EBay Inc. agreed to pay $6.4 million to settle a fraud and breach of contract class action in California federal court brought by more than a million sellers alleging the massive auction website charged them hidden, recurring listing fees. The proposed settlement would let eBay out of a lawsuit over more than $50 million in “Good ‘Til Canceled” fees, putting the end in sight after more than three years of litigation. The deal would put $4.5 million in the hands of class members and $1.6 million to class counsel, according to the motion. The class includes users behind nearly 1.2 million accounts, though the number of actual users represented by those accounts was unclear as one person could have multiple accounts. The proposed settlement doesn’t provide for a claims process and says most sellers will receive an automatic credit to their accounts.
Richard Noll, the Plaintiff, filed suit in September 2011, alleging that eBay suggested that the Good ‘Til Canceled listings, which automatically renew every 30 days until the seller cancels the listing or the item is sold, came “at no extra cost” when fees were actually charged monthly. About a year later, Rhythm Motor Sports LLC filed a separate suit, and the cases were ultimately consolidated. The lawsuit alleged breach of contract, unfair competition, false advertising, violation of the Consumer Legal Remedies Act, unjust enrichment and fraud. During the course of the litigation, eBay won the dismissal of two of the Plaintiffs’ complaints. But the court granted the Plaintiffs leave to amend except as to claims involving insertion fees during times when eBay’s fee schedules explicitly said they those fees would be charged every 30-day period.
During the discovery process, eBay produced more than 90,000 pages of documents and 2 gigabytes of data, according to the motion. The settlement fund would be nonreversionary, with uncashed or returned checks split between the nonprofits National Cyber-Forensics & Training Alliance and the National Consumer Law Center. The case is in U.S. District Court for the Northern District of California.
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