JANE B. STRANCH, Circuit Judge.
Appellants Joe Solo and BleachTech L.L.C. filed a putative class action suit alleging that United Parcel Service Co. (UPS) overcharges customers for liability coverage against loss or damage for packages with a declared value of $300 or more. The complaint sought recovery based on four counts: breach of contract, declaratory relief pursuant to 28 U.S.C. § 2201, violation of 49 U.S.C. § 13708(b) (regulating billing and collecting practices for motor carriers), and, in the alternative, unjust enrichment. The district court dismissed all claims pursuant to Federal Rule of Procedure 12(b)(6), agreeing with UPS that the language of the shipping contract at issue unambiguously precluded the interpretation on which plaintiffs relied. For the following reasons, we affirm the dismissal of Solo and BleachTech's claim under 49 U.S.C. § 13708(b), reverse the dismissal of the remaining claims, and remand the case to the district court for further proceedings consistent with this opinion.
Named appellants are Joe Solo and BleachTech L.L.C. R. 1, ¶¶ 11, 15. Each uses UPS "from time to time" to ship packages with a declared value over $300. Id. at ¶¶ 12, 16. Solo is a resident and citizen of California. Id. at ¶ 11. On December 26, 2013, he shipped a package via UPS with a declared value of $565. Id. at ¶ 13. BleachTech is a privately-held Ohio limited liability company that operates plants in Ohio and Virginia and serves customers throughout the Midwest, including Michigan. Id. at ¶ 15. Between September 17, 2012, and November 26, 2013, BleachTech used UPS to ship packages with declared values between $326 and $1,634 a number of times. Id. at ¶ 16.
Appellee UPS is a Delaware corporation headquartered in Atlanta, Georgia, and wholly-owned subsidiary of United Parcel Service, Inc. Id. at, ¶ 20. It is one of the world's largest package delivery companies — UPS delivered an average of 16.3 million packages per day worldwide in 2012. Id. at ¶ 32.
This case concerns the fee charged for liability coverage against package loss or damage, which UPS refers to as "declared value coverage." Solo and BleachTech claim that "UPS has for years been systematically overcharging customers for the first $100 of declared value coverage, which UPS in its standardized published rates claims to provide at no additional charge for each shipment." Id. at ¶ 1. Each alleges to have paid an additional charge above that set forth in UPS's published rates when they shipped packages with a declared value greater than $300. Id. at ¶¶ 14, 17. They seek relief on behalf of a nation-wide class composed of "[a]ll persons residing in the United States who purchased from defendant UPS, directly or through an Authorized Outlet, coverage for loss or damage for shipments with a declared value in excess of $300.00" under theories of breach of contract, 49 U.S.C. § 13708(b), and, alternatively, unjust enrichment. Id. at ¶¶ 45, 53-83. They also seek declaratory relief under 28 U.S.C. § 2201. Id. at ¶¶ 58-64.
Solo and BleachTech (hereinafter, collectively Solo or "he") assert that customers
Solo alleges that UPS makes an "explicit representation and/or contractual promise" to provide the first $100 of liability coverage at no charge in the "Shipping Contract," which incorporates UPS's Tariff/Terms and Conditions of Service (UPS Terms) and its Rate and Service Guide (Service Guide).
R. 1, PageID 137. Accordingly, UPS's liability for loss or damage to packages with no declared value, or a declared value between $0.00 and $100, is capped at $100. Liability coverage can be increased for packages with a declared value between $100.01 and $50,000 for a charge of $0.85 per each $100 (or portion thereof) "of the total value declared." Id. There is a minimum charge of $2.55 to increase liability beyond the default cap. Id.
The UPS Terms also include a "Third-Party Retailer" provision that limits liability in any action for loss, damage, or delay of a package shipped by a third-party retailer, including all UPS store locations.
This case was originally filed in the Central District of California on December 27, 2013 along with a nearly identical companion case in the Eastern District of Michigan, Sivak v. United Parcel Service Co., 28 F.Supp.3d 701 (E.D.Mich.2014). In response to the plaintiffs' complaint in Sivak, UPS initially filed an answer that included among its affirmative defenses the argument that the plaintiffs lacked standing because they were "not in direct contractual privity with UPS." Defendant United Parcel Service Co.'s First Amended Answer to Complaint at 17, Sivak v. United Parcel Service Co. (filed Jan. 6, 2014) (No. 13-15263). After an amended complaint was subsequently filed, UPS responded with a motion to dismiss that was granted on other grounds. Sivak, 28 F.Supp.3d at 723.
The Solo plaintiffs then voluntarily dismissed their complaint without prejudice and refiled it in the Eastern District of Michigan. They requested that the court vacate its order of dismissal under Federal Rule of Civil Procedure 60(b)'s catch-all provision, consolidate Sivak with Solo, and dismiss the single consolidated amended complaint, presumably to facilitate a swift appeal. The district court denied the motion, finding that plaintiffs failed to show that "principles of equity require[d] the Court to vacate its judgment." R. 24, PageID 452.
UPS filed a motion to dismiss Solo's complaint on August 29, 2014. On March 27, 2015, the district court granted the motion and dismissed the complaint with prejudice for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). In so doing, the district court incorporated its order dismissing Sivak. Id. at 447 ("Because the facts of this case are materially identical to those in Sivak, the court focuses here on the few distinctions between the two cases and the procedural relationship between them, and refers the reader to Sivak for a more complete treatment of the overlapping facts.").
Solo timely appealed the district court's order of dismissal. He maintains that the district court erred in concluding, among other things, that UPS's interpretation of the Shipping Contract was the only permissible reading. Solo contends that "[a]t the very least, Plaintiffs-Appellants' reading is reasonable, thereby creating a jury issue." Solo also challenges the court's dismissal of the unjust enrichment and 49 U.S.C. § 13708(b) claims.
The district court's order granting a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) is reviewed de novo. Winget v. JP Morgan Chase Bank, N.A., 537 F.3d 565, 572 (6th Cir.2008). We construe the complaint in the light most favorable to the plaintiff, accept all well-pleaded factual allegations as true, and examine whether the complaint contains "sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). This standard "does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence
The court "consider[s] the complaint in its entirety, as well as ... documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007); see also Weiner v. Klais & Co., 108 F.3d 86, 89 (6th Cir.1997) (noting documents that a defendant attaches to a motion to dismiss are also considered part of the pleadings if referred to in the complaint and central to the claim). Issues not examined by the district court are ordinarily not considered on appeal. See e.g., Singleton v. Wulff, 428 U.S. 106, 120, 96 S.Ct. 2868, 49 L.Ed.2d 826 (1976) ("It is the general rule, of course, that a federal appellate court does not consider an issue not passed upon below.").
A federal court sitting in diversity applies the choice of law provisions of the forum state. See Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Michigan courts follow the Restatement (Second) of Conflict of Laws. Kipin Indus., Inc. v. Van Deilen Intern., Inc., 182 F.3d 490, 493 (6th Cir.1999). Under this approach, in the absence of an express choice of law provision, Michigan courts apply forum law unless (1) no substantial relationship exists between the forum state and the contract, or (2) the application of forum law would conflict with the policy interest of a state with a greater connection to the contract than the forum state. NILAC Intern. Mktg. Grp. v. Ameritech Servs., Inc., 362 F.3d 354, 358 (6th Cir. 2004). The UPS Shipping Contract contained no choice of law provision and the parties agree that the district court correctly applied Michigan law to the state claims.
In Michigan, contract interpretation is a question of law and therefore subject to de novo review. Port Huron Educ. Assn. v. Port Huron Area Sch. Dist., 452 Mich. 309, 550 N.W.2d 228, 237 (1996). The language of a contract must be construed according to its plain and ordinary meaning, rather than technical or constrained constructions. Dillon v. DeNooyer Chevrolet Geo, 217 Mich.App. 163, 550 N.W.2d 846, 848 (Mich.1996). "Every word, phrase, and clause in a contract must be given effect, and contract interpretation that would render any part of the contract surplusage or nugatory must be avoided." McCoig Materials, LLC v. Galui Const., Inc., 295 Mich.App. 684, 818 N.W.2d 410, 416 (Mich.2012). When the language at issue is clear and unambiguous, its meaning is a question of law. Port Huron, 550 N.W.2d at 237. However, if the language is "unclear or susceptible to multiple meanings, interpretation becomes a question of fact." Id. See also Henderson v. State Farm Fire & Cas. Co., 460 Mich. 348, 596 N.W.2d 190, 193 (1999) (explaining that "if reasonable minds could disagree about the conclusions to be drawn from the facts, a question for the factfinder exists").
Solo's position is that the fee chart's placement of the cost for additional liability coverage under the indented category (-$100.01-$50,000.00) applies the fees only to the declared package values as
The district court instead accepted the argument of UPS that the meaning of "total value declared" is clear from the four corners of the contract because "total" is an unambiguous term that should be given its plain and ordinary meaning — here, the full amount of a package's declared value. Thus, it determined that UPS complies with the Service Guide when including the first $100 increment in its fee calculation for liability coverage.
The parties do not dispute the language in the Service Guide — they dispute what that language may reasonably mean. Viewing the agreements, the parties agree that UPS limits its liability to $100 for packages shipped when no value in excess of $100 is declared and paid for the package: under the Domestic Value-Added Services chart, Fee section, Package heading, the indented category for packages (-$0.00-$100.00) specifies a corresponding fee of $0.00. Nor do the parties dispute that it is the next indented category for packages (-$100.01-$50,000) that specifies a fee of $0.85 for each $100 of "total value declared." Though the decision below concedes that the term "total value declared" is not defined in the parties' agreements, Sivak, 28 F.Supp.3d at 712, it relies on dictionary definitions of "total" to accept UPS's argument that, within the $100.01-$50,000 category, the $0.85 charge applies to every $100 increment, including the first $100 that would have been covered at no charge on a package with a declared value under $100.01 or no declared value.
To determine whether a complaint states a claim upon which relief may be granted, we consider the complaint in its entirety. Tellabs, 551 U.S. at 322, 127 S.Ct. 2499. On a Rule 12(b)(6) motion, we must accept all well-pleaded factual allegations as true. Id. The complaint alleges that when customers have complained about having the fee applied to the first $100 of value declared, "UPS routinely acknowledges the overcharge and credits the account," R. 1, ¶ 6; that "UPS has implemented a practice of crediting with refunds those few customers who complain of the overcharge," id. at ¶ 9; and that, in addition to obtaining credit for the charge, "UPS has acknowledged that the charge was not proper," id. at ¶ 40. On the complaint before us, we must accept as true the allegation that UPS itself acknowledges the validity of Solo's reading of the
Having considered the arguments and all well-pleaded allegations of the complaint, we conclude that reasonable minds could differ on the correct interpretation of the Service Guide provision. Because the provision is at least ambiguous, its meaning is a question of fact that is not properly answered by the court at this early stage in the proceedings.
The district court found that Solo's unjust enrichment claim was precluded by the existence of an express contract concerning the subject matter at issue. Sivak, 28 F.Supp.3d. at 714. Taking the facts in the light most favorable to the plaintiff, the court reasoned, it must accept Solo's argument that the Shipping Contract was valid and bound the parties. Id. at 714 n. 5. On appeal, Solo contends that this determination was made in error because a party may present pleadings in the alternative that need not be consistent. Fed. R. Civ. P. 8(a)(3), (d)(3). Solo brought the claim as Count IV and labeled it: Unjust Enrichment (In the Alternative).
The courts of Michigan will imply a contract when a plaintiff can establish that no express contract concerning the subject matter exists and that the defendant has received a benefit from the plaintiff and retained it, resulting in an inequity. Fodale v. Waste Mgmt. of Mich., Inc., 271 Mich.App. 11, 718 N.W.2d 827, 841 (Mich.2006). Peabody v. DiMeglio, 306 Mich.App. 397, 856 N.W.2d 245, 251 (2014) ("`[T]he law operates to imply a contract in order to prevent unjust enrichment,' and ... this will not occur if there is already an express contract on the same subject matter.") (internal citation omitted). Rule 8(a)(3) permits pleadings in the alternative "when, for instance, there is a dispute between the parties as to whether an express agreement exists." Bowlers' Alley, Inc. v. Cincinnati Ins. Co., 32 F.Supp.3d 824, 833-34 (E.D.Mich.2014) (citing Cascade Elec. Co. v. Rice, 70 Mich.App. 420, 245 N.W.2d 774, 777 (1976)).
Though Solo argues that the Shipping Contract is a valid and binding agreement between the parties for the purpose of his breach of contract claim, it would be improper to prematurely conclude that UPS will not dispute this allegation in subsequent stages of the proceedings. See Terry Barr Sales Agency, Inc. v. All-Lock Co., Inc., 96 F.3d 174, 182 (6th Cir.1996) (allowing plaintiff to proceed under both breach of contract and unjust enrichment theories where defendant "kept its options open, and may deny the existence of a contract on remand to the district court"). Here, UPS immediately moved for dismissal and did not file an answer to the complaint, whereas in Sivak, UPS first answered and denied privity of contract before moving for dismissal upon the filing of an amended complaint. In light of the lack of information about the relationship between UPS and its third party retailers, and mindful of the procedural history in Sivak, Solo's complaint specifically raised this issue, alleging: "to the extent customers who ship via UPS through a third party retailer or other Authorized Outlet lack contractual privity with UPS ..." R. 1, ¶ 64(c), "in the alternative, plaintiffs and members of the Class seek relief for unjust enrichment," id. at ¶ 83.
Having determined that the parties were subject to an express contract, the district court did not reach UPS's contention, raised far more extensively here, that Solo's unjust enrichment claim should be dismissed as preempted by the Federal Aviation Administration Authorization Act (FAAAA). The FAAAA was enacted to "ensure that the States would not undo federal deregulation with regulation of their own." Rowe v. N.H. Motor Transport Ass'n, 552 U.S. 364, 367-68, 128 S.Ct. 989, 169 L.Ed.2d 933 (2008) (examining state regulations affecting shipment of tobacco). It bars states from "enact[ing] or enforc[ing] a law, regulation, or other provision having the force and effect of law related to a price, route, or service" of any motor or air carrier. 49 U.S.C. §§ 14501(c)(1), 41713(b)(4)(A). UPS's redeveloped argument contends that Solo's unjust enrichment claim "falls squarely within" this preemptive scope.
We are not inclined to decide this matter before it has been fully briefed by both parties and considered by the district court in the first instance. However, several Supreme Court cases and the similarly worded Airline Deregulation Act (ADA) provide guidance on the scope of the preemption provisions in the FAAAA.
In American Airlines, Inc. v. Wolens, the Supreme Court determined that the ADA's preemption provision did not foreclose suits alleging breach of the carrier's "own self-imposed undertakings" as these did not constitute a "violation of state-imposed obligations." 513 U.S. 219, 228, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995). There, the Supreme Court considered a class action brought by members of American Airlines' frequent flyer program who alleged that retroactive modification of the program terms violated the Illinois Consumer Fraud Act and constituted a breach of contract. Id. at 224-25, 115 S.Ct. 817. The Court held that the Consumer Fraud Act claim fell within the preemption provision of the ADA, noting the Act "serves as a means to guide and police the marketing practices of the airlines; the Act does not simply give effect to bargains offered by the airlines and accepted by airline customers." Id. at 228, 115 S.Ct. 817. The Court, however, found that the ADA's preemption clause did not shelter airlines from breach of contract claims because "[a] remedy confined to a contract's terms simply holds parties to their agreements — in this instance, to business judgments an airline made public about its rates and services." Id. at 229, 115 S.Ct. 817.
Further defining what may constitute a "state imposed obligation," the Supreme Court recently explained that "the reasoning
The Court looked to whether the passenger's "implied covenant claim is based on a state-imposed obligation or simply one that the parties voluntarily undertook," and found the obligation fell into the former category. Id. at 1431. Under governing state law, the duty of good faith and fair dealing applied to all contracts and could not be disclaimed. Id. at 1432. The Court concluded that "[w]hen the application of the implied covenant depends on state policy, a breach of implied covenant claim cannot be viewed as simply an attempt to vindicate the parties' implicit understanding of the contract." Id.
Here, UPS argues that under Northwest Inc., Solo's unjust enrichment claim — "predicated on the absence of a contract" — "requires the enforcement of state law and policy and is therefore preempted by the FAAAA." However, as there are significant differences between Northwest Inc. and the case before us, further consideration is warranted.
In Northwest Inc., for instance, the Supreme Court found it determinative that the duty of good faith and fair dealing applied to "every contract" under the governing state law. Nw. Inc., 134 S.Ct. at 1433. In this way, the doctrine acted as a tool used by the state to "ensure that a party does not `violate community standards of decency, fairness, or reasonableness.'" Id. at 1431-32 (internal citation omitted). The doctrine of unjust enrichment does not synonymously apply to all contracts as a matter of state policy. Instead, unjust enrichment serves to "effectuate the intentions of parties or to protect their reasonable expectations," and thus looks to the particular parties to a transaction rather than a universal, state imposed obligation. Id. Moreover, Solo's claim is based in fraud — specifically, that UPS allegedly made an explicit representation to customers that it would offer the first $100 of liability coverage free of charge and then failed to follow through. This scenario may resemble that of Wolens, where the plaintiff sought the aid of the court to "hold[ ] parties to their agreements," specifically, "to business judgments an airline made public about its rates and services." 513 U.S. at 229, 115 S.Ct. 817.
As explained above, we conclude that Solo may plead unjust enrichment in the alternative. On remand, both parties will have the opportunity to fully form their arguments on the preemption issue, to be considered by the district court as the case progresses.
Billing and collection obligations of motor carriers are set forth in 49 U.S.C. § 13708, which reads in relevant part:
49 U.S.C. § 13708(b).
Solo alleges that "one or more affiliates or employees of defendant developed the content of, formatted, and/or published or caused defendant to publish the UPS Service Guide, including the excess declared value rates and tables," or, in the alternative, "defendant caused UPS Inc. to publish the UPS Service Guide and to present false or misleading information regarding excess declared value charges therein." R. 1, PageID 16. On appeal, Solo adds that "UPS can be both `a person' and `a motor carrier,' and is, in fact, both."
Neither we nor our sister circuits have yet examined the scope of § 13708. We disagree with the district court that the language of § 13708(b) is ambiguous and see no need to look to its sparse legislative history.
It is plausible, as Solo claims, that the Service Guide constitutes a "document" about the "actual rate [or] charge" for declared value coverage within the meaning of § 13708(b). However, Solo has not sufficiently alleged that a "person" caused a "motor carrier" to commit the misconduct at issue. Neither the articulation presented in the complaint (that the "person" is an — as yet unknown — UPS employee/affiliate and the "motor carrier" is UPS or that the "person" is UPS and the "motor carrier" is its parent corporation) nor that offered on appeal (that UPS is both the "person" and the "motor carrier") states a colorable claim.
Solo relies heavily on Grocery Haulers, Inc. v. C & S Wholesale Grocers, Inc., to support his claim. 2012 WL 4049955 (S.D.N.Y. Sept. 14, 2012). However, the court in Grocery Haulers found that the plaintiff shipper had failed to state a claim under § 13708(b). Id. at *9. There, the shipper had engaged a motor carrier to deliver food to retailer locations and alleged that "[the carrier] submitted inaccurate mileage figures in a number of its Invoices and billed [the shipper] based on these inaccurate miles for at least one delivery" as well as billing for "State road use taxes that it did not actually incur." Id. at *8. The court concluded that while the defendant carrier could be both a "legal person and a motor carrier" for the purpose of the statute, § 13708(b) was not satisfied where the shipper alleged the carrier caused itself to engage in the relevant conduct. Id. at *9. Because "[t]here is a legal distinction between performing an act directly and causing an act to be done" and the shipper accused the carrier of "only the former; [while] subsection (b) addresses only the latter," the court resolved this claim in the carrier's favor. Id. at *9, 19.
We find that Solo's claim succumbs to the same flaw. It is insufficient, according
Based on the foregoing reasoning, we AFFIRM the dismissal of Solo's claim under 49 U.S.C. § 13708(b), REVERSE the dismissal of the remaining claims, and REMAND the case to the district court for further proceedings consistent with this opinion.