NY Stone Manhattan, LLC v. Cowan Logistics, LLC
- Laura Swain
- 1:23-cv-02850
- U.S. District Court · Southern District of New York
- 3
In NY Stone Manhattan v. Cowan Logistics, Judge Rearden denied an earlier dismissal motion as moot and required briefing on federal jurisdiction.
NY Stone Manhattan, LLC, Cowan Logistics, LLC, and 5 Star Logistics, Inc.; the order immediately addressed Cowan Logistics’ earlier motion and the parties’ dispute over federal jurisdiction.
What happened
NY Stone Manhattan, LLC sued Cowan Logistics, LLC and 5 Star Logistics, Inc. over state-law negligence and breach-of-contract claims. Cowan Logistics removed the case from New York state court and argued that federal law governed the dispute.
NY Stone filed an amended complaint before responding to Cowan Logistics’ first motion to dismiss. Cowan Logistics later filed a new motion arguing that federal law preempted the negligence claim. The parties disagreed about whether the case belonged in federal court based on federal-question or diversity jurisdiction.
Judge Jennifer H. Rearden denied Cowan Logistics’ first motion to dismiss as moot because NY Stone had timely amended its complaint. She ordered Cowan Logistics to explain whether the Carmack Amendment supported federal jurisdiction and allowed NY Stone to respond; the court did not yet decide the later motion to dismiss or whether the case should be returned to state court.
The detailed version
- NY Stone Manhattan, LLC v. Cowan Logistics, LLC · No. 1:23-cv-02850
- Laura Swain
- June 12, 2023
Background
NY Stone Manhattan, LLC brought state-law claims for negligence and breach of contract against Cowan Logistics, LLC and 5 Star Logistics, Inc. Cowan Logistics removed the action from New York state court. Its notice of removal asserted that the case involved federal-question jurisdiction because the Carmack Amendment, 49 U.S.C. § 14706(d), applied to an action for damages occurring during interstate transportation.
Cowan Logistics initially moved under Federal Rule of Civil Procedure 12(b) to dismiss the negligence claim on federal-preemption grounds. NY Stone then filed an amended complaint. Cowan Logistics later filed a letter-motion asserting that the first motion should be granted because NY Stone had not responded on time, and it also filed a new motion to dismiss the negligence claim based on preemption under the Federal Aviation Administration Authorization Act.
Jurisdiction issue
The amended complaint asserted only state-law claims, although it invoked diversity jurisdiction. The court explained that federal-question jurisdiction can sometimes exist when federal law completely preempts a state-law claim, meaning federal law replaces the state-law claim for jurisdictional purposes. But the court also explained that a federal defense, including defensive preemption, ordinarily cannot create federal-question jurisdiction under the well-pleaded-complaint rule. That rule generally looks to the claims stated on the face of the plaintiff’s complaint rather than anticipated defenses.
Because Cowan Logistics relied on the Carmack Amendment in its notice of removal but relied on the Federal Aviation Administration Authorization Act in its dismissal motion, the court required clarification. The court ordered Cowan Logistics to file a memorandum by June 26, 2023, supporting federal-question jurisdiction and explaining its position. NY Stone could respond by July 6, 2023.
Rulings and status
The court denied Cowan Logistics’ April 13, 2023 motion to dismiss as moot because NY Stone had timely amended its complaint and Cowan Logistics later filed a new motion to dismiss. The Clerk was directed to terminate ECF Nos. 6 and 12. The court did not rule in this order on Cowan Logistics’ May 23, 2023 motion to dismiss, and stated that it would set a briefing schedule for that motion only if the case was not remanded for lack of subject-matter jurisdiction. Judge Jennifer H. Rearden signed the order.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.