Archive for March 7th, 2010

Are you a company faced with the prospect of having to defend a class action lawsuit that you believe is frivolous?  You have many options, but unfortunately, none of them are all that palatable.  You can settle for big bucks right away, you start paying some superstar class action defense lawyer hundreds of dollars an hour to fight the case for a decade before you settle for big bucks later, you can fight the case to the death in court, you can file for bankruptcy protection, or you can pursue any number of other, more desperate, options (what these might be are best left for another discussion).  But one company is trying a different approach altogether.  According to its blog, Chicago-based Internet company Groupon has responded to a class action lawsuit by “organizing” a class action against itself.  Here is an excerpt from a posting on the company’s blog, Groublogpon, Groupon Corporate Overlord,” entitled Groupon Organizes Class Action Against Itself:

Dear Groupon Customers,

You may or may not have heard that a lawyer named Jay Edelson from a law firm called Edelson McGuire is attempting to organize a class action lawsuit against Groupon, claiming that our deals’ prominently displayed expiration dates somehow “systematically deceive our customers.” As a company with one of the most irrationally liberal customer satisfaction policies on the planet, the idea that we’re systematically deceiving anyone is news to us – hopefully it’s news to you as well.

We can think of two possible explanations for this lawsuit:

  1. The law firm sees an opportunity to exploit our success and make a bunch of money.
  2. We are indeed systematically deceiving our customers, but instead of taking advantage of our 100% open refund policy or telling us about their problems or sharing them in a public forum, our customers are secretly gossiping about them to each other and Edelson McGuire, kind of like Emily Johnson did against me in 9th grade (Emily if you are reading this I want my cabbage patch doll back).

* * *

Here’s the only thing that I think matters about this to you, our customers: We are so not the type of company that needs to be sued to bend over backwards for our customers. . . . So while we obviously think this lawsuit is ridiculous, it’s an opportunity for us to reinforce the fact that there is nothing more important to us than making sure you guys love us.

Thanks for reading,

Andrew Mason, Groupon Corporate Overlord

Whether the company’s public response turns out to be pure PR genius or ends up simply being Exhibit A at trial remains to be seen, but it looks like there will be no shortage of entertainment value along the way.  Corporate counsel and public relations representatives of other companies who face consumer class actions might want to keep an eye on how things play out in this one.

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