A federal district court in Florida entered summary judgment against SeaWorld in a class action case, finding the theme park violated the Electronic Funds Transfer Act (EFTA) by renewing class members’ contracts during their one-year term and collecting unauthorized payments after the contracts expired.
Lead Plaintiff Jason Herman commenced the action in December 2014, alleging breach of contract and violation of the EFTA. Herman bought two one-year passes to SeaWorld and Busch Gardens in March 2013. According to Herman, SeaWorld continued to charge his credit card one year later even though he had already paid for the passes in full. Herman alleged that this violated his contract with SeaWorld which, Herman contended, specifically stated that SeaWorld would only continue charging for those passes that were not fully paid in one year’s time. The court granted class certification in March, with class members hailing from Florida, Texas, Virginia, and California.
Both parties moved for summary judgment on Plaintiffs’ breach of contract claim, each arguing for their own interpretation of the pass contract. Plaintiffs argued that SeaWorld breached the pass contract while it was still in effect by failing to ensure the contract terminated properly. In turn, SeaWorld argued that the customers were obligated to make additional payments. SeaWorld further contended that, if the court sided with the Plaintiffs’ interpretation of the pass contract, then the Plaintiffs’ claims failed because the one-year contracts terminated by the time the alleged breach occurred.
The court sided with the Plaintiffs, finding that SeaWorld breached the pass contract by renewing during the one-year term. “Plaintiffs bargained for a one-year pass,” Judge Mary S. Scriven wrote, “not a pass of infinite duration. And it is undisputed that plaintiffs suffered damages in the form of unauthorized charges. Although those charges may have occurred after the contract expired, they are ‘damages flowing from the breach.’”
The court further found that SeaWorld violated EFTA by continuing to collect monthly payments by electronic transfer. Plaintiffs argued that SeaWorld violated § 1693e(a) when it failed to obtain preauthorization for bank account and debit card transfers made after the pass contract expired. SeaWorld contended that a material dispute existed over whether the challenged transfers qualified as “preauthorized electronic fund transfers” under § 1693a(10). Judge Scriven dismissed SeaWorld’s argument, finding that even if the challenged transfers qualified as “unauthorized electronic fund transfers,” the transfers could, at the same time, qualify as “preauthorized electronic fund transfers.” Because SeaWorld did not have customers’ authorization for those transfers it initiated after the pass contract expired, the Court concluded the theme park did not obtain the written preauthorization required by § 1693e(a).
The case is Herman et al. v. SeaWorld Parks & Entertainment, Inc., Case No. 8:14-cv-3028-T-35JSS. A copy of the Court’s opinion is available here.