Byron printer to battle $2 million postage charge

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A Byron firm is going to court over a $2 million postage bill.

Schmidt Printing Inc. is asking an Olmsted District judge to find that it doesn't owe$2,118,909 in unpaid postage to Pitney Bowes Inc.

Mankato attorneys Wade Davis and Douglas Peterson filed the complaint March 8 against Pitney Bowes in Olmsted District Court after getting a letter dated Feb. 5 from the company's president, Robert DeVincenzo, demanding payment.

The letter says that Pitney Bowes International Services collects postage on behalf of Royal Mail, the British national postal service. DeVincenzo said their records show that Schmidt owes the $2.1 million balance.

Attorneys for Schmidt said that the Byron company provides printing services to marketing companies, and that around 1999, Schmidt began printing marketing materials for Response Direct Publishing Ltd (RDP). The materials were packets of cards with advertisements directed at people living in the United Kingdom. Schmidt printed, packaged and shipped the materials to the United Kingdom, where they were mailed directly to individuals via Royal Mail. The attorneys said the information and belief is that RDP paid the Royal Mail postage for the mailing.

The complaint says that in 2003, RDP entered discussions with G3 Worldwide Inc. relating to the administration, handling and shipping of its marketing materials to England.

In 2004, RDP asked Schmidt to work with RDP and G3 Services to ship the marketing materials to the United Kingdom. Under that agreement, Schmidt continued to package, handle and work with third parties to ship the marketing materials to the United Kingdom.

About the same time, G3 Services began to pay RDP and Schmidt service/freight rebates for the bulk-mail shipments to the United Kingdom based on the weight of materials that were packaged and shipped. The rebates were compensation for services related to the administrative, packaging and shipping of the freight, the complaint says.

In 2007, Pitney Bowes began to perform the obligations of G3 Services under the previous agreements. The complaint says that Schmidt believed RDP continued to pay Royal Mail packaging costs related to its mailings until about April 2009. RDP has since entered bankruptcy proceedings in the United Kingdom.

The complaint says that Schmidt is not legally obligated to pay for the postage referred to by Pitney Bowes in its February letter, and asks the court to make that declaration.

No response has been filed by Pitney Bowes.