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Dawn J. Bennett Holding, LLC v. FedEx TechConnect, Inc.

United States District Court, District of Columbia

November 8, 2016

DAWN J. BENNETT HOLDING, LLC, Plaintiff,
v.
FEDEX TECHCONNECT, INC., Defendant.

          MEMORANDUM OPINION

          AMY BERMAN JACKSON UNITED STATES DISTRICT JUDGE

         Plaintiff Dawn J. Bennett Holding, LLC has brought this breach of contract and fraud action against defendant FedEx TechConnect, Inc. Compl. [Dkt. # 1-2]. Plaintiff alleges that defendant violated the parties' pricing agreement by refusing to apply the correct discount rates to plaintiff's transportation fees, and by refusing to provide plaintiff with an accounting of payments and discounts. Id. ¶¶ 8-11. Plaintiff also alleges that defendant defrauded it by misrepresenting the size of the discounts it would receive under the pricing agreement. Id. ¶¶ 13-15. Defendant has moved to dismiss the complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) on the grounds that the complaint is barred by res judicata, plaintiff failed to adhere to the Agreement's notice requirement, the complaint is time barred, the fraud claim is preempted by federal law, and the complaint does not plausibly allege breach of contract or fraud. Combined Mot. to Dismiss & Mem. of P. & A. in Supp. of Mot. to Dismiss [Dkt. # 7] (“Def.'s Mot.”) at 4-12.

         Plaintiff opposed the motion, but it did not address defendant's arguments about the statute of limitations, preemption, or the failure of the complaint to state a claim. See Pl.'s Opp. to Def.'s Mot. [Dkt. # 9] (“Pl.'s Opp.”). In light of those concessions, and because, even setting the concessions aside, the complaint is time barred, the Court will grant defendant's motion.

         BACKGROUND

         Plaintiff sells “top-of-the line sports apparel and equipment to a world-wide market.” Compl. ¶ 3. It makes over 10, 000 shipments a year. Id. On April 9, 2012, plaintiff entered into a pricing agreement with defendant, after defendant “aggressively began to solicit [plaintiff's] business.” Id. ¶ 5; see also Ex. A to Compl. [Dkt. # 1-2] (“Agreement”). The purpose of the Agreement was to obtain improved transportation services at discounted rates. Compl. ¶ 5. Plaintiff used defendant's services from April 9, 2012 through February 2014, and it paid defendant $139, 036.76 in transportation fees. Id. ¶¶ 6, 10.

         The Agreement expressly incorporates FedEx's service guides:

Each shipment made with FedEx is subject to the country of origin location's terms and conditions of carriage and the FedEx Service Guide in effect at the time of shipment, which terms are incorporated into this Agreement by reference.

         Agreement ¶ 2. All three relevant Service Guides for Express Shipments limit recovery for “any . . . legal or equitable relief whatsoever” to “one year from the date of delivery of the shipment or from the date on which the shipment should have been delivered.” Ex. 4 to Def.'s Mot. [Dkt. # 7-4] (“2012 Service Guide”) at 9, 23; Ex. 5 to Def.'s Mot. [Dkt. # 7-5] (“2013 Service Guide”) at 9, 23; Ex. 6 to Def.'s Mot. [Dkt. # 7-6] (“2014 Service Guide”) at 9, 24. And the Service Guides for Ground Shipments limit recovery for “claims for overcharges” to “18 months after the claim accrues.” 2012 Service Guide at 38; 2013 Service Guide at 38; 2014 Service Guide at 39. The Service Guides for Ground Shipments define an “overcharge” as “a charge based on an incorrect rate or an incorrect special handling fee.” 2012 Service Guide at 30; 2013 Service Guide at 30; 2014 Service Guide at 31.

         In January of 2014, plaintiff became concerned that it was not receiving the discounted rates to which it was entitled based on its volume of business. Decl. of Anderson McNeill, Ex. A to Compl. [Dkt. # 1-2] (“McNeill Decl.”) ¶ 6. In January of 2014, plaintiff's Vice President and General Merchandise Manager met with a FedEx representative who admitted that plaintiff's discount was “predicated at a lower level than the level of business it was providing FedEx, ” and that plaintiff “was entitled to a larger discount.” Id. ¶¶ 2, 6-8.[1] Plaintiff began to withhold payments after that meeting. Id. ¶ 9. Plaintiff does not specify the date it began to withhold payments, but in August 2014, a collection agency contacted plaintiff, seeking $22, 377.98 in unpaid transportation fees accumulated between February 25, 2014 and August 19, 2014. Id. ¶ 10.

         On February 25, 2015, defendant filed suit in D.C. Superior Court to collect the unpaid transportation fees. McNeill Decl. ¶ 10. While that action was pending, plaintiff filed its own action on June 6, 2016 in Superior Court. Compl. Plaintiff alleged that defendant breached the Agreement, and committed fraud in failing to give it the rates to which it was entitled. Id. ¶ 1.

         On June 30, 2016, defendant timely removed plaintiff's lawsuit to this Court. Notice of Removal [Dkt. # 1]. On July 7, 2016, defendant moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), asserting that plaintiff's complaint is barred by res judicata because it was fully adjudicated as a defense to defendant's collection action in Superior Court. Def.'s Mot. at 4-6. Defendant also contends that plaintiff failed to adhere to the Agreement's notice requirement, the complaint is time barred, the complaint does not adequately allege breach of contract or fraud, and the fraud claim is preempted by federal law. Id. at 6-12. Plaintiff opposed the motion, but only addressed the res judicata and the notice requirement issues.[2] Pl.'s Opp. at 6-8. Defendant replied in support of its motion. Reply in Supp. of Def.'s Mot. to Dis. [Dkt. # 10] (“Def.'s Reply”), STANDARD OF REVIEW

         “To survive a [Rule 12(b)(6)] motion to dismiss, a complaint must contain 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 (2009) (internal quotation marks omitted); accord Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In Iqbal, the Supreme Court reiterated the two principles underlying its decision in Twombly: “First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” 556 U.S. at 678. And “[s]econd, only a complaint that states a plausible claim for relief survives a motion to dismiss.” Id. at 679.

         A claim is facially plausible when the pleaded factual content “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678. “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. A pleading must offer more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action, ” id., quoting Twombly, 550 U.S. at 555, and “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.

         When considering a motion to dismiss under Rule 12(b)(6), the Court is bound to construe a complaint liberally in the plaintiff's favor, and it should grant the plaintiff “the benefit of all inferences that can be derived from the facts alleged.” Kowal v. MCI Commc'n Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). Nevertheless, the Court need not accept inferences drawn by the plaintiff if those inferences are unsupported by facts alleged in the complaint, nor must the Court accept plaintiff's legal conclusions. See id.; Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). In ruling upon a motion to dismiss for failure to state a claim, a court may ordinarily consider only “the facts alleged in the complaint, documents attached as ...


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