
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.                                         -3-                    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.                                         -12-
