Lee v. Enterprise Leasing Company-West, LLC

Filing 142

ORDERED that Plaintiffs' # 124 Motion for Final Approval of Settlement is GRANTED. IT IS FURTHER ORDERED that Plaintiffs' # 125 Motion for Attorney Fees, Costs, and Incentive Awards is GRANTED. Plaintiffs shall recover $2,500,000 in attorney fees from Defendants, which shall include the $10,000 incentive awards for named Plaintiffs Lee and Bissonette. Plaintiffs shall also recover $96,913.43 in costs from Defendants. Signed by Judge Larry R. Hicks on 5/15/2015. (Copies have been distributed pursuant to the NEF - DRM)

1
2
3
4
5
6

UNITED STATES DISTRICT COURT

7

DISTRICT OF NEVADA

8

***

9
10
11
12
13
14
15

LYDIA LEE and CAROLYN BISSONETTE, )
individually and on behalf of all others
)
similarly situated,
)
)
Plaintiffs,
)
)
v.
)
)
ENTERPRISE LEASING COMPANY)
WEST, a Delaware LLC; and VANGUARD )
CAR RENTAL USA, LLC, a Delaware LLC, )
)
Defendants.
)
)

3:10-CV-00326-LRH-WGC
ORDER

16
17

Before the Court is Plaintiffs Lydia Lee and Carolyn Bissonette’s (“Plaintiffs”) Motion

18

for Final Approval of Settlement (Doc. #124)1 and Motion for Attorney Fees, Costs, and Incentive

19

Awards (Doc. #125). Defendants Enterprise Leasing Company–West, LLC and Vanguard Car

20

Rental Group, Inc. (“Defendants”) filed a memorandum in support of Plaintiffs’ Motion. Doc.

21

#134. Six class members filed objections to the proposed settlement (Doc. ##117, 118, 119, 120,

22

131, 133, 135),2 to which Plaintiffs and Defendants replied (Doc. ##137, 138). The Court held a

23

Fairness Hearing on May 12, 2015, and heard from Plaintiffs, Defendants, and Objector William

24

Andrews (“Andrews”). After considering the submissions of Plaintiffs and Defendants, the

25
26

1

Refers to the Court’s docket entry number.

2

Objector Raymond Sterling’s objection was filed in two separate documents. Doc. ##126, 131.

1

objections submitted by class members, and the arguments from the May 12, 2015, Fairness

2

Hearing, the Court shall grant Plaintiffs Motions for Final Approval of Settlement, and for Attorney

3

Fees, Costs, and Incentive Awards.

4

I.

5

Facts and Procedural History
This is a class action filed on behalf of persons who rented cars at Nevada airports from

6

Defendants. In return for the right to operate on-site at these Nevada airports, rental car companies

7

like Defendants are required to pay a percentage of their gross revenues to the airports as

8

“concession fees.” The companies pass along the fees to their customers as surcharges labeled

9

“airport concession recovery fees” (“ACRF”). At all relevant times, Defendants “unbundled” the

10

surcharges from the base rental rate, so that the rental rate quoted to customers did not include the

11

additional “airport concession recovery fee,” which was itemized separately in the rental

12

agreement.

13

A. Procedural Background

14

Plaintiff Lydia Lee filed the underlying class action Complaint on June 3, 2010. Doc. #1.

15

On June 24, 2014, the Court granted summary judgment in favor of Plaintiffs, finding that

16

Defendants’ practice of unbundling the surcharges from the base rental rate violated Nevada

17

Revised Statute (“NRS”) § 482.31575. Doc. #102. The Court further determined that Plaintiffs

18

were entitled to restitution of any airport concession recovery fees that they paid to Defendants

19

during the class period. Id. at 22-30. Finally, the Court granted class certification pursuant to

20

Federal Rule of Civil Procedure 23. Doc. #103. On December 12, 2014, the Court granted

21

Plaintiffs’ Motion for Preliminary Approval of Settlement and Approval of the Form of Notice.

22

Doc. #116. The Order stated that potential class members could opt-out of the settlement or file

23

objections with the Court on or before April 13, 2015 (id. at 3-4), and that the Court would hold a

24

Fairness Hearing on Tuesday, May 12, 2015, at 10:00 a.m (id. at 4). The Court instructed class

25

members to submit their registration forms to recover under the settlement no later than sixty (60)

26

days after the Fairness Hearing. Id. at 5.
2

1

On March 30, 2015, Plaintiffs filed a Motion for Final Approval of Settlement (Doc. #124),

2

and a Motion for Attorney Fees (Doc. #125). These Motions are unopposed by Defendants (Doc.

3

#134), but seven class members have filed objections with the Court (see Doc. ##117, 118, 119,

4

120, 131, 133, 135).

5

B. Notice and Settlement Details

6

Pursuant to the Court’s preliminary approval of settlement, Class Notice has been

7

distributed to a total of 1,276,448 class members by U.S. Mail and email. Doc. #124 at 5. Each

8

notice includes a unique registration number, and directs class members to a dedicated website and

9

toll-free telephone number where the class member can enter his or her registration number and

10

choose a cash or voucher option for recovery of the ACRF charged to that class member.

11

The proposed settlement provides that class members can choose to receive a check worth

12

80% of the amount that they were wrongfully charged, or vouchers that represent at least 100% of

13

the amount that they were wrongfully charged. Id. at 2. Since the minimum cash recovery is

14

$5.00, those class members who were wrongfully charged less than $5.00 will recover more than

15

they were wrongfully charged. Id. at 7. Plaintiffs represent that if all class members elect

16

vouchers, the settlement is worth $70 million, and if all class members elect cash, the settlement is

17

worth $19.3 million.3 Id.

18

///

19
3

20
21
22
23
24
25
26

At the Fairness Hearing, class counsel acknowledged that these figures do not include interest to
represent the time value of money because such interest was not agreeable to both parties under the settlement.
Nevada law recognizes a right to prejudgment interest following final judgments for any debt, damages, or
costs. NRS § 17.130 (“When no rate of interest is provided by contract or otherwise by law, or specified in the
judgment, the judgment draws interest from the time of service of the summons and complaint until satisfied,
except for any amount representing future damages, which draws interest only from the time of the entry of the
judgment until satisfied, at a rate equal to the prime rate at the largest bank in Nevada as ascertained by the
Commissioner of Financial Institutions on January 1 or July 1, as the case may be, immediately preceding the
date of judgment, plus 2 percent.”); see Schuette v. Beazer Homes Holdings Corp., 124 P.3d 530, 549-50 (Nev.
2005) (awarding prejudgment interest on an entire verdict that represented only past damages). Although the
class would have been entitled to prejudgment interest following final judgment in this case, the Court
understands that this was a necessary concession to reach a settlement, and does not disturb that agreement
between the parties.

3

1

If a class member elects to receive a voucher, the voucher will be valid for two years from

2

the date of issuance, and can be used by anyone in the class member’s family. Id. The amount of a

3

voucher will depend on the total ACRF that was charged to that class member:

4

7

All class members, regardless of how much they paid in airport concession recovery
fees, will be entitled to choose at least one voucher. Class members who paid
airport concession recovery fees of at least $20, but less than $40 will be entitled to
two vouchers; class members who paid fees of at least $40, but less than $60 will be
entitled to three vouchers; class members who paid fees of at least $60, but less than
$80 will be entitled to four vouchers; and class members who paid fees of $80 or
more will be entitled to five vouchers.

8

Id. Enterprise class members will receive vouchers that are valid for Enterprise rentals, and

9

Vanguard class members will receive vouchers valid for Alamo and/or National rentals. Id. The

5
6

10
11

vouchers are not limited to Reno/Tahoe International Airport, and can be used nationwide. Id.
Defendants have agreed to pay attorney fees up to $2,500,000, and up to $125,000 in costs.

12

This represents a lodestar of $1,205,134.50, with a multiplier of approximately 2.07.4 This figure

13

also includes up to $10,000 in service awards to the two named plaintiffs. Id. at 8.

14

C. Objections to the Proposed Settlement

15

Six class members filed objections to the proposed settlement. See Doc. ##117, 118, 119,

16

120, 126, 131, 133, 135. The most comprehensive of these objections, on behalf of Andrews,

17

refers to the settlement as a “coupon settlement,” which “are disfavored because they often fail to

18

disgorge illegal profits and instead force future business with the defendant.” Doc. #133 at 8

19

(citing Synfuel Techs., Inc. v. DHL Express (USA), Inc., 463 F.3d 646, 654 (7th Cir. 2006)).

20

Andrews also objects to class counsel’s fee award because he argues that it shows signs of

21

impermissible self-dealing. Id. at 10-12. Further, Andrews argues that the fee award should be

22

deferred until the actual number of redeemed coupons is known, at the end of the claims period.

23

Id. at 11-12.

24
4

25
26

On May 6, 2015, Plaintiffs submitted a Supplement to their Motion for Attorney Fees, stating that
class counsel had spent 316.4 additional hours of time on this case, for a lodestar of $121,952.00. Doc. #140.
Previously, class counsel requested the equivalent total of $2,500,000 in attorney fees, which before the
supplement represented a lodestar of $1,178,358.53 with a multiplier of approximately 2.3. Doc. #125 at 2-3.

4

1

Another objector—Raymond Sterling—stated in an email that the vouchers provided in the

2

settlement are “impossible to use, or minimally, so aggravating to use that people give up, making

3

them of negative value.” Doc. #131. Sterling inquired in a separate email why class members have

4

to affirmatively respond to the settlement rather than simply be sent checks: “The hoops that the

5

class action members have to go through are unnecessary and will virtually guarantee a low

6

recovery rate.” Doc. #126.

7

Other objections focused on the large attorney fee award when so few of the class members

8

are likely to follow through with recovery. See Doc. #118 (George Markich) (“These kind of cases

9

are legal robbery.”); Doc. #117 (Bruce J. Downey II) (“I object to the attorney’s fees being

10

requested by Plaintiffs’ counsel. It appears that this action was brought for their benefit rather than

11

the plaintiffs.”). Another objector (N. Elasali) stated that the charges involved in this lawsuit are

12

common, and that punitive damages “are the only solution to send a message to all these companies

13

to stop charging illegal fees.” Doc. #135.

14

II.

15

Discussion
Before the Court are Plaintiffs’ Motions for Final Approval of Settlement (Doc. #124), and

16

for Attorney Fees (Doc. #125). The Court considers these Motions in turn, after analyzing

17

Andrews’ argument that the proposed settlement is a coupon settlement.

18

A.

19

Andrews’ objection to Plaintiffs’ Motions for Final Approval of Settlement and Attorney

Not a Coupon Settlement

20

Fees is based largely on the argument that the proposed settlement is a coupon settlement that

21

requires heightened scrutiny under the Class Action Fairness Act (“CAFA”). However, there is no

22

credible indication that the proposed settlement constitutes a coupon settlement, given that every

23

class member has the option to recover 80% of the ACRF charged to that class member in cash.

24

Andrews argues that “offering a cash option does not make the voucher any less of a coupon”

25

because whether “the voucher is a coupon is independent of other types of relief offered to the

26

class.” Doc. #133 at 8. However, the Ninth Circuit held recently that a settlement involving
5

1

Walmart gift cards was not a coupon settlement because it did not require class members to spend

2

their own money, and enabled them to choose from a large number of items to purchase. In re

3

Online DVD-Rental Antitrust Litig., 779 F.3d 934, 944 (9th Cir. 2015); see In re Toys R. Us-Del.,

4

Inc., 295 F.R.D. 438, 459 n.95 (C.D. Cal. 2014) (discussing the differences between coupons and

5

vouchers); Foos v. Ann, Inc., No. 11-cv-2794, 2013 WL 5352969, at *2 (S.D. Cal. Sept. 24, 2013)

6

(declining to apply CAFA to a settlement involving $15 vouchers to Ann Taylor stores because “a

7

voucher is more like a gift card or cash” than a coupon).

8
9

Here, the actual cash available to any class member in the proposed settlement likewise
does not require class members to spend their own money, and does not limit the items the class

10

member can purchase. The Court is therefore satisfied that the proposed settlement—which

11

provides meaningful cash option to all class members—is not a coupon settlement.

12

B.

13

The Ninth Circuit has recognized a “strong judicial policy that favors settlements,

Final Approval of Settlement

14

particularly where complex class action litigation is concerned.” Class Plaintiffs v. City of Seattle,

15

955 F.2d 1268, 1276 (9th Cir. 1992). Once a court has granted preliminary approval of a

16

settlement and ordered notice to be sent to class members, the court can enter final approval of the

17

settlement if it is “fundamentally fair, adequate and reasonable.” Officers for Justice v. Civil Serv.

18

Comm’n of City and Cnty. of S.F., 688 F.2d 615, 625 (9th Cir. 1982). However, “class actions

19

‘present unique due process concerns for absent class members,’ including the risk that class

20

counsel ‘may collude with the defendants.’” Online DVD-Rental Antitrust Litig., 779 F.3d at 944

21

(quoting In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011)). “To

22

guard against these dangers, Federal Rule of Civil Procedure 23(e) ‘requires court approval of all

23

class action settlements, which may be granted only after a fairness hearing and a determination

24

that the settlement taken as a whole is fair, reasonable, and adequate.’” Id. (quoting In re

25

Bluetooth, 654 F.3d at 946).

26

///
6

1

To assess the fairness of a settlement, courts consider eight factors, including:

2

(1) the strength of the plaintiff's case; (2) the risk, expense, complexity, and likely
duration of further litigation; (3) the risk of maintaining class action status
throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery
completed and the stage of the proceedings; (6) the experience and view of counsel;
(7) the presence of a governmental participant; and (8) the reaction of the class
members of the proposed settlement.

3
4
5
6

Id. (quoting Churchill Village, LLC v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004)). This is not

7

an exhaustive list, and the “relative degree of importance to be attached to any particular factor will

8

depend upon and be directed by the nature of the claim(s) advanced, the type(s) of relief sought,

9

and the unique facts and circumstances presented by each individual case.” Officers for Justice,

10

688 F.2d at 625. As discussed in detail below, consideration of these eight factors indicates that

11

final approval of the settlement is warranted.

12

1. Strength of Plaintiff’s Case

13

Plaintiffs argue that the “strength of the case is established by this Court’s rulings in

14

Plaintiffs’ favor on liability and restitution.” Doc. #124 at 14. Plaintiffs state, however, that the

15

strength of their case on appeal may be unpredictable because (1) the Court granted Defendants’

16

motion for summary judgment as to damages, and (2) on appeal, the Ninth Circuit could reverse the

17

Court’s grant of summary judgment in Plaintiffs’ favor because the Court acknowledged in Sobel v.

18

Hertz, a case involving the same underlying violation, that the statute in question “is an ambiguous

19

and poorly worded statute that is capable of being understood in two or more senses.” No. 3:06-cv-

20

0545, 2007 WL 2710725, at *2 (D. Nev. Sept. 13, 2007). In short, the proposed settlement would

21

provide plaintiffs immediate relief, whereas an appeal could lead to an unpredictable or adverse

22

result.

23

It is difficult to assess the strength of Plaintiffs’ case with certainty. However, Defendants

24

represented that litigation will continue if the Court does not approve the settlement. While this is

25

not itself a reason to deny a motion for final approval of settlement, it is relevant considering that

26

the Court has ruled that the Nevada statute at issue is poorly worded and ambiguous. It is therefore
7

1

possible that on appeal, the Ninth Circuit would overturn the Court’s finding of liability, which

2

would make recovery for Plaintiffs much less likely. All things considered, the unpredictability of

3

a potential appeal on the effective strength of Plaintiffs’ case weighs in favor of approving the

4

settlement.

5
6

2. Risk, Expense, Complexity, and Likely Duration of Further Litigation
Plaintiffs argue that the risk of further litigation weighs heavily in favor of granting their

7

Motion for Final Approval of Settlement. Doc. #124 at 15-16. Given that class counsel has been

8

involved in this case for nearly nine years, and that Defendants have represented that they will

9

appeal the Court’s legal determinations if the settlement is not approved, Plaintiffs predict that this

10

litigation would be “dragged on in the Ninth Circuit for several more years without the Class

11

receiving the immediate and substantial benefit of the Settlement,” and potentially without

12

recovering at all. Id. at 16. Because denial of the motion for final approval of settlement could

13

cause significant further litigation, and appeals that could disturb the Court’s findings, this factor

14

weighs in favor of approving the settlement.

15
16

3. Risk of Maintaining Class Action Status
This factor was not addressed in detail by the parties’ briefs or objections. At the May 12,

17

2015, Fairness Hearing, Plaintiffs stated that they were not concerned about the potential for losing

18

class certification status. Thus, this factor does not weigh in favor of, or against, final approval.

19
20

4. Amount Offered in Settlement
The proposed settlement enables each class member to choose between recovery of 80% of

21

the ACRF charged to that class member in cash (with a minimum of $5 recovery), or vouchers

22

providing up to five days of free time and mileage, depending on the amount of ACRF charged to

23

the class member. Class counsel argues that this settlement is valued at more than $19 million in

24

cash, or more than $70 million in vouchers. Doc. #124 at 13-14. Andrews argues that these figures

25

are unreliable because they are based on a 100% recovery, which is extremely unlikely. Doc. #133

26

at 15-16.
8

1

At the time of Plaintiffs’ Motion, approximately 78,000 class members had opted to recover

2

cash (approximately 60% of respondents), and approximately 52,000 had opted to recover vouchers

3

(approximately 40% of respondents). Id. at 16. In Sobel, the Court found that there was no basis to

4

find that the class would recover “real value,” largely because it was a coupon settlement, but also

5

because the parties did not provide enough information with which the Court could calculate the

6

actual value to the class. Here, Plaintiffs have submitted substantial information to enable the

7

Court to determine the value of the settlement, and that it provides real value to the

8

class—potentially in cash. See Doc. #124 at 7, 12-13. Because the settlement provides that class

9

members will recover 80% cash value or vouchers in an amount equal to or in surplus of the ACRF

10

charged to each class member, the amount offered by Defendants weighs in favor of approval.5

11
12

5. Extent of Discovery Completed
When the parties reached a settlement, “both fact and expert discovery were complete, and

13

the Court had ruled on the parties’ respective motions for summary judgment.” Doc. #124 at 17.

14

Of course, the Court had already ruled on the parties’ motions for summary judgment in Sobel, and

15

nonetheless found for a variety of reasons that the settlement did not warrant final approval.

16

Indeed, the Court held that “[b]ecause discovery on damages was in its infancy at the time of

17

settlement, it is highly questionable whether Plaintiffs have sufficient information to make a fully-

18

informed assessment of the strengths, weaknesses and value of their case going forward.” Sobel v.

19

Hertz Corp., No. 3:06-cv-0545, 2011 WL 2559565, at *13 (D. Nev. June 27, 2011).

20
21

Here, there is nothing in the record to indicate that the parties have not conducted enough
discovery to have a fully-informed assessment of the strengths, weaknesses, and value of their case.

22
23
24
25
26

5

Andrews is correct that a 100% response rate is unrealistic. However, the value to the 11% of class
members who have registered so far is considerable, given that the settlement gives each class member the
option for 80% recovery in cash or full recovery in vouchers. Moreover, the Ninth Circuit considers the value
available to the class in determining total value, rather than merely the amount redeemed. See Wear v. Sprint
Commc’ns Co., No. 2:11-cv-0809, 2013 WL 3108312, at *2 (D. Nev. June 18, 2013) (basing percentage of the
fund method of calculating attorney fees on the gross value available to the class members).

9

1

Importantly, the proposed settlement provides class members with 80% recovery of the charged

2

fees in cash, or full recovery by voucher. There is minimal ambiguity about what each class

3

member would recover that additional discovery would illuminate. As such, this factor weighs in

4

favor of approval of the settlement.

5
6

6. Experience and View of Counsel
There is no dispute that this action has been litigated and settled by experienced and

7

competent counsel. Class counsel has obtained an excellent result for class members, given that

8

the Court has ruled in Plaintiffs’ favor on liability, remedies, and class certification. Considering

9

the favorable terms of the settlement, the Court has no reason to doubt class counsel’s

10

representation that “the Parties’ settlement negotiations were in good faith, at arms’-length and

11

were in no way collusive.” Doc. #124 at 18. Accordingly, this factor weighs in favor of approval.

12
13
14
15
16

7. Presence of Governmental Participant
There is no governmental participant. Thus, this factor does not weigh in favor of, or
against, final approval.
8. Reaction of the Class
Plaintiffs argue that this factor weighs strongly in favor of approving the settlement because

17

nearly 130,000 class members have already signed up for cash or voucher recovery, while only a

18

handful have filed objections. Doc. #124 at 19. In fact, more than 11% of class members had

19

registered to receive either cash or vouchers under the settlement as of April 27, 2015, the date

20

Defendants filed their Reply to Objections to the Motion for Approval of Settlement. Doc. #137 at

21

10. Only six class members have objected to the proposed settlement, and approximately

22

1000—less than one percent of those who responded—have opted out for reasons unknown to the

23

parties or the Court.

24

Courts have entered final approval of settlements of class action lawsuits with much lower

25

response rate than eleven percent. See Online DVD-Rental Antitrust Litig., 779 F.3d at 941

26

(upholding final approval of settlement where claims were submitted by less than four percent of
10

1

class members); White v. Experian Info. Solutions, Inc., 803 F. Supp. 2d 1086, 1100 (C.D. Cal.

2

2011) (“[T]his underwhelming response rate [5%] does not mean that the Settlement, on the whole,

3

is not fair, reasonable, and adequate.”); Shames v. Hertz Corp., No. 07-cv-2174, 2012 WL

4

5392159, at *14 (S.D. Cal. Nov. 5, 2012) (finding that a 4.9% response rate did not diminish the

5

fairness of a settlement, and noting that the response rate would be larger at the end of the claim

6

period).

7

The 11% registration rate to this point, though not high, likewise does not indicate that the

8

proposed settlement is not fair, reasonable, and adequate. Moreover, the dearth of meaningful

9

objections and relatively small number of opt-outs does not cast doubt on what appears to be a

10

beneficial settlement for the class members. Accordingly, this factor weighs in favor of approval of

11

settlement.

12
13

Because the majority of factors weigh in favor of approving the settlement, the Court shall
grant Plaintiffs’ Motion for Final Approval of Settlement.

14

C.

15

Defendants have agreed to pay attorney fees and costs up to $2,625,000, of which $125,000

Motion for Attorney Fees

16

can be applied to costs. The requested $2,500,000 attorney fees is based upon a total lodestar to

17

date of $1,205,134.50, with a multiplier of approximately 2.07. Doc. #140 at 2.

18

Andrews argues that the attorney fee included in the proposed settlement is unreasonably

19

high compared to the recovery of class members, and that the requested fee shows signs of self-

20

dealing. Doc. #133 at 12. The Ninth Circuit has acknowledged that self-dealing “concerns warrant

21

special attention when the record suggests that settlement is driven by fees; that is, when counsel

22

receive a disproportionate distribution of the settlement.” Hanlon v. Chrysler Corp., 150 F.3d

23

1011, 1021 (9th Cir. 1998). “If fees are unreasonably high, the likelihood is that the defendant

24

obtained an economically beneficial concession with regard to the merits provisions, in the form of

25

lower monetary payments to class members or less injunctive relief for the class than could

26

otherwise have obtained.” Staton v. Boeing Co., 327 F.3d 938, 964 (9th Cir. 2003). The necessary
11

1

inquiry is therefore whether the requested fee is reasonable in light of reliable methods for

2

calculating reasonable attorney fees, and whether signs of impermissible self-dealing are present.

3
4

1. Application of the Lodestar Method
Plaintiffs argue that application of attorney fees based on the lodestar method is appropriate

5

because class counsel negotiated its fee award separately from the common fund that was created,

6

and the figure was therefore not calculated based on a percentage of the fund. Andrews argues that

7

the Court must consider attorney fees under the parameters of CAFA, 28 U.S.C. § 1712, because

8

the value of the settlement is based partially on vouchers. However, CAFA § 1712 only applies to

9

analysis of attorney fee awards in coupon settlements. As discussed above, the proposed settlement

10

is not a coupon settlement, largely because all class members have the option to recover cash.

11

Thus, the Court need not calculate the attorney fee under CAFA § 1712. See Shames, 2012 WL

12

5392159, at *16 n.14 (rejecting the argument that a cash option does not change the status of a

13

coupon settlement because “Section 1712(c) addresses calculation of attorneys’ fees in a settlement

14

that involves ‘an award of coupons to class members and also provides for equitable relief,

15

including injunctive relief,’ (emphasis added), not monetary relief in the form of cash payments”).

16

The Nevada Supreme Court has recognized that in determining the amount of fees to award,

17

a court’s “analysis may begin with any method rationally designed to calculate a reasonable

18

amount, including those based on a ‘lodestar’ amount or a contingency fee.” Schuette v. Beazer

19

Homes Holdings Corp., 124 P.3d 530, 549 (Nev. 2005). Once the lodestar has been

20

determined—by multiplying the number of hours reasonably spent in the litigation by the

21

reasonable hourly rates charged—Nevada law requires a court to consider four factors to determine

22

whether the requested attorney fee is reasonable:

23
24
25
26

(1) the qualities of the advocate: his ability, his training, education, experience,
professional standing and skill; (2) the character of the work to be done: its
difficulty, its intricacy, its importance, time and skill required, the responsibility
imposed and the prominence and character of the parties where they affect the
importance of the litigation; (3) the work actually performed by the lawyer: the skill,
time and attention given to the work; (4) the result: whether the attorney was
successful and what benefits were derived.
12

1

Id. at 549 n.100. None of the objectors addressed these factors in detail. But given the fact that the

2

Court ruled in Plaintiffs’ favor on liability, remedies, and class certification, the Court finds that the

3

Schuette factors support an award of a reasonable lodestar with an appropriate multiplier.

4

2. Lodestar Multiplier

5

The proposed settlement’s attorney fee award represents a lodestar of $1,205,134.50, with a

6

multiplier of approximately 2.07. District courts have discretion to apply the lodestar method and

7

add a multiplier “to reward attorneys for taking the risk of non-payment.” In re Wash. Pub. Power

8

Supply Sys. Secs. Litig., 19 F.3d 1291, 1299 (9th Cir. 1994). Courts consider a variety of factors to

9

determine the appropriate multiplier, “including the quality of representation, the benefit obtained

10

for the class, the complexity and novelty of the issues presented, and the risk of nonpayment.” In

11

re Bluetooth, 654 F.3d at 942; see Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1051 (9th Cir.

12

2002) (approving a 3.65 multiplier where class counsel faced a significant risk of loss and the

13

litigation was complex and drawn out).6 In Sobel, which involved the same underlying violation,

14

this Court approved a lodestar of $3,135,269.00 with a 2.0 multiplier—for a total of $6,270,538.00

15

in attorney fees—due to “the amount of risk adopted by class counsel, the drawn-out nature of the

16

litigation and extent of work performed by class counsel, the favorable results obtained, and class

17

counsel’s continuing responsibilities.”7 53 F. Supp. 3d at 1331.
As in Sobel, the Court finds that applying a multiplier of 2.07 to the requested lodestar is

18
19

reasonable given the amount of risk adopted by class counsel, the drawn-out nature of the litigation

20

and extent of work performed by class counsel, and the favorable results obtained. Andrews’

21

///

22
23
24
25
26

6

Vizcaino notes that in common fund cases worth between $50 and $200 million between 1996 and
2001, multipliers ranged from 1.2 to 19.6, with the majority falling between 1.2 and 4.0. 290 F.3d at 1052.
7

The Court also granted Plaintiffs leave to file additional fee and/or expense petitions if such fees
accrued based on any appeals. Sobel, 53 F. Supp. 3d at 1335. Prior to granting attorney fees in Sobel, the Court
denied the parties’ motions for final approval of settlement, largely because the Sobel settlement was a coupon
settlement. Sobel v. Hertz Corp., No. 3:06-cv-0545, 2011 WL 2559565, at *11-12 (D. Nev. June 27, 2011).

13

1

remaining arguments are that the percentage of the fund cross check indicates that the requested fee

2

is excessive, and that the settlement’s “clear sailing” provision shows signs of self-dealing.

3

3. Clear Sailing Provision

4

The clear sailing provision in the proposed settlement provides that Defendants will not

5

oppose an attorney fee request of up to $2,500,000, and costs of $125,000. “[T]he very existence

6

of a clear sailing provision increases the likelihood that class counsel will have bargained away

7

something of value to the class.” In re Bluetooth, 654 F.3d at 948 (quoting Weinberger v. Great N.

8

Nekoosa Corp., 925 F.2d 518, 525 (1st Cir. 1991)). This Court held in Sobel that generally, “the

9

separate negotiation of the class recovery and attorneys' fees does tend to mitigate the potential

10

conflict of interest between counsel and the class.” 2011 WL 2559565, at *14. The Court added

11

that this principle was undermined, however, “by the settlement's inclusion of a clear sailing

12

provision on attorneys' fees and by Class Counsel's position that fees should be calculated and

13

awarded without regard to the value of the class recovery.” Id.

14

Plaintiffs emphasize that the settlement is not contingent on class counsel recovering the

15

full $2,625,000 in fees and costs, and that the clear sailing provision “reflects a determination by

16

Defendants that setting a cap on what Plaintiffs’ Counsel could request was worth agreeing not to

17

challenge a request at that amount.” Doc. #138 at 2. While the Court disproved of the clear sailing

18

provision in Sobel, that settlement was a strict coupon settlement and did not produce “real value”

19

for the class. 2011 WL 2559565, at *13. Moreover, clear sailing provisions are not automatically

20

rejected. In re Bluetooth, 654 F.3d at 946-47 (noting that there is less of a chance of self-dealing by

21

class counsel if the settlement is negotiated after class certification). Finally, the Court indicated in

22

Sobel that a clear sailing provision should be considered along with a percentage of the fund cross

23

check. 2011 WL 2559565, at *14 (criticizing class counsel for calculating the award “without

24

regard to the value of the class recovery”). As such, a clear sailing provision would be acceptable if

25

it represents a reasonable attorney fee based on a percentage of the fund cross check.

26

///
14

1

4. Percentage of the Fund Cross Check

2

“[C]ourts typically calculate 25% of the fund as the ‘benchmark’ for a reasonable fee award,

3

providing adequate explanation in the record of any ‘special circumstances’ justifying a departure.”

4

In re Bluetooth, 654 F.3d at 942. “Just as the lodestar method can ‘confirm that a percentage of

5

recovery amount does not award counsel an exorbitant hourly rate,’ the percentage-of-recovery

6

method can likewise ‘be used to assure that counsel’s fee does not dwarf class recovery.’” Id. at

7

945 (quoting In re Coordinated Pretrial Proceedings, 109 F.3d 602, 607 (9th Cir. 1997)). Fees

8

larger than the benchmark may be appropriate when class counsel achieves an excellent result after

9

representing the class for a long period of time. See, e.g., Szymborsld v. Ormat Techs. Inc., No.

10

3:10-cv-0132, 2012 WL 4960098, at *3 (D. Nev. Oct. 16, 2012) (“In this case, thirty percent of the

11

Settlement Amount does not seem an extraordinary or extravagant fee for counsel. Plaintiffs’

12

counsel have litigated this case for more than two years without recompense until now.”).

13

The parties dispute whether the percentage of the fund cross check should be calculated

14

based on the total amount available to the class under the proposed settlement, or the amount

15

actually recovered. “Under the percentage-of-the-fund method, it is appropriate to base the

16

percentage on the gross cash benefits available for class members to claim, plus the additional

17

benefits conferred on the class by the Settling Defendants’ separate payment of attorneys’ fees and

18

expenses, and the expenses of administration.” Wear v. Sprint Commc’ns Co., No. 2:11-cv-0809,

19

2013 WL 3108312, at *2 (D. Nev. June 18, 2013) (citing Boeing Co. v. Van Gemert, 444 U.S. 472,

20

479 (1980)). In Boeing, the Supreme Court “concluded that the attorneys for a successful class may

21

recover a fee based on the entire common fund created for the class, even if some class members

22

make no claims against the fund so that money remains in it that otherwise would be returned to the

23

defendants.” Williams v. MGM-Pathe Commc’ns Co., 129 F.3d 1026, 1027 (9th Cir. 1997); see

24

also Lopez v. Youngblood, No. 07-0474, 2011 WL 10483569, at *12 (E.D. Cal. Sept. 2, 2011) (“It

25

is well established that, in claims made or class reversion cases where there is a maximum fund,

26

///
15

1

and unclaimed funds revert to the defendant, it is appropriate to award class fund attorneys' fees

2

based on the gross settlement fund.”).

3

Andrews argues that class counsel’s fee should be calculated based on the amount actually

4

recovered by the class, rather than the total amount recoverable. See Redman v. Radioshack Corp.,

5

768 F.3d 622, 630 (7th Cir. 2014) (“The ratio that is relevant to assessing the reasonableness of the

6

attorneys’ fee that the parties agreed to is the ratio of (1) the fee to (2) the fee plus what the class

7

members received.”). However, the weight of precedent in this district and the Ninth Circuit favors

8

considering the total amount available to the class, and the Ninth Circuit held recently that “the

9

choice of whether to base an attorneys’ fee award on either net or gross recovery should not make a

10

difference so long as the end result is reasonable.” Online DVD-Rental Antitrust Litig., 779 F.3d at

11

953 (quoting Staton, 327 F.3d at 974).

12

Based on the foregoing, the Court finds that the percentage of the fund cross check should

13

be calculated based on the total amount available to the class, rather than the amount actually

14

recovered. Thus, the central question before the Court is whether class counsel’s requested

15

attorney fees are reasonable compared to the total recovery available to class members. To prevent

16

any danger associated with overvaluing a settlement that is based in part on vouchers, the Court has

17

conducted its calculation of the value of the settlement only on the much lower figure for if every

18

class member chose cash recovery,8 because all class members had that option.

19

The Court conducts its percentage of the fund cross check as follows. If all class members

20

had received cash, the total amount available to class members would have been $19,344,653.98.

21

The attorney fee requested by class counsel is $2,500,000. The reimbursement of costs requested

22

by class counsel is $96,913.43. Administrative costs assumed by Defendants in serving notice to

23

the class totaled $804,339.95. These figures result in a total potential cash responsibility for

24
25
26

8

Plaintiffs represent that “if every class member were to elect vouchers, the value of the fund could
reach approximately $71,309,640 million in value.” Doc. #125 at 8. Class counsel’s requested attorney fee
represents 3.3% of this figure.

16

1

Defendants of $22,745,907.36.9 Class counsel’s requested attorney fee award represents 11% of

2

this figure, well below the 25% benchmark. Thus, under the calculation based on the total amount

3

available to class members, class counsel’s requested attorney fee award is reasonable.

4

Even if the Court conducted the percentage of the fund cross check based on the total

5

amount actually recovered by the class, as proposed by Andrews, the fee award would be within

6

the range of reasonable attorney fees for cases in which class counsel expended considerable time

7

and achieved an excellent result. See, e.g., Szymborsld, 2012 WL 4960098, at *3 (finding that

8

attorney fees worth 30% of the settlement amount was reasonable where class counsel litigated the

9

case for two years without compensation). Here, the value of the voucher recovery claimed to this

10

point is $3,243,680.00. The value of the cash recovery claimed to this point is $1,436,795.98.

11

Added to class counsel’s requested fee award and costs, these figures result in a total responsibility

12

for Defendants (so far) of $8,081,729.36. Class counsel’s requested fee award represents 30.9% of

13

this figure. Given the fact that class counsel has achieved strong results for the class over its nine

14

years of involvement with this case, this attorney fee award is not unreasonable. See Online DVD-

15

Rental Antitrust Litig., 779 F.3d at 953 (“[T]he choice of whether to base an attorneys’ fee award

16

on either net or gross recovery should not make a difference so long as the end result is

17

reasonable.”) (quoting Staton, 327 F.3d at 974).

18

Whether the percentage of the fund cross check is calculated based on the total amount

19

available to the class, or the amount actually recovered, the Court finds that the attorney fee

20

requested is reasonable. Accordingly, the Court shall grant Plaintiffs’ Motion for Attorney Fees

21

and Costs. The Court notes that class counsel’s obligations to the class will continue after final

22

approval of settlement. Plaintiffs represented at the May 12, 2015, Fairness Hearing, for example,

23
9

24
25
26

In the Ninth Circuit, district courts have discretion to include administrative costs in the total amount
paid by defendants for purposes of the percentage of the fund cross check. See Online DVD-Rental Antitrust
Litig., 779 F.3d at 953 (“The district court did not err in calculating the attorneys’ fees award by calculating
it as a percentage of the total settlement fund, including notice and administrative costs, and litigation
expenses.”). The Court has included administrative costs in its calculations here because these funds are part
of the total amount paid by Defendants in the settlement.

17

1

that class counsel will continue to follow-up with class members through the claims period and

2

ensure that class recovery is as large as possible. The Court fully expects class counsel to remain

3

available to class members, and to facilitate any further claims under the settlement.

4

D.

5

Plaintiffs request incentive awards of $10,000 for each of the two named Plaintiffs, Lee and

6

Bissonette. Doc. #124 at 8. Incentive awards are well established in class actions as compensation

7

for a named plaintiff’s often extensive involvement in the litigation. See In re Mego Corp. Sec.

8

Litig., 213 F.3d 454, 463 (9th Cir. 2000); Sobel, 53 F. Supp. 3d at 1332 (awarding $10,000

9

incentive awards to two named plaintiffs).

Incentive Awards

10

The Court finds that the requested incentive awards are reasonable and appropriate.

11

Importantly, the incentive awards were negotiated after the parties agreed to a settlement to benefit

12

the entire class, so they will not impact the recovery available to other class members. Moreover,

13

Lee and Bissonette have been intimately involved in this litigation, working to ensure that the case

14

was successful. Without their integral efforts, no class member would recover. The Court

15

therefore approves payment of the $10,000 incentive awards to Plaintiffs Lee and Bissonette.

16

III.

17
18
19

Conclusion
IT IS THEREFORE ORDERED that Plaintiffs’ Motion for Final Approval of Settlement

(Doc. #124) is GRANTED.
IT IS FURTHER ORDERED that Plaintiffs’ Motion for Attorney Fees, Costs, and Incentive

20

Awards (Doc. #125) is GRANTED. Plaintiffs shall recover $2,500,000 in attorney fees from

21

Defendants, which shall include the $10,000 incentive awards for named Plaintiffs Lee and

22

Bissonette. Plaintiffs shall also recover $96,913.43 in costs from Defendants.

23

IT IS SO ORDERED.

24

DATED this 15th day of May, 2015.
__________________________________
LARRY R. HICKS
UNITED STATES DISTRICT JUDGE

25
26
18