Universal Coin and Bullion, Ltd. v. Federal Express Corporation, et al.

Filing 23

ORDER GRANTING in part and DENYING in part Defendant's Motion to Dismiss Judge Samuel H. Mays, Jr., 09/12/13.

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

UNIVERSAL COIN AND BULLION,
LTD.,
Plaintiff,
v.
FEDEX CORPORATION,

Defendant.

)
)
)
)
)
)
)
)
)
)
)
)
)
)

No. 12-2778

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO
DISMISS

Before the Court is Defendant FedEx Corporation‟s (“FedEx”)
November 19, 2012 Motion to Dismiss
Dismiss, ECF No. 5.)

(the “Motion”). (Mot. to

Plaintiff Universal Coin and Bullion, LTD.

(“UCB”) responded on December 21, 2012 (the “Response”). (Resp.
to Mot. to Dismiss, ECF No. 9.)
2013.

(Reply, ECF No. 13.)

FedEx replied on January 14,

FedEx seeks an order dismissing

UCB‟s Complaint under Rule 12(b)(6) of the Federal Rules of
Civil Procedure.

For the following reasons, FedEx‟s Motion is

GRANTED IN PART and DENIED IN PART.

Background1

I.

UCB brings suit for gross negligence, negligence, breach of
contract, interference with a prospective advantage or business
relationship, and breach of the duty of good faith and fair
dealing

arising

from

FedEx‟s

information

to

Dealers”).

(Compl. ¶ 1.)

precious

third-party

metals,

contracted

with

New

for

York

coin

of

confidential

dealers

(the

“Coin

UCB markets, sells, and distributes

including
FedEx

disclosure

gold
the

coins.

shipment

(Id.
of

¶

coins

7.)
to

UCB

or

from

clients and “to pick up checks from customers of UCB who have
purchased coins from UCB and chosen to pay for the coins by
personal check or money order.”

(Id. ¶ 9.)

UCB‟s use of FedEx

was “uniquely limited to [UCB‟s] high value clients.”

(Id. ¶

10.)
Beginning

in

2009,

UCB

learned

that

clients had been contacted by the Coin Dealers.

several

of

(Id. ¶ 20.)

its
On

March 17, 2010, UCB representatives met with an Assistant United
States

Attorney

for

the

Eastern

District

of

New

York,

who

informed UCB that the Coin Dealers had defrauded UCB‟s clients.
(Id. ¶ 22.)

The Coin Dealers used confidential information

obtained from FedEx account invoices to contact UCB customers
and convince them to purchase gold coins worth as little as five

1

The following allegations are taken from UCB‟s Complaint, unless otherwise
stated. (Compl., ECF No. 1.)

2

percent of their represented value.

(Id. ¶¶ 43-44, 46.)

Many

of the Coin Dealers have been indicted for mail fraud, wire
fraud, and money laundering, among other things.

(Id. ¶ 49.)

UCB and FedEx were parties to a number of agreements.
include

standard

Remittance

shipping

Agreement,

contracts,

FedEx

Pricing

a

FedEx

Agreement,

They

Credit
FedEx

Card

Service

Guide, Contract of Carriage, FedEx Smart Post Shipments, FedEx
Express Terms & Conditions, and Website Modifications to the
Agreements

(collectively, the “FedEx Agreements”).

(Id. ¶¶ 12-

13.) (Mot. to Dismiss, ECF No. 5 at 13.)
The FedEx Agreements “contained numerous references to the
importance

of

confidentiality

involving the account.”

and

privacy

(Id. ¶ 14.)

of

information

The FedEx Credit Card

Remittance Agreement “recognizes that all credit card account
information

shall

be

treated

as

strictly

confidential

and

provides that FedEx shall keep such confidential information in
good

order

and

not

disclose

such

information

to

any

without consent unless the law requires disclosure.”
15.)

(Id. ¶

The FedEx Pricing Agreement specifically recognizes mutual

confidentiality between the client and FedEx.
FedEx

person

Service

Guide

“recognizes

the

(Id. ¶ 16.)

potential

for

The

improper

illegal or other misuse of a FedEx account” and “also recognizes
the need for safekeeping of the account number, the account
information and the protection from any misuse of the account.”
3

(Id. ¶ 17.)

The contractual relationship between FedEx and UCB

“foresaw the potential for improper, illegal or other misuses of
the FedEx account information and the importance of protecting
the confidential nature of account information including account
invoices.”
II.

(Id. ¶ 19.)

Jurisdiction and Choice of Law

Under

28

U.S.C.

§

1332(a),

this

Court

has

original

jurisdiction of all civil actions between citizens of different
states “where the matter in controversy exceeds the sum or value
of

$75,000,

1332(a)(1).

exclusive

of

interest

and

costs”.

28

U.S.C.

UCB is a Texas corporation with its principal place

of business in Beaumont, Texas.

(Compl. ¶ 7.)

FedEx is a

Delaware corporation headquartered in Memphis, Tennessee.
¶ 8.)
58.)

§

UCB alleges “millions of dollars” of damages.

(Id.
(Id. ¶

The parties are completely diverse, and the amount-in-

controversy requirement is satisfied.
In a diversity action, state substantive law governs.

See

Brocklehurst v. PPG Indus., Inc., 123 F.3d 890, 894 (6th Cir.
1997)

(citing

(1938)).

Erie

R.R.

Co.

v.

Tompkins,

U.S.

64,

78

A federal district court applies the choice-of-law

rules of the state in which it sits.
Electric

304

Mfg.

Co.,

313

U.S.

487,

See Klaxon Co. v. Stentor
496

(1941);

Montgomery

Wyeth, 580 F.3d 455, 459 (6th Cir. 2009) (citation omitted).

4

v.

Tennessee courts generally “honor a contractual choice-oflaw provision, so long as it meets certain requirements.”

Yang

Ming Marine Transp. Corp. v. Intermodal Cartage Co., Inc., 685
F. Supp. 2d 771, 780 (W.D. Tenn. 2010) (citations omitted).

A

choice-of-law provision must: (1) be executed in good faith; (2)
bear a material connection to the parties‟ business; (3) be
reasonable and not merely sham or subterfuge; and (4) not be
contrary to a fundamental policy of a state that possesses “a
materially
govern.

greater

interest”

and

whose

law

would

otherwise

Id. (citations and internal quotation marks omitted).

The FedEx Express Terms & Conditions provide that, “[t]o
the extent that any court finds that state rather than federal
law applies to any provision of this contract, the controlling
law is the substantive law of the state in which you tendered
your shipment to us.”

(Defendant Ex. 1, ECF No. 5-1 at 10).

UBC tendered its shipments in Texas.

(Compl. ¶ 7.)

of-law provision was executed in good faith.

The choice-

Tennessee does not

have a materially greater interest in the contract claims in
this case.
The

Court

Neither party disputes the application of Texas law.
will

apply

Texas

substantive

law

to

the

contract

claims.
Both parties also agree that Texas substantive law applies
to

the

tort

claims.

(Mot.

to

(Response, ECF No. 9 at 16.)

Dismiss,

ECF

No.

5

at

5);

When “the parties agree to the
5

particular state law application, the court will apply [that
state‟s] law and will not conduct a choice of law analysis sua
sponte.”

AutoZone, Inc. v. Glidden Co., 737 F. Supp. 2d 936,

941 (W.D. Tenn. 2010) (citing Americoach Tours, Inc. v. Detroit
Diesel Corp., No. 04-2016 B/V, 2005 WL 2335369, at *1 (W.D. Tenn
Sept. 23, 2005)).

See also In re Korean Air Lines Disaster of

Sept. 1, 1983, 932 F.2d 1475, 1495 (D.C. Cir. 1991) (“Unlike
jurisdictional issues, courts need not address choice of law
questions sua sponte.”).

The Court will apply Texas substantive

law to the tort claims.
III. Standard of Review
In addressing a motion to dismiss for failure to state a
claim under Federal Rule of Civil Procedure 12(b)(6), the court
must construe the complaint in the light most favorable to the
plaintiff and accept all well-pled factual allegations as true.
League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523,
527

(6th

Cir.

2007).

A

plaintiff

can

support

a

claim

“by

showing any set of facts consistent with the allegations in the
complaint.”
(2007).

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 563

This standard requires more than bare assertions of

legal conclusions.

Bovee v. Coopers & Lybrand C.P.A., 272 F.3d

356, 361 (6th Cir. 2001).

“[A] formulaic recitation of the

elements of a cause of action will not do.”
at 555.

Twombly, 550 U.S.

Any claim for relief must contain “a short and plain
6

statement of the claim showing that the pleader is entitled to
relief.”
curiam).

Erickson

v.

Pardus,

551

U.S.

89,

93

(2007)

(per

“Specific facts are not necessary; the statement need

only „give the defendant fair notice of what the . . . claim is
and the grounds upon which it rests.‟”

Id. (quoting Twombly,

550 U.S. at 555).
Nonetheless, a complaint must contain sufficient facts “to
„state a claim to relief that is plausible on its face‟” to
survive a motion to dismiss.

Ashcroft v. Iqbal, 129 S. Ct.

1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570).
plausibility

standard

is

not

akin

to

a

“The

„probability

requirement,‟ but it asks for more than a sheer possibility that
a defendant has acted unlawfully.”
U.S. at 556).
of

action,

Id. (citing Twombly, 550

“Threadbare recitals of the elements of a cause

supported

by

mere

conclusory

statements,

do

not

suffice.”

Id. at 1949 (citation omitted).

A plaintiff with no

facts

“armed

conclusions”

and

with

nothing

more

“unlock the doors of discovery.”

than

cannot

Id. at 1950.

UCB did not attach the FedEx Agreements to its Complaint
because it sought to avoid having a motion to dismiss converted
into a motion for summary judgment.

(See Response 6) (“Because

FedEx filed a Rule 12(b)(6) Motion to Dismiss, and not a Motion
for

Summary

Judgment,

UCB

need

not

and

should

not

attach

documents and evidence to this Opposition, lest the Motion to
7

Dismiss

be

converted

into

a

Motion

for

Summary

Judgment.”)

FedEx attached the FedEx Agreements as exhibits to the Motion.
“[W]hen a document is referred to in the pleadings and is
integral to the claims, it may be considered without converting
a motion to dismiss into one for summary judgment.”

Commercial

Money Ctr., Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 33536

(6th

Cir.

2007).

The

Court

“retains

the

discretion

to

consider or exclude [] extrinsic evidence presented with a Rule
12(b) motion.”

Notredan, LLC v. Old Republic Exch. Facilitator

Co., No. 11-2987-STA-tmp, 2012 U.S. Dist. LEXIS 48976, at *13
(W.D.

Tenn.

Republic

Apr.

Exch.

6,

2012),

Facilitator

aff‟d
Co.,

by,

No.

Notredan,

12-5852,

LLC

2013

v.

U.S.

Old
App.

LEXIS 15879 (6th Cir. July 29, 2013).
The FedEx Agreements attached to the Motion are integral to
UCB‟s claims.

They include confidentiality provisions that bear

directly on the extent to which FedEx may be liable.

Because

the FedEx Agreements are integral to UCB‟s claims, the Court
will

consider

them

without

converting

FedEx‟s

Motion

into

a

motion for summary judgment.
IV.

Analysis

FedEx
(“ADA”),

49

argues
U.S.C.

that:
§§

(1)

the

41713,

et

Airline
seq.,

Deregulation

preempts

UCB‟s

Act
non-

contractual state-law claims; (2) UCB‟s breach-of-contract claim
must

be

dismissed;

(3)

even

if
8

UCB‟s

claims

for

tortious

interference

and

breach

of

a

duty

of

good

faith

were

not

preempted, they should be dismissed as insufficiently pled; and
(4) each of UCB‟s claims is barred by the one-year contractual
limitations period.
A. ADA Preemption of Non-Contractual State-Law Claims
The

ADA

provides,

in

relevant

part,

that

“a

State,

political subdivision of a State, or political authority of at
least 2 States may not enact or enforce a law, regulation, or
other provision having the force and effect of law related to a
price, route, or service of an air carrier that may provide air
transportation under this subpart.”

49 U.S.C. § 41713(b)(1).

In passing the ADA, Congress “largely deregulated air transport”
to ensure that the “States would not undo federal deregulation
with

regulation

Wolens,

513

omitted).

of

U.S.

their
219,

own.”

222

American

(1995)

Airlines,

(internal

Inc.

quotation

v.

marks

The Supreme Court has broadly construed the statute‟s

preemption clause, concluding that the “relating to” language
means

“having

a

connection

with,

„rates, routes, or services.‟”

or

reference

to,

airline

Id. at 223 (quoting Morales v.

Trans World Airlines, Inc., 504 U.S. 374, 378 (1992)).
The

Supreme

Court‟s

decisions

interpreting

the

ADA‟s

preemption clause in Morales and Wolens provide limited guidance
here because the ADA clearly preempted the claims at issue in
both cases.

In Morales, the Supreme Court held that the ADA
9

preempted fare advertising requirements imposed by the National
Association of Attorneys General, which “obviously relate[d] to
rates within the meaning of” the ADA.
(internal quotation marks omitted).

Morales, 504 U.S. at 375

In Wolens, application of a

state consumer fraud statute to retroactive changes in capacity
controls and blackout dates “typified” the kind of “intrusive
regulation

of

airline

business

practices”

preemption clause sought to avoid.

that

the

ADA‟s

Wolens, 513 U.S. at 227.

Neither case can be straightforwardly applied to tort claims
against

airlines

for

allegedly

mishandling

private

customer

information.
Despite the limited applicability of the facts in Morales
and

Wolens,

the

Supreme

Court

has

stated

several

principles

helpful in applying the ADA‟s preemption clause. First, even
when

Congress

enacts

an

express

preemption

clause,

its

interpretation must begin with the “presumption that Congress
does not intend to supplant state law.”

New York State Conf. of

Blue Cross & Blue Shield v. Travelers Ins. Co., 514 U.S. 645,
654 (1995).

Second, there is clearly a limit to the breadth of

the ADA‟s preemption clause because some sate law claims may
affect airline fares or services “in too tenuous, remote, or
peripheral a manner to have pre-emptive effect.”

Morales, 504

U.S. at 390 (internal quotation marks omitted).

Finally, in

drawing the line between preempted claims and tenuously related
10

claims, courts should consider the purpose behind the preemption
clause, which was to “promote maximum reliance on competitive
market

forces”

and

prevent

deregulation of airlines.

state

interference

with

federal

Wolens, 513 U.S. at 230 (citing 49

U.S.C. App. § 1302(a)(4)); Charas v. Trans World Airlines, Inc.,
160 F.3d 1259, 1265 (9th Cir. 1998).
The

Sixth Circuit has not decided when to apply the ADA‟s

preemption clause to state tort claims, Hammond v. Nw. Airlines,
No.

09-122331,

2009

WL

4166361,

at

*3

(E.D.

Mich.

Nov.

25,

2009), and there is no consensus among the other circuits.
The Ninth Circuit focuses on the economic deregulation of
the

airline

industry,

construing

“services”

narrowly

on

the

basis that, “when Congress enacted federal economic deregulation
of

the

airlines,

it

intended

to

insulate

the

industry

from

possible state economic regulation as well . . . . It did not
intend

to

immunize

the

airlines

from

injuries caused by tortious conduct.”

liability

for

personal

Charas, 160 F.3d at 1266

(emphasis in original).
The Seventh Circuit has similarly considered the economic
impact of state claims, concluding that the ADA did not preempt
claims

by

a

travel

agency

alleging

that

an

airline

uttered

slanderous statements because the claims did not directly relate
to

or

have

the

“forbidden

significant

airline rates, routes, or services.
11

[economic]

effect”

on

Travel All Over The World,

Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1431 (7th Cir.
1996) (citation omitted).

See also S.C. Johnson & Son, Inc. v.

Transport Corp. of America, Inc., 697 F.3d 544, 553 (7th Cir.
2012).
The Third Circuit has also construed the ADA‟s preemption
clause to exclude from preemption state tort laws that do not
have a “regulatory effect.”

Taj Mahal Travel, Inc. v. Delta

Airlines, Inc., 164 F.3d 186, 194 (3rd Cir. 1998).
Travel,

the

defamation

court
claims

held

that

because

the

such

ADA

did

claims

not

do

In Taj Mahal
preempt

not

state

“frustrate[]

deregulation by interfering with competition” and do not amount
to “public utility-style regulation.”

Id.

The Fifth Circuit has applied the ADA‟s preemption clause
by defining “services” to include only activities “appurtenant
and necessarily included with the contract of carriage between
the passenger or shipper and the airline.”

Hodges v. Delta

Airlines, Inc., 44 F.3d 334, 336 (5th Cir. 1995) (en banc).
Under this view, “federal preemption of state laws, even certain
common law actions „related to services‟ of an air carrier, does
not displace state tort action for personal physical injuries or
property

damage

aircraft.”

caused

Hodges,

44

by

the

F.3d

at

operation
336.

In

and

maintenance

Hodges,

the

of

Fifth

Circuit held that the ADA did not preempt a state tort claim
against Delta Airlines for negligently allowing storage of a box
12

in

an

overhead

element

“of

compartment

the

air

because

carrier

that

service

storage

bargain

.

was

not

an

.

such

as

.

ticketing, boarding procedures, provision of food and drink, and
baggage

handling,

in

addition

to

the

transportation

itself.”

Id. at 336 (quoting Hodges v. Delta Airlines, Inc., 4 F.3d 350,
354 (5th Cir. 1993)).
definition
airline

of

The Hodges court supported its narrow

“services”

regulatory

code

by

citing

that

other

require

provisions

air

carriers

of

to

the

carry

insurance “for the loss of or damage to property of others,
resulting from the operation or maintenance of aircraft.”

Id.

at 338.
The Southern District of New York has concluded that three
primary

factors

preemption

emerge

clause.

from

Rombom

the

v.

case

United

F.Supp. 214, 221 (S.D.N.Y. 1994).

law
Air

construing

Lines,

Inc.,

the
867

The threshold question is (1)

whether an activity at issue is an airline “service.”

If the

activity is not a service, state laws are not preempted. If the
activity

is

plaintiff‟s

a

service,

claims

the

affect

question

the

service

is

(2)

whether

directly

or

the

merely

tenuously.

If the claim does affect the service directly, the

court

(3)

asks

whether

“the

underlying

tortious

conduct

reasonably necessary to the provision of the service.”
FedEx

argues

that

UCB‟s

gross

negligence,

was

Id.

negligence,

tortious interference and breach of duty of good faith and fair
13

dealing claims (Counts I, II, IV, and V) are preempted because
they relate to FedEx‟s prices and services.

FedEx argues that

those claims relate to FedEx‟s invoicing procedures for shipping
services and the handling of customer shipping data and account
information.
To

support

its

preemption

argument,

FedEx

cites

In

re

American Airlines, in which the District Court for the Northern
District

of

Texas

information

to

(“TSA”)

a

was

held

the

that

the

disclosure

Transportation

“service”

under

Security

the

ADA

of

passenger

Administration

because

it

has

“a

connection at least with American‟s ticketing service, including
the reservation component.”
2005).
an

370 F. Supp. 2d 552, 564 (N.D. Tex.

FedEx also cites Copeland v. Northwest Airlines Corp.,

unreported

case

preempted

claims

passenger

data

Administration
security.

in

which

against
with

(“NASA”)

the
to

this

Court

Northwest

held

that

Airlines

for

National

Aeronautics

aid

in

NASA

the

sharing

and

researching

ADA

Space
airline

2005 WL 2365255, *1 (W.D. Tenn. 2005).

UCB argues that the claims in Counts I, II, IV, and V are
not

preempted

because

they

affect

tenuous, remote, or peripheral manner.
Morales, 504 U.S. at 390).

airline

activities

in

a

(Response at 7) (citing

Citing In re JetBlue Airways, UCB

argues that, because its state claims do not “„directly relate[]
to airline rates or routes,‟” they are not preempted by the ADA.
14

379 F. Supp. 2d 299, 318 (E.D.N.Y. 2005).

In In re JetBlue

Airways, the court concluded that common law causes of action
for

trespass

to

property,

unjust

enrichment,

and

breach

of

contract, which arose from an airline‟s unauthorized transfer of
passenger

information

preempted.

to

a

data

mining

379 F. Supp. 2d at 300.

company,

were

not

The court reasoned that

defendants had “failed to establish how the plaintiffs‟” commonlaw claims “that pertain[] to the dissemination of plaintiffs‟
information directly relate[] to airline rates or routes.”

Id.

at 318.
The Court does not need to adopt a particular definition of
“services”

or

apply

the

Rombom

three-factor

approach

to

determine that the ADA does not preempt UCB‟s state common law
tort

claims

for

information.
prevent

the

alleged

mishandling

of

private

customer

Congress enacted the ADA‟s preemption clause to

states

from

burdening

air

carriers

with

invasive

regulations that would frustrate the federal regulatory scheme.
The ADA preempts state common law tort claims only when those
claims

are

sufficiently

related

to

the

air

carrier‟s

rates,

routes or services to “undo federal deregulation with regulation
of their own.”

See Wolens, 513 U.S. at 222.

Here, FedEx‟s

alleged mishandling of UCB‟s customer information, which allowed
the defrauding of UCB‟s customers and a significant reduction in
sales,

falls

within

the

category
15

of

claims

that

are

“too

tenuous, remote, or peripheral” to aviation regulation to be
preempted by the ADA.

See Morales, 504 U.S. at 390.

Neither In re American Airlines nor Copeland, both cited by
FedEx,

is

to

the

contrary.

In

both,

private

customer

information was intentionally disclosed to government agencies
in the ordinary course of business to assist those agencies in
performing

their

statutory

duties.

The

disclosure

supported

research directly related to the provision of airline services,
such as reservations and security.
2005 WL 2365255, *1.
disclosed

confidential

permitted

the

See 370 F. Supp. 2d at 564;

Here, UCB alleges that FedEx negligently
information

perpetration

of

to

private

fraud.

The

parties
cases

that

are

not

comparable.
FedEx cites no provision in the ADA or in Supreme Court
precedent to overcome the presumption against preempting state
tort claims.
offers

no

negligence

See
reason

and

Travelers Ins. Co., 514 U.S. at 654.
other

gross

than

preemption

negligence

claims.

to

dismiss

FedEx‟s

FedEx
UCB‟s

Motion

to

dismiss UCB‟s negligence and gross negligence claims is DENIED.
B. Breach of Contract
FedEx argues that UCB‟s claim for breach of contract should
be

dismissed

because

UCB

fails

to

identify

a

contractual

provision that FedEx has breached, UCB has not demonstrated any
damages that could be recovered from the breach of an agreement
16

with FedEx, FedEx expressly limited liability in its contract
with UCB, and UCB‟s breach-of-contract claim is preempted by the
ADA.
In the context of a motion to dismiss, a breach-of-contract
claim

must

contain
the

either

direct

material

or

elements

inferential

respecting

all

necessary

recovery.

Twombly, 550 U.S. at 562 (2007).

allegations
to

sustain

Under Texas law,

the essential elements of a breach of contract claim are: (1)
the existence of a valid contract; (2) performance or tendered
performance by the plaintiff; (3) breach of contract by the
defendant; and (4) damages sustained as a result of the breach.
Sauceda v. GMAC Mortg. Corp., 268 S.W.3d 135, 139 (Tex. App.
2008).
UCB adequately pleads a claim for breach of contract.

UCB

directly alleges the existence of valid contracts with FedEx.
(Compl., ECF No. 1 at ¶ 12.) (“In furtherance of its business,
UCB entered into standard [FedEx] shipping contracts.”)

UCB

also alleges the existence of an implied promise by FedEx to
safeguard UCB‟s client information.

UCB alleges that the FedEx

Pricing Agreement specifically recognizes mutual confidentiality
between UCB and FedEx (Id. ¶ 16.) and “[t]he FedEx agreements
contained

numerous

confidentiality

and

references
privacy

of

account.” (Id. at ¶¶ 14, 58.)

to

the

information

importance

of

involving

the

UCB adequately alleges that it
17

has tendered performance.

(Id. at ¶ 9) (“UCB utilized FedEx for

the shipment of coins to or from clients and to pick up checks
from customers of UCB who have purchased coins from UCB.”)

UCB

also adequately alleges that FedEx breached the contract.

(Id.

at ¶¶ 14, 58) (“UCB has identified a minimum of 621 unique coin
clients whose confidential information was disclosed . . . as a
result of FedEx‟s failure to protect the confidential nature of
these transactions.”)

UCB directly alleges damages sustained as

a result of the breach.

(Id. at ¶ 58)

(“An analysis of those

621 clients shows a staggering reduction in the number of sales
transactions with UCB after their disclosure by FedEx with a
resulting loss of millions of dollars of sales to UCB.”)

UCB

adequately alleges each element of a breach-of-contract claim.
FedEx

asserts

that

a

limited

liability

clause

in

its

contract with UCB precludes recovery for breach of contract.
Specifically,
Guide

FedEx

labeled

argues

„Declared

that

Value

“the
and

section

Limits

of

of

the

Service

Liability

(not

insurance coverage)‟ established FedEx‟s maximum liability under
the contract: „The declared value of any package represents our
maximum liability in connection with a shipment of that package,
including, but not limited to, any loss, damage, . . .

or

misdelivery

to

of

information

Dismiss, ECF No. 5 at 13.)

relating

to

shipment.‟”

(Mot.

FedEx argues that its liability

limitation is enforceable under Texas law, citing Bergholtz v.
18

Southwestern Bell Yellow Pages, Inc., 324 S.W.3d 195, 199 (Tex.
Ct. App. 2010).
Regardless of the enforceability of the clause, its terms
limit its applicability to damages sought in “connection with a
shipment of a package.”

(Mot. to Dismiss, ECF No. 5 at 13.)

UCB‟s claim for breach of contract goes beyond the shipping
contract.

UCB alleges that FedEx breached an implied promise to

safeguard UCB‟s client information.

(Comp., ECF No. 1 at ¶¶ 14,

58.)

Thus, even if enforceable, the limited liability clause

would

not

warrant

dismissal

of

UCB‟s

claim

for

breach

of

contract at this stage.
FedEx also argues that the ADA preempts UCB‟s claim for
breach of contract.

The ADA does not “shelter airlines from

suits . . . seeking recovery solely for the airline‟s alleged
breach of its own, self-imposed undertakings.”
at

228.

Rather,

“terms

and

conditions

Wolens, 513 U.S.

airlines

offer

and

passengers accept are privately ordered obligations and thus do
not

amount

to

a

State‟s

enact[ment]

[of]

any

law,

rule,

regulation, standard, or other provision having the force and
effect of law” within the meaning of the ADA.

Id. at 228-29

(alterations in original) (citation and internal quotation marks
omitted).

The

ADA

does

not

preempt

“state-law-based

adjudication of routine breach-of-contract claims. . . .”
at 232.
19

court
Id.

UCB has adequately pled a claim for breach of contract, the
limited-liability clause does not prohibit the contract claim
from moving forward, and the ADA does not preempt the claim.
FedEx‟s Motion to dismiss UCB‟s claim for breach of contract is
DENIED.
C. State-Law
Breach of

Claims

for

Tortious

Interference

and

Duty of Good Faith and Fair Dealing

FedEx argues that UCB fails to adequately allege claims for
tortious interference with a prospective advantage or business
relationship

and

breach

of

the

duty

of

good

faith

and

fair

dealing.
To

establish

a

claim

for

tortious

inference

with

a

prospective advantage or business relationship under Texas law,
a plaintiff must prove (1) a reasonable probability that the
plaintiff would have entered into a business relationship; (2)
an independently tortious or unlawful act by the defendant that
prevented

the

relationship

from

occurring;

(3)

that

the

defendant did that act with a conscious desire to prevent the
relationship

from

occurring

or

the

defendant

knew

the

interference was certain or substantially certain to occur as a
result

of

the

actual

harm

conduct;
or

damages

and
as

(4)
a

20

that

the

result

plaintiff

of

the

suffered

defendant‟s

interference.

See Baty v. Protech Ins. Agency, 63 S.W.3d 841,

860 (Tex. Ct. App. 2001).
FedEx correctly argues that UCB has failed to allege any
behavior by FedEx that, if proven, would establish that FedEx
acted with a conscious desire to prevent a business relationship
from

occurring,

or

knew

that

interference

certain as a result of its conduct.
at 16.)
FedEx‟s

was

substantially

(Mot. to Dismiss, ECF No. 5

Indeed, UCB‟s allegations imply the opposite – that
disclosures

were

unintentional,

perhaps

negligence or gross negligence, but not more.
1 at ¶ 31.)

amounting

to

(Compl., ECF No.

(“[A] request to e-mail or fax a billing invoice

should have alerted FedEx that this was an improper request for
information and been denied.” (emphasis added)).

The basis of a

tortious interference claim is intent or knowledge.
support such a claim have been alleged here.

No facts to

FedEx‟s Motion to

dismiss UCB‟s claim for tortious interference is GRANTED.
UCB also fails to adequately allege that it had a “special
relationship” with FedEx, a necessary element of a claim for
breach of good faith and fair dealing.

The Texas Supreme Court

has “specifically rejected the implication of a general duty of
good faith and fair dealing in all contracts.”

City of Midland

v. O‟Bryant, 18 S.W.3d 209, 215 (Tex. 2000).

The court “has

imposed an actionable duty of good faith and fair dealing only
when there is a special relationship, as that between an insured
21

and his or her insurance carrier.”
quotation

marks

omitted).

“A

Id. (internal citation and

special

relationship

has

been

found to exist in the insurance context because of the parties'
unequal bargaining power and the nature of insurance contracts
which would allow unscrupulous insurers to take advantage of
their

insureds'

misfortunes

resolution of claims.”

in

bargaining

for

settlement

Saucedo v. Horner, 329 S.W.3d 825, 831

(Tex. App. 2010) (internal quotation marks omitted).
bargaining

power

or

alone

is

special

For example, Texas courts have refused to infer a
an

employer

or

a

unfairness.

between

possibility

create

absent

relationship

strong

to

relationship

special

the

insufficient

Unequal

and

presence

an

of

employee,

O‟Bryant, 18 S.W.3d at 215, or a creditor and a debtor.

See

UMLIC VP LLC v. T & M Sales and Envtl. Sys., Inc., 176 S.W.3d
595, 612 (Tex. App. 2005).
UCB argues that it has adequately alleged the existence of
a special relationship with FedEx because it provided FedEx “its
most valuable asset – its list of „whale‟ clients in the gold
industry.” (Resp. to Mot. to Dismiss, ECF No. 9 at 19.)

UCB

also argues that, because FedEx is a much larger corporation and
drafted all of the contracts between the parties,

FedEx

superior

a

bargaining

power

sufficient

relationship. (Id.)

22

to

establish

had

special

FedEx and UCB did not have a special relationship under
Texas law.

Both are sophisticated corporations that engaged in

arms-length

transactions

benefit.

with

each

other

for

their

mutual

That FedEx drafted the contracts at issue does not, by

itself, suggest disproportionate bargaining power.

UCB does not

allege that its shipping options were limited to FedEx or that
any aspect of the contracts was unfair.
sensitive

information

relationship.

is

insufficient

Entrusting FedEx with
to

create

a

special

Thus, UCB has failed to plead a claim for breach

of good faith and fair dealing, and FedEx‟s Motion to dismiss
that claim is GRANTED.
D. Statute of Limitations
FedEx alleges that UCB failed to file its complaint within
the

one-year

enforceable,

contractual
however,

the

limitations
terms

of

the

period.
contract

Even

if

confine

the

contractual limitations period to causes of action “arising from
the transportation of any package.”
5-1 at 10.)
packages,

but

information.

(Defendant Ex. 1, ECF No.

UCB‟s claims do not arise from the shipment of
the

alleged

mishandling

of

private

customer

Thus, FedEx‟s Motion to dismiss the complaint as

untimely filed is DENIED.
V.

Conclusion

For the foregoing reasons, FedEx‟s Motion to Dismiss is
GRANTED IN PART and DENIED IN PART.
23

So ordered this 12th day of September, 2013.
s/ Samuel H. Mays, Jr._____ _
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE

24