A California federal judge recently dismissed a class action lawsuit against Discount Tire alleging that it failed to disclose certain information to their customers. Specifically, the plaintiff, who was representing the putative class, asserted that Discount Tire failed to properly disclose the fact that he was being charged a fee for disposing of his old tires. This disposal fee was included as a line item on the receipt that was handed to the plaintiff in an envelope. However, the clerk who spoke with the plaintiff at the Discount Tire store purportedly failed to inform him that he was being charged for the disposal fee. Instead, the plaintiff allegedly assumed that the total price quoted by the clerk was simply the amount it cost to purchase and install the new tires. Ultimately, the judge dismissed the various statutory and common law claims the plaintiff was pursuing for a multitude of reasons, not the least of which was the fact that the tire disposal fee was listed as a line item on the receipt.
The decision, while a victory for Discount Tire, also provides an excellent example of how retail stores can reduce their risks of facing a lawsuit in the first instance. It must be remembered that Discount Tire was still forced to incur substantial legal fees and costs in defending itself against the class action lawsuit. Specifically, retail chains, such as Discount Tire, should exercise vigilance in confirming that their customers understand or, at a minimum, are notified of all charges they are incurring. A verbal explanation as to the charges that the plaintiff was incurring, rather than just handing him an envelope containing a receipt with line item charges, could have gone a long way towards reducing Discount Tire’s risk of being exposed with a class action lawsuit. The implementation of this, or some other basic quality control standards, potentially could have allowed Discount Tire to avoid the costs associated with defending a lawsuit all together.
For more information, please contact any member of Goldberg Segalla’s Global Insurance Services Practice Group.