Carvalho v. HP, Inc.

CourtDistrict Court, N.D. California
DecidedFebruary 24, 2025
Docket5:21-cv-08015
StatusUnknown

This text of Carvalho v. HP, Inc. (Carvalho v. HP, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carvalho v. HP, Inc., (N.D. Cal. 2025).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 RODNEY CARVALHO, et al., Case No. 21-cv-08015-PCP

8 Plaintiffs, ORDER GRANTING MOTION FOR 9 v. PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 10 HP, INC., Re: Dkt. No. 85 Defendant. 11

12 BACKGROUND 13 This is a putative class action lawsuit filed by named plaintiffs Rodney Carvalho and Mark 14 Maher against defendant HP, Inc., alleging that HP displayed misleading strikethrough and 15 discounted prices on its website. Plaintiffs allege that they were harmed by HP’s conduct by, 16 among other things, paying more for their products than they would have paid and being induced 17 to make purchases they would not have otherwise made absent the false and misleading prices and 18 discounts. In their operative July 2022 complaint, plaintiffs asserted violations of California’s 19 Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law, as well as a 20 claim for unjust enrichment. 21 The parties engaged in substantial discovery and several meetings before reaching the 22 proposed settlement. Dkt. No. 85, at 9–11. The parties engaged in formal and informal discovery 23 regarding the prices and discounts at issue, which included production of sales data for 287,784 24 orders, production of over 500,000 screenshots of HP’s website, and an analysis of the pricing 25 data collected. The parties then participated in a full day of mediation on June 12, 2024, where the 26 parties reached a settlement in principle. The parties continued to negotiate, and, several months 27 later, were eventually able to finalize the settlement agreement. 1 settlement, conditional certification of the settlement classes, appointment of class representatives 2 and counsel, approval of the selection of the settlement administrator, approval of the class 3 notices, and setting of a final approval hearing. The filing included a copy of the class and 4 collective action settlement agreement and release. The Court ordered the parties to provide 5 supplemental briefing. Plaintiffs submitted their supplemental brief and supporting evidence on 6 January 2, 2025, and the Court heard argument on the motion for preliminary approval on January 7 16, 2025. At the hearing, the Court inquired whether the parties would consider striking the 8 preliminary approval order’s proposed injunction against litigation by class members pending final 9 approval. On January 30, 2025, the parties filed a revised settlement agreement omitting the 10 proposed injunction and instead permitting HP to withdraw from the settlement should a specified 11 number of class members opt out. Dkt. No. 90. 12 Under the terms of the revised settlement, HP will contribute a total gross amount of 13 $4,000,000, which will be used to make payments to class members, fund class representative 14 services awards in an amount not to exceed $5,000 per representative, reimburse class counsel for 15 attorney’s fees and costs of no more than $1,000,000, and pay settlement administration costs 16 currently estimated at approximately $246,467.20. 17 Plaintiffs request certification of a settlement class that consists of all individuals 18 nationwide who purchased HP desktop computers, laptops, mice, and keyboards between June 5, 19 2021, and October 28, 2024, that were offered at a discount more than 75% of the time the 20 products were offered for sale during that same period (the “Class Products”). Excluded from the 21 class are individuals who (1) purchased more than two of the same Settlement Class Product in the 22 same order; (2) are employees of HP and members of his/her immediate family; (3) are judicial 23 officers presiding over the action and members of their immediate family and judicial staff; (4) are 24 counsel of record for the parties, and their respective law firms; or (5) timely and properly exclude 25 themselves from the settlement class. 26 Under the terms of the proposed settlement, settlement class members who do not timely 27 and validly exclude themselves will release: any and all actual or potential claims, actions, causes of action, suits, 1 counterclaims, cross claims, third party claims, contentions, 2 allegations, and assertions of wrongdoing, actual, compensatory, treble, nominal, punitive, exemplary, statutory, or otherwise), 3 attorneys’ fees, costs, expenses, restitution, disgorgement, injunctive relief, any other type of equitable, legal, or statutory relief, any other 4 benefits, or any penalties of any type whatever relating to or arising out of the claims that were or could have been asserted by Plaintiffs 5 or the Settlement Class Members with respect to (1) the strikethrough 6 prices and discounts advertised on HP’s website for the Settlement Class Products during the Settlement Class Period; or (2) the 7 allocation, division, or payment of the Settlement Fund or any Class Member’s cash benefit, whether known or unknown, suspected or 8 unsuspected, contingent or non-contingent, or discovered or undiscovered, whether asserted or unasserted, and, if asserted, 9 whether asserted in federal court, state court, arbitration, or otherwise, 10 whether asserted in an individual action, a putative class action, a parens patriae action, or other representative action (including any 11 action purportedly brought on behalf of the general public of the United States or of a particular state, district, or territory therein), and 12 whether triable before a judge or jury or otherwise, through the Class Period. and any demands for any and all debts, obligations, liabilities, 13 damages. 14 Under the parties’ proposed process for notifying and paying settlement class members, 15 HP will provide the contact information of all settlement class members to the settlement 16 administrator within 30 days of preliminary approval. The administrator will then distribute notice 17 of the proposed settlement to the class members within 15 days. Settlement class members will 18 have the opportunity to submit claims, opt out, or object to the settlement within 60 days from 19 distribution of the notices. 20 The parties estimate that 287,784 individuals fall within the class definition and will 21 receive notice of the settlement. The parties predict the opt-out rate for the settlement class will be 22 less than 1%. The parties anticipate at least $2,750,000 will be available to provide cash benefits 23 to the settlement class members after payment of settlement administration costs and any court- 24 approved service awards or attorneys’ fees and costs. The parties propose five different cash 25 benefit amounts based on product type and estimated per-unit damages. Assuming a claims rate of 26 15%, the parties anticipate that each settlement class member who submits a valid claim is likely 27 to receive a cash payment that at least fully compensates them for the estimated per-unit damages. 1 LEGAL STANDARDS 2 While “[t]he Ninth Circuit has a strong judicial policy that favors settlements in class 3 actions,” Hudson v. Libre Technology, Inc., 2019 WL 5963648, at *3 (S.D. Cal. Nov. 13, 2019), 4 district courts must carefully “scrutinize pre-class certification settlements,” as there is a risk of 5 collusion between the defendants and class counsel to settle “without devoting substantial 6 resources to the case.” Briseño v. Henderson, 998 F.3d 1014, 1024 (9th Cir. 2021). “Approval of a 7 settlement is a two-step process. Courts first determine whether a proposed class action settlement 8 deserves preliminary approval [including conditional class certification] and then, after notice is 9 given to class members, whether final approval is warranted.” In re Volkswagen “Clean Diesel” 10 Mktg., Sales Pracs., & Prod. Liab. Litig., 229 F. Supp. 3d 1052, 1062 (N.D. Cal.

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