Penny Auction Website May Be Liable For Deceptive Trade Practices, Illegal Lottery

A website operator that offers visitors the ability to bid in “penny auctions” for the option to purchase popular items such as laptops, cameras, appliances, and iPads may be liable for deceptive trade practices, the U.S. District Court for the District of Connecticut ruled March 28 (Mendelsohn v. Bidcactus LLC, D. Conn., 3:11-cv-01500-JCH, 3/27/12).

Judge Janet C. Hall rejected the site operator’s motion to dismiss. The court held that the plaintiff could proceed with deceptive trade practices allegations, plus his attempt to recover funds lost through allegedly illegal wagers.

Although the site had terms of service explaining ...