Overstock.com Announces Dismissal of Federal Class Action Suit

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.