Carvalho v. HP, Inc.

Background

Rodney Carvalho and Mark Maher filed a putative class action against HP, Inc. They alleged that HP used misleading strikethrough prices and discounts on its website, causing consumers to pay more than they otherwise would have and inducing purchases they otherwise would not have made. The operative complaint asserted claims under California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law, as well as a claim for unjust enrichment.

The parties conducted formal and informal discovery, including producing sales data for 287,784 orders, more than 500,000 website screenshots, and an analysis of pricing data. They participated in mediation on June 12, 2024, and later finalized a settlement agreement. The court held argument on the motion for preliminary approval on January 16, 2025, and the parties filed a revised settlement agreement on January 30, 2025.

Settlement terms

HP will contribute a total gross settlement amount of $4,000,000. The fund will be used for payments to class members, service awards of no more than $5,000 per class representative, attorneys’ fees and costs of no more than $1,000,000, and settlement-administration expenses estimated at approximately $246,467.20. The parties estimated that at least $2,750,000 would remain for class-member payments after administration costs and any court-approved awards and fees.

The proposed settlement class covers individuals nationwide who purchased specified HP desktop computers, laptops, mice, or keyboards during the settlement period, June 5, 2021, through October 28, 2024. The products had to have been offered at a discount more than 75% of the time they were offered for sale during that period. The court estimated that approximately 287,784 people fall within the class definition.

Class members who do not timely and validly exclude themselves will release claims relating to the advertised strikethrough prices and discounts for the covered products, as well as claims concerning the allocation or payment of the settlement fund or a class member’s cash benefit. HP denied the claims and allegations, and the order states that the settlement is not an admission of liability, fault, wrongdoing, or the validity of the claims or defenses.

Court’s analysis

The court conditionally certified the settlement class under Federal Rule of Civil Procedure 23 for settlement purposes only. It found that the class satisfied the requirements of numerosity, commonality, typicality, and adequacy of representation. The approximately 287,784 class members satisfied numerosity. The court identified common questions about whether HP’s website advertising was false or misleading, how reasonable consumers would understand the strikethrough prices, whether HP sold or offered the products at those prices, and whether HP’s pricing practices violated established law.

The court also found that common issues predominated and that a class action was superior to individual lawsuits. It noted that estimated damages for each product were $100 or less, while class counsel had incurred approximately $805,296 in litigation costs.

The court separately concluded, for purposes of preliminary approval, that the settlement was fair, reasonable, and adequate. It found that the settlement appeared to result from serious, informed, and non-collusive negotiations after substantial discovery and mediation; that it had no obvious deficiencies; that it did not unfairly favor some class members over others; and that it fell within the range of possible approval. The court reserved further review of the proposed service awards until the final-approval stage.

Order and next steps

The court preliminarily approved the settlement and conditionally certified the settlement class for settlement purposes only. It appointed the plaintiffs as class representatives, appointed EDGE, A Professional Law Corporation, and Capstone Law APC as class counsel, approved the proposed notices, and appointed Kroll Settlement Administration LLC as settlement administrator.

HP was ordered to provide available class-member contact information to the administrator within 30 days of entry of the order. The administrator was directed to establish a settlement website and distribute notice. Class members who wish to submit claims, object, or exclude themselves generally must do so within 105 days from entry of the order, subject to the procedures described in the order.

The court set a final approval hearing for August 21, 2025, at 10:00 a.m. At that hearing, the court would consider final approval of the settlement, final certification of the settlement class, attorneys’ fees and costs, service awards, and whether to enter final judgment approving the settlement and dismissing the action on the merits with prejudice. The order did not make those final determinations.