Disch v. Hicks

900 So. 2d 399, 2004 Ala. LEXIS 288, 2004 WL 2418061
Supreme Court of Alabama·Decided October 29, 2004·No. 1030403 to 1030405 and 1030758·Published·Cited by 5 cases

Opinions

STUART, Justice.

In these appeals, Heidi Disch, Mary Sisk Rawls, Alice Lusk, and Mrs. Henry Little (hereinafter referred to collectively as the “objectors”) appeal from an order approving the settlement of a class action filed by Sharon Hicks against Oxmoor House, Inc. We reverse and remand with directions.

Background

On May 29, 2003, Sharon Hicks sued Oxmoor House, Inc., a corporation engaged in the marketing and selling of books. Oxmoor House uses a “negative option plan” in marketing its books. This means that once a consumer orders a single book on a “30-day trial plan,” the consumer is enrolled in a program pursuant to which Oxmoor House notifies the consumer that another related book (a “subsequent book”) will automatically be sent to the consumer unless the consumer notifies Oxmoor House that he or she does not. want the subsequent book. Once the consumer receives the subsequent book, the consumer may return the book, if the consumer decides not to keep it, at his or her own expense and no payment is due.

Sharon Hicks alleged in her complaint that, upon receiving a subsequent book from Oxmoor House, she and many other consumers believed that they were obligated to pay for the book. Additionally, she alleged that, in many cases, Oxmoor House began billing the consumer for the subsequent book, regardless of whether the consumer had requested the subsequent book and regardless of whether the consumer returned the subsequent book or kept it. She also alleged that, in many cases, Oxm-oor. House sent letters to consumers threatening to take legal action to collect payment for the subsequent book, even when the subsequent book had not been requested and even when the consumer had returned the subsequent book.

In her complaint, Hicks included claims of unjust enrichment and money had and received, suppression, misrepresentation, and a violation of § 35-1-3, Ala.Code 1975.1 Hicks sought injunctive relief and sought to have a class certified of all persons similarly situated. However, within only a few weeks after Hicks filed her complaint, the parties submitted a joint motion seeking preliminary approval of a proposed settlement and the certification of a class for settlement purposes.2 Hicks, [402] through her counsel, and Oxmoor House submitted briefs in support of the proposed settlement.

On June 19, 2003, the trial court entered a preliminary order, conditionally certifying a nationwide class for settlement purposes. The trial court scheduled a fairness hearing for September 15, 2003, to consider the adequacy and reasonableness of the proposed settlement. The trial court ordered actual and publication notice be given to the class members so that they could opt out of the class or object to the proposed settlement.3

The trial court conducted the fairness hearing on September 15, 2003. The trial court received 30 objections to the proposed settlement; only 10 of those objections were timely. Of those 10 objectors, Heidi Disch, Mary Sisk Rawls, Alice Lusk, Mrs. Henry Little, and David Hill appeared, through their respective counsel, at the fairness hearing.

The trial court approved the proposed settlement on October 31, 2003. In its order approving the settlement, the trial court certified the following class:

“All persons who received one or more Subsequent Books from Oxmoor House or any Billing Correspondence relating to a Subsequent Book between June 15, 1997 and December 31, 2002 and who meet one or more of the following definitions:
“Group One Class Members are those who received and paid for Book Two or Three as their highest Ship Level at any time from June 15, 1997 through October 5, 2001, inclusive.
“Group Two Class Members are those who received and paid for Book Two or Three as their highest Ship Level between October 6, 2001 and December 31, 2002, inclusive, and who ordered them first Enrollment Book in a Series on or before April 30, 2002.
“Group Three Class Members are those who received Book Two or Three in one or more Book Series as their highest Ship Level at any time from June 15, 1997 through December 31, 2002, inclusive, returned one or more books in a Book Series, and paid the return postage.
“Group Four Class Members are those who reached Ship Level Four or higher in one or more Book Series at any time from June 15, 1997 through December 31, 2002, inclusive.
“Group Five Class Members are those who received Book Two or Three as their highest Ship Level in one or more Book Series between June 15, 1997 and October 5, 2001, inclusive, and whose accounts have been classified by Oxmoor House in the ordinary course of business as ‘other’ or for purposes of accounts receivable have been classified as ‘bad debt’ or referred by Oxmoor House to a collection agency.”

The trial court’s order also incorporated the parties’ stipulation of settlement and the exhibits filed with that stipulation.

By approving the proposed settlement, the trial court agreed with Hicks (the class representative) and Oxmoor House that [403] the participating members of the class should receive the following relief:

“(1) Cash Refunds for Group One Class Members
“Each Group One Class Member who timely submits a signed Cash Refund Claim Form will receive an $8.00 refund for each Subsequent Book the Class Member paid for in all Series in which the Class Member was enrolled during the Class Period.
“(2) Premium Book Discounts for Group
Two and Group Four Class Members “All Group Two and Group Four Class Members are entitled to receive a Premium Book Discount which means that the Class Member will be entitled to purchase a current book with a retail price of not less than $29.95 for the discounted price of $12.00, including shipping and handling.
“(3) Book Return Reimbursement for Group Three Class Members
“Each Group Three Class Member who timely submits a signed Postage Refund Claim Form will receive a refund in the amount [of] $3.95 for each Subsequent Book at Ship Level Two or Three the Class Member returned at his or her own expense during the Class Period.
“(4) Oxmoor House Agrees to Cease Collections for Group Five Class Members
“For all Group Five Class Members, Oxmoor House will cease all efforts to collect any amounts that may be owed for Subsequent Books covered by the Settlement. These Class Members may keep the books sent to them with no adverse consequences to their credit.”

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Disch v. Hicks, 900 So. 2d 399, 2004 Ala. LEXIS 288, 2004 WL 2418061 (Ala. 2004).

900 So. 2d 399 (Disch v. Hicks) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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