McClintic v. Lithia Motors, Inc.

Filing 52

NOTICE OF FILING OF OFFICIAL TRANSCRIPT of Settlement Hearing held on 10/11/2012 before Judge Richard A. Jones.Parties have ten (10) calendar days to file with the court a Notice of Intent to Request Redaction of this transcript. If no such Notice is filed, the transcript may be made remotely electronically available to the public without redaction after 90 calendar days.Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Information regarding the policy can be found on the court's website at www.wawd.uscourts.gov.To purchase a copy of the transcript contact court reporter Debbie Zurn by telephone at 206-370-8504. or by e-mail at [e-mail].. Release of Transcript Restriction set for 2/4/2013, (DZ)

1

1

UNITED STATES DISTRICT COURT

2

WESTERN DISTRICT OF WASHINGTON AT SEATTLE

3
4
5
6
7
8
9
10
11
12
13

_____________________________________________________________
KEVIN McCLINTIC on behalf of
himself and all others
similarly situated,
Plaintiffs,
v.
LITHIA MOTORS, INC.
Defendant.

)
)
)
)
)
)
)
)
)
)
)
)

C-11-859-RAJ
SEATTLE, WASHINGTON
October 11, 2012
Settlement

_____________________________________________________________
VERBATIM REPORT OF PROCEEDINGS
BEFORE THE HONORABLE RICHARD A. JONES
UNITED STATES DISTRICT JUDGE
_____________________________________________________________

14
15

APPEARANCES:

16
17
18

For the Plaintiff:

19
20

Roblin J. Williamson
Kim Williams
Williamson & Williams
17253 Agate Street NE
Bainbridge Island, WA

98110

21
22
23
24
25

For the Defendant:

Grant S. Degginger
Erin M. Wilson
Lane Powell, PC
1420 Fifth Avenue
Suite 4100
Seattle, WA 98101

Debbie Zurn - RPR, CRR - Federal Court Reporter - 700 Stewart Street - Suite 17205 - Seattle WA 98101

2

1

THE CLERK:

We are here in the matter of McClintic

2

versus Lithia Motors Inc., Cause No. C-11-859, assigned to

3

this court.

4

appearances.

If counsel could please rise and make your

5

MS. WILLIAMS:

6

MR. WILLIAMSON:

7

THE COURT:

8

MR. DEGGINGER:

9

Rob Williamson for the plaintiff.

Good afternoon to the both of you.
Grant Degginger for the defendant,

Your Honor.

10

THE COURT:

11

MS. WILSON:

12

THE COURT:

13

Kim Williams for the plaintiff.

Good afternoon.
Erin Wilson for the defendant, as well.
Good afternoon to you, as well.

We are scheduled here today for the final approval of the

14

proposed settlement agreement.

15

any offerings to this court, as it seems things are pretty

16

straightforward as to where we are right now.

17

certainly give you the opportunity to make any comments or

18

offerings before the court makes its ultimate determination.

19
20

MS. WILLIAMS:

Do the parties wish to make

But I'll

Thank you, Your Honor.

Well, this is a settlement I think you're pretty familiar

21

with, Your Honor, so I won't run down all the details for

22

you.

23

to answer any questions that the court may have about the

24

final judgment and order.

25

But we're here to seek approval of the settlement and

In particular, as you can see from the form of judgment

Debbie Zurn - RPR, CRR - Federal Court Reporter - 700 Stewart Street - Suite 17205 - Seattle WA 98101

3

1

and order that we submitted, we were actually quite specific

2

about the dollar amounts that each group that received the

3

text messages:

4

group that received a second one after attempting to opt out;

5

and the group that received just two text messages, will get

6

under -- the settlement has actually gone up somewhat because

7

of the claims rate from the $175, $350 and $675 that we had

8

originally settled upon.

9

The group that received one text message; the

So those numbers will change a little bit, if the court

10

does not accept counsel's recommendation as to the

11

disposition of the four or five groups of claims that had

12

deficiencies.

13

As is pointed out in the motion for final approval at

14

pages four and five, and also discussed in Jennifer Keough's

15

declaration, from Garden City Group.

16

who did not sign the claim; there were 106 where the claim

17

information was inconsistent, they said yes to having

18

received one text, but also yes to receiving a second one

19

after attempting to opt out.

20

that those claimants are paid as if they received one text.

21

For those that didn't sign, we're recommending that they pay

22

-- be paid for the number they claimed, even though they

23

forgot to sign the claim form.

24
25

There were 6 persons

For that group we recommend

Then there are 262 that neglected to include the number of
texts received.

We're recommending that they be paid as if

Debbie Zurn - RPR, CRR - Federal Court Reporter - 700 Stewart Street - Suite 17205 - Seattle WA 98101

4

1

they received one text.

2

might have the most concern about:

3

completed the box participating in the settlement, and

4

indicated the number of texts they received, but they -- and

5

they signed the claim, but they is signed the exclusion.

6

Evidently assuming they saw a signature line and thought they

7

had to sign twice.

8
9

And then this is the group that you
There were 39 people who

And Your Honor had ordered that the claim form would be
invalid if there was information in both boxes.

So, we think

10

those people intended to make a claim.

If you disagree, we

11

can tweak the numbers a little bit so that they will be

12

excluded and the class members with legitimate claims will

13

receive a little bit more.

14

And then there were 478 claims where the listed phone

15

number was not included in the original data of phone numbers

16

that received text messages.

17

downloaded from the settlement website rather than being

18

submitted by individuals who received the direct-mail notice.

19

And we are recommending that those claims not be paid,

20

because the potential for fraud is just too high.

21

numbers that they included on their claim forms did not match

22

the phone numbers in the data for anyone who received one of

23

these text messages.

24

categories of claims.

25

All of these claim forms were

The phone

So that's the rundown on those five

The costs of administration are coming in a little higher

Debbie Zurn - RPR, CRR - Federal Court Reporter - 700 Stewart Street - Suite 17205 - Seattle WA 98101

5

1

than the 150 that we had predicted, but Lithia has agreed to

2

pay the additional costs above and beyond the settlement

3

amount.

4

THE COURT:

5

MS. WILLIAMS:

6

So any overage, Lithia is going to cover?
That's correct.

And then attorneys fees and costs, this is a common fund

7

case, the attorneys fee request is for approximately

8

23.8 percent of the common fund.

9

objections filed to the fees and costs request by counsel, or

10

the requested incentive, or service award for Mr. McClintic.

11

And he has been of great assistance to us in this litigation

12

from the beginning, reviewing the pleadings.

13

regular contact with us, and was throughout the mediation,

14

and he's been a strong class representative.

15

THE COURT:

There have been no

He's been in

Counsel, can you give me any more

16

specifics of what he was doing?

17

pleadings".

18

else specifically was he doing?

19

doesn't award an incentive payment that high.

20

You say, "Reviewing

How comprehensive was his involvement and what

MS. WILLIAMS:

Right.

Because the court normally

We've had some that high but

21

not all or even most.

So it is a generous service award.

He

22

actually is one of the few clients we've had that took the

23

class action complaint draft and, you know, had a few changes

24

in the way we had drafted it in terms of the facts.

25

very concerned and responsible about the fact that it should

He was

Debbie Zurn - RPR, CRR - Federal Court Reporter - 700 Stewart Street - Suite 17205 - Seattle WA 98101

6

1
2

all be completely accurate.
He did not attend the mediation.

3

him by phone during the mediation.

4

case settled fairly quickly.

5

We were in touch with

asked to submit to a deposition.

6

THE COURT:

And as you know, this

So it settled before he was

Let me ask you this, counsel.

To the

7

best that you can recall, if you were to cross reference your

8

attorney's invoices for time spent with your client, or

9

communicating with your client, what would be your ballpark

10

of the number of hours that you've actually spent with him?

11

MS. WILLIAMS:

12

THE COURT:

I would say five to ten hours.

And five to ten hours actual time with

13

you, that's a pretty healthy and generous payment for that

14

small amount of time.

15

MS. WILLIAMS:

16

THE COURT:

17

MS. WILLIAMS:

18

Yes, it is, Your Honor.

Okay.

Okay.

We feel he deserves it, but we respect

your opinion, whatever you decide.

19

THE COURT:

All right.

20

MS. WILLIAMS:

And then as you also know, Your Honor,

21

there was one objector to the settlement, Mr. McLaren; he

22

objected through his Chicago counsel.

23

present today.

24

intervene in this action earlier on.

25

motion.

And they're not

He is the same individual that attempted to
The court denied that

And he is the plaintiff in a case in Oregon against

Debbie Zurn - RPR, CRR - Federal Court Reporter - 700 Stewart Street - Suite 17205 - Seattle WA 98101

7

1

Lithia and DME.

2

dismissed shortly before he filed his claim and his objection

3

in this case.

4

His Oregon claim against Lithia was

He objects based on a couple of grounds:

One, that the

5

settlement does not provide for any injunctive relief.

6

not concerned about injunctive relief.

7

not suggest what type of injunctive relief might be

8

appropriate.

9

is about was in April of 2011, and it was a one-time

10

occurrence.

11

marketing.

12

We're

His objection does

And this text messaging campaign that this case

Lithia is no longer using this form of
So we don't see the need for an injunction.

He also objects that there was no confirmatory discovery

13

or subpoenas to third parties, as part of the settlement in

14

this case.

15

that.

16

and as the declaration of Thomas Leonard, who is the Chief

17

Information Officer at DME, who was responsible for this text

18

messaging campaign, or handled it for Lithia, as his

19

declaration in support of Lithia's response to the objection

20

attests that there are 59,178 class members who received at

21

least one text.

22

We likewise respond that there was no need for

The data in this case has actually been quite good,

And DME has arrived at that number in consultation with

23

the text delivery vendor 3CI.

So, we know exactly how many

24

class members there are, the attempt to reach all of them

25

through direct mail notice and reverse directory search, and

Debbie Zurn - RPR, CRR - Federal Court Reporter - 700 Stewart Street - Suite 17205 - Seattle WA 98101

8

1

actually almost over-noticing so that we were as sure as

2

possible that we reached these individuals, was quite

3

thorough.

4

And we believe that the objection should be overruled,

5

that the settlement is fair, reasonable, and adequate, and

6

the court should approve it.

7

THE COURT:

8

Thank you.

All right.

Thank you, counsel.

Counsel,

any additional input?

9

MR. DEGGINGER:

Really nothing else to add, Your

10

Honor, unless the court has questions, I'd be happy to

11

answer.

12
13

THE COURT:

I have no specific questions.

Counsel, the court is going to make the following

14

determinations:

15

party was limited to one individual, and that was

16

Mr. McLaren.

17

note for the record that the only people present are court

18

personnel and the attorneys who have been identified on the

19

record.

20

First of all I'll note that the objecting

Mr. McLaren is not present today, and I will

The two objections that Mr. McLaren has identified, I

21

believe counsel has adequately addressed in her

22

representations this afternoon.

23

value of any injunctive relief, because at this point in time

24

it merely would be nothing more than saying, just follow the

25

law.

The court does not see the

You don't need an injunction to say, follow the law.

Debbie Zurn - RPR, CRR - Federal Court Reporter - 700 Stewart Street - Suite 17205 - Seattle WA 98101

9

1

And, second, he doesn't provide the court with any

2

affirmative indication of what he believes would be

3

appropriate injunctive relief.

4

court doesn't believe that that particular objection is

5

meritorious or worth further comment by the court.

6

that reason that particular objection is denied.

7

So for those reasons, the

So for

As to the type of claim form, the court has previously

8

addressed that question.

9

type of form that was sent out was adequate and sufficient.

10

The court understands it appears that Lithia does know who

11

sent -- Lithia contends they don't know who actually received

12

the texts, but the court is satisfied that the claim

13

processing forms that were sent out were sufficient and

14

adequate to give any individual the opportunity to file a

15

claim.

16

the objections provided by Mr. McLaren.

17

The court is satisfied that the

So for those reasons the court will deny and overrule

As to the attorneys fees, I'm satisfied that the attorneys

18

fees requested will be granted in the full amount.

The

19

request for the $10,000 incentive payment, I believe is the

20

requested amount, is what I would characterize

21

extraordinarily high.

22

in the range of five to ten hours of actual time with

23

counsel.

24

receiving somewhere between $2,000 to $1,000 an hour for his

25

work.

Counsel has characterized it somewhere

It would appear that Mr. McClintic would be

And I think that would probably cover at least all of

Debbie Zurn - RPR, CRR - Federal Court Reporter - 700 Stewart Street - Suite 17205 - Seattle WA 98101

10

1

your attorneys fees for this afternoon's appearance.

2

believe he's done that type of work and deserves that kind of

3

fee.

4

I don't

So that will probably be reduced to somewhere in the

5

neighborhood of somewhere around $1,000, as the gesture

6

demonstrates the level of work he's actually done in this

7

case.

8
9

I'm also satisfied that the amount for the class
administrator is sufficient.

Counsel has clarified that

10

Lithia is going to pay for any overage, and that meets the

11

court's concerns.

12

So, that appears to be the only real issues that we have

13

to address.

14

settlement and request for attorneys fees as indicated.

15

make the affirmative finding on the record that what's been

16

presented to this court by way of resolution of settlement is

17

fair, reasonable, and adequate.

18

by way of an order should be out in about a week's time from

19

now.

20

I will let you know that I will approve the
I'll

And, counsel, final approval

Was something else to address at this time.

21

MR. WILLIAMSON:

Your Honor, if Mr. McClintic is

22

reduced to whatever amount, there will be some extra money,

23

which either we painstakingly allocate among all the class,

24

or agree could go to the law fund, along with uncashed

25

checks.

We just need your guidance in the final order on

Debbie Zurn - RPR, CRR - Federal Court Reporter - 700 Stewart Street - Suite 17205 - Seattle WA 98101

11

1

that.

2
3

THE COURT:

That will be reflected in the final

order.

4

MR. WILLIAMSON:

5

THE COURT:

6

MR. DEGGINGER:

7

THE COURT:

Thank you.

Anything further, counsel?
Nothing further, Your Honor.

Thank you all for coming this afternoon.

8

I appreciate your time and effort.

9

getting this thing resolved in the manner that you did.

10
11

Thank you for being here.

I applaud your efforts in

Have a good day.

(The proceedings recessed.)

12
13
14
15
16
17
18
19
20
21
22
23
24
25

Debbie Zurn - RPR, CRR - Federal Court Reporter - 700 Stewart Street - Suite 17205 - Seattle WA 98101

12

C E R T I F I C A T E

I, Debbie K. Zurn, RPR, CRR, Court Reporter for
the United States District Court in the Western District of
Washington at Seattle, do hereby certify that I was present
in court during the foregoing matter and reported said
proceedings stenographically.
I further certify that thereafter, I have caused
said stenographic notes to be transcribed under my direction
and that the foregoing pages are a true and accurate
transcription to the best of my ability.

Dated this 6th day of November, 2012.

/s/ Debbie Zurn
DEBBIE ZURN
OFFICIAL COURT REPORTER

Debbie Zurn - RPR, CRR - Federal Court Reporter - 700 Stewart Street - Suite 17205 - Seattle WA 98101