Federal Express Corp. said Friday it won its appeal of an earlier decision handed down by a federal district court in San Diego. As a result,
the company will not be liable for refunds of transportation charges for shipments delayed due to the strike by the International Brotherhood of Teamsters against UPS in 1997.
"We are grateful that the 9th Circuit Court of Appeals recognized that there was no wrong committed by FedEx and that a class action in this instance and award of damages had no basis. We appreciate the support from the thousands of grateful customers who refused to be members of this frivolous lawsuit," said Kenneth R. Masterson, FedEx Corp. executive vice president and general counsel.
During a 26-day period surrounding the Teamsters' strike, FedEx Express employees worked many hours of overtime to keep U.S. commerce moving, handling high volumes of shipments, as businesses sought alternatives to the idled UPS network. The majority of shippers said they were pleased with the efforts of FedEx Express.
Despite clear language in the FedEx Express Service Guide indicating that the FedEx Express Money Back Guarantee does not apply to delays due to strikes, and the company's press release announcing the suspension of the money-back guarantee during the period of the UPS strike, two shippers, represented by class action trial lawyers, filed a lawsuit against FedEx Express.
They asserted that the company was obliged to refund transportation charges for shipments delivered later than the normal commitment time. The District Court had earlier issued a ruling, without a trial, which would have resulted in payment of damages totaling approximately $70 million.