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, v. Plaintiffs, ASHLEY FURNITURE INDUSTRIES, INC., a Wisconsin corporation; and DOES 1 through 25, inclusive, Defendants. Case No. 13-cv-2445 BTM (DHB) CLASS ACTION NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT Courtroom 15B (Annex) The Hon. Barry T. Moskowitz THIS LEGAL NOTICE AFFECTS YOUR RIGHTS, PLEASE READ IT CAREFULLY. I. PURPOSE OF THIS NOTICE AND SUMMARY OF THE CASE This Notice of Pendency of Class Action and Proposed Settlement ( Notice ) informs you about the abovereferenced legal action and a proposed settlement on behalf of a certain class of persons. This Notice advises you of the benefits that may be available to you under the proposed settlement and your rights and options as a potential class member, and further notifies you that a Court hearing will be held to decide whether to approve the settlement. You are receiving notice of this legal action and proposed settlement because you may have been an Ashley Furniture HomeStore customer who was requested or required to provide, and did provide and had recorded, an email address, zip code or other Personal Identification Information during a credit card transaction at an Ashley Furniture HomeStore store in California between October 10, 2012 and December 2, 2015 in which you took your purchase with you at the conclusion of the transaction. Plaintiff Perry Johnson ( Johnson ) filed this class action lawsuit against Ashley Furniture Industries, Inc. ( AFI ), claiming that AFI violated the law by requesting or requiring customers to provide Personal Identification Information during certain credit card transactions. AFI denies Johnson s allegations. Johnson, AFI, Ashley HomeStores Limited ( AHS ) and participating licensees of the Ashley Furniture HomeStore trademark, specifically Southwestern Furniture of Wisconsin, LLC ( Southwestern ), Stoneledge Furniture, LLC ( 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., have reached a proposed settlement of these claims, the details of which are described below. If you participate in this settlement, and you are eligible to receive benefits from this settlement, you will receive a single twenty-five dollar ($25.00) Voucher that can be used toward the purchase of products at an Ashley Furniture HomeStore in California. The store location(s) where you can utilize the Voucher will be listed in the letter accompanying the Voucher. In addition, you will have the opportunity to withdraw from the email marketing campaigns of AFI, AHS and the participating licensees. ASJNTW03 Case No. 13-cv-2445 BTM (DHB)
II. THE LITIGATION On October 10, 2013, Johnson and Layne Butler ( Butler ) filed a Complaint in the United States District Court for the Southern District of California, entitled Perry Johnson and Layne Butler, on behalf of a class of similarly situated individuals and themselves individually v. Ashley Furniture Industries, Inc., a Wisconsin Corporation; and Does 1 through 25, inclusive, Case Number 13-cv-02445-BTM-DHB (the Action ). In their Complaint, Johnson and Butler sought to represent a class of persons who were requested or required to provide Personal Identification Information, including their telephone number, address, and/or ZIP code, in connection with a credit card or debit card transaction at a Ashley Furniture HomeStore in California and New York, in alleged violation of California Civil Code Section 1747.08 and New York General Business Law 520-a(3). Johnson and Butler asserted a cause of action for violation of Credit Card / Debit Card Consumer Protection Laws. On December 2, 2013, AFI filed a motion to dismiss and to strike the Complaint to the extent that it purported to assert a violation of New York General Business Law 520-a(3), and to the extent that the Complaint purported to assert claims based on the use of a debit card. AFI also moved to dismiss or strike Johnson and Butler s request for injunctive relief and to strike all references to a nationwide class. On November 4, 2014, the Court issued an order granting AFI s motion to dismiss and denying its motion to strike. The Court dismissed the New York claim (asserted by Butler) with prejudice. The Court also dismissed the California claim (asserted by Johnson) to the extent that it relied on debit card transactions. Further, the Court dismissed Johnson s claim for injunctive relief under the Song Beverly Credit Card Act. The Court denied AFI s motion to strike. On November 24, 2014, AFI filed an answer to the Complaint. The parties have now agreed upon the terms of a settlement. Johnson and 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. have settled because they consider it to be in their best interests to settle and dispose of, fully and completely, any and all claims, demands and causes of action heretofore or hereafter arising out of, connected with or incidental to the Action, including, without limitation on the generality of the foregoing, any and all claims, demands and causes of action reflected in the Action, and any and all of the facts and circumstances giving rise to the Action, to the extent such claims, demands, and causes of action are held by Class Members for the Class Period. III. DEFINITIONS As used in this Notice, the following terms have the meanings specified below: 1. Claims Administrator means a company or persons designated to provide class notice and to administer the distribution of Vouchers to Class Members. 2. Claim Form means the form attached as Exhibit A to the Settlement Agreement and Release of Claims and Rights, and which will be delivered to all Unknown Class Members, as set forth herein. 3. Class Counsel means Phillip R. Poliner and Neil B. Fineman of the law firm, Fineman Poliner LLP. - 2 - Case No. 13-cv-2445 BTM (DHB)
4. Class Member(s) means 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 December 2, 2015, and who took all of their purchases with them at the conclusion of the transaction. 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. Further, pursuant to 28 U.S.C. 455(b)(5)(iii), any judge of the United States shall disqualify himself if he or his spouse, or a person within the third degree of relationship to either of them, or the spouse of such a person is known by the judge to have an interest that could be substantially affected by the outcome of the proceeding. 5. Class Period means the period from October 10, 2012 through December 2, 2015. 6. Class Representative means Perry Johnson. 7. Effective Date means (a) if no objection is raised to the proposed settlement at the Final Settlement Hearing, the date on which the Final Approval Order is entered; or (b) if any objections are raised to the proposed settlement at the Final Settlement Hearing, the latest of the following events: (i) the expiration date of the time for the filing or notice of any appeal from the Final Approval Order; (ii) the date of final affirmance of any appeal of the Final Approval Order; (iii) the expiration of the time for, or the denial of, a petition for writ of certiorari to review the Final Approval Order and, if the certiorari is granted, the date of final affirmance of the Final Approval Order following review pursuant to that grant; or (iv) the date of final dismissal of any appeal from the Final Approval Order or the final dismissal of any proceeding on certiorari to review the Final Approval Order. 8. Final Approval Order means an order issued by the United States District Court for the Southern District of California giving final approval to the Agreement without material change. 9. Final Settlement Hearing means a hearing before the Court for final approval of the settlement. 10. Known Class Members means all Class Members that AFI, AHS and/or AHS s participating licensees can identify from the records of AFI, AHS and/or AHS s licensees. 11. Opt-Out and Objection Date means forty-five (45) calendar days after the first issuance of this notice and the summary notice. 12. Preliminary Approval means an order issued by the United States District Court for the Southern District of California preliminarily approving the Agreement without material change. 13. Preliminary Approval Date means the date on which the Court enters an order preliminarily approving this Agreement. 14. Summary Notice means the form attached to the Settlement Agreement and Release of Claims and Rights as Exhibit C. - 3 - Case No. 13-cv-2445 BTM (DHB)
15. Take-With Transaction means a credit card purchase transaction in which the applicable customer immediately takes all of their purchases with them at the conclusion of the transaction and which do not include a return, a special order, a delivery, or the arrangements for the later pick-up of a purchased item. 16. Unknown Class Members means and refers to a subset of Class Members who were customers of California Ashley Furniture HomeStores owned and operated by Southwestern and Unrelated Licensees (defined below) during a period of time in 2012-2013 when the point of purchase systems utilized by Southwestern and the Unrelated Licensees did not distinguish between credit card and non-credit card transactions, or between Take-With Transactions and other transactions. Southwestern and the Unrelated Licensees have contact information for these Unknown Class Members, some of whom may be Class Members, but some of whom may not be. All Unknown Class Members shall receive a Claim Form as set forth herein, and all Unknown Class Members who timely return a properly completed Claim Form to AFI or the Administrator shall become Known Class Members. 17. Unrelated Licensees are independent companies that owned and operated Ashley Furniture HomeStores in California during the Class Period. 18. Voucher or Merchandise Voucher means a single twenty-five dollar ($25.00) credit that can be used toward the purchase of products at the Ashley Furniture Home Store(s) listed on the letter that each Class Member will receive (along with a wallet-sized card) from AFI or the Claims Administrator. Vouchers cannot be used with telephone orders or on www.ashleyfurniturehomestore.com. Vouchers are valid only for eighteen (18) months after Vouchers are first issued. Only one Voucher may be used in a single transaction. Each Voucher may be used multiple times until the balance of the Voucher is extinguished. Vouchers are not transferrable. Vouchers are not redeemable for cash. Vouchers are not gift cards or gift certificates under California law or otherwise. Vouchers are not valid for prior purchases. Vouchers may be used on sale and/or promotional items. Class Members are responsible for any applicable sales tax. A. Class Members. IV. RIGHTS AND OPTIONS OF CLASS MEMBERS If you are an Ashley Furniture HomeStore California customer who was requested or required to provide, and did provide and had recorded, your Personal Identification Information in connection with a credit card transaction at an Ashley Furniture HomeStore between October 10, 2012 and December 2, 2015 in which you took all of your purchases with you at the conclusion of the transaction, then you are eligible to receive one Voucher. B. Request for Exclusion. If you do not wish to participate in the Class or be bound by the settlement, you must request exclusion from the Class. Exclusion means that you will not receive any benefits from the settlement, you will not be bound by the settlement or any judgment entered thereon, and you cannot object to the settlement. To exclude yourself, you must send a written request for exclusion to the Claims Administrator that must be postmarked on or before February 5, 2016. In the case of individuals requesting exclusion, your request must include your name and address. In the case of corporations or other legal entities (including partnerships or associations) requesting exclusion, your request must include the entity s - 4 - Case No. 13-cv-2445 BTM (DHB)
name and principal place of business. For both individuals and corporations or other legal entities, the request for exclusion must include the signature of the individual or an authorized signer for the entity requesting exclusion. If more than two hundred (200) Class Members opt out of the Class and the settlement AFI may, at its election, deem the settlement null and void. C. Representation and Objections. If you want to represent yourself or hire an attorney to represent you in this matter, or if you wish to object to the settlement, you may do so at your own expense. If you wish to object to the settlement you must file a written objection and/or a notice of intention to appear with the Court, and serve copies on Plaintiff s Counsel by first class mail, postage prepaid, postmarked no later than the Opt-Out and Objection Date. The written objection must include: (a) the full name, address, and telephone number of the person objecting; (b) a statement that the person is a Class Member; (c) the words Notice of Objection or Formal Objection; (d) in clear and concise terms, the legal and factual arguments supporting the objection; (e) whether the person intends to speak at the Final Settlement Hearing, (f) a detailed list of any other objections by that Class Member or that Class Member s counsel to any class action settlements submitted in any court, whether state, federal, or otherwise, in the United States in the previous five (5) years; and (g) the Class Member s signature, even if represented by counsel. The Objection will not be valid if it only objects generally to the Action s appropriateness or merits. Class Members who fail to make specific objections in the manner stated will be deemed to have waived any objections and will be foreclosed from making any objections (whether by appeal or any other process) to the Agreement. Only Class Members who file and serve timely written objections and/or Notices of Intention to Appear can speak at the Final Settlement Hearing. Class Members who make objections will be subject to a deposition prior to the Final Settlement Hearing at the Fineman Poliner LLP office located at 155 N. Riverview Dr., Anaheim, California, upon seven days notice, with costs and objector s attorneys fees to be borne by objector. V. EFFECT OF SETTLEMENT APPROVAL -- RELEASED CLAIMS If the settlement is approved, each Class Member who does not request exclusion shall automatically and without further action or notice be deemed to have forever relieved, released and discharged AFI, AHS, Stoneledge, Southwestern, 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 affiliated entities (including, without limitation, parents and subsidiaries), and their predecessors, successors, assigns, attorneys, accountants, insurers, representatives, parents, partners, licensees, officers, directors, stockholders, employees, and agents, and each of them, from any and all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs, and expenses (including but not limited to attorneys' fees), damages, actions, causes of action and claims for relief (referred to hereafter collectively as "claims") of whatever kind or nature, under any theory, whether legal, equitable or other, under the law, either common, constitutional, statutory, administrative, regulatory, or other, of any jurisdiction, foreign or domestic, whether such claims are known or unknown, suspected or unsuspected, arising out of, in connection with, or relating to any of the acts, omissions or other conduct that was alleged in the Action, regarding any and all alleged requests for and recording of Personal Identification Information during the Class Period, including but not limited to claims for violations of Cal. Civ. Code section 1747.08. Class Members who do not timely request exclusion will further be deemed to understand and to have waived provisions and principles of law such as California Civil Code section 1542 (as well as any and all provisions, - 5 - Case No. 13-cv-2445 BTM (DHB)
rights, and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar or comparable to Section 1542) with respect to the matters released in the settlement: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. VI. THE PROPOSED SETTLEMENT The Parties have agreed to a proposed settlement which, if approved by the U.S. District Court for the Southern District of California, will result in a judgment being entered in the Action which provides for certain benefits to Class Members. The details of the settlement are set forth in the Settlement Agreement and Release of Claims and Rights attached to the parties Motion for Preliminary Settlement Approval, which is on file with and available for public inspection at the James M. Carter and Judith N. Keep United States Courthouse, located at 333 West Broadway, San Diego, California 92101. You may also request a copy of the Settlement Agreement and Release of Claims by contacting the Claims Administrator or Class Counsel. If this Agreement is finally approved by the Court, then as soon as is reasonably practicable after the issuance of the Final Approval Order, and in no event later than sixty-five (65) calendar days after the Effective Date, AFI and/or the Claims Administrator will distribute a single Voucher to each Known Class Member (who does not opt-out of this Agreement). Unknown Class Members who wish to submit a claim in order to become a Known Class Member and receive the benefits set forth in the Settlement Agreement and Release of Claims and Rights shall complete a Claim Form and return it to the Claims Administrator not later than sixty (60) days after the Claims Administrator distributes the Class Notice and Claim Form to the Unknown Class Members. The Claims Administrator shall review all Claim Forms received from Unknown Class Members to ensure that the Claim Forms are completed in their entirety and that the applicable Unknown Class Members are eligible to receive a Voucher. In the event AFI or AHS conclude that the use of Vouchers appears to involve fraud or other improper activity, after meeting and conferring with Class Counsel, AFI and AHS may suspend the Voucher redemption process and consult with Class Counsel about remedial measures. Under the settlement no settlement fund or common fund is created or implied, and there shall be no unpaid residual whether under California Civil Procedure Code section 384 or any other statutory or case authority. Any amounts not provided to Class Members due to a failure to redeem a Voucher, will not be provided to any third party. Any such amounts will remain solely with AFI, AHS, Stoneledge, Southwestern, 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. If, for any reason, a court determines otherwise, the settlement shall be null and void. AFI or the Claims Administrator will submit a declaration to the Court at least five (5) days before the Final Settlement Hearing certifying that Class Notice was provided in accordance with the terms of the Agreement and any applicable court order. After the Vouchers have been distributed, AFI or the Claims Administrator shall submit a declaration affirming that such Vouchers have been distributed as required under the settlement. - 6 - Case No. 13-cv-2445 BTM (DHB)
Upon the Court s approval of the settlement at the Final Settlement Hearing, the parties shall jointly request that the Court enter a judgment. AFI will pay its own attorneys fees and costs and all costs incurred in administering the settlement. AFI and Johnson have, through arms-length negotiations, agreed that an award of costs and attorneys fees of one hundred and forty thousand dollars ($140,000.00) to Class Counsel is fair and reasonable, in light of the nature and circumstances of the Action. At the Final Settlement Hearing, Class Counsel will request that the Court approve an award of costs and attorneys fees to be paid to Class Counsel in the total amount of $140,000.00, and AFI will not oppose such a request. If such an award is approved by the Court, then AFI will pay Class Counsel $140,000.00, and no more, separate and apart from any benefits to be paid to the Class. The parties have further agreed that an incentive award to the Class Representative in the total amount of five thousand dollars ($5,000.00) is fair and reasonable, in light of the nature and circumstances of the action. At the Final Settlement Hearing, Class Counsel will request that the Court approve an incentive award to be paid to Johnson in the total amount of $5,000.00, and AFI will not oppose such a request. If such an award is approved by the Court, then AFI will pay Johnson $5,000.00, and no more, separate and apart from any benefits to be paid to the Class. The settlement terms have been chosen by the parties as a method of determining an appropriate remedy, without admission of liability by any party. Further, the settlement terms contemplated herein are intended to represent and include any and all other damages claimed by or owed to all Class Members, related to the settled claims including, but not limited to, interest charges, general damages and punitive damages. AFI denies that any Class Member is entitled to any relief whatsoever, and maintains that all remedies afforded hereunder are made solely for convenience and to stop the expense and inconvenience of further litigation. VII. EMAIL MARKETING COMMUNICATIONS If you want to withdraw from the email marketing campaigns of AFI, AHS, and/or the participating licensees, please send an e-mail with your request and current contact information to Admin@CAAFHSCreditCardClassAction.com, or send a letter with your request and current contact information to Johnson v. Ashley Furniture Industries Claims Administrator, P.O. Box 40007, College Station, TX 77842-4007. Upon receipt of your request to withdraw, AFI, AHS and the participating licensees will take appropriate steps to remove you from their email marketing communications. AFI, AHS and the participating licensees will not purge or destroy your information. Class Members who opt out of the email marketing campaigns may still be contacted by AFI, AHS and the participating licensees for customer service issues, service or reminder notices, product recalls or similar matters. VIII. FINAL SETTLEMENT HEARING On March 7, 2016 at 10:00 a.m., a hearing will be held in U.S. District Court for the Southern District of California before the Honorable Barry T. Moskowitz in Courtroom 15B (Annex) to determine whether the settlement should be approved by the Court. This hearing may be continued from day to day at the discretion of the Court. You need not appear at the hearing to receive settlement benefits. - 7 - Case No. 13-cv-2445 BTM (DHB)
IX. EFFECT OF DISAPPROVAL If the settlement is not approved the parties will return to the positions they occupied as of the time the settlement was reached, and the litigation will continue as if there had not been a proposed settlement. X. ADDRESSES OF THE COURT AND ATTORNEYS FOR THE PARTIES The address for the U.S. District Court for the Southern District of California is: 333 West Broadway, San Diego, California 92101. The address for Class Counsel is: Phillip R. Poliner, Esq. and Neil B. Fineman, Esq., Poliner Fineman LLP, 155 N. Riverview Drive, Anaheim Hills, California 92808. The address for AFI s counsel is: John C. Dineen, Esq., Sheppard, Mullin, Richter & Hampton LLP, 501 West Broadway, 19th Floor, San Diego, California 92101-3598. XI. FOR MORE INFORMATION ABOUT THIS CLASS ACTION This notice is only a summary of the proposed settlement, which is fully set forth in the Settlement Agreement and Release of Claims and Rights. To obtain more information about this settlement, or to obtain a copy of the Settlement Agreement and Release of Claims and Rights, you may contact the Claims Administrator or Class Counsel at the above address. Do not contact AFI s counsel, the Court clerks, or the Hon. Barry T. Moskowitz regarding this Notice. THE COURT HEREBY APPROVES THIS NOTICE. IT IS SO ORDERED. Dated: December 22, 2015 HON. BARRY T. MOSKOWITZ U.S. DISTRICT COURT JUDGE - 8 - Case No. 13-cv-2445 BTM (DHB)