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Third Circuit Affirms No Cause of Action in $50 Million Class Action Against OLSS Client

Orloff, Lowenbach, Stifelman & Siegel, P.A. partners Jeffrey Garrod and Craig Ollenschleger recently obtained an affirmance by the United States Court of Appeals for the Third Circuit of the dismissal with prejudice of a class action alleging damages in excess of $50 million against Nestlé Waters North America Inc.  The class action included claims for violation of the N. J. Consumer Fraud Act and centered on allegations that the plaintiff paid late fees that exceeded the reasonable amount of costs and projected losses associated with the outstanding balance and were therefore illegal.

Mr. Garrod successfully moved to dismiss the complaint on several grounds, pointing out that among the many defects in the complaint, the plaintiff failed to present any factual basis that the late fees were an unconscionable commercial practice and constituted penalties.

The Third Circuit agreed with the District Court that the plaintiff had no cause of action and affirmed dismissal of the suit.  In its affirmance, the Third Circuit concluded that Nestlé Waters’ late fee disclosures and the plaintiff’s claims lacked the central element of a “capacity to deceive”, requiring affirmance of the dismissal.  Nestlé Waters discloses its late fees in it invoices, and reminds consumers that they will be incurred and what they may be.

Obtaining Third Circuit affirmance of the dismissal was just the most recent positive class action defense outcome obtained by the firm, and Mr. Garrod in particular.  Results in class action lawsuits obtained by Mr. Garrod in recent years include dismissals, denials of class certification, summary judgment effectively disposing of class claims, and favorable settlements (resulting in one instance in payment by plaintiff’s counsel to the firm’s client as a condition of dismissal).

OLSS associate Matthew Aslanian joined Messrs. Garrod and Ollenschleger in obtaining the dismissal before the District Court.

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