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Dnow, LP v. Paladin Freight Solutions, Inc.

United States District Court, S.D. Texas, Houston Division

January 12, 2018

DNOW, L.P., Plaintiff,



         A truck driver was delivering concrete barriers when he allegedly struck a fire hydrant on the premises and caused serious property damage. The concrete barriers' buyer, Plaintiff DNOW L.P., sued the barriers' seller, Defendant Tricon Precast Ltd.; the driver, Defendant Luis Acosta Hernandez d/b/a L&M Eagle Express; and the freight broker who hired the driver, Defendant Paladin Freight Solutions, Inc. (Doc. No. 1-1.) Paladin removed the case from state district court in Harris County, Texas, arguing that federal law completely preempts DNOW's claim against Paladin. (Doc. No. 1.)

         Conflicting motions are now pending before this Court: Paladin's Motion to Dismiss (Doc. No. 3), and DNOW's Motion to Remand (Doc. No. 10). Paladin has also moved for limited jurisdictional discovery and a stay of DNOW's Motion to Remand (Doc. No. 13), responding to a potential procedural defect that DNOW raised in its Motion to Remand. Based on careful consideration of the filings and applicable law, the Court GRANTS DNOW's Motion to Remand, DENIES Paladin's Motion to Dismiss, and DENIES AS MOOT Paladin's motion for limited discovery.

         I. BACKGROUND

         The following facts are drawn from the Original Petition that DNOW filed in the 215th Judicial District Court in Harris County, Texas. (Doc. No. 1-1.) DNOW is a Texas limited partnership. In January 2017, DNOW ordered twenty “concrete reinforced barriers” from Tricon, another Texas L.P. (Id. at 2.) Tricon was to deliver them several days later to premises belonging to a customer of DNOW, located in Cleburne, Texas. (Id.) Tricon contracted with Paladin, a Tennessee corporation, to handle the delivery, which in turn contracted with L&M.[1] (Id. at 2-3.) According to DNOW, the “driver, while delivering the barriers on behalf of Tricon, negligently crashed his truck into a fire hydrant on the premises, which caused substantial property damage.” (Id. at 3.) Using “PFS” for Paladin, DNOW pointedly links this driver to Paladin, referring to the driver as “PFS/L&M's driver.” (Id.) After the accident, DNOW evidently had to reimburse its customer for the damage. (Id.)

         DNOW now sues Tricon for breach of contract, citing an indemnification provision in its purchase order for the concrete barriers. (Doc. No. 1-1 at 3-4.) DNOW also sues Paladin and L&M for negligence, owing to the following failures: “failure to maintain a proper lookout while driving”; “failure to maintain control of a vehicle”; “failure to maintain a single lane of traffic”; “failure to operate a vehicle in a reasonable manner”; “failure to apply the brakes to avoid a collision”; and “failure to maintain safe and clear distance.” (Id. at 4.) DNOW's negligence theories all concern the operation of the vehicle that caused the accident; none concerns Paladin's procedures for selecting or monitoring carriers.

         On November 3, 2017, Paladin removed the case to this Court.[2] (Doc. No. 1.) Paladin asserts that it is a licensed freight broker, [3] and so DNOW's negligence claim against Paladin is completely preempted by 49 U.S.C. § 14501(b)(1), an express preemption provision for freight forwarders and brokers. In Paladin's view, this provision mandates dismissal of DNOW's negligence claim. (Doc. No. 3-2 at 10-11.) DNOW disagrees on both points, seeking remand to state court where it believes it can properly pursue its negligence claim against Paladin. Accordingly, this Court's subject-matter jurisdiction and the fate of DNOW's claim against Paladin turn on the interpretation of 49 U.S.C. § 14501(b)(1).


         a. Removal and Remand

         Generally, “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). Removal is therefore possible for “all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. “Under the well-pleaded complaint rule, a federal court does not have federal question jurisdiction unless a federal question appears on the face of the plaintiff's well-pleaded complaint.” Elam v. Kansas City Southern Railway Co., 635 F.3d 796, 803 (5th Cir. 2011). “An exception to the well- pleaded complaint rule arises when Congress ‘so completely preempt[s] a particular area that any civil complaint raising this select group of claims is necessarily federal in character.'” Id. (quoting Gutierrez v. Flores, 543 F.3d 248, 252 (5th Cir. 2008)). “When the federal statute completely pre-empts the state-law cause of action, a claim which comes within the scope of that cause of action, even if pleaded in terms of state law, is in reality based on federal law.” Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 8 (2003).

         If a federal court lacks subject-matter jurisdiction over a removed case, remand is required. “If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). “Removal deprives the plaintiff of his chosen forum, and every day litigating in federal court is a day spent not litigating in state court. It is imperative that a motion to remand be resolved as swiftly as possible so that the plaintiff maintains his right to choose the forum in which to litigate.” Guillory v. PPG Industries, Inc., 434 F.3d 303, 310 (5th Cir. 2005).

         b. Dismissal

         Rule 12(b)(6) of the Federal Rules of Civil Procedure permits dismissal for “failure to state a claim upon which relief can be granted.” “To prevail against a defendant's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a plaintiff's complaint must contain sufficient factual matter, if accepted as true, to state a claim to relief that is plausible on its face.” Anderson v. Valdez, 845 F.3d 580, 589 (5th Cir. 2016) (cleaned up). “A claim is facially plausible if the complaint allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quotation omitted).

         c. ...

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