Whalen v. Ford Motor Company

Filing 526

ORDER Granting #515 Plaintiffs' Motion for Preliminary Approval of Class Action Settlement. Signed by Judge Edward M. Chen on 3/28/2019. (emcsec, COURT STAFF) (Filed on 3/28/2019)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

IN RE

8

MYFORD TOUCH CONSUMER
LITIGATION

Case No. 13-cv-03072-EMC

10

ORDER GRANTING PLAINTIFFS’
MOTION FOR PRELIMINARY
APPROVAL OF CLASS ACTION
SETTLEMENT

11

Docket No. 515

United States District Court
Northern District of California

9

12
13

Plaintiffs filed this class action suit against Defendant Ford Motor Company (“Ford”) in

14

2013, alleging that Ford’s vehicles were equipped with an MyFordTouch “infotainment system”

15

(“MFT”) that was so defective that it compromised the safety, reliability, and operability of the

16

vehicles. After more than five years of litigation, including extensive motions practice and

17

discovery, the parties engaged in settlement negotiations overseen by Magistrate Judge Kim and

18

ultimately agreed to her Mediator’s Proposal. Currently pending before the Court is Plaintiffs’

19

motion for preliminary approval of the resulting Settlement Agreement. Docket No. 515 (“Mot.”).

20
21

For the reasons discussed below, the Court finds that the proposed Settlement Agreement
is fair, adequate, and reasonable, and accordingly GRANTS the motion for preliminary approval.

22
23
24

I.
A.

BACKGROUND

Procedural Background
Named Plaintiff Jennifer Whalen filed her original complaint against Ford in July 2013,

25

followed by a First Amended Class Action Complaint in November 2013 and a Second Amended

26

Class Action Complaint in May 2015. Docket Nos. 1, 47, 154. Along the way, Plaintiffs’ claims

27

were narrowed as a result of two motions to dismiss. Docket Nos. 97, 175. The Third Amended

28

Class Action Complaint was filed in October 2015, asserting claims on behalf of 19 Plaintiffs

1

from 14 states. Docket No. 183. Plaintiffs moved for class certification in January 2016. Docket

2

No 196-5. The Court granted in part and denied in part the motion, certifying classes for nine

3

states. Docket No. 279. Plaintiffs sought to interlocutorily appeal the class certification order, but

4

the Ninth Circuit denied their petition.

5

In October 2017, Ford moved for summary judgment on all of Plaintiffs’ certified class
claims, as well as certain non-certified claims on behalf of individual Plaintiffs. Docket No. 341.

7

The Court granted the motion as to two certified claims and one non-certified claim, allowing the

8

remaining claims to proceed. Docket No. 383. In August 2018, the Court granted Ford’s motion

9

to decertify Plaintiffs’ Massachusetts Consumer Protection Act claim. Docket No. 465. This left

10

eleven certified claims for seven classes (California, Massachusetts, New Jersey, North Carolina,

11

United States District Court
Northern District of California

6

Ohio, Virginia, and Washington).

12

The parties reached a provisional settlement agreement in March 2018. However, over the

13

course of several orders and a hearing, the Court raised a number of concerns about the

14

provisional agreement. See Docket Nos. 442, 448, 449. Of these concerns, three in particular

15

stood out. First, the monetary portion of the settlement was a “claims-made” fund that was

16

functionally equivalent to a common fund with a reversion to Ford. Docket No. 449 at 1. Second,

17

the supposed value of the equitable portion of the settlement—a free upgrade to version 3.10 of

18

the MFT software—was highly questionable as that version of the software had not been tested or

19

verified by Class Counsel. Id. Third, the settlement included a “clear-sailing” provision which

20

guaranteed that Ford would not oppose Class Counsel’s fee request up to $22 million, an amount

21

which dwarfed the actual value of the likely relief to the class. Id. The parties met and conferred

22

to discuss the Court’s concerns, and Plaintiffs ultimately opted to withdraw from the provisional

23

agreement. Docket No. 452.

24

The Court then referred the parties to Magistrate Judge Kim for settlement negotiations.

25

Docket No. 479. Judge Kim presided over a settlement conference on October 16, 2018, which

26

did not result in a settlement agreement. However, the parties continued to exchange proposals

27

via Judge Kim through October and November before reaching an impasse, whereupon Judge Kim

28

made a Mediator’s Proposal on November 19, 2018. Both parties accepted the Mediator’s
2

1

Proposal the next day. The parties then moved the Court to grant preliminary approval of the

2

resulting Settlement Agreement. Docket No. 498. At a hearing on January 24, 2019, the Court

3

conveyed several concerns it had regarding the Settlement Agreement, and ordered the parties to

4

discuss possible solutions to those concerns. Docket No. 509. The parties filed the instant

5

renewed motion for preliminary approval addressing the Court’s concerns.

6

B.

Terms of Proposed Settlement Agreement

7

The key terms of the Settlement Agreement are summarized below.

8

1.

9

The proposed settlement classes are the same as the seven remaining certified classes. See

Settlement Classes and Released Claims

Docket No. 516-1 (New Settlement Agreement or “NSA”) § I.X. In return for the consideration

11

United States District Court
Northern District of California

10

described below, Class Members will release

12

all claims, demands, causes of action, and suits pleaded against Ford
in the Litigation, and all other claims, demands, actions, causes of
action of any nature whatsoever, including, but not limited to, any
claim for violations of federal, state, or other law (whether in
contract, torts, or otherwise, including statutory and injunctive relief,
common law, property, warranty, Lemon Law, and equitable
claims), and also including Unknown Claims, that relate to
malfunctions of the MFT in Ford and Lincoln vehicles sold or leased
prior to August 9, 2013 and which are asserted or brought against
any of the Released Parties.

13
14
15
16
17
18

NSA § I.W. The release does not extend to “individual claims seeking damages for an alleged

19

personal injury caused by a malfunction of the MFT.” Id.

20

2.

21

Class Members can receive monetary compensation1 in one of two ways under the

22

Monetary Consideration

Settlement Agreement.
a.

23

Claims Process

First, they can submit a claim through the Claims Process under three possible categories:

24

i.

25

MFT Software Warranty Repairs

Class Members who sought one or more MFT Software Warranty Repairs to their Class

26
27
28

1

The monetary compensation will be distributed in the form of Visa check cards.
3

1

Vehicle and submits a claim within 180 days after preliminary approval will receive a payment as

2

follows:

3
4

Number of MFT Software Repairs

Payment Amount

5

1

$100

6

2

$250

7

3 or more

$400

8
9

NSA § II.B.1. An “MFT Software Repair” includes: (1) an Authorized Ford Dealer’s attempt to
repair MFT software during the warranty of a Class Vehicle; (2) an Authorized Ford Dealer’s

11

United States District Court
Northern District of California

10

installation of an updated version of MFT software; and (3) a non-Ford repair provider’s attempt

12

to repair MFT software, if a Class Member paid for the repair. NSA § I.N.

13

ii.

Post-Warranty Repairs

14

Class Members who paid for an MFT Software Repair within one year after the expiration

15

of their MFT Extended Warranty and submit a claim within 180 days of preliminary approval will

16

receive reimbursement for the full amount they paid for the repair. NSA § II.B.1.b.

17
18

iii.

Unsatisfactory MFT Performance

Class Members who submit a claim within 180 days of preliminary approval stating that

19

they experienced two or more instances of Unsatisfactory MFT Performance will receive a

20

payment of $45. NSA § II.B.2. “Unsatisfactory MFT Performance” means any of the following

21

types of MFT software malfunction experienced by a Class Member in their Class Vehicle: (1)

22

freezing up; (2) crashing; (3) blacking-out; (4) failing to respond to touch and/or voice commands;

23

or (5) backup camera failure. NSA § I.B. Class Members do not need to submit any proof of a

24

repair attempt to qualify for this category of compensation. NSA § II.B.3.

25
26

b.

Unilateral Payments Process (Without Submission of Claim)

Second, Class Members who do not submit a claim can nonetheless receive compensation

27

through the Unilateral Payments Process. After the claims process is complete, all original owners

28

and lessees of Class Vehicles that Ford’s records indicate received an MFT Software Repair
4

1

during the warranty period, but as to which no claim was submitted, will receive a payment of

2

$55. NSA § II.B.2. And all original owners and lessees of Class Vehicles that Ford’s records

3

indicate did not receive an MFT Software Repair will receive a payment of $20. Id. Class

4

Members who purchased their Class Vehicles used will not receive unilateral payments, since

5

Ford does not have records pertaining to them.
c.

6
7

Total Value of Monetary Consideration

As explained in more detail below, the parties estimate that, assuming a 7% claims rate,

8

the total value of the monetary consideration (i.e., the sum of payments Class Members will

9

receive from the Claims Process and the Unilateral Payment Process) under the Settlement
Agreement will be approximately $17.4 million. If the claims rate turns out to be lower, leading

11

United States District Court
Northern District of California

10

to an actual payout of less than $17 million, the difference between the actual payout and $17

12

million will then be unilaterally distributed pro rata to all Class Members who submitted valid

13

claims. NSA § II.B.3. In other words, the Settlement Agreement provides a guaranteed minimum

14

monetary payout of $17 million. There is no upper cap on the total monetary consideration Ford

15

will pay to Class Members. If the claims rate is higher than 7%, Ford will be required to pay out

16

for all valid claims, even if their total exceeds $17 million. If, for example, the claims rate turns

17

out to be 15%, the total recovery will be approximately $20.2 million. Docket No. 516 (Berman

18

Decl.) ¶ 15; Docket No. 506.

19

3.

Non-Monetary Consideration

20

Class Members will be able to obtain the most current version of the MFT software

21

(version 3.10 or later) for free. NSA § II.A. This software upgrade is already available to the

22

public for free on the Ford website, but typically consumers must download and install the

23

software themselves. However, Class Members will be able to have a Ford technician complete

24

the installation for free within six months of the Effective Date of Settlement by downloading a

25

certificate from the settlement website. Id. Ford estimates that the out-of-pocket cost for such an

26

installation is between $80 and $100.

27

4.

Claims Process

28

The parties represent that “the precise contours of the [claims] process have yet to be
5

1

developed.” Mot. at 11. However, they represent that Class Members will be able to submit their

2

claims online, via a claim form on the settlement website. Id. The claim form will be

3

prepopulated with certain information (such as the Class Members’ names, contact information,

4

and Vehicle Identification Numbers) to make the claims process easier. Id.

5

Class Members who submit claims for MFT Software Warranty Repairs will be able to

6

select the qualifying repairs they completed from a list prepopulated from Ford’s warranty records.

7

Mot. at 12. These claims require one document showing proof of ownership at the time of the

8

repair. Id.

9

Class Members who submit claims for Post-Warranty Repairs will need to manually input
the repair information because Ford does not maintain records for post-warranty repairs. Id.

11

United States District Court
Northern District of California

10

These claims require proof of ownership at the time of the repair, documents showing information

12

about the repair, and proof of payment for the repair. Id.

13

Class Members who submit claims for Unsatisfactory MFT Performance will be able to

14

select the type of qualifying malfunction they experienced from a list, and electronically sign the

15

claim form under penalty of perjury. Id. Original owners and lessees will not be required to

16

submit any supporting documents, but purchasers of used Class Vehicles will need to submit

17

documents showing class membership. Id.

18

The claims process will begin 45 days after the Court grants preliminary approval of the

19

Settlement Agreement, and close 180 days after preliminary approval (i.e., 135 days after claims

20

processing opens). NSA § II.C; Mot. at 1.

21

5.

Notice, Objections, and Opt-Out

22

The parties propose to appoint JND Class Action Administration, which conducted the

23

notice campaign to Class Members in this case in 2017, as the Settlement Administrator. NSA

24

§ I.Y. The Settlement Administrator will provide notice of the settlement to Class Members using

25

the same methods that the Court approved for the 2017 Class Notice campaign. Namely, the

26

Settlement Administrator will use the name and address of each Class member collected during

27

the 2017 campaign and update new addresses using the National Change of Address database.

28

NSA § III.C. It will then use U.S. mail to send copies of the Short Form Class Notice to Class
6

1

Members and use email to send the Email Notice to all Class Members whose email addresses are

2

known. Id.; see Docket No. 525-1 (Short Form Class Notice); Docket No. 525-3 (Email Notice).

3

The Long Form Class Notice will also be posted on the settlement website. NSA § III.C; see

4

Docket No. 525-5 (Long Form Class Notice). If any Short Form Class Notice is returned as

5

undeliverable, the Settlement Administrator will perform a reasonable search for a more current

6

name and/or address and resend the notice. NSA § III.C. No further mailings will be attempted

7

for any Short Form Class Notice returned as undeliverable for a second time. Id.

8

Any Class Member who intends to object to the Settlement Agreement must file such

9

objection with the Court by 180 days from preliminary approval. NSA § III.D.1. Any Class
Member who wishes to opt out of the Settlement Agreement (who has not already opted out) can

11

United States District Court
Northern District of California

10

submit a request for exclusion via first-class U.S. mail to the Settlement Administrator by the

12

same date. NSA § III.D.2. In response to the Court’s suggest, see Docket No. 523 at 1, the parties

13

agreed at the March 21, 2019 hearing to also permit Class Members to submit exclusion requests

14

online.
Attorneys’ Fees and Service Awards

15

6.

16

Class Counsel intends to file their motion for attorneys’ fees and costs, seeking a total of

17

$16 million, 35 days prior to the end of the objection and opt-out period. Mot. at 14–15. Ford has

18

agreed not to oppose any fee request up to that amount, and will pay the amount awarded

19

separately from and in addition to the settlement consideration to Class Members. NSA § II.E.
Class Counsel also intends to file an application for a $9,000 service award for each of the

20
21

nineteen Named Plaintiffs. NSA § II.F.

22

II.

23
24

A.

DISCUSSION

Legal Standard
Per Rule 23, a class action may only be settled with court approval. Fed. R. Civ. P. 23(e).

25

Before a court renders approval, it must determine that the settlement is “fundamentally fair,

26

adequate, and reasonable.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998) (citing

27

Fed. R. Civ. P. 23(e)(2)).

28

Amendments to Rule 23 took effect on December 1, 2018. These amendments provide
7

1

new guidance on the “fair, adequate, and reasonable” standard at the preliminary approval stage.

2

Prior to the amendments, “[t]he standard for reviewing class action settlements at the final

3

approval stage [wa]s well-settled,” but the standard applied to preliminary approval was less clear.

4

Cotter v. Lyft, Inc., 193 F. Supp. 3d 1030, 1035–36 (N.D. Cal. 2016). Courts in the Ninth Circuit

5

generally interpreted Rule 23 to require a determination of whether the proposed settlement “falls

6

within the range of possible approval” and “has no obvious deficiencies.” In re Tableware

7

Antitrust Litig., 484 F. Supp. 2d 1078, 1079–80 (N.D. Cal. 2007). The new Rule 23 clarifies that

8

preliminary approval should only be granted where the parties have “show[n] that the court will

9

likely be able to . . . approve the proposal under [the final approval factors in] Rule 23(e)(2).” Fed.
R. Civ. P. 23(e)(1)(B) (emphasis added). Review at the preliminary approval stage thus is

11

United States District Court
Northern District of California

10

increasedly robust.
Accordingly, for the purposes of this motion the Court will consider the factors informing

12
13

final approval, namely, whether:

14

(A) the class representatives and class counsel have adequately represented the class;

15

(B) the proposal was negotiated at arm’s length;

16
(C) the relief provided for the class is adequate, taking into account:
17
(i) the costs, risks, and delay of trial and appeal;

18

(ii) the effectiveness of any proposed method of distributing relief to the class,

19

including the method of processing class-member claims;

20
21

(iii) the terms of any proposed award of attorney’s fees, including timing of

22

payment; and

23

(iv) any agreement required to be identified under Rule 23(e)(3); and

24
(D) the proposal treats class members equitably relative to each other.

25
26

Fed. R. Civ. P. 23(e)(2).2

27
28

2

Because the classes in this case have already been certified, the Settlement Agreement need not
be held to the “higher standard of fairness” required of pre-certification settlements. See Hanlon,
8

1

B.

The Court’s Previous Concerns
Before discussing the Rule 23(e)(2) factors, the Court first addresses the specific concerns

2
3

it voiced about the March 2018 provisional settlement agreement. See Docket Nos. 442, 448, 449.

4

The Court agrees with the parties that those concerns have been resolved by the present Settlement

5

Agreement.

6

1.

Claims-Made Settlement

7

The Court’s first concern was that the “claims-made” structure of the provision settlement

8

only required Ford to pay Class Members who file claims. Docket No. 449 at 1. The parties had

9

estimated that, assuming 100% of Class Members submitted claims, the total value of the
provisional settlement would be over $55 million. Id. at 3. But Class Counsel conceded that in

11

United States District Court
Northern District of California

10

reality, claims rates tend to range from 1–10%, which meant that the amount that Ford would have

12

distributed to Class Members under the provisional settlement would likely to have been in the

13

$550,000–$5.5 million range. See id.
Two aspects of this Settlement Agreement—the guaranteed minimum total payment of $17

14
15

million and the Unilateral Payment Process that compensates Class Members who do not submit

16

any claims—cure this deficiency. The guaranteed minimum payment provision mitigates the most

17

problematic feature of a claims-made settlement—the reversion of unclaimed funds to the

18

defendant. See 4 Newberg on Class Actions § 13:7 (5th ed. 2018). The Unilateral Payment

19

process ensures that all Class Members (apart from those who purchased used Class Vehicles) as a

20

group will receive a guaranteed measure of recovery.
Although the use of a claims process deserves scrutiny,3 as a practical matter, a claims

21
22

process is necessary here because Ford’s warranty database does not contain enough information

23

to allow it to unilaterally determine which Class Members sought warranty repairs, paid out-of-

24

pocket for post-warranty repairs, or experienced unsatisfactory MFT performance. Ford’s

25
26
27
28

150 F.3d at 1026.
This district’s Procedural Guidance for Class Action Settlements requires a party proposing a
claims process for the distribution of settlement funds to justify the process by estimating the
expected claim rate. See Proc. Guidance for Class Action Sett. ¶ 1.
9
3

1

database tracks warranty repairs by vehicle, and records the original owner of each vehicle, but not

2

the identity of the vehicle owner at the time of repair. Docket No. 517 (“Ford Br.”) at 13–14.

3

Ford also lacks information about non-warranty repairs. Id. at 14. Thus, unless Class Members

4

corroborate proof of ownership and provide other relevant information, Ford would not be able to

5

compensate the correct vehicle owners.

6

The parties have designed the claims process will be designed minimize the burdens on

7

Class Members to submit a claim. The claims form will prepopulate with information to the

8

extent it is available in Ford’s database, and the forms can be completed and submitted online. Id.

9

at 15–16. Class Members who submit claims for in-warranty MFT Software Repairs will only
need to include one document showing proof of ownership at the time of the repair, and claims for

11

United States District Court
Northern District of California

10

Unsatisfactory MFT Performance will require no supporting documentation at all (unless the

12

vehicle was purchased used, in which case the owner will need to submit documents showing

13

class membership). Id. at 16. Furthermore, every eligible class member who does not submit a

14

claim will receive compensation.

15

2.

Software Upgrade to MFT Version 3.10

16

The Court’s second concern was about the supposed value of the free upgrade to version

17

3.10 of the MFT software. Docket No. 449 at 2. “Class Counsel conceded that it had not engaged

18

in any real scrutiny of MFT v. 3.10 . . . . to determine whether it functioned materially better” than

19

the earlier MFT versions that Plaintiffs had consistently argued were inherently defective. Id.

20

Moreover, the software upgrade was already available for free on the Ford website, so the only

21

“value” that Class Members would derive would be from the approximately $80–100 in labor

22

costs that would be waived if they asked a Ford dealership to install the software upgrade for

23

them. Id.

24

Class Counsel explained at the January 24, 2019 hearing that vetting version 3.10 would

25

entail reviewing the source code and therefore incur significant additional time and expense.

26

However, Class Counsel did “review . . . information provided by Ford regarding software version

27

3.10” and “belie[ves] that software version 3.10 is the most reliable MFT software version.”

28

Berman Decl. ¶ 14. At least some Class Members have told Class Counsel that they “would find
10

1

value in a no-cost, dealer-installed MFT software version upgrade.” Id. ¶ 14. Ford has also

2

submitted an updated expert analysis based on the latest available government data that shows no

3

statistically significant difference in accident rates between model year 2014 vehicles equipped

4

with MFT software and otherwise identical models without MFT software.4 See Docket No. 518-

5

1 (expert report of Dr. Paul Taylor). This tends to support Ford’s assertion that, even if Plaintiffs

6

maintain the MFT software is flawed, version 3.10 is sufficiently reliable that its use mitigates

7

significant safety concerns. These considerations, in addition to the potentially substantial cost

8

Ford would absorb in reimbursing dealers for performing installations, indicate that the free

9

upgrades to version 3.10 do add some value to the settlement, even if that value is not substantial.5
Attorneys’ Fees

3.

11

United States District Court
Northern District of California

10

Third, the Court expressed concern that the provisional settlement included a “clear-

12

sailing” provision which guaranteed that Ford would not oppose Class Counsel’s request for fees

13

and costs up to $22 million. Docket No. 449 at 4. The Court was troubled by the disproportionate

14

size of the fee request relative to the likely total recovery for the Class under the pure claims-made

15

model of the provisional settlement. Id. The current Settlement Agreement retains the clear

16

sailing provision. See NSA § II.E. However, relative to the provisional agreement, the total

17

recovery for the class has increased to a guaranteed minimum of $17 million and the requested

18

fees and costs have decreased to $16 million, the amount recommended in Judge Kim’s

19

Mediator’s Proposal. Berman Decl. ¶ 12. Class Counsel represents that it has accrued

20

approximately $7,095,405 in total costs ($2,395,405 in litigation expenses plus $4,700,000 in

21

expert fees). Id. ¶ 27. Subtracting these costs from the $16 million request, Class Counsel is

22

effectively seeking $8,904,595 in fees. Id.
“[C]ourts have an independent obligation to ensure that [an attorneys’ fee] award, like the

23
24
25
26
27
28

4

Ford transitioned to version 3.10 of the MFT software in August 2013, so model year 2014
vehicles were generally equipped with this version. Docket No. 518-1 at 2.
5

Class Members will not be able to receive their free version 3.10 installations from dealers until
after final approval of the Settlement Agreement is granted, but the parties have agreed to
disseminate a second round of notice upon final approval to alert Class Members that the free
upgrades are available.
11

settlement itself, is reasonable, even if the parties have already agreed to an amount.” In re

2

Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011). In particular, “when

3

confronted with a clear sailing provision, the district court has a heightened duty to peer into the

4

provision and scrutinize closely the relationship between attorneys’ fees and benefit to the class,

5

being careful to avoid awarding ‘unreasonably high’ fees simply because they are uncontested.”

6

Id. at 948 (quoting Staton v. Boeing Co., 327 F.3d 938, 954 (9th Cir. 2003)). Generally, courts

7

have discretion to choose between using the lodestar method and the percentage-of-recovery

8

method to analyze the reasonableness of attorneys’ fees, depending on the circumstances. See

9

Bluetooth Headset, 654 F.3d at 941. Some courts have suggested that the lodestar method is more

10

appropriate where, as here, counsel “do[es] not request a percentage of recovery from the common

11

United States District Court
Northern District of California

1

fund, but instead seek attorneys’ fees and expenses separate from the Class Members’ recovery.”

12

Schuchardt v. Law Office of Rory W. Clark, 314 F.R.D. 673, 688 (N.D. Cal. 2016). Whatever

13

method is employed, the other method is typically used as a cross-reference. See Bluetooth

14

Headset, 654 F.3d at 944.

15

“The lodestar figure is calculated by multiplying the number of hours the prevailing party

16

reasonably expended on the litigation (as supported by adequate documentation) by a reasonable

17

hourly rate for the region and for the experience of the lawyer.” Id. at 941. “Though the lodestar

18

figure is presumptively reasonable, the court may adjust it upward or downward by an appropriate

19

positive or negative multiplier reflecting a host of ‘reasonableness’ factors, including the quality of

20

representation, the benefit obtained for the class, the complexity and novelty of the issues

21

presented, and the risk of nonpayment.” Id. at 941–42 (citations and internal quotation marks

22

omitted). Class Counsel will be required to provide more fulsome documentation of its hours and

23

rates when it moves for fees, but for the purposes of the instant motion it represents that it has

24

accrued over 67,500 hours and $31.7 million in fees in this litigation. Berman Decl. ¶ 27.

25

Accordingly, the $8,904,595 fee request represents a negative multiplier of 0.28 on the lodestar

26

total. Even if the multiplier were calculated on the basis of the total amount requested for fees and

27

costs, the result would be a negative multiplier of 0.50.

28

The Ninth Circuit has observed that lodestar multipliers ranging from one to four are
12

1

frequently awarded in complex class action cases, Vizcaino v. Microsoft Corp., 290 F.3d 1043,

2

1051 n.6 (9th Cir. 2002), and “courts view self-reduced fees” representing a negative multiplier on

3

the lodestar “favorably,” Schuchardt, 314 F.R.D. at 690. Assuming Class Counsel’s billed hours

4

and rates are reasonable,6 the negative multiplier it has applied to its fee request suggests the

5

request is reasonable. Further, while a clear sailing provision can be a warning sign of possible

6

collusion between the parties, that concern is mitigated by two considerations here. First, the

7

Settlement Agreement and fee agreement were reached under the auspices of an experienced

8

mediator. See Bluetooth Headset, 654 F.3d at 948 (holding that the participation of a mediator is

9

“a factor weighing in favor of a finding of non-collusiveness”). Second, the $17 million
“settlement fund is not subject to reversion to the Defendant; all of it will be distributed to class

11

United States District Court
Northern District of California

10

members,” In re TracFone Unlimited Serv. Plan Litig., 112 F. Supp. 3d 993, 1007 (N.D. Cal.

12

2015), reducing “the likelihood that class counsel will have bargained away something of value to

13

the class,” Bluetooth Headset, 654 F.3d at 948.

14

Using the percentage-of-recovery method as a cross-check, a fee (net of costs) of

15

$8,904,595 represents 27% of the estimated $33 million that Ford will pay out in total (i.e., $17

16

million settlement fund + $16 million fees and costs), a percentage close to the 25% benchmark in

17

the Ninth Circuit. See Bluetooth Headset, 654 F.3d at 942.

18

On balance, given the size of Class Counsel’s lodestar, accrued over five-plus years of

19

litigation, the request for $8,904,595 in fees and $7,095,405 in costs is not unreasonable on its

20

face.

21

C.

Preliminary Approval Factors

22

The Court now turns to the Rule 23(e)(2) factors.

23

1.

24

The first factor asks whether “the class representatives and class counsel have adequately

25

Adequate Representation of the Class

represented the class.” Fed. R. Civ. P. 23(e)(2)(A). “[T]he adequacy of representation

26
27
28

The Court will scrutinize Class Counsel’s billing records once Plaintiffs separately move for fees
and costs. See Berman Decl. ¶ 26 (“Plaintiffs’ motion for fees, costs, and expenses will be filed
35 days prior to the end of the objection and opt-out period and well in advance of the Fairness
Hearing.”). It should be noted that 67,500 hours is a sizable number, even for a lengthy case.
13
6

1

requirement . . . . requires that two questions be addressed: (a) do the named plaintiffs and their

2

counsel have any conflicts of interest with other class members and (b) will the named plaintiffs

3

and their counsel prosecute the action vigorously on behalf of the class?” In re Mego Fin. Corp.

4

Sec. Litig., 213 F.3d 454, 462 (9th Cir. 2000).

5

In granting class certification, the Court has already found that Named Plaintiffs have no

6

conflicts of interest and can adequately represent Class Members. See Docket No. 279 at 20–21.

7

That remains the case. Moreover, Named Plaintiffs and Class Counsel have vigorously prosecuted

8

this action for more than five years, through motion practice, extensive initial discovery, class

9

certification, and formal mediation.
This factor therefore weighs in favor of approval.

11

United States District Court
Northern District of California

10

2.

12

The second factor asks whether “the [settlement] proposal was negotiated at arm’s length.”

13
14

Arms-Length Negotiation

Fed. R. Civ. P. 23(e)(2)(B).
Here, the parties reached settlement under the supervision of Judge Kim; indeed, the

15

Settlement Agreement is based on Judge Kim’s Mediator’s Proposal. Berman Decl. ¶ 12. Thus,

16

the settlement proposal is the product of arm’s-length bargaining. Further, the parties have

17

conducted extensive discovery, and Class Counsel has reviewed more than 8.3 million pages of

18

Ford’s documents, analyzed MFT source code, and deposed fourteen Ford fact witnesses and five

19

Ford experts. Berman Decl. ¶ 4. This gave Class Counsel adequate information to gauge the

20

value of the class claims and assess the adequacy of the settlement terms. See Hanlon, 150 F.3d at

21

1027 (affirming approval of settlement after finding “no evidence to suggest that the settlement

22

was negotiated in haste or in the absence of information illuminating the value of plaintiffs’

23

claims”).

24

Accordingly, the Settlement Agreement “appears to be the product of serious, informed,

25

non-collusive negotiations.” In re Tableware Antitrust Litig., 484 F. Supp. 2d at 1079–80. This

26

factor weighs in favor of approval.

27

3.

Relief Provided for the Class

28

The third factor requires the Court to consider whether “the relief provided for the class is
14

1

adequate, taking into account: (i) the costs, risks, and delay of trial and appeal; (ii) the

2

effectiveness of any proposed method of distributing relief to the class, including the method of

3

processing class-member claims; (iii) the terms of any proposed award of attorney’s fees,

4

including timing of payment; and (iv) any agreement required to be identified under Rule

5

23(e)(3).” Fed. R. Civ. P. 23(e)(2)(C).

6
7

a.

Costs, Risks, and Delay of Trial and Appeal

In accordance with Rule 23(e)(2)’s instruction to evaluate “the costs, risks, and delay of

8

trial and appeal,” courts assess “the strength of the plaintiffs’ case; the risk, expense, complexity,

9

and likely duration of further litigation; [and] the risk of maintaining class action status throughout
the trial.” Hanlon, 150 F.3d at 1026. This inquiry focuses on “substantive fairness and

11

United States District Court
Northern District of California

10

adequacy,” and evaluates “plaintiffs’ expected recovery balanced against the value of the

12

settlement offer.” In re Tableware Antitrust Litig., 484 F. Supp. 2d at 1080.

13

Plaintiffs acknowledge that there are three notable weaknesses in their case. First, their

14

implied warranty claims are difficult to prove. Mot. at 21. To succeed on their implied warranty

15

claims, Plaintiffs must establish that “their vehicles were affected by a persistent defect that so

16

affected their safety, reliability, or operability as to render them unfit” for their ordinary purpose.

17

Docket No. 383 at 9. The theory of liability underpinning all their certified claims (implied

18

warranty, express warranty, and negligence) is that all versions of the MFT software up to and

19

including version 3.6 are inherently defective. Mot. at 21. But Ford represents that it has

20

evidence of a significant drop-off in warranty repairs and software updates, and survey data

21

indicating improvements in MFT performance, after MFT version 3.5 was introduced. Berman

22

Decl., Exh. I at 6. Ford also has evidence that “every Plaintiff had driven their Class Vehicles for

23

tens of thousands of miles without a major accident.” Id. Moreover, Ford has filed a motion in

24

limine to exclude any statements from Ford engineers, executives, or employees regarding the pre-

25

release quality of most versions of the MFT software. Plaintiffs concede that if this motion is

26

successful, they would “lose a large amount of the best evidence to demonstrate that the software

27

versions were defective.” Id. Thus, there is a substantial risk that a jury could find that versions

28

3.5 and 3.6 had mitigated the alleged MFT defects to a sufficient degree that they longer
15

1

persistently impaired the safety, reliability, or operability of the Class Vehicles. See Chun-Hoon

2

v. McKee Foods Corp., 716 F. Supp. 2d 848, 851 (N.D. Cal. 2010) (finding that approval of a

3

class settlement is appropriate when “there are significant barriers plaintiffs must overcome in

4

making their case”).

5

Second, Plaintiffs recognize potential challenges to their damages model, premised on the

6

benefit-of-the-bargain theory that, had they known the MFT system was inherently defective, they

7

would either have paid less for their vehicles or not purchased them at all. Mot. at 21. Their

8

experts, Dr. Boedeker and Dr. Arnold, conducted analyses to calculate Plaintiffs’ damages under

9

such a theory. However, the Court had observed at the class certification stage that

10

Dr. Arnold’s calculations assume that all the money paid by class
members for their MFT systems is a loss; in other words, the MFT
system had no value whatsoever at the time of purchase. This
assumption is contradicted by Ford’s evidence that Plaintiffs still use
the MFT’s navigation, Bluetooth, and backup camera features,
suggesting that MFT, for all its alleged faults, had some utility and
residual value.

United States District Court
Northern District of California

11
12
13
14

Docket No. 279 at 7–8. The Court further pointed out that “Dr. Arnold’s assumption seems

15

inconsistent with the evidence presented by Dr. Boedeker” that suggested “consumers were still

16

willing to pay at least $551 for a defective MFT system.” Id. at 8. In light of these issues, it is

17

possible that Ford could “convince a jury that the experts’ calculations did not properly account

18

for any residual utility of the MFT system, after the MFT defects were taken into account.” Mot.

19

at 22. In other words, Plaintiffs may not succeed in their theory of damages even if they are able

20

to establish liability.

21

Third, Plaintiffs point to the risk arising from “the inherent complexity of trying class

22

claims for express warranty, implied warranty, and negligence under the laws of seven states, in

23

addition to 21 individual Plaintiffs’ claims under the laws of twelve states,” even if the trial would

24

be bifurcated. Mot. at 22. “Complex litigation is inherently uncertain.” Mego Fin. Corp., 213

25

F.3d at 463. The uncertainty in this case is particularly pronounced given the significant hurdles

26

Plaintiffs face to prevailing on their claims at trial, which justify a reduction in the percentage of

27

their settlement recovery. See Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 966 (9th Cir. 2009).

28

On the other side of the scale, the risk to Plaintiffs of maintaining class action status
16

1

throughout the trial does not appear to be substantial. The Court has already certified the seven

2

state classes, and resolved a decertification motion and a motion for summary judgment as to

3

certain certified claims. The Ninth Circuit has also rejected a Rule 23(f) appeal of the class

4

certification order. Ford notes, however, that the damages phase of a trial could still present

5

individualized issues of proof that complicate a classwide verdict. This factor therefore does not

6

lean strongly in either direction.
To assess whether the value of the settlement is adequate in light of the above risks, the

7
8

Court compares the settlement amount to the parties’ estimates of the maximum amount of

9

damages recoverable in a successful litigation. Mego Fin. Corp., 213 F.3d at 459. Plaintiffs
estimate that the maximum value of their claims is approximately $300 million. Thus, the

11

United States District Court
Northern District of California

10

guaranteed minimum recovery of $17 million under the Settlement Agreement represents 5.7% of

12

the maximum possible recovery.7 This percentage does not account for the value of the free

13

dealer-installed upgrades to version 3.10 of MFT that will be available for Class Members under

14

the Settlement Agreement. It also does not include the reimbursements Ford will provide to Class

15

Members who paid out-of-pocket for post-warranty MFT repairs (although Ford’s counsel

16

conceded at the January 24, 2019 hearing that Ford does not expect to receive many post-warranty

17

reimbursement claims).
“[T]he very essence of a settlement is compromise.” Officers for Justice v. Civil Serv.

18
19

Comm’n of City & Cty. of San Francisco, 688 F.2d 615, 624 (9th Cir. 1982) (citation omitted).

20

Accordingly, “[t]he fact that a proposed settlement may only amount to a fraction of the potential

21

recovery does not, in and of itself, mean that the proposed settlement is grossly inadequate and

22

should be disapproved.” Linney v. Cellular Alaska Partnership, 151 F.3d 1234, 1242 (9th Cir.

23

1998) (citation omitted). The expected recovery rate here of approximately 6% is on the lower

24

end of settlements approved in this district. However, as discussed above, there are several

25

deficiencies in Plaintiffs’ case that could jeopardize their recovery at trial. In such circumstances,

26
27
28

7

If the claims rate turns out to be higher than the assumed 7%, the value of the settlement would
be greater. For example, if the claims rate is 15%, the recovery under the Settlement Agreement
would be 6.7% of the maximum recovery at trial.
17

1

courts have approved settlements below the 10% threshold that reflect the plaintiffs’ judgment that

2

“a deeply discounted recovery is better than the substantial likelihood of recovering nothing.”

3

Viceral v. Mistras Grp., Inc., No. 15-CV-02198-EMC, 2016 WL 5907869, at *8 (N.D. Cal. Oct.

4

11, 2016). See, e.g., id. at *7 (approving settlement representing 8.1% of the full verdict value in

5

recognition of the “daunting” risks plaintiffs faced in proving their case); In re Uber FCRA Litig.,

6

No. 14-CV-05200-EMC, 2017 WL 2806698, at *7 (N.D. Cal. June 29, 2017) (approving a

7

settlement worth less than 7.5% of the possible verdict where the class faced “substantial risks and

8

obstacles” to prevailing at trial, as well as “the inevitable expense of litigating a large, complex

9

case through trial”); Balderas v. Massage Envy Franchising, LLC, No. 12-CV-06327 NC, 2014
WL 3610945, at *5 (N.D. Cal. July 21, 2014) (approving a settlement representing 5% of the

11

United States District Court
Northern District of California

10

maximum recovery in light of “the strengths of plaintiff’s case and the risks and expense of

12

continued litigation”).

13

Given the substantial obstacles Plaintiffs must surmount if litigation continues, and the

14

benefits Class Members will derive from the free upgrades to MFT version 3.10 on top of the

15

monetary relief, the Court concludes that the settlement amount is reasonable.

16
17

b.

Method of Distributing Relief to the Class

As discussed in Part II.B.1, supra, the Court determines that the composite method of

18

distributing relief to the Class, consisting of a claims-made portion and a unilateral payment

19

portion, is appropriate and effective. The current Settlement Agreement also eliminates a concern

20

that was present under the provisional settlement that the claims process would not begin until

21

after final approval of the settlement is granted. See Docket No. 442 at 3. Now, Class Members

22

will be able to submit claims starting from 45 days after preliminary approval, and the claims

23

process will close 135 days later, before the fairness hearing. See Mot. at 1; NSA §§ II.B, II.C.

24

The Court will therefore have the claims rate data before it when ruling on final approval.

25

The Court further approves the method and content of the proposed Notices of Settlement.

26

Notice will be sent via U.S. mail (the Short Form Class Notice), email (the Email Notice), and

27

posted on the settlement website (the Long Form Class Notice). NSA § III.C. If any Short Form

28

Class Notice is returned as undeliverable, the Settlement Administrator will perform a “reasonable
18

1

search” for a more current name and/or address and resend the notice. Id. This method of notice

2

satisfies due process. See Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 254 (N.D. Cal.

3

2015) (approving system of mailing settlement notices to last-known addresses and using skip

4

traces to re-send undeliverable mail as “reasonably calculated to provide notice to class

5

members”). Before the March 21, 2019 hearing, the Court suggested some changes to the content

6

of the Notices to bring them into compliance with the requirements of Rule 23(c)(2)(B) and this

7

district’s Procedural Guidance for Class Action Settlements. See Docket No. 523. The parties

8

have incorporated these suggestions into the final version of the Notices. See Docket No. 525.

9

Accordingly, this factor weighs in favor of approval.
c.

10

United States District Court
Northern District of California

11
12

Attorneys’ Fees

As discussed in Part II.B.3, supra, the Court concludes that Class Counsel’s request for
$8,904,595 in fees and $7,095,405 in costs is not unreasonable on its face.

13

4.

Equitable Treatment of Class Members

14

The Settlement Agreement does not improperly grant preferential treatment to certain

15

segments of the class. Under the claims process, Class Members who sought more repairs receive

16

a greater recovery because the number of repair attempts serves as a proxy for the seriousness of

17

their MFT defects. Establishing a persistent defect is a requirement of a breach of warranty claim.

18

See Docket No. 383 at 9 (holding that Plaintiffs can establish a breach of implied warranty “by

19

introducing evidence that their vehicles were affected by a persistent defect that so affected their

20

safety, reliability, or operability as to render them unfit” for their ordinary purpose). Similarly, the

21

minimum threshold of two instances of unsatisfactory MFT performance is a proxy for the

22

persistency of MFT defects. Under the Unilateral Payment Process, only original owners and

23

lessees will receive compensation because Ford does not have ownership information for Class

24

Vehicles that were purchased used.

25

Plaintiffs also intend to apply for $9,000 service awards for each Named Plaintiff. NSA

26

§ II.F. “[T]he Ninth Circuit has recognized that service awards to named plaintiffs in a class

27

action are permissible and do not render a settlement unfair or unreasonable.” Harris v. Vector

28

Mktg. Corp., No. C-08-5198 EMC, 2011 WL 1627973, at *9 (N.D. Cal. Apr. 29, 2011) (citing
19

Staton v. Boeing Co., 327 F.3d 938, 977 (9th Cir. 2003)). However, the service award must be

2

“reasonable,” and the Court “must evaluate their awards individually, using ‘relevant factors

3

includ[ing] the actions the plaintiff has taken to protect the interests of the class, the degree to

4

which the class has benefitted from those actions, ... the amount of time and effort the plaintiff

5

expended in pursuing the litigation ... and reasonabl[e] fear[s of] workplace retaliation.’” Staton,

6

327 F.3d at 977 (quoting Cook v. Niedert, 142 F.3d 1004, 1016 (7th Cir. 1998)) (alterations in

7

original). A “very large differential in the amount of damage awards between the named and

8

unnamed class members” must be justified by the record. Id. at 978. A $9,000 service award is

9

on the high end. See Harris v. Vector Mktg. Corp., No. C-08-5198 EMC, 2012 WL 381202, at *7

10

(N.D. Cal. Feb. 6, 2012) (“[I]ncentive payments of $10,000 or $25,000 are quite high and . . . as a

11

United States District Court
Northern District of California

1

general matter, $5,000 is a reasonable amount.”).
The Named Plaintiffs represent that they have devoted significant time and effort to this

12
13

case, including preparing declarations, sitting for full-day depositions, and presenting their Class

14

Vehicles in response to Ford’s requests for inspection. Berman Decl. ¶¶ 22–23. The request,

15

therefore, is not unreasonable on its face. Compare, e.g., Cook v. Niedert, 142 F.3d 1004, 1016

16

(9th Cir. 1998) (upholding $25,000 incentive payment in case with a $13 million settlement where

17

class representative spent “hundreds” of hours with class counsel) with, e.g., Knight v. Red Door

18

Salons, Inc., No. 08–01520, 2009 WL 248367, at *7 (N.D. Cal. Feb.2, 2009) (awarding $5,000 to

19

named plaintiffs who spent 40–50 hours each to help recover $500,000).

20

D.

21

Procedural Guidance for Class Action Settlements
Finally, the Court notes that the proposed Settlement sufficiently conforms to the standards

22

articulated in this district’s updated Procedural Guidance for Class Action Settlements. For

23

example, the parties have provided the necessary information about the Settlement for the Court to

24

determine that its terms are sufficiently fair, reasonable, and adequate. See Proc. Guidance for

25

Class Action Sett. ¶ 1. The parties have justified their choice of JND as Settlement Administrator.

26

See id. ¶ 2; Mot. at 16; Berman Decl., Exh. C. And the Court finds that the language of the class

27

notices is appropriate and that the means of notice is the “best notice . . . practicable under the

28

circumstances.” Fed. R. Civ. P. 23(c)(2)(B); see also Proc. Guidance for Class Action Sett. ¶¶ 3–
20

1

5, 9.
III.

2

CONCLUSION

For the foregoing reasons, the Settlement Agreement is fair, adequate, and reasonable.

3
4

Accordingly, the Court GRANTS the motion for preliminary approval. It is further ORDERED

5

that:

6
7
8
9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24

(1)

The Settlement Classes are defined as follows:
“California Settlement Class” means all persons or entities who
purchased or leased a Ford or a Lincoln vehicle in California from
Ford Motor Company or through a Ford Motor Company Dealership
before August 9, 2013, which vehicle was equipped with a MyFord
Touch or MyLincoln Touch in-vehicle information and
entertainment system.
“Massachusetts Settlement Class” means all persons or entities who
purchased or leased a Ford or a Lincoln vehicle in Massachusetts
from Ford Motor Company or through a Ford Motor Company
Dealership before August 9, 2013, which vehicle was equipped with
a MyFord Touch or MyLincoln Touch in-vehicle information and
entertainment system.
“New Jersey Settlement Class” means all persons or entities who
purchased or leased a Ford or a Lincoln vehicle in New Jersey from
Ford Motor Company or through a Ford Motor Company Dealership
before August 9, 2013, which vehicle was equipped with a MyFord
Touch or MyLincoln Touch in-vehicle information and
entertainment system.
“North Carolina Settlement Class” means all persons or entities who
purchased or leased a Ford or a Lincoln vehicle in North Carolina
from Ford Motor Company or through a Ford Motor Company
Dealership before August 9, 2013, which vehicle was equipped with
a MyFord Touch or MyLincoln Touch in-vehicle information and
entertainment system.
“Ohio Settlement Class” means all persons or entities who
purchased or leased a Ford or a Lincoln vehicle in Ohio from Ford
Motor Company or through a Ford Motor Company Dealership
before August 9, 2013, which vehicle was equipped with a MyFord
Touch or MyLincoln Touch in-vehicle information and
entertainment system.

27

“Virginia Settlement Class” means all persons or entities who
purchased or leased a Ford or a Lincoln vehicle in Virginia from
Ford Motor Company or through a Ford Motor Company Dealership
before August 9, 2013, which vehicle was equipped with a MyFord
Touch or MyLincoln Touch in-vehicle information and
entertainment system.

28

“Washington Settlement Class” means all persons or entities who

25
26

21

purchased or leased a Ford or a Lincoln vehicle in Washington from
Ford Motor Company or through a Ford Motor Company Dealership
before August 9, 2013, which vehicle was equipped with a MyFord
Touch or MyLincoln Touch in-vehicle information and
entertainment system.

1
2
3
4

(2)

Excluded from all of the Settlement Classes are: (a) all federal court judges who have

5

presided over this case and any members of their immediate families; (b) all entities

6

and natural persons that elect to exclude themselves from the Settlement Classes; (c) all

7

entities and natural persons that have litigated claims involving MFT against Ford to

8

final judgment; (d) all entities and natural persons who, via a settlement or otherwise,

9

delivered to Ford releases of their claims involving MFT; (e) Ford’s employees,
officers, directors, agents, and representatives, and their family members; and (f) all

11

United States District Court
Northern District of California

10

entities and natural persons who submitted a valid request for exclusion following the

12

Notice of Pendency of Class Action and did not revoke his, her, or its exclusion and re-

13

enter the Settlement Classes.

14

(3)

Named Plaintiffs Jennifer Whalen, Center for Defensive Driving, Jason Connell,

15

William Creed, Daniel Fink, Leif Kirchoff, Joshua Matlin, Henry Miller-Jones, Jerome

16

Miskell, Darcy Thomas-Maskrey, and Richard Decker Watson (the “Named

17

Plaintiffs”), all of whom were representatives of the certified litigation classes, are

18

appointed to serve as representatives of the Settlement Classes.

19

(4)

The appointment of Steve W. Berman Esq., Craig Spiegel Esq., Catherine Y.N.

20

Gannon Esq., Roland Tellis Esq., Mark Pifko Esq., Adam J. Levitt Esq., John E.

21

Tangren Esq., Nicholas E. Chimicles Esq., Benjamin F. Johns Esq., and the law firms

22

Hagens Berman Sobol Shapiro LLP, Baron & Budd, P.C., DiCello Levitt & Casey

23

LLC, and Chimicles Schwartz Kriner & Donaldson-Smith LLP, to serve as Class

24

Counsel is confirmed.

25

(5)

Ford is authorized and directed to establish an administrative mechanism for receiving

26

requests from Settlement Class Members to exclude themselves from the Settlement

27

Classes, as set forth in the Settlement Agreement.

28

(6)

In conjunction with moving for final approval, Class Counsel may apply to the Court
22

1

for an award of attorneys’ fees and expense reimbursement covering all legal services

2

provided to the Named Plaintiffs and Settlement Class Members in connection with the

3

Litigation and settlement of the Litigation (the “Fee and Expense Application”). The

4

Fee and Expense Application shall be filed by August 16, 2019.

5

(7)

Also in conjunction with moving for final approval, Class Counsel may submit by

6

August 16, 2019, an application for any service award for each of the 19 Plaintiffs, to

7

be paid by Ford separately from the fee and expense award.

8

(8)

Pursuant to Rule 23(e)(2) of the Federal Rules of Civil Procedure and 28 U.S.C.
§ 1715(d), a hearing (the “Fairness Hearing”) shall be held on November 21, 2019, at

10

1:30 p.m. before the undersigned at United States Federal Building and Courthouse,

11

United States District Court
Northern District of California

9

450 Golden Gate Avenue, San Francisco, CA 94102, for the purpose of finally

12

determining whether the proposed Settlement Agreement is fair, reasonable, and

13

adequate and should be approved by the Court via entry of the Final Judgment and

14

Order attached to the Settlement Agreement and, if so, what amount of reasonable

15

attorneys’ fees and reasonable reimbursement of costs and expenses should be awarded

16

to Class Counsel, and whether the service awards shall be awarded.

17

(9)

On or before June 10, 2019, Ford shall cause to be delivered by United States Postal

18

Service first-class mailing, postage prepaid, copies of the Short Form Class Notice

19

containing the language in Exhibit 1 to the Settlement Agreement to be mailed to the

20

current address of each original and subsequent purchaser or lessee of a Class Vehicle

21

for whom Ford can reasonably obtain an address. On or before June 10, 2019, Ford

22

shall cause to be transmitted via electronic mail, copies of the Email Notice containing

23

the language in Exhibit 2 to the Settlement Agreement to the Settlement Class

24

Members for whom an e-mail address was previously obtained from Ford’s records.

25

On or before May 10, 2019, Ford shall cause to be posted on a settlement website that

26

it shall establish and maintain the Long Form Class Notice containing the language in

27

Exhibit 3 to the Settlement Agreement. The Court finds that such individual notice is

28

the best notice practicable under the facts and circumstances of this case.
23

1

(10)

If it has not done so already, Ford shall provide to the Attorney General of the United

2

States and the attorneys general of the states and territories in which Settlement Class

3

Members reside the information specified in 28 U.S.C. § 1715 by the deadline

4

established in that statute.

5

(11)

Ford shall provide a declaration from it or the Settlement Administrator attesting to its

6

compliance with its notice obligations not less than seven days prior to the Fairness

7

Hearing. The declaration shall include:

8

•

the total number of Settlement Class Members;

9

•

a sample copy of the Class Notice;

10

•

the process by which Ford obtained a mailing list for the Short Form Class
Notice;

United States District Court
Northern District of California

11
•

12

which such Notices were mailed; and

13
•

14

the number of Short Form Class Notices returned to Ford by the United States
Postal Service.

15
16

the number of Short Form Class Notices mailed and the range of dates within

(12)

Each potential Settlement Class Member who wishes to be excluded from the

17

Settlement Classes must submit via United States Postal Service first-class mailing a

18

Request for Exclusion to the address specified in the Class Notice, which address shall

19

be a site under Ford’s control. Such Requests for Exclusion must be received at that

20

address on or before September 20, 2019. To be effective, the Request for Exclusion

21

must:

22

•

number;

23
24

•

•

Explicitly and unambiguously state his, her, or its desire to be excluded from
the Settlement Classes in In re MyFord Touch Consumer Litigation; and

27
28

Identify the model, model year, and vehicle identification number of the
Settlement Class Member’s Class Vehicle(s);

25
26

Include the Settlement Class Member’s full name, address, and telephone

•

Be individually and personally signed by the Member of the Settlement Classes
24

1

(if the Member of the Settlement Classes is represented by counsel, it must also

2

be signed by such counsel).

3

(13)

Any Settlement Class Member who fails to submit a timely and complete Request for
Exclusion to the required address, or communicates his, her or its intentions regarding

5

membership in the Settlement Classes in an ambiguous manner, shall be subject to and

6

bound by all proceedings, orders, and judgments of this Court pertaining to the

7

Settlement Class pursuant to the Settlement Agreement unless determined otherwise by

8

the Court. Any communications from Settlement Class Members (whether styled as an

9

exclusion request, an objection, or a comment) as to which it is not readily apparent

10

whether the Settlement Class Member meant to request an exclusion from the Class

11

United States District Court
Northern District of California

4

will be evaluated jointly by counsel for the Parties, who will make a good-faith

12

evaluation if possible. Any uncertainties about whether a Settlement Class Member

13

requested to exclude himself, herself, or itself from the Settlement Classes will be

14

resolved by the Court.

15

(14)

The Notice Administrator shall tabulate Requests for Exclusion from prospective

16

Settlement Class Members and shall report the names and addresses of such persons to

17

the Court and to Class Counsel no less than seven days before the Fairness Hearing.

18

(15)

Any Settlement Class Member who intends to object to the fairness of the Settlement

19

Agreement (including Class Counsel’s Fee and Expense Application) must, by

20

September 20, 2019, file any such objection with the Court. Any objection to the

21

Settlement Agreement must be individually and personally signed by the Settlement

22

Class Member (if the Settlement Class Member is represented by counsel, the objection

23

additionally must be signed by such counsel), and must include:

24

•

Number 13-cv-3072-EMC);

25
26

•

The objecting Member of the Settlement Classes’s full name, address, and
telephone number;

27
28

The case name and number (In Re MyFord Touch Consumer Litigation, Case

•

The model, model year, and VIN of the objecting Member of the Settlement
25

Classes’s Class Vehicle, along with Proof of Membership in a Settlement Class;

1
•

2

A written statement of all grounds for the objection, accompanied by any legal
support for the objection;

3
•

4

Copies of any papers, briefs, or other documents upon which the objection is
based;

5
•

6

A list of all cases in which the Member of the Settlement Classes and/or his or

7

her counsel filed or in any way participated—financially or otherwise—

8

objecting to a class settlement during the preceding five years;
•

9

representing the objector; and

10
•

11

United States District Court
Northern District of California

The name, address, email address, and telephone number of every attorney

A statement indicating whether the objector and/or his or her counsel intends to

12

appear at the Fairness Hearing and, if so, a list of all persons, if any, who will

13

be called to testify in support of the objection.

14

(16)

The parties to this Litigation and to the Settlement Agreement shall file any

15

memoranda or other materials in support of final approval of the Settlement

16

Agreement, including in response to any timely and properly filed objection to the

17

Settlement Agreement, no later than November 7, 2019, fourteen days prior to the

18

Fairness Hearing. Such materials shall be served on Class Counsel, counsel for Ford,

19

and on any member of the Settlement Classes (or their counsel, if represented by

20

counsel) to whose objection to the Settlement Agreement the memoranda or other

21

materials respond.

22

(17)

Following the Fairness Hearing, and based upon the entire record in this matter, the

23

Court will decide whether the Settlement Agreement should be finally approved and, if

24

so, what amount of reasonable fees and expenses should be awarded to Class Counsel,

25

and whether a service award of no more than $9,000 service award for each of the 19

26

Plaintiffs, will be awarded. If the Court determines the Settlement is reasonable, fair,

27

and adequate, the Court will issue a Final Order and Judgment memorializing its

28

decision. The Court will also issue an Order awarding reasonable fees and expenses to
26

1

Class Counsel in an amount determined by the Court but in any event of no more than

2

$16,000,000.

3

(18)

Pending final determination of the joint application for approval of this Settlement

4

Agreement, all proceedings in this Litigation other than settlement approval

5

proceedings shall be stayed and all Members of the Settlement Classes who do not

6

validly request exclusion from the Settlement Classes shall be enjoined from

7

commencing or prosecuting any action, suit, proceeding, claim, or cause of action in

8

any court or before any tribunal based on based on alleged malfunctions of the MFT in

9

Ford and Lincoln vehicles.

10

United States District Court
Northern District of California

11

This order disposes of Docket No. 515.

12
13

IT IS SO ORDERED.

14
15

Dated: March 28, 2019

16
17
18

______________________________________
EDWARD M. CHEN
United States District Judge

19
20
21
22
23
24
25
26
27
28
27