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ORE-IDA FOODS, INC. v. RICHMOND TRANSP. SERVS.

February 6, 1992

ORE-IDA FOODS, INC., Plaintiff,
v.
RICHMOND TRANSPORTATION SERVICES, INC., BRADLEY TRANSPORTATION, INC., ZURICH INSURANCE COMPANY, HARTFORD FIRE INSURANCE COMPANY, Defendants.


NORGLE, SR.


The opinion of the court was delivered by: CHARLES RONALD NORGLE, SR.

HONORABLE CHARLES R. NORGLE

 Before the court are the motions to dismiss Ore-Ida Foods, Incorporated's amended complaint presented by Hartford Fire Insurance Company and Zurich Insurance Company. For reasons that follow, the court grants both motions.

 FACTS

 Ore-Ida Foods, Incorporated ("Ore-Ida") contracted with two common carriers, Bradley Transportation, Incorporated ("Bradley") and Richmond Transportation Services, Incorporated ("Richmond"), for a June 22, 1989 shipment of potatoes and dozens of other items to New Jersey from Ore-Ida facilities in Wisconsin. The goods were picked up but were damaged in transit.

 Prior to transporting these goods, Bradley obtained insurance with Zurich Insurance Company ("Zurich"). In accord with the strictures of 49 C.F.R. § 1043.1, Zurich filed a Motor Carrier Cargo Liability Certificate of Insurance, also known as a form B.M.C. 34 (hereinafter referred to as a "B.M.C. 34"). In the B.M.C. 34 Zurich certified that it issued a B.M.C. 32 in accord with 49 C.F.R. § 1043.2 (hereinafter referred to as a "B.M.C. 32"). Presumably, Hartford Insurance Company ("Hartford") filed the same forms when it insured Richmond.

 The terms of the B.M.C. 32 and B.M.C. 34 endorsements are critical here. Zurich's B.M.C. 34 endorsement provides that Zurich "has issued . . . a policy of cargo insurance which, by the attachment of endorsement, form number B.M.C. 32 . . . has or have been amended to provide compensation for loss of or damage to all property belonging to shippers or consignees and coming into possession of the insured [shipper] . . . ." The B.M.C. 32 endorsement states that Zurich "agrees to pay . . . any shipper or consignee for all loss or damage to all property belonging to such shipper or consignee . . . for which loss the insured may be held legally liable . . . ."

 Ore-Ida sued in federal court seeking to recover monies for the damaged goods. Jurisdiction, Ore-Ida alleged, was based on a federal question, 28 U.S.C. 1337. Specifically, Ore-Ida claimed that 49 U.S.C. §§ 10101 et seq. (the Revised Interstate Commerce Act) governed this case and that the controversies arising under this Act were sufficient to confer subject matter jurisdiction for federal question purposes.

 The amended complaint named Richmond, Bradley, Zurich, and Hartford as defendants. Ore-Ida's theory against Richmond and Bradley was simple - the goods were not delivered to the New Jersey site in the condition in which they were released to Bradley and thus the common carriers were responsible for the loss. Against Zurich and Hartford, Ore-Ida alleged that these companies insured Richmond and/or Bradley and that the B.M.C. 32 and B.M.C. 34 created a right to proceed directly against Zurich and Hartford. Both insurers have moved to dismiss. Zurich moved to dismiss claiming the case amounted to a direct action against an insurer prohibited by Illinois law. Hartford moved to dismiss on the independent ground that there is no subject matter jurisdiction in this court.

 DISCUSSION

 On a motion to dismiss, all well-pleaded factual allegations are taken as true. Johnson v. Martin, 943 F.2d 15, 16 (7th Cir. 1991). All reasonable inferences to be drawn from those allegations are also accepted as true. Meriwether v. Faulkner, 821 F.2d 408, 410 (7th Cir.), cert. denied, 484 U.S 935 (1987). Dismissal pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction is not proper unless it appears certain that Ore-Ida cannot prove sufficient facts upon which jurisdiction could be determined. See Fed. R. Civ. P. 12(b)(1).

 I.

 Hartford has moved to dismiss Ore-Ida's amended complaint asserting that this case presents no valid federal question. The federal question statute, 28 U.S.C. § 1331, *fn1" provides "the district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." The court is therefore presented with two questions for resolution: what law or laws has Ore-Ida asserted confer jurisdiction, and does this legal basis comport with the § 1331 definition of "arising under"? The first question is simply answered. Ore-Ida points to 49 U.S.C. § 10927 and 49 C.F.R. §§ 1043.1, 1043.2 as conferring jurisdiction on this court. The issue of whether these laws are sufficient to confer jurisdiction on this court as a federal question is more problematic.

 Whether a claim arises under federal law must be determined by reference to the well-pleaded complaint. Oklahoma Tax Comm'n v. Graham, 489 U.S. 838, 840 (1989). "Arising under" has no uniform definition.

 This much, however, is clear. The "vast majority" of cases that come within this grant of jurisdiction are covered by Justice Holmes' statement that a "'suit arises under the law that creates the cause of action.'" Thus, the vast majority of cases brought under the federal-question jurisdiction of ...


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