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eBay Settles Class Action Lawsuit for $1.2 Million

eBay will pay $1.2 million to settle a lawsuit filed in 2012 over practices related to its Buy It Now feature. Luis Rosado sued eBay after becoming fed up with a non-paying bidder for an eBay Motors listing for which he had paid $36 for the original listing and $36 for each of his two relistings.

If you are considered a member of the class, you must submit a claim form to be eligible for a cash payment by December 8th.

Rosado complained that while prospective eBay sellers know they won’t receive a refund for listing fees if their item runs its course and does not sell, “they have no reason to suspect their item may be delisted prematurely by a prospective buyer clicking the “Buy It Now” button but not paying.”

He said when a purchaser who has clicked on the Buy It Now button does not complete a transaction, eBay does not entitle the seller to relist the item for the remainder of the listing duration or provide a refund for that period of time.

In his amended complaint on October 2013, Rosado alleged that eBay offered, at best, a “hodgepodge of isolated disclosures at various unrelated places” on its website that confuse sellers. “While eBay purportedly offers additional explanations of its “Buy It Now Option” in isolated areas of its website, eBay does so in a way such that would be misleading to a reasonable consumer.”

In 2014, after eBay’s third motion to dismiss all claims in which it argued it had acted in accordance with its user agreement, a judge ruled not to dismiss, finding that Rosado might be able to show that eBay’s user agreement – in particular the portion regarding a user who “commits” to buying an item – was misleading and vague, according to Court House News.

“Furthermore,” the publication quoted the judge, “the existence of a contract between parties does not intrinsically allow one party to contract to circumvent the factual question of whether the agreement was misrepresented or misleading.”

eBay and the plaintiff agreed to settle the case in July, and last month, the court granted the motion to settle. Note that eBay disputes the allegations in the litigation.

Are you likely to receive part of the settlement? Here’s a definition of the class, and you can read more about the settlement on eBayBuyItNowClassAction.com:

“The Settlement Class shall be conditionally certified for settlement purposes only and shall consist of all eBay sellers in the United States who paid Listing Fees to place a “Buy It Now” Listing on eBay’s websites during the period from July 30, 2008 to today’s date, whose item was subsequently delisted when the “Buy It Now” button was selected by a prospective buyer prior to the end of the scheduled listing duration, who were not ultimately paid by the prospective buyer for the listed item, and whose Listing Fees were not refunded by eBay (“Class Members”).”

And how much should class members expect to receive?

Claimants who submit a claim for a non-vehicle listing will receive $5, and claimants who submit a claim for a vehicle listing will receive $10. The maximum payment to any single claimant will be $15. Rosado is expected to receive $2,500 as a class representative incentive award.

October 9th was the last day for the claims administrator to send notice to sellers and publish the settlement to a website. Class members have until December 8th to file a form, an exclusion request, or an objection to the settlement.

There will be a hearing on February 25, 2016 on the final approval of the settlement and motion for attorneys’ fees, costs, and class representative incentive award.

Comment on the EcommerceBytes Blog.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.