American Cleaners (case settled)
“All offers should be clear, honest and complete so that the consumer may know the exact nature of what is being offered, the price [and] the terms of payment (including all extra charges) ….”
--Direct Marketing Association’s Guidelines for Ethical Business Practice
American Cleaners operated a chain of 26 dry cleaners in the St. Louis area and added an amount, which it called an “Environmental Surcharge,” to the bill for every item it dry cleaned. American Cleaners regularly distributed coupons throughout the region in newspapers, direct mail and otherwise, but the prices shown on the coupons were not available to consumers because of this surcharge.
The Law Office of Richard S. Cornfeld, along with co-counsel, Anthony and A.J. Bruning, brought a lawsuit in the Circuit Court of St. Louis County on behalf of a proposed class of Missouri consumers challenging this practice and seeking refunds from American Cleaners. The lawsuit alleged that American Cleaners did not provide any service in exchange for this surcharge.
The term “Environmental Surcharge” implied that it was an amount mandated by the government or some other authority for the protection of the environment, but this surcharge was no such thing. Nor, based on the information that we saw, did American Cleaners use the money it received from the surcharge for any specific environmental activities. It allegedly used the money simply to increase its profits.
The lawsuit concluded that this surcharge was deceptive and unethical and that, among other things, it violated the ethical principles laid down by the Direct Marketing Association for companies that, like American Cleaners, market directly to consumers. Click on this link to see those ethical principles: Direct Marketing Association's Guidelines for Ethical Business Practice. Click on this link to see the Amended Petition in Green v. American Cleaners and Laundry Co., Inc. et al.
The Court approved a settlement that allowed each class member to receive eight $1.00 vouchers good for dry cleaning services at any Missouri American Cleaners store, more if the class member had documentation of paying more than $8.00 in surcharges during the class period. Plaintiff estimated that the total value of the settlement to the class was $1.7 million. It also ended the "Environmental Surcharge." In addition, our client received a substantial incentive award.