UPS Supply Chain Solutions, Inc. v. Megatrux Transp., Inc.

UPS Supply Chain Solutions, Inc. v. Megatrux Transp., Inc.

Opinion

 [*1283]  MIDDLEBROOKS, District Judge:

This case involves a pirated shipment of disk drives, two logistics contracts, and application of the Carmack Amendment, 49 U.S.C. § 14706, a federal law regulating the interstate transportation of goods. It requires us to address the ability of intermediaries to negotiate limitations on liability, the sufficiency of proof of loss, and the scope of federal preemption  [**2] with respect to a third-party logistic company's contract-based claim for attorney's fees.

I. Background

On September 18, 2009, a shipment of new and refurbished disk drives owned by Seagate Technology, LLC ("Seagate") was stolen while in transit. Although the identities of the thieves are not known, the cargo is presumed to have been stolen by drivers posing as employees of Stallion Carrier Corporation ("Stallion"). Unbeknownst to Seagate, and without authorization of its logistics provider, UPS Supply Chain Solutions, Inc. ("UPS"), Stallion had been subcontracted by the defendant, Megatrux Transportation, Inc. ("Megatrux"), to transport the disk drives from Los Angeles, California to McAllen, Texas.

Seagate had contracted with UPS to provide transportation, custom brokerage services, and warehousing and freight management services on an exclusive basis throughout the Americas for air, land, or sea. The Global Logistics Service Provider Agreement ("GLSPA") between Seagate and UPS allowed UPS to subcontract obligations under the contract to third parties, and limited the liability of UPS and  [*1284]  its subcontractors to $100,000, except where the loss was due to gross negligence. The GLSPA was  [**3] effective December 19, 2008, and continued until terminated by the parties.

UPS, in turn, had a non-exclusive contract with Megatrux for Megatrux to provide ground transportation services to UPS and its customers. However, pursuant to the Master Transportation Services Agreement ("MTSA") between UPS and Megatrux, dated August 14, 2009, Megatrux was not allowed to subcontract its work to others without the consent of UPS.³ Despite this prohibition and without informing UPS, Megatrux subcontracted with individuals it thought to be associated with Stallion, a company it had not previously used, to haul the Seagate disk drives.

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