Starbucks sued for $114 million over canceled free-drink coupon

Attorney Peter Sullivan sued on behalf of Kelly Coakley, a 23-year-old Starbucks regular who felt "betrayed" when her coupon wasn't honored. The lawyer accuses the company of fraud and says he'll request class-action status to include the "thousands who were misled" by the free-drink offer, which Starbucks intended to go to a limited number of employees and their friends. (Associated Press)

Comments

[AnnoyedBarista]

Crap like this is unnecessary.. There *WAS* a barista need-to-know going around telling people to ACCEPT the coupon and INFORM the customer that it wouldn't be accepted anymore. This rumor that they weren't to be accepted was only for people who "read the sign."

"For any customers who have not had the opportunity to see the register sign, please "Just Say Yes" and honor the coupon anyway, taking the time to inform them that it cannot be accepted anymore."

Then again, the case won't go anywhere. If I forge a coupon for free legal service and the lawyer refuses to honour it, then it's pretty much the same boat. They're presenting a coupon that NEVER EXISTED in the first place to be honoured.

Still. Dumb mistake.

[ex coffee wench]

oh please.... what trauma can not honoring her coupon cause? not 114$ million

[Bess]

I'm more offended that Starbucks would secretly honor the coupon for those people who didn't read, or chose to ignore the sign, than that they canceled a coupon.

Never the less, the law suit is just plain stupid, Mr. Sullivan obviously needs to get a life.

[coffeeguy]

This lawsuit is so bogus. Internet coupons are usually almost never accepted anywhere nowadays.

[matthew]

What an imbecile.

[corianderstem]

If this girl feels betrayed by this, I'd hate to see her reaction if her significant other cheats on her. How much do you think she'd sue for then? A trillion bajillion eleventy-million dollars!!!

[nycbearista]

>>The $114 million the lawsuit asks for approximates the average cost of one cup of Starbucks coffee a day for all of the people turned away for the 38 days the offer was valid, Sullivan explained. "That's a very conservative figure," he said.

He did not explain how they determined how many people had tried to redeem the coupon.

HEH HEH - like to see how he plans on finding all of those people and giving each and every one of them their money back - or is he just going to give it all to the poor regular who feels so betrayed?

[Andrew]

Afte some quick caculations I figured that this attourny thinks that between 5%-10% of Starbucks customers felt betrayed becuase of this offer. That is assuming that every customer of Starbucks recieved it and knew about it.

Didn't Starbucks already just give every customer either $5 or $15 (more than the cost of one drink) as a reload on their Starbucks card? I think this issue is already moot. (Starbucks' average ticket is around $4.04 according to Forbes.com)

If I were the judge for this case I would take away this attorney's license to practice law. And hammer the kid with the legal costs incured by Starbucks.

[Scorpio370]

Oh brother...what next..."You made my drink wrong, I'll sue for 114 million dollars!"

The lady and the lawyer need to get an f'ing life. Why is it she's the one getting the money? Why not get all the people who were turned away in on the suit, then she'd get what...*thinks* about a dollar? LOL what a moron.

[SBUXGUY97]

This is an attempt to get rich quick that is so obvious it's completely disgusting. It's not even an expired legitimate coupon. it's a fraudulently produced coupon! If they win it will be a sad day in the justice system.

[James the Barista]

Do you guys understand who this fool is trying to sue? Starbucks, the company with a bigger legal team then Microsoft. So, this fool who is trying to sue can have a fun time with that...we treat our customers like mini-gods anyways...

[Deusx]

They were gambling on an out of court settlement, betcha.

[MIke Williams]

This lawsuit is symptomatice of our culture of not taking responsibility for anything. I think Starbucks should tie this lady to a dunking stool and dunk her in boiling hot coffee till her skin falls off.

How's that for betrayal?

---loyal customer

[formerly "anon"]

Mike,
Don't get me wrong, this is definitely a frivolous lawsuit, but to suggest this customer be punished severely is ridiculous. But considering what kind of company Starbucks is, not what they CLAIM to be, I wouldn't be surprised if they actually "tie this lady to a dunking stool and dunk her in boiling hot coffee till her skin falls off."

[Lou Sussler]

"they felt let down and angry."

Last time I checked, this wasn't actionable. He's suing for fraud which is very difficult to prove. He has to prove that SB INTENTIONALLY caused the coupons to be distributed with the PRIOR KNOWLEDGE that they wouldn't be honored.

First, that is almost impossible to prove and second, from what we've read, it's not true.

Just a sleazy lawyer looking for a quick payday.

[fuller]

As a law student, I can tell you that it's a pretty common technique to put an absurdly high figure in the pleading in hopes of generating press coverage to put pressure on the defendant to settle ('Starbucks doesn't honor coupons, angry customers sue company for ONE HUNDRED AND FOURTEEN MILLION DOLLARS!'). No competent lawyer would ever think that you could get anything near that figure from such a claim.

Sleaze of this particular lawyer aside, there will probably be nothing quick about this payday.

Fraud seems like a stretch ... I'd guess he might also be suing for breach of contract.

I don't understand. Why is the coupon considered fraudulent?

[M.J. Feelgud]

This is what is wrong with America now. What is being betrayed worth? Nothing, because no amount of money can make you feel unbetrayed.

And Kelly Coakley is really stupid. Doesn't she know that if ever she wins her lawsuit, she'll get $4 in Starbucks coupons and the lawyer will get $50 million? If they for some stupid reason they ever won, then the lawyer should get $50 million in Starbucks coupons.

[Boston Starbucks Rebel]

That is true. They should just give them Starbucks card for that amount so we will ultimately get our money back. Genius!

[Jimmy Chang from NYC]

"I'm offeneded, I'm put out, this is just so not right, this is fraud!"

What this person needs is a quick slap across the face. A moron looking for attention.

What a waste of time this fool is. Get a life and suck it up dumb***!

[cornfrost]

This guy is a slip-and-fall lawyer. He was the lawyer for a nightclub called Twilo where people died of drug overdoses.

http://query.nytimes.com/gst/fullpage.html?res=9901E6DE1330F933A15757C0A9679C8B63&sec=health&pagewanted=print

[Theolaxor]

i think all she should get is a service recovery coupon to replace her other free drink coupon--thats it

[headache]

At least she stands for something! You are all missing the big picture...it starts here, whats next revoking your tax return. Thats right Kelly Coakley DAMN THE MAN!!!!!!

[nycbearista]

RE: Damn the Man.

well i look at it this way. In order to get the benefits I and my family need, as a middle aged ex-performer who never went to college and thus has few marketable skills, I need to work for the 'man'. Now as 'Men' go, Starbucks is definitely one of the better ones.

[recoveringattorney]

There may, in fact, be a colorable claim here. SB *did* distribute coupons that had an eligible date range for redemption. They made a gross error in distribution (an apparent failure to understand *how* email functionally works) which resulted in a much broader distribution than they originally intended. They then made the unilateral decision to refuse their own coupons prior to the end of the "useful life" of the coupon(s). There would appear, at first blush, to be a false advertising clair...fraud is a bit of a stretch. The class status and dollar value sought is clearly tactical...but again, colorable. Personally, I think SB should be punished...simply for thier stunning display of incompetence as to the distribution of the coupons in the first place...but that's just me.

[HopkinsBella]

WTF? Simply, inexpressibly stupid.

[DT]

recoveringattorney

what about the fact that the coupons were modified from the original before being redistributed?

[blonde barista]

i think that people are forgetting that not only did they get passed WAY further than the original scope of the promotion, but also that they were ALTERED. therefore, they were NOT STARBUCKS ISSUED COUPONS. if your local coffee spot sees a coupon that has been obviously altered, they aren't going to accept it either.

yeah yeah, "just say yes" and all that. well if you're getting 200+ fake coupons a day, you can't really "just say yes."

[auntie b]

I think Kelly Coakleys mother should be punished for raising such a fool!

[Colin]

She should've just gone over to Caribou Coffee on Friday. My mom is a manager for one a had a lot of Starbucks customers thanking her for their free drink. Funny how a twenty some billion dollar company thinks making customers angry is worth what the free drinks would have cost them. The lawsuit seems lame. I just think that with national news taking notice, it wasn't the smartest decsion on Starbucks part to not accept the coupon.

[BaristaBabyKai]

this woman and her lawyer's stupidity is causing me emtional trauma by suing my company.
i want $113 million as compensation to my emotional damages.
hahah, well, if she wins, i should win too, shouldn't i?

[Deusx]

Im glad you and your mom feel that way Colin, then I can expect that I and 20 of my friends will be welcome every day at her store with the nifty new Caribou coupons I've photo shopped?

[someone]

Does anyone else feel like we didnt get the whole story about the coupon????? Seriously...all that JUST SAY YESS busines and they cancel it and blame the partners for sending it beyond the original scope?????SBUX never came right out and said it had been altered...they just blamed us for sending it beyond it's original intended distribution.....
I know some busy stores got swamped, but mine is small and we only got a few, so what gives?

I wonder if we're missing some piece here...

[recoveringattorney]

DT -- Altered coupons are really a different issue. SB is wholly within their rights to refuse to honor an altered coupon (e.g. I could alter an coupon to say that SB would give me a cup of coffee and a cookie every day for year...but I could not reasonably expect it to be honored). One would reasonably assume that SB distributed to the shops a copy of what the coupons look like and any that do not match the "official" coupon are simply not valid.

That said, if you have *valid* coupons that have a "valid through..." date stated on them and the company suddenly decides to refuse their own coupons...there is a problem. There is no doubt that SB made a pretty stunning error in the distribution meathod it chose for the coupons...but that is really *their* problem...not the holders of otherwise valid coupons. Refusing to accept a valid coupon unilaterally legitimately exposes SB to claims of false advertising and possibly fraud. [N.B. Again, this does not extend to altered coupons]

One would think that someone did a cost benefit analysis of honoring the coupons for X days vs the litigation/defense costs of the almost guaranteed litigation (not to mention bad PR). Personally, I think SB followed one extremely dumb move (the emailed coupon) with a second extremely dumb move (refusing their own coupons).

[javagrrl]

As someone who's worked for the company for a long time, I was EMBARRASSED at this stupid coupon. It horrified me the first day I saw it, knowing that it was going to turn into a mess like this. What horrified me even more were the lines of customers who very proudly admitted to having, as one customer put it, "stacks of these in my office that we printed out and photocopied!" Great! Fantastic! We just opened the freaking Pandorá's box of Starbucks. Internet coupons... are we nuts?!

I as a partner for this company would love an apology from the Regional Director who approved their Regional Coordinator to send this coupon out. You've made thousands of your partners in this company look like idiots every day in front of our customers, and now we have to deal with the media of enormous lawsuits (however frivous and stupid) popping up as a result. Where's the respect and dignity for the people who have to put up with the "coupon fall-out" on a daily basis?

[Damaris]

I don't get the big deal about the coupon. Who would pitch a fit over a plain, little cup of coffee when most people who go to Starbucks order something better and more expensive anyway? How many people go to Starbucks and order just plain coffee, or even plain iced coffee? Everyone wants the Frosted Raspberry Double Chocolate Flan Chai Frappuchino or something like that, LOL. At least that's what I do.

[sbuxnewbie]

Damaris - the problem, as I understand it, is that the coupon was altered from offering a free iced coffee ( I don't recall if it was tall of grande) to offering a free grande beverage. THAT is what was being distributed on-line. I don't recall if the expiration date was altered or not, but that wouldn't surprise me, either.

[Tim]

If anyone should be sued, it's the asshat who sent the coupon to his friends and shouldn't have. The instructions were clear and *Starbucks* was taken advantage of.

I can't believe we're getting sued over this even though we were still told to accept the coupon and still politely inform people about why we weren't supposed to.

[Rob]

Suing one's ex for eleventy-million is a little high. Besides, my case against Starbucks, for $23 million, where they served me a too cold frap which caused my lips to freeze together, is still out. I'm upping it to $114 million and one dollar, bob.

[Daniel]

Meanwhile, the news keeps talking about "altered" but I have yet to see any proof that any coupon was actually "altered" or changed in any way -- its totally just rumor spreading bullshit by Starbucks which thinks it can do whatever it pleases beacuse its on every corner.... luckily, I dont even like Starbucks cofee but maybe they and haliburton should merge and just get it over with

[corianderstem]

Recoveringattorney - I can see the argument that Starbucks should have to pay somehow for a bonehead move, but suing for $114 million because she felt betrayed?

She should be ashamed, really.

[sb]

oh heavens what a lot of bunk. just say no if you don't like the SB experience or company. The girl and the others have a choice. go away.

[Dave the info guy]

Starbucks Coupon

Claim: Starbucks issued coupons via e-mail good for free iced grande beverages.

Status: Was true; cancelled by Starbucks; picked up by Caribou.

Example: [Collected via e-mail, 2006]

Hi Everyone,
Starting today until September 30th, please join us in "surprising and delighting" our family and friends, while introducing you to our iced beverages. Attached is an invitation for a complimentary iced Grande beverage. Please forward this invitation to everyone in your email address book.

Thanks so much!

Kimberly Beasley
*Starbucks Coffee Company*
*Southeast Regional Coordinator*
*(404) 636-5200 ext 2200*

COUPON WAS HERE

Origins: Recipients are well-advised to treat retail coupons circulated via e-mail with suspicion, because the coupons often turn out to be phonies created by pranksters or real coupons
that someone has reproduced and circulated without authorization (and which are therefore not accepted by the retailer).

The Starbucks coupon for a free iced grande beverage (valid until 30 September 2006) reproduced above was legitimate, if only in a limited sense, and if only briefly. We called the Starbucks Regional Coordinator whose name was listed on the e-mail to check, and she'd obviously been getting quite a few calls about the matter, because her phone line rolled over to a voicemail message that included information about the coupon. The gist of the message was that the coupon was genuine, but only for company-owned Starbuck outlets in the "Southeast region." However, a follow-up call to Starbucks' Customer Relations department yielded the information that since many coupons were e-mailed outside the Southeast region, the company had extended the offer to include all company-owned Starbucks locations in North America.

However, according to a 29 August 2006 press release, Starbucks has since changed its mind about honoring the e-mailed coupon anywhere:
Starbucks Response to Free Iced Coffee Email

An email offering a free Starbucks iced coffee was distributed to a limited group of Starbucks partners (employees) in the Southeast United States on Wednesday, August 23, 2006 with instructions to forward to their group of friends and family. Unfortunately, it has been redistributed beyond the original intent and modified beyond Starbucks control. Effective immediately, this offer will no longer be valid at any Starbucks locations.

We apologize for any confusion and inconvenience as a result of this offer.
Taking advantage of the withdrawn Starbucks promotion, the rival Caribou Coffee chain announced a few days later that they would honor the voided coupons on 8 September 2006 by giving free medium Cold Press iced coffee, iced Americano, or iced tea to persons presenting Starbucks iced coffee coupons at Caribou outlets from noon until the close of business that day.

[seattle]

1. People that sue for things like this are slapping everyone in the face who has actually had a legitimate reason to sue in order to stand up for themselves. Anyone who sues over something like a COUPON should be horribly ashamed of themselves simply for that fact alone.

2. Fraud? Please give me a break. Please.

3. A lawyer that actually takes on a case like this is simply calling attention to the fact that they are a ghetto, half-a**ed lawyer that didn't end up as successful as they thought they might when attending law school. I wouldn't be surprised if he actually has a low budget commercial that is played only in the middle of the night urging anyone watching to call if they've fallen somewhere.

[MidwestBarista]

Here in the heart of the Midwest, I saw very few of these, but each one was slightly different, a varied date, iced beverage vs. iced coffee, different sizes offered, etc. No one seemed upset when I didn't accept it. Why should they? Everyone knows to suspect email anything. Does anyone actually expect a $50.00 Olive Garden gift card when they click on the "Do you like the President?" pop up? Americans are just getting "stupider and stupider."

[recoveringattorney]

corianderstem - I do not disagree that the number seems large. However, the case is seeking class action certification and, in theory, it is the aggregate of "x" number of cups of iced coffee plus, I wager, some punitives figure (the first to address the "damage" and the later as a "punishment" for bad business practice(s). Please note, I am not suggesting it is right or wrong...just trying to give a bit of background other than knee-jerk annoyance responces.

It is worth noting that punitive damages are meant to punish bad practices (in this case, false advertising/fraud) and are most easily conceptualized in terms of a percentage of the market value of the Defendant. In this case, the compensatory damages might be $14MM and the punitives are $100 (N.B. these are purely arbitrary numbers on my part). As a percentage of gross revenue (approx. $6.4BB in 2005), a $100MM punitive award would represent about 1.5ish%...that is, about a $450ish dollar fine to someone making $30,000/year....mildly annoying but not especially significant (N.B. the math is off the top of my head and may be off in one direction or another).

This is one of the not insubstantial "problems" with punitive awards...they are meant to *punish* a company for bad behavior. The problem, of course, is what seems like stunning numbers to normal humans are just balance sheet adjustments to many companies. People were *shocked* about the punitive award against Exxon over the Valdez spill (and they successfully had it reduced)...in truth, it was the functional equivalent of a $120 fine for someone making $28K/year. Bill Gates/Microsoft literally scoffed when threatened with a $1MM/DAY fine for contempt...as the fine was literally nothing against the income stream of the subject behavior.

There is, obviously, a legitimate question as to whether a company should be "punished" for a poorlly designed/executed promotion. Then again, it is not unreasonable to hold a company responisible for the "promises" it makes.

Red Lobster had a promotion not long ago where they offered "all you can eat" crab legs for $10 (just a guess on price)...they took an absolute bath on it. However, they did not stop the promotion (advertized on tv and in press) until the end of the "good through" period...they just sucked it up and wrote off the loss (and, as I recall, fired the executive whose brainchild it was).

I want to be clear, I am not suggesting that the suit is well grounded or is likely to be a winner for anyone. I do, however, think there is at least a colorable cause of action.

[P. Scranton]

This has got to be the most biggest waste of time I've heard of! I still in shock that a lawyer would even bother clogging up the courts with crap like this! No wonder attorneys are held in such low esteem.

[Tony]

And they can feel really betrayed when starbucks adds a dime to the cost of everything they sell to recoup the losses (if they lose) for this lawsuit. That 2 bucks they get for winning will be far offset by a price increase. Nice job you fools (although the lawyer is going to take 1/3 of the settlement before everyone else sees their 1.25 "rebate").

Someone please post the address of the lawfirm and everyone write to them and tell them what fools they are.

[corianderstem]

Recovering Attorney - thanks for the info! Very interesting.

It is a legitimate concern on the consumers part. I don't think they actually expect to collect the amount sued for, but rather prove a point. They probably want to send a message to bi business that they shouldn't be allowed to get away with something like this...especially when this particular company preaches "just say yes" and is a rile model for many other large customer service oriented businesses. Starbucks needs to release a major apology and send a nominal amount of gift cards to these once loyal customers.