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Jana Brands, Inc. v. C.H. Robinson International, Inc.

United States District Court, D. Massachusetts

December 20, 2018

JANA BRANDS, INC., Plaintiff,


          Leo T. Sorokin, United States District Judge.

         Plaintiff Jana Brands, Inc. (“Jana Brands”) brought this action on November 2, 2017, and amended its Complaint on April 20, 2018. Docs. No. 1, 25. The Amended Complaint claims that the actions of defendants C.H. Robinson, International, Inc. (“C.H. Robinson”) and Ryan Freight Services, Inc. (“Ryan”) caused Jana Brands to incur more than $154, 000 in damages when U.S. Customs and Border Protection (“CBP”) denied Jana Brands's claims for refund of previously paid customs duties, taxes, and fees. Doc. No. 25 ¶ 11, 27. On May 4, 2018, Defendant C.H. Robinson, International, Inc. (“C.H. Robinson”) moved to dismiss Counts III and IV against them for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Doc. No. 27. Jana Brands opposed. Doc. No. 32. For the reasons set forth below, the Court ALLOWS in part and DENIES in part C.H. Robinson's motion to dismiss.

         I. FACTS

         C.H. Robinson and Ryan are licensed by CBP to act as brokers on behalf of third-party importers and purport to be experts in their field. Doc. No. 25 at ¶ 29. Jana Brands, which imports tuna in pouches, engaged C.H. Robinson and Ryan to act as its U.S. customs brokers. Id. at ¶¶ 7-8.

         At some point before September 2015, the U.S. Food and Drug Administration barred from entry into the United States tuna that Jana Brands had shipped from Thailand. Id. ¶ 11. In their role as Jana Brands's customs brokers, in September 2015, C.H. Robinson and Ryan filed unused merchandise drawback claims on behalf of Jana Brands. Id. at ¶ 10. The claims sought a refund for duties, taxes, and fees Jana Brands paid on the barred shipments. Id. at ¶ 11.

         Because the barred shipments had been examined by CBP in Chicago but were going to be exported back to Thailand from the Port of Los Angeles, CBP regulations required that the merchandise be transported in-bond from Chicago to Los Angeles. Id. at ¶¶ 13, 14; see also 19 C.F.R. § 191.35(d). Such transportation, which occurred without incident, was arranged for and carried out by parties other than C.H. Robinson and Ryan. Id. at ¶ 15. However, CBP regulations require that various paperwork be completed to effect in-bond transportation, and CBP will deny drawback claims if these requirements are not met. Id. at ¶ 18-22. Jana Brands relied on C.H. Robinson and Ryan to submit to CBP the paperwork required to effectuate the in-bond transportation process such that Jana Brands would receive the refund owed. Id. at ¶ 24. C.H. Robinson and Ryan failed to properly submit the paperwork. Id. at ¶¶ 25-26. As a result, CBP denied Jana Brands' drawback claims, causing Jana Brands to incur damages of over $154, 000. Id. at ¶¶ 27-28.

         Jana Brands now brings claims of breach of contract (Count I as to C.H. Robinson and Count II as to Ryan), negligence (Count III), and unfair and deceptive business practices under Mass. Gen. Laws ch. 93A, §§ 2, 11 (Count IV) against C.H. Robinson and Ryan. Id. at ¶¶ 31-49.


         To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain sufficient factual allegations to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In evaluating a complaint, the court must accept all factual allegations in the complaint as true and construe all reasonable inferences in the plaintiff's favor. Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993). The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions and “threadbare recitals of the elements of a cause of action.” Iqbal, 556 U.S. at 678. A reviewing court must conduct a “context-specific” assessment of the pleadings by drawing on “its judicial experience and common sense.” Maldonado v. Fontanes, 568 F.3d 263, 269 (1st Cir. 2009) (quoting Iqbal, 556 U.S. at 663-64). A complaint must be dismissed for failure to state a claim when it lacks “factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory.” Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir. 1997).

         III. ANALYSIS

         A. Preemption

         Defendant C.H. Robinson argues that Counts III and IV against them fail to state a claim because they are expressly preempted by the preemption provision of the Interstate Commerce Commission Termination Act of 1995 (“ICCTA”).[1] The ICCTA, which governs interstate transportation of property, provides in relevant part:

[A] State . . . may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.

49 U.S.C. § 14501(c)(1).[2] The ICCTA contains further definitions of various terms, three of which are particularly relevant. A “motor carrier” is “a person providing motor vehicle transportation for compensation.” Id. § 13102(14). A “broker” is “a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or ...

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