Bloomberg Law: Privacy & Data Security brings you single-source access to the expertise of Bloomberg Law’s privacy and data security editorial team, contributing practitioners,...
By Jimmy H. Koo
Sept. 17 — Consumers alleging that rent-to-own retailer Aaron's Inc. and its franchisee Aspen Way Enterprises Inc. spied on them through computers they rented can't pursue their unjust enrichment claim, the U.S. District Court for the Northern District of Georgia held Sept. 17.
Judge Thomas W. Thrash said that the plaintiffs in the putative class action didn't provide a direct benefit to Aaron's and that any payments Aaron's received from Aspen Way were determined completely by a franchisee agreement.
Aaron's has been under fire for allegedly installing a spyware—PC Rental Agent—on the computers it rents and sells and remotely accessing personal data.
The company previously settled charges with the California attorney general by agreeing to pay $28.4 million and with the Federal Trade Commission by agreeing to prohibit the use of the monitoring technology.
Further, two Aaron's franchisees, not Aspen Way, have settled charges with Canada's Office of the Privacy Commissioner and the Vermont attorney general.
In the class action complaint, the plaintiffs were allowed June 9 to pursue an invasion of privacy claim against Aaron's and Aspen Way. In their second amended complaint, the plaintiffs also asserted a state law unjust enrichment claim. The defendants moved to dismiss.
The court said that an unjust enrichment claim isn't a separate tort, but an alternative theory of recovery if a contract claim fails. In Georgia, it said, theory of unjust enrichment applies if there isn't a legal contract and “when there has been a benefit conferred which would result in an unjust enrichment unless compensated.”
The plaintiffs elected to limit their unjust enrichment claim only to Aaron's and therefore, Aspen Way's dismissal bid must be granted, the court held.
The plaintiffs acknowledged that they didn't directly pay Aaron's for the leased computers. Instead, they alleged that Aspen Way, through the franchisee agreement, paid Aaron's a portion of its gross revenues. Therefore, the plaintiffs argued, they indirectly conferred a financial benefit on Aaron's.
Dismissing the argument, the court held that the plaintiffs failed to offer a “persuasive reason to expand the scope of unjust enrichment liability in this context.” It said, “where there can be no unjust enrichment claim against the franchisee because of an express contract, it makes no sense to hold the franchisor liable on this theory.”
Herman Gerel LLP; Edward C. Konieczny, in Atlanta; and Levin, Fishbein, Sedran & Berman represented the plaintiffs. Alston & Bird LLP represented Aaron's. Marshall Dennehey Warner Coleman & Goggin PC and Nelson Mullins Riley & Scarborough LLP represented Aspen Way.
To contact the reporter on this story: Jimmy H. Koo in Washington at email@example.com
To contact the editor responsible for this story: Donald G. Aplin at firstname.lastname@example.org
Full text of the court's opinion is available at http://www.bloomberglaw.com/public/document/MICHAEL_PETERSON_et_al_Plaintiffs_v_AARONS_INC_et_al_Defendants_N.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)