fineman poliner llp neil b. fineman, esq. sbn 177915 email...

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF’S UNOPPOSED MOTION

FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

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FINEMAN POLINER LLP Neil B. Fineman, Esq. – SBN 177915 Email: [email protected] Phillip R. Poliner, Esq. – SBN 156145 Email: [email protected] 155 North Riverview Drive Anaheim Hills, California 92808-1225 Tel. (714) 620-1125 - Fax (714) 701-0155 Lee G. Werner (SBN: 84744) WERNER LAW FIRM 18200 Von Karman Avenue, Suite 900 Irvine, California 92612 P | (949) 553-1328 F | (949) 553-8454 Email: [email protected] Attorneys for Plaintiff, PERRY JOHNSON

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

PERRY JOHNSON and LAYNE BUTLER,

on behalf of a class of similarly situated

individuals, and themselves individually,

Plaintiffs,

v.

ASHLEY FURNITURE INDUSTRIES, INC.,

Wisconsin Corporation; and Does 1 through

25, inclusive,

Defendants.

Case No.: 13-CV-2445-BTM (DHB)

CLASS ACTION

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF’S UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT; DECLARATIONS OF LEE G. WERNER, PHILLIP R. POLINER AND NEIL B. FINEMAN [Filed Concurrently with Class Action Settlement Agreement and [Proposed] Order]

Date: August 19, 2015 Time: 10:00 a.m. Ctrm.: 15B, 15th Fl. Judge: Hon. Barry T Moskowitz

Case 3:13-cv-02445-BTM-DHB Document 35-1 Filed 06/29/15 of 36



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TABLE OF CONTENTS

I. INTRODUCTION 1

II. BRIEF EXPLANATION OF ALLEGATIONS 2

III. BASIS OF LIABILITY 2

IV. BASIC ELEMENTS OF THE PROPOSED SETTLEMENT 3

A. Establishment of the Class 4

B. Compliance with Civil Code Section 1747.08 5

C. Class Members May Opt-Out of Their PII being used by Defendant for

Marketing Purposes 5

D. Distribution of Pecuniary Benefits to the Class 5

E. Right to Elect Not to Participate in the Settlement 6

F. Right to Object 6

G. Incentive Award Paid By Defendant – Not the Class 6

H. Attorneys’ Fees and Costs Paid By Defendant – Not the Class 7

V. CRITERIA AND EVIDENCE ESTABLISHING THE FAIRNESS OF

THE SETTLEMENT 8

A. Strength of Plaintiff’s Case 9

B. The Risk, Expense, Complexity, and Duration of Further Litigation and

the Risk of Maintaining Class Action Status Through Trial 9

C. The Benefits Provided In Settlement 10

D. The Extent of Discovery and Stage at Which Settlement Is Reached 11

E. Experience and Views of Counsel 11

F. Presence of Governmental Participants 12

G. The Proposed Settlement Resulted from Serious, Informed and Non-

Collusive Arm’s Length Negotiations 12

VI. THE PROPOSED CLASS MEETS THE CRITERIA FOR

CERTIFICATION 12

A. The Settlement Satisfies the Requirements of Rule 23(a) 12

1. Numerosity 12

2. Commonality 13

3. Typicality 13

4. Adequacy 13

B. The Settlement Should be Certified Under Rule 23(b)(3) 14

1. Common Questions Predominate Over Individual Issues 15

2. A Class Action is the Superior Method to Settle this Controversy 16




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Table of Contents, cont.

VII. THE FORM AND METHOD OF PROVIDING CLASS NOTICE

MEETS DUE PROCESS REQUIREMENTS AND SHOULD BE

APPROVED 16

VIII. IF THE SETTLEMENT IS PRELIMINARILY APPROVED, THE

COURT SHOULD SCHEDULE A HEARING ON FINAL

SETTLEMENT APPROVAL 18

IX. CONCLUSION 19

DECLARATION OF NEIL B. FINEMAN 20

DECLARATION OF LEE G. WERNER 25

DECLARATION OF PHILLIP R. POLINER 27




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TABLE OF AUTHORITIES

CASES PAGE

7-Eleven Owners for Fair Franchising v. Southland Corp.

85 Cal.App.4th 1135 (2000) 9

Adams v. Inter-Con Security Systems, Inc.

No. C-06-5428 MHP, 2007 WL 3225466 (N.D. Cal. Oct. 30, 2007) 12

Amchem v. Windsor

521 U.S. 591 (1997) 15, 16

Chavez v. Netflix, Inc.

(2008) 162 Cal.App.4th 43 11

Churchill Village v. General Electric

361 F.3d 566 (9th Cir. 2004) 17

Davis v. Devanlay Retail Group, Inc.

785 F.3d 359 (9th Cir. 2015) 8

Deposit Guaranty National Bank v. Roper

445 U.S. 326 (1980) 16

Detroit v. Grinnell Corp.

495 F.2d 448 (2nd. Cir. 1974) 9

Eisen v. Carlisle & Jacquelin

417 U.S. 156 (1974) 16

Florez v. Linens ‘N Things, Inc.

108 Cal.App.4th 447 (2003) 2, 8

General Telephone Company of the Southwest v. Falcon

457 U.S. 147 (1982) 15

Hanlon v. Chrysler Corp.

150 F.3d 1011 (9th Cir. 1998) 12-16

Hanon v. Dataproducts Corp.

976 F.2d 497 (9th Cir. 1992) 13

In re Compact Disc Minimum Advertised Price Antitrust Litigation

216 F.R.D. 197 (D. Me. 2003) 17




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Table of Authorities continued

In re Corrugated Container Antitrust Litigation

643 F.2d 195 (5th Cir. 1981) 11

In re First Alliance Mortgage Co.

471 F.3d 977 (9th Cir. 2006) 13

In re Immune Response Securities Litigation

497 F. Supp. 2nd 1166, at 1169-1170 (S.D. Cal. 2007) 7, 8

In re Mercury Interactive Corp. Securities Litigation

618 F.3d 988 (9th Cir. 2010) 7

Local Joint Executive. Board of Culinary/Bartender Trust Fund v. Las Vegas Sands, Inc.

244 F.3d 1152 (9th Cir. 2001) 15

Mendoza v. Tucson School District No. 1

623 F.2d 1338 (9th Cir. 1980) 17

Mullane v. Central Hanover Bank & Trust Co.

339 U.S. 306 (1950) 16

National Rural Telecommunications Cooperative v. DIRECTV, Inc.

221 F.R.D. 523 (C.D. Cal. 2004) 8, 10, 11

Officers of Justice v. Civil Service Commission

688 F.2d 615 (9th Cir. 1982) 9

Pineda v. Williams-Sonoma Stores, Inc.

51 Cal.4th 524 (2011) 8, 9

Staton v. Boeing

327 F.3d 938 (9th Cir. 2003) 14

The TJX Companies, Inc. v. Superior Court

(2008) 163 Cal.App.4th 80 3

Valentino v. Carter-Wallace, Inc.

97 F.3d 1227 (9th Cir. 1996) 16

Wiener v. Dannon Co., Inc.

255 F.R.D. 658 (C.D. Cal. 2009) 12-16

Williams v. Vukovich

720 F.2d 909 (6th Cir.1983) 10




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Table of Authorities continued

Zinser v. Accufix Research Institute, Inc.

253 F.3d 1180 (9th Cir. 2001) 16

Vasquez v. Superior Court

(1974) 4 Cal.3d 800 16

STATUTES AND RULES

Civil Code section 1747.08 passim

Federal Rules of Civil Procedure, rule 23 passim

SECONDARY AUTHORITY

Federal Practice & Procedure § 1777 (2d ed. 1986) 14

Manual for Complex Litigation § 21.633 (4th ed. 2004) 18

Newberg on Class Actions § 11.41 (4th ed. 2007) 12


1 PLAINTIFF’S NOTICE OF MOTION AND UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF

CLASS ACTION SETTLEMENT

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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF

PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

I. INTRODUCTION

Defendant, Ashley Furniture Industries, Inc., (“Defendant”), manufactures and

distributes furniture and home furnishing accessories. Defendant licenses the trademark name

“Ashley Furniture HomeStore” to licensees that operate Ashley Furniture HomeStores in

California.1

This action arises from Defendant’s alleged violations of the Song-Beverly Credit Card

Act, codified in California Civil Code section 1747.08 (the “Act” or “Section 1747.08”), by

and through its alleged practice whereby Defendant requested and recorded personal

identification information, in the form of telephone numbers, addresses, and/or e-mail

addresses, from customers using credit cards at the point-of-sale in Defendant’s California

stores.

After an initial investigation; Court Orders regarding Defendant’s Motions to Strike

and Dismiss; discovery; and three (3) separate days of Early Neutral Evaluation Conferences

with the Honorable David H. Bartick, United States Magistrate Judge, the Parties reached a

class wide resolution and entered into a proposed Settlement Agreement and Release

(“Agreement,” filed concurrently).

Plaintiff’s counsel believes that the proposed settlement is fair, reasonable and

adequate; therefore, Plaintiff now moves the Court for an order: (1) preliminarily approving

the Settlement Agreement as being fair, reasonable, and adequate; (2) provisionally certifying

the class under Federal Rule of Civil Procedure 23 for settlement purposes only; (3)

preliminarily approving the form, manner, and content of the Class Notices and Claim Form;

(4) appointing Plaintiff Perry Johnson as the class representative; (5) appointing the law firms

of Fineman Poliner LLP, and the Werner Law Firm as counsel for the class; and (6) setting the

date and time of the Fairness Hearing.

1 All licensees that are participating in the proposed settlement are referred to collectively

herein as “Defendant.”




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II. BRIEF EXPLANATION OF ALLEGATIONS

As alleged in the complaint, Plaintiff visited one of Defendant’s retail stores in

California and purchased an item using his personal credit card. Because he was taking the

item with him rather than having the item delivered to his home, there was no need for

Defendant to request and record any personal identification information (“PII”) from Plaintiff.

However, Mr. Johnson contends the Defendant’s cashier did in fact request and record Mr.

Johnson’s PII, and that the cashier did so pursuant to an alleged uniform policy and practice of

Defendant. The complaint in this action asserts that the requesting and recording of Mr.

Johnson’s PII was a patent violation of Section 1747.08. Defendant denies all claims of

wrongdoing and asserts several affirmative defenses on the grounds that it did not engage in

the alleged conduct and it did not violate the Song-Beverly Credit Card Act or any other laws

relating to its alleged conduct.

III. BASIS OF LIABILITY

The Act states in relevant part:

(a) Except as provided in subdivision (c), no person, firm, partnership, association, or

corporation which accepts credit cards for the transaction of business shall do either of

the following:

(2) Request, or require as a condition to accepting the credit card as payment in full

or in part for goods or services, the cardholder to provide personal identification

information, which the person, firm, partnership, association, or corporation

accepting the credit card writes, causes to be written, or otherwise records upon the

credit card transaction form or otherwise.”

(Civ.Code, § 1747.08(a)(2); emphasis added.)

Under the Act, “personal identification information” means information concerning the

cardholder, other than information set forth on the credit card, and including, but not limited

to, the cardholder’s address and telephone number. (Civ.Code, § 1747.08(b).)

The Act was designed to promote consumer protection. (Florez v. Linens ‘N Things,

Inc. (2003) 108 Cal.App.4th 447, 450.) “The act imposes fair business practices for the

protection of the consumers. Such a law is remedial in nature and in the public interest and is

to be liberally construed to the end of fostering its objectives.” (Id.)




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Section 1747.08 was originally enacted as a response to two principal privacy

concerns: first, that with increased use of computer technology, very specific and personal

information about a consumer’s spending habits was being made available to anyone willing

to pay for it; and second, that acts of harassment and violence were being committed by store

clerks who obtained customers’ phone numbers and addresses.2

The Act was intended to keep the customer’s credit card number separated from their

personal information such as address, telephone number, birth date, etc., in order to prevent

thieves from obtaining both at the same time (i.e., “dumpster diving”) and engaging in credit

card fraud, usually over the telephone or the Internet.3 When drafting Section 1747.08, the

Legislature was well aware that anyone with access to a consumer’s credit card number and

other personal identification information, could access their credit history, open credit in their

name, or charge something in their name.4

Pursuant to the Act, a violator of the statute shall be liable for a civil penalty of up to

$250.00 for the first violation and up to $1,000.00 for each subsequent violation of the statute.

(Civ.Code § 1747.08(e).) Although a violator of the statute is subject to a mandatory civil

penalty, the amount of the civil penalty to be imposed against a Defendant is discretionary.

The civil penalties are capped at $1,000 per violation, but could be as little as a penny or the

“proverbial peppercorn.” (See, The TJX Companies, Inc. v. Superior Court (2008) 163

Cal.App.4th 80, 86-87.)

IV. BASIC ELEMENTS OF THE PROPOSED SETTLEMENT

The settlement was reached after arms-length negotiations by experienced counsel on

both sides with assistance of Judge Bartick. Over the course of three (3) separate days

(January 29, 2015, February 19, 2015, and April 1, 2015), Judge Bartick masterfully mediated

the matter and was instrumental in getting the Parties to reach a settlement. (See, Declaration

2 Id. at 452. See also, Off. of Sen. Floor Analysis, 3d reading analysis of Assem. Bill No. 1316 (1995-1996

Reg. Sess.) July 18, 1995, p. 3.

3 Assem. Floor Analysis, 3d reading of Assem. Bill No. 2533 (1995-1996 Reg. Sess.) May 15, 1996, pp. 1-2.

4 Dept. Consumer Affairs, Analysis of Assem. Bill No. 1316 (1995-1996 Reg. Sess.) p. 1.




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of Neil B. Fineman (“Fineman decl.”) p.22 ¶ 7.) The proposed settlement provides that

Defendant will agree to a provisional class for settlement purposes and will provide pecuniary

and non-pecuniary benefits to settlement class members, while settlement class members will

only release claims based on facts alleged in the complaint. A fuller explanation follows.

A. Establishment of the Class.

In order to avoid the risk and expense of litigating whether a class should be certified,

the parties agreed for the purposes of settlement only, that this action meets the requirements

of a “class action” pursuant to Federal Rules of Civil Procedure, Rule 23, as fully explained in

Section V of this memorandum. The parties seek to conditionally certify a plaintiff class

defined as:

“All Ashley Furniture HomeStore customers who were requested or required to provide, and did provide and had recorded, their personal identification information (which includes, but is not limited to, a customer’s address, ZIP code, telephone number, and/or email address), during a credit card transaction at a Ashley Furniture HomeStore in California between October 10, 2012 and the Preliminary Approval Date, and who took all of their purchases with them at the conclusion of the transaction.”5 (Agreement, § 3.4.)

Upon preliminary approval, Defendant anticipates that its records will identify

approximately 15,000 “Known Class Members,” defined as class members who can be

identified from Defendant’s records (Agreement, § 3.12.), i.e., customers who (1) paid with a

credit card; (2) had their PII requested and recorded, and (3) took their purchases with them.

In addition to the 15,000 “Known Class Members”, there are approximately 10,000

“Unknown Class Members”. “Unknown Class Members” are Defendant’s customers who,

during the period of 2012 to 2013, had their PII requested and recorded by Defendant, but

5 class members do not include (a) AFI, AHS, Southwestern, Stoneledge, Del Monte Furniture Rental, Inc., Empty Heads, Inc., Dobbs TV and Appliance Limited Partnership, MPB Furniture Corporation, Santa Maria Décor, Inc., River Rock Interiors, Inc., Sang Kim, Corp., Saki Trans, Inc., Visalia Sang Kim, Corp., Fairfield Furniture Solutions, Inc., Rohnert Park Furniture Solutions, Inc., Fremont Furniture Solutions, Inc., Concord Furniture Solutions, Inc., and Oakland Furniture Solutions, Inc., and their respective parents, subsidiaries, affiliates, and control persons, as well as officers, directors, agents, attorneys, employees, and immediate family members of all such persons, and (b) the Court and its staff.




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because Defendant’s point of purchase systems during that time did not distinguish between

credit card and non-credit card transactions, or between Take-With transactions and other

transactions, Defendant cannot accurately distinguish how many of these 10,000 customers

who provided PII meet the other two requirements of “known” class members, e.g. (1) used a

credit card, and (2) took purchases with them. (Agreement, § 3.18.)

B. Compliance with Civil Code Section 1747.08.

As part of the settlement, Defendant agrees to comply with the provisions of Civil

Code sections 1747.08 et seq. in its California retail stores. Specifically, Defendant’s licensees

agreed that following preliminary approval of the proposed settlement (if preliminary approval

is granted), these licensees will no longer request PII in conjunction with any “Take With”

transaction at Ashley Furniture HomeStores they operate in California. (Agreement, § 4.1 and

4.2.)

C. Class Members May Opt-Out of Their PII being used by Defendant for

Marketing Purposes.

Defendant has agreed, for those class members who desire, not to use class members’

PII for marketing purposes. (Agreement, § 4.1.)

D. Distribution of Pecuniary Benefits to the Class.

If the settlement agreement is given final approval, Defendant or the Claims

Administrator, will automatically distribute to each of the estimated 15,000 “Known Class

Members” a $25.00 Merchandise Voucher (not a coupon), which will be available to each

class member in the form of a store credit, without the need of making any claim to receive the

benefit. (Agreement, §§ 3.20, 4.3.) The same $25 Merchandise Voucher will be made

available to the estimated 10,000 “Unknown Class Members” upon the submission of a timely

and valid Claim Form wherein the Unknown Class Member attests that he/she used a credit

card (not a debit card) to make a purchase of a take-with item (not an item for delivery).

(Agreement, § 5.30.)6

6 As discussed, in section IV.A., Unknown class members includes customers who had their PII requested and

recorded, but Defendant cannot distinguish which of these 10,000 customers also used a credit card and took




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The $25.00 Merchandise Voucher may be used at the California Ashley Furniture

HomeStores listed in the information each Class Member will receive from the Claims

Administrator and may be used multiple times by the class member until the full $25.00 is

extinguished. (Agreement, § 3.20.) The Merchandise Voucher is valid for 18 months from the

final approval date (if final approval is granted).7 Defendant sells a large variety of “take with”

items costing less than $25.00 (e.g., vases, picture frames, and other house hold accessories)

so class members can literally walk into one of Defendant’s California regional retail stores

and walk out with a free product. For example, the product purchased by Plaintiff in this case

was a vase which cost $16.99.

E. Right to Elect Not to Participate in the Settlement

Any person who wishes to request to be excluded from or opt out of the settlement

must submit a written, signed Request for Exclusion to the Settlement Administrator, within

the deadline set by the Court. (Agreement § 5.4.)

F. Right to Object

Any class member who wishes to object to the settlement must file a signed, written

objection with the Court and serve copies on Class Counsel within the deadline set by the

Court. (Agreement § 5.6.1.)

G. Incentive Award Paid By Defendant – Not the Class.

After the parties reached an agreement as to the class benefits, counsel for the parties

then engaged in arms-length negotiations in regard to an incentive award for the named

Plaintiff and class counsels’ attorneys’ fees and costs. The parties agreed that based upon the

time, as well as the risks to him in bringing the litigation, a modest incentive award of

$5,000.00 was agreeable to the parties. (Agreement, § 4.8.)

purchases with them. Therefore in order to provide a benefit to the customers who did use a credit card and took

their items – and to prevent fraud against Defendant by customers who did not use a credit card and/or did not take

items with them – a claims process is necessary for this group.

7 Because the Certificate and Voucher will be e-mailed and/or mailed directly to the class, the parties believe class

members will use the Voucher within a short period of time after final approval and not hold on to the benefits

beyond the 18 month expiration.




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Plaintiff will provide further supporting documentation and briefing regarding the

agreed upon awards for the class representative’s incentive payment in his Motion for an

Award of Attorneys’ Fees and Costs to Class Counsel and for Incentive Award to the Class

Representative.

H. Attorneys’ Fees and Costs to be Paid By Defendant – Not the Class.

With the aid of Judge Bartick, the Parties agreed through arms-length negotiations, that

“an award of attorneys’ fees and costs (combined) in the amount of $140,000.00 to class

counsel is fair and reasonable, in light of the nature and circumstances of the Action,” and fees

and costs are to be paid by Defendant, and not from the class or any common fund.

(Agreement, § 4.7.) Plaintiff will provide further supporting documentation and briefing

regarding the agreed upon awards for attorneys’ fees and costs in his Motion for an Award of

Attorneys’ Fees and Costs to Class Counsel and for Incentive Award to the Class

Representative. Plaintiff’s’ Motion for attorneys’ fees will be filed prior to the objection

deadline. (See In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988 (9th Cir. 2010).)

V. CRITERIA AND EVIDENCE ESTABLISHING THE FAIRNESS OF THE

SETTLEMENT

As explained by the Court in In re Immune Response Secs. Litigation, 497 F. Supp.

2nd 1166, at 1169-1170 (S.D. Cal. 2007):

“‘Although Rule 23(e) is silent respecting the standard by which a proposed

settlement is to be evaluated, the universally applied standard is whether the

settlement is fundamentally fair, adequate and reasonable.’ Officers for Justice,

688 F.2d at 625; see also Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1375

(9th Cir. 1993). When determining whether approval of a settlement is

warranted, courts consider ‘several factors which may include, among others,

some or all of the following: [1] the strength of Plaintiffs’ case; [2] the risk,

expense, complexity, and likely duration of further litigation; [3] the risk of

maintaining class action status throughout the trial; [4] the amount offered in

settlement; [5] the extent of discovery completed, and the stage of the

proceedings; [6] the experience and views of counsel; [7] the presence of a

governmental participant; and [8] the reaction of the class members to the

proposed settlement.’ Torrisi, 8 F.3d at 1375; see also Hanlon v. Chrysler Corp.,

150 F.3d 1011, 1026 (9th Cir. 1998).”




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“Not all of these factors will apply to every class action settlement. Under certain

circumstances, one factor alone may prove determinative in finding sufficient grounds for court

approval. See, e.g., Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1376 (9th Cir.1993).”

(National Rural Telecommunications Cooperative v. DIRECTV, Inc. 221 F.R.D. 523, 525-26

(C.D. Cal. 2004).)

A. Strength of Plaintiff’s Case

Defendant and/or its licensees acknowledge that it often requested and recorded

customers’ personal identification information. However, Defendant contends that any

personal identification information provided was done so voluntarily or its consumer

transactions fall within one or more of the Act’s statutory exemptions in any event. Defendant

also contends that it would be difficult for Plaintiff to certify a class in this case if contested.

Plaintiff contends that voluntarily providing PII during a credit card transaction is not a

defense. The seminal case interpreting Civil Code section 1747.08 makes it clear that obtaining

personal identification information such as telephone numbers and addresses voluntarily in

connection with a credit card purchase is prohibited. (Florez, supra,, 108 Cal.App.4th at 453

[“As we read it, the legislative intent suggests the 1991 amendment simply clarified that a

“request” for personal identification information was prohibited if it immediately preceded the

credit card transaction, even if the consumer’s response was voluntary and made only for

marketing purposes”].) Further, the California Supreme Court’s unanimous decision in Pineda

v. Williams-Sonoma Stores, Inc., confirmed that there is no “voluntary” defense in 1747.08

cases. (Pineda v. Williams-Sonoma Stores, Inc., 51 Cal.4th 524 (2011).) However, this question

is currently the subject of an Order Certifying a Question to the California Supreme Court by

the United States Court of Appeals for the Ninth District (Davis v. Devanlay Retail Group, Inc.

785 F.3d 359, 360 (9th Cir. 2015)), so the viability of the “voluntary” defense has yet to be

decided.

However, at this stage, the Court need only to conduct a prima facie review of the

relief and notice provided by the settlement to determine whether notice should be sent to the

settlement class members. (In re Immune Response, 497 F.Supp.2d at 1172.) It is simply “not




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appropriate for the court to attempt to settle these questions of law and fact: ‘[T]he settlement

or fairness hearing is not to be turned into a trial or rehearsal for trial on the merits. Neither the

trial court nor [the appellate court] is to reach any ultimate conclusions on the contested issues

of fact and law which underlie the merits of the dispute, for it is the very uncertainty of

outcome in litigation and avoidance of wasteful and expensive litigation that induce

consensual settlements.’” (Id., citing Officers of Justice v. Civil Service Com., 688 F.2d 615,

625 (9th Cir. 1982).)

In sum, “the merits of the underlying class claims are not a basis for upsetting the

settlement of a class action; the operative word is ‘settlement.’“ (7-Eleven Owners for Fair

Franchising v. Southland Corp., 85 Cal.App.4th 1135, 1150 (2000). Even “[t]he fact that a

proposed settlement may only amount to a fraction of the potential recovery does not, in and

of itself, mean that the proposed settlement is grossly inadequate and should be disapproved.”

(Detroit v. Grinnell Corp., 495 F.2d 448, 455 (2nd. Cir. 1974).)

Plaintiff believes his case is strong, but the outcome of this case is uncertain, and if

Defendant was to prevail on any of its arguments, the class would obtain little or nothing

through litigation. Even if Plaintiff was to convince the Court to certify the class after a

contested motion for class certification and eventually establish liability at trial, then the

amount of the civil penalty to be awarded (somewhere between a penny and $1,000) would

rest within the sound discretion of the trial court. (Pineda, 51 Cal. 4th at 536 (2011).) As such,

if Plaintiff and the class succeed at trial, the amount of the civil penalties to be awarded by the

Court is uncertain.

B. The Risk, Expense, Complexity, and Duration of Further Litigation and the

Risk of Maintaining Class Action Status Through Trial

The settlement takes into account the risk, expense, and complexity of further

litigation. Plaintiff and the class would have to retain additional experts to conduct forensic

analysis of the recording and storage of Defendant’s customer information, as well as experts

to perform an analysis in regard to the value of the collected information. Defendant would

vigorously oppose Plaintiff’s attempts to get a class certified and would also retain experts to




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defeat certification and the class claims.

Additional time consuming and expensive law and motion proceedings would be

necessary to narrow or eliminate the claims and defenses both at the certification stage and the

trial stage. The time and expense of further litigation could potentially negatively impact

Defendant’s business operations and would interfere with potential class members’

opportunity to obtain benefits promptly. Accordingly, the settlement at this stage in the

litigation benefits the Court and the parties, as well as the class.

C. The Benefits Offered in Settlement

Notwithstanding the conflicting legal arguments described above, each proposed class

member will be entitled to receive benefits in the amount of a $25.00 and class members will

be permitted to opt-out of Defendants’ email marketing campaigns. More importantly perhaps

for future consumers, Defendant has agreed to stop requesting and recording PII from

customers purchasing “take-with” items from Defendant’s stores, thereby limiting the threat of

identity theft and credit card fraud. Such recovery to the proposed class is without any risk of

the class not being certified and is without any risk that Plaintiff will not prevail as to liability

and/or penalties.

While it is true the civil penalties in this case could range from $1,000.00 down to the

proverbial peppercorn, “[i]n assessing the consideration obtained by the class members in a

class action settlement, it is the complete package taken as a whole, rather than the individual

component parts, that must be examined for overall fairness. In this regard, it is well-settled

law that a proposed settlement may be acceptable even though it amounts to only a fraction of

the potential recovery that might be available to the class members at trial.” (Nat. Rural Tele.

Coop., 221 F.R.D. at 527, internal citations and quotes omitted; see also, Williams v.

Vukovich, 720 F.2d 909, 922 (6th Cir.1983) [court may not withhold approval merely because

settlement is only a fraction of what a successful plaintiff would have received in a fully

litigated case].) Further, while the dollar value of the settlement per class member may be

relatively small, it must be remembered that Plaintiff does not allege that he or other class

members suffered any “damages” – and any allegation of alleged harm may be difficult to




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prove. (See, Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 55 [Six dollar benefit provided

by the settlement - free DVD rentals - directly addresses the harm alleged in the complaint].)

D. The Extent of Discovery and Stage at Which Settlement Is Reached

It is not the law that no class action can be settled until the last particle of discovery

has been completed and analyzed. (See, In re Corrugated Container Antitrust Litig., 643 F.2d

195, 211 (5th Cir. 1981) [“‘It is true that very little formal discovery was conducted and that

there is no voluminous record in the case. However, the lack of such does not compel the

conclusion that insufficient discovery was conducted’”].) (Emphasis omitted).

The settlement in this case came only after Plaintiff and his counsel conducted a

sufficient amount of investigation before and after filing the action. (Fineman decl., p. 22, ¶ 7;

and Declaration of Lee Werner (“Werner decl.”), p. 25, ¶¶ 3-5.) Plaintiff’s counsel conducted

extensive research prior to settlement regarding Defendant’s point-of-sale procedures and use

of personal identification information. (Werner decl., p. 25, ¶¶ 3-5.) Counsel also performed

independent research, consisting of exhaustive reviews of trade literature, civil dockets, and

legal filings. (Id.) Class Counsel then engaged in an informal exchange of discovery with

Defendant. (Id.) After all the information was obtained and analyzed, the parties were

sufficiently informed of the nature of the claims and defenses to be in a position to evaluate

the proposed settlement for its fairness, adequacy, and reasonableness. (Werner decl., p. 26, ¶

8.)

E. Experience and Views of Counsel

“‘Great weight’” is accorded to the recommendation of counsel, who are most closely

acquainted with the facts of the underlying litigation. This is because parties represented by

competent counsel are better positioned than courts to produce a settlement that fairly reflects

each party’s expected outcome in the litigation. (Nat. Rural Tele. Coop, 221 F.R.D. at 528,

internal citations and quotes omitted.)

Plaintiff’s counsel has extensive experience litigating consumer class actions and has

litigated numerous cases based upon violation of the Act. (Fineman decl., p. 20, ¶¶ 4-6.)

Plaintiff’s counsel has represented millions of consumers in numerous consumer class actions




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asserting violations of the Song-Beverly Credit Card Act, the Consumers Legal Remedies Act,

and California’s Unfair Competition Law. (Id.) Based upon Plaintiff’s counsels’ substantial

experience, they believe the present settlement is in the best interest of the class members due

to the significant recovery to the class members, without any risk of the class not being

certified and not prevailing as to liability and/or civil penalties. (Fineman decl., p. 23, ¶ 11.)

F. Presence of Governmental Participants

There is no governmental entity participating in this matter.

G. The Proposed Settlement Resulted from Serious, Informed and Non-

Collusive Arm’s-Length Negotiations

The requirement that a settlement be fair is designed to protect against collusion

among the parties. (See, Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998).)

Typically, “[t]here is a presumption of fairness when a proposed class settlement, which was

negotiated at arm’s-length by counsel for the class, is presented for Court approval.” (Newberg

on Class Actions, § 11.41 (4th ed. 2007).)

Here, the fact Judge Bartick (masterfully) facilitated the settlement after three (3) days

of an Early Neutral Evaluation confirms that it is anything but collusive. (See, Adams v. Inter-

Con Sec. Sys. Inc., No. C-06-5428 MHP, 2007 WL 3225466, at *3 (N.D. Cal. Oct. 30, 2007)

[“The assistance of an experienced mediator in the settlement process confirms that the

settlement is non-collusive.”].) The negotiations were spirited and contentious, to say the least.

(Fineman decl. ¶ .) Accordingly, the settlement was the result of serious, informed, and non-

collusive arm’s-length negotiations.

VI. THE PROPOSED CLASS MEETS THE CRITERIA FOR CERTIFICATION

A. The Settlement Satisfies the Requirements of Rule 23(a)

Rule 23(a) enumerates four prerequisites for class certification: (1) numerosity; (2)

commonality; (3) typicality; and (4) adequacy. Plaintiff believes that each requirement is met.

1. Numerosity. Rule 23(a)(1) requires that “the class is so numerous that

joinder of all members is impracticable.” (Fed. R. Civ. P. 23(a); Wiener v. Dannon Co., Inc.,

255 F.R.D. 658, 664 (C.D. Cal. 2009).) Here, the numerosity requirement is readily met




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because joinder of absent class members would be exceedingly difficult. According to

Defendant, during the class period, there are 15,000 to 25,000 class members. As such, the

numerosity requirement is satisfied. (Fineman decl., p. 22, ¶ 9(a).)

2. Commonality. “The existence of shared legal issues with divergent factual

predicates is sufficient [to satisfy commonality], as is a common core of salient facts coupled

with disparate legal remedies within the class.” (Hanlon, 150 F.3d at 1019; In re First Alliance

Mortg. Co., 471 F.3d 977, 990-91 (9th Cir. 2006).) The commonality requirement is construed

“permissively.” (Hanlon, 150 F.3d at 1019; Wiener, 255 F.R.D. at 664.)

In this case, there are multiple “common issues” affecting the entire class and

Defendant’s liability; mainly, whether Defendant’s policy and practice of requesting and

recording customers’ PII during purchase transactions, violate California Civil Code section

1747.08. (Fineman decl., p. 23, ¶ 9(b).)

3. Typicality. Rule 23(a)(3) typicality is satisfied where the plaintiff’s claims

are “reasonably coextensive” with absent class members’ claims; they need not be

“substantially identical.” (Hanlon, 150 F.3d at 1020; see also Wiener, 255 F.R.D. at 665.) The

test for typicality “is whether other members have the same or similar injury, whether the

action is based on conduct which is not unique to the named Plaintiffs, and whether other class

members have been injured by the same course of conduct.” (Hanon v. Dataproducts Corp.,

976 F.2d 497, 508 (9th Cir. 1992).) Thus, “[t]he purpose of the typicality requirement is to

assure that the interest of the named representative aligns with the interests of the class.” (Id.)

Plaintiff alleges he was exposed to the same alleged unlawful policy and practice of

Defendant. Specifically, Plaintiff alleges that Defendant requested and recorded his PII during

a credit card purchase transaction which constituted a violation of section 1747.08.

Importantly, Plaintiff alleges no claims or facts unique to himself. Thus, the requirement of

typicality is satisfied. (Fineman decl., p. 23, ¶ 9(c).)

4. Adequacy. Rule 23(a)(4) requires that “the representative parties will fairly

and adequately protect the interests of the class.” Adequacy is satisfied where (i) counsel for

the class is qualified and competent to prosecute the action vigorously, and (ii) the interests of




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the proposed class representatives are not antagonistic to the interests of the class. (See, Staton

v. Boeing, 327 F.3d 938, 957 (9th Cir. 2003); Hanlon, 150 F.3d at 1020; Weiner, 225 F.R.D. at

667.)8

Plaintiff has retained counsel with significant experience in prosecuting large

consumer protection class actions. (Fineman decl., p. 20, ¶¶5-6; Declaration of Phillip R.

Poliner, p. 27, ¶¶ 4-9.) Likewise, the proposed class representative is a member of the

proposed class and has the same interests as the class in maximizing the recovery from

Defendant. He alleges that Defendant requested and recorded his PII during a credit card

purchase transaction for a “take-with” item which constituted a violation of section 1747.08.

He alleges no claims or facts unique to himself or that conflict with the claims of absent class

members. Thus, Plaintiff is an adequate representative. (Fineman decl., p. 23, ¶ 9(d).)

B. The Settlement Class Should be Certified Under Rule 23(b)(3)

The Parties request that the Court, for the purposes of settlement, certify a class of the

following individuals under Rule 23(b)(3): “All Ashley Furniture HomeStore customers who

were requested or required to provide, and did provide and had recorded, their personal

identification information (which includes, but is not limited to, a customer’s address, ZIP

code, telephone number, and/or email address), during a credit card transaction at a Ashley

Furniture HomeStore in California between October 10, 2012 and the Preliminary Approval

Date, and who took all of their purchases with them at the conclusion of the transaction.”

Certification under Rule 23(b)(3) is appropriate “whenever the actual interests of the

parties can be served best by settling their difference in a single action.” (Hanlon, 150 F.3d at

1022, quoting 7A C.A. Wright, A.R. Miller, & M. Kane, Federal Practice & Procedure §

1777 (2d ed. 1986).)

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8 Rule 23(g)(1) also requires the Court to appoint class counsel. Plaintiff requests the Court appoint the law firms

of Fineman Poliner LLP and Werner Law Firm as Class Counsel.




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There are two fundamental conditions to certification under Rule 23(b)(3): (1)

questions of law or fact common to the members of the class predominate over any questions

affecting only individual members; and (2) a class action is superior to other available

methods for the fair and efficient adjudication of the controversy. (Fed. R. Civ. P. 23(b)(3);

Local Joint Exec. Bd. of Culinary/Bartender Trust Fund v. Las Vegas Sands, Inc., 244 F.3d

1152, 1162-63 (9th Cir. 2001); Hanlon, 150 F.3d at 1022; Wiener, 255 F.R.D. at 668.) Rule

23(b)(3) encompasses those cases “in which a class action would achieve economies of time,

effort, and expense, and promote... uniformity of decision as to persons similarly situated,

without sacrificing procedural fairness or bringing about other undesirable results.” (Amchem

v. Windsor, 521 U.S. 591, 615 (1997), citations omitted and alterations in original; Wiener,

255 F.R.D. at 668.)

1. Common Questions Predominate Over Individual Issues. Rule 23(b)(3)’s

predominance inquiry “tests whether proposed classes are sufficiently cohesive to warrant

adjudication by representation.” (Amchem, 521 U.S. at 623.) “Predominance is a test readily

met in certain cases alleging consumer. . . fraud. . . .” (Id.) “When common questions present a

significant aspect of the case and they can be resolved for all members of the class in single

adjudication, there is clear justification for handling the dispute on a representative rather than

on an individual basis.” (Fed Prac. & Proc., § 1778; Gen. Tel. Co. of Sw. v. Falcon, 457 U.S.

147, 157 n.13 (1982) [noting commonality and typicality tend to merge].)

The predominance requirement is satisfied here. As discussed above, Plaintiff alleges

class members are entitled to the same legal remedies based on the same alleged wrongdoing:

exposure to the same alleged policy and practice. The central issue for every claimant is

whether Defendant requested and recorded customers’ PII in connection with credit card

transactions for take-with items. Under these circumstances, there is sufficient basis to find

that the requirements of Rule 23(b)(3) are satisfied. (See, Weiner, 255 F.R.D. at 669; Hanlon,

150 F.3d at 1022.)

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2. A Class Action is the Superior Method to Settle this Controversy. Rule

23(b)(3) sets forth the relevant factors for determining whether a class action is superior to

other available methods for the fair and efficient adjudication of the controversy. These factors

include: (i) the class members’ interest in individually controlling separate actions; (ii) the

extent and nature of any litigation concerning the controversy already begun by or against

class members; (iii) the desirability or undesirability of concentrating the litigation of the

claims in the particular forum; and (iv) the likely difficulties in managing a class action. (Fed.

R. Civ. P. 23(b)(3); see, Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1190-92 (9th

Cir. 2001).) “[C]onsideration of these factors requires the court to focus on the efficiency and

economy elements of the class action so that cases allowed under subdivision (b)(3) are those

that can be adjudicated most profitably on a representative basis.” (Zinser, 253 F.3d at 1190

(citations omitted); see also, Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir.

1996) [finding superiority requirement may be satisfied where granting class certification

“will reduce litigation costs and promote greater efficiency”].)

Application of the Rule 23(b)(3) “superiority” factors shows that a class action is the

preferred procedure for this Settlement. The amount of potential monetary relief to which an

individual class member would be entitled is not large. (Zinser, 253 F.3d at 1191; Wiener 255

F.R.D. at 671.) It is neither economically feasible, nor judicially efficient, for the thousands of

class members to pursue their claims against Defendant on an individual basis. (Deposit Guar.

Nat’l Bank v. Roper, 445 U.S. 326, 338-39 (1980); Hanlon, 150 F.3d at 1023; Vasquez v.

Superior Court, 4 Cal. 3d 800, 808 (1971).) The fact of settlement eliminates any potential

difficulties in managing the trial of these actions as class-actions. When “confronted with a

request for settlement-only class certification, a district court need not inquire whether the

case, if tried, would present intractable management problems . . . for the proposal is that there

be no trial.” (Amchem, 521 U.S. at 620.)

Because the proposed class meets the criteria for certification, provisional certification

for settlement purposes only is appropriate.

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VII. THE FORM AND METHOD OF PROVIDING CLASS NOTICE MEETS DUE

PROCESS REQUIREMENTS AND SHOULD BE APPROVED

The threshold requirement concerning the sufficiency of class notice is whether the

means employed to distribute the notice is reasonably calculated to apprise the class of the

pendency of the action, of the proposed settlement, and of the class members’ rights to opt out

or object. (Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173-74 (1974); Mullane v. Cent.

Hanover Bank & Trust Co., 339 U.S. 306, 315 (1950).) The mechanics of the notice process

are best left to the discretion of the court, subject only to the broad “reasonableness” standards

imposed by due process.

In this Circuit, it has long been the case that a notice of settlement will be adjudged

satisfactory if it “generally describes the terms of the settlement in sufficient detail to alert

those with adverse viewpoints to investigate and to come forward and be heard.” (Churchill

Village v. General Electric, 361 F.3d 566, 575 (9th Cir. 2004), citing Mendoza v. Tucson Sch.

Dist. No. 1, 623 F.2d 1338, 1352 (9th Cir. 1980)); Hanlon, 150 F.3d at 1025 [notice should

provide each absent class member with the opportunity to opt-out and individually pursue any

remedies that might provide a better opportunity for recovery].)

The proposed Class Notice meets these standards. Attached to the Agreement as

Exhibit 1 is a true and correct copy of the Full Class Notice, and attached to the Agreement as

Exhibit 2 is a true and correct copy of the Summary Notice. The Full and Summary Notices

are written in simple, straightforward language and includes: (1) basic information about the

lawsuit; (2) a description of the benefits provided by the Settlement; (3) an explanation of how

class members can obtain Settlement benefits; (4) an explanation of how class members can

exercise their right to opt-out or object to the Settlement; (5) an explanation that any claims

against Defendant that could have been litigated in these actions will be released if the class

member does not opt out from the Settlement; (6) the names of class counsel and information

regarding attorneys’ fees and expenses and the class representatives’ incentive awards; (7) the

Final Fairness Hearing date; and (8) an explanation of eligibility for appearing at the Final

Fairness Hearing.




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Collectively, the Notices provide class members with sufficient information to make

an informed and intelligent decision about the Settlement. As such, they satisfy the content

requirements of Rule 23. (See, In re Compact Disc Minimum Advertised Price Antitrust Litig.,

216 F.R.D. 197, 203 (D. Me. 2003) [“notice must describe fairly, accurately and neutrally the

claims and parties in the litigation entitled to participate, including the right to exclude

themselves from the class”].)

Additionally, the proposed dissemination of Notices to class members satisfies all due

process requirements: Subject to Court approval, within twenty (20) days of the entry of a

Preliminary Approval Order the Defendant or the Claims Administrator will e-mail the

Summary Notice to all Known and Unknown Class Members with their last known e-mail

addresses (the Claim Form will also be e-mailed to Unknown Class Members along with the

Summary Notice), or if Defendant does not have an e-mail address, the Summary Notice will

be mailed to all Known and Unknown Class Members last known address. (Agreement, § 5.2.)

Mail returned to the Claims Administrator as undeliverable will be forwarded to the class

member’s new address (as provided in a post office forwarding notice), or the Claims

Administrator will utilize publicly available databases and then resend the Notice to the new

address (if one appears in those databases).

Finally, the Full Notice, the operative complaint, the settlement agreement and order

granting preliminary approval will be posted on the Claims Administrator’s website prior to

mailing or emailing the summary notice (Id.)

The parties believe this method of providing notice of the pendency of the settlement

of this class action fully comply with the requirements of due process and constitute the best

notice practicable under the circumstances.

In regard to the period of time for class members to object to the settlement or request

exclusion from the settlement, that time period will be dictated by the date of the final fairness

hearing. The Agreement states that objections and requests for exclusions must be made no

later than forty-five calendar days after the first issuance of the Class Notice. (Agreement, §

3.13.)




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VIII. IF THE SETTLEMENT IS PRELIMINARILY APPROVED, THE COURT

SHOULD SCHEDULE A HEARING ON FINAL SETTLEMENT APPROVAL

Following notice to the class members, a fairness hearing is to be held on the proposed

settlement. (Manual for Complex Litigation section 21.633 (4th ed. 2004).) Because direct

notice of the pendency of the class action and proposed settlement will be directly

disseminated to each class member via e-mail and/or U.S. mail no later than 20 days following

preliminary approval of the settlement, Plaintiff believes the final fairness hearing should be

held approximately 75 days following preliminary approval of the settlement (if granted).

IX. CONCLUSION

For the reasons stated above, Plaintiff requests that the Court preliminarily approve the

settlement and certify the class for settlement purposes; approve the form and method of

service of notice to the class; and schedule a hearing for final approval of the settlement. At

that time, the parties will present additional papers in support of the settlement and address

any potential concerns class members may have with the proposed settlement.

Dated: June 29, 2015 Respectfully Submitted,

FINEMAN POLINER LLP

WERNER LAW FIRM

By: /s/ Neil B. Fineman

Neil B. Fineman

Co-Lead Counsel for Plaintiff

Lee G. Werner (SBN: 84744) WERNER LAW FIRM 18200 Von Karman Avenue, Suite 900 Irvine, California, 92612




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DECLARATION OF NEIL B. FINEMAN

IN SUPPORT OF PRELIMINARY APPROVAL

I, Neil B. Fineman, declare as follows:

1. I am a consumer attorney who handles litigation in Federal and State courts

throughout California and I am one of the attorneys of record for Plaintiff and the class

herein. I make this declaration in support of Plaintiff’s Unopposed Motion for Preliminary

Approval of Class Action Settlement. If called as a witness, I would and could testify to the

following:

2. I am duly licensed and admitted to the Bar of the State of California; the

United States District Court for the Southern, Central, and Northern Districts of California;

the United States Court of Appeals for the Ninth Circuit; and the United States Supreme

Court.

3. In addition to being a practicing attorney, I am also a Temporary Judge with

the Superior Court for the State of California, County of Orange.

4. In my practice I primarily represent plaintiffs in consumer class actions

asserting violations of many of California’s consumer protection statutes, including the

Consumers Legal Remedies Act; the Song-Beverly Credit Card Act; and the Unfair

Competition Law.

5. Over the past 20 years, I have served as the sole class counsel or as lead class

counsel in approximately 100 certified class actions. I was lead class counsel in the seminal

Song-Beverly Credit Card case, Florez v. Linens ‘N Things, Inc. (4th Dst.Ct.,2003) 108 Cal.

App. 4th 447, and co-counsel in the consumer class actions, Levy v. State Farm Mut. Auto. Ins.

Co. (4th Dst.Ct.,2007) 150 Cal.App.4th 1, and Gormley v. Nike USA, Inc. (N.D. Cal. October 5,

2011) 2011 U.S. Dist. LEXIS 114707. I have also written for the Business Law News, a

publication of the State Bar of California.

6. I have also served as class counsel in a number of large consumer class actions,

including, but not limited to: Chambers v. Aldo Group, Inc. et al., San Diego Sup. Ct. Case No.

GIC 873440; Macbeth v. Barneys New York, San Diego Sup. Ct. Civil Case No. GIN022990;




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Yudelson v. Bebe Stores, Inc., Los Angeles Sup. Ct. Case No. BC423835; Buzby v. Best Buy

Co., San Diego Sup. Ct. Case No. GIN 040241; Crawford v. Armstrong Garden Centers, Inc.,

Orange County Sup. Ct., Case No. 01CC06945; Drown v. Carter’s Retail, Inc.; Carter’s, Inc.,

San Diego Sup. Ct., Case No. 37-2008-00050316-CU-BT-NC; Golden v. J.C. Penney Co. Inc.,

et al, Orange County Sup. Ct., Case No. 00CC03165; In Re Children’s Place Cases, J.C.C.P.

No. 4418; Leiter v. Coach, Inc., San Diego Sup. Ct. Case No. 37-2011-00086037-CU-BT-CTL;

Barajas v. The Container Store, Inc., San Diego Sup. Ct., Case No. GIN 041129; Cox v. Cost

Plus, Inc., Sacramento Sup. Ct., Case No. 06AS04426; Privacy Rights Clearinghouse, et al. v.

CWI, Inc., San Diego Sup. Ct., Case No. GIC 835547; Stern v. Dunn Edwards Corporation,

San Diego Sup. Ct. Case No.: 37-2009-00052542-CU-BT-NC; Dunwoody v Sears, Roebuck

And Co., Los Angeles Sup. Ct., Case No. BC397930; Mandel v. Kenneth Cole Productions,

Inc., San Diego Sup. Ct., Case No. 37-2007-00052191-CU-BT-NC; Florez v. Linens ‘N Things,

Inc., Orange County Sup. Ct. Case No. 01CC00335; Milam v. Lowe’s HIW, Inc., Orange

County Sup. Ct. Case No. 01CC00343; Stone v. M. Fredric & Co., Los Angeles Sup. Ct., Case

No. BC387889; Waldman v. Metropark USA, Inc., Los Angeles Sup. Ct., Case No. BC404671;

Boyce v. Jennifer Kors (USA), Inc., San Diego Sup. Ct., Case No. 37-2008-00093848-CU-BT-

CTL; McCartney v. Nike Retail, Inc., N.D.Cal, Case No. 11-cv-00893-SI; Guzman v. Pacific

Sales, Inc., Orange County Sup. Ct. Case No. 03CC00178; Magnan v. Panda Restaurant

Group, Inc., Orange County Sup. Ct. Case No. 03CC00413; Deukmejian v. Payless

Shoesource, Inc., Los Angeles Sup. Ct., Case No. BC352924; Ernandes v. Buca di Beppo, San

Diego Sup. Ct. Case No. 37-2009-00060548-CU-BT-NC; Seban v. Ralphs Grocery Company,

Los Angeles Sup. Ct. Case No. BC358651; Bartolo v. Tween Brands, Inc., San Diego Sup. Ct.

.37-2009-00100063-CU-BT-CTL; Vear v. Cellco Partnership, San Diego Sup. Ct., Case No.

37-2008-00085825-CU-BT-CTL; Perez v. Victoria’s Secret Stores, Inc., Orange County Sup.

Ct., Case No. 03CC00412; Gallegos v. Victoria’s Secret Stores, Inc., San Diego Sup. Ct., Case

No. GIN 053910; Ballard v. Yankee Candle, Orange County Sup. Ct., Case No. 03CC00166;

and Roll v. Ziba Beauty Center, Inc. Los Angeles Sup. Ct., Case No. BC440176.

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7. The settlement was reached after arms-length negotiations by experienced

counsel on both sides with assistance of the Honorable David H. Bartick, United States

Magistrate Judge. Judge Bartick, over a course of three (3) separate days (i.e., January 29,

2015, February 19, 2015 and April 1, 2015), mediated the matter and was able to assist the

Parties on reaching a settlement. Before the ENE, the Parties exchanged information through

informal discovery and obtained information necessary to evaluate the proper amount of civil

penalties. Prior to the ENE, my partner, Phillip Poliner, and myself, who are experienced in

prosecuting this type of complex class action, had “a clear view of the strengths and

weaknesses” of the case and were in a strong position to make an informed decision regarding

the reasonableness of a potential settlement.

8. The settlement takes into account the risk, expense, and complexity of further

litigation. Plaintiff and the class would have to retain additional experts to conduct forensic

analysis of the recording and storage of Defendant’s customer information, as well as experts

to testify to the value of the collected information. Defendant would vigorously oppose

Plaintiff’s attempt to get a class certified and would also retain experts to defeat certification

and the class claims. Additional time consuming and expensive law and motion proceedings

would be necessary to narrow or eliminate the claims and defenses both at the certification

stage and the trial stage. The time and expense of further litigation could potentially negatively

impact Defendant’s business operations and would interfere with potential class members’

opportunity to obtain benefits promptly. Accordingly, the settlement at this stage in the

litigation benefits the Court and the Parties, as well as the class.

9. Plaintiff believes that each requirement of Rule 23(a) is met.

A. Numerosity

Here, the numerosity requirement is readily met. According to Defendant, during the

class period, at least 15,000 take with credit card transactions occurred in California stores

during the class period, and may be up to another 10,000 take with credit card transactions. As

such, the numerosity requirement is satisfied.

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B. Commonality

In this case, there are multiple “common issues” affecting the entire class and

Defendant’s liability; mainly, whether Defendant’s policy and practice of requesting and

recording customers’ PII during purchase transactions, violate California Civil Code section

1747.08.

C. Typicality

Here, Plaintiff alleges he was exposed to the same alleged unlawful policy and practice

of Defendant. Specifically, Plaintiff alleges Defendant requested and recorded his PII during a

credit card purchase transaction of a take with item, which constituted a violation of section

1747.08. Importantly, Plaintiff alleges no claims or facts unique to himself. Thus, the

requirement of typicality is satisfied.

D. Adequacy

As set forth in the declarations of Phillip Poliner, Lee Werner, and myself, Plaintiff has

retained counsel with significant experience in prosecuting large consumer protection class

actions. Likewise, the proposed class representative is a member of the proposed class and has

the same interests as the class in maximizing the recovery from Defendant. He alleges

Defendant requested and recorded his PII during a credit card purchase transaction which

constituted a violation of section 1747.08. He alleges no claims or facts unique to himself or

that conflict with the claims of absent class members. Thus, Plaintiff is an adequate

representative.

10. If the Court grants preliminary approval of the proposed settlement, class

counsel will provide the Court at the final fairness hearing with a detailed explanation of how

the parties reached the agreed upon fees and costs award and why the agreed upon amount is

appropriate.

11. I believe the settlement is fair, reasonable, and adequate and merits submission

to the class for their review. The settlement provides substantial recovery to the class members,

without any risk of the class not being certified and not prevailing as to liability.




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I declare under penalty of perjury under the laws of the State of California that the

foregoing is true and correct. Executed on June 29, 2015.

/s/ Neil B. Fineman

Neil B. Fineman




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DECLARATION OF LEE WERNER


I, Lee Werner, declare as follows:

1. I am duly licensed and admitted to the Bar of the State of California and I am

co-counsel for Plaintiff in this Action.

2. I have personal knowledge of the facts stated in this declaration except as to

those stated on information and belief, and if called as a witness I could and would testify

competently thereto.

3. The type and amount of informal discovery obtained for this particular case

was sufficient to provide me and my co-counsel with a complete understanding of the

defenses available to Defendant and the amount of recover, if any, that we could obtain for

the class if this case went to trial.

4. I performed pre-litigation investigations, including a thorough review of

litigation concerning the Defendant and any past claims for violations of the Song-Beverly

Credit Card Act or other consumer protection statutes. This includes preliminary review of

both state and federal dockets, as well as judgments, liens, and UCC filings, and any

published articles or reports discussing Defendant’s marketing and sales strategies and

procedures.

5. I performed additional investigation and analyses research in online marketing

databases, as well as secondary sources related to the software and hardware used to capture

and record class members’ personal identification information.

6. Also, I was involved in the informal investigation of certain class related

issues.

7. I opposed two motions filed by Defendant – a Motion to Strike and a Motion

to Dismiss. I reviewed and analyzed Defendant’s Answer and Affirmative defenses.

8. The informal discovery obtained permitted me and my co-counsel to assess

liability, calculate possible penalties, and zealously represent my client.




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9. If the Court grants preliminary approval of the proposed settlement, class

counsel will provide the Court at the final fairness hearing with a detailed explanation of how

the parties reached the agreed upon fees and costs award and why the agreed upon amount is

appropriate.

10. I believe the settlement is fair, reasonable, and adequate and merits

submission to the class for their review. The settlement provides substantial recovery to the

class members, without any risk of the class not being certified and not prevailing as to

liability.



/s/ Lee G. Werner

Lee G. Werner




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DECLARATION OF PHILLIP R. POLINER


I, Phillip R. Poliner, declare as follows:

1. I am a consumer and employment attorney who handles class action litigation in

federal and state courts throughout California, and I am an attorney of record for Plaintiff and

the class.

2. I have personal knowledge of the facts stated in this declaration except as to

those stated on information and belief, and if called as a witness I could and would testify

competently thereto.

3. Before the Early Neutral Evaluation, the Parties exchanged information

through informal discovery and obtained information necessary to evaluate Defendant

exposure. The settlement was reached after arms-length negotiations by experienced counsel

on both sides with assistance of the Honorable David H. Bartick, United States Magistrate

Judge. Judge Bartick, over a course of three (3) separate days, mediated the matter and was

able to assist the Parties on reaching a settlement.

GENERAL EXPERIENCE AND QUALIFICATIONS

4. Along with my business partner, Neil Fineman, I am one of the lead attorneys

on this case. I have been practicing law for 22 years in State and Federal Courts. Before joining

with Neil Fineman and forming the firm Fineman Poliner, LLP, I was a partner of Westrup

Klick LLP from 2004 through 2013.

5. My sole focus of law for the past 16 plus years has been class action litigation. I

have been the lead litigation attorney on over 75 class action cases, of which approximately

half have been consumer class actions and the other half, employment class actions. To ensure

that I am up to date with class action law and trends, I routinely attend class action seminars.

6. I have been admitted to practice before the United States Supreme Court, the

United States Court of Appeals for the Ninth Circuit, and the United States District Courts for

the Northern, Central, and Southern Districts of California.




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7. Over the past 15 years, I have been appointed by various Court’s in Sothern and

Northern California, either lead or co-lead Class Counsel, in numerous class actions, which

have asserted violations of the Consumers Legal Remedies Act; the Song-Beverly Credit Card

Act; and the Unfair Competition Law.

8. I have served as class counsel in a number of large class actions, including, but

not limited to the following::

a. Cemex Wage Cases (S.F.S.C. Case No. JCCP 4520)

b. Washington vs. Siemens Medical Solutions (L.A.S.C. Case No. BC387302)

c. Securitas Security Services Cases (L.A.S.C. Case No. JCCP 4469)

d. In Re: Reformulated Gasoline (RFG) Antitrust & Patent Litigation (U.S.D.C.

Case No. MDL-05 1671)

e. In Re: Automobile Advertising Cases (S.F.S.C. Case No. JCCP 4149)

f. Ko v. AvalonBay Communities Inc. (L.A.S.C. Case No. BC297004)

g. Dewey Services, Inc., Overtime Cases (L.A.S.C. Case No. JCCP 4280)

h. Grafman, et al. v. Washington Mutual, et al. (L.A.S.C. Case No. BC218991

Consolidated with BC240935)

i. Dotson, et al. v. Royal SunAlliance, et al. (O.C.S.C. Case No. 02CC01787)

j. Freeman v. Terminix (U.S.D.C. Case No. CV-01-1852 RMT)

k. Rico v. Office Depot (U.S.D.C. Case No. C-02-00563 VRW)

l. Tovar v. L’Abri Management (L.A.S.C. Case No. BC237666)

m. Fowler v. Aames Acquisition (U.S.D.C. Case No. CV-01-04330 AHM)

9. There have been numerous other class actions wherein I have been appointed

class counsel specifically related to consumer class actions, including but not limited to, the

following defendants: Smart Disk Corporation; La Cie; Provide Commerce, Inc. dba

ProFlowers; Trimspa Corporation; Lerner New York, Inc.; The Men’s Wearhouse; Gucci; The

Children’s Place; Richemont North America, LLC, dba Cartier; MontBlanc North America,

LLC; Mothers Work, Inc.; Ben Bridge Jewelers; Nordstrom, Inc.; MAC Cosmetics; and Fry’s

Electronics, Inc.




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/s/ Phillip R. Poliner

Phillip R. Poliner




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PROOF OF SERVICE

I am employed in the County of Orange, State of California. I am over the age of 18 and

not a party to the within action. My business mailing address is 155 North Riverview Dr.,

Anaheim Hills, CA 92808. My electronic address is: [email protected].

On June 29, 2015, I served the foregoing document(s) described as:

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF’S UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF

CLASS ACTION SETTLEMENT; DECLARATIONS OF LEE G. WERNER, PHILLIP R. POLINER AND NEIL B. FINEMAN

CLASS ACTION SETTLEMENT AND RELEASE

PROPOSED] ORDER GRANTING PRELIMINARY APPROVAL OF CLASS SETTLEMENT AND PROVISIONAL CLASS CERTIFICATION

on the parties in this action by placing _____ the original(s), X true copy thereof enclosed

in a sealed envelope addressed as follows, or as otherwise described below: SHEPPARD, MULLIN, RICHTER & HAMPTON LLP Attorneys for Defendant, PHILLIP A. DAVIS, Cal. Bar No. 110430 Ashley Furniture Industries, Inc. [email protected] ROBIN A. ACHEN, Cal. Bar No. 287033 [email protected] 333 South Hope Street, 43rd Floor Los Angeles, California 90071-1422 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP Attorneys for Defendant, JOHN C. DINEEN, Cal. Bar No. 222095 Ashley Furniture Industries, Inc. [email protected] 501 West Broadway, 19th Floor San Diego, California 92101-3598

BY CM/ECF NOTICE OF ELECTRONIC FILING: I electronically filed the

document(s) with the Clerk of the Court by using the CM/ECF system. Participants in the case

who are registered CM/ECF users will be served by the CM/ECF system. Participants in the

case who are not registered CM/ECF users will be served by mail or by other means permitted

by the court rules.


above is true and correct. Executed on June 29, 2015.

/s/ Neil B. Fineman

Neil B. Fineman


fineman poliner llp neil b. fineman, esq. sbn 177915 email...

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