This court's research reveals that there is no evidence that § 1043 was intended to preempt state law. Moreover, Ore-Ida's cases are clears distinguishable.
The text of § 1043.1 and § 1043.2 is a proper starting point. The sections themselves nowhere state that they are intended to preempt any state law. In fact, the implication of § 1043.1(a)(1), which the court emphasizes, is the opposite:
No common or contract carrier . . . shall engage in interstate or foreign commerce . . . until there shall have been file with and accepted by the Commission . . . certificates of insurance . . . conditioned to pay any final judgment recovered against such motor carrier for bodily injuries to or death of any person resulting from the negligent operation, maintenance or use of motor vehicles in transportation . . . or for loss of or damage to property of others . . . .
(emphasis added). Hence, every motor carrier licensed by the Commission need only obtain insurance that pays upon a "final judgment recovered against such motor carrier". The sections only mandate that a carrier obtain insurance to become properly licensed with the ICC. No intent to preempt is recognizable here.
The legislative history verifies this impression. The Commission stated that it adopted these sections, with others, to "eliminate any conflict with the insurance rules of the U.S. Department of Transportation . . . ." 48 Fed. Reg. 51777 and 51778 (1983). In fact, this entire section of the Federal Register is devoted to the explanation of that intended purpose. Not once is preemption mentioned.
Nor can any inference of an intention to preempt be drawn. As mentioned, the sections are very narrow in scope. They concern only the issuance of permits from the ICC. Their effect, even given the broadest of readings, regulates what is required to insure a common carrier. To the extent that state regulations attempt to interfere with that type of regulation, perhaps that is preempted. But the question presented here is whether Illinois' prohibition of direct action law suits is preempted by this law. The federal regulation speaks of nothing of this kind. Therefore, the answer is no.
The court now turns to the principle cases Ore-Ida asserts mandate preemption here. First the court is asked to revisit Ford Motor Co. v. Transport Indem. Co., 795 F.2d 538 (6th Cir. 1986). There, Ford sued a rail transporter's insurer (the defendant Transport Indemnity Company) directly for damages sustained to Ford cars during the transporter's carriage of the cars to Ford dealers. Ore-Ida asserts that this decision stands for the proposition that direct action is appropriate under 49 C.F.R. § 1043.
Ore-Ida's argument misses the mark. Of significant import to that case - and what both parties fail to point out - was that Ford had demanded payment from the transporter, Automobile Transport, Incorporated ("ATI"), prior to demanding payment from the Transport Indemnity. When ATI sought protection from this and its other mounting liabilities under Chapter 11 of the Bankruptcy Code, Ford sued Transport Indemnity directly and eventually obtained a modification of the automatic stay provisions of the Bankruptcy Code to allow ATI to become a party in the Ford-Insurer action. As a result, the insured, ATI, was a party to the original action. Furthermore, Ford Motor Co. did not even consider whether § 1043 preempted any state's direct action law.
The same conclusion is reached when reviewing Milan Express Co. v. Western Surety Co., 886 F.2d 783 (6th Cir. 1989). That case was concerned with whether under 49 U.S.C. § 10927(b) a motor carrier could properly recover from the surety of delinquent brokers. Milan Express, 886 F.2d at 789. Obviously not the case here.
Finally, the court notes that at least one other court agrees with this court's interpretation that preemption is not mandated. In Hartford Ins. Co. v. Henderson & Son, Inc., 258 Ga. 493, 371 S.E.2d 401 (1988), the Georgia Supreme Court was asked to find that both 49 U.S.C. § 10927(a)(3) and 49 C.F.R. § 1043 create a federal right of direct action (and thus preempts state law to the contrary). The court held that "this statute merely affords the ICC the discretionary power to require motor common carriers to be sufficiently secure or insured so as to be able to respond to a shipper's or consignee's claim for damages. Nothing in the language of the statute suggests that Congress intended to authorize a direct action." Id. at 402-03. This was so even though Georgia had a direct action law. Id. at 403 n.1.
In sum, the court grants both motions. Hartford Fire Insurance Company's motion to dismiss Ore-Ida's amended complaint against them for lack of proper subject matter jurisdiction as to them in this court is granted. Also, Zurich Insurance Company's motion to dismiss Ore-Id's amended complaint against them because those claims amount to a direct action against the insurer and therefore barred by Illinois law, is granted.
IT IS SO ORDERED.
CHARLES RONALD NORGLE, SR., Judge
United States District Court