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Angie's List agrees to settle class-action suit for $1.4 million

August 22, 2016

Angie's List Inc. has agreed to pay $1.4 million to settle a class-action lawsuit claiming it manipulated search results and ratings to favor advertisers—claims that the home-services company denies.

Judge Stewart Dalzell of the U.S. District Court of the Eastern District of Pennsylvania signed off on the settlement proposal last month and signed a scheduling order earlier this month. In recent days, class-action members—all U.S. citizens who were paid Angie's List members between March 11, 2009, and July 12, 2016—started receiving emails with information about filing settlement claims.

Indianapolis-based Angie’s List agreed to the settlement without admission or concession of any liability or wrongdoing, according to court filings, and the court hasn't sided with either party. However, Angie's List agreed to provide expanded disclosures about service-provider advertising on its website and in its membership agreement.

A hearing to finalize the settlement is set for Dec. 5. Attorneys in the case are seeking a maximum of $937,500 in legal fees and the three main plaintiffs are looking to split $12,500.

Class-action members have until Nov. 15 to file claims. Those individuals are entitled to either a cash payment of $5 or $10, or "one free month of membership to Angie’s List for each full year he or she paid for membership during the relevant periods."

The case stems in part from a suit filed by a Philadelphia woman in March 2015 claiming she was swindled by a contractor whose bad reviews were suppressed on the Angie's List site. That suit was merged with two other suits alleging revenue-related manipulation and was granted class-action status.

Angie's List denied the plaintiffs' claims, according to court documents, denying that revenue can affect the content of reviews and ratings.

Angie's List spokeswoman Cheryl Reed sent the following response to IBJ via email on Monday:

"We are committed to the mission of connecting consumers with high-quality service providers and doing it with integrity while striving for transparency and awareness. We believe that we have conducted business in this manner, and the proposed settlement is not an admission that the company has done anything wrong.  As a company, however, we would rather pursue a settlement at this time in a manner that provides a benefit to our members rather than incurring the cost and disruption associated with continued litigation."

Attorneys with Philadelphia-based Golomb & Honik PC didn't immediately return phone calls seeking comment.

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