McDermott Secures Appeals Court Decision Affirming Dismissal of Class Action Against Trustpilot
International law firm McDermott Will & Emery represented Trustpilot, Inc., a leading online business review platform, in obtaining the affirmance of the dismissal of a class action complaint with prejudice by the United States Court of Appeals for the Second Circuit.
“We are gratified that the Second Circuit agreed with Judge Rakoff’s decision to dismiss the class action brought against our client, absolving Trustpilot of all deceptive business practice and related claims brought against them,” Andrew Kratenstein, McDermott’s lead partner in the case and who argued the appeal, said. “Trustpilot is a highly respected company, and we are delighted to have succeeded in achieving this complete victory for our client.”
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 concerning how reviews of the business are displayed online. Per the terms of the subscription agreement, 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 United States District Court for the Southern District of New York agreed with the McDermott team’s arguments and granted Trustpilot’s motion to dismiss the case with prejudice. The Plaintiffs then appealed. The Second Circuit agreed with McDermott’s argument that the Plaintiffs’ contractual claims failed because the parties’ valid and enforceable subscription agreements clearly disclosed Trustpilot’s auto-renewal policies and did not require Trustpilot to send renewal-reminders. The Second Circuit also agreed that the NYGBL §§ 349-50 claim was properly dismissed because Plaintiffs failed to allege that the conduct was deceptive. Finally, the Second Circuit held that Plaintiffs’ NYGOL § 5-903 claim failed because any connection to personal property was merely incidental to Trustpilot’s provision of consulting, analytical or administrative services and thus the statute did not apply.
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