Tuesday, April 26, 2011

Gittin v. KCI USA and Calloway v. CashNetUSA class action settlements

In these two California class action settlements over debt-collection practices, one strongly suspects the attorneys are trying to rip off their clients: notwithstanding the clear requirement of Rule 23(h) and In re Mercury Interactive Securities Lit., notice is going to the class without any disclosure of the requested attorneys' fees. But in Calloway v. Cash America Net of California LLC, No. 09-CV-4858, 2011 WL 1467356 (N.D. Cal. Apr. 12, 2011), the Court ruled that the fact that the attorneys' fees were being paid separately from a common fund meant that the class would not be affected by the fee award. This is economic nonsense: the fact that a denial of a fee request will revert to the defendant instead of the plaintiff is reason to give a settlement more rather than less scrutiny. And, indeed, the settlements in these cases pay a grand total of $212,500 to class members (compared to $6,000 for the two class representatives), a tiny fraction of the statutory damages available. So how can a court say that attorneys who settle for pennies on the dollar for their clients but reserve the right for a full fee award by insisting an admission from the defendant that the plaintiffs are "prevailing parties" aren't potentially depriving the class? Imagine a hypothetical settlement where every class member gets a penny but the attorneys ask for a multiplied lodestar and get clear sailing: by Judge Seeborg's reasoning, class members have no complaint because the fees aren't coming from the class's pockets. But class members do have a complaint when attorneys settle class actions with self-serving agreements that benefit the attorneys at the expense of the class: that prevailing-party clause surely comes at a cost to class recovery.

If there's a member of one of these two classes who would like to timely object to this potential rip-off, the Center would be happy to represent them pro bono to vindicate the protections of Rule 23(h) in all class settlements. The second case is Gittin v. KCI USA, Inc., No. C-09-5843 RS (N.D. Cal.).


  1. If you are starting another class action suit against CashNet USA, I would like to throw my hat in the ring. I already lost almost $100k because of these people and a year and a half of harrassment.

    I continually receive harassing calls from a collector for CashNet USA. They call my friends, my family and my jobs at least twice a month. When they call, they represent themselves as different government entities, say there is a subpoena being set up and a restraining order against me.

    I lost two jobs already because of their harassing and embarrassing calls. They repeat my FULL social security number to everyone they call and repeat my mother’s maiden name back to me to prove they are who they say they are. I filed a complaint with the BBB but they won’t do anything because they are an “accredited company”. They forwarded my complaint to CashNet USA and CashNet USA responded to the BBB by indicating they confirm they have a profile with me and are able to confirm my bankruptcy status. They claim they are not making any calls to me, however, after piecing everything together, they are DEFINITELY the ones making the calls.


    My previous BBB Complaint: Consumer's Original Complaint : Case # 91176260

    I continually get harassing calls from someone saying they are from the federal bureau of legislation san francisco indicating I owe for an outstanding loan for CashNetUSA and they threatened me and my family. They constantly call my work, my home and my family members. The guy is an Indian guy with a heavy accent - phone # 415-932-8710. Although I provided CashNetUSA with a copy of my bankruptcy paperwork, they still continue to make harassing calls even though I am protected under a court order.

    As of late, I continually get calls from a southern black woman with a professional voice and she said her name was Renee Roe and gave a file # and said I need to call 210-892-1235 and that there is a subpoena on me and a restraining order on me. When I called them back, they said they were from the DuPage County Legal Processing Center (no such entity exists) and claimed I owed $1k+ and I could save myself from a legal mess if I pay them with a credit card.

    I asked the local police for assistance in tracing the calls and they claim it is out of their jurisdiction and that they did a little investigation and the address the call came from is an empty field.

    The same lady called me last month and claimed she was from the Deputies office. They called all of my friends, family and previous employers, repeated my FULL social security # and mother’s maiden name back to me. They somehow hacked someone's system to get that info. Â They are a scam!!!! I reported them to the three credit bureaus, local police, Federal Trade Commission and BBB.

    I did a little investigation on my own and stumbled on a blog
    that said some called their husband ....she said ""Funny, my husband just got a call From 866-653-2116 (CashNet USA’s collection department) and said for him to call them back at 210-892-1235 because he "owes" them money. But they also stated he needed to give this number over to his attorney... Weird!!!
    When I looked up the 866 # it belongs to CashNetUSA which ties CashNetUSA to the incoming calls as well as the number they refer people to call back at 210-892-1235. I believe either its them calling and harassing or they sold peoples confidential information to third parties since they have peoples FULL social security number.

    1. sorry, forgot to include my email: Debrober1@gmail.com