Jim Ball Pontiac-Buick-GMC, Inc. v. DHL Express (USA), Inc. et al

Filing 136

DECISION AND ORDER. Plaintiff has no cause of action against Defendants as alleged in the Amended Complaint; the Clerk of Court shall enter judgment accordingly, and close the file.-CLERK TO FOLLOW UP- Signed by Hon. Leslie G. Foschio on 3/26/2015. (SDW)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
____________________________________
JIM BALL PONTIAC-BUICK-GMC, INC.,
on behalf of itself and all others similarly situated,

DECISION
and
ORDER

Plaintiff,
v.

08-CV-761F
(Consent)

DHL EXPRESS (USA), INC.,
DHL WORLDWIDE EXPRESS, INC.,
DPWN HOLDINGS (USA), INC., formerly known
as DHL Holdings (USA), Inc.,
Defendants.
____________________________________
APPEARANCES:

HODGSON RUSS LLP
Attorneys for Plaintiff
DANIEL C. OLIVERIO,
JOHN L. SINATRA, JR.,
REETUPARNA DUTTA, of Counsel
The Guaranty Building
140 Pearl Street, Suite 100
Buffalo, New York 14202-4040
QUINN EMANUEL URQUHART & SULLIVAN, LLP
Attorneys for Plaintiff
RICHARD I. WERDER, JR., of Counsel
52 Madison Avenue, 22nd Floor
New York, New York 10010
DECHERT LLP
Attorneys for Defendants
JOSEPH F. DONLEY, of Counsel
1095 Avenue of the Americas
New York, New York 10036
EDWIN V. WOODSOME,
CHRISTOPHER S. RUHLAND,
ANDREW S. WONG, of Counsel
633 West 5th Street, 37th Floor
Los Angeles, California 90071

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JURISDICTION
This matter is before the undersigned on consent pursuant to 28 U.S.C. § 636(c)
filed May 12, 2014 (Doc. No. 104).

BACKGROUND
This class action, pursuant to 28 U.S.C. § 1332(d), was commenced October 14,
2008. On behalf of itself and a putative nationwide class of shippers, Plaintiff alleges
Defendants (“Defendants” or “DHL”) providing carrier service to Plaintiff, improperly
charged Plaintiff and the class a jet fuel surcharge in connection with the Plaintiff’s and
the class’s shipments, i.e., packages, transported solely via motor vehicles, not
involving air transportation in breach of the contracts entered into by the parties with
respect to such shipments. Plaintiff alleged it began using DHL’s shipping services as
early as 1998 when it sent business documents, primarily auto loan credit applications,
to business counterparts, auto-loan finance entities, located within a 200-mile radius of
Plaintiff’s retail auto dealership located in Erie County, New York. Amended Complaint
¶ 58. According to Plaintiff, none of these shipments involved air travel to effect their
respective delivery. As a result of Defendants’ alleged breaches over many years,
Plaintiff seeks damages to numerous, i.e., “several hundred thousand,” id. ¶ 17, putative
class members exceeding “tens of millions of dollars.” Id. ¶ 68.
This action was originally assigned to Senior District Judge John T. Curtin and
was, prior to its transfer to the undersigned, the subject of several substantive motions.
At the outset, both parties attempted to obtain partial summary judgment on the
competing interpretations of the relevant documents forming the contract between the
parties particularly whether such contract permitted DHL to apply a jet fuel surcharge to
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Defendants’ charges to Plaintiff for the shipping of Plaintiff’s packages when Defendants
used only ground transportation for which, according to Plaintiff, the contract
authorized only a diesel fuel surcharge. By Decision and Order, filed May 7, 2010 (Doc.
No. 33) (“the May 7, 2010 D&O”), Judge Curtin denied Plaintiff’s motion and DHL’s
cross-motion finding that DHL’s 2008 Rate Guide, one of the contract documents the
parties have stipulated constitutes the contract, although referencing that DHL’s
domestic shipping services for same and next day deliveries, and providing that DHL’s
“Air Express shipments” were subject to a jet fuel surcharge, did not sufficiently indicate
that Air Express was meant to define a particular type of shipment service, as DHL
urged, such as next day service, or simply a mode of transportation, i.e., by air or
ground, which Plaintiff argued would allow either a jet or diesel fuel surcharge
depending on whether the package was shipped by air or ground transport or both thus
creating ambiguity in the meaning of these contract terms requiring trial. May 7, 2010
D&O at 7-8. In reaching the conclusion that Defendants’ use of the term Air Express to
permit the disputed jet fuel surcharges as added to Plaintiff’s invoices was sufficiently
ambiguous to require trial, Judge Curtin found that extrinsic evidence would be
admissible, but that such evidence as submitted by Plaintiff was insufficient to support
summary judgment. Id.
By Decision and Order filed March 2, 2011 (Doc. No. 58), Judge Curtin denied
Plaintiff’s motion pursuant to Fed.R.Civ.P. 23 (“Rule 23”) for class certification (“March
2, 2011 D&O”). In denying Plaintiff’s motion, Judge Curtin found, inter alia, that
Plaintiff’s claims were subject to the 180-day limitation on filing claims against an
interstate motor carrier like DHL as established by the Interstate Commerce

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Commission Termination Act (“ICCTA”), specifically 49 U.S.C. § 13710(a)(3)(B) (“§
13710(a)(3)(B)”), and, accordingly, would require the court engage in excessive
individual examinations of class members’ claims to determine compliance with §
13710(a)(3)(B), and that the class would therefore not be readily ascertainable. March
2, 2011 D&O at 7-8. The court also found that because class members used a variety
of shipping arrangements through DHL’s individual form contracts, internet sales, and
resellers, sufficient commonality of the exact contractual basis for the class claims was
not established. Id. at 8.
Judge Curtin further determined that because some class members had used
various contractual arrangements to obtain DHL services, resulting in Plaintiff’s contract
and related defenses being unique, Plaintiff could not demonstrate its claim was typical
of the class, March 2, 2011 D&O at 9, and that as individual inquiry would be necessary
to determine whether class members’ claims were timely filed, Plaintiff failed to show
that the proposed class claims predominate over individual claims. Id. at 12. In
addition, Judge Curtin held that variances among state law regarding the use of
extrinsic evidence to resolve contractual ambiguities prevented Plaintiff from
establishing that the proposed nationwide class to enforce Plaintiff’s alleged contract
claim was superior to individual actions as required by Fed.R.Civ.P. 23(b)(3) (“Rule
23(b)(3)”). Id. at 13-14. Judge Curtin also noted that a lack of reliable information
regarding the identity of putative class members rendered the proposed class not
readily ascertainable, and that Defendants’ lack of records necessary to establish which
relevant shipments by the class were solely by ground or air transportation modes also

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supported that Plaintiff had failed to establish that the proposed class was superior to
individual actions, as required for certification by Rule 23(b)(3). Id. at 13-14.
On September 8, 2010 (Doc. No. 53), Plaintiff renewed its motion for summary
judgment. In this motion, Plaintiff relied on information obtained through discovery that
suggested that because DHL stated the surcharges for both jet and diesel fuel were
simply a “pass through” as partial offset to DHL’s rising fuel costs, DHL intended the
respective surcharges to be linked with the corresponding mode of transportation
actually employed by DHL for a specific package, i.e., if by air, a jet fuel surcharge; if by
ground, a diesel fuel surcharge. In rejecting Plaintiff’s renewed motion, Judge Curtin
reiterated that the intent of the parties’ based from the actual language utilized in the
relevant documents remained sufficiently ambiguous thus requiring reliance on extrinsic
evidence to resolve the disputed construction by the trier of fact, and not on summary
judgment. Decision and Order dated April 12, 2011 (Doc. No. 61) (“April 12, 2011
D&O”) at 3-4. Judge Curtin further stated that any resort to the doctrine of contra
proferentem (ambiguities in standard form contract to be construed against party
providing contract) as a “last resort” must also await trial. Id. at 5.
On September 28, 2011, Plaintiff filed a renewed motion for class certification
based on Plaintiff’s proposed exclusion, from the proposed class, of customers who
purchased DHL shipping services through a reseller or those for whom whose pricing
did not specify one of the surcharges at issue. Judge Curtin nevertheless denied
Plaintiff’s renewed motion reiterating his previous finding that issues of timely objections
required by §13710(a)(3)(B) to the disputed surcharges would require individualized
determinations negating Plaintiff’s ability to satisfy Rule 23’s commonality and typicality

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requirements. Decision and Order filed February 3, 2012 (Doc. No. 86) (“February 3,
2012 D&O”) at 7. Judge Curtin also rejected Plaintiff’s attempt to apply equitable tolling
to the issue of class members’ timely notice of any objection to the disputed DHL jet fuel
surcharges. February 3, 2012 D&O at 10. Further, despite Plaintiffs multi-jurisdictional
review of state law on the availability of extrinsic evidence, such as course of dealing
and the understanding of the parties, to resolve the ambiguity in the applicable contract
documents as determined by Judge Curtin, Judge Curtin nevertheless found that
variations in state law regarding contract interpretation would “overwhelm the common
issues subject to generalized proof and defeat predominance.” February 3, 2012 D&O
at 13.
On March 21, 2012, Defendants moved for partial summary judgment seeking to
limit Plaintiff’s damages to billings for shipments after April 13, 2008, 180 days prior to
October 10, 2008, when Plaintiff first complained to DHL about the alleged improper jet
fuel surcharges, and before April 22, 2008, when Plaintiff stopped using DHL’s services
and began using a DHL reseller for shipment of its business documents rather than
shipping directly with DHL, Plaintiff shortly thereafter transferred its business to UPS,
one of Defendants’ major competitors. In granting Defendants’ motion, Judge Curtin
again rejected Plaintiff’s contention that the 180-day notice prerequisite established by §
13710(a)(3)(B) was inapplicable to judicial proceedings, Decision and Order filed
September 14, 2012 (Doc. No. 93) (“September 14, 2012 D&O”) at 4, that a provision in
the applicable waybill forms, DHL Exhs. H at 2, J at 2 (Doc. No. 121), providing a oneyear period for a billing claim, did not waive a defense based on § 13710(a)(3)(B), and
that because Plaintiff was not shown to have been subject to any improper influences or

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misdirections by DHL impairing Plaintiff’s ability to commence suit at an earlier time,
equitable tolling was inapplicable. September 14, 2012 D&O at 4-6.
After filing a consent pursuant to 28 U.S.C. § 636(c) in this case on May 12,
2014, the parties conferred with the undersigned on June 25, 2014 (Doc. No. 107), and
initially selected a trial date for November 13, 2014 (Doc. No. 108). On September 16,
2014, the parties again conferred with the court to discuss a bench trial in lieu of a jury
trial based on the court’s review of a protocol guiding preparation for a bench trial (“the
protocol”) the parties agreed to submit by September 26, 2014 (Doc. No. 110). The
parties accordingly submitted the protocol for the court’s consideration on September
26, 2014 (Doc. No. 111). Following its review, the court approved the protocol, which
was filed September 29, 2014 (Doc. No. 112), and agreed to conduct a non-jury trial
commencing December 18, 2014, including oral presentations by counsel and any
testimony the parties or the court may require. In the protocol the parties, inter alia,
waived a jury trial and established a schedule for the submission of evidence. Doc. No.
112 ¶ 1; ¶ 3. Included in the schedule, the parties agreed that following filing of the
various trial documents, the parties could also require, not later than December 4, 2014,
the testimony of any witness who submitted any declaration on behalf of an opposing
party. Id. ¶ 3(c). Neither side has made such a request and the court found no need for
any in-court testimony to assist in its determination of the merits. In accordance with
the schedule established by the protocol, the following documents were filed on October
23, 2014:
•

Joint Fact Stipulation (Doc. No. 115).

•

Jim Ball Pontiac-Buick-GMC, Inc.’s Trial Brief (Doc. No. 114).

7

•

Joint Deposition Designations (Doc. Nos. 116-120).
- Exh. 28 – Jim Ball Deposition, July 29, 2010 (Doc. No. 120)
- Exh. 29 – Gary Prieschel Deposition, July 29, 2010 (Doc. No. 119)
- Exh. 30 – Kevin Grupp Deposition, July 30, 2010 (Doc. No. 118)
- Exh. 31 – Hank Gibson Deposition, August 19, 2010 (Doc. No. 116)
- Exh. 32 – Charles Boice Deposition, March 2, 2011 (Doc. No. 117)

•

Joint Exhibit List (Doc. No. 121).

•

Jim Ball Trial Exhibits Vol. I, Jim Ball Exhibits 1-31 and 34-35 (Doc. No. 121).

•

Jim Ball Trial Exhibits Vol. II, Jim Ball Exhibit 33 (Doc. No. 121).

•

DHL’s Exhibits A-J (Doc. No. 121 for Exhs. A, B, E, F, G, H, I, J) (Doc. No. 125
for Exh. C) (Doc. No. 126 for Exh. D).

•

DHL’s Trial Brief (Doc. No. 128).

•

Declaration of Hank Gibson (Doc. No. 129).

•

Declaration of Charles Boice (Doc. No. 130)

•

The parties also provided courtesy copies of Jim Ball Pontiac-Buick-GMC, Inc.’s
Cases and Other Authorities Cited in Trial Brief and Authorities Cited in DHL’s
Trial Brief.
On November 19, 2014, the following papers were filed:

•

Jim Ball Pontiac-Buick-GMC, Inc.’s Brief In Opposition To DHL’s Trial Brief.

•

DHL’s Opposition To Jim Ball’s Trial Brief.
While the court was in the process of completing and issuing the instant Decision

and Order, Defendants filed, on March 23, 2015, Defendants’ Notice of Supplemental
Authority (Doc. No. 134) attaching a copy of a Summary Order of the Second Circuit,
dated March 23, 2015, in the related False Claims Act case, Grupp v. DHL, 14-CV-3595
(“Grupp”), affirming Judge Curtin’s order, dated September 11, 2014, dismissing the qui
tam complaint in the Grupp action for failure to state a claim. As relevant, the Second
Circuit found that as DHL’s jet fuel surcharge, as stated in the same contract documents

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before this court, applies to a customer’s shipment based on the category of DHL’s
expedited, e.g., NEXT DAY, delivery service selected by the customer and not the
actual mode, i.e., airplane or truck, employed by DHL to effect delivery, plaintiffs had
failed to allege an actionable fraud under the False Claims Act. Grupp v. DHL __
Fed.Appx. ___; 2015 U.S.App. LEXIS 4686, at *3-6 (2d Cir. Mar. 23, 2015). In Plaintiff’s
response, filed March 24, 2015 (Doc. No. 135), Plaintiff asserts the Second Circuit’s
determination in the Grupp matter “does not dictate any particular result in this trial.”
Plaintiff’s Response at 2.

FACTS 1
The essential facts underlying this action are not disputed. Plaintiff is a local auto
retail dealership which, prior to April 22, 2008, frequently shipped auto financing
documents to Wachovia/WFS, a local finance company (“Wachovia”), located
approximately 18 miles from Plaintiff’s dealership, using DHL’s delivery services. Based
on Judge Curtin’s ruling, only two shipments by Plaintiffs, on April 10, 2008, and April
14, 2008, using DHL’s services are at issue and involved two packages of documents
shipped on those dates. According to Plaintiff, as to each shipment DHL breached their
contract because, in addition to the base shipping rate of $5.63 per package, negotiated
by the parties, DHL invoiced Plaintiff a 22% fuel surcharge in the amount of $1.24
based on the then price of jet fuel instead of a 6.3% or $.35 fuel surcharge based on the
then price of diesel fuel. Plaintiff paid DHL’s April 17, 2018 invoice, Plaintiff’s Exh. 3,
which billed Plaintiff for these two shipments, by check dated May 14, 2008, Plaintiff’s
Exh. 4. Plaintiff’s claim is predicated on the fact that because Plaintiff’s packages were
1

Taken from the pleadings and papers filed by the parties.
9

always transported to Wachovia solely by surface, i.e., truck transportation, these
shipments were not, according to the relevant contract documents, subject to the higher
jet fuel surcharge. Thus, Plaintiff seeks damages for the two shipments in the amount
of $1.78 representing the difference of $.89 between the $1.24 jet fuel surcharges DHL
added to each of Plaintiff’s invoices as opposed to the smaller, $.35, diesel fuel
surcharge which Plaintiff contends DHL was obligated to charge Plaintiff by the contract.
In this case, the parties have stipulated into evidence, by a Joint Exhibit List,
Doc. No. 121, see Stipulation No. 6(a)-(d), the following exhibits or documents as
comprising the contract between them: the two DHL Waybills for the April 10 and April
14, 2008 shipments Plaintiff requested from DHL on April 10, 2008 (Plaintiff’s Exh. 1)
and April 14, 2008 (Plaintiff’s Exh. 2) (“the Waybills”); DHL’s Standard Rate Guide 2008
Effective January 6, 2008 (Plaintiff’s Exh. 5) (“DHL’s Rate Guide” or “the Rate Guide”);
DHL’s U.S. Fees Document (Plaintiff’s Exh. 6) (“DHL’s U.S. Fees Document”); and
DHL’s 2008 Indexed Fuel Surcharge Document (Plaintiff’s Exh. 8)(“DHL’s Fuel
Surcharge Index”). 2
In each of the Waybills Plaintiff addressed its package of auto financing
documents to Wachovia located in Amherst, New York, with Plaintiff selecting DHL’s
Next Day service with a guaranteed delivery of 3:00 PM following receipt of the
packages by DHL, subject to DHL Express Terms and Conditions (“DHL Terms and
Conditions”), on the reverse side of the Waybills which appear in reasonably legible
form in DHL Exhibits H at 2 and J at 2, Doc. No. 121. As relevant, the DHL Terms and
Conditions provide that “‘Shipment’ means all documents or parcels that travel under
2

The referenced exhibits are docketed at Doc. No. 121.

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one waybill and may be carried by any means DHL chooses, including air, road or any
other carrier.” Exhs. H & J, Doc. No. 121. DHL Express Terms and Conditions also
provide that the law applicable to any dispute is that of the “country of origin of the
Shipment.” Id. ¶ 14. The parties cite to and do not dispute the applicability of New York
law to the issue presented in this case.
As relevant, the DHL Rate Guide’s section referred to as “Domestic Services” is
subtitled “DHL SERVICES.” Plaintiff’s Exh. 5 at 4. The document states that DHL’s “full
suite of Domestic offerings includes time-and-day-definite . . . services across the U.S.
. . ..” Id. (underlining added). 3 Immediately under this statement appear five headings
describing DHL’s available delivery services: “DHL SAME DAY”, “DHL NEXT DAY
10:30 AM”; “DHL NEXT DAY 12:00 PM”; “DHL NEXT DAY 3:00 PM”; and “DHL 2ND
DAY.” Id. For each category of delivery service, the associated text appearing
immediately below the headings guarantees delivery consistent with the heading, e.g.,
“DHL NEXT DAY 3:00 PM” guarantees “delivery by 3:00 p.m. the next business day.”
Id. Following these five categories of “DOMESTIC SERVICES”, is the service category
“DHL GROUND” which, according to the text immediately below, provided “Door-to-door
delivery throughout the U.S. . . . in 1-6 business days.” Below this representation, the
following text appears: “DHL GROUND offers increased savings without decreased
service features. We guarantee your packages receive the same attention and careful
handling that you value with our Air Express services including tracking and delivery
details.” Id.
The Rate Guide also provides a detailed explanation in the Domestic Rates
Section of DHL’s prices for its delivery services, Plaintiff’s Exh. 5 at 9-15, by which a
3

Unless indicated otherwise all underlining is added.
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customer can compute the cost of a shipment based on its weight, the DHL service
category selected by the customer such as DHL NEXT DAY 3:00 PM, and the
destination, i.e., “zone.” Id. at 11. In this particular section the lowest cost available for
DHL service is for a letter to be delivered within Zone 2. 4 Id. The differences between
Plaintiff’s Waybill charge of $5.63 and the lowest published rate in the Rate Guide,
$12.50 for NEXT DAY 3:00 PM delivery, Plaintiff’s Exh. 5 at 11, results from the fact, as
explained by the parties in response to the court’s request for clarification in e-mails with
counsel, Court Exh. A, that the $5.63 base charge for Plaintiff’s two shipments
represents a discounted rate that had been negotiated between Plaintiff and
Defendants. The court had requested this explanation because of the appearance of a
potential discrepancy between Plaintiff’s actual Waybill charges, and the applicable
published DHL rates as appearing in the Rate Guide. DHL agreed with this explanation
but added that “the record does not support a conclusion that DHL’s contract terms are
non-negotiable.” E-mail to the court from Catherine Carlisle, Esq., dated February 10,
2015. Court Exh. A. The published Domestic Rates for DHL GROUND service are
substantially lower than those applicable to, for example, the DHL NEXT DAY 3:00 PM
service: $4.20 versus $16.50, for a one pound package going to Zone 2. Plaintiff’s
Exh. 5 at 11; 14. The Rate Guide’s explanation of DHL GROUND includes the
statement that in providing this service DHL “Guarantee[s] that your packages receive
the same attention and careful handling that you value with our express services . . ..”
Plaintiff’s Exh. 5 at 14.

4

Further explanation of the “Zones” is available at the DHL website, Rate Guide at 8, and is not
provided in the record.
12

The Rate Guide further addresses the subject of DHL’s “Fees,” Plaintiff’s Exh. 5
at 35, and begins with the statement that “[e]xcept where noted, fees are applicable to
all services – Domestic and International, Ground and Air Express – with the exception
of DHL SAME DAY, DHL Global Forwarding, DHL GlobalMailTM, and DHL Solutions.”
Plaintiff’s Exh. 5 at 35. This FEES section also contains a “Fuel Surcharge” sub-section
and under this heading includes the following text: “Air express shipments are
assessed a fuel surcharge which is indexed to the U.S. Gulf Coast kerosene-type jet
fuel index. Ground shipments are assessed a fuel surcharge which is indexed to the
U.S. Dep’t. of Energy’s on-highway diesel fuel index.” Plaintiff’s Exh. 5 at 35. A
substantially identical statement appears in a document entitled “DHL-Express-U.S.
Fees,” Plaintiff’s Exh. 6 at 2, and the “DHL 2008 Indexed Fuel Surcharge,” Plaintiff’s
Exh. 8 at 1, stipulated as among the documents forming the contract at issue. Joint
Fact Stipulation No. 6. In each of these documents, the jet fuel surcharge table is
labeled as “DHL Air Express Services” and the diesel fuel surcharge table as “DHL
Ground Delivery Service.” Id.
Both of Plaintiff’s shipments were, as noted, delivered to the Wachovia office
address located 18 miles from Plaintiff’s business location, Fact Stip. No. 15, Doc. No.
115, the next day, and “more likely than not . . . were transported solely by ground
transportation.” Joint Fact Stip. No. 14. See also Plaintiff’s Exh. 33 (Doc. No. 127),
regarding the April 10, 2008 shipment, at DHLEXPO11826-28, lines 381-87 (DHL’s
customer tracking detail, at Columns Y and Z, showing only Buffalo “stops,” for the
package and no DHL air hub stops); Deposition of Kevin Grupp (Plaintiff’s Exh. 30)

13

94:13-97:3; 97-9-99;15) (“Grupp Dep.”) 5 (explaining DHL’s practice of ground
transportation for local shipments); Plaintiff’s Exh. 33 (Doc. No. 127), regarding the April
14, 2018 shipment, at DHLEXPO11835-37, lines 513-519 (DHL’s customer tracking
detail, at Columns Y and Z, showing only Buffalo “stops” for the package, and no DHL
air hub stops); Grupp Dep. at 94:13-97:3; 97:9-98:12 (explaining DHL’s practice of
ground transportation of holding local shipments in the same DHL facility for next day
delivery by truck). Packages that required air transport as part of its delivery route were
trucked to the Buffalo airport for air shipment to a DHL air hub in Wilmington, Ohio;
ground shipments were sent to a DHL truck hub in Erie, Pennsylvania for further
transport. Grupp Deposition 94:13-23, 24; 95:1-6.
Plaintiff and DHL conducted business amicably for approximately 11 years. Joint
Deposition Exhibit (Deposition of Gary Preischel, Plaintiff’s Controller (“Preischel Dep.”),
(Doc. No. 119) 48:23-25; 49:1-5). DHL became Plaintiff’s exclusive provider during the
period 2005-2008, id., 52:12-22; 59:1-4, until August 2008, when Plaintiff ceased using
DHL after Plaintiff’s counsel informed Plaintiff that DHL’s jet fuel surcharges for
Plaintiff’s local shipments represented an overcharge to Plaintiff by Defendants. Id.
24:12-17; 73:16-23. Plaintiff gave DHL its exclusive shipping business, id., 59:3-4,
following DHL’s 2005 sales presentation in which Defendants proffered a better
shipping rate but without discussion of DHL’s fuel surcharge. Id. 62:25; 63:1-4;
Deposition of James Ball, Plaintiff’s Exh. 28 (Joint Exhibit) (“Ball Dep.”) 76:22-23 (“I just
always assumed [DHL charges] were the negotiated prices we talked about . . .“). Until
2008, when Plaintiff’s counsel advised Plaintiff of the alleged fuel surcharge overcharge,
5

Kevin Grupp, a former DHL independent contractor for cartage services who did not handle Plaintiff’s
packages, Grupp Dep. 6:22-24, is the plaintiff in a related False Claims Act case pending in this court
against DHL, United States ex rel. Grupp v. DHL Express (USA), Inc., et al., 12-CV-3829C.
14

Preischel Dep. 69:20-23, Plaintiff was aware DHL’s fuel surcharge was included in the
invoices for Plaintiff’s shipping services which Plaintiff paid, id. 69:15-16, but did not
know the details regarding the nature of the surcharge or its method of computation.
Id., 69:15-19. Plaintiff accepted Plaintiff’s counsel’s representation without making any
investigation regarding its accuracy. Id. 97:18-24. Plaintiff’s new carrier, UPS, also
charges Plaintiff a fuel surcharge, id. 98:8-10, however, Plaintiff is unaware of its details
or how UPS transports Plaintiff’s packages to local destinations. Id. 98:11-16.
DHL charges customers using DHL’s SAME DAY and NEXT DAY services a jet
fuel surcharge because most shipments in this DHL delivery service category travel by
air and it is impractical for DHL to allocate the amount of jet or diesel fuel used by DHL
to ship for any one of the 30 million packages transported monthly by DHL. Declaration
of Hank Gibson, DHL’s former Vice President of Pricing and Revenue Management
(“Gibson Decl.”) (Doc. No. 129) ¶ 18. In order to guarantee SAME DAY or NEXT DAY
deliveries at the stated time, i.e., 10:30 a.m., 12:00 p.m., and 3:00 p.m., the vast
majority of DHL’s shipping activity to U.S. domestic and foreign destinations require air
transportation. Deposition of Hank Gibson (Doc. No. 116) (“Gibson Dep.”) 105:21-25;
106:1. Charging a jet fuel surcharge on DHL’s delivery services guaranteeing same or
next day delivery (“expedited categories of service”) is consistent with industry practice,
including UPS and FedEx, DHL’s competitors. Gibson Decl. ¶¶ 15, 17; Gibson Dep.
(Doc. No. 116) 58:2-7 (“That’s how the industry works.”). The purpose of the fuel
surcharge was to provide relief to DHL from a rapid rise in the price of its jet fuel costs
which it incurred in the course of the bulk of its guaranteed expedited deliveries
requiring air transportation, Gibson Dep. 18:4-7; 81:1-23, and not as an increase to

15

DHL’s base delivery prices to improve DHL’s profits. Gibson Dep. 26:15-19; 27:11-22.
A review of DHL’s computerized tracking information indicates Plaintiff’s packages at
issue remained at a DHL Buffalo facility after pickup and were delivered to their Amherst
destination the next day. Deposition of Charles Boice, DHL’s Service Quality Manager
(Doc. No. 117) (“Boice Dep.”) 152:18-25; 158:20-25; 159:2-13.
Upon pick-up by a DHL employee, or cartage DHL reseller contractor like Mr.
Grupp, customer packages are coded with destination information into a DHL computer
or “scanner” along with the selected DHL “service level,” e.g., NEXT DAY 10:30 AM, 12
NOON, 3:00 PM, or NEXT DAY, that indicates the “appropriate route” which the DHL
employee then “write[s] on the package.” Grupp Dep. 41:15-25. DHL employees
reviewing the route information could override the preselected route for a package if it
appeared to be in error. Id. 47:20-25; 48:1. Packages with local destinations in the
Western New York area were not routed to outside DHL locations such as in
Wilmington, Ohio for delivery by air or a surface transportation hub such as in Erie,
Pennsylvania; instead, they were held overnight in the local DHL facility for next-day
delivery by truck. Id. 96:4-20. This procedure, according to Grupp, was employed by
DHL to deliver Plaintiff’s packages to their Amherst destination. Id. 98:1-11; 99:1-15.
When a package is picked up by DHL, the destination’s zip code is scanned into the
DHL computer which determines routing information for the package. Id. 41:15-25;
Boice Dep. 43:22-25, 44:2-7. The DHL package tracking system, FOCUS, does not
provide information from which it can be determined that a package was transported
solely by ground transportation. Boice Dep. 44:8-12.

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UPS’s Next Day Air® service guarantees deliveries between 8:00 a.m. and 4:30
p.m.; UPS Next Day Air® Freight provides guaranteed delivery by 12:00 p.m. and 5:00
p.m. for shipments exceeding 150 pounds. DHL Exh. C (Doc. No. 122) at 11
(DHLEXP069008). FedEx offers several delivery service options for packages and
envelopes: SameDay®, First Overnight®, Priority Overnight®, and Standard Overnight®,
with guaranteed times between 8:00 a.m. and 3:00 p.m. DHL Exh. D. (Doc. No. 121) at
DHLEXO69758. UPS imposes a jet fuel surcharge on its Next Day Air Early, Next Day
Air, Next Day Air Saver, 2nd Day Air A.M., 2nd Day Air, 3 Day Air Select, and
international deliveries, including, inter alia, pickup and residential delivery charges,
without qualification as to the mode of transportation used by UPS to ship the package
or envelope. DHL Exh. E (Doc. No. 121) at 2, 3. UPS also adds a diesel fuel Ground
Fuel Surcharge to its Ground Commercial, Ground Residential, Hundredweight Ground
Service, and Standweight delivery services, including, inter alia, pickup and delivery
charges. DHL Exh. E (Doc. No. 121) at 1, 3. UPS Ground Commercial, Residential
and Hundredweight services guarantee delivery to 50 states and Puerto Rico based on
a scheduled date. DHL Exh. C at 12. FedEx charges a jet fuel surcharge for its FedEx
Express® services; a diesel-fuel surcharge is added for FedEx Ground services. DHL
Exh. D at 10, n. 1, 116 (referring to FedEx Express Terms and Conditions for “these
delivery services,” viz. FedEx Same Day and “Overnight,” i.e., “next business day”
deliveries) see DHL Exh. D at 122 (FedEx Express Terms and Conditions cover FedEx
Same Day, FedEx First Overnight, Priority Overnight, and Standard Overnight delivery
services); DHL Exh. D at 11 (referring to calculating weight of a “FedEx Express®
package;” 12 (describing FedEx Ground® services as providing delivery within 1-5

17

business days); DHL Exh. F at 1 (jet fuel surcharge applies to “FedEx Express
services”; diesel fuel surcharge applied to “FedEx Ground services”).

DISCUSSION
Plaintiff’s breach of contract claim is predicated on Plaintiff’s contention that in
assessing the jet fuel surcharge on DHL’s Air Express delivery services, the contract
between the parties required that such surcharge would be applied only to deliveries
that used air transportation in whole or in part. Plaintiff’s Trial Br. at 1. Because
Plaintiff’s shipments subject to the Waybills relied solely on local truck transportation,
Plaintiff contends DHL fuel surcharges should have been based on the DHL diesel fuel
index which the contract documents associate with ground transportation. Id. (“Jet fuel
surcharges were to be applied to shipments going by air, and diesel fuel surcharges
were to be applied to shipments travelling solely by truck.”) (italics in original). 6 Plaintiff
acknowledges DHL’s defense is based on DHL’s position that “there was a blanket
surcharge for higher service levels, and that ‘Air Express’ really means [DHL’s] ‘Next
Day,’ [delivery service] regardless of how a shipment travelled.” Plaintiff’s Trial Br. at 2.
However, Plaintiff maintains “DHL’s assertion that a jet fuel surcharge does not apply to
jet fuel, but instead to [DHL’s] levels of service, is wrong.” Plaintiff’s Trial Br. at 2
(bracketed material added). 7
Plaintiff’s argument rests primarily on its construction of the contract documents
that because, according to DHL’s U.S. Fees Document, Plaintiff’s Exh. 6, DHL’s jet fuel
surcharge applies to DHL’s “Air Express shipments,” Plaintiff’s Trial Br. at 3, a term not

6
7

Unless indicated otherwise, all material in italics are in the original.
Unless indicated otherwise, all bracketed material is added.
18

defined in the DHL Waybills, Plaintiff’s Trial Br. at 4, DHL’s jet fuel surcharge should
have been applied to Plaintiff’s two shipments only if either was shipped at least in part
by air, which they were not; and, if not, then the proper surcharge was the diesel fuel
surcharge as the packages could be and, according to Plaintiff, Plaintiff’s Trial Br. at 6
(citing Joint Fact Stip. No. 14, DHL tracking records, Plaintiff’s Exh. 33, and deposition
testimony), were in fact transported solely by truck. Plaintiff’s Trial Br. at 5-6. Plaintiff
maintains that although the 2008 DHL Rate Guide lists DHL’s domestic delivery service
options, DHL did not “articulate” in the Rate Guide that the term “Air Express is a
‘collection’ of available service levels (i.e., contractual delivery times) . . . which . . .
always entitles it [DHL] to apply a jet fuel surcharge.” Plaintiff’s Trial Br. at 16. Plaintiff
also argues that DHL’s attempt to define the term Air Express by reference to the Rate
Guide’s description of DHL’s various categories of delivery services is defeated by the
presence of inconsistent uses of the Air Express term within the text of the Rate Guide.
Plaintiff’s Trial Br. at 17. For example, in comparing DHL’s “express services” to DHL
GROUND service, the Rate Guide does not refer to Air Express, Rate Guide at 4;
Plaintiff’s Trial Br. at 17; Plaintiff points to the same issue in the Rate Guide’s
explanation of DHL GROUND fees. Id. (referencing the Rate Guide at 14).
In short, Plaintiff argues that in the contract documents, particularly the Waybills
and the Rate Guide, DHL could have, but did not, directly state it would charge a jet fuel
surcharge on all “Next Day and Second Day services,” regardless of the manner of
shipping the package. Plaintiff’s Trial Br. at 16. Plaintiff further contends that because
DHL’s Fuel Surcharge Table, Plaintiff’s Exh. 8, states that both jet fuel and diesel fuel
surcharges apply to all DHL products including DHL Next Day shipments, without

19

distinction as to the category of DHL shipping service, the diesel fuel surcharge applies
when no air transportation using jet fuel was utilized. Plaintiff’s Trial Br. at 20-21.
Plaintiff also relies on DHL’s Ground Tariff, Plaintiff’s Exh. 13, a 2006 document, for the
proposition that DHL’s use of the term Ground refers to a mode of transportation, i.e.,
“ground transportation,” not a type of unexpedited delivery service. Plaintiff’s Trial Br. at
21-22. However, the Joint Fact Stipulation No. 6 does not include this document among
the four relevant documents forming the contract between the parties. Plaintiff therefore
asserts that “[u]nder the plain meaning of the form contract, DHL has agreed to charge
a ‘jet fuel’ surcharge for shipments transported in whole or in part, and a ‘diesel fuel’
surcharge for shipments transported solely by ground. Plaintiff’s Trial Br. at 13.
Should the court determine upon trial, consistent with Judge Curtin’s finding as a
matter of law in denying summary judgment, that the contract presented significant
ambiguity based on the absence of any explicit definition in the contract of the term Air
Express regarding the applicability of DHL’s jet fuel surcharge to Plaintiff’s invoices,
Plaintiff alternatively asserts that the contract terms, particularly the Air Express term,
are ambiguous requiring extrinsic evidence be evaluated to determine the contract’s
correct meaning. Plaintiff’s Trial Br. at 22 (“Even if DHL’s Contract is Ambiguous, . . .
[Plaintiff] Prevails on the Extrinsic Evidence.”). In support of Plaintiff’s alternative
contention, Plaintiff also relies on nine pieces of alleged extrinsic evidence, including a
DHL corporate history (Plaintiff’s Exh. 10), two DHL press releases (Plaintiff’s Exhs. 11,
26), a 2006 sales promotion letter to Plaintiff, DHL Same Day service marketing
material (Plaintiff’s Exh. 14), DHL’s “Historic Fuel Surcharge” Document (Plaintiff’s Exh.
15), DHL’s Cost Pass Through Documents (Plaintiff’s Exhs. 17-22), DHL Vice President

20

Hank Gibson’s Deposition Testimony (Plaintiff Exh. 31) and An Adverse Inference
Based On An Absence of DHL Drafting History re: Air Express and Jet Fuel Terms
(Plaintiff’s Exh. 27 at 5). Plaintiff’s Trial Br. at 22-32.
Plaintiff also contends that DHL may not rely upon a so-called course of
performance argument, viz. that Plaintiff’s failure to object to the jet fuel surcharges
during the 11-year period DHL provided delivery services to Plaintiff indicates Plaintiff’s
acceptance of DHL’s interpretation of the contract terms relating to the surcharge, DHL
Trial Br. at 13-15, as Plaintiff was unaware of how its packages were transported, air or
surface, and did not understand how DHL’s fuel surcharges were implemented.
Plaintiff’s Trial Br. at 30-31. Plaintiff further asserts that even if UPS or FedEx, DHL’s
chief competitors, employ jet fuel surcharge business policies similar to DHL’s at issue
in this case, such usage is irrelevant to Plaintiff’s case because what Plaintiff points to
are significant dissimilarities between DHL’s surcharge practices and those of its chief
competitors and therefore does not support DHL’s assertion that its fuel surcharges
were consistent with industry practice. Plaintiff’s Trial Br. at 31-32. Finally, Plaintiff
urges the court apply the contra proferentem doctrine to DHL’s form contracts because
the alleged ambiguity, should the court so determine, regarding the scope and meaning
of the terms of the contract at issue, was created by DHL. Plaintiff’s Trial Br. at 33-44
(“If the contract documents themselves and the litany of extrinsic evidence are not
enough, the Court may apply contra proferentum to construe the ambiguity in DHL’s . .
. form contract against DHL.”) (citing cases).
For its opposition, DHL contends that the text and interrelationship of the
documents forming each shipping contract between the parties demonstrate that where

21

a customer like Plaintiff selected one of DHL’s NEXT DAY shipment service options, as
did Plaintiff in this case, a jet fuel surcharge would be added to DHL’s standard shipping
charge applicable to the selected shipping option such as DHL NEXT DAY 3:00 PM, the
service option selected by Plaintiff for the two shipments at issue, regardless of the
specific mode, air or surface, of transport used by DHL to effect delivery, and does not
concede that any relevant terms of the contract documents are ambiguous. DHL Trial
Br. at 1 (“the documents that make up the contract between . . . [the parties] indicate
that Next Day shipments will be assessed a jet fuel surcharge”); id. at 2 (“DHL charged
– and customers [including Plaintiff] agreed to pay – different fuel surcharges based on
the type of [shipping] product the customer purchased.”). Like Plaintiff, DHL relies on
the terms of the 2008 Standard Rate Guide, the Waybills, DHL’s U.S. Fees Document,
and the DHL 2008 Indexed Fuel Surcharge Document as provided in Stipulated Facts
No. 6. DHL Trial Br. at 3.
DHL relies particularly on the express terms of the Standard Rate Guide which
advise customers that “Air Express shipments” are surcharged based on DHL’s jet fuel
index, DHL Trial Br. at 4 (citing Plaintiff’s Exh. 5 at 35) while DHL’s GROUND shipments
are surcharged based on DHL’s diesel fuel index, id. (citing Plaintiff’s Exh. 5 at 35).
DHL stresses that as used in the DHL Fuel Surcharge Document (Plaintiff’s Exh. 8 at 1),
the jet fuel surcharge table is titled “DHL Air Express services,” the word “services”
being in the plural thereby referencing “DHL’s Next Day and 2nd Day services.” DHL
Trial Br. at 5 (citing Plaintiff’s Exh. 8 at 1 and Gibson Decl. ¶ 18 (averring that the jet fuel
surcharge applies to DHL’s “expedited categories of service [i.e., NEXT DAY, 2ND DAY]”
because this practice was customary in the package shipping industry, “most” DHL

22

shipments were transported by air, and that it would be “impossible” for DHL to
apportion a diesel and jet fuel surcharge between the surface and air transport
components associated with any of the 30 million packages DHL shipped monthly)).
DHL also relies on the text of the two Waybills Plaintiff employed in selecting DHL’s
NEXT DAY 3:00 PM service for the two packages at issue which reserved to DHL the
right to ship a customer’s package however DHL determined. DHL Trial Br. at 6 (citing
Stipulated Facts No. 6(a); DHL’s Exhs. H at 2; J at 2 (“‘Shipment’ means all documents
or parcels that travel under one waybill and may be carried by any means DHL
chooses, including air, road or any other carrier.”)). Thus, DHL maintains “[n]othing in
the waybills suggest that if DHL transported an Air Express package by truck, it could
only assess a diesel fuel surcharge,” DHL Trial Br. at 10; DHL Opposition Br. at 1 (“The
contract does not say that DHL will assess Jim Ball fuel surcharges based on (or to
what extent) packages moved by plane or truck”), and that as Plaintiff has not
“identifie[d] a specific provision of the parties’ contract DHL alleged breached,” DHL
Opposition Br., Plaintiff has failed to “meet its burden of proof.” Id.
DHL further argues that its construction of the contract terms at issue is
consistent with DHL’s intent to structure its pricing based on practical business
considerations, DHL Trial Br. at 11-13, the 11-year course of performance between the
parties during which Plaintiff, as a “sophisticated business entity,” DHL’s Trial Br. at 14,
“never once challenged DHL’s fuel surcharges,” id. at 13-14, and that DHL’s jet fuel
surcharge policy was consistent with industry practice, id. at 15-16, under which both
UPS and FedEx tied a jet fuel surcharge to expedited shipping services denominated,
like DHL, by the term “Air,” and a diesel fuel surcharge linked to a substantially less

23

speedy and less expensive guaranteed delivery service referred to by UPS and FedEx
as a Ground option. DHL Opposition Br. at 15-16 n. 5-6 (citing DHL Exh. C (UPS Rate
and Service Guide) at 11-12; DHL Exh. D (FedEx Service Guide) at 12.
The principles guiding the court’s analysis of the parties’ competing constructions
of the relevant contract documents are well-established. Like a jury trial, in a non-jury
trial, the plaintiff must establish its claim by a preponderance of evidence. See
Rodriguez v. Home Depot U.S.A., Inc., 2014 WL 1757513, at *8 (E.D.N.Y. Apr. 30,
2014) (dismissing personal injury claim after bench trial where plaintiff failed to sustain
burden of proving negligence by a preponderance of the credible evidence (citing Ward
v. Cunard Line, Ltd., 1986 WL 11197, at *6 (S.D.N.Y. Sept. 26, 1986) (same))). In
assessing the correct meaning of a contract comprised of more than one document,
“[u]nder New York law, all writings forming part of a single transaction are to be read
together.” This Is Me, Inc. v. Taylor, 157 F.3d 139, 143 (2d Cir. 1998) (citing Gordon v.
Vincent Youmans, Inc., 358 F.2d 261, 263 (2d Cir. 1965) (“Gordon”) (“[I]t is good sense
and good law that these closely integrated and nearly contemporaneous documents be
construed together.” (internal quotation marks omitted) (quoting Kurz v. United States,
254 F.2d 811, 812 (2d Cir. 1958) (per curiam))); see also F.H. Krear & Co. v. Nineteen
Named Trustees, 810 F.2d 1250, 1258 (2d Cir. 1987) (citing Gordon for the proposition
that under New York law all writings forming a single transaction must be read together
); Nau v. Vulcan Rail & Construction Co., 36 N.E.2d 106, 110 (N.Y. 1941) (finding that
agreements at issue “were executed at substantially the same time, related to the same
subject-matter, were contemporaneous writings and must be read together as one.”). 8
The parties stipulate that DHL’s Waybills, U.S. Fees Document, 2008 Indexed Fuel
8

As the parties cite to New York law, the court finds they have stipulated to its application.
24

Surcharge Document, and 2008 Standard Rate Guide form the contract between them
and the court is therefore required to construe the relevant provisions of each
document. However, as explained, Discussion, supra, at 17-23, the parties contest the
meaning of terms “Air” and “Ground” as used in the contract documents. Particularly,
Plaintiff argues that the term “Air” means transportation by airplane and Ground means
transportation by truck. Plaintiff’s Trial Br. at 1. Thus, according to Plaintiff, where DHL
ships a package solely by truck involving no use of jet fuel but only diesel fuel, DHL’s
diesel fuel surcharge should apply to the charge for the shipment. Plaintiff’s Trial Br. at
5 (if package not transported “by air” . . . DHL’s contract required it to charge the lower
diesel fuel surcharge.”) DHL on the other hand argues that the terms Air Express and
Ground refer, respectively, to DHL’s expedited shipment services, e.g., NEXT DAY 3:00
PM, and DHL’s GROUND service providing a 1-6 day delivery guarantee thus requiring
a jet fuel surcharge be applied to the NEXT DAY expedited service options designated
on the Waybills and the diesel fuel surcharge be applied to the GROUND service, one
capable of performance solely or primarily by surface transportation but with a
substantially longer and slower period of performance in contrast to the DHL expedited,
or NEXT DAY, services. DHL Trial Br. at 1-2.
Under New York law, an “interpretation that ‘gives a reasonable and effective
meaning to all terms of a contract is generally preferred to one that leaves a part
unreasonable or of no effect.’” Galli v. Metz, 973 F.2d 145, 149 (2d Cir. 1992) (quoting
Rothenberg v. Lincoln Farm Camp, Inc., 755 F.2d 1017, 1019 (2d Cir. 1985)). See also
ISC Holding AG v. Nobel Biocare Investments N.V., 351 Fed.Appx. 480, 482 (2d Cir.
Oct. 27, 2009) (construing, under New York law, “contract’s terms, in light of the

25

apparent purpose of the contract as a whole . . . .” (quoting 11 Samuel Williston &
Richard A. Lord, A TREATISE ON THE LAW OF CONTRACTS § 30:7 (4th ed. 1999), and citing
Record Club of Am. Inc. v. United Artists Records, Inc., 890 F.2d 1264, 1271 (2d Cir.
1989))), Eastman Kodak Co. v. Bayer Corp., 576 F.Supp.2d 548, 552 (S.D.N.Y. 2008)
(court required to interpret contract in a manner “that makes sense in the context of the
entire agreement”). Further, where, as here, a party asserts the presence of an
ambiguous terms, as does Plaintiff, Trial Br. at 22 (“Even if DHL’s Contract is
Ambiguous, Jim Ball prevails on the Extrinsic Evidence”), “‘the entire contract must be
considered and, as between possible interpretations of an ambiguous term, that will be
chosen which best accords with the sense of the remainder of the contract.’” Israel v.
Chabra, 537 F.3d 86, 99 (2d Cir. 2008) (quoting Rentways , Inc. v. O’Neill Milk & Cream
Co., 126 N.E.2d 271, 273 (N.Y. 1955)). Where the contract term at issue is ambiguous,
a court may rely on extrinsic evidence to aid in ascertaining the parties’ intent. In re
Lehman Bros. Holdings Inc., 761 F.3d 303, 309 (2d Cir. 2014) (“Where contractual
language is ambiguous, a court may consider extrinsic evidence of the parties’ intent.”
(citing Roberts v. Consol. Rail Corp., 893 F.2d 21, 24 (2d Cir. 1989))). While Judge
Curtin determined for summary judgment purposes that the disputed term Air Express
as used in the DHL contract was sufficiently ambiguous, see Walk-In Medical Centers,
Inc. v. Breuer Capital Corp., 818 F.2d 260, 263 (2d Cir. 1987) (“The determination of
whether a contract term is ambiguous is a threshold question of law for the court”), to
require trial, such finding does not preclude the court’s further consideration of that
issue for purposes of the instant non-jury trial on Plaintiff’s breach of contract claim.
See Davidson v. Scully, 173 F.3d 843, 1999 WL 220093, at *1 (2d Cir. 1999) (“law of

26

case doctrine is discretionary and does not limit a court’s power to reconsider its own
decisions prior to final judgment.” (citing Sagendorf-Teal v. County of Rensselaer, 100
F.3d 270, 277 (2d Cir. 1996)). Moreover, it is basic that as the purpose of summary
judgment is to identify issues that require trial, such identification is, in itself, not
determinative of the issues so identified. See SSP Capital Partners, LLC v. Mandala,
LLC, 715 F.Supp.2d 443, 452 (S.D.N.Y. 2009) (citing Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 597 (1986) (citing Advisory Committee Note to Rule
56 and noting that the purpose of summary judgment is to “pierce the pleadings and to
assess the proof in order to see whether there is a genuine need for trial”)).
Accordingly, as the parties contend at the outset the contract is not ambiguous, the
court first addresses whether the disputed term in the instant contract is ambiguous
requiring reliance on extrinsic evidence.
DHL’s 2008 Indexed Fuel Surcharge is intended to buffer DHL against the
adverse cost impact caused by “rapid rises in the cost of fuel,” Gibson Dep., Plaintiff’s
Exh. 31, 15:6-10, a “highly variable” component of DHL’s costs. Id. 17:5-6 (“Our fuel
costs is one of our main cost [sic] of serving customers.”). The DHL fuel surcharge
operates not as a device to pass through the “total cost of fuel,” but to “capture an
unexpected variation in [the] underlying fuel costs.” Id. 17:11-22. To provide for an
“equitable sharing” with its customers, Gibson Dep. 32:4-5, of unexpected “increases” or
“decreases” in the price of fuel, id. 18:5-7, the DHL Jet Fuel Surcharge Table for “DHL
Air Express Services” specifies a base surcharge of 10% with a corresponding price per
gallon of jet fuel of $1.75 - $1.78. Plaintiff’s Exh. 8 at 1. The DHL surcharge table
increases by .5% for each $.04 increase in the per gallon price of jet fuel, to a maximum

27

of 23.50% at $2.82-$2.86 per gallon of jet fuel price. Id. The DHL surcharge table for
DHL GROUND Delivery Service provides a surcharge rate of 4.5% corresponding to a
price per gallon for diesel fuel of $2.78-$2.86. Plaintiff’s Exh. 8 at 1. The surcharge
increases by two to three tenths of a percentage point as the price per gallon of diesel
fuel increases by $.08 per gallon to a maximum of 5.8% at a price per gallon of $3.18 $3.26. Id. Thus, the applicable surcharge percentage to be calculated and added to a
customer’s invoice for DHL NEXT DAY or 2ND DAY services is substantially higher than
the GROUND service surcharges. No explanation as to how the increments in the
stated price per gallon of jet and diesel fuel nor the related surcharge percentages as
they appear in the DHL Air Express services and Ground service surcharge tables were
determined is provided in the record.
DHL’s jet fuel surcharges applied to DHL’s Next Day services which DHL
referred to as its “Air Express or expedited services.” Gibson Dep. 53:15-17; 54:10-15.
While some of DHL’s Next Day services could have been transported solely by ground
forms of transportation, some if not most are transported by both air and ground.
Gibson Dep. 55:17-25; Boice Decl. ¶ 9. DHL’s Air Express product represented a
guaranteed shorter delivery time than its GROUND service and thus the GROUND
service was a “much cheaper” way to send a package, Gibson Dep. 81:20-23, than the
available “faster” Next Day services. Gibson Dep. 82:9-12. Only a small percentage of
DHL deliveries involved “solely ground transportation,” Gibson Dep. 105:14-17; the
“vast majority” are by plane. Id., 105:21-25; 106:1. All of DHL’s deliveries were either
solely by ground or a combination of both air and ground transportation. Gibson Dep.
56:1-4. DHL monthly shipped 30 million packages domestically. Gibson Decl. 18.

28

Some of DHL’s shipments were transported by air for cost reasons instead of being
transported by truck despite the close proximity of the points of pickup and delivery.
Boice Decl. ¶ 15; Boice Dep. 44:8-12 (there is no “way you can go into the system and
look at shipments and determine whether they travelled solely by ground.”) Although
DHL’s record-keeping system provided information on a package’s destination, date of
travel and the “pace at which it travelled between locations,” it did not record information
regarding whether it “went by airplane or truck.” Boice Decl. ¶ 12. DHL’s computerized
records indicate that “most” of Plaintiff’s “packages travelled through one of DHL’s air
hubs” or through a commercial airport. Boice Decl. ¶ 13.
Plaintiff’s basic contention that the contract documents require DHL apply its jet
fuel charge only where a customer’s package was actually shipped wholly or partially by
air and not based on the customer’s selection of one of DHL’s expedited delivery
service options, in this case DHL’s NEXT DAY 3:00 PM service as stated in the 2008
Rate Guide, Plaintiff’s Exh. 5 at 5, is defeated by a fair reading of the relevant terms of
the Rate Guide and the DHL 2008 Indexed Fuel Surcharge document, Plaintiff’s Exh. 8
at 1. Specifically, the Rate Guide offers the customer a variety of “Domestic Services”
which include “Domestic offerings” of “time and day definite . . . services across the
U.S.” Plaintiff’s Exh. 5 at 4. Immediately following these representations, the Rate
Guide lists these expedited services as “DHL SAME DAY,” “DHL NEXT DAY 10:30
AM,” “DHL NEXT DAY 12:00 PM,” “DHL NEXT DAY 3:00 PM,” and “DHL 2ND DAY.” Id.
The prices or rates for these expedited services are stated in the Rate Guide, Plaintiff’s
Exh. 5 at 9 (“Domestic Rates range from a low of $14.80 to $594.10 for the DHL NEXT
DAY 10:30 AM and DHL NEXT DAY 12:00 PM service based on destination and

29

package weight.”). Id. For DHL NEXT DAY 3:00 PM, the service used by Plaintiff for
the two shipments at issue, the rates stated at $12.80 for a letter and went up to
$558.40. As noted, Facts, supra, at 11-12, Plaintiff had negotiated a base service of
$5.63 for its shipments designating DHL NEXT DAY 3:00 PM service on the Waybills.
In addition to its expedited – SAME DAY, NEXT DAY and 2ND DAY services ̶ the Rate
Guide also offered “DHL GROUND” service which guaranteed “delivery through the
U.S. (48 contiguous states) in 1-6 business days.” Plaintiff’s Exh. 5 at 1. In its
description of this service option, DHL stated “We guarantee your packages receive the
same attention and careful handling that you value with our Air Express services,
including tracking and delivery details.” Id.
As further noted, Facts, supra at 12, DHL prices for these services appear in the
“Fees” section of the Rate Guide, Plaintiff’s Exh. 5 at 35. In this section, DHL states
that its “fees are applicable to all services – Domestic and International, GROUND and
Air Express . . ..” Id. As relevant, the Fees section, under the heading “Fuel
Surcharge” states: “Air Express shipments are assessed a fuel surcharge which is
indexed to the U.S. Gulf Coast kerosene-type jet fuel index. Ground shipments are
assessed a fuel surcharge which is indexed to the U.S. Dept. of Energy’s on-highway
diesel fuel index. For details go to Fuel Surcharge Table and see Current Indexed Fuel
Surcharge.” The DHL 2008 Indexed Fuel Surcharge document, Plaintiff’s Exh. 8 at 1,
stipulated as one of the contract documents, Joint Stip. No. 6(c), reproduces two fuel
surcharge tables. Id. One is titled “DHL Air Express Services.” the other is titled “DHL
Ground Delivery Service.” Id. Each table reflects DHL’s fuel surcharge percentages
related to the incremental price per gallon of, respectively, jet fuel and diesel fuel, as

30

explained in the Fees section. The DHL U.S. Fees Document, Plaintiff’s Exh. 6 at 2,
like the Rate Guide’s Fees section, includes a “Fuel Surcharge” heading. Under this
heading, DHL states “Air Express shipments are assessed a fuel surcharge which is
indexed to the USGC kerosene-type jet fuel index. Ground shipments are assessed a
fuel surcharge which is indexed to the U.S. Dept. of Energy’s on-highway diesel fuel
index.” Thus, the question of contract construction is whether the term Air Express as
used in the Fees section of the Rate Guide, Plaintiff’s Exh. 5 at 35, the DHL U.S. Fees
document, Plaintiff’s Exh. 6 at 2, and the DHL 2008 Indexed Fuel Surcharge document,
Plaintiff’s Exh. 8 at 1, refers to the DHL NEXT DAY expedited services described in the
Rate Guide, Plaintiff’s Exh. 5 at 4, providing the basis for the fuel surcharge amount
invoiced to Plaintiff, or any such expedited services offered by DHL regardless of how –
by airplane or truck or motor vehicle – a customer’s packages were actually transported
by DHL to effect delivery. Both a careful and common sense reading of the text and
interrelationship of the relevant contract documents demonstrates that it does, for
several reasons.
First, the Rate Guide’s description of DHL services in describing DHL’s domestic
services is unambiguous in its definition of DHL’s SAME DAY, NEXT DAY, 2nd DAY and
GROUND delivery options as “services,” not modes of transportation, i.e., airplane or
truck. Second, in describing the DHL “GROUND service,” the Rate Guide contrasts this
delivery service option as providing a longer period of guaranteed delivery but with
quality assurances similar to that applicable to DHL’s “Air Express services”. Rate
Guide at 4. In the context of the entire text and structure of this portion of the Rate
Guide describing in detail the scope of each DHL delivery service available to the

31

public, including the four Next Day services and the 2nd Day service, in contrast to the
six-day slower and much cheaper GROUND service option the term “Air Express
services” can only be read and understood to refer to these DHL expedited services. Id.
The presence of a pluralized term “services” reasonably and logically refers to the Next
Day, expedited, service options; the singular DHL GROUND therefore refers only to the
less expensive and slower delivery service option. Otherwise, the reference to term Air
Express is left without meaning, contrary to the required principle of contract
construction that such a result be avoided. See Galli, 973 F.2d at 149. By the same
token, the introductory text to this section of the Rate Guide directly states that all of the
described DHL delivery options – SAME DAY, NEXT DAY, 2ND DAY & GROUND ̶ are
“services,” not particularized modes or means of transportation, viz., airplane or truck,
by which these services will be provided by DHL. Plaintiff argues that because the DHL
Indexed Fuel Surcharge Document (Plaintiff’s Exh. 8) states that both the jet fuel and
diesel fuel surcharge apply to all DHL services, except for certain exceptions not
applicable, without regard to any particular service category, that the diesel fuel
surcharge must apply when only truck transports of a package were used. Plaintiff’s
Trial Br. at 21. However, Plaintiff’s assertion requires that the term “Air Express
services” as used in this document refers to services in the plural and thus logically
references the several expedited service categories described in the Rate Guide, Rate
Guide at 4, and that the diesel fuel surcharge relates only to the GROUND service
option. Plaintiff’s contention therefore finds no support in the actual text of the
document on which it is based.

32

Third, the text of the 2008 Indexed Fuel Surcharge is consistent with this
construction of the relevant text of the Rate Guide. For example, the “Jet Fuel
Surcharge Table” states it applied to “DHL Air Express Services.” Plaintiff’s Exh. 8 at 1.
Contrary-wise, the “Diesel Fuel Surcharge Table” states it applies to the “DHL Ground
Delivery Service_.” Id. That the Air Express jet fuel surcharge is by its terms applicable
to DHL’s Air Express Services, plural, reasonably and logically means it applies to
multiple DHL delivery services, not, in contrast to diesel fuel surcharges applicable to
the “DHL Ground Delivery Service,” a delivery option referred to by the Indexed Fuel
Surcharge document in the singular and by the Rate Guide. Rate Guide at 4. Thus, the
DHL Jet Fuel Surcharge Table’s use of the term Air Express refers to the same
categories of expedited DHL domestic delivery service options detailed by the Rate
Guide, including NEXT DAY 3:00 PM, described in detail by the Rate Guide and the
option selected by Plaintiff in filling out the Waybills, thereby requiring the application of
the DHL Jet Fuel Surcharge Table to Plaintiff’s invoices regardless of the actual mode
of transportation used by DHL in effecting delivery of the packages, a decision explicitly
reserved to DHL by the Waybills’ Terms and Conditions. If, as Plaintiff contends, the
term “Air Express Services” as used in the Jet Fuel Surcharge Table does not refer to
DHL’s Same Day, Next Day and 2nd Day services, one is left to ask: to what does it
refer? Plaintiff’s argument raises, but leaves this relevant question of contract
construction unanswered. This same question – and inherent refutation ̶ applies
equally to Plaintiff’s contention, Plaintiff’s Trial Br. at 16, that the phrase in the Rate
Guide’s description of DHL’s GROUND option in comparison to DHL’s “Air Express
services” does not sufficiently reference the DHL expedited services described in that

33

section. Although not capitalized, there can be no reasonable doubt as to what the
word “services” in this section refers – the only other “services” described in this section
are the DHL expedited services.
Plaintiff’s attempt to parse the DHL contract’s terms “services” and “shipments,”
Plaintiff’s Opposition Br. at 2, in support of its contention that DHL’s jet fuel surcharge
relates solely to a mode of “shipment” via airplane and not a category of service to
which the DHL jet fuel surcharge is applicable, id. citing the Rate Guide at 35, is
similarly unavailing. Specifically, Plaintiff contends the word “shipment” as it appears in
the phrase “Air Express shipment” as used by DHL’s Standard Rate Guide, Plaintiff’s
Exh. 5 at 35, should be construed as referring to “something transported from one place
to another for a fee.” Plaintiff’s Opposition Br. at 2. Plaintiff’s analysis, again, runs afoul
of the general rule of contract construction, applicable to this case under New York law,
that all terms of the contract be read and construed together so as to give meaningful
effect to the contract as a whole. ISC Holding AG, 351 Fed.Appx. at 482. Specifically,
Plaintiff’s argument ignores that the introduction to the Fees section of the DHL Rate
Guide begins with the statement: “Except where noted, [DHL] fees are applicable to
all services – Domestic and International, Ground and Air Express . . .” thereby
establishing that in regard to DHL “Fees,” as provided for in the Rate Guide, Plaintiff’s
Exh. 5 at 35, 9 the term Air Express refers to a DHL “service,” not a mode of delivery or
“shipment” via air or motor vehicle. The Rate Guide’s Fuel Surcharge provision,
Plaintiff’s Exh. 5 at 35, states that “Air Express shipments are assessed a fuel
surcharge which is indexed to the U.S. Gulf Coast kerosene-type jet fuel index,” and
that “Ground shipments are assessed a fuel surcharge which is indexed to the U.S.
9

Bolding in original; underlining and bracketed material added.
34

Dept. of Energy’s on-highway diesel fuel index.” To determine whether Plaintiff’s
contention, Plaintiff’s Opposition Br. at 2, that the term “shipment” as used in this Rate
Guide provision imposing fuel surcharges refers to a mode of transportation, i.e., by air
or surface transportation, rather than a category of DHL’s delivery services, e.g., NEXT
DAY or DHL GROUND, is correct, it is therefore necessary as a matter of proper
contract construction, see This Is Me, Inc., 157 F.3d at 143 (New York law “all writings
forming part of a single transaction are to be read together”), to read this surcharge fee
provision in relation to the Rate Guide’s general description of DHL SERVICES,
Plaintiff’s Exh. 5 at 5. In this section of the Rate Guide the text describing DHL’s
DOMESTIC delivery services (“Our full suite of Domestic offerings includes time and
day-definite and mail services across the U.S.”), the Rate Guide, Plaintiff’s Exh. 5 at 4,
distinguishes between DHL SAME DAY, NEXT DAY, and 2ND DAY delivery services,
and DHL GROUND delivery services. Id. As noted, Discussion, supra, at 28-29, in
contrast to DHL’s description of DHL’s GROUND delivery service, which provides
delivery within “1-6 business days,” DHL’s SAME DAY, NEXT DAY, and 2ND DAY
services guarantee “delivery” within significantly more limited time periods, viz, two days
or less, after DHL receives the customer’s package. Plaintiff’s Exh. 5 at 4. More
particularly, as the DHL SERVICES description with respect to DHL SAME DAY service
states: “Every shipment is tracked every step of the way,” id.; with respect to DHL
NEXT DAY 10:30 AM service the DHL SERVICES description states: “Just prepare
your overnight shipment and know you are shipping with the logistics company that
meets your needs and expectations.” Id. Similarly, DHL NEXT DAY 12:00 PM service is
promoted as a “smarter way to ship,” and, as to DHL’s NEXT DAY 3:00 PM service, the

35

specific DHL delivery service option upon which Plaintiff’s claims are based, the Rate
Guide represents this service option as a “solid and reliable choice for time-sensitive
shipments.” Id. DHL’s Terms and Conditions also define “shipment” as “all documents
or parcels that travel under one Waybill . . ..” Plaintiff’s Exhs. H at 2; J at 2. Although
the terms “Air Express shipments” and “Ground shipments” appear in the Fuel
Surcharge section of the Rate Guide, Plaintiff’s Exh. 5 at 35, and are used in that
section of the Rate Guide without the word “service” as a modifier, these terms – Air
Express and Ground ̶ also appear in the introduction to the FEES section of the Rate
Guide as included in “all” DHL “services,” Plaintiff’s Exh. 5 at 35 (“Except where noted
fees are applicable to all services . . ..”), thus supporting that when the terms Air
Express and Ground appear in the Fuel Surcharge section of the Rate Guide, Plaintiff’s
Exh. 5 at 35, they are the same DHL delivery services referred to as AIR EXPRESS and
GROUND services as those terms appear elsewhere in the Rate Guide. Thus, given
the text and interrelationship of the relevant provisions of the Rate Guide, the court finds
that in DHL’s Rate Guide, one of the key contract documents in this case, the term
“shipment” reasonably refers, depending on the specific context in which the term
appears, either to the package accepted by DHL for delivery under a Waybill
designating one of DHL’s delivery service options, Rate Guide at 4 (“Just prepare your
overnight shipment . . ..”); Waybills, Plaintiff’s Exhs. H at 2; J at 2, to be shipped under
one of the various categories of DHL delivery service, e.g., NEXT DAY 3:00 PM,
Plaintiff’s Exh. 5 at 4, or GROUND, id., the specific DHL delivery service category, that
a customer may designate on a DHL waybill for a particular shipment, and does not

36

denote a specific mode, airplane or truck, of transporting the package or “shipment,” as
Plaintiff argues.
This conclusion is reinforced by the fact that the Rate Guide’s description of DHL
GROUND defines this delivery service option by comparing it to DHL’s “Air Express
services,” Plaintiff’s Exh. 5 at 4, and by the complete absence in this section of the
Rate Guide of any reference associating a specific mode of transportation – airplane or
motor vehicle ̶ with either Air Express or DHL GROUND delivery services. As the
Rate Guide’s description of DHL GROUND further states: “We [DHL] guarantee your
[customer] packages receive the same attention and careful handling that you value
with our Air Express services, including tracking and delivery details.” Plaintiff’s Exh. 5
at 4. Although, as DHL’s former Vice-President of Pricing and Revenue Management,
Hank Gibson, explained, because only a “fairly small” percentage of all DHL deliveries
entail only truck transportation and the “vast majority” of DHL’s shipping commitments
are long distance in nature and thus likely to require air transportation, Gibson Dep.
105:21-25; 106:1; 112:19-20, nevertheless, the fact that in the Rate Guide a specific
mode of shipment, air or truck, is not contractually tied to a specific DHL delivery service
option – NEXT DAY or GROUND ̶ in whole or in part, is consistent with DHL’s
reservation of unfettered discretion to select how – air or surface – a particular shipment
is to be physically transported. DHL Terms and Conditions, DHL Exh. H at 2; DHL Exh.
J at 2. Therefore, the court finds that when the Rate Guide’s Fees provision, Plaintiff’s
Exh. 5 at 35, explaining that DHL Air Express and DHL GROUND “shipments” accrue a
jet and diesel fuel surcharge, respectively, the term “shipments” denotes either the
package to be shipped or the type of DHL service, e.g., NEXT DAY or GROUND, as

37

selected by the customer but not a specific mode of transportation, i.e., by airplane or
truck, by which the shipment or delivery will be made. 10 Nor is there any merit in
Plaintiff’s assertion that by stating in its brief on appeal in the related False Claims Act
litigation brought by Mr. Grupp, Plaintiff’s Opposition Br. at 1-2 (citing Exh. A, Defendant
DHL’s Brief on Appeal at 44, 46 and 48), that in DHL’s contract documents the term Air
Express was “not explicitly defined,” DHL admitted “there is no Air Express category of
services set forth in DHL’s contract,” thus supporting Plaintiff’s construction. Id. at 1.
As discussed, Discussion, supra, at 28-33, the actual text of the relevant section of the
Rate Guide describing DHL delivery services, particularly its NEXT DAY expedited
services and its unexpedited GROUND services, shows that the term Air Express as it
appears in that section can only be reasonably understood to refer to DHL’s expedited
services categories and not a particular mode or form of transportation. This is also
made abundantly clear by the Rate Guide’ s Fees section and DHL Fuel Surcharge
Index, both of which refer specifically to DHL’s Air Express services. Thus, although
DHL has acknowledged that the Rate Guide’s description of its expedited services did
not “explicitly” include the term Air Express, such acknowledgment does not support
Plaintiff’s main contention that the Air Express term used as the basis for DHL’s jet fuel
surcharge is undefined. Thus, Plaintiff’s cabined construction of the Rate Guide’s

10

Because the court finds that a proper construction of contract documents themselves establish
unambiguously that DHL Air Express services refer to DHL’s Next Day expedited services, thereby
permitting DHL to add jet fuel surcharges to Plaintiff’s invoices, it is unnecessary to rely on DHL’s Exh. A
(Doc. No. 121) (“Exhibit A”), a March 8, 2008 Memorandum explaining DHL’s default weight polices,
indicating that DHL’s term Air Express refers to DHL’s Next Day and Second Day services. Gibson Decl.
¶ 2; DHL Trial Br. at 12. Plaintiff contests the admissibility of Exh. A on various grounds such as a lack of
proper foundation in violation of Fed.R.Evid. 602 or as inadmissible evidence of subjective intent.
Plaintiff’s Opposition Br. at 2-3 (citing caselaw). As the court does not rely on this document, it is
unnecessary to address the merits of Plaintiff’s objections.
38

provisions describing DHL’s various services and related fees on this issue is supported
by neither the text nor the structure of the Rate Guide’s relevant provisions. 11
This conclusion is also more consistent with DHL’s business purpose to
implement a system for partial recoupment of its rising fuel costs, particularly, because
air transport is the bulk of its delivery business, jet fuel costs, in the absence of which
DHL, as well as its competitors who also impose a jet and diesel fuel surcharge on their
respective expedited delivery services, would be forced to incur potentially crippling
losses. More specifically, if Plaintiff’s contention that DHL’s fuel surcharge scheme by
the terms of the contract attached not to Air Express service options, DHL’s trade name
for its expedited services, but, as Plaintiff argues, to the particular mode of shipment,
air, i.e., by airplane or ground, i.e., truck, actually used by DHL for specific deliveries like
Plaintiff’s, the question, unaddressed by Plaintiff, is how the surcharge would be applied
to the delivery charges invoiced to the customer. To accept Plaintiff’s construction that
the particular surcharge, jet or diesel fuel, applies to the mode of transportation,
particularly the fuel cost component, actually used by DHL for a particular package,
rather than to the price of the service category selected, e.g., NEXT DAY or GROUND,
would require both a tracking of the particular shipment package, a logistical
impossibility for DHL, Gibson Decl. ¶ 8, and, because delivery of DHL’s package
shipments typically require both surface and air transportation, an allocation of the costs
of both the ground and air transportation actually used to which the applicable
surcharge percentage, as set forth in DHL’s jet fuel and diesel fuel surcharge indexes,

11

Plaintiff also relied on DHL’s Ground Tariff, Plaintiff’s Exh. 13, which links the term Ground to “ground
transportation.” However, as this document is not among the contract documents stipulated by the
parties as forming the contract, see Joint Fact Stipulation No. 6, the court does not consider it.
39

could be then applied and added to the customer’s invoice, would also create a
commercial impossibility for DHL given its system of doing business. Gibson Decl. ¶ 8.
DHL maintains such a process would be impractical as it would require difficult
calculations of distances, the type of fuel used for the ground and air transport parts of
the routes used for each of the 30 million packages shipped monthly by DHL, DHL Trial
Br. at 5, 17; Gibson Decl. ¶ 18; DHL’s Opposition Br. at 4 (citing In re Lipper Holdings,
LLC, 766 N.Y.S.2d 561, 562 (1st Dept. 2003) (courts should refrain from contract
interpretation that would be “absurd, commercially unreasonable, or contrary to the
reasonable expectations of the parties”)). Such additional expense, would constitute
commercial impracticality, Gibson Decl. ¶ 18 (applying fuel surcharge based on mode of
shipment for packages “prohibitively expensive and impossible for DHL”), that would
result from Plaintiff’s construction exclusively tying DHL’s fuel surcharges to the mode of
transportation actually used for a particular package, and strongly supports DHL’s
contention that Plaintiff’s approach represents a commercially unreasonable
construction that is to be avoided in contract construction. SeeTiVo Inc. v. Goldwasser,
560 Fed.Appx. 15, 19-20 (2d Cir. Mar. 17, 2014) (recognizing that under New York law
a contract should not be interpreted to produce commercially “absurd” result (citing In re
Lipper Holdings, LLC, 776 N.Y.S.2d at 562)); see also Newmont Mines, Ltd. v. Hanover
Ins. Co., 784 F.2d 127, 136 (2d Cir. 1986) (construing contract “‘in light of the business
purposes sought to be achieved by the parties and the plain meaning of the words
chosen by them to effect these purposes.’” (quoting Champion Int’l Corp. v. Continental
Cas. Co., 546 F.2d 502, 505 (2d Cir. 1976))).

40

Plaintiff does not dispute that its construction would entail “difficulties of
determining the percentage of each type of fuel used,” Plaintiff’s Opposition Br. at 5 n.3
(“No one argues to the contrary”); rather, Plaintiff attempts to rebut DHL’s assertion of
such “difficulties” by contending that DHL’s failure to adjust to them is merely evidence
of DHL’s “breaching practice” in violation of the contract. Id. (“DHL’s reasons for
following a breaching practice do not justify the practice where the contract disallows
it.”) Plaintiff’s contention of course begs the question of whether the asserted
“difficulties” are evidence of commercial infeasibility which aids the court, see Newmont
Mines Ltd., 784 F.2d at 134, in considering which of the two competing constructions
represents the more reasonable one. See In re Lipper Holdings, LLC, 766 N.Y.S.2d at
562. Significantly, although Plaintiff attacks Mr. Gibson’s averments, Plaintiff’s
Opposition Br. at 4 n. 2, on various evidentiary grounds, – including improper legal
conclusions, subjective intent, and lack of relevancy –Gibson’s averment that “it was
impossible for DHL to assess fuel surcharges on a package-by-package basis,” Gibson
Decl. ¶ 18, is not contradicted by Plaintiff on such evidentiary or any other grounds. Nor
does Plaintiff dispute that the Gibson and Boice Declarations are part of the body of
evidence which the court may consider in this trial.
Further, Plaintiff argues that, contrary to the testimony of Mr. Boice, DHL’s
FOCUS tracking system for its packages during the relevant period did not allow for the
detailed tracking of packages and the allocation of jet and diesel fuel costs to a specific
shipment, Boice Decl. ¶ 12 (“FOCUS . . . did not contain information on whether a
package went by airplane or truck.”), the record shows DHL capable of tracking its
packages, see Plaintiff’s Opposition Br. at 4 n. 2 (“Boice’s declaration is similarly

41

objectionable where it (¶ ¶ 9, 12) discussed DHL’s records and scan codes.”), pointing
to contrary evidence, id. (citing Plaintiff’s Exh. 33, DHL computerized records showing
how Plaintiff’s packages actually were handled), id. However, Plaintiff does not contest
Boice’s testimony that DHL’s system does not enable it to determine that a particular
package travelled solely by truck. See Boice Dep. 44:8-12 (Q: “Is there a way you can
go into the system and look at shipments and determine whether they travelled solely
by ground?” A: “No, that I am aware of.”). Even if DHL could make such determination
it is basic that the fact that an obligor is capable of committing itself to certain results,
does not mean it has done so unless its agreement so provides. Plaintiff also disputes
that DHL’s system would require determining the correct fuel surcharge “before
movement of the shipment.” Id. at 6 n. 5. There are two problems with these
contentions. First, Plaintiff overlooks that the issue is whether DHL’s surcharge scheme
is contractually tied to the mode of transportation and its associated costs, used to ship
a package, or the type of service and its published price, (expedited, i.e., NEXT DAY, or
unexpedited, i.e., GROUND) applicable to a particular package (see Plaintiff’s Trial Br.
at 16 (“DHL’s contract applies fuel surcharges based on the mode of transportation
(e.g., air or ground), not based on the classification of DHL service levels (e.g., NEXT
DAY, 2nd DAY, etc.)). Second, DHL’s asserted need to know the shipping fuel usage
details for each package “at the outset,” DHL’s Opposition Br. at 4, is reasonably related
to its need to promptly and accurately bill a customer for its services, including the
applicable fuel surcharge amount, rendered immediately following delivery. The
undisputed “difficulties,” if not the “impossibility,” Gibson Decl. ¶ 18, of doing so inherent
in Plaintiff’s construction therefore support DHL’s construction as the more commercially

42

reasonable compared to Plaintiff’s which conceivably would impose additional and
expensive administrative costs not contemplated by DHL in establishing its published
shipping rates thereby requiring DHL to raise its prices with a likely loss of business, or
suffer debilitating losses, or both.
This explanation of the business rationale for DHL’s surcharge charge scheme
also answers Plaintiff’s rhetorical question, Plaintiff’s Trial Brief at 2 n. 2, asking why two
fuel surcharges were necessary given that DHL’s customers were charged more for
DHL’s expedited delivery services. As discussed, Discussion, supra, at 36-38, DHL, as
a matter of business practice, applied the jet fuel surcharge to its expedited services
given that the greatest proportion of its business necessitated the use of air
transportation, and used surface transportation where the guaranteed delivery time, 1-6
days, could be accomplished solely by truck within that period. Gibson Dep. 105:20-25
(explaining shipments with destinations beyond an 8-hour truck ride required using air
transport). If, however, the delivery, under this non-expedited service option, could not
be efficiently delivered solely by truck transportation within the six-day period as
promised, DHL was required, by the contract, to employ air transportation to effect the
guaranteed delivery at no extra charge to the customer. Also, as noted, DHL, like its
major competitors, required some degree of protection against rapid rises in the cost of
jet fuel, a practical business consideration in this industry, a risk not as acute in the case
of its DHL diesel fueled delivery trucks. DHL, like its competitors, (“UPS and FedEx
linked the surcharges for their expedited and unexpedited service categories in the
same way [as DHL],” Gibson Decl. ¶ 17), accordingly adopted its fuel surcharge system
to guide its customers in calculating their costs depending on the service category

43

selected by the customer, instead of incurring the burden of periodically recalculating
and republishing its general fee tables to adjust for respective future increases in its jet
fuel costs as they occurred. That DHL found it more practical to charge its expedited
service customers a jet fuel surcharge regardless of whether their packages were
shipped solely by truck, rather than apply its diesel fuel surcharge, Gibson Decl. ¶ 12
(“logistically impossible” for DHL to commit a particular mode of delivery for a package),
does not require the court to construe the contract to overrule DHL’s business decision
in order to benefit this substantially smaller segment of DHL’s customers including
Plaintiff.
In sum, Plaintiff’s claim is predicated on the premise that the words AIR and
GROUND in the context of the DHL contract can only mean, respectively, airplane or
motor vehicle transportation, one flawed by ignoring the fundamental rule of contract
law that a breach occurs only where an obligor, like DHL, fails to provide a obligee, like
Plaintiff, with the benefit of its bargain. See Ayco Co., L.P. v. Feldman, 2010 WL
4286154, at *6 (N.D.N.Y. Oct. 22, 2010) (recognizing defendant, by breaching contract,
deprived plaintiff of benefit of bargain). Here, DHL accepted Plaintiff’s offer stated in the
Waybill for a guaranteed delivery in accordance with DHL’s NEXT DAY 3:00 PM service
option and the DHL’s correlative commitment to deliver Plaintiff’s package as promised,
including risk of non-performance and damage to DHL’s service reputation. Thus, if
DHL had for some reason failed to perform it may be asked whether given Plaintiff’s
construction of the contract, Plaintiff would have refrained from complaining that it had
paid the applicable jet fuel surcharge in addition to the base delivery charge and was
therefore entitled to assert a breach. Plaintiff could have elected a less rapid

44

guaranteed delivery at a substantially lower price and without the greater jet fuel
surcharge on such expedited service compared with the cost of DHL GROUND service
and the associated lower diesel fuel surcharge. Plaintiff did not do so. Plaintiff’s
insistence that Plaintiff was entitled to DHL’s Next Day delivery guarantee but only with
a diesel fuel surcharge, if accepted, would in effect create a new category of DHL
service, a guaranteed next day delivery at DHL GROUND delivery diesel fuel surcharge
pricing, uncontemplated in the Rate Guide and certainly unintended by DHL. See In re
Lipper Holdings, LLC, 766 N.Y.S.2d at 562 (construction of contract contrary to “the
reasonable expectations of the parties’” to be avoided).
Significantly, as DHL persuasively contends, DHL Opposition Br. at 1, Plaintiff
points to no specific provision of the contract which DHL may be fairly said to have
breached. DHL’s pricing, including its fuel surcharge scheme, covered the likelihood,
assumed by DHL in offering its expedited NEXT DAY service, that this guaranteed
delivery would entail both transportation by air and truck to accomplish, logistical
decisions reserved to DHL by the Waybills Terms and Conditions. Given that most of
these shipments required air travel, it was reasonable for DHL to apply the jet fuel
surcharge to them as both the structure and terms of the contract documents indicated
DHL would do. That DHL conceivably could have agreed to apply a diesel fuel
surcharge to all deliveries in fact effected by motor vehicle rather than by air, is
irrelevant, as DHL did not agree to do so. Moreover, Plaintiff’s claim ignores that DHL’s
competitors utilize a fuel surcharge policy substantially similar to DHL’s. See Facts,
supra, at 17-18; DHL Opposition Br. at 15-16 (citing UPS Rate and Service Guide
“Ground Fuel Surcharge will apply to all . . . UPS Ground commercial etc. services;”

45

“The Air and International Surcharge will apply to UPS Next Day Air Early etc. services.”
and FedEx’s jet fuel surcharge apply to FedEx Express, i.e., expedited services similar
to DHL’s)). In sum, Plaintiff’s primarily semantical arguments find no support in the
text, structure, or commercial purposes of its contract with DHL. As such, the court
finds no ambiguity warranting application of the contra proferentem doctrine to resolve
the instant dispute. Accordingly, the court finds Plaintiff has not established, as was its
burden, by a preponderance of the evidence that Defendants breached its contract with
Plaintiff as Plaintiff alleged in the Amended Complaint.
Even if the terms AIR EXPRESS and GROUND as used in the contract between
Plaintiff and DHL were ambiguous, the extrinsic evidence relied upon by Plaintiff to
establish that these terms refer exclusively to the mode –airplane or truck – DHL used
to transport Plaintiff’s packages, rather than, as DHL maintains, to the DHL delivery
service category – NEXT DAY 3:00 PM ̶ selected by Plaintiff, is unpersuasive.
•

DHL Timeline Document (Plaintiff’s Trial Br. at 22-23). This 2008 summary of
DHL’s corporate history, Plaintiff’s Exh. 10, refers to a new concept of
“international air express service . . . by airplane.” Contrary to Plaintiff’s view,
that this statement shows DHL’s use of the term air express means the mode of
transportation, Plaintiff’s Trial Br. at 23, the context of the statement shows it
describes a new system of international air express delivery when DHL was
founded, not DHL’s definition of that term as used in the Rate Guide or
Surcharge Fuel Index Document. Plaintiff’s reliance also overlooks the
indisputable fact that all commercial delivery services involving airplane
transportation must necessarily employ ground transportation to some extent. As

46

such, this piece of extrinsic evidence is irrelevant.
•

DHL’s March 2005 Major League Baseball Press Release (Plaintiff’s Trial Br. at
23). This document, Plaintiff’s Exh. 11, using the phrase “air and ground
express,” according to Plaintiff, shows DHL’s intent to use the words “air” and
“ground” as meaning modes of delivery, not categories of expedited, i.e.,
“express” delivery service. Plaintiff’s Trial Br. at 23. However, in proffering this
evidence, Plaintiff ignores that the sentence in which the phrase on which it relies
appears also refers to “logistic services.” Id. (quoting DHL 2005 Press Release
re: MLB). Thus, as with DHL’s use of this term in the Rate Guide and Fuel
Surcharge Index Document, the term air express is, in this document, directly
tied to delivery “services” provided by DHL, and not the mode of transportation
used by DHL. Moreover, the phrase “ground express” is not a term that appears
in the contract documents at issue and, as such, it is itself ambiguous and thus
not probative. Rather than supporting Plaintiff’s position, the court finds this
document to be more consistent with DHL’s construction of the term Air Express.

•

DHL’s December 2006 Letter (Plaintiff’s Trial Br. at 23-24). In this letter to its
customers, Plaintiff’s Exh. 16, DHL describes its expedited “shipping services”
without use of the term air express, an omission Plaintiff contends shows air
express, as used by DHL in the contract documents, does not signify a DHL
service category. Plaintiff’s Trial Br. at 24. Although this document, as Plaintiff
asserts, fails to reference the disputed air express term, the letter is quite
evidently a marketing communication touting DHL’s services, and its relation to
the issue before the court is therefore too attenuated to provide significant

47

support for Plaintiff’s position. Moreover, Plaintiff’s proffer ignores the footnote in
the letter stating that “all [DHL] services . . . are subject to DHL Terms and
Conditions as published at www.dhl-usa.com,” which, presumably includes the
Rate Guide and Fuel Surcharge Index documents which as discussed,
Discussion, supra, at 28-33, strongly associate the term air express with the DHL
expedited delivery categories described in the letter. As such, this piece of
extrinsic evidence fails to remove the assumed ambiguity regarding the correct
meaning of the term air express as used in the contract and does not support
Plaintiff’s construction.
•

“DHL Same Day” Document (Plaintiff’s Trial Br. at 24). According to Plaintiff, this
document, Plaintiff’s Exh. 14 at 2, states that because DHL will apply a gasoline
fuel surcharge, as well as its jet fuel surcharge, to DHL’s Same Day service, the
document indicates the “air fuel” surcharge is associated with DHL SAME DAY
deliveries by air and the gasoline fuel surcharge is applicable to ground
deliveries. Plaintiff’s Trial Br. at 24. DHL counters that the document is not
relevant as its sheds no light on the meaning of the term Air Express as that term
does not appear in the document. Defendants’ Opposition Br. at 6. Additionally,
as the fees for DHL’s Same Day Service are established outside the published
DHL Fees, see Rate Guide, Plaintiff’s Exh. 5 at 35 (DHL “fees are applicable to
all services – Ground and Air Express – with the exception of DHL SAME DAY . .
..”) upon customer request to DHL, id., it is more reasonable to infer that the
references to fuel surcharges in Plaintiff’s Exh. 14 inform a prospective customer
that DHL’s special pricing, unpublished, for SAME DAY will include either the

48

“air” fuel or “ground” fuel surcharge to be determined by DHL when the order is
placed in the process of accepting the SAME DAY delivery service order and
selecting the particular mode of transportation necessary to meet the SAME DAY
service guarantee for the shipment. As such, the document is not relevant to the
meaning of the term Air Express applicable to DHL’s NEXT DAY and 2ND DAY
expedited services subject to the contract at issue in this case. Finally, by its
terms, the notice is directed to DHL NEW customers effective October 1, 2008
making it inapplicable to Plaintiff and, as such, irrelevant.
•

Historic Fuel Surcharge Document (Plaintiff’s Trial Br. at 24-25). According to
Plaintiff, this document, Plaintiff’s Exh. 15, provides data for DHL’s “Air” and
“Ground” fuel surcharges over a seven-year period, 2002-2009, arguing that the
absence on the chart of the term Air Express, demonstrates that the DHL jet fuel
surcharge requires the use of “air,” transport as a basis for is application.
Plaintiff’s Trial Brief at 25. Plaintiff’s inference is undercut by the fact that in the
chart, the relevant word air as it appears in the chart could also be an
abbreviated form of Air Express given its proximity in the Chart with the word
“Ground,” a term closely associated with DHL’s non-expedited delivery service
category. Because the word “Air,” as used in the Chart could also reasonably
refer to DHL’s Air Express services, this document, at best, provides only
ambivalent support to Plaintiff’s asserted interpretation, insufficient to meet
Plaintiff’s burden of proof.

•

February 2004 Press Release (Plaintiff’s Trial Br. at 25). As with Plaintiff’s Exh.
15, Plaintiff’s reliance on this document, Plaintiff’s Exh. 26 at 2, which also fails to

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mention the term Air Express, does not support Plaintiff’s contention that the DHL
service category does not exist. Rather, by referencing DHL’s Next Day as one
of DHL’s “Express Shipping Services,” the document actually supports DHL’s
position that its Next Day delivery options are an express, i.e., “Time Definite
Product[ ],” id., service category to which the jet fuel surcharge applies. In
context, the absence of the word “air” from the “DHL Express Shipping Services”
heading therefore does not point to the conclusion as Plaintiff urges. Moreover,
as the document is dated 2004, its relevance to the meaning of the Air Express
term in the 2008 Rate Guide at issue here is too attenuated to be probative of the
meaning of the term as used in the Rate Guide and other related contract
documents.
•

DHL’s “Straight Pass Through” Documents (Plaintiff’s Trial Br. at 22-26). These
documents, Plaintiff’s Exhs. 17-22, purport to explain DHL’s business rationale
for its fuel surcharges. Plaintiff contends that because in these documents DHL
represented to its customers the surcharges merely served to “pass-through,”
Gibson Dep. 15:4-10; Plaintiff’s Exh. 17 at DHLEXPO13724, (“The DHL FSC is
only a cost pass through”), the respective fuel price increases to its customers
and was not a price increase to enhance DHL’s profitability, Gibson Dep. 26:1519, the statements demonstrate that a pass-through of such costs only makes
sense, according to Plaintiff, if the type of fuel, jet or diesel, was actually used in
connection with a DHL delivery. Plaintiff’s Trial Br. at 26. On its face, this
argument has some appeal: why should a fuel surcharge intended to potentially
pass through fuel costs apply where no fuel subject to the specific pass through

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applied was used in a customer’s shipment? Id. But despite such facial appeal
Plaintiff’s contention, on closer examination, fails because DHL’s pass-through
rationale for its fuel surcharges does not support that DHL thereby intended to
associate the applicability of a particular surcharge to a particular mode of
transportation, viz. jet fuel to airplane transport; diesel-fuel to truck transport,
rather than, as DHL maintains, to one of its delivery service options. Thus,
although the document helps to understand why the surcharges exist; they do
not compel the conclusion that the DHL jet fuel surcharge be applied only in
cases where DHL transportation services involved the use of airplanes.
•

DHL’s Hank Gibson Testimony (Plaintiff’s Trial Br. at 26-29). In this argument,
Plaintiff asserts Mr. Gibson’s deposition testimony demonstrates that DHL’s Air
Express contract term is in fact ambiguous and that Plaintiff’s proffered extrinsic
evidence support’s Plaintiff’s position that it be construed to refer to DHL’s use of
air transport and not its expedited delivery services. Id. However, a careful
reading of Mr. Gibson’s deposition testimony reflects his view that DHL was
authorized by its contract to allocate the jet fuel surcharge to DHL’s expedited
services regardless of whether a particular shipment may have been
accomplished solely by ground transportation. See, e.g., Gibson Dep. 57:20-25;
58:2 (“It never crossed my mind that we (DHL) were not. . . contractually
authorized” to “charge its higher jet fuel surcharge for NEXT DAY shipments that
travelled solely by ground . . ..”). The court therefore discounts Mr. Gibson’s
deposition testimony on which Plaintiff relies as extrinsic evidence supportive of
Plaintiff’s position.

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•

DHL’s Failure to Provide Drafting History (Plaintiff’s Trial Br. at 29-30). Plaintiff
further argues that DHL’s failure to provide any significant drafting history related
to the contract documents supports an adverse inference that such failure
indicates that the expected history would be inconsistent with DHL’s asserted
meaning in the term Air Express. Defendants oppose this assertion on the
ground that Plaintiff failed to raise this issue during the discovery period,
Defendant’s Opposition Br. at 7 n. 4, and because to support an adverse
inference the responsive party, DHL, must be shown to have withheld the
requested documents with a “culpable state of mind,” and that the documents
would, in fact, support the requesting party’s claim. Id. quoting Residential
Funding Corp. v. DeGeorge Fin. Corp, 306 F.3d 99, 107 (2d Cir. 2002); see also
Chin v. Port Authority of New York & New Jersey, 685 F.3d 135, 162 (2d Cir.
2012) (same). Further, “a bare assertion that the[ ] documents are missing is not
sufficient to “meet . . . [Plaintiff’s] burden.” See In re Pfizer, Inc. Sec. Litig., 288
F.R.D. 297, 324 (S.D.N.Y. 2013). The court’s review of Mr. Gibson’s deposition
does not indicate Plaintiff directed any questions to Mr. Gibson on this issue to
provide any support for Plaintiff’s assertions. As such, absent a showing that the
alleged drafting history was culpably withheld by DHL, no adverse inference, as
Plaintiff requested, will be drawn.
In sum, Plaintiff’s extrinsic evidence is insufficient to meet Plaintiff’s burden of

proof that the term Air Express refers only to a DHL delivery mode using air
transportation and excludes surface transportation of Plaintiff’s packages by truck, even
if it is assumed that such term as used in the contract is in fact ambiguous.

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Conversely, as DHL maintains, the parties’ course of performance under the
contracts over 11 years demonstrate that Plaintiff had accepted DHL’s application of the
jet fuel surcharge to Plaintiff’s NEXT DAY 3:00 PM deliveries despite knowing that its
packages were being transported solely by truck. DHL’s Opposition Br. at 8-9. In fact,
in its Amended Complaint, Plaintiff alleged the jet fuel surcharge was 29% and the
diesel fuel surcharge was 9.3%, Amended Complaint ¶ 42, and Plaintiff periodically
compared DHL’s charges with the “rate charges of its competitors.” Prieschel Dep.
60:23-25; 61:1. Plaintiff also assumed all its deliveries addressed to Wachovia were
delivered by truck. Id. 102:1-4. Contrary to Plaintiff’s objection that it was unaware of
DHL’s “fuel surcharge practices” or how its packages were being transported, Plaintiff’s
Opposition Br. at 30, Plaintiff could determine, based on the fuel surcharges appearing
on the invoices that the fuel surcharges were at levels, i.e., percentages, substantially
higher than those DHL published for diesel fuel in the Fuel Surcharge Index, and related
documents, that were available to Plaintiff on DHL’s website. Joint Fact Stipulation No.
6. (listing documents as “available on DHL’s website”). While Plaintiff was aware DHL
charged Plaintiff a fuel surcharge, id. 69:8, and that DHL’s competitors, FedEx and
UPS, had charged Plaintiff a fuel surcharge on deliveries these companies provided
prior to 2005 when DHL became Plaintiff’s exclusive delivery service provider, to
Plaintiff, id., 69:24-25; 70:1-3, Plaintiff never inquired of these companies how their
respective fuel surcharges were constituted or applied to Plaintiff’s invoices. Id., 77:2025; 78:1-4.
Under New York law, Plaintiff’s asserted lack of awareness of the details of the
DHL’s jet fuel surcharge policy is “no answer,” Evans v. Famous Music Corp., 807

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N.E.2d 869, 874 (N.Y. 2004), where Plaintiff was aware it was being charged a fuel
surcharge and had the ability to make inquiries concerning such invoiced charges. See
Jobim v. Songs of Universal, Inc., 732 F.Supp.2d 407, 417 (S.D.N.Y. 2010) (“claimed
lack of awareness is not sufficient to rebut conclusions to be drawn from a course of
performance over an extensive period of time” (citingEvans, 807 N.E.2d at 874)). See
also Continental Casualty Co. v. Rapid-American Corp., 609 N.E.2d 506, 511-12 (N.Y.
1993) (courts may imply awareness of a course of performance to a contracting party).
Here, Plaintiff was aware (1) a fuel surcharge was being applied to its DHL invoices for
the packages at issue, (2) the packages were being delivered via truck and not airplane,
(3) the relative surcharge rates for DHL’s jet fuel and diesel fuel surcharges could have
been determined by Plaintiff based on DHL’s invoices and by consulting the DHL Fuel
Surcharge Index, information available to Plaintiff on the DHL website which would have
resulted in Plaintiff learning it was invoiced the DHL jet fuel surcharge, rather than its
diesel fuel surcharge, (4) FedEx and UPS, as Plaintiff’s former delivery service
providers, and beginning in 2008 UPS, its current provider, also charged Plaintiff a fuel
surcharge, and (5) Plaintiff never inquired about the details of such surcharges nor did
Plaintiff complain to DHL about the surcharge until advised by counsel.
Under these circumstances, Plaintiff’s lack of awareness claim concerning the
details of the disputed jet fuel surcharge as a ground to avoid consideration of DHL’s
extrinsic evidence of Plaintiff’s course of performance with DHL must be rejected. See
Jobim, 732 F.Supp.2d at 417 (“claimed lack of awareness is not sufficient to rebut the
conclusions to be drawn from a course of performance over an extensive period of time”
(citing Evans, 807 N.E.2d at 874)). See also Continental Casualty Co., 609 N.E.2d 506,

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511 (N.Y. 1993) (courts may imply awareness of a course of performance to a
contracting party). Thus, the nearly 11 year course of performance between the parties,
without Plaintiff’s objection or even inquiry regarding DHL’s jet fuel surcharges strongly
supports that the parties intended the jet fuel surcharge was linked to DHL’s expedited
services, including the NEXT DAY 3:00 PM delivery option selected by Plaintiff,
regardless of whether any air transportation was involved and Plaintiff’s packages were
delivered solely by truck. See Federal Insurance Company v. Americas Insurance
Company, 691 N.Y.S.2d 508, 512 (1st Dept. 1999) (“the parties’ course of performance
under the contract is considered to be the ‘most persuasive evidence of the agreed
intention of the parties’” (quoting Webster’s Red Seal Publs. v. Gilberton World-Wide
Publs., 415 N.Y.S.2d 229, 230, aff’d, 421 N.E.2d 118 (N.Y. 1981))).
DHL’s second piece of extrinsic evidence, that customs and practice in the
package shipping industry support DHL’s interpretation of the contract, DHL Opposition
Br. at 9-10, is also persuasive. Specifically, DHL points to the record which indicates
that DHL’s major competitors, FedEx and UPS, like DHL, apply a similar jet fuel
surcharge by category, not mode of service. Id. at 9. For example, both DHL and UPS
use the term “air” to denote an expedited shipping category. Id. (citing Gibson Decl. ¶
13; DHL Exh. C (UPS Rate Guide and Service Guide 11-12)). Further, DHL, FedEx and
UPS apply their respective jet fuel surcharges to their expedited delivery service
categories. See DHL Exh. D at 116 (jet fuel surcharge to be applied to FedEx Express,
i.e., next day, shipments; diesel fuel surcharge to be applied to FedEx Ground
shipments); see also Facts, supra, at 17-18. DHL, FedEx and UPS provided similar
information regarding the fuel surcharge policies on their respective published

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documents and website. See Plaintiff’s Exhs 5, 6 and 8 (DHL); DHL Exhs. C (UPS), D
(FedEx), E (UPS), F (FedEx). Thus, contrary to Plaintiff’s contention, that the three
major competitors in the package delivery industry maintain substantially, if not
identical, fuel surcharge policies linked to expedited (jet fuel) and unexpedited (diesel
fuel) delivery service categories, strongly indicates that DHL’s interpretation of the
disputed Air Express should prevail even assuming it were considered ambiguous, and
Plaintiff has failed to demonstrate by a preponderance of the evidence that Plaintiff’s
interpretation is correct.

CONCLUSION
Based on the foregoing, Plaintiff has no cause of action against Defendants as
alleged in the Amended Complaint; the Clerk of Court shall enter judgment accordingly,
and close the file.
SO ORDERED.
/s/ Leslie G. Foschio
________________________________
LESLIE G. FOSCHIO
UNITED STATES MAGISTRATE JUDGE
Dated: March 26, 2015
Buffalo, New York

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