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Fedex Overcharging Suit Accord Wins Final Court Approval

Nov. 22 (Bloomberg) -- FedEx Corp. and lawyers suing the company over claims it billed for deliveries to government offices and businesses at higher residential rates won final approval of a $21.5 million settlement.

FedEx, the world’s largest cargo airline, was accused in 2011 by two law firms of overcharging as much as $3 each for tens of thousands of packages. The company denied the allegations and said customers could challenge the charges.

FedEx settled the class-action suit in July. U.S. District Judge John T. Fowlkes Jr. in Memphis, Tennessee, granted preliminary approval to the accord Aug. 1 and final approval today after a fairness hearing. It is for $16.5 million in cash and billing-practice changes worth an estimated $5 million.

The company denied wrongdoing.

“We agreed to settle this matter to avoid the cost and uncertainty of continued litigation,” Ben Hunt, a FedEx spokesman, said in an e-mail after the hearing.

“After several years of hard fought litigation, we are pleased to have obtained a settlement that not only provides monetary relief to the to the class, but also puts an end to the practices we challenged,” a plaintiffs’ lawyer, Steven J. Rosenwasser of the Atlanta law firm Bondurant Mixson & Elmore LLP, said in an e-mail.

The plaintiffs claimed FedEx charged residential rates to destinations including the U.S. Citizenship and Immigration Office in Chicago, a Bank of America Corp. facility in Tampa, Florida, and the Safariland Group body armor company in Jacksonville, Florida.

Company Position

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 settlement class includes FedEx customers 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.

The case is Manjunath A. 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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