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Electroplated Metal Solutions, Inc. v. American Services

February 7, 2008


The opinion of the court was delivered by: Harry D. Leinenweber, Judge United States District Court

Hon. Harry D. Leinenweber


Plaintiff Electroplated Metal Solutions, Inc. (hereinafter, "EMS") seeks recovery against the Defendants for damage sustained to industrial machinery during its transport from California to Illinois. Defendant Two Brothers Trucking, Inc. (hereinafter, "Two Brothers") was previously dismissed from this case in a ruling dated December 4, 2007. EMS now seeks leave to file an amended complaint, adding breach of contract and negligence claims against Two Brothers. For the reasons stated below, Plaintiff's Motion for Leave to File an Amended Complaint is granted.


The Court derives the following facts from the pleadings, resolving all reasonable inferences and factual conflicts in Plaintiff's favor. See, McMillan v. Collection Professionals, Inc., 455 F.3d 754, 758 (7th Cir. 2006).

The Plaintiff, EMS, is a metal fabrication company based in Illinois. On or about July 6, 2006, EMS contracted with Two Brothers for the transport of machinery from Costa Mesa, California to Elk Grove Village, Illinois. Two Brothers subsequently engaged American Riggers to prepare and load the machinery and Mielec Express to transport it to Illinois. On or about July 11, 2006, the machinery arrived in Illinois in damaged condition and EMS refused acceptance of the machinery. This suit followed.

Defendant Two Brothers is a California corporation with its sole office in that state. It has no offices in the state of Illinois and none of its employees reside here. Acting as a broker, Two Brothers performs all of its work at its office in California, receiving requests, providing quotes, and arranging transportation through the use of phone, fax, e-mail, and internet advertising. Two Brothers advertises that it is able to provide service in "all forty-eight states." Arrangement of carriage to or from Illinois makes up less than five percent of Two Brothers' business.


Federal Rule of Civil Procedure 15(a) states that leave to amend "shall be freely given when justice so requires." FED. R. CIV. P. 15(a). See also, Foman v. Davis, 371 U.S. 178, 182 (1962) (leave should be granted absent undue delay, bad faith, repeated failure to cure deficiencies, undue prejudice to the opposing party, or futility). The Court need not grant leave to amend, however, if an examination of the proposed complaint "makes clear that it does not cure the deficiencies of the original pleading and the amended complaint is doomed not to survive a motion to dismiss." Duda v. Board of Educ. of Franklin Park Public School Dist. No. 84, 133 F.3d 1054, 1057 n.4 (7th Cir. 1998). But the burden on the objecting party to show futility is "substantial." Acme Printing Ink Co. v. Menard, Inc., 881 F.Supp. 1237, 1243 (E.D. Wis. 1995). Leave to amend should be refused "only if it appears to a certainty that plaintiff cannot state a claim." Barry Aviation Inc. v. Land O'Lakes Municipal Airport Com'n, 377 F.3d 682, 687 (7th Cir. 2004) (collecting cases).

Defendant Two Brothers opposes the motion to amend, arguing that allowing the amended complaint would be futile for two reasons: (1) EMS's proposed amended complaint fails to state a claim; and (2) Two Brothers is not subject to personal jurisdiction in this district.

A. Failure to State a Claim

In asserting that the amended complaint fails to state a claim, Two Brothers makes two major arguments: (1) that state law claims for damage to machinery during interstate transport are preempted by the Carmack Amendment; and (2) that any duties Two Brothers may have owed EMS are set solely by law and that Two Brothers fulfilled those duties. In reviewing the claim of futility, the Court applies a standard similar to that which governs motions to dismiss under Rule 12(b)(6). See General Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1085 (7th Cir. 1997). Thus, EMS's amended complaint need only suggest a plausible right to relief and describe the claim in sufficient detail to give the defendant fair notice of the claim and its basis. See E.E.O.C. v. Concentra Health Services, Inc., 496 F.3d 773 (7th Cir. 2007).

1. Carmack Preemption

Because of the pervasive regulation over the conduct and liability of motor carriers, the Carmack Amendment has been held to preempt state law actions against carriers. See Adams Express Co. v. Croninger, 226 U.S. 491, 505-06 (1913); Reider v. Thompson, 339 U.S. 113, 119 (1950). Contrary to the extensive regulation of motor carriers, however, the Interstate Commerce Act imposes relatively few duties upon brokers and makes no equivalent grant of liability. This silence as to liability should not be construed as an implicit grant of immunity to brokers. See Custom Cartage, Inc. v. Motorola, Inc., 1999 WL 89563 * 3 (N.D. Ill. 1999) ("The Carmack Amendment streamlines and simplifies suits against carriers and freight forwarders. It does not exempt brokers from paying for their own negligence or prevent them from entering into contracts with shippers."). Rather, the relative scarcity of regulation over brokers counsels for the allowance of state law causes of action, rather than demonstrating that such claims should be preempted. See DeHart v. Town of Austin, Inc., 39 F.3d 718, 721 (7th Cir. 1994) (inferring preemption only ...

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