United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
JOAN B. GOTTSCHALL, District Judge.
Plaintiff DaBecca Natural Foods arranged for 6, 910 pounds of fully cooked bacon to be transported from Iowa to Chicago, Illinois. Despite DaBecca's admonitions about the temperature during transit, the bacon arrived spoiled in an insufficiently cooled truck. This lawsuit followed against RD Trucking (the company responsible for transporting the bacon), Total Quality Logistics (the entity that arranged for the transportation of the bacon), and Shelby County Cookers (now known as Monogram Prepared Meats) and Westin Packaged Meats (presumably the entities that produced the bacon).
Total Quality Logistics seeks to dismiss this action pursuant to Fed.R.Civ.P. 12(b)(3) based on the forum selection clause in its agreement with DaBecca. In contrast, DaBecca contends that its Carmack Amendment claims against Total Quality Logistics trump the forum selection clause and that, in any event, the present dispute is outside the ambit of that clause. For the following reasons, Total Quality Logistics' motion to dismiss is denied but DaBecca has failed to show that venue is proper in this district based on the Carmack Amendment's venue provision, 49 U.S.C. § 14706(d). As detailed below, the parties must brief this issue.
DaBecca's amended complaint seeks damages arising from a spoiled interstate shipment of precooked bacon. According to the declaration of Marc Bostwick (an operational sales manager with Total Quality Logistics), Total Quality Logistics arranges for the transportation of its customers' freight utilizing independent motor carriers. (Bostwick Decl. ¶ 3, Dkt. 15.) Bostwick asserts that DaBecca (through its Chief Financial Officer, William Vree) agreed to Total Quality Logistics' standard terms and conditions, which are attached to his declaration as Exhibit A.
In pertinent part, the terms and conditions provide that "Applicant [DaBecca] understands that Total Quality Logistics is a transportation broker who will arrange their freight to be transported by a third party motor carrier. Applicant understands and agrees that Total Quality Logistics cannot fill out the Bills of Lading nor be listed on the Bills of Ladings as the delivering carrier." (Bostwick Decl., Ex. A at § 9, Dkt. 15.) The terms and conditions also provide that "[t]he state courts located in Clermont County, Ohio shall have exclusive and irrevocable jurisdiction and shall be the exclusive venue with respect to any claim, counterclaim, or dispute arising in connection with any transactions, loads, or other business between Total Quality Logistics and applicant." ( Id. at § 11.)
In June 2013, pursuant to DaBecca's directions, Total Quality Logistics arranged for RD Trucking to provide freight services between Iowa and Illinois for a delivery of precooked bacon. DaBecca gave Total Quality Logistics instructions about the required temperature of the truck and the bacon during transit. Total Quality Logistics thus knew about the temperature requirements and "agreed to... ensur[e] the proper temperature of the [truck and bacon] during the shipment process." (Am. Compl. ¶ 15, Dkt. 21.) According to DaBecca, Total Quality Logistics erroneously gave RD Trucking written information about the truck's temperature that specified that the truck had to be 34 degrees rather than 26 degrees. This conflicted with the bill of lading, which specified a truck temperature of 26 degrees. RD Trucking nevertheless knew that 26 degrees was the correct truck temperature.
DaBecca rejected the bacon upon delivery because the truck was 53 degrees and the bacon was 49 degrees. Because the bacon arrived at an unsafe temperature, DaBecca "made clear" that it could not be salvaged. ( Id. ¶ 21.) Total Quality Logistics "informed [DaBecca] that it would work with RD [Trucking] relative to disposition of the [bacon]." ( Id. ¶ 17.) Despite DaBecca's instructions to the contrary, Total Quality Logistics failed to communicate with RD Trucking appropriately and the bacon was released for human consumption, "causing [DaBecca] damages." ( Id. ¶ 22.)
DaBecca alleges a Carmack Amendment claim (Count II), 49 U.S.C. § 14706, against Total Quality Logistics. It also asserts that Total Quality Logistics is liable for reasonable attorneys' fees based on the regulations associated with the Carmack Amendment (Count III), 49 C.F.R. §370, and state law claims of negligence (Count V), breach of contract (Count VI), and conversion (Count VII).
II. LEGAL STANDARD
"A challenge to venue based upon a forum selection clause can appropriately be brought as a motion to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(3)." Schwarz v. Sellers Markets, Inc., 812 F.Supp.2d 932, 941 (N.D. Ill. 2011) (quoting Muzumdar v. Wellness Int'l Network, Ltd., 438 F.3d 759, 760 (7th Cir. 2006)). When a defendant challenges venue, the plaintiff bears the burden of establishing that venue is proper. Soucy v. Capital Mgmt. Servs., L.P., No. 14 C 5935, 2015 WL 404632, at *5 (N.D. Ill. Jan. 29, 2015). Factual conflicts are resolved in the plaintiff's favor, and the court may draw reasonable inferences from those facts. Hanyuan Dong v. Garcia, 553 F.Supp.2d 962, 964 (N.D. Ill. 2008). If venue is improper, the court may either dismiss the suit or transfer it to a district in which it could have been brought. See 28 U.S.C. § 1406(a).
Total Quality Logistics' motion to dismiss is based on the forum selection clause in the terms and conditions portion of the contact between it and DaBecca. DaBecca contends that regardless of the forum selection clause, the Carmack Amendment allowed it to file suit in this district. Alternatively, DaBecca it argues that even if the court rejects its Carmack Amendment ...