Norfolk Southern Railway Company v. Baker Hughes Oilfield Operations LLC

CourtDistrict Court, S.D. Ohio
DecidedJanuary 21, 2022
Docket2:19-cv-03486
StatusUnknown

This text of Norfolk Southern Railway Company v. Baker Hughes Oilfield Operations LLC (Norfolk Southern Railway Company v. Baker Hughes Oilfield Operations LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Norfolk Southern Railway Company v. Baker Hughes Oilfield Operations LLC, (S.D. Ohio 2022).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

NORFOLK SOUTHERN RAILWAY COMPANY,

: Plaintiff,

Case No. 2:19-cv-3486

v. Judge Sarah D. Morrison

Magistrate Judge Kimberly A.

Jolson

BAKER HUGHES OILFIELD : OPERATIONS, LLC,

Defendants.

OPINION & ORDER

This matter is before the Court on three motions. First, Plaintiff Norfolk Southern Railway Company moves for summary judgment on all of its claims against Defendant Baker Hughes Oilfield Operations, LLC. (ECF Nos. 61, 64). Baker Hughes, in turn, moves for summary judgment on all of Norfolk’s claims. (ECF No. 65). Finally, Norfolk moves for sanctions and to preclude testimony. (ECF No 49). All motions are fully briefed. I. BACKGROUND A. Factual Background This lawsuit arises out of two freight shipments of frac sand in December 2016 and February 2017. (ECF No. 65, Baker’s Mot., PageID 1587). Baker Hughes sold the frac sand to Silver Creek Services; per the terms of the bill of sale, Silver Creek was responsible for freight transportation costs to ship the sand from North Dakota to Ohio. (ECF No. 65-1, Bill of Sale, PageID 1617–18). Norfolk Southern was not a party to sale. Despite Silver Creek’s responsibility for the frac sand transportation, Baker Hughes actively coordinated shipping logistics after the sale. (ECF No. 65, Baker’s Mot., PageID 1590; ECF No. 64, Norfolk’s Mot., PageID 1542–

43). Shipment of the frac sand required the services of two rail carriers – BNSF Railway (the originating carrier) and Norfolk Southern. (ECF No. 61-2, Harris Decl., PageID 1044–45). Rail services are ordered through the originating carrier’s online portal, from which the bill of lading is issued. (Id.). Baker Hughes, attempting to “get those 39 cars moving,” did not have login credentials for BNSF’s

portal. (ECF No. 61-15, PageID 1211–16; ECF No. 63, Monaco Depo, PageID 1510– 12). So, Baker Hughes instructed Francis Drilling Fluids (“FDF”) to ship the sand. Baker Hughes had previously used FDF to arrange transportation of freight and, as to this frac sand, it instructed FDF to use FDF’s login credentials to submit shipping instructions for the frac sand to BNSF’s online portal. (ECF No. 60, Richard Depo, PageID 873–75; ECF No. 61-15, PageID 1216). Specifically, Baker Hughes employee Mario Monaco instructed FDF employee

Freddie Richard to “notify the railroad and enter the ‘billing’ (shipping instructions) in the BNSF system […., and] ensure that the freight payer in the BNSF system is shown as Silver Creek.” (ECF No. 61-14, PageID 1206–07). Mr. Monaco intended this to mean that “FDF was to contact [BNSF] and let them know when the cars were ready to be released and what location they needed to go.” (Monaco Depo, PageID 1500). Only FDF could approve release of the rail cars because the cars were on a site that FDF owned and controlled. (Richard Depo, PageID 963). Mr. Monaco further told FDF, “I’m going to be watching from my end and you need to watch from your end to make sure that Baker Hughes or FDF doesn’t show up as

the party to bill… other than that, the product needs to leave your facility and go wherever [Silver Creek] designate[s] that it needs to be delivered.” (Id., PageID 895–96). Following these orders, FDF submitted the shipping instructions to the BNSF online portal and released the cars. (Richard Depo, PageID 885–86, 893–96, 986–87; ECF No. 57, Franklin Depo, PageID 645–46; Harris Decl., PageID 1044–

45). Bills of lading for two shipments were issued on December 16, 2016 and February 21, 2017. (ECF Nos. 61-16, 61-17). The bills of lading were marked “prepaid,” FDF was identified as the shipper, Silver Creek was the “bill to” party, and the Section 7 nonrecourse boxes were not checked. (Id.; See also ECF No. 7-2). The approval of both Silver Creek and Baker Hughes was necessary for completion of the frac sand shipments. (Richard Depo, PageID 902, 989). Ultimately, approval was given, the rail cars were released, and the frac sand was

delivered to its destination. (Harris Decl., PageID 1045). For its services, Norfolk sent an invoice to Silver Creek (the “bill to” party), but Silver Creek refused to pay the charges. (Id., PageID 1046). B. Procedural Background Prior to commencing this action, Norfolk sued Silver Creek for the unpaid freight charges but voluntarily dismissed that suit. (ECF No. 65, PageID 1587). Norfolk then filed a lawsuit against FDF for the unpaid freight charges but FDF filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of Texas. (Id.). Norfolk received a payment of $2,987.91 from FDF

in accordance with FDF’s approved Chapter 11 bankruptcy plan. Norfolk then commenced this action against Baker Hughes on August 12, 2019. (ECF No. 1). Norfolk brought claims for: Failure to Pay Rail Common Carrier Freight Charges (Count I); Breach of Contract (Count II); Unjust Enrichment (Count III); Promissory Estoppel (Count IV); and Quantum Meruit (Count V). (ECF No. 1). For its part, Baker Hughes brought a third-party complaint against

Defendants Silver Creek Services, Inc. and Silver Line Logistics, Inc. (ECF No. 15). Those defendants failed to answer Baker Hughes’s complaint, and the clerk entered default. (ECF No. 41). Baker Hughes has not moved for default judgment against either third-party Defendant. Norfolk has now moved for sanctions and to preclude testimony. (ECF No. 49). Both parties have moved for summary judgment on all five claims alleged in Norfolk’s complaint. (ECF Nos. 61, 65).

II. SUMMARY JUDGMENT MOTIONS A. Standard of Review Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The movant has the burden of establishing there are no genuine issues of material fact, which may be achieved by demonstrating the nonmoving party lacks evidence to support an essential element of its claim. Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986); Barnhart v. Pickrel, Schaeffer & Ebeling Co., 12 F.3d 1382, 1388–89 (6th Cir. 1993). The burden then shifts to the nonmoving

party to “set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quoting Fed. R. Civ. P. 56). When evaluating a motion for summary judgment, the evidence must be viewed in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). A genuine issue exists if the nonmoving party can present “significant

probative evidence” to show that “there is [more than] some metaphysical doubt as to the material facts.” Moore v. Philip Morris Cos., 8 F.3d 335, 339–40 (6th Cir. 1993). In other words, “the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Anderson, 477 U.S. at 248; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (concluding that summary judgment is appropriate when the evidence could not lead the trier of fact to find for the non-moving party).

B.

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