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

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

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We might think in the job of Amazon element that as soon as we shop on the web the product must arrive in ~ our door for free. Yet there space obviously costs associated with mailing the items we buy online, expenses that don’t exist once we choose up in store. E-Sellers have always understood the must make this shipping and also handling costs—as fine as various other terms and conditions the sale—clear and conspicuous to the customer prior to he buys the product. Similarly, e-Sellers recognize when they advertise a product together “free” or as a “free trial” the charging additional fees such as shipping and also handling, unless very clearly communicated, have the right to pique the attention of state enforcers. The current class action attack top top retailers focuses not ~ above how plainly such charges room communicated but instead on the quantities charged and whether the is in which method unfair to charge more than the yes, really out-of-pocket shipping and handling cost, also if the charges are adequately disclosed.

In January, two course actions to be filed in federal district court in California against companies based upon their allegedly deceptive, unfair, and also “unethical” shipping and handling charges. Both complaints, which were lugged under the Unfair Competition regulation (“UCL”) and also Consumers legal Remedies plot (“CLRA”), allege the the defendants fee shipping and also handling fees the “were not fairly related to prices of delivering or shipping the items come consumers but instead significantly exceeded those costs.” The plaintiffs seek course certification on instead of of “ll persons in the State that California that purchased assets from and were charged a fee for shipping, handling, and/or delivery within the period of the applicable law of limitations.”

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

Perhaps many notably, the complaints in these situations assert, as a major basis for their claims, the dispute that too much shipping and handling charges are “in contravention of created ethical principles.” these charges, speak the plaintiffs, “are unfair, unethical and/or in violation of windy policy because it violates company ethics to charge more for shipping or distribution than a company’s costs of shipping, postage and also handling.”

Established ethical principles? company ethics? You could be wondering—as we were—just whereby these values come from.

According come the plaintiffs, lock “come<>, in part, from created ethical principles recognized by the straight Marketing Association.” The plaintiffs suggest in certain to DMA’s Guidelines for Ethical company Practices and a companion volume called Do the appropriate Thing. Article 11 of the Guidelines says that “

ostage, shipping, or handling charges, if any, need to bear a reasonable connection to actual costs incurred,” and the companion volume, elaborating on post 11, offers that “hen figuring shipping and handling fees, it is vital to reflect the costs as correctly as feasible so that your client or prospects are not likely to check out these fees as a firm ‘profit center."” The plaintiffs likewise invoke DMA’s Guidance for Establishing and Substantiating Shipping and Handling Charges, which note “a tendency by legislation enforcement agencies . . . To urge that a customer who is fee shipping and handling costs should be paying a fees reasonably based upon the marketer’s cost”—a place that DMA recognizes together “consistent v existing DMA guidelines.”

Very often, self-regulation and industry password go past what the regulation requires and collection a greater aspirational bar because that participating companies. In this cases, the plaintiffs look for to make the DMA accuse the minimum standard and also legally binding. Against this backdrop, each complaint alleges hurt of California’s UCL, saying that the defendants’ command violates the UCL’s “unfairness” prong, “violates developed public policy as known by DMA,” and also “violates public plan as known by the Federal trade Commission in enforcing section 5(a) of the Federal profession Commission Act.” The complaints make similar allegations under the CLRA, and one complaint also contains a request for declaratory relief, asserting that the causing obligation arbitration provisions top top the company’s website—potentially a fatal blow to the class action—are unenforceable because that a variety of reasons. The complain asks the court to declare these provisions invalid and unenforceable.

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Given the boosting prominence of shipping and also handling course actions, and given the copycat nature that class activity lawsuits much more generally, currently would it is in a great time because that retailers to review their shipping and handling practices to ensure they understand any type of litigation risks and also are acquisition the ideal steps to minimization the hazard of these lawsuits.