Paleohacks Class Action Says Automatic Renewal Terms Unfair

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A class action lawsuit was filed against Paleohacks LLC., an online service that puts together “paleo” snack boxes and mails them to customers, claiming that the company automatically renews customer accounts in violation of California law.

Lead plaintiff Matthew Lopez alleges that the company does not ask permission from its customers before automatically renewing the snack box delivery service and charging them annually. According to the complaint, Paleohacks violates California’s Automatic Renewal Law and Unfair Competition Law by failing to provide notice to its customers about their automatic renewal and cancellation policies.

According to the complaint, Paleohacks sells snack boxes by mailing them to customers through www.paleolifebox.com on a monthly, quarterly or biannual basis. The plaintiff alleges that customers sign-up for a subscription to the service to obtain paleo snack products. The plaintiff further alleges that unbeknownst to its customers, Paleohacks will automatically renew the subscriptions but does not provide notice of the renewal policy or how to cancel the subscription before charging for the renewal.

The class action lawsuit alleges that after Lopez, and other proposed Class Members, signed up for the Paleohacks service, they received confirmation of their orders and renewals by email; however, these email communications did not provide information about the automatic renewal or continuous service policy.

According to the complaint, Paleohacks “failed, and continues to fail, to provide an acknowledgement that includes the automatic renewal or continuous service offer terms, cancellation policy, and information on how to cancel.” “Moreover,” claims the plaintiff in his complaint, “Defendant failed to provide Plaintiff and Class Members with an acknowledgement regarding how to cancel the subscription and allow Plaintiff and Class Members to cancel before payment.”

The plaintiff alleges that under California law, the practice of ongoing charges to consumers’ payment methods without consumers’ explicit consent for ongoing shipments of a product or ongoing deliveries of service is prohibited. California law also states that businesses must provide an acknowledgement that includes the automatic renewal or continuous service offer terms, cancellation policy, and information regarding how to cancel in a manner that is capable of being retained by the consumer, argues the plaintiff.

The descriptions of the automatic renewal and cancellation terms must be “clear and conspicuous” under California law, says the plaintiff. Additionally, if the business sends goods, wares, merchandise, or products under a continuous service agreement without obtaining the affirmative consent of the consumer, the items and/or service is considered an “unconditional gift” from the business to the consumer, leaving the consumer with no obligation to the business.

The plaintiff seeks to represent a nationwide Class of Paleohacks customers who purchased services subject to an “automatic renewal.” Additionally, the plaintiff is seeking damages, restitution, declaratory and injunctive relief, plus attorney fees and costs for himself and on behalf of the class.

Lopez is represented by Scott J. Ferrell, Richard H. Hikida, David W. Reid and Victoria C. Knowles of the Newport Trial Group.

The Paleohacks Automatic Renewal Class Action Lawsuit is Lopez v. Paleohacks LLC., Case No. 3:16-cv-00716, in the U.S. District Court for the Southern District of California.