Peet’s Coffee Allegedly Violates California’s Automatic Renewal Law
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In July 2017, a San Francisco judge rejected Peet’s Coffee’s attempt to put an end to a putative class action. The California class action alleges that Peet’s violated California’s Automatic Renewal Law due to improper notification of customers regarding the automatic renewal of coffee and tea subscriptions. The judge rejected Peet’s Coffee’s findings that the class members could not provide evidence of an injury.
It was argued that allegations against Peet’s Coffee could not stand due to the inclusion of legally required disclosures on the company’s website and due to the class’s failure to state an injury in accordance with the Unfair Competition Law claim requirements. After hearing the arguments, Judge Karnow found both to be factually disputed. He stated that the ARL claim was pled sufficiently and that the class’s injury was the fact that a lack of proper disclosure left plaintiffs that had not consented to pay for services. Without consent for payment, the coffee may be considered a gift and the “price” charged for it is the injury.
Due to the facts of the case, the judge found that motion for summary judgment or a quick bench trial would be the best way to handle the case.
The class includes California Peet’s Coffee customers who purchased subscriptions after February 2013. Allegations state that Peet’s did not comply with California state law because they did not provide “clear and conspicuous” disclosures and did not provide notification prior to every additional charge. Allegedly, the checkout page for the Peet’s subscription service did not include the appropriate notifications regarding automatic renewal.
Class members seek recovery of the money paid for recurring products because they can be defined as “unconditional gifts” under California state law.
Legal counsel for Peet’s Coffee argues that the plaintiffs’ allegations are full of conclusory allegations regarding conspicuous disclosure and that the complaint itself stated that Eduardo Leon Castillo, plaintiff, selected a different coffee blend, then cancelled the subscription service. There is no mention in the complaint that the subscription was difficult to cancel, only that the plaintiff cancelled when he wanted to cancel and made purchases according to his own wishes. Peet’s attorney pointed out that Castillo’s ordering of the coffee was proof that it wasn’t “unsolicited.”
The judge responded that if the info presented was accurate, then Peet’s would come out the victor, but that it didn’t warrant an argument that the members didn’t have standing to bring the case to court.
Castillo’s attorney responded to Peet’s arguments by stating that according to California state law, Eduardo’s state of mind is not relevant to the case. According to the law, it doesn’t matter if the plaintiff knew or not – it matters if the disclosure requirements were met.
If you have questions or concerns about California’s Automatic Renewal Law, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.
