Otterson v. Federal Express Corporation et al

Filing 67

Findings & Recommendation: Defendants FedEx and Kinko's Motion for Summary Judgment 32 should be granted, and Plaintiff's Motion for Summary Judgment 44 should be denied. Otterson's implied federal common law cause of actio n for loss of goods shipped by interstate carrier should be dismissed as moot, and his express state-law claims for conversion and for negligent performance of bailment duties should be dismissed as preempted by federal law, to the extent pled agains t the named defendants in this action. The conversion claim pled against the Doe defendants should be remanded to the Circuit Court of the State of Oregon, County of Multnomah, for further proceedings. Objections to the Findings and Recommendation are due by 2/11/2009. Response to Objections to the Findings and Recommendation are due by 2/25/2009. Signed on 1/28/09 by Magistrate Judge Paul Papak. (gm)

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28 I N THE UNITED S T A T E S DISTRICT C O U R T F O R T H E DISTRICT OF OREGON K E V I N OTTERSON, Plaintiff, CV 07-1274-PK FINDINGS A N D RECOMMENDATION v. F E D E R A L EXPRESS CORPORATION, KINKO'S, INC., FEDEX KINKO'S OFFICE AND PRINT SERVICES, INC., and DOES 310; Defendants. P A P A K , M a g i s t r a t e Judge: This action was filed o n August 1,2007, by p l a i n t i f f Kevin Otterson i n the Circuit Court o f t h e S t a t e o f Oregon, C o u n t y o f M u l t n o m a h , a l l e g i n g a s i n g l e c l a i m o f c o n v e r s i o n a g a i n s t defendant Federal Express Corporation ("FedEx") and ten Doe defendants. On August 23, 2007, the action was removed to this comi. Subsequently, o n May 19, 2008, Otterson amended his P a g e I - FINDINGS AND R E C O M M E N D A T I O N complaint to state the conversion claim against FedEx, two corporate entities respectively identified as Kinko's, Inc., and Fedex Kinko's Office a n d Print Services, Inc. (collectively, "Kinko's"I), and eight D o e defendants, as well as a claim styled as a breach o f bailment alleged o n l y against Kinko's. T h i s c o u r t has federal q u e s t i o n a n d s u p p l e m e n t a l j u r i s d i c t i o n o v e r Otterson's claims pursuant to 28 U.S.C. §§ 1331 and 1367 (as discussed in greater detail below). N o w b e f o r e t h e c o u r t a r e t h e m o t i o n for s u m m a r y j u d g m e n t ( # 3 2 ) f i l e d b y d e f e n d a n t s F e d E x a n d K i n k o ' s a n d t h e m o t i o n f o r s u m m a r y j u d g m e n t ( # 4 4 ) filed b y p l a i n t i f f Otterson. I h a v e c o n s i d e r e d t h e p a r t i e s ' m o t i o n s , o r a l a r g u m e n t o n b e h a l f o f t h e p a r t i e s , a n d a l l o f the pleadings on file. For the reasons set forth below, the defendants' motion should b e granted and O t t e r s o n ' s m o t i o n s h o u l d b e denied. LEGAL STANDARD S u m m a t y j u d g m e n t is appropriate " i f the pleadings, depositions, answers to intenogatories, and admissions on file, together w i t h t h e affidavits, i f any, s h o w t h a t there i s no genuine issue as to any material fact and that the moving p a t i y is entitled to a j u d g m e n t as a matter o f law." Fed. R. Civ. P. 56(c). Summary j u d g m e n t is not proper i f material factual issues exist for trial. See, e.g., Celotex Corp. v. Catrett, 477 U.S. 318, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Warren v. City a/Carlsbad, 58 F J d 4 3 9 , 4 4 1 (9th Cir. 1995), cert. denied, 116 S.C!. 1261 (1996). The substantive l a w goveming a claim o r defense I The entities "Kinko's, Inc.," and "Fedex Kinko's Office a n d Print Services, Inc.," apparently do n o t n o w exist, although they m a y at one time have done so; t h e p a t i i e s appear to agree that the veridical entity c o n e s p o n d i n g to these i n c o n e c t names is FedEx Office and Print Services, Inc. FedEx Office and Print Services, Inc., refell'ed to herein as "Kinko's" (a name associated with a corporate predecessor o f t h e c u n e n t entity), appears to have consented to service and t o this couti's jurisdiction under the incoll'ect names listed in Otterson's amended complaint. Page 2 - FINDINGS AND R E C O M M E N D A T I O N detennines whether a fact is material. See }vfiller v. Glenn lvfiller Prod., Inc., 454 F . 3 d 975, 987 (9th Cir. 2006). I n e v a l u a t i n g a m o t i o n f o r summalY j u d g m e n t , t h e d i s t r i c t c o u r t s o f t h e U n i t e d S t a t e s m u s t d r a w a l l r e a s o n a b l e i n f e r e n c e s i n f a v o r o f t h e n o n m o v i n g party, a n d m a y n e i t h e r m a k e credibility detel1ninations nor perform any w e i g h i n g o f the evidence. See, e.g., Lytle v. Household lvIfg., Inc., 4 9 4 U.S. 545, 554-55 (1990); Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 1 3 3 , 1 5 0 (2000). O n cross-motions for s u m m m y j u d g m e n t , t h e court m u s t c o n s i d e r e a c h m o t i o n s e p a r a t e l y t o d e t e l m i n e w h e t h e r e i t h e r p a r t y h a s m e t its b u r d e n w i t h t h e facts construed i n t h e light m o s t favorable to the non-moving pmi)'. See Fed. R. Civ. P. 56; see also, e.g., Fair Housing Council o fRiverside County, Inc. v. Riverside Two, 2 4 9 F . 3 d 1132, 1136 (9th Cir. 2001). S u m m m y j u d g m e n t , o f course, m a y not be granted where the court finds u m e s o l v e d i s s u e s o f m a t e r i a l fact, e v e n i n s i t u a t i o n s w h e r e t h e c r o s s m o t i o n s a l l e g e t h a t n o disputed facts exist. See id. FACTUAL BACKGROUND O n M a r c h 9, 2007, plaintiff Otterson sent a n email with the subject line "Hi Matt .. " t o a r e c i p i e n t i d e n t i f i e d as M a t t h e w B a i n o f M i a m i B e a c h , F L , as f o l l o w s : L o o k i n g t o sell o f f a f e w o f m y p i e c e s , d o y o u h a v e a n y i n t e r e s t i n t h i s ? [ A t t a c h m e n t omitted.] T h e d i a l is m i n t , a n d c o m e s w i t h R o l e x service papers. A s k i n g $60K, there is none nicer. A l i t t l e o v e r h a l f a n h o u r l a t e r , O t t e r s o n r e c e i v e d the f o l l o w i n g r e p l y f r o m B a i n ' s e m a i l address: I w i l l b u y it... Thanks Page 3 - FINDINGS A N D R E C O M M E N D A T I O N (Ellipsis original.) Within the next h a l f hour, Otterson replied, "OK, I ' l l Fedex it Monday for Tuesday delivery. I f everything looks O K j u s t pop me a check i n the mail." O n March 1 3 , 2 0 0 7 , Otterson shipped a package to Bain's address via FedEx, from the Kinko's outlet at SW 2nd and Alder in POliland, OR. I t may reasonably be inferred from Otterson's s w o m declaration, and defendants do not deny for purposes o f the motions now before the comi, that the package contained the Rolex watch that Bain had agreed t o purchase. O n the FedEx airbill, Otterson listed the shipper as "Kevin Otterson; KWP, Inc.; 8260 E. Raintree Drive, Suite 108; Scottsdale, Arizona," and declared the value o f the package's contents as equal to "$0.00." T h e F e d E x a i r b i l l , t o g e t h e r w i t h t h e F e d E x S e r v i c e G u i d e t h e r e i n i n c o r p o r a t e d by reference, constitute the applicable contract o f carriage. The airbill states, i n relevant part, that FedEx's "liability is limited to $100 unless [the shipper] declare[s] a higher value," and directs customers to "[s]ee the current FedEx Service Guide for details." The airbill fmiher states, in relevant part, t h a t FedEx's liability in connection with [a] shipment is limited to the lesser o f [a shipper's] actual damages or $100, unless [the shipper] declare[s] a higher value, pay[s] an additional charge, and document[s] [his] actual loss in a timely manner. [The shipper] may pay a n additional charge for each $100 o f declared value. The declared value does n o t constitute, nor do[es] [FedEx] provide, cargo liability insurance. The applicable FedEx Service Guide similarly states that: A. T h e declared value o f a n y package represents o u r m a x i m u m liability i n connection with a shipment o f that package, including, but n o t limited to, any loss, damage, delay, misdelivelY, nondelivelY, misinformation, any f a i l u r e to p r o v i d e i n f o r m a t i o n , o r m i s d e l i v e r y o f i n f o r m a t i o n r e l a t i n g to t h e s h i p m e n t . I t i s t h e s h i p p e r ' s r e s p o n s i b i l i t y to p r o v e a c t u a l d a m a g e s . Exposure to and risk o f any loss in excess o f the declared value is assumed P a g e 4 - FINDINGS A N D R E C O M M E N D A T I O N by the shipper. [The shipper] may transfer this risk to an insurance carrier o f [the shipper's] choice through the purchase o f an insurance policy. Contact an insurance agent or broker i f you desire insurance coverage. WE DO N O T PROVIDE INSURANCE COVERAGE OF ANY KIND. B. With respect to U.S. express package services, unless a higher value is declared and paid for, our liability for each package is limited to U S $ l 00. For each package exceeding U S $ l 00 i n declared value, an additional amount will be charged. See Rates i n the FedEx Service Guide for details. *** F. Shipments (packages or freight) containing all o r part o f the following items are limited to a maximum declared value o f US$500: 7. *** Jewelry, including but not limited to, . . . watches and their parts . . . . When the package arrived in Miami, FedEx discovered that the shipment container showed signs o f having been tampered with, and that it contained an empty Rolex box only. FedEx tendered a check for $100 to Otterson to cover its liability for his alleged loss. Otterson declined to cash the check. This action followed. ANALYSIS Otterson alleges that all defendants - necessarily including the anonymous Doe defendants - are liable for conversion o f the contents o f the package shipped to Miami Beach, either directly or vicariously, pursuant to the doctrine o f respondeat superior. Otterson further alleges that defendant Kinko's is directly liable for breach o f bailment. For their pati, defendants assert that Otterson's state-law claims are preempted by the federal Airline Deregulation Act, and moreover that Otterson's damages are contractually limited to the $100 already tendered to him. Page 5 - FINDINGS AND RECOMMENDATION The Airline Deregulation A c t o f 1978 (the "Act") contains an express preemption clause providing, in relevant part, that: a State . . . may not enact or enforce a law, regulation, or other provision having t h e f o r c e a n d e f f e c t o f l a w r e l a t e d to a p r i c e , r o u t e , o r s e r v i c e o f a n a i r c a r r i e r . . . when such ca11'ier is transporting propelty by aircraft or b y motor vehicle (whether o r n o t s u c h p r o p e l t y h a s h a d o r will h a v e a p r i o r o r s u b s e q u e n t a i r m o v e m e n t ) . 49 U.S.C. § 4 I 713(b)(4)(A). In addition, the Act contains a savings clause providing that "[a] remedy under [the Act] is in addition to any other remedies provided by law." 49 U.S.C. § 40120(c). I n 1995, the United States Supreme C o m t construed the Act's preemption clause as follows: T h e [Act]'s p r e e m p t i o n c l a u s e . . . s t o p s S t a t e s f r o m i m p o s i n g t h e i r o w n substantive standards w i t h respect to rates, routes, or services, but n o t from affording r e l i e f to a party who claims and proves that an airline dishonored a term the airline i t s e l f stipulated. This distinction between what the State dictates and w h a t t h e a i r l i n e i t s e l f u n d e r t a k e s c o n f i n e s c o u r t s , i n b r e a c h - o f - c o n t r a c t a c t i o n s , to the parties' bargain, with no enlargement or enhancement based o n state laws or p o l i c i e s e x t e r n a l to t h e a g r e e m e n t . Am. Airlines v. Wolens, 513 U.S. 219, 232-233 (1995) (footnote omitted); see also id. at 222 ("the ADA's preemption prescription bars state-imposed regulation o f air ca11'iers, but allows r o o m for court enforcement o f contract tenllS set by the parties themselves"). The Wolens court held that the Act's preemption clause did n o t permit parties t o bring civil actions against air ca11'iers based o n state laws directly or indirectly regulating carrier behavior relating to the p r i c i n g o f carrier services, b u t m a d e clear that a c t i o n s s e e k i n g e n f o r c e m e n t o f contractual commitments voluntarily entered into b y ca11'iers could go forward. See id. at 226-228, 228-233. Subsequently, in 1997, the Fifth Circuit decided Sam L. }.Iajors Jewelers v. ABX, Inc., P a g e 6 - FINDINGS A N D R E C O M M E N D A T I O N 117 F.3d 922 (5th Cir. 1997), in which the Act was determined to preempt state l a w claims for deceptive business practices, and i n which liability-limiting language included i n a catTier's airbill was held enforceable against a shipper. The }vIajors plaintiff had shipped three packages containing jewelry (including a gold Rolex watch) via an interstate catTier, and the packages failed to arrive a t their destination. See J1,Iajors, 117 F.3d at 923-924. The canier's airbill contained language excluding all liability for lost shipments containing jewelry o f any kind. See i d at 924. The shipper p l a i n t i f f sued the c a n i e r defendant in a Texas state court, alleging breach o f contract, negligence, and violation o f Texas deceptive business practices law; the defendant removed the action to federal court, where it prevailed o n summalY judgment. See i d The }vIajors court found that, under Wolens, the plaintiff's state-law deceptive business practices claims were clearly preempted. See i d at 931. I n addition, the court held that the defendant canier's airbill constituted a catTiage contract, see id. at 930, that carriers are pel1'nitted u n d e r federal c o m m o n l a w t o l i m i t t h e i r l i a b i l i t y w i t h i n a c a n i a g e c o n t r a c t , see i d ; see a l s o Deiro v. American Airlines, Inc., 816 F.2d 1360, 1364-1365 (9th Cir. 1987)(ho1ding under the federal common l a w that a n airline passenger was bound by a clause limiting carrier liability for l o s t o r d a m a g e d baggage, r e g a r d l e s s o f w h e t h e r t h e p a s s e n g e r h a d actual n o t i c e o f t h e c l a u s e ) , and that therefore the catTier defendant's liability had effectively been eliminated and the plaintiff could make no recovelY for its loss, see i d at 930-931. In 1999, the N i n t h Circuit expressly "agree[d] with the Fifth Circuit that federal common l a w applies to loss o f or damage to goods b y interstate common carriers by air," Read-Rite Corp. v. Burlington A i r Express, L t d , 186 F.3d 1190, 1195 (9th Cir. 1999), citing Deiro, 816 F.2d a t 1365; also referencing i\Iajors, 117 F.3d a t 928, and further expressly "agree[d] with the Fifth Page 7 - FINDINGS A N D R E C O M M E N D A n O N Circuit that state l a w regulating the scope o f air carrier liability for loss or damage to cargo is preempted b y the [Act]." Read-Rite, 186 F.3d at 1197, citing lvfajors, 117 F.3d at 929 n.15, 931; also citing Deiro, 816 F.2d a t 1365. The Read-Rite court additionally affirmed that the application o f state contract l a w to routine breach-of-contract claims was n o t preempted by the Act, s e e i d T h e R e a d - R i t e c o u r t e x p l a i n e d t h a t , u n d e r t h e federal c o m m o n l a w o f t h e N i n t h C i r c u i t as distinct from the common l a w o f the Fifth Circuit articulated b y the lvfajors court - provisions limiting an air catTier's liability for lost or damaged goods are "prima f a c i e valid [only] i f the face o f the contract (or, in this case, air waybill) recites the liability limitation and 'the means to avoid it.'" I d a t 1198, quoting R o y a l Insurance Co. v. Sea-Land Service Inc., 50 F.3d 723, 727 (9th Cir. 1995). "The burden then shifts t o the shipper to prove that it did n o t have a 'fair opportunity' t o purchase greater liability coverage." Id., quoting R o y a l Insurance, 50 F.3d at 727. The ReadR i t e c o u r t a f f i l m e d t h e d e c i s i o n o f t h e d i s t r i c t c o u r t b e l o w , g r a n t i n g s u m m a r y j u d g m e n t to e n f o r c e l i a b i l i t y - l i m i t i n g p r o v i s i o n s c o n t a i n e d w i t h i n t h e c a r r i e r d e f e n d a n t s ' a i r b i l l s , see i d a t 1 1 9 9 , a n d a f f i l m e d t h e c o u r t ' s d e c i s i o n to a w a r d d a m a g e s s t r i c t l y b a s e d o n t h e l i a b i l i t y s c h e m e s e t f o r t h i n t h o s e a i r b i l l s , see i d I. Subject-Matter Jurisdiction Here, the issue t o be first detelmined i s whether this court has subject matter jurisdiction over the p l a i n t i f f s claims. The amount i n controversy, $60,000, is insufficient to invoke diversity jurisdiction, so Otterson's amended complaint must be analyzed to detelmine whether it gives rise to federal question jurisdiction. O n its face, Otterson's amended complaint articulates precisely two claims, each Page 8 - FINDINGS A N D R E C O M M E N D A T I O N expressly stating a cause o f action under the common law o f the State o f Oregon. "In general, d i s t r i c t c o u t i s h a v e f e d e r a l - q u e s t i o n j u r i s d i c t i o n o n l y i f a federal q u e s t i o n a p p e a r s o n t h e f a c e o f a plaintiffs complaint." Brennan v. Southwest Airlines Co., 134 F.3d 1405 (9th Cir. 1998) (emphasis original), citing Louisville & Nashville R.R. Co. v. ,"[ottley, 211 U.S. 149, 152 (1908). However, the so-called "miful pleading doctrine" provides a n exception to this general rule: Under the artful pleading doctrine, "a plaintiff may n o t defeat removal by omitting to plead necessary federal questions i n a complaint." Franchise Tax Bd. [v. CanstI'. Laborers Vacation Trust], 463 U.S. [1,] 22 [(1983)]; see also Sparta [Surgical Corp. v. NASD], 159 F.3d [1209,] 1212 [(9th Cir. 1998)] ("A plaintiff may n o t avoid federal jurisdiction b y omitting from the complaint federal l a w essential t o his or her claim or b y casting i n state telms a claim that can be made only under federal law."). T h e artful pleading doctrine allows courts to "delve b e y o n d t h e face o f t h e s t a t e c o u r t c o m p l a i n t a n d f i n d f e d e r a l q u e s t i o n jurisdiction" by "recharacterizing a p l a i n t i f f s state-law claim as a federal claim." Precision P a y Phones v. Qwest Communs. Corp., 210 F. Supp. 2d 1106, 1112, 1113 (N.D. Cal. 2002) (citing Hunter v. United Van Lines, 746 F.2d 635, 640 (9th Cir. 1985)). C o u t i s s h o u l d " i n v o k e t h e d o c t r i n e 'only i n l i m i t e d c i r c u m s t a n c e s a s i t r a i s e s difficult issues o f state and federal relationships and often yields unsatisfactOlY results.''' Sullivan [v. First A f f i l i a t e d Secur., Inc.], 813 F.2d [1368,] 1373 [(9th Cir. 1987)] (quoting Salveson v. W. States Bankcard, 731 F.2d 1423, 1427 (9th Cir. 1984)). While the miful pleading doctrine is a useful procedural sieve to d e t e c t t r a c e s o f f e d e r a l s u b j e c t m a t t e r j u r i s d i c t i o n i n a p m i i c u l a r case, i t a l s o h a s substantive implications o n the scope o f federal jurisdiction and efficiency. See generally Alihur R. Miller, Artfiil Pleading: A Doctrine in Search o fDefinition, 76 Tex. L. Rev. 1781 (1988) (discussing the histOlY o f miful pleading doctrine and the implications o f doctrinal expansion on federal jurisdiction). Lippitt v. Raymond James Fin. Servs., 340 F.3d 1033, 1041 (9th Cir. 2003) (emphasis supplied). The L i p p i t t court explained that the doctrine pelmits federal courts to assert federal q u e s t i o n o v e r o s t e n s i b l e s t a t e - l a w c l a i m s i n t w o sets o f c i r c u m s t a n c e s : c o m p l e t e p r e e m p t i o n c a s e s a n d s u b s t a n t i a l federal q u e s t i o n cases: Since its first miiculation in Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. P a g e 9 - F I N D I N G S AND R E C O M M E N D A T I O N 667,673,94 L. Ed. 1 1 9 4 , 7 0 S. Ct. 876 (1950), courts have used the atiful pleading doctrine in: (1) complete preemption cases, see j'vfetropolitan Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 64-65, 95 L. Ed. 2d 5 5 , 1 0 7 S. Ct. 1542 (1987) and (2) substantial federal question cases, see Franchise Tax Bd., 463 U.S. at 27-28. Subsumed within this second categOly are those cases where the claim is necessarily federal in character, see Brennan v. Southwest A i r l i n e s Co., 134 F.3d 1405 a t 1409, or where the right to r e l i e f depends o n the resolution o f a substantial, disputed federal question, see Merrell D o w [Pharmaceuticals, Inc. v. Thompson], 478 U.S. [804,] 814 (1986). Id. at 1041-1042 (footnote omitted). I t is clear that, here, the Act does n o t completely preempt state-couti jurisdiction over all claims relating to the Act's subject matter: N o r i s i t p l a u s i b l e t h a t C o n g r e s s m e a n t t o c h a n n e l i n t o federal c o u t i s t h e b u s i n e s s o f r e s o l v i n g , p u r s u a n t to j u d i c i a l l y f a s h i o n e d f e d e r a l c o m m o n l a w , t h e r a n g e o f contract claims relating to airline rates, routes, or services. The A [ct] contains no hint o f such a role for the federal coutis. I n this regard, the A [ct] contrasts m a r k e d l y w i t h t h e E R I S A , w h i c h d o e s c h a n n e l c i v i l a c t i o n s into federal courts, see ERISA §§ 502(a), (e), 2 9 U . S . c . §§ 1132(a), (e), under a comprehensive scheme, detailed in the legislation, designed to promote "prompt and fair claims settlement." P i / o t Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54, 95 L. Ed. 2 d 3 9 , 1 0 7 S. Ct. 1549 (1987); see Ingersoll-Rand Co. v. iv!cClendon, 498 U.S. 133, 143-145, 112 L. Ed. 2d 4 7 4 , 1 1 1 S. Ct. 478 (1990) (finding ERISA's comprehensive civil enforcement scheme a "special feature" supporting preemption o f common-law w r o n g f u l d i s c h a r g e claims). Wolens, 513 U.S. a t 232. Subject matter jurisdiction therefore attaches only to the extent that O t t e r s o n ' s c l a i m s n e c e s s a r i l y r a i s e a s u b s t a n t i a l federal q u e s t i o n . The L i p p i t t court usefully set out the parameters o f the substantial federal question analysis: A state l a w claim falls within t h [e substantial federal question] category when: (1) " a substantial, disputed question o f federal l a w is a n e c e s s w y element o f . . . the well-pleaded state claim," Rains [v. Criterion Sys.], 80 F.3d [339,] 345 (9th Cir. 1996) (internal citation omitted) (emphasis in original) or the claim is an "inherently federal claim" articulated i n state-law terms, Brennan, 134 F.3d at 1409; or (2) "the right to r e l i e f depends on the resolution o f a substantial, disputed Page 10 - FINDINGS AND RECOMMENDATION federal question," A R C O Envtl. Remediation, L . L . c . v. Department o fHealth & Envtl. Quality, 213 F.3d 1108, 1114 (internal citation omitted). A careful reading o f artful pleading cases shows that no specific recipe exists for a court to alchemize a state claim into a federal claim -- a court must l o o k at a complex group o f factors in any particular case to decide whether a state claim a c t u a l l y " arises" under federal law. I d a t 1 0 4 2 - 1 0 4 3 ( i t a l i c i z e d e m p h a s i s o r i g i n a l ; b o l d e d e m p h a s i s s u p p l i e d ) ; see a l s o A s s o c i a t i o n o f Westinghouse Salaried Employees v. Westinghouse Electric CO/p., 348 U.S. 437, 450 (1955) ("Although it has sometimes been suggested that the 'cause o f action' must derive from federal l a w , i t h a s b e e n f o u n d s u f f i c i e n t t h a t s o m e a s p e c t o f f e d e r a l l a w is e s s e n t i a l t o p l a i n t i f f s s u c c e s s . The litigation provoking problem has b e e n the degree to which federal l a w must be i n the forefront o f the case and not be remote, collateral or peripheral.") (footnoted citations omitted). The Ninth Circuit has observed t h a t " [a] traditional example o f the artful pleading doctrine is one in which the defendant has a federal preemption defense to a state claim and federal l a w provides a remedy." Brennan, 134 F.3d at 1409 (intemal quotation marks omitted), quoting Sullivan v. First Affiliated Sec., Inc., 813 F.2d 1368, 13712 (9th Cil'. 1987). The Brennan cOUli analyzed state law causes o f action for unlawful business practices and breach o f contract, determined that they were preempted by the Internal Revenue Code, but detelmined that, because the IRC provided a cause o f action for seeking tax refunds, and the claims were effectively the equivalent o f suits for t a " refunds, the claims were inherently federal. See i d at 1409-1412. Here, as i n Brennan, the defendants have asserted a clear federal preemption defense. Moreover, also as in Brennan, i t is clear that federal law, i n this case the federal c o m m o n law, provides a remedy for the p l a i n t i f f s alleged halm. See, e.g., Read-Rite Corp. v. Burlington A i r Page 11 - FINDINGS AND RECOMMENDATION Express, Ltd., 186 F.3d 1190, 1195 (9th Cir. 1999) ("federal c o m m o n law applies to loss o f or damage t o goods by interstate common c a n i e r s by air"), citing Deiro v. A m e r i c a n Airlines, Inc., 816 F.2d 1360, 1365 (9th Cir. 1987); see also 49 U.S.C. § 40120(c) (expressly preserving remedies available at the federal common law). Because Otterson seeks a remedy for the loss o f goods shipped via an interstate air c a n i e r , and because the only remedy available for such loss is under the federal c o m m o n law, under Brennan Otterson's claims are best construed as inherently federal, giving rise to federal question jurisdiction pursuant to the miful pleading doctrine. See Brennan, 134 F.3d a t 1409, 1409-1412; see also lvJajors, 117 F.3d at 925-929 (constming a state- l a w negligence claim as a federal c o m m o n l a w claim for loss o f or damage to goods shipped by a i r c a n i e r ) . B e c a u s e O t t e r s o n ' s c o m p l a i n t c o n t a i n s at l e a s t o n e i n h e r e n t l y federal c l a i m , t h i s court has federal question jurisdiction over that claim. See 28 U.S. C. § 1331. Because Otterson's claims are, collectively, sufficiently related to fOlm p m i o f the same case o r controversy, this c o m i s h o u l d a s s e l i s u p p l e m e n t a l j u r i s d i c t i o n o v e r the s t a t e - l a w claims m i i c u l a t e d i n the a m e n d e d complaint. See 28 U.S.C. § 1367. II. Preemption Under the Act Although Otterson's complaint i s best construed as stating a n inherently federal claim for loss o f o r damage to goods shipped by interstate air c a n i e r , s e e supra, i t is perhaps most equitable to interpret the complaint as additionally stating b o t h o f the two state-law claims i t expressly miiculates. I therefore consider the effect o f the Act's preemption provision on both the claim for conversion and the claim for breach o f bailment. A. Conversion Otterson's a m e n d e d c o m p l a i n t states a c a u s e o f a c t i o n f o r c o n v e r s i o n a g a i n s t FedEx, Page 12 - FINDINGS AND RECOMMENDATION Kinko's, and eight individual Doe defendants. Under the unambiguous language o f the Act's preemption clause and the clear holdings o f Wolens, Read-Rite, and }viajors, Otterson's state-law causes o f action against F e d E x and Kinko's, other than "routine" breach o f contract claims, cannot go forward in this or any other c o u r t ? See 49 U.S.C. § 41713(b)(4)(A); Wolens, 513 U.S. a t 2 2 2 , 2 3 2 - 2 3 3 ; Read-Rite, 186 F J d at 1195, 1197; Majors, 117 F J d at 930-931. Otterson argues that his conversion claim may be construed as a species o f breach o f contract claim, and therefore should survive preemption. I do n o t find support for Otterson's argument in Oregon law. Although Otterson could have elected to plead a claim for routine breach o f contract, he d i d n o t do so in his complaint as originally filed or as amended. To the contraty, Otterson's conversion claim against FedEx and Kinko's, as pled, sounds i n tort, and is therefore subject to preemption under the Act. However, the same conclusion does n o t apply t o Otterson's conversion claim as pled against the individual Doe defendants. To the extent Otterson alleges that any individual Doe defendant converted the contents o f the FedEx package for his or h e r own personal gain, a claim seeking to establish such defendant's direct liability for such conversion would n o t i n any material way "relate[] to a price, route, or service o f an air carrier." 49 U.S.C. § 41713(b)(4)(A). Because the claim alleging the Doe defendants' direct liability for conversion is not within the scope o f the Act's preemption provision, the conversion claim should survive federal preemption 2 This conclusion applies with equal force whether the claim is atiiculated against F e d E x or against Kinko's. Preemption is applicable to claims "related to a price, route, or service o f an air catTier" regardless o f whether the defendant is actually a carrier itself. 49 U.S.C. § 41713(b)(4)(A); see also, e.g., Lyn-Lea Travel Corp. v. Am. Airlines, 283 F J d 282, 287 (5th Cir. 2002) ("ADA preemption is n o t limited to claims brought directly against air carriers. . . . Rather, claims are preempted i f they 'relate to' the prices, routes or services o f an air catTier") ( c i t a t i o n s omitted). Page 13 - FINDINGS AND RECOMMENDATION to the sole extent alleged against the Doe defendants. Recognizing the inapplicability o f the preemption doctrine to the claims against the Doe defendants, some or all o f whom are alleged to be employees o f either FedEx or Kinko's, Otterson argues that the named defendants are vicariously liable for their employees' tort under Oregon's respondeat superior doctrine. According to Oregon law: Under the doctrine o f respondeat superior, an employer is liable for a n employee's t o r t s w h e n t h e e m p l o y e e acts w i t h i n t h e s c o p e o f e m p l o y m e n t . N e g l i g e n c e o r o t h e r t o r t i o u s c o n d u c t b y t h e e m p l o y e r is n o t r e q u i r e d . . . . Three requirements must be met to conclude that an employee was acting within the scope o f employment. These requirements traditionally have been stated as: ( I ) w h e t h e r t h e a c t occurred s u b s t a n t i a l l y w i t h i n t h e t i m e a n d s p a c e limits authorized by the employment; (2) whether the employee was motivated, at least p a t i i a l l y , b y a p u r p o s e t o s e r v e t h e e m p l o y e r ; a n d (3) w h e t h e r t h e a c t i s o f a k i n d which the employee was hired to perform. Chesterman v. Barman, 305 Or. 439, 442 (1988) (citations omitted). Here, the record contains no evidence from which a trier o f fact could reasonably conclude that a F e d E x or Kinko's employee was either hired for the purpose o f convetiing FedEx customers' property or converted Otterson's watch while motivated, even in pati, by a purpose o f serving his or her employer. As a matter o f l a w , Otterson's entirely speculative vicarious liability argument therefore fails. For the foregoing reasons, Otterson's conversion claim should be found preempted as to defendants FedEx and Kinko's, but survive preemption to the extent pled against the Doe d e f e n d a n t s . T h e c l a i m s h o u l d t h e r e f o r e b e d i s m i s s e d to t h e e x t e n t p l e d a g a i n s t F e d E x a n d Kinko's. B. Breach o f B a i l m e n t Otterson's complaint states a claim for breach o f bailment against defendant Kinko's only. Page 14 - FINDINGS AND RECOMMENDATION Under Oregon law, the creation o f a bailment requires "a delivety o f something o f a personal nature b y one party (bailor) t o another (bailee), to be held according to the purpose or object o f the delivery, and to be returned or delivered over when that purpose is accomplished." Gage v. A l l Nations Ins. Co., 314 Or. 700, 705 (1992), citing Kantola v. L o v e l l Auto Co., 157 Or. 534, 538 (1937). A bailee is under a duty o w e d to the bailor to return the goods entrusted in good condition. See, e.g., National Fire Ins. Co. v. l'vfogan, 186 Or. 285, 290 (1949). Oregon law clearly recognizes a cause o f action for breach o f a contract o f bailment; for such a cause o f action, the l a w o f contract and all n01mal contractual remedies apply. See, e.g., D i a m o n d Roller ivlills v. }vloody, 63 Or. 90, 100 (1912). In addition, Oregon law recognizes a cause o f action for negligent p e l j o r m a n c e o f a bailee's duties, for which the law o f negligence, sounding i n tort, is applicable. See, e.g., National Fire, 186 Or. at 290. Where goods entrusted to a bailee are lost or damaged, a bailor may elect between maintaining a breach o f contract action or maintaining a n action i n t01i for negligent performance o f the bailee's duty o f care. See, e.g., S h e p h e r d v . Hub L u m b e r Co., 273 Or. 331, 342 (1975), q u o t i n g National Fire, 186 Or. at 290. A n a l y s i s o f t h e a m e n d e d c o m p l a i n t i n t h i s a c t i o n s t r o n g l y s u g g e s t s t h a t O t t e r s o n intends his action to sound i n tort, for negligent performance o f Kinko's duties as bailee. See, e.g., First Amended Complaint. ~ 17 ("Defendant Kinko's breached the duty it owed to plaintiff by n o t delivering the watch to Defendant Fed[Ex] for shipping"). Because the breach o f bailment cause o f action is best construed as a tort claim, it is clearly preempted and should be dismissed. See 49 U.S.C. § 41713(b)(4)(A); Wolens, 513 U.S. at 222, 232-233; Read-Rite, 186 F J d at 1195, 1197; 2vlajors, 117 F J d at 930-931. Page 15 - FINDINGS AND RECOMMENDATION III. Fedeml Common Law Claim A s noted above, Otterson's amended complaint should be construed as stating a federal c o m m o n law claim for loss o f goods shipped by air carrier, in this case by defendant FedEx. Under the federal common law, the provisions o f the FedEx airbill and FedEx Service Guide constitute the applicable contract o f caniage. Those documents contain express limitations on liability which purport to limit the c a n i e r ' s liability for the loss o f goods without higher declared value to $100. That amount has already b e e n tendered to Otterson. U n d e r t h e federal c o m m o n l a w o f t h e N i n t h C i r c u i t , c o n t r a c t u a l p r o v i s i o n s l i m i t i n g a n a i r c a n i e r ' s liability for lost or damaged goods are ''primajacie valid i f the face o f the contract (or, i n this case, air waybill) recites the liability limitation and 'the means to avoid it.'" Read-Rite, 186 F.3d at 1198, quoting Royal Insurance, 50 F.3d at 727 (9th Cir. 1995). "The burden then shifts to the shipper t o prove that it did n o t have a 'fair oppoliunity' to purchase greater liability coverage." Id., quoting Royal Insurance, 50 F.3d at 727. Here, the airbill clearly states the liability limitation and sets forth the ways i n which it can be avoided: either b y declaring a value higher than $100 and paying a c o n e s p o n d i n g l y higher amount for shipping the goods, or, in the event (as here) that the telIDS o f the contract do n o t permit declaration o f a sufficiently high value, by purchasing third-pmiy insurance. There is no evidence i n the record to support the conclusion that Otterson lacked a fair opportunity to purchase adequate liability coverage. The liability-limiting provisions are therefore enforceable as a matter o f l a w . Otterson neveliheless argues that applicable law does n o t permit FedEx and Kinko's to contractually limit their o w n liability where, as here, it is alleged that goods shipped by an interstate air carrier may have been converted b y a n employee o f the cmTier. In fact, the federal Page 16 - FINDINGS AND RECOMMENDATION common l a w recognizes the "true conversion" doctrine, pursuant to which a carrier will not be permitted to limit liability for its o w n conversion o f shipped goods. See, e.g., Glickfeld v. H o w a r d Van Lines, Inc., 213 F.2d 723, 727 (9th Cil'. 1954) ( " i f the propelty has been converted by the carrier, it would be against public policy t o pelIDit the carrier to limit its liability and thus to profit from its own misconduct"). "However, the cases are unifOlID i n holding that the conversion doctrine is peltinent only w h e n there has been a true conversion, i. e., where the carrier has appropriated the property for its o w n use or gain. The carrier may properly limit its liability where the conversion is by third pmties o r even b y its own employees." Id. (emphasis s u p p l i e d ; footnoted c i t a t i o n s o m i t t e d ) . T h e G l i c k f e l d c o u r t r e a s o n e d t h a t " [ i ] n t h e latter c i r c u m s t a n c e , w h i l e t h e c a r r i e r m a y h a v e b e e n guilty o f n e g l i g e n c e i n t h e s e l e c t i o n o f its employees, it has not b e e n unjustly emiched, nor has it been guilty o f any misconduct." Id. Here, however, the record contains no evidence from which a trier o f fact could reasonably conclude that FedEx or Kinko's appropriated Otterson's Rolex and added its value t o its asset sheets. The true conversion doctrine is therefore inapplicable here as a matter o f law. I n consequence, Otterson is limited as a matter o f l a w to a maximum recovelY o f $1 00 o n h i s f e d e r a l c o m m o n l a w c l a i m . A s d e f e n d a n t s have a l r e a d y t e n d e r e d t h a t amount, s u c h c l a i m should b e dismissed as moot. IV. Remaining State-Law Claims A s n o t e d above, O t t e r s o n ' s s t a t e - l a w c l a i m s a g a i n s t d e f e n d a n t s F e d E x a n d K i n k o ' s a r e clearly preempted by the Act, and any federal common law claim m'ising out o f Otterson's c o m p l a i n t i s s u b j e c t to a n e n f o r c e a b l e l i a b i l i t y - l i m i t i n g p r o v i s i o n , a n d s h o u l d b e d i s m i s s e d a s moot. The only remaining cause o f action is the conversion claim, to the sole extent it is alleged Page 17 - FINDINGS AND RECOMMENDATION against the individual Doe defendants. Because the conversion claim against the Doe defendants is a pure creature o f state l a w and raises no federal question, and because this court lacks diversity jurisdiction over Otterson's claims, this court's jurisdiction over the remaining claim is supplemental, pursuant to 28 U.S.C. § 1367. Section 1367 provides, in relevant part, that: T h e district courts may decline t o exercise supplemental j u r i s d i c t i o n o v e r a c l a i m ... if(1) the claim raises a novel or complex issue o f State law, (2) the claim substantially predominates over the claim or claims over . w h i c h t h e d i s t r i c t c o u r t has o r i g i n a l j u r i s d i c t i o n , (3) the district court has dismissed all claims over which i t has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining j u r i s d i c t i o n . 28 U.S.C. § 1367(c). Here, all claims over which this c o m t had original jurisdiction should be dismissed. In consequence, the court has authority pursuant to Section 1367(c)(3) to decline to exercise supplemental jurisdiction over the remaining state-law claim. However, as the Ninth Circuit h a s stated, "actually exercising discretion and deciding whether t o decline, or to retain, supplemental jurisdiction over state l a w claims w h e n any factor in subdivision (c) is implicated is a responsibility that district courts are duty-bound to take seriously." A e r i v. Varian Assoes., 114 F.3d 999, 1001 (9th Cir. 1997) (en bane). After determining that authority exists to decline supplemental jurisdiction under Section 1367(c), the district comts o f the Ninth Circuit are d i r e c t e d t o c o n s i d e r w h e t h e r t h e e x e r c i s e o f j u r i s d i c t i o n w o u l d a d v a n c e t h e v a l u e s " o f economy, c o n v e n i e n c e , f a i r n e s s , a n d comity." f d ( c i t a t i o n o m i t t e d ) . Page 18 - FINDINGS AND RECOMMENDATION The Supreme Court has noted that "in the usual case in which all federal-law claims are eliminated before trial, the balance o f factors to be considered . . . -- judicial economy, convenience, fairness, and comity -- will p o i n t toward declining to exercise jurisdiction over the remaining state-law claims." Carnegie-jVfellon Univ. v. Cohill, 484 U.S. 343, 350 n. 7 (1988). Otterson's claim does n o t present circumstances that take it outside the nmID. Requiring Otterson to p u r s u e h i s s o l e s u r v i v i n g c l a i m i n s t a t e c o u r t w o u l d n o t c r e a t e m u l t i p l e p a r a l l e l p r o c e e d i n g s , a n d t h u s w o u l d n e i t h e r i m p a i r j u d i c i a l e c o n o m y n o r cause i n c o n v e n i e n c e o r unfaimess. Moreover, it is beyond dispute that "[n]eedless decisions o f state l a w should be avoided b o t h as a matter o f comity and to promote justice between the parties, b y procuring for them a surer-footed reading o f applicable law." United lvIine Workers v. Gibbs, 383 U.S. 715, 726 (1966) (footnote o m i t t e d ) . T h e c o u r t s h o u l d t h e r e f o r e d e c l i n e to e x e r c i s e s u p p l e m e n t a l j u r i s d i c t i o n o v e r Otterson's remaining state-law claim, which should be remanded for further proceedings in state court. See 28 U.S.C. § 1367(c)(3); A c r i , 114 F.3d a t 1001; Cohill, 484 U.S. a t 350 n. 7. CONCLUSION For the reasons s e t forth above, I recommend that the motion for summmy j u d g m e n t (#32) filed b y defendants FedEx and Kinko's be granted, and the motion for summary judgment (#44) filed by p l a i n t i f f Otterson be denied. Otterson's implied federal c o m m o n l a w cause o f action for loss o f goods shipped by interstate carrier should be dismissed as moot, and his e x p r e s s s t a t e - l a w claims for c o n v e r s i o n and for negligent p e r f o r m a n c e o f b a i l m e n t d u t i e s s h o u l d be dismissed as preempted by federal law, t o the extent pled against the named defendants i n this action. The conversion claim pled against the Doe defendants should be remanded to the Circuit Court o f the State o f Oregon, County o f Multnomah,. for further proceedings. Page 19 - FINDINGS AND RECOMMENDATION SCHEDULING ORDER T h e a b o v e F i n d i n g s a n d R e c o m m e n d a t i o n w i l l b e r e f e r r e d to a U n i t e d S t a t e s D i s t r i c t Judge for review. Objections, i f any, are due February 11, 2009. I f n o objections are :filed, review o f the Findings and Recommendation will go under advisement o n that date. I f objections are :filed, a response to the objections is due fOUlteen days after the date the objections are filed and the review o f the Findings and Recommendation will go under advisement on that date. D a t e d t h i s 2 8 t h d a y o f J a n u a r y , 2009. o n o r a b l e Paul P a a k U n i t e d S t a t e s Magistrate Judge P a g e 2 0 - FINDINGS A N D R E C O M M E N D A T I O N

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