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Can I Sue Subscription Information Services?

The world economy seems to be going in the direction of subscriptions. Whether it's TV, news, movies, music, weather, or computer programs and information, companies are offering their products and services to us in the form of monthly or yearly subscriptions.

In the digital era, the convenience of being able to download everything on your computer is pretty great, but it comes with its own problems. Subscription information services can come with a catch, especially when you don't have physical possession of the product in your hands:

  • Your subscription is subject to an intellectual property license agreement which can be unfairly canceled or revoked at any time.
  • A subscriber could get trapped in a billing cycle that is difficult or impossible to cancel.
  • The subscription service is only usable as long as the company or the information data brokers behind it stay in business and provide accurate information.
  • Subscription information services rely on collecting your personal data and other sensitive information which can get leaked or stolen by hackers.

If a company that offers a subscription to you is responsible for causing problems like this, a consumer protection attorney can help you do some legal research on whether you have a case.

Disclaimers and Limitations on Liability

Before you sue, you should be aware that any agreement that exists between you and the subscription information service will likely have a disclaimer of warranties and a limitation of liability clause.

Such clauses can be harmful to your lawsuit under certain circumstances, so you should check your subscription agreement to see if your recovery is limited. To limit its liability, the subscription information service might state in its terms that it is not responsible for:

  • service interruptions;
  • inaccurate information; or
  • the safety of your data.

For example, a disclaimer might state that the subscription service is providing information to you on an "as is" basis and "without any warranties," which means they are not guaranteeing that service will be provided in an accurate or error-free condition. If you accept these terms, you may have to deal with all the faults and problems that might exist from using the subscription information service.

A subscription service might further limit its liability by stating that data is provided to you only "as available," which means that the company is not at fault if service interruptions result from server downtime, Internet outages, or Acts of God such as unforeseeable natural disasters.

Forum Selection and Mandatory Arbitration

There is one other big factor to consider before you sue. If a subscription service agreement exists, it might have clauses that limit where and when you can sue in court.

A forum selection or venue clause will state that you can only bring your case against the subscription information service in a specific place. For example, if the clause says that a claim can only be brought in the courts of Cook County, Illinois, your case might get thrown out if you try filing it in New York.

Your subscription agreement might also have a mandatory arbitration clause, which will state that instead of suing in court, you have to do mediation or binding arbitration. Mediation is an opportunity to try to resolve your case amicably with the help of a neutral mediator, though their decision will not be legally enforceable against either party. On the other hand, in binding arbitration, the decision of the arbitrator — usually an experienced private lawyer or retired judge — will carry the same weight as the ruling of a court.

Where a subscription agreement conflicts with local, federal, and state laws regarding disclaimers, limitations on liability, forum selection, or arbitration, then it might not matter if your subscription agreement says you can't sue. Also, sometimes the conduct of the subscription service might be so abusive or inappropriate that a court might have an interest in hearing a lawsuit against the company no matter how restrictive the terms and conditions happen to be.

Suing Under Terms of Use or Licensing Agreements

It's possible for subscription information service companies to violate their own license agreement or to provide unfair terms to begin with. In these situations, you can sue for:

  • Violation (breach) of the terms of the licensing contracts or service purchase agreement
  • Violation of the implied covenant of good faith and fair dealing (more on this below)

While state laws can differ, in general, these are the legal elements you must show to prove that a breach of contract has occurred:

  1. a valid contract existed;
  2. you've performed your obligations under the contract;
  3. the other side has breached the contract by failing to perform; and
  4. damages (losses).

For example, if a written and signed agreement exists showing that you subscribed to purchase news information from a subscription service, there may be a breach if the company turns off your subscription because they disagree with your political views.

Even though you performed your obligations by paying the subscription fee, the subscription information service has breached the contract by failing to provide you with the information you paid to receive.

The damages in such a case might be equal to the value of the subscription, plus all the resulting (consequential) harm you might suffer from losing access to the information.

In most states, a breach of contract claim can be accompanied by a separate claim for breach of the implied covenant (promise) of good faith and fair dealing. This is a provision implied by law into the contract that the parties must behave honestly and not unfairly take advantage of one another in the course of performing a contract. In most states, some variation of the following elements will be required:

  1. Plaintiff and defendant entered into a valid contract;
  2. Plaintiff materially (substantially) performed their duties (or was excused from performing) under the contract;
  3. Even though the defendant had an obligation to perform the contract, the defendant did something to prevent the plaintiff from receiving the benefits of the contract; and
  4. Defendant failed to act fairly and in good faith, and their conduct harmed the plaintiff.

As in our example above, a subscription information service that shuts you down because they don't like your political views is arguably doing something to prevent you from getting the information you paid for. This would be a violation of the implied covenant of good faith and fair dealing: Even though they might not like your political views, they don't have a good-faith reason to restrict your access to the subscription content that you're dutifully paying for.

Suing for Improper Billing or Unfair Cancellation Policy

If a subscription information service makes it difficult or impossible for you to opt out, or if they are charging you more than what you agreed to (e.g. hidden fees), you may consider suing for:

  • Violation (breach) of the billing or cancellation agreement
  • Fraudulent billing

If you're suing for the breach of the billing or cancellation agreement, you'll again show:

  1. there was a valid contract;
  2. you performed your end of the deal by making subscription payments and then asking to cancel the subscription within the time frame provided by the contract;
  3. the subscription information service breached the agreement because it overcharged you or refuses to let you cancel; and
  4. you're damaged because your time and money are wasted.

If it appears that the subscription service is overcharging you or refusing to let you cancel with purposeful intent to act maliciously toward you, you may be able to sue them for civil fraud as well. While state laws can vary, a claim for fraud will generally involve:

  1. the subscription information company making a false statement;
  2. with an intent (“scienter") to deceive you; and
  3. your reasonable reliance and resulting injury from the false statement.

Here, if you can show that the subscription information service intentionally lied to you about an easy opt-out, or they lied to you about the non-existence of surprise or overage fees, you may be able to pursue them for fraud and recover the money you're out.

Suing for Failure to Provide Accurate Information

If you're suing a subscription service for giving you bad information, make sure you haven't waived your rights through a disclaimer agreement as discussed earlier in this article. However, even if the services are provided "as is" and without any warranties whatsoever, the subscription service may be liable to you in certain circumstances where their conduct was malicious or where it would have been reasonable for you to rely on the quality of information presented to you.

Arguably, it's reasonable that you would rely on a subscription information service to provide correct information to you — after all, you're paying for it, and they're probably advertising their service in a way that implies it is reliable. If they close up shop, their servers go down, or they just can't seem to provide you with reliable data, you might want to sue the company for:

  • Violation (breach) of the terms of the licensing contract or service purchase agreement
  • Negligence

The breach of contract claim will involve the same legal elements in our earlier example, except that in this case, the subscription information service's breach arises from their failure to provide accurate or reliable data (or reliable access to the same).

The reason for their failure could be anything from a computer glitch to something more serious like a business shutdown — no matter what the excuse, they're in breach for failing to provide you with accurate information which you contracted for.

A negligence claim, on the other hand, doesn't have to involve contract law. You can sue separately for negligence if you can show:

  1. The subscription information service has a duty to you;
  2. They breached that duty when they failed to provide accurate information;
  3. Their breach caused (resulted in) harm to you; and
  4. You have provable damages.

For instance, you may argue that because you are a paying customer of the subscription information service, they have a duty to provide you with accurate information. If bad information — such as incorrect news, names, or other misleading data — was provided to you, you may have suffered harm because you relied on that information to run your own business.

For example, let's say you were using the subscription information service to obtain accurate data about the weather. The company's data tells you that it is 100% certain it will not rain today. In reliance on that information, you start an outside construction project which falls apart as a result of rain and injures you in the process.

Here, the subscription information service provided you with bad information regarding the weather, and you relied on that information only to end up with broken bones. Your negligence suit would ask for damages including the cost of your medical care as well as your pain and suffering.

Suing for Leaking Personal Data and Sensitive Information

Until now, this article has discussed how you can sue if you are a subscriber. In other words, we talked about how you may be able to sue a subscription service if you are unhappy as a customer who purchased subscription information services.

But what if you're not the subscriber, and instead, you're the subject of the information they're selling?

For example, if a subscription information service company leaked your social security number and other personal information to the public or to a third party, you may become a victim of identity theft.

Even if your information or identity is stolen, you still have a right to privacy. If the subscription information company mistakenly leaks your personal data, it could ruin your reputation or violate your privacy.

In these situations, you may be able to pursue the subscription service company for:

  • Invasion of privacy
  • Negligence

An invasion of privacy lawsuit will claim that the subscription service company publicly disclosed private facts about you. There are other types of privacy lawsuits, but the ones relating to the disclosure of private facts are most relevant here. State laws can vary, but generally, when you sue for public disclosure of private facts, you must show:

  • The subscription service leaked private information about you via the internet or some other channel which makes it easy for the public at large to obtain that information.
  • A reasonable person would find the information to be offensive (for example, if it relates to your financial troubles, health status, or criminal history).
  • The leaked information is not of legitimate concern to the public.

In addition to suing under state privacy laws, you may be able to sue the subscription service company for negligence in mishandling your private information.

A negligence lawsuit will claim that the subscription service company:

  1. had a duty to safeguard your information because they deal in a business where they are entrusted with sensitive consumer information; and
  2. they breached that duty by mishandling your private data and making it available to the wrong people (whether by mistake, carelessness, or malicious intent); and
  3. their breach caused your information to be compromised; and
  4. you were damaged as a result of the time and money you had to spend to recoup losses (to your identity, reputation, job prospects, etc.).

Class Actions

You may be able to bring your case as a class action. A class action is a lawsuit in which a group of people collectively bring a case against a defendant.

Depending on whether a class action lawsuit is being filed in state court or federal court, there are different requirements before it can be certified by the judge. A leader or “class representative" — typically someone who has suffered at the hands of a defendant and is intending to sue personally anyway — decides to sue the defendant on behalf of all other similarly injured parties.

Unless you're in federal court, local laws can vary but in general, the leader of the class has to show:

  1. There are numerous plaintiffs who can be identified, and allowing them to join a single class action is a more efficient way of resolving the disputes.
  2. The plaintiffs' claims involve common factual or legal issues.
  3. The leader of the class has claims that are similar to or the same as those common legal issues and will be an appropriate representative of all the potential plaintiffs.

If you're dealing with a large subscription information service that has violated the legal rights of many people, such as by failing to provide accurate information to them or by leaking their private data to the public, you may be able to lead or join a class action against such a company.

In this situation, since there would be numerous plaintiffs who have common legal claims with you relating to information services, a court might find that a class action is the most appropriate way to proceed.

What You Can Recover in Court

If you win your lawsuit against the subscription services company, the court may award you any one or more of the following remedies:

  • Compensatory damages - This includes the money you lost from paying for the subscription services, falling victim to identity theft, and money to repair and monitor the damage to your reputation and credit if personal data was leaked.
  • Liquidated damages - The subscription information service agreement might provide that any breach will automatically make the at-fault party liable for a certain specified sum, which the parties agree is the fair and reasonable value of damages that would result.
  • Punitive damages - These are intended to punish a defendant that acts with malice or fraud and to deter others from engaging in similar egregious misconduct. If the subscription service company intentionally leaked your private data or lied to you about the effectiveness of their information services, chances are that a court might order punitive damages against them.
  • Court costs and attorney's fees - Money you spent on court filing fees and attorney billing may be recoverable in some circumstances, especially if the subscription service company's contract states that a winner of any dispute may collect costs and fees.

A Consumer Protection Attorney Can Help

If a subscription information services company has caused harm to you, a consumer protection attorney can help pursue a case against them.

Whether you're suing under state law or under federal law, it's important that you receive advocacy from a lawyer sooner than later. An attorney can take the initiative to file your case before the legal time limit, known as the statute of limitations, expires and prevents you from taking legal action.

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