June 26, 2014

Judge Awards Utah Couple $306,750 in Case Against Retailer That Tried to Impose Fine for Critical Online Review

Statement of Scott Michelman, Attorney, Public Citizen

On Wednesday, Judge Dee Benson of U.S. District Court in Utah awarded Public Citizen clients John and Jen Palmer $306,750 ($102,250 in compensatory damages and $204,500 in punitive damages) against the online retailer KlearGear.com. The company had demanded $3,500 from the Palmers for writing a critical online review of the company, then ruined John’s credit when he refused to pay.

As a result of KlearGear.com’s actions, the Palmers lost credit opportunities; suffered anxiety, fear and humiliation; and spent weeks without heat in their home for themselves and their 3-year-old son when their furnace broke and they were unable to obtain a loan to replace it.

Public Citizen sued KlearGear.com on the Palmers’ behalf in December. When KlearGear.com failed to respond, the court granted a default judgment declaring that John did not owe the $3,500 and setting a hearing, held Wednesday, to determine damages. After an hour-long hearing at which both plaintiffs testified, the judge announced the award from the bench.

We are gratified by Judge Benson’s ruling, which appropriately compensates the Palmers for their ordeal and punishes KlearGear.com for its abuse of the credit reporting system in retaliation for the Palmers’ speech. The court sent a strong message that corporate bullying of consumers would not be tolerated. The Palmers are relieved that John’s credit has been restored and they feel vindicated by today’s award.

More information about the case is available here.