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Matt Mauer publishes "Groupon Pays Over $500,000 to Settle Class Action Lawsuit" on Slaw

Nov 05, 2013

Justice Edward Belobaba has approved the settlement reached in the Groupon class action lawsuit.

For those not familiar with Groupon, the company sells a variety of vouchers at a discount that can be used towards the purchase of goods or services. For example, a customer may be able to pay $50 for a voucher that can be redeemed to obtain $150 worth of duct cleaning services.

Up until recently, the vouchers carried an expiry date. The plaintiff alleged that it was illegal (for a variety of reasons) for the vouchers to carry an expiry date.

The settlement provides that customers can continue to redeem their vouchers for the purchase price even after the listed expiry date or, if redemption is not possible, they can recover their purchase money back from a settlement fund.

Using the example above, if the duct cleaning voucher expired on January 1, 2013, purchasers of the voucher could still redeem the purchase price ($50) towards the duct cleaning services notwithstanding that voucher had technically expired. In the event that the duct cleaning company in question had gone out of business, customers could recover the purchase price from the settlement fund.

The approved settlement fund totals $535,000. $235,000 of this will go to the lawyers who obtained the settlement on behalf of the class members. A further $100,000 will be used for administrative fees. The remaining $200,000 will be available for claims made by the class members.

While the amount of legal fees may at first glance seem high, Justice Belobaba noted that the value of the overall settlement is in excess of $7 million once the value of the unredeemed vouchers is factored into the equation.

Reposted from Slaw at