Aaron’s Inc. Loses Appeal on Computer Spyware Allegations

Third Circuit Court of Appeals Notes ‘Orwellian-Like’ Surveillance of Customers

ComputerA class action lawsuit accusing Aaron’s Inc. and a franchisee of secretly collecting thousands of computer webcam photos, screen shots and keystroke logs of customers will go forward because of a federal appellate court’s ruling, Herman Gerel LLP and co-counsel said today.

The U.S. Court of Appeals for the Third Circuit ruled that the U.S. District Court for the Western District of Pennsylvania “abused its discretion” in February 2014 when it ruled against class certification for the claims of Crystal and Brian Byrd, of Casper, Wyo., and other affected consumers.

The Third Circuit ruling noted, “The spyware, as described in the Byrds’ complaint, was Orwellian-like in that it guaranteed that ‘[t]here was of course no way of knowing whether you were being watched at any given moment … because [the defendants] apparently activated the PC Rental Agent’s Detective Mode ‘whenever they wanted to.’”

The Byrds are represented by Herman Gerel LLP, of Atlanta; Jamieson & Robinson, LLC, of Casper and Jackson, Wyo.; The Spence Law Firm, LLC, of Jackson, Wyo.; and Levin, Fishbein, Sedran and Berman, of Philadelphia.

Frederick S. Longer, of Levin, Fishbein, Sedran & Berman, wrote and argued the Third Circuit appeal for the Byrds. He said, “The Court’s ruling provides clear guidance regarding the certification of class actions. With this ruling, we are pleased to refocus our efforts on getting the victims of the spyware back into court.”

Andrea S. Hirsch, of Herman Gerel LLP, said, “While Aaron’s still refuses to reveal the scope of the spying, we look forward to the Byrds and other affected consumers having their class action certified and then having their day in court.”

John H. Robinson, of Jamieson & Robinson, LLC, said, “The Byrds’ courageous stand against Aaron’s began four years ago, and they deserve to be recognized for their perseverance. Because of them, consumers and privacy advocates alike are aware of Aaron’s secret surveillance of its customers throughout the nation.”

According to the Third Circuit, “The central question in this appeal is whether the District Court erred in determining that the Byrds’ proposed classes were not ascertainable. Because the District Court confused ascertainability with other relevant inquiries under Rule 23, we conclude it abused its discretion and will vacate and remand.”

Maury A. Herman, of Herman Gerel LLP, said, “With this ruling, the Court recognizes the pendulum had swung too far in the direction of protecting corporations and too far away from protecting victims. If there ever were a case appropriate for class certification, this is it.”

The case is “Crystal Byrd, et al., v. Aaron’s Inc., et al.,” No. 14-3050 in the U.S. Court of Appeals for the Third Circuit, on appeal from the U.S District Court for the Western District of Pennsylvania District Court No. 1-11-cv-00101.

According to the Byrds’ lawsuit and others filed by their legal team in other courts, information collected, transmitted and stored by Aaron’s corporate servers – without encryption – allegedly includes financial and other personal information, such as credit and debit card numbers, expiration dates, security codes, pin numbers, passwords, Social Security numbers, birth dates, identity of children and their personal and school records, tax returns, personal health information, employment records, bank account records, email addresses, log-in credentials, answers to security questions, and private communications with health care providers, therapists, attorneys, and others.

In October 2013, Aaron’s Inc. agreed to settle Federal Trade Commission charges that the company “surreptitiously tracked consumers’ locations, captured images through the computers’ webcams – including those of adults engaged in intimate activities.” According to the FTC, Aaron’s senior corporate management knew the PC Rental Agent® software, created and sold by now-defunct DesignerWare, LLC, of North East, Pa., could be highly intrusive and invaded consumers’ privacy when in “Detective Mode.”

The FTC investigation began after the Byrds sued Aaron’s Inc., Aspen Way Enterprises, Inc., and DesignerWare in May 2011.



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