## Facts

- Stampede Presentation Products, Inc. (Stampede) purchased 960 flat-screen televisions from 1 SaleADay (1SaleADay).
- The purchase invoice stated the televisions were to be shipped to Stampede’s customer in Illinois.
- Stampede retained Productive Transportation, Inc. (Productive) to transport the televisions from 1SaleADay’s warehouse in California to Illinois.
- The Stampede–Productive transportation arrangement was reflected in a bill of lading that identified Stampede as the shipper and stated the shipment was “FOB Origin.”
- Productive subcontracted with MML Transport to perform the physical carriage.
- MML Transport picked up the televisions in California, but the televisions were lost or stolen in transit.
- Stampede sued Productive and 1SaleADay, asserting, among other claims, breach of contract based on the missing televisions.
- 1SaleADay moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the parties’ arrangement was a UCC shipment contract and that risk of loss shifted to Stampede when the televisions were delivered to the carrier.

## Issues

1. Whether Stampede’s complaint plausibly stated a breach-of-contract claim against 1SaleADay for the loss of the televisions during transit.
2. Whether the alleged sale and shipping terms were properly treated as a UCC shipment contract (risk of loss passes on delivery to the carrier) rather than a destination contract (risk remains with the seller until tender at destination).
3. Whether the invoice’s instruction to ship to Stampede’s Illinois customer, or any other alleged term, plausibly kept the risk of loss on 1SaleADay after carrier pickup.

## Decision

- The district court (W.D.N.Y.) adopted the magistrate judge’s report and recommendation and granted 1SaleADay’s Rule 12(b)(6) motion.
- The court treated the transaction as a shipment-type arrangement under the UCC’s default rules and the alleged shipping documents.
- Because the televisions were delivered to the carrier for shipment and no contrary risk-allocation term was plausibly alleged, risk of loss had shifted to Stampede at pickup.
- Stampede therefore failed to plead a plausible breach-of-contract (or related) claim against 1SaleADay based on the transit loss, and 1SaleADay was dismissed from the action.

## Legal Principles

- Under UCC risk-of-loss rules for shipment contracts, risk of loss passes to the buyer when the seller duly delivers conforming goods to the carrier.
- A sales contract is generally treated as a shipment contract unless the parties clearly agree the seller must deliver at a named destination (a destination contract).
- “FOB Origin” is trade shorthand indicating the seller’s delivery responsibility ends at the point of shipment; it supports treating the arrangement as one in which the buyer bears transit risk after carrier pickup.
- Directing shipment to a third-party location (such as the buyer’s customer) does not, without more, convert the deal into a destination contract or keep transit risk on the seller.
- At the pleading stage, when the alleged documents and transaction structure show the buyer arranged carriage and risk shifted on delivery to the carrier, a contract claim against the seller based solely on loss in transit is subject to dismissal for failure to state a claim.

## Conclusion

In Stampede Presentation Products, Inc. v. Productive Transportation, Inc., the court dismissed Stampede’s claims against seller 1SaleADay because the alleged shipping terms and UCC default rules treated the sale as a shipment-type transaction: once the televisions were delivered to the carrier for transport, the risk of loss shifted to Stampede, so the loss or theft in transit did not plausibly amount to a breach by 1SaleADay.


Stampede Presentation Products, Inc. v. Productive Transportation, Inc., 2013 WL 2245064 (2013)