Ferrostaal Inc v. Seale

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 01-40422
Summary Calendar
FERROSTAAL INC.,
Plaintiff-Appellant,
versus
DONALD SEALE,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 6:00-CV-212
September 6, 2001
Before HIGGINBOTHAM, WIENER, and BARKSDALE, Circuit Judges.
PER CURIAM:*
Ferrostaal Inc. appeals from the grant of summary judgment in
favor of the defendant, Donald Seale, on Ferrostaal's claim for
common-law conversion. It argues that the district court erred in
finding there was no genuine issue of material fact as to whether
its claim against Seale in his individual capacity was preempted by
the Carmack Amendment to the Interstate Commerce Act.1
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
1
49 U.S.C. § 14706 et seq.
We review a grant of summary judgment de novo, applying the
same standard as the district court.2 We may affirm a summary
judgment on any ground raised by the movant below and supported by
the record, even if it is not the ground relied on by the district
court.3
Ferrostaal's claim arises from a shipment of steel bars
transported in June 1997 from Texas by rail by Union Pacific
Railroad Company with an intended destination in Pennsylvania. Due
to an administrative error, the steel never left the yard after it
arrived in Fort Worth. Fourteen months later, in December 1998,
Union Pacific found the steel in a car in the Fort Worth yard and
did not identify it as belonging to Ferrostaal. Union Pacific told
its employee, Seale, to solicit bids on the steel, which Seale did.
Union Pacific accepted one of the bids and sold the steel in
January 1999, retaining the proceeds. Following an unsuccessful
Carmack Amendment claim against Union Pacific filed in New York
federal district court, Ferrostaal pursues this state law tort
action against Seale individually for his actions in soliciting
bids on and selling the steel.
It is clear under Fifth Circuit precedent that an intentional
tort claim, including a state law conversion action, against Union
2
Holtzclaw v. DSC Communications Corp., 255 F.3d 254, 257
(5th Cir. 2001).
3
Id. at 257-58.
2
Pacific would be preempted by the Carmack Amendment.4 The injuries
alleged from the conversion claim result directly from the loss of
the shipped property.5
Ferrostaal's arguments in support of its claim that the
Carmack Amendment would not apply to a conversion action against
Union Pacific are without merit. Ferrostaal is incorrect when it
claims that the district judge in its Southern District of New York
case against Union Pacific held that the Carmack Amendment did not
apply to Ferrostaal's claims against Union Pacific.6 Judge
Schwartz held that the parties opted out of the Carmack Amendment's
two-year statute of limitations through a one-year limitation
period provision in the UP Exempt Circular, which the parties
contracted to have control the shipping of the steel.7 This does
not amount to a holding that the Carmack Amendment does not govern
Union Pacific's liability for the loss of Ferrostaal's property
4
See Moffit v. Bekan Van Lines Co., 6 F.3d 305, 306-07 (5th
Cir. 1993) (preemption of Texas state law claims of, inter alia,
intentional infliction of emotional distress, violation of the
DTPA, slander, misrepresentation, fraud, and gross negligence); see
also Chemsource, Inc. v. Hub Group, Inc., 106 F.3d 1358, 1362 (7th
Cir. 1997) ("The Carmack Amendment preempts a state law conversion
claim against a carrier or freight forwarder for loss or damage to
interstate shipments.").
5
See Morris v. Covan Worldwide Moving, Inc., 144 F.3d 377,
382-83 (5th Cir. 1998).
6
See Ferrostaal, Inc. v. Union Pac. R.R. Co., 109 F. Supp.
2d 146 (S.D.N.Y. 2000).
7
Id. at 149-50.
3
shipped in interstate commerce as a common carrier under a receipt
or bill of lading. Furthermore, although the steel never left
Texas in the course of Union Pacific's handling of the shipment,
the transportation of the shipment was in interstate commerce
because it is undisputed that Ferrostaal intended for the steel to
travel in interstate commerce at the time of the shipment.8
The uncontradicted evidence on summary judgment shows that
Seale was an employee of Union Pacific acting within the scope of
his employment and pursuant to orders from his employer when he
solicited bids on Ferrostaal's steel. Ferrostaal does not allege
that Seale appropriated the steel for his own use or gain, but
rather that Union Pacific retained the proceeds of the sale of the
steel.9 Even if there was some doubt as to whether the Carmack
Amendment would limit Union Pacific's damages for its conversion of
Ferrostaal's steel, an action arising from the loss of property
shipped in interstate commerce by a common carrier subject to the
Carmack Amendment lies only against the common carrier itself.10
A conversion action against the common carrier's employee,
8
See Merchants Fast Motor Lines, Inc. v. Interstate Commerce
Comm'n, 5 F.3d 911, 917 (5th Cir. 1993).
9
Cf. Kemper Ins. Cos. v. Fed. Express Corp., 252 F.3d 509,
515 (1st Cir. 2001) (conversion exception to Carmack Amendment's
released value doctrine does not apply in the case of employee
theft or where a common carrier has not appropriated the property
for its own use or gain).
10
See Arnold J. Rodin, Inc. v. Atchison, Topeka & Santa Fe
Ry. Co., 477 F.2d 682, 688 (5th Cir. 1973).
4
nominally in his individual capacity, is simply an attempted end-
run around the time bar on Ferrostaal's Carmack Amendment action
against Union Pacific. We hold that, just as a state law tort
action naming Union Pacific as defendant would be preempted by the
Carmack Amendment, so, too, is Ferrostaal's conversion action
against Union Pacific's employee Seale preempted by the Amendment.11
We therefore conclude that the district court did not err in
granting summary judgment to Seale on Ferrostaal's state law
conversion claim. There is no genuine issue of material fact as to
whether this claim is preempted by the Carmack Amendment.
AFFIRMED.
11
See Moffit, 6 F.3d at 307 (state law claims preempted in
furtherance of Carmack Amendment's goal of providing uniform,
national law as to the rights and liabilities of interstate common
carriers).
5