629 F.Supp.3d 42
E.D.N.Y2022Background:
- Parties: A.S.A.P. Logistics, Ltd. (Plaintiff) sued UPS Supply Chain Solutions, Inc. (Defendant) for breach of contract, breach of the duty of good faith and fair dealing, and prima facie tort.
- Contract: On April 16, 2020 the parties executed a Global Air Charter Services Agreement under which UPS agreed to charter one or more aircraft from third-party carriers for four specific flights to transport Plaintiff’s goods from China to the U.S.
- Allegations: Plaintiff claims UPS ‘‘bumped’’ its freight—delaying shipments and placing others ahead—causing customer cancellations; Plaintiff admits the goods ultimately shipped.
- Procedural move: Defendant moved to dismiss under Rule 12(b)(6), arguing the Montreal Convention preempts Plaintiff’s claims.
- Contract terms: The Agreement reserves to Defendant the right to change departure times, routes, substitute aircraft/carriers, and route goods without notice.
- Disposition: Court held Defendant is a "contracting carrier," Plaintiff’s breach claim sounds in delay and is preempted by the Montreal Convention; remaining claims were abandoned or dismissed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether UPS is covered by the Montreal Convention as a "contracting carrier" | UPS acted as a broker procuring space, not an air carrier | UPS contracted to arrange carriage by third-party carriers and thus is a contracting carrier | UPS is a contracting carrier under the Montreal Convention |
| Whether the breach claim falls within the Montreal Convention (delay vs nonperformance) | Claim alleges nonperformance — failure to provide designated space on specific flights | Claim alleges delay/bumping of shipments, so it is covered and preempted by Montreal | Claim sounds in delay (not total nonperformance) and is preempted by the Montreal Convention |
| Whether tort claims survive Montreal preemption | Plaintiff did not contest preemption | Montreal preempts tort claims related to international carriage | Tort claims are preempted/abandoned and dismissed |
| Whether implied covenant and prima facie tort/ADA arguments survive given counsel’s failure to respond | Plaintiff offered no substantive response | Defendant argued failure to state claims and ADA preemption | Court deemed those claims abandoned and dismissed; ADA issue not reached |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard)
- El Al Israel Airlines v. Tseng, 525 U.S. 155 (Warsaw Convention purpose/uniformity)
- King v. Am. Airlines, Inc., 284 F.3d 352 (Warsaw/Montreal remedial system exclusivity)
- Ehrlich v. Am. Airlines, Inc., 360 F.3d 366 (Montreal substituted/expanded Warsaw regime)
- Best v. BWIA W. Indies Airways Ltd., 581 F. Supp. 2d 359 (entities arranging/reselling air transport can be contracting carriers)
- Seagate Logistics, Inc. v. Angel Kiss, Inc., 699 F. Supp. 2d 499 (Montreal provides exclusive remedies for loss/damage/delay of cargo)
- In re Nigeria Charter Flights Contract Litigation, 520 F. Supp. 2d 447 (distinguishing delay from total nonperformance)
- Weiss v. El Al Israel Airlines, Ltd., 433 F. Supp. 2d 361 (nonperformance where plaintiffs were never transported)
- Wolgel v. Mexican Airlines, 821 F.2d 442 (facts showing non-departure rather than mere delay)