Consumer Law

5th Circuit tosses deceptive trade practice claim in suit against

A federal appeals court has tossed a deceptive trade practices claim in a would-be class action against that alleged subscribers were misled about the number of active users on the website.

The New Orleans-based 5th U.S. Circuit Court of Appeals said the plaintiffs had failed to state an unconscionability claim under the Texas Deceptive Trade Practices Act. The Texas Lawyer’s Tex Parte Blog summarizes the unpublished opinion (PDF), issued on Oct. 3.

The plaintiffs had alleged that allowed fake profiles because it didn’t vet them, didn’t remove inactive or duplicate profiles, didn’t block profiles known to be connected with scams, and didn’t accurately disclose the size of its reachable membership base.

In August 2012, a federal judge dismissed claims for breach of contract and breach of the duty of good faith and fair dealing. The judge also initiated proceedings to dismiss the deceptive practices claim sua sponte, and tossed that claim in October 2012 with prejudice. The plaintiffs appealed the latter decision.

The 5th Circuit said the Texas trade practices law doesn’t apply in breach of contract cases unless the defendant never intended to fulfill the contract in the first place.

The appeals court also upheld the judge’s decision to bar the plaintiffs from filing an amended complaint on the trade-practices claim. Several actions have been pending against since 2008, and there have been “numerous motions to dismiss” and amended complaints by various plaintiffs. The court didn’t abuse its discretion “given the length of time these claims have persisted and the multiple opportunities at amendment that have passed,” the courts said.

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