Solo v. United Parcel Serv. Co.
| Citation | 819 F.3d 788 |
| Decision Date | 18 March 2016 |
| Docket Number | No. 15–1426.,15–1426. |
| Parties | Joe SOLO; BleachTech L.L.C., on behalf of themselves and all others similarly situated, Plaintiffs–Appellants, v. UNITED PARCEL SERVICE CO., Defendant–Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (6th Circuit) |
ARGUED:Andrew J. McGuinness, Andrew J. McGuinness, Esq., Ann Arbor, Michigan, for Appellants. Caitlin Sinclaire Blythe, Morrison & Foerster LLP, San Francisco, California, for Appellee. ON BRIEF:Andrew J. McGuinness, Andrew J. McGuinness, Esq., Ann Arbor, Michigan, Paul F. Novak, Diana Gjonaj, Milberg LLP, Detroit, Michigan, for Appellants. Caitlin Sinclaire Blythe, Ruth N. Borenstein, Morrison & Foerster LLP, San Francisco, California, Gregory B. Koltun, Morrison & Foerster LLP, Los Angeles, California, Bonnie L. Mayfield, Dykema Gossett PLLC, Bloomfield Hills, Michigan, for Appellee.
Before: STRANCH, DONALD, and
OPINION
Appellants Joe Solo and BleachTech L.L.C. filed a putative class action suit alleging that United Parcel Service Co. (UPS) overcharges customers for liability coverage against loss or damage for packages with a declared value of $300 or more. The complaint sought recovery based on four counts: breach of contract, declaratory relief pursuant to 28 U.S.C. § 2201, violation of 49 U.S.C. § 13708(b)(regulating billing and collecting practices for motor carriers), and, in the alternative, unjust enrichment. The district court dismissed all claims pursuant to Federal Rule of Procedure 12(b)(6), agreeing with UPS that the language of the shipping contract at issue unambiguously precluded the interpretation on which plaintiffs relied. For the following reasons, we affirm the dismissal of Solo and BleachTech's claim under 49 U.S.C. § 13708(b), reverse the dismissal of the remaining claims, and remand the case to the district court for further proceedings consistent with this opinion.
Named appellants are Joe Solo and BleachTech L.L.C. R. 1, ¶¶ 11, 15. Each uses UPS "from time to time" to ship packages with a declared value over $300. Id. at ¶¶ 12, 16. Solo is a resident and citizen of California. Id. at ¶ 11. On December 26, 2013, he shipped a package via UPS with a declared value of $565. Id. at ¶ 13. BleachTech is a privately-held Ohio limited liability company that operates plants in Ohio and Virginia and serves customers throughout the Midwest, including Michigan. Id. at ¶ 15. Between September 17, 2012, and November 26, 2013, BleachTech used UPS to ship packages with declared values between $326 and $1,634 a number of times. Id. at ¶ 16.
Appellee UPS is a Delaware corporation headquartered in Atlanta, Georgia, and wholly-owned subsidiary of United Parcel Service, Inc. Id. at, ¶ 20. It is one of the world's largest package delivery companies—UPS delivered an average of 16.3 million packages per day worldwide in 2012. Id. at ¶ 32.
This case concerns the fee charged for liability coverage against package loss or damage, which UPS refers to as "declared value coverage." Solo and BleachTech claim that "UPS has for years been systematically overcharging customers for the first $100 of declared value coverage, which UPS in its standardized published rates claims to provide at no additional charge for each shipment." Id. at ¶ 1. Each alleges to have paid an additional charge above that set forth in UPS's published rates when they shipped packages with a declared value greater than $300. Id. at ¶¶ 14, 17. They seek relief on behalf of a nation-wide class composed of "[a]ll persons residing in the United States who purchased from defendant UPS, directly or through an Authorized Outlet, coverage for loss or damage for shipments with a declared value in excess of $300.00" under theories of breach of contract, 49 U.S.C. § 13708(b), and, alternatively, unjust enrichment. Id. at ¶¶ 45, 53–83. They also seek declaratory relief under 28 U.S.C. § 2201. Id. at ¶¶ 58–64.
Solo and BleachTech (hereinafter, collectively Solo or "he") assert that customers are unlikely to notice this improper fee because the additional declared value charges are not itemized on their bills. Id. at ¶ 36. Solo claims that UPS is aware of this problem but seeks to limit its own liability by enforcing a 180–day limitation period to contested billing claims. Id. at ¶ 39. For those who do notice the improper charge and timely contest it (generally shippers large enough to retain shipping auditors), UPS allegedly engages in a "refund mitigation scheme." Id. at ¶ 41. Solo alleges that "shipping auditors who have made pre-suit notice of the declared value overcharge have routinely gotten their clients credited for the charge for the first $100 of coverage, and UPS has acknowledged that the charge was not proper." Id. at ¶ 40. Despite these acknowledgments, however, UPS has not rewritten the Service Guide provision. Id. On appeal, Solo contends that the language of the Service Guide provision is at least ambiguous, and therefore the district court's dismissal must be reversed so that the matter can be submitted to the jury.
Solo alleges that UPS makes an "explicit representation and/or contractual promise" to provide the first $100 of liability coverage at no charge in the "Shipping Contract," which incorporates UPS's Tariff/Terms and Conditions of Service (UPS Terms) and its Rate and Service Guide (Service Guide).1 R. 1, ¶ 28; R. 17–2, PageID 347. The UPS Terms state that, "UPS's liability for loss or damage to each UPS domestic package or international shipment ... is limited to a value of $100" unless the shipper records a declared value greater than $100 and pays "an additional charge." Id. at 343–44 §§ 50, 50.2. The Service Guide sets forth the additional charges for domestic shipments as follows:
Domestic Value–Added Services
R. 1, PageID 137. Accordingly, UPS's liability for loss or damage to packages with no declared value, or a declared value between $0.00 and $100, is capped at $100. Liability coverage can be increased for packages with a declared value between $100.01 and $50,000 for a charge of $0.85 per each $100 (or portion thereof) "of the total value declared." Id. There is a minimum charge of $2.55 to increase liability beyond the default cap. Id.
The UPS Terms also include a "Third–Party Retailer" provision that limits liability in any action for loss, damage, or delay of a package shipped by a third-party retailer, including all UPS store locations.
R. 17–2, PageID 322 § 15. Third-party retailers are not agents of UPS. Id.
This case was originally filed in the Central District of California on December 27, 2013 along with a nearly identical companion case in the Eastern District of Michigan, Sivak v. United Parcel Service Co., 28 F.Supp.3d 701 (E.D.Mich.2014). In response to the plaintiffs' complaint in Sivak , UPS initially filed an answer that included among its affirmative defenses the argument that the plaintiffs lacked standing because they were "not in direct contractual privity with UPS." Defendant United Parcel Service Co.'s First Amended Answer to Complaint at 17, Sivak v. United Parcel Service Co. (filed Jan. 6, 2014) (No. 13–15263). After an amended complaint was subsequently filed, UPS responded with a motion to dismiss that was granted on other grounds. Sivak, 28 F.Supp.3d at 723.
The Solo plaintiffs then voluntarily dismissed their complaint without prejudice and refiled it in the Eastern District of Michigan. They requested that the court vacate its order of dismissal under Federal Rule of Civil Procedure 60(b)'s catch-all provision, consolidate Sivak with Solo, and dismiss the single consolidated amended complaint, presumably to facilitate a swift appeal. The district court denied the motion, finding that plaintiffs failed to show that "principles of equity require[d] the Court to vacate its judgment." R. 24, PageID 452.
UPS filed a motion to dismiss Solo's complaint on August 29, 2014. On March 27, 2015, the district court granted the motion and dismissed the complaint with prejudice for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). In so doing, the district court incorporated its order dismissing Sivak. Id. at 447 ().
Solo timely appealed the district court's order of dismissal. He maintains that the district court erred in concluding, among other things, that UPS's interpretation of the Shipping Contract was the only permissible reading. Solo contends that "[a]t the very least, Plaintiffs–Appellants' reading is reasonable, thereby creating a jury issue." Solo also challenges the court's dismissal of the unjust enrichment and 49 U.S.C. § 13708(b)claims.
The district court's order granting a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6)is reviewed de novo. Winget v. JP Morgan Chase Bank, N.A., 537 F.3d 565, 572 (6th Cir.2008). We construe the complaint in the light most favorable to the plaintiff, accept all well-pleaded factual allegations as true, and examine whether the complaint contains "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). This standard "does not impose a probability requirement at the pleading stage; it simply...
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