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UPS targeted in class action suit

By Kathy Woods | Feb 8, 2010

DENVER (Legal Newsline)- United Parcel Service Inc., one of the nation's largest private shippers, is the target of a class action lawsuit over its Air-In-Ground program.

The complaint, filed in Denver, accuses the Atlanta-based company of breach of contract, fraudulent inducement, fraudulent nondisclosure, intentional misrepresentation, and negligent misrepresentation, breach of implied covenant of good faith and fair dealing and unjust enrichment.

The "Air-In-Ground" program which UPS implemented in 1995 was designed to identify and sort "air" packages that could be transported by "ground" transport and still arrive at their destination on time.

According to the complaint, UPS's Air-In-Ground program demonstrates the premeditated actions of UPS because the company agrees and accepts payment for air shipping yet has been "systematically and deliberately" substituting the far less expensive ground shipping services.

The complaint argues that UPS has benefited from this practice and received unjustified fees to the tune of hundreds of millions of dollars. UPS has reported in 2008 their total revenue for the year was $51.5 billion and delivered 3.92 billion packages.

The lawsuit also claims that UPS participated in mail fraud and or wire fraud when they sent out invoices that falsely state that the package was sent by air when in fact the package was diverted to ground transport.

The plaintiffs say each time a false invoice was sent out the conduct represented a pattern of racketeering activity.

Further, the complaint states that UPS charged its customers "fuel surcharges" to compensate for the rising costs of "jet fuel" knowing that those packages would never see the inside of a plane.

The lawsuit seeks actual and compensatory damages, treble damages, preliminary and permanent injunctive relief, attorney's fees, the costs incurred by the lawsuit, restitution and interest on any amounts awarded. Plaintiffs are also demanding a jury trial.

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