Facts

MoviePass, Inc. was an American subscription-based movie ticket service founded in 2011. It initially allowed subscribers to purchase up to three movie tickets per month for a discounted monthly fee. In 2017, it was acquired by Helios and Matheson Analytics, Inc., a New York based publicly traded company. MoviePass's business model shifted from a three movie per month subscription to offering an "unlimited" subscription plan for $9.95 per month. However, this model shifted a few times over the next few years to the detriment of consumers. MoviePass shut down its mobile ticketing service on September 14, 2019. On January, 28, 2020, Helios and Matheson Analytics filed for Chapter 7 bankruptcy and ceased all business operations. In 2018, a local Contra Costa County resident filed a complaint against MoviePass with the California Attorney General's Office regarding alleged violations of its Terms of Service. The District Attorney then filed suit against Theodore Farnsworth, former CEO of Helios and Matheson Analytics, Inc., and Mitchell Lowe, former CEO of MoviePass, for these alleged violations.

PLAINTIFF CONTENTIONS: Plaintiff contended that defendants engaged in unlawful business practices and false advertising that misled consumers by calling subscriptions "unlimited" when they clearly weren't, conducted unauthorized billing, and created a data breach because of their unsecured server and allowed it to continue for three months before it was taken down.

DEFENDANT CONTENTIONS: Defendants denied all allegations.

Result

The parties settled the lawsuit for $400,000 (including civil penalties and cy pres restitution.) Additionally, Farnsworth and Lowe are enjoined from engaging in any alleged unlawful or fraudulent business practices.