Wines ‘Til Sold Out Settlement Opposed by 19 States’ Attorneys General

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A group of state attorneys general say a proposed Wines ‘Til Sold Out class action settlement fails to provide an adequate remedy for Class Members.

The attorneys general from 19 different states filed an amicus curiae brief on Friday, urging the court to reject the proposed settlement with internet wine retailer Wines ‘Til Sold Out.

They argue that the terms of the settlement fail to satisfy provisions of the federal Class Action Fairness Act that govern the terms of class action coupon settlements.

CAFA was passed in 2005, in response to concerns that many class action settlements were benefitting plaintiff attorneys without providing significant relief to Class Members. CAFA requires courts to take a closer look at proposed settlements that offer benefits in the form of coupons, to ensure that they treat Class Members fairly.

Under terms of the Wines ‘Til Sold Out class action settlement, the benefits provided to Class Members would be out of proportion to the amount requested by class counsel for attorney fees and costs, according to the attorneys general. They note that class counsel would receive a total of $1.7 million, while each qualifying Class Member would receive a coupon worth no more than $2.

“Even assuming an ultimate redemption rate of ~5-7% (itself high given the expected low claims rate and then the low redemption rate once coupons are claimed) the class is likely to receive only ~$500,000 to ~$800,000 in value from the coupons here,” the brief says.

The attorneys general are also concerned that the coupon terms are overly restrictive. They note the coupons can only be used for a limited subset of the wines available on Wines ‘Til Sold Out. The coupons are also non-transferrable and subject to a one-year expiration date, according to the proposed settlement.

Furthermore, each $2 coupon can be applied only to a single bottle of wine, forcing Class Members to spend a significant amount of money to redeem the credit. A Class Member with $100 in coupons, for example, would have to buy 50 bottles of wine to redeem them, spending as much as $2,000 in order to do so.

One Class Member who objected to the settlement expressed concern that at a discount of only $2 per bottle, Wines ‘Til Sold Out would actually profit every time a Class Members redeems their coupons.

The Wines ‘Til Sold Out class action lawsuit raises claims by plaintiffs Kyle Cannon, Lewis Lyons and Dianne Lyons that the website’s operator Ashburn Corp. marked its wines with deceptively inflated original prices so that the actual, lower sale price would appear to offer a much more appealing bargain for purchasers.

The wines were never offered for sale at the posted original prices, the plaintiffs claim. They accuse Wines ‘Til Sold Out of deceiving consumers into believing they were getting a nonexistent bargain.

The plaintiffs are represented by attorneys James E. Cecchi of Carella Byrne Cecchi Olstein Brody & Agnello PC, Oren Giskan of Giskan Solotaroff & Anderson LLP, Edward Hernstadt of Hernstadt Atlas PLLC, and Thomas Rosenthal of the Law Offices of Thomas Rosenthal.

The Wines ‘Til Sold Out Class Action Lawsuit is Cannon, et al. v. Ashburn Corp., et al., Case No. 1:16-cv-01452-RMB-AMD, in the U.S. District Court for the District of New Jersey.