McDermott Secures Dismissal of Class Action Claim Against Trustpilot, Inc.
International law firm McDermott Will & Emery obtained dismissal with prejudice of a class action complaint filed against its client Trustpilot, Inc. (Trustpilot), absolving Trustpilot of all deceptive business practice and related claims brought against them.
“Trustpilot is a highly regarded company and we are delighted the court dismissed all claims against our client,” Andrew Kratenstein, lead McDermott partner in the case, said. “The Court properly recognized the claims brought against Trustpilot were meritless.”
Trustpilot is a digital platform that brings businesses and consumers together to foster trust and inspire collaboration, allowing users to post reviews of businesses on its website. Businesses are able to contract with Trustpilot to collect and manage information concerning the reviews, providing subscriptions that allow businesses to access consumer insight data and obtain consulting services on how reviews of the business are displayed online. Trustpilot automatically renews these subscriptions unless the subscriber notifies Trustpilot of its desire to cancel at least 30 days before the end of the subscription’s term.
Plaintiffs sued on behalf of a putative nationwide class of Trustpilot subscribers, asserting claims for deceptive business practices under New York law and other states’ unfair business practices statutes, as well as claims for breach of contract, breach of the implied covenant of good faith and fair dealing and unjust enrichment.
On June 29, 2021, Judge Jed Rakoff of the US District Court for the Southern District of New York agreed with the McDermott team’s arguments, including that plaintiffs failed to allege that under New York Law the conduct was consumer-oriented, deceptive or related to personal property. In addition, the Court agreed that, because New York law applies, the claims under other state consumer protection laws failed. Further, the Court held that plaintiffs’ claim for breach of contract failed because the parties’ valid and enforceable subscription agreements clearly disclosed Trustpilot’s auto-renewal policies and did not require Trustpilot to send renewal reminder emails.
The Court also held that there was no breach of the duty of good faith and fair dealing because the cause of action was duplicative of plaintiffs’ breach of contract claim, and the subscription agreement clearly disclosed Trustpilot’s auto-renewal procedure and how customers could avoid auto-renewal. The Court further held that plaintiffs’ unjust enrichment claim failed because the subscription agreement governed the subject matter of the claim.
Plaintiffs moved for reconsideration and, on October 14, 2021, Judge Rakoff denied the motion as a rehash of arguments were already made and rejected by the Court.
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