Carbonite Class Action Challenges Automatic Renewal Agreement

Data storage company Carbonite fails to properly disclose the terms of its revolving subscription agreements, according to a class action lawsuit filed by a California customer.

Plaintiff Kyle Johnson is taking issue with the automatic renewing subscription agreements offered by Carbonite. Johnson claims Carbonite fails to adequately disclose the terms of these agreements, violating California consumer protection laws in several ways.

Boston-based Carbonite offers cloud-based storage and data backup protection. Among other plans, Carbonite offers services through a Personal Plus plan at a cost of $99 per year, Johnson says. He says this plan constitutes as an “automatic renewal and/or continuous service plan” for purposes of California law.

According to this Carbonite class action lawsuit, a California law passed in 2010 creates certain disclosure requirements that apply to revolving subscription agreements like the ones offered by Carbonite.

Businesses offering such agreements are required to disclose to the customer in “clear and conspicuous language.” The disclosure is supposed to remind the customer that the agreement will continue until the customer cancels it. It must also explain the business’ cancellation policy and what the customer must do to cancel the agreement.

The disclosure must be presented in a form that the customer can retain, according to Johnson’s Carbonite class action lawsuit.

In addition to the required disclosures, businesses must also get the customer’s affirmative consent to the automatic renewal terms. Customers who agree to these terms are entitled to an acknowledgement of the agreement and contact information for the business, Johnson says.

Carbonite’s subscription plan satisfies none of these requirements, Johnson alleges. He says the $99 annual subscription is subject to automatic renewal. Yet nowhere in the course of purchasing that subscription is the purchaser made aware of the revolving nature of the agreement, Johnson claims.

He includes screen shots from the Carbonite website showing what a customer sees in the course of purchasing the annual plan. The web-based form indicates a purchase of a plan lasting one year at a set price but does not appear to make any mention of automatic renewal.

Without getting the purchaser’s affirmative consent to the automatic renewal, Johnson argues, all services provided by Carbonite pursuant to that agreement are deemed an “unconditional gift” under California law, allowing purchasers to use those services however they like without incurring any obligation to Carbonite.

Johnson proposes to bring his claims on behalf of all California persons who within the applicable statutory limitations period purchased any product or service from Carbonite under terms that would constitute an “automatic renewal” under applicable California law.

He is asking the court to declare that Carbonite has violated California consumer protection law by engaging in the conduct complained of here. He also seeks an award of damages, restitution, court costs, attorneys’ fees, and any other relief the court sees fit to grant.

Johnson is represented by attorneys Scott J. Ferrell and Victoria C. Knowles of Pacific Trial Attorneys APC.

The Carbonite Auto-Renewal Disclosure Class Action Lawsuit is Kyle Johnson v. Carbonite Inc., Case No. 2:17-at-00411, in the U.S. District Court for the Eastern District of California.