New Wave of Shipping Fee Class Actions: High Steaks
Omaha Steaks International Inc. recently became the target of a proposed class action lawsuit, in which the company is accused of charging unreasonable shipping fees that were excessive compared to the company’s actual costs.
The plaintiff, Neiman McCoy, alleges that he purchased a jar of Tangy Buffalo Rub from the Omaha Steaks website for $3.99, but then had to pay an additional $15.99 for shipping and handling, a flat rate charged by Omaha for orders under a certain total. McCoy alleges that the cost for shipping would have been less than half of that charge for his order through the United States Postal Service, and that the fee ultimately includes a profit for the company. He alleges that this is contrary to ethical guidelines provided by the Direct Marketing Association.
McCoy is seeking compensatory damages for the proposed class, including full refunds of shipping and delivery charges that were in excess of Omaha’s actual costs, as well as injunctive relief.
This case illustrated the issues that may arise with online orders and shipping costs. Arent Fox’s E-Commerce group monitors developments in this area. If you have any questions, please contact Anthony V. Lupo, Matthew R. Mills, Diana S. Bae, or the Arent Fox professional who usually handles your matters.