EIJ, Inc. v. United Parcel Service, Inc.

MEMORANDUM *

This case concerns the liability of United Parcel Service (UPS) and its insurer for a set of valuable watches that EIJ shipped from California to New York via UPS’s Next Day Air Service. The February 2, 2002, shipment, which was insured for a declared value of $50,000, was never delivered. EIJ submitted a claim for the lost package, valuing it at $52,900. UPS did not reimburse EIJ on the ground that UPS does not accept or insure packages whose value exceeds $50,000.

The district court granted summary judgment to the defendants, concluding that EIJ’s bad faith denial of a claim, failure to deliver freight, and fraud claims are preempted and precluded by federal law and that the defendants prevail on the breach of contract claim because the defendants’ refusal to insure or accept liability for packages valued over $50,000 was valid, not waived, and applicable to the disputed shipment.

On appeal, EIJ has abandoned its prior argument that it received inadequate notice of the $50,000 liability limitation. Instead, EIJ argues that none of its claims are preempted by federal law and that summary judgment is inappropriate on the breach of contract claim for two reasons:…