window.dataLayer = window.dataLayer || [];function gtag(){dataLayer.push(arguments);}gtag('js', new Date()); gtag('config', 'UA-151938219-2'); HungryRoot Subscription Service Breaks California Law, Plaintiff Claims - Milberg | Leading Class Action Law Firm

HungryRoot Subscription Service Breaks California Law, Plaintiff Claims

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February 17, 2023

by Brian Eckert

A former subscriber to the food-subscription service HungryRoot has filed a class action lawsuit against the company, claiming that it automatically renews customers’ subscriptions without providing the proper disclosures under California law.

California residents charged automatic renewal fees by HungryRoot may be eligible to join this lawsuit and recover compensation. Class members are represented by Milberg, one of the nation’s leading class action law firms.

HungryRoot and the Rise of the Subscription Business Model

Subscription-based products and services have exploded in popularity in recent years. Following the success of digital media subscription services such as Netflix, Spotify, Hulu, and Amazon Prime, the subscription model has spread to physical goods.

According to McKinsey & Company, in 2018 media subscribers outranked ecommerce product subscribers by about 3 to 1. By 2025, physical good subscriptions are expected to overtake digital subscriptions, growing to more than $263 billion globally from $64 billion in 2020, reports Juniper Research.

The consumer subscription market for physical goods is expected to grow from $64 billion in 2020 to more than $263 billion in 2025.

The COVID-19 pandemic was a major driver of the physical goods subscription economy, including meal kit delivery services. Grocery delivery also boomed during the pandemic.

HungryRoot, calling itself an “all-in-one recipe and grocery service,” was founded in 2015 and received substantial capital investments on the heels of post-pandemic growth in meal kit demand. HungryRoot was worth $750 million in 2021 and saw 35% year-over-year growth from Q1 2021 to Q1 2022.

Similar to other meal kit companies, HungryRoot sends shoppers weekly product shipments. It differentiates itself from the competition, however, by offering recipes, meal planning, and nutritional support based on customer questionnaire responses and an AI-powered algorithm.

Plaintiff: HungryRoot Subscription Breaks California Auto Renewal Law

Customers enjoy the convenience of subscription services, but a common complaint is that companies make it difficult to cancel subscriptions. This appears to be a feature—not a bug—of the subscription plan model.

A 2021 survey found that only around half of customers who sign up for a new subscription ecommerce service kept the plan. At the same time, the Washington Post writes that, when the cancellation process is unclear or complicated, “consumers may lose interest but be too harried to take the extra step of canceling their membership[s].”

Defendant uniformly fails to obtain any form of consent from–or even provide effective notice to–its subscribers before charging consumers’ Payment Methods on a recurring basis.

As a result, many ecommerce sites are implementing manipulative designs to mislead customers into signing up for recurring subscriptions. These designs include “dark patterns” that trick users into taking actions they might not normally take (e.g., signing up for recurring bills), and deliberate omissions, such as not fully disclosing the terms of an automatic renewal program.

Milberg’s lawsuit accuses HungryRoot of using dark patterns that make it “next to impossible” for subscribers to cancel their subscriptions. The company is also accused of violating California’s Automatic Renewal Law (ARL).

The ARL, enacted in 2010 and amended in 2018, requires businesses that make an automatic renewal or continuous service offer to:

  • Present the terms in a “clear and conspicuous manner”
  • Obtain affirmative consumer consent to the agreement
  • Make material disclosures about the automatic renewal terms, cancellation policy, recurring charges, and any minimum purchase obligation

Plaintiff Allegations

The plaintiff in our class action complaint is a California resident and past HungryRoot subscriber. She says that, due to deficient disclosures, she was unaware that HungryRoot enrolled her in an automatic renewal program when she signed up for a subscription at a promotional rate. She believed that she had cancelled her subscription, but a few days later, saw that HungryRoot had charged her credit card.

Plaintiff’s economic injury, in the form of unauthorized credit card charges, could have been avoided if HungryRoot had adequately disclosed its subscription terms, she says. On behalf of herself and similarly situated consumers, she seeks compensation for economic injuries resulting from HungryRoot’s business practices.

How to Join the HungRoot Class Action Lawsuit

You may be able to join this lawsuit as a class member if you meet the following criteria:

  • All persons in California who, within the applicable statute of limitations period, up to and including the date of final judgment in this action, incurred renewal fee(s) in connection with Defendant’s HungryRoot Subscriptions.

Eligible class members do not have to hire an attorney. Milberg is representing the class on a contingency-fee basis.

Milberg pioneered federal class action litigation and remains a national leader in class actions. Since 1965, we’ve recovered more than $50 billion for our clients and played a prominent role in correcting corporate abuses.