January 24, 2008 – 9:08 pm
When Dale Martinez opened the first of his four Mail Boxes Etc. (MBE) stores in suburban Reedley in 1995, he looked forward to building a family-based business that would make his life a reflection of the “American Dream.” Today, that dream has turned into a nightmare of conflict with United Parcel Service , and Martinez’ once profitable shipping and business support enterprise has changed dramatically following the 2001 acquisition of MBE by Atlanta-based UPS and its launching of the competing UPS Store brand in 2003. “We’re hanging on at this point,” said Martinez, a Reedley native and graduate of local schools who served as a helicopter crew chief during the Vietnam War. “But to keep the other stores going, we will probably sell one of the four sometime this spring. Martinez earlier changed the name of two of his stores from Mail Boxes Etc. to Pack & Ship Authority (PSA), when UPS demanded that MBE franchisees whose franchise agreements had expired immediately adopt the UPS Store identity. Martinez chose to go independent with two of his stores.
“The initials, PSA (Pack & Ship Authority), are the same as a group I belong to, the Platinum Shield Association,” he added, “and that group of over 130 store owners filed a lawsuit against UPS in 2003. Our group of MBE store owners wants UPS to make restitution for our losses that resulted from their launching of the competing UPS Store.”
The UPS Stores have also brought suit against MBE and UPS for misrepresentations made to convince franchisees like Martinez to convert their MBE Centers to The UPS Stores. UPS Store franchisees won a major court decision last October, when a California appellate court overturned a lower court and certified their lawsuit against UPS as a class action. At present there are four lawsuits filed against UPS by various store owner groups across the country based on the forced conversion of the successful Mail Boxes Etc. business model to the failed UPS Store model. If successful, the end result could be the undoing of this conversion of approximately 3,400 UPS Store franchise locations.
In the almost five years since the lawsuit was filed, Martinez and many other Platinum Shield Association members have been forced to sell property, mortgage their homes and make other financial sacrifices to keep their stores open and fund their legal effort. “I cashed in my retirement plan, and we have reduced our workforce to keep the stores open and to keep the lawsuit alive,” he said.
“I wanted to build a successful franchise business and create something to leave to my children as a legacy. I thought I was living the American Dream when I made this purchase, but now it has become the American nightmare for me and my family,” Martinez continued. “My American Dream was shattered when in 2003 UPS announced that MBE stores could not renew their franchise as MBE and must renew as UPS Stores.” Now it is very different, and all of us store owners want to just get our chance to face UPS in court, and let the world know what they did to bankrupt the store owners like me. Maybe this year will be that time,” he said.
An example of UPS’ strategy, Martinez noted, was their seeking Temporary Restraining Orders (TRO) against him and 12 other franchisees around the country in early 2006. UPS claimed that the former MBE franchisees violated the MBE trademark after they were forced to become independent because already existing Yellow Pages ads still linked the independent stores with the name MBE. MBE sought to obtain TRO’s in federal court, and force the immediate closure of the stores. That effort failed in every instance.
Fresno-based U.S. District Court (Eastern District of California) Judge Oliver W. Wanger dismissed the UPS action against Martinez. As noted in the court proceedings he told the UPS attorney, “You haven’t even served these people. I have no jurisdiction over them. Until you serve a summons and complaint, you don’t have personal jurisdiction over a party, counsel. Didn’t you learn that in law school?” Judge Wanger further expressed his displeasure, “He who seeks equity must come into the court with clean hands and he who seeks equity must do equity, and so there’s no basis to issue a TRO today. This looks like an ambush.” Howard Spanier, President of the Platinum Shield Association, commented, “UPS has unlimited financial and legal resources and knows full well that their ‘mom and pop’ franchisees do not. UPS subsequently lost or withdrew each of these TRO motions in all 13 federal jurisdictions. Clearly, this desperate and frivolous ambush by UPS was for the sole purpose of forcing these small franchisees to spend money on legal fees that they could otherwise use to support their families. Shame on them.”
Looking to the future, Martinez said he hopes the lawsuit will give him and his Platinum Shield Association colleagues “our day in court” soon. In the meantime he tries to remain upbeat, and continues to work with his family to provide local customers the service he has always prided himself on giving to everyone who comes into any of his four stores.
The stores are located at 1630 Manning Ave., Reedley; and 7084 North Cedar Ave., 2037 West Bullard Ave. and 2339 Kern St., all in Fresno, California.
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