Class action suit against River North-owned company may proceed

31-Jul-13 – A decision by the Supreme Court of New Jersey three weeks ago has cleared the way for a class action lawsuit to resume against a suburban Chicago company owned by two River North residents.

Restaurant.com, based in Arlington Heights and owned by Dr. Kenneth Chessick and his wife, Ellen Chessick, who is president of the condo board at Marina City, got a three-year break in the suit filed in 2010. The complaint is over expiration dates on gift certificates the company sells that are redeemable at restaurants nationwide. The expiration dates have conflicted with state laws, including laws in New Jersey and Illinois, which define how long a gift certificate must be valid.

Two New Jersey residents, Larissa Shelton and Gregory Bohus, complained that gift certificates they bought from RDC’s website expired in one year despite a law in their state that says gift certificates must be valid for two years.

Although its gift certificates currently do not expire at all, for at least four years, starting on April 4, 2006, Restaurant.com coupons expired one year from the date they were issued, according to the fine print, “except in California and where otherwise provided by law.”

A $5 million lawsuit by Shelton and Bohus filed on behalf of themselves and others on February 17, 2010, was moved to U.S. District Court and ended there four months later. The judge, already dubious that the plaintiffs had actually lost any money, agreed with RDC that the certificates are not consumer contracts and the plaintiffs in the lawsuit were not, as defined by law, “consumers.”

The case was dismissed on June 15, 2010 and appealed on July 9, 2010.

Three years to the day later, on July 9, 2013, the New Jersey Supreme Court ruled that Shelton and Bohus were consumers and the $10 and $25 gift certificates they bought from RDC did indeed represent written consumer contracts. The state court rejected RDC arguments that included a claim that its transactions are not consumer contracts because they are not in writing. The court pointed out that since 2001, New Jersey’s Uniform Electronic Transactions Act has addressed “the steady shift from traditional paper transactions to electronic transactions.”

Bruce Greenberg (left), an attorney for Shelton and Bohus, told Loop North News on Monday that his lawsuit against Restaurant.com “can resume.” The case could affect thousands of consumers who have purchased gift certificates from RDC since 2006.

Restaurant.com has been sued at least twice over expiration dates on its gift certificates. A 2010 lawsuit, which failed to win certification as a class action lawsuit, was dismissed, appealed, and dismissed again. A 2005 lawsuit by a trading partner was settled out of court.

 Related story: Restaurant.com dodges class action lawsuit but served plate full of complaints