Solo et al v. United Parcel Service Co.
OPINION and ORDER Granting Defendant's 17 Motion to Dismiss. Signed by District Judge Gerald E. Rosen. (JOwe)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
JOE SOLO, and BLEACHTECH
L.L.C., on behalf of themselves
and all others similarly situated,
Hon. Gerald E. Rosen
UNITED PARCEL SERVICE
OPINION AND ORDER GRANTING DEFENDANT’S MOTION TO
In this putative class action, Plaintiffs allege that Defendant United Parcel
Service Company (“UPS”) intentionally overcharges customers who purchase
additional liability coverage for packages with a declared value of over $300, in
violation of the agreement made between UPS and its customers. The case is
materially identical to its companion case, Sivak v. United Parcel Service Co.,
which was dismissed by this Court pursuant to Fed. R. Civ. P. 12(b)(6) on July 1,
2014. 28 F. Supp. 3d 701 (E.D. Mich. 2014). In that case, an individual resident
of Michigan and a nonprofit corporation in Ohio that had purchased “declared
value coverage” -- extra insurance for packages shipped that have a value in excess
of $300 -- brought suit in this Court on behalf of themselves and a putative class,
alleging that UPS violated the terms of the shipping contract made between UPS
and its customers. Id. at 704-05. The plaintiffs’ claims rested entirely on their
argument that the language in UPS’s shipping contract, most reasonably
interpreted, provided that any individual purchasing declared value coverage for a
package valued in excess of $300 was to pay $0.85 per $100 of package value after
the first $100 -- the plaintiffs maintained that the contract specified that declared
value coverage on the first $100 of package value was to be provided for free. Id.
at 708-10. After UPS moved to dismiss, the Court held that (1) the terms of the
contract unambiguously stated that the declared value coverage cost was to be
$0.85 per $100 of package value for the total package value, not just any amount
beyond $100, id. at 711-13; (2) the plaintiffs’ unjust enrichment claim relied on
their faulty interpretation of the contract and thus failed, id. at 713-14; (3) the
plaintiffs’ claims under 49 U.S.C. § 13708 failed both because they relied on the
plaintiffs’ faulty interpretation of the shipping contract and because § 13708 cannot
support mere “overbilling” claims, id. at 715-19; and (4) plaintiffs’ RICO claims
failed because they did not allege sufficient fraudulent conduct, id. at 719-22.
The claims in the instant case are the same as those of Sivak, with the
exception of the Sivak RICO claims, which Plaintiffs do not assert here.1 Plaintiffs
here allege that UPS violated the terms of the shipping contract, was unjustly
enriched by that violation, and violated 49 U.S.C. § 13708. Plaintiffs’ theories as
to why Defendant’s conduct was unlawful are also the same as those of Sivak, and
Defendant has now moved to dismiss the case, relying on the same arguments that
allowed it to prevail in Sivak.
Having reviewed and considered the parties’ briefs and supporting
documents and the entire record of this matter, the Court has determined that the
pertinent allegations and legal arguments are sufficiently addressed in these
materials and that oral argument would not assist in the resolution of this motion.
Accordingly, the Court will decide the motion “on the briefs.” See L.R. 7.1(f)(2).
This Opinion and Order sets forth the Court’s ruling.
II. PERTINENT FACTS
Because the facts of this case are materially identical to those of Sivak, the
Court focuses here on the few distinctions between the two cases and the
procedural relationship between them, and refers the reader to Sivak for a more
complete treatment of the overlapping facts.
See 28 F. Supp. 3d at 705-10.
Plaintiff Joe Solo, a resident of California, “from time to time ships packages using
As explained below, Plaintiffs attempted to consolidate this case with Sivak, but
were unsuccessful for procedural reasons.
UPS.” Pl.’s Compl. ¶ 11-12. On December 26, 2013, Solo shipped a package via
UPS with a declared value of $565, and purchased declared value coverage from
UPS for the full value of his package.
Id. ¶¶ 13-14.
BleachTech, a privately-held Ohio corporation, uses UPS’s services, and shipped
various packages between September 2012 and November 2013 that were valued
above $300, purchasing declared value coverage for each. Id. ¶¶ 15-17. Plaintiffs,
like those in Sivak, allege that they were improperly charged “for the first $100 of
the declared value coverage,” id. ¶ 17, which Plaintiffs argue was “to [be]
provide[d] at no additional charge” pursuant to the terms of the UPS shipping
contract that governs the transaction, id. ¶ 56.
The underlying Shipping Contract -- the interpretation of which determines
the outcome of the case -- is the same contract at issue in Sivak. As the Court
explained in that case, the Shipping Contract provided as follows:
UPS’s liability for loss or damage to each UPS domestic package or
international shipment, or to each pallet in a UPS Worldwide Express
Freight™ shipment, is limited to a value of $100, except as set forth
below. Unless a greater value is recorded in the declared value field of
the UPS Source Document or the UPS Automated Shipping System
used, the shipper agrees that the released value of each domestic
package or international shipment, or pallet is no greater than $100,
which is a reasonable value under the circumstances surrounding the
transportation, and that UPS shall not be liable for more than $100 for
each domestic package or international shipment or pallet.
To increase UPS’s limit of liability for loss or damage above $100,
the shipper must declare a value in excess of $100 for each package
or pallet in the declared value field of the UPS Source Document or
the UPS Automated Shipping System used and pay an additional
Shipping Contract, Dkt. #1, Ex. A, § 50 (emphasis added); Sivak, 28 F. Supp. 3d at
705. The Contract also provided tables indicating the specific rates for liability
coverage, depending on the declared value of the package. For example, for
shipping of domestic packages, the rates were as follows:
UPS Rate and Service Guide, Dkt. #1, Ex. B, at 70.
Also as in Sivak and relevant here, the Contract provided that a customer
(termed a “shipper” in the Contract) was required to raise certain billing disputes
with UPS within 180 days of receiving the invoice giving rise to the dispute:
Shippers requesting an invoice adjustment (e.g., adjustment of
Charges based on an incorrect rate, billable weight, account number,
failure to tender a shipment, type of service, shipping charge
correction, etc.) or a refund due to a duplicate payment must notify
UPS of the request within 180 days of receiving the contested invoice,
or any billing dispute is waived. Notification to UPS of a request for
an invoice adjustment must be made in writing using one of the
–Submit a request through UPS’s online Billing Center at
–Email a request to UPS through ups.com®; or
–Mail a request to United Parcel Service, P.O. Box 7247- 0244,
Philadelphia, PA 19170-0001;
The notification to UPS must include the date of shipment, the
tracking number for each disputed charge, and the reason for the
disputed charge. A partial payment against an invoice is not
considered a request for an invoice adjustment or notice to UPS of a
disputed charge. UPS reserves the right to refuse to issue any invoice
adjustment until all outstanding charges owing to UPS have been paid
Shipping Contract, Dkt. #1, Ex. A, § 47.1; Sivak, 28 F. Supp. 3d at 705. UPS
required that any claims were to be submitted in writing and received by UPS
within the 180-day deadline. Sivak, 28 F. Supp. 3d at 705. Plaintiffs in this case
allege that they satisfied the 180-day deadline and gave UPS proper notice that
they were overcharged. Pl.’s Compl. ¶ 18.
Plaintiffs’ basic argument as to how Defendant breached is identical to its
arguments in Sivak:
Plaintiffs contend that “UPS plainly states in its Terms that the first
$100 of coverage is free or at no additional charge, whether or not a
shipper purchases additional declared value coverage.” But the
problem, according to Plaintiffs, is that when a shipper declares a
value in excess of $100.00 and is therefore charged $0.85 per each
portion of $100.00, UPS does not actually provide the first $100.00 of
coverage for free:
“Despite the promise by UPS that the first $100 of declared value
coverage is free or at no additional charge, UPS has systematically
charged and caused its agent and sales network to charge customers
an additional amount for coverage for the first $100 when they
purchase additional declared value coverage.”
This “problem” actually kicks in when a shipper declares a value in
excess of $300.00. This is because the Service Guide provides . . . for
a $2.55 minimum for additional coverage, which divided by $0.85
equates to 3 portions of $100.00. In other words, when a customer
declares a value between $100.01 and $300.00, UPS charges the
customer $2.55 for additional declared value coverage without
apportioning $0.85 per $100.00 in coverage.
But when a customer declares a value above $300.00, Plaintiffs claim
that UPS overcharges that customer by $0.85 by failing to account for
the first $100.00 in free coverage that they assert the Shipping
Id. at 708-09 (citations omitted).
On December 27, 2013, Plaintiffs’ counsel filed two separate lawsuits
challenging the manner in which UPS charges its customers for declared value
coverage: one in the Eastern District of Michigan (Sivak) and one in the Central
District of California (Solo v. UPS, No. 13-9515). Sivak, 28 F. Supp. 3d at 722-23.
UPS responded to the Sivak matter first; moving to dismiss that case on February
2, 2014. Id. at 723. “While that motion remained pending, the parties -- without
judicial involvement -- discussed consolidating both matters” in the Eastern
District of Michigan. Id. Before they were able to reach such an agreement,
however, the Sivak Court granted UPS’s motion to dismiss on July 1, 2014. Id.
The Solo Plaintiffs then voluntarily dismissed their complaint in the Central
District of California without prejudice, refiled the case in the Eastern District of
Michigan as a companion case to Sivak (the instant matter), and filed a motion
pursuant to Fed. R. Civ. P. 60(b)(6) in the Sivak matter, requesting that the Court
“(1) vacate its July 1, 2014 judgment under Rule 60(b)’s catch-all provision; (2)
consolidate Sivak and Solo; (3) permit the filing of a single consolidated amended
complaint . . . ; (4) deem UPS’s previously filed Motion to Dismiss to be refiled
against this new complaint . . . ; and (5) dismiss the single consolidated amended
complaint with ‘a new, one-sentence judgment . . . on the basis of its July 1, 2014
Opinion and Order.’” Id. (third omission in original). Presumably, Plaintiffs’
attorneys made this request with the expectation that the outcome of the motion to
dismiss in this matter would be the same as that of Sivak, and consolidating the
motions and dismissing them together would speed the eventual appeal. The Sivak
Court denied the plaintiffs’ motion, however, finding that while the plaintiffs’
motive was well-intentioned and in the interest of judicial economy, the plaintiffs
failed to show that “principles of equity require[d] the Court to vacate its
Id. at 724.
The Court also noted that “Plaintiffs’ promised
forthcoming appeal in the Sivak matter will govern the Solo matter.” Id. at 725.
The Sivak plaintiffs did not file an appeal, however. Their briefing in this
matter explains the reason for this: Plaintiffs’ counsel believes that Plaintiffs in the
Solo matter better meet the 180-day notice requirement in the Shipping Contract
than did the plaintiffs in the Sivak matter. See Pl.’s Resp. to Def.’s Mot. to
Dismiss, Dkt. # 20, at 1 (“To avoid two appeals, only one case could go up -- and
in Solo each named plaintiff meets any arguable notice requirement in the UPS
terms (a defense that this Court did not reach in Sivak). While plaintiffs view the
UPS terms to be unenforceable, they wished to avoid the risk of affirmance on an
alternative ground that had not been reached by the trial court.”). The Sivak
plaintiffs also mentioned this issue in their Rule 60(b)(6) motion. See Sivak, 28 F.
Supp. 3d at 725 n.5.
Plaintiffs’ complaint in the instant case raises issues entirely encompassed
by those in Sivak, though it does not raise the RICO claim that the Sivak plaintiffs
alleged. Relying on the same Shipping Contract as the Sivak plaintiffs, Plaintiffs
here allege that Defendants breached the Contract by “charg[ing] Plaintiffs for the
initial $100 of coverage that it was obliged to provide at no additional charge,”
Pl.’s Compl., ¶ 56 (Count I); violated 49 U.S.C. § 13708(b) by presenting false or
misleading information in the Shipping Contract, id. ¶ 69 (Count III); and was
unjustly enriched when third-party retailers paid overcharges arising from the
initial $100 of coverage to UPS, id. ¶ 82 (Count IV).2 Defendant filed its Motion
to Dismiss on August 29, 2014 date (Dkt. # 17) and that motion is now fully
Rule 12(b)(6) Standard
In deciding a motion brought under Rule 12(b)(6), the Court must construe
the complaint in the light most favorable to Plaintiffs and accept all well-pled
factual allegations as true. League of United Latin Am. Citizens v. Bredesen, 500
Plaintiffs also seek a declaratory judgment on their claims (Count II). Pl.’s
Compl. ¶¶ 58-64.
F.3d 523, 527 (6th Cir. 2007). To withstand a motion to dismiss, however, a
complaint “requires more than labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007). The factual allegations in the complaint, accepted as true,
“must be enough to raise a right to relief above the speculative level,” and must
“state a claim to relief that is plausible on its face.” Id. at 570. “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.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
The Court must “construe the
complaint in the light most favorable to the plaintiff, accept its allegations as true,
and draw all reasonable inferences in favor of the plaintiff.” DirecTV, Inc. v.
Treesh, 487 F.3d 471, 476 (6th Cir. 2007). However, the Court “need not accept as
true legal conclusions or unwarranted factual inferences.” Id. (quoting Gregory v.
Shelby Cnty., 220 F.3d 433, 446 (6th Cir. 2000)).
If the well-pled facts in Plaintiffs’ Complaint -- accepted as true -- are
insufficient for Plaintiffs to recover on a claim, that claim must be dismissed.
Iqbal, 556 U.S. at 680 (“Because the well-pleaded fact of parallel conduct,
accepted as true, did not plausibly suggest an unlawful agreement, the Court held
the plaintiffs’ complaint must be dismissed.”).
Plaintiffs’ Claims Fail for the Reasons Described in Sivak
Plaintiffs recognize that the ruling in Sivak fully encompasses Plaintiffs’
claims here. “If UPS’s construction is the only permissible construction [of the
Shipping Contract] as a matter of law . . . as this Court ruled in . . . Sivak . . . , then
each of plaintiffs’ claims fail.” Pl.’s Resp. to Def.’s Mot. to Dismiss, at 1. Indeed,
as noted above, when Plaintiffs initially requested to consolidate this case with
Sivak, they requested that the Court simply dismiss the consolidated complaint
with a “one-sentence judgment” so that the appeal could be expedited. Sivak, 28 F.
Supp. 3d at 725. Accordingly, the Court declines to rephrase the analysis of Sivak,
and instead summarizes the reasons -- fully articulated in that case -- why
Plaintiffs’ claims here must fail.
First, regarding Plaintiffs’ breach of contract claim (Count I), Plaintiffs
argue that Defendant’s (and the Sivak Court’s) interpretation of the Shipping
Contract “turns on a laser-focused isolation of the word ‘total’ in the phrase ‘for
each $100.00 (or portion of $100.00 of the total value declared.” Pl.’s Resp. to
Def.’s Mot. to Dismiss at 2. Plaintiffs assert that “the contract language . . . plainly
limits the $0.85 to one-hundred dollar increments over the first $100.” Id. at 9-10.
These are the same arguments that were raised in Sivak, and the Court does not
modify its analysis here. As the Court explained in Sivak, when reading the
language of the Rate and Service Guide describing the payment structure for
purchase of declared value coverage both alone and with the Shipping Contract as
a whole, “the Shipping Contract unambiguously precludes Plaintiffs’ constrained
contractual interpretation.” The Court made clear why this is so in several key
[Under the Supping Contract,] an $0.85 charge applies ‘‘for each
$100.00 . . . of the total value declared.’’ Though the term ‘‘total
value declared’’ is not defined in the Shipping Contract, its core
modifier—’’total’’—plainly means relating to the ‘‘whole,’’ ‘‘not
divided’’ and ‘‘of or relating to something in its entirety.’’ BLACK’S
LAW DICTIONARY (9th ed. 2009); WEBSTER’S THIRD NEW
INTERNATIONAL DICTIONARY, UNABRIDGED (2014). The Shipping
Contract’s use of the phrase ‘‘total’’ therefore unambiguously means
that packages shipped with a declared value of between $100.01 and
$50,000.00 are charged $0.85 for each $100.00 (or portion of $100.00
thereof) of the total value declared.
Sivak, 28 F. Supp. 3d at 712 (omission in original).
The first $100 of declared
value is, of course, part of the total value declared when taking that term for its
plain meaning, and accordingly, the contract indicates that an $0.85 charge applies
to that declared value. See id. Accordingly, the Court rests on the analysis
provided in Sivak in dismissing Count I of Plaintiffs’ Complaint. And as the Sivak
Court noted, “Counts I and . . . II -- Breach of Contract and Declaratory Relief -expressly arise out of the terms of the Shipping Contract and rise and fall
together.” Id. at 711. Accordingly, Plaintiffs’ Count II here must be dismissed as
Counts I and II are state law claims. The Court in Sivak interpreted the Shipping
Contract under Michigan law. Sivak, 28 F. Supp. 3d at 711. Typically, a federal
court sitting in diversity must apply the forum state’s choice of law rules to
Next, regarding Plaintiffs’ claim under 49 U.S.C. § 13708(b) -- that UPS
published in its Service Guide “false or misleading information,” in violation of the
statute -- the Sivak Court held that
Plaintiffs premise their Section 13708 claim solely on their view of
the Shipping Contract. Having comprehensively addressed this
constrained view above, Plaintiffs’ Section 13708 theory collapses
and therefore fails to state a claim for relief. They have not set forth
any facts indicating that UPS failed to disclose “the actual rates,
charges, or allowances” and “whether and to whom any allowance or
reduction in charges [was] made.”
Id. at 715-16. But, as the Court explained, even if Plaintiffs’ breach-of-contract
theory were valid, § 13708(b) could not provide relief under that theory. “Section
13708(a) and (b) address ‘truth-in-billing,’ mandating that bills reflect the actual
charges assessed -- including an explanation of discounts that are applied off the
four corners of an invoice. It simply does not apply to Plaintiffs’ allegations that
UPS’s bills reflect charges that were more than agreed to.”
Id. at 718-19
determine the applicable law. But here, the parties are in agreement that “the same
general principles relied on by the Court in Sivak also apply under both California
and Ohio law” -- the two states in which Plaintiffs here are domiciled. Def.’s Mot.
to Dismiss, Dkt. # 17, at 12; see also Pl.’s Resp. to Def.’s Mot. to Dismiss, Dkt. #
20, at 6-7. Accordingly, there is no need for the Court to determine which law
applies here, as that analysis would have no impact on the ultimate outcome of
Counts I and II. See Tech. for Energy Corp. v. Scandpower, A/S, 880 F.2d 875,
877 (6th Cir. 1989) (“[The district court] concluded defendants would prevail
under either state’s law, [and so] the Court deemed it unnecessary to solve the
choice of law puzzle. [Plaintiff] does not contest the District Court’s application of
California law to its claims; indeed, it argues California law ‘is clearly applicable.’
Like the District Court, we find it unnecessary to reach the choice-of-law
(emphasis added). Plaintiffs explain their disagreement with this analysis in their
briefing, but they concede that this claim is identical to that of Sivak. See Pl.’s
Resp. to Def.’s Mot. to Dismiss, at 21 (“UPS argues -- and this Court found in
Sivak -- that § 13708 does not apply to overcharges, but only ‘off-bill
discounting . . . .’
Plaintiffs respectfully submit that this Court’s detailed
discussion . . . in its Sivak opinion demonstrates that § 13708(b) is not directed at
off-bill discounting.”). Accordingly, the Court rests on the analysis provided in
Sivak in dismissing Count III of Plaintiffs’ Complaint in the instant matter.
Last, regarding Plaintiffs’ unjust enrichment claim (Count IV), “Plaintiffs’
[claim] only relies upon the existence of the Shipping Contract to form the basis of
their claim that UPS systematically overcharges those who declare values in excess
of $300.” Id. at 714. And, as in Sivak,
It is clear . . . that Plaintiffs and UPS have a contractual relationship
by virtue of Plaintiffs shipping packages pursuant to the Shipping
Contract, and that this contractual relationship precludes Plaintiffs
from bringing their unjust enrichment claim. Simply, . . . this Court
[cannot] imply a contract where there is an express contract covering
the same subject matter.
Id. Accordingly, for the reasons fully described in Sivak, Plaintiffs’ Count IV must
The parties spend considerable pages in their briefs arguing whether federal law
preempts Plaintiffs’ unjust enrichment claim. See Def.’s Mot. to Dismiss, at 1718; Pl.’s Resp. to Def.’s Mot. to Dismiss, at 15-21. The Sivak Court found that the
plaintiffs’ unjust enrichment claim failed even if not preempted, and thus explicitly
For all of the foregoing reasons,
IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss (Dkt. # 17)
IT IS FURTHER ORDERED that Plaintiff’s Complaint is DISMISSED
IT IS SO ORDERED.
s/Gerald E. Rosen
Chief Judge, United States District Court
Dated: March 27, 2015
I hereby certify that a copy of the foregoing document was served upon the parties
and/or counsel of record on March 27, 2015, by electronic and/or ordinary mail.
Case Manager, (313) 234-5135
declined to reach the preemption issue. Sivak, 28 F. Supp. 2d at 711 n.4. Because
the analysis is the same here, there is no need for the Court to resolve the
preemption issue in the instant case.
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