Bloomberg News

FedEx Settles Lawsuit Over Claims It Overcharged Customers (1)

July 09, 2013

FedEx Corp. (FDX:US) agreed to settle a lawsuit over claims the company was “systematically overcharging” customers by billing for deliveries to businesses and government offices at higher residential rates.

A “preliminary settlement approval hearing” is set for July 23, according to a filing yesterday in federal court in Memphis, Tennessee. Terms of the accord weren’t disclosed in the filing.

Steven Rosenwasser, an attorney for the plaintiffs, confirmed that an agreement has been reached.

“The details will be released when we move for preliminary approval,” Rosenwasser said today in a phone interview. The plaintiffs will request certification of a national class of consumers for purposes of the settlement, he said.

Shea Leordeanu, a FedEx spokeswoman, said the company would provide comment soon.

The lawsuit, filed in 2011, claimed that FedEx overcharged commercial and government customers as much as $3 each for tens of thousands of packages delivered.

The plaintiffs asked to proceed on behalf of all customers of the Memphis-based company’s FedEx Express unit since 2010 who paid the alleged overcharges and those who were overcharged by its FedEx Services unit after August 2008.

FedEx charged residential rates to destinations including the U.S. Citizenship and Immigration Office in Chicago, a Bank of America Corp. (BAC:US) facility in Tampa, Florida, and the Safariland Group body armor company in Jacksonville, Florida, according to an amended complaint filed in December.

Triple Damages

The plaintiffs, claiming violations of federal civil racketeering law, asked for three times the amount of the alleged overcharges in their lawsuit.

FedEx denied the overcharging allegations and said customers could avail themselves of a procedure for challenging the charges, according to court filings.

FedEx rose $6.09, or 6.1 percent, to $104.92, at 11:57 a.m. in New York Stock Exchange composite trading.

The case is Gokare PC v. Federal Express Corp., 11-cv-02131, U.S. District Court, Western District of Tennessee (Memphis).

To contact the reporters on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net; Andrew Harris in Chicago at aharris16@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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  • FDX
    (FedEx Corp)
    • $175.9 USD
    • -0.52
    • -0.3%
  • BAC
    (Bank of America Corp)
    • $17.98 USD
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