C.R. England has agreed to pay $37.8 million to settle a class action lawsuit brought against it. The suit was filed over its lease-to-own program, which critics described as “predatory” and even “fraudulent.”
The settlement agreement comes just a few weeks shy of the eight-year anniversary of the original lawsuit’s filing. At the start in 2011 there were only two plaintiffs: Kenneth McKay and Charles Roberts. Both had been independent contractors for C.R. England who entered into a vehicle lease agreement with Opportunity Leasing, Inc – also known as Horizon Truck Sales and Leasing – the leasing arm and subsidiary of C.R. England.
Attorneys for McKay and Roberts argued that C.R. England misled potential new hires in order to get them to commit to a lease-purchase program. Once truckers were locked in, many found that it wasn’t possible to make enough money to support themselves. After making payments for weeks, months, or sometimes even years, they walked away from the job, their truck reclaimed by C.R. England. The carrier was then free to turn around and lease it again to the next driver.
Many of the lease-purchase truckers came from C.R. England’s “free” CDL training school. In actuality, the program did cost thousands of dollars, but there was no upfront payment required, and after driving for the carrier for a set amount of time the tuition was forgiven. C.R. England even guaranteed employment after completion of their program.
But according to the class members, company driver jobs were scarce and new graduates were steered toward the lease-purchase program with false promises.
While the lawsuit started with just two drivers, according to the class action settlement notice, the class now involves 17,519 drivers. Class members include anyone who entered into vehicle lease and independent contractor agreements with C.R. England and Horizon between 2007 and 2017.
Now that the settlement has been agreed upon by both parties, it will need to be approved by a judge at a hearing which is set for July 9th, 2019.
If approved, C.R. England will pay $37.8 million. Members of the class who do not opt out of payment will receive somewhere between $1,000 and $1,500 each. Nearly $16.3 million of the total settlement will go to attorneys’ costs and fees.
In addition, C.R. England has agreed to stop trying to collect on all unpaid debts from students who found themselves having to pay back the “advanced funds” payment which covered the cost of their “free” CDL training. The current amount of debt that is still unpaid by those students is approximately $13 million.
There’s also $48 million worth of “Advanced Funds Debts” which C.R. England still hasn’t collected from class members which will be forgiven entirely. Those debts include things the company billed their independent contractors for like truck maintenance, permits, licensing fees, and lease payments. Some class members claimed the fees were so egregious that they ended up owing money on their paychecks and had no choice but to walk away.
According to one of the co-lead attorneys for the class, C.R. England will also have to inform credit reporting agencies that those debts have been cancelled and provide “an opportunity for credit and DAC reporting repair.” Though since the vast majority of that debt is at least two years old with some of it up to twelve years old, it is not clear how much damage has already been done.
Finally, a total of $68,500 will be paid to Kenneth McKay and the estate of Charles Roberts as an incentive award for bringing the case back in 2011. Roberts passed away before the settlement was reached.
“We are proud of the opportunity we offered to enterprising people to start and grow their own businesses, much like our founder, C.R. England, did with just one truck,” a spokesperson for C.R. England said. “However, we understand that some were not happy with their experience and we hope that this settlement resolves any lingering concerns.”
C.R. England has not admitted any wrongdoing as part of the settlement agreement.