Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: eBay settles recurring listing fee suit for $6.4M, (Sep 18, 2015)

By Greg Hammond, J.D.

eBay sellers have obtained final approval of a $6.4 million settlement with the e-commerce company, disposing of claims eBay violated California’s Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumer Legal Remedies Act (CLRA) by failing to disclose that fees would be charged every 30 days for “Good ‘Til Cancelled” listings. The federal district court in San Jose found the settlement to be fair, reasonable, and adequate (Noll v. eBay, Inc., September 15, 2015, Davila, E.).

In September 2008, eBay made the “Good ‘Til Cancelled” (GTC) duration for listings available. Plaintiffs Richard Noll and Rhythm Motor Sports, LLC alleged that the Core, Motors, and Stores Fees Schedules never stated that the fees would recur. However, in December 2008, eBay revised its Core Fees Schedule by adding “Good ‘Til Cancelled renews automatically every 30 days until the item sells or you end the listing. Insertion Fees are charged every 30 day period.” The change was also made to the Motors and Stores Fees Schedules in March 2010. The plaintiffs claimed that eBay violated the UCL, FAL, and CLRA by failing to clearly and unequivocally state that insertion fees and optional feature fees would be charged every 30 days for GTC Listings placed between September 16, 2008 and June 19, 2012.

The parties reached a $6.4 million settlement, which they contend would provide immediate relief and a substantial refund to nearly 1.2 million eBay sellers. In addition, no claims process would be necessary because most sellers would receive an automatic credit without the need to cash a check. Class members without active eBay accounts, whoever, would receive a check under the settlement. Noll moved for final approval and for attorney fees and costs.

Certification. The court first granted class certification for settlement, finding that the plaintiffs met the numerosity, commonality, typicality, and adequacy requirements of Federal Rule of Civil Procedure 23(a), as well as the predominance and superiority requirements of Rule 23(b). The class was defined as “All natural persons and entities who are United States residents and who (1) placed GTC Listings on eBay that commenced during the Class Period, and (2) were charged Disputed Fees.”

Fairness. The court next concluded that the settlement was fair, reasonable, and adequate. Specifically, it determined: (1) the settlement represents a good deal for the class in view of the risks posed to their case; (2) the risks of continued litigation and that the class could see no recovery at all favored settlement; (3) the risks that the class could not be certified or maintained supported approval; (4) the $6.4 million settlement fund, representing 50 percent of the total first month renewal fees, falls within the range of prior approved settlements; (5) the extensive discovery conducted and counsel’s significant experience with eBay demonstrated a reasoned and informed settlement decision; (6) plaintiffs’ counsel defended or prosecuted over 20 class actions over the last 20 years and knows the risks both sides face; (7) the absence of a governmental participant indicated that such officials do not object to the settlement; (8) the objection rate of .00025 percent reflected an overall favorable reaction by class members; and (9) there was no risk of collusion.

Attorney fees. Class counsel also moved for approval of attorney fees in the amount of $1.6 million, or 25 percent of the settlement fund, and nearly $73,000 in expenses. The court concluded that the attorney fees were appropriate in light of the substantial risk in this case and the significant time and skill required of class counsel to obtain a result for the class. The fee request was also not disproportionate to the class benefit and was deemed comparable to awards approved in other similar Internet privacy class actions. The amount of hours and other costs attributed to the case were also found reasonable in light of the efforts required to litigate and ultimately engage in a lengthy settlement process. The incentive awards, however, were reduced from $15,000 for each class representative to $5,000, as the court was not persuaded that this case warranted an upward departure from the established incentive award of $5,000 for each class representative, which was presumptively reasonable.

The case number is 5:11-cv-04585-EJD.

Attorneys: Keith R. Verges (Figari & Davenport, LLP) for Richard Noll. John C. Dwyer (Cooley LLP) for eBay, Inc., eBay Europe S.A.R.L., and eBay International AG.

Companies: eBay, Inc.

Cases: Advertising ConsumerProtection StateUnfairTradePractices CaliforniaNews