Stamps.com agreed last month to settle a lawsuit filed by Rapid Enterprises, which operates as Express 1. The case began after Stamps.com acquired ShipStation last year, in June. Express 1 then sued ShipStation on August 14, 2014.
Express 1 is a sales and support business partner for the USPS that provides discounted shipping rates and technology solutions to lower volume USPS shippers, according to Stamps.com. “Through our partnership with Express 1, Stamps.com and our subsidiaries are able to provide Express 1’s shipping discounts to our lower volume customers, and Express 1 is able to utilize our systems and software to better serve its customers.”
Express 1 alleged that ShipStation breached its contract with Express One by violating an exclusivity provision and it sought an injunction, damages, attorneys’ fees, and court costs. In December, Express 1 added additional claims and added Stamps.com and its CEO as named defendants.
On August 6, 2015, Stamps.com Express 1 entered into a settlement agreement that resolved all disputes between the parties. Stamps.com agreed to pay Express 1 $10 million in exchange for Express 1’s dismissal and permanent withdrawal of Express 1’s tort claims.
The two companies also agreed to continue and expand their business relationship going forward, and they entered mutual general releases in connection with the settlement.
Stamps.com may be looking to do some housekeeping prior to its planned acquisition of Endicia, which is currently under review by the government as part of its pre-merger review process to see if competition could be harmed with the acquisition.