Dennis v Kellogg Company

Filing 141

AMENDED ORDER Granting 101 Motion for Final Settlement Approval, Attorneys' Fees and Incentive Awards; Granting Certification of the Settlement Class; Overruling all Objections and Denying Objector's Request for Attorney Fees. Upon motion of the parties 137 , the Order of September 10, 2013 115 is hereby vacated and replaced with this Amended Order. Signed by Judge M. James Lorenz on 11/14/2013. (All non-registered users served via U.S. Mail Service)(sjt)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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HARRY DENNIS and JON KOZ,
individually and on behalf of those
similarly situated,

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CASE NO. 09-CV-1786-L (WMc)
AMENDED ORDER:

Plaintiffs,

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Defendant.

[Doc. No. 101]

vs.
KELLOGG CO.,

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2.

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GRANTING MOTION FOR
FINAL SETTLEMENT
APPROVAL, ATTORNEYS’
FEES, AND INCENTIVE
AWARDS;
OVERRULING ALL
OBJECTIONS AND
DENYING OBJECTOR’S
FEE REQUEST

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Upon motion of the parties [Doc. No. 137], the Order of September 10, 2013

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[Doc. No. 115] is hereby vacated and replaced with this Amended Order which

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addresses Plaintiffs’ motion for final settlement approval and attorneys’ fees and

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costs, as well as several objections, one of which also requests attorneys’ fees. For

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the reasons below, the Court GRANTS Plaintiffs’ motion in its entirety,

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OVERRULES all objections, and DENIES objector’s request for attorneys’ fees.

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BACKGROUND
This is a consumer class action alleging Defendant Kellogg Company made

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false and unsubstantiated representations in advertising and labeling its Frosted

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Mini-Wheats cereal products. The action originally settled with the approval of this
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Court on April 5, 2011. [See Doc. No. 49.] Under the original settlement, all

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claims1 were released in exchange for:

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claims-made basis;

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Kellogg refraining from using the challenged representations in
advertising for three years; and

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Kellogg distributing, pursuant to the cy pres doctrine, $5.5 million of
food products to charities to feed the indigent;

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a $2.75 million cash fund for distribution to class members on a

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approximately $2 million in attorneys’ fees and costs.

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The original settlement’s value thus totaled approximately $10.5 million. With

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attorney and claims administration fees and costs subtracted, the value totaled

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approximately $8.5 million.

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But on September 4, 2012, the Ninth Circuit reversed the final settlement

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approval order, vacated the judgment and award of attorneys’ fees, and remanded

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for further proceedings, finding that the cy pres award under the terms of the

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original settlement failed to target the plaintiff class. See Dennis v. Kellogg

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Company, 697 F.3d 858, 869 (9th Cir. 2012). While the asserted claims concern

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fair competition and consumer protection, the original cy pres award would benefit

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the indigent. The Ninth Circuit reasoned that “[t]his noble goal . . . has little or

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nothing to do with the purposes of the underlying lawsuit or the class of plaintiffs

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involved.” Id. at 866.

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On remand, the parties negotiated a revised settlement, which the Court

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preliminarily approved on May 3, 2013. [Doc. No. 95.] Under the revised

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settlement, all claims arising out of the challenged advertising are released in

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The Amended Complaint alleges claims of unjust enrichment, and
violation of California’s Unfair Competition Law and Consumer Legal Remedies
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exchange for:

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a $4 million cash fund for distribution to class members on a claims-

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made basis, any remaining balance of which to be distributed equally,

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pursuant to the cy pres doctrine, among recipients Consumers Union,

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Consumer Watchdog, and the Center for Science in the Public

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Interest; and

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advertising for three years.

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Kellogg refraining from using the challenged representations in

The revised settlement’s value thus totals $4 million plus the value of the

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agreed injunctive relief. Minus requested attorneys’ fees and expenses of $1

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million as well as approximately $900,000 in claims notice and administration

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costs, the cash value to the class totals approximately $2.1 million. From this cash

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fund, class members that submit a valid claim are entitled to cash distributions of

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between $5 and $45. In its preliminary approval order, the Court ordered the

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settling parties to address the revised settlement’s diminished value yet seemingly

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unchanged attorneys’ fees and expenses.

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Notice issued and out of a putative class of hundreds of thousands only 6

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objections were submitted. [See Doc. Nos. 102 (filing by Obj. Henderson, 103

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(joint filing by Objs. Jan and Onzen), 105 (filing by Obj. Santiago), 107 and 109

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(filings by Obj. Cicero), 113-1, Ex. 3 (Obj. by Kutchka), 113-1, Ex. 4 (Obj. by

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Sagaribay)] The settling parties filed reply briefs addressing the objections as well

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as the Court’s concerns. [Doc. Nos. 112, 113.] As to the Court’s concerns,

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Plaintiffs explain that although the combined, total fees and costs appear

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unchanged, the cost of notice has increased due to expanded notice to the class

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while the requested fees have decreased by 50%. On September 9, 2013, the Court

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heard oral argument on behalf of the settling parties and objectors.

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For the reasons below, the Court:

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GRANTS final settlement approval;
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GRANTS certification of the settlement class;

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GRANTS class counsel’s request for attorneys’ fees and costs;

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GRANTS the requested incentive awards to the class representatives;

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OVERRULES all objections; and

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DENIES objector’s request for attorneys’ fees.
DISCUSSION

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I.

Final Approval of the Settlement
“Voluntary conciliation and settlement are the preferred means of dispute

resolution in complex class action litigation.” Smith v. CRST Van Expedited, Inc.,

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2013 WL 163293, at *2 (S.D. Cal. Jan. 14, 2013) (citing Officers for Justice v.

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Civil Service Com’n of City and County of San Francisco, 688 F.2d 615, 625 (9th

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Cir. 1982)). “And though, unlike the settlement of most private civil actions, class

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actions may be settled only with the approval of the district court, the court’s

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intrusion upon what is otherwise a private consensual agreement negotiated

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between the parties to a lawsuit must be limited.” Id. (internal quotation omitted);

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see also Fed. R. Civ. P. 23(e). “Courts are not to reach any ultimate conclusions on

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the contested issues of fact and law which underlie the merits of the dispute, nor is

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the proposed settlement to be judged against a hypothetical or speculative measure

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of what might have been achieved by the negotiators.” Id. “Rather, ‘a district

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court’s only role in reviewing the substance of [a] settlement is to ensure that it is

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fair, adequate, and free of collusion.” Id. (quoting Lane v. Facebook, 696 F.3d 811,

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819 (9th Cir. 2012)).

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“In making this appraisal, courts have ‘broad discretion’ to consider a range

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of factors such as ‘the strength of the plaintiffs’ case; the risk, expense, complexity,

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and likely duration of further litigation; the risk of maintaining class action status

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throughout the trial; the amount offered in settlement; the extent of discovery

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completed and the stage of the proceedings; the experience and views of counsel;

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the presence of a governmental participant; and the reaction of the class members
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to the proposed settlement.’” Id. “The relative importance to be attached to any

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factor will depend upon and be dictated by the nature of the claim(s) advanced, the

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type(s) of relief sought, and the unique facts and circumstances presented by each

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individual case.” Officers for Justice, 688 F.2d at 625.

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Here, after careful review, the proposed settlement appears fair, adequate,

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and free of collusion. As discussed more fully below, the settlement is the product

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of arms-length negotiations by experienced counsel before a respected mediator,

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reached after and in light of years of hard fought litigation and ample discovery

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into the asserted claims. As a result of counsel’s efforts, the settlement provides the

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class with both a substantial cash recovery as well as significant injunctive relief,

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which together amount to over $4,000,000 in value achieved for the class.

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Moreover, the reaction of the class has been largely positive and the few objections

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are without merit.

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A.

Strengths and Risks of the Case and Value of the Settlement

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This case was initiated in 2009 and has progressed through considerable

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litigation and discovery into the asserted claims, an initial approved settlement, a

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lengthy appeal, as well as further discovery and mediation on remand. Plaintiffs

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maintain they have developed a strong case. [See Doc. No. 101-1 at 4-11, 24-25,

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28-29.] Defendant disagrees and, should the case not settle, has committed to

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vigorously contesting the asserted claims. [Id. at 25.] But both parties acknowledge

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the significant risks and costs presented by further litigation and which are avoided

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by this reasonable compromise. Settlement was reached with much of the case still

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to be litigated. This prevents the likely expense, complexity, and duration of, inter

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alia, full discovery, summary judgment, expert reports, trial, and any subsequent

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appeals. Numerous issues remain in dispute, including, e.g., whether the contested

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advertising constitutes puffery, whether the claims are amenable to class wide

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proof, whether common issues predominate, and the measure and extent of

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damages. In addition to being expensive, going forward risks further exposure and
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uncertainty for Defendant as well as impairment or delay of relief to the class.
Against these considerations, the parties have agreed to a settlement fund of

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$4,000,000, which results in individual payouts to claimants of at least $5 and up

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to $45. [See Doc. No. 101-1 at 12.] These amounts reflect the retail cost of between

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1 and 9 boxes of cereal, the advertising of which forms the basis of this dispute.

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This is a favorable result given the considerable challenges Plaintiffs face should

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litigation continue. Moreover, the settlement avoids the risks of extreme results on

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either end, i.e., complete or no recovery. Thus, it is plainly reasonable for the

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parties at this stage to agree that the actual recovery realized and risks avoided here

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outweigh the opportunity to pursue potentially more favorable results through full

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adjudication. These factors support approval. See Officers for Justice, 688 F.2d at

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625 (settlement is necessarily “an amalgam of delicate balancing, gross

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approximations and rough justice.”); Facebook, 696 F.3d at 819 (“the question

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whether a settlement is fundamentally fair . . . is different from the question

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whether the settlement is perfect in the estimation of the reviewing court.”).

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B.

Endorsement of Experienced Counsel

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Class counsel attest to decades of experience litigating class actions,

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including similar litigation on behalf of consumers and a range of other complex

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matters. [See, e.g., Doc. No. 90-3 (firm resumes).] “Given their extensive

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experience and understanding of the strengths and weaknesses of cases such as

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this, class counsel’s endorsement weighs in favor of final approval.” Smith, 2013

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WL 163293, at *4; see also Hartless v. Clorox Co., 273 F.R.D. 630, 641 (S.D. Cal.

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2011) (“The recommendations of counsel are given great weight since they are

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most familiar with the facts of the underlying litigation.”); Singer v. Becton

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Dickinson and Co., 2010 WL 2196104, at *6 (S.D. Cal. June 1, 2010) (same).

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C.

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The reaction of the class has been almost entirely positive. Of a putative

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Reaction of the Class

class covering hundreds of thousands of purchases of cereal nationwide, [see Doc.
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No. 95 (recognizing numerosity of the putative class)], only 6 objections have been

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submitted. “The small percentage of . . . objectors strongly supports the fairness of

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the settlement.” Smith, 2013 WL 163293, at *4; see also Hartless, 273 F.R.D. at

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641 (“The absence of a large number of objections to a proposed class action

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settlement raises a strong presumption that the terms of the settlement are favorable

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to the class members.”).

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Moreover, the few objections submitted are without merit.2
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Objection of Kendal Mark Jan and Toni Ozen

Jan and Ozen object to class counsel’s purported failure to identify the

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intended cy pres recipients and purported failure to file a request for attorneys’

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fees. [Doc. No. 103.] But the settlement itself, Plaintiffs’ briefing, as well as the

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Court’s preliminary approval order, all identified the three intended cy pres

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recipients, [Doc. Nos. 90, 95], and class counsel did in fact file a request for fees

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Many jurists and commentators bemoan that “too much of the
controversy in many class action litigations seems to center on the issue of
attorneys’ fees” and that, as a result, “a cottage industry has developed of
professional objectors, where again the emphasis or at least the primary motivation
is attorneys’ fees.” In re Countrywide Financial Corp. Customer Data Sec. Breach
Litig., 2010 WL 3328249, at *4 (W.D. Ky. Aug. 24, 2010). As a corollary, “when
assessing the merits of an objection to a class action settlement, courts consider the
background and intent of objectors and their counsel, particularly when indicative
of a motive other than putting the interest of the class members first.” In re Law
Office of Jonathan E. Fortman, LLC, 2013 WL 414476, at *5 (E.D Mo. Feb. 1,
2013). In this light, the Court notes that present objectors’ counsel, Darrell Palmer
has been widely and repeatedly criticized as a serial, professional, or otherwise
vexatious objector, see, e.g., In re Oil Spill by Oil Rig Deepwater Horizon,
_F.R.D._, 2013 WL 144042, at *48 n.40 (E.D. La. Jan. 11, 2013) (noting that “Mr.
Palmer has been deemed a ‘serial objector’” with a history of “admitt[ed] . . . ‘bad
faith and vexatious conduct’”); Heekin v. Anthem, Inc., 2013 WL 752637, at *3
(S.D. Ind. Feb. 27, 2013) (finding “bad faith and vexatious conduct on the part of .
. . attorney Darrell Palmer” and noting his reputation as “a serial objector”).

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along with its motion for final approval, [101-1 at 42-51]. Thus, Jan and Ozen’s

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objection appears baseless.

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Moreover, Jan and Ozen’s objection fails to provide their signatures,

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telephone numbers, or addresses, all of which are required per the terms of the

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settlement notice. [See Doc. No. 103.] With these omissions, Jan or Ozen fail to

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establish that they are members of the class with the right to object. See In re Apple

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Sec. Litig., 2011 WL 1877988, at *2 n.4 (N.D. Cal. May 17, 2011) (finding

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objector “lacks standing to object [because] he did not provide evidence to show

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that he is a class member.”). As Jan and Ozen appear to lack standing to object,

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their objection is defective. See Moore v. Verizon Communs., Inc., 2013 WL

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450365, at *4 (N.D. Cal. Feb. 5, 2013) (“non-class members have no standing to

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object to the settlement of a class action”).

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For these reasons, the Court OVERRULES Jan and Ozen’s objection.
2.

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Objections of M. Todd Henderson

Objector Henderson does not object to the fairness of the settlement

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amount;3 rather, he argues that other objectors should be entitled to attorneys’ fees

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for their prior success on appeal. But neither Henderson nor his counsel, Theodore

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Frank of the Center for Class Action Fairness, participated in the appeal. The

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objectors that in fact prevailed on appeal, class members Stephanie Berg and Omar

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Rivero, [see Dennis, 697 F.3d at 863], are no longer participating in this case. They

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have apparently terminated their association with objector’s counsel Darrell

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Palmer, and neither objects to the present settlement or moves for fees.

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Henderson concedes that claims made will likely exhaust the fund and
thus that a cy pres distribution will be unnecessary. [Doc. No. 102 at 16.]
26 Nonetheless, Henderson reserves the right to object to the Center for Science in the
Public Interest as an “activist” organization inappropriate as a cy pres recipient.
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[Id.] As Henderson concedes, this objection is unripe and likely to prove moot.
28 [See Doc. No. 113-2 at 2.]
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Accordingly, the propriety of a fee award on behalf of their efforts on appeal is not

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properly before the Court.

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Henderson also objects that the class notice and administration costs are

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excessive as a percentage of recovery and for including the notice costs of the

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original settlement, and further that no such costs should be considered for

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purposes of determining attorneys’ fees. [Doc. No. 102.] But the costs of noticing

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the original settlement are not in fact included in the present request. [See Doc. No.

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113 at 7.] And the Court finds the approximately $900,000 in requested notice

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costs reasonable given the challenges of adequately noticing the disparate,

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nationwide class governed by the present settlement. [See infra §III.A.] Finally,

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contrary to Henderson’s objection, “post-settlement cost of providing notice to the

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class can reasonably be considered a benefit to the class,” and thus such costs are

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properly and routinely paid from the common settlement fund. Staton v. Boeing

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Co., 327 F.3d 938, 975 (9th Cir. 2003); accord Smith, 2013 WL 163293, at *5.

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For these reasons and in light of all briefing and oral argument on his behalf,

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the Court OVERRULES all of Henderson’s objections and DENIES as

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unwarranted his request for a fee award to objectors’ counsel.

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3.

Objections of Stephen Santiago

Objector Santiago objects that the injunctive relief provided under the

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settlement is illusory because the advertising Kellogg agrees to refrain from has

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already been debunked. [Doc. No. 105.] But the purported falsity of the challenged

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advertising has not been determined. Indeed, Kellogg maintains Plaintiffs’ claims

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would ultimately fail on the merits. Because the merits of the challenged

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advertising remains unsettled, injunctive relief preventing such advertising

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constitutes a substantial concession by Defendant. As such, Santiago’s objection is

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baseless and does not undermine the fairness of the settlement. Cf. Smith v. CRST

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Van Expedited, Inc., 2012 WL 5873701, at *6 (S.D. Cal. Nov. 20, 2012) (in

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objecting to a proposed settlement “empty assertion does not suffice”).
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Santiago also objects that class counsel’s attorneys’ fee request is

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insufficiently detailed and includes a “Quick Pay provision.” [Doc. No. 105 at 1.]

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But the settlement does not in fact include a “Quick Pay provision,” as fees are not

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paid to counsel until 10 days after final judgment is entered. [See Doc. Nos. 89 at

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19; 113 at 17.] And the declarations of counsel detailing rates and hours worked

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suffice even without a corresponding allocation of fees among counsel. See Staton,

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327 F.3d at 963 n.15. Thus, the Court OVERRULES Santiago’s objections.
4.

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Objection of Dorothy Cicero

Objector Cicero claims that her family eats more that 3 boxes of cereal a

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month and thus that she should be compensated for 54 boxes. But any settlement is

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necessarily “an amalgam of delicate balancing, gross approximations and rough

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justice.” Officers for Justice, 688 F.2d at 625. And “the question whether a

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settlement is fundamentally fair . . . is different from the question whether the

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settlement is perfect in the estimation of the reviewing court.” Facebook, 696 F.3d

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at 819. Cicero’s dissatisfaction based on circumstances unique to her and her

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family cannot undermine the overall fairness of the settlement to the class as a

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whole in light of the significant risks posed by further litigation. See Smith, 2013

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WL 163293, at *4 (“the proposed settlement [is not] to be judged against a

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hypothetical or speculative measure.”). Thus, the Court OVERRULES Cicero’s

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objection.

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5.

Objection by Jeremy Sagaribay

Objector Sagaribay does not object on behalf of the class, but rather objects

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to Defendant Kellogg Co. paying anything at all without Plaintiffs’ claims being

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first proven at trial. [Doc. No. 113-1 at 25.] But in reviewing the proposed

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settlement, the Court is a fiduciary to absent class members, not Defendant. See,

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e.g., Wiesmueller v. Kosobucki, 2009 WL 4667576, at *4 (W.D. Wisc. Dec. 2,

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2009) (notwithstanding “the judicial duty under Rule 23 to insure that class

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counsel can adequately represent the interests of the class,” courts owe “no such
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duty to defendants, who may protect their own interests.”). Accordingly, objections

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on behalf of Defendant are irrelevant and cannot undermine final approval. Thus,

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the Court OVERRULES Sagaribay’s objections.
6.

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Objection by Jay Kutchka

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Objector Kutchka objects that the approved notice program is insufficient

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because he has eaten Kellogg cereal for years and did not know of this litigation

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until recently. [Doc. No. 113-1 at 19-21.] No notice of pending litigation is

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required; only notice of pending settlement is required. See Fed. R. Civ. P. 23.

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Kutchka plainly received notice of the settlement. Moreover, Rule 23 only requires

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that the notice be the “best practicable under the circumstances.” Fed. R. Civ. P.

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23(c)(2)(B). It need not be perfect. Browning v. Yahoo! Inc., 2007 WL 4105971, at

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*7 (N.D. Cal. Nov. 16, 2007) (“For approval, the notice need not have been

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perfect.”). Here, the parties implemented a notice program with the assistance of an

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experienced administrator that included print advertising, online banner

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advertising, press releases to print, broadcast, television, and online media, and a

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settlement website because individual notice was not possible. [See Doc. Nos. 90;

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101.] This extensive notice program appears sufficient and warranted under the

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circumstances. Thus, the Court OVERRULES Kutchka’s objections.

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D.

No Suggestion Of Collusion

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Although the Court expressed skepticism in its preliminary approval order

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regarding the revised settlement value as compared to the corresponding fee

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request, that skepticism has been allayed. The Court was concerned that the

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combined attorneys’ fee request and claims administration costs appeared

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unchanged from the last settlement, notwithstanding a significant drop in total

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value to the class. But Plaintiffs’ final approval briefing and supporting

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declarations make clear that the seemingly unchanged total amount reflects the

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increased cost of expanded claims notice administration rather than static fees. In

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fact, the requested attorneys’ fees are 50% less than provided under the initial
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settlement. [See, e.g., Doc. No. 101-1 at 10-11 ($1 million present fee request

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versus $2 million dollar fee provision under the initial settlement).] With the

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Court’s concerns allayed, no aspect of the settlement suggests collusion. Rather the

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present settlement was reached through mediation before the Honorable Richard

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Haden, [see Doc. No. 101-2 at 6], and neither the requested attorneys’ fees nor the

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requested incentive awards appear unreasonable, [see infra]. Nor have even the few

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objectors suggested collusion. [Cf. Doc. No. 102 (Henderson Obj. (“This objection

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does not argue that the settlement is a product of collusion.”).] At bottom, “the

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circumstances and extent of the parties’ negotiations suggest fundamental fairness

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and thus weigh in favor of approval.” Smith, 2013 WL 163293, at *4.
Thus, the Court OVERRULES all objections and GRANTS final approval

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of the settlement.

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II.

With its preliminary settlement approval order, the Court preliminarily

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Class Certification

certified the following settlement class:

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All persons or entities in the United States who purchased Frosted

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Mini-Wheats branded cereal from January 28, 2008, up to and

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including October 1, 2009. Excluded from the Class are Kellogg’s

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employees, officers, directors, agents, and representatives and those

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who purchased Frosted Mini-Wheats for the purpose of re-sale.

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[Doc. No. at .] Only one objector, Santiago, contests the propriety of class

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certification, and he does so in utterly conclusory fashion. [See Doc. No. 105 (one

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sentence objection to class certification providing no specifics or reasoning).]

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Nothing in any of the objections or final approval briefing undermines the Court’s

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preliminary findings in regard to class certification. Accordingly, the Court

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GRANTS final certification of this settlement class.

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III.

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Class Counsel’s Requests for Fees, Expenses, and Incentive Awards
Out of the $4 million settlement fund, class counsel seeks an award of $1
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million in attorneys’ fees and expenses, approximately $900,000 in class claims

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notice and administration costs, and $5,000 incentive awards to class

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representatives Koz and Dennis. [See Doc. No. 101 at 11.]

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A.

Class Counsel’s Fees and Expenses

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Because “[t]his action asserts California claims premised on diversity

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jurisdiction,” “the Court applies California law to determine both the right to and

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method for calculating fees.” Smith, 2013 WL 163293, at *5. “Under California

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law, . . . in cases such as this, where the class benefit can be monetized with a

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reasonable degree of certainty, a percentage of the benefit approach may be used.”

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Id. (citing In re Consumer Privacy Cases, 175 Cal. App. 4th 545, 557-58 (2009)).

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“Under the percentage method, California has recognized that most fee awards

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based on either a lodestar or percentage calculation are 33 percent and has

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endorsed the federal benchmark of 25 percent.” Id.; see also In re Consumer

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Privacy Cases, 175 Cal. App. 4th at 556 n. 13. “As to the settlement fund amount:

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‘[t]he total fund c[an] be used to measure whether the portion allocated to the class

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and to attorney fees is reasonable.’” Id. (citing Manual for Complex Litigation (4th

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ed. 2008) § 21.71, p. 525). “Always, the ultimate goal is to award a reasonable

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fee.” Id. (internal citation omitted); see also Hartless, 273 F.R.D. at 645.

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Here, the settlement confers a total financial benefit to the class in excess of

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$4,000,000, including both a non-reversionary cash fund of $4,000,000 and

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injunctive relief that will benefit both class members and non-class consumers

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going forward. In light of the results achieved, the requested fees appear

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reasonable. The settlement provides for, and class counsel here seeks, an award of

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$1,000,000 in fees which constitutes 25% of the cash fund. This percentages

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compares favorably with both California (33%) and federal (25%) benchmarks and

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the requested fee compares well with a lodestar cross-check as well. Applying class

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counsel’s hourly rates ranging from $145 (for law clerks) to $950 (for name

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partners), which fall within typical rates for attorneys of comparable experience,
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the total lodestar totals $975,526.25. [See, e.g., Doc. No. 101-2 at 10 (summary

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class counsel hourly rates and hours expended).] The $1 million requested fee is

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essentially at cost without any multiplier and thus appears reasonable, perhaps even

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a discount, given the risks borne by counsel proceeding on contingency, the

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duration and complexity of the case, and the substantial benefit realized for the

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class. Cf. Sproul v. Astrue, 2013 WL 394056, at *2 (S.D. Cal. Jan. 30, 2013)

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(“Courts are loathe to penalize experienced counsel for efficient representation

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under contingency agreements.”); see also Singer, 2010 WL 2196104, at *8

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(awarding 33 1/3% fee in class action); Ingalls v. Hallmark Mktg. Corp., Case No.

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08cv4342, Doc. No. 77 (C.D. Cal. Oct. 16, 2009) (awarding 33.33% fee on a $5.6

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million class action); Birch v. Office Depot, Inc., Case No. 06cv1690, Doc. No. 48

12

(S.D. Cal. Sept. 28, 2007) (awarding a 40% fee on a $16 million class action);

13

Rippee v. Boston Mkt. Corp., Case No. 05cv1359, Doc. No. 70 (S.D. Cal. Oct. 10,

14

2006) (awarding a 40% fee on a $3.75 million class action).

15

The requested claims notice and administration costs also appear reasonable.

16

Class counsel seeks $908,665 in claims notice and administration costs. [See Doc.

17

No. 101-1 at 11.] These amounts are within that contemplated by the settlement,

18

have been endorsed by experienced counsel and claims administration consultants

19

involved in this case, and are thus presumed reasonable. See Smith, 2013 WL

20

163293, at *4 (“costs and expenses incurred by experienced counsel in creating or

21

preserving a common fund [are] presumed reasonable”). Moreover, the widely

22

disparate, nationwide class of potential claimants in this case both necessitates, and

23

justifies the increased cost of, the broad and diverse notice campaign contemplated

24

and executed under the present settlement. Cf. Malta v. Fed. Home Loans Mortg.

25

Corp., 2013 WL 444619, at *7 (S.D. Cal. Feb. 5, 2013) (approving nearly $3

26

million is claims notice and administration costs); In re Immune Response Sec.

27

Litig., 497 F. Supp. 2d 1166, 1177-78 (S.D. Cal. 2007) (finding similar costs and

28

expenses “necessary” to class action litigation).
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1

Accordingly, the Court GRANTS class counsel’s fee and expense request.

2

B.

3

The two class representatives, Koz and Dennis, each seek an incentive

Incentive Awards to Class Representatives

4

payment of $5,000 for their service in prosecuting this action on behalf of the

5

class. [See Doc. No. 101-1 at 51-52.] “Incentive awards are fairly typical in class

6

action cases.” Rodriguez v. West Publishing Corp., 563 F.3d 948, 958 (9th Cir.

7

2009). “Such awards are discretionary . . . and are intended to compensate class

8

representatives for work done on behalf of the class, to make up for financial or

9

reputational risk undertaken in bringing the action.” Id. “The criteria courts may

10

consider in determining whether to make an incentive award include: 1) the risk to

11

the class representative in commencing suit, both financial and otherwise; 2) the

12

notoriety and personal difficulties encountered by the class representative; 3) the

13

amount of time and effort spent by the class representative; 4) the duration of the

14

litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class

15

representative as a result of the litigation.” Van Vranken v. Atlantic Richfield Co.,

16

901 F. Supp. 294, 299 (N.D. Cal. 1995) (citations omitted).

17

Here, all factors weigh in favor of the awards sought. This consumer class

18

action risked the class representatives’ reputations and their exposure to joint and

19

several liability for counterclaims. See Martin v. AmeriPride Services, Inc., 2011

20

WL 2313604, at *4 (S.D. Cal. 2011) (acknowledging professional and legal risks

21

posed to class representatives in class actions). Further, both class representatives

22

were active in assisting class counsel in a wide variety of respects, from initiating

23

the case, reviewing pleadings, making themselves available for deposition and

24

possible trial testimony, to providing factual background and support, and

25

communicating with class counsel in regard to the case. [See, e.g., Doc. No. 101-1

26

at 51-52; 101-4.] Class representatives’ efforts and involvement have thus

27

protected and benefitted the class as a whole. See Hartless, 273 F.R.D. at 647

28

(class representative involvement “protect[s] the interests of the class” and thus
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1

warrants incentive awards). Given Koz and Dennis’s record of involvement despite

2

the risks posed, the requested incentive awards are warranted. Van Vranken, 901

3

F.Supp. at 300.

4

Moreover, the amount of the incentive payments requested, $5,000, is well

5

within if not below the range awarded in similar cases. See Smith, 2013 WL

6

163293, at *5 ($15,000 award); Singer, 2010 WL 2196104, at *9 ($25,000 award);

7

Cicero v. DirectTV, 2010 WL 2991486, at *5 (C.D. Cal. July 27, 2010) ($5,000

8

award); Van Vranken, 901 F. Supp. at 300 ($50,000 incentive award). Thus, the

9

Court GRANTS the requested class representative incentive awards.

10

CONCLUSION

11

For the foregoing reasons, the Court hereby:

12

•

GRANTS final settlement approval;

13

•

GRANTS certification of the settlement class;

14

•

GRANTS class counsel’s request for attorneys’ fees and costs;

15

•

GRANTS the requested incentive awards to the class representatives;

16

•

OVERRULES all objections; and

17

•

DENIES objector’s request for attorneys’ fees.

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IT IS SO ORDERED.

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DATED: November 14, 2013

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M. James Lorenz
United States District Court Judge

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22

COPY TO:

HON. WILLIAM MCCURINE, JR.
UNITED STATES MAGISTRATE JUDGE
24 ALL PARTIES/COUNSEL
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