The UPS Store will need to face a class action lawsuit accusing it of illegally overcharging customers seeking to have documents notarized, after a state appeals panel agreed the plaintiffs had done enough to back their claims the company allegedly had conspired with its Illinois franchisees to charge for “clerical services” in a bid to sidestep a state law limiting notary publics to fees of only $1 per notary service.
On Aug. 7, a three-justice panel of the Illinois First District Appellate Court agreed to revive a portion of the lawsuit brought by named plaintiff Reba Shavers, of Chicago, and her attorneys Katrina Carroll and others with the firms of Carlson Lynch, of Chicago, and Whitfield Bryson, of Raleigh, North Carolina, and Nashville, Tennessee.
At least 175 stories operate under The UPS Store brand in Illinois, providing a range of parcel and office-related services, including notary services.
According to the lawsuit, UPS Store has faced similar lawsuits over his alleged practice, which the plaintiffs claim shows the company “systematically flouts laws on notary fees, including that of Illinois.”
In her complaint, Shavers asserts she was overcharged for notary services by a UPS Store franchisee in Chicago in April 2020, when she was charged $10.
Should the lawsuit proceed as a class action, it could ultimately include “hundreds if not thousands” of additional UPS Store customers who may have been allegedly similarly overcharged for notary services.
The lawsuit also sought to expand the action to include as defendants every UPS Store franchisee that provided notary public services in Illinois.
In Cook County Circuit Court in August 2022, Judge Thaddeus L. Wilson dismissed the action, agreeing with UPS Store that the plaintiffs failed to show that UPS Store violated Illinois’ consumer fraud law or the state’s law regulating notary publics by controlling the fees its franchisee stores charged for notary services.
The court also dismissed counts against UPS Store franchisee Generation I, which had accused the store operator of conspiring with UPS Store to violate the Illinois Notary Act by overcharging customers for notary services.
Shavers and her lawyers appealed that decision, resulting in a partial resurrection of their claims.
In the appellate decision, the panel agreed to keep a lid on Shavers’ claims that UPS Store itself violated the Consumer Fraud Act and the Notary Act by allegedly directing its franchisees to overcharge for notary services.
In the decision, the appellate justices said they did not believe Shavers had done enough to demonstrate UPS Store exercised such direct control over the affairs and operations of its franchisee stores.
However, the appeals panel said Shavers could at least continue with claims that UPS Store and its Illinois franchisees engaged in a civil conspiracy to require customers to pay a $4 fee for “clerical services,” in addition to charging the $1 direct fee for notarization of documents.
The justices found Shavers could continue with her claims under the Notary Act against Generation I, which they said also underlie her conspiracy claims against The UPS Store.
“Although a cause of action does not lie directly against TUPSS under the Notary Act, TUPSS may be held liable for conspiring with its franchisees to violate said Act,” the justices said.
The decision was issued as an unpublished order under Supreme Court Rule 23, which may limit its use as precedent.
Justice Mary Ellen Coghlan authored the judgment. Justice Aurelia Pucinski concurred entirely.
Justice Michael B. Hyman concurred with part of the decision, but also partially dissented.
In dissent, Hyman said his colleagues had misread both the law and prior court decisions related to the relationship between a franchisor company and their franchisees.
Hyman said under his reading of the law and legal precedents, Shavers should be allowed to sue UPS Store itself for violating the state consumer fraud law, “because she alleged not only that The UPS Store knew about its franchisees’ fraudulent conduct but also played an active and direct role in it.”
The UPS Store, Hyman said, “is not an unrelated third party but rather the franchisor alleged to have directly participated in the fraud by setting prices for notary services and mandating franchisees charge $5, including $4 for non-existent clerical services.”
The case was sent back to Cook County Circuit Court for further proceedings.