Judge lets Claude Max users' false-advertising claims against Anthropic proceed

A federal magistrate judge ruled on 6 November that consumers suing Anthropic over its Claude Max subscriptions can proceed with some of their claims. In a 19-page order in Kahn et al. v. Anthropic, Magistrate Judge Alex Tse granted Anthropic’s motion to dismiss in part and denied it in part. The case is in the Northern District of California.

Karl Kahn and Solomon Smith, suing for a putative class of subscribers, allege that Anthropic’s claim that Max provides “5x or 20x more usage” than the Pro plan is misleading. The order sets out the plans: Pro at $17 to $20 a month, Max 5x at $100 and Max 20x at $200. Anthropic’s sales pages promise “5x more usage than Pro” and “20x more usage than Pro”. The order accepts, at this stage, that users do get that multiple within a five-hour session. But all plans also have weekly limits, which are higher for Max users and not by the same factor. The plaintiffs calculated that, for the Sonnet 4 model, Max 5x gives 3.5 times Pro’s weekly usage and Max 20x gives six times. These are the plaintiffs’ figures, which the court took as true for the motion and did not test.

Tse held that a reasonable consumer could read the wording, given monthly billing, as promising that multiple per month. Anthropic had pointed to an asterisk reading “Usage limits apply” and to a help page, two hyperlinks away from the sales pages, saying the multiples were per session. The judge said that disclosure could persuade a fact-finder but was not a ground for dismissal at the pleading stage, and that the asterisk “says nothing about usage limits per session”. The judge also held that Claude Code, included with Max, could plausibly count as a “service” under California’s Consumers Legal Remedies Act.

The ruling dismisses Kahn’s claim under that Act, because he had not shown personal rather than commercial use. It also dismisses the unfair-competition and false-advertising claims, partly for want of standing to seek an injunction, and the claim for breach of the implied covenant of good faith and fair dealing. Smith’s claim under the Act, negligent misrepresentation and breach of contract survive. The plaintiffs have until 2 December to amend. If they do not, Anthropic must answer by 16 December.

A ruling on a motion to dismiss decides only whether the allegations, if true, state a claim. It makes no finding on whether subscribers were misled, and no class has been certified. The sources reviewed contain no statement from Anthropic.