Preempted Claims Do Not Automatically Transform Into Federal Claims Under the Carmack Amendment, S.D. Iowa Holds

Per Midamerican Energy Co. v. Start Enterprises, Inc., 437 F. Supp. 2d 969 (S.D. Iowa July 11, 2006):

Plaintiff argues that, in the event the Court finds its state law claims preempted by the Carmack Amendment [to the Interstate Commerce Clause, in which Congress superseded state laws to create a nationally uniform policy governing interstate carriers' liability for property loss], the Court should find that the state law claims are automatically transformed into a Carmack Amendment claim. The Defendant, on the other hand, argues that if preemption applies, Plaintiff's entire Complaint should be dismissed with prejudice, effectively precluding Plaintiff from stating a claim under the Carmack Amendment. While the Court agrees with Defendant that the state law claims must be dismissed, it finds Defendant's position that the entire Complaint should be dismissed with prejudice untenable, in light of the purpose of Rule 12(b)(6), that is, to permit a defendant to test whether, as a matter of law, a plaintiff is entitled to sustain a recovery under some viable legal theory. To establish a prima facie case of damaged goods under the Carmack Amendment, a Plaintiff must establish: 1) the goods were undamaged prior to shipment; 2) the goods arrived at the destination in damaged condition; and 3) the amount of damages. See Missouri Pac. R. Co. v. Elmore & Stahl, 377 U.S. 134, 138 (1964). The facts as alleged in Plaintiff's Complaint are more than sufficient to demonstrate a viable cause of action under the Carmack Amendment. See U.S. Aviation Underwriters, Inc. v. Yellow Freight Sys., Inc., 296 F.Supp.2d 1322, 1336-37 (S.D.Ala.2003) (discussing how the Supreme Court's analysis of the complete preemption doctrine in usury cases applies with equal force to preemption under the Carmack Amendment: "[T]hrough the magic of 'jurisdictional alchemy' (to quote Justice Scalia's dissent in Beneficial), [plaintiff's] state law claims morph into a federal Carmack Amendment claim, there being 'no such thing' as a state law claim against a common carrier for damage to goods in interstate transportation") (citing Beneficial Nat'l Bank v. Anderson, 539 U.S. 1 (2003)). Regardless of whether the state law claims "automatically transform," however, it is well within the Court's discretion to permit Plaintiff to file an Amended Complaint, stating a proper cause of action under federal law.