2013 trial date agreed for FedEx-UPS antitrust lawsuit
The legal challenge to FedEx and UPS policy restricting independent shipping consultants from negotiating discounts on behalf of their clients looks set to move to trial next year. AFMS LLC, the transportation consultancy that brought the case said today it has secured a trial date for its complaint to be heard in court, with the trial date set for June 18, 2013.
The date, which remains subject to court approval, was agreed as FedEx and UPS answered an amended complaint from AFMS last week.
FedEx and UPS have both confirmed to Post&Parcel that the court date is agreed subject to a final court confirmation.
The case stretches back to an August 2010 filing from Oregon-based AFMS, which essentially accused FedEx and UPS of colluding in the marketplace by issuing new policies at similar times restricting shipping consultants from accessing discounts from the shipping companies.
AFMS has had two complaints dismissed by the courts since the original filing, but has amended its complaint each time before re-filing.
Alison Decker, from the California-based law firm Blecher and Collins, which is representing AFMS, explained to Post&Parcel that in the latest amendment to the complaint against FedEx and UPS, the accusation that FedEx and UPS were seeking to monopolise the market have been removed.
“We’re now focusing on showing that they colluded together to get rid of the third party shipping consultants,” explained Decker, adding that the complaint suggested that UPS and FedEx had made threats to customers to keep them from using shipping consultants, suggesting they would lose discounts or fail to have shipping contracts renewed.
UPS said it has decided to respond to the latest complaint rather than seek a fresh dismissal so that it can “tell its story and submit evidence to court”.
UPS spokesperson Susan Rosenberg said: “Previously, with the motion to dismiss, the court could only consider the AFMS allegations, and UPS, by procedure, was not permitted to submit evidence to the court.”
Rosenberg added that the case still has to pass through the ‘discovery’ stage of litigation before it can be heard in court.
The discovery stage in the US legal process is the pre-trial phase where each party can obtain evidence from the opposing party through formal requests for documents and depositions.
“Through the course of litigation, the case may be resolved in various ways before trial, including a motion for summary judgement,” said the UPS spokesperson.
Claims
Since the original AFMS claims were filed back in 2010, FedEx and UPS have argued that they had originally sought to persuade customers not to seek discounts via shipping consultants because they felt their in-house sales staff were in a better position to know the best discounts available for those customers.
However, the AFMS antitrust claims stemmed from the timing of the policy change at FedEx and UPS. The consultancy stated that the two companies announced the move on the same stage of an industry conference in October 2009, then circulated policy memos to their respective sales teams “within hours of each other” on April 23, 2010.
The timings suggested to AFMS that the shipping giants were working together to avoid the prospect of losing customers to each other if only one restricted the discount access of shipping consultants.
UPS spokesperson Susan Rosberg said today: “We strongly defend our right to decline to deal with third party negotiators when doing so is in the best interest of UPS and the best interests of its customers. We acted unilaterally with our policy about third party negotiators. Allegations to the contrary are baseless.”
FedEx spokesman Chris Stanley said his company was also looking forward to presenting its case to the court.
Commenting on the case, he said: “There is no agreement between FedEx and UPS regarding prices, in fact we compete against each other in an open marketplace. We believe the plaintiff’s case lacks sufficient facts to support their allegations, and we think we have a strong case and we look forward to our day in court.”
AFMS, which had a 20-year background in shipping negotiations for clients that have included Sony, GE, Quiksilver, Domino’s Pizza, Johnson & Johnson and Toyota, claims the actions of FedEx and UPS violate the Sherman Antitrust Act, and has meant increased shipping prices for FedEx and UPS customers as well as damage to its own business.
Commenting on the latest development in the case, AFMS founder and president Mike Erickson said he was “obviously pleased that our case will be proceeding forward”.
“UPS and FedEx are unfairly preventing shippers from accessing valuable knowledge and information that can make a significant impact on their contract negotiations and, ultimately, on their bottom lines,” claimed Erickson.
“We strongly believe in the claims made in our complaint and are encouraged by the defendants’ decision not to challenge our pleadings.”
Last year, the US Department of Justice said it was looking into the issue separately to the AFMS lawsuit, with FedEx and UPS stating that they were cooperating with the authorities.
