S & B Transportation, Inc. v. Allou Distributors, Inc.

41 F. Supp. 2d 388, 1999 U.S. Dist. LEXIS 4374, 1999 WL 188133
CourtDistrict Court, E.D. New York
DecidedMarch 30, 1999
DocketNo. CV-97-4629 (ETB)
StatusPublished
Cited by3 cases

This text of 41 F. Supp. 2d 388 (S & B Transportation, Inc. v. Allou Distributors, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
S & B Transportation, Inc. v. Allou Distributors, Inc., 41 F. Supp. 2d 388, 1999 U.S. Dist. LEXIS 4374, 1999 WL 188133 (E.D.N.Y. 1999).

Opinion

ORDER AND MEMORANDUM OPINION

BOYLE, United States Magistrate Judge.

FACTS

This is an action by the broker plaintiff, L.A.M. Truck Brokers (“LAM,”)1, against the shipper defendants, Allou Distributors, Inc., and its divisions, Transworld Grocers (“Transworld”) and Chesapeake Distributors, Inc. (“Chesapeake”) (collectively “Allou”) to recover unpaid transportation brokerage charges under the Interstate Commerce Act, 49 U.S.C. § 13706 (the “Act”) for brokerage services rendered by the plaintiff to the defendants. Amended Complaint, dated November 26, 1997, ¶ 6 (original complaint filed on August 11, 1997). Allou claims that the money allegedly owed to the plaintiff represents deductions, properly taken, for goods lost or damaged during the brokered shipments. Answer, dated December 18, 1997.

LAM is a federally licensed transportation broker. Affidavit of Lee Anne Black, dated March 18, 1998, ¶ 3 (hereinafter [390]*390“Black Aff.”)- A transportation broker acts as an intermediary from the shipper and remitting the charges to the carrier. Black Aff., ¶ 5. The broker charges the shipper a commission in exchange for its services. Black Aff., ¶ 4. Alton is a distributor of cosmetics, pharmaceuticals, and other health-related products. Affidavit of David Shamilzadeh, dated September 1, 1998, ¶ 1 (hereinafter “Shamilzadeh Aff.”). It is Allou’s practice to use transportation brokers to find responsible motor carriers and to submit claims to those carriers on its behalf if any merchandise is lost or damaged during shipment. Shamilzadeh Aff, am.

From May, 1995 to July or August, 1996, LAM brokered 102 shipments on behalf of Allou using various motor carriers. Black Aff., ¶ 8; Land Aff., ¶ 24. LAM claims that Allou failed to remit full payment on approximately eighty of these shipments and now makes claim for a total of $18,548.00 in unpaid brokerage charges. Land Aff, ¶ 5. Allou claims that, according to the custom of the industry and its own business practices, a shipper will routinely deduct amounts from broker invoices for the value of goods lost or damaged during that particular shipment. Shamilzadeh Aff, at ¶ 3'. LAM’s president, Lee Anne Black (“Black”), testified at a deposition that if she received a short payment on an invoice she would contact Allou. Deposition of Lee Anne Black, dated March 24, 1998, at 35-36 (hereinafter “Black Depo.”). She further testified that she was either told that a particular shipment was short or damaged; or, if the Allou employee had no knowledge regarding that shipment, that she would be contacted by an employee who knew why the deduction was taken. Black Depo., at 35-45. Black testified that it was the custom of the industry and her business practice to give shippers thirty days in which to file claims with LAM for goods lost or damaged during shipment. Black Depo., at 36-38. She stated that this policy enabled her to make timely claims to the carriers on behalf of the shippers. Black Depo., at 36. Black also testified, however, that she instructed Al-lou to file claims directly with the carrier and that they failed to do so. Black Depo., at 52. Black remembers receiving three written claims from Transworld which she filed with the appropriate carrier. Black Depo., at 55. LAM also claims that a number of Allou’s loss or damage deductions were made on sealed shipments which LAM claims is impossible. Black Depo., at 57-58. It is undisputed that Allou, from the beginning of its relationship with LAM, regularly deducted amounts for lost or damaged goods when paying LAM invoices. It is also undisputed that LAM continued to broker shipments for Allou, for over a year, in spite of the short payments.

LAM now moves this court, under Rule 56 of the Federal Rules of Civil Procedure, for summary judgment as to its claim against Allou. LAM asserts that it is entitled to judgment as a matter of law on its claim for the unpaid brokerage fees because, under the Act, a shipper is strictly liable to a transportation broker for full payment of services. Plaintiff’s Memorandum of Law in Support of its Motion for Summary Judgment, dated August 14, 1998, at 11 (hereinafter “PLMem.”). Allou cross-moves for dismissal under Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction. Defendant’s Memorandum of Law in Support of its Motion to Dismiss and its Opposition to Plaintiff’s Motion, dated September 11, 1998, at 3 (hereinafter “Def.Mem.”). Allou also opposes LAM’s motion for summary judgment by asserting that LAM impeded its ability to file claims with the appropriate carriers by withholding their names, addresses and phone numbers, and that there is a disputed issue of material fact as to whether and how LAM was obligated to file claims for loss or damage on Allou’s behalf. Def. Mem., at 5.

DISCUSSION

Allou has cross-moved this court, pursuant to Fed.R.Civ.P. 12(b)(1) for dismissal [391]*391of plaintiffs cause of action for lack of subject matter jurisdiction. Allou asserts that the Act cannot be the basis for federal subject matter jurisdiction for what it claims is a private contractual dispute between the parties. LAM argues that this dispute arises out of the provisions of the Act and that therefore there is federal subject matter jurisdiction.

The Interstate Commerce Act requires motor common carriers to publish their rates in tariffs filed with the Interstate Commerce Commission (“ICC”). 49 U.S.C. § 13702 (West 1998). The historical purpose of the Interstate Commerce Act was “to achieve uniformity in freight transportation charges, and thereby to eliminate the discrimination and favoritism that had plagued the railroad industry in the late 19th century.” Southern Pacific Transportation Co. v. Commercial Metals Co., 456 U.S. 336, 344, 102 S.Ct. 1815, 1821, 72 L.Ed.2d 114 (1982) (citing Midstate Horticultural Co. v. Pennsylvania R. Co., 320 U.S. 356, 361, 64 S.Ct. 128, 130, 88 L.Ed. 96 (1943); New York, N.H. & H.R. Co. v. ICC, 200 U.S. 361, 391, 26 S.Ct. 272, 276, 50 L.Ed. 515, (1906)). One of the Act’s primary purposes is to “secure the making public of rates to intending shippers.” New York Cent. & H.R.R. Co. v. United States, 166 F. 267, 269-270 (2d Cir.1908).

Both carriers and shippers are prohibited from deviating from the rates filed with the ICC. See Maislin Indus. v. Primary Steel,

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41 F. Supp. 2d 388, 1999 U.S. Dist. LEXIS 4374, 1999 WL 188133, Counsel Stack Legal Research, https://law.counselstack.com/opinion/s-b-transportation-inc-v-allou-distributors-inc-nyed-1999.