A federal court has certified shippers who paid an excess value charge to UPS from January 1, 1984 to the present as a class for the purpose of a class action suit against United Parcel Service and related insurance companies and affiliates.
The notice announcing the certification of the class explains that it should not be construed to mean that the claims are meritorious. It is merely to advise of the courts agreement that the plaintiff has identified a lawful class under the federal rules. If a shipper wishes to remain in the class, nothing needs to be done at this time. Those that remain in the class will be represented by class counsel, or by subclass counsel, at no cost. Shippers may also opt out of the class and not share in any recovery or may be represented by their own counsel at their expense. Pending or future loss and damage claims are not affected.
This class action alleges that UPS and other defendants represented that fees paid for excess value insurance would be remitted to an insurance company as a premium for insurance above UPS $100 per package limitation. The plaintiffs allege that these fees were instead retained by UPS, and thus the shippers did not receive insurance. It is also alleged that fees paid for this insurance were higher than they should have been and that some of the defendants violated state insurance laws.
The court dismissed all state causes of action on the grounds that they were preempted by federal law, except where they involve issues of state insurance law. Four state-wide class actions were certified that allege violations of
The class includes all shippers who paid excess value charges for UPS domestic and international packages. Excluded from the class, however, are residents of Illinois, who were represented in a separate class.
The entire notice may be viewed online at www.noticeclass.com/EVICLitigation.
This development is just one in a series of litigation evolving from UPS attempt to avoid paying taxes on the excess value premiums received from shippers by creating an off-shore insurance program. The litigation instituted by the Internal Revenue Service against UPS and its partners is reportedly in the settlement stage, but the private litigation resulting from those events appears to be endless. In the interim, some shippers continue to pay UPS for excess value insurance that is provided by a UPS affiliate company, but UPS continues to administer the claims investigation. According to all sources, if UPS agrees to pay the first $100, the insurer will pay the balance of the insured value. If UPS declines to pay the first $100, the insurer will decline payment.
Shippers who regularly ship items worth more than $100 should consider discussing shipping insurance with their insurance providers.
