1422-CC09685 v. Deluxe Corp. Complaint.pdf1422-cc09685 jn the circibt court of the city of st.loills sta te of .missouri jennifer graves plaintiff, v. deluxe corporation, doing business

1422-CC09685

JN THE CIRCIBT COURT OF THE CITY OF ST. LOillS STA TE OF .MISSOURI

JENNIFER GRAVES

Plaintiff,

v.

DELUXE CORPORATION, DOING BUSINESS AS DELUXE CHECK PRINTERS, IN CORPORA TED

Serve: CT Corporation System 120 South Central Avenue Clayton, MO 63105 (314) 863-5545

Defendant

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Cause No.

Divisjon No.

PLAINTIFF'S CLASS ACTION PETITION

Plaintiff Jennifer Graves brings this action on behalf of herself and all others similarly

situated ("Class"), against Deluxe Corporation, d/b/a Deluxy Check Printers, Incorporated

("Defendant"), and, upon information and belief, alleges as follows:

PARTIES

1. Plaintiff is a Mjssouri citizen residing in Arnold, Mjssouri.

2. Defendant is a co:rporation incorporated in the State of Minnesota with its

principal place of business at 3680 Victoria St. N., Shoreview, MN 55126. Defendant is

registered with the Missouri Secretary of State's office under the name, ''Deluxe Check Printers,

Incorporated."

VENUE AND JURISDICTION

3. This Court bas subject matter jurisdiction over this action because a transaction

complained of took place in City of St Louis. V.A.M.S. § 407.025.1.

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Case: 4:14-cv-01823 Doc. #: 3 Filed: 10/28/14 Page: 1 of 13 PageID #: 818

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4. This Court bas personal jurisdiction over the Defendant because Defendant does

business in City of St. Louis.

5. Venue is proper in this court because the cause of action arose in City of St

Louis. V.A.M.S. § 407.025.l.

GENERAL ALLEGATIONS

6. This action is brought by Plaintiff on behalf of herself and a proposed class of

Missouri residents who were charged excessive, deceptive, unfair and unethical fees for delivery

of new and replacement personal checks by Defendant during the five year period before the

filing of this Petition (the "Class Period").

7. Under the brand name Deluxe, Defendant sold checks to account holders at

various banks in Missouri, including U.S. Bank, Commerce Bank, Heartland Banlc, First Bank,

Fifth Third Bank and others.

8. Customers could order checks from a bank branch and have the checks delivered

to their homes. A bill from Defendant for the checks and delivery would accompany the

delivered checks.

9. Defendant also operated a web site with the address www.deluxe.com for the

purpose of allowing consumers to order new or replacement persona] checks.

10. Consumers could access this web site either directly or by being directed to it by

their bank's web site.

11. For instance if an account holder at Commerce Bank attempts to order check from

www.cornrnercebank.com, a pop-up appears stating:

"You are now leaving the Commerce Banlc website. By clicking the 'I agree' button below, you acknowledge and agree to the following: You will leave the Commerce Bank website and enter a site sponsored by Deluxe Coi:p., a non-

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affiliated service provider. Please not that Deluxe Corp. may have it' .s own privacy and security policies which differ from those of Commerce Bank_,,

When consumers ordered checks from Defendant, they were first quoted a price

for the checks, and then required to choose among the three Delivery Methods, with the prices

listed below in effect as of the filing of this Petition:

A. '1Ba.sic: Standard Delivery'': $7.00.

B. "Better: Four-Day Express Delivery": $30.45.

c. "Best: Checks Next Day": $46.10

13. Defendant told consumers to allow 11-14 days, plus printing time for Basic:

Standard Delivery, 4 business days for printing and delivery in the case of Better: Four-Day

Express Delivery, and 2 full business days for printing and delivery in the case of Best: Checks

Next Day.

14. The prices of these delivery methods bear no reasonable relationship to and, in

fact, greatly exceed Defendant's costs incurred for delivery and contained improper and

unethical profit for Defendant.

15. At various times during the Class Period, Defendant charged different prices for

these Delivery Methods, but they always greatly exceeded Defendant' s costs incurred for

delivery and contained improper and unethical profit for Defendant.

16. As a ba.sis of the above allegation, Defendant maintains web sites under other

brand names besides Deluxe; such as Checks Unlimited, Check Gallery, and others whlch share

manufacturing facilities with Deluxe and provide the same delivery services as Deluxe but

charge much less for delivery than Deluxe does. See Exhibit A- Deluxe Corporation 2011 SEC

Form 10-K at 7, 8.

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17. Wben consumers ordered checks from Defendant through.the Checks Unlimited

website, they were first quoted a price for tbe checks, and then required to choose among the

following five Delivery Methods, with the prices listed below in effect as of the filing of this

Petition, along with a "handling fee of $3.45 per box:

A. "Standard": $0.00-

B. "UPS Trackable": $8.95

c. "UPS Ground": $10:95

D. "UPS 2-Day": $11.95

E. "UPS 1-Day": $19.95

18. Defendant told consumers to allow up to I 0 business days to deliver for St.andard,

4 to 6 business days to deliver for UPS Trackable, 2 to 5 business days to deliver for UPS

Ground, 2 business days to deliver for UPS 2-Day, and l business day to deliver for UPS 1-Day.

19. Thus, for standard delivery, Defendant charges only $3.45 per box (denominated

as "handling,,) for standard U.S. Postal Service Delivery on its Checks Unlimited web site but

$7 .00 for the same delivery on its Deluxe web site. Similar discrepancies apply to the faster

delivery methods.

20. There is no reasonable explanation for charging much more for delivery services

when the checks bear the brand name Deluxe rather than its other brands.

21. The delivery charge additionally violates established ethical principles laid down

by the Direct Marketing Association ('<DMA"), the leading industry association for companies

that, like Defendant, market directly to consumers. DMA has established principles of ethical

business practices for such marketing activities, whether engaged in by DMA members or other

businesses that market to consumers. Direct Marketing Association's Guidelines for Ethical

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Business Practices, revised May 2011. ("DMA Ethical Guidelines") See Exhibit B - DMA

Ethical Guideline, revised May 2011, Exhibit C - DMA Ethical Guideline, revised January 2014

22. These Ethical Guidelines "are intended to provide individuals and organizations

involved in direct marketing in all media with generally accepted principles of conduct." Id. at

2. They are based on DMA's "long-standing policy of high levels of ethics aod the

responsibility of the Association, its members, and all marketers to maintain conswner and

community relationships th~t are based on fair and ethical principles." Id. (emphasis added). . .. . .

23. In addition, the Ethical Guidelines "are intended to be honored in light of their

aims and principles. All marketers should support the guidelines in spirit and not treat their

provisions as obstacles to be circumvented by legal ingenuity.'' Id.

24. Defendant's method of delivery charges violates Article #11 of the DMA Ethical

Guidelines. That principle states: "Postage, shipping or handling charges, if any, should bear a

reasonable relationship to actual costs incurred." Id. at 12.

25. DMA has published a companion volume to its Ethical Guidelines called Do the

Right Thing: A Companion to DMA 's Guidelines for Ethical Business Practice (Revised January

2009) ("Do the Right Thini'). That volume is intended to "giveO direct marketers advice on

how to assure their business practices comply with" tbe Ethical Guidelines. See Exhibit D - Do

the Right Thing at 2.

26. With respect to Article #11, Do the Right Thing states: "When figuring shipping

and handling fees, it is important to reflect the costs as accurately as possible so that your

customers or prospects are not likely to view these fees as a company 'profit center."' Id. at 12-

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27. DMA further elaborates on this ethical principle on its web site, Guidance for

Establishing and Substantiating Shipping and Handling Charges,

http://www.d.maresponsibility.org/SH/, where it st.ates:

Some marketers take tbe position that so long as there is clear disclosure on how much the consumer pays in total for the shipped product, the amount the marketer charges for shipping and handling should not matter. There appears to be a trend by law enforcement agencies, however, to insist that a consumer who is charged shipping and handling costs should be paying a fee reasonably based on the marketer's cost The latter position is consistent with existing DMA guidelines.

* * * * * Your goal shouid be not to charge consumers as a whole more than you pay in tot.al.

28. Defendant's Delivery charges for Deluxe checks violate the above ethical

principles because they are not reasonably related to Defendants' costs and include profit

29. For these reasons, Defendant's delivery charges are deceptive, unethical and

unfair.

NAMED PLAINTIFF ALLEGATIONS

30. Plaintiff purchased checks from Deluxe for personal, family or household

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purposes and was illegally overcharged a fee for delivery.

31. Plaintiff has an account with Commerce Bank identified as account number

166535635.

32. On September 11, 2012, Plaintiff entered a Commerce Bank and ordered two

boxes of checks to be delivered to her home in the City of St. Louis.

33. Eleven to fourteen days later, she received th~ checks along with a bill from

Deluxe for $40.00. See Exhibit E.

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34. A portion of the $40-.00 total was for delivery which greatly exceed Deluxe's

costs incurred for delivery and constitute improper and unethical profit for Deluxe.1

. 35. On July 1, 2014, Plaintiff again responded to Commerce Bank to order checks .

36. She ordered l box of checks for a Base Price of $16.50 and was charged $7.00 for

St.andard Delivery. See Exhibit F.

37. The price of delivery had no ·reasonable relationship to and, in fact, greatly

exceeded Defendant's costs incurred for delivery and constitute improper and unethical profit for

Defendant. Had Plaintiff ordered checks from Deluxe's Check Unlimited website, she would

have only paid $3.45 for handling.

CLASS ACTION ALLEGATIONS

38. Plaintiff seeks to represent the following Class:

All Missouri citizens who purchased Deluxe checks from Defendant for personal, family or household purposes within the Class Period and were charged a fee for delivery.

39. Excluded from the proposed Class are Defendant, its Officers, Directors, and

employees, as well as employees of any subsidiary, affiliate, successors, or assignees of

Defendant Also excluded is any trial j udge who may preside over this case.

40. The Class is believed to comprise many consumers, the joinder of whom is

impracticable, both because they are geographically dispersed across the state and because of

their number.

1 Plaintiff bas attempted to retrieve the itemized bill from both Commerce Bank and from Deluxe but neither Commerce Bank nor Deluxe have agreed to provide her with one.

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41. Class treatment will provide substantial benefits to the parties and the Court. A

well-defined commonality of interest in the questions of law and fact involved affect Plaintiff

and the putative Class Members. Common questions of law and fact include:

A. Whether Defendant charged consumers an amount for delivery of personal

checks;

B. Whether the amount Defendant charged consumers for delivery of

personal checks exceeded Defendant's actual costs for shipping the checks to

consumers;

c. Whether Defendant charged consumers for delivery of personal checks

more than it paid for such delivery;

D. Whether and, if so, how Defendant determined its costs for delivering

persona.I checks to Missouri consumers;

E. Whether Defendant's actions in charging more for delivery than its

delivery costs was unethical;

F. Whether Defendant's actions in charging more for delivery than its

delivery costs violated the Missouri Merchandising Practices Act, § 407.010, et seq.;

G. Whether Defendants should be required to pay attorney's fees.

42. Questions of law and fact common to members of the Class, some of which are

set forth above, predominate over any questions affecting only individual members of the Class.

The resolution of common questions will resolve the claims of both Plaintiff and the Class.

43. Plaintiffs claims are typical of the claims of the proposed Class in that Plaintiff

ordered personal checks from Defendant's web site and was charged more for delivery of the

checks than Defendant's costs of delivery.

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44. Plaintiff will fairly and adequately represent and protect the interests of the

proposed Class. Plaintiff has no interests antagonistic to those of the Class. Plaintiff has

retained competent and experienced counsel in the prosecution of this type of litigation.

45. A class action is superior to other available methods for the fair and efficient

adjudication of this controversy because members of the Class are numerous and individual

joinder is impracticable. The expenses and burden of individual litigation would make it

impracticable or irnpossjble for proposed Class Members to prosecute their claims individually.

Trial of Plaintiff's claims is manageable.

46. This action is maintainable as a class action pursuant to Missouri Civil Procedure

Rule 52.08 and Rev. Stat. Mo.§ 407.025.

JURY DEMAND

4 7. Plaintiff demands trial by jury on all issues so triable.

COUNT I-VIOLATIONS OFMO. REV. STAT. § 407.010, et seq.

48. Plaintiff hereby incorporates by reference all preceding paragraphs of this Petition

as if fully set forth herein.

49. Defendant has sold and delivered personal checks, as described herein, to Plaintiff

and the Class.

50. Defendant is a person within the meaning of the Missouri Merchandising

Practices Act, Mo. Rev. Stat.§ 407.010(4).

51 . Plaintiff and the Class purchased personal checks from Defendant for personal,

family and/or household use.

52. Defendant charged Plaintiff and the Class more for delivery of the checks than its

costs for delivery of same.

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53. Defendant's actions in charging more for delivery of personal checks than its

costs violated the MMJ> A because they constituted deception, fraud, misrepresentation and/or

omission of material fact in connection with the sale of personal checks.

54. Defendant's actions alleged herein violated the MlvfPA because they constituted

unfair practices as that term is defined in Mo. Code Regs. tit. 15, § 60-8.020, which provides as

follows.

I. The act, use or employment by any.person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or conunerce or the solicitation of any funds for any charitable purpose, as defined in section 407.453, in or from the state of Missouri, is declared to be an unlawful practice.

55. The Attorney General has promulgated regulations defining the meaning of unfair

practice as used in the above statute. Specifically, CSR. tit. 15, § 60-8.020, provides:

(1) An unfair practice is any practice whic?-

(A) Either-

1. Offends any public policy as it has been established by the Constitution, statutes or conunon law of this state, or by the Federal Trade Commission, or its interpretive decisions; or

2. Is unethical, oppressive or unscrupulous; and

(B) Presents a risk of, or causes, substantial injury to consumers.

(2) Proof of deception, fraud, or misrepresentation is not required to prove unfair practices as used in section 407 .020.1., RSMo. (See Federal Trade Commission v. Sperry and Hutchinson Co., 405 U.S. 233, 92 S.Ct. 898, 31L.Ed.2d170 (1972); Marshall v. Miller, 302 N.C. 539, 276 S.E.2d 397 (N.C. 1981); see also, Restatement:, Second, Contracts, sections 364 and 365).

56. Pursuant to Mo. Rev. Stat. §407.020 and Mo. Code Regs. Ann. tit. 15, § 60-8.020,

Defendant's actions in charging more for delivery than its costs of delivery were unfair because

those actions were unethical.

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57. Plaintiff and the Class have suffered ascertainable loss due to the unfair and

deceptive practices described herein. Specifically, this loss is the amount that Plaintiff and the

Class paid for delivery of Deluxe checks in excess of the amount that it cost Defendant to deliver

those checks; this amount is measured by the difference between the excess charge that

Defendant imposed for delivery of Deluxe checks and the amount that Defendants' charged for

such delivery at its other websites. As illustration, a Class Member who was charged $7 .00 for

standard delivery of a box of Deluxe checks sustained a loss of $7.00 less $3.45, the amount that

Defendant charged for such delivery at its Checks Unlimited web site.

WHEREFORE, Plaintiff and the Class pray for the relief requested in the Prayer for

Relief set forth below in this petition.

MONEY HAD AND RECEIVED

,58. Plaintiff incorporates by reference all preceding paragraphs of this Petition as if

fully set forth herein.

59. Defendant has received money from Plaintiff and the Class by charging an

amount for delivery of personal checks which in equity and good conscience ought to be

returned to Plaintiff and the Class.

60. WHEREFORE, Plaintiff and the Class pray for the relief requested in the Request

for Relief set forth below in this Class Action Petition.

COUNT ID: UNJUST ENRICHMENT

61. Plaintiff incorporates by reference and re-alleges all preceding paragraphs of the

Petition as though fully set forth herein.

62. Defendant was enriched by the receipt of the delivery charge from Plaintiff and

the Class because of the deceptive and unfair activities of Defendants, as alleged herein.

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63. As a result, Defendant was enriched at the expense of Plaintiff and the Class.

64. Allowing Defendant to retain the monies it received for the delivery of personal

checks would be unjust.

65. WHEREFORE, Plaintiff and the Class pray for the relief requested in the Request

for Relief set forth below in this Class Action Petition.

PRAYER FOR RELIEF

66. WHEREFORE, Plaintiff and each member of tbe proposed Class pray for a

judgment:

A. Certifying the Class as defined herein;

B. Entering an order appointing The Law Office ofIUchard S. Comfeld and

Leritz, Plunkert & Bruning, P.C. as counsel for the Class;

C. Awarding Plaintiff and the Class compensatory damages, including a full

refund of the amount of delivery charge they paid in excess of Defendant's actual costs of

delivery;

D. Awarding restitution to Plaintiff and the Class;

E. Providing such further relief as the Court may deem fair and reasonable.

Respectfully submitted,

LAW OFFICE OF RICHARD S. CORNFELD

By: /s/ IUchard S. Cornfeld Richard S. Cornfeld, #31046 1010 Market Street, Suite 1720 St. Louis, MO 63101 (314) 241-5799 (314) 241-5788 (Fax) [email protected]

and

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/s/ Anthony S. Bruning, Jr. Anthony S. Bruning, Jr., #60200 LERJTZ, PLUNKERT & BRUNJNG, P.C. 555 Washington Avenue, Suite 600 St Louis, MO 63101 (314) 231-9600 (314) 231-9480 Fax) [email protected]

Attorneys for Plaintiff

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1422-CC09685 v. Deluxe Corp. Complaint.pdf1422-cc09685 jn the circibt court of the city of st.loills sta te of .missouri jennifer graves plaintiff, v. deluxe corporation, doing business