This summer, an interstate van line was granted a motion to dismiss of all state law claims associated with a storage contract. The court observed that the execution of a separate contract for storage of household goods, a service delivered entirely in the state of origin, does not permit recovery under state law because it may be deemed incidental to interstate transportation and therefore storagein-transit.
In Lloyd v. All My Sons Moving & Storage, the plaintiff alleged the existence of a contract with the defendant for storage services to be provided in addition to an interstate household goods move from Florida to Connecticut.1 The plaintiff sought damages for (1) Breach of Contract, (2) carrier liability under the Carmack Amendment, and (3) Intentional Infliction of Emotional Distress (IIED). The plaintiff asserted that the Breach of Contract and IIED claims arose out of the contract for storage rather than the interstate household goods transportation for which she separately contracted. In granting the defendant’s motion to dismiss the counts for Breach of Contract and IIED, the court noted that a separate contract for storage does not render associated claims outside the ambit of Carmack preemption.
The plaintiff hired the defendant household goods mover to load her goods in Florida, store the goods for an indefinite period of time, and then ultimately deliver to goods to her residence in Connecticut. The plaintiff’s goods were held in storage at a Florida location for approximately one year until she provided instructions for the defendant to transport the goods to Connecticut and complete delivery. The plaintiff alleged that performance did not meet her expectations because the shipment involved multiple deliveries over a lengthy period of time, not all services were provided, the cost exceeded the contracted amount, and her goods sustained loss and damage.
The plaintiff maneuvered to position the Breach of Contract and IIED claims as arising under the contract for storage services rather that for interstate moving services. This strategy was an attempt to maintain both state law claims in the face of the defendant’s motion relying on the Carmack Amendment. As interstate carriers are well aware, the Carmack Amendment provides a uniform national standard of liability for common carriers providing interstate service.2 In general, the Carmack Amendment governs claims and limits carrier liability for loss, damage or injury to cargo, and preempts common or state law remedies related to such loss, damage or injury, while claims based on conduct separate and distinct from the delivery, loss of or damage to goods survive preemption.3 State law claims related to incidental storage provided as part of interstate transportation are preempted by the Carmack Amendment.4
The plaintiff’s strategy to emphasize separate contracts and services had some merit based on other decisions.5 Courts have noted the “problematic” analysis involved in extending Carmack preemption to separate and distinct contracts for nontransportation services, as compared to services rendered under single contracts or bills of lading.6 The timing of the separate contracts can be dispositive, as cases involving separate contracts for storage are often remanded back to state court where the shipper’s request and contract for interstate transportation occurred later in time.7
Here, the court ruled in favor of the defendant on both counts despite the plaintiff’s attempt to bifurcate the services she hired the defendant to perform. The plaintiff specifically failed to demonstrate that the state law claims were in fact separate and distinct from the performance of interstate transportation services and the alleged loss and damage to her goods.
The plaintiff’s Breach of Contract claim suffered from the fact that there was no evidence that the storage service, while allegedly agreed and performed under a separate contract, was in fact separate and distinct from the interstate transportation service. Rather, the goods were under the defendant’s care, custody and control for performance of interstate transportation services from loading at the point of origin, throughout the storage services, and finally to delivery at the ultimate destination. The court specifically observed that the purported storage contract had no bearing on the case: “[e]ven assuming Plaintiff and Defendant executed a separate contract for storage, Defendant maintained possession of the belongings from the time they left Plaintiff’s Florida residence until they were delivered to her Connecticut residence…[t]his illustrates that storage of the belongings was part of the agreed transportation.”8
As for the plaintiff’s IIED claim, the court noted that the plaintiff only contended that the defendant’s alleged actions in connection with the delivery of her goods caused IIED. She did not argue that IIED specifically resulted from the defendant’s activities in performance of the storage services. In the words of the court, the allegation of IIED in the context of delivery services “falls squarely within the preemptive scope of the Carmack Amendment, and therefore…must be dismissed.”9
While the court’s ruling on this motion to dismiss is favorable to the carrier, care must always be taken to ensure that the limitation of liability and preemption available under the Carmack Amendment extend as broadly as possible across the portfolio of transportation and related services. If the defendant’s operations team had chosen or had been requested to handle this shipment in a different manner, then the outcome could have been less favorable. Suppose, for example, that the defendant converted the shipment to permanent storage during the year-long service. Under such scenario, the termination of interstate transportation service would certainly complicate the assertion of Carmack preemption to dismiss the state law claims.10 Of course, operational best practices are always dependent on the services actually requested and performed. Conversion to permanent storage may be requested by a shipper or even required of the carrier if interstate transportation in fact terminates or auction proceedings are necessary.