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Complete Distribution Services, Inc. v. ALL States Transport, LLC

United States District Court, D. Oregon

March 25, 2015


John A. Anderson and Keven M. Anderson, ANDERSON & YAMADA, P.C., Portland, OR, Of Attorneys for Plaintiff.

Flavio A. Ortiz and Martin M. Rall, LACHENMEIER ENLOE RALL & ORTIZ, Portland, OR, Of Attorneys for Defendant.


MICHAEL H. SIMON, District Judge.

United States Magistrate Judge Dennis J. Hubel issued a Findings and Recommendation ("F&R") in this case on November 11, 2014.[1] Dkt. 65. Judge Hubel recommended that Plaintiff Complete Distribution Services, Inc.'s ("CDS") motion to dismiss certain counterclaims and motion to strike certain affirmative defenses (Dkt. 46) be granted in part. Specifically, Judge Hubel recommended that Defendant All States Transport, LLC's ("AST") counterclaim for negligence be dismissed; that AST's affirmative defenses of negligence, "fault of others, " breach of contract, and lack of subject-matter jurisdiction be struck; and that AST's affirmative defenses of failure to perform a condition precedent and preemption of contractual indemnity not be struck.

Under the Federal Magistrates Act ("Act"), the Court may "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate." 28 U.S.C. § 636(b)(1)(C). If a party files objections to a magistrate's findings and recommendations, "the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." Id.; Fed.R.Civ.P. 72(b)(3). For those portions of a magistrate's findings and recommendations to which neither party has objected, the Act does not prescribe any standard of review. See Thomas v. Arn, 474 U.S. 140, 152 (1985) ("There is no indication that Congress, in enacting [the Act], intended to require a district judge to review a magistrate's report to which no objections are filed."). Nor, however, does the Act "preclude further review by the district judge[] sua sponte ... under a de novo or any other standard." Thomas, 474 U.S. at 154. Indeed, the Advisory Committee Notes to Fed.R.Civ.P. 72(b) recommend that "[w]hen no timely objection is filed, " the Court review the magistrate's recommendations for "clear error on the face of the record."

AST timely filed an objection, Dkt. 67, to which CDS responded. Dkt. 68. AST objected to the portions of Judge Hubel's F&R regarding negligence, breach of contract, and subjectmatter jurisdiction. The Court reviews the remainder of the F&R, to which no party has objected, for clear error on the face of the record. As no such error is apparent, the Court adopts the remainder of the F&R. The Court reviews de novo the portions of the F&R to which AST objects.


AST is an interstate motor carrier registered with the Federal Motor Carrier Safety Administration.[2] CDS is a registered freight broker; it acts as a liaison between carriers and shippers[3] to arrange for transportation. 49 U.S.C. § 13102(2). In December 2012, CDS arranged for AST to transport two shipments of vitamins and nutritional supplements for Pacific Nutritional, Inc. ("PNI") from Vancouver, Washington, to two separate locations in Florida. On December 7, 2012, AST picked up the shipments. Without informing CDS or PNI, AST combined the two shipments into one trailer for transportation. The next day, December 8, 2012, AST's truck was involved in an accident on Interstate 84 in eastern Oregon, causing loss and damage to PNI's cargo.

The Carmack Amendment to the Interstate Commerce Act governs all claims between motor carriers and shippers concerning "delay, loss, failure to deliver and damage to property." White v. Mayflower Transit, L.L.C., 543 F.3d 581, 584 (9th Cir. 2008); see § 14706. PNI filed a claim with CDS for $169, 844.47 in loss and damage to its shipments, which CDS forwarded to AST and AST's insurer. Then, in exchange for an assignment of PNI's claims, CDS paid PNI the full amount.

On May 13, 2013, standing in the shoes of PNI under the Carmack Amendment, CDS filed suit against AST for freight loss and damage. CDS also brought claims for indemnity and setoff under its contracts with AST. On January 23, 2014, CDS amended its complaint to add an additional contract claim, alleging 89 other occasions on which AST had combined shipments in violation of its agreements with CDS. On February 10, 2014, AST filed its answer, including certain affirmative defenses and counterclaims. On February 24, CDS moved to dismiss AST's counterclaim for negligence under Federal Rule of Civil Procedure 12(b)(6) and to strike some of AST's affirmative defenses under Rule 12(f).


A. Motion to Dismiss for Failure to State a Claim

A motion to dismiss for failure to state a claim may be granted only when the pleading states no cognizable legal theory or contains insufficient factual allegations to support a claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a pleading's factual allegations, the court must draw all reasonable inferences in favor of the non-moving party and accept all well-pleaded material facts as true. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). Legal conclusions couched as factual allegations, however, are not entitled to that presumption of truth. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). The plaintiff "may not simply recite the elements of a cause of action, but must [provide] sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). Furthermore, the underlying factual allegations must " plausibly suggest an entitlement to relief." Baca, 652 ...

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