Progressive Rail, Inc. v. CSX Transportation, Inc.

          MEMORANDUM OPINION & ORDER

          GREGORY F. VAN TATENHOVE, UNITED STATES DISTRICT JUDGE

         Progressive Rail, Inc. and Siemens Energy, Inc. brought separate actions, in separate districts, seeking to recover for damages to electrical transformers they claim were sustained during rail shipment by CSX Transportation, Inc. from Baltimore, Maryland, to Ghent, Kentucky. Progressive filed its action against CSX in the Eastern District of Kentucky on April 1, 2015; Siemens filed its action against CSX in the District of Maryland on April 14, 2015. Ultimately, Siemens's action was transferred to the Eastern District of Kentucky, and consolidated into Progressive's action. Following consolidation, Siemens filed a Second Amended Complaint. CSX now moves to dismiss that complaint. Additionally, Siemens filed a motion to intervene in Progressive's action. For the following reasons, CSX's Motion to Dismiss will be GRANTED IN PART and DENIED IN PART, and Siemens's Motion to Intervene will be DENIED.

         I

         Given the present context, the factual summary that follows is taken from the Siemens's Second Amended Complaint [R. 52.] and construed in favor of the plaintiff. See Crugher v. Prelesnik, 761 F.3d 610, 614 (6th Cir. 2014) (citation omitted). At some point prior to August 23, 2012, Gallatin Steel Company purchased two electrical transformers from Siemens. [See R. 52.] Siemens contracted with Kuehne Nagel, Inc. (K), who contracted with Progressive, who contracted with CSX, for the shipment of the two transformers by rail from the Port of Baltimore to Ghent, Kentucky. [See Id. at 2-3.] Progressive, having arranged the rail shipment of the transformers with CSX, issued a bill of lading for this shipment.^[1] [Id. at 3.] The bill of lading listed Progressive Rail, Inc. as the shipper, and Gallatin Steel Company as the Consignee. [R. 53-2.] The bill of lading was not signed by Progressive, CSX, K, or Siemens, and it contained no terms or conditions or other boilerplate language. [See id.] Additionally, the area of the bill of lading dedicated to the declared value of the cargo was left blank. [Id.]

         On or about August 23, 2012, the transformers, “in good order and condition, were delivered to CSX[T] at the port of Baltimore, Maryland for carriage to Siemens' customer Gallatin Steel Company in Ghent, Kentucky.” [R. 52 at 2.] The transformers arrived in Ghent in a damaged condition. [Id. at 3.] “[T]he transformers' impact recorders indicat[ed] that the transformers had been subjected to g-forces greater than the maximum allowed for transportation by rail. . . .” [Id.] One of the transformers (Serial Number D147578) sustained damage to the extent it had to be “returned to Siemens [sic] manufacturing plant in Dresden, Germany where it was opened, inspected, repaired and subsequently returned to Gallatin Steel Company.” [Id.] The other transformer (Serial Number D147579), although damaged, remained in the United States for later inspection and testing. [See id.] According to Siemens, it sustained losses estimated at approximately $1, 555, 824.60 for costs in transporting, inspecting, repairing, and storing the transformers. [Id. at 4-5.] Within nine months of the transformers being damaged, Siemens, pursuant to 49 U.S.C. § 11706(e), filed a written claim with CSX regarding the damaged transformers. [Id. at 4.] CSX denied Siemens's claim on April 18, 2013. [Id.]

         Siemens first asserts a claim against CSX under the Carmack Amendment, 49 U.S.C. § 11706, alleging CSX, as the rail carrier, is liable to Siemens, as the owner of the transformers, for the damage incurred by the transformers during rail shipment. [See generally R. 52.] Siemens also seems to assert state law claims of negligence and breach of duty as bailee against CSX. [Id. at 4.] CSX moves to dismiss Siemens's Second Amended Complaint asserting Siemens's lacks standing to bring a Carmack Amendment claim because Siemens was not named in the bill of lading. [R. 53.] Additionally, CSX seeks to dismiss any state law claims Siemens asserts in its Second Amended Complaint because any such claim is preempted by the Carmack Amendment. [Id.]

         II

         The Federal Rules of Civil Procedure allow a defendant to seek dismissal of a complaint which fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). In making such a motion, “[t]he defendant has the burden of showing that the plaintiff has failed to state a claim for relief.” DirecTV, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (citing Carver v. Bunch, 946 F.2d 451, 454-55 (6th Cir. 1991)). Federal Rule 8 requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). However, to survive a motion to dismiss, the complaint “must contain either direct or inferential allegations” establishing each material element required for recovery under some actionable legal theory. Bishop v. Lucent Technologies, Inc., 520 F.3d 516, 519 (6th Cir. 2008) (internal citation and quotation marks omitted).

         When reviewing a Rule 12(b)(6) motion, the Court “construe[s] the complaint in the light most favorable to the plaintiff, accept[s] its allegations as true, and draw[s] all reasonable inferences in favor of the plaintiff.” DirecTV, Inc., 487 F.3d at 476 (citation omitted). The Court, however, “need not accept as true legal conclusions or unwarranted factual inferences.” Id. (citation omitted). Moreover, as is now well known, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In other words, the facts that are pled must rise to the level of plausibility, not just possibility - “facts that are merely consistent with a defendant's liability . . . stop[ ] short of the line between possibility and plausibility.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). According to the Sixth Circuit, “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” DirecTV, Inc., 487 F.3d at 476 (citing Twombly, 550 U.S. at 556). Thus, the plaintiff must at least “provide the grounds of his entitlement to relief, [which] requires more than labels and conclusions. . . .” Twombly, 550 U.S. at 555 (internal citations and quotation marks omitted).

         When ruling on a Rule 12(b)(6) motion, a district court generally may not consider matters presented outside the pleadings unless it converts the motion into one for summary judgment under Rule 56. Fed.R.Civ.P. 12(d); Heinrich v. Waiting Angels Adoption Servs., Inc., 668 F.3d 393, 405 (6th Cir. 2012). The district court, however, also has the discretion to ignore such evidence and resolve the motion solely on the basis of the pleadings. Heinrich, 668 F.3d at 405; Max Arnold & Sons, LLC v. W.L. Hailey & Co., Inc., 452 F.3d 494, 502-03 (6th Cir. 2006) (collecting cases). Certain matters beyond the allegations in the complaint such as “matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint, also may be taken into account.” Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir. 2001) (citations and internal quotation marks omitted). Additionally, the Sixth Circuit has held that when a defendant attaches undisputed documents to a motion to dismiss, they “are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to her claim.” Id. (citations and internal quotation marks omitted).

         A

         CSX first challenges whether Siemens has standing to bring its claim. [R. 53.] “Standing is a threshold question in every federal case, ” Coal Operators & Assocs., Inc. v. Babbitt, 291 F.3d 912, 915 (6th Cir. 2002) (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)). Article III's “irreducible constitutional minimum” of standing has three elements. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). The plaintiff must: (1) have suffered an ‘injury-in-fact' - an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual an imminent, not conjectural and hypothetical;” (2) show that the injury is “fairly traceable to the challenged action of the defendant;” and (3) show that it is “likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” White v. United States, 601 F.3d 545, 551 (6th Cir. 2010) (quoting Lujan, 504 U.S. at 560-61). “The party invoking federal jurisdiction bears the burden of establishing these three elements.” Lujan, 504 U.S. at 561. Siemens's Second Amended Complaint addresses all three of the constitutional requirements. [See R. 52.]

         CSX, however, does not challenge Siemens's constitutional standing, but rather asserts that Siemens lacks statutory standing to bring its Carmack claim. Where constitutional standing deals with the federal district courts' power to hear Article III cases and controversies, statutory standing looks to whether Congress, by statute, intentionally removed certain causes of actions from the realm of cases or controversies federal district courts normally hear. Relatedly, Congress did not remove cases concerning rail carrier liability from those Article III cases and controversies heard by lower federal courts.

         In 1906, Congress enacted the Carmack Amendment, which “created a national scheme of carrier liability for loss or damages to goods transported in interstate commerce.” Exel, Inc. v. S. Refrigerated Transp. Inc., 807 F.3d 140, 148 (6th Cir. 2015). The purpose of the Carmack Amendment “is to relieve cargo owners of the burden of searching out a particular negligent carrier from the often numerous carriers handling an interstate shipment of goods.” KawasakiKisen Kaisha Ltd. V. ...