eBay Must Face ‘Buy It Now’ Class Action Lawsuits from Sellers

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On June 30, a California Federal judge denied eBay Inc.’s motion to dismiss a putative class action lawsuit against them for allegedly removing consumer item listings prematurely and refusing to compensate sellers. The eBay Buy It Now class action lawsuit also claims that the current eBay user agreement uses vague language with the potential to mislead consumers about the exact nature of its item removal policies.

According to the eBay class action lawsuit, lead plaintiff Luis Rosado alleges that eBay’s practice of immediately and permanently removing a seller’s listing when a user clicks the “Buy It Now” button, even when a buyer does not complete the transaction, robs a seller of money spent on the listing and cheats them out of the time left on the listing.

U.S. District Judge Edward J. Davilla rejected eBay’s claim that the practice of removing listings under the “Buy It Now” feature is written out in detail in its user agreement. Davilla states the agreements policy is not as clear as the online auction giant claims it to be.

In his order denying eBay’s motion, Davilla states, “The court does not find that Plaintiff is attempting to re-write the contract, as eBay argues. Furthermore, the existence of a contract between parties does not intrinsically allow one party to a contract to circumvent the factual question of whether the agreement was misrepresented or misleading[.]”

For the foreseeable future, eBay will have to face legal arguments from the Class of Buy It Now eBay consumers.

Rosado originally filed the eBay class action lawsuit after attempting to sell a car on eBay.com. According to court records, Rosado had listed his car on eBay by paying $36 listing fee to list his vehicle for 21 days on the online auction website.

On March 8, 2011, 7 days after he listed the item, a prospective buyer clicked the “Buy It Now” option on the listing, which immediately delisted the item from eBay.com, and forcing Rosado to lose 14 days left on his paid listing.

However, the potential buyer did not complete the transaction and Rosado did not immediately receive an instant sale. In his complaint, Rosado states, “The buyer did not deposit money into Plaintiff’s PayPal account, instead requesting that Plaintiff cash a check and send the difference back to the buyer, which Plaintiff did not do.” Rosado did not do so because he suspected the potential buyer was attempting to commit fraud.

Rosado allegedly contacted eBay and requested a full refund of his original listing fee, but eBay only agreed to a $4.25 credit. In light of eBay’s decision, Rosado filed the eBay Buy it Now class action lawsuit on July 30, 2012, in a California state court. Since then, eBay has made several motions to dismiss the class action lawsuit.

While eBay is clear in its user agreement that listing fees are non-refundable, Rosado claims that an eBay customer and seller would have no reason to believe, based on the agreement, that they would lose large portions of the listing time to which they are entitled through their payment.

eBay claims that these allegations of fraud are without merit and go against user’s terms of agreement provided to Rosado and other sellers.

Judge Davilla, however, has dismissed eBay’s claim, saying Rosado had demonstrated that eBay’s contract omits important information that would have clarified the selling policy.

According to the order, “had [Rosado] known he would not receive a refund for the time remaining or that he would not be given an opportunity to relist the item, he would not have placed the listings[.]”

Neither party have immediately responded or commented on the case since this decision.

Rosado is represented by Jordan L. Lurie, Tarek H. Zohdy and Cody R. Padgett of Capstone Law APC and D.J. Morgado of Feldman Fox & Morgado PA.

The eBay Buy It Now Class Action Lawsuit is Luis Rosado v. eBay Inc., Case No. 5:12-cv-04005, in the U.S. District Court, Northern District of California.

UPDATE: On July 24, eBay reportedly agreed to settle the “Buy It Now” class action lawsuit.

UPDATE 2: Claim filing instructions for the eBay Buy It Now class action settlement are now available! Click here or visit www.eBayBuyItNowClassAction.com for details.

UPDATE 3: On Jan. 8, 2016, the plaintiffs filed a motion seeking final approval of the eBay Buy It Now class action settlement.

UPDATE 4: On Sept. 23, 2016, Top Class Actions readers started receiving checks in the mail worth as much as $15 from the eBay “Buy It Now” class action settlement. Congratulations to all our viewers who filed a Claim Form and got PAID!