IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

 

No. 05-10300

 

 

CLARENDON NATIONAL INSURANCE CO.,

Plaintiff-Appellee,

versus

FFE TRANSPORTATION SERVICES, INC., FROZEN FOOD EXPRESS INDUSTRIES, INC.,

Defendants-Appellants.

 

Appeal from the United States District Court for

the Northern District of Texas

(USDC No. 3:03-CV-1752)

_________________________________________________________

Before REAVLEY, JOLLY and DeMOSS, Circuit Judges.

PER CURIAM:*

 

Appellants-Defendants FFE Transportation Services, Inc. and Frozen Food Express Industries, Inc. (collectively AFFE@) appeal the magistrate judge=s judgment granting Appellee-Plaintiff Clarendon National Insurance Co.=s motion for summary judgment and denying FFE=s cross-motion for summary judgment.  We affirm.

I.

Clarendon issued Business Auto Policy No. T 07701905 (the Apolicy@) to Frozen Foods.  The policy was in effect from December 1, 1996 to December 1, 1997.  FFE Transportation was a named insured under the policy.  The policy provided $2 million in insurance coverage subject to a Self-Insured Retention (SIR) of $1 million.  The SIR functioned essentially as a deductible in that FFE was responsible for the first $1 million in damages arising from an accident.  Clarendon then provided $1 million in excess coverage above the SIR.

 

Under the policy, FFE had a duty to report both accidents and claims in which it was involved.  First, the policy required Aprompt notice@ of any Aaccident, claim, suit or loss.@  Additionally, Endorsement #9 of the policy required Aimmediate notice@ to Clarendon of A[a]ny claim in which the requested damage exceeds the self retained amount,@ in this case $1 million.  Endorsement #9 further required notice of an occurrence of any injury, death, or disease paid or reserved for 25% or more of the amounts stated in the schedule of underlying insurance.

The policy provided that in the event the notice provisions were not followed Clarendon would (1) not be liable on the policy if Clarendon was prejudiced by the lack of notice, and (2) would be eligible for reimbursement from the insured for any amounts paid on claims involving a breach of the policy.  The policy explicitly provided Clarendon the right to investigate, defend, and settle any claim at its discretion.

On January 9, 1997, one of FFE Transportation=s vehicles was involved in an accident which resulted in several claims against FFE.  All but one of these claims were settled by FFE for a cumulative pay out of $219,861.99.  The remaining claim was brought as a tort action against FFE by Ray Stewart in state court in Missouri.

 

Although FFE appears to dispute exactly when it should have given notice of the accident and resulting claims, the parties agree that notice was not given until after trial on the Stewart claim, and that the timing of this notice breached the policy.  Further, FFE admits that Stewart offered to settle his claim for $700,000 in the spring of 2001.  FFE did not notify Clarendon of this offer.  FFE rejected the settlement offer and the case proceeded to trial.  The jury rendered a verdict of $1.1 million in favor of Stewart and judgment was entered on April 5, 2001.   On July 18, 2001, more than three months later, FFE gave its first notice to Clarendon of the January 1997 accident and the resulting claims.   After reserving its right to seek reimbursement from FFE, Clarendon participated in post-judgment settlement efforts of the Stewart claim which resulted in a $1 million settlement.   Clarendon contributed approximately $220,000 toward that settlement.2  Clarendon then sought reimbursement of the $220,000 from FFE.  FFE refused and Clarendon brought this lawsuit.

The parties agreed that there were no genuine issues of material fact and submitted cross-motions for summary judgment by agreement to the magistrate judge.  Clarendon sought reimbursement arguing that: (1) FFE breached the notice provisions of the policy; (2) Clarendon was prejudiced by the lack of notice; and (3) because of the prejudicial breach by FFE, Clarendon had no liability under the policy.  FFE argued that, under Texas law, Clarendon must prove actual prejudice, which it contended Clarendon could not do.  Thus, FFE sought a declaratory judgment that Clarendon was not entitled to any relief.  Judgment was entered for Clarendon and FFE appeals.

 

Reviewing the magistrate judge=s grant of summary judgment de novo, we consider the parties= arguments below.

II.

The parties agree that Texas law applies to this case, and that Clarendon must prove that FFE=s failure to give notice prejudiced Clarendon in order for coverage to be forfeited.  Thus, this case turns on what proof must be offered to establish prejudice.  Clarendon argues that prejudice can be established in two ways and that it has put forth sufficient evidence to meet both standards.  First, it argues that in certain situations the prejudice can be presumed B presumed prejudice or prejudice as a matter of law.  Second, Clarendon contends that where prejudice is not presumed the insurer can still avoid coverage by demonstrating actual prejudice.   FFE argues that the presumed prejudice standard is no longer good law and that Clarendon failed to prove actual prejudice.  We need not decide whether the presumed prejudice rule is still good law as Clarendon has shown actual prejudice.

 

Clarendon contends that FFE=s breach of the notice provision prevented it from exercising valuable rights.  Clarendon points to Section II.A. of the Trucker=s coverage form providing Clarendon with the absolute right to settle the claim as it Adeems appropriate.@  Stewart offered to settle the claim for $700,000.  FFE refused and a judgment of $1.1 million resulted.  Consequently, Clarendon argues that the breach of the notice provision by FFE resulted in the deprivation of Clarendon=s right to settle which proved to be worth $400,000.3  Had the Stewart claim settled for $700,000, the total payout on all claims resulting from the January 8, 1997 collision would have been $919,861.994 B within the SIR, resulting in no cost on the claim to Clarendon.  However, with the post-judgment settlement of $1 million, the total payout on the claim was $1,219,861.99, resulting in a cost of $219,861.99 to Clarendon.  Clarendon argues that this evidence demonstrates actual prejudice.

FFE counters that this is insufficient evidence of actual prejudice.  It contends that Clarendon must establish, not that it could have settled the claim for $700,000, but that it would have settled had FFE given notice.  We disagree and hold that Clarendon has shown that it suffered actual prejudice. It is beyond dispute that, pursuant to the express terms of the policy and in its unfettered discretion, Clarendon could have settled the Stewart action for a sum that would have resulted in no cost on the claim to Clarendon.

 

The Texas Supreme Court has held that  prejudice is the loss of a valuable right or benefit.  Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 693 (Tex. 1994) (holding that where the Aexpected benefit@ lost due to the breach Ahas no value. . . .  the insurer is not prejudiced by the breach@ and thus the insured cannot deny coverage).  The primary concern of Hernandez is that the insured must suffer the loss of a valuable right in order to avoid payment.  Thus, whether Clarendon would have accepted the settlement offer, as FFE urges, is immaterial to this point.  The fact remains that FFE=s failure to give notice caused Clarendon to lose a valuable settlement right.  See Motiva Enters. v. St. Paul Fire & Marine Ins. Co.,

— F.3d –, 2006 WL 774926, at(5th Cir. Mar. 28, 2006) (holding that Awhen … the insurer is not consulted about the settlement, the settlement is not tendered to it and the insurer has no opportunity to participate in or consent to the ultimate settlement decision, we conclude that the insurer is prejudiced as a matter of law@).  This satisfies the concerns of Hernandez and sufficiently establishes Clarendon=s prejudice.

 

We do not believe that Clarendon must show precisely what the outcome of the underlying case would have been had notice been given to make a showing of actual prejudice.  Clarendon is required to show the precise manner in which its interests have suffered.  Clarendon has done so, and thus, has demonstrated actual prejudice.

III.

For the reasons stated above, we affirm the magistrate judge=s judgment granting Clarendon=s motion for summary judgment and denying FFE=s cross-motion for summary judgment.

AFFIRMED.

United States District Court,

S.D. New York.

LEARNING LINKS, INC., on behalf of itself and others similarly situated,

Plaintiffs,

v.

UNITED PARCEL SERVICE OF AMERICA; INC., and United Parcel Service, Inc.,

Defendants.

No. 03 Civ. 7902(DAB).

 

March 27, 2006.

 

MEMORANDUM AND ORDER

 

BATTS, J.

 

Plaintiff Learning Links, Inc. (“Plaintiff” or “Learning Links”) has brought a breach of contract class action against Defendants United Parcel Service of America, Inc. and United Parcel Service, Inc. (collectively, “UPS”). Learning Links alleges that UPS overcharges them and other commercial customers for shipping. Specifically, Learning Links complains of UPS’s implementing shipping rates that are higher than the rates they contractually agreed upon. Now before the Court is Defendants’ Motion to Dismiss Learning Links’ Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. For the reasons contained herein, Defendants’ Motion to Dismiss is DENIED in part and GRANTED in part.

 

I. BACKGROUND

The following are the facts as set forth in the Complaint. Learning Links is a New York corporation that sells books and other educational products to individuals, school districts and other customers. They ship large quantities of products to both residential and commercial addresses throughout the Untied States and Canada. (Am.Compl.¶ ¶  2, 15, 16.) Defendants United Parcel Service of America, Inc,. and United Parcel Service, Inc. are Delaware corporations with their principal places of business in Georgia. (Defs.’ Notice of Removal ¶  28.)

 

“In order to induce commercial customers to use their shipping services, UPS contracts to provide those customers with volume shipping discounts”, charging “lower rates for commercial shipments than for residential shipments.” (Am. Com pl. ¶ ¶  12-13 .) Under these agreements, commercial customers who spent more than $2,000 per month on UPS shipping allegedly received volume discounts on all shipments beyond that amount. (Id. ¶  21.)

 

On April 8, 2002, Learning Links entered into such a written contract with UPS. (Id. ¶  17.) This contract took effect on June 24, 2002, and was a continuation of Learning Links’ pre-existing commercial relationship with UPS. (Id. ¶  17.) The agreed-upon volume discounts were set forth in Addendum B of that contract. (Id. ¶  19.)

 

In or about July 2002, Learning Links “discovered that UPS was not crediting it with the volume discounts which UPS had agreed to provide in [their] contract.” (Id. ¶  22.) They “promptly advised” UPS of the overcharges. (Id. ¶  23.) Learning Links alleges that on September 5, 2002, a UPS agent informed them that a computer software problem caused the overcharges. (Id. ¶ ¶  24-26.) The agent provided them with new software and a new computer printout that purportedly reflected the volume discount rates set forth in their contract. (Id.) However, shortly thereafter, Learning Links again complained of continued overcharges, and on September 11, 2002, was given another computer printout which also showed that UPS was not honoring the volume discounts. (Id. ¶ ¶  27-29.)

 

Learning Links alleges that they continued to complain to UPS about shipment overcharges. (Id. ¶  30.) Finally on January 13, 2003, UPS gave Learning Links another printout of their shipping rates and volume discounts. (Id. ¶  32.) This printout, like the others, contained shipping rates and volume discounts inconsistent with their contract and previous rate sheets. (Id.) UPS allegedly overcharged Learning Links in five different ways: (1) the UPS invoices regularly were more expensive than the corresponding UPS “manifest” which reflected the volume discounts set forth in the initial contract; (2) UPS frequently applied to commercial shipments a residential surcharge of $1.10 which it failed to disclose in its contract; (3) UPS consistently double-charged for residential ground packages sent by Learning Links; (4) UPS incorrectly labeled many commercial shipments as residential shipments, billed them at higher rates, and added surcharges to them; and (5) UPS double-billed all packages shipped to Canada. (Id. ¶  33.)

 

On August 28, 2003, Learning Links brought suit against UPS in New York State Supreme Court on behalf of itself and all other UPS customers who had entered into volume discount contracts with UPS and who had been similarly overcharged. Learning Links alleged breach of contract, fraud, and unjust enrichment. On October 6, 2003, UPS removed the case to this Court pursuant to 28 U.S.C. §  1441. Following removal, UPS moved to dismiss Learning Links’ original complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. However, on November 18, 2003, Learning Links filed an Amended Complaint in which it dropped all of its original causes of action except breach of contract. UPS now moves to dismiss the Amended Complaint in its entirety on grounds that the state common law claim is pre-empted by federal law. Alternatively, UPS moves to dismiss the breach of contract claim on statute of limitations grounds to the extent Learning Links seeks recovery for wrongdoing taking place prior to the relevant accrual date. []

 

UPS’s statute of limitations argument is two-tiered. UPS urges that since the Carmack Amendment applies to this case, the Carmack Amendment’s statute of limitations bars all of Learning Links’ claims accruing prior to February 28, 2002. UPS alternatively argues that if this Court permits Learning Links’ state law causes of action to proceed, then the appropriate statute of limitations would bar all claims prior to August 28, 1997.

 

II. DISCUSSION

A. Legal Standard

 

Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, Defendants have filed a motion to dismiss Learning Links’ claims. Rule 12(b)(6) permits dismissal when the Complaint fails to state a claim upon which relief can be granted.

 

A complaint should not be dismissed under Rule 12(b)(6) unless it is entirely clear that the plaintiff is unable to prove any set of facts that would support the claim and thereby grant him relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102 (1957). The complaint must be read “generously, accepting as true the factual allegations in the complaint and drawing all inferences in favor of the pleader.” Bolt Elec., Inc. v. City of New York, 534 F.3d 465, 469 (2d Cir.1995); Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir.1993). A court should grant the motion to dismiss only “if, after viewing a plaintiff’s allegations in this most favorable light, it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Walker v. City of New York, 974 F .2d 293, 298 (2d Cir.1992) (quoting Ricciutti v. New York City Transit Auth., 941 F.2d 119 (2d Cir.1991)). The Court “is not to weigh the evidence that might be presented at trial but merely to determine whether the complaint itself is legally sufficient.” Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir.1985). In ruling on a 12(b)(6) motion, a court may consider the complaint as well as any additional documents incorporated into or appended to the complaint. See Tarshis v. Riese Org., 211 F.3d 30, 39 (2d Cir.2000).

 

B. Preemption

 

UPS argues that Learning Links’ common law breach of contract claim is preempted by the Carmack Amendment to the Interstate Commerce Act of 1887, 49 U.S.C. §  14706, and therefore should be dismissed. Implied preemption of state law exists “where the federal interest in the subject matter regulated is so pervasive that no room remains for state action, indicating an implicit intent to occupy the field where the state [law] at issue conflicts with federal law or stands as an obstacle to the accomplishment of its objectives.” Redoubt Elec., Inc. v. NYS Dept. of Labor, 335 F.3d 162, 166 (2d Cir.2003), cert. denied, 540 U.S. 1105 (2004). See also Green Mountain R.R. Corp. v. Vermont, 404 F.3d 638, 641 (2d Cir.2005). UPS suggests that the Carmack Amendment implicitly preempts all state law causes of action by occupying the entire field of carrier liability. (Def. Memo. of Law at 5.) This Court disagrees.

 

The Carmack Amendment, enacted in 1906, states, in relevant part, that

[t]he liability imposed … is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States or from a place in the United States to a place in an adjacent foreign country when transported through a bill of lading….

49 U.S.C. §  14706(a)(1). A “bill of lading” provides for an interstate carrier’s liability for any “loss, damage, or injury to such property caused by it … and no contract, receipt rule or regulation shall exempt such … carrier from the liability hereby imposed.” N.Y., N.H. & Hartford R. Co. v. Nothangle, 346 U.S. 128, 131-32 (1953). See also Mich. Cent. R.R. Co. v. Marck Owen & Co., 256 U.S. 427, 430-31 (1921).

 

This Court, along with other courts in the Circuit, concludes that the Carmack Amendment addresses loss, damage or injury to shipped property, and nothing more. Id.; Travelers Indemnity Company of Illinois v. Schneider Specialized Carriers, Inc, 2005 WL 351106, at(S.D.N.Y.2005) (“It is well settled that Congress clearly intended the Carmack Amendment to preempt all state law claims against interstate carriers for loss or damage to goods during shipping.” ) (emphasis added); In re EVIC Class Action Litigation, 2002 WL 1766554 (S.D.N.Y.) (Carmack Amendment was “inapposite” to claims against defendant United Parcel Service, where those claims were not for “loss or damage to shipped goods”, but for misuse of customers’ payments for shippers’ insurance). See also Windows, Inc. v. Jordan Panel Systems Corp., 177 F.3d 114, 117-18 (2d Cir.1999); Calka v. North Am. Van Lines, 2001 WL 434871, at(S.D.N.Y.2001); Commercial Union Ins. Co. v.. Forward Air, Inc., 50 F.Supp.2d 255, 257 (S.D.N.Y.1999). []

 

Prior to the enactment of the Carmack Amendment, goods shipped across state lines passed through the hands of several carriers en route to their final destination. See Atlantic Coast Line R. Co. v. Riverside Mills, 219 U.S. 186, 199-203 (1911). However, interstate carriers limited their liability for lost or damaged goods to only those injuries that occurred on their portion of the shipment route. Id. at 199. Consequently, “the shipper could look to the initial carrier for recompense only for loss, damage, or delay occurring on its own line. This burdensome situation was the matter which Congress undertook to regulate.” N.Y., Phila. & Norfolk R.R. Co. v. Peninsula Produce Exchange of Md., 240 U.S. 34, 38 (1916) (internal quotations omitted).

The purpose of the Carmack Amendment was to achieve “uniformity” in claims against carriers for damage to goods they ship across state lines. See Reider v. Thompson, 339 U.S. 113, 119 (1950) (describing the goal of the Carmack Amendment as creating a uniform rule of liability so that shippers need not determine which of several carriers bears blame for damage under diverse state laws); see also Cleveland v. Beltman N. Am. Co., 30 F.3d 373, 379 (2d Cir.1994) (holding that “one of the primary purposes of the Carmack Amendment [is] to provide some uniformity in the disposition of claims”).

 

To be sure, the Supreme Court has held that delays in the arrival of goods shipped in interstate commerce also are covered under the Carmack Amendment. In Southeastern Express Co. v. Pastime Amusement Co., 299 U.S. 28 (1936), the Carmack Amendment controlled claims relating to a film reel delivered late, even though the reel itself incurred no physical damage. 299 U.S. at 29. The late delivery, however, meant that the film could not premier at the advertised show time. Id. at 28. Such delay meant that for practical purposes the film reel had been damaged. It lost substantial value when it could not be viewed on the show date that had been promulgated to the public. Such an action is tantamount to other Carmack Amendment actions for lost or damaged goods.

 

As another example, strawberries delivered late were actionable under the Carmack Amendment when the delay in delivery caused the fruits to spoil by the time they arrived. New York, Phila & Norfolk R.R. Co., 240 U.S. at 37. See also Starmakers Pub. Corp. v. Acme Fast Freight, Inc., 615 F.Supp. 787, 790- 91 (1985) (Carmack Amendment cause of action for delayed delivery is “derived from” the Amendment’s “mandate that a carrier shall be liable … for any loss or damage to property….”). The results in these cases do not stray from the well-settled axiom that the Carmack Amendment applies only to loss, damage, or injury to shipped goods.

 

Contrary to the well-settled case law surrounding the Carmack Amendment, UPS is arguing that the federal law preempts Learning Links’ breach of contract claim, even though Learning Links alleges no loss, damage, delay or injury to its shipped goods. (Defs.’ Memo. Law at 5.) The present breach of contract claim, UPS says, should be dismissed, because it “seeks to evade the full scope” of the Carmack Amendment’s preemption of state law. (Id.) But Learning Links’ Complaint only refers to shipment overcharges. Nothing in the Complaint alleges that the goods were lost or damaged.

 

UPS does cite a small cache of cases from other circuits to persuade this Court that the Carmack Amendment’s preemptive reach should be expanded. Specifically, UPS relies upon Duerrmeyer v. Alamo Moving & Storage One Corp., 49 F.Supp.2d 934 (W.D.Tex.1999); United Van Lines, Inc. v. Shooster, 860 F.Supp. 826 (S.D.Fla.1992); and Davis v. N. Am. Van Lines, 934 F.Supp. 245, 249 (S.D.Tex.1996). Not only are these decisions not binding on this Court, but they also are distinguishable from the present case.

 

The Duerrmeyer court noted that lost or damaged goods actually were alleged in that case, as evidenced by plaintiff’s asserted $600,000 in “conversion damages” and other injuries resulting from the defendant’s failure to properly store their shipped belongings. Duerrmeyer, 49 F.Supp.2d 931, n. 1. In Davis, the plaintiffs brought suit for post-delivery storage charges, not for breaches made during or before delivery, as is the case with Learning Links. Davis, 934 F.Supp. at 247. In Shooster, the court relied on Sylgab Steel & Wire Corp. v. Strickland Transp. Co., which exclusively addressed damage to shipped goods. 860 F.Supp. at 828 (citing Syglab, 270 F.Supp. 264, 270-71 (E.D.N.Y.1967) (holding that Carmack Amendment governs a carrier’s responsibility to provide compensation for damaged goods)). The Shooster court never explained how Sylgab applies to the fraudulent inducement controversy that was before it, and did not clearly ascribe the limits of the Carmack Amendment.

 

But to the extent that these cases did allow for the preemption of state law claims unrelated to a carrier’s liability for loss or damage to goods, they exceeded the holding of Adams Express Co., 226 U.S. at 505-06. See In re EVIC Class Action Litigation, 2002 WL 1766554 at (finding that court’s holding in Duerrmeyer was “inapposite” to a case alleging no claims of lost or damaged goods). Moreover, the cases cited by UPS are not binding on this Court.

 

What is binding is the well-settled principle in the Second Circuit that the Carmack Amendment preempts only state law actions for lost or damaged goods. See, e.g., Windows, Inc. v. Jordan Panel Systems Corp., 177 F.3d 114, 117- 18 (2d Cir.1999); Travelers Indemnity Company of Illinois v. Schneider Specialized Carriers, Inc, 2005 WL 351106, at(S.D.N.Y.2005); In re EVIC Class Action Litigation, 2002 WL 1766554 (S.D.N.Y.); Calka v. North Am. Van Lines, 2001 WL 434871, at(S.D.N.Y.2001); Commercial Union Ins. Co. v. Forward Air, Inc., 50 F.Supp.2d 255, 257 (S.D.N.Y.1999). []

 

Other circuits have held the same view. See, e.g., Ward v.. Allied Van Lines, Inc., 231 F.3d 135, 138 (4th Cir.2000) (the Carmack Amendment “preempt[s][the] shipper’s state and common law claims against a carrier for loss or damage to goods during shipment”); Gordon v. United Van Lines, Inc., 130 F.3d 282 (7th Cir.1997) (holding that the “Carmack Amendment does not preempt those state law claims that allege liability on a ground that is separate and distinct from the loss of, or the damage to, the goods that were shipped in interstate commerce”).

 

In light of the Second Circuit’s call for sparing use of the doctrine of complete preemption, Spielman v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 332 F.3d 116, 124 n. 5 (2d Cir.2003), this Court declines to expand the Carmack Amendment’s preemptive reach. Accordingly, this Court holds that Defendants’ Carmack Amendment preemption argument is without merit.

 

C. Statute of Limitations

 

UPS moves to dismiss all of Learning Links’ claims which accrued prior to February 28, 2002, arguing that the statute of limitations applicable to the Carmack Amendment requires a plaintiff to bring suit within eighteen months. See 49 U.S.C. §  14705(b). As this Court already has determined that the Carmack Amendment does not preempt Learning Links’ state law claims, UPS’s suggestion that the eighteen-month statute of limitations applies is incorrect.

 

UPS alternatively argues that if New York state law is to apply. Learning Links’ claims that accrued before August 28, 1997 are time-barred. (Defs.’ Memo. Law at 10.) On this, UPS is correct. This Court, sitting in diversity, must apply state substantive law, including applicable state statutes of limitations. See Cantor Fitzgerald Inc. v. Lutnick, 313 F.3d 704, 710 (2d Cir.2002). New York law sets forth a six-year statute of limitations in breach of contract cases. N.Y. C.P.L.R. §  213(2). Under this requirement, since Learning Links filed its original Complaint on August 28, 2003, Learning Links is barred from asserting claims for UPS contractual breaches prior to August 28, 1997.

 

Learning Links argues that it is premature to determine which claims are timely because it is not yet possible to ascertain when putative class members knew or should have known of UPS’s alleged wrongdoing. However, it is well established that New York’s six-year limitations period begins to run at the time of the contractual breach, not when the injured party discovers the breach. See, e.g., Ely-Cruikshank Co., Inc. v. Bank of Montreal, 81 N.Y.2d 399, 404 (1993) (noting that “[t]o extend the highly exceptional discovery notion to general breach of contract actions would effectively eviscerate the Statute of Limitations in [the] commercial dispute arena”); Spinelli v. Procassani, 258 A.D.2d 577 (2d Dep’t 1999) (holding that “[t]he cause of action accrued at [the] time [of breach] … not when [the plaintiff] discovered the breach….”). Thus, regardless of who is in the putative class and when those class members discovered or should have discovered UPS’s alleged contract breaches, no class member can assert claims for breaches occurring prior to August 28, 1997.

 

UPS’s Motion to Dismiss Plaintiff’s claims which accrued prior to August 28, 1997 is hereby GRANTED.

 

III. CONCLUSION

For the foregoing reasons, this Court DENIES in part and GRANTS in part Defendants’ Motion to Dismiss Learning Links’ Amended Complaint as follows:

(1) Defendants’ Motion to Dismiss the entire action on grounds of preemption is DENIED;

(2) Defendants’ Motion to Dismiss all Claims Accruing Prior to February 28, 2002 is DENIED;

(3) Defendants’ Motion to Dismiss all Claims Accruing Prior to August 28, 1997 is GRANTED.

 

Defendants shall answer Learning Links’ Amended Complaint within 30 (thirty) days of the date of this Order.

 

SO ORDERED.