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Log In / Register | Mar 16, 2010

Court Certifies Nationwide Class Action against UPS on Fraud Claims

LOS ANGELES – According to MBE franchisee Joe Wightman (not yet confirmed), a nationwide class action lawsuit alleging fraud was certified today for franchise owners who converted from the Mail Boxes Etc. brand to The UPS Stores concept in 2003. The ruling made by Superior Court Judge William F. Highberger will allow 3500 UPS Store owners to present their claims that UPS and its affiliated companies violated California Franchise law that protects franchisees from deception.

The franchise owners assert that they were misled into making the conversion after United Parcel Service acquired the Mail Boxes Etc. franchise system in 2001. Other legal actions have been filed by MBE store owners claiming they were also subjected to breaches of contract and other violations of California law. Both sets of claims are pending before Judge Highberger.

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Related Article:

Mail Boxes Etc Franchisees Head to Trial with Crucial Exhibits in Hand
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Press Release by Home Run
We need to make a MAJOR Press Release regarding this!!!! This is awesome!
Re: Press Release by Guest
OMG I hope your friend is right! I could really use that! Maybe this means I can finally close this dog down!!! Please keep informed as to anything else your friend says!
Re: Press Release by Guest
"We" need to do a press release? Where is YOUR part of the money for that!!!!!!
Confirmed by Guest
06/19/2009 at 02:00 pm in Department 307, William F. Highberger, Presiding Motion for Class Certification - Granted Just posted on LA Superior Court Websits, I Believe this is conclusive confirmation of the judge's ruling!
Re: Confirmed by Guest
Wonder what Norman Black has to say about this. Mike ESCHEW in the annual UPS stockholders meeting in may of 2007 when questioned by Joe Wightman at that stockholders meeting said that every thing was just fine. The UPS Stores had no problems. People in the courtroom said that AMY Darby was verrrrrry effective in her arguments. This is the 3rd time that Amy has argued an prevailed. 2 Appellate rulings in her favor and now this. UPS was visably not happy. Time to Nail them to the WALL.
Yes! by Barbara Jorgensen
Barbara Jorgensen's picture

3500 zees is a statement.  Zees need to band together.  Richard is right only by being a militant force is when things will change.  Apathy and being passive will not change anything.

You can also thank sites like BMM where people can voice their opinion. 

Re: Yes! by Guest
3500 Zees did NOT band together. NOT in the least. Gordon and Reese filed a class action with one named plaintiff many years ago. Wouldn't it have been great if those 3500 would have banded together back in, ohhh lets say late 2002 and early 2003 when UPS was busy rolling out the UPS Store model. Gee, so many wouldn't have been in lawsuits!!! I hope the UPS Stores enjoy their coupons, and that Gordon and Reese enjoy their legal fees!
MBE/UPS Class by Guest
You are right 3500 Zees didn't band together and out of those 3500 probably 2500 already sold their or lost their stores since 2003, but as you know they can still be plaintiffs. Out of the current owners, the documentation coming out in this case (like the BCG report) and some current actions from MBE will start another suit or strenghthen the BSA case. Right now if stores could opt in I would estimate you would see another 2000 plaintiffs, but 1st things 1st, the fraud of Gold Sheild has to come out and all the old MBE stores will get their day. Then the current UPS Stores will have the road paved for their "out". Norman I don't think the stores will end up with coupons, something more like recission of the Gold Shield contract. But your are right I do hope Gordon & Reese make out like bandits.
Let's Not Forget... by Guest
IAMCO the first group to bring suit against UPS that got the ball rolling for the rest of the MBE Franchise.They deserve a lot of credit too :)
The UPS Store Franchise by Guest
Will be GONE in 12-18 months. UPS has screwed things up soooo bad that they will be in LITIGATION for YEARS & YEARS over the things they have done to this once great franchise.As business people(now thats very funny)even UPS will reach the point where they will have to end the "mess".How much SHAREHOLDER $$$$$$ are they going to spend to try and extract themselves for the "mess".UPS will just explain to the SHAREHOLDERS that due to the "pesky franchise owners" the great idea of the UPS Store turned out to be nothing more than a "FAILED BUSINESS EXPERIMENT".Dont be surprised if in order to "END THE MESS" if UPS offers independence to the franchise owner & of course they get to keep their UPS account #'s.Its unfortunate that i believe most of the owners would quickly agree to this due to the fact that its reported most of the UPS/MBE system is sinking or has already sunk and this would be a very quick out for the store owner.ALSO IF THE BOSTON CONSULTING GROUP REPORT EVER BECOMES PUBLIC......DONT PEOPLE GO TO JAIL FOR KNOWINGLY COMMITTING FRAUD....RELEASE THE BCG REPORT....RELEASE THE BCG REPORT
Re: The UPS Store Franchise by Guest
This is absolutely great news! I spoke to a friend of mine that has some experience with this case. He told me that all of the franchisees that have done absolutely nothing (moaning and complaining excepted of course!) are going to make out like bandits. My friend told me that he had spoken to someone in the lawyers office, and that for all of the franchisees that converted we are going to get beacoup bucks. He thought it was possible that very soon we would just get a check in the mail for more than a million dollars! How unbelievably great is this! Most of us have done absolutely nothing to help, (and many have tried to hinder! My friend said some franchisees signed papers against the lawsuit!) and yet a check will be coming to me in a month or so! (I do not want to count my chickens yet, but I did buy a new Mercedes this weekend! Thank god this worked, my store stinks!) It's weird, all those franchisees that spent tons of money and time have gotten nothing, and the smart ones did nothing and will get all the money! YIPPEE
DAME BRAMAGED ? by wise old franchisee
If you think that any check will be coming in a few weeks, or whatever your "friend's attorney says" is true, please get a cat scan. This kind of demented response is more likey from a Brown Lurker, trying to perpetuate dissonance between those who have invested huge amounts of time, energy and money to keep these cases going and those who think they will be able to free ride on the backs of franchisees who actually took a stand, and took action. Does UPS actually pay you to monitor these boards and to kick up dust?
UPS Lawsuit by michael webster
michael webster's picture

Guest writes : "It's weird, all those franchisees that spent tons of money and time have gotten nothing, and the smart ones did nothing and will get all the money!"

Guest has got a great sense of humor.  Been a very hard road for many of these franchisees, and many of the undeserving complainers may get a financial reward from the class action.

But, this was as dysfunctional group of franchisees as I have ever seen, which allowed UPS to pick them off.  UPS did engage in appalling legal tactics which intimidated any reasonable person.  However, the franchisee groups seem to spend as much time attacking each other as moving on their litigation.

Am I wrong about this? 

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"


Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"


Yes, Michael, you are wrong about this. by Guest
Sure there are differencies of opinion between the various groups, most of which are related to the differences in their situations. The first group was made up mostly of people who bought into MAIL BOXES ETC. when Tony DeSio still ran the show, people who had actually worked in the stores worked in the home office and the head honcho truly understood the business. These folks resented the capital event of rolling the company up into the USOP conglomerate to cash Tony out. Of course, he traded MBE stock for USOP stock and eventually took a bath on it. The biggest beef these folks had was the tightening of the noose at renewal and the flawed technology and unnecessary design changes forced upon them. A few may have seen the setup for a UPS takeover, but this was not the major concern at the beginning of this group. Jim Amos at a later date admitted that a UPS takeover had been his goal from virtually day one. The second group of dissenters was made up of many who clearly saw the UPS Scheme for what it was and determined to fight the forced conversion. This group has clung together for six years and is really the opposite of dysfunctional. This group had the foresight to add the class action to their complaint to preserve the rights of those who might not wake up in time to beat the statutes of limitations. This group includes many who were sucessful MBE's who won many awards and were leaders in the network. Sure their have been some disagreements over time, but the ability of the group to pull together for over 6 years is amazing under the circumstances. UPS seems to have truly believed they could buy off the leader and the group would crumble. DID NOT HAPPEN! The next group to gain attention was the Brown Board which had some intelligent leadership. The downfall being that they thought they could negotiate without litigating. UPS basically chewed them up and spit them out. Their intentions were noble, their efforts commendable, unfortunately they were too trusting of their adversary. The BSA group split off from the Brown Board and was made up of mostly new store owners who bought into the concept post conversion. There may be exceptions, but none of the members were among the ranks of those who declined to convert in 2003. Michael, I do appreciate that you have a better understanding than most outsiders on this situation, but I do have to say you are wrong in some of your statements or at the very least not totally correct. Just my humble opinion, of course - and I still love you for what you have done!
Thank-You for the Clarification by michael webster
michael webster's picture

Guest writes: "Michael, I do appreciate that you have a better understanding than most outsiders on this situation, but I do have to say you are wrong in some of your statements or at the very least not totally correct."

I stand corrected and thank-you for laying this out so clearly.

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"


Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"


Hi Michael, I have read your by Guest
Hi Michael, I have read your posts on here for a long time and always appreciate the reasoned approach you take. I have a hypothetical question for you and I hope you will respond, I know that many many people are interested in this issue. Hypothetically: Suppose you were a UPS Store that converted from an old Mail Boxes Etc back in 2003 (I think this may be the group covered by the class action certification discussed here,)and you are now a plaintiff in an action against the franchisor over the very same issues discussed in the class action, can you drop out of your pending action and join the class action? I think my question is clear, but obviously I am trying to find out (hypothetically of course) if I have given up my rights to be included in the class. I think that a class might be cheaper to be a part of, and it is possible that the class action attorneys are better (HYPOTHETICALLY) than what an individual or small group might be able to afford. I would really appreciate your thoughts on this. Thanks so much.
Re: Hi Michael, I have read your by Guest
I have the same type of question, except I will be more specific. I am currently a member of the Brown Shield group. I have to pay each month to my attorney. I have read, as much as is possible in this legal stuff, about the Class Action that was just certified. It seems that it is the same issues that the Brown Shield group has filed on. Can I just move groups, so to speak? I still have my UPS Store, but I am barely hanging on, and making attorney payments is not easy, and may well be unaffordable soon. With the class action, I don't believe I would have to pay the attorney fees, and if both of these lawsuits are about the same, then it seems that the end result would be about the same also. Now, does this seem feasible for me to just switch over to the class action?
Brown Shield Group by michael webster
michael webster's picture

Guest writes: "I still have my UPS Store, but I am barely hanging on, and making attorney payments is not easy, and may well be unaffordable soon."

The Brown Shield Group has advanced their group's litigation.  

If you get an opt out notice from the class action, then you will have a serious decision.

But, I would not make this decision based upon paying attorney fees.

You have to ask your attorney about the differences between the two actions, and trust that those attorneys who have got this far with the group are going to be straight up with you.

This is not the time to look for what you think might be a cheaper legal solution.

Talk with your attorneys as a group - but make no mistake, the certification is only the beginning of a very long fight.  You may be closer to the finish line with your current litigation.

Good luck with whatever course you take. 

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"


Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"


Re: Brown Shield Group by Guest
Let me ask some of the attorneys on this board a question. The Brown Shield group has been forced to file MSJ's on every single plantiff (the first few bellweather cases were dismissed). Assuming around August that the rest of the group is also sent packing, we would then go to the 9th circuit (San Francisco). I have been told by various people, that this appeal court is one that is very behind, and that it could easily be a 2 year wait. Is that true?
Class Actions by michael webster
michael webster's picture

I am not an expert in US Class Actions, but generally one opts out of a class and doesn't opt in.  I am pretty sure that if you are a part of the class, you will get a notice asking you to exercise your right to opt out.  But this decision should be taken only in consultation with your current attorney. 

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"


Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"


Why are you so opinionated when you do not live in this country? by USA

I have to ask I have noticed that you seem to have quite an opinion here in relation to the various posts, strong opinions one might say, yet, it is obvious that not only are you outside this group but you are also outside the country this lawsuit is being litigated, while I am sure that your opinion is welcomed and read here I find it logical to assume that your advertising links are the primary reason you post here and I for one would appreciate it if you would cease and desist from doing so. 

Pardon the Pun...

Reasons and Opinions by michael webster
michael webster's picture

USA writes: "I am sure that your opinion is welcomed and read here I find it logical to assume that your advertising links are the primary reason you post here."

Well, one out of two isn't bad.  I do post here because my opinion is welcomed, read and responded to.

Since I am not licensed in the US to practice law, despite having a JD, your assumption that I post because of advertising links is not logical.

What would I be advertising to an audience that cannot employ my litigation services?

As to your request that I cease posting for your benefit - I have a suggestion.  Don't read what I post.

Looking forward to a more intelligent discussion of franchising next time around.


Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"


Blame Canada, Eh? by Paul Steinberg
Paul Steinberg's picture

Being a New Yorker, I am the last one to criticize people for sticking their nose into other folks affairs.

We New Yorkers keep a close eye out for any disputes with the British as an excuse to invade Canada, and when our hometown boy Aaron Burr wasn't lawyering he was busy planning to invade Mexico--or at least become King of Kentucky (wonder if Col. Sanders would have commanded Burr's militia?). We named our red-light district the "Crossroads of the World" and in the middle of it we set up lawn chairs in the street and have a naked cowboy from Ohio playing a guitar.

Compared to New Yorkers, them Canucks are models of propriety.

That being said, "USA" misses the point that BMM has a global audience (including a lot of Australians) and that Webster customarily gives an analysis which is accurate under US law.

It is one thing to criticize the accuracy of his analysis, but to criticize him merely for being Canadian is a bit odd if this was intended as a serious comment.

Besides, until we can get some folks from New Jersey to post on BMM, the Canucks are who we poke fun at.


Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
FTC Franchise Rule and Ontario Franchise Law by michael webster
michael webster's picture

Paul writes: "It is one thing to criticize the accuracy of his analysis, but to criticize him merely for being Canadian is a bit odd if this was intended as a serious comment."

The Ontario Franchise Law is largely based on the FTC Rule, with some notable changes.  As our legal history on this is small, it is incumbent on an franchise attorney in Ontario to learn the US law.  

I look forward to being corrected on the nuances of US franchise law.


Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"


I didn’t know franchising had a fence by Ray Borradale

My perception on the idiot’s comments are based on layman research, over many years, into Australian law and its influence on franchising; or lack of.  Obviously Michael is highly qualified and I find the expert discussions about interpretations, applications and differences in the laws of the US and Canada to add to my understanding. 

When it comes to the subject of law pertaining to franchising I would suggest that there is mostly a universal language, admittedly with different dialects, that one can appreciate if one bothers to listen, or read. 

‘George’ might want to learn rather than criticize without contribution but you cannot learn unless you know when to keep your mouth shut.  There is an awful lot to be learnt here if one has a functioning operating system.

Australian Franchise Opportunities, a common sense approach to franchising
My ultimate contribution to this thread is to inform all of you by RichardSolomon
RichardSolomon's picture

that - Are you ready? Do you have pen and paper? Ok. Here goes:

 

YOU CAN'T FIX STUPID.


Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
You embarass the USA by identifying yourself as USA by RichardSolomon
RichardSolomon's picture

You obviously have no knowledge of this subject, but run your stupid mouth against a man who is a bonafide expert on this and many questions of relevance here.

His comments are correct.

Yours are ignorant and insulting.

You are a bloody fool, sir. You might have passed for intelligent had you kept your mouth shut.


Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
And about them Texans by Paul Steinberg
Paul Steinberg's picture

We are in great haste to construct a magnetic telegraph from Maine to Texas. But Maine and Texas, it may be, have nothing important to communicate.

--Henry David Thoreau


Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
I have spent some grand times in Maine. Nothing could be by RichardSolomon
RichardSolomon's picture

further removed from Texas, and not only geographically.  I enjoy both and will continue to do so. But the observation is correct. We have absolutely nothing whatsoever in common. Maybe that's the reason I enjoy both so very much. If you think about the prospect of being promiscuous, your wife's twin sister usually aint your first choice.

Speaking of promiscuity, Paul, where are those pictures of your sister that you promised me?


Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Much Ado about something? by Carol Cross Eblen

Who is taking shots at our Canadian Franchise Expert,  Michael Webster,  who shares his expertise and  insight and views with all who read Blue Mau Mau.    Thanks for always articulate Richard Solomon who steps in and embarasses those who don't know what they are talking about and who defends a fellow attorney who tells the truth.    All of the Blue Mau Mau Attorneys,  i.e. Richard Solomon,  Paul Steinberg,  and Michael Webster can be depended upon to tell the truth ----and interestingly,   they now and then share a different perspective of the truth,  and share their valuable insight with readers of Blue Mau Mau.    

We,  who read  Blue Mau Mau,   have been educated to a degree about Class Actions in prior postings.    I really don't know anything about this new classs action,  or whether or not,  there is a newer lawsuit,  a classaction,   in the works by  The UPS Store  franchisees against MBE/UPS.     

The PSA lawsuit is due to hit the court again in August,  after a continuance,  and if there is another  continuance,  or a jury trial,  or a settlement,,  this will,  of course,  be interesting and relevant,  in some respects,  to the mass actions (The BSA Lawsuit)  in the the California federal courts.      

The PSA has been fighting in the Courts since 2003 and the BSA Class Action,  that became a Mass Action,  (agreed to by the parties and the District Court Judge) in the Federal Court was filed in 2006.    My understanding,  as a lay person,  and not as an attorney,  is that a federal Mass Action involves  belweather trials of representative plaintiffs picked by both the defendant and the plaintiff.    In the BSA Lawsuit,  eight Bellweather plaintiffs were dismissed in summary judgement by the District Court Judge,   who then decidided that he wanted to dismiss the entire 200 or more plaintiffs in individual summary judgements before the summary judgement could be appealed to the 9th Circuit Court of Appeals.    

It would be interesting if the attorneys would continue the discussion started on this thread as to the advantages and disadvantages of dismissing 200 or more defendants out of court in a summary judgement from the perspective of justice for both of the parties.      

You can't rejoin a class from which you opted out and started by RichardSolomon
RichardSolomon's picture

another separate lawsuit. First of all, the separate lawsuit cannot simply be dismissed without prejudice once a responsive pleading has been filed by the opposite party - unless the opposite party is willing to stipulate to dismissal without prejudice - not likely, especially once they know your reason. If they think you are growing light in the wallet, they will not cooperate on anything other than a favorable resolution in their favor - including a cheap settlement.

Even if that very unlikely event were to occur, the court from which you opted out probably would not now allow you to rejoin the class. You had your chance, so the theory goes, and you made your bed.

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School


Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
opting out and back in by Guest
I agree that you can't. However, in this case, did anyone even have the option to opt out. Does not that option get offered after certification occurs. I am not a lawyer, just asking the question.
The standard procedure is for a notice to be sent when the class by RichardSolomon
RichardSolomon's picture

is certified. In that notice there is an opt out opportunity given. If you don;t opt out you are in. In some state courts, if you don;t opt in, you are out. I don't know what court this ws in, state or federal. I am assuming the class action is in a federal court. If I am wrong, then I don;t have the answer.

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School


Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
This class action by Guest
was just certified by Judge Highberger in LA Superior Court, so it would be governed by California State Law. I believe the other class action that was filed by the Brown Shield Group was in a Federal Court! I believe that one is still pending appeal!
Class Actions go to Federal Courts ----unfortunately! by Carol Cross Eblen

It appears that under the terms of the Class Action Fairness Act of 2005,  defendants will remove this newest class action against MBE/UPS   from the State Courts to the Federal Courts,  where a Federal Judge will apply State Law and Federal Law as well as  Federal Regulatory Policy Goals to the dispute.    

Re: This class action by Guest
The class action was filed in L.A. Superior Court and stayed there. The Brown Shield action was also filed in L.A. Superior Court but was removed to Federal Court early on. MBE/UPS filed papers to have it sent to Fed which is where it sits now.
Get real by Guest
You had better take off the rose colored glasses. In class action suits the lawyers make a bulk of the money and the plantiffs get the crumbs. They may pay to convert you back to a MBE or independent if you are lucky. This is not a Misssippi court. You get what you pay for. Sweet Dreams
MBE/UPS by Guest
It's funny that people think this is about money for the franchisees.
Re: MBE/UPS by Guest
In the end------it's ALWAYS about the money!
Re: Re: The UPS Store Franchise by cathy gordon
You are drinking more koolaid then the converting mbe drank at the time of gold shield
What a fun life by Guest
Why so bitter? Bad Father's Day?
Re: Re: The UPS Store Franchise by Guest
OMG I hope your friend is right! I could really use that! Maybe this means I can finally close this dog down!!! Please keep informed as to anything else your friend says!

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