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Texas Telephone Solicitation Act

Texas Telephone Solicitation Act

Texas Telephone Solicitation Act

Telemarketing is an important tool used by many businesses to generate revenues, but it can also expose consumers to misinformation and fraud. That’s why Texas lawmakers passed important consumer protection laws that explicitly prohibit false, misleading, or deceptive practices. One such law is the Texas Telephone Solicitation Act, which regulates attempts by companies to sell or rent property, products, or services to consumers via telephone solicitation. The law is part of the Texas Business and Commerce Code, which protects consumers against a wide range of fraudulent business practices. The section of the statute governing telephone solicitations is meant to protect purchasers against false, misleading, or deceptive practices on sales calls. When a company makes a sales call, they must abide by the guidelines set forth in the statute. This includes filing a registration statement that contains relevant sales information, as well as making required disclosures to purchasers during telephone solicitations about both the company and the items for sale.

To learn more about the Texas Telephone Solicitation Act and the protections it affords consumers, keep reading this blog.

What Is the Texas Telephone Solicitation Act?

The Telephone Solicitation Act is codified in Texas Bus. & Com. Code, Title 10, Subtitle A, Chapter 302. The statute defines a “telephone solicitation” as a telephone call that is initiated to induce someone to buy, rent, claim, or receive an item. Importantly, the Texas law also covers phone calls made by consumers in response to a solicitation that was sent electronically (e.g., an email) or physically (e.g., a letter in the mail). Moreover, the law applies to calls placed manually, calls initiated by an automatic dialing machine, and calls that involve a recorded messaging device.

Telephone Solicitation Registration Requirements in Texas

The requirements of the Texas Telephone Solicitation Act are strictly enforced, with any violation by a telemarketer possibly triggering both civil and criminal penalties. The statute imposes requirements on companies both during the registration process and when the phone solicitation is made.

Seller Disclosures at Registration

Before making a telephone solicitation, sellers must first fill out a Telephone Solicitation Registration Statement and obtain a registration certificate for their business. Moreover, the registration statement must list each telephone number that will be used by the seller, as well as the specific locations from which any phone solicitations will be made. Other sales information that must be disclosed in the statement includes a copy of all telephone solicitation scripts and other material provided to salespersons, a copy of any written material that might be sent to consumers, and the contact information for outside product suppliers.

The registration statement is filed with the Texas Secretary of State, and it must identify each principal of the seller: owners, executive officers, general partners, trustees, etc. The registration certificate is valid for one year, and it must be renewed annually. Additionally, for every three-month period after the certificate was issued, the business must provide information for each salesperson who solicited on behalf of the business.

One of the most important requirements imposed by the Telephone Solicitation Act is the security requirement: sellers must submit a security deposit in the amount of $10,000. The deposit is meant to ensure that the seller complies with the law. When a seller is found to have violated the statute, the deposit may be used as payment for any penalties imposed by the court.

Seller Disclosures on the Call

In addition to requiring disclosures in the registration statement filed with the state, the Texas Telephone Solicitation Act also compels companies to make certain disclosures to consumers before a purchase is made through a phone solicitation. For example, prior to the finalization of any transaction on a sales call, the seller must provide the consumer with the street address of the building or office from which the call is being made. Additionally, if the seller tells the consumer that the item is being offered at a reduced price, the seller must provide the name of the manufacturer. Along those same lines, if the seller represents that one of the items is a gift or prize, then they also need to clearly state the contest rules.

The Telephone Solicitation Act also places a significant limitation on exactly what telemarketers are allowed to say during a sales call: the caller is not allowed to state or otherwise reference their supposed compliance with the statute. The idea behind this restriction is that sellers should not be able to discourage consumers from investigating on their own to determine whether a seller violated the law by making a deceptive sales call.

How to File a Civil Lawsuit Against a Telemarketer in Texas

Consumers who are defrauded, scammed, or otherwise injured by a telemarketer’s violation of the Telephone Solicitation Act can take legal action. Experienced Texas consumer fraud lawyers know just how strong the statute’s protections are, and they also know how to navigate the legal system to hold businesses accountable for violating the law.

One option available to consumers is to file a civil suit against the company or person who made the sales call. Any individual who suffered economic losses due to a seller breaching an agreement that was entered into during a telephone solicitation may be eligible to recover financial compensation against the seller’s security deposit with the state. It might also be possible for consumers to bring a claim under the Deceptive Trade Practices Act (DTPA) because a violation of the Telephone Solicitation Act qualifies as a violation of the DTPA. Additionally, a person bringing a civil action under either statute may be entitled to compensation for reasonable attorney’s fees and related legal expenses.

Burden of Proof

The protections set forth in the Texas Telephone Solicitation Act are far-reaching and tend to be interpreted broadly by judges. In fact, the statute even stipulates that the burden of proof in these cases will be on the defendant accused of violating the law. For example, in civil proceedings where the defendant argues that they are exempt from the law, the burden of proving the exemption will fall on the defendant. Similarly, a company or individual who faces criminal charges for violating the telephone solicitation law is required to produce evidence supporting their defense that they are exempt from the statute.

Which Sellers Are Exempt from the Texas Telephone Solicitation Act?

Some sellers accused of violating the Telephone Solicitation Act may be able to argue that the consumer protection law does not apply to them, but only in certain situations. Those who may be exempt from the statute include agents of publicly traded companies, sellers for banks or other supervised financial institutions, anyone associated with companies regulated by the Public Utility Commission of Texas, individuals who are already subject to regulation by the Federal Communications Commission (FCC), and educational institutions or nonprofit organizations that are exempt from taxation by the IRS. In many instances, exemption from the Telephone Solicitation Act is possible because another law or regulation applies instead and takes precedence.

The Texas Business and Commerce Code also includes explicit exemptions from the phone solicitation law for the following categories of sellers:

  • Anyone selling a subscription to a newspaper, magazine, or cable television service.
  • Anyone selling items to a consumer who has consented in advance to receiving periodic deliveries of those items.
  • Individuals or companies delivering catalogs that are distributed in at least one other state and that have a circulation of at least 250,000 customers.
  • Anyone selling items to a business that plans to resell the items.
  • Persons or companies attempting to sell food products.
  • Persons calling about maintenance or repair of an item that was previously purchased from them.
  • Businesses soliciting a former or current customer.

Criminal and Civil Penalties Imposed by the Texas Telephone Solicitation Act

Every individual violation of a provision in the Texas Telephone Solicitation Act is considered a separate offense, which means that the penalties can add up very quickly even when the offenses stem from a single sales call. Beyond that, there can be both civil and criminal penalties imposed against sellers who violate the statute.

Criminal Penalties

Violations that may be charged as criminal offenses include failing to obtain the necessary registration certificate before making a phone solicitation, failing to make necessary disclosures to the consumer before finalizing a sale, and mentioning compliance with the statute on the sales call. Each of these offenses can be charged as a class A misdemeanor, which carries a possible fine of $4,000 and a sentence of up to one year in jail. Moreover, these criminal penalties can be imposed against both the business owner and the salesperson or telemarketer who made the call. Additionally, the defendant in a criminal action may be ordered to pay the costs of prosecuting the case, including the attorney general’s expenses for the investigation, depositions, witnesses, and related attorney’s fees.

Civil Penalties

Sellers who violate a provision in the Texas Telephone Solicitation Act are also subject to civil penalties. These penalties can be substantial, with the statute calling for a fine of up to $5,000 for each violation. The penalties become even harsher when the seller violates an injunction brought by the secretary of state for a previous offense: a $25,000 fine for each subsequent violation, plus an additional $50,000 fine for all violations after the injunction was issued.

Contact the Texas Consumer Protection Lawyers at Tauler Smith LLP

Did you receive a telemarketing call from a person who failed to identify themselves, their business, or their reason for calling? Did the telemarketer’s attempts to sell you something feel like part of a scam? The Texas Telephone Solicitation Act gives consumers the ability to take legal action by notifying the secretary of state and possibly filing a civil suit, and the Texas consumer protection attorneys at Tauler Smith LLP can help you.

Call or email us today to discuss your case.

NY Automatic Renewal Law

New York’s Automatic Renewal Law

NY Automatic Renewal Law

New York’s Automatic Renewal Law (ARL) protects consumers by prohibiting businesses from engaging in certain practices when making an automatic renewal offer in the state. The New York ARL tracks California’s strict statutory requirements, which means that businesses must follow guidelines about disclosing renewal offer terms to consumers, giving customers the opportunity to affirmatively consent before they sign up for an auto-renewal program, and allowing customers to easily cancel their subscription afterwards. NY consumers who have enrolled in a subscription program without their consent should immediately reach out to a qualified New York false advertising attorney who understands both state and federal laws on auto-renewal offers.

To learn more about the New York automatic renewal law, keep reading this blog.

NY Automatic Renewal Bill: SB 1475

New York’s Automatic Renewal Law (ARL) is set forth in New York State Senate Bill S1475A. The law went into effect in February 2021 after being passed by the New York State Legislature and signed by NY Governor Andrew Cuomo. SB 1475 greatly expanded the scope of the state’s previous automatic renewal law, New York General Obligations Law § 5-903. The new ARL added substantial requirements for businesses that offer either automatic renewal plans or continuous service plans to consumers, including a stricter requirement that businesses notify consumers of the subscription terms after enrollment. Additionally, SB 1475 expanded the old law’s scope beyond service, maintenance, and repair contracts to also include consumer contracts involving “any goods, services, money, or credit for personal, family, or household purposes.”

New York businesses that offer auto-renewal subscription services to consumers must comply with SB 1475, relevant federal laws, and any other state ARLs which may be applicable if the purchase was made online by an out-of-state customer. Additionally, these businesses must also comply with New York’s older ARL, which remains in effect even after the passage of the new law.

New York ARL Requirements for Businesses

The New York ARL imposes the following requirements on businesses that offer consumer contracts for automatically renewing subscription services:

  • Auto-renewal terms must be conspicuous. The auto-renewal terms should be in visual proximity to the section where the consumer provides affirmative consent, and the terms should also stand out visually from the rest of the offer. (E.g., different text sizes, different fonts, and different colors.)
  • Auto-renewal terms must be clear. The terms and conditions of the subscription service must be easy for the consumer to understand. The exact language used by the NY ARL is that the offer terms should be presented “in a manner capable of being retained by the consumer.” (E.g., the offer should clearly state that the subscription will continue until the purchaser cancels.)
  • Must obtain affirmative consent from purchaser. The customer needs to affirmatively consent to the automatic renewal terms before it becomes a legally binding contract. Otherwise, NY law stipulates that any goods received by the consumer are an “unconditional gift” and do not need to be paid for.
  • Must send enrollment acknowledgement to consumer. After the customer has enrolled in the subscription program, the business needs to send a letter, email, or other type of written acknowledgement that states the program’s terms and cancelation policy.
  • Cancelation policy must match method used to subscribe. When a customer uses a company’s website to enroll in a subscription program, the company must allow the customer to cancel online.
  • Free trial offers must have cancelation options. If the company offers a “free” trial period before the subscription automatically renews for a monthly fee, the company needs to provide the consumer with the ability to opt out of the paid subscription service. Additionally, the cancelation policy must be presented clearly and conspicuously in the original agreement.
  • Must disclose any material changes to the agreement. It is common for businesses to modify their agreements later. But if a business wants to change the terms of an auto-renewal plan, they must have already alerted the consumer to this possibility in the original offer. Moreover, when making material changes to its subscription plan, the business must disclose those changes to the consumer and give the consumer an easy way to cancel their subscription.

Defenses Available to Businesses Accused of Violating the NY ARL

Although New York’s ARL provides strong protections to consumers who enroll in auto-renewal plans, there are some exceptions to the law that allow businesses to raise possible defenses against an alleged violation. For instance, the new ARL only applies to contracts for subscriptions involving consumers; business-to-business contract are addressed by the state’s old ARL.

SB 1475 also has a “safe harbor” provision that gives companies a possible defense when the violation was unintentional. If the company can show that they made a bona fide error despite taking reasonable measures to comply with the law, the New York Attorney General may choose not to bring charges.

What Remedies Are Available to Consumers in NY ARL Cases?

Compliance with the New York ARL is enforced by the NY Attorney General. The statute gives the state Attorney General authority to fine businesses as much as $100 for each violation of the auto-renewal law. When the violation was knowing and intentional, the fine can be increased to $500 for each violation. For companies with popular services and large subscription bases, these fines can add up quickly and serve as an effective deterrent against further abuse.

The individual consumers who enrolled in the unlawful subscription services also stand to benefit financially under New York’s auto-renewal law. That’s because the statute specifies that consumers who receive a service or product without providing affirmative consent for enrollment in the subscription program will not have to pay for the goods or services received. Additionally, they may be eligible to join a consumer class action lawsuit brought under one of the state’s consumer protection laws.

Contact the New York False Advertising Lawyers at Tauler Smith LLP

Tauler Smith LLP is a law firm that represents clients in consumer fraud litigation throughout the United States, including New York. Our experienced NY false advertising lawyers have filed complaints on behalf of clients in both federal and state court, and we know how to win these cases. Call or email us to speak with a member of our litigation team.

California Automatic Renewal Law

California’s Automatic Renewal Law

California Automatic Renewal LawThe explosion of the internet and e-commerce has led many businesses to offer their products and services through online subscription services. This has made it easier for consumers to quickly make purchases from their phone or computer, and it has also made it easier for companies to lock customers into subscriptions that renew automatically. These auto-renewal plans become problematic when companies use them to take advantage of customers who might not realize what they are signing up for. California’s Automatic Renewal Law (ARL) was a direct response to this problem, with state lawmakers codifying strong protections for consumers in these situations. The California ARL specifically requires businesses disclose all relevant subscription terms to customers, get consent from the customers before charging their credit cards, and provide customers with a way to easily cancel the contract.

To learn more about the California automatic renewal law, keep reading.

What Requirements Does California’s ARL Impose on Businesses?

Automatic renewal subscriptions affecting California consumers are governed by the state’s Automatic Renewal Law (ARL), which is set forth in Cal. Bus. & Prof. Code §§ 17600. The California ARL requires companies to clearly and conspicuously explain “automatic renewal offer terms.” State legislators passed the law for the purpose of stopping companies from continually charging consumer credit or debit cards without the consumers’ explicit consent for ongoing shipments of products or ongoing provision of services.

When a business violates the ARL by failing to properly disclose information about an auto-renewal offer, it may be possible for the customer to file a consumer fraud lawsuit and seek financial compensation from the business. If you have been billed for an automatically renewing subscription that you did not want to be enrolled in, your first step should be to speak with a California false advertising lawyer.

What Information Must Be Disclosed in California Auto-Renewal Offers?

California’s Automatic Renewal Law (ARL) is among the most consumer-friendly in the entire country, with other states modeling their own ARLs after it.

The California ARL requires companies to disclose the following information before a customer enrolls in an automatic subscription program:

  1. That the subscription will continue until the consumer cancels.
  2. A description of the policy for canceling the subscription.
  3. Any recurring charges that will be charged to the consumer’s credit card, debit card, or bank account as part of the automatic renewal plan, as well as whether the amount of the charge may change and how often the consumer will be billed.
  4. The length of the automatic renewal term. (If the service is continuous, this must also be disclosed.)
  5. Any minimum purchase obligation.

“Clear and Conspicuous” Disclosures Required Under California’s ARL

Importantly, section 17602 of the California ARL requires that the automatic renewal offer terms must be presented to the consumer both before the purchasing contract is fulfilled and after enrollment in the form of an email or other post-sale acknowledgement. There can be no concealing of the auto-renewal offer at any point in the process. Moreover, there can be no attempts by the company to thwart or frustrate a customer’s attempts to cancel the subscription. That’s because the ARL explicitly requires businesses to provide a “cost-effective, timely, and easy-to-use mechanism for cancelation.”

Additionally, those disclosures must be plainly visible and obvious to the customer. In fact, there are strict guidelines for the manner in which the information is presented. For example, the terms of the automatic subscription service must be in “visual proximity” to the request for consent to the offer. Those terms must also be presented “clearly and conspicuously” so that they can be distinguished from the rest of the offer. This means that the text of the auto-renewal offer should be:

  • In larger type than the surrounding text.
  • In contrasting type, font, or color to the surrounding text of the same size.
  • Set off from the surrounding text of the same size by symbols or other marks in a manner that clearly calls attention to the language.

Remedies Available Under California’s Auto-Renewal Law

What happens when a company violates the California automatic renewal law (ARL) by failing to clearly and conspicuously disclose the terms and conditions of a subscription service? The answer to this question depends on the facts and circumstances of your particular case, which is why it’s important for you to speak with a Los Angeles false advertising attorney who has knowledge of both state and federal automatic renewal laws, as well as other applicable California consumer protection laws. An experienced attorney may be able to force the company to stop its misleading sale and advertisement of services, in addition to helping you get full restitution of any expenses you’ve already incurred. In some cases, you may also be entitled to additional financial compensation for your losses or harm suffered.

Call the Los Angeles False Advertising Lawyers at Tauler Smith LLP

Tauler Smith LLP is a Los Angeles law firm that focuses on consumer fraud litigation, including violations of the California Automatic Renewal Law (ARL). Our false advertising lawyers represent plaintiffs in lawsuits filed against companies that misrepresent or fail to disclose the terms of their monthly subscription contracts. Call 310-590-3927 or email us to schedule a free consultation.

Macy’s Beauty Box Lawsuit

Macy’s Faces Lawsuit for Beauty Box Automatic Subscription

Macy’s Beauty Box Lawsuit

High-end department store Macy’s faces a lawsuit for its Beauty Box automatic subscription service. The company has been accused of violating consumer protection laws by using deceptive practices to enroll customers in an auto-renewal program for one of its popular beauty product services. Law firm Tauler Smith LLP believes that many people have probably fallen victim to Macy’s allegedly unlawful subscription practices. Since a lot of states like New York, California, and others have strict laws regulating automatic renewals, anyone who purchased the Macy’s Beauty Box from the Macys.com website may be able to file a lawsuit for financial compensation.

Tauler Smith LLP is looking to certify a class of plaintiffs nationwide for a class action lawsuit against Macy’s. If you purchased the Macy’s Beauty Box and were later charged for an ongoing subscription to which you did not consent, you should contact one of our lawyers immediately.

Macy’s Accused of Consumer Fraud

Macy’s Beauty Box is a monthly subscription package of deluxe beauty samples and beauty-related products that has attracted many customers. Unfortunately, the Beauty Box program’s terms and conditions are not always made clear to customers, which has exposed Macy’s to being named as a defendant in lawsuits in California, New York, and other states with strong consumer protection laws. For instance, the automatic renewal terms of Macy’s Beauty Box subscription program may be a violation of both the California Consumers Legal Remedies Act (CLRA) and the California Automatic Renewal Law (ARL). Specifically, Macy’s is enrolling customers into an automatic renewal subscription without providing the clear and conspicuous disclosures required by California law.

Some consumers may be unaware that they are being enrolled in an auto-renewal program when purchasing the Macy’s Beauty Box from the store’s website. For example, at least one customer has complained that she did not notice a second charge appearing on her credit card more than one month after her initial purchase. In fact, the entire checkout process on Macys.com appears to be designed to conceal the nature of the automatically renewing subscription and recurring charges. This could make it a clear violation of state consumer fraud laws, including automatic renewal laws.

Does Macy’s Beauty Box Subscription Service Violate Auto-Renewal Laws?

Macy’s, Inc. has been accused of committing numerous violations of automatic renewal laws, including the following:

  • Failure to clearly and conspicuously disclose auto-renewal terms.
  • Failure to disclose when and how often customers will be automatically billed.
  • Failure to inform customers of cancelation policy.
  • Making it difficult for customers to cancel subscription.
  • Failure to send email or other notification to customers after enrollment.

Clear & Conspicuous Disclosure

Macy’s has been accused of failing to clearly and conspicuously disclose its automatic renewal terms to customers who purchase the Macy’s Beauty Box on the store’s website. Although online customers check a box to indicate consent to be enrolled into a monthly subscription service, this box is not clear and conspicuous in the manner required by California’s ARL. For example, Macy’s does not present the auto-renewal offer terms in a larger type font than the surrounding text, nor is the text in the box distinguishable from the surrounding text via contrasting type, font, or color.

One way that Macy’s could have more clearly called attention to the automatic subscription language is by using bold, highlighted, all-capitalized, or different-colored text for the automatic renewal terms. Macy’s also could have employed a “call out” box near the terms so that the subscription enrollment contract was distinct from the product purchase agreement.

Timing of Automatic Charges

Macy’s does not adequately disclose the timing of the automatic charges. For example, the store represents that its customers will be automatically charged “monthly,” but the actual charges to consumers appear to occur in arbitrary intervals. For example, at least one customer was charged on her credit card 49 days after the initial charge.

Cancelation Policy

Macy’s does not adequately disclose how a customer can cancel their subscription. This information could be disclosed either directly on the Macy’s website or in an email sent to the customer after enrollment in the subscription service.

Frustrating Attempts to Cancel Subscription

Macy’s has failed to make it easy for a customer to cancel the subscription. In fact, it appears that Macy’s has intentionally made the cancelation process difficult and frustrating in the hopes that customers will abandon trying to cancel their subscriptions.

Email Acknowledgement After Enrollment

Macy’s fails to send an ARL-compliant retainable acknowledgement consistent with state consumer protection laws. When a customer enrolls in the Beauty Box subscription program, they do not receive an email from Macy’s that accurately explains the terms and conditions of the service. The absence of an email also means that customers are not informed of the policy for canceling the subscription. By failing to provide a permanently retainable post-transaction acknowledgement that allows for cancelation before payment, Macy’s is effectively concealing the nature of the agreement and violating state automatic renewal laws meant to protect consumers.

Macy’s Accused of Violating California’s Consumers Legal Remedies Act (CLRA)

In addition to possibly violating state automatic renewal laws, Macy’s has also been accused of violating broader consumer protection laws, such as the California Consumers Legal Remedies Act (CLRA). In California, a violation of the ARL can form the basis for a CLRA claim, as well as a claim under California’s Unfair Competition Law. One of the unlawful business practices that Macy’s has been accused of is failing to include a clear and conspicuous explanation of the price that will be charged for its Beauty Box subscription service. Another more general accusation against Macy’s is that the company fails to first obtain affirmative consent from customers before charging their credit and debit cards. All of these practices constitute violations of the ARL, which means that affected consumers may also be able to file lawsuits under the CLRA and other statutes.

Tauler Smith LLP Pursuing Class Action Lawsuit Against Macy’s for ARL Violations

Tauler Smith LLP is a law firm that represents consumers in false advertising claims in California, New York, and nationwide. We suspect that thousands of consumers may have been illegally enrolled in Macy’s Beauty Box subscription program. Our consumer protection lawyers are actively seeking plaintiffs for a possible class action lawsuit against Macy’s. The lawsuit seeks the following remedies on behalf of affected consumers:

  • Full financial restitution to all purchasers throughout the United States of all purchase money obtained from the sales of Macy’s services and products that violate automatic renewal laws.
  • Monetary compensation for any damages suffered by consumers because of Macy’s unlawful business practices.
  • Punitive damages for knowing and egregious violations.
  • An injunction ordering Macy’s to cease and desist from the continued misleading sale and advertisement of its Beauty Box services.
  • A corrective advertising campaign by Macy’s to inform consumers about the true price of any services they purchase, including any automatically renewing charges in connection with those services.
  • Payment by Macy’s of all reasonable attorney’s fees and court costs related to the lawsuit.
  • Additions to the Macy’s website that include a clear and conspicuous explanation of the amount customers will be charged for the Macy’s Beauty Box subscription service.
  • The inclusion of a mechanism for obtaining customers’ affirmative consent before Macy’s charges their credit and debit cards.
  • An email or other post-transaction acknowledgement sent by Macy’s to customers that will allow for cancelation of the subscription service before the first payment.

Did You Purchase the Macy’s Beauty Box? Contact the False Advertising Lawyers at Tauler Smith LLP

Were you enrolled in a monthly subscription service after purchasing the Macy’s Beauty Box, or any other product, from the Macys.com website? The false advertising attorneys at Tauler Smith LLP represent plaintiffs in pre-trial settlement negotiations and at trial, and we have helped countless clients achieve successful outcomes that include restitution and financial compensation. We are looking for plaintiffs nationwide in a possible class action lawsuit against Macy’s.

Call or email us to discuss your eligibility to join the lawsuit.

JAMS Arbitration

Tauler Smith Investigating Claims Against JAMS

JAMS Arbitration

The California business fraud lawyers at Tauler Smith LLP are investigating claims against JAMS after concerns were raised about the arbitration company’s relationship with WeWork. In WeWork arbitrations administered by JAMS, prior case results were known only by JAMS and WeWork. These case results were never shared with WeWork’s opponents, who are mostly small businesses. Neither WeWork nor JAMS would seem to have an interest in sharing information with WeWork’s opponents because doing so could lead to less fees for JAMS. It is wrong for JAMS to operate so obliquely. As an administrator of justice, they need to be held to a higher standard.

To learn more about the claims against JAMS, keep reading this blog.

WeWork Uses JAMS Arbitration Services

JAMS is the world’s largest private provider of Alternative Dispute Resolution (ADR) services. As the name suggests, Alternative Dispute Resolution is an alternative to traditional litigation that allows parties to resolve their legal dispute without needing to go to court for a trial. Sometimes, a contract will require two parties to use ADR services, which is what happens in the standard WeWork contract: the small business owners who sign a lease with WeWork have no choice but to use mandatory arbitration if a dispute arises, and the parties are bound by the decision of the JAMS arbitrator. JAMS also sets the rules and procedures for these arbitrations.

JAMS arbitrates cases in several practice areas, including civil rights, class actions, intellectual property, personal injury, product liability, and real estate. One of JAMS’ biggest clients appears to be WeWork, which uses JAMS to administer arbitrations anytime a dispute arises with one of WeWork’s tenants. When a small business owner signs a lease agreement with WeWork, it typically includes a pre-dispute contract that requires the parties to use arbitration if a dispute arises. The effect of these forced arbitration clauses in WeWork contracts is to have the parties waive their right to a jury trial. A WeWork contract typically stipulates that the arbitration will be administered by JAMS, and the decisions rendered by JAMS arbitrators are final and legally binding on the parties.

JAMS Won’t Disclose Data About Arbitrations Involving WeWork

Does JAMS have a conflict of interest in WeWork arbitrations? JAMS touts its ability to resolve legal and business disputes with “impartial” dispute resolution services administered by “neutral” arbitrators and mediators. The former legal professionals who administer JAMS arbitrations are known as “JAMS Neutrals.” As their title indicates, these individuals are supposed to provide fair, unbiased decisions. But there are questions about JAMS’ relationship with its biggest client – WeWork – and this has raised concerns about the fairness and impartiality of the JAMS arbitrators in these cases.

Significantly, JAMS refuses to disclose information that might show they are colluding with WeWork in arbitration. Law firm Tauler Smith LLP recently requested disclosures from JAMS about WeWork and WeWork affiliates. JAMS responded by refusing to provide the requested information because it supposedly “goes beyond legal and ethical disclosure requirements for arbitrators and would violate JAMS confidentiality obligations to other litigants.”

Thus far, JAMS has only provided data about the number of arbitrations with respect to one WeWork company: the one with a listed address of 500 7th Avenue in New Yok. JAMS did not provide any disclosures about the other 36 WeWork entities. Moreover, even the information in the JAMS disclosure about the single WeWork address is limited becuase it simply states that the 500 7th Ave. tenant has 35 pending arbitrations with JAMS and 17 pending mediations. As such, JAMS failed to address the problem identified by the business fraud lawyers at Tauler Smith LLP: that WeWork could have an unfair advantage in any JAMS-administered dispute. If JAMS administers 1,000 cases in which WeWork is one of the parties, and WeWork has won all 1,000 of these cases, why wouldn’t JAMS tell the parties about this?

Why Is JAMS Sharing Relevant Case Information Only with WeWork?

JAMS has refused to share relevant case information with WeWork’s opponents in arbitration due to what JAMS claims is a confidentiality requirement. But JAMS is allowing this information to be shared with WeWork affiliates. This has created an information imbalance that severely disadvantages the small business owners being sued by WeWork. While JAMS declines to provide specific case information to the other parties in these claims, the fact is that WeWork already has access to this information and can share with its affiliates that are involved in other disputes administered by JAMS. This means that only one side of the dispute – and not the other side – can share information with itself, know the outcomes of other cases, and share information with its affiliates. This results in an unfair advantage for WeWork in any arbitration overseen by JAMS.

If WeWork and its affiliates (i.e., WeWork shell entities) account for a significant number of JAMS cases administered in the New York market, it could be evidence of many incentives that are created by JAMS’ administration of WeWork disputes. For example, JAMS would have an incentive to litigate all WeWork cases separately so that only WeWork (and JAMS) has relevant information about outcomes. If WeWork knows that arbitrators are ruling in WeWork’s favor 100% of the time and awarding attorney’s fees every single time based on an identical contract, WeWork’s legal counsel could overbill, constantly brief unnecessary issues, file pre-trial briefs, and file post-trial briefs knowing that these requests will be granted. Further, the small business owner respondents in these cases will not have access to this information because they are not allowed to see it.

Antitrust Concerns Over JAMS’ Relationship with WeWork

JAMS has an effective monopoly over these types of cases. And they may use that privilege unfairly. This could raise concerns about JAMS violating federal antitrust laws like the Sherman Act because WeWork appears to be getting preferential treatment from JAMS. The fact is that WeWork and its affiliates are repeat customers of JAMS, not the small businesses that are typically on the other side of a dispute with WeWork.

The actions taken by JAMS with respect to its relationship with WeWork do not appear to be a fair or reasonable way to administer justice. Any system of justice should treat litigants equally. In the complaint being prepared against JAMS, the California business fraud attorneys at Tauler Smith LLP allege that their clients’ due process rights have been violated because it would be manifestly unjust to collect arbitration fees from thousands of small businesses and force them to go to a hearing to defend themselves when the end result is already known to the other party in advance.

Contact the California Business Fraud Lawyers at Tauler Smith LLP

If you are a small business owner who has been forced to go into an arbitration administered by JAMS, you should speak with an experienced California business fraud lawyer immediately. The Tauler Smith LLP legal team includes attorneys who have extensive experience with professional negotiation, mediation, and alternative dispute resolution. Call or email us to schedule a free consultation about your case.

WeWork Arbitration

Tauler Smith Investigating Claims Against WeWork

WeWork Arbitration

Law firm Tauler Smith LLP is investigating claims against WeWork and JAMS over misconduct in hundreds of arbitrations initiated by WeWork against small businesses. The unprecedented number of arbitrations (enforcing identical “membership agreements” for “services” despite business closures stemming from COVID-19) generates massive revenue and incentives for JAMS, creating a conflict of interest that is not disclosed to small businesses being pursued by WeWork through JAMS. Neither JAMS nor WeWork discloses to any of these small businesses the nature of the parties’ pecuniary relationship, such as the amount WeWork pays to JAMS every year. Beyond that, neither JAMS nor WeWork discloses prior case outcomes to the small businesses pursued by WeWork, even though WeWork uses identical contracts and identical legal theories in these cases.

Only WeWork and JAMS know case outcomes, but small business opponents defending claims brought by WeWork do not. This places WeWork at a massive advantage since only they have access to certain information, including how JAMS has interpreted the identical contract on multiple occasions. The result is a process that is unfair to small business defendants. It is a process that benefits only WeWork and JAMS by perpetuating WeWork’s ability to pursue its members and by giving JAMS the continued ability to collect fees from hundreds of disputes.

To learn more about the possible legal claims against WeWork and JAMS, keep reading this blog.

WeWork Sued Small Business Owners for Rent During COVID Pandemic

WeWork is a company that provides coworking spaces to businesses. WeWork uses an identical “Membership Agreement,” but not as a lease of space; rather, it is for the provision of services. This allows WeWork to argue that legal protections ordinarily afforded to tenants do not apply to WeWork members. WeWork then argues that landlord-tenant law is applicable to obtain favorable rulings from JAMS.

The attorneys at Tauler Smith LLP are also investigating whether WeWork is reporting the revenue in Membership Agreements accurately to the U.S. Securities and Exchange Commission (SEC). WeWork’s accounting procedures have come under public scrutiny over the last several years. The COVID-19 pandemic and the arbitrations WeWork initiated with JAMS potentially provide a means for WeWork to double-book revenue if they apply deceptive accounting methods.

Tauler Smith LLP is also investigating whether WeWork uses private arbitration to protect itself from revealing misconduct that is of concern to the public. Since WeWork structures all of its contracts to be private, only WeWork and JAMS know how and why JAMS has been ruling favorably for WeWork. Moreover, since the cases go through arbitration instead of going through the courts, the small businesses do not know the prior results. This puts the small businesses at an even greater disadvantage in the proceedings. Arbitration is often used for business conflicts that involve contract disputes. WeWork requires anyone who signs a lease with the company to agree in advance to use arbitration for any legal disputes. Even being a part of an arbitration can cost a small businesses significant money. WeWork arbitrations are administered by JAMS, an arbitration company that also provides mediation and Alternative Dispute Resolution (ADR) services.

Tauler Smith LLP Investigates Relationship Between WeWork and Arbitration Company JAMS

Tauler Smith LLP is now investigating a possible legal claim against JAMS stemming from the arbitration company’s lucrative and ongoing relationship with WeWork. It has been reported that WeWork may be the largest tenant/landlord in all of New York City, and it is believed that WeWork has pursued hundreds (if not thousands) of claims against its members using only one arbitration company: JAMS. This would mean that JAMS has received millions of dollars from WeWork. JAMS is therefore incentivized to side with WeWork in every case, creating a conflict of interest that is not disclosed. Based on our preliminary investigation, no WeWork member has ever won a JAMS-arbitrated dispute against WeWork. Since WeWork members are never informed of case results – but JAMS and WeWork are privy to this information – WeWork cases submitted to JAMS are inherently unfair.

WeWork uses discrete companies for each of their workplaces to further obfuscate the claims it pursues against its members, as well as the work it gives to JAMS. Tauler Smith LLP has obtained a list of 36 company names and/or addresses for WeWork affiliates that have been involved in arbitrations administered by JAMS:

  • 18691 Jamboree Rd., Irvine, CA 92612
  • 1601 Vine St., Los Angeles, CA 90028
  • 8305 Sunset Blvd., Los Angeles, CA 90069
  • 8687 Melrose Ave., Los Angeles, CA 90069
  • 4041 MacArthur Blvd., Newport Beach, CA 92660
  • 600 B St., San Diego, CA 92101
  • 71 Stevenson St., San Francisco, CA 94105
  • 535 Mission St. 14th Floor, San Francisco, CA 94105
  • 3001 Bishop Dr., San Ramon, CA 94583
  • 255 Giralda Ave. Floor 5, Coral Gables, FL 33134
  • 78 SW 7th St., Miami, FL 33130
  • 765 W. Peachtree St. NW #4, Atlanta, GA 30308
  • 31 St. James Ave. 6th Floor, Boston, MA 02116
  • 200 Portland St., Boston, MA 02114
  • 625 Massachusetts Ave., Cambridge, MA 02139
  • 1330 Lagoon Ave., Minneapolis, MN 55408
  • 10845 Griffith Peak Dr. #2, Las Vegas, NV 89135
  • 12 E. 49th St., New York, NY 10017
  • 115 Broadway, New York, NY 10006
  • 185 Madison Ave., New York, NY 10016
  • 199 Water St., New York, NY 10038
  • 222 Broadway 19th Floor, New York, NY 10038
  • 300 Park Ave. 12th Floor, New York, NY 10022
  • 401 Park Ave. S. 10th Floor, New York, NY 10016
  • 500 7th Ave., New York, NY 10018
  • 524 Broadway, New York, NY 10012
  • 880 3rd Ave., New York, NY 10022
  • 1115 Broadway, New York, NY 10010
  • 1881 Broadway, New York, NY 10023
  • 1201 3rd Ave., Seattle, WA 98101
  • Bastion Collective LLC
  • We Company
  • WeWork
  • WeWork Companies, Inc.
  • WeWork Companies LLC
  • WeWork Management LLC

How Much Money Does JAMS Make from Its Relationship with WeWork?

JAMS has thus far dismissed any concerns about impartiality or failure to disclose in WeWork cases without providing the data requested. A representative for JAMS stated that the company “administers approximately 15,000 cases per year” and “no single party or law firm significantly impacts JAMS’ total revenue.” The millions of dollars flowing to JAMS from WeWork provides a natural incentive for JAMS to continue ruling favorably for WeWork – which is easy because it is the same “Membership Agreement” being interpreted in each arbitration. Moreover, since JAMS and WeWork refuse to share with small business defendants any relevant information about past rulings, the small businesses remain unaware of the full nature of the WeWork-JAMS relationship. The small businesses will then fight the arbitration and pay JAMS even more fees, only to inevitably lose in front of a JAMS-provided arbitrator. There is no reason for JAMS to be fair because it is not in their financial interests.

JAMS would appear to have an incentive to rule in WeWork’s favor not just because of the many disputes they are currently arbitrating, but also because of all the future business that WeWork will continue to send their way. In other words, JAMS may want to keep WeWork happy because JAMS collects fees on every arbitration, and WeWork sends them a lot of business that generates fees.

Contact the California Business Fraud Lawyers at Tauler Smith LLP

Are you a small business owner who is being pursued by WeWork through JAMS? If so, you may have a possible legal claim against both WeWork and JAMS. WeWork uses JAMS to arbitrate legal disputes, and it is believed that WeWork has never lost a JAMS-administered dispute. You can schedule a free consultation with the California business fraud lawyers at Tauler Smith LLP by calling or sending an email.

Anxiety Supplement Lawsuit

Natrol Class Action for Anxiety Supplements

Anxiety Supplement Lawsuit

Tauler Smith LLP, a California law firm focusing on consumer fraud litigation, recently filed a class action complaint against supplement manufacturer Natrol LLC. The Natrol class action for anxiety supplements complaint asserts that Natrol is violating the Consumers Legal Remedies Act (CLRA) by marketing its Relax+ Ultimate Calm supplement as a remedy for anxiety when it contains “ineffectual herbs, extracts, and other vitamins that plainly do not have the ability to treat anxiety.” The nutritional supplement lawsuit also alleges that when an individual uses unapproved anxiety medications like Relax+ Ultimate Calm instead of seeking treatment from a licensed doctor, they could worsen their mental health.

The Los Angeles false advertising lawyers at Tauler Smith LLP are bringing civil actions against companies that market and sell dietary supplements claiming to remedy anxiety. If you purchased one of these supplements, you may be eligible to join a class action lawsuit. Contact us today to discuss your options.

Nutritional Supplement Manufacturers Endanger Consumers with Unapproved Anxiety Drugs

Anxiety is a recognized mental disorder. When a person suffers from anxiety, they may be stricken with feelings of worry or fear while attempting to perform everyday activities. This is a major mental health concern for millions of Americans, with statistics showing that more than 40 million U.S. adults are affected by anxiety disorders. This includes millions of young children and teenagers who struggle with mental health problems.

According to the Mayo Clinic, the best way to treat an anxiety disorder is with medications prescribed by a licensed physician and psychotherapy provided by a mental health counselor. Additionally, the National Institute of Public Health (NIH) has stated that individuals should not self-diagnose or use over-the-counter supplements to treat anxiety. The nutritional supplement industry has attempted to capitalize on the country’s worsening mental health crisis in the aftermath of the COVID-19 pandemic by making unsupported claims regarding the ability of their products to relieve conditions like anxiety. When anxiety is left untreated, it can be ruinous to individuals and lead to more serious conditions and diseases.

Natrol Accused of False Advertising of the Relax+ Ultimate Calm Supplement as a Remedy for Anxiety

Natrol is a U.S. manufacturer of vitamins, minerals, and nutritional supplements. The company’s headquarters are in Chatsworth, California. According to Dun & Bradstreet, Natrol’s annual revenues surpass $121 million, which is part of the $140 billion market for dietary supplements.

The complaint alleges that Natrol puts consumers at risk by advertising its Relax+ Ultimate Calm supplement as a treatment for anxiety. The U.S. Food and Drug Administration (FDA) has issued a warning about the use of unapproved drugs to treat anxiety. Consumers who place their trust in nutritional supplement manufacturers may be more likely to forego seeking medical treatment for their health conditions, which can compound the effects of the disorders. Additionally, these individuals may be more likely to develop other mental and physical conditions because anxiety can cause depression, substance misuse, social isolation, and suicide.

Supplements Claiming to Treat Anxiety Violate the California Consumers Legal Remedies Act

The California Consumers Legal Remedies Act (CLRA) is a consumer protection statute that is meant to safeguard individuals against business fraud, including “unfair methods of competition and unfair or deceptive acts or practices in a transaction.” The CLRA, which is codified in Cal. Civ. Code §§ 1750, makes it illegal for companies to mislead consumers in advertising or sales transactions. The statute explicitly prohibits companies from “representing that goods…have…characteristics, ingredients, uses, benefits, or quantities that they do not have.” Plaintiffs can bring private civil actions under the CLRA when they have been deceived by the acts or practices of a company in the sale of consumer goods such as nutritional or dietary supplements.

Natrol has been accused of making unsupported claims about the ability of its Relax+ Ultimate Calm product to relieve anxiety. On the product packaging, Natrol prominently represents that use of the Relax+ Ultimate Calm supplement will reduce “stress, anxiety & tension” and offer other health benefits. According to the complaint, these representations are untrue and unlawful.

Class Action Lawsuit Filed Against Natrol for Violating the CLRA

The Los Angeles business fraud attorneys at Tauler Smith LLP have brought a class action lawsuit against Natrol for violating the CLRA. The legal complaint was filed in the Los Angeles County Superior Court. The complaint explains that an individual who consumes the Relax+ Ultimate Calm product “in lieu of a professional medical evaluation and treatment” is at risk of exacerbating their anxiety, as well as developing additional mental health disorders. Anyone who purchased the Relax+ Ultimate Calm supplement may be eligible to join the class action.

The class action lawsuit against Natrol seeks relief and judgment that includes the following:

  • An injunction that orders Natrol to correct its alleged deceptive marketing scheme and stop claiming that Relax+ Ultimate Calm is a remedy for anxiety.
  • An award of actual, punitive, and statutory damages to compensate the plaintiffs who purchased Relax+ Ultimate Calm.
  • Reimbursement of attorney’s fees for the plaintiffs.
  • Any other relief that the court may deem just and proper.

Did You Buy a Supplement That Claims to Treat Anxiety? Contact a California Consumer Fraud Lawyer Today

The California consumer fraud attorneys at Tauler Smith LLP are committed to protecting consumers against deceptive business practices. If you purchased a dietary supplement that claims to remedy anxiety, you should contact our legal team today to discuss your eligibility to join a class action lawsuit. Call 310-590-3927 or email us to schedule a free consultation.

Texas Deceptive Trade Practices Act

Texas Deceptive Trade Practices Act

Texas Deceptive Trade Practices Act

Texas has strong consumer protection laws that safeguard residents against scams, deceptive sales calls, and other illegal practices. Chief among these laws is the Texas Deceptive Trade Practices Act (DTPA), which gives plaintiffs the ability to recover additional damages when they have been defrauded by false, misleading, or deceptive business practices. When state lawmakers passed the DTPA, the intent behind the bill was that companies should think twice before committing any kind of fraud against consumers. Texas consumer protection lawyers know just how effective the DTPA can be at holding fraudsters accountable for their unethical actions.

To learn more about the Texas Deceptive Trade Practices Act, keep reading this blog.

What Is the Texas Deceptive Trade Practices Act?

The Texas Deceptive Trade Practices Act, or DTPA, is a consumer protection law that prohibits businesses from making false or misleading statements in advertisements, contracts, and any transactions involving consumers. The DTPA gives consumers a cause of action for a civil suit when they have been misled by a business. The text of the statute casts a wide net by explicitly forbidding businesses from knowingly deceiving customers in advertisements, marketing materials, and sales transactions. This includes “false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty.”

The DTPA applies to several different types of consumer transactions, including the sale or lease of commercial goods, products, services, or property. The Texas DTPA law has a lengthy list of examples of deceptive business acts, including the following:

  • Passing off goods or services as those of another.
  • Confusing consumers about the true source of goods or services.
  • Lying about the certification status of a product or service.
  • Misrepresenting whether a product or service has received sponsorship or approval.
  • Lying about the geographic origin of goods or services.
  • Misrepresenting the ingredients of goods such as food products or nutritional supplements.
  • Selling an item as “new” when the product is used or reconditioned.
  • Lying about the quality or grade of a product.
  • Using misleading statements to disparage a competitor’s goods or services.
  • Advertising items as available for sale when they are unavailable or there is only a limited supply.
  • Lying about the reasons for a price reduction.
  • Misrepresenting the need for additional parts, replacement, or repairs.
  • Falsely presenting a salesperson as having the authority to negotiate final terms of a transaction.
  • Secretly resetting the odometer on a motor vehicle for sale.
  • Lying about a “going out of business” sale when the store is not going out of business.
  • Using “corporation” or “incorporated” in the name of a business when it has not been incorporated.
  • Falsely representing that a solicitation has been sent on behalf of a governmental entity.
  • Price gouging during a natural disaster.

Additional Damages Available Under the DTPA

The damages and compensation that may be available to plaintiffs filing lawsuits under the Texas Deceptive Trade Practices Act include actual damages (i.e., economic damages), mental anguish damages, and attorney’s fees. The actual damages could involve things like the money spent on the purchase, as well as repair or replacement costs after the transaction.

Additionally, when a plaintiff in a DTPA case wins their claim, they may be eligible for up to three (3) times the usual damages awarded in a Texas civil suit.

Mental Anguish Damages

If the judge or jury finds that the defendant knowingly deceived the plaintiff, then it may be possible for the plaintiff to receive an award for mental anguish damages. The ability to recover damages for mental anguish is unique in DTPA claims because business transactions typically don’t involve the same kinds of mental or emotional harms as personal injury and wrongful death claims.

Treble Damages

The DTPA also allows for the recovery of treble damages, which means that the judge may impose a multiplier on the judgment or ruling and award up to three times the damages amount. When a defendant’s conduct is deemed egregious, it is not uncommon for plaintiffs to be awarded significantly higher damages as a way of sending a message and discouraging unethical behavior by other businesses in the future.

DTPA Waiting Period & Deadlines

Texas law requires victims of business fraud to wait at least 60 days before filing a DTPA lawsuit. The statute specifically requires plaintiffs to send a demand letter to the business owner or individual so that they have an opportunity to address the alleged fraud and potentially resolve the matter before a legal claim is necessary. Once 60 days have passed since the demand letter was sent to the defendant, then the plaintiff may choose to formally file their lawsuit in a Texas court.

Just as there is a waiting period on the front end of any DTPA claim, there is also a time limit for the plaintiff to take legal action. The deadline for a consumer to file a DTPA lawsuit is two (2) years from the date on which the false or deceptive business practice occurred. This statute of limitations is half the time that a plaintiff typically has available to file a breach of contract lawsuit in Texas.

Contact the Texas Consumer Fraud Lawyers at Tauler Smith LLP

The Deceptive Trade Practices Act (DTPA) gives Texas consumers the right to file a lawsuit and pursue damages when they have been victimized by a scammer or fraudulent business. If you have been misled or deceived in a commercial transaction, the Texas consumer fraud attorneys at Tauler Smith LLP can help you file a DTPA claim. Call or email us today to go over your options.

CLRA Consumer Protection

What Is the Consumers Legal Remedies Act?

CLRA Consumer Protection

California consumer fraud lawyers know that the state has been at the forefront of the consumer rights movement for a long time. In 1970, the California State Legislature passed the Consumers Legal Remedies Act (CLRA) to safeguard customers against deception by businesses. The CLRA makes it unlawful to engage in unfair or misleading acts when selling goods or services to consumers. The CLRA is often applicable in cases involving false advertising claims and/or consumer fraud. For example, when a company uses a misleading advertisement to persuade someone to purchase a product or service, the misrepresentation may constitute a violation of the statute. The same is true when a deceptive or intentionally confusing ad causes a customer to trigger an automatic renewal policy.

To learn more about the Consumers Legal Remedies Act, keep reading this blog.

What Deceptive Business Practices Does the CLRA Prohibit?

The California Consumers Legal Remedies Act, or CLRA, is a consumer statute that’s codified in Cal. Civil Code §§ 1750. The law allows plaintiffs to bring private civil actions against companies that use “unfair methods of competition and unfair or deceptive acts or practices in a transaction.”

The CLRA explicitly prohibits certain deceptive business practices, including the following acts:

  • Selling counterfeit goods.
  • Misrepresenting the source of a good or service.
  • Lying about a professional affiliation, certification, or endorsement.
  • Lying about the geographic origin of a product.
  • Selling a used or reconditioned item as new.
  • Misrepresenting the quality of a good or service.
  • Making false statements that disparage another business’ products.
  • Advertising items as being available for sale when they won’t be.
  • Advertising furniture as available for sale without disclosing that it is unassembled.
  • Telling a customer that a repair or replacement is necessary when it isn’t.
  • Offering a rebate or discount with hidden conditions.
  • Falsely presenting a salesperson’s authority to negotiate and finalize a transaction.
  • “Robo-calling” individuals who are not already customers.

One of the advantages of the CLRA is that victims of business fraud in California are not limited to filing lawsuits under the statute. This means that a consumer could bring multiple claims citing both the CLRA and other state or federal laws.

What Remedies Are Available to California Consumers in CLRA Cases?

The CLRA gives California consumers a powerful tool to hold businesses accountable for deceptive practices because the statute allows plaintiffs to recover different kinds of damages. The law is often interpreted broadly by courts to provide strong protections against consumer fraud, false advertising, and unfair business practices. When a consumer has been defrauded, they can file a lawsuit in a California Superior Court.

Consumers who bring a claim under the CLRA may pursue several remedies for any harm they suffered, including:

  • Actual monetary damages.
  • Punitive damages.
  • Restitution of property to the plaintiff.
  • An injunction against the defendant.
  • Attorney’s fees and court costs.
  • Any other relief the court deems proper.

Actual Damages & Attorney’s Fees

The first remedy available under the CLRA – actual damages – has a statutory minimum of $1,000 for each deceptive act or practice. The last remedy – “any other relief the court deems proper” – is a catch-all provision that gives courts wide latitude when determining what kind of monetary relief should be available to plaintiffs in CLRA actions.

In addition to getting damages for fraud, a plaintiff filing a claim under the CLRA may also be able to get attorney’s fees from a defendant who is found to have violated the Act. This can make it financially feasible for a plaintiff to bring a CLRA claim – since the defendant would have to pay the legal costs for both sides if they lose the case.

Additional Damages for Senior Citizens & Disabled Persons

A couple of special categories of consumers may be eligible for additional damages: senior citizens and disabled persons. As set forth by the CLRA, a “senior citizen” is defined as anyone over the age of 65. (In California, a senior citizen is usually defined as anyone over the age of 62, with the age threshold being lowered to 55 years old when the person lives in a senior citizen housing development.) California law defines “disabled person” quite broadly to include just about anyone who has a physical or mental condition that substantially limits at least one major life activity. For both seniors and disabled persons, the CLRA allows an award of up to $5,000 in damages to be tacked on by the court.

Proving a CLRA Violation

Although the Consumers Legal Remedies Act gives plaintiffs many options when seeking damages for consumer fraud, there are still ways for defendants to avoid paying maximum compensation. For example, if the defendant did not intentionally violate the CLRA, and they subsequently made a good faith attempt to correct the mistake, then the court might not award damages to the plaintiff. The complexities of the statute are one reason why it’s so important for you to have a knowledgeable California business fraud attorney handling your case.

Who Is Allowed to Bring a Lawsuit Under the Consumers Legal Remedies Act?

Private Civil Actions & Class Actions

The CLRA may serve as the basis for a civil suit in any consumer transaction where goods changed hands or services were provided. Anyone who can show damages having been caused by one of the acts prohibited by the CLRA can file a lawsuit, either individually by the consumer or in a class action involving other consumers who were deceived or defrauded. For class action litigation, the cases must be substantially similar. An experienced California consumer protection lawyer can assist you with a CLRA class action lawsuit and help get your class certified.

Exclusions from the CLRA

Certain types of transactions and business owners are excluded from the Consumers Legal Remedies Act: (1) real estate transactions, and (2) newspapers and other advertisers. Although the CLRA applies to most commercial transactions, the statute cannot be used as the basis for a legal claim when the transaction involved the sale of either a residential property or a commercial property. Additionally, the CLRA cannot be used to bring a lawsuit against the owner of a newspaper, magazine, radio station, or any other advertising medium unless the plaintiff can prove that the business owner knew that the ads were deceptive before disseminating them.

How Long Do You Have to Bring a CLRA Claim?

Three-Year Statute of Limitations

It is important for you to speak with a qualified CLRA attorney as soon as possible because you do not want the statute of limitations to expire before you attempt to bring a claim. The general rule is that a consumer has three (3) years from the date on which the unfair business practice occurred to file a lawsuit under the Consumers Legal Remedies Act. If you miss this deadline, you may be barred from bringing a legal action.

Business Owner’s Opportunity to Cure

In addition to making sure you file within the statute of limitations, an experienced attorney can also ensure that you meet any other important deadlines and filing requirements. For example, before the CLRA suit can proceed in court, the consumer must notify the defendant in writing about the alleged violation. This must happen at least 30 days before the lawsuit is filed, and the business owner will then have an opportunity to take appropriate action to fix or otherwise “cure” the harm. (E.g., repairing or replacing a damaged item that was sold to the consumer.)

Contact the California CLRA Lawyers at Tauler Smith LLP

Tauler Smith LLP is a Los Angeles law firm that focuses on consumer fraud litigation. Our attorneys are extremely familiar with the Consumers Legal Remedies Act, and we have filed both private civil actions and class action lawsuits on behalf of consumers. If you were a victim of business fraud or false advertising in California, we can help you take legal action and get you the financial compensation to which you are entitled. Call or email us to discuss your eligibility to file a CLRA claim.

PPE Fraud Lawyer

Tauler Smith Obtains Judgment for Fraud Against PPE Scam

The California business fraud lawyers at Tauler Smith LLP recently helped a client obtain a judgment for fraud against a PPE scam. After a two-day bench trial, a U.S. District Court granted 100% of the compensatory damages sought by plaintiff Solmark International in the case.

PPE Fraud Lawyer

L.A. Law Firm Tauler Smith LLP Secures Victory for Client in PPE Fraud Case

 

On February 4, 2022, federal judge Hon. Stanley Blumenfeld, Jr. for the United States District Court for the Central District of California entered Judgment for Fraud on behalf of Tauler Smith client Solmark International against PPE scammers.

Solmark International is a major supplier of personal protective equipment to companies in the United States. The defendants in the case were PPE scammers who had engaged in a scheme to sell non-existent PPE (personal protective equipment) to national distributors like Solmark. The PPE fraud scheme began with the defendants falsely representing that they had acquired millions of masks to service Solmark International’s clients who were looking to return to work more safely during the COVID-19 pandemic. Once the defendants received a bank wire transfer for the PPE products, they effectively vanished. This resulted in a series of defaults from the defendants.

Solmark International then filed suit in 2020 with predecessor counsel, and the case was scheduled for trial in late-2021. Los Angeles law firm Tauler Smith LLP ultimately helped the plaintiff secure a favorable judgment and recover significant compensation.

Federal Court Issues Final Judgment in Favor of Solmark International

A final judgment was issued by United States District Judge Stanley Blumenfeld, Jr. on February 4, 2022. The specifics of the federal court’s ruling were as follows:

  • Compensatory Damages: The defendants were ordered to pay plaintiff Solmark International the sum of approximately $100,000.
  • Counterclaims Dismissed: The defendants’ counterclaims against Solmark International were dismissed.

Attorney Robert Tauler Fights for Victims of Business Fraud in California

“I am very pleased our team was able to obtain a fraud judgment against dishonest people who thought only about themselves at the expense of others during such a sensitive time in our history,” said L.A. business fraud attorney Robert Tauler. “I am fortunate to have clients like Solmark International that believe justice is worth fighting for.”

Tauler Smith LLP is a law firm with a history of success in California business fraud cases. Our experienced litigators have successfully represented clients in business disputes and fraud matters in both local California courts and federal courts. We understand the nuances of this complicated area of the law, and we have the institutional expertise needed to guide you through the legal system and get you the compensation you deserve.

Contact the Los Angeles Business Fraud Lawyers at Tauler Smith LLP

If you were a victim of business fraud, corporate fraud, or consumer fraud, the litigators at Tauler Smith LLP can help you. Call 310-590-3927 or fill out the online contact form to schedule a free consultation.