Overstock.com, Inc. OSTK announced the dismissal of a multi-million dollar federal class action
lawsuit filed in the Eastern District of New York in 2009. The suit was
brought by Cynthia Hines, a secretary working in a plaintiff's attorney law
firm. Hines claimed she failed to understand the company's return policy and
alleged breach of contract, common law fraud and New York consumer statute
violations. Later Hines added other state consumer claims and asked for an
injunction.
Early on, Overstock.com identified the Hines suit as "lawyer-driven" – noting
that Hines worked directly for the lawyer who filed the suit – and determined
that settlement would not be an option, in keeping with its historical
practice.
In the ruling dismissing the case, the court held that a consumer, acting
reasonably, would first look for and understand a retailer's returns policy
before finalizing a purchase transaction, noting, "Any consumer who failed to
do so appears to have assumed the risk of such a cost in the event that the
merchandise is returned."
The court also based part of the dismissal ruling on Hines' failure to clearly
state necessary facts in her complaint.
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