Another company sues GoDaddy over auction clawback

Another expired domain buyer was a victim of the same clawback.

A second plaintiff has joined a lawsuit against GoDaddy over expired domain clawbacks.

In August, Crisby Studio AB sued GoDaddy after the registrar clawed back the domain calor.com, which Crisby Studio had purchased for $11,405 on GoDaddy Auctions about two months prior. Crisby had already entered into a joint venture to develop the site into a business.

Now a new plaintiff has come forward (amended lawsuit, pdf) with almost the exact same facts.

Prime Loyalty acquired the domain name butane.com for $19,755 in an expired domain auction at GoDaddy. Like Crisby, it had also partnered with another company to build a business on its new domain, and GoDaddy took the domain back about two months later.

Looking at historical records, it appears Calor Gas Ltd of Great Britain was the previous registrant of these domains at 123-Reg, a registrar owned by GoDaddy.

In correspondence with Prime Loyalty, a GoDaddy representative blamed a technical error that prevented the previous registrant from being able to renew the domain. He noted:

We realize that in circumstances like this, the party we recover the domain from is not going to be very happy with the outcome. That said, we believe that fixing the original issue and returning the domain was the right thing to do. If the roles were reversed and an error on our part caused you to miss an opportunity to renew one of your domains, we would take the same actions.

GoDaddy initially offered to pay Prime Loyalty instore compensation to cover the cost of two additional domains it bought after acquiring butane.com. (It spent $1,999 to buy butane.net and $5,000 to buy butane.org, both through GoDaddy.) GoDaddy later offered to pay $10,000 as compensation, but Prime Loyalty claimed it spent much more to start building a business.

Jeffrey J. Neuman is representing the plaintiffs.