 currently pending before the U.S. Supreme Court, which asked the Acting Solicitor General to weigh in on the issue. (ECF No. 136.) 25 4CHR sought dismissal of Miller’s vicarious liability claim because it was not an 26 independent cause of action, but rather a theory of liability. (ECF No. 59 at 10-11.) There is no dispute that Miller consented to dismiss his vicarious liability claim without prejudice. 27 (ECF No. 70 at 1-2.). However, Miller argues that he is not precluded from pursuing the vicarious liability theory under his negligence claim at trial. (ECF No. 129 at 28.) While 28 vicarious liability as a claim was dismissed, the Court agrees that Miller is not precluded 2 judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue 3 is “genuine” if there is a sufficient evidentiary basis on which a reasonable factfinder could 4 find for the nonmoving party and a dispute is “material” if it could affect the outcome of 5 the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 6 (1986). Where reasonable minds could differ on the material facts at issue, however, 7 summary judgment is not appropriate. See id. at 250-51. “The amount of evidence 8 necessary to raise a genuine issue of material fact is enough ‘to require a jury or judge to 9 resolve the parties’ differing versions of the truth at trial.’” Aydin Corp. v. Loral Corp., 718 10 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat’l Bank v. Cities Serv. Co., 391 U.S. 253, 11 288-89 (1968)). In evaluating a summary judgment motion, a court views all facts and 12 draws all inferences in the light most favorable to the nonmoving party. See Kaiser 13 Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986) (citation 14 omitted). 15 The moving party bears the burden of showing that there are no genuine issues of 16 material fact. See Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once 17 the moving party satisfies Rule 56’s requirements, the burden shifts to the party resisting 18 the motion to “set forth specific facts showing that there is a genuine issue for trial.” 19 Anderson, 477 U.S. at 256. The nonmoving party “may not rely on denials in the pleadings 20 but must produce specific evidence, through affidavits or admissible discovery material, 21 to show that the dispute exists,” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 22 1991), and “must do more than simply show that there is some metaphysical doubt as to 23 the material facts.” Orr v. Bank of Am., 285 F.3d 764, 783 (9th Cir. 2002) (quoting 24 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). “The mere 25 existence of a scintilla of evidence in support of the plaintiff’s position will be insufficient[.]” 26 Anderson, 477 U.S. at 252. 27 /// 28 /// 2 CHR contends that summary judgment is appropriate because “Miller cannot 3 establish, as a matter of law, that CHR violated the standard of care and/or that CHR’s 4 conduct was the proximate cause of the accident which injured Miller.” (ECF No. 124 at 5 6.) The Court first addresses CHR’s breach argument, then its proximate cause 6 argument. Because genuine disputes of material fact remain as to whether CHR violated 7 its duty of care and whether CHR’s actions were the proximate cause of the accident, the 8 Court will deny CHR’s Motion. 9 A. Breach of Duty 10 CHR argues that it did not violate its duty because the company performed a 11 reasonable background check on RT, by ensuring that RT was registered by the Federal 12 Motor Carrier Safety Administration (“FMCSA”)5 and had federally mandated insurance. 13 (Id. at 22.) CHR also suggests that there is no evidence it actually knew that RT was a 14 “chameleon carrier” of Rhea Trans (“Rhea”).6 (Id.) Miller counters that CHR ignored 15 serious red flags that RT was a chameleon carrier and unfit for the job, and failed to further 16 investigate the motor carrier. (ECF No. 129 at 20-21.) The Court agrees with Miller. 17 To prevail on a negligence claim under Nevada Law, the plaintiff must demonstrate 18 “(1) the existence of a duty of care, (2) breach of that duty, (3) legal causation, and (4) 19 damages.” Sanchez ex rel. Sanchez v. Wal-Mart Stores, Inc., 221 P.3d 1276, 1280 (Nev. 20 2009) (citation omitted). For negligent hiring, there is a “general duty on the employer to 21 conduct a reasonable background check on a potential employee to ensure that the 22 5According to CHR, the FMCSA is an administrative agency that regulates 23 interstate motor carriers, issues safety regulations for motor carriers, completes compliance reviews, and assigns safety ratings to carriers. (ECF No. 124 at 8-9.) See 49 24 C.F.R. § 385.1; 49 C.F.R. § 385.3.

25 6The U.S. Department of Transportation prohibits two or more motor carriers from “us[ing] common ownership, common management, common control, or common familial 26 relationship to enable any or all such motor carriers to avoid compliance, or mask or otherwise conceal non-compliance, or a history of non-compliance, with statutory or 27 regulatory requirements.” 49 C.F.R. § 385.1005. The parties refer to these carriers as “chameleon carriers,” a term the Court adopts for the purposes of consistency and clarity. 28 (ECF Nos. 124 at 12, 129 at 8-9.) 2 1991) (citation omitted). The employer violates this duty “when it hires an employee even 3 though the employer knew, or should have known, of that employee's dangerous 4 propensities.” Hall v. SSF, Inc., 930 P.2d 94, 98 (Nev. 1996) (citation omitted). 5 The Court is persuaded that a reasonable juror could find that several “red flags”7 6 should have triggered CHR to further investigate RT. See Anderson, 477 U.S. at 250-51. 7 First, Miller points to CHR’s admission that it previously contracted with Rhea in 2013 and 8 did not remove Rhea from its system until 2017. (ECF Nos. 129 at 7, 130-2 at 3.) Rhea 9 was a motor carrier owned by Ronel Singh, the driver in the accident, that had its license 10 permanently revoked8 by the FMCSA in 2014 due to multiple, egregious violations. (ECF 11 No. 129 at 7-8.) Ronel Singh was listed as Rhea’s owner in its 2013 contract with CHR. 12 (ECF No. 125-1 at 180.) According to Miller, Ronel Singh subsequently formed RT and 13 applied for FMCSA registration under his father’s name, “Kuwar.” (ECF Nos. 129 at 8, 14 130-6 at 2-3.) Ronel Singh and his father have the same last name, and Kuwar Singh 15 was listed as RT’s owner in its 2014 contract with CHR. (ECF Nos. 125-1 at 165, 129 at 16 8.) Miller suggests that CHR’s long history with Rhea and the identical last names should 17 have indicated to CHR that RT was a chameleon carrier of Rhea, and unfit to be hired. 18 (ECF No. 129 at 7-8, 21.) This is because FMCSA applicants with chameleon 19 characteristics are three times more likely to be involved in severe crashes than those 20 without chameleon characteristics, since they “reincarnate or re-brand with the same 21 22 7Miller also cites to findings by expert witness Steven Belyus that CHR ignored red 23 flags within RT’s own record prior to the accident. (ECF No. 129 at 11-15.) CHR objects to the Court’s consideration of Belyus’ affidavit for this Motion since Miller previously 24 confirmed that he would not be calling Belyus to testify about causation at trial. (ECF No. 133 at 16.) The Court need not decide this issue at this stage because the Court does 25 not rely on Belyus’ affidavit in its decision and Miller has presented other evidence to show that genuine issues of material fact exist. 26 8According to Miller, the FMCSA revoked Rhea’s registration several times in 2013 27 and 2014, and never reinstated the registration due to Rhea’s “failure to maintain the minimum required insurance.” (ECF No. 129 at 7.) Rhea was also cited for driver-related, 28 vehicle-related, hours-of-service, and logbook violations. (Id. at 7-8.) 2 9.) Moreover, chameleon or reincarnated carriers are prohibited by FMCSA regulations. 3 See 49 CFR § 385.1005. 4 Next, Miller contends that CHR should have known that RT was a chameleon 5 carrier because the phone numbers and email addresses for RT and Rhea were the same 6 in CHR’s database.10 (ECF Nos. 129 at 10, 21, 138-1 at 2-4.) Both Ronel and Kuwar 7 Singh were also listed as points of contact in CHR’s sign-up form for RT. (ECF Nos. 129 8 at 10, 130-9 at 2.) Notably, the time stamp on the sign-up form was February 3, 2014— 9 before the contract date between RT and CHR. (ECF Nos. 125-1 at 165, 129 at 10, 130- 10 9 at 2.) CHR admits that the company has an internal system that checks for chameleon 11 carriers by looking at a new carrier’s “address, telephone and contract signer information” 12 to identify previous carriers with same information. (ECF No. 124 at 13-14.) If the system 13 finds a match, CHR’s “carrier service group investigates the connection and whether the 14 other entity was shut down for safety reasons, had its registration revoked, or otherwise 15 had issues with the FMCSA . . . [i]f any of those reasons are found, CHR will not do 16 business with the new motor carrier.” (Id. at 14.) Despite the matching information 17 9Miller points to data about chameleon carriers from the U.S. Government 18 Accountability Office. See Motor Carrier Safety: New Applicant Reviews Should Expand to Identify Freight Carriers Evading Detection, U.S. Government Accountability Office, 19 https://www.gao.gov/products/gao-12-364 (last visited Feb. 16, 2022). In CHR’s reply, it broadly asks the Court to exclude “improper documents and websites” from its 20 consideration because Miller failed to provide “foundation, authentication, nor even a request for the Court to take judicial notice of the same.” (ECF No. 133 at 7.) CHR does 21 not specify which websites it takes issue with. (Id.) However, to the extent CHR objects to the Court’s consideration of the Accountability Office’s website and data, Federal Rule 22 of Evidence 201 permits the Court to take judicial notice on its own of a fact that is not subject to reasonable dispute because it “can be accurately and readily determined from 23 sources whose accuracy cannot reasonably be questioned.” Here, the chameleon carrier data is highly relevant to Miller’s argument and has been generated by the Accountability 24 Office, using FMCSA data. The Court will therefore take judicial notice of the aforementioned source and data. 25 10CHR argues that RT and Rhea were categorized as “related parties” three 26 months after the accident, and that the physical addresses for the carriers were different in the system. (ECF No. 133 at 12-13.) Screenshots from CHR’s database confirm that 27 the “Relationship Note” between RT and Rhea was added in March 2017. (ECF No. 138 at 7.) However, this does not negate the contention that Rhea and RT’s phone numbers 28 and email addresses were identical in CHR’s system prior to the December 2016 accident 2 carrier services group allegedly never conducted further investigation into RT. (ECF No. 3 129 at 10.) A reasonable factfinder could conclude that CHR’s failure to investigate RT, 4 despite these blatant warning signs, constitutes breach because it violated CHR’s own 5 protocols and was not a reasonable background check. See Hall, 930 P.2d at 98; 6 Anderson, 477 U.S. at 248-49. 7 In sum, the plethora of evidence Miller provides creates a genuine dispute of 8 material fact for the breach issue and challenges CHR’s assertion that there is no 9 evidence CHR actually knew RT was a chameleon carrier at the time of hiring. (ECF No. 10 124 at 7, 23.) See Anderson, 477 U.S. at 256. However, even if CHR lacked actual 11 knowledge, a rational trier of fact could find that CHR should have made the connection 12 between RT and Rhea and investigated further, especially given Ronel and Kuwar’s 13 identical last names, CHR’s past relationship with Rhea, Ronel Singh being listed as the 14 point of contact for RT, the identical phone numbers and email addresses for RT and 15 Rhea, and CHR’s own protocols for chameleon carriers. See Hall, 930 P.2d at 98 (noting 16 that breach occurs even when the employer should have known of the employee's 17 dangerous propensities) (emphasis added); see also Rockwell v. Sun Harbor Budget 18 Suites, 925 P.2d 1175, 1181 (Nev. 1996) (finding there was a genuine dispute of material 19 fact for negligent hiring because the plaintiff produced evidence that the hired employee 20 had been fired from past jobs due to his violent behavior, had a criminal record, and had 21 lied on his application). 22 Thus, drawing all inferences in the light most favorable to Miller, the Court finds 23 that there are genuine issues of material fact as to whether CHR breached its duty of 24 care. See Kaiser Cement Corp., 793 F.2d at 1103; Hall, 930 P.2d at 98. Moreover, denial 25 of summary judgment is justified because the issue of breach and whether a party’s 26 conduct is reasonable are generally questions of fact reserved for the jury. See 27 Pennington v. Ed’s Tire Serv., Inc., 130 Nev. 1228 (2014); Lee v. GNLV Corp., 22 P.3d 28 209, 212 (Nev. 2001). 2 CHR argues that Miller cannot establish proximate cause because there is no 3 evidence CHR knew of the relationship between Rhea and RT, and because CHR had 4 no control over which driver and vehicle were selected to deliver the shipment. (ECF No. 5 124 at 23, 26.) CHR also suggests that speeding by both parties, rather than the vehicle’s 6 brake issues and RT’s prior hours of service violations, was the cause of the accident. 7 (Id. at 26-27.) The Court disagrees that these arguments are sufficient to warrant 8 summary judgment in CHR’s favor. 9 A reasonable factfinder could conclude that the accident was a foreseeable harm 10 of CHR’s inadequate and unreasonable screening measures, and that CHR’s negligence 11 created an undue risk to others by placing a dangerous motor carrier on the road. See 12 Anderson, 477 U.S. at 250-51 (noting that summary judgment is inappropriate where 13 reasonable minds could differ on the material facts at issue); see also Taylor v. Silva, 615 14 P.2d 970, 971 (Nev. 1980) (noting that “[a] negligent defendant is responsible for all 15 foreseeable consequences proximately caused by his or her negligent act”) (citation 16 omitted). A rational trier of fact could also find that CHR’s failure to investigate RT, despite 17 multiple warning signs, was part of the “natural and continuous sequence, unbroken by 18 any efficient intervening cause” that produced the accident. See Taylor, 615 P.2d at 971 19 (citations omitted); see also Mahan v. Hafen, 351 P.2d 617, 620 (Nev. 1960). 20 Moreover, summary judgment is inappropriate because proximate cause generally 21 concerns issues of fact that should be reserved for the jury. See Nehls v. Leonard, 630 22 P.2d 258, 260 (Nev. 1981) (citations omitted); see also Flaherty v. Kelly, 129 Nev. 1114 23 (2013) (noting that the Nevada Supreme Court is “reluctant to affirm summary judgment 24 [in negligence cases] . . . because, generally, the question of whether a defendant was 25 negligent in a particular situation is a question of fact for the jury to resolve”) (citation 26 omitted). Thus, drawing all inferences in the light most favorable to Miller, the Court finds 27 that there are genuine disputes of material fact as to the proximate cause issue that 28 1 || should be reserved for trial. See Kaiser Cement Corp., 793 F.2d at 1103; Anderson, 477 2 || U.S. at 256. 3 || V. CONCLUSION 4 The Court notes that the parties made several arguments and cited to several 5 || cases not discussed above. The Court has reviewed these arguments and cases and 6 || determines that they do not warrant discussion as they do not affect the outcome of the 7 || issues before the Court. 8 It is therefore ordered that CHR’s motion for summary judgment (ECF No. 124) is 9 || denied. 10 DATED THIS 22"4 Day of February 2022. 11 (ho 12 □ MIRANDA M. DU 13 CHIEF UNITED STATES DISTRICT JUDGE 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28