ProFlowers Reaches $38M Membership Program Class Action Settlement

The company behind the websites Proflowers.com, RedEnvelope.com, and others, agreed to a settlement valued at $38 million to resolve a class action lawsuit claiming that it improperly sold consumers’ private information to a third-party for unauthorized enrollment in a rewards membership program.

E-commerce operator Provide Commerce Inc. and marketing agency Encore Marketing International Inc. agreed to the $38 million settlement in order to resolve allegations that they took consumers’ information without authorization and used it to improperly enroll them in reward programs.

The membership progam settlement came after nearly seven years of litigation and several settlement conferences, according to court documents.

Originally filed in California state court in August 2009, the class action lawsuit brought claims of fraud, beach of contract and false advertising.

Specifically, the lawsuit alleged that when Class Members completed a purchase on one of Provide Commerce’s retail websites, including Proflowers.com and RedEnvelope.com, they were presented with a pop-up window offering $15 off their next purchase as a “thank you” gift.

Plaintiffs were then prompted to enter their zip code and email address and click “accept” to receive the gift.

However, according to the plaintiffs, Provide Commerce then transmitted this private payment information to Encore Marketing International without consent.

Encore allegedly then proceeded to enroll plaintiff Class Members in a Rewards Membership Program and charged their credit or debit cards a $1.95 activation fee, followed by a $14.95 monthly fee.

In 2013, U.S. District Court Judge Anthony Battaglia issued a final order approving a proposed settlement, but Provide Commerce and Encore filed an appeal opposing the initial settlement, claiming the Rewards Membership Program details were adequately disclosed and that the plaintiffs entered into the electronic contracts with Encore for membership in the Rewards Program.

The Appeals Court vacated Judge Battaglia’s ruling in 2015 and remanded the case for further litigation based upon a similar case ruling, In re Online DVD-Rental Antitrust Litigation.

While on appeal, the case was transferred to U.S. District Court Judge Cynthia Bashant.

After hearing the parties’ oral arguments this past July, Judge Bashant found that the proposed membership program class settlement was not a “coupon settlement” and reinstated Judge Battaglia’s initial approval order for the proposed settlement and dismissed the case without prejudice.

Under the terms of the proposed membership program settlement, Provide and Encore will set up a $12.5 million non-reversionary cash fund to reimburse Class Members who were charged an activation fee or monthly fee without their consent, as well as distribute $20 merchandise credits via email or postal service to the approximately 1.5 million proposed Class Members for use on the ProFlowers, RedEnvelope, Shari’s Berries and Cherry Moon Farms websites.

“The chances of them actually using these gifts are much higher than others who have not expressed a preference or interest in receiving the gifts,” Judge Bashant wrote.

Any funds leftover will be donated to higher-education projects relating to internet privacy and consumer protection.

More information about how to file a claim for the proposed ProFlowers class action settlement was not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also “Follow” this article using your free Top Class Actions account to receive notifications when this case is updated.

The plaintiffs are represented by Andrus Anderson LLP, Patterson Law Group LC, Baron & Budd PC among others.

The ProFlowers Rewards Membership Program Class Action Lawsuit is In Re: Easysaver Rewards Litigation, Case No. 09-cv-02094-BAS-WVG, in the U.S. District Court for the Southern District of California.