Facts

Alexandra Kondracke filed a class action against Hanover Direct Inc., The Company Store Factory Inc., and United Marketing Group LLC, in connection with the companies' business practices.

PLAINTIFF'S CONTENTIONS:
Plaintiff claimed that when consumers purchased merchandise over the telephone, they were automatically enrolled to defendants' "Buyers Edge Membership Program," which charged a yearly rate of $99. Plaintiff contended that defendants had violated California's consumer protection laws under California's unfair competition law, the Consumer Legal Remedies Act, and duties established at common law barring breach of contract. Plaintiff also contended that defendants violated statutory and common law by retaining ill-gotten gains at plaintiff's and other class members' expense.

DEFENDANTS' CONTENTIONS:
Defendants denied plaintiffs' allegations. They also denied any wrongdoing and any and all liability.

Damages

Plaintiff sought restitution and other equitable relief.

Result

The parties reached a settlement, which provided for injunctive relief and $297,500 in attorney fees, costs and expenses, as well as a $2,500 incentive award for plaintiff. The injunction enjoined Hanover from marketing or otherwise selling the Buyer's Edge Program to anyone for a period of five years. Meanwhile, United Marketing Group was required to adopt certain procedural changes with respect to the sales of the Buyer's Edge Program as outlined in the settlement agreement.

Other Information

FILING DATE: June 28, 2012.