## Facts

- CSX Transportation, Inc. sold out-of-service railcars and parts, including sales for scrap.
- An individual associated with Interstate Demolition and Environmental Corp. (IDEC) contacted CSX about purchasing railcars for scrap using an email address on Recovery Express, Inc.’s domain (`@recoveryexpress.com`) and described himself as being “from” both IDEC and Recovery.
- CSX and the individual proceeded with a transaction: railcars were removed and scrapped, and CSX invoiced IDEC for $115,757.36.
- A check tendered for payment bounced; IDEC later became defunct and did not appear in the litigation.
- CSX sued Recovery and IDEC for breach of contract and equitable relief, alleging Recovery was bound because the sender had apparent authority based largely on use of Recovery’s domain email and related representations.
- Recovery denied the sender was its employee or agent and moved for summary judgment.

## Issues

1. Whether a third party’s use of a company’s domain-based email address, coupled with self-identification as being “from” the company, is sufficient to create apparent authority to bind the company to a contract absent additional manifestations by the company.

## Decision

- The court granted Recovery’s motion for summary judgment.
- The court held that use of a company-domain email address and the sender’s own statements, without more, are insufficient as a matter of law to establish apparent authority traceable to the company.
- Because CSX failed to show an enforceable contract with Recovery, the breach-of-contract claim against Recovery failed.
- The court also rejected CSX’s equitable claims because there was no showing that Recovery received or retained a benefit from the railcars transaction.

## Legal Principles

- Apparent authority exists only when a third party reasonably believes an actor is authorized to act for a principal and that belief is traceable to manifestations of the principal, not merely the actor’s assertions.
- Indicia such as company stationery or business cards, without additional principal conduct, generally do not establish apparent authority; a company-domain email address is analogous.
- Reliance on a domain-based email address alone is unreasonable for a substantial commercial transaction when the alleged principal has not directly confirmed authority through contracts, communications, or other outward manifestations.
- Equitable recovery against a defendant requires evidence the defendant obtained and retained a benefit from the transaction; absence of benefit defeats unjust enrichment and related theories.

## Conclusion

The court entered judgment for Recovery because CSX’s apparent-authority theory rested primarily on a domain-based email address and the sender’s self-description, neither of which constituted manifestations by Recovery sufficient to bind it to the railcar contract, and CSX failed to show Recovery was unjustly enriched.


CSX Transp., Inc. v. Recovery Express, Inc., 415 F. Supp. 2d 6 (D. Mass. 2006)