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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
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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.
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