Many folks are finishing off their lists of New Year’s Resolutions, no doubt adding “increase your level of exercise” and “lose weight” near the top. At the same time, consumers from California, Colorado, and Wisconsin filed, on January 5, 2016, a nationwide class action against Fitbit, Inc. This technology firm is one that seemed poised to take advantage of the planned increases in exercise activity levels. As if that weren’t enough, six days later, an investor filed a class action in California against Fitbit that alleged fraud and other securities violations. What do you need to know about the pending litigation?
Core Allegations of the Consumers’ Civil Action
Among the points contained in the complaint filed on behalf of consumers are allegations:
- That, contrary to the firm’s advertisements, Fitbit’s “Charge HR” and “Surge” products do not consistently record accurate heart rates, particularly during strenuous physical activity;
- That consumers are not only deceived by Fitbit’s widespread advertising – the firm ran ads during the 2015 Baseball World Series – they are also put at a safety risk, since they may be lulled into trusting the devices’ inaccurate measurements; and
- That Fitbit attempted to shield itself from accountability by using an arbitration clause and a class action ban that are hidden in the fine print of the company’s website.
Those involved in the consumer action point out that the Fitbit devices won’t function properly without being registered on the Fitbit website and that by visiting the site, purchasers of Fitbit devices are purportedly bound by an arbitration clause and a class action ban. Particularly problematic is the fact that many devices are sold in retail stores where there is nothing to alert the purchaser about the hidden language on the Fitbit website.
Primary Allegations in the Investor Civil Action
Among the contentions in the complaint filed on behalf of investors are allegations:
- That, as a result of false and/or misleading statements related to the ability of Fitbit devices to detect and provide accurate readings of pulse rate and other information, Fitbit securities traded at inflated prices; and
- That Fitbit’s stock suffered a precipitous decline, causing significant losses and damages to the plaintiff and other similarly situated investors.
Indeed, while Fitbit’s stock price was approximately $50 in early August 2015, it closed January 28, 2016 just shy of $16 per share. Fitbit went public in July 2015, with an initial offering price of $20 per share.
Discuss any Issue Related to Commercial or Corporate Litigation With an Expert Attorney
Plaintiffs in both civil actions against Fitbit are trying to gain class action status. Some fear that the lawsuits are like an anvil hung from Fitbit’s neck. The entire Fitbit story points to the importance of having competent, experienced corporate and commercial attorneys who can litigate tough issues if need be. Whether your business is large or small, consider Milwaukee-based Kerkman Wagner & Dunn The firm’s primary focus is litigation, and has litigated disputes all over the country. The firm’s objective is to be large enough to meet the diverse needs of the firm’s clients, yet small enough to stay personally accessible. For assistance in assessing any of your business litigation needs, call 414–278–7000, or complete the contact form on our firm’s web site. The initial consult is free of charge.