# Gillard v. Volkswagen Group of America, Inc.

> District Court, N.D. California · September 12, 2022

URL: https://www.frixlaw.com/law-library/cases/10072905

## Case

- **Court:** District Court, N.D. California
- **Decided:** September 12, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10072905

## How later opinions describe it (automated extraction)

- noting that the standard for class notice is “best practicable” 26 notice, not “actually received” notice
- noting that the Ninth 20 Circuit has “expressed disapproval of these incentive agreements” and that “in some cases 21 incentive awards may be proper but . . . awarding them should not become routine practice”

## Opinion text

1
2
3
4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
6
7 JOHN CHESS, Case No. 17-cv-07287-HSG

8 Plaintiff, ORDER GRANTING MOTION FOR
FINAL APPROVAL OF CLASS
9 v. ACTION SETTLEMENT AND
GRANTING IN PART AND DENYING
10 VOLKSWAGEN GROUP OF AMERICA, IN PART PLAINTIFF’S COUNSEL’S
INC., MOTION FOR ATTORNEYS’ FEES
11 AND EXPENSES
Defendant.
12 Re: Dkt. Nos. 139, 142

13
Pending before the Court is Plaintiff’s motion for final approval of class action settlement,
14
Dkt. No. 142, and Plaintiff’s counsel’s motion for attorneys’ fees and expenses, Dkt. No. 139.
15
Two individuals filed objections to the settlement, see Dkt. Nos. 140 and 141, and Defendant filed
16
a memorandum of law in response to the objections and in support of Plaintiff’s motion for final
17
approval, see Dkt. No. 143. The Court held a final fairness hearing on August 18, 2022.
18
Following the hearing, Plaintiff submitted two supplemental filings regarding the attorneys’ fees
19
and service award requests, Dkt. Nos. 146 and 148, and the parties submitted a joint supplemental
20
brief in support of the motion for final approval, Dkt. No. 149. For the reasons set forth below,
21
the Court GRANTS Plaintiff’s motion for final approval and GRANTS in substantial part
22
Plaintiff’s counsel’s motion for attorneys’ fees and expenses.
23
I. BACKGROUND
24
A. Factual Allegations
25
Plaintiff alleges that the direct-shift gearbox (“DSG”) transmissions in 2010-2012 Audi S4
26
and S5 vehicles (the “Class Vehicles”) are defective, causing sudden, rough, unexpected shaking
27
and violent jerking—also referred to as “juddering” or “shuddering”—when drivers attempt to
1 accelerate, shift into second, third, or fourth gear, or decelerate. Dkt. No. 119 at ¶ 4. Plaintiff also
2 alleges that Class Vehicles exhibit clunky downshifting and inhibited gear shifting. Id. According
3 to Plaintiff’s Fourth Amended Complaint, the Class Vehicles were sold or leased subject to
4 express and implied warranties, and Defendant knew or should have known about the safety
5 hazard posed by the transmission defect before the sale of the first Class Vehicles. See id. at ¶¶ 3,
6 8.
7 Plaintiff brings causes of action for breach of express warranty; violation of the Magnuson-
8 Moss Warranty Act, 15 U.S.C.A. §§ 2301, et seq., and the Declaratory Judgment Act, 28 U.S.C.
9 §§ 2201, et seq.; and equitable, injunctive, and declaratory relief. See generally id. A summary of
10 the case’s procedural history is included in the Court’s order granting preliminary approval of the
11 class action settlement. See Dkt. No. 135 at 2-3.
12 B. Settlement Agreement
13 After engaging in months of arms-length negotiations, including a full-day mediation with
14 third-party JAMS mediator Bradley A. Winters, Esq., the parties entered into a settlement
15 agreement. Dkt. No. 142 at 2-3; see also Dkt. No. 142-4. Following the Court’s preliminary
16 approval hearing, the parties submitted an amended settlement agreement. Dkt. No. 142-5
17 (“Amended Settlement Agreement” or “ASA”).
18 Class Definition: The Settlement Class is defined as
All persons and entities who purchased or leased a Settlement Class
19 Vehicle, as defined in Section I.X. of this Agreement, in the United
States of America or Puerto Rico.
20
Excluded from the Settlement Class are (a) all Judges who have
21 presided over the Action and their spouses; (b) all current employees,
officers, directors, agents, and representatives of Defendant, and their
22 family members; (c) any affiliate, parent, or subsidiary of Defendant
and any entity in which Defendant has a controlling interest; (d)
23 anyone acting as a used car dealer; (e) anyone who purchased a
Settlement Class Vehicle for the purpose of commercial resale; (f)
24 anyone who purchased a Settlement Class Vehicle with salvaged title
and/or any insurance company who acquired a Settlement Class
25 Vehicle as a result of a total loss; (g) any insurer of a Settlement Class
Vehicle; (h) issuers of extended vehicle warranties and service
26 contracts; (i) any Settlement Class Member who, prior to the date of
this Agreement, settled with and released Defendant or any Released
27 Patties from any Released Claims, and (j) any Settlement Class
1 ASA at § I.Y. A Settlement Class Vehicle means any model year 2010, 2011, or 2012 Audi S4 or
2 Audi S5 vehicle that was imported and distributed by Volkswagen Group of America, Inc. for sale
3 or lease in the United States or Puerto Rico. Id. at § I.X.
4 Settlement Benefits:
5 Subject to the limitations set forth in the Amended Settlement Agreement, Defendant will
6 reimburse class members for one repair (parts and labor) of a diagnosed condition of shuddering,
7 juddering, rough shifting or improperly entering “limp mode” of a Settlement Class Vehicle’s
8 transmission. Id. at §§ I.K, II.A. A repair means the replacement of either the transmission or
9 mechatronics unit (“Covered Repair”). Id. at §§ I.K, II.A. To qualify for reimbursement, the
10 Covered Repair must have been performed prior to the Notice Date and within nine years or ninety
11 thousand miles (whichever occurred first) from the Settlement Class Vehicle’s In-Service Date.
12 Id. at § II.A. A Settlement Class Vehicle’s “In-Service Date” means the date on which it was first
13 delivered to either the original purchaser or original lessee; or if the vehicle was first placed in
14 service as a “demonstrator” or “company” car, on the date it was first placed in service. Id. at §
15 I.R. The cost of a Covered Repair is reimbursed on a sliding scale based on the Settlement Class
16 Vehicle’s age and mileage, as detailed in Table 1 of the Amended Settlement Agreement. Id. at §
17 II.A. If the Covered Repair was performed at an independent service center and not an authorized
18 Audi dealer, then the reimbursement will be limited to $5,000 for replacement of the mechatronics
19 unit and $12,000 for a total transmission replacement. Id. To be reimbursed, within 140 days
20 after the Notice Date, each class member must submit a Claim Form, proof of past paid out-of-
21 pocket expenses incurred for a Covered Repair, and proof of the class member’s adherence to the
22 relevant aspects of the Settlement Class Vehicle’s maintenance schedule (within a variance of ten
23 percent of the scheduled time/mileage requirements). Id. at §§ I.T-U, II.A, II.B.; see also Dkt. No.
24 142-2 Exhibits B and C. The Amended Settlement Agreement imposes other requirements for
25 reimbursement, including proof of class membership if the Claim Form is not addressed to the
26 claimant and deductions for any discounts already received on Covered Repairs. ASA at § II.B.
27 As an added benefit, Settlement Class Members may also still be covered by a 9
1 II.C. The Extended Warranty will cover a percentage of the cost of a Covered Repair on a sliding
2 scale based on the mileage and age of the vehicle. Id. As with the reimbursement plan described
3 above, a Settlement Class Member must submit Proof of Adherence to the Vehicle’s Maintenance
4 Schedule to qualify for the Extended Warranty. Id.
5 Transmission shuddering, juddering, rough shifting, or improperly entering “limp mode”
6 resulting from misuse, abuse, alteration or modification, a collision or crash, vandalism, lack of or
7 improper maintenance, and/or damage from an environmental or outside source, are not
8 reimbursable or covered by the Extended Warranty. Id. at §§ II.B-C.
9 Release: Under the Amended Settlement Agreement, all class members will release:
[A]ny and all claims, causes of action, demands, debts, suits,
10 liabilities, obligations, damages, entitlements, losses, actions, rights
of action and remedies of any kind, nature and description, whether
11 known or unknown, asserted or unasserted, foreseen or unforeseen,
regardless of any legal or equitable theory, existing now or arising in
12 the future, by Plaintiff and any and all Settlement Class Members
(including their successors, heirs, assigns, and representatives) which
13 in any way relate to the transmissions of Settlement Class Vehicles,
including all matters that were or could have been asserted in the
14 Action, and all claims, causes of action, demands, debts, suits,
liabilities, obligations, damages, entitlements, losses, actions, rights
15 of action and remedies of any kind, nature and description, arising
under any state, federal or local statute, law, rule and/or regulation,
16 under any federal, state or local consumer protection, consumer fraud,
unfair business practices or deceptive trade practices statutes or laws,
17 under common law, and/or under any legal or equitable theories
whatsoever including tort, contract, products liability, negligence,
18 fraud, misrepresentation, concealment, consumer protection,
restitution, quasi-contract, unjust enrichment, express and/or implied
19 warranty, implied covenants, the Magnuson-Moss Warranty Act,
California Consumer Legal Remedies Act, California Business and
20 Professions Code, California Song-Beverly Consumer Warranty Act
and any federal, state or local derivations thereof or similar laws, any
21 state Lemon Laws, secret warranty and/or any other theory of liability
and/or recovery, whether in law or in equity, and for any and all
22 injuries, losses, damages, remedies, recoveries, or entitlements of any
kind, nature and description, in law or in equity, under statutory
23 and/or common law, including, but not limited to, compensatory
damages, actual damages, economic losses or damages, exemplary
24 damages, punitive damages, statutory damages, statutory penalties or
rights, restitution, unjust enrichment, and any other legal or equitable
25 relief. This Settlement Agreement expressly exempts claims for
personal injuries and property damage (other than damage to the
26 Settlement Class Vehicle itself).
27 Id. at § I.V. Class members further agree to waive:
“A general release does not extend to claims which the creditor does
1 not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
2 settlement with the debtor.”

3 Id. at § VIII.D(2).
4 Class Notice: A third-party settlement administrator mailed notices to all reasonably
5 identifiable class members. Id. at § IV.B(1); Dkt. No. 142-2 at 2-3. To identify class members,
6 the third-party settlement administrator obtained from Defendant the VINs of the Settlement Class
7 Vehicles, matched the VINs to names and addresses of the last known owners and lessees via
8 DMV records, and confirmed the addresses through the United States Postal Service’s National
9 Change of Address database. ASA at §§ IV.B(2)-(3); Dkt. No. 142-2 at 2-3. For any
10 undeliverable notice packets, the third-party settlement administrator re-mailed the class notice
11 using any forwarding addresses provided or, in the absence of a forwarding address, any address
12 available via an advance address search. ASA at §§ IV.B(3); Dkt. No. 142-2 at 2-3. Additionally,
13 the third-party settlement administrator established a website (including instructions on how to
14 submit a claim; instructions on how to contact the administrator, Plaintiff’s counsel, and/or
15 Defense Counsel; pdfs of the Claim Form, Class Notice, Amended Settlement Agreement, and the
16 Preliminary Approval Order among other key documents; and relevant deadlines) and a toll-free
17 number. ASA at §§ IV.B(6)-(7); Dkt. No. 142-2 at 3-4.
18 Service Award: The named Plaintiff, John Chess, requests a service award of $5,000, as
19 allowed by the Amended Settlement Agreement. Dkt. No. 139 at 16; ASA at § V.III.C(2).
20 Attorneys’ Fees and Costs: Plaintiff’s counsel requests $996,348.80 in attorneys’ fees and
21 expenses, as allowed by the Amended Settlement Agreement. See Dkt. No. 139 at 4, ASA at §
22 V.III.C(1). Defendant does not oppose or object to Plaintiff’s counsel’s application, as the parties
23 agreed. See ASA at § V.III.C(1)
24 II. ANALYSIS
25 A. Final Settlement Approval
26 i. Class Certification
27 Final approval of a class action settlement requires, as a threshold matter, an assessment of
1 (b). Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019–1022 (9th Cir. 1998). Because no facts that
2 would affect these requirements have changed since the Court preliminarily approved the class,
3 this order incorporates by reference its prior analysis under Rules 23(a) and (b) as set forth in the
4 order granting preliminary approval. See Dkt. No. 135 at 7-11.
5 ii. The Settlement
6 “The claims, issues, or defenses of a certified class may be settled . . . only with the court’s
7 approval.” Fed. R. Civ. P. 23(e). “Adequate notice is critical to court approval of a class
8 settlement under Rule 23(e).” Hanlon, 150 F.3d at 1025. The Court may finally approve a class
9 settlement “only after a hearing and on finding that it is fair, reasonable, and adequate.” Fed. R.
10 Civ. P. 23(e)(2); Officers for Justice v. Civil Serv. Comm’n of the City and County of San
11 Francisco, 688 F.2d 615, 625 (9th Cir. 1982) (“The district court’s role in evaluating a proposed
12 settlement must be tailored to fulfill the objectives outlined above. In other words, the court’s
13 intrusion upon what is otherwise a private consensual agreement negotiated between the parties to
14 a lawsuit must be limited to the extent necessary to reach a reasoned judgment that the agreement
15 is not the product of fraud or overreaching by, or collusion between, the negotiating parties . . . ”).
16 a. Adequacy of Notice
17 Under Federal Rule of Civil Procedure 23(e), the Court “must direct notice in a reasonable
18 manner to all class members who would be bound by the proposal.” Fed. R. Civ. P. 23(e)(1).
19 Rule 23(c)(2)(B) requires “the best notice that is practicable under the circumstances, including
20 individual notice to all members who can be identified through reasonable effort.” The notice
21 must “clearly and concisely state in plain, easily understood language” the nature of the action, the
22 class definition, and the class members’ right to exclude themselves from the class. Fed. R. Civ.
23 P. 23(c)(2)(B). Although Rule 23 requires that reasonable efforts be made to reach all class
24 members, it does not require that each class member actually receive notice. See Silber v. Mabon,
25 18 F.3d 1449, 1454 (9th Cir. 1994) (noting that the standard for class notice is “best practicable”
26 notice, not “actually received” notice).
27 The Court finds that the notice and notice plan previously approved by the Court was
1 Dkt. No. 142-2 at 2-4. Because the notice plan was carried out as preliminarily approved, this
2 order incorporates by reference the Court’s prior evaluation of the adequacy of notice from the
3 order granting preliminary approval. See Dkt. No. 135 at 15-16. The Court finds that the parties
4 have sufficiently provided the best practicable notice to the Class Members.
5 b. Fairness, Adequacy and Reasonableness
6 To assess whether a proposed settlement comports with Rule 23(e), the Court “may
7 consider some or all” of the following factors: (1) the strength of plaintiff’s case; (2) the risk,
8 expense, complexity, and likely duration of further litigation; (3) the risk of maintaining class
9 action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery
10 completed, and the stage of the proceedings; (6) the experience and views of counsel; (7) the
11 presence of a governmental participant; and (8) the reaction of the class members to the proposed
12 settlement. Rodriguez v. West Publ’g Corp., 563 F.3d 948, 963 (9th Cir. 2009); see also Hanlon,
13 150 F.3d at 1026. “The relative degree of importance to be attached to any particular factor” is
14 case specific. Officers for Justice, 688 F.2d at 625.
15 1. Strength of Plaintiff’s Case and Litigation Risk
16 Approval of a class settlement is appropriate when plaintiffs must overcome significant
17 barriers to make their case. Chun-Hoon v. McKee Foods Corp., 716 F. Supp. 2d 848, 851 (N.D.
18 Cal. 2010). Additionally, difficulties and risks in litigating weigh in favor of approving a class
19 settlement. Rodriguez, 563 F.3d at 966. “Generally, unless the settlement is clearly inadequate,
20 its acceptance and approval are preferable to lengthy and expensive litigation with uncertain
21 results.” Ching v. Siemens Indus., Inc., No. 11-cv-04838-MEJ, 2014 WL 2926210, at *4 (N.D.
22 Cal. June 27, 2014) (quotations omitted).
23 The Court finds that the settlement is reasonable in light of the complexity of this litigation
24 and the substantial risk Plaintiff would face in litigating the case given the nature of the asserted
25 claims. See Dkt. No. 142 at 16-18, see also Dkt. No. 143 at 3. This case involves complex and
26 technical issues relating to the design and manufacture of DSG transmissions. Defendant denies
27 Plaintiff’s allegations, and argues that the subjective nature of the complaints and numerous
1 maintenance history) suggest that there is no malfunction or defect. See Dkt. No. 143 at 3; see
2 also Dkt. No. 142 at 17. In order to prevail, Plaintiffs also would have to overcome Defendant’s
3 arguments that no warranties, express or implied, were breached; no statutes were violated; and
4 some claims fall outside of the statute of limitations, among other defenses. See Dkt. No. 142 at
5 17. There is an appreciable chance that the result of further litigation would be that the Class
6 Members receive no recovery at all. Moreover, litigation of complex automotive issues is often
7 lengthy, as demonstrated by the three rounds of motions to dismiss already adjudicated in this
8 case, and even a successful recovery following trial and appeal could be years away.
9 In reaching a settlement, Plaintiff has ensured at least some recovery for the class. See
10 Rodriguez, 563 F.3d at 966 (finding litigation risks weigh in favor of approving class settlement).
11 These factors weigh in favor of approving the settlement. See Ching, 2014 WL 2926210, at *4
12 (favoring settlement to protracted litigation).
13 2. Risk of Maintaining Class Action Status
14 In considering this factor, the Court looks to the risk of maintaining class certification if
15 the litigation were to proceed. Certifying a class encompassing 11,733 Class Vehicles, with
16 owners and lessees spread out across the nation with varying purchase/lease circumstances, car
17 histories, and driving experiences presents complex issues that could undermine certification.1 See
18 Dkt. No. 142 at 18-19; see also Dkt. No. 143 at 4. Accordingly, this factor also weighs in favor of
19 settlement.
20 3. Settlement Amount
21 The settlement benefit is another factor that weighs in favor of approval. The settlement
22 benefit is the functional equivalent of an extended warranty for all Class Vehicles that more than
23 doubles the vehicles’ original warranties’ time-limitation and almost doubles the original mileage
24 limitation.2 For those Settlement Class Members that already paid for a Covered Repair within 9
25 years or 90,000 miles of the vehicle’s In-Service Date, Defendant will reimburse them for a
26

27
1 Plaintiff notes that the number of Settlement Class Members is larger than the number of Class
1 covered percentage of the repair. See Dkt. No. 142 at 8.3
2 Those Settlement Class Members who already incurred the cost of a Covered Repair were
3 required to submit a Claim by July 29, 2022. Defendant reports that as of August 9, 2022, “the
4 estimated aggregate amount of the reimbursement claims submitted . . . totals $3,089,756.55,
5 representing 608 claims with an average amount claimed for reimbursement of $5,081.82 each.”
6 Dkt. No. 143 at 15; see also Dkt. No. 142-2 (declaration by claims administrator reporting on
7 number of claims submitted as of July 26, 2022).4 This is not a final number, as the claims
8 administrator has not yet analyzed the claims for completeness and compliance with the
9 Settlement terms, but even assuming some number of claims may be rejected, the Settlement
10 Amount is a significant recovery for those who incurred the cost of a Covered Repair within the
11 age and mileage limitation.
12 The vast majority of class members will not receive any payment under this settlement.
13 But as further discussed below, the Court finds the settlement to be fair, adequate and reasonable
14 given the significant recovery available to those who paid for a Covered Repair within 9 years or
15 90,000 miles and the substantial risks of further litigation. This factor therefore weighs in favor of
16 approval.
17 4. Extent of Discovery Completed and Stage of Proceedings
18 The Court finds that Plaintiff’s counsel had sufficient information to make an informed
19 decision about the merits of the case. See In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459
20 (9th Cir. 2000). The parties reached this settlement after nearly four years of litigation, including
21 multiple amended complaints and multiple motions to dismiss. See Dkt. No. 139-5. Plaintiff’s
22 counsel reports that they conducted significant investigation of their own (including investigating
23 issues related to Defendant’s representations, advertising, marketing, business practices, and
24 engineering decisions), interviewed multiple Class Members, and received substantial information
25
3 Although the settlement also results in an “Extended Warranty” for 9 years or 90,000 miles,
26
Plaintiff’s counsel acknowledged at the final fairness hearing that he is not aware of anyone who
still qualifies given the age and milage limits. Plaintiff notes that reimbursement for past Covered
27
Repairs is the “primary benefit” of the Settlement. See Dkt. No. 142 at 10.
1 from Defendant under the settlement and mediation privilege. Dkt. No. 142 at 20; see Dkt. No.
2 139-5 ¶¶ 5-9; Dkt. No. 139-6 ¶ 8. The Court finds that the parties received, examined, and
3 analyzed information, documents, and materials sufficient to allow them to assess the likelihood of
4 success on the merits. This factor weighs in favor of approval.
5 5. Experience and Views of Counsel
6 The Court next considers the experience and views of counsel. Plaintiff’s counsel has
7 substantial experience in automobile defect class actions and favors this settlement. See Dkt. No.
8 139 Exhibits B-D. The Court recognizes, however, that courts have diverged on the weight to
9 assign counsel’s opinions. Compare Carter v. Anderson Merch., LP, 2010 WL 1946784, at *8
10 (C.D. Cal. May 11, 2010) (“Counsel’s opinion is accorded considerable weight.”), with Chun-
11 Hoon, 716 F. Supp. 2d at 852 (“[T]his court is reluctant to put much stock in counsel’s
12 pronouncements. . . .”). This factor’s impact is therefore modest, but favors approval.
13 6. Reaction of Class Members
14 Finally, the Court considers the reaction of the Class Members. “[T]he absence of a large
15 number of objections to a proposed class action settlement raises a strong presumption that the
16 terms of a proposed class settlement action are favorable to the class members.” Nat’l Rural
17 Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528–29 (C.D. Cal. 2004); In re Linkedin
18 User Privacy Litig., 309 F.R.D. 573, 589 (N.D. Cal. 2015) (“A low number of opt-outs and
19 objections in comparison to class size is typically a factor that supports settlement approval.”).
20 The class notice, which was served on over 30,000 Settlement Class Members in
21 accordance with the method approved by the Court, advised the Class of the requirements to
22 object or opt out of the settlement. Seven individuals requested to be excluded from the
23 settlement, see Dkt. No. 142-2 Exh. D, and two individuals objected, see Dkt. Nos. 140, 141.
24 The first objector, Edward Havas, objects to the settlement because it “provides no actual
25 benefit to [him] and other similarly situated class members, even though [they] are affected by the
26 transmission defect.” Dkt. No. 140. Mr. Havas reports that he owns a 2010 S5 Cabriolet with
27 over 90,000 miles on it, and that although he experiences the performance issues described in this
1 done to solve the issues, and that the very expensive repairs that might be attempted were unlikely
2 to fix the problem.” Id. Mr. Havas also objects that the Extended Warranty will not benefit many
3 class members, as “by definition” the Settlement Class Vehicles are more than nine years past
4 their In-Service Dates. Id.
5 The second objector, Zack Sinemus, objects to the settlement because “for nearly all
6 Settlement Class Members who have not yet had Covered Repairs made, [there will be] no
7 material warranty extension.” Dkt. No. 141 at 3. Mr. Sinemus reports that he worked as an Audi
8 car salesman from 2010 through 2012, and knew the Settlement Class Vehicles were prone to
9 rough shifting but thought that it was a “harmless cosmetic defect.” Id. at 2. According to Mr.
10 Sinemus, he purchased a 2011 Audi S4 in 2017 when it had 63,694 miles, and the car now has
11 approximately 85,000 miles. Mr. Sinemus asserts that his car often enters “limp mode,” in which
12 the engine does not respond to the gas pedal and it is not possible to accelerate, requiring an entire
13 transmission replacement. Id. at 2-3. Mr. Sinemus argues that “[a]pproving the proposed
14 Settlement rewards the Defendant for having denied the existence of a widespread mechanical
15 issue in the Settlement Class Vehicles” and that because the Extended Warranty only covers nine
16 years most Settlement Class Members who have not already paid out-of-pocket for a Covered
17 Repair will not benefit from this settlement. See id. at 3.
18 The Court understands the objectors’ desire to receive a greater settlement benefit, but a
19 settlement is, in essence, a compromise that reflects the risk, expense, complexity and likely
20 duration of further protracted litigation. And the Court is charged not with ensuring each class
21 member receives the exact remedy they prefer, but that the settlement as a whole is fair,
22 reasonable, and adequate. See Hanlon, 150 F.3d at 1027 (“Settlement is the offspring of
23 compromise; the question we address is not whether the final product could be prettier, smarter or
24 snazzier, but whether it is fair, adequate and free from collusion.”).
25 The Court recognizes that not all Settlement Class Members will receive repairs or cash in
26 this settlement. But given the prospect of protracted litigation and the serious risks that could
27 result in no recovery at all, a near doubling of the Settlement Class Vehicles’ original warranties is
1 As other courts have recognized, “[a]ge and mileage limitations are common in automotive
2 defect cases, and reflect manufacturers’ strong arguments that vehicles ordinarily fail after a number
3 of years or miles due to wear and tear.” Seifi v. Mercedes-Benz USA, LLC, Case No. 12-cv-05493,
4 2015 WL 12964340, at *2 (N.D. Cal. Aug. 18, 2015) (citations omitted); see also Herremans v.
5 BMW of N.A., LLC, 2016 WL 6780349 (C.D. Cal. November 28, 2016) (approving a settlement that
6 extended the warranty period for 2006-2012 BMW Mini-Coopers from 4 years or 50,000 miles to
7 7 years or 84,000 miles); Zakskorn v. Am. Honda Motor Co., Inc., 2015 WL 3622990, at *5 (E.D.
8 Cal. June 9, 2015) (approving a settlement that reimbursed out-of-pocket expenses for 2006-2011
9 Honda Civics that were incurred by class members within the New Vehicle Limited Warranty Period
10 of 3 years or 36,000 miles). Defendant cannot be expected to warranty all transmission problems
11 in perpetuity when many factors can impair a vehicle’s transmission performance. The Settlement
12 ameliorates the cost for those Settlement Class Members who may have experienced the alleged
13 defect and sought a repair within 9 years or 90,000 miles of the vehicle’s in-service date. This is a
14 reasonable and objective standard meant to aim the settlement benefit at those most likely to have
15 experienced the alleged defect, as opposed to transmission problems due to other causes. And as
16 Defendant argues in its memorandum, reimbursing for Covered Repairs performed within 9 years
17 or 90,000 miles, as opposed to those Covered Repairs identified in that same period, is an industry
18 standard meant to avoid subjective, and possibly unverifiable, claims about when an issue first arose.
19 See Dkt. No. 143; see also In re Toyota Motor Corp. Unintended Acceleration, 754 F. Supp. 2d
20 1145, 1179 (C.D. Cal. 2010) (concluding that those plaintiffs who did not seek repairs for the alleged
21 latent, automobile defect within the warranty period could not pursue a claim for breach of express
22 warranty).
23 For these reasons, the Court OVERRULES the two objections. Although seven
24 individuals requested to be excluded from the Settlement, the Court does not find that a 0.02%
25 exclusion rate militates against approving the settlement.5 The Court finds that this factor weighs
26
5 Notice was mailed to 36,328 Settlement Class Members, 5,410 Notice Packets were returned as
27
undeliverable, and 3,465 of the undeliverable Notice Packets were remailed to new addresses.
1 in favor of approval.
2 B. Attorneys’ Fees, Costs and Expenses, and Class Representative Enhancement
Payment
3
Plaintiff’s counsel asks the Court to approve an award of $996,348.80 in attorneys’ fees
4
and $25,908.65 in costs. Dkt. No. 139 at 7; Dkt. No. 148 at 2.6 Plaintiff’s counsel also seeks a
5
$5,000 incentive award for the Class Representative. Id. at 16-17.
6
i. Attorneys’ Fees
7
a. Legal Standard
8
“In a certified class action, the court may award reasonable attorney’s fees and nontaxable
9
costs that are authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). In a state
10
law claim—like this one—state law also governs the calculation of attorneys’ fees. See Vizcaino
11
v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002). Nevertheless, the Court may still look to
12
federal authority for guidance in awarding attorneys’ fees. See Apple Computer, Inc. v. Superior
13
Court, 126 Cal. App. 4th 1253, 1264 n.4 (2005) (“California courts may look to federal authority
14
for guidance on matters involving class action procedures.”).
15
“The two primary methods for determining reasonable fees in the class action settlement
16
context are the ‘lodestar/multiplier’ method and the ‘percentage of recovery’ method.” Wershba
17
v. Apple Computers, Inc., 91 Cal. App. 4th 224, 254 (2001) (overruled on other grounds by
18
Hernandez v. Restoration Hardware, Inc., 4 Cal. 5th 260 (2018)).
19
Under the lodestar method, a “lodestar figure is calculated by multiplying the number of
20
hours the prevailing party reasonably expended on the litigation (as supported by adequate
21
documentation) by a reasonable hourly rate for the region and for the experience of the lawyer.”
22
In re Bluetooth, 654 F.3d at 941 (citation omitted). “[T]he established standard when determining
23
a reasonable hourly rate is the rate prevailing in the community for similar work performed by
24
attorneys of comparable skill, experience, and reputation.” Camacho v. Bridgeport Fin., Inc., 523
25
26
6 Plaintiff’s counsel originally requested an award of $1,050,000.00 in attorneys’ fees. Dkt. No.
27
139 at 7. Due to technical issues, Plaintiff’s counsel cannot access some timekeeper records, and
1 F.3d 973, 979 (9th Cir. 2008) (quotation omitted). Generally, “the relevant community is the
2 forum in which the district court sits.” Id. (citation omitted). And typically, “affidavits of the
3 plaintiffs’ attorney and other attorneys regarding prevailing fees in the community, and rate
4 determinations in other cases . . . are satisfactory evidence of the prevailing market rate.” United
5 Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990). “[O]ther evidence
6 of prevailing market rates may include affidavits from other area attorneys or examples of rates
7 awarded to counsel in previous cases.” Schuchardt v. Law Off. of Rory W. Clark, 314 F.R.D. 673,
8 687 (N.D. Cal. 2016).
9 Under the percentage-of-the-fund method, twenty-five percent of a common fund is the
10 benchmark for attorneys’ fees awards. See, e.g., In re Bluetooth, 654 F.3d at 942 (“[C]ourts
11 typically calculate 25% of the fund as the ‘benchmark’ for a reasonable fee award, providing
12 adequate explanation in the record of any ‘special circumstances’ justifying a departure.”); Six
13 Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1311 (9th Cir. 1990). Whether the
14 Court awards the benchmark amount or some other rate, the award must be supported “by findings
15 that take into account all of the circumstances of the case.” Vizcaino, 290 F.3d at 1048.
16 “Though courts have discretion to choose which calculation method they use, their
17 discretion must be exercised so as to achieve a reasonable result.” In re Bluetooth, 654 F.3d at
18 942. To guard against an unreasonable result, the Ninth Circuit has encouraged district courts to
19 cross-check any calculations under one method against those under another method. Vizcaino,
20 290 F.3d at 1050–51.
21 b. Analysis
22 Plaintiff’s counsel asks the Court to approve an award of $996,348.80 in attorneys’ fees.
23 Dkt. No. 148 at 2. The Court finds this amount substantially reasonable, with a slight adjustment
24 for the reason explained below.
25 Plaintiff’s counsel’s attorneys’ fee request is the equivalent of their lodestar.7 See Lowery
26
7 Despite initially representing that they were requesting a “reduced lodestar” and a “downward
27
adjustment, also known as a negative multiplier,” Plaintiff’s counsel subsequently revised their fee
1 v. Rhapsody Int’l, Inc., No. 16-cv-01135-JSW, 2021 WL 7448610, at *3 (N.D. Cal. Sept. 20,
2 2021) (“In a claims-made settlement, the lodestar method is typical.”). At the Court’s request,
3 Plaintiff’s counsel submitted two supplemental filings identifying their lodestar and summarizing
4 timekeepers’ rates and hours worked. According to these supplemental filings, Plaintiff’s counsel
5 worked 1,281.30 hours equating to $996,348.80 in fees. See Dkt. Nos. 146, 148. Timekeepers’
6 hourly rates range from $1,100 for partners with over 30 years of experience to $550-800 for
7 associates with multiple years of experience. See Dkt. No. 139 at 14-16; Dkt. No. 139-5 ¶¶ 15-18;
8 Dkt. No. 148.8 Requested hourly rates for staff and paralegals range from $150 to $250. See Dkt.
9 No. 148. The Court finds Plaintiff’s counsel’s billing rates in line with prevailing rates in this
10 district for personnel of comparable experience, skill, and reputation. See, e.g., Carlotti v. ASUS
11 Computer Int’l, No. 18-cv-03369-DMR, 2020 WL 3414653, *5 (N.D. Cal. June 22, 2020) (finding
12 hourly rates of $950 to $1025 for partners, $450 to $900 for other attorneys, and $225 to $275 for
13 legal assistants to be reasonable); In re Volkswagen “Clean Diesel” Mktg., Sales Pracs., & Prod.
14 Liab. Litig., No. 2672 CRB (JSC), 2017 WL 1047834, at *5 (N.D. Cal. March 17, 2017) (finding
15 rates ranging from $275 to $1,600 for partners, $150 to $790 for associates, and $80 to $490 for
16 paralegals as reasonable). Given the four years of litigation and multiple rounds of motions in this
17 case, the Court finds the lodestar reasonable.
18 “Though the lodestar figure is ‘presumptively reasonable,’ the court may adjust it upward
19 or downward by an appropriate positive or negative multiplier reflecting a host of ‘reasonableness’
20 factors, ‘including the quality of representation, the benefit obtained for the class, the complexity
21 and novelty of the issues presented, and the risk of nonpayment.’” In re Bluetooth, 654 F.3d at
22 941-42 (citations omitted). The Court recognizes that Plaintiff’s counsel litigated this case
23 skillfully and professionally. Over multiple years, Plaintiff’s counsel has engaged in factual
24
8 In the motion for attorneys’ fees, Plaintiff’s counsel lists John Bryson’s rate as $550 per hour.
25
Dkt. No. 139 at 15. But in the supplemental filings, which serve as the basis for the $996,348.80
attorneys’ fees request, Plaintiff’s counsel lists John Bryson’s rate as $575.00 an hour. Dkt. No.
26
148 at 3. No explanation for this difference is offered. Based on Plaintiff’s counsel’s
representation in its original motion for attorneys’ fees, the Court finds that hours worked by John
27
Bryson should be compensated at $550 an hour. Plaintiff’s counsel represents that Mr. John
1 investigation, briefed three motions to dismiss, and participated in six months of negotiations. See
2 Dkt. No. 139 at 13-14; Dkt. No. 139-6 ¶ 8. As reflected in the motion to dismiss briefing, this
3 case presented complex issues regarding statutes of limitations, statutory interpretation,
4 permissible remedies, and allegations of fraud. See, e.g., Dkt. Nos. 45, 56, 58, 61, 72, 78, 79, 91,
5 94, 96. Choice-of-law issues, managing a nationwide class, proving the existence of the defect,
6 and causation are additional issues that increased the litigation risk, and thus the risk of no fee
7 recovery, in this case. See Dkt. No. 139 at 6-7. “Foremost among these considerations, however,
8 is the benefit obtained for the class.” In re Bluetooth, 654 F.3d at 942. Here, the Court finds that
9 the result and benefit obtained for the class are fair, reasonable, and adequate, but unexceptional.
10 Assuming their claims are approved, approximately six hundred class members will receive a
11 substantial payment, averaging approximately $5,000. See Dkt. No. 149 at 2. The vast majority
12 of the class, however, as a practical matter will receive nothing at all. For these reasons, the Court
13 finds that essentially awarding Plaintiff’s counsel their lodestar as requested, with no positive or
14 negative multiplier, is reasonable.
15 Cross-checking the requested fees compared to the benefit being paid to the Class, the
16 Court confirms that the requested fees do not raise cause for concern. Lowery, 2021 WL 7448610,
17 *8 (finding that although the Ninth Circuit has not set a bright-line rule whether a percentage-of-
18 the-fund calculation in a claims-made settlement should be based on the total available funds or
19 the claimed amount, the Ninth Circuit has noted that a district court cannot ignore the amount
20 actually claimed). Six hundred seventeen class members have made claims at an average of
21 $5,081.82 requested reimbursement per claim. Dkt. No. 149 at 2. As of August 9, 2022, when
22 only 608 claims had been submitted, the aggregate amount of reimbursement claims totaled
23 $3,089,746.56. Dkt. No. 143 at 15.
24 In light of the risks of litigation, the financial burden assumed by Plaintiffs’ counsel, and
25 the work invested, Plaintiff’s counsel’s request is substantially reasonable and the Court
26 GRANTS attorneys’ fees of $992,533.80. 9
27
ii. Costs and Expenses
1
“In a certified class action, the court may award . . . nontaxable costs that are authorized by
2
law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). The parties’ Amended Settlement
3
Agreement allows Plaintiff’s counsel to apply “for a combined award of reasonable attorneys
4
fees’, costs, and expenses . . . to be paid by Defendant separate and apart from any benefits to the
5
Settlement Class . . . in an amount up to, but not exceeding . . . One Million and Fifty Thousand
6
Dollars and No Cents ($1,050,000.00).” Dkt. No. 142-5 at 24. Plaintiff’s counsel requests
7
reimbursement of $25,908.65 in litigation costs, which includes filing fees, expert fees, travel, and
8
research costs. See Dkt. No. 139 at 16, Dkt. No. 139-5 ¶ 20. The Court finds that counsel’s
9
requested expenses are reasonable and allowed under the Amended Settlement Agreement, and the
10
Court GRANTS costs and expenses of $25,908.65.
11
iii. Service Award
12
Lastly, Plaintiff’s counsel requests a service award of $5,000 for the Class Representative.
13
“Service awards as high as $5,000 are presumptively reasonable in this judicial district.” See
14
Wong v. Arlo Techs., Inc., No. 5:19-CV-00372-BLF, 2021 WL 1531171, at *12 (N.D. Cal. Apr.
15
19, 2021). However, the Court shares the Ninth Circuit’s concern that “if class representatives
16
expect routinely to receive special awards in addition to their share of the recovery, they may be
17
tempted to accept suboptimal settlements at the expense of the class members whose interests they
18
are appointed to guard.” See Staton v. Boeing Co., 327 F.3d 938, 975 (9th Cir. 2003); Radcliffe v.
19
Experian Information Sols. Inc., 715 F.3d 1157, 1163–64 (9th Cir. 2013) (noting that the Ninth
20
Circuit has “expressed disapproval of these incentive agreements” and that “in some cases
21
incentive awards may be proper but . . . awarding them should not become routine practice”). The
22
Ninth Circuit has cautioned that “district courts must be vigilant in scrutinizing all incentive
23
awards to determine whether they destroy the adequacy of the class representatives . . . .”
24
Radcliffe, 715 F.3d at 1165 (quotations omitted). This is particularly true where “the proposed
25
26
No. 140 at 1. The majority of Mr. Havas’ objection notes his disagreement with the substance of
27
the settlement, and he does not offer further detail on his objection to the requested fees, expenses,
1 service fees greatly exceed the payments to absent class members.” Id.
2 Plaintiff’s counsel represents that Class Representative Chess invested significant time into
3 this litigation. See Dkt. No. 139 at 17. According to Plaintiff’s counsel he “consistently invested
4 personal time to seek out and speak with Plaintiff’s Counsel, search for relevant evidence, review
5 and approve various documents for filing, respond to discovery, keep apprised of the progress of
6 the litigation, prepare for mediation, evaluate the settlement proposals during and following
7 mediation, and read through and discuss drafts of the Settlement Agreement before ultimately
8 approving and executing the Agreement.” Dkt. No. 139-5 ¶ 22. These representations are
9 supported by Class Representative Chess’s declaration, which states he spent about 35 hours on
10 relevant factual and legal issues after becoming involved in the lawsuit. See generally Dkt. No.
11 146-1. Although not all class members will receive payment under the Settlement, those who will
12 receive payment have an average claim size greater than the requested service award. The Court
13 concludes that given the time invested by Class Representative and the circumstances of this case,
14 the requested service award is justified and reasonable to compensate Class Representative for his
15 efforts.
16 //
17 //
18 //
19 //
20 //
21 //
22 //
23 //
24 //
25 //
26 //
27 //
Wl. CONCLUSION
For the foregoing reasons it is hereby ordered that:
2
1. Plaintiff's Motion for Final Approval of Class Action Settlement is hereby
3
GRANTED.
4
2. Plaintiff's counsel’s Motion for Attorneys’ Fees and Expenses is hereby
5
GRANTED IN PART AND DENIED IN PART, as adjusted for the billing rate discrepancy
6
described in footnote 8.
7
3. The Court approves the settlement, including attorneys’ fees in the amount of
8
$992,533.80; costs in the amount of $25,908.65; and an incentive fee for the Named Plaintiff in
9
the amount of $5,000.
10
The parties and settlement administrator are directed to implement this Final Order and the
11
settlement agreement in accordance with the terms of the Amended Settlement Agreement. The
a 12
parties are further directed to file a short stipulated final judgment of two pages or less within 7
13
days from the date of this Order. The judgment need not, and should not, repeat the analysis in
14
this order.
15
IT IS SO ORDERED.
16
Dated: 9/12/2022
= 17

Z 18 HAYWOOD S. GILLIAM, JR.
19 United States District Judge
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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10072905. Public record. Not legal advice.