Disch v. Hicks
Decision Date | 29 October 2004 |
Docket Number | No. 1030403 to 1030405 and 1030758.,1030403 to 1030405 and 1030758. |
Citation | 900 So.2d 399 |
Parties | Heidi G. DISCH v. Sharon HICKS and Oxmoor House, Inc. Mary Sisk Rawls v. Sharon Hicks and Oxmoor House, Inc. Alice Lusk v. Sharon Hicks and Oxmoor House, Inc. Mrs. Henry Little v. Sharon Hicks and Oxmoor House, Inc. |
Court | Alabama Supreme Court |
William Chadwick Green, Birmingham, for appellants Heidi G. Disch, Mary S. Rawls, and Alice A. Lusk.
Michael R. Lunsford of Galese & Ingram, P.C., Birmingham, for appellant Mrs. Henry Little.
Timothy G. Blood of LeRach Coughlin Stoia & Robbins, LLP, San Diego, California; Joe R. Whatley, Jr., and Charlene P. Ford of Whatley Drake, LLC, Birmingham; John Yanchunis and Christopher Casper of James, Hoyer, Newcomer & Smiljanich, P.A., Tampa, Florida; and Benjamin R. Bingham of Bingham & Lea, P.C., San Antonio, Texas, for appellee Sharon Hicks.
M. Christian King of Lightfoot, Franklin & White, LLC, Birmingham; Pamela G. Matthews of Akin Gump Strauss Hauer & Feld, LLP, San Antonio, Texas; and L. Joseph Shaheen, Jr., of Gardner, Wilkes, Shaheen & Candelora, Tampa, Florida, for appellee Oxmoor House, Inc.
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.
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, Oxmoor 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, 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:
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 the participating members of the class should receive the following relief:
The trial court also awarded $3,010,000 to the plaintiffs' attorneys in legal fees and expenses. Neither the trial court's October 31, 2003, order nor any of the pleadings and exhibits incorporated into that order addressed the Rule 23, Ala. R. Civ. P., criteria for class certification. In its order, the trial court simply stated that the class representative and class counsel had adequately represented the class under Rule 23; that the settlement met all the criteria required by law; and that the notice of the certification of the class and the proposed settlement provided to the class members met all of the requirements of Rule 23, Ala. R. Civ. P.
Little filed a motion to alter, amend, or vacate the order approving the class settlement. The trial court denied this motion on January 2, 2004.
Disch, Rawls, Lusk, and Little appeal.4 Disch, Rawls, and Lusk are represented by the same counsel; they assert identical issues and arguments on appeal. They challenge the fairness and reasonableness of the settlement and the $3,010,000 attorney fee awarded to the plaintiffs' counsel as excessive.
Little is represented by different counsel. She asserts that the trial court erred by certifying the class without conducting the rigorous analysis required by § 6-5-641, Ala.Code 1975; she also challenges the adequacy, fairness, and reasonableness of the settlement. Our resolution of the issues raised by Little pretermits our discussion of the issues raised by the other objectors.
Mayflower Nat'l Life Ins. Co. v. Thomas, 894 So.2d 637, 640 (Ala.2004). Additionally, the standard of review applicable to a trial court's approval of a proposed settlement of a class action is as follows:
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