Knapp v. Art.com Inc.
In this class action, plaintiffs allege that Art.com violated consumer protection laws and committed unlawful business practices by offering items on “sale” but at prices it ordinarily offers to consumers in the regular course of its business.
Under the settlement, class members will receive $10 vouchers for use on Art.com’s ecommerce sites. The settlement has hallmarks of the coupon-settlement abuse that Congress targeted with the Class Action Fairness Act of 2005: Class members were not able to choose cash in place of a voucher, the vouchers expire in 18 months, and they can be used only for the narrow range of products available on those websites, where the average purchase price is almost twice as much as the voucher. Art.com also agreed to comply with the law going forward and to undertake a compliance program — illusory relief that will not benefit the class of past-purchasing class members. Meanwhile, class counsel is seeking $745,000 in fees and expenses, unopposed by Art.com, despite notoriously low coupon redemption rates and, thus, minimal class benefit, in low-value consumer settlements such as this.
On August 22, 2017, the court issued a ruling finding the vouchers are coupons, approving the settlement, and deferring the issue of attorneys’ fees until the coupon redemption rate is known. We will now await the coupon redemption information and further word from the court.