Elite Logistics Corporation v. Mol America, Inc. et al, No. 2:2011cv02952 - Document 84 (C.D. Cal. 2013)
Court Description: ORDER DENYING PLAINTIFFS MOTION FOR PARTIAL SUMMARY JUDGMENT 63 by Judge Dean D. Pregerson. (lc). Modified on 8/29/2013 (lc).
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Elite Logistics Corporation v. Mol America, Inc. et al Doc. 84 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 ELITE LOGISTICS CORPORATION and on behalf of all others similarly situated, 13 Plaintiff, 14 v. 15 MOL AMERICA, INC., 16 Defendants. ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 11-02952 DDP (PLAx) ORDER DENYING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT [Dkt. No. 63] 17 18 Presently before the court is Plaintiff’s Motion for Partial 19 Summary Judgment Regarding Declaratory and Injunctive Relief. 20 Having considered the submissions of the parties and heard oral 21 argument, the court denies the motion and adopts the following 22 order. 23 I. 24 Background Defendant MOL (America) Inc. (“MOL”) is an international ocean 25 carrier, and transports cargo in shipping containers MOL owns. 26 (Declaration of Don Licata, ¶3). 27 truckers, such as Plaintiff, transport MOL’s cargo containers from 28 ports to inland distribution centers, then return the empty Independent motor carriers, or Dockets.Justia.com 1 containers to MOL at the port. 2 cargo owners, not the truckers, for the overland transport. 3 6.) 4 7.) 5 (Id. ¶ 5.) MOL contracts with the The cargo owners, in turn, hire and pay the truckers. (Id. ¶ (Id. ¶ MOL’s contracts with cargo owners provide for some period of 6 “free time,” during which MOL does not charge customers for the use 7 of its shipping containers. 8 returned after the expiration of the “free time” period, MOL 9 assesses a “detention charge.” (Id. ¶ 13.) When containers are (Id. ¶ 10.) In other words, MOL 10 allows its cargo customers to check out, or borrow, the shipping 11 containers containing the cargo owners’ property at no charge for a 12 certain time period. 13 unloaded, then returned to MOL within the “free time” period. 14 the container is returned late, however, MOL charges a late return 15 fee.1 16 Ideally, the container can be delivered, If While cargo owners contract with MOL to transport containers 17 to the inland container yard, the independent truckers actually 18 pick up, transport, and return MOL’s containers. 19 not, however, parties to the transportation service contract.2 20 Nevertheless, when truckers are late returning MOL’s containers, 21 for whatever reason, it is the truckers, not the contracting cargo 22 owners, who must pay the late fee. (Id. ¶ 15.) The truckers are Truckers pay the 23 24 25 1 The parties refer to this late fee either as a “detention charge” or “per diem.” 2 26 27 28 Though the record is somewhat unclear, the parties appear to agree that this case only concerns what the parties dub either “CY moves” or “merchant haulage” scenarios where truckers deliver containers to a container yard. In “door move” scenarios, in contrast, MOL itself hires a trucker to deliver cargo to the cargo owner’s facility. (Licata Decl. ¶¶ 6-7). 2 1 late fees, then in turn bill cargo owners for those fees. 2 (Declaration of Erich Wise, Ex. A at 20). 3 pay late fees, they may be denied access to shipping containers and 4 essentially foreclosed from doing business. 5 6 (Id. at 21). In 2005, California enacted Business and Professions Code § 2298, which states: 7 (b) An intermodal marine equipment provider or intermodal marine terminal operator shall not impose per diem, detention, or demurrage charges on an intermodal motor carrier relative to transactions involving cargo shipped by intermodal transport under any of the following circumstances: (1) When the intermodal marine or terminal truck gate is closed during posted normal working hours. No per diem, detention, or demurrage charges shall be imposed on a weekend or holiday, or during a labor disruption period, or during any other period involving an act of God or any other planned or unplanned action that closes the truck gate. 8 9 10 11 12 13 14 If truckers refuse to Cal. Bus. & Profs. Code § 2298. 15 By this motion for partial summary judgment, Elite seeks a 16 declaratory judgment that California Business and Professions Code 17 § 2298 prohibits MOL from charging late fees on any weekend or 18 holiday, as well as related injunctive relief.3 19 II. 20 Legal Standard Summary judgment is appropriate where the pleadings, 21 depositions, answers to interrogatories, and admissions on file, 22 together with the affidavits, if any, show “that there is no 23 genuine dispute as to any material fact and the movant is entitled 24 to judgment as a matter of law.” 25 seeking summary judgment bears the initial burden of informing the 26 court of the basis for its motion and of identifying those portions Fed. R. Civ. P. 56(a). A party 27 3 28 This motion does not seek summary judgment regarding damages. 3 1 of the pleadings and discovery responses that demonstrate the 2 absence of a genuine issue of material fact. 3 Catrett, 477 U.S. 317, 323 (1986). 4 the evidence must be drawn in favor of the nonmoving party. 5 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 242 (1986). 6 If the moving party does not bear the burden of proof at trial, it 7 is entitled to summary judgment if it can demonstrate that “there 8 is an absence of evidence to support the nonmoving party’s case.” 9 Celotex, 477 U.S. at 323. 10 See Celotex Corp. v. All reasonable inferences from See Once the moving party meets its burden, the burden shifts to 11 the nonmoving party opposing the motion, who must “set forth 12 specific facts showing that there is a genuine issue for trial.” 13 Anderson, 477 U.S. at 256. 14 party “fails to make a showing sufficient to establish the 15 existence of an element essential to that party’s case, and on 16 which that party will bear the burden of proof at trial.” 17 477 U.S. at 322. 18 that a reasonable jury could return a verdict for the nonmoving 19 party,” and material facts are those “that might affect the outcome 20 of the suit under the governing law.” 21 There is no genuine issue of fact “[w]here the record taken as a 22 whole could not lead a rational trier of fact to find for the non- 23 moving party.” 24 475 U.S. 574, 587 (1986). 25 Summary judgment is warranted if a Celotex, A genuine issue exists if “the evidence is such Anderson, 477 U.S. at 248. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., It is not the court’s task “to scour the record in search of a 26 genuine issue of triable fact.” 27 1278 (9th Cir. 1996). Counsel has an obligation to lay out their 28 support clearly. Keenan v. Allan, 91 F.3d 1275, Carmen v. San Francisco Sch. Dist., 237 F.3d 4 1 1026, 1031 (9th Cir. 2001). 2 file for evidence establishing a genuine issue of fact, where the 3 evidence is not set forth in the opposition papers with adequate 4 references so that it could conveniently be found." 5 III. Discussion The court “need not examine the entire Id. 6 A. 7 MOL argues that Section 2298 is preempted by the Federal Preemption 8 Aviation Administration Authorization Act (“FAAAA”), 49 U.S.C. § 9 14501(c)(1). That statute states, in relevant part, that “a State 10 . . . may not enact or enforce a law, regulation, or other 11 provision having the force and effect of law related to a price, 12 route, or service of any motor carrier . . . with respect to the 13 transportation of property.” 49 U.S.C. § 14501(c)(1). 14 The question presented here is whether Section 2298 is 15 sufficiently connected with, or makes reference to, motor carrier 16 rates, routes, or services. 17 Assoc., 552 U.S. 364, 370 (2008)(citing Morales v. Trans World 18 Airlines, Inc., 504 U.S. 374, 378 (1992). 19 that because truckers pass the cost of late fee charges on to cargo 20 owners, any law affecting the upstream fees charged to the truckers 21 affects or is related to the fees the truckers themselves charge, 22 and is therefore preempted. (Opp. at 13). 23 Rowe v. New Hampshire Motor Transp. MOL appears to argue Section 2298 regulates the fees that marine equipment 24 providers such as MOL may charge motor carriers. The statute does 25 not require anything of the carriers themselves. Thus, the effect 26 of Section 2298 on motor carriers’ rates or services with respect 27 to transportation of property is indirect, at best. 28 having even an indirect effect on rates, routes, or services may, 5 While a law 1 in some cases, be preempted, the FAAA does not preempt state laws 2 that affect prices, routes, or services “in only a tenuous, remote, 3 or peripheral manner.” 4 S.Ct. 1769, 1778 (2013) (citations and alteration omitted); Rowe, 5 552 U.S. at 370. 6 Dan’s City Used Cars, Inc. v. Pelkey, 133 In Rowe, Maine passed a law (1) requiring tobacco retailers to 7 use delivery services that used particular recipient-verification 8 services and (2) forbidding transportation of tobacco under certain 9 circumstances and from certain shippers. Rowe, 552 US. at 368. 10 The Supreme Court held that Maine’s recipient-verification law, 11 which regulated shippers rather than carriers, was “less ‘direct’ 12 than it might be,” but nevertheless effectively required motor 13 carriers to offer services that they otherwise would not provide, 14 thus hampering the competitive market forces that the FAAA was 15 designed to protect. 16 purposes, the state statute’s imposition of civil liability upon 17 motor carriers for failure to conduct certain specific inspection 18 procedures directly regulated shippers’ services. 19 Accordingly, the Court held Maine’s law preempted.4 20 Id. at 371-72. More damningly for preemption Id. at 372-73. Id. at 377. Here, unlike the statute at issue in Rowe, California Business 21 & Professions Code § 2298 has no regulatory effect, whether direct 22 or indirect, on motor carriers’ services. At most, by limiting 23 24 25 26 27 28 4 In American Trucking Associations, Inc. v. City of Los Angeles, the Supreme Court recently held that the FAAA preempted a Port of Los Angeles requirement that truckers display certain placards and submit parking plans to city authorities. Am. Trucking Ass’ns, Inc. v. City of Los Angeles, 133 S.Ct. 2096, 2100, 2105. There, however, there was no dispute whether the Port’s regulations were related to truckers’ services. Id. at 202. The issue rather, was whether the Port’s regulations had the force and effect of law. Id. 6 1 truckers’ exposure to certain fees, Section 2298 has a tenuous 2 impact on truckers’ prices. 3 this peripheral link, asserting that it invoices per diem fees 4 separate and apart from its freight rates, which are independent of 5 such charges. (Wise Decl., Ex. A.) 6 fees into its fee structure, the effect of that increased cost 7 would be remote, akin to that of other state-imposed input costs 8 resulting from such regulations as highway weight and clearance 9 restrictions, speed limits, and fuel taxes. Elite, for its part, disputes even Even if Elite did build late Section 2298's impact 10 on truckers’ prices, routes, and services, if any, is sufficiently 11 remote as to fall outside the ambit of the FAAA preemption 12 provision. 13 14 B. Meaning of Section 2298 Section 2298 prohibits late fees “[w]hen the intermodal 15 marine or terminal truck gate is closed during posted normal 16 working hours.” 17 container if the truck gate is closed. 18 that MOL cannot, and does not, currently charge late fees when the 19 truck gate is closed. 20 A trucker cannot, of course, return an overdue The parties appear to agree Elite contends, however, that Section 2298 forbids the 21 imposition of late fees on any weekend or holiday, regardless 22 whether the terminal is open for business. 23 points to the second sentence of Section 2298(b)(1), which reads, 24 “No per diem, detention, or demurrage charges shall be imposed on a 25 weekend or holiday, or during a labor disruption period, or during 26 any other period involving an act of God or any other planned or 27 unplanned action that closes the truck gate.” 28 7 Specifically, Elite 1 Courts need not look beyond the clear language of a statute 2 to determine its meaning. 3 758, 770 (2010). 4 forth a number of “planned and unplanned action[s]” that could 5 conceivably result in the closing of the truck gate. 6 limitation other than the closed gate language, the statute would 7 be so broad as to be meaningless. 8 Joaquin, 42 Cal. 4th 1121, 1135 (2008); Hensel Phelps Const. Co. v. 9 San Diego Unified Port Dist., 197 Cal. App. 4th 1020, 1034 (2011). Clayworth v. Pfizer, Inc., 49 Cal.4th The second sentence of Section 2298(b)(1) sets Absent any See Metcalf v. Country of San 10 Without any geographical or temporal restriction on the terms 11 “labor disruption period” or “act of God,” the statute might 12 theoretically be applicable at any given moment. 13 sense to read into those phrases a requirement that each scenario 14 disrupt operations at the terminal, as the “closes the truck gate” 15 language, which Plaintiff seeks to ignore with respect to weekends 16 and holidays, serves precisely that purpose. 17 Nor would it make To the extent the statutory language is ambiguous, Section 18 2298's legislative history confirms that it applies only when the 19 truck gate is closed. 20 768, 787 (2013). 21 Section 2298 stated that the bill “stems from the complaints of the 22 commercial vehicle operators . . . regarding the penalties imposed 23 for the late return of cargo containers which they characterize as 24 unfair and unwarranted. 25 are ‘charged late fees for the return of empty containers, even 26 when terminals are closed . . . .” 27 7/1/2005. 28 charges “[w]hen the marine terminal or terminal truck terminal is See Alejo v. Torlakson, 212 Cal. App. 4th The legislative analysis of the bill that became These vehicle operators argue that they CA. B. An., S.B. 45 Assem., A later analysis specified that the bill prohibits late 8 1 closed.” 2 confirms that Section 2298 applies only when the truck gate is 3 closed, and not, as Plaintiff contends, on any and all weekends and 4 holidays. CA. B. An., S.B. 45 Sen., 8/18/2005. This history 5 Because Section 2298 prohibits late fees only on weekends and 6 holidays when the truck gate is closed, Elite’s Motion for Summary 7 Judgment Regarding Declaratory and Injunctive relief is denied, 8 insofar as it seeks a declaratory judgment that MOL cannot charge 9 late fees on any weekend or holiday and injunctive relief against 10 such charges. 11 C. 12 MOL also contends that Elite lacks standing to pursue the Pass-On Defense 13 relief requested because it passes on any late fee charges to the 14 cargo customer, and therefore has not sustained any injury. 15 at 20.) 16 event, the court need not reach the issue, having rejected Elite’s 17 interpretation of Section 2298 and determined that Elite’s motions 18 must be denied. 19 Supreme Court has rejected such a “pass-on” defenses, even outside 20 the antitrust context. 21 310, 334; Clayworth, 49 Cal. 4th at 789 (“That a party may 22 ultimately be unable to prove a right to damages . . . does not 23 demonstrate that it lacks standing to argue for its entitlement to 24 them. . . . [M]itigation, while it might diminish a party’s 25 recovery, does not diminish the party’s interest in proving it is 26 entitled to recovery.). 27 /// 28 /// MOL did not, however, fully brief its argument. (Opp. In any The court notes, however, that the California Kwikset Corp. v. Superior Court, 51 Cal.4th 9 1 2 3 IV. CONCLUSION For the reasons stated above, Plaintiff’s Motion for Summary Judgment Regarding Declaratory and Injunctive relief is DENIED. 4 5 6 7 IT IS SO ORDERED. 8 9 10 Dated: August 29, 2013 DEAN D. PREGERSON United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10
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