Vickie FOGIE, Joan Leonard, and Angela Adams, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees, v. THORN AMERICAS, INC., Defendant-Appellant, THORN EMI North America Holdings, Inc., a Delaware corporation, Defendant-Appellant. Vickie Fogie, Joan Leonard, and Angela Adams, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. THORN Americas, Inc., formerly known as Rent-A-Center, Inc., Defendant-Appellee, THORN EMI North America Holdings, Inc., A Delaware corporation, Defendant-Appellee.
No. 98-2442, 98-2447.
United States Court of Appeals, Eighth Circuit.
Submitted: May 10, 1999. Filed: Aug. 20, 1999.
191 F.3d 893
Palmisano further argues that he qualifies for severance benefits under the terms of the formal severance plans because, after he was fired, his position was eliminated. However, regardless of how Allina may have restructured Palmisano‘s position after he was terminated, the trial record makes clear that Allina fired him because he had not responded adequately to allegations of billing fraud. Thus, the district court‘s finding that he was ineligible for benefits under the formal severance plans is not clearly erroneous.
The judgment of the district court is affirmed.
Janice M. Symchych, Minneapolis, MN, argued (Peter W. Carter, David M. Genrich, on the brief), for appellant.
Kay Nord Hunt, Minneapolis, MN, argued (Phillip A. Cole, David L. Ramp, Seymour J. Mansfield, Richard J. Fuller, on the brief), for appellee.
Before RICHARD S. ARNOLD, JOHN R. GIBSON, and BOWMAN, Circuit Judges.
Vickie Fogie, Joan Leonard, and Angela Adams filed a class-action lawsuit against THORN Americas, Inc. and its parent companies, including THORN EMI North America Holdings, Inc. (TEMINAH),1 alleging the companies had violated Minnesota and federal law while operating a rent-to-own business. The District Court entered judgment for the plaintiff class on its claim that THORN Americas and TEMINAH committed usury in violation of Minnesota law by charging excessive interest rates on credit sales of consumer goods. The plaintiffs recovered approximately $30 million in damages on their usury claim, and the District Court dismissed their other claims. THORN Americas and TEMINAH appeal several aspects of the District Court‘s damage award on the usury claim. The plaintiffs cross-appeal, claiming the District Court erred when it dismissed their claims that the defendants violated the Racketeer Influenced and Corrupt Organizations Act (RICO),
As described in this Court‘s previous opinion, Fogie v. THORN Americas, Inc., 95 F.3d 645 (8th Cir.1996), appellant THORN Americas operates stores called Rent-A-Centers (RAC)2 that offer household goods, including furniture and appliances, for sale or lease. Customers choosing to lease goods enter rent-to-own agreements with RAC. Under the agreements, customers pay a portion of the goods’ purchase price plus interest and take possession of the goods for an initial period of a week or month. At the end of this period, a customer either returns the goods or renews the agreement. Once a rent-to-own agreement has been renewed a designated number of times, the customer obtains ownership of the goods.
In 1991, several RAC customers in Minnesota (plaintiff class representatives Fogie, Leonard, and and Adams) filed a class-action lawsuit against RAC, alleging that RAC had engaged in usury and deceptive and unlawful business practices. The plaintiffs claimed these practices violated several Minnesota statutes, including the Consumer Credit Sales Act (CCSA),
In March 1993, the District Court certified the plaintiff class to include “all persons who have entered into rent to own contracts on or after August 1, 1990 in the State of Minnesota with the defendants or any of their predecessors or successors in interest in a written form substantially similar to that executed by plaintiff Fogie.” Fogie v. Rent-A-Center, Inc., 867 F.Supp. 1398, 1407 (D.Minn.1993) (Memorandum Opinion and Order). The class certification encompasses individuals who entered approximately 58,000 agreements. The District Court also determined the rent-to-own agreements were “consumer credit sales” governed by the CCSA and entered partial summary judgment for the plaintiffs on their CCSA claim. See id. at 17. The court‘s decision to treat rent-to-own agreements as consumer credit sales governed by the CCSA was subsequently endorsed by the Minnesota Supreme Court in its response to the District Court‘s certified questions, Fogie v. Rent-A-Center, Inc., 518 N.W.2d 544 (Minn.1994), and in a separate case, Miller v. Colortyme, Inc., 518 N.W.2d 544 (Minn.1994).
When answering the District Court‘s certified questions, the Minnesota Supreme Court also directed the District Court to apply the Minnesota General Usury Statute‘s limitation on interest rates to the rent-to-own agreements. See Fogie, 518 N.W.2d at 544. The District Court therefore declared RAC‘s rent-to-own agreements usurious as a matter of law under CCSA and the Minnesota General Usury Statute and “unlawful debt” under RICO. It permanently enjoined RAC from entering into rent-to-own agreements with interest rates exceeding the General Usury Statute‘s limits, voided the existing rent-to-own agreements with the plaintiff class ab initio, ordered rescission of all payments made by the plaintiff class to RAC, and prohibited RAC from collecting or receiving future payments from class members under the voided agreements. RAC appealed the award of injunctive relief, and this Court—conducting interlocutory review only of the injunctive relief and interdependent matters. See Fogie, 95 F.3d at 648, 654.
The District Court later modified its original order, directing the defendants to
The special master submitted his report and recommendations, and the District Court essentially adopted them. It entered judgment in favor of the plaintiffs in the amount of $29,898,250 plus $3418 per day from December 9, 1997, to April 15, 1998. The District Court also adopted the special master‘s recommended plan for depositing and distributing the damages, determined fees for the plaintiffs’ attorneys, and ordered that all funds remaining unclaimed after complete distribution be placed in a cy pres fund. This appeal followed.
II.
We consider first the issues raised in the plaintiffs’ cross-appeal, which challenges the District Court‘s dismissal of the plaintiffs’ RICO claims. To recover in a civil suit for a violation of RICO, a plaintiff must prove: (1) that the defendant violated
A.
The District Court ruled the plaintiffs could not recover for alleged violations of
It shall be unlawful for any person who has received any income derived . . . from a pattern of racketeering activity or through collection of an unlawful debt in which such person has participated as a principal . . . to use or invest . . . any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in . . . interstate or foreign commerce.
Determining whether only those injured by the use or investment of racketeering income have standing to bring a civil suit for violation of
After examining the matter de novo, we believe that the majority position is correct: RICO gives only individuals who have suffered injury from the use or investment of racketeering income standing to bring a civil suit under
Second, if individuals injured only by predicate acts could bring a civil action under
The plaintiffs claim they can satisfy a use-or-investment requirement because RAC reinvested the income it obtained from the unlawful debt collection in the operation and maintenance of the rent-to-own business. Such allegations of reinvestment do not suffice to give the plaintiffs standing under
B.
The plaintiffs also appeal the District Court‘s grant of summary judgment to the defendants on the plaintiffs’
The plaintiffs assert that the persons allegedly conducting the RICO enterprise, THORN Americas and TEMINAH, are sufficiently distinct from the enterprise, RAC. The plaintiffs explain that THORN Americas conducts the usurious rental-purchase business nationwide while TEMINAH, the ultimate North American parent company, receives much of the illegal income. By “RAC,” the plaintiffs say they refer to the alleged RICO enterprise, the “conglomerate of corporate entities that conduct the corporate affairs of THORN EMI, plc.” Appellee/Cross-Appellant‘s Br. at 45. The plaintiffs also describe the roles of some of the other corporate entities that made up the RAC conglomerate: THORN EMI, Inc., for example, was “involved in the cash management,” including paying THORN Americas’ bills and transferring the usurious profits to other related entities; and THORN EMI, plc headed the international corporate structure. See id.
A corporation such as THORN Americas or TEMINAH may serve as a “person” for purposes of RICO
This Court has not previously considered whether the
But we must consider whether a subsidiary may be sufficiently distinct from its parent or other related subsidiaries so as to satisfy
Turning our attention to the present case, the plaintiffs have not shown sufficient distinctiveness between THORN Americas; TEMINAH; THORN EMI, plc; or any of the other related business entities that allegedly comprise the RAC enterprise. All these entities are part of one corporate family operating under common control. Therefore, we affirm the District Court‘s granting of summary judgment to the defendants on the plaintiffs’
C.
The plaintiffs’ final RICO argument is that the District Court incorrectly granted the defendants summary judgment on a claim that THORN EMI, plc; THORN Americas; and TEMINAH violated
We affirm the District Court‘s grant of summary judgment on a different basis. Cf. Porous Media Corp. v. Pall Corp., 173 F.3d 1109, 1116 (8th Cir.1999) (“[W]e may affirm the district court‘s judgment on any basis supported by the record.“). The plaintiffs allege that the only participants in this conspiracy were THORN EMI, plc and its wholly owned subsidiaries THORN Americas and TEMINAH. See Third Amended Complaint at 18. Such allegations fail to allege a conspiracy, because as a matter of law a parent corporation and its wholly owned subsidiaries are legally incapable of forming a conspiracy with one another. We believe that Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984), in which the Supreme Court held that a parent and its wholly owned subsidiary lacked the capacity to conspire to violate § 1 of the Sherman Act, requires the identical conclusion when the same principle is applied to alleged parent-subsidiary RICO civil conspiracies.
In Copperweld, the Supreme Court stated that “[i]n any conspiracy, two or more entities that previously pursued their own interests separately are combining to act as one for their common benefit.” Copperweld, 467 U.S. at 769 (emphasis added). The Court determined that an alleged conspiracy between a parent and a subsidiary lacks this crucial element:
A parent and its wholly owned subsidiary have a complete unity of interest. Their objectives are common, not disparate; their general corporate actions are guided or determined not by two separate corporate consciousnesses, but one. They are not unlike a multiple team of horses drawing a vehicle under the control of a single driver.
Id. at 771. The Court also noted that the whole notion of an “agree-
In our analysis of the plaintiffs’
We recognize that the Seventh and Ninth Circuits have reached a conclusion different than ours. In Ashland Oil, Inc. v. Arnett, 875 F.2d 1271 (7th Cir.1989), the Seventh Circuit determined that Copperweld does not prevent a RICO conspiracy from consisting solely of a parent and its wholly owned subsidiary because, according to the Seventh Circuit, special policy considerations embodied in the Sherman Act do not apply in RICO cases. See id. at 1281 (discussing the theoretical “community of interest” that causes a parent and subsidiary to pose “no threat to the goals of antitrust law—protecting competition“). The Seventh Circuit stated that liability should extend to intracorporate RICO conspiracies because “intracorporate conspiracies do threaten RICO‘s goals of preventing the infiltration of legitimate businesses by racketeers and separating racketeers from their profits.” Id. In Webster v. Omnitrition International, Inc., 79 F.3d 776, 787 (9th Cir.), cert. denied, 519 U.S. 865 (1996), the Ninth Circuit relied upon the Seventh Circuit‘s reasoning to extend
We find this reasoning unconvincing. Neither the Seventh nor the Ninth Circuit explain why, when two entities are under common control and there is no distinctiveness or independence of action, an agreement or understanding between them creates any of the special dangers
Therefore, although we do not reach the ground upon which the District Court relied, we affirm the District Court‘s grant of summary judgment to the defendants on the plaintiffs’
Now we turn to the arguments raised in RAC‘s direct appeal regarding the damages awarded to the plaintiff class on its state-law usury claim. RAC challenges two aspects of the District Court‘s award of damages to individual plaintiffs. In order to give these challenges a context, we briefly summarize the District Court‘s damage distribution plan. The distribution plan divides plaintiffs into three groups. The first group includes two subgroups, those plaintiffs who leased goods that RAC did not designate for return and those who had previously returned their leased goods to RAC. Under the District Court‘s distribution plan, plaintiffs in both subgroups recover all principal and interest paid. The second group of plaintiffs consists of those plaintiffs who, when RAC designated their goods for return, elected to retain the goods. These plaintiffs receive a refund only of the interest they paid under the rent-to-own agreements. The third group also leased goods that RAC designated for return, but, unlike the second group, the third group elected to return those goods. The District Court‘s order grants this group, like the first group, repayment of all principal and interest paid. See Fogie v. THORN Americas, Inc., Civ. No. 3-94-359, slip op. at 7-8 (D.Minn. Apr. 15, 1998) (Order for Judgment; Orders in Enforcement of Injunctive, Allowing Attorneys’ Fees and Costs, and Plan of Distribution) [hereinafter “Order for Judgment“].
The first aspect of the damage distribution plan that RAC challenges is that it allows some plaintiffs—apparently members of the first and second groups—to keep the goods they had leased without paying RAC the full value of those goods. According to RAC, plaintiff class members failed to pay the department-store price for the goods leased (i.e., the fair value of the goods as determined by an unrelated retail seller) in approximately 37,500 of the 58,000 rent-to-own agreements covered by the class certification. The distribution plan allows plaintiffs who entered those 37,500 agreements to keep the goods, even those goods RAC designated for return, without making further payments. RAC claims this awards such plaintiffs an improper windfall. Citing Burney v. Thorn Americas, Inc., 944 F.Supp. 762 (E.D.Wis.1996), RAC urges this Court to redefine the plaintiff class to exclude such plaintiffs, whom RAC calls “windfall plaintiffs.”
Reviewing this legal issue de novo, we find that the District Court‘s order is consistent with Minnesota usury law, which permits a victim of usury to retain goods purchased through a usurious contract without paying full value for them. Since 1877, the Minnesota usury statute has provided two remedies for victims of usury: recovery of all interest paid pursuant to
Trauernicht‘s interpretation of the Minnesota usury statute remains valid. See First Fed. Sav. & Loan Ass‘n v. Guildner, 295 N.W.2d 501, 503 (Minn.1980) (citing Trauernicht for the principle that a “plaintiff suing for cancellation of [a] usurious loan need not return the money actually received“); see also In re Estate of Fauskee, 497 N.W.2d 324, 328 (Minn.Ct.App.1993) (“If a loan is usurious, it is unenforceable and the lender must forfeit interest and principal payments.“). Under Minnesota law, therefore, if a seller commits usury when selling goods, the buyer may keep the goods purchased without paying the seller the full value of the goods. The buyer also may cancel the contract pursuant to
The second aspect of the District Court‘s damage distribution that RAC challenges are the provisions that force RAC to repay principal and interest to plaintiffs in the first and third groups. Relying on Rathbun v. W.T. Grant Co., 300 Minn. 223, 219 N.W.2d 641 (1974), and its progeny, RAC argues that Minnesota law allows victims of usury to recover interest only. In Rathbun, a class-action lawsuit involving usurious retail sales installment contracts, the Minnesota Supreme Court determined “that the recovery of both interest and principal provide[d] a remedy too harsh under the circumstances.” 219 N.W.2d at 653. Therefore, the Minnesota Supreme Court permitted the plaintiffs to recover interest only. See id. RAC claims that Rathbun provides a bright-line rule for Minnesota usury lawsuits, or at the least for usury class-action lawsuits similar to Rathbun and the present case, that limits a usury victim‘s recovery to interest only. We disagree.
As we have already discussed, the Minnesota General Usury Statute grants usury victims two remedies: return of all interest paid and cancellation of the contract as void. See Barton, 558 N.W.2d at 750. When a usurious loan is canceled, “the one guilty of usurious exaction must bear the legal consequences flowing from such violation. As such he must lose not only the interest on the money risked, but also the principal, including as well all security given to secure performance.” Midland Loan Fin. Co. v. Lorentz, 209 Minn. 278, 296 N.W. 911, 915 (1941); accord United Realty Trust v. Property Dev. & Research Co., 269 N.W.2d 737, 743 n. 12 (Minn.1978); Fauskee, 497 N.W.2d at 328. The distribution plan, therefore, correctly enforces Minnesota law when it compels RAC to forfeit and repay all principal and interest collected on the usurious loans.
Rathbun and its progeny do not create a bright-line rule to the contrary. Rather, Rathbun and its progeny indicate that in some circumstances the forfeiture of both principal and interest may punish the usurer too harshly. See Rathbun, 219 N.W.2d at 653 (stating “that the recovery of both interest and principal provides a remedy too harsh under the circumstances” (emphasis added)); Katz & Lange, Ltd. v. Beugen, 356 N.W.2d 733, 735 (Minn.Ct.App.1984) (“Although the interest rate . . . was usurious, [the] counterclaim seeking to have the entire underlying debt declared void is too harsh under the circumstances. [Cite to Rathbun.] Forfeiture of all the charges is a sufficient remedy.” (emphasis added)); Kudzia v. Weise, No. C7-93-1906, 1994 WL 233599 (Minn.Ct.App. May 31, 1994) (unpublished) (citing Rathbun and Beugen for the proposition that “[u]nder some circumstances . . . forfeiture of the interest alone is the proper remedy for usury because forfeiture of both the principal and interest would be too harsh a remedy” (emphasis added)).
This case does not involve circumstances in which the forfeiture of principal and interest constitutes too harsh a remedy. The Order for Judgment permits a plaintiff to recover both principal and interest only when RAC failed to designate the plaintiff‘s goods for return or when the plaintiff returned goods RAC designated for return. In these instances, the Order for Judgment essentially rescinds the original contract: RAC has to repay both principal and interest only when it either recovers the leased goods or declines to recover those goods, apparently because the goods have little residual value. Rescission is a common remedy that does not seem too harsh, nor does RAC argue that it is. Furthermore, Rathbun and its progeny do not involve rescission cases. Concluding the distribution plan‘s awarding of principal and interest to plaintiffs in the first and third groups is permitted by Minnesota law and not too harsh considering the circumstances of this case, we affirm the District Court on this matter.
RAC also claims that the District Court erred when it granted the plaintiff class a retrospective remedy based on Miller v. Colortyme, Inc., 518 N.W.2d 544 (Minn.1994). In Minnesota, “[t]he general rule is that . . . [a] decision is to be given retroactive effect.” Hoff v. Kempton, 317 N.W.2d 361, 363 (Minn.1982). But Minnesota courts recognize that sometimes retroactive application of a judicial decision is inappropriate. To determine when a legal principle should be applied prospectively only, Minnesota courts employ a three-factor standard the United States Supreme Court described in Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971). The three factors to consider are: (1) whether the decision overrules clear precedent or resolves an issue of first impression in a manner “not clearly foreshadowed“; (2) whether, considering the history, purpose, and effect of the legal principle at issue, retroactive application will retard, not further, that principle; and (3) whether the inequities that would result from retroactive application provide an ample basis for applying the legal rule prospectively only. See Hoff, 317 N.W.2d at 363 (quoting Chevron Oil, 404 U.S. at 106-07); see also Holmberg v. Holmberg, 588 N.W.2d 720, 726 (Minn.1999).
This Court already considered the Chevron Oil factors and determined that retroactive application of the Miller v. Colortyme decision is appropriate. See Fogie, 95 F.3d at 651. RAC argues that our decision in Fogie does not foreclose its argument that a retrospective remedy is inappropriate because the United States Supreme Court distinguishes between retroactive application of a rule and the awarding of a retrospective remedy based upon the rule, and recognizes that sometimes retroactive-application and retrospective-remediation issues should be considered independently. See Reynoldsville Casket Co. v. Hyde, 514 U.S. 749, 754-59 (1995) (summarizing four instances when the Supreme Court observed this application-remediation distinction).7 Without examining the Reynoldsville Casket decision further, RAC argues this case is one in which this Court should consider the retrospective-remediation issue separately. RAC believes that, should we engage in independent retroactivity analysis of the remediation issue and use the Chevron Oil factors as directed by Hoff, we will conclude that the District Court erred in granting a retrospective remedy. RAC makes such claims even though the Minnesota Supreme Court declined to apply the Miller v. Colortyme decision prospectively only. See Miller v. Colortyme, No. C2-92-2595, slip op. at 1. (Minn. Aug. 2, 1994) (Order denying petition for clarification).
In raising its retrospective-remediation argument, RAC bids us to make three substantial analytical leaps. First, there is no precedent indicating that Minnesota courts would make the application-remediation distinction the Supreme Court recognized in Reynoldsville Casket. Second, the United States Supreme Court—while recognizing the application-remediation distinction—has largely superseded Chevron Oil with a test under which we would be compelled to apply Miller v. Colortyme retroactively. Thus, while encouraging us
We do not explore these three analytical leaps, however, because even if we resolved each one in RAC‘s favor we would still conclude that the District Court did not err when it awarded a retrospective remedy. Applying the three-factor Chevron Oil standard to consider the propriety of awarding a retrospective remedy, we would first recognize that Miller v. Colortyme did not overturn a prior decision nor did it announce a legal principle not clearly foreshadowed in Minnesota law. Rather, Miller v. Colortyme “simply stated a reasonable and correct interpretation of the law which differs from the erroneous view RAC had chosen to follow.” Fogie, 95 F.3d at 651. According to the Minnesota Supreme Court in Miller v. Colortyme, this interpretation flows from the only conceivable reason the Minnesota legislature amended the CCSA in 1981—because it wanted the CCSA to cover rent-to-own agreements. See Miller v. Colortyme, 518 N.W.2d at 548.
Second, awarding a retrospective remedy would further, not retard, the principles of the Minnesota General usury statute as reflected in it‘s purpose, history, and effect. The Minnesota General Usury Statute seeks “to protect the weak and necessitous from being taken advantage by lenders who can unilaterally establish the terms of the loan transaction.” Trapp v. Hancuh, 530 N.W.2d 879, 884 (Minn. Ct. App. 1995). RAC charged it‘s interest on the rent-to-own agreements ranging from 46 to 746 percent, see Fogie, 95 F.3d at 652, approximately six to ninety-three times greater that the eight percent permitted under Minnesota law. See
Third, we reject RAC‘s arguments that the inequities that would result from awarding a retrospective remedy provide a compelling basis for us to grant only prospective relief. RAC complains that a retrospective remedy will unjustly compensate plaintiffs because it will allow them to escape paying for RAC‘s overhead expenses and for use of and damage to the leased goods. RAC ignores that it charged interest rates far in excess of the legal limits. RAC also ignores that the Order for Judgment allows RAC to keep some income from its usurious transactions: profits included in the retail price of designated goods the second group of plaintiffs had paid for and chose to keep and income RAC made using or investing the plaintiffs’ payments of principal and interest before the plaintiffs filed suit. The equities of this case do not provide a sufficient basis for us to conclude that only prospective relief is appropriate.
None of the three Chevron Oil factors weigh in favor of denying the plaintiffs a retrospective remedy. Furthermore, as we have already stated, the Minnesota Supreme Court has refused to amend Miller v. Colortyme to make it apply only prospectively. See Miller v. Colortyme, No. C2-92-2595, slip op. at 1 (Minn. Aug. 2, 1994) (Order denying petition for clarification). Reassured by the Minnesota Supreme Court‘s refusal to amend Miller v. Colortyme that our determination correctly interprets Minnesota law, we affirm the District Court‘s grant of a retrospective remedy.
RAC also challenges the cy pres fund that the judgment of the District Court creates for unclaimed damages. According to the Order for Judgment, if any monies remain “[a]fter the Unlocated Members Subfund is closed . . . the pay over of waived principal refunds to [THORN] is completed . . . all disputes are resolved . . . [,] all checks issued on the Common Fund have either expired or been cashed,” and certain other taxes, fees, and expenses are paid, they are to be placed in a cy pres fund. See Order for Judgment at 12-13. The District Court directs class counsel at that time to provide an accounting to the District Court and “petition the [District] Court for direction on distribution of the Cy Pres Fund.” Id. at 13.
RAC claims that the creation of a cy pres fund is unprecedented and inappropriate when, as in this case, the District Court formulates an individualized remedy tied to specific transactions, and all class members are known and will receive full compensation if they come forward. RAC argues that undistributed funds should be returned so that RAC can compensate class members who seek payment after the common fund is closed but still with the time for enforcing a judgment set forth by Minnesota law.
Several questions regarding the cy pres fund remain unanswered. Most importantly, we do not yet know whether any undistributed monies will remain. For all that appears, at the end of the day there may be nothing left to go into the fund. Moreover, the District Court has not decided how any such funds will be distributed or to whom. In the absence of information regarding the existence and amount of residual funds, the District Court acted prematurely in ordering the creation of a cy pres fund. Accordingly, we vacate the portion of the District Court‘s order that creates the cy pres fund for unclaimed monies without prejudicing the District Court‘s ability to consider the creation of a cy pres fund if in fact there are unclaimed monies left after the plan for the payout of damages has been fully carried out. Cf. Hennenfent v. Mid Dakota Clinic, P.C., 164 F.3d 419, 420 (8th Cir.1998) (vacating without prejudice a district court‘s determination that an ADA plaintiff could not perform an essential function of his job because the plaintiff might still elect to undergo the medical testing necessary to make that determination).
VI.
Finally, RAC argues the District Court mistakenly granted the plaintiffs double recovery when it ordered RAC to return funds from an escrow account to the plaintiffs. RAC claims that the $1.6 million in escrow funds were already included when the parties stipulated that RAC had received $27.9 million from the plaintiff class in transactions governed by the rent-to-own agreements. The District Court found to the contrary, ordering RAC to return the $1.6 million in escrow funds and to pay damages based on the $27.9 million in receipts. We review this factual determination for clear error. See Chicago Title Ins. Co. v. FDIC, 172 F.3d 601, 604 (8th Cir.1999).
To determine whether the escrow funds were included in the damage stipulation, we trace the history of the two amounts. Initially, the District Court did not establish an escrow account; rather, it ordered RAC to “cease making any further collections or receiving any further payments of any kind from the Plaintiff Class on the rental purchase agreements.” Fogie v. Rent-A-Center, Inc., No. 3-94-359, 1995 WL 649575, slip op. at 16 (D.Minn. Sept. 28, 1995) (Memorandum Opinion and Order). RAC later requested that the District Court stay this requirement, claiming that—because the District Court‘s order prevented RAC from contacting the class members—RAC‘s return of payments without explanation would create unnecessary confusion. The District Court agreed with RAC that returning payments would create unnecessary confusion but declined to grant a stay. Instead, the court ordered RAC to place all payments received in a “separate, interest bearing account” until the plaintiffs were notified regarding the outcome of this litigation. See Fogie v. THORN Americas, Inc., No. 3-94-359, slip op. at 7 (D.Minn. Feb.19, 1997) (Memorandum Opinion and Order).
The parties subsequently stipulated that the total amount of sales subject to rescission—that is, the amount “reflect[ing] receipts on rental purchase contracts issued by [THORN] from August 1, 1990, through November 13, 1996“—totaled approximately $27.9 million. See Order for Judgment at 2. The District Court used this amount to calculate interest, made other adjustments, and ordered RAC to pay approximately $29.9 million in damages. The District Court also ordered RAC to return the $1.6 million in payments that had been placed in escrow.
After reviewing the District Court‘s orders regarding the treatment of payments received after litigation commenced, the creation of the escrow account, and the Order for Judgment, we do not believe the District Court clearly erred when it determined that the escrow funds were not included in the total damage stipulation. The damage stipulation provided the total amount of RAC‘s actual receipts. Because the funds placed in escrow were never received by RAC, the District Court did not clearly err when it determined the escrow funds were not included in the damage stipulation. Therefore, we uphold the District Court‘s decision to calculate damages based on the $27.9 million stipulation and also order RAC to return the $1.6 million in escrow funds.
VII.
For the reasons stated above, the judgment of the District Court is vacated without prejudice insofar as it creates a cy pres fund. In all other respects, the judgment of the District Court is affirmed.
BOWMAN
CIRCUIT JUDGE