A new lawsuit against LivingSocial is accusing the online daily deal juggernaut of partnering with a company in Washington to offer a promotional deal for painting classes, only to turn around and steal the company's business model and offer classes of its own.
Seed Works Inc., which offers class under the name Uncork'd Art, organizes painting classes where participants are also treated to music and wine. The company is suing LivingSocial, which is based in Washington, for fraud, misrepresentation, breach of contract, unfair trade and other claims to the tune of $1.5 million.
According to the complaint (PDF), which was filed May 4 in District of Columbia Superior Court, Uncork'd Art staff contacted LivingSocial in March 2011 about offering promotional deals for Uncork'd Art’s classes. During these negotiations, the company claims LivingSocial representatives "implicitly communicated" that LivingSocial wouldn't try to compete with Uncork'd Art in the future.