Home > Class action > Retailers challenge a new Threat: Shipping and Handling course ActionsRetailers confront a brand-new Threat: Shipping and also Handling class Actions

The plaintiffs’ bar is at it again, this time through a brand-new target—the shipping and also handling fees that retailers fee consumers in the course of carrying a product.

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We may think in the job of Amazon prime that as soon as we shop top top the web the product have to arrive at our door because that free. Yet there room obviously costs connected with e-mail the items we buy online, expenses that don’t exist as soon as we choose up in store. E-Sellers have constantly understood the need to make this shipping and also handling costs—as fine as other terms and conditions that sale—clear and also conspicuous to the customer prior to he buys the product. Similarly, e-Sellers understand when lock advertise a product together “free” or as a “free trial” the charging added fees such as shipping and also handling, uneven very clearly communicated, have the right to pique the attention of state enforcers. The present class action attack on retailers focuses not ~ above how plainly such charges are communicated however instead top top the amounts charged and also whether it is somehow unfair to charge more than the really out-of-pocket shipping and also handling cost, also if the charges room adequately disclosed.

In January, two class actions were filed in commonwealth district court in California against companies based upon their allegedly deceptive, unfair, and “unethical” shipping and also handling charges. Both complaints, i beg your pardon were lugged under the Unfair Competition regulation (“UCL”) and Consumers legal Remedies plot (“CLRA”), allege the the defendants fee shipping and also handling fees that “were not sensibly related to costs of transporting or shipping the items to consumers however instead considerably exceeded those costs.” The plaintiffs seek class certification on instead of of “ll people in the State of California who purchased commodities from and were charged a fee because that shipping, handling, and/or delivery within the period of the applicable statutes of limitations.”

The facts in the situations are similar, and also the plaintiff is the same in both actions. This plaintiff accused bought a filter native one company’s website and was charged $1.99 because that the product and $7.99 because that “Shipping/Handling,” and from another seller the plaintiff allegedly purchased a “small, lightweight product” native the company’s website because that $17.93 (plus tax) and was fee $8.00 because that “Shipping/Handling.” The complaints allege that these charges are much more than twice the actual cost of shipping and also delivery according to the U.S. Postal Service’s online calculator.

Perhaps many notably, the complaints in these instances assert, together a major basis for their claims, the argument that extreme shipping and handling charges are “in contravention of created ethical principles.” these charges, to speak the plaintiffs, “are unfair, unethical and/or in violation of publicly policy because it violates service ethics come charge more for shipping or distribution than a company’s prices of shipping, postage and handling.”

Established honest principles? business ethics? You could be wondering—as us were—just where these ethics come from.

According to the plaintiffs, castle “come<>, in part, from developed ethical principles recognized through the direct Marketing Association.” The plaintiffs suggest in particular to DMA’s Guidelines because that Ethical organization Practices and a companion volume referred to as Do the ideal Thing. Write-up 11 the the Guidelines claims that “

ostage, shipping, or handling charges, if any, have to bear a reasonable connection to actual costs incurred,” and also the companion volume, elaborating on article 11, gives that “hen figuring shipping and also handling fees, the is important to reflect the expenses as that s right as possible so that your customers or prospects are not most likely to view these fees as a firm ‘profit center."” The plaintiffs likewise invoke DMA’s Guidance for Establishing and also Substantiating Shipping and Handling Charges, which notes “a tendency by regulation enforcement organ . . . To firmly insist that a consumer who is fee shipping and also handling costs should be paying a fees reasonably based upon the marketer’s cost”—a position that DMA recognizes together “consistent through existing DMA guidelines.”

Very often, self-regulation and industry codes go beyond what the legislation requires and collection a greater aspirational bar because that participating companies. In these cases, the plaintiffs seek to do the DMA guidance the minimum standard and also legally binding. Versus this backdrop, each complaint alleges violate of California’s UCL, arguing that the defendants’ command violates the UCL’s “unfairness” prong, “violates developed public plan as known by DMA,” and also “violates public plan as well-known by the Federal profession Commission in enforcing ar 5(a) of the Federal profession Commission Act.” The complaints make comparable allegations under the CLRA, and one complaint additionally contains a inquiry for declaratory relief, asserting the the causing obligation arbitration provisions on the company’s website—potentially a fatal blow to the course action—are unenforceable because that a number of reasons. The complain asks the court to explain these provisions invalid and also unenforceable.

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Given the increasing prominence of shipping and also handling class actions, and given the copycat nature the class action lawsuits more generally, currently would it is in a good time for retailers to evaluation their shipping and also handling techniques to ensure they understand any litigation risks and also are taking the ideal steps to minimize the risk of this lawsuits.