Netflix Class Action Filed Over ‘Grandfathered’ Price Increase

A class action lawsuit alleges that Netflix Inc. broke the contract it made with millions of customers who have “grandfathered” subscription plans with price guarantees.

According to the Netflix class action, “For a period of time, Netflix solicited persons to subscribe to Netflix’s streaming service by guaranteeing that Netflix would not increase monthly subscription prices as long as the subscribers maintained the subscription service continuously.”

The class action asserts that “Netflix has broken its contract with these subscribers by unilaterally raising monthly subscription prices.”

Plaintiff George Keritsis says he became a customer of Netflix’s video streaming service some time around 2011 and has maintained his monthly subscription ever since.

Keritsis contends that he saw an advertisement from Netflix saying that its streaming plan would be “grandfathered,” or guaranteed, at the price of $7.99 per month “for so long as Plaintiff continuously maintained his Netflix subscription.”

The plaintiff alleges that he called Netflix, and was told the same thing by a telephone representative. Keritsis says he relied on those representations when he signed-up for Netflix streaming service, and as he has continuously maintained his account.

According to the Netflix lawsuit, those representations to Keritsis, and other customers, created a contract which Netflix has apparently followed until now.

The complaint states that in May of 2014, Netflix increased the price of its streaming service for new subscribers in the U.S. to $8.99 per month. Then in October of 2015, Netflix again raised its monthly rate for its streaming service for new customers to $10.99 per month.

However, in April of 2016 Netflix allegedly announced that it would “phase out this grandfathering gradually over the remainder of 2016, with our longest tenured members getting the longest benefit.” The complaint states that approximately half of Netflix’s 22 million customers are currently grandfathered in at the $7.99 monthly rate.

Keritsis claims that he was billed $7.99 per month for his Netflix streaming service until October of 2012. Since then, he has paid $8.68 per month, according to the complaint.

The plaintiff alleges that on June 22, 2016 he received an email from Netflix stating that “Your special price is now ending and as of 7/22/16 your new price will be $9.99 per month.”

The Netflix grandfathered plan price increase lawsuit requests certification of a Class of “all persons who entered into an agreement with Netflix for a streaming plan at a subscription price that Netflix promised not to increase for as long as they continuously maintained their subscriptions.”

The lawsuit seeks an injunction, or court order, stopping Netflix from breaching the alleged contract, as well as payment of “compensatory damages and any other damages authorized by law.”

Keritsis is represented by Noah M. Schubert and Robert C. Schubert of Schubert Jonckheer & Kolbe LLP; and Thomas G. Shapiro of Shapiro Haber & Urmy LLP.

The Netflix “Grandfathered Plan” Price Increase Class Action Lawsuit is George Keritsis v. Netflix Inc., Case No. 3:16-cv-03675, in the U.S. District Court for the Northern District of California, San Jose Division.

UPDATE: The Netflix Class Action Filed Over ‘Grandfathered’ Price Increase was voluntarily dismissed on July 22, 2016.  Top Class Actions will let our viewers know if a similar case is filed.