Groupon Class Action Settlement Denied

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A federal judge on Friday rejected the proposed $8.5 million Groupon class action lawsuit settlement that would have resolved allegations that Groupon vouchers are illegal because they contain improper expiration dates, finding fault with a provision of the Groupon settlement that would have provided $75,000 to two charity organizations.

U.S. District Judge Dana Sabraw said neither of the non-profit groups were “expressly committed to righting the specific wrongs alleged in the case,” and therefore he had to reject the entire Groupon settlement because he was not allowed to strike down just the charity provisions.

The Groupon voucher settlement was reached in April to resolve 17 class action lawsuits accusing the company of violating consumer protection laws by placing illegal expiration dates and other provisions on Groupon vouchers, such as the requirement that they be used in a single transaction.

The proposed Groupon class action settlement would have allowed consumers who purchased Groupon vouchers before December 1, 2011 to either redeem the vouchers past their expiration date or, if they were unable to, obtain a refund from the $8.5 million class action settlement fund. Of this fund, $75,000 was set to go to the Electronic Frontier Foundation and the Center for Democracy and Technology, two organizations concerned with Internet privacy rights.

Judge Sabraw agreed with objectors to the Groupon settlement who argued the money should instead be distributed to the Class, and struck down the Groupon class action settlement on the grounds that neither organization dealt with the core issue of the case: expiration dates and other restrictions on consumer vouchers or misleading advertising related to vouchers.

“That consumers purchase vouchers on the Internet is not enough,” he said. “Indeed, it is incidental to the claims at issue in this case.”

The case is In Re: Groupon, Inc. Marketing and Sales Practices Litigation, 11-MD-2238, U.S. District Court Southern District of California, San Diego.

UPDATE:  Claim filing instructions for the revised Groupon voucher class action settlement are now available! If you previously filed a claim for the 2012 Groupon settlement, you do not need to take any further action to receive benefits. Click here or visit www.GrouponVoucherSettlement.com for more information.