Opinion

POWELL v. SUBARU OF AMERICA, INC.

Court: District Court, D. New Jersey
Filed: Oct 3, 2024
Cited by: 0 cases
Authority: More cited than 31.6%

noting that “the requirements of Rule 23(a) are ‘threshold requirements’” and should be considered first

How later courts described this case

noting that “the requirements of Rule 23(a) are ‘threshold requirements’” and should be considered first

Written by the judges who cited it.

The opinion

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

CAMDEN VICINAGE

CHRISTINE POWELL,

Individually and on behalf of all others

similarly situated,

Plaintiff,

Civil No. 19-19114 (MJS)

OPINION & ORDER GRANTING

SUBARU OF AMERICA, INC., et al., PRELIMINARY APPROVAL OF

SETTLEMENT

Defendants.

This matter is before the Court on Plaintiffs’ unopposed motion for preliminary approval

of the class action settlement [ECF No. 146] (“Motion”). Plaintiffs’ motion seeks an order:

(1) granting preliminary approval of the parties’ proposed Settlement Agreement (“Agreement”),

ECF No. 148;1 (2) conditionally certifying the proposed Settlement Class for settlement purposes;

(3) conditionally appointing the named plaintiffs as Representative Plaintiffs and appointing Peter

A. Muhic, Russell D. Paul, and Edwin J. Kilpela, Jr., as Settlement Class Counsel; (4) approving

the proposed Class Notice and plan for disseminating the Class Notice (“Notice Plan”); (5)

conditionally appointing JND Legal Administration as the Settlement Administrator; (6) setting

deadlines for the filing of any objections to, or requests for exclusion from, the Settlement, and for

other submissions in connection with the Settlement approval process; and (7) setting a Final

Fairness Hearing date and briefing schedule for final approval of the Settlement and Plaintiffs’

application for attorneys’ fees, reimbursement of costs and expenses, and service awards for the

1 The Court has reviewed the unredacted version of the Agreement, which was submitted to this

Court as an exhibit to the declaration of Peter A. Muhic and filed under seal. ECF No. 147.

Representative Plaintiffs. The Court, with the consent of counsel, has signed an order referring all

settlement-related proceedings to the undersigned United States Magistrate Judge [ECF No. 140].

28 U.S.C. § 636(c)(1). Pursuant to Federal Rule of Civil Procedure 78 and Local Civil Rule

78.1(b), the Court decides this motion without oral argument. For the reasons that follow,

Plaintiffs’ motion is GRANTED.

Background

The initial complaint in this action was filed on October 18, 2019. ECF No. 1. The

complaint alleged that defendant Subaru of America (“SOA”) manufactured, marketed, and sold

new vehicles with defective windshields that were susceptible to spontaneous cracking, chipping,

or otherwise breaking in a dangerous manner, and further replaced those windshields with

similarly defective windshields. Id. ¶ 1. A second amended complaint followed on November 12,

2019, which joined additional plaintiffs and class vehicles and asserted claims on behalf of certain

state sub-classes. ECF No. 12. This litigation was consolidated with two other similar actions on

January 27, 2020. ECF No. 25. On February 6, 2020, sixteen named plaintiffs filed a consolidated

class action complaint against SOA and Subaru Corporation (collectively, “Defendants”). ECF

No. 27. The operative complaint was filed on December 23, 2020, and Defendants’ answer was

filed on January 18, 2021. ECF Nos. 69, 73. On March 28, 2024, all but four of the named plaintiffs

were dismissed from the action with prejudice by way of stipulation. ECF No. 143. The remaining

named Plaintiffs—Jeffrey Barr, Arnold Milstein, Allan Zaback, and Brittany Funk—now seek

conditional appointment as the representative plaintiffs in this litigation. ECF No. 146-1 at 10.

Discovery in this matter has included negotiating a protocol for the production of

electronically stored information, exchanging written interrogatories and document requests

between all parties, serving third-party document and deposition subpoenas, and taking depositions

of eleven of the named plaintiffs and multi-day depositions of Defendants’ representatives.

Declaration of Peter Muhic (“Muhic Decl.”), ECF No. 147 ¶ 9. The parties’ document production

resulted in the production of over 16,000 documents, of which “significant numbers . . . had to be

translated into English from Japanese.” Id. These documents included “warranty data and records

of . . . stress testing” performed by Defendants. Id. ¶ 10. On March 31, 2023, this Court entered an

order referring the matter to mediation and staying all pending deadlines while mediation remained

ongoing. ECF No. 127. The parties continued to exchange document discovery regarding the

alleged defect and Defendants’ relevant testing throughout the mediation, and on November 6,

2023, the parties informed the Court that they had reached an agreement in principle as to all

material terms of the settlement. Muhic Decl. ¶ 12; ECF Nos. 128-133. With the parties’ consent,

all further proceedings were referred to this Court on March 12, 2024. ECF No. 140. The parties

thereafter filed this motion seeking preliminary approval of the Agreement. ECF No. 146.

The proposed settlement class (“Settlement Class Member”) is defined as:

All natural persons who are residents of the continental United

States, Alaska, or Hawaii, currently or previously owning or leasing a

Settlement Class Vehicle originally purchased or leased in the continental

United States, Alaska, or Hawaii. Excluded from the Settlement Class are

(a) all Judges who presided over the Action and their spouses; (b) all

current employees, officers, directors of Defendants and their immediate

family members; (c) any affiliate, parent, or subsidiary of Defendants and

any entity in which Defendants have a controlling interest; (d) used car

dealers; (e) anyone who purchased a Settlement Class Vehicle solely for

resale; (f) anyone who purchased a Settlement Class Vehicle with a

salvaged title and/or any insurance company that acquired a Settlement

Class Vehicle as a result of a total loss; (g) issuers of extended vehicle

warranties and service contracts; (h) any Settlement Class Member who,

prior to the date of the Settlement Agreement, settled with and released

Defendants or any Released Parties from any Released Claims; (i) any

Settlement Class Member filing a timely and proper Request for Exclusion

from the Settlement Class.

Agreement, § C, ¶ 1. The term “Settlement Class Vehicle” refers to “model year 2019

through 2022 Subaru Ascent vehicles, model year 2019 through 2022 Subaru Forester vehicles,

model year 2020 through 2022 Subaru Legacy vehicles, and model year 2020 through 2022 Subaru

Outback vehicles.” Agreement, § B, ¶ 27.

The Agreement provides Settlement Class Members with two types of relief, in exchange

for which the Settlement Class Members will release Defendants from any and all causes of action

or claims for damages “concerning alleged defects in the windshields of the Settlement Class

Vehicles.” Agreement, § B, ¶ 22; Id. § F, ¶ 3. First, under the proposed terms of the Agreement,

qualifying Settlement Class Members are eligible to recover between 100% and 200% of their out-

of-pocket expenses incurred as a result of needing to repair or replace their windshields due to the

alleged defect depending on the proof they can produce to accompany their claims. Agreement,

§ G, ¶ 2(e). The Agreement sorts qualifying Settlement Class Members into two groups: (1) those

who can produce proof that they incurred a qualifying repair cost prior to the close of the claims

period and contemporaneous photographs confirming the damage (Tier 1); and (2) those can

produce proof of costs prior to the notice date but do not have contemporaneous photographs of

the damage (Tier 2). Agreement, § G, ¶ 2. Settlement Class Members who can satisfy the

requirements of Tier 1 claims are eligible to recover at least 125% of their costs. Agreement, § G,

¶ 2(e)(ii)(2). Those who fall under Tier 2 will recover up to 100% of their costs, subject to a

conditional $2 million limit,2 upon completion of a photo questionnaire designed to verify their

2 The Agreement provides that the sum of Tier 2 claims is not expected to exceed $2 million, but

in the event it does, each claim shall be proportionally reduced according to the number of

qualifying claims filed. Agreement, § G, ¶ 2(e)(3). Absent clear evidence of fraud, no successful

Tier 2 claimant will receive less than 25% of their approved claim. Id.; ECF No. 146-1 at 18.

claim. Agreement, § G, ¶ 2(e)(ii)(3); ECF No. 146-1 at 17. There is no limit to the total amount of

Tier 1 claims to be paid by Defendants. ECF No. 146-1 at 17.

The second form of relief provided by the Agreement is an extended warranty for a period

of eight years or 100,000 miles, whichever occurs first, which will cover all parts and costs

associated with a one-time replacement of a windshield with the alleged defect (a “pre-counter-

measure windshield”) with a windshield without the alleged defect (a “post-counter-measure

windshield”), to be performed by an Authorized Subaru Dealer. Agreement, § G, ¶ 1. The extended

warranty period will become effective three business days following the deadline for Settlement

Class Members to submit claims for reimbursement. Id. All Settlement Class Members are eligible

for the extended warranty period, even if they do not qualify for reimbursement, and the extended

warranty period is transferrable between owners and/or lessees during its coverage period. Id.

In addition to these terms, the Agreement sets forth a proposal for notice and administration

of the settlement. Under this plan, the Settlement Administrator, who the parties propose should

be JND Legal Administration, will disseminate all required notices, administer any requests for

exclusion, and oversee the review, approval, and payment of any claims for reimbursement made

pursuant to the Agreement. ECF No. 146-1 at 19. The Agreement provides that Defendants shall

bear all costs associated with notice of the settlement and settlement administration without any

impact on the Settlement Class Members’ potential recovery. Agreement, § C, ¶ 3. The Agreement

also contains terms regarding attorneys’ fees, costs, and service awards to the named plaintiffs,

which Plaintiffs represent were separately negotiated after the parties agreed to the substantive

terms of the settlement. Muhic Decl., ¶ 14. Under the terms of the agreement, the fees, costs, or

awards ultimately granted will not reduce the benefits available to the Settlement Class Members.

Agreement, § N, ¶ 1. Plaintiffs do not currently seek the Court’s approval of the fees, costs, or

awards listed, which will be the subject of a separate motion. ECF No. 146-1 at 23-24.

Discussion

I. Provisional Certification of the Settlement Class

“Federal Rule of Civil Procedure 23 allows the Court to certify a class for settlement

purposes only.” In re Prudential Ins. Co. of Am. Sales Pracs. Litig., 962 F. Supp. 450, 508 (D.N.J.

1997). “To certify a class for settlement purposes, a district court must determine that the

requirements for class certification under Rule 23(a) and (b) are met.” Atis v. Freedom Mortg.

Corp., Civ. No. 15-03424, 2018 WL 5801544, at *5 (D.N.J. Nov. 6, 2018) (citing In re Pet Food

Prods. Liab. Litig., 629 F.3d 333, 341 (3d Cir. 2010)). “Additionally, where, as here, a settlement

class is sought to be certified under Rule 23(b)(3), the class must satisfy the Rule’s superiority and

predominance requirements.” Chemi v. Champion Mortg., No. 2:05-cv-1238, 2009 WL 1470429,

at *3 (D.N.J. May 26, 2009).

A. Rule 23(a)

The Court begins with the requirements of Rule 23(a). See In re Modafinil Antitrust Litig.,

837 F.3d 238, 249 (3d Cir. 2016) (noting that “the requirements of Rule 23(a) are ‘threshold

requirements’” and should be considered first). Rule 23(a) sets out four prerequisites to the

certification of a class: (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of

representation. In re Prudential, 962 F. Supp. at 508. “A plaintiff bears the burden of demonstrating

that these requirements are met by a preponderance of the evidence, and the district court ‘must

make whatever factual and legal inquiries are necessary and must consider all relevant evidence

and arguments presented by the parties.’” Udeen v. Subaru of Am., Inc., Civ. No. 18-17334, 2019

WL 4894568, at *4 (D.N.J. Oct. 4, 2019) (quoting In re Hydrogen Peroxide Antitrust Litig., 552

F.3d 305, 307 (3d Cir. 2008)). The Court addresses each requirement in turn.

1. Numerosity

Pursuant to Rule 23(a)(1), a class action may only be maintained if “the class is so

numerous that joinder of all members is impracticable.” Fed. R. Civ. P. 23(a)(1); Chemi, 2009 WL

1470429, at *6. In the Third Circuit, “[n]o minimum number of plaintiffs is required to maintain a

suit as a class action,” but “generally if the named plaintiff demonstrates that the potential number

of plaintiffs exceeds 40, the first prong of Rule 23(a) has been met.” Modafinil, 837 F.3d at 249-

50 (alteration in original) (quoting Stewart v. Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001)). In

this case, the documents supporting the motion indicate that there are approximately 1.4 million

class vehicles in the United States, indicating that there are over one million potential plaintiffs.

ECF No. 146-1 at 25. The Court is therefore satisfied that the proposed class is sufficiently

numerous.

2. Commonality

Rule 23(a)(2) requires that “there are questions of law or fact common to the class.” Fed.

R. Civ. P. 23(a)(2). “Commonality requires the plaintiff to demonstrate that the class members

‘have suffered the same injury.’” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349-50 (2011)

(quoting Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 157 (1982)). This requirement “‘does

not mean merely that [class members] have all suffered a violation of the same provision of law’;

rather, ‘[t]heir claims must depend on a common contention . . . of such a nature that it is capable

of classwide resolution.’” Alin v. Honda Motor Co., Ltd., Civ. No. 08-4825, 2012 WL 8751045,

at *4 (D.N.J. Apr. 13, 2012) (alterations in original) (quoting Dukes, 564 U.S. at 350). “The

commonality inquiry is satisfied where ‘all putative class members were subjected to the same

harmful conduct by the defendant,’ even in the presence of ‘legal and factual differences among

the putative class members.’” Neale v. Volvo Cars of N. Am., LLC, Civ. No. 10-4407, 2021 WL

3013009, at *6 (D.N.J. July 15, 2021) (quoting In re Cmty. Bank of N. Va. Mortg. Lending Pracs.

Litig., 795 F.3d 380, 398 (3d Cir. 2015)).

In this case, Plaintiffs allege that Defendants knew or should have known that the

Settlement Class Vehicles suffered from design defects that caused the windshields to be

unreasonably susceptible to cracking, and those defects were material, should have been disclosed,

and caused Plaintiffs to incur hundreds of dollars in expenses to repair or replace their windshields.

ECF No. 69 ¶¶ 48-62. Evidence concerning the alleged defect and Defendants’ knowledge of the

alleged defect, as well as issues concerning Defendants’ duty to disclose the alleged defect, are all

central to the validity of Plaintiffs’ claims and would be common to all proposed class members.

Therefore, the commonality requirement is satisfied.

3. Typicality

Rule 23(a)(3) requires that “the claims or defenses of the representative parties [be] typical

of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). This requirement is “intended to

preclude certification of those cases where the legal theories of the named plaintiffs potentially

conflict with those of the absentees.” Laurens v. Volvo Car USA, LLC, Civ. No. 2:18-cv-8798,

2020 WL 10223641, at *7 (D.N.J. Dec. 8, 2020) (quoting Newton v. Merrill Lynch, Pierce, Fenner

& Smith, Inc., 259 F.3d 154, 183 (3d Cir. 2001)). Although “closely related” to the commonality

requirement, the typicality requirement works to “screen out class actions in which the legal or

factual position of the representatives is markedly different from that of other members of the class

even though common issues of fact or law are present.” Marcus v. BMW of N. Am., LLC, 687

F.3d 583, 598 (3d Cir. 2012) (quoting 7A Charles Alan Wright et al., Federal Practice & Procedure

§ 1764 (3d ed. 2005)). “The Third Circuit has adopted a ‘low threshold’ for typicality,” and “[e]ven

pronounced factual differences’ will not destroy typicality where there is a ‘strong similarity of

legal theories’ or where each claim ‘arises from the same practice or course of conduct.’” Neale,

2021 WL 3013009, at *6 (quoting In re Nat’l Football League Players Concussion Inj. Litig. (In

re NFL Players) 821 F.3d 410, 428 (3d Cir. 2016)).

Here, Plaintiffs’ and the class members’ claims all arise out of the same alleged defect, the

same acts Defendants allegedly engaged in to conceal that defect, and the same resulting damages.

Plaintiffs and the proposed class members are all current or previous owners or lessees of

Settlement Class Vehicles. Plaintiffs and the class members would make the same legal arguments

to support their claims. Therefore, the typicality requirement is satisfied. See id. at *7 (finding

typicality met where plaintiffs alleged uniform defect across all class vehicles); Udeen, 2019 WL

4894568, at *5 (finding typicality satisfied where claims “all originated from the same allegedly

defective product and Defendants’ alleged actions to conceal that defect, relying on the same legal

theories”); Alin, 2012 WL 8751045, at *6 (finding typicality satisfied where claims involved

defect common to all class vehicles, named plaintiffs each owned or leased a vehicle in the class,

and each plaintiff incurred repair costs as a result of alleged defects).

4. Adequacy of Representation

The final Rule 23(a) prerequisite to class certification is that “the representative parties will

fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). “This ‘adequacy’

requirement has two components: (1) whether Plaintiffs’ counsel is qualified, experienced, and

able to conduct the litigation; and (2) whether any of conflicts of interest exist between the named

parties and the class they seek to represent.” Udeen, 2019 WL 4894568, at *5. “[T]he linchpin of

the adequacy requirement is the alignment of interests and incentives between the representative

plaintiffs and the rest of the class.” Dewey v. Volkswagen Aktiengesellschaft, 681 F.3d 170, 183

(3d Cir. 2012). The Court must determine whether the named representatives have “the ability and

the incentive to represent the claims of the class vigorously, that [they have] obtained adequate

counsel, and that there is no conflict between the [representatives’] claims and those asserted on

behalf of the class.” Laurens, 2020 WL 10223641, at *10 (quoting Sapir v. Averback, Civ. No.

14-CV-07331, 2015 WL 858283, at *3 (D.N.J. Feb. 26, 2015)).

a) Adequacy of Class Counsel

Rule 23(g) provides the criteria for evaluating the qualifications of Plaintiffs’ counsel.

Sheinberg v. Sorensen, 606 F.3d 130, 132 (3d Cir. 2010). Accordingly, the Court considers: (1) the

work that counsel has done in identifying and investigating potential claims; (2) counsel’s

experience; (3) counsel’s knowledge of applicable law; and (4) the resources counsel will expend

in representing the class. Fed. R. Civ. P. 23(g)(1)(A). The Court may also consider “any other

matter pertinent to counsel’s ability to fairly and adequately represent the interests of the class.”

Fed. R. Civ. P. 23(g)(1)(B).

Defendant does not oppose the appointment of the proposed class counsel, and the Court

finds that the proposed class counsel are well-qualified to represent the class. The proposed class

counsel is comprised of attorneys with extensive experience in multi-state class actions and other

complex litigation, including numerous class actions involving motor vehicle products liability

claims. See Declaration of Edwin J. Kilpela, Jr. (“Kilpela Decl.”), ¶¶ 4-5 [ECF No. 146-2];

Declaration of Russell Paul (“Paul Decl.”), ¶¶ 4-6 [ECF No. 146-3]; Muhic Decl., ¶ 5 [ECF No.

147]. Counsel has also been involved in this litigation since its early stages [ECF Nos. 4, 17, 28],

and throughout this time, has demonstrated a thorough knowledge of the applicable law. Moreover,

counsel has invested a significant amount of time and resources in investigating the claims at issue,

engaging in formal discovery, reviewing test results, consulting with technical experts, and

negotiating the terms of the settlement through a lengthy formal mediation process. Muhic Decl.,

¶¶ 8, 16. Therefore, the Court finds that Plaintiffs have established the adequacy of counsel.

b) Adequacy of Representative Plaintiffs

“Class representatives are adequate if they demonstrate (1) ‘[a] minimal degree of

knowledge’ about the litigation; and (2) that no ‘fundamental’ conflict of interest exists between

the representatives and the class.” Neale, 2021 WL 3013009, at *7 (quoting In re NFL Players,

821 F.3d at 430). Here, the record shows that Plaintiffs assisted counsel with responding to written

discovery requests, gave deposition testimony, and remained in contact with counsel throughout

the settlement negotiations process. Muhic Decl., ¶ 20. Moreover, the Court can find no

fundamental conflict of interest between Plaintiffs and the defined class. Although the Agreement

divides the class into groups and provides different benefits to each one, there is nothing to suggest

that the groups were drawn to disproportionately favor Plaintiffs. Compare Rossini v. PNC Fin.

Servs. Grp., Inc., Civ. No. 2:18-cv-1370, 2020 WL 3481458, at *9 (W.D. Pa. June 26, 2020)

(finding requirement satisfied where named plaintiffs were also members of “lesser” classes and

distribution appeared to reflect reasonable value of actual injury), with Dewey, 681 F.3d at 187-

88 (finding fundamental conflict where proposed allocation gave named plaintiffs’ group priority

access to available funds). In addition, to the extent that Plaintiffs are eligible for reimbursement,

the Agreement is structured such that the payment of claims to one group has no impact on the

amount paid to the other. See Dewey, 681 F.3d at 187-88. The Court finds that there is an alignment

of interests between Plaintiffs and the proposed settlement class and that Plaintiffs are appropriate

representatives for this litigation.

B. Rule 23(b)(3) — Predominance and Superiority

Having determined that Plaintiffs have satisfied the prerequisites of Rule 23(a), the Court

next considers whether Plaintiffs have met the requirements of Rule 23(b)(3), that “questions of

law or fact common to class members predominate over any questions affecting only individual

members, and that a class action is superior to other available methods for fairly and efficiently

adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). The “predominance inquiry tests whether

proposed classes are sufficiently cohesive to warrant adjudication by representation.” Amchem

Prods., Inc. v. Windsor, 521 U.S. 591, 622 (1997). As for superiority, the Court’s task is to

“balance, in terms of fairness and efficiency, the class action method of proceeding against

alternative available methods of adjudication.” Rudel Corp. v. Heartland Payment Sys., Inc., Civ.

No. 16-2229, 2017 WL 4422416, at *4 (D.N.J. Oct. 4, 2017) (quoting Smith v. Pro. Billing &

Mgmt. Servs., Inc., Civ. No. 06-4453, 2007 WL 4191749, at *4 (D.N.J. Nov. 21, 2007)).

“[T]he focus of the predominance inquiry is on whether the defendant’s conduct was

common as to all of the class members, and whether all of the class members were harmed by the

defendant’s conduct.” Sullivan v. DB Invs., Inc., 667 F.3d 273, 297 (3d Cir. 2011). Here, the

Settlement Class consists of all owners and lessees of Settlement Class Vehicles that were

originally purchased in the continental United States, Alaska, or Hawaii. Agreement, § C ¶ 1. The

asserted claims are, broadly speaking, breach of express warranty, breach of implied warranty of

merchantability, violations of various state and federal consumer protection statutes, and unjust

enrichment (CAC, ¶¶ 302-523). The alleged design defect and Subaru’s alleged conduct regarding

the manufacture and sale of the Settlement Class Vehicles lies at the core of these claims, and each

Settlement Class member is alleged to have been harmed in the same way. These common issues

predominate over any individual variations in potential claims, such as differences in state law or

the precise figure of damages.3

The class action is also the “superior” method of adjudicating this controversy.

Rule 23(b)(3) provides courts with a non-exhaustive list of factors for consideration when

determining the superiority of a class action: (1) the class members’ interests in individually

litigating separate actions; (2) the extent and nature of any related litigation begun by or against

the class members; (3) the desirability or undesirability of concentrating the claims in a particular

forum; and (4) the likely difficulties in managing a class action. Fed. R. Civ. P. 23(b)(3). Here,

individual class members have little interest in maintaining separate actions because their alleged

losses are relatively minor compared to the cost of prosecuting a lawsuit. See In re Warfarin

Sodium Antitrust Litig., 391 F.3d 516, 534 (3d Cir. 2004). Moreover, the Court is not aware of

other litigation concerning this controversy, and concentrating the claims in New Jersey is

desirable because New Jersey is Defendant SOA’s state of incorporation, as well as where it

maintains its principal place of business and headquarters. CAC, ECF No. 27 ¶ 38. Therefore, the

Court finds that the superiority requirement is satisfied. See Atis, 2018 WL 5801544, at *7.

II. Appointment of Class Counsel

Having determined that the proposed class is suitable for certification, the Court must now

appoint class counsel. See Fed. R. Civ. P. 23(g)(1); see also Jones v. Com. Bancorp, Inc., Civ. No.

3 In any event, such differences likely would not defeat the predominance requirement, as the class

at issue is presented for settlement purposes only. See McGowan v. CFG Health Network, LLC,

Case No. 3:22-cv-2770, 2024 WL 1340329, at *6 (D.N.J. Mar. 28, 2024) (“Where, as here,

‘common issues which determine liability predominate,’ calculating damages on an individual

basis does not prevent an otherwise valid certification.” (quoting Bogosian v. Gulf Oil Corp., 561

F.2d 434, 456 (3d Cir. 1977)); Sullivan, 667 F.3d at 304 (“[S]tate law variations are largely

‘irrelevant to certification of a settlement class.” (quoting In re Warfarin Sodium Antitrust Litig.,

391 F.3d 516, 529 (3d Cir. 2004)).

05-5600, 2007 WL 2085357, at *4 (D.N.J. July 16, 2007). Here, Plaintiffs seek an order appointing

their attorneys, Peter A. Muhic, Russell D. Paul, and Edwin J. Kilpela, Jr., as Settlement Class

Counsel. As noted above, Plaintiffs’ counsel have extensive prior experience with complex and

class action litigation, including those involving alleged motor vehicle defects. Moreover, counsel

have collectively and individually expended considerable resources in investigating the claims in

this action. See Kilpela Decl., ¶ 6; Paul Decl., ¶ 8; Muhic Decl., ¶¶ 7-16. Therefore, the Court finds

that Peter A. Muhic, Russell D. Paul, and Edwin J. Kilpela, Jr., are fit to serve as Settlement Class

Counsel and will grant Plaintiffs’ request.

III. Preliminary Approval of the Proposed Settlement Agreement

“Under Federal Rule of Civil Procedure 23(e), the settlement of a class action requires

court approval, which may issue only ‘on finding that [the settlement] is fair, reasonable, and

adequate.’” In re Nat’l Football League Players’ Concussion Inj. Litig. (In re Nat’l Football

League) 961 F. Supp. 2d 708, 713 (E.D. Pa. 2014) (quoting Fed. R. Civ. P. 23(e)(2)). Review of a

proposed class settlement typically proceeds in two stages. At the first stage, preliminary approval,

the reviewing court performs a “preliminary fairness evaluation” to determine “whether the

proposed settlement is ‘likely’ to be approved under Rule 23(e)(2).” Wood v. Saroj & Manju Invs.

Phila. LLC, Civ. No. 19-2820, 2020 WL 7711409, at *10 (E.D. Pa. Dec. 28, 2020) (quoting Fed.

R. Civ. P. 23(e)(1)(B)). If the court grants preliminary approval, the court then directs that notice

of the settlement be provided to all class members. At the second stage, the court holds a formal

hearing to determine whether the settlement is “fair, reasonable, and adequate.” Weissman v.

Philip C. Gutworth, P.A., Civ. No. 14-0666, 2015 WL 333465, at *2 (D.N.J. Jan. 23, 2015)

(quoting Fed. R. Civ. P. 23(e)(2)). In this case, the proposed settlement is under the first stage of

review.

A. Fairness

“Preliminary approval is appropriate where the proposed settlement is the result of the

parties’ good faith negotiations, there are no obvious deficiencies and the settlement falls within

the range of reason.” Zimmerman v. Zwicker & Assocs., P.C., 2011 WL 65912, at *2 (D.N.J. Jan.

10, 2011). At the preliminary approval stage, the court’s inquiry generally considers whether “(1)

the negotiations occurred at arm’s length; (2) there was sufficient discovery; (3) the proponents of

the settlement are experienced in similar litigation; and (4) only a small fraction of the class

objected.” In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 785

(3d Cir. 1995). These factors, if established, will impart a presumption of fairness upon the

proposed settlement. In re Nat’l Football League, 961 F. Supp. 2d at 714.

The Court’s preliminary approval is not binding and is typically granted unless the

proposed settlement is obviously deficient. Weissman, 2015 WL 333465, at *2 That said,

preliminary approval is not merely a “rubber stamp” of the parties’ agreement. In re Nat’l Football

League, 961 F. Supp. 2d at 714. “While the issue of final settlement approval is not presently

before the Court, it is important to consider the final approval factors during this stage so as to

identify any potential issues that could impede the offer’s completion.” Singleton v. First Student

Mgmt. LLC, Civ. No. 13- 1744, 2014 WL 3865853, at *5 (D.N.J. Aug. 6, 2014). As articulated by

the Third Circuit, these factors, sometimes called the Girsh factors, include:

(1) the complexity, expense and likely duration of the litigation;

(2) the reaction of the class to the settlement;

(3) the stage of the proceedings and the amount of discovery completed;

(4) the risks of establishing liability;

(5) the risks of establishing damages;

(6) the risks of maintaining the class action through the trial;

(7) the ability of the defendants to withstand a greater judgment;

(8) the range of reasonableness of the settlement fund in light of the best

possible recovery; and

(9) the range of reasonableness of the settlement fund to a possible

recovery in light of all the attendant risks of litigation.

Girsh v. Jepson, 521 F.2d 153, 157 (3d Cir. 1975).

Having considered all of the aforementioned factors, the Court finds that each factor

weighs in favor of preliminary approval. The proposed settlement appears to have been negotiated

at arm’s length, having been crafted over the course of multiple in-person mediation sessions and

telephonic meetings with a third-party mediator. Muhic Decl. ¶ 11. The parties also appear to have

exchanged substantial discovery, including over 16,000 pages of documents, responses to written

interrogatories, subpoenas to third parties, and depositions of both parties’ representatives. Id. ¶ 9.

Negotiations lasted several months before the parties reached an agreement in principle as to all

material terms. Id. ¶¶ 12-14. As noted above, Plaintiffs’ counsel has substantial experience in

similar litigation. And, finally, though the Court does not yet have information regarding potential

objections from putative class members, preliminary approval is appropriate because the putative

class members will have the opportunity to object after they are formally notified of the class action

and proposed settlement. See Weissman, 2015 WL 333465, at *2.

To the extent they can be assessed at this stage, the Girsh factors also support preliminary

approval. With respect to the first factor, this case involves complex technical and engineering

questions. Defendants have consistently denied, and continue to deny, all allegations of liability or

wrongdoing, as well as that Plaintiffs’ claims would be suitable for class treatment if the action

proceeded through litigation and trial. Agreement, § A, ¶ 3. Were the matter to proceed, the parties

“would be engaged in contested motion practice and adversarial litigation for years.” ECF No.

146-1 at 34. As a result, given the “probable costs, in both time and money of continued litigation,”

the Court finds that the first factor weighs in favor of preliminary approval. Little-King v. Hayt

Hayt & Landau, Civ. No. 11-5621, 2013 WL 4874349, at *8 (D.N.J. Sept. 10, 2013) (quoting In

re Cendant Corp. Litig., 264 F.3d 201, 233 (3d Cir. 2001)).

The Court cannot at this point assess the second Girsh factor, since the class has yet to be

notified of the litigation. However, the third factor arguably supports approval. As discussed, the

parties have exchanged a substantial volume of discovery regarding the alleged windshield defect,

providing them with a clear understanding of the strengths and weaknesses of the case. See Muhic

Decl. ¶ 13. The fourth and fifth factors, which “survey the potential risks and rewards of

proceeding to litigation in order to weigh the likelihood of success against the benefits of an

immediate settlement,” similarly favor approval. In re Warfarin, 391 F.3d at 537. Here, if the action

were to proceed to trial, the parties would likely contest certification, liability, and damages, none

of which are certain in this case and would require the parties to expend significant resources to

resolve. ECF No. 146-1 at 42. The presence of “significant uncertainties and risks in continuing

this litigation” support granting preliminary approval. Singleton, 2014 WL 3865853, at *6. With

respect to the sixth factor, which “measures the likelihood of obtaining and keeping a class

certification if the action were to proceed to trial,” Plaintiffs candidly acknowledge that “there is

a risk of not obtaining class certification should this action be litigated rather than settled” based

on Defendants’ likely argument that individualized factual issues could render the proposed class

unmanageable. ECF No. 146-1 at 42; see In re Warfarin, 391 F.3d at 537 (“A district court retains

the authority to decertify or modify a class at any time during the litigation if it proves to be

unmanageable.”). The Court agrees with Plaintiffs’ assessment and finds that the sixth factor

likewise weighs in favor of approval.

The seventh Girsh factor considers whether Defendants “could withstand a judgment for

an amount significantly greater than the [proposed] Settlement.” Little-King, 2013 WL 4874349,

at *11 (quoting Cendant Corp., 264 F.3d at 240). This factor “is most relevant when the defendant’s

professed inability to pay is used to justify the amount of the settlement.” Udeen, 2019 WL

4894568, at *3 (quoting In re NFL Players, 821 F.3d at 440). This factor is neutral, since the parties

have not presented any arguments regarding Defendants’ ability to pay a larger settlement. In re

NFL Players, 821 F.3d at 440.

Finally, as for the eighth and ninth Girsh factors, the Court considers “whether the

settlement represents a good value for a weak case or a poor value for a strong case.” Id. (quoting

In re Warfarin, 391 F.3d at 538). “The reasonableness of a proposed settlement is assessed by

comparing ‘the present value of the damages plaintiffs would likely recover if successful [at trial],

appropriately discounted for the risk of not prevailing . . . with the amount of the proposed

settlement.” Sullivan, 667 F.3d at 323-34 (alterations in original) (quoting In re Prudential Ins. Co.

Am. Sales Prac. Litig. Agent Actions, 148 F.3d 283, 322 (3d Cir. 1998)). Here, the proposed

settlement will provide Settlement Class Members with out-of-pocket reimbursements for up to

100% or more of their Qualified Repair Expenses, as well as an extended warranty that will cover

“all parts and labor costs associated with the replacement of the windshield due to a Qualifying

Crack, performed by an Authorized Subaru Dealer.” Agreement, § G, ¶ 1(c). Moreover, the

Agreement assigns the costs of administrating the settlement to Defendants without reducing the

available benefits to any Settlement Class Members. Id. ¶ 5(a). In that regard, the proposed

settlement provides targeted, specific relief to the Settlement Class Members that is proportionate

to their claims. Further, the proposed settlement ensures that the relief will be delivered in a

relatively timely fashion by requiring the Settlement Administrator to mail a check for the

approved recovery to the appropriate Settlement Class Member within sixty days of the finalization

of the final judgment and order in this matter. Id. § H, ¶ 1(a). See Udeen, 2019 WL 4894568, at

*3 (“Given the litigation risks Plaintiffs have identified, the provision of substantial, targeted, and

timely relief in the Agreement is certainly within the range of reasonableness.”). Therefore, the

eighth and ninth Girsh factors support preliminary approval.

In short, none of the aforementioned factors weigh against settlement, and, indeed, many

weigh in favor. Further, there is no indication that the proposed agreement improperly favors any

segment of the class over another. See Jones, 2007 WL 2085357, at *2. While the agreement

provides that the representative plaintiffs will each receive “Service Awards” for their services on

behalf of the class, those payments will not reduce the benefits being made to the Settlement Class

Members in any way, nor will the Settlement Class Members be required to pay any portion of

any attorneys’ fees or expenses ultimately awarded.4 Agreement, § N, ¶ 3. The proposed settlement

is reasonable and does not present any obvious deficiencies. Therefore, the standards for

preliminary approval are met.

B. Approval of the Proposed Notice Plan

Finally, Rule 23 requires that the Court “direct notice in a reasonable manner to all class

members who would be bound by the proposal” upon finding that the proposed settlement will

likely satisfy the requirements for final approval and the proposed class will meet the requirements

for final certification. Fed. R. Civ. P. 23(e)(1)(B). “To satisfy the notice requirement, the party

4 The Court emphasizes that the service payments to the class representatives and proposed fees

to class counsel are subject to approval at or after the final fairness hearing. Jones, 2007 WL

2085357, at *2.

proposing settlement must comply with the guidelines contained in Rule 23(c) and 23(e)(2).”

Shapiro v. Alliance MMA, Inc., Civ. No. 17-2583, 2018 WL 3158812, at *7 (D.N.J. June 28,

2018). Where, as here, certification is sought pursuant to Rule 23(b)(3), “the court must direct to

class members the best notice that is practicable under the circumstances, including individual

notice to all members who can be identified through reasonable effort.” Fed. R. Civ. P. 23(c)(2)(B).

“The form of notice is committed to the district court’s discretion, ‘subject to due process

requirements.’” Atis, 2018 WL 5801544, at *8 (quoting Zimmer Paper Prods., Inc. v. Berger &

Montague, P.C., 758 F.2d 86, 90 (3d Cir. 1985)).

The proposed notice must state, clearly and concisely and in plain, easily understood

language:

(i) the nature of the action;

(ii) the definition of the class certified;

(iii) the class claims, issues, or defenses;

(iv) that a class member may enter an appearance through an attorney if

the member so desires;

(v) that the court will exclude from the class any member who requests

exclusion;

(vi) the time and manner for requesting exclusion; and

(vii) the binding effect of a class judgment on members under

Rule 23(c)(3).

Fed. R. Civ. P. 23(c)(2)(B). “In addition to the requirements of Rule 23, due process further

requires that notice be ‘reasonably calculated, under all the circumstances, to apprise interested

parties of the pendency of the action and afford them an opportunity to present their objections.’”

In re NFL Players, 821 F.3d at 435 (quoting Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S.

306, 314 (1950)). Thus, the proposed notice must inform putative class members of: (1) the nature

of the pending litigation; (2) the general terms of the settlement; (3) the availability of additional

information from the court files; and (4) the right of any class member to appear and be heard at

the final fairness hearing. In re Prudential, 962 F. Supp. at 527. The notice “need not be unduly

specific,” but it must “describe, in detail, the nature of the proposed settlement, the circumstances

justifying it, and the consequences of accepting and opting out of it.” Atis, 2018 WL 5801544, at

*9 (quoting In re Diet Drugs, 226 F.R.D. 498, 518 (E.D. Pa. 2005)).

Here, the proposed notice program (the “Notice Plan”) provides that within seventy-five

days after the entry of a preliminary approval order, the Settlement Administrator shall begin

mailing the short-form notice, attached as Exhibit B to the Agreement [ECF No. 147-1 at 53-56],

to the current or last known addresses of all Settlement Class Members by first-class mail.

Agreement, § I, ¶ 2. Within the same time-frame, a long-form notice, attached as Exhibit A to the

Agreement [ECF No. 147-1 at 39-51], shall be made available on a website to be established by

Defendants (the “Settlement Website”). Id. Under the terms of the Notice Plan, Defendants will

obtain the names and last known addresses for the Settlement Class Members by reference to the

vehicle identification numbers of the Settlement Class Vehicles. Id. The Settlement Administrator

shall confirm the address information with the United States Postal Service, making updates where

necessary, prior to mailing the short-form notice. Id. If a notice is returned as undeliverable, the

Notice Plan requires the Settlement Administrator to conduct an additional search for an updated

address, and re-mail the notice to the extent it locates a new and current address. Id.5

The short-form notice will provide recipients with: a brief description of this action, the

Settlement Class, and the proposed settlement; a URL directing Settlement Class Members to the

5 Counsel’s Supplemental Declaration [ECF No. 153] provides additional detail regarding the

mailing and notice procedures to be followed by JND, which the Court has considered.

Settlement Website and advising them that the long-form notice can be found there; the deadline

for submitting claims, objections, or opt-out requests; and a toll-free number and/or email address

at which the Settlement Administrator can be reached for additional information or where

individuals may request a copy of the long-form notice. Id. § I, ¶ 3. The proposed long-form notice

provides detailed information about the consequences of accepting or opting out of the settlement,

how to submit a request for exclusion from the settlement, how Settlement Class Members can

raise objections at the final fairness hearing, and informs class members of Class Counsel’s intent

to seek attorneys’ fees. ECF No. 147-1 at 44-49. In addition to the long-form notice, the Settlement

Website will also provide Settlement Class Members with instructions for submitting claims for

reimbursement and contacting Defendants and Class Counsel, and will contain online claims

submission forms, a redacted version of the Agreement, and any additional information agreed to

by counsel for the parties. Agreement, § I, ¶ 2.

Having reviewed the proposed forms, the Court finds that they “fairly, accurately, and

neutrally describe the claims and parties in the litigation as well as the terms of the proposed

settlement and the identity of the parties entitled to participate in it.” Udeen, 2019 WL 4894568,

at *7 (quoting Shapiro, 2018 WL 3158812, at *7). Moreover, the Court finds that the proposed

Notice Plan implements the best notice practicable under the circumstances because it ensures a

relatively timely delivery of notice to the Settlement Class members, and to the extent that some

class members may not receive notice under the current proposal, there is no alternative method

of distribution that is more likely to result in delivery. See Jones, 2007 WL 2085357, at *5.

Therefore, the proposed notice program satisfies both Rule 23 and due process requirements.

IV. Appointment of Settlement Administrator

Plaintiffs also seek the provisional appointment of JND Legal Administration as the

Settlement Administrator. The settlement agreement provides by stipulation that Defendants will

bear all costs of notifying the Settlement Class Members and administrating the settlement. On the

record before it, the Court has identified no obvious conflict or other basis to deny the appointment.

Therefore, the Court will grant the provisional appointment of JND Legal Administration as the

Settlement Administrator.

ORDER

For all of the foregoing reasons, Plaintiffs’ unopposed motion for preliminary approval of

the proposed class action settlement is GRANTED. Accordingly, the Court having considered the

submissions, arguments, and authorities in support of preliminary approval of the settlement,

IT IS on this 3rd day of October 2024,

ORDERED that the Court hereby incorporates the terms of the parties’ Settlement

Agreement and Release (“Agreement”) for the purposes of this preliminary approval order,

including the definitions set forth in the Agreement [ECF No. 148]; and it is further

ORDERED that Plaintiffs’ request for conditional certification of the settlement class for

settlement purposes only is GRANTED as to the following class:

All natural persons who are residents of the continental United

States, Alaska, or Hawaii, currently or previously owning or leasing a

Settlement Class Vehicle originally purchased or leased in the continental

United States, Alaska, or Hawaii;

and it is further

ORDERED that consistent with the terms of the Agreement, the following individuals

and/or entities shall be excluded from the Settlement Class: