CHICAGO (LN) — U.S. District Judge Sara L. Ellis on Wednesday denied in part a motion to dismiss a consumer class action against Route App, ruling that the company’s pre-checked shipping protection fees likely deceive shoppers and survive dismissal under Illinois and California consumer protection laws.
The court granted the motion only as to the plaintiffs’ tortious interference with contract claim, dismissing it without prejudice for failing to allege that Route App intended to induce e-commerce retailers to breach their shipping promises.
Route App, a Utah-based software company, provides shipping services to online retailers through a widget that adds a pre-selected “Shipping Protection by Route” fee to consumer carts at checkout.
The amended complaint alleges that Route App designed the widget to automatically add the fee, which plaintiffs Philip Cantore and Jessica Conley purchased from retailers Ritual Zero Proof and Killstar, without any action.
Plaintiffs allege the widget presents the fee as mandatory, leaving consumers unaware they can remove it by unchecking a small box on the screen.
Route App argued that e-commerce retailers, not the software provider, control the presentation of the service and that the plaintiffs failed to identify any deceptive act.
Judge Ellis rejected that argument, noting that the plaintiffs alleged Route App “designed the key features of the deceptive process at issue in this case and then foisted that design upon merchants.”
The court found that Route App’s widget design and naming may deceive a reasonable consumer because the fee is automatically added at a late checkout stage and presented as mandatory.
Route App also argued that the plaintiffs’ claims fail because they do not identify any act that would deceive a reasonable consumer, specifically pointing to the retailers’ promises of free shipping and the lack of actual package damage.
Judge Ellis found the plaintiffs’ allegations regarding the retailers’ shipping promises unconvincing as a basis for dismissal because those promises came from the retailers, not Route App.
The court also dismissed the plaintiffs’ argument that Route App’s protection does not extend beyond what retailers provide, noting the complaint lacks allegations that anyone damaged, lost, or stole the plaintiffs’ packages.
The judge ruled that the plaintiffs satisfied Rule 9(b)’s heightened pleading standard for fraud by alleging the who, what, when, where, and how of the alleged deceptive conduct.
Route App further argued that the voluntary payment doctrine bars monetary relief because the plaintiffs voluntarily paid the fees.
Judge Ellis rejected the defense, noting that the doctrine does not apply when money is paid under circumstances amounting to compulsion, such as when the payer lacks full knowledge of the facts.
The plaintiffs alleged they were not aware the fee was optional or removable, meaning they did not have full knowledge of the facts surrounding the payment.
The court also declined to dismiss the plaintiffs’ unjust enrichment claim, finding that Route App’s alleged conduct of obscuring fees and coercing payment was sufficient to state a claim.
Route App receives at least half of all fees it imposes on consumers, and the company reports that 98% of e-commerce retailers leave the box auto-checked.