An amicus brief was filed in federal appeals court to protect Arizona consumers from abuse in the class action settlement process. The states are asking the appeals court to reverse a lower court approval of a proposed class action settlement that would send $8.5 million to class action attorneys but only $225,000 in cash to consumer class members.
The Arizona Attorney General’s Office is taking the lead in a bi-partisan effort involving 13 states including Arkansas, Idaho, Louisiana, Maine, Michigan, Missouri, Montana, Nevada, Ohio, Oklahoma, Texas, and Wyoming.
The class action lawsuit alleged that when consumers clicked on ads offering a future discount during the check-out process for certain flower and gift websites that they were then improperly enrolled in a fee-based subscription service without the Defendants fully disclosing that consumers’ credit cards would be charged. Under the settlement, Defendants are paying out over $13 million in cash. Approximately $8.5 million of this goes to class action attorneys and another $3 million goes to San Diego area universities. But consumers only receive $225,000 in cash along with highly restrictive $20 “e-credit” settlement coupons to the flower and gift websites that are almost useless because they expire in one year, are subject to extensive blackout dates (including around Mother’s Day, Valentine’s Day, and Christmas), and require class members to spend their own money to take advantage of the face value of the coupon.
The states urge the Court to recognize that the proposed settlement is imbalanced and unfair because it sends two-thirds or more of the almost $13 million in available cash to the class action attorneys while the consumer class members get almost nothing beyond highly restrictive, nearly useless “e-credit” coupons.