Chavez v. Netflix, Inc., Case No. CGC-484334 (Cal. Super. Ct.)

This class action charged that Netflix falsely advertised “unlimited” DVDs and “one-day delivery” in violation of California’s consumer protection laws. The case settled on a classwide basis, and the court preliminarily approved the terms of the settlement. As relief to the class, the settlement provided that class members would receive a “free” month of service or upgrade in service from Netflix. However, at the end of the month, the service would automatically renew, and class members would then be billed each month, unless they took affirmative steps to cancel or downgrade the service. On behalf a class member, KSG filed objections and a motion to intervene, arguing that the auto-renewal provisions were unlawful negative option billing practices. The settlement has since been amended to eliminate all of the auto-renewal provisions, and the Court has scheduled a hearing to determine whether to grant final approval to the amended settlement.

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Originally Posted: 03/09/2006