Rini v. United Van Lines

• Court: Court of Appeals for the First Circuit
• Decided: January 23, 1997
• Docket: 95-2334
• Status: Published

Opinion

USCA1 Opinion

UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT

                                 ____________________



          No. 95-2334



                                      JANE RINI,



                                Plaintiff - Appellee,



                                          v.



                               UNITED VAN LINES, INC.,



                                Defendant - Appellant.



                                 ____________________



                     APPEAL FROM THE UNITED STATES DISTRICT COURT



                          FOR THE DISTRICT OF MASSACHUSETTS



                    [Hon. Michael A. Ponsor, U.S. District Judge]
                                             ___________________



                                 ____________________



                                        Before



                               Torruella, Chief Judge,
                                          ___________



                         Coffin and Campbell, Circuit Judges.
                                              ______________



                                _____________________



               Daniel  J.  Gleason,  with   whom  Terry  L.  Wood,  Nutter,
               ___________________                _______________   _______

          McClennen  & Fish,  LLP, Wesley  S. Chused, Lisa  Sternschuss and
          _______________________  _________________  _________________

          Looney & Grossman were on brief for appellant.
          _________________

               George W. Wright, Michael  J. Rush and Kenneth E.  Siegel on
               ________________  ________________     __________________

          brief  for American  Movers Conference,  Association  of American

          Railroads and American Trucking Associations, amicus curiae.

               John P.  Pucci,  with  whom Jeanne  M.  Kaiser  and  Fierst,
               ______________              __________________       _______

          Mitchell & Pucci were on brief for appellee.
          ________________


____________________



                                   January 17, 1997

                                 ____________________



TORRUELLA, Chief Judge.   Plaintiff-appellee Jane  Rini
                    TORRUELLA, Chief Judge.
                               ___________



          ("Rini") hired defendant-appellant United Van Lines ("United") to



          move her belongings from South Carolina to Massachusetts.  Rini's



          household items were packed on August 20, 1990, and loaded into a



          moving  van  the  next day.    Her  belongings  arrived at  their



          destination on August 27,  but certain items were missing.   Rini



          proceeded  to file a claim with United.  Following an acrimonious



          attempt to settle the  claim, Rini filed a complaint  in district



          court  on December 22, 1992.  The complaint included claims under



          the Carmack  Amendment to the Interstate Commerce  Act, 49 U.S.C.



            11707  (1992),1 as  well  as state  law  claims of  negligence,



          misrepresentation, use of unfair  and deceptive acts in violation



          of Mass. Gen. L. ch. 93A, and intentional infliction of emotional



          distress.   See Rini v. United  Van Lines, 903 F.  Supp. 224, 225
                      ___ ____    _________________



          (1995).



                    The  jury  found for  Rini  on  the Carmack  Amendment,



          negligence, and misrepresentation  claims in connection with  the



          claims process.  See Rini, 903 F. Supp. at  230.  On the claim of
                           ___ ____



          intentional infliction of emotional  distress, the jury found for



          United.   Id.  The district court  found that United, in handling
                    ___



          Rini's claim, had willfully violated chapter 93A.  Id. at 232-33.
                                                             ___



          Damages  were awarded  in the  amount of  $50,000 on  the Carmack



          claim and a  total of $300,000 on the state law claims.  Id. 234-
                                                                   ___



                              
          ____________________



          1  There have been amendments to the Carmack Amendment since 1990

          when the events  at issue in  this case took  place.   Throughout

          this  opinion,  references  will  be made  to  the  pre-amendment

          statute.



                                         -2-



35.  In addition, Rini was awarded attorney's fees in the  amount



          of $146,950,  costs in the  amount of $7,359.60,  and prejudgment



          interest in  the amount of  $100,000.   See Memorandum  Regarding
                                                  ___



          Plaintiff's  Motion for Attorney's  Fees, Costs, and Pre-Judgment



          Interest, Nov. 1, 1995.  This appeal by United ensued.



                    We must determine whether the state law claims on which



          Rini prevailed are  preempted by  the Carmack  Amendment.   These



          claims are  for negligence,  misrepresentation, and  violation of



          Mass. Gen. L. ch. 93A.



                       I.  Preemption and the Carmack Amendment
                       I.  Preemption and the Carmack Amendment



                    The  Carmack Amendment to  the Interstate Commerce Act,



          49 U.S.C.    11707, passed  in 1906 as  part of the  Hepburn Act,



          ch. 5391, 34  Stat. 584,  governs the  liability of carriers  for



          lost  or damaged goods.   The relevant portions  of the Amendment



          are:



                      A  common carrier  . .  . subject  to the

                      jurisdiction  of the  Interstate Commerce

                      Commission . . . shall issue a receipt or

                      a bill of lading for property it receives

                      for transportation . .  . .  That carrier

                      . . .  and any other common  carrier that

                      delivers  the  property and  is providing

                      transportation or service subject  to the

                      jurisdiction  of the Commission . . . are

                      liable  to the person entitled to recover

                      under the receipt or bill of lading.  The

                      liability imposed under this paragraph is

                      for actual loss or injury to the property

                      caused by (1)  the receiving carrier, (2)

                      the  delivering  carrier, or  (3) another

                      carrier  over  whose lines  or  route the

                      property is transported  into the  United

                      States . . . .



          49 U.S.C.   11707.


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Article VI  of the United States  Constitution provides



          that the laws of the  United States "shall be the supreme  Law of



          the Land," notwithstanding contrary state laws.  U.S. Const. art.



          VI,   2.   It is settled, therefore, "that  all conflicting state



          provisions be without effect."   Maryland v. Louisiana, 451  U.S.
                                           ________    _________



          725, 746 (1981).  When faced with a preemption question, however,



          consideration  "starts with  the  assumption  that  the  historic



          powers of the States [are] not to be superseded  by . . . Federal



          Acts  unless  that  [is]  the   clear  and  manifest  purpose  of



          Congress."  Rice  v. Santa Fe Elevator  Corp., 331 U.S.  218, 230
                      ____     ________________________



          (1947).



                      Such  a purpose  [to displace  state law]

                      may be  evidenced in  several ways.   The

                      scheme  of federal  regulation may  be so

                      pervasive  as  to  make   reasonable  the

                      inference that Congress left no  room for

                      the States to supplement  it.  Or the Act

                      of Congress  may touch  a field  in which

                      the federal interest is so  dominant that

                      the  federal  system will  be  assumed to

                      preclude enforcement of state laws in the

                      same  subject.    Likewise,   the  object

                      sought to  be obtained by the federal law

                      and the character of  obligations imposed

                      by it may reveal the same purpose.



          Id.   Finally, a  state statute is  void to the  extent it  is in
          ___



          conflict with a federal statute.  Maryland, 451 U.S. at 747.
                                            ________



                    In determining the scope of Carmack preemption, we look



          to the intent of Congress and  the purpose of the Amendment.  Our



          inquiry  into the  intent  of  Congress  is made  more  difficult



          because the  Carmack Amendment was adopted  without discussion or



          debate.  40  Cong. Rec. 7075  (1906).  It  is accepted,  however,



          that the  principal  purpose  of the  Amendment  was  to  achieve



                                         -4-



national uniformity in the liability assigned to carriers.  "[I]t



          is evident that  Congress intended  to adopt a  uniform rule  and



          relieve such contracts from the diverse regulation to  which they



          had  been theretofore subject."   Adams Express Co. v. Croninger,
                                            _________________    _________



          226  U.S.  491, 506  (1912).   The  importance of  uniformity has



          frequently  been stressed  in subsequent Supreme  Court opinions.



          See, e.g., New York, N.H.  & Hartford R.R. Co. v.  Nothnagle, 346
          ___  ____  ___________________________________     _________



          U.S. 128, 131 (1953); Atchison, Topeka  & Santa Fe Ry. v. Harold,
                                ________________________________    ______



          241 U.S. 371, 378 (1916).



                    The foundation for Carmack preemption analysis is Adams
                                                                      _____



          Express,  in which  the Supreme  Court considered  the preemptive
          _______



          scope of the Carmack Amendment, concluding:



                      That the legislation  supersedes all  the

                      regulations and policies of  a particular

                      state upon the same subject  results from

                      its general character.   It embraces  the

                      subject of  the liability of  the carrier

                      under  a bill  of  lading which  he  must

                      issue,  and  limits his  power  to exempt

                      himself by rule, regulation, or contract.

                      Almost every  detail  of the  subject  is

                      covered so completely  that there can  be

                      no  rational  doubt  but   that  Congress

                      intended  to  take   possession  of   the

                      subject,   and    supersede   all   state

                      regulation with reference to it.



          Adams Express, 226 U.S. at 505-06.  The Court stated further that
          _____________



          to  allow state regulations  to affect the  liability of carriers



          "would  be to  revert  to the  uncertainties  and diversities  of



          rulings which led to the amendment."  Id. at 506.
                                                ___



                    The  preemptive effect  of the  Carmack  Amendment over



          state law  governing damages for the loss  or damage of goods has



          been reiterated by  the Supreme Court in  many cases and  is well



                                         -5-



established.   See,  e.g.,  Southeastern Express  Co. v.  Pastime
                         ___   ____   _________________________     _______



          Amusement  Co.,  299 U.S.  28  (1936)  (claim of  negligence  for
          ______________



          failure to deliver  a film  on time is  preempted); Charleston  &
                                                              _____________



          Western Carolina Ry. Co. v. Varnville Furniture Co., 237 U.S. 597
          ________________________    _______________________



          (1915) (state  statute  imposing a  penalty  for failure  to  pay



          claims to a shipper within 40 days is preempted).



                    Unfortunately, the  Supreme Court  case  law  does  not



          provide clear guidance  on the reach of the  preemption doctrine.



          In  particular, the Court has  not clarified the  extent to which



          state law provisions pertaining to the claims process, as opposed



          to the shipping of goods, are preempted.  Two cases, however, are



          instructive.  First, in Missouri, Kansas, & Texas Railway Company
                                  _________________________________________



          of  Texas v. Harris, 234 U.S. 412  (1914), the Court considered a
          _________    ______



          Texas  statute  that  allowed  for  the  recovery  of  reasonable



          attorney's  fees in cases where  the value of  the claims did not



          exceed  two hundred  dollars.   The Court  held that  because the



          state statute at issue "had a broad sweep which only incidentally



          includes  claims rising  out of  interstate commerce,  it follows



          that it  cannot be held to  constitute a direct burden  upon such



          commerce."  Id. at 416.   For this reason, the statute  was ruled
                      ___



          to  be valid and able  to exist alongside  the Carmack Amendment.



          The important distinction made  by the Court was that  "the Texas



          statute  . .  . does  not  anywhere either  enlarge or  limit the



          responsibility of  the carrier for the loss of property intrusted



          to it in transportation, and only incidentally affects the remedy



          for  enforcing that responsibility."   Id. at  420.  Furthermore,
                                                 ___


-6-



"[t]he  local statute . . . does not  at all affect the ground of



          recovery,  or the  measure  of recovery;  it  deals only  with  a



          question  of costs,  respecting which  Congress has  not spoken."



          Id. at 421-22.
          ___



                    Second,  in Varnville,  the  Court ruled  that a  South
                                _________



          Carolina  statute  that imposed  a fine  of  $50 on  carriers for



          failure to  pay within 40 days for damage to goods transported in



          interstate  commerce  was  preempted by  the  Carmack  Amendment.



          Varnville,  237  U.S. at  603.   The  Court determined  that "the
          _________



          special regulations  and policies  of particular states  upon the



          subject  of  the  carrier's  liability  for  loss  or  damage  to



          interstate shipments, and the  contracts of carriers with respect



          thereto,  have been superseded."  Id. at  603.  The state statute
                                            ___



          before  the  Court was  found to  "overlap[]  the Federal  act in



          respect of the subjects, the grounds, and the extent of liability



          for loss."  Id.
                      ___



                    These  two cases  are  of particular  relevance to  the



          instant  case  because the  state laws  at  issue did  not govern



          claims arising directly out of damage to goods.  Like the instant



          case, both  Harris and   Varnville  consider state  remedies that
                      ______       _________



          relate  to the claims process.   The distinction  between the two



          cases was made in Varnville, where the Court stated that:
                            _________



                      [i]t   is  true  that   in  [Harris]  the
                                                   ______

                      inclusion  of  the  attorney's  fee,  not

                      exceeding   $20,   in   the  costs   upon

                      judgments  for  certain small  claims was

                      upheld,  although  incidentally including

                      some  claims  arising  out of  interstate

                      commerce.    But  apart  from  the effect

                      being only incidental, the  ground relied



                                         -7-



upon was that the statute did not 'in any

                      way  enlarge  the  responsibility of  the

                      carrier' for  loss or 'at all  affect the

                      ground  of  recovery, or  the  measure of

                      recovery'.   The  South Carolina  Act, on

                      the other hand, extends the  liability to

                      losses   on   other   roads    in   other

                      jurisdictions, and increases it by a fine

                      difficult to escape.



          Id. at 603 (citations omitted).
          ___



                    The lesson from these cases is  that state statutes are



          preempted  by the Carmack Amendment  if they "in  any way enlarge



          the responsibility  of the carrier for loss  or at all affect the



          ground of recovery, or the measure of recovery."  Id.
                                                            ___



                    The  Carmack   Amendment   and  the   set  of   federal



          regulations  that  complement  it   cover  not  only  the  actual



          transport of goods, but they also govern the claims process.  For



          example,  the Amendment itself  provides that a  carrier "may not



          provide . . . a period of less than 9 months for filing a claim .



          . . and a period of less than 2 years for bringing a civil action



          against it under this section."  49 U.S.C.   11707(e).2



                    In light of  the Court's holding in  Varnville, we find
                                                         _________



          that  all state laws that  impose liability on  carriers based on
                                                                   ________

                              
          ____________________



          2     See  also  49  C.F.R.      1005.2-1005.5.    These  federal
                _________

          regulations govern the filing of claims,   1005.2, acknowledgment

          of  claims,    1005.3, investigation  of  claims,    1005.4,  and

          disposition  of claims,   1005.5.   Failure to  comply with these

          federal regulations subjects the carrier  to sanctions.  See Zola
                                                                   ___ ____

          v. I.C.C., 889 F.2d 508, 509 (3d Cir. 1989); Aaacon Auto Transp.,
             ______                                    ____________________

          Inc. v. I.C.C., 792 F.2d  1156, 1158 (D.C. Cir. 1986).   Although
          ____    ______

          "the mere existence of a federal regulatory or enforcement scheme

          . .  . does not  by itself  imply preemption of  state remedies,"

          English v. General Elec. Co.,  496 U.S. 72, 87 (1990), the  above
          _______    _________________

          federal regulations  indicate that  the claims process  is within

          the scope  of the  shipper-carrier relationship that  the federal

          government seeks to regulate.



                                         -8-



the  loss or damage of shipped goods  are preempted.  A state law
          ____________________________________



          "enlarges  the responsibility of the  carrier for loss  or at all



          affects  the ground of recovery, or the measure of recovery," id.
                                                                        ___



          at 603,  where, in the  absence of an  injury separate and  apart



          from the loss  or damage of goods, it increases  the liability of



          the carrier.   Preempted state law claims, therefore, include all



          liability  stemming  from  damage  or loss  of  goods,  liability



          stemming  from the claims  process, and liability  related to the



          payment  of claims.   Thus, the  forty day  limit for  payment at



          issue  in Varnville is preempted.   On the  other hand, liability
                    _________



          arising from separate harms  -- apart from the loss or  damage of



          goods --  is not preempted.   For example, if an  employee of the



          carrier  assaulted and  injured the  shipper, state  law remedies



          would not  be  preempted.   Similarly,  a claim  for  intentional



          infliction of  emotional distress alleges  a harm to  the shipper



          that is  independent from  the loss  or damage  to goods  and, as



          such, would not be preempted.3



                                   II.  Application
                                   II.  Application


____________________



          3   We are aware  that our holding  today conflicts with  certain

          previous decisions  of the District  Court of Massachusetts.   In

          particular, we note that the cases of Sokhos v. Mayflower Transit
                                                ______    _________________

          Inc.,  691 F. Supp. 1578 (D. Mass  1988), and Mesta v. Allied Van
          ____                                          _____    __________

          Lines,  695 F. Supp. 63  (D. Mass. 1988),  allowed certain claims
          _____

          that  would  be preempted  under the  decision  that we  lay down

          today.  To the  extent these decisions are inconsistent  with our

          holding, they  do not represent the  law of the circuit.   We are

          also aware that our own decision in Fredette v. Allied van Lines,
                                              ________    ________________

          66  F.3d 369 (1st Cir. 1995), involved both Carmack Amendment and

          state  law claims.   Id.  at 372.   That  case did  not, however,
                              ____

          address  the  preemption  issue  and,  therefore,  offers  us  no

          guidance.



                                         -9-



In the instant  appeal, the state  law claims at  issue



          all stem  from the  loss of  goods.   The alleged negligence  and



          misrepresentation took  place in the  course of settling  a claim



          for damages stemming from the move.   Rini suffered no harm other



          than the loss  of goods and, therefore, her state  law claims are



          preempted  by the Carmack Amendment.   Had Rini  prevailed on her



          claim for intentional infliction  of emotional distress, it would



          not have been preempted.  Because the three state claims at issue



          in  this  appeal involve  no injury  save  the loss  of property,



          however, we find them to be preempted.



                    Our conclusion is consistent with the view taken by the



          Second Circuit in Cleveland v. Beltman North American Company, 30
                            _________    ______________________________



          F.3d 373 (2d Cir. 1994), cert denied,  115 S. Ct. 901 (1995).  In
                                   ___________



          that  case, the  court described  the plaintiffs'  allegations as



          follows:



                      In   handling  plaintiffs'   claims,  the

                      moving  company --  in  a deliberate  and

                      determined     effort    to     frustrate

                      plaintiffs'  collection  of  damages  for

                      their  losses  --  was  guilty  of  foot-

                      dragging  and stonewalling.   It  did not

                      deal fairly  and in good  faith with  the

                      couple.



          Id.  at 374.   The  claim addressed  by the  court was  a federal
          ___



          common law claim for breach of  an implied covenant of good faith



          and  fair dealing in the claims process, damages from which "were



          to be exclusive of damages awarded for actual loss under the bill



          of lading."   Id. at  376.   The Second Circuit  held that  there
                        ___



          could be no federal common law  claim for a breach of the implied



          covenant of  good faith  and fair dealing.   Id.  at 379.   In so
                                                       ___



                                         -10-



deciding, the court concluded  that "[a] claim for breach  of the



          implied covenant of good  faith and fair dealing resulting  in an



          award  of punitive damages could  well thwart one  of the primary



          purposes  of  the Carmack  Amendment;  that is,  to  provide some



          uniformity in the disposition  of claims brought under a  bill of



          lading."  Id.  Although Cleveland dealt with an  issue of federal
                    ___           _________



          common law, the  same reasoning implies  that state law  remedies



          for loss or damage to goods would be preempted.



                    The  instant case  presents  the same  question as  did



          Cleveland.  We face a plaintiff  who has been ill-treated in  her
          _________



          attempts  to  settle her  claim  with  United.   As  a  result of



          United's  unfair  practices,  the  jury  found  for  Rini on  the



          negligence and misrepresentation counts and the trial judge found



          for Rini on the use of unfair and deceptive acts count.  Like our



          sister circuit before us, we note that although "[i]t may be that



          Congress'  enforcement  scheme  does  not  provide  a  sufficient



          deterrent  to the  type of  conduct  defendants employed  in this



          case," id.  at 379, we find that the federal scheme has preempted
                 ___



          negligence, misrepresentation, and chapter 93A claims.



                    Finally,  we  note   that  our  ruling   preserves  the



          uniformity  of  the  federal  scheme by  protecting  the  federal



          government's  exclusive  jurisdiction  over  the  shipper-carrier



          relationship,  the importance  of which  has been  underscored on



          numerous occasions.4   "The purpose of [the Carmack Amendment] is



          to  establish  uniform federal  guidelines  designed  in part  to

                              
          ____________________



          4  See supra pp. 4-5.
             ___ _____



                                         -11-



remove  the uncertainty  surrounding a  carrier's liability  when



          damage occurs  to a  shipper's interstate  shipment."   Hughes v.
                                                                  ______



          United Van Lines, Inc., 829 F.2d 1407, 1415  (7th Cir. 1987); see
          ______________________                                        ___



          also Cleveland, 30 F.3d  at 379 (stating that one  of the primary
          ____ _________



          purposes of the Carmack Amendment is to provide uniformity in the



          disposition of claims brought  under a bill of lading).   Because



          the  Carmack  Amendment was  intended  to  provide uniformity  to



          claims for the loss or damage to goods, the goal of uniformity is



          not  frustrated by the allowance of state law claims for injuries



          that are separate and distinct from such loss or damage.



                                   III.  Conclusion
                                   III.  Conclusion



                    For  the  foregoing  reasons,  the  conclusion  of  the



          district  court regarding  the preemptive  effect of  the Carmack



          Amendment  is reversed.   In  light of  our ruling,  the district
                        ________



          court's judgment  as to costs, fees and prejudgment interest must



          be revisited.  The case is remanded to the district court for the
                                     ________



          entry of an order with  respect to damages and a ruling  on fees,



          costs, and interest consistent with this decision.


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