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FedEx Sues Cuomo to Block New York State Probe of Rates, Routes, Services
FedEx Corp. sued New York Attorney General Andrew M. Cuomo, claiming he is overstepping his authority in a state investigation of the company’s rates, routes and services.
FedEx, the world’s second-largest package-delivery firm, said today in a suit filed in federal court in Manhattan that it is regulated by the federal government. It asked for a court order barring Cuomo from continuing the investigation.
“FedEx is therefore faced with an ongoing investigation and civil prosecution that is beyond the right, power, or duty of the State Attorney General to pursue and prosecute,” the firm said.
John Milgrim, a spokesman for Cuomo, said in an e-mail, “We’re reviewing the filing which we have just received.”
Cuomo notified FedEx in June that his office was investigating the company’s insurance policies and coverage for items it ships. His office served a subpoena upon the firm on June 8, 2010, seeking information about FedEx’s “rates routes, prices and or services,” the company said in its complaint. FedEx has until next week to respond to the subpoena.
In its suit, FedEx said Cuomo’s office is investigating “repeated fraudulent or illegal acts” committed by the freight company and “persistent fraud or illegality.”
Liability
Cuomo also seeks information about FedEx’s agreements with any insurance companies related to liability insurance for items shipped through the freight company, the company said. The Attorney General wants documents regarding customers’ complaints related to items worth more than $1,000, such as artwork, antiques, jewelry, furs, precious metals, precious metals and musical instruments worth more than 20 years old, FedEx said in the complaint.
The attorney general also asked the firm to give them internal company memos and e-mails about FedEx’s “coverage” related to these items.
FedEx said they’ve told Cuomo and his office that he lacks the authority to conduct such a probe, saying that since Congress passed the Airline Deregulation Act of 1978, the state is not permitted to regulate “substantive economic terms” of a air carriage contract.
The firm seeks a court order blocking Cuomo from pursuing the investigation and says it continues to be “irreparably harmed” by the disruption of business and adverse publicity from the Attorney General’s probe.
“We believe this investigation is pre-empted by federal law and the New York attorney general does not have jurisdiction in this matter,” said Maury Lane, a spokesman for FedEx. “We took these steps only after requesting several times they withdraw, and they refused.”
The suit is Federal Express Corporation v. Andrew Cuomo, 10-CV-6343, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net
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