DETROIT (Legal Newsline) - A federal judge agrees that a class action lawsuit against Panera should be sent to arbitration.
Judge Thomas Ludington on March 22 in Michigan federal court adopted the report and recommendation of Magistrate Judge Patricia Morris, who said Panera's arbitration clause in the subscription for the self-service "Unlimited Sip Club" was enforceable.
Plaintiff lawyer Spencer Sheehan did not file objections to Morris' R&R within 14 days.
"They have therefore forfeited their right to appeal Judge Morris' findings," Ludington wrote.
Plaintiff Ryan Lee was upset there are restrictions on the "Unlimited Sip Club, for which members pay a $10.99 monthly fee for coffee, tea, soda and lemonade. Customers are allegedly being misled into thinking refills are "unlimited."
One promo promises "endless NEW Charged Lemonades, coffees, teas and soda," the suit says.
"However," the suit says, the fine print reveals that the 'Unlimited" offer of "Any size. Any Time" means only 'once every 2 hours. Plus unlimited refills while you're in the cafe.'"
The clause at issue requires arbitration of disputes and was included in terms and conditions that could be accessed by a hyperlink displayed in a contrasting font color to a start button on the company's website.
"Plaintiff was not required to access a website to access the terms of a 'browsewrap' agreement, but rather, was warned in the paragraph directly preceding the 'Start' button that he was bound by the terms and conditions which were available for review via hyperlink that was accessible from the very same paragraph," Morris wrote.
"Even assuming that the subscription agreement could be construed as 'browsewrap' rather than modified clickwrap, the result would not change."
The lawsuit also complains subscribers have a difficult time canceling memberships after signing up for a free first month.
Sheehan attempted to defeat the arbitration agreement by claiming it was unconscionable, but Morris noted the first page of the terms and conditions states: "If you do not agree to this Agreement, do not subscribe."