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Chaikin v. Lululemon USA Inc.

United States District Court, Ninth Circuit

November 6, 2013

LAUREN CHAIKIN, an individual, on behalf of herself and all others similarly situated, Plaintiff,
LULULEMON USA INC., a Nevada Corporation, LULULEMON ATHLETICA INC., a Delaware Corporation, and DOES 1 through 50, inclusive, Defendants.


GONZALO P. CURIEL, District Judge.

Named Plaintiff Lauren Chaikin ("Plaintiff") and Defendant lululemon USA Inc. and lululemon Athletica Inc. ("lululemon" or "Defendants") have entered into a Settlement Agreement ("Agreement") dated April 1, 2013, which, if finally approved, would resolve this putative Class action case ("Litigation"). The parties seek preliminary approval of Class action settlement under Rule 23(e) of the Federal Rules of Civil Procedure.

The putative Class action is brought by Plaintiff on behalf of herself and all other customers who purchased merchandise from stores owned and operated by Defendants in California, used a credit card to make an in-store purchase, and whose personal identification information was requested and recorded by a lululemon employee. (Dkt. No. 8, "Amended Complaint.") Plaintiff alleges these acts constitute a violation of the Song-Beverly Credit Card Act, Cal. Civ. Code § 1747.08. (Id.)

Defendants, retailers which own and operate retail stores throughout California, deny all claims of wrongdoing and assert several defenses on the grounds that it did not violate any laws relating to its' alleged conduct. (Dkt. No. 10, "Answer.")

The parties have engaged in extensive arms-length negotiations and entered into a Settlement Agreement and Release. (Dkt. No. 24-3.) Plaintiff has engaged in informal discovery and analyzed the relevant legal issues with regards to the claims and potential defenses to the action. (Dkt. No. 24-2.) Defendants provided Plaintiff with information relating to its policies and practices regarding the collection of personal identification information and the approximate total number of Class Members. (Id.) Plaintiff and her counsel considered the uncertainties of trial and the benefits to be obtained under the proposed Settlement and have considered the costs, risks, and delays associated with the continued prosecution of this time-consuming litigation and the likely appeals of any rulings in favor of either Plaintiff or Defendant. (Id.) Defendant agrees that counsel for each of the Parties has sufficient information to assess the strengths, weaknesses, and likely expense of taking this case to trial. (Id.) Defendants also recognize that the expense and time spent pursuing this Litigation has and will further detract from resources that may be used to run Defendants' business. (Dkt. No. 24-3.) Both parties conclude that the Agreement is fair, reasonable, adequate and in the best interests of the Settlement Class. (Id.)

Due to the uncertainties and expense of protracted litigation, the Parties engaged in negotiations and ultimately agreed on the material terms of the Settlement Agreement. (Dkt. No. 24-3.) The Agreement was reached only after investigation and informal discovery was conducted during the Litigation, and was the result of negotiations between the parties as embodied in the Agreement. (Id.)

The Court has read and considered the Agreement and all exhibits attached thereto, including the proposed notices and claim form, and finds there is sufficient basis for: (1) granting preliminary approval of the Agreement; (2) provisionally certifying a Class for settlement purposes; (3) preliminarily approving the form, manner and content of the Class Notices and Claim Form; (4) appointing Plaintiff Lauren Chaikin as Class representative and her counsel as Class Counsel; (5) directing the Notice be disseminated to the Class; and (5) setting a hearing at which the Court will consider whether to grant final approval of the Agreement.

Based on the foregoing, the Court hereby GRANTS the Plaintiff's Unopposed Motion for Preliminary Approval. Accordingly, the Court herby makes the following findings and orders:

1. Pursuant to Federal Rule of Civil Procedure 23, the Court hereby certifies, for purposes of settlement, this Litigation as a Class action on behalf of the following Class:

All persons who used a credit card to purchase merchandise at one of the Affected Locations during the applicable Class Period, and from whom Defendants requested and recorded their ZIP code.

Excluded from the Settlement Class are all persons who used a debit card, business credit card or a prepaid credit card to purchase merchandise; all persons who only engaged in a transaction that involved shipping, delivery, return or servicing of the purchased merchandise, or for special orders; all persons who opt-out of the settlement in a timely and correct manner; Defendants, its subsidiaries, affiliates, successors, assigns, any entity in which Defendants have a controlling interest and all of their respective officers, directors, and employees; counsel of record and their respective law firms for either of the Parties; and the presiding judge in the Action, his family members and relatives.

2. The Court finds that the Class meets the requirements of Rule 23(a), and (b)(3) of the Federal Rules of Civil Procedure. Joinder of all Class Members in a single proceeding would be impracticable because of the size of the potential Class is approximately 13, 912. (See Dkt. No. 24-4, "Stonebarger Decl." at ¶ 7.) Common issues exist among Class Members and predominate over questions affecting individual Class Members only. In particular, each Class Member's claim depends on whether lululemon's conduct of requesting and recording personal identification information from its credit card customers violated California Civil Code Section 1747.08. The named Plaintiff's claims are typical of and identical to those of the Class, as Plaintiff alleges she was exposed to the same alleged unlawful policy and practice of lululemon. Specifically, Plaintiff alleges that lululemon requested and recorded her personal identification information during a credit card purchase transaction. The Plaintiff and her counsel will fairly and adequately protect the interests of the Class, as Plaintiff has no interests antagonistic to the Class and has retained experienced and competent counsel to prosecute this matter on behalf of the Class. Finally, a Class settlement is superior to other methods available for a fair resolution of the controversy.

3. The Court approves Plaintiff Lauren Chaikin as Class Representative.

4. Having considered the factors set forth in Rule 23(g)(1) of the Federal Rules of Civil Procedure, the Court appoints Plaintiff's counsel, the law firms of Stonebarger Law, APC, Patterson ...

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