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3/10/2011
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Groupon Sued Over Expiration Dates

LivingSocial and other group discounting sites may also face legal challenges, a law firm warns.

Two days after Groupon was notified it was being sued in two separate courts, the law firm that filed a class action suit against the group-buying site is said to be considering similar moves against the popular business' competitors.

Cuneo Gilbert & LaDuca, a law firm in Washington, D.C., on Tuesday filed a class action suit against Groupon for Carlos Vazquez of Washington, D.C., claiming that Groupon and its partner violate both local and federal laws because of their expiration dates. In the suit, partner Charles LaDuca said Groupon's offerings are gift certificates and, therefore, should have five-year expiration dates. Vazquez said he spent $20 on YMCA services valued at $305, but did not use the membership within the two-month deadline and lost his investment. The suit also cited anonymous online comments from other Groupon users expressing frustration with the expiration dates.

Now LivingSocial, another group discount site that is backed in part by Amazon, and others could be next, LaDuca told the Washington Business Journal.

"We are investigating cases against LivingSocial and some of Groupon's other competitors," said LaDuca. "I believe the practice is almost identical to what Groupon is doing."

On the same day LaDuca filed the class action suit in Washington, D.C., a Minnesota man filed a suit at the U.S. District Court in Minneapolis that also claimed that federal and state laws prohibit companies from selling or issuing gift certificates with expiration dates. Plaintiff Brian Zard of Richfield is seeking class-action status, according to Bloomberg, as well as unspecified damages, and an order preventing Groupon from issuing discounts with expiration dates.

Groupon does not comment on litigation, a spokeswoman told Bloomberg.

Founded in 2008, Groupon was sued in mid-January and earlier this month. In both cases, the plaintiffs sued Groupon because of the discounts' expiration dates. However, Groupon -- which settled out of court in both cases -- addresses the issue of expiration dates in the FAQ section of its Web site.

In response to the question: "What happens if my Groupon expires?" the company says: "All is not lost! Once a Groupon reaches its expiration date, it loses its promotional value, but you can still redeem it at the price you paid for the length of time stated by gift certificate laws in your state. If anything happens that makes it impossible for you to redeem your Groupon, we'll make sure you get your money back."

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