Harrah’s Plans Appeal of Birthday Voucher Class Action Settlement

According to a Dec. 4, 2013 filing with the Securities and Exchange Commission (SEC), Harrah’s Atlantic City plans to appeal a $5.2 million judgment from a class action lawsuit accusing the casino of participating in misleading customer loyalty program promotions.

In its SEC filing, Caesars Entertainment Corp. (formerly called Harrah’s Entertainment Inc.) says that Harrah’s Atlantic City will ask the New Jersey Supreme Court to overturn the multi-million dollar judgment stemming from a 2003 class action lawsuit filed by casino customers who claim they were unable to redeem $15 “birthday cash” vouchers that were issued as part of a customer loyalty program.

According to the Harrah’s Casino class action lawsuit, Debra Smerling visited the Harrah’s Atlantic City Resort and Casino, intending to redeem a $15 voucher she received as part of the casino’s “Total Rewards” customer loyalty program for her birthday. She attempted to redeem the voucher at 12:30 a.m. on Aug. 10, 2003, the day that the voucher became valid, but the casino informed her that the offer would not be effective until 8:00 a.m. Smerling joined with her mother and one other plaintiff to file the class action lawsuit, alleging Harrah’s violated the New Jersey Consumer Fraud Act and Truth in Consumer Contract, Warranty and Notice Act by making the promotion available only during certain hours.

In 2010, a judge in Middlesex County, N.J. ruled that Harrah’s Casino had violated the state’s truth in advertising laws and awarded up to $8 million to thousands of customers. According to the SEC filing, this judgment was reduced in March 2012 when the judge held that the damages class should be based on the number of individuals who redeemed certificates rather than the actual number of certificates redeemed, because some plaintiffs redeemed multiple certificates. This ruling limited Caesars’ liability to $5.2 million. The casino birthday cash lawsuit was stayed pending a New Jersey Supreme Court decision that would potentially affect the outcome.

“The decision in the New Jersey Supreme Court Case clarified two aspects of the New Jersey Truth in Consumer Contract, Warranty and Notice Act, which support our contention that the existing judgment against us should be vacate and the case dismissed in our favor,” Caesars said in its SEC filing. However, the court denied both parties’ motions for reconsideration of the class action lawsuit in November. In the SEC filing, Caesars indicates that Harrah’s plans to stay the judgment and appeal the lawsuit to the New Jersey Supreme Court.

Smerling is represented by Andrew Wolf.

The Harrah’s Birthday Cash Class Action Lawsuit is Debra S. Smerling, et al. v. Harrah’s Entertainment Inc., et al., Case No. A-1689-05T1, in the Superior Court of New Jersey, Appellate Division.