Hall v. North American Van

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
EVA HALL, 
Plaintiff-Appellant,
No. 04-16182
v.
NORTH AMERICAN VAN LINES, INC.;  D.C. No.
CV-04-00510-BZ
GEORGE CORREA; ALL CITY
OPINION
MOVING AND STORAGE,
Defendants-Appellees.

Appeal from the United States District Court
for the Northern District of California
Bernard Zimmerman, Magistrate Judge, Presiding
Argued and Submitted
April 13, 2005—San Francisco, California
Filed January 29, 2007
Before: Robert R. Beezer, Diarmuid F. O’Scannlain, and
Andrew J. Kleinfeld, Circuit Judges.
Opinion by Judge Beezer
1061
1064 HALL v. NORTH AMERICAN VAN LINES
COUNSEL
Jeffrey K. Perkins, San Francisco, California, for the plaintiff-
appellant.
Greg S. Garfinkel, Stone, Rosenblatt & Cha, Encino, Califor-
nia, for defendant-appellee North American Van Lines, Inc.
Robert T. Lazzarini, Low, Ball & Lynch, San Francisco, Cali-
fornia, for defendants-appellees George Correa and All-City
Moving and Storage.
OPINION
BEEZER, Circuit Judge:
We consider whether federal law preempts state law claims
for breach of an interstate shipping contract and for common
law fraud and conversion. The district court concluded that it
had removal jurisdiction over Plaintiff-Appellant Eva Hall’s
complaint because her claims were completely preempted by
the 1906 Carmack Amendment to the Interstate Commerce
Act of 1887, 49 U.S.C. § 14706. The district court denied
Hall’s motion to remand and dismissed each of her claims.
We have jurisdiction under 28 U.S.C. § 1291 and we
affirm.
I
The district court dismissed Hall’s complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6). We accept as true
HALL v. NORTH AMERICAN VAN LINES 1065
the facts as Hall pleaded them in her complaint. See Maduka
v. Sunrise Hosp., 375 F.3d 909, 911 (9th Cir. 2004).
Eva Hall contracted with North American Van Lines1 in
March 2001 to ship her household goods from San Francisco,
California to Montana. The contract comprised a service order
and a bill of lading. The bill of lading required that any claim
for “loss or damage, injury or delay” be filed within nine
months after “a reasonable time for delivery has elapsed.”
Although the contract omitted the estimated shipping charges
and estimated date of arrival, Hall alleges that the Carriers
orally agreed to a total charge of $6,144, payable upon the
arrival of her goods in Montana.
After signing the contract, Hall released her property to the
Carriers for shipment and departed for Montana. When she
inquired several weeks later why her goods had not arrived,
the Carriers informed Hall that they would not release her
goods from storage and ship them until she paid $9,000 in
transportation and storage charges. Hall acquiesced, but after
14 months of additional delay the Carriers demanded another
$18,000. Hall refused to pay. She later convinced the Carriers
to release her goods to her in San Francisco for a final addi-
tional payment of $4,612.
Hall filed her complaint in California state court in Decem-
ber 2002. The complaint alleged that the Carriers (1) breached
the contract by refusing to ship her goods and demanding
charges in excess of the $6,144 originally agreed upon, (2)
fraudulently concealed their intentions to hold her goods for
ransom and (3) converted Hall’s goods to their personal use.
Hall sought $500,000 in damages for her contract claim. She
sought $13,312 in “bogus” shipping charges and $50,000 in
1
Because there are few relevant factual distinctions between North
American Van Lines, its agent All-City Moving and Storage and
employee George Correa, we refer to the Defendants-Appellees collec-
tively as the “Carriers.”
1066 HALL v. NORTH AMERICAN VAN LINES
special damages for her fraud claim, together with unspecified
damages for her conversion claim.
The Carriers removed the case from state court under 28
U.S.C. §§ 1337(a) and 1441(b), asserting that Hall’s com-
plaint framed a cause of action under the Carmack Amend-
ment, 49 U.S.C. § 14706.2 The district court denied Hall’s
motion to remand and dismissed the case, concluding that the
Carmack Amendment preempted claims arising from an inter-
state bill of lading. The district court also granted the Carri-
ers’ separate motion to dismiss based on Hall’s failure to file
a loss claim within the contract’s nine-month limitations
period. The district court granted Hall leave to amend her
complaint to state an express Carmack Amendment claim.
Hall declined to amend and instead filed a notice of appeal,
after which the district court entered final judgment. We deem
Hall’s premature appeal to have been taken from the judg-
ment. See Fed. R. App. P. 4(a)(2).
II
We review de novo the district court’s dismissal of Hall’s
complaint for failure to state a claim upon which relief could
be granted. See Adams v. Johnson, 355 F.3d 1179, 1183 (9th
Cir. 2004). We also review de novo the district court’s denial
of Hall’s motion to remand. See Vasquez v. N. County Transit
Dist., 292 F.3d 1049, 1054 (9th Cir. 2002).
We may affirm on any basis supported by the record,
whether or not relied upon by the district court. Adams, 355
F.3d at 1183.
2
The Carmack Amendment limits a carrier’s liability under an interstate
bill of lading to “the actual loss or injury to the property caused by” the
carrier. 49 U.S.C. § 14706(a). A plaintiff may bring a Carmack claim in
state or federal court, id. § 14706(d)(3), but the district courts have origi-
nal jurisdiction only if the amount in controversy exceeds $10,000, exclu-
sive of interests and costs, 28 U.S.C. § 1337(a).
HALL v. NORTH AMERICAN VAN LINES 1067
III
This appeal presents a series of questions:
(A) whether the district court had removal jurisdiction by
virtue of a federal question on the face of Hall’s well-pleaded
complaint;
(B) whether, in the alternative, federal jurisdiction arose
because Hall’s “artfully pleaded” complaint contains a cause
of action that is completely preempted by the Carmack
Amendment; and
(C) whether any of Hall’s claims survive preemption and
should be remanded to state court.
A
We begin by deciding whether Hall’s common law claims
for breach of contract, fraud or conversion established federal
jurisdiction.
[1] Under 28 U.S.C. § 1441(a), the district courts have
removal jurisdiction over any claim that could have been
brought in federal court originally. “The presence or absence
of federal-question jurisdiction is governed by the ‘well-
pleaded complaint rule,’ which provides that federal jurisdic-
tion exists only when a federal question is presented on the
face of the plaintiff’s properly pleaded complaint.” Caterpil-
lar Inc. v. Williams, 482 U.S. 386, 392 (1987).
[2] Hall’s complaint does not contain a well-pleaded fed-
eral claim on its face. Each of her three claims relies exclu-
sively on state law. See id. (plaintiff “may avoid federal
jurisdiction by exclusive reliance on state law”).
The Carriers raise federal preemption as a defense, but “the
existence of a defense based upon federal law is insufficient
1068 HALL v. NORTH AMERICAN VAN LINES
to support jurisdiction.” Wayne v. DHL Worldwide Express,
294 F.3d 1179, 1183 (9th Cir. 2002).
Hall’s complaint also references and attaches an interstate
shipping contract, but the presence of underlying federal
issues does not create jurisdiction over a well-pleaded state
law claim. See Easton v. Crossland Mortgage Corp., 114 F.3d
979, 982 (9th Cir. 1997); see also Opera Plaza Residential
Parcel Homeowners Ass’n v. Hoang, 376 F.3d 831, 840 (9th
Cir. 2004) (claims “for damages stemming from alleged
breach of contract” ordinarily arise under state law).
[3] Subject matter jurisdiction over Hall’s complaint must
arise, if at all, from something other than a well-pleaded fed-
eral claim.
B
[4] The absence of a federal claim on the face of Hall’s
complaint does not end our jurisdictional inquiry. Although
we usually defer to the plaintiff’s choice to plead state law
claims, there exist “a handful of ‘extraordinary’ situations
where even a well-pleaded state law complaint will be
deemed to arise under federal law for jurisdictional purposes.”
Holman v. Laulo-Rowe Agency, 994 F.2d 666, 668 (9th Cir.
1993). Under the “artful pleading” doctrine, a well-pleaded
state law claim presents a federal question when a federal stat-
ute has completely preempted that particular area of law. See
Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d
1102, 1107 (9th Cir. 2000). “[A]ny claim purportedly based
on that preempted state law is considered, from its inception,
a federal claim, and therefore arises under federal law.” Id. A
complaint containing a completely preempted claim may be
removed to district court under § 1441. Beneficial Nat’l Bank
v. Anderson, 539 U.S. 1, 8 (2003).
[5] The Carriers argue that the Carmack Amendment, 49
HALL v. NORTH AMERICAN VAN LINES 1069
U.S.C. § 14706, is among the few statutes3 that completely
preempt well-pleaded state claims by “provid[ing] the exclu-
sive cause of action for the claim asserted and also set[ting]
forth procedures and remedies governing that cause of
action.” Beneficial Nat’l Bank, 539 U.S. at 8. We have
described the Carmack Amendment as providing “a uniform
national liability policy for interstate carriers.” Hughes Air-
craft Co. v. N. Am. Van Lines, Inc., 970 F.2d 609, 613 (9th
Cir. 1992); see also Hunter v. United Van Lines, 746 F.2d
635, 638 (9th Cir. 1985) (observing that plaintiffs’ contract
claim would have been completely preempted if it had satis-
fied Carmack’s minimum amount in controversy). It is well
settled that the Carmack Amendment is the exclusive cause of
action for interstate-shipping contract claims alleging loss or
damage to property.4 See, e.g., Ga., Fla., & Ala. Ry. Co. v.
Blish Milling Co., 241 U.S. 190, 195 (1916) (“[T]he question
as to the proper construction of the bill of lading is a Federal
question.”); Adams Express Co. v. Croninger, 226 U.S. 491,
3
The Supreme Court has identified only four such statutes: section 301
of the Labor Management Relations Act of 1947, 29 U.S.C. § 185; sec-
tion 502(a) of the Employee Retirement Income Security Act of 1974, 29
U.S.C. § 1132(a); and sections 85 and 86 of the National Bank Act of
1864, as amended, 12 U.S.C. §§ 85, 86. Beneficial Nat’l Bank, 539 U.S.
at 6-8, 11.
4
Hall relies on Hunter and its progeny to argue that complete preemp-
tion occurs only when federal law provides “a superseding remedy replac-
ing the state law cause of action.” Williams v. Caterpillar Tractor Co., 786
F.2d 928, 932 (9th Cir. 1986), aff’d sub nom. Caterpillar Inc. v. Williams,
482 U.S. 386 (1987). The Supreme Court has rejected this view, stating
that the “ ‘breadth or narrowness of the relief which may be granted under
federal law . . . is a distinct question from whether the court has jurisdic-
tion over the parties and the subject matter.’ ” Caterpillar, 482 U.S. at 391
n.4 (quoting Avco Corp. v. Aero Lodge No. 735, Int’l Ass’n of Machinists
& Aero Space Workers, 390 U.S. 557, 561 (1968)).
Our jurisdictional analysis requires us to decide only “whether [Hall’s]
claim arose under [federal law], thus permitting removal to federal court,”
even though Hall “may have sought a remedy available only under state
law.” Newberry v. Pac. Racing Ass’n, 854 F.2d 1142, 1146 (9th Cir.
1988).
1070 HALL v. NORTH AMERICAN VAN LINES
505-06 (1913) (Carmack covers “the subject of the liability of
the carrier under a bill of lading . . . so completely that there
can be no rational doubt but that Congress intended to take
possession of the subject, and supersede all state regulation
with reference to it”); Hoskins v. Bekins Van Lines, 343 F.3d
769, 778 (5th Cir. 2003) (“Congress intended for the Carmack
Amendment to provide the exclusive cause of action for loss
or damages to goods arising from the interstate transportation
of those goods by a common carrier.” (emphasis omitted)).
These cases establish that the Carmack Amendment com-
pletely preempts a contract claim alleging loss or damage to
property.
[6] Hall argues that her contract claim is not completely
preempted because it arises from the Carriers’ refusal to
deliver rather than loss or damage to her property. We have
not previously considered this argument, but the Fifth Circuit
holds that the Carmack Amendment completely preempts a
contract claim alleging the late delivery of goods, even with-
out loss or property damage. Moffit v. Bekins Van Lines Co.,
6 F.3d 305, 306-07 (5th Cir. 1993). We agree with that court’s
observation that making finer distinctions between types of
contract damages would “defeat the purpose of the statute,
which was to create uniformity out of disparity.” Id. at 307;
see also Duerrmeyer v. Alamo Moving & Storage One, Corp.,
49 F. Supp. 2d 934, 936 (W.D. Tex. 1999) (Carmack Amend-
ment completely preempts “state law claims seeking to
recover damages for charging an improper rate for transport-
ing the goods and the failure to fulfill duties closely related
to the duty of delivery”).
[7] We hold that the Carmack Amendment is the exclusive
cause of action for contract claims alleging delay, loss, failure
to deliver or damage to property.5 Hall’s breach of contract
5
Hall relies on First and Seventh Circuit cases holding that a claim for
intentional infliction of emotional distress that does not allege loss or dam-
age of goods may avoid preemption. See Gordon v. United Van Lines,
Inc., 130 F.3d 282, 289 (7th Cir. 1997); Rini v. United Van Lines, Inc., 104
F.3d 502, 506 (1st Cir. 1997). Hall’s contract claim finds no support in
these cases.
HALL v. NORTH AMERICAN VAN LINES 1071
claim is completely preempted by the Carmack Amendment
and satisfies the minimum amount in controversy. See 28
U.S.C. § 1337(a) ($10,000 minimum).6
[8] Because Hall’s completely preempted contract claim
presents a federal question, the district court properly denied
Hall’s motion to remand, see Franchise Tax Bd. v. Constr.
Laborers Vacation Trust, 463 U.S. 1, 13 (1983), and dis-
missed her contract claim on the merits, see Moffit, 6 F.3d at
306-07.
C
[9] Having concluded that Hall’s preempted contract claim
established removal jurisdiction over the entire case, we need
not decide whether her fraud and conversion claims also arise
under federal law. The only remaining question is whether the
district court properly dismissed Hall’s fraud and conversion
claims on the merits rather than remanding to state court.7
[10] Even if Hall’s fraud and conversion claims do not arise
under federal law, those claims were properly dismissed. See
Avco, 390 U.S. at 561 (“The nature of the relief available after
6
For removal purposes, the amount of damages sought in the complaint
controls. Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 375 (9th
Cir. 1993). Hall’s complaint alleges that the Carriers’ breach of contract
was the proximate cause of general and consequential damages of at least
$500,000. These damages, although based on the Carriers’ refusal to
deliver rather than loss or damage to property, are recoverable under the
Carmack Amendment. See Contempo Metal Furniture Co. v. E. Tex.
Motor Freight Lines, Inc., 661 F.2d 761, 765 (9th Cir. 1981) (Carmack
does not alter “common law rule that special, or consequential damages”
are recoverable if foreseeable “as ordinary, natural consequences of a
breach when the contract was made”).
7
The district court dismissed Hall’s “federal” contract claim in the same
order as her remaining state law claims. We need not consider whether the
district court properly exercised supplemental jurisdiction over Hall’s
fraud and conversion claims under 28 U.S.C. § 1367. See Munger v. City
of Glasgow Police Dep’t, 227 F.3d 1082, 1088 n.4 (9th Cir. 2000).
1072 HALL v. NORTH AMERICAN VAN LINES
jurisdiction attaches is, of course, different from the question
whether there is jurisdiction to adjudicate the controversy.”).
The Carmack Amendment may constitute an affirmative
defense even to state law claims that are not completely pre-
empted.8 See Wayne, 294 F.3d at 1182-85. We so held in
Hughes, concluding that the Carmack Amendment required
the dismissal of a common law negligence claim against a
carrier. 970 F.2d at 613.
[11] Our holding in Hughes applies to Hall’s common law
fraud and conversion claims, even though Hall’s claims arise
from events other than loss or damage to her property. It is
well settled that the Carmack Amendment constitutes a com-
plete defense to common law claims alleging all manner of
harms. See Southeastern Express Co. v. Pastime Amusement
Co., 299 U.S. 28, 29 (1936) (delay); Blish Milling, 241 U.S.
at 197 (mistaken delivery); Adams Express, 226 U.S. at 505-
06 (loss). It applies equally to fraud and conversion claims
arising from a carrier’s misrepresentations as to the conditions
of delivery or failure to carry out delivery. See Blish Milling,
241 U.S. at 197 (conversion, or “trover”); Smith v. United
Parcel Serv., 296 F.3d 1244, 1247 (11th Cir. 2002) (dismiss-
ing claims that carrier committed fraud by accepting ship-
ments it “had no intention of fulfilling or attempting to
deliver”) (internal quotation marks omitted)).
[12] Hall was not entitled to have her fraud and conversion
claims remanded to state court.9
8
Complete preemption (a jurisdictional issue) converts a well-pleaded
state law claim into an inherently federal claim for jurisdictional purposes;
defensive preemption (a substantive issue) does not enable removal, but
does constitute a complete defense to a state law claim. See Hughes, 970
F.2d at 613 (no jurisdictional question presented, but Carmack required
dismissal of common law negligence claim).
9
Because Hall declined to amend her complaint to add a Carmack claim,
we need not address the district court’s separate ground for dismissal
based on Hall’s failure to plead compliance with the contract’s nine-month
limitations period.
HALL v. NORTH AMERICAN VAN LINES 1073
IV
The district court properly denied Hall’s motion to remand
and properly dismissed each of Hall’s common law claims on
the merits.
AFFIRMED.