Restaurant.com dispute waiting for appeals court ruling

9-Sep-13 – It is now up to a U.S. Court of Appeals to decide if the federal class action lawsuit against a Chicago company, owned by two River North residents, can continue.

The dispute is over gift certificates sold by Restaurant.com between 2006 and 2010 that had expiration dates in possible violation of law in at least two states.

Representing potentially thousands of other customers, two residents of New Jersey filed a lawsuit against RDC in 2010. The case is likely to influence any business selling gift cards and certificates and help clarify how some laws written before the Internet are interpreted in modern times.

On August 12, the appellate court for the Third Circuit, based in Philadelphia and serving three states including New Jersey, asked each party in the dispute to submit briefs explaining how a recent decision by the Supreme Court of New Jersey has affected their case.

The Supreme Court of New Jersey decided against the Arlington Heights, Illinois company on July 9. The attorney for Larissa Shelton and Gregory Bohus, the New Jersey residents suing Restaurant.com, predicts the court will reverse an earlier dismissal of the case, allowing at least one of the claims to continue.

“In its briefing, Restaurant.com conceded that, as a result of the Supreme Court’s decision, the plaintiffs’ claim under New Jersey’s ‘Truth in Consumer Contract, Warranty and Notice Act’ should be reinstated,” Bruce Greenberg (left) told Loop North News on Monday, “although Restaurant.com did not concede that it was liable under that statute.”

Not only that, but an attorney for RDC is disputing how the New Jersey Supreme Court ruling is being interpreted. Michael McDonald (right) says the court did not say that the gift certificates were “consumer contracts” or even that Shelton and Bohus were, strictly speaking, “consumers.”

And he calls the losses suffered by Shelton and Bohus “hypothetical.”

“Under the guise of the [Truth in Consumer Contract, Warranty and Notice Act], the complaint asserts claims on behalf of thousands who did not suffer any conceivable economic loss in connection with their purchase of certificates,” argues McDonald, “yet asserting entitlement to windfall damages on behalf of all purchasers of certificates, even those like…Shelton who have already redeemed their certificates at participating restaurants and received the full benefit of their bargain.”

The last brief was submitted on September 3. Both sides are now waiting for a decision from the appellate court.

Restaurant.com is owned by Dr. Kenneth Chessick, a lawyer in Chicago, and his wife, Ellen Chessick, who is president of Marina Towers Condominium Association.

 Related story: Restaurant.com cautionary tale for anyone selling gift certificates