Story v. Heartland

Story v. Heartland

This case is a class action on behalf of, possibly, millions of parents at more than 30,000 schools. alleging that Heartland Payment Systems—a private company that contracts with school districts to allow parents to pay for their children’s school lunches and other school fees online—defrauded parents into believing that the extra fees Heartland charges were going to their children’s school, when in fact they were going straight into Heartland’s pocket.

Not long after this lawsuit was filed, Heartland undertook a series of dubious procedural maneuvers with the explicit goal of trying to prevent this lawsuit from going forward—and prevent any other parents from ever being able to file another one.  First, Heartland used the named plaintiff’s account information—information the company only had because the named plaintiff is a parent who used Heartland to pay for school fees—and attempted to deposit $40,000 into his bank account, without permission. In other words, Heartland attempted to buy off the named plaintiff—without even asking him. The named plaintiff rejected this attempt. Nevertheless, Heartland has asked the court to dismiss the lawsuit anyway, arguing that the case is now somehow moot simply because it tried to pay off the named plaintiff. We disagree that a failed attempt to buy off a named plaintiff is sufficient to moot a class action.

Second, Heartland set about trying to prevent other parents from participating in this lawsuit—or filing a lawsuit of their own. Soon after this lawsuit was filed, Heartland updated the terms of service on its  website to include a retroactive arbitration provision and class waiver, which purport to prohibit anyone who uses Heartland to pay for their kids’ school lunches, from ever bringing claims against Heartland in court or ever participating as a class member in a lawsuit brought by someone else . Heartland’s new terms specifically state that this prohibition applies to lawsuits that have already been filed—including this one. There is no way for parents to reject these new terms, and, in fact, Heartland has said that if parents don’t like the new terms, their only choice is to stop using Heartland—i.e. stop using the only company their school contracts with to pay these fees online. Courts have repeatedly rejected similar attempts by defendants to force potential class members to give up their rights. We’re fighting Heartland’s efforts to do that here.

Not only is this case important to the millions of parents who use Heartland to pay their schools, it’s important to the preservation of access to justice more generally. We’re seeing with alarming frequency companies like Heartland resort to, essentially, dirty tricks to try to avoid being held accountable in court—attempts to end a class action by buying off the named plaintiff, even against the named plaintiff’s will or to force new terms of service on customers or employees, who have no way of rejecting them, that purport to prohibit them from participating in a lawsuit that’s already been filed. We hope that the court in this case, and courts seeing these same tactics in other cases, will recognize the threat these efforts pose to access to justice and to the integrity of the judicial system.

Public Justice attorneys Jennifer Bennett and Stevie Glaberson are co-counsel in the case with Varnell & Warwick.

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