Transportation — preemption

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United States Court of Appeals For the Seventh Circuit

Civil

Transportation — preemption

Although state tort claims are preempted by the FAAAA, claims alleging bribery and racketeering are not preempted.

“Wisconsin’s law forbidding bribery (and related offenses such as conspiracy or attempt to bribe) should not be characterized for FAAAA purposes in the same way as a consumer fraud and deceptive practices law (which imposes non-waivable state-ordered provisions in contracts that displace private arrangements) or an antitrust law (which forbids price-fixing or its equivalents). It is not at all inevitable that the damages that S.C. Johnson suffered as a result of Morris’s dishonesty will move in lockstep with the amount of the bribes that he took. The precise value of the travel expenses, illicit excursions, and the cash bribes that Morris pocketed, for instance, need not have had any effect on the actual prices S.C. Johnson paid to its carriers. Cf. U.S.S.G. § 2C1.1, app. note 3 (treating the ‘value of the benefit received [as] the same regardless of the value of the bribe’). Had Morris stolen from S.C. Johnson, or had he surreptitiously used part of the chosen carrier’s capacity to transport illegal drugs, or had he committed any number of other crimes, S.C. Johnson would also have been injured, and its injuries would ultimately have had a tangential effect on its costs. These, however, are the kinds of offenses that the Supreme Court has already said fall on the ‘non-preemption’ side of the line. We thus conclude that S.C. Johnson’s second claim, charging a conspiracy to violate the bribery statute, is not preempted by the FAAAA.”

Reversed and Remanded.

11-3577 S.C. Johnson & Son, Inc. v. Transport Corporation of America, Inc.

Appeal from the United States District Court for the Eastern District of Wisconsin, Clevert, J., Wood, J.