FOLLOW US

The U.S. Court of Appeals for the Tenth Circuit has affirmed the dismissal of a $500 million lawsuit filed by Rapid Enterprises LLC, doing business as Express One, against the United States Postal Service (USPS). The three-judge panel upheld a Utah federal court’s ruling, effectively ending Express One’s claims of contract breach and tortious misconduct.

The 10th Circuit affirms toss USPS contractor $500M lawsuit, rejecting Express One’s allegations that USPS misappropriated confidential business information and wrongfully terminated a longstanding business agreement.

In an unpublished opinion, the appellate panel upheld U.S. District Judge Jill Parrish’s findings that most of Express One’s tort claims were barred under the Federal Tort Claims Act (FTCA) and fell within the “misrepresentation exception,” preventing further litigation on those counts. The court also held that Express One failed to sufficiently establish contract-based claims, including breach of the implied covenant of good faith and fair dealing.

Express One contended that USPS engaged in a “bait-and-switch” by inducing it to enter into a 2019 reseller agreement under false pretenses and then terminated the contract after obtaining proprietary customer data. The Tenth Circuit disagreed, noting that the contract allowed USPS to terminate at any time with 90 days’ notice and that Express One entered the agreement voluntarily.

The lawsuit, originally filed in late 2022, alleged that USPS’s launch of its e-commerce platform "USPS Connect eCommerce" was part of a scheme to replace Express One in the market after acquiring critical customer insights. Express One claimed this action would force the company out of business and sought over $500 million in damages.

The Tenth Circuit concluded that Express One had ample opportunity to include protections for its business data in the contract and could not rely on the doctrine of expressio unius to impose obligations not explicitly stated.

Express One’s legal representation includes Scott Young and D. Jason Hawkins of Spencer Fane LLP. USPS is represented by Tiffiney Carney and Terrance Mebane of the U.S. Department of Justice’s Civil Division.

The case is Rapid Enterprises LLC v. United States Postal Service, et al., Case No. 24-4041, in the U.S. Court of Appeals for the Tenth Circuit.