Appeal from the United States District Court for the Southern District of Illinois. No. 05-00057-G. Patrick Murphy, Judge.
The opinion of the court was delivered by: Flaum, Circuit Judge.
Before EASTERBROOK, Chief Judge, and FLAUM and EVANS, Circuit Judges.
C.H. Robinson Worldwide, Inc. is a freight broker (or, in its estimation, a "travel agent for freight"). REI Transport, Inc., is an Illinois trucking company that provides drayage services-in this case, the local delivery of cargo from a railroad terminal to the cargo's final destination. The retail electronics company Circuit City hired C.H. Robinson to coordinate the shipment of several hundred DVD players from a Circuit City warehouse in California to another warehouse in southern Illinois. In so doing, C.H. Robinson contracted with REI Transport to carry the DVD players the final leg of the trip-from a train depot near St. Louis to Marion, Illinois. As it turned out, through no fault of REI Transport's, the shipment arrived short approximately $85,000 worth of DVD players. C.H. Robinson indemnified Circuit City for the lost DVD players, and Circuit City assigned any right to recover to C.H. Robinson. Surmising that REI Transport was responsible for the loss and pursuant to its contract with REI Transport, C.H. Robinson withheld amounts from what it owed REI Transport.
REI Transport then filed this suit in the Southern District of Illinois, alleging conversion, unjust enrichment, and that C.H. Robinson breached the parties' contract by withholding payment. In its defense, C.H. Robinson counterclaimed that, under the Carmack Amendment, REI Transport owed more money for the damaged cargo. The district court agreed with C.H. Robinson and dismissed REI Transport's claims. This appeal followed and, for the reasons set out below, we affirm.
The interstate shipment of goods is a complicated business. Moving a given quantity of goods from one part of the country to another frequently involves several unrelated carriers using different modes of transportation, ranging from trucks, railroads, and freighters to the occasional plane. Locating and contracting with multiple carriers for a multistate shipment may be prohibitively expensive for the average shipper. So third parties fill the gap by negotiating lower rates with a number of carriers around the country and selling their logistical services to would-be shippers.
C.H. Robinson is one such company. In October 2003, Circuit City hired C.H. Robinson to move several hundred portable DVD players from its facility in Walnut, California to another facility in Marion, Illinois. Three different carriers would ultimately move the shipment from Walnut to Marion. Patriot Logistics, Inc. first trucked the cargo from Circuit City's facilities in Walnut to a railroad depot in Los Angeles. Union Pacific Railroad then moved the cargo by train from Los Angeles to Dupo, Illinois. And REI Transport completed the shipment by trucking the cargo to Circuit City's facilities in Marion. REI Transport had contracted with C.H. Robinson in May 2002 to make at least three shipments for C.H. Robinson as the need arose. This would be one of those shipments, governed by the terms of their 2002 contract.
Things began innocently enough. Prior to sending the cargo out from the Walnut facility, a Circuit City employee, John Abarca, verified the contents of the shipment, which consisted of 4633 pieces of electronics, including over 1100 DVD players. Abarca then locked the container with a numbered, steel-cable security seal and recorded the seal number on the bill of lading, which consigned the goods to Circuit City's warehouse in Marion. Patriot picked up the shipment, signed the bill of lading, and delivered the cargo to Union Pacific in Los Angeles. When the train began to chug eastward, the steel security seal was still intact, along with all of the original cargo.
But problems soon arose. En route, a Union Pacific employee noticed that the container's seal was missing (along with the seals for several other containers on the train). A security guard for Union Pacific, Lucas Melendez, filled out an inspection report for Circuit City's container in which he indicated both that the original seal was gone and that there was an "unknown loss" of DVD players. Melendez then resealed the container with a numbered Union Pacific seal, and the train moved along to Dupo, Illinois, where REI Transport picked it up. The receipt obtained by REI Transport's driver from Union Pacific erroneously indicated that the container had Circuit City's original seal. But, after delivery in Marion, Circuit City's receipt from REI Transport had the Union Pacific seal number instead-making it appear, on paper at least, that the seal had changed while the container was in REI Transport's custody.
On November 1, 2003, Circuit City broke the Union Pacific seal on the container and determined that 295 portable DVD players were missing from the shipment, a value of $85,429.98. In January 2004, it sent a claim to C.H. Robinson for the full amount of its loss. C.H. Robinson initially forwarded the claim on to REI Transport, which denied that it was responsible for the loss and refused to pay. C.H. Robinson eventually paid Circuit City the full amount claimed, and in return Circuit City assigned C.H. Robinson "all rights, title and interest in and claim to any payment from any and all carriers involved in the shipment of" the lost DVD players. The May 2002 carrier agreement with REI Transport provided that "[c]ompensation paid to [REI Transport] under this Contract may be withheld in whole or in part by Robinson . . . to satisfy claims or shortages arising out of this or other Contracts." Pursuant to Circuit City's assignment and this provision of the carrier agreement, C.H. Robinson withheld $81,232.64 from amounts it owed to REI Transport to cover the claim.*fn1
REI Transport filed this suit in the Southern District of Illinois alleging breach of contract, conversion, and unjust enrichment. The crux of REI Transport's claims was a provision of the May 2002 carrier agreement with C.H. Robinson that provided REI Transport "hereby assumes all liability for cargo loss and damage while such commodities are in [its] custody or control." Because the damage had not occurred when the container was in REI Transport's "custody or control," REI Transport claimed that it was entitled to full payment. C.H. Robinson counterclaimed under the Carmack Amendment, 49 U.S.C. § 14706, arguing that REI Transport was required to pay for the lost DVD players even if it was not ultimately responsible. After discovery, the district court denied REI Transport's motions for summary judgment. The court reasoned that REI Transport's claims for conversion and unjust enrichment both failed under Illinois law. The court also denied REI Transport's breach of contract claim, reasoning that it was preempted by the Carmack Amendment. Finally, the court granted C.H. Robinson's motions for summary judgment and judgment on the pleadings, and ordered REI Transport to pay over $4197.34 to C.H. Robinson. This appeal followed.
REI Transport raises two issues on appeal. First, it submits that the district court erred in holding that the Carmack Amendment preempted its breach-of-contract claim against C.H. Robinson. Second, REI Transport argues that C.H. Robinson has not made out its ...