YAEGER et al v. SUBARU OF AMERICA, INC. et al

Filing 109

MEMORANDUM OPINION RE: ATTORNEYS' FEES, EXPENSES AND INCENTIVE AWARDS. Signed by Chief Judge Jerome B. Simandle on 8/31/2016. (TH, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

KEITH YAEGER, et al.,

HONORABLE JEROME B. SIMANDLE

Plaintiffs,

No. 1:14-cv-4490 (JBS-KMW)

v.
SUBARU OF AMERICA, INC., a New
Jersey Corporation, et al.,

MEMORANDUM OPINION
RE: ATTORNEYS’ FEES,
EXPENSES, AND
INCENTIVE AWARDS

Defendants.

SIMANDLE, Chief District Judge:
Plaintiffs in this nationwide class action have filed the
present motion for court approval of attorneys’ fees, expenses,
and incentive awards.

[Docket Item 69].

The terms of the

proposed Settlement Agreement were previously set forth in
connection with the parties’ motion for preliminary approval of
class certification and for notice of the proposed settlement to
the class [Docket Item 49].

After due notice by mail to the

proposed class numbering more than 665,000 members in March and
April 2016, the Court convened a final fairness hearing on July
26, 2016 to consider whether the proposed settlement was fair,
adequate, and reasonable, pursuant to Rule 23(e), Fed. R. Civ.
P., considering all objections and the arguments of all counsel.
The Court, for reasons stated at the hearing and in the Opinion
and Order of August 31, 2016 [Docket Items 107 & 108], approved
the certification of the settlement class and the terms of the

proposed Settlement Agreement.

The Court thus granted class

certification of the Settlement Class defined as follows:
All residents of the continental United States who
currently own or lease, or previously owned or
leased, a Settlement Class Vehicle originally
purchased or leased in the continental United
States, including Alaska.
Excluded from the
Settlement Class are Subaru, Subaru’s employees,
employees
of
Subaru’s
affiliated
companies,
Subaru’s officers and directors, dealers that
currently own Settlement Class Vehicles, all
entities claiming to be subrogated to the rights
of Settlement Class Members, issuers of extended
vehicle warranties, and any Judge to whom the
Litigation is assigned.
The class membership was reduced by 2,238 persons who timely
opted out, identified in Exhibit A to the Order of today’s date
Granting Plaintiffs’ Motion for Final Approval. [Docket Item
108].
Two provisions of the Settlement Agreement give rise to the
present motion, namely Section XIII.51 (providing that Subaru
agrees to pay, subject to Court approval, the amount of up to
$1,500,000 to Plaintiffs’ Counsel for their attorneys’ fees and
expenses), and Section VIII.52 (providing that Subaru agrees to
pay incentive awards of $3,500 to each of the nine Class
Representatives, totaling $31,500).
Plaintiffs have submitted their motion, memorandum of law,
and supporting declarations of counsel1 [Docket Items 69 and 69-1

1

Declarations of counsel include Richard D. McCune [Docket Item 69-3];
Benjamin F. Johns and Exs. A & B thereto [Docket Item 69-4,5 & 6]; Eric H.
Gibbs and Ex. A thereto [Docket Item 69-7 & 8]; Eric Lechtzin and Ex. A
thereto [Docket Items 69-9 & 10]; and Matthew R. Mendelsohn [Docket Item 6911].

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through 69-11], together with the record at the fairness hearing
(see Tr. 7/26/16 at 60:3 to 63:20).
Consistent with the Settlement Agreement, Defendant Subaru
does not oppose this motion for payment of $1,500,000 in
attorneys’ fees and reimbursement of expenses, and for payment
of the $3,500 incentive awards to the nine named Class
Representatives.

(Tr. 7/26/16 at 61:21-22).

Likewise, no

member of the Settlement Class has objected to this motion.2
The Court makes the following findings of fact and
conclusions of law pursuant to Rules 23(h)(3) and 52(a), Fed. R.
Civ. P:
1.

Plaintiffs’ counsel submitted declarations of the time

expended, the services rendered, and the current billing rates
charged to clients, together with expenses incurred in pursuing
this class action, all in compliance with Rule 54(d)(2), Fed. R.
Civ. P.
2.

These submissions are summarized as follows:
a.

The law firm of McCune Wright, LLP billed 528.20

hours at a total lodestar of $301,051.75.
are $3,077.00.

The firm’s expenses

See Exhibit 1 for the Declaration of Richard

McCune, at ¶¶ 42, 44.

2

In contrast, 28 opposition letters were received, opposing various aspects
of the negotiated Settlement Agreement, which were considered in connection
with the final fairness hearing and discussed in the Opinion approving the
class settlement of today’s date. It may be inferred, however, that
objectors who are dissatisfied with some aspect of the Settlement Agreement
would not favor an award of attorneys’ fees or class representative incentive
fees for achieving it.

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b.

The law firm of Chimicles & Tikellis LLP billed

1,201.75 hours at a total lodestar of $538,403.75.
total expenses are $13,682.70.

The firm’s

See Exhibit 2 for the

Declaration of Benjamin F. Johns, at ¶¶ 6, 9.
c.

The law firm of Girard Gibbs billed 838.00 hours

at a total lodestar of $391,893.50.
$16,016.10.

The firm’s expenses are

See Exhibit 3 for the Declaration of Eric H. Gibbs,

at ¶¶ 4, 22.
d.

The law firm of Berger & Montague, P.C. billed

229.3 hours at a total lodestar of $159,850.00.
total expenses are $1,541.25.

The firm’s

See Exhibit 4 for the Declaration

of Eric Lechtzin, at ¶¶ 8-9.
e.

The law firm of Mazie Slater Katz & Freeman, LLC

billed 58 hours at a total lodestar of $31,900.00.
total expenses are $81.38.

The firm’s

See Exhibit 5 for the Declaration of

Matthew R. Mendelsohm, at ¶¶ 10, 13.
3.

The documentation adequately describes the services

rendered, the hourly rates for each attorney and paralegal
performing services, and the expenses incurred, all based upon
contemporaneously maintained billing records.
lodestars for those firms is $1,423,099.

The combined

They have collectively

incurred $34,398.43 in unreimbursed expenses, and have billed
over 2,855 contingency fee hours on this case.

The total

lodestar of fees plus unreimbursed expenses is $1,457,497.43.
This does not include fees for services to be rendered to the

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class in the future, such as monitoring and enforcement of the
administration of Settlement Agreement.

The Court finds that

these services were reasonable and necessary to undertaking this
class action and that the expenses were reasonably incurred.
4.

The Court has the duty, pursuant to Rule 23(h), to

examine any request for fees and expenses in a certified class
action and award “reasonable attorney’s fees and nontaxable
costs that are authorized by law or by the parties’ agreement.”
The procedures governing such determinations are specified in
Rule 23(h)(1)-(3), and those have been followed here.

The

objective is to determine whether the fee award sought by class
counsel is reasonable.

In re Cendant Corp. Litig., 264 F.3d

201, 283 (3d Cir. 2001).
5.

This is not a case where class counsel’s attorney’s

fees and expenses are to be paid from a common fund that
diminishes the net recovery to the class.

Nonetheless, in an

abundance of caution, the Court will apply the non-exhaustive
factors for such cases in the Third Circuit set forth in Gunter
v. Ridgewood Energy Corp., 223 F.3d 190 (3d Cir. 2000).
Gunter factors include:
(1) the value of benefits accruing to class
members attributable to the efforts of class
counsel as opposed to the efforts of other
groups, such as government agencies conducting
investigations; (2) the percentage fee that
would have been negotiated had the case been
subject to a private contingent fee agreement
at the time counsel was retained; and (3) any
‘innovative’ terms of settlement.

5

These

In re AT&T Corp. Secs. Litig., 455 F.3d 160, 165 (3d Cir. 2006)
(internal citations omitted).
6.

The size of the class benefits in this case and the

number of persons benefitted justifies the award.

With 577,860

class vehicles and 665,730 owners and lessees, class counsel
have served the interests of over a half million people
nationwide.

The value of the benefits conferred cannot be

precisely computed because of the open-ended nature of Subaru’s
obligations for repairs and restitution going forward.

Subaru’s

counsel has indicated that the cost to Subaru of the extended
warranty provisions alone is estimated at $5 million, and that
reimbursements for past covered expenditures will only push the
total higher.

(Tr. 7/26/16 at 17:9 to 18:19).

The value of the

extended warranty repairs to class members exceeds these
figures, since retail repairs would cost the consumer more than
the dealer’s own costs.

The indicated attorney fee lodestar

this would represent less than 23 percent3 of the anticipated
overall benefit of the extended warranty to the class not
counting the benefit of the reimbursements that Subaru is also
required to make in the claims process.

If one assumes claim

payouts to class members of, for example, $2 million, the fee

3

The recovery can be analogized
$5 million in class benefits and
total recovery of $6.5 million.
denominator is $6.5 million, the
of the common fund, by analogy.

to a common fund where the fund consists of
$1.5 million in class attorney’s fees, for a
Where the numerator is $1.5 million and the
fee award would represent approximately 23%

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award sought herein would be less than 18 percent of a common
fund, by analogy.4
7.

The class acceptance of this proposed settlement was

widespread, with only 28 objections filed before the July 6,
2016 deadline and an opt-out rate of 0.35% (as discussed in the
separate Opinion approving class settlement (Docket Item 107)).
The objections were considered and overruled in the Opinion
approving the class settlement filed on today’s date. (Id.)
There are, moreover, no objections to the attorney’s fee
request, which is “strong evidence that the fees request is
reasonable,” Reinhart v. Lucent Techs., Inc., 327 F. Supp 2d
426, 435 (D.N.J. 2004); accord Weber v. GEICO, 262 F.R.D. 431,
451 (D.N.J. 2009).
8.

Class counsel were efficient and skillful in achieving

the class settlement expeditiously and professionally.

The

proposed settlement was negotiated within 16 months of the
initiation of this suit.

Class counsel’s submissions to the

Court during the litigation and settlement phases were well done
and persuasive.
9.

This class action presented complex legal, factual and

logistical issues which were fairly resolved in counsel’s
negotiated class settlement.

4

If the common fund consisted of $8.5 million (extended warranty of $5.0
million plus reimbursements of $2.0 million plus counsel fees of $1.5
million), a counsel fee of $1.5 million awarded from that fund would amount
to 17.64 percent.

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10.

Class counsel undertook the case risking non-recovery

and non-payment for thousands of hours of service.
11.

As noted, class counsel devoted considerable time

(2,855 hours) to prosecuting and negotiating this class action,
and additional time remains to be expended to monitor and, if
necessary, seek to enforce class rights under the settlement.
The fee request is proportional to the time expended.
12.

Class counsel have pointed to fee awards in similar

cases (Pl. Mem. in Support of Motion for Attorneys’ Fees at 28),
although each case must turn on its own facts and little can be
learned from a listing of seemingly comparable fee awards
without a more detailed analysis of those cases based on
whatever data might be available.

Since no party or class

member has alleged that the present fee request lies outside the
zone of awards in comparable cases, the Court will not further
examine this factor.
13.

The value this settlement has to the class is

attributable to the class counsel and class representatives
stepping forward to obtain this result.

The Court is unaware of

efforts of other groups, such as government agencies conducting
investigations into this oil consumption problem.
14.

A contingent fee agreement on a case-by-case basis

would likely have been for a significantly greater percentage
fee than the overall award sought herein, and typically the

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consumer would be liable for out-of-pocket expenses in such a
contingent fee agreement, win or lose.
15.

Whether class counsel achieved “innovative” terms of

settlement may be judged by recognition of several unusual
features, namely:

(1) the risks of the class vehicles’ covered

repair costs, like the costs of reimbursements, are borne by
Subaru, not by a fixed fund; and (2) the costs of claims
administration, class counsel fees, incentive awards, and
expenses are borne by Subaru and not by the class.

These are

among the unusually favorable aspects of the results obtained by
class counsel.
16.

The lodestar method also provides a useful cross-check

of the above analysis, see In re Insurance Brokerage Antitrust
Litig., 579 F.3d 241, 280 (3d Cir. 2009).

Based on the lodestar

summary in ¶3, above, the total for attorneys’ fees and expenses
of $1,457,497.43 is nearly identical to the requested total of
$1,500,000.00.

The requested award represents a multiplier of

102.9% of the lodestar, which is quite reasonable for the
results obtained.
17.

Under both methods -- whether by consideration of the

Gunter/AT&T factors or consideration of the lodestar method5 -the Court finds the requested award of fees and expenses of $1.5

5

For discussion of cases using a comparison of percentage awards and lodestar
methods to ascertain reasonableness of class counsel’s fee request, see 7B
Wright, Miller & Kane, Federal Practice and Procedure, § 1803.1 n. 41 (2005
ed. & 2012 Supp.)

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million to be reasonable, appropriate and fair, and it will be
approved.
18.

Finally, the Court approves incentive award payments

of $3,500 to each of the nine Class Representatives, to be paid
by Subaru in the total amount of $31,500.

The Court finds that

these individually-named plaintiffs were a catalyst to achieving
the class settlement for the benefit of the class; without their
initiative and willingness to find attorneys and authorize
filing of lawsuits seeking redress, which were combined into
this consolidated nationwide case, this result would not have
been obtained.

The Court accepts the representations of class

counsel that the Class Representatives “participated in
conferences and meetings with their attorneys, searched for and
produced documents relevant to their claims in the litigation,
and stayed abreast of significant developments in the case.”
(Pl. Mem. in Support of Motion for Attorneys’ Fees at 32.)
[Docket Item 69-2].

The amount of each award -- $3,500 -- is

not elaborate or out of line but is consistent with the scale of
relief likely to be obtained by a class member whose vehicle
requires the engine replacement due to excess oil consumption,
which is valued at approximately $4,000, not counting any
reimbursements for previous engine oil and eligible repairs.
Subaru’s payment of these incentive awards is approved.
19.

Further, it is noted that class counsel’s duties are

not at an end.

Under the Settlement Agreement, and as discussed

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in the Opinion of today’s date approving the proposed class
settlement (Docket Item 107 at Part III.D), class counsel will
receive information about the administration of the class
settlement, monitor the class settlement, seek additional
information and take action if necessary and appropriate to
enforce the class settlement for the benefit of the class at
large.

Class counsel retain classwide duties to assure the

protection of class rights.6

These duties may involve additional

services, time, and incidental expense which is already embedded
in the present fee award.
CONCLUSION
For the above reasons, the Court grants Plaintiffs’ motion
for an award of attorneys’ fees, expenses, and incentive awards.
The accompanying Order will be entered.

August 31, 2016
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

6

According to the Settlement Agreement, however, the duties of class counsel
do not extend to representing individuals in the Better Business Bureau
Appeals process, stating: “Class Counsel will have no obligation to
represent a Settlement Class Member in connection with a BBB appeal.”
Settlement Agreement, Section VI.C.3 [Docket Item 49-2].

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