Steve Block, Foster Pepper PLLC, USA

Ref: Mid-America Freight Logistics, LLC v. Walters Trucking, Inc., 2017 WL 4778570 (E.D. Mo. 2017)

Freight broker Mid-America Freight Logistics had a contract with motor carrier Walters Trucking whereby Walters agreed to hold Mid-America harmless from shippers’ cargo claims. The contract specified that Carmack would define Walters’ liability. Mid-America booked with Walters a load of frying oil belonging to shipper Stratas Foods from Missouri to Texas, some of which was stolen en route. The consignee rejected the entire load when it saw the container seal was broken, and Mid-America had to pay Stratas some 36 grand based on its shipper-broker contract.

When Walters refused Mid-America’s demand for reimbursement, the broker sued the carrier in the Circuit Court of St. Louis County, a Show-Me State court. Walters removed the action to the U.S. District Court for the Eastern District of Missouri, and Mid-America moved to remand the claim back to state court. The court granted the motion, and awarded Mid-America its attorneys’ fees to boot.

The broker’s claim here was based on rights under a contractual agreement, and not Carmack. Just because the contract provided that Carmack concepts determine the trucker’s liability doesn’t mean Carmack preemptively governs it as a statute. Incorporation of Carmack’s liability and defense provisions was just another contract term, and not a basis for federal jurisdiction.

[Ed Note: this case commentary was first published in The Intermodal Lead, Vol 8 Iss 3, and is republished here with the author’s permission.]