If eBay Lawsuit Goes Class Action, Watch Out

This is a big month for the legal team at eBay, as the true ramifications behind a two-year old case begin to unfold.

The case was opened in April 2010, when Charlotte Smith, an online retailer, sued eBay over its payment acceptance policies. Basically, the plaintiff alleged that only letting buyers and sellers transact through PayPal was unfair. Or, as it was stated in the suit, "Defendant's actions constitute an unlawful tying arrangement resulting in an impermissible restraint of trade, in violation of federal law."

Recent actions have narrowed the scope of the case, from the entire online payment market to only the online auction space. That was the result of last week's decision by U.S. District Judge James White. But according to Carl Schaerf, the big news is set to hit the wires later this month.

Schaerf is a partner at Schnader Harrison Segal & Lewis LLP, and chair of the firm's Antitrust and Trade Regulation Practice Group. He says there are two big words that could change the course of this case dramatically: class certification.

The plaintiffs appear to have been positioning this case as a class action suit from the outset, particularly with hiring Detroit's Macuga Liddle & Dubin PC, which specializes in class action. But by Schaerf's assessment, the plaintiffs have not yet received the certification required to transform this case into a class action suit officially. That possibility, says Schaerf, is what "puts the fear into eBay," because it would immediately make potential settlement or damages a much more expensive proposition.

We'll know more later this month, Schaerf says: the certification filing is scheduled for June 15th, with an accompanying conference scheduled for June 22nd. For now, Schaerf estimates that eBay probably doesn't know what it wants to do, because it's not clear that the plaintiffs will be given class certification.

But either way, as we said before: it's a big month for eBay.

( ^ emphasis mine)