Petition for Writ of Certiorari — Headstream Technologies, LLC, Petitioner v. FedEx Express

No.

IN THE

Supreme Court of the United States

HEADSTREAM TECHNOLOGIES, LLC, PETITIONER

Vv.

FEDEX EXPRESS

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

JOHN A. RENDA

Counsel of Record

900 Parish Street

Pittsburgh, PA 15220

john.renda@gmail.com

(412) 736-9925

CURRY & TAYLOR ¢ (202) 350-9073

1

QUESTION(S) PRESENTED

To foster economic competition among airlines,

Congress in the Airline Deregulation Act of 1978

prohibits States from enacting or enforcing any law

related to “a price, route, or service” of an air carrier. But

when an air carrier’s employee intentionally commits

fraud, even inventing a fake recipient/signor to cover up

the air carrier’s failed delivery of petitioner’s package, is

it liable under state law for its fraud using the rationale of

the Second, Third, Fourth, Ninth and Tenth Circuits or

are such claims preempted by the ADA as decided by the

First, Fifth and Sixth Circuits?

1. Should this Court resolve the continuing conflict

among the Circuits whether the ADA preempts state-law

tort claims which allege intentional, unreasonable and

unnecessary behavior by an air carrier in providing its

service?

2. Did the Panel mishandle the summary judgment

record by refusing to view the reasonable inferences

drawn therefrom in the light most favorable to petitioner,

the nonmoving party, when assessing its state-law

contract claim that the air carrier never presented it with

its terms of service until after the contract was formed?

Ww

PARTIES TO THE PROCEEDING

All the parties in this proceeding are listed in the

caption.

RULE 29.6

Petitioner Headstream Technologies, LLC

(“Headstream’’) is a non-governmental limited lability

Delaware company with a principal place of business in

Charlotte, Michigan. Its parent company is Faulkner

Tech, Inc., a Michigan corporation. Neither Headstream

nor its parent company are publicly held entities. No

publicly held entity owns, holds, or controls 10% or more

of Headstream’s stock or membership units.

STATEMENT OF RELATED CASES

None.

TABLE OF CONTENTS

Page

(JUESTION(S) PRESENTED ...........cssssscssssscecesssscecessssseceesssceeeess l

PARTIES TO THE PROCEEDING.........ccccccccsssssscccecceessssssssceeecees ll

RULE 29.6 ......cccsscssscsscssscccssscscssssceessscecessscecessscseesssescessceeesecees il

STATEMENT OF RELATED CASES ........ccccccsssssssssssssseesssseeenss il

TABLE OF AUTHORITIEGD..........sccccssssssscessssccesssseccesssscecessescers IV

OPINIONS BELOW ........csscccssssscsesseccssscecessseccssssceeeesceesesseeeseseees 1

JURISDICTION. ....sssccccsssssscccccssssscccccssssssceccesssssceccsesssseeecessssseeees 1

RELEVANT PROVISIONS INVOLVED. .......ccccccsssssssccessssseeeeeees 2

STATEMENT .......ccssssscssssssscesssseccesssscecessssceecssssceeesssscseeesesseeeessees D

REASONS FOR GRANTING THE PETITION .........ccscscsssssseeeees 15

CONCLUSION ......cccssssccsssccsssccccessccessssecessscccecsseceseseceeseseeeeessees 34

APPENDIX

Circuit Court Decision dated February 1,

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Transcript of District Court Decision dated

APT il 6, 2OQ2 wiecccserrccccsssrcccessccecesssceceesseceesesseeeecesseeeeees 18a

Order Denying Rehearing dated February

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TABLE OF AUTHORITIES

Page

CASES

AL-WATAN V. AM. AIRLINES, 570 F.SUPP.2D

925 (E..D. MICH. 2008) ...........cccsscsccsssscescesssseecessssceceeseees 23

AMERICAN AIRLINES V. WOLENS, 518 U.S. 219

(1995) .......ssccccsssscsccsssscccesssseecesssseecesssscecessssceceesssceecesesseees 26

ANDERSON V. LIBERTY LOBBY, 477 U.S. 242,

ZA9-255 (1986).......sccccsssscsscssssceccessssecessssceccssssceecesssseeeeses 30

BEARD V. BANKS, 548 U.S. 521, 529-530 (2006).............. 30

CHARAS V. TRANS WORLD AIRLINES, INC., 160

F.3D 125912638-1264 (9TH CIR. 1998)..........ccccccsscsessees 20

CHUKWU V. BOARD OF DIRECTORS BRITISH

AIRWAYS, 889 F.SUPP. 1218, 1223-1224 (D.

MASS. 1995), AFF'D, 101 F.3D 106 (1ST CIR.

1996) ......cccccssscsccssssccccesssseccssssceccesssceecesssscecessesseceesesseseeses 18

CIPOLLONE V. LIGGETT GROUP, INC., 505 U.S.

BOA, 516 (1992) ........ecssssccssssccessssceccesssceecesssceecesssseesessenes 25

DAY V. SKYWEST AIRLINES, 45 F.3D 1181, 1186

(LOTH CIR. 2022) ...cccccccccccccsssssscccccccccccssssssccccecccccsccccsssces 28

DIFIORE V. AM. AIRLINES, INC., 646 F.3D 81, 86

(IST CIR. 2011)... ccccccccssscsssccssccessssssssccssessssseees 19, 20

EK LASSAAD V. INDEPENDENCE AIR, INC., 618

F.3D 119, 126 (BRD CIR. 2010) wo... ecccsscteeessscteeeeeees 22

FENN V. AMERICAN AIRLINES, INC., 839

F.SUPP. 1218, 1223-1224 (S.D. MISS. 1998)............ 18, 28

GEE V. SOUTHWEST AIRLINES, 110 F.3D 1400,

1409-1410 (OTH CIR. 1997)..........ccsscsccssssscesssssescessseeeess 18

HODGES V. DELTA AIRLINES, INC., 44 F.3D 334,

340 (STH CIR. 1995) ........cccsscsccssscceccsssseeceesees 14, 17, 20, 23

KLAPP V. UNITED INS. GROUP AGENCY, 663

N.W.2D 447, 454 (MICH. 2008) ...........cccccsssccscessssrreeseeees 33

LAWAL V. BRITISH AIRWAYS, PLC, 812 F.SUPP.

718, 720 (S.D. TEX. 1992)........:ccccsssssssscsssssccseesscsssesseseees 18

MONTALVO V. SPIRIT AIRLINES, 508 F.3D 464,

ATA-475 (OTH CIR. 2007).......scccscsssssesccsecsscsssesecsscsscseecenes 18

MORALES V. TRANS WORLD WORLD AIRLINES,

INC., 504 U.S. 874 (1992) uu... sesescscsrsesscssssecscesrssneenees 26

NORTHWEST, INC. V. GINSBERG, 572 U.S. 273

(C0) 0) eee 26

ONOH V. NORTHWEST AIRLINES, INC., 613 F.3D

59G (STH CIR. 2010).........ccessccscssscssccssscssccsecssncssecsnseenceees 20

REEVES V. SANDERSON PLUMBING PRODUCTS,

INC., 580 U.S. 138, 150-151 (2000) ..........csssscsessesseseeseees 30

ROMBOM V. UNITED AIR LINES, INC., 867

F.SUPP. 214 (S.D.N.Y. 1994) . 10-14, 18, 21, 24-26, 28-29

ROWE V. NEW HAMPSHIRE MOTOR TRANSP.

ASSN., 552 U.S. 364, 371 (2008)..........sccsccssscsssssseesecesreees 16

SHAW V. DELTA AIRLINES, INC., 463 U.S. 85,

100 N.21 (1988)........ccssccsssssscscsesscssscsssessccsecesesseesecesseensees 16

SHQEIRAT V. U.S. AIRWAYS, INC., 515

F.SUPP.2D 984, 1006-07 (D.MINN.2007) .........csccssssesseee 23

SILKWOOD V. KERR-MEGEE CORP., 464 U.S.

238, 251 (1984) ........csccscsssscesccssscsssssccsssesssescessscesscesresseeess 25

SMITH V. ALLENDALE MUT. INS. Co., 308

N.W.2D 702, 709 (MICH. 1981) .........cscsscssssscsscssssessseeees 30

SMITH V. COMAIR, INC., 134 F.3D 254, 259 (4TH

CIR. 1998)........sscssscsscessesstesssescessscessesseescesseseneessesessssesses 33

THOMAS V. UNITED PARCEL SERVICE, 614

N.W.2D 707 (MICH. CT. APP. 2000).........scssccsssrsssresseeees 13

TOBIN V. FED. EXP. CORP., 775 F.3D 448, 449-50

(IST CIR. 2014).........cecccsscsnssrscsrcensesssesscesseensesees 12, 20, 23

TOLAN V. COTTON, 572 U.S. 650, 660 (2014) (PER

CURIAM) .....cssccsssessscesscssstcesecessessccesseessteesscesssensceessersseeses 33

WELLONS V. NORTHWEST AIRLINES, INC., 165

F.3D 498, 494 (6TH CIR. 1999)........cccccscceseeseeees 18, 20, 21

WITTY V. DELTA AIRLINES, INC., 366 F.3D 380,

383 (BTH CIR. 2004) ........csccssccsscsscsccscsssscssscsscesscesesenseess 18

VI

STATUTES

28 U.S.C. § 12541) wc cccccceesscsscccccccccccscssssscccecccccceccceees 2

28 U.S.C. § 1882(A),. uc ccccccccccccccssssssscccccccccccccssssscccccececceeees 10

28 U.S.C. § 2ZIOL(C) wc ecccccccccccccesssssscccccccccccsscssscssccccccccssceesees 2

AQ U.S.C. 8 13 T1(Q)L) wu cccccccccccccceccccccccsscccsscscceeees 29

AD U.S.C. § LA5OL(C)(1) occ tc cccccccccccccccssssssscccececcosees 4,9

AD ULS.C. § ALLI2(A). wc cet cceeccsscccccccccccccsssssccccceeecceeees 4

AD USC 8 41TIS8(B)(L) wee ec ccccccccccccsssssssscceeees 3, 10, 29

RULES

FR.ALP. 40 coi. cccccccssssccccccsssccccccssccccccssscccccsssccccceessees 15

REVISED SUPREME COURT RULE 13.8 ..........csscccccsssseeceees 2

OTHER AUTHORITIES

POUND, SURVEY OF THE CONFERENCE

PROBLEMS, 14 U.CIN.L.REV. 324, 339 (1940)............. 17

1

OPINIONS BELOW

The unpublished Opinion of the United States

Court of Appeals for the Sixth Circuit in Headstream

Technologies, LLC v. Federal Express, C.A. Docket No.

22-1410, decided and filed February 1, 20238, and

reported at 2023 WL 1434054 (6 Cir. 2/1/2028),

affirming the district court’s grant of summary

judgment in favor of respondent, is set forth in the

Appendix hereto (App. 1-17).

The unpublished Order of the United States

District Court for the Western District of Michigan,

Southern Division, in Headstream Technologies, LLC v.

Federal Express, Civil Action No. 1:20-cv-282, decided

and filed April 6, 2022, contained in the transcript of a

hearing on respondent’s summary judgment motion,

and unreported by either Westlaw or LEXIS, granting

respondent’s motion for summary judgment, is set forth

in the Appendix hereto (App. 17-50).

The unpublished Order of the United States

Court of Appeals for the Sixth Circuit in Headstream

Technologies, LLC v. Federal Express, C.A. Docket No.

22-1410, decided and filed February 17, 2023, denying

petitioner’s timely filed petition for Panel rehearing, is

set forth in the Appendix hereto (App. 51-52).

JURISDICTION

The unpublished Opinion of the United States

Court of Appeals for the Sixth Circuit affirming the

2

district court’s entry of summary judgment in favor of

respondent, was entered on February 1, 2023; and its

unpublished Order denying petitioner’s timely filed

petition for Panel rehearing was decided and filed on

February 17, 2028 (App. 1-17;51-52).

This petition for writ of certiorari is filed within

ninety (90) days of the date the Court of Appeals denied

petitioner’s timely filed petition for Panel rehearing. 28

U.S.C. § 2101(c). Revised Supreme Court Rule 13.3.

The jurisdiction of this Court is invoked

pursuant to the provisions of 28 U.S.C. § 1254(1).

RELEVANT PROVISIONS INVOLVED

United States Constitution, Article VI,

Clause 2(The Supremacy Clause) :

This Constitution, and the Laws of the United

States which shall be made in Pursuance thereof;

and all Treaties made, or which shall be made,

under the Authority of the United States, shall

be the supreme Law of the Land; and the Judges

in every State shall be bound thereby, any Thing

in the Constitution or Laws of any State to the

Contrary notwithstanding.

United States Constitution, Amendment V:

No person shall ... be deprived of life, liberty, or

property, without due process of law....

5)

49 USC § 41713(b)(1) & (b)(4)(A) (the

Airlines Deregulation Act):

Preemption of authority over prices, routes,

and service

(b) Preemption.—

(1) Except as provided in this subsection, a

State, political subdivision of a State, or political

authority of at least 2 States may not enact or

enforce a law, regulation, or other provision

having the force and effect of law related to a

price, route, or service of an air carrier that may

provide air transportation under this subpart.

(4) Transportation by air carrier or carrier

affiliated with a direct air carrier.—

(A) General rule.—

Except as provided in subparagraph (B), a State,

political subdivision of a State, or political

authority of 2 or more States may not enact or

enforce a law, regulation, or other provision

having the force and effect of law related to a

price, route, or service of an air carrier or carrier

affiliated with a direct air carrier through

common controlling ownership when such carrier

is transporting property by aircraft or by motor

vehicle (whether or not such property has had or

will have a prior or subsequent air movement).

4

49 U.S. Code § 41112(a):

Liability insurance and financial

responsibility

(a) Liability Insurance.—

The Secretary of Transportation

may issue a certificate to a citizen of the United

States to provide air transportation as an air

carrier under section 41102 of this title only if

the citizen complies with regulations and orders

of the Secretary governing the filing of an

insurance policy or self-insurance plan approved

by the Secretary. The policy or plan must be

sufficient to pay, not more than the amount of

the insurance, for bodily injury to, or death of, an

individual or for loss of, or damage to, property

of others, resulting from the operation or

maintenance of the aircraft under the certificate.

A certificate does not remain in effect unless the

carrier complies with this subsection.

49 U.S. Code § 14501(c)(1):

Federal authority over intrastate

transportation

(c) Motor Carriers of Property.—

(1) General rule.—

Except as provided in paragraphs (2) and (8), a

State, political subdivision of a State, or political

authority of 2 or more States may not enact or

D

enforce a law, regulation, or other provision

having the force and effect of law related to a

price, route, or service of any motor carrier

(other than a carrier affiliated with a direct air

carrier covered by section 41718(b)(4)) or any

motor private carrier, broker, or freight

forwarder with respect to the transportation of

property.

STATEMENT

In early 2018, the Norfolk Public School System

of Norfolk, Virginia, issued a Request for Proposals

(“RFP”) from vendors to provide it with a professional

development management system. Bidders were

required to submit their proposals to the Norfolk Public

Schools in Norfolk by 1:00 PM on March 28, 2018.

Petitioner Headstream Technologies, LLC (“petitioner”

or “Headstream”) prepared its bid on the project. On

March 27, 2018, its employee took a USB drive or “flash

drive” containing its proposal to Kopy Korner in Mt.

Pleasant, Michigan, to have it printed and then

delivered to Norfolk, Virginia, before the 1:00 PM

deadline on March 28, 2018.

Kopy Korner is an agent of respondent FedEx

Express (“respondent” or “FedEx”). Told that

Headstream needed the documents printed and sent to

Norfolk Public Schools at its address in Norfolk,

Virginia via the earliest next-day delivery offered

(which was 8:00AM the following day), FedEx’s agent

agreed that FedEx could provide this delivery.

6

Headstream’s employee left the Norfolk address and

the USB drive and returned later that day when the

documents were ready for shipment. The printed

documents were placed by FedEx’s agent into an

envelope which it had addressed to “Norfolk Public

School RFP” at the tendered address in Norfolk,

Virginia; “First Overnight” delivery was designated.

At this point the FedEx agent told the

Headstream employee the amount of the bill and the

Headstream employee paid by credit card.

After paying the bill, the FedEx employee

printed out the receipt for Headstream which detailed

only the transaction amounts. To this receipt, FedEx’s

agent then stapled an 8 % x 11 sheet of paper on which

was copied both the shipping label and — if one looked

closely — additional (and new) “terms and conditions.”

One such “term” was that the customer agrees to all the

terms and conditions found in FedEx’s “Service Guide.”

At no point during the transaction did FedEx’s

agent present Headstream’s employee with FedEx’s

“terms and conditions,’ FedEx’s “Service Guide,” or

even a “contract of carriage” to sign or even review. At

no point did FedEx’s agent alert Headstream to any

new contract terms. As became clear in discovery,

FedEx’s agent at Kopy Korner alone was aware of the

FedEx Service Guide, and the “terms and conditions,”

and it was FedEx’s agent who filled out the “contract

for carriage” for the shipment. In discovery, FedEx

declined to provide a copy of the contract of carriage

7

and the only evidence of the sheet of paper stapled to

the receipt is a photograph taken later by the

Headstream employee to document his expenses. There

the added terms are partially visible.

The delivery of Headstream’s proposal by

FedEx to the School System was scheduled for on or

before 8:00 AM the following morning of March 28,

2018. FedEx’s tracking number for Headstream’s parcel

was 4154 0905 2889.

By 9:00 AM the morning of March 28", FedEx’s

website still showed that Headstream’s parcel was “out

for delivery.” Shortly after 10:00 AM, FedEx sent

Headstream a delivery confirmation that its parcel had

been successfully delivered to the Norfolk Public School

System at Room 1008 in the School Administration

Building in Norfolk, Virginia, at 10:14 AM and was

signed for by one “J. Pruiett” (App. 3). Headstream

relied upon FedEx’s delivery confirmation in deciding

not to pursue any further attempt to deliver its

proposal to the School System by another method prior

to the 1:00 PM deadline.

After the 1:00 PM deadline passed, the Norfolk

Public School System advised Headstream that its

proposal had never arrived and that it was excluded

from bidding on the School System’s project. Surprised,

Headstream forwarded FedEx’s delivery confirmation

to the School System and called FedEx who told them

that it the delivery had been delivered specifically to

the School System’s “Room 1008”. When Headstream

8

sent FedEx’s delivery confirmation to the School

System to rebut the claim that its proposal never

arrived, the School System’s Michael Sinnott—who

oversaw the RFP process—investigated. Mr. Sinnott

personally searched the several floors which the School

System occupied—including the mail room and Room

1008—and confirmed that Headstream’s proposal had

not been delivered anywhere within the School System.

In fact, the School System’s employee in Room 1008

specifically denied having contact with “anybody [at]

FedEx to accept a package” (App. 4). Sinnott even

went so far as to call the School System’s Human

Resources Department and search the School System’s

employee e-mail database. Both confirmed that no “J.

Pruiett” was employed anywhere in the School System

(App. 3).

Only after the deadline had passed was

Headstream’s parcel brought to the School System by

someone from the juvenile court system located on

floors 1 through 3 of the same building. We can only

speculate how and when FedEx later dropped the

parcel off in that location. On March 29, 2018, the day

after bids were due, Sinnott emailed Headstream that

its proposal in response to the RFP arrived at the

School System “at 9:00 AM today,” i.e., March 29, 2018,

a day late, and therefore it “cannot be considered”

(App. 3-4). According to Sinnott’s email, “Federal

Express delivered it yesterday to an unknown person,

J. Pruiett, who is not an employee of Norfolk Public

Schools” (App. 4).

9

FedEx told two different stories about what

happened to Headstream’s proposal. To Headstream,

FedEx claimed that its courier delivered the proposal

directly to the School System by delivering it to Room

1008 (and only to Room 1008) on the tenth floor of the

School Administration Building and that one “J.

Pruiett” in Room 1008 signed for the parcel on behalf of

the School System. However, to the School System

FedEx gave an entirely different story: that the FedEx

courier misdelivered the parcel “a couple of blocks

away” (App. 4). As Michael Sinnott later testified, “the

package had not been delivered to the School

Administration Building on the day that it was due,

notwithstanding what FedEx claimed” (Id.).

FedEx misrepresented to Headstream when its

proposal was delivered, where it was delivered and

even invented a fake recipient/signor to cover up its

failed delivery of petitioner’s parcel. However,

Headstream’s claim did not pursue the misdelivery of

the parcel. Headstream’s claim concerned the

misrepresentations which FedEx published to

Headstream following the delivery—

misrepresentations which Headstream relied upon at a

time when it could still accomplish the delivery by

another (albeit expensive) route.

Proceedings Below.

On March 27, 2020, petitioner brought this civil

action against both FedEx Express and FedEx

Corporation in the federal district court for the

10

Western District of Michigan, Southern Division,

asserting diversity jurisdiction under 28 U.S.C. §

1332(a), and seeking damages under the laws of

Michigan for common law fraud, tortious interference

with prospective economic advantage and breach of

contract (App. 4;20). After discovery and the voluntary

dismissal of FedEx Corporation, FedEx moved for

summary judgment claiming that petitioner’s claims

were preempted by the Airlines Deregulation Act, 49

USC § 41718(b)(1) (“SADA”), which prohibits a State

from enacting or enforcing any law or regulation

relating to “a price, route, or service of an air carrier”

like FedEx.

FedEx argued that petitioner’s two claims

alleging intentional torts were simply claims about how

an air carrier performed its service and were therefore

preempted by the ADA (App. 24-25). Headstream

maintained that while the delivery notifications sent

out by FedEx following delivery might be considered

“related to” a service, that such notifications were, at

best, tenuously related to the air carrier’s services.

Regarding Headstream’s contract claim, FedEx

contended that the additional paper that accompanied

the receipt given to Headstream after the transaction

was sufficient to impose new “terms and conditions” on

the transaction, including the incorporation of the

“FedEx Service Guide.” In discovery and in summary

judgment, FedEx made no showing of any agreement

(signed or unsigned) of Headstream’s acceptance or

even knowledge of its “terms and conditions.” Still,

11

FedEx argued that such terms governed the

relationship, including a one-year statute of limitations

(App. 25-27) and a $100 Declared Value Limit (App.

27;28). Since petitioner’s suit was not brought within

one year, FedEx argued that such claims were time

barred (App. 25-26).

Headstream averred before the district court

that it never saw, read, signed, agreed to, or was

alerted to any of FedEx’s “terms and conditions” and

that it was FedEx’s burden to show evidence of such.

Headstream argued that— when FedEx handed the

receipt to Headstream after they had completed the

transaction—FedEx’s agent did not alert it to any

additional contract terms. Discovery showed that

FedEx’s agent, and not Headstream, filled out the

“contract for carriage” for the parcel (App. 36-38).

As for the intentional tort of fraud (petitioner

abandoned its tortious interference claim), Headstream

argued that preemption will never apply to give an air

carrier carte blanche to lie and deceive its customers, as

FedEx did here. Headstream contended that it would

be illogical and unfair to assume that Congress

intended to preempt tort suits where carriers perform a

service in an unreasonable and unnecessary manner

since such fraudulent conduct could never meaningfully

impact an air carrier’s economic competitiveness (App.

28;29-30;33;34-35). Here FedEx deliberately lied about

where, when and to whom Headstream’s proposal was

delivered, a lie which Headstream relied upon. As

petitioner argued, a jury could find that this fraudulent,

12

outrageous and unreasonable conduct implicated a tort

claim not preempted by the ADA (App. 35).

Ruling in open court, the district court, Neff, J.,

read the court’s opinion from the Bench granting

FedEx’s summary judgment motion (App. 43-50). She

determined that all petitioner’s claims stemmed from

FedEx’s mishandling of its parcel and that these

common law claims therefore all relate to FedEx’s

delivery “service” which warrants preemption under

the ADA (App. 44-45;46 citing Tobin v. Fed. Express

Corp., 775 F.3d 448, 454 (1* Cir. 2014)). The court did

not believe that FedEx’s alleged false representations

which followed the delivery of the parcel amounted to

outrageous conduct for purposes of Rombom v. United

Air Lines, Inc., 867 F.Supp. 214 (S.D.N.Y. 1994) (App.

45-46). Though no evidence of any effects were

presented, the district court found that permitting

petitioner to go forward on its fraud claim would have a

direct effect on FedEx’s services, changing it

“considerably to remain in business” (App. 47).

Accordingly, the district court found that “preemption

wins this case for FedEx on the strength of the

statutory exemption and the Airline Deregulation Act”

(App. 46).

Regarding petitioner’s contract claim, the

district judge ruled that in placing the parcel in the

hands of FedEx, “paying the fee and accepting the

forms back,... there was an agreement” (App. 46). The

court also noted that FedEx’s “terms and conditions”

appeared on the shipping label (App. 47-48). It bears

13

noting that the shipping label was in evidence as a joint

stipulation and no such language exists there (App. 35-

36;38-39). Due the contract’s “limitation of liability”

provision and the one-year statute of limitations

contained in FedEx’s Service Guide, the court ruled

that petitioner’s claims were barred except for its

recovery of $100.00 pursuant to the contract of carriage

(App. 47-48).

Petitioner filed a timely appeal to the Sixth

Circuit Court of Appeals on May 5, 2022 and submitted

its brief on August 12, 2022. On February 1, 2023, the

court of appeals affirmed the entry of summary

judgment in FedE:x’s favor (App. 1-17).

In reaching its decision, the court of appeals

noted the murky line separating conduct which courts

have deemed “preempted” versus conduct which courts

have deemed to have survived preemption. And while

the court noted the existence of the Rombom threepart test raised by Headstream, the test was not

applied. See, Rombom, 867 F.Supp. at 221-224 (App. 5-

8).

Headstream noted that claims such as

discrimination (See Wellons v. Northwest Airlines, Inc.,

165 F.3d 493, 494 (6th Cir. 1999)), defamation (See,

Thomas v. United Parcel Service, 614 N.W.2d 707

(Mich. Ct. App. 2000), and personal injury (See, Day v.

SkyWest Airlines, 45 F.4th 1181 (10th Cir. 2022))

survive preemption because such tortious conduct is

not reasonably necessary to the provision of the

14

service. Rombom, 867 F.Supp. at 222. See also, Hodges

v. Delta Airlines, Inc., 44 F.8d 334, 340 (5th Cir. 1995).

Headstream argued that the tortious conduct in the

instant case (intentional misrepresentation) is also not

reasonably necessary to the provision of a service and

should survive preemption.

The circuit court disagreed, affirming the district

court’s finding of preemption with regard to

Headstream’s tort claims. (App. 8 citing Tobin v. Fed.

Exp. Corp., supra). To Headstream’s use of Wellons and

Rombom in making its argument, the majority noted

that FedEx’s misrepresentation “is not equivalent to an

airline passenger’s assault or [an] employee’s

experience with racial discrimination.” (App. 8-9).

The circuit court also rejected Headstream’s

contract claim, not because it was preempted by the

ADA but because the claim was untimely under the

one-year limitations period contained in FedEx’s

Service Guide (App. 10-11). It ruled that Headstream’s

argument that at no time during the transaction were

FedEx’s additional terms ever shown to Headstream

was foreclosed by precedent establishing that mere

acceptance of a receipt where additional terms were

present constituted acceptance of those additional

terms. (App. 10-12).

In a concurring opinion, Murphy, J., admitted

that he failed to understand the dividing line developed

by the decisional law about which conduct by an air

carrier is sufficiently connected to its service to make

15

claims arising therefrom subject to preemption and

which conduct is not, especially here where the ADA’s

preemption covers an air carrier’s non-air or ground

services (App. 12; 14-15). Instead, he decided

Headstream’s fraud claim on the merits, concluding

that there was not enough evidence on this record to

show that FedEx knowingly or recklessly made a false

statement during its “cursory communication [with

Headstream] before the 1:00 PM deadline” (App. 15-16).

On February 15, 2028, Headstream timely filed

its Petition for Panel Rehearing Pursuant to F.R.A.P.

40. On February 17, 2023, the Panel denied petitioner’s

petition (App. 51-52).

REASONS FOR GRANTING THE PETITION

I. The Court Should Resolve the Continuing

Conflict Among the Circuits About Whether

the Airlines Deregulation Act Preempts

State-Law Tort Claims Which Allege

Intentional, Unreasonable or Unnecessary

Behavior by An Air Carrier in Providing Its

Service.

Due to confusion among the circuits regarding

when preemption should apply under the Air

Deregulation Act, the populace is left with differing

ruling in different circuits which provide different legal

results depending on where a litigant files his or her

case.

16

In Morales, the Court determined that (1) state

enforcement actions “having a connection with, or

reference to” an air carrier’s “rates, routes, or service,”

are preempted. Morales, 504 U.S. at 384; (2)

preemption may occur even if a state law’s effect on

rates, routes, or service “is only indirect,” id. at 386;

and (8) preemption occurs at least where state laws

have a “significant impact” related to Congress’

deregulatory and preemption-related objectives. Id. at

390. Because Congress’ overarching goal in

deregulating the airlines was to achieve maximum

reliance on competitive forces in the industry which

would stimulate efficiency, innovation and low prices,

Morales held that the ADA preempts States from

enforcing their consumer fraud statutes against

deceptive airline-fare advertisements. Jd. at 391.

Finally, Morales held that federal law might not

preempt state laws that affect airline fares in only a

“tenuous, remote, or peripheral...manner,” such as state

laws forbidding gambling or prostitution. Id. at 390

quoting Shaw v. Delta Airlines, Inc., 463 U.S. 85, 100

n.21 (1988). But the Court did not say where, or how, “it

would be appropriate to draw the line” for when

preemption is found because the state law before it in

Morales did not present “a borderline question.” Id. See

Rowe v. New Hampshire Motor Transp. Assn., 552 U.S.

364, 371 (2008) .

In Wolens, the Court held that the ADA’s

preemption clause did not stop a state from affording

relief to a party who claims and proves that an airline

17

dishonored a term in a contract the airline itself

stipulated, 1.e., its frequent flyer program. 513 U.S. at

226-228. As to the line between what the ADA

preempts and what it leaves to private ordering,

backed by judicial enforcement, the Wolens majority

adopted a “middle course” between minimal and nearly

total preemption as “best calculated to carry out the

congressional design.” Id. at 226-227.

The Wolens Court acknowledged the _linedrawing problem created in Morales for finding

preemption under the ADA but advised that “principles

seldom can be settled ‘on the basis of one or two cases,

but require a closer working out..”” 513 U.S. at 227-228

quoting Pound, Survey of the Conference Problems, 14

U.Cin.L. Rev. 324, 339 (1940) (Conference on the Status

of the Rule of Judicial Precedent). In the absence of “a

closer working out” of these principles of preemption

by the Court itself, lower federal courts have with

difficulty tried to determine when state-law tort claims

having enough of a connection to a carrier’s “rates,

routes, or service” to be preempted under the ADA.

The result is judicial opinions—Judge Murphy’s

concurrence among them—which recognize the lack of a

coherent dividing line these cases mean to establish

(App. 14-15). See Hodges v. Delta Airlines, Inc., 44 F.3d

834, 340; 348-344 (5" Cir. 1995) (en banc)

(Higginbotham, J., dissenting) (disagreeing with

majority’s finding of no preemption of state tort claims

and describing the preemption question as “a difficult

interpretation task”); (Jolly, J., specially concurring)

18

(where majority and dissent agree on a preemption test

but come to different conclusions upon its application,

“7t promises uncertainty and inconsistent results.”); Gee

v. Southwest Airlines, 110 F.3d 1400, 1409-1410 (9" Cir.

1997) (O’Scannlain, J., specially concurring) (disagrees

with majority’s “muddled” preemption jurisprudence

regarding state-law tort claims and“problematic”

distinction between airline “services” and “operations”

made by the Fifth Circuit in deciding preemption).

There is also a host of decisions addressing the

preemption of state-law tort claims under the ADA

which are difficult to reconcile. Compare Montalvo v.

Spirit Airlines, 508 F.3d 464, 474-475 (9 Cir. 2007)

(claim requiring airplane cabin seating design to avoid

deep vein thrombosis not preempted) with Witty v.

Delta Airlines, Inc., 366 F.3d 380, 383 (5" Cir. 2004)

(negligence claim for design of cabin seating causing

deep vein thrombosis preempted). See Chukwu v.

Board of Directors British Airways, 889 F.Supp. 1218,

1223-1224 (D. Mass. 1995), aff'd, 101 F.3d 106 (1™ Cir.

1996) (tort claims such as slander preempted) with

Fenn v. American Airlines, Inc., 839 F.Supp. 1218,

1223-1224 (S.D. Miss. 1998) (slander claim not

preempted). See Lawal v. British Airways, PLC, 812

F.Supp. 713, 720 (6.D. Tex. 1992) (claims for

mistreatment of passenger held preempted) and

Rombom, supra, 867 F.Supp. at 221-224 (state tort

claim arising from mistreatment of passenger not

preempted).

19

The issue of the ADA’s scope of preemption for

state-law tort claims comes within Rule 10(¢)’s guidance

about the considerations which point toward the

Court’s granting a petition for certiorari, i.e., when “a

United States court of appeals has decided an

important question of federal law that has not been, but

should be, settled by th[e] Court, or has decided an

important federal question in a way that conflicts with

relevant decisions of thle] Court.” Headstream

respectfully requests that the Court grant certiorari,

identify error in the Opinion below where it is present,

provide further guidance to conflicting circuits

regarding when a state-law tort claim against an air

carrier is preempted under the ADA, and remand the

matter back to the district court for trial.

A. The concurring Judge in this very case

expressed confusion over the legal

standards.

Judge Murphy’s concurring opinion in this

matter speaks volumes regarding the confusion among

the courts:

Because the Airline Deregulation Act's

preemption provision uses this “related to”

phrase, it raises the same concerns. See DiFiore

v. Am. Airlines, Inc., 646 F.8d 81, 86 (1st Cir.

2011). Read literally, it could wipe out nearly all

state laws as applied to air carriers. The Court

thus ended its Morales opinion by suggesting

that some laws (such as those regulating

20

gambling) could have “too tenuous, remote, or

peripheral” of a connection to a carrier's rates,

routes, or services to fall within the provision

(even if the carrier offered in-cabin gambling).

504 U.S. at 390.

Yet how should courts distinguish a “regular”

connection (subject to preemption) from a

“tenuous” one (saved from preemption)? If a

flight attendant negligently runs a drink cart

into a passenger, may the passenger assert a

negligence claim under a state's tort law? Cf.

Day v. SkyWest Airlines, 45 FAth 1181, 1182

(10th Cir. 2022); Hodges v. Delta Airlines, Inc.,

44 F.3d 384, 335 (5th Cir. 1995) (en bance). If an air

carrier discriminates against a pilot on the basis

of race, may the pilot assert a discrimination

claim under a state's civil-rights laws? Cf.

Wellons v. Nw. Airlines, Inc., 165 F.3d 498, 495-

96 (6th Cir. 1999). Courts have held that the Act

does not preempt these sorts of claims. See Day,

45 F’4th at 1190; DiFiore, 646 F.3d at 87 nn.6 &8.

How about if an air carrier negligently delivers a

package to the wrong address, causing that

different homeowner harm? Cf. Tobin v. Fed.

Exp. Corp., 775 F.3d 448, 449-50 (ist Cir. 2014).

Or if the carrier commits fraud in its frequentflyers program? Cf. Wolens, 513 U.S. at 224-25.

Courts have found these claims preempted. See

id. at 228; Tobin, 775 F.3d at 453-54.

21

I fail to understand the dividing line that these

cases mean to establish. What in the Act's text

or purposes distinguishes an airline customer's

negligence claim for a personal injury from the

customer's fraud claim for a property injury?

(App. 14) (emphasis supplied).

B. There is a Conflict Among the Circuits

Whether the ADA Preempts State-Law

Tort Claims Which Allege Intentional,

Unreasonable and Unnecessary Behavior

by an Air Carrier in Providing its Service.

There is conflict among the Circuits as to

whether the ADA preempts state-law tort claims which

allege intentional, unreasonable, or unnecessary

behavior by an air carrier in providing its service. The

confusion arises because — after a court concludes that

an air carrier’s “service” is involved — there is no clear,

agreed-upon test or metric for whether the alleged

tortious activity is too tenuously related to the service.

The circuit courts have no clear direction regarding

when a claim involving “service” ought to be preempted

and when it should not. Is the dividing line whether or

not the tortious act is a provision of a service in a

reasonable manner as the Rombom court maintains in

the Second Circuit? Is it whether air safety or market

efficiency is appreciably hindered by the state law as

suggested by Wellons v. Northwest Airlines, Inc., 165

F.3d 493 (6 Cir. 1999) in the Sixth Circuit? Is it simply

that the complained-of activity was “sufficiently related

6é

22

to” the service provided as opined by the Fifth Circuit’s

Onoh v. Northwest Airlines, Inc., 618 F.3d 596 (5th Cir.

2010)?

No real test exists to adjudicate what to do once

an air carrier’s activity has been identified as a

“service.” As the concurrence in the Opinion below

stated outright: read literally, the ADA’s “related to”

language can be read to preempt virtually all state law

applied to air carriers (App. 18-14). Consequently, the

circuit courts have been left to write their own tests

which have produced inconsistent results.

Headstream’s claims would most certainly earn

different treatment in other circuits. There is a conflict

among the Circuits whether the ADA preempts statelaw tort claims which allege intentional, unreasonable

and unnecessary behavior by an air carrier in providing

its service. Courts in the Second (Rombom), Third

(Elassaad v. Independence Air, Inc., 613 F.8d 119, 126

(3 Cir, 2010)); Fourth (Smith v. Comair, Inc., 184 F.3d

254, 259 (4 Cir. 1998)); Ninth (Charas v. Trans World

Airlines, Inc., 160 F.3d 12591263-1264 (9 Cir. 1998));

and Tenth (Day v. Skywest Airlines, 45 F.3d at 1187-

1188) Circuits have adopted, more or less, Rombom’s

approach in assessing the behavior or manner in which

an air carrier renders its service in order to determine

preemption or they have interpreted the term “service”

in the ADA in a less expansive way to find no

preemption of state tort claims.

23

On the other hand, courts in the First (Tobin v.

Fed. Express Corp., 775 F.3d at 453-454), Fifth (Hodges

v. Delta Airlines, Inc., 44 F.8d at 340-345), and Sixth

(Headstream Technologies, LLC v. FedEx, supra)

Circuits have either adopted an overly-broad reading of

“service” in the ADA even to include an air carrier’s

unreasonable or unnecessary behavior when providing

service or, because the circuit employs no clear

preemption analysis, it is only with great difficulty that

any state tort claim survives ADA preemption.

The Al-Tawani Court in the Eastern District of

Michigan stated plainly that, “[clourts in other

jurisdictions have reached differing conclusions based

upon the factual bases for state law torts and whether

they relate to a rate, route or service of an air carrier.”

See, e.g., Shgeirat v. U.S. Airways, Inc., 515 F.Supp.2d

984, 1006-07 (D.Minn.2007) (surveying the varying

interpretations of the § 41713(b)(1)’s use of the term

“service” generated by the Fourth, Fifth, Seventh,

Eighth, and Eleventh Circuits).” Al-Watan v. Am.

Airlines, 570 F.Supp.2d 925 (E.D. Mich. 2008).

The Tenth Circuit court of appeals in Day v.

Skywest Airlines noted that there was no direct

definition of what activities fall within the scope of

“services” but that they have favorably borrowed

language from the Fifth Circuit. See, Day v. Sky West,

45 F’\Ath at 1184.

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