Alcazar v. Fashion Nova, Inc.

Background

Juan Alcazar alleged that Fashion Nova, Inc.’s website violated the Americans with Disabilities Act and California’s Unruh Civil Rights Act. Alcazar, who is visually impaired, alleged that he and similarly situated people could not access Fashion Nova’s goods and services because the website could not be used with screen-reader software.

The parties engaged in discovery, depositions, motion practice, settlement conferences, and mediation. The court had certified a nationwide class seeking injunctive relief—that is, a court-ordered change in conduct—and a California class. The case was scheduled for trial in June 2024.

Proposed Settlement

The proposed settlement provided injunctive relief for the nationwide class and monetary relief for the California class. Fashion Nova would be required to make its website comply with applicable accessibility standards, adopt a Website Accessibility Policy, consult with accessibility experts or entities, and allow class counsel to conduct compliance audits.

Fashion Nova also agreed to pay $5,150,000 into a funding pool. After notice costs, administration expenses, any approved attorneys’ fees and costs, and any approved service award, the remaining amount would be available for payments to eligible California class members. Each qualifying claimant could receive up to $4,000, subject to a pro rata reduction based on the number of valid claims. The agreement also provided that 50% of any remaining money would go to the American Foundation for the Blind and 50% would return to Fashion Nova, which would use any returned funds to implement the settlement’s injunctive relief.

Court’s Analysis

At the preliminary-approval stage, the court evaluates whether a proposed class settlement appears fair, reasonable, adequate, free of collusion, and within the range of possible approval. The court noted that reversion provisions are generally disfavored because they can create incentives to keep the claims rate low and can reduce the defendant’s actual payment while increasing the apparent value used to support a request for attorneys’ fees.

The court found that the settlement appeared eligible for preliminary approval in most respects, but the provision returning half of unclaimed funds to Fashion Nova placed the agreement outside the range of possible approval on the record presented. Class counsel argued that reversion was unlikely because many people would submit claims and that returned money would fund the required website improvements. The court rejected those explanations. If reversion was unlikely, the court reasoned, there was no need for the provision; and Fashion Nova was already required to fund the improvements, so returning class funds would reduce its financial obligation. The court was also concerned that the provision could reward Fashion Nova if participation was low.

Disposition

The court denied Alcazar’s motion for preliminary approval without prejudice because the reversion of unclaimed settlement funds to Fashion Nova had not been adequately justified. The court stated that a renewed motion should correct that deficiency. The order did not grant final approval of the settlement.