Internal E-Mails Support FedEx Overbilling Class Action Lawsuit

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Internal E-Mails Support FedEx Overbilling Class Action Lawsuit

By Matt O’Donnell

UPDATE: A class action settlement has been reached. Consumers have until December 9, 2013, to file a claim. See our detailed claim filing instructions for the Gokare v. FedEx class action lawsuit settlement here.

UPDATE 2: A federal judge granted final approval to the FedEx Overbilling Class Action Settlement on Nov. 22, 2013.

Internal e-mails saying FedEx has been “systematically overcharging” its customers for services “we know we didn’t provide” for years were unsealed yesterday in a class action lawsuit against the shipping giant, adding fuel to plaintiffs’ claims that FedEx Corp. and FedEx Corporate Services Inc. violated federal racketeering laws.

Plaintiffs allege in the FedEx class action lawsuit that the company has been overcharging its business and government customers as much as $3 each for millions of packages since at least 2008.

“We allege that FedEx has and continues to engage in a pattern of intentionally charging its customers residential delivery fees for deliveries to obviously non-residential addresses such as courthouses, government offices and banks,” Steven J. Rosenwasser, a lawyer for the plaintiffs, said in an interview.

“Defendants’ own internal documents prove that defendants have known for years that they are unlawfully charging residential surcharges when they do not apply, but have permitted the unlawful surcharges to continue because they generate substantial illicit profits,” plaintiffs’ attorneys said in an amended class action lawsuit filed yesterday.

The unsealed e-mails were sent by FedEx sales executive Alan Elam and reveal Elam became aware of the problem in 2008 and brought the issue to the attention of three of his supervisors, including his managing director and the FedEx senior vice president for sales.

“In conversations with each, I used the language, ‘This is a huge class-action lawsuit waiting to happen.’ None of them have ever reported back taking any action to elevate this issue,” reads one Elam e-mail sent on August 12, 2011.

Other Elam e-mails unsealed yesterday read:

“I have brought this to attention of many people over the past five or six years, including more than one managing director, and no action has been taken to address it…. My belief is that we are choosing not to fix this issue because it is worth so much money to FedEx.”

The FedEx shipping fee class action lawsuit is seeking to represent a national class of consumers. It is asking for treble damages – three times the amount of the alleged overcharges — as well as an injunction barring FedEx from charging commercial customers at residential rates.

FedEx responded to the unsealed emails with this statement: “These 11 documents do not tell the entire story of this case. We will continue to defend these allegations in a court of law and not the media.”

The FedEx Overbilling Class Action Lawsuit case is Gokare P.C. v. Federal Express Corp., Case No. 11-cv-02131, U.S. District Court, Western District of Tennessee (Memphis).

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