Poshmark class action lawsuits have included a federal Telephone Consumer Protection Act case over text messages, shareholder suits challenging the company’s $1.2 billion sale to Naver Corp., a California wage-and-hour class action that settled for $450,000, and an open privacy investigation tied to a 2018 data breach. Only one of these produced a confirmed payout to a class, and Poshmark’s current Terms of Service now steer most new disputes into individual arbitration.
The TCPA Text Message Case: Reichman v. Poshmark
Christopher J. Reichman sued Poshmark in 2016 in the U.S. District Court for the Southern District of California, seeking to represent a class of people who received text messages from the app without prior written consent. He said he got two unwanted texts in January 2015 inviting him to shop on Poshmark.1U.S. District Court, Southern District of California. Reichman v. Poshmark Inc., Case No. 16-cv-2359
Those messages had been triggered by another Poshmark user, Tricia Tolentino, who used the app’s “Invite All” feature to blast invitations to everyone in her phone’s contacts. Reichman argued Poshmark was legally responsible for sending them.1U.S. District Court, Southern District of California. Reichman v. Poshmark Inc., Case No. 16-cv-2359
On May 15, 2017, Judge Dana M. Sabraw granted Poshmark summary judgment and threw the case out. The court found Poshmark did not “make” or “initiate” the texts under the TCPA; the user who granted contact access and tapped “Invite All” was the one who sent them. Reichman filed a notice of appeal.1U.S. District Court, Southern District of California. Reichman v. Poshmark Inc., Case No. 16-cv-23592Klein Moynihan Turco LLP. Text Message Marketing Blog No settlement or class payout came out of the case.
Shareholder Suits Over the Naver Acquisition
Naver Corp. announced on October 3, 2022 that it would buy Poshmark for $17.90 per share in an all-cash deal worth about $1.2 billion. Plaintiffs’ firms moved almost immediately.3Bragar Eagel & Squire, P.C. Poshmark Inc. Investigation
Bragar Eagel & Squire opened an investigation into whether Poshmark’s officers and directors breached their fiduciary duties or federal securities laws by approving an unfair process and an inadequate price.3Bragar Eagel & Squire, P.C. Poshmark Inc. Investigation Monteverde & Associates began recruiting shareholders to serve as named plaintiffs in a potential class action over the $17.90 price.4Monteverde & Associates PC. Poshmark Inc.
Two actions were actually filed. On December 2, 2022, Acocelli Law filed a securities suit in the U.S. District Court for the Southern District of New York, alleging Poshmark’s proxy statement was “materially incomplete and misleading” and left stockholders without enough information to make an informed vote.5Law360. Investor Serves Up Securities Suit Over Poshmark-Naver Deal On December 26, 2022, shareholder Evgeny Nikolayevich Berdnikov filed a books-and-records action in the Delaware Court of Chancery, calling the sale process “potentially-conflicted and flawed” and driven by insiders with their own interests in closing a deal.6Bloomberg Law. Poshmark-Naver Merger Sparks Suit Alleging Conflicted Process
Naver closed the acquisition on January 5, 2023, and Poshmark’s stock was delisted from the Nasdaq.7PR Newswire. Naver Completes Acquisition of Poshmark The available record does not show how either suit was ultimately resolved.
Lakey v. Poshmark: $450,000 Employment Settlement
In Lakey v. Poshmark Inc., workers brought a California class action alleging unfair business practices, wage and hour violations, meal and rest break violations, and claims under the state’s Private Attorneys General Act. The case settled for $450,000, placing it among the top 100 labor and employment settlements in California for 2023.8Top Verdict. Top 100 Labor and Employment Settlements in California This is the one Poshmark class action in the record that produced a confirmed class recovery.
Privacy Investigation and the 2018 Data Breach
Attorneys working with ClassAction.org have been investigating Poshmark over how it handles user data, including suspicions that the company may be sharing information with third parties such as Facebook or PayPal without proper authorization.9ClassAction.org. Newsletter Issue 315
The backdrop is a confirmed breach. In May 2018, an unauthorized party accessed Poshmark’s systems and obtained profile data for roughly 36.4 million user accounts, including email addresses, names, usernames, genders, locations, and password hashes.10Have I Been Pwned. Poshmark Poshmark did not disclose the incident publicly until August 2019, when it said profile data had been compromised but financial information and physical addresses were not believed to be affected.11NBC DFW. Poshmark Announces Data Breach No lawsuit or regulatory action tied to the breach appears in the available research.
The Arbitration Clause That Blocks New Class Actions
Anyone thinking about joining or starting a class action against Poshmark today runs into a contractual wall. Poshmark’s Terms of Service, as updated in October 2024, require users to resolve most disputes through individual arbitration and expressly prohibit class arbitration, class actions, other representative proceedings, and jury trials.12Poshmark. Terms of Service
Courts sometimes refuse to enforce such clauses depending on the circumstances, but the waiver makes it meaningfully harder for users to pursue claims collectively. The terms also cap Poshmark’s total liability for any single claim at the greater of $100 or the commissions and fees the user paid in the six months before the claim arose.13Poshmark. Terms of Service