Ivana Vidovic Mlinar v. United Parcel Service, Inc.

Supreme Court of Florida
____________
No. SC14-54
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IVANA VIDOVIC MLINAR,
Petitioner,
vs.
UNITED PARCEL SERVICE, INC., et al.,
Respondents.
[March 3, 2016]
PERRY, J.
This case is before the Court for review of the Fourth District Court of
Appeal’s decision in Mlinar v. United Parcel Service, Inc., 129 So. 3d 406 (Fla. 4th
DCA 2013), which the district court certified as being in direct conflict with the
Fifth District Court of Appeal’s decision in Braid Sales & Marketing, Inc. v. R & L
Carriers, Inc., 838 So. 2d 590 (Fla. 5th DCA 2003). We have jurisdiction. See art.
V, § 3(b)(4), Fla. Const. For the reasons discussed below, we quash the Fourth
District’s decision to the extent it is inconsistent with this opinion.
STATEMENT OF THE CASE AND FACTS
Ivana Vidovic Mlinar, a professional paint artist, brought an action in circuit
court against the United Parcel Service (“UPS”) and others, alleging that her two
oil paintings were unscrupulously removed from their packaging during the
interstate shipment process and subsequently sold to a third party without her
knowledge or consent. The Fourth District set forth the relevant facts and
circumstances as follows:
[Mlinar] is an artist who created two valuable oil paintings:
Advice and The Messenger. Her husband took the paintings to Pak
Mail, a third party retailer, to be shipped via UPS to New York.
When the container arrived at its intended destination in New York, it
was empty. The duct tape had been sliced and the paintings had been
removed. [Mlinar] reported the loss to UPS and Pak Mail. Months
later, Pak Mail offered her $100 for the missing contents of the
package.
At some point, UPS sold the paintings to Cargo Largo, UPS’s
lost goods contractor. Cargo Largo later auctioned the paintings. An
individual named Aaron Anderson purchased one of the paintings at
the Cargo Largo auction.
About two years after [Mlinar] lost possession of the paintings,
she received a telephone call from Anderson, who informed her that
he had just purchased Advice at the Cargo Largo auction sale.
Anderson inquired into the value of the painting, and she informed
him that it had been appraised to be worth $20,000. He also informed
her that The Messenger was auctioned in the same lot, but that he did
not know the identity of the purchaser.
Anderson placed a listing online offering to sell Advice and
even offering to introduce the buyer to [Mlinar]. He eventually
acquired The Messenger as well. He then placed advertisements
online in which he offered to sell or trade both paintings, and again
offered to introduce the buyer to [Mlinar].
Based on the above facts, [Mlinar] filed suit against UPS, Pak
Mail, Cargo Largo, and Anderson. According to the operative
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complaint, UPS selectively located the contents of her container
“based on their nature, probable worth, and lack of insurance,” and
then sold the paintings to Cargo Largo for “some as of yet
undiscovered consideration.” UPS also utilized [Mlinar]’s contact
information on the back of each painting “to catalogue, sell and/or
distribute” the paintings to Cargo Largo.
[Mlinar] asserted four claims in her complaint: Conversion
(Count I—against UPS, Cargo Largo, and Pak Mail), Profiting by
Criminal Activity (Count II—against UPS, Cargo Largo, and Pak
Mail), Unauthorized Publication of Name or Likeness (Count III—
against UPS, Cargo Largo, and Anderson), and a claim under
Florida’s Deceptive and Unfair Trade Practices Act (Count IV—
against UPS).
The trial court dismissed all of [Mlinar]’s claims against UPS,
ruling that they were preempted by the federal Carmack Amendment.
Mlinar, 129 So. 3d at 408-09.
On appeal, the Fourth District also held that Mlinar’s state law claims were
preempted by the Carmack Amendment, reasoning that the allegations asserted did
not involve conduct separate and distinct from the delivery, loss of, or damage to
goods, but instead were predicated on or closely related to the performance of the
delivery contract. Id. at 410-11. Accordingly, the Fourth District affirmed the trial
court’s final order of dismissal but certified conflict “[t]o the extent [its] opinion
conflicts with the Fifth District’s decision in Braid Sales.” Id. at 411-12. Mlinar
subsequently filed a notice with this Court to invoke discretionary jurisdiction to
review the Fourth District’s decision. We granted review.
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ANALYSIS
Preemption of State Law Claims
Carmack Amendment1
The Carmack Amendment to the Interstate Commerce Act was passed in
1906, ch. 3591, § 7, 34 Stat. 595 (1906), and governs the liability of domestic
common carriers for losses of or damage to goods en route. King Ocean Cent.
Am., S.A. v. Precision Cutting Servs., Inc., 717 So. 2d 507, 511 (Fla. 1998) (citing
Rini v. United Van Lines, Inc., 104 F.3d 502, 503 (1st Cir. 1997)). It specifically
provides that certain interstate carriers must “issue a receipt or bill of lading for
property . . . receive[d] for transportation,” and a carrier is held strictly “liable to
the person entitled to recover under the receipt or bill of lading . . . for the actual
loss or injury to the property caused by” the carrier. 49 U.S.C. § 14706(a)(1);
accord King Ocean Cent., 717 So. 2d at 511. The statute expressly recognizes the
right of a shipper and carrier to limit the latter’s liability to a stipulated value only
if the value is “reasonable under the circumstances surrounding the transportation.”
49 U.S.C. § 14706(c)(1)(A). The Carmack Amendment further permits a civil
action to be brought against a “carrier alleged to have caused the loss or damage, in
the judicial district in which such loss or damage is alleged to have occurred.” 49
U.S.C. § 14706(d)(2). Finally, the statute includes a “savings clause” stating that
1. 49 U.S.C. § 11706, et seq.
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“[e]xcept as otherwise provided in this part, the remedies provided under this part
are in addition to remedies existing under another law or common law.” 49 U.S.C.
§ 15103; accord Multiflex Sys., Inc. v. Reed Transport Serv., Inc., 2010 WL
2363337, at *2 (M.D. Fla. June 11, 2010) (“The savings clause preserves rights
and remedies not inconsistent with the rules and regulations prescribed by the
provision of this act.”) (quoting Smith v. United Parcel Serv., 296 F.3d 1244, 1247
(11th Cir. 2002)).
Congress enacted the Carmack Amendment to achieve uniformity in rules
governing liability arising from interstate shipment contracts. UPS Supply Chain
Solutions, Inc. v. Megatrux Transp., Inc., 750 F.3d 1282, 1285 (11th Cir. 2014);
King Ocean Cent., 717 So. 2d at 511; see also Adams Express Co. v. Croninger,
226 U.S. 491, 505 (1913) (explaining that a carrier could be liable for loss of or
damage to transported property under the decree of one tribunal while another
carrier, who was sued based on the same or substantially similar circumstances,
could escape liability in another tribunal). Consistent with this goal, it became
well-established that the statute “broadly ‘preempts state law claims arising from
failures in the transportation and delivery of goods.’ ” Casamassa v. Walton P.
Davis Co., Inc., 2008 WL 879412, at *3 (M.D. Fla. Mar. 28, 2008) (quoting Smith,
296 F.3d at 1246). However, courts nationwide have also accepted the notion “that
situations may exist in which the Carmack Amendment does not preempt all state
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and common law claims.” Smith, 296 F.3d at 1248-49 (citing Gooch v. Or. Short
Line R.R. Co., 258 U.S. 22 (1922); Chi. Rock Island & Pac. Ry. Co. v. Maucher,
248 U.S. 359 (1919); Morris v. Covan Worldwide Moving, Inc., 144 F.3d 377, 383
(5th Cir. 1998); Reeves v. Mayflower Transit, Inc., 87 F. Supp. 2d 1251, 1254
(M.D. Ala. 1999)); see also Gordon v. United Van Lines, Inc., 130 F.3d 282, 289
(7th Cir. 1997) (“Nevertheless, not every claim even remotely associated with the
transfer of goods from one place to another is necessarily a claim for damages to
the shippers’ goods.”); Schwartz v. Nat’l Van Lines, Inc., 2004 WL 1166632, at *5
(N.D. Ill. May 21, 2004). Nationwide, courts have not settled on a single test to
determine whether such claims escape the amendment’s preemptive ambit. The
conflict extends to Florida’s district courts of appeal.
Conflict in Florida Caselaw
Caselaw in this state embraces two competing tests for assessing Carmack
Amendment preemption: one is based on alleged harm to the shipper, and the other
focuses on the carrier’s conduct. We expound upon each test below. However, as
also discussed, neither of them need be adopted as the sole standard determining
whether common law and state law claims are preempted by the federal statute.
In Braid Sales, the certified conflict case, an owner of machinery that was
damaged during shipment by an interstate carrier of goods brought action in circuit
court against the carrier. The complaint alleged a breach of an oral contract in
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which the carrier promised to pay the full cost of repairing the machinery. Braid
Sales, 838 So. 2d at 591. The Fifth District ultimately determined that the
Carmack Amendment did not preempt the claim. Id. at 593. It ruled “that liability
arising from separate harms [is] not preempted.” Id. (citing Rini, 104 F.3d at 505-
06). It further noted that “[n]either the Carmack Amendment nor public policy
support a carrier’s attempt to evade the legal responsibilities voluntarily assumed
by entry into an independent contract.” Id. (footnote omitted). As such, the Fifth
District concluded that the breach “of an alleged oral contract between the parties
for payment of repairs, entered into after the shipment was completed, constitutes a
separate harm which is independent from the loss or damage to goods.” Id.
In Mlinar, the case on review, the Fourth District acknowledged the
existence of two competing standards for evaluating claims of Carmack
Amendment preemption, including the “separate harm” or “separate injury” test
applied in Braid Sales and a “separate conduct” test. Mlinar, 129 So. 3d at 410
(citing Morris, 144 F.3d at 382; Braid Sales, 838 So. 2d at 593). The court opined
that the latter test—that is, “separate and distinct conduct rather than injury”—is
the appropriate standard. Id. Applying that test, the Fourth District concluded that
each of Mlinar’s claims, which arose from the intentional removal of her oil
paintings from packaging being shipped by UPS and their subsequent sales, were
in fact preempted by the Carmack Amendment. Id. at 410-11. Accordingly, the
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Fourth District affirmed the dismissal of the state law claims. Id. at 411.
However, it certified conflict “[t]o the extent this opinion conflicts with the Fifth
District's decision in Braid Sales.” Mlinar, 129 So. 3d at 411-12.
Because the Fourth and Fifth Districts applied different tests in evaluating
whether the claims before each court were preempted under federal law, the
preliminary question before this Court is whether Florida courts must apply the
“separate harm” test or the “separate conduct” test for purposes of determining
whether common law and state law claims, including Mlinar’s, are preempted by
the Carmack Amendment. This issue presents a pure question of law subject to de
novo review. See McKenzie Check Advance of Fla., LLC v. Betts, 112 So. 3d
1176, 1180 (Fla. 2013).
On the one hand, a test focusing on separate harm corresponds with the
Carmack Amendment’s plain language. The amendment states in pertinent part
that a carrier is liable to a shipper for “actual loss or injury to the property”
transported by it. 49 U.S.C. § 14706(a)(1). And, in the context of Carmack
Amendment preemption, the word “harm” has been loosely used by various courts
as interchangeable for the word “injury.” Compare Rini, 104 F.3d at 506 (using
“separate harms”), and Gordon, 130 F.3d at 289 (using “separate and
independently actionable harms” (citing N. Am. Van Lines, Inc. v. Pinkerton Sec.
Sys., Inc., 89 F.3d 452, 456 (7th Cir. 1996))); with Morris, 144 F.3d at 382 (using
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phrase “injuries separate and apart”) (citing Rini, 104 F.3d at 506-07; Gordon, 130
F.3d at 289). Thus, the “separate harm” language closely reflects the actual
language found in the Carmack Amendment. See McGinn v. JB Hunt Transp.,
Inc., 2012 WL 124401, at *3 (E.D. Wis. Jan. 17, 2012) (comparing tests based on
harm and conduct, and noting that “the plain language of the statute limits the
carrier’s liability to the ‘actual loss or injury to the property’ damaged en route”).
Notwithstanding, caselaw also indicates that a claim’s nature may warrant
the consideration of conduct underlying the alleged harm in order to verify that the
liability asserted is indeed separate from the loss of or damage to goods. For
example, in Gordon, the Seventh Federal Circuit held that Carmack Amendment
preemption did not apply to a shipper’s intentional infliction of emotional distress
claim arising from a carrier’s failure to deliver family memorabilia and heirlooms,
followed by a four-month-long course of deception concerning the non-delivery.
In reaching its conclusion, the circuit court acknowledged the First Federal
Circuit’s determination that such claims allege a harm to the shipper that is
independent from the loss of or damage to goods. Gordon, 130 F.3d at 282, 289
(citing Rini, 104 F.3d at 506).
The Ninth Federal Circuit later critiqued the Gordon decision, explaining:
Although the Seventh Circuit adopted the First Circuit’s
language focusing on harm, the Seventh Circuit’s holding in Gordon
was actually motivated by the defendant’s conduct. [Gordon, 130
F.3d] at 283, 290. The Seventh Circuit was troubled by the fact that
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the defendant lied to the plaintiff and engaged in a “four-month course
of deception pertaining to [their] nondelivery.” Id. Indeed, a rule
focusing on harm to the exclusion of conduct would contradict the
Supreme Court’s statement that “[t]he words of the statute ‘are
comprehensive enough to embrace all damages resulting from any
failure to discharge a carrier’s duty with respect to any part of the
transportation to the agreed destination.’ ” Se. Express Co. v. Pastime
Amusement Co., 299 U.S. 28, 29 (1936) (per curiam); see also Ga.,
Fla. & Ala. Ry. Co. v. Blish Milling Co., 241 U.S. 190, 196 (1916).
White v. Mayflower Transit, L.L.C., 543 F.3d 581, 585-86 (9th Cir. 2008).
According to the White court, the Seventh Circuit’s finding of harm,
independent of the loss of or damage to the goods transported, was based on its
consideration of the conduct from which the alleged harm flowed. Accord Glass v.
Crimmins Transfer Co., 299 F. Supp. 2d 878, 887 (C.D. Ill. 2004) (making similar
observation that intentional infliction of emotional distress claim asserted in
Gordon survived federal preemption because the alleged emotional distress arose
from “overt conduct,” and not simply from loss of or damage to property). Stated
differently, a finding of separate conduct was part and parcel of a finding of
separate harm. See Clean Harbors Recycling Servs. Ctr. of Chi., LLC v. Harold
Marcus Ltd., 2013 WL 1329532, at *4 (D. Mass. Mar. 29, 2013) (“The dispute
about payment for contract cleanup services thus involves conduct and resulting
harms ‘distinct from the contract of carriage.’ ”) (quoting Gordon, 130 F.3d at
290).
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Notably, the Ninth Federal Circuit was not suggesting that the Gordon
decision utilized a standard focusing purely on conduct. Rather, it recognized that
the decision placed considerable emphasis on the carrier’s conduct—in addition to
identifying the resulting harm. This observation is particularly persuasive given
the circuit court’s explicit rejection of “a rule focusing on harm to the exclusion of
conduct.” White, 543 F.3d at 585-86. In fact, various courts have found it prudent
either to adopt or address both tests for purposes of evaluating Carmack
Amendment preemption. See, e.g., Certain Underwriters at Interest at Lloyds of
London v. United Parcel Serv. of Am., Inc., 762 F.3d 332, 336 n.4 (3d Cir. 2014)
(holding shipper’s state law claims did not fall within “peripheral set of state and
common law causes of action that are not preempted by the Carmack
Amendment,” and citing for support cases analyzing both “separate conduct” and
“separate harm” tests); Clean Harbors Recycling, 2013 WL 1329532, at *4
(reviewing claims for “conduct and resulting harms”); Kashala v. Mobility Servs.
Int’l, LLC, 2009 WL 2144289, at *9 (D. Mass. May 12, 2009) (“None of the facts
alleged by Mr. Kashala give rise to conduct or harm sufficiently separate and
distinct from the shipment and claims process as to warrant exemption from the
preemptive reach of the Carmack Amendment.”) (citing Rini, 104 F.3d at 506);
Brightstar Int’l Corp. v. Minuteman Int’l, 2011 WL 4686432, at *3 (N.D. Ill. Oct.
4, 2011) (“Although a shipper may be liable to a carrier in tort due to the breach of
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a duty implied under the Carmack Amendment, such liability must arise from
conduct that is separate and distinct from the loss of the goods or be due to
incidental harms apart from the harm to the goods shipped.”) (citing Gordon, 130
F.3d at 284); Smallwood v. Allied Pickfords, LLC, 2009 WL 3247180, at *9-10
(S.D. Cal. Sept. 29, 2009) (rejecting plaintiff’s argument that his state law causes
of action for negligence and breach of contract alleged “separate and independent
harms” distinct from the loss of or damage to his goods since both claims asserted
conduct related to the interstate misdelivery of goods); see also Gordon, 130 F.3d
at 289 (“[W]e too conclude that the Carmack Amendment does not preempt those
state law claims that allege liability on a ground that is separate and distinct from
the loss of, or the damage to, the goods that were shipped in interstate
commerce.”).
In light of the above, we see no compelling reason to adopt one test over the
other as the exclusive standard for assessing Carmack Amendment preemption.
We instead hold that a state law or common law claim against an interstate carrier
of goods is generally preempted by the statute unless the claim alleges conduct or
harm that is separate and distinct from the loss of or damage to the goods
transported. Bearing this principle in mind, we now turn to the claims asserted in
the instant case.
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This Case
Mlinar challenges the circuit court’s order dismissing four state law claims
against UPS and others, including conversion; profiting by criminal activity under
section 817.02, Florida Statutes (2015); unauthorized publication of name or
likeness under section 540.08, Florida Statutes (2015); and violating Florida’s
Deceptive and Unfair Trade Practices Act (FDUTPA) under chapter 501, Florida
Statutes (2015). This Court reviews an order granting a motion to dismiss de novo.
Wallace v. Dean, 3 So. 3d 1035, 1045 (Fla. 2009). Such review must be confined
to the four corners of the complaint. Blue Supply Corp. v. Novos Electro
Mechanical, Inc., 990 So. 2d 1157, 1158 (Fla. 3d DCA 2008) (citing Pizzi v. Cent.
Bank & Trust Co., 250 So. 2d 895 (Fla. 1971)). The “allegations of the complaint
are assumed to be true and all reasonable inferences arising therefrom are allowed
in favor of the plaintiff.” Wallace, 3 So. 3d at 1042-43 (quoting Ralph v. City of
Daytona Beach, 471 So. 2d 1, 2 (Fla. 1983)).
UPS contends that the Carmack Amendment preempts the state law causes
of action in this case because they “stemmed from UPS’s loss of Mlinar’s
package.” We disagree. Regarding the conversion, criminal activity, and
FDUTPA claims, the operative complaint alleges that “UPS selectively located the
[paintings] based on their nature, probable worth, and lack of insurance”; “sent the
paintings to [Cargo Largo] for some as of yet undisclosed consideration exceeding
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the $100.00 liability coverage provided for all shipments”; and “utilized the
information on the back of the painting including [Mlinar’s] name to catalogue,
sell and/or distribute the item to” Cargo Largo. The complaint further alleges UPS,
Cargo Largo, and Pak Mail systematically appropriated the paintings “by falsely
impersonating and/or representing themselves as part of a shipping enterprise
rather than a fencing organization.” Lastly, the complaint identifies policies, acts,
and practices sanctioned by UPS that “were intended to result and did result in the
payment of UPS rates under false pretenses and through misleading billing
practices.” And, “[b]ased upon its refusal to accept consumer information, UPS is
virtually guaranteed that it will never pay nearly as much to that servicer as it
receives from the servicer.”
The above allegations illustrate a course of criminal conduct by UPS and its
cohorts that bears, at best, only a tangential relationship to the interstate shipment
process and, more specifically, a carrier’s contractual obligation to transport goods.
As Mlinar accurately points out, this is not a case where “the paintings were stolen
by a rogue UPS employee or even by a trespasser.” Cf. Olympian Worldwide
Moving & Storage Inc. v. Showalter, 2013 WL 3875299 (D. Ariz. July 26, 2013)
(granting motion to dismiss state law claims alleging that common carrier’s
employees stole property shipped by plaintiffs). Rather, it is the common carrier
itself that has adopted or ratified the unscrupulous practices at issue. To expand
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Carmack Amendment preemption to cases in which a plaintiff seeks to hold a
carrier liable not for a negligent yet good-faith loss of goods, but instead for
larcenous misconduct by the carrier that was intended to and in fact resulted in the
separation of goods from their owner is repugnant to the purpose behind the
statute’s enactment. Thus, we conclude that the conversion, criminal activity, and
FDUPTA claims arise from conduct or harm that is independent from the loss of
goods during the interstate shipment process.
Likewise, the claim of unauthorized publication of name or likeness also
alleges separate and distinct conduct or harm. The complaint avers that, after
receiving the paintings from UPS, Cargo Largo indicated to auction bidders that
the subject paintings were originals from a professional artist and disclosed
Mlinar’s name. Anderson was aware that other individuals’ properties had been
misappropriated under circumstances similar to those alleged in this case.
Additionally, Mlinar confirmed with Anderson that her paintings had been stolen.
According to the complaint, Anderson nevertheless insisted that he intended to sell
them at their appraised value and did in fact sell them on eBay despite Mlinar’s
objection to the sale. Anderson also detailed on the sale advertisements
information about his conversation with Mlinar in order to authenticate the
paintings’ values and boost their sale prices. Cargo Largo’s and Anderson’s
improper uses of Mlinar’s prestige to resell her paintings after they were
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misappropriated has nothing to do with the shipment process. As such, the
Carmack Amendment cannot operate to insulate them from liability under statutory
law.
UPS maintains that the dismissal of Mlinar’s claims is consistent with the
Carmack Amendment’s purpose of providing uniformity of liability and remedy.
The disposition Mlinar seeks today would undermine the clearly established
protections afforded by the statute, UPS adds. As mentioned in passing, Congress
enacted the Carmack Amendment “to establish uniform federal guidelines
designed in part to remove the uncertainty surrounding a carrier’s liability when
damage occurs to a shipper’s interstate shipment.” McGinn, 2012 WL 124401, at
*3 (citation omitted). To insist, however, that lawmakers also intended to allow a
common carrier to break one law and shield itself from liability under the
protections afforded by another is dubious. Moreover, UPS’s position would
perpetuate dishonesty by companies that hold themselves out to the public as
providers of interstate shipment services and in which consumers entrust their
property. It would also prompt consumers to lose confidence in common carriers,
thereby discouraging future business in the interstate shipment market.
Neither the Carmack Amendment nor public policy supports UPS’s attempt
to evade liability arising not from the loss of property, but from its intentional
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misconduct. Accordingly, we conclude that Mlinar’s state law causes of action are
not preempted.
CONCLUSION
For the foregoing reasons, we quash the Fourth District’s decision in Mlinar
to the extent it is inconsistent with this opinion. We also remand this case for
further proceedings.
It is so ordered.
LABARGA, C.J., and PARIENTE, LEWIS, and QUINCE, JJ., concur.
CANADY and POLSTON, JJ., concur in result.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
IF FILED, DETERMINED.
Application for Review of the Decision of the District Court of Appeal - Certified
Direct Conflict of Decisions
Fourth District - Case No. 4D12-1332
(Palm Beach County)
John Scarola, Mara Ritchie Poncy Hatfield, and Patrick Edward Quinlan of Searcy
Denney Scarola Barnhart & Shipley, P.A., West Palm Beach, Florida; and
Shannon M. Mahoney of the Law Offices of Shannon Mahoney, PA, West Palm
Beach, Florida,
for Petitioner
Evan Seth Gutwein of Hamilton, Miller & Birthisel LLP, Miami, Florida, and
David Roy Heffernan of Kaire & Heffernan, LLC, Miami, Florida,
for Respondent United Parcel Service, Inc.
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