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Thursday, October 17, 2019

MGM Resorts, Costco seek to have gift card fee suit tossed

By Glenn Minnis | Jun 7, 2017

SEATTLE (Legal Newsline) – MGM Resorts International and Costco Wholesale are seeking to have some claims dismissed in a class action complaint in which the two are accused of slapping consumers with inactivity fees on gift cards purchased for MGM properties.

In seeking to have the causes dismissed, both defendants claim the plaintiff’s suit fails to meet class certification mandates.

David Hanson first filed suit in October in the U.S. District Court for the Western District of Washington, alleging that he suffered monetary injury when the defendants assessed monthly fees to his unused MGM card months before they outlined they would in advertisements, in violation of federal and state law and in breach of their contract with consumers.

The suit also states that consumers were deceived into believing the cards could be used at other places of business, but in fact where only accepted at MGM Resorts International.

More specifically, the suit states that “inactivity fees” of $2.50 per month were billed to patrons at least six months prior to the 18-month grace period they were assured. 

"In reality, however, the fees were assessed six months earlier than promised, enabling Defendants to reap $15 dollars per card - 15 percent of each card’s $100 value - time and time again," Hanson's complaint states.

MGM issued the cards and Costco sold them.

As part of their motion to dismiss, the defendants also argued Hanson never suffered damages because he never sought to use the cards in question and the fees he makes reference to have since been refunded.

Represented by the attorneys Kim D. Stephens and Kevin A. Bay of Tousley Brain Stephens PLLC in Seattle; Rafey S. Balabanian, Eve-Lynn Rapp and Stewart Pollock of Edelson PC in San Francisco; and Alexander Darr of Darr Law Offices in Fishers, Indiana; Hanson is seeking a trial by jury, damages, court costs, interest and all relief the court grants.

The defendants are represented by representatives from Orrick, Herrington and Sutcliffe of Seattle and Washington, D.C.

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U.S. District Court of the Western District of Washington Seattle Division