United States District Court, N.D. Illinois, Eastern Division
October 19, 2004.
AIR PLUS LIMITED, Plaintiff,
TRANSPORTATION DISTRIBUTION SERVICES, INC., DAKOTALAND TRUCK BROKERAGE, INC., NG EXPRESS, INC., DEJAN MILJAKOVIC, GREAT AMERICAN INSURANCE COMPANY OF NEW YORK, UNDERWRITERS AT LLOYDS OF LONDON, and JOHN DOE 1, Defendants.
The opinion of the court was delivered by: JAMES ZAGEL, District Judge
MEMORANDUM OPINION AND ORDER
On June 3, 2004, Plaintiff Air Plus Limited ("Air Plus") filed
a multi-count Complaint against several defendants, arising out
of the theft of a shipment containing electronic equipment. The
trailer in which the electronics were being shipped was stolen
while parked overnight in Addison. Air Plus has asserted causes
of actions against Defendants Transportation Distribution
Services, Inc., Dakotaland, Inc., NG Express ("NG"), and Dejan
Miljakovic under the Carmack Amendment, 49 U.S.C. § 14706. In
conjunction with and as a derivative of its Carmack allegations,
Air Plus has asserted causes of action against Defendant Lloyds
of London ("Lloyds"), as a statutory surety of NG and Miljakovic,
pursuant to BMC 32 and/or BMC 34 surety bonds.
Lloyds now moves to dismiss Counts VI and VII of the Complaint
for lack of subject matter jurisdiction. Where it appears from
the complaint that there are insufficient facts upon which subject matter jurisdiction may be determined, dismissal is
proper pursuant to Fed.R. Civ. P. 12(b)(1). The federal question
statute gives the district courts original jurisdiction over all
civil actions arising under the constitution, laws, or treaties
of the United States. 28 U.S.C. § 1331. Dismissal under § 1331(a)
is proper if a cause of action is so patently without merit as to
justify dismissal for want of jurisdiction. Lasalle Nat'l Trust,
N.A. v. ECM Motor. Co., 76 F.3d 140 (7th Cir. 1996). Whether a
claim "arises under" federal law must be determined by references
to the well-pled complaint rule. Merrell Dow Pharm., Inc. v.
Thompson, 478 U.S. 804 (1986). Merely alleging a violation of
federal law does not necessarily confer jurisdiction to the
district court. Id. at 804.
In its Complaint, Air Plus claims that federal subject matter
jurisdiction exists under 49 U.S.C. § 13906(a)(3)*fn1 and §
13906(f).*fn2 However, even a cursory reading of § 13906
demonstrates that the statute was not intended to create a
federal cause of action against a statutory insurer, such as
Lloyds. Section 13906(a)(3) and (f) vests the Secretary of
Transportation with the power to require motor carriers to have
security and to determine what type of security is most
appropriate. The Section itself does not confer any rights or
obligations on the shipper or the insurer. A similar situation arose in Ore-Ida Foods, Inc., v. Richmond
Transp. Serv., Inc., 783 F. Supp. 382 (N.D. Ill. 1992). In
Ore-Ida, a shipper brought suit against several motor carriers
and their insurers for cargo damage, alleging that federal
question jurisdiction existed under 49 U.S.C. §§ 10101 ("ICA").
Id. at 384. Much like the case before me here, the defendant
surety had issued the carrier a BMC 32 endorsement and filed a
form BMC 34, as required by the Interstate Commerce Commission.
After reviewing the relevant sections of the ICA, which contain
language very similar to the language at issue in this case, the
court concluded that the ICA did not confer federal question
jurisdiction on the defendant insurer. Id. at 386. In making
this decision, the court looked specifically at the direction of
the statute, finding that "it creates no rights, duties, or
obligations. Rather, it gives the ICC the ability to require, if
it so chooses, a motor common carrier to obtain security." Id.
at 385-86. The statute before me, § 13906, is similarly directed
toward the powers granted to a government entity, the Secretary
of Transportation, and does not directly confer any rights onto
interstate carriers or their insurers. Furthermore, as was the
case in Ore-Ida, the Plaintiff is not claiming that the statute
was violated by any party. Like the court in Ore-Ida, I find
the cause of action presented is only tacitly related to the
subject matter of the statute, which deals exclusively with the
powers of a government agency and not the rights of the parties
at issue in this case. For these reasons, I find that subject
matter jurisdiction is lacking.
Air Plus also attempts to pursue its suit for loss owing to the
stolen electronics shipment directly against Lloyds. Under
Illinois state law, however, a direct action against an insurer
is prohibited. 315 ILCS 5/388 (West 2004). Only after judgment
has been obtained and execution of that judgment remains
unsatisfied, is the shipper permitted to bring a direct action in
state court against an insurer for loss of cargo. See Mar San v. Ins.
Co. of N. Am., 407 N.E.2d 969 (Ill.App. Ct. 1980). Air Plus
argues that a judgment has been rendered against NG since NG has
not answered or otherwise pled within the proper time after
receiving service of the Complaint. Even if I were to enter a
default judgment against NG, that default could still be vacated
within a reasonable amount of time. The other Defendant insured
by Lloyds, Miljkovic, has not yet received service. Thus, we are
still far away from the final adjudication necessary to create
grounds for a direct action against Lloyds. Since the case is
only in its primary stages, a direct suit against Lloyds would be
For these reasons, Lloyds' Motion to Dismiss Counts VI and VII
of the Complaint is GRANTED.