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Wednesday, September 13, 2006

Speaking of Free Things

This tale from the Starbucks file might be fun for a discussion of mutual assent and consideration:

Starbucks Corp. was sued for $114 million Friday over its recall last week of a coupon that entitled the holder to a free large iced drink being promoted by the Seattle coffee retailer.

Peter Sullivan, the lawyer who sued on behalf of a 23-year-old Starbucks regular who felt "betrayed" when her coupon was not honored, accused the company of fraud and said he will request class-action status to include the "thousands who were misled" by the offer.

On Aug. 23, Starbucks e-mailed the coupon for the free grande drink to select employees with instructions for them to forward the coupon to friends and family. The offer was valid through Sept. 30.

But, Sullivan said, Starbucks got jittery and refused to honor the coupon after the company saw how widely it had been distributed. "I believe they were surprised by how successful the promotion was," the lawyer said.

"The excuse proffered by Starbucks, that they did not believe that an offer released over the Internet would be so widely distributed, is ridiculous," Sullivan said. "Clearly, Starbucks chose to initiate a viral marketing campaign to counteract their slumping sales."

A spokeswoman for Starbucks said company officials had seen Sullivan's press release but not his court papers and would have no immediate comment.

Sullivan said he saw lines of coupon-carrying caffeine customers outside Starbucks coffee shops in New York in response to the promotion, and when they could not redeem the coupons "they felt let down and angry."

One of those people, Sullivan said, was his client, Kelly Coakley of Queens, who works as a paralegal and administrative assistant.

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 said. "That's a very conservative figure," he said.

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

[Meredith R. Miller / HT: Isaac Samuels, 1L]

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