Rodger Blanco v. Federal Express Corporation, d/b/a FedEx Express, Justin Digby and Matthew Wainer

In 2014 a FedEx employee stole about $380,000 worth of gold coins and gold bars from a

package entrusted to FedEx for delivery. Almost two years later, the sender, Rodger Blanco,

sued FedEx for negligent investigation and conversion. FedEx moved for summary judgment,

which the district court granted principally because the contract of

carriage required Mr. Blanco to file suit within one year. In the alternative, the district

court held that (a) Mr. Blanco’s state-law claims were preempted by the Airline

Deregulation Act of 1978 (“ADA”), 49 U.S.C. §§ 1301, et seq., and (b) his conversion

claim, even if timely, failed on the merits.

Mr. Blanco now appeals. Because we agree that Mr. Blanco’s claims are timebarred,

we affirm the district court’s judgment on that basis alone and decline to reach

either of the alternative grounds presented.

I. BACKGROUND

On May 9, 2014, Mr. Blanco dropped off a package containing 300 ounces of gold

coins and gold bars at a FedEx1 post in Redmond, Washington, for overnight delivery to

a recipient in Oklahoma. The package made it intact only so far as FedEx’s shipping

facility in Oklahoma City, where a FedEx employee named Justin Digby ripped open the

package and stole its contents. Months later, upon questioning from the United States

Secret Service, Mr. Digby confessed to stealing Mr. Blanco’s gold. Mr. Digby pleaded

guilty to federal criminal charges and has since completed a term of incarceration in

federal prison.

Although the package’s contents were evidently worth hundreds of thousands of

dollars, the airbill memorializing the shipment notes a declared value of just $1000. It is

undisputed that the airbill and the FedEx Service Guide, which the airbill incorporates by

1 “FedEx” is shorthand for the defendant-appellee Federal Express Corporation, an

all-cargo air carrier operating under a certificate of authority granted by the U.S.

Department of Transportation through the Federal Aviation Administration.

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reference, together constitute the contract of carriage between Mr. Blanco and FedEx.

Among other things, the FedEx Service Guide includes a provision extinguishing “any

cause of action arising from the transportation of any package” if not filed within one

year from the date of delivery of the shipment or from the date on which the shipment

should have been delivered. Appellant’s App’x at 120. Mr. Blanco’s package should have

been delivered on May 12, 2014, and Mr. Blanco did not file this action until April 19,

2016, more than a year later.

Mr. Blanco alleges two causes of action against FedEx: common-law negligent

investigation and common-law conversion.2 As for negligent investigation, Mr. Blanco

alleges FedEx voluntarily undertook an investigation into his claim for lost or stolen

goods. By voluntarily undertaking that investigation, FedEx allegedly owed a duty of

care to Mr. Blanco, a duty FedEx breached “in conducting a slothful, incompetent

investigation.” Appellant’s App’x at 194, ¶ 32. As for conversion, Mr. Blanco alleges

that FedEx became liable for its employees’ theft by ratifying their conduct, which it did

by “imped[ing]” a criminal investigation, “or refus[ing] to share the information from [its

own] investigation with law enforcement.” Appellant’s Br. 15. The district court granted

summary judgment for FedEx, holding that Mr. Blanco’s claims are subject to the

contractual time bar and, in the alternative, preempted by the ADA, at least to the extent

his claims arise under state law. Blanco v. Fed. Express Corp., No. CIV-16-561-C, 2017

2 Mr. Blanco’s complaint also brought conversion claims against Mr. Digby and

Matthew Wainer, another FedEx employee. Those claims are not before us on appeal. See

infra, Part II.

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WL 3496458, at *2 (W.D. Okla. Aug. 15, 2017). As a further alternative basis for its

holding, the district court analyzed the merits of Mr. Blanco’s conversion claim under

federal common law, ultimately concluding that it failed as a matter of law. Id. at *3. The

district court determined that the conversion claim, even if timely, would have been

dismissed for failure to allege a “true conversion, i.e., where the carrier has appropriated

the property for its own use or gain.” Id. The district court did not opine on the merits of

the negligent-investigation claim.

II. JURISDICTION

Our jurisdiction to hear this case was not initially clear due to a question about the

finality of the district court’s order.3 In addition to his claims against FedEx, Mr. Blanco

in the same complaint also brought claims against two of FedEx’s former employees. See

supra, note 2. Immediately prior to entering final judgment in favor of FedEx, the district

court entered an order dismissing the individual defendants without prejudice. “As a

general rule, we will not allow parties to manufacture finality by obtaining a voluntary

dismissal without prejudice of some claims so that others may be appealed.” Spring

Creek Expl. & Prod. Co. v. Hess Bakken Inv., II, LLC, 887 F.3d 1003, 1015 (10th Cir.

2018) (internal quotation marks omitted). The individual defendants were dismissed

without prejudice pursuant to different provisions of the Federal Rules of Civil

Procedure. Mr. Digby’s dismissal came about through Rule 41(a)(2); for Mr. Wainer, it

was Rule 4(m). The latter rule provides that the court “must dismiss the action without

3 Under 28 U.S.C. § 1291, our jurisdiction is limited to appeals from “final

decisions” of the district courts in our circuit.

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prejudice against” any defendant not served within ninety days after a complaint is filed

“or order that service be made within a specified time.” Because Mr. Wainer was never

served, he is not a party to this case and his dismissal without prejudice does not defeat

finality. See Raiser v. Utah Cty., 409 F.3d 1243, 1245 n.2 (10th Cir. 2005); Bristol v.

Fibreboard Corp., 789 F.2d 846, 847 (10th Cir. 1986).

As to Mr. Digby, things were more complicated. We have said that a plaintiff’s

“efforts to seek review of without-prejudice dismissals under Rule 41(a)(2) raise issues of

non-aggrievement and non-finality that generally bar appellate jurisdiction.” Brown v.

Baeke, 413 F.3d 1121, 1123 n.3 (10th Cir. 2005). “Because such a plaintiff may reinstate

his action regardless of the decision of the appellate court, permitting an appeal is clearly

an end-run around the final judgment rule.” Palmieri v. Defaria, 88 F.3d 136, 140 (2d

Cir. 1996). Of course, Mr. Blanco did not appeal the Rule 41(a)(2) dismissal as to Mr.

Digby. He appealed only the district court’s grant of summary judgment to FedEx. Under

Federal Rule of Civil Procedure 54(b), when multiple parties are involved the district

court may direct entry of final judgment as to one party (say, FedEx) but not another (say,

Mr. Digby) so long as there is no just reason for delay. “Otherwise, any order or other

decision, however designated, that adjudicates . . . the rights and liabilities of fewer than

all the parties does not end the action as to any of the . . . parties . . . .” Fed. R. Civ. P.

54(b) (emphasis added). The district court in this case did not avail itself of Rule 54(b);

instead, it entered a one-sentence judgment on behalf of FedEx and against Mr. Blanco

without any elaboration.

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After oral argument, we remanded this case to the district court for Mr. Blanco to

obtain an order from the district court that can be considered a final decision. The district

court has since entered a judgment dismissing Mr. Digby with prejudice, removing any

question as to finality. Satisfied that we have jurisdiction under 28 U.S.C. § 1291, we

now proceed to the merits.

III. ANALYSIS

A. Standard of Review

“We review the district court’s summary judgment decision de novo, applying the

same standards as the district court.” Punt v. Kelly Servs., 862 F.3d 1040, 1046 (10th Cir.

2017). Summary judgment is warranted when “there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(a).

B. Discussion

The district court determined that Mr. Blanco’s claims were barred by the contract

of carriage, which incorporated by reference a one-year limitations period contained

within FedEx’s Service Guide. Our review on appeal is narrow. Mr. Blanco does not

dispute that the FedEx Service Guide is part of the contract governing his shipment. Nor

does he dispute that its limitations clause is enforceable and applicable to any claims

arising out of that contract. Mr. Blanco contests only the district court’s conclusion that

his claims in fact “arose from the transportation (or lack thereof) of Plaintiff’s package.”

Blanco, 2017 WL 3496458, at *2.

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In evaluating whether Mr. Blanco’s claims are covered by the contract’s

limitations clause, we start with the text of that provision:

Limitations on Legal Actions.

Any right you might have to damages, refunds, credits, recovery of reliance

interests, disgorgement, restitution, injunctive relief, declaratory relief or

any other legal or equitable relief whatsoever against us under any cause of

action arising from the transportation of any package pursuant to the FedEx

Service Guide shall be extinguished unless you file an action within one

year from the date of delivery of the shipment or from the date on which

the shipment should have been delivered.

Appellant’s App’x at 120. That language is expansive. It mandates that “[a]ny right . . .

under any cause of action . . . shall be extinguished” if not pursued within one year of the

date of delivery or the date on which the shipment should have been delivered, which the

parties agree is May 12, 2014. The limitations period, however, is circumscribed in one

respect: it covers only those causes of action which “aris[e] from the transportation of a[ ]

package.” Thus, by the contract’s plain terms, Mr. Blanco’s suit is untimely to the extent

it “aris[es] from the transportation” of his package. Whether Mr. Blanco’s claims “aris[e]

from the transportation” of his package is accordingly the critical question we must now

decide.

The contract does not define “arising,” so we use its ordinary or dictionary

definition. See, e.g., Logan Cty. Conservation Dist. v. Pleasant Oaks Homeowners Ass’n,

374 P.3d 755, 762 (Okla. 2016) (“Words must be viewed in the context of the contract

and must be given their plain ordinary meaning.” (internal quotation marks and alteration

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omitted)).4 In relevant part, the Oxford English Dictionary defines “arise” as: “Of

circumstances viewed as results: To spring, originate, or result from (of obsolete).” Arise,

Oxford English Dictionary, (last visited July 10,

2018). Black’s Law Dictionary adds: “To originate; to stem (from) (a federal claim

arising under the U.S. Constitution).” Arise, Black’s Law Dictionary (10th ed. 2014).

Both dictionaries use the word “originate,” suggesting the limitations clause

should be interpreted to reach any and all causes of action Mr. Blanco might have against

FedEx, no matter how remote from the transportation of his package, so long as the cause

of action can in some way trace its origins to that event. That origin-based interpretation

of “arising from” is in accord with the district court’s analysis, which employed a simple

and straightforward but-for test. See Blanco, 2017 WL 3496458, at *2 (“[B]ut for FedEx

transporting the shipment of gold, Plaintiff would not have a claim for negligent

investigation or conversion. Accordingly, Plaintiff’s claims are time-barred and the

claims against FedEx must be dismissed.”). We do not decide whether the district court’s

but-for test is sufficient for all cases. Some causes of action may be so remote from the

transportation of a package that they would not “aris[e] from the transportation of a[ ]

package,” even if in some attenuated sense the transportation of a package is a factual

predicate without which the cause of action would not exist. Wherever the line is to be

4 The parties disagree on the substantive law governing Mr. Blanco’s claims. Mr.

Blanco argues for Oklahoma common law; FedEx argues for federal common law. We

need not decide. Instead, we will assume for purposes of analysis that the substantive law

of Oklahoma applies, as Mr. Blanco urges. Because Mr. Blanco’s claims fail under his

preferred choice of law, we need not consider whether the result would differ under

federal common law.

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drawn, however, we have little difficulty concluding that the causes of action alleged here

did arise from the transportation of Mr. Blanco’s gold coins and gold bars. Mr. Blanco’s

claim, in essence, is that he entrusted a package to FedEx, the package was stolen, and

then FedEx conducted a negligent investigation into the theft, thereby impeding a

criminal investigation and making FedEx liable for conversion. In our judgment these

claims can be fairly said to “aris[e] from the transportation of a[ ] package.” That means

they are covered by the contract of carriage’s limitations period. Because there is no

dispute that Mr. Blanco’s claims were filed outside the time provided by contract, we

conclude the district court was correct to grant summary judgment in favor of FedEx.

On appeal, Mr. Blanco argues the district court’s analysis was contrary to ordinary

principles of contract construction. But Mr. Blanco exhibits little interest in applying such

ordinary contract principles himself. Rather than referring us to anything in the contract

that might limit its scope, Mr. Blanco cites Magnus Electronics, Inc. v. Royal Bank of

Canada, 611 F. Supp. 436, 440 (N.D. Ill. 1985), a case that interpreted the meaning of

“transportation by air” as that phrase was used in the Warsaw Convention of 1929. The

contractual language at issue here does not use the phrase “transportation by air” or

involve the Warsaw Convention, and so Magnus is no aid in our quest to interpret the

scope of the limitations clause to which Mr. Blanco and FedEx agreed.

Mr. Blanco also argues “the facts show that once [Mr. Digby] had stolen the

[package], FedEx no longer had actual or constructive possession” of Mr. Blanco’s

property. Appellant’s Br. 6. From that fact, Mr. Blanco concludes that his claims based

on FedEx’s “post-loss conduct . . . do not arise from FedEx’s air transport of those

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goods.” Id. We are not persuaded. Put simply, FedEx need not have continuously

possessed Mr. Blanco’s package in order for Mr. Blanco’s claims to “aris[e] from the

transportation of [that] package.” His claim, again, is that he entrusted a package to

FedEx, the package was stolen, and then FedEx conducted a negligent investigation into

the theft, thereby impeding a criminal investigation and making FedEx liable for

conversion. These claims “aris[e] from the transportation of a[ ] package,” regardless of

when the package was stolen and FedEx’s possession of it ceased.

For the above reasons, we AFFIRM the district court’s judgment on the basis that

Mr. Blanco’s claims were contractually time-barred. Because of our disposition, we need not and do not opine on the claims’ underlying merits or whether they are preempted by

federal law.