If a disappointing product or service is free, an MMPA claim cannot be
“An ascertainable loss of money or property” is an essential element of a cause of action brought under the Missouri Merchandising Practices Act.
But what if something is free and doesn’t perform as advertised?
In Grawitch v. Charter Communications, Inc., 2013 WL 253534 (E.D. Mo. Jan. 23, 2013), an internet-service provider offered its existing customers a free upgrade: faster internet service (“with download speeds of up to 30 MBPS”) at no additional charge. But to enjoy the faster internet service, customers would need to upgrade their modems (available only from the ISP). According to plaintiffs, those upgraded modems weren’t capable of download speeds of up to 30 MBPS.
Plaintiffs brought a class action under the MMPA, alleging a loss of money to Plaintiffs: “specifically, the difference in the cost and value of the service they paid for, and the useable service they received.”
Is that an “ascertainable loss” under the MMPA? No, held the court.
The court found that the upgraded service was provided for free and not at an increased cost; thus, plaintiffs failed to plead facts demonstrating an “ascertainable loss”.
Looking closely at the decision, there is no indication that the plaintiffs spent money to upgrade their modems. (In fact, there is no indication that the plaintiffs even attempted to upgrade their modems at all.) Nor did they allege that they were somehow induced to renew their service contracts believing that they would get faster internet service. Nor was there any allegation that the upgraded modems were slower.
And in case you’re wondering how fast your internet connection is, click here.
UPDATE: The Eight Circuit affirmed the district court’s decision. 750 F.3d 956 (8th Cir. 2014) (“Charter provided the service upgrade for free. In the absence of factual support for the plaintiffs’ allegation of damages, the plaintiffs’ complaint is insufficient to withstand a motion to dismiss under Rule 12(b)(6).”)