HCI / Silkies Class Action Lawsuit

Gibbs Law Group filed a class action lawsuit on behalf of consumers who responded to an offer for free Silkie-brand hosiery from HCI Direct, Inc. The lawsuit alleges that HCI failed to adequately disclose the terms and conditions of its continuity sales program and billed customers for hosiery that they did not order. The court certified the case as a class action in December 2005. The parties reached a Settlement which consists of injunctive relief and a cash fund of up to $9,000,000. A final fairness hearing was held October 30, 2006 and the Court approved the settlement as fair, reasonable, and adequate to the class. At this time, all valid claims have been paid.

HCI Settlement FAQ

1. I Saw a Notice of Settlement in a Magazine. What is the Summary Notice Talking About?

2. How Do I Obtain a Copy of the Notice & Claim Statement?

3. What is a Class Action?

4. How Do I Know if I am Part of the Settlement?

5. How Do I Know if I Qualify as a “Former Customer”?

6. How Much/What Will I Get Under the Settlement?

7. How Do I Obtain A Cash Payment?

8. If I Want to Participate in This Settlement, What Do I Do?

9. What Happens if I Do Nothing?

10. Where Do I Mail the Claim Statement to?

11. What is the Deadline for Submitting a Claim Statement?

12. When Will I Receive my Benefits Under the Settlement?

13. I Do Not Want to Participate in the Settlement. How Do I Opt-Out of (Exclude Myself From) the Settlement?

14. What Happens if I Do Not Opt-Out of (Exclude Myself From) the Settlement Class?

15. How Do I Tell the Court What I Think of the Settlement?

16. What is the “Incentive Payment” to the Class Representatives?

17. Do I Have to Pay an Attorney for Any of This?

18. How Do I Get in Touch With the Attorneys For the Settlement Class?

19. Do I Have to go to Court? I Do Not Want to or Cannot go to Court.

20. What if My Address Changes After I Submit My Claim Statement?

21. What if I Still Have Questions?

1. I Saw a Notice of Settlement in a Magazine. What is the Summary Notice Talking About?

The “Summary Notice” you saw refers to the settlement of a class action lawsuit against HCI Direct, Inc. (discussed in the next paragraph).

Plaintiffs Teri Paul and Terri Carl filed a lawsuit against HCI Direct, Inc. alleging that HCI advertised the availability of a free pair of Silkies-brand hosiery but failed to adequately disclose that people who signed up for the free pair of hosiery would be sent and billed for additional hosiery. Plaintiffs allege that in some instances, HCI has collected money from customers for hosiery that they did not order.

The parties to the action reached a Settlement. You can receive a full copy of the Notice by clicking here. The Notice contains additional details regarding (1) the existence of the litigation; (2) the proposed Settlement of the litigation; (3) your rights with respect to the proposed Settlement; and (4) that you may be eligible to receive certain benefits pursuant to the Settlement of the litigation.

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2. How Do I Obtain a Copy of the Notice & Claim Statement?

If you would like a full copy of the Notice and Claim Statement, you can download them by here. You may also obtain a copy of the Notice & Claim Statement by mail by calling the Claims Administrator toll free at (888) 374-9171.

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3. What is a Class Action?

In a class action, one or more people, called Class Representatives (in this case Teri Paul and Teri Carl), sue on behalf of all other people, the “Class,” who have similar legal claims. All of these people with similar legal claims are members of the class. One court resolves the issues in the case for all Class Members, except for those who exclude themselves from the Class. California Superior Court Judge Robert Freedman of the Alameda County Superior Court is the judge assigned to this class action.

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4. How Do I Know if I am Part of the Settlement?

Membership in the Class depends on whether you received a bill or collection letter for Silkies-brand hosiery that you did not order from HCI Direct, Inc. The Settlement Class is defined as:

All Former Customers of HCI Direct, Inc. residing in the United States who, on or after April 11, 1999, received a bill or collection letter from HCI Direct, Inc., or its agents and representatives for Silkies-brand hosiery that they did not order.

A “Former Customer” is someone who, as of September 12, 2006, is no longer eligible to receive future shipments of Silkies-hosiery from HCI and who is no longer receiving billing statements from HCI.

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5. How Do I Know if I Qualify as a “Former Customer”?

A “Former Customer” is someone who, as of September 12, 2006, is no longer eligible to receive future shipments of Silkies-hosiery from HCI and who is no longer receiving billing statements from HCI.

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6. How Much/What will I Get Under the Settlement?

If the Settlement is approved by the Court, Class members will be eligible for the following relief:

Cash Payments:

If you are a Class member and paid HCI for Silkies hosiery that you did not order or request, you are eligible for a cash payment in the amount of $8 or $14, whichever most closely reflects the amount of money you paid. You must complete and submit a short Claim Statement to receive a cash payment. Claim Statement must be received by the Claims Administrator and be postmarked no later than November 11, 2006. To obtain a copy of the Claim Statement, click here.

The cash payments will be paid from a cash fund of $5,000,000 deposited by HCI into an interest bearing account.In the event the $5,000,000 cash fund is exhausted before all valid claims are paid, HCI will then pay up to an additional $4,000,000 in the amount necessary to satisfy all claims.

Collection Efforts and Debt Forgiveness Relief:

HCI will automatically cease collection efforts, forgive debt, and reverse any negative credit notations of Class members who did not pay HCI for any unsolicited and unordered Silkies hosiery.

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7. How Do I Obtain a Cash Payment?

To receive a cash payment in the amount of $8 or $14, you must complete and send a Claim Statement by first-class mail, so that it is received by the Claims Administrator and is postmarked no later than November 11, 2006. You can download a Claim Statement by here.

All claims for cash payments are subject to verification by HCI.

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8. If I Want to Participate in This Settlement, What Do I Do?

If you want to participate in the Settlement, you must complete and submit a Claim Statement, which must be received by the Claims Administrator and postmarked no later than November 11, 2006.

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9. What Happens if I Do Nothing?

If you paid HCI for unordered Silkies hosiery and you do not submit a claim within the time period identified in the Notice and you do not opt out, you will remain in the class, but you will not receive a settlement payment and you will release all of your rights relating to the legal claims in this case.

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10. Where Do I Mail the Claim Statement?

The Claim Statement should be mailed to the following address, so that it is received by the Claims Administrators and is postmarked no later than November 11, 2006.

Silkies-Settlement Claims Administrator

The Garden City Group
P.O. Box 91055
Seattle, Washington 98111-9155

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11. What is the Deadline for Submitting a Claim Statement?

All Claim Statements must be received by the Claims Administrator and be postmarked no later than November 11, 2006.

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12. When Will I Receive my Benefits Under the Settlement?

The Claims Administrator will issue cash payments to Class members who submit a timely and valid Claim Statement once the Court has reviewed the Settlement and has issued an order granting final approval of the Settlement and after the time has passed for anyone to appeal the settlement. The Court has scheduled the final approval hearing for October 30, 2006.

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13. I Do Not Want to Participate in the Settlement. How Do I Opt-Out of (Exclude Myself From) the Settlement?

The opt-out deadline is October 17, 2006. If you choose to opt-out (exclude yourself) from the Settlement Class, you will not receive the benefits of the Settlement, and your claims will not be released. If you wish to opt-out (exclude yourself) from the Settlement Class, you must send a written request for exclusion postmarked by October 17, 2006, to the Claims Administrator at:

Silkies-Settlement Claims Administrator

The Garden City Group, Inc.
P.O. Box 91055
Seattle, Washington 98111-9155

Your written request for exclusion must be signed and sent by first-class mail, stating (1) your name, address, and telephone number; (2) the reference “ Paul v. HCI Direct, Inc., Case No. RG03091369”; and (3) that you wish to be excluded from the Settlement and the Class. If you submit a request for exclusion that does not comply with these requirements, your request will be deemed invalid, and you will not be excluded from the Settlement or the Class.

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14.What Happens if I Do Not Opt-Out of (Exclude Myself From) the Settlement Class?

If you meet the definition of the Settlement Class and you do not opt-out, you will remain in the Settlement Class. This means you may be able to make a claim and receive relief. Also, the Court will enter a judgment dismissing the lawsuit against HCI with prejudice, and releasing all claims that you have or may have against HCI.

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15. How Do I Tell the Court What I Think of the Settlement?

If you do not request exclusion from the Class, you have the right to submit written objections or comments in support of the proposed Settlement, the proposed payment of Incentive Awards to the Class Representative Plaintiffs, or the proposed payment of attorneys’ fees and expenses to Class Counsel. To do so, you must submit a written statement setting forth: (1) your name, address, and telephone number; (2) the reference “ Paul v. HCI Direct, Inc., Case No. RG03091369”; (3) affirming, under penalty of perjury, that you reside in the United States and that, on a specified period or estimated date on or after April 11, 1999, you received a bill and/or collection letter from HCI or its agents or representatives for Silkies-brand hosiery; and (4) stating your objections, comments or any supporting arguments, to:

Clerk of the Court

Superior Court of the State of California for the County of Alameda
René C. Division Courthouse, Room 100
1225 Fallon Street
Oakland, California 94612

You must also mail copies of your entire written submission to Class Counsel and HCI’s Counsel at the following addresses:

Class Counsel:

Eric H. Gibbs, Esq.
Gibbs Law Group LLP
601 California Street, Suite 1400
San Francisco, California 94108

HCI’s Counsel:

Michele Floyd, Esq.
Reed Smith LLP
Two Embarcadero Center, Suite 200
San Francisco, California 94111

To be considered by the Court, your objections or supporting comments must be actually received by the Clerk of the Court, Class Counsel, and HCI’s Counsel, and not merely postmarked, no later than October 17, 2006. You cannot both request exclusion and make an objection. Only those who remain in the Class may make an objection.

The Court will hold a Fairness Hearing to decide whether to grant final approval of the proposed settlement. The Fairness Hearing is scheduled for October 30, 2006 at 2:00 PM, before the Honorable Robert Freedman, Judge of the Superior Court, in Department 20 of the Superior Court of California for Alameda County, René C. Davidson Courthouse, 1225 Fallon Street, Oakland, California 94612

If you want to speak at the Fairness Hearing, either personally or through an attorney retained by you at your own expense, you must submit your objections or comments in writing in compliance with the procedures specified above and include in your comments a statement: (a) that you intend to appear and wish to be heard at the hearing; (b) setting forth the position you intend to present and your supporting arguments; and (c) a list of all witnesses or experts you intend to call to testify, if any.

If you do not comply with the above procedures and deadlines, the Court will not consider any objection you have to the Settlement, the payment of Incentive Awards to the Class Representative Plaintiffs, or the payment of attorneys’ fees and costs to Class Counsel; you will not be entitled to speak at the Fairness Hearing; and you will not be entitled to appeal from any order or judgment of the Court approving the Settlement.

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16. What is the “Incentive Payment” to the Class Representatives?

Class Counsel will ask the Court to award an Incentive Award to each of the two Class Representatives in an amount not to exceed $10,000 per award. The Class Representatives are the individuals who originally filed the lawsuits against HCI. The Incentive Awards are sought in recognition of the time and effort the Class Representatives expended in pursuing the lawsuit, in participating in discovery, in fulfilling their obligations and responsibilities as Class Representatives, and of the benefits conferred on all of the Class members by the Settlement.

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17. Do I Have to Pay an Attorney for Any of This?

No. You are not responsible for paying any attorneys’ fees or expenses out of your own pocket. Class Counsel’s fees and expenses in connection with this lawsuit will be paid from the $5,000,000 cash fund in an amount approved by the Court.

The litigation began in April 2003, with additional lawsuits filed in federal court in California and Pennsylvania. Class Counsel has worked on these cases on an entirely contingency basis, which means they agreed to be paid only if they eventually recovered something for their clients. Thus, at this time, Class Counsel has not been paid for their services or received any reimbursement for out-of-pocket expenses. As a result of Class Counsel’s efforts in this litigation, they were able to successfully negotiate the present settlement. As part of the Settlement, Class Counsel will apply for attorneys’ fees and expenses in an amount not to exceed $3,715,000.00.

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18. How Do I Get in Touch With the Attorneys For the Settlement Class?

You can contact Class Counsel by sending an e-mail to Silkies-Settlement@girardgibbs.com Due to the high volume of e-mails, it may take up to three business days for Class Counsel to respond to your e-mail. Please do not direct any questions to the Court.

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19. Do I Have to go to Court? I Do Not Want to or Cannot go to Court.

You do not have to go to court . To remain in the Settlement, you do not have to do anything. To receive a cash payment, all you have to do is complete and submit a valid Claim Statement so that it is received by the Claims Administrators and is postmarked no later than November 11, 2006.

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20. What if My Address Changes After I Submit My Claim Statement?

If your address changes after you have submitted your Claim Statement you must notify the Claims Administrator of your new address in writing to:

Silkies-Settlement Claims Administrator

The Garden City Group, Inc.
P.O. Box 91055
Seattle, Washington 98111-9155

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21. What if I Still Have Questions?

If you still have questions, feel free to contact us at Silkies-Settlement@girardgibbs.com.

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Questions? Speak to a Consumer Attorney

If you have additional questions about this case or wish to discuss a new matter, please contact one of our consumer attorneys by calling (800) 254-9493 or filling in the form on the right.

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