Lawsuit Accuses UPS of Cheating Franchise Owners

The complaint contents inaccurate measurement system is costing franchises


May 02, 2007, 01:00 ET from Hagens Berman Sobol Shapiro

    SAN FRANCISCO, May 2 /PRNewswire/ -- Today shipping giant UPS (NYSE:  
 UPS) was hit with a proposed class-action lawsuit claiming the shipping
 giant routinely uses an inaccurate measurement system that causes thousands
 of franchise store owners to be back-charged for higher shipping rates.
     According to the complaint filed by the law firm of Hagens Berman Sobol
 Shapiro, franchise owners measure packages in the store, charge the
 customer and ship the package to UPS where the company re-measures the
 package using what the suit claims is inaccurate techniques and
 back-charges the franchisee for the difference.
     In the complaint, franchisees argue that since the re-measurement
 process occurs at UPS facilities, they have no ability to argue the revised
 measurements, nor do they have the ability to reassess the customer for the
 additional charges.
     According to attorneys representing the proposed class, the problem is
 widespread costing the 4,000 franchise owners millions of dollars in back
     Steve Berman, managing partner of Hagens Berman Sobol Shapiro, says
 that his clients are most upset with their inability to dispute additional
     "The packages are reassessed in an external location where owners can't
 see the process or results," he said. "This reminds me of the old trick of
 the butcher placing his thumb on the scale. Back then though at least you
 could see the scale."
     The accuracy of the laser technology UPS uses to measure packages has
 long been suspect, the compliant notes, citing complaints by trade
 associations that represent franchise owners.
     The laser measuring system used at UPS has not been approved by any
 state Weights and Measures Departments, the complaint notes, and any
 calibration or adjustments are completely under the control of UPS.
     "Our investigation has show that this may be a very widespread problem
 at UPS, not just with franchises, but also with the shipper's largest
 corporate customers who compute charges in-house before shipping to UPS,"
 Berman added. "Adding a few bucks to each package can quickly add up to
     The suit was filed in San Francisco in U.S. District Court on behalf of
 named plaintiff Persepolis Enterprise. If certified as a class action, the
 suit would represent the named plaintiff on behalf of all franchises
 worldwide that operate under the UPS Store, Mail Box Etc. and companies
 that are account-holders with UPS.
     The complaint states several counts against UPS including breach of
 contract, fraud and unjust enrichment. Within those claims UPS violated the
 contractual agreement between the company and individual franchises stating
 that UPS had no right to charge for alleged mismeasurements. UPS also
 failed to use accurate, properly calibrated and tested machines as promised
 in its obligations to franchise owners.
     The suit is seeking damages for all UPS Stores nationwide as well as
 six digit account holders, primarily corporate accounts. A small sampling
 of the plaintiff's additional charges range from $3.52 - $31.43 per package
 and that is only a very small number of the thousands of charges it has
     "UPS has an obligation to its franchise owners to deal fairly and in
 good faith," said Berman.
     According to the compliant UPS is one of the most recognized brands in
 the world and has become the largest package delivery company. The
 company's focus is enabling commerce worldwide and has grown into a $42.6
 billion business since its founding in 1907.
     To view the complaint visit
     About Hagens Berman Sobol Shapiro
     The law firm of Hagens Berman Sobol Shapiro is based in Seattle with
 offices in Chicago, Cambridge, Los Angeles, Phoenix and San Francisco.
 Since the firm's founding in 1993, it has developed a nationally recognized
 practice in class-action and complex litigation. Among recent successes,
 HBSS has negotiated a pending $300 million settlement as lead counsel in
 the DRAM memory antitrust litigation; a $340 million recovery on behalf of
 Enron employees which is awaiting distribution; a $150 million settlement
 involving charges of illegally inflated charges for the drug Lupron, and
 served as co-counsel on the Visa/Mastercard litigation which resulted in a
 $3 billion settlement, the largest anti-trust settlement to date. HBSS also
 served as counsel in a $850 million settlement in the Washington Public
 Power Supply litigation and represented Washington and 12 other states in
 lawsuits against the tobacco industry that resulted in the largest
 settlement in the history of litigation. For a complete listing of HBSS
 cases, visit

SOURCE Hagens Berman Sobol Shapiro