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Judge Tosses Nestle Waters Late Fee Class Action Lawsuit
By Anne Bucher
A New Jersey federal judge yesterday dismissed a $50 million putative class action lawsuit accusing Nestle Waters North America Inc. of charging its customers excessive late fees, finding that the fees were not unreasonable.
Gary Ciser and his company Ciser Computer Consulting filed the class action lawsuit against Nestle in 2011, claiming that the company charges excessive and illegal late fees on deliveries of its Arrowhead, Poland Springs and Deer Park brands of water.
U.S. District Judge William J. Martini dismissed the Nestle Waters class action lawsuit in January, finding that Ciser had standing to bring the action but his consulting company did not. The judge also found that Ciser brought allegations against Nestle that he did not support with alleged facts. Specifically, Judge Martini took issue with Ciser’s failure to mention the actual or anticipated costs Nestle incurs from untimely payments.
In March, Ciser amended the putative class action lawsuit. He claimed that Nestle assessed a $15 late charge per month, regardless of the amount that was due or how many days the payment is overdue. He argued that the fees have no reasonable relationship to the costs Nestle incurs from a customer’s late monthly payment. In some cases, the late fees were more than 130 percent of the monthly charge for water delivery service. Ciser claims that these fees were “far beyond the customary late fee rate in the bottled water industry,” and referred to policies of other companies that impose less significant penalties for late payments.
On Oct. 24, Judge Martini again dismissed Ciser’s class action lawsuit, this time without leave to amend. The judge concluded Nestle did not violate state consumer laws and was not misleading about its late fees. “Based on the facts pled in the (class action lawsuit), it is clear that Nestle did not hide its late charges from Ciser,” the judge said. “Given that Nestle’s conduct was up-front, in good faith and not in violation of a ‘broad business ethic,’ … the Court holds that Nestle did not engage in an unconscionable commercial practice.”
The class action lawsuit accused Nestle of consumer fraud, unjust enrichment and liquidated damages. He sought to represent a subclass of New Jersey Nestle customers and a subclass of Nestle customers throughout the United States who were assessed a late fee from August 2005 until a judgment is issued. He was seeking damages of more than $50 million.
Because Judge Martini found that Nestle’s late fees were not unreasonable, he dismissed the liquidated damages and unjust enrichment claims.
The plaintiffs are represented by Steven L. Wittels and J. Burkett McInturff of the Law Offices of Steven L. Wittels PC.
The Nestle Waters Late Fee Class Action Lawsuit is Ciser, et al. v. Nestle Waters North America Inc., Case No. 2:11-cv-05031, in the U.S. District Court for the District of New Jersey.
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