Headstream Tech., LLC v. FedEx Corp.

CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 1, 2023
Docket22-1410
StatusUnpublished

This text of Headstream Tech., LLC v. FedEx Corp. (Headstream Tech., LLC v. FedEx Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Headstream Tech., LLC v. FedEx Corp., (6th Cir. 2023).

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 23a0064n.06

No. 22-1410

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

) FILED HEADSTREAM TECHNOLOGIES, LLC, Feb 01, 2023 ) Plaintiff-Appellant, ) DEBORAH S. HUNT, Clerk ) v. ) ON APPEAL FROM THE UNITED ) STATES DISTRICT COURT FOR FEDEX CORPORATION, ) THE WESTERN DISTRICT OF Defendant, ) MICHIGAN ) FEDEX EXPRESS, jointly and severally, ) OPINION ) Defendant-Appellee. ) )

Before: STRANCH, MURPHY, and DAVIS, Circuit Judges.

STRANCH, J., delivered the opinion of the court in which DAVIS, J., joined in full. MURPHY, J. (pp. 11–14), delivered a separate opinion concurring in part and in the judgment.

JANE B. STRANCH, Circuit Judge. This case concerns Plaintiff Headstream

Technologies, LLC’s common law claims of fraud and tortious interference with prospective

economic advantage, and its alternative claim for breach of contract, against Defendant FedEx

Express. Headstream brought these claims when its bid in response to a request for proposals,

submitted to FedEx for delivery, was not received until after the deadline for consideration had

passed. FedEx moved for summary judgment, arguing that Headstream’s common law claims

were preempted by the Airline Deregulation Act, that its breach of contract claim was untimely,

and that FedEx’s liability was limited to $100 based on the contract of carriage. The district court

granted FedEx’s motion; Headstream appealed. For the reasons that follow, we AFFIRM. No. 22-1410, Headstream Technologies, LLC v. FedEx Corp., et al.

I. BACKGROUND

In early 2018, the Norfolk Public School System of Norfolk, Virginia, issued a request for

proposals (RFP) for a system to track teachers’ professional development and credentials.

Bidders’ proposals were due by 1:00 p.m. on March 28, 2018. Headstream (whose parent company

is a Michigan corporation) sought to submit a proposal.

On March 27, 2018, a Headstream employee took a digital copy of the company’s proposal

to a business called Kopy Korner for printing and overnight delivery. Headstream paid Kopy

Korner to print the documents and ship them via FedEx Express, to be delivered to the Norfolk

Public School System by 8:00 a.m. the next day, March 28, 2018. Headstream did not declare a

value on the shipment, and asserts that “at no point” was its employee presented with a written

contract to review or sign. After Headstream paid for the shipment, however, the employee was

handed a receipt to which the shipping label was stapled.

The shipping label noted that its use constituted the shipper’s “agreement to the service

conditions in the current FedEx Service Guide,” and that FedEx’s liability for “any loss,” including

lost profits, was “limited to the greater of $100 or the authorized declared value.” In March 2018,

the operative FedEx Service Guide confirmed that, “[w]ith respect to U.S. Express package

services, unless a higher value is declared and paid for, [FedEx’s] liability for each package is

limited to $100.” The Guide explained that FedEx would “[i]n no event” be liable for “any special,

incidental or consequential damages, including . . . loss of profits,” whether or not FedEx knew

such damages might be incurred. The Guide also stated that any right to equitable or legal relief

based on any cause of action arising from FedEx’s transportation of a package would be

“extinguished” unless the shipper filed the action within one year “from the date of delivery of the

shipment or from the date on which the shipment should have been delivered.”

-2- No. 22-1410, Headstream Technologies, LLC v. FedEx Corp., et al.

At approximately 10:14 a.m. on March 28, 2018, the package was marked as signed for in

Room 1008 of the Norfolk Public School System building by a “J. Pruiett.” No one by that name

worked for Norfolk Public Schools at the time.

The next day, Headstream received an email from Michael Sinnott, the Norfolk Public

Schools employee in charge of the bid process, informing the company that its proposal had arrived

at 9:00 a.m. on March 29, 2018, and could not be considered because it was not received by the

deadline. Sinnott had unsuccessfully checked both the mailroom and Room 1008 for the package

the previous day. According to FedEx, in the investigation that followed, Sinnott learned that a

Norfolk Public Schools employee had found Headstream’s package in the mailroom sometime

after 1:30 p.m. on March 28, 2018, and that a person from another office in the building had

brought the package to the mailroom at some point that morning. During the investigation, FedEx

maintained to Headstream that the package had been delivered to Room 1008 of the Norfolk Public

School System building at 10:14 a.m. on March 28, 2018, but told Sinnott that, based on GPS data,

the courier was “a couple blocks away” from the building at that time. Per FedEx, the GPS address

captures around this time were inaccurate due to the variable quality of the satellite signals used

to establish the GPS location.

On March 27, 2020, Headstream sued FedEx, claiming diversity jurisdiction and alleging

that (1) FedEx committed common law fraud when it represented that the company’s proposal had

been timely delivered on March 28, 2018, to “J. Pruiett,” (2) FedEx committed tortious

interference with Headstream’s prospective economic advantage when it “willfully” failed to

deliver Headstream’s proposal to the Norfolk Public School System, and (3) in the alternative,

FedEx breached its contract with Headstream to deliver the proposal by March 28, 2018, causing

Headstream to incur consequential damages. At summary judgment, the district court determined

-3- No. 22-1410, Headstream Technologies, LLC v. FedEx Corp., et al.

that Headstream’s common law claims were preempted by the Airline Deregulation Act, that its

breach of contract claim was untimely, and that FedEx’s liability was limited to $100 based on the

contract of carriage. Headstream timely appealed.

II. ANALYSIS

We review the district court’s grant of summary judgment de novo, making all reasonable

inferences in favor of the non-moving party.1 SunAmerica Hous. Fund 1050 v. Pathway of

Pontiac, Inc., 33 F.4th 872, 878 (6th Cir. 2022).

A. Headstream’s Common Law Claims

The Airline Deregulation Act (ADA, or the Act) was enacted in 1978 to promote

“efficiency, innovation, and low prices” in the airline industry. 49 U.S.C. § 40101(a)(12)(A). “To

ensure that the States would not undo federal deregulation with regulation of their own, the ADA

included a pre-emption provision[.]” Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378-79

(1992). In its current form, the provision prohibits states from enacting or enforcing “a law,

regulation, or other provision having the force and effect of law related to a price, route, or service

of an air carrier.” 49 U.S.C. § 41713(b). The parties do not dispute that FedEx is an air carrier

subject to the ADA.

The preemption clause’s causation requirement is broadly construed. See Morales, 504

U.S. at 383-84; Am. Airlines, Inc. v.

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