Starbucks Sued For Millions Over Refused Coupon
Posted September 14, 2006 12:00 pm.
This article is more than 5 years old.
Businesses regularly face the threat of lawsuits over the most innocent of perceived offences.
It used to be the expensive lawyers who toiled for large corporations would simply laugh them off.
But things have changed, with many consumers surprisingly winning big awards for what many would rate only minor sleights.
Which brings us to the latest would-be legal battle involving coffee giant Starbucks, a supposedly innocent email and a coffee lover who felt scorned.
The story began brewing last month, when the company sent out an email to its employees offering a coupon for a free iced drink. The letter purportedly encouraged the recipients to forward the coupon to family and friends.
Starbucks didn’t take into account the power of the Internet and the caffeinated-drink vendor received a rude wake-up call. So many people sent that offer to so many others, the coffee giant was overwhelmed by the response. And it began costing them too much money. So they quickly rescinded the offer and refused to accept the coupons.
That was a slap in the face for 23-year-old Kelly Coakley, who tried to cash in her freebie and was refused. Most of us would simply forget about it and move on. But the regular customer claims she felt ‘betrayed’ and did something we likely wouldn’t – contacted a lawyer.
Now what started as a simple good-will freebie promotion has spiraled into a potential $114 million class action lawsuit. New York lawyer Peter Sullivan is accusing the Seattle-based coffee giant of fraud and has filed a complaint on behalf of the company’s millions of customers.
How did he reach the multi-million dollar figure? Sullivan explains it represents an estimate of the average cost of one daily cup of Starbucks coffee for all of the people turned away.
Another frivolous lawsuit? Maybe. And most legal scholars don’t believe he has any chance of winning.
But similar bizarre tactics have improbably worked before. The most famous remains the well known McDonald’s case from 1994, where the fast food outlet was sued by a 79-year-old woman who burned herself after claiming a cup of coffee at one of its restaurants was too hot.
The burger barons were stunned when they lost in court and a jury ordered them to pay $2.7 million in damages, an amount that was later reduced to $640,000 by the judge.
It not only cost the company a fortune defending itself, but prompted the legal community to take a second look at what they used to call ‘nuisance’ suits.
And it’s had one other effect as well.
Every coffee cup at every fast food franchise now comes with a legal warning about consuming it properly.
Unfortunately for Starbucks, there wasn’t one on their coupon, another lesson about the way the world of business works these days. Executives are hoping it’s one omission they won’t have to pay for.
