United States District Court, N.D. Illinois, Eastern Division
OPINION AND ORDER
L. ELLIS UNITED STATES DISTRICT JUDGE
Georgia Nut Company (“Georgia Nut”) brings this
action against Defendants C.H. Robinson Company (“C.H.
Robinson”) and All Interstate Trucking (“AI
Trucking”), for their failure to properly deliver 42,
000 pounds of almonds. After the Court dismissed Georgia
Nut's claims against C.H. Robinson in its First Amended
Complaint, Georgia Nut filed the Second Amended Complaint
(“SAC”) addressing the deficiencies with its
negligent performance claim and replacing its negligent
hiring and negligent supervision claim with a claim for
breach of contract against C.H. Robinson. Defendant C.H.
Robinson now moves to dismiss  the breach of contract
claim arguing that it is nothing more than a restyled
negligence claim and therefore preempted by the Federal
Aviation Administration Authorization Act
(“FAAAA”), 49 U.S.C. § 14501, because it
seeks relief under state laws that have an effect on the
prices, routes, or services of freight brokers covered by the
FAAAA. C.H. Robinson also argues that even if it is a genuine
contract claim, the alleged contract does not include any
provision for which C.H. Robinson could be liable for damages
to Georgia Nut's shipment and that the FAAAA preempts any
implied terms that Georgia Nut alleges are part of the
contract . Because the FAAAA does not preempt voluntary
contractual arrangements between private parties, and it also
does not preempt the type of implied contract terms Georgia
Nut alleges in the SAC, Georgia Nut's contract claim can
stand. Additionally, because Georgia Nut sufficiently alleges
the existence of a contract with both express and implied
terms that C.H. Robinson breached, and because Georgia Nut
alleges that it suffered damages as a result of the breach,
the Court denies the motion to dismiss Count III.
June 14 and June 17, 2016, Juan Juanez of Georgia Nut
negotiated the terms of an agreement with two employees of
C.H. Robinson, pursuant to which C.H. Robinson would broker a
shipment of almonds from a Del Rio Nut facility in
Livingston, California, to a Georgia Nut facility in Niles,
Illinois. The parties conducted the negotiation of this
agreement via email and over the phone during these four
days, and on June 17, Edward Johnson of C.H. Robinson emailed
Juanez to accept Georgia Nut's offer to enter into a
freight brokerage services contract (the
Nut alleges that one of the terms of the Contract required
C.H. Robinson to “hire a trucking company that was
reliable, was experienced, and would pick-up the Almonds in
Livingston, California on June 17, 2016 and deliver the
Almonds directly to Niles, Illinois by 8 a.m. on June 20,
2016.” Doc. 31 ¶ 77. Georgia Nut also alleges that
based on its need for expedited delivery, about which C.H.
Robinson was aware, and based on industry custom and the
prior relationship of the parties, C.H. Robinson additionally
was required to select a shipper that was qualified,
experienced, reputable, and reliable. In consideration of its
services pursuant to the Contract, Georgia Nut paid C.H.
Robinson $3, 800.
Robinson hired motor carrier AI Trucking to deliver the
almonds from Livingston to Niles. As agreed, AI Trucking
picked up the almonds from the facility in Livingston on June
17. Before AI Trucking departed with the almonds, Del Rio Nut
placed a tamper-proof band (the “Band”) on the
cargo door of the truck. The Band had a unique
load-identifying seal number, which matched the number on the
bill of lading for the shipment.
departing the Del Rio Nut facility, AI Trucking did not
proceed directly to Niles, but instead routed the shipment
through the state of Georgia. Ultimately, AI Trucking
delivered the almonds to the Niles facility on the evening of
June 21, 2016. However, at the time of the delivery, the Band
on the truck no longer matched the number on the bill of
lading, indicating that someone had tampered with the almonds
and rendered them no longer usable for human consumption.
Based on the issue with the Band, Georgia Nut rejected the
shipment and took a loss on the entire $162, 000 value of the
Nut alleges that C.H. Robinson did not conduct due diligence
on AI Trucking before hiring it to ship the almonds. C.H.
Robinson did not investigate whether AI Trucking was an
experienced, reputable, and reliable trucking company. AI
Trucking was established in July of 2015 and was
administratively dissolved on December 7, 2016. Public
Federal Motor Carrier Safety Administration records show that
AI Trucking had one driver and drove one mile in 2015. To
date, AI Trucking has refused to cooperate with its insurance
company regarding the loss of the shipment of almonds.
motion to dismiss under Rule 12(b)(6) challenges the
sufficiency of the complaint, not its merits. Fed.R.Civ.P.
12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510,
1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion
to dismiss, the Court accepts as true all well-pleaded facts
in the plaintiff's complaint and draws all reasonable
inferences from those facts in the plaintiff's favor.
AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th
Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint
must not only provide the defendant with fair notice of a
claim's basis but must also be facially plausible.
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S.
First Amended Complaint, Georgia Nut brought a negligence
claim against C.H. Robinson. The Court held that the FAAAA
preempted this claim. C.H. Robinson argues that because the
Court previously dismissed Georgia Nut's negligence claim
as preempted by the FAAAA, the Court should now dismiss
Georgia Nut's breach of contract claim, which is based on
related conduct, for the same reason. C.H. Robinson asserts
that because the conduct underlying the preempted negligence
claim and the current breach of contract claim is similar,
the FAAAA likewise preempts the breach of contract claim.
C.H. Robinson also argues that even if the Court continues to
construe Count III as a breach of contract claim, it is still
preempted because it is premised on breaches of implied terms
derived from state law. Finally, C.H. Robinson argues that
Georgia Nut has not alleged the existence of any contract
term that if breached would entitle it to recover damages
from C.H. Robinson.
FAAAA generally does not preempt contract claims. Am.
Airlines, Inc. v. Wolens, 513 U.S. 219, 228-29, 115
S.Ct. 817, 130 L.Ed.2d 715 (1995). C.H. Robinson, therefore,
wants the Court to find that Georgia Nut's breach of
contract claim is nothing but a repackaged version of its
previously dismissed state law negligence claim and thus,
subject to preemption. The fact that Georgia Nut previously
brought a negligence claim based on much of the same conduct
underlying its present breach of contract claim does not mean
that the Court must construe this breach of contract claim as
a negligence claim. In fact, it means very little at all.
Georgia Nut, as plaintiff, is the master of its complaint and
may choose to assert whatever theories of liability it
chooses. Bagdon v. Bridgestone/Firestone, Inc., 916
F.2d 379, 381 (7th Cir. 1990). The Supreme Court rejected a
similar attempt to convert a non-preempted contract claim
into a preempted state law claim based on similar conduct in
Wolens. The Court rejected this argument because the
breach of contract claim and the state law negligence claim
required the plaintiff to prove different elements.
Wolens, 513 U.S. at 233. The same reasoning applies
here. To succeed on its contract claim, Georgia Nut must
prove the existence of an agreement and a breach of the terms
of that agreement, whereas its previously dismissed
negligence claim did not require Georgia Nut to prove that it
had an agreement with C.H. Robinson related to how it would
hire and supervise AI Trucking. It sought to impose a duty to
do so irrespective of the existence of an agreement. This
distinction is what makes the contract claim a non-preempted
self-imposed undertaking while the negligence claim is a
preempted state-imposed duty. Therefore, the Court declines
to construe the breach of contract claim as a negligence
claim, and the FAAAA does not preempt Count III on this
Robinson next argues that even as a breach of contract claim,
Count III fails because the alleged contract does not contain
any provision requiring C.H. Robinson to pay for any damages
to Georgia Nut's shipment caused by the motor carrier, AI
Trucking. In the SAC, Georgia Nut alleges that following oral
and written negotiations, C.H. Robinson agreed to act as a
broker for shipping services for Georgia Nut in exchange for
$3, 800. Georgia Nut alleges that C.H. Robinson breached this
contract by failing to provide “adequate and proper
freight brokerage services” with respect to the
shipment. Doc. 31 ¶ 83. This breach specifically
consisted of hiring AI Trucking to serve as the motor carrier
for the shipment of almonds without investigating whether AI
Trucking was qualified to handle the shipment. As a result of
C.H. Robinson's failure to properly vet AI Trucking,