DHL Express (USA), Inc. v. Falcon Express International, Inc.
Falcon Express International (Falcon) sued DHL Express (USA), Inc. (DHL) for rescission of an assignment and assumption agreement and punitive damages, alleging fraud by non-disclosure. Falcon claimed DHL failed to disclose its plans to exit the domestic package delivery market before Falcon assumed a third-party's debt and reseller agreement with DHL. DHL countersued for breach of contract. A jury awarded Falcon $1.7 million in rescission damages and $3.2 million in punitive damages, while awarding $0 to DHL on its counterclaim. DHL appealed, arguing Falcon's fraud claim was preempted by the Airline Deregulation Act (ADA) and Federal Aviation Administration Authorization Act (FAAAA), and that the $0 damages for its counterclaim were factually insufficient. The Court of Appeals agreed with DHL, reversing the trial court's judgment regarding Falcon's fraud claim and punitive damages, dismissing that claim, and remanding DHL's counterclaim for breach of contract for further proceedings.