Blair v. Rent-A-Center, Inc.

Background

Paula L. Blair, Andrea Robinson, and Falechia Harris brought this class action individually and for others similarly situated against Rent-A-Center, Inc., Rent-A-Center West, Inc., and unnamed defendants. The opinion states that the defendants operated rent-to-own stores throughout California, where consumers rented or bought new and used household merchandise through periodic payments.

The plaintiffs asserted claims under the Karnette Act, the California Consumers Legal Remedies Act, California usury law, and California Business and Professions Code § 17200. Earlier orders had addressed summary judgment and class certification. The court had certified a class of people who, on or after March 13, 2013, entered into a rent-to-own transaction with the defendants in California. It later certified a subclass involving transactions between March 13, 2013, and January 17, 2018, in which an item was shipped to a Rent-A-Center retail location by Rent-A-Center National Product Services, LLC and the defendants allocated a freight up-charge.

After settlement proceedings, the parties reached an agreement in March 2019. The court had previously granted preliminary approval and approved the form and content of the settlement notice. Notice was sent or emailed to 32,792 class members in the Matched NPS Dataset and 80,609 class members in the Unmatched Dataset. The settlement administrator also posted relevant documents online and attempted to locate people whose notices were returned as undeliverable. The opinion states that 1,335 people ultimately could not receive notice, two people opted out, and no class members objected.

Final Settlement Approval

Under Federal Rule of Civil Procedure 23(e), a court must approve a class settlement after notice and a hearing if the settlement is fair, reasonable, and adequate. The court found the notice adequate and determined that the release provisions were appropriately limited. Members of the Consumers Legal Remedies Act class would release only the specific claim involving California Civil Code § 1770 and the related California Business and Professions Code § 17200 claim. Members of the Karnette Act subclass would release only claims arising from or related to the allegation that a statutory pricing cap was exceeded because of a freight up-charge connected to the National Product Services transactions.

The settlement provided a gross fund of $13 million for the National Product Services subclass, which the court stated was approximately 76.8 percent of the statutory damages the plaintiffs claimed were owed. It also required Rent-A-Center to refrain from including in, or enforcing against California customers, arbitration provisions that barred customers from seeking otherwise available public injunctive remedies under the Consumers Legal Remedies Act.

The court found the settlement fair, reasonable, and adequate, considering the risks and costs of continued litigation, the extensive discovery and motion practice, the experience of counsel, and the class members’ response. The net settlement, after approved deductions, would be distributed based on qualifying transactions. Uncashed checks would first be redistributed to class members who cashed their checks, with any remaining uncashed funds going to a recipient chosen for a related public purpose. The court approved the settlement and plan of allocation. Non-excluded class members were bound by the settlement order.

Expenses, Service Awards, and Attorney’s Fees

Class counsel requested reimbursement of $209,531.54 in litigation costs and expenses. The requested expenses included expert-related professional fees, deposition and transcript costs, and travel and meal expenses. The court found the expenses reasonable and necessary and granted reimbursement in full: $62,619.78 to Altshuler Berzon and $146,911.76 to Dostart Hanniak & Coveney.

The named plaintiffs requested service awards of $2,500 for Falecha Harris and $1,500 each for Paula Blair, Andrea Robinson, and Celinda Garza. The court recognized that the plaintiffs produced and responded to discovery and sat for depositions, and that Harris took time off work to attend mediation or settlement conferences. Because the record did not establish the exact out-of-pocket costs they incurred, the court granted a $400 service award to Harris and $200 each to Blair, Robinson, and Garza. It denied the remainder of the service-award request.

Class counsel requested $3.9 million in attorney’s fees, equal to 30 percent of the gross settlement fund and slightly more than the claimed lodestar of $3,451,165.50. A lodestar is a fee calculation based primarily on reasonable hours multiplied by reasonable hourly rates. The court credited counsel’s substantial motion practice, appellate work, depositions, contingent-fee representation, and work involving an untested statute. It nevertheless denied the $3.9 million request and awarded $3,836,840.54, which the court described as 30 percent of the net settlement fund and a lodestar multiplier of 1.1.

Disposition

Judge William Alsup granted the motion for final approval of the class settlement. He granted in part the motion for attorney’s fees, expenses, and incentive awards: expenses were granted in full, service awards were granted in reduced amounts, and the requested attorney’s fees were denied while a lower fee award was entered. The order awarded class counsel $3,836,840.54 in fees, $209,531.54 in expenses, and service awards of $400 to Harris and $200 each to Blair, Robinson, and Garza.