Federal Express Overharge Class Action

Manjunath A. Gokare, P.C. et al v. Federal Express Corp., Case No. 2:11-cv-02131-JTF-cgc (W.D. Tenn. 2011)

Every day Federal Express makes deliveries to both commercial and residential addresses throughout the nation. When the address is a business, Fed Ex has one charge; when the address turns out to be a residence, Fed Ex is entitled under its shipping contract to add a “surcharge” of $3.50, the theory being that residences present more difficult deliveries than do office buildings and other businesses.  

Our clients, a group of law firms that frequently sent packages to U.S. governmental agencies, noticed that they were routinely charged the additional residential surcharge despite the fact that their deliveries never went to home addresses. When they made formal complaints to Fed Ex, they were told no refund or credit would be given.

Our firm and our co-counsel investigated this matter before filing suit and found that Fed Ex routinely overcharged for deliveries to commercial addresses. Our clients filed suit and, naturally, were met with major opposition. In this instance, Fed Ex immediately moved to the court to dismiss our clients’ class allegations by relying upon a clause buried in a 117 page document in which our clients purportedly agreed to waive their ability to file suit as a class action.

We were able to convince the district court that class discovery should occur before we were required to brief and argue Fed Ex’s motion to deny class certification.  See Order Dismissing Motion [To Deny Certification] Without Prejudice, No.11-cv-02131 (W.D. Tenn. Aug. 25, 2011).

The discovery process in this case was massive, involving over 100,000 electronically stored information documents. Our diligence paid off when we discovered a large number of e-mails in which Fed Ex’s own employees were highly critical of the surcharging.    

One Fed Ex employee complained that he had tried to bring the billing problem to all sorts of upper management personnel – even describing the residential surcharge situation as “a huge class action waiting to happen.” These pleas were ignored by Fed Ex because the profits were simply too big to pass up. For our clients’ RICO and Breach of Contract Class Action Complaint along with these e-mails, click here.

Following this discovery, our team was able to negotiate a $21 million settlement on behalf of a nationwide class, which included an agreement by Fed Ex to change the way it determines the applicability of its residential surcharge. 

For more information on this case, please go to the settlement website http://noticeclass.com/gokaresettlement