Bloomberg News

Fedex Overcharging Suit Settlement Wins Preliminary Approval (1)

August 01, 2013

FedEx Corp. (FDX:US) and lawyers suing the company over claims it billed governments and businesses at higher residential rates won preliminary approval of a $21.5 million settlement.

Under the settlement, which was reached through mediation, FedEx will “implement prospective relief regarding residential delivery fee practices” as well as provide money to the plaintiffs represented as a class in the suit, U.S. District Judge John T. Fowlkes Jr. in Memphis, Tennessee, said today.

Fowlkes set a hearing for final approval for Nov. 22.

FedEx, the world’s largest cargo airline, was accused in the 2011 complaint of overcharging commercial and government customers as much as $3 each for tens of thousands of packages. The company denied the allegations and said customers could avail themselves of a procedure for challenging the charges.

The class of hundreds of thousands of FedEx customers including those who used its services from Aug. 28, 2008, to July 13, 2011, and didn’t get a full refund for claimed overcharges on residential deliveries, Fowlkes said.

“Today’s preliminary approval is just another step in the settlement process,” Shea Leordeanu, a FedEx spokeswoman, said in a phone interview.

“We are pleased the court found the settlement to be fair, reasonable and adequate,” Steven Rosenwasser, an attorney for the plaintiffs, said by phone. Class members would be paid within 75 days of final approval, he said.

Residential Rates

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.

FedEx contended the plaintiffs would have been barred from pursuing their claims in a class action by provisions in the FedEx Service Guide. They would also have been barred from pursuing settlements beyond 60 days after an alleged overcharge, Memphis-based FedEx’s lawyers said in court filings.

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

To contact the reporter on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net

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


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    (FedEx Corp)
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    (Bank of America Corp)
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