MENORA MIVTACHIM INSURANCE LTD. v. NEW CENTURY TRANSPORTATION, INC.
Filing
29
MEMORANDUM ORDER granted and denied 23 Motion for Summary Judgment. Signed by Judge Renee Marie Bumb on 2/11/2014. (dmr)
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[Docket No. 23]
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
________________________________
:
MENORA MIVTACHIM INSURANCE LTD.,:
:
:
Plaintiff,
:
:
v.
:
NEW CENTURY TRANSPORTATION,
:
INC.,
:
:
Defendant.
:
________________________________:
Civil Action No. 12-5189
(RMB/KMW)
MEMORANDUM ORDER
This matter comes before the Court upon a motion for summary
judgment by Defendant New Century Transportation, Inc. (“New
Century”) [Docket No. 23].
For the reasons that follow, summary
judgment is denied in part and granted in part.
Plaintiff Menora Mivtachim Insurance Ltd. (“Plaintiff”)
brought this action as the subrogee of Teva Pharmaceuticals
Industries Ltd. and/or Teva Pharmaceuticals, USA (“Teva”).
Plaintiff was the insurer of certain shipments of injectable
pharmaceuticals that were shipped from Teva’s facility in North
Wales, Pennsylvania in March 2010.
The pharmaceuticals were
loaded into a tractor with a refrigerated trailer for delivery by
New Century.
The parties do not dispute that the pharmaceuticals
were to be stored at temperatures ranging between 36NF and 46NF
during transport.
While en route, a sensor fault code in the
trailer activated.
Teva gave New Century permission to break the
seal on the trailer to determine whether the refrigerated unit
was functioning.
(See New Century’s 56.1 Statement, Docket No.
23-4 ¶ 45). “The trailer doors were opened for a very short time,
and it was ascertained that the sensor was not working properly.”
Id.
No testing of the pharmaceuticals was ever done.
Summary Judgment
A.
Argument
New Century moves for summary judgment on several grounds.
With respect to Count I (the Carmack Amendment), New Century
argues that Plaintiff has failed to prove (1) the good condition
of the pharmaceuticals at the time of shipment; and (2) that the
pharmaceuticals were damaged.
Alternatively, if summary judgment
on these grounds is denied, New Century argues that any recovery
by Plaintiff must be limited.
New Century has also moved for
summary judgment as to the negligence (Count I), breach of
contract (Count I) and breach of bailment claims (Count II)
because they are preempted as a matter of law by the Carmack
Amendment.
Because Plaintiff does not dispute this preemption
mandate, Defendant’s motion will be granted as to these claims.
The Carmack Amendment, 49 United States Code Section 20(11),
governs the liability of common carriers on bills of lading.
The
Paper Magic Group, Inc. v. J.B. Hunt Transport, Inc., 318 F.3d
458 (3d Cir. 2003).
A bill of lading is a transportation
2
contract between a shipper/consignor (i.e., a seller of goods)
and a carrier.
Id.; EF Operating Corp. v. Am. Bldgs., 993 F.2d
1046, 1050 (3d Cir. 1993).
To establish a prima facie case
against a carrier under the Carmack Amendment, a shipper must
prove “(1) delivery of goods to the initial carrier in good
condition, (2) damage of the goods before delivery to their final
destination, and (3) amount of the damages.”
Beta Spawn, Inc. v.
FFE Trans. Serv., Inc., 250 F.3d 218, 223 (3d Cir. 2001)(citation
omitted).
In addition, and in relevant part, liability under the
Carmack Amendment may be limited if the carrier gives the shipper
a reasonable opportunity to choose between two or more rates with
corresponding levels of liability.
Emerson Elec. Supply Co. v.
Estes Express Lines Corp., 451 F.3d 179, 187 (3d Cir. 2006).
B.
Standard
Summary judgment shall be granted if “the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
P. 56(a).
Fed. R. Civ.
A fact is “material” if it will “affect the outcome of
the suit under the governing law . . . .” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986).
A dispute is “genuine” if
it could lead a “reasonable jury [to] return a verdict for the
nonmoving party.”
Id.
When deciding the existence of a genuine
dispute of material fact, a court’s role is not to weigh the
evidence: all reasonable “inferences, doubts, and issues of
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credibility should be resolved against the moving party.”
Meyer
v. Riegel Prods. Corp., 720 F.2d 303, 307 n.2 (3d Cir. 1983).
The movant “always bears the initial responsibility of informing
the district court of the basis for its motion, and identifying
those portions of ‘the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any,’ which it believes demonstrate the absence of
a genuine issue of material fact.”
Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986)(quoting Fed. R. Civ. P. 56(c)).
Then, “when
a properly supported motion for summary judgment [has been] made,
the adverse party ‘must set forth specific facts showing that
there is a genuine issue for trial.’”
(quoting Fed. R. Civ. P. 56(e)).
Anderson, 477 U.S. at 250
The non-movant’s burden is
rigorous: it “must point to concrete evidence in the record”;
mere allegations, conclusions, conjecture, and speculation will
not defeat summary judgment.
Orsatte v. N.J. State Police, 71
F.3d 480, 484 (3d Cir. 1995); Jackson v. Danberg, 594 F.3d 210,
227 (3d Cir. 2010)(citing Acumed LLC v. Advanced Surgical Servs.,
Inc., 561 F.3d 199, 228 (3d Cir. 2009)) (“[S]peculation and
conjecture may not defeat summary judgment.”).
C.
Analysis
Construing all reasonable inferences in favor of Plaintiff,
see Meyer, 720 F.2d at 307 n.2 (3d Cir.1983), the Court agrees
with Plaintiff that proof of a temperature malfunction creates an
4
issue of fact for the jury to determine whether or not the
pharmaceutical goods were damaged.
A jury could readily find
that even in the absence of product testing - a fact relied on by
New Century - Teva acted reasonably in not selling the product
because they were rendered unsafe, i.e., damaged, by faulty
storage.
As stated in the Declaration of Joseph J. Boyce, “in
the face of this temperature data, Teva could no longer assure
its customer or the ultimate end users of the pharmaceuticals
that the product had been consistently stored in the acceptable
temperature range and remained unadulterated, so it could no
longer be sold or used.” [Docket No. 27-2, ¶ 12.]1
Because the
Court finds that this presents a genuine issue of material fact,
the Court need not address the remaining arguments regarding
Teva’s prima facie case.
New Century next argues that even if summary judgment is not
appropriate, its liability should be limited under the Carmack
Amendment.
The central dispute focuses on whether or not Teva
was given a reasonable opportunity to choose between one or more
levels of liability.
Defendant argues that Teva was given such
opportunity because Joseph Boyce, Teva’s Senior Manager,
Logistics, confirmed that the parties had discussed differing
1
New Century initially pointed to an email regarding
Copaxone’s potential usability despite the alleged temperature
fluctuations. Apparently, the parties have now clarified that
Copaxone was not included in the shipment.
5
limitations of liability: the Tariff-based limitation in the New
Century Rules Tariff and the limitation being negotiated for the
master contract with New Century at the time of the loss.
Related to this argument New Century also contends that the
parties’ long course of dealing demonstrates that Teva was well
aware of differing levels of coverage.
New Century also argues
that the bill of lading itself provided an opportunity to select
a higher limit of liability, but the section was left blank.
Defendant’s arguments, however, are unpersuasive.
First, as
Plaintiff argues, a reasonable inference suggests that Teva had
rejected New Century’s Tariff, as evidenced by the parties’
continued negotiations and the higher freight rate Teva actually
paid for the shipment.
Second, the bill of lading contained no
rates on its face and makes no reference to any document
containing two or more levels of liability.
In sum, on the
disputed record before the Court, New Century has not established
that it is entitled to a limitation of its liability.
Accordingly, for the above reasons;
IT IS ON THIS 11th day of February 2014, ORDERED that
Defendant’s motion for summary judgment as to Count I (Carmack
Amendment) and to the limitation of liability is DENIED; and
IT IS FURTHER ORDERED that Defendant’s motion for summary
judgment as to the remaining counts sounding in negligence,
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breach of contract, and breach of bailment is hereby GRANTED as
unopposed.
s/Renée Marie Bumb
RENÉE MARIE BUMB
United States District Judge
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