Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-02174/USCOURTS-casd-3_07-cv-02174-6/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 15:1 Antitrust Litigation

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MICHAEL SHAMES, individually and on

behalf of others similarly situated, and, 

GARY GRAMKOW, individually and on

behalf of others similarly situated,

Plaintiffs,

CASE NO. 07-CV-2174-MMA(WMC)

ORDER ON FINAL APPROVAL

OF CLASS ACTION SETTLEMENT,

ATTORNEYS’ FEES, COSTS, AND

INCENTIVE AWARD;

JUDGMENT AND DISMISSAL

vs. [Doc. Nos. 327 & 328]

HERTZ CORPORATION, et al.,

Defendants.

On October 29, 2012, this matter came before the Court on Plaintiffs’ Motion for Final

Approval of Class Settlement, [Doc. No. 327], and Motion for Attorney Fees, Reimbursement of

Expenses, and Incentive Award [Doc. No. 328].1

 For the reasons explained below, the Court

GRANTS Plaintiffs’ motions in their entirety.

/ / /

/ / /

/ / /

/ / /

/ / /

1

 All page citations to documents filed on the Court’s docket refer to the documents’ renumbered

CM/ECF pages, not to their native pagination.

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I. BACKGROUND

A. Class Action Allegations2

A “nonprofit mutual benefit corporation” created by state legislation in order to expand and

develop California’s tourism industry, the California Travel and Tourism Commission (the

“Commission”) is governed by thirty-seven commissioners, who simultaneously serve as directors.3

The Secretary of the Business, Transportation and Housing Agency chairs the Commission. Twelve

commissioners are appointed by the governor, while the remaining twenty-four are elected by the

tourism industry itself.

In 2006, the passenger rental car industry (hereafter, the “Rental Car Defendants”) proposed

changes to California law which were subsequently enacted. Under these changes, the passenger

rental car industry became the fifth tourism industry category under the Commission scheme and

agreed to pay a high assessment fee, greatly increasing the Commission’s budget. In exchange for

this increased funding, the Rental Car Defendants were allowed to “unbundle” fees charged to

customers and itemize such fees separately from the base rental rate. Significantly, the adopted

changes allowed the companies to “pass on some or all of the assessment to customers.”

Plaintiffs allege this led to the imposition of two specific fees on leisure rental car customers. 

First, pursuant to an agreement between the Rental Car Defendants and the Commission, a 2.5%

tourism assessment fee was added to the cost of a car rental which, in turn, helped fund the

Commission. Plaintiffs allege that the Commission then colluded with the Rental Car Defendants,

fixing rental car prices by passing on the 2.5% tourism assessment fee to customers. Second, the

Rental Car Defendants “unbundled” the already-existing airport concession fee charged to customers

to pay airports for the right to conduct business on airport premises; this fee has traditionally

2

 With minor alterations and omissions of citations, the following section is a near-verbatim

reproduction of the Ninth Circuit’s well-written summary of this case. Shames v. Cal. Travel & Tourism

Comm’n, 626 F.3d 1079, 1081-82 (9th Cir. 2010).

3

 The tourism industry is represented by five industry categories, one of which is the passenger

rental car industry, which was added in 2006. Each category is allotted a number of commission seats

based on the weighted percentage of assessments paid to the Commission by that category. Unlike the

other categories, the passenger rental car industry is specifically limited to six commission seats

regardless of the percentage of assessments paid to the Commission.

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amounted to 9% of the rental price. The bill permitted the Rental Car Defendants to charge this

concession fee separately from the base rental rate. According to Plaintiffs, the Commission also

colluded with the passenger rental car industry in passing the 9% concession fee on to customers as

an uniform add-on charge. Plaintiffs allege that these agreements between the rental car companies

and the Commission constituted pricefixing of rental car rates in violation of the Sherman Act

section 1. Plaintiffs also claim the Commission committed a host of Bagley-Keene Open Meeting

Act violations, specifically, failing to adhere to detailed notice requirements and impermissibly

holding closed session meetings.

Plaintiffs allege that, as a result of the Rental Car Defendants’ collusion, they and similarly

situated renters in the proposed settlement class paid a higher total price for the rental of a car at

California airports than they would have otherwise. Plaintiffs sought damages on behalf of

themselves and the class.

B. Procedural History

Plaintiffs originally filed suit on November 14, 2007. After several extensions of time to file

responsive pleadings, the Rental Car Defendants filed a motion to dismiss in January 2008. The

Commission and a now-dismissed individual defendant filed motions to dismiss shortly thereafter. 

On April 8, 2008, the Court granted all three motions to dismiss, denied a pending motion for

preliminary injunction, and granted Plaintiffs leave to amend their Complaint.

On May 1, 2008, Plaintiffs filed a First Amended Complaint. Thereafter, all Defendants

filed a second round of motions to dismiss. On July 28, 2008, the Court granted the Commission’s

motion to dismiss and entered judgment in its favor on September 24, 2008. The Rental Car

Defendants answered the First Amended Complaint on August 25, 2008. On October 23, 2008,

Plaintiffs appealed the Commission’s dismissal.

On November 2, 2008, the case was transferred to the undersigned’s caseload.

On January 18, 2011, after extensive briefing, oral argument, and a petition for rehearing, the

Ninth Circuit reversed the dismissal and reinstated the Commission in this case. In the meantime,

the remaining parties participated in settlement discussions with the assigned Magistrate Judge, met

and conferred to coordinate discovery among related cases, drafted multiple discovery plans, and

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participated in scheduling and status conferences with the Court.

Moreover, the parties conducted extensive discovery, including multiple rounds of written

discovery; the production, organization, and review of 737,000 pages of documents; 27 witness

depositions across the country; 17 third-party subpoenas resulting in the production of 1,200

documents; and devotion of 1,932 hours of expert witness time by Plaintiffs alone. 

Once the Commission re-entered the case, the parties continued litigation, participating in

additional status conferences, discovery conferences, and six private mediation sessions with Judge

Ronald M. Sabraw (ret.).

On October 10, 2011, the Court granted a stay of all proceedings to facilitate the parties’

settlement efforts. The Court extended the stay several times until the parties moved for preliminary

approval of class settlement on May 17, 2012.

This matter is now before the Court on final approval of the settlement, award of attorneys’

fees and costs, and approval of a class representative incentive award. On October 29, 2012, the

Court held a hearing on Plaintiffs’ pending motions. Professor Robert Fellmeth and attorneys

Dennis Stewart and Donald Rez appeared and argued on behalf of Plaintiffs. Attorney Michael

Tubach, accompanied by several other attorneys, appeared and argued on behalf of all Rental Car

Defendants. Objector Stephen Hagen appeared and argued on his own behalf, and attorney Steven

Miller appeared and argued on behalf of Objector Steven Signer.

C. The Settlement

1. Settlement Class

The settlement class is comprised of all Persons (other than those Persons who timely and

validly request exclusion from the Class) who rented a car directly from a Rental Car Defendant for

pick-up at a California Airport Location during the period from January 1, 2007 through November

14, 2007, and were charged and paid to the Rental Car Defendant an Airport Concession Fee,

Tourism Commission Assessment Fee, or both, for that rental car as a separate line item or items on

their invoices.

Excluded from the Class are: (i) rentals made pursuant to a pre-existing agreement between

a business or governmental entity and a Rental Car Defendant pursuant to which the rental charge

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was determined; and (ii) rentals in which the customer paid a package price to a third party tour

operator or on-line booking agency rather than a Rental Car Defendant. Also excluded from the

Class are the Defendants, the directors, officers, subsidiaries, and affiliates of Defendants, any

person, firm, trust, corporation, officer, director or other individual or entity in which any Defendant

has a controlling interest, and the legal representatives, affiliates, heirs, successors-in-interest or

assigns of any such excluded person, and Related Parties as well as any judges or mediators

involved in the Litigation (including U.S. District Judge Michael M. Anello, U.S. Magistrate Judge

McCurine, and Judge Ronald Sabraw (ret.)).

2. Settlement Terms

The settlement allows class members to choose from one of two payment options:

(1) Cash Option. Class members may choose to receive cash in the amount of $2.00 per

rental day with a minimum payment of $5, no matter the length of the rental. For example, a class

member who had a total of 10 rental days can choose to receive $20 cash. A class member who

rented for only 1 day may choose to receive $5.

(2) Voucher Option. Class members who rented for a total of less than 8 days during the

class period may choose a voucher for one free rental day (time and mileage) on any class of car up

to full size, no matter what class of car the class member originally rented.

Class members who rented for a total of more than 8 days during the class period may

choose a voucher for two free rental days on any class of car.

The free rental day vouchers may be stacked and may be used with most other rate discounts

and promotions otherwise available to renters. The vouchers may be used at any company-owned

location of the brand for which it is issued anywhere in the United States.4

 They also may be used

by anyone in the class member’s household at the same address. Defendants’ obligation to issue and

redeem vouchers and to pay all cash claims is uncapped.

Finally, the Commission has agreed, with no time limitation, to undertakings assuring future

compliance with the Bagley-Keene Act and other measures designed to assure that: (1) consumers

4

 Avis and Budget renters may use the vouchers on either brand.

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are correctly informed about the Tourism Commission Assessment; and (2) the Commission does

not facilitate concerted decision making by the Rental Car Defendants or by any other class of

assessed businesses on whether and how much to charge consumers for their respective Tourism

Commission Assessment obligations.

The sole class representative, Gary Gramkow, will receive an incentive award of $2,000.5

The parties have agreed that Defendants will not oppose Plaintiffs’ motion for attorneys’ fees

and costs, seeking a total of $5,870,000, which includes costs of $746,664. The parties agreed that

any attorneys’ fees and costs shall be paid separately from the settlement and shall not reduce the

benefits that accrue to the class. The parties negotiated this fee and cost award separately and after

agreeing on the class settlement. Judge Ronald Sabraw (ret.), who acted as the mediator for the

class settlement negotiations, also helped negotiate the fee and cost arrangement in a separate

mediation session.

II. DISCUSSION

A. Motion for Final Approval of Class Settlement

1. Class Certification

A plaintiff seeking a Rule 23(b)(3) class certification must first satisfy the prerequisites of

Rule 23(a). Once subsection (a) is satisfied, the purported class must then fulfill the requirements of

Rule 23(b)(3). In the present case, the Court previously preliminarily certified the following class: 

[A]ll Persons (other than those Persons who timely and validly request exclusion

from the Class) who rented a car directly from a Rental Car Defendant for pick up

at a California Airport Location during the period from January 1, 2007 through

November 14, 2007, and were charged and paid to the Rental Car Defendant an

Airport Concession Fee, Tourism Commission Assessment Fee, or both, for that

rental car as a separate line item or items on their invoices.

At that time, the Court concluded that the proposed class satisfied the numerosity,

commonality, typicality, and adequacy of representation requirements of Rule 23(a). [See Doc. No.

313.] The Court also found that the proposed class satisfied the predominance and superiority

requirements of Rule 23(b)(3). The Court reaffirms its prior certification of the class for the purpose

5

 Plaintiff Michael Shames is the second named plaintiff, but not a class representative for

incentive award purposes.

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of settlement. No party or class member has objected to certification of the settlement class.

2. The Settlement

a. Legal Standard 

Courts require a higher standard of fairness when settlement takes place prior to formal class

certification to ensure class counsel and defendant have not colluded in settling the case. Hanlon v.

Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). Ultimately, “[t]he court’s intrusion upon what

is otherwise a private consensual agreement negotiated between the parties to a lawsuit must be

limited to the extent necessary to reach a reasoned judgment that the agreement is not the product of

fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken

as a whole, is fair, reasonable and adequate to all concerned.” Officers for Justice v. Civil Serv.

Comm’n, 688 F.2d 615, 625 (9th Cir. 1982). “The question [the Court] address[es] is not whether

the final product could be prettier, smarter or snazzier, but whether it is fair, adequate and free from

collusion.” Hanlon, 150 F.3d at 1027.

Courts considers several factors when determining whether a proposed settlement is “fair,

adequate and reasonable” under Rule 23(e). Such factors may include: “[1] the strength of the

plaintiffs’ case; [2] the risk, expense, complexity, and likely duration of further litigation; [3] the

risk of maintaining class action status throughout the trial; [4] the amount offered in settlement; [5]

the extent of discovery completed and the stage of the proceedings; [6] the experience and views of

counsel; [7] the presence of a governmental participant; and [8] the reaction of the class members to

the proposed settlement.” Hanlon, 150 F.3d at 1026; see also Lane v. Facebook, Inc., ___ F.3d ___,

2012 U.S. App. LEXIS 19767, at *10 (9th Cir. Sept. 20, 2012) (quoting Hanlon, 150 F.3d at 1026).

Judicial policy favors settlement in class actions and other complex litigation where

substantial resources can be conserved by avoiding the time, cost, and rigors of formal litigation. In

re Wash. Pub. Power Supply Sys. Sec. Litig., 720 F. Supp. 1379, 1387 (D. Ariz. 1989).

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b. Analysis

i. The strength of the case and the risk, expense, complexity and

likely duration of further litigation

To determine whether the proposed settlement is fair, reasonable, and adequate, the Court

must balance against the risks of continued litigation (including the strengths and weaknesses of

Plaintiffs’ case), the benefits afforded to members of the Class, and the immediacy and certainty of a

substantial recovery. In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 458 (9th Cir. 2000). In other

words,

[t]he Court shall consider the vagaries of litigation and compare the

significance of immediate recovery by way of the compromise to the mere

possibility of relief in the future, after protracted and expensive litigation. In

this respect, “It has been held proper to take the bird in hand instead of a

prospective flock in the bush.”

Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 526 (C.D. Cal. 2004) (citations

omitted).

Here, Plaintiffs aver that the main challenge in proving their antitrust claim against the

Rental Car Defendants at trial would be able to establish the existence of a conspiracy among the

Rental Car Defendants, who “adamantly maintained that each company’s decision to surcharge

those fees on the effective date of the legislation permitting it was reached unilaterally, flowed

naturally from their unilateral self-interest, and was not the product of any agreement among them.” 

Although Plaintiffs were confident they had developed persuasive evidence which would support

such a finding, “as in most antitrust conspiracy cases, the meaning and inferences to be drawn from

such evidence here were hotly disputed. Defendants were prepared to put forth a broad

interpretation of the summary judgment standard in antitrust cases and argue that the evidence upon

which Plaintiffs relied was not sufficient to exclude the possibility that they acted independently.”

Moreover, Plaintiffs explain that their case was complicated by Defendants’ intention to

argue that the “Noerr-Pennington” doctrine, which involves immunity for petitioning the

government, shielded much of the evidence of meetings and communications among the Defendants. 

While Plaintiffs were confident they could ultimately distinguish the case at bar from the line of

cases applying the Noerr-Pennington doctrine, their evaluation of the risks and strength of this case

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nonetheless required taking into account the risk posed by this defense at summary judgment, trial,

and on appeal.

Finally, Plaintiffs faced obstacles in proving damages in this antitrust case, as Defendants

were prepared to argue that Plaintiffs could not prove damages even if they prevailed on the liability

issue. Thus, even if Plaintiffs prevailed at trial on the liability issue, they would have faced a fight

to establish damages.

Plaintiffs’ case was hardly a foregone victory that would have garnered a significantly more

favorable victory for the class at trial. In his declaration, Judge Ronald M. Sabraw, a highly

experienced and well-respected retired trial judge and mediator, observed that, “[t]he mediation

sessions and materials submitted demonstrated that both parties faced significant risks and were

advancing sharply contrasting theories and views both on liability and damages. It was readily

apparent that the matter, if litigated, would be highly contested by able counsel to an uncertain

result.” [Doc. No. 328-6 at ¶ 5.] In sum, this case presented Plaintiffs myriad challenges, uncertain

prospects at trial, and the possibility that recovery for the class would not come immediately, if ever. 

Indeed Judge Sabraw, a disinterested third party, describes the results achieved in this case as

“excellent . . . given the liability and damages risks [the parties] faced and with which [he] became

closely familiar with during the mediation.” Plaintiffs faced significant uncertainty and risk of nonrecovery at trial, making a pre-trial settlement a reasonable tactical choice.

ii. The stage of the proceedings

In the context of class action settlements, as long as the parties have sufficient information to

make an informed decision about settlement, “formal discovery is not a necessary ticket to the

bargaining table.” Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1239 (9th Cir. 1998) (quoting

In re Chicken Antitrust Litig., 669 F.2d 228, 241 (5th Cir. 1982)) (internal quotations omitted). 

Here, the parties engaged in extensive formal and informal discovery, including 27 depositions by

Plaintiffs alone, all forms of written discovery, production and review of 737,000 pages of

documents, and third-party discovery. The parties participated in a number of meet and confer

efforts and discovery conferences with the assigned Magistrate Judge. Experts were hired and

consulted for a total of 1,932 hours by Plaintiffs’ experts alone. The parties left no stone unturned,

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and utilized a multitude of discovery tools, in the discovery phase of this case. Class counsel were

highly knowledgeable about the case and well-prepared for settlement discussions.

iii. The settlement amount

To assess whether the amount offered is fair, the Court may compare the settlement amount

to the parties’ estimates of the maximum amount of damages recoverable in a successful litigation. 

In re Mego Fin. Corp. Sec. Litig., 213 F.3d at 459. While settlement amounts that are close to the

plaintiffs’ estimate of damages provide strong support for approval of the settlement, settlement

offers that constitute only a fraction of the potential recovery do not preclude a court from finding

that the settlement offer is fair. Id. (finding settlement amount constituting one-sixth of the potential

recovery was fair and adequate). Thus, district courts have found that settlements for substantially

less than the plaintiffs’ claimed damages may be fair and reasonable, especially when taking into

account the uncertainties involved with litigation. See, e.g., Williams v. Costco Wholesale Corp.,

2010 U.S. Dist. LEXIS 67731, at *9-*10 (S.D. Cal. July 7, 2010) (finding settlement amount

constituting approximately 75.6% of the plaintiffs’ claimed losses from unpaid overtime pay to be

adequate); Glass v. UBS Fin. Serv., Inc., 2007 U.S. Dist. LEXIS 8476, at *13 (N.D. Cal. Jan. 26,

2007) (finding settlement of wage and hour class action for 25% to 35% of the claimed damages to

be reasonable).

Plaintiffs aver that each class member sustained approximately $3 in actual damages for each

day they rented Defendants’ cars.6

 When compared to the estimated actual damages, the $2 cash

option represents a recovery of at least 67% of actual damages.7

 Moreover, a single-day voucher,

6

 At the final approval hearing, class counsel explained that this estimated damage amount was

determined by Plaintiffs’ economics expert, Michael Harris, who conducted highly complex

econometrics studies and prepared an expert report that Plaintiffs did not disclose to Defendants. While

Plaintiffs did not disclose the details of the report, they used some of the general information–such as

the damages amount–to reach settlement during mediation sessions. At the hearing, class counsel

provided acceptable explanations for not providing the expert report to the Court. Given that counsel

declares–subject to Rule 11–that their expert-determined damages are $3 per rental day, the Court finds

the damages amount credible. For their part, Defendants’ expert valued damages at $0.18 per rental day. 

Using $3 as the benchmark for purposes of this order actually raises the bar for reasonableness purposes,

as a $2 recovery is several times higher than $0.18 and a fraction of $3.

7

 In some cases, the cash option provides class members more value than their actual damages. 

Class members who claim only one rental day receive a minimum of $5. For these class members, the

(continued...)

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the value of which can range from $40 to more than $100, represents a minimum of 1,333% value

above actual damages.8

 Thus, while the cash option compensates each class member for nearly all

of–or slightly more than–his or her actual damages, the voucher option compensates each class

member for much more than actual damages. Objectors’ beliefs to the contrary notwithstanding, the

Court finds that the rental vouchers provide real value to class members who choose that payment

option. The settlement amount is fair and reasonable in light of actual damages.

iv. Whether the class has been fairly and adequately represented

during settlement negotiations

Counsel who represented the class included attorneys from three separate law firms and the

University of San Diego School of Law’s Center for Public Interest Law. Counsel were all

individually and as a group experienced in antitrust and class actions. The lead attorneys at each of

the three law firms and the Center for Public Interest Law all have over 30 years of antitrust, class

action, and public interest law experience. Their experience includes the litigation of antitrust and

class action cases through trial and appeal. The class was more than adequately represented by

experienced and competent counsel. As such, their support of the settlement should be accorded

significant consideration. See, e.g., Nat’l Rural Telcoms Coop. v. DIRECTV, Inc., 221 F.R.D. 523,

528 (C.D. Cal. 2004) (“Great weight is accorded to the recommendation of counsel, who are most

closely acquainted with the facts of the underlying litigation. This is because parties represented by

competent counsel are better positioned than courts to produce a settlement that fairly reflects each

party’s expected outcome in the litigation.”) (internal quotation marks and citations omitted).

7

(...continued)

cash option represents approximately 167% of their actual damages. Class members who claim 2 rental

days will receive 133% of their damages.

8

 At the hearing, counsel for both sides credibly noted that future rental rates are not amenable

to precise determination. Rates vary based on market conditions, season, and the locations of the

specific rental facilities throughout the United States. However, there is no need for exact future rental

values so long as the Court can reasonably value the settlement using reasonable voucher values. The

values the parties have proposed are reasonable. The rental vouchers continue to provide class members

a substantial value even based on Objector Hansmeier’s lower rental prices. [See Doc. No. 352-1 at 3

(citing full size car rental prices ranging from $18.40 to $53.49).] On the low end of Objector

Hansmeier’s range, a voucher for a $18.40 rental day still provides a class member many times the value

of his or her estimated actual damages. The same is true for the rates Objector Hansmeier cites of

weekend car rentals. [See id. at 5-6 (citing weekend prices ranging from $16.26 to 27.49).]

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Moreover, counsel represented the class fairly during settlement negotiations. Class counsel

did not capitulate early in the litigation process and accept a mediocre settlement for the class to

save themselves time, effort, and money. Rather, they vigilantly advocated for the class throughout

this case and during settlement talks, as evidenced in part by six separate day-long mediation

sessions in addition to a settlement conference with the assigned Magistrate Judge. The sheer

number of mediation sessions alone demonstrates class counsel’s dedication to the class. Moreover,

Judge Sabraw attests that the settlement negotiations he witnessed first-hand “were vigorous,

contentious and arms-length.” [Doc. No. 328-6 at ¶ 6.]

The Court finds that the class has been fairly and adequately represented during settlement

discussions.

v. The reaction of the class to the proposed settlement

The Ninth Circuit has held that the number of class members who object to a proposed

settlement is a factor the Court may consider in its settlement approval analysis. Mandujano v.

Basic Vegetable Prods. Inc., 541 F.2d 832, 837 (9th Cir. 1976). The absence of a large number of

objectors supports the fairness, reasonableness, and adequacy of the settlement. See In re Austrian

& German Bank Holocaust Litig., 80 F. Supp. 2d 164, 175 (S.D.N.Y. 2000) (“If only a small

number of objections are received, that fact can be viewed as indicative of the adequacy of the

settlement.”) (citations omitted); Boyd v. Bechtel Corp., 485 F. Supp. 610, 624 (N.D. Cal. 1979)

(finding “persuasive” the fact that 84% of the class has filed no opposition). Here, class notice was

mailed to approximately 3.5 million potential class members. Of the nearly 3.5 million class

members, only 143 class members opted out of the class as of September 6, 2012. Moreover, the

Court received only 9 formal objections (by 12 total objectors) to the settlement agreement,

attorneys’ fees request, or both. The small number of objections and class members who opted out

of the settlement, when compared to the large number of class members, favors approval. Nat’l

Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 529 (C.D. Cal. 2004); see also Ko v.

Natura Pet Prods., 2012 U.S. Dist. LEXIS 128615, at *15-*16 (N.D. Cal. Sept. 10, 2012); Collado

v. Toyota Motor Sales, U.S.A., Inc., 2011 U.S. Dist. LEXIS 133572, at *6-*7 (C.D. Cal. Oct. 17,

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2011); Wren v. RGIS Inventory Specialists, 2011 U.S. Dist. LEXIS 38667, at *33 (N.D. Cal. Apr. 1,

2011).

The Court next addresses the concerns of each objector.

a. Objections by Lawrence W. Stover, Jr.

Objector Lawrence W. Stover Jr. objects to the amount of attorneys’ fees. [Doc. No. 322

(“This amount is outrageous. My understanding is that the plaintiffs lost the case and the defendants

are only settling to be rid of a nuisance.”).] To the extent that Mr. Stover’s objection is based on his

“understanding,” his objection is unfounded since Plaintiffs have neither “won” nor “lost” the case. 

Mr. Stover’s, and other objectors’, objections to the reasonableness of the amount of attorneys’ fees

is discussed more fully in the Court’s ruling on Plaintiffs’ attorneys’ fees motion.

b. Objections by Valerie Large

Objector Valerie Large, a Canadian resident, notes that she only rents cars during week-long

trips to the United States, which means she would not be able to take advantage of week-long rental

rates if she chooses the voucher. [Doc. No. 321.] She states that the vouchers are useless to her

because she would be exposed to higher costs associated with shorter-term trips. Regardless of

whether Ms. Large’s assertion is true, she can nonetheless choose the cash settlement option, which

refunds her substantially all of the actual damages class members suffered if she chooses. Just

because the voucher option may provide class members more than their actual damages does not

render the cash settlement “derisory” or unfair. Ms. Large also objects that she will be forced to

conduct business with “a company with which [she] may not now choose to do business.” However,

class members may choose not to conduct business with Defendants by choosing the cash settlement

option, which, again, substantially reimburses class members their actual damages and does not

force them to conduct business with the Rental Car Defendants.

c. Objections by Aaron H. Pratt

Objector Aaron H. Pratt opines that the true aim of Plaintiffs’ suit is to “enrich legal

professionals,” and is “frivolous” because it “provides no meaningful or significant benefit to” class

members. [Doc. No. 319.] Mr. Pratt further opines that there “is nothing morally wrong with

passing a tax or a fee on to consumers.” With respect to Mr. Pratt’s belief that this case provides no

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meaningful or significant benefit to class members, the Court has found that, when compared to the

low damages each individual class member sustained, the proposed settlement either makes class

members substantially whole (the cash option) or provides class members significantly more benefit

than the actual damages suffered (the voucher option).9 If Mr. Pratt believes the cash option is de

minimus, that objection is unfounded, as $2 is substantial when compared to each class member’s

damages. As for Mr. Pratt’s opinion on the morality of passing taxes to consumers, his view is not a

challenge to the fairness of the settlement, but a general observation about the merits of this case and

his opinion about the propriety of Defendants’ conduct. Mr. Pratt is always free to opt out of the

class if his beliefs compel him to do so, but he has not raised a valid basis to challenge the fairness

of the settlement.

d. Objections by Ronald L. Harman

Objector Ronald L. Hartman, a member of the California State Bar, writes a scathing

condemnation of class action litigation in general. [Doc. No. 323.] He essentially accuses the

parties of colluding to settle the case for minimal benefit to class members in favor of Plaintiffs’

attorneys, who he believes will receive an unreasonably large fee award, and Defendants, who he

sees as benefitting from increased income from class members’ use of the vouchers. However, like

Mr. Pratt, Mr. Hartman does not recognize that the damages each class member suffered were

themselves very small. In stating that, as part of the parties’ class action fee-churning conspiracy,

“[i]f a class member does not want a voucher, he receives a de minimus payment such as $2.00,”

Mr. Hartman misses the point that the cash option substantially compensates class members, and the

voucher option, which is an added bonus, provides class members more than their actual damages. 

A class member who chooses the voucher option certainly does not receive de minimus value. In

9

 Of course, the value of an object or monetary amount is relative and depends on context. 

Objectors who deride the $2-per-day payment as illusory, worthless, or de minimus do so without

evaluating the $2 within the context of their estimated actual damages. $2 is a substantial recovery

when compared to their estimated $3 in actual damages. The objectors further ignore that those who

have a claim for only one rental day receive more than their actual damages because the class settlement

requires that every class member who chooses the cash option receive a minimum of $5. Indeed, 10 out

of the 12 objectors will receive $5 even though they have only one compensable rental day within the

class period. [Doc. No. 347 at 5.] Thus, while they otherwise would be entitled to only $2–or 67% of

their estimated actual damages–they will receive $5–or 167% of their estimated actual damages. In the

proper context, Objectors’ condemnation of the $2 payment as de minimus is unfounded.

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light of all the evidence before the Court, Mr. Hartman’s objections to the fairness of the class

settlement are unfounded. Moreover, as explained below, the Court finds no evidence of collusion

here.

e. Objections by Michael J. Schulz

Objector Michael J. Schulz lodges several objections. First, he believes the “claims process

is too cumbersome” because the Rental Car Defendants know who is in the class and could “send

the cash option to everyone in the class who does not make a claim requesting the non-cash option.” 

[Doc. No. 339.] However, there is nothing inherently objectionable with a claims-submission

process, as class action settlements often include this process, and courts routinely approve claimsmade settlements. See, e.g., Guschausky v. Am. Family Life Assur. Co., 851 F. Supp. 2d 1252, 1259

(D. Mont. 2012); Pelletz v. Weyerhaeuser Co., 255 F.R.D. 537, 544 (W.D. Wash. 2009) (approving

claims-made process where class members were required to “answer two reasonable claim forms

and submit a total of 10 photographs of the mold spotting.”); Lemus v. H&R Block Enters. LLC,

2012 U.S. Dist. LEXIS 119026 (N.D. Cal. Aug. 22, 2012) (approving claims-made settlement where

unclaimed funds reverted to the defendants); Morales v. Stevco, Inc., 2012 U.S. Dist. LEXIS 68640

(E.D. Cal. May 16, 2012) (recommending final approval of claims-made settlement); Harris v.

Vector Mktg. Corp., 2012 U.S. Dist. LEXIS 13797 (granting final approval of claims-made

settlement) (N.D. Cal. Feb. 6, 2012).

Mr. Schulz next objects that “the 8-day cut-off for non-cash claims is arbitrary and

unreasonable.” This “8-day cut-off” refers to the settlement terms which grant class members a 1-

day rental voucher if they had between 1 and 7 days of qualifying rental days and a 2-day voucher if

they had 8 or more qualifying rental days. Whether this “cut-off” is arbitrary is irrelevant, as it is a

term negotiated by the parties. Mr. Schulz does not propose an alternative non-arbitrary cut-off or a

better method the parties should have used to calculate the cut-off, and the Court finds nothing

unreasonable or unfair about this term.

Next, without any explanation, Mr. Schulz asserts that the rental vouchers “have illusory or

no value.” The Court has addressed this objection in other portions of this Order.

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Finally, Mr. Schulz objects that attorneys’ fees are unreasonable, and the Court “should wait

until the claims are in, and it is determined how much was actually paid to the class before

determining a reasonable percentage for class counsel.” Mr. Schulz’s objection necessarily assumes

that the Court will–or should–employ the “common fund” percentage method of calculating

attorneys’ fees. However, here, the Court uses the more time-consuming “lodestar” method. In any

event, even if the Court employed the common fund approach, the Court could nonetheless gauge

the reasonableness of the fee award by using the “percentage-of-the-recovery method” by

“reasonably estimat[ing] the settlement value based on the terms agreed by the parties.” Guschausky

v. Am. Family Life Assur. Co., 851 F. Supp. 2d 1252, 1258-59 (D. Mont. 2012) (discussing Shaffer v.

Cont’l Cas. Co., 362 Fed. Appx. 627, 631 (9th Cir. Jan. 12, 2010), and related cases). There is no

need to wait until all class members have filed claims to award attorneys’ fees.

f. Objections by Steven C. Signer

Objector Steven C. Signer, through counsel, objects both to the fairness of the settlement and

the requested attorneys’ fees. First, he objects that the cash option is nominal when compared to the

voucher option, which he avers is an attempt to steer class members to the voucher option and

continued business with Rental Car Defendants. [Doc. No. 329.] The cash-option value objection

has already been addressed. As for Mr. Signer’s belief that the parties intended to steer class

members to the voucher option, that “goal” clearly has not been accomplished because nearly twice

as many class members have chosen the cash option over the voucher option so far. [Decl. of

Patrick M. Passarella, Doc. No. 343-3 at ¶ 39 (declaring that, of the claims submitted as of October

12, 2012, 108,619 were for the cash option while 61,732 were for the voucher option).]

Mr. Signer next objects that the settlement agreement’s “clear sailing” provision, whereby

Defendants agree not to oppose Plaintiffs’ motion for attorneys’ fees and incentive award, suggests

the presence of collusion. The Court addresses Objector Signer’s objection to the “clear sailing”

provision below in its discussion of the same objection by Objector Hansmeier.

g. Objections by Stephen E. Hagen

Objector Stephen E. Hagen objects to portions of the claims process and raises issues with

class notice. [Doc. No. 334.] With respect to the claims process, Mr. Hagen objects to the

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requirement of an “ID Number” to file a claim. He claims class members who lose their class notice

or receive notice through publication are effectively barred from filing a claim because they do not

have an ID number. However, although an identification number is required to file a claim online,

the website dedicated to this matter also allows class members to download a blank Election of

Benefits Form, which does not require an ID Number. See Election of Benefits Form, available at

http://www.acftcasettlement.com/Documents/HZS0001/HZS_EOB_web.pdf (last visited November

1, 2012). Class members who do not have an ID Number can submit their claim form via mail.

With respect to class notice, Mr. Hagen points out that the hyperlink in the initial class notice

email he received did not work. He admits that he received a second email, which included a

working link, but asserts that it did not mention the broken link in the first email. However, the

significance of these observations is unclear, as the fact remains that the mistake was fixed and class

members were given an operative hyperlink. Moreover, according to the parties, the first email had

several hyperlinks, only one of which was broken. Although Mr. Hagen avers that “[a] discouraged

claimant, unable to file a claim after reading the first notice, would likely ignore any subsequent

notice,” this observation appears purely anecdotal. Even had the broken hyperlink been the most

convenient way to access the claims website, it was not the only way to do so. For instance, class

members could have typed the address of the claims website into their web browser and navigated

directly to the site.

Mr. Hagen also raises issues regarding the use of “stale” or outdated address information

when mailing the class notice. While the Court shares Mr. Hagen’s genuine desire to ensure proper

class notice and certainly appreciates his efforts in bringing his concerns to the Court’s attention, the

Court is satisfied that the parties and the class administrator made reasonable efforts to reach class

members. Class members who did not receive individualized notice still had opportunity for notice

by publication, email, or both. Patrick Passarella, Vice President of Class Action Services at

Kurtzman Carson Consultants LLC, submitted a detailed declaration that convinces the Court that

the class notice mailing procedure, as implemented, was reliable and adequate. [See Doc. No. 343-3

at ¶¶ 35-38.] The Court is satisfied that the redundancies in the parties’ class notice procedure–

mailing, e-mailing, and publication– reasonably ensured the widest possible dissemination of the

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notice. Indeed, the efficacy of these overlapping notice efforts is evidenced in the objection filed by

Objector Valerie Large–a Canadian resident and someone who Mr. Hagen argues was likely

“ignored by the notice process” because she does not have a U.S. address. Having considered Mr.

Hagen’s objection, the parties’ responses, and Mr. Passarella’s declaration, the Court respectfully

disagrees with Mr. Hagen’s concerns and consequently declines his request to delay the final

approval hearing.

h. Objections by Andrew Cesare, Cery Perle, Gary Bishop,

and Frank DeJulius

Objectors Andrew Cesare, Cery Perle, Gary Bishop, and Frank DeJulius, collectively and

through counsel, object to the claims process and method of calculating attorneys’ fees. [Doc. No.

335.] First, they contend that the claims-made “process is intended to minimize relief” because

“[r]equiring claim form submittals generally results in a claims rate of less than 10%.” They cite no

case within the Ninth Circuit and only one case from the District of Maine in support of this

proposition. The Court has a much different view of the intent of the claims-made feature of this

settlement. Rather than including this feature with the intent to minimize claims, the actual intent of

the claims process is to allow class members the opportunity to choose between several payment

options. The parties would otherwise have no way of knowing whether a particular class member

wants to receive the cash option or the rental voucher. In Sylvester, the sole case Objectors cite,

there was no indication that class members had an option between different payments. Accordingly,

the Court does not assign to the parties the sinister intent Objectors advocate. See Sylvester v. Cigna

Corp., 369 F. Supp. 2d 34, 42 (D. Me. 2005) (class members who filed a valid claim form received

$51.97).

Objectors next challenge the amount of attorneys’ fees and aver that “attorneys fees must be

linked to [the] actual value of settlement.”10 However, Objectors’ position ignores that two methods

10 In doing so, it appears that Objectors misunderstand the cash option: “Cash claimants must

demonstrate they rented a car for a minimum of three days during the relevant time frame[.] [T]his

minimum claim will net them the whopping sum of $6.00.” This is incorrect. Class claimants are

entitled to $2 per rental day and a $5 minimum payment. Thus, for example, a class member whose

claim is for only one rental day would receive $5. Based on their misunderstanding, Objectors then

(continued...)

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exist for calculating attorneys’ fees, and, as discussed below, that the lodestar–rather than the

“percentage of the common fund”–method is the most appropriate in cases like the one at bar. The

Objectors further do not acknowledge that, even under the common fund approach–which, again, the

Court does not apply here–the Court is not required to compare requested attorneys’ fees against the

actual settlement payouts. See, e.g., Lopez v. Youngblood, 2011 U.S. Dist. LEXIS 99289, at *32-*33

(E.D. Cal. Sept. 1, 2011) (citing cases); see generally Petersen v. Lowe’s Hiw, Inc., 2012 U.S. Dist.

LEXIS 123018, at *9 (N.D. Cal. Aug. 24, 2012) (citing Williams v. MGM-Pathe Commc’n Co., 129

F.3d 1026, 1027 (9th Cir. 1997)) (in common fund settlements, the fee percentage awarded is based

on the total common fund rather than the funds actually paid to class members); see also Iorio v.

Allianz Life Ins. Co. of N. Am., Inc., 2011 U.S. Dist. LEXIS 21824, at *36 (S.D. Cal. Mar. 3, 2011)

(cross-checking $18,000,000.00 lodestar-calculated fees award against the settlement’s “‘full

utilization value’ (i.e., the value of the benefits made available to the Class) and 29.95% of the

Settlement’s ‘projected utilization value’ midpoint, (i.e., the midpoint of the range of the projected

value of the benefits which will be received by the Class).”).

i. Objections by Gordon Hansmeier

Objector Gordon Hansmeier, through counsel, has filed by far the most lengthy objection to

the class settlement and attorneys’ fees request.11 To the extent the Court has not addressed his

objections above, the Court addresses each new objection in turn. First, Objector Hansmeier asserts

“this settlement displays each and every one of the red flags and ‘subtle signs’ of collusion identified

by the Ninth Circuit in In re Bluetooth Headset Products Liability Litigation, 654 F.3d 935 (9th Cir.

2011).” Although Bluetooth is distinguishable on several grounds, the Court limits its analysis to

10(...continued)

assert: “Claimants who were subjected to the illegal practice for one or two days may only claim

coupons.” This is also incorrect.

11 On October 22, 2012, Objector Hansmeier filed a “reply” to the parties’ responses to the

objectors’ objections. Neither the Local Rules nor the Court’s preliminary approval Order allow

Objector Hansmeier to file such a document in the current proceedings. Objector Hansmeier also did

not seek leave of Court to file this document. Accordingly, the Court declines to specifically address

the arguments made therein. Nonetheless, the Court has reviewed the filing and finds it unpersuasive.

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the three “subtle” or “warning” signs of collusion identified in that case,12 and which Objector

Hansmeier asserts exist in the parties’ settlement.

First, Objector Hansmeier asserts that class counsel has “negotiated a ‘claims made’

settlement which does not guarantee a distribution of cash or coupons to the class whatsoever,” and

has simultaneously “negotiated for themselves to receive [fees] in cash withing ten days of the

Court’s order and judgment. Thus, Class Counsel would guarantee an ample reward for themselves

even while the class distribution remains entirely speculative.” However, as explained below, the

Court’s application of the lodestar method convinces the Court that Plaintiffs’ sub-lodestar fee

request is eminently reasonable despite Objector’s belief that the “guaranteed” award is “ample”–a

characterization that muddies the waters, but provides no substantive analysis. In any event,

Bluetooth does not support Objector’s position, as the trial court in that case had not addressed a

number of factors and, as a result, did not satisfy the appellate court that it had fully evaluated the

fairness of the settlement. Id. at 947-48. Here, the Court has taken pains to analyze the settlement

and has made express findings that do not implicate the Court’s concerns in Bluetooth. Indeed, in

Bluetooth, the parties had negotiated a fee award 8 times higher than the fixed cy pres relief

negotiated for the class. See id. at 947-48. In stark contrast, the parties in this case have negotiated

a settlement that provides direct payment to class members and the value of which dwarfs the

negotiated fee amount. In this case, as the Court has explained elsewhere in this Order, there simply

is no evidence of an effort to short-change the class so that class counsel may be unjustly enriched.

Second, Objector Hansmeier asserts, without any substantive analysis of the resulting

implications, that the settlement agreement contains a “free sailing” agreement. The Court thus

12 The Court in Bluetooth identified the following signs on possible collusion:

(1) when counsel receive a disproportionate distribution of the settlement, or when the

class receives no monetary distribution but class counsel are amply rewarded;

(2) when the parties negotiate a “clear sailing” arrangement providing for the payment

of attorneys’ fees separate and apart from class funds . . . ; and

(3) when the parties arrange for fees not awarded to revert to defendants rather than be

added to the class fund.

Bluetooth, 654 F.3d at 947 (internal quotations and citations omitted). 

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turns its analysis to the Ninth Circuit’s concern that such provisions may indicate collusion.13 First

and foremost, the Court has placed little to no value on the fact that Plaintiffs’ fee request is

uncontested. Further, as discussed below, the Court finds no evidence of collusion in the settlement

process. As far as the possible existence of collusion in negotiating the uncontested attorneys’ fees

request, the Court finds no evidence of collusion in that process either. The fee amount was

negotiated separately and only after the class settlement was finalized. The parties also agreed that

the class settlement would not hinge on whether they could successfully negotiate a fee amount. 

Therefore, the parties took the risk that they would not be able to successfully negotiate a resolution

of the attorneys’ fees issue and the matter would be decided by the Court without their guidance. 

Individually, each side also took the risk that the final fee amount would be more or less than they

envisioned. Further still, there is no evidence that Plaintiffs “negotiated away” anything to garner a

higher fee amount. The cash option represents at least a two-thirds recovery of actual estimated

damages, and the voucher option represents a recovery many times more than actual damages. 

Despite certain objectors’ assertion that the settlement has no value, the Court has expressly found

that the settlement provides substantial value to the class in light of their actual damages. Had class

counsel colluded to reduce the class recovery amount in exchange for higher fees, the settlement

would not provide such a substantial value to the class. Moreover, as discussed below, the parties’

negotiated fee amount is less than the Court could have awarded on its own. Had the parties

colluded to garner higher fees, it is likely their fee request would have been much higher given the

Court’s conclusion below that the lodestar method is appropriate and reasonable given the sheer

amount of work it took to litigate this case. Finally, unlike in Bluetooth, the fee request here is not

disproportionately higher than the benefits negotiated for the class–indeed it is much lower.

The third and final “warning sign” identified in Bluetooth simply is not a factor in this case. 

The settlement in Bluetooth “contained a ‘kicker’: all fees not awarded would revert to defendants

13 “The very existence of a clear sailing provision increases the likelihood that class counsel will

have bargained away something of value to the class. Therefore, when confronted with a clear sailing

provision, the district court has a heightened duty to peer into the provision and scrutinize closely the

relationship between attorneys’ fees and benefit to the class, being careful to avoid awarding

‘unreasonably high’ fees simply because they are uncontested.” Id. at 948 (internal quotations,

alteration, and citations omitted).

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rather than be added to the cy pres fund or otherwise benefit the class.” Id. at 947. Objector

Hansmeier asserts that this warning sign exists in this case because the Court’s reduction of the fee

request will result in a “savings” for Defendants. However, because the attorneys’ fees in this case

are wholly separate from the class settlement–and will have no impact one way or the other on the

amount the class recovers–a “savings” for Defendants does not implicate the concerns the Ninth

Circuit expressed about the “kicker” provision in the Bluetooth settlement. Cf. id. at 949. In any

event, even if the Court believed the three Bluetooth warning signs existed in this case, the Court has

fully “assure[d] itself that the fees awarded in the agreement were not unreasonably high.” Id.

(citations and internal quotations omitted). 

Objector Hansmeier’s next objection relies on his assertion that the Class Action Fairness

Act (“CAFA”) governs approval of this settlement, which he classifies as a “coupon settlement”

because it “contains a large ‘coupon settlement’ component.” The Court addresses this objection

under separate header below.

Objector Hansmeier’s third objection relies on the applicability of CAFA and asserts that,

“[e]valuating whether the Proposed Settlement is fair, adequate, and reasonable requires the Court to

compare the value of the claims surrendered by the class to the value of the relief the class will

receive under the settlement terms.” The Court undertakes this analysis, including Objector

Hansmeier’s reliance on Sobel v. Hertz Corp., 2011 U.S. Dist. LEXIS 68984 (D. Nev. June 27,

2011), in its discussion of CAFA below and elsewhere in this Order. 

Finally, Objector Hansmeier argues that the “limited information before the Court shows a

fee-driven settlement, certain to result in minimal class recovery.” [Doc No. 331 at 19-26.] The

Court disagrees. The claim submission rate to date is on par with similar class action settlements,

and the Court declines the invitation to infer that the parties intended to keep the redemption rate

low. Given the fact that class members must choose between different payment options, the claim

process makes eminent sense. As of October 12, 2012, 170,579 class members submitted claim

forms, representing a response rate of approximately 4.9%. However, this arguably low response

rate does not heavily weigh against approval of the settlement for several reasons. First, the

settlement is otherwise fair and represents a recovery of a substantial percentage of actual estimated

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damages. Accord Touhey v. United States, 2011 U.S. Dist. LEXIS 81308, at *21-*22 (C.D. Cal.

July 25, 2011) (finding that 2% response rate did not militate against final approval because, inter

alia, settlement was fair to class members). Second, class members may continue to file claim forms

until January 25, 2013–an additional 3.5 months beyond the date used for the 4.9% response rate

calculation. As claims continue to come in, the response rate will increase. Third, the response rate

to date may be the result of a variety of factors including procrastination or lack of interest. In short,

a 4.9% response rate–which will be higher once the claim period ends–does not diminish the

fairness of the settlement. Accord White v. Experian Info. Solutions, Inc., 803 F. Supp. 2d 1086,

1100 (C.D. Cal. 2011) (“[T]his underwhelming [5%] response rate does not mean that the

Settlement, on the whole, is not fair, reasonable and adequate.”); Touhey, 2011 U.S. Dist. LEXIS

81308, at *21-*22; see also In re Cardizem CD Antitrust Litig., 218 F.R.D. 508, 526 (E.D. Mich.

2003) (finding favorable class reactions in a 6.9% response rate–1800 proofs of claim out of 26,000

notices sent–and a 9% response rate–37,000 proofs of claim out of over 400,000 notices sent); In re

New Motor Vehicles Canadian Export Antitrust Litig., 2011 U.S. Dist. LEXIS 40843, at *25 (D. Me.

April 13, 2011) (finding favorable class reaction in a 3.9% response rate–438,169 claims out of 11.3

million eligible claimants). Indeed, many of the cases upon which Objector Hansmeier relies

approved settlements with lower redemption rates than in the case at bar. In re TJX Cos. Retail Sec.

Breach Litig., 584 F. Supp. 2d 395, 397, 406 (D. Mass. 2008) (approving entire amount of attorneys’

fees request after previously approving settlement with response rate of slightly more than 3%); In

re Compact Disc Minimum Advertised Price Antitrust Litig., 370 F. Supp. 2d 320, 321 (D. Me.

2005) (noting prior approval of settlement that yielded 2% claim rate); Strong v. BellSouth Telcoms.,

Inc., 173 F.R.D. 167, 169, 172 (W.D. La. 1997) (noting prior approval of settlement that yielded

4.3% claim rate); Yeagley v. Wells Fargo & Co., 2008 U.S. Dist. LEXIS 5040, at *1, *5-*7 (N.D.

Cal. Jan. 18, 2008) (reducing attorneys’ fees request after previously approving settlement with less

than 1% claim rate).

Based on the foregoing, and in addition to discussions in the remainder of this Order, all

objections are OVERRULED.

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vi. Absence of collusion in the settlement process

In addition to the above considerations, the Court has an obligation to “satisfy itself that the

settlement was not the product of collusion.” Browning v. Yahoo! Inc., 2007 U.S. Dist. LEXIS

86266, at *38 (N.D. Cal. Nov. 16, 2007). This negotiation process spanned more than a year and

involved 7 separate sessions with two different judges. The parties first met with Magistrate Judge

William McCurine Jr. on February 14, 2011. Thereafter, the parties met with The Honorable Ronald

M. Sabraw (ret.) of JAMS for six separate private mediation sessions and participated in “multiple”

teleconferences with Judge Sabraw. [Judge Sabraw Decl., Doc. No. 328-6 at ¶ 4.] In his

declaration, Judge Sabraw provides his first-hand account of the of settlement negotiations:

The matter was complex and contentious and the parties submitted extensive

Mediation Statements with numerous exhibits detailing the factual legal and

procedural issues entailed in this antitrust class action. Mediation sessions were

substantive and focused on the numerous factual disputes and legal issues and

claims that were being litigated. The mediation sessions and materials

submitted demonstrated that both parties faced significant risks and were

advancing sharply contrasting theories and views both on liability and damages. 

It was readily apparent that the matter, if litigated, would be highly contested by

able counsel to an uncertain result.

The negotiations were vigorous, contentious and arms-length. For example,

when the initial three days of mediation found the parties at a very significant

distance from each other, further extensive discovery ensued both on core

liability issues as well as expert analysis of class certification and damages

issues. . . . . It was apparent that all counsel were well informed of the

strengths and weaknesses of their respective cases when they reached

agreement.

[Id. at ¶¶ 5-6.]

The Court is very satisfied that the settlement process did not involve collusion. The Court

partly bases its conclusion on Judge Sabraw’s participation, the sheer number of mediation sessions,

and Judge Sabraw’s first-hand description of the process. See In re Bluetooth Headset Prods. Liab.

Litig., 654 F.3d 935, 948 (9th Cir. 2011) (participation of mediator is not dispositive, but is “a factor

weighing in favor of a finding of non-collusiveness.”); accord Amunrud v. Sprint Commc’ns Co.,

2012 U.S. Dist. LEXIS 17258, at *10 (D. Mont. Feb. 10, 2012) (finding absence of signs of

collusion based, in part, on mediator’s participation); In re HP Laser Printer Litig., 2011 U.S. Dist.

LEXIS 98759, at *12-*13 (C.D. Cal. Aug. 31, 2011) (same). The protracted and hard-fought nature

of this case further militates against the existence of collusion. It is highly unlikely that parties who

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seek to collude would spend nearly a million dollars in costs (by Plaintiffs alone) and devote

thousands upon thousands of valuable attorney hours to the matter. Rather, had the parties sought to

collude, they would have been much more likely to reach a collusive settlement as quickly and

cheaply as possible to minimize their costs and attorney time while maximizing their personal

recovery. Finally, the substantial nature of the class recovery in this case further supports the

absence of collusion. There are no objective signs of collusion in this case.

vii. Class Action Fairness Act Considerations

As mentioned above, Objector Hansmeier asserts the settlement in this case is a “coupon

settlement” and avers that the Class Action Fairness Act mandates heightened scrutiny of such

settlements.

When applicable, special considerations arise in cases involving coupon settlements. CAFA

allows a court to approve coupon settlements “only after a hearing to determine whether, and

making a written finding that, the settlement is fair, reasonable, and adequate for class members.” 

28 U.S.C. § 1712(e). Although this “fair, reasonable, and adequate” standard is identical to that

contained in Rule 23(e)(2), “several courts have interpreted section 1712(e) as imposing a

heightened level of scrutiny in reviewing such [coupon] settlements.” True v. Am. Honda Motor

Co., 749 F. Supp. 2d 1052, 1069 (C.D. Cal. 2010) (citing Synfuel Techs., Inc. v. DHL Express

(USA), Inc., 463 F.3d 646, 654 (7th Cir. 2006); Figueroa v. Sharper Image Corp., 517 F. Supp. 2d

1292, 1321 (S.D. Fla. 2007)). Likewise, Rule 23 itself may require closer scrutiny of coupon

settlements. See Fed. R. Civ. P. 23(h), 2003 Advisory Committee Notes (“Settlements involving

non-monetary provisions for class members also deserve careful scrutiny to ensure that these

provisions have actual value to the class.”). Accordingly, before granting final approval, the court

“must discern if the value of a specific coupon settlement is reasonable in relation to the value of the

claims surrendered.” True, 749 F. Supp. 2d at 1069.

It is unclear whether CAFA applies to the settlement in this case. Objector claims the

vouchers for free car rental days are “coupons” within the meaning of CAFA. Although CAFA

defines various other terms, it does not define what constitutes a “coupon.” See 28 U.S.C. § 1711. 

Persuasive authority supports Defendants’ position that CAFA does not apply to settlements, such as

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this one, that offer the option between cash and vouchers for free products (as opposed to discounts

on products where class members are required to purchase the products and pay the difference

between the full and coupon-discounted price). For example, in an unpublished memorandum, the

Ninth Circuit recently observed:

The settlement gives every class member the option to receive its share of the

settlement proceeds in cash or cash-equivalent forgiveness of indebtedness already

incurred. This is not a “coupon settlement” and therefore does not trigger the Class

Action Fairness Act of 2005’s limitations on contingent fees awarded in connection

with such settlements.

CLRB Hanson Indus., LLC v. Weiss & Assocs., PC, 465 Fed. Appx. 617, 619 (9th Cir. 2012).

Moreover, while Objector Hansmeier urges the Court to follow Sobel, it appears that case

implicated CAFA because it was “strictly [a] coupon settlement” that did not involve a “settlement

fund or any provision of cash payments to the Settlement Class.” Sobel v. Hertz Corp., 2011 U.S.

Dist. LEXIS 68984, at *13 (D. Nev. June 27, 2011). The Court is not convinced that CAFA controls

the parties’ settlement.14

However, even if CAFA applied here, the Court has undertaken the “heightened analysis”

Objector Hansmeier advocates. Specifically, the Court has satisfied CAFA’s requirement that a

hearing be held and the Court’s findings be in writing. See 28 U.S.C. § 1712(e). Moreover, the

Court has considered the value of the rental vouchers in comparison to the estimated actual damages

and has concluded that the settlement provides class members substantial value in comparison to the

individual claims surrendered. Indeed, many of the concerns about the true value of the coupons in

Sobel are not implicated here. See Sobel, 2011 U.S. Dist. LEXIS 68984, at *34-*38. The Court

reiterates its finding that the rental vouchers in this settlement offer real and substantial value in

relation to class members’ injuries, and that the settlement as a whole is fair, reasonable, and

adequate in light of the totality of the Court’s discussions. The Court is satisfied that the settlement

14 Objector Hansmeier also cites 28 U.S.C. section 1712(c) for the proposition that, “[t]he fact

that class members have a cash option does not change the fact that this is a coupon

settlement—Congress specifically recognized that coupon settlements may have a ‘mixed basis,’ where,

as here, coupons are mixed with other forms of recovery.” [Doc. No. 331 at 13 (emphasis added).] The

Court is not persuaded. Section 1712(c) addresses calculation of attorneys’ fees in a settlement that

involves “an award of coupons to class members and also provides for equitable relief, including

injunctive relief,” (emphasis added), not monetary relief in the form of cash payments as Objector

Hansmeier argues.

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in this case does not violate Congress’s concern that in many cases “counsel are awarded large fees,

while leaving class members with coupons or other awards of little or no value.” Pub. L. No. 109-2,

119 Stat. 4, § 2(a)(3).

3. Conclusion

The Court GRANTS the motion for final approval, finding that the settlement is

fundamentally “fair, adequate and reasonable” under Rule 23(e). The Court expressly finds that no

evidence of collusion exists in the settlement of class members’ claims.

B. Motion for Award of Attorneys’ Fees, Costs, and Class Representative Award

Plaintiffs seek an award of attorneys’ fees and costs in the amount of $5,870,000, which

represents $5,123,336 in attorneys fees and $746,664 in costs. After negotiating and finalizing the

class settlement, the parties separately negotiated the fees and costs award with Judge Ronald

Sabraw’s assistance. Defendants agreed to pay these fees and costs in addition to the class

settlement, which the parties agreed would not be reduced by any attorneys fees and costs. Nor

would the parties’ willingness to go forth with the settlement hinge on the Court’s approval or

alteration of the negotiated award.

1. Relevant Law

Rule 23(h) of the Federal Rules of Civil Procedure provides that, “[i]n a certified class

action, the court may award reasonable attorneys’ fees and nontaxable costs that are authorized by

law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). “Where a settlement produces a common

fund for the benefit of the entire class, courts have discretion to employ either the lodestar method or

the percentage-of-recovery method.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 942

(9th Cir. 2011). “Because the benefit to the class is easily quantified in common-fund settlements,

we have allowed courts to award attorneys a percentage of the common fund in lieu of the often

more time-consuming task of calculating the lodestar.” Id. However, “[t]he ‘lodestar method’ is

appropriate in class actions brought under fee-shifting statutes (such as federal civil rights,

securities, antitrust, copyright, and patent acts) . . . .” Id. at 941.

“The lodestar figure is calculated by multiplying the number of hours the prevailing party

reasonably expended on the litigation (as supported by adequate documentation) by a reasonable

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hourly rate for the region and for the experience of the lawyer.” Id. “Though the lodestar figure is

presumptively reasonable, the court may adjust it upward or downward by an appropriate positive or

negative multiplier reflecting a host of ‘reasonableness’ factors, including the quality of

representation, the benefit obtained for the class, the complexity and novelty of the issues presented,

and the risk of nonpayment. Foremost among these considerations, however, is the benefit obtained

for the class.” Id. at 941-42 (internal quotation marks and citations omitted).

2. Analysis

Because Plaintiffs pursued claims under statutes with fee-shifting provisions, 15 U.S.C.

§ 15(a); Cal. Govt. Code § 11130.5; Cal. Code Civ. Proc. § 1021.5, the Court chooses to apply the

lodestar method–not the common fund method–to calculate and evaluate attorneys’ fees. Here,

Plaintiffs provide the Court the following chart, which calculates the lodestar based on the four

plaintiffs firms’ total hours and blended average hourly rate:

Firm Hours Rate Range Avg. Rate Total Lodestar

Hulett, Harper, Stewart 7,375.17 $150-$675 $473.07 $3,488,939.75

Sullivan, Hill, Lewin, Rez & Engel 3,725.8 $150-$540 $463.38 $1,726,467.00

Center for Public Interest Law 1,237.66 $450-$600 $549.07 $672,686.00

Freedman, Boyd, Hollander,

Goldberg, Ives, & Duncan

2,168.25 $100-$400 $227.39 $493,035.00

Totals 14,506.9 $439.87 $6,381,127.75

The Court first considers whether counsel’s $439.8715 average hourly rate is reasonable and

finds that it is. A reasonable hourly rate is typically based upon the prevailing market rate in the

community for “similar work performed by attorneys of comparable skill, experience, and

reputation.” Chalmers v. City of L.A., 796 F.2d 1205, 1210 (9th Cir. 1986); see also Davis v. City of

S.F., 976 F.2d 1536, 1545-46 (9th Cir. 1992), vacated in part on other grounds, 984 F.2d 345 (9th

Cir. 1993). In support of this rate, Plaintiffs first submit extensive documentation from the National

15 The Court first finds that it is appropriate to use this blended hourly average as the rate for

lodestar purposes. In reviewing the declarations submitted in support of the fees motion, it appears the

attorneys with the highest billing rates performed the bulk of the work in this case. Therefore, this

blended average rate represents a discount off the top billers’ rates, meaning that the lodestar itself is

discounted.

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Law Journal, The Wall Street Journal, and other sources. The National Law Journal data reveals

that rates at six national defense firms with San Diego offices averaged between $550 and $747 per

hour for partners and $346 and $508 per hour for associates. The Wall Street Journal data reveals

that so-called “top billers” at five national firms charged between $1,025 and $1,250 per hour.

As for plaintiffs attorneys in the San Diego market, Plaintiffs cite Hartless v. Clorox Co., 273

F.R.D. 630, 644 (S.D. Cal. Jan. 20, 2011) (Bencivengo, J.), in which this Court approved hourly

rates that ranged from $575 to $795 per hour for six local plaintiffs attorneys. The low end was

awarded to a 1989 graduate of Duke Law School and the high end was awarded to a 1986 graduate

of the University of Tulsa College of Law. The Court also approved a $655 rate for a 1990 graduate

of George Washington University and $585 rate for a 1995 graduate of U.C. Hastings. Based on the

thorough declarations and exhibits that accompany Plaintiffs’ fee motion, the Court finds class

counsel’s skills and experiences comparable to local counsel, including the comparable local

plaintiffs’ attorneys in the Hartless case. Based on the detailed, ample data provided, the Court

further finds the four firms’ average hourly rate of $439.87 is a reasonable hourly rate for counsel of

similar skill and experience in the San Diego legal market.

The Court next considers whether the four firms’ collective devotion of 14,506.9 hours of

work to this matter is reasonable and finds that this number of hours is justified given the nature and

the course this case took. Although counsel has not provided the Court with detailed time sheets,

such detailed time sheets are not necessary given the Court’s intimate familiarity with this case and

the sheer amount of work and effort it took for the case to proceed to this point. See Fox v. Vice,

131 S. Ct. 2205, 2216 (2011) (“[T]rial courts need not, and indeed should not, become

green-eyeshade accountants. The essential goal in shifting fees (to either party) is to do rough

justice, not to achieve auditing perfection. So trial courts may take into account their overall sense

of a suit, and may use estimates in calculating and allocating an attorney’s time. And appellate

courts must give substantial deference to these determinations, in light of the district court’s superior

understanding of the litigation.”) (internal quotations and citations omitted). Over the course of the

past five years, this case has entailed a large number of mediation sessions, extensive briefing in

both trial and appellate courts, discovery disputes, lengthy meet and confer efforts, numerous court

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appearances and contacts, 27 depositions across the country, and other extensive discovery-related

work. The issues were complex and required a substantial amount of research and analysis. The

documentary discovery produced to Plaintiffs was voluminous and required extensive organization,

review, and analysis. The parties also appeared before the Ninth Circuit Court of Appeals, which

required extensive analysis, research, briefing and preparation for oral argument. Additionally,

throughout this case, counsel’s briefing was extensive, thorough, and of exceptional quality–as

evidenced by the two motions currently pending before the Court. At every juncture, the case was

hard-fought by both sides. In short, superior quality takes time to produce, and given the

contentious, novel, and complex nature of this case, the 14,506.9 hours spent on this case were

reasonable and justified.16

Based on the foregoing, when multiplying the reasonable hourly rate by the number of hours,

Plaintiffs’ calculation of a $6,381,127.75 lodestar amount is both appropriate and “presumptively

reasonable.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011) (citing

Cunningham v. Cnty. of L.A., 879 F.2d 481, 488 (9th Cir. 1988)). In light of this presumptively

reasonable lodestar, Plaintiffs’ $5,123,336.00 fee request is reasonable, as it represents a

20% reduction of the lodestar.

Next, although the Court chooses not to increase the parties’ negotiated fee and costs

amount, the Court nonetheless discusses the “reasonableness” factors, as they further support the

parties’ negotiated fees and costs. First, the quality of representation in this matter was exceptional. 

Class counsel fought hard for the class, employing nearly every possible litigation tool and

succeeding on appeal before the Ninth Circuit. As just a few examples of the quality of counsel’s

work, the motion for preliminary approval, motion for final approval, and the instant motion for fees

and costs were impeccable, thorough, detailed, and stand as models for others to follow. Second, the

benefit obtained for the class was, particularly in the case of the voucher option, highly beneficial to

the class. While individual damages were only a few dollars per day, a class member who chooses

16 This conclusion is supported by the unsurprisingly detailed and thorough joint declaration of Mssrs.

Rez and Stewart. This conclusion is also informed by some of the factors previously discussed in the section on

approval of the class settlement.

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to receive a voucher receives many, many times the value of his or her damages. Third, the novelty

and complexity of the issues in this case are evident in the appellate work completed here. While

the Ninth Circuit initially affirmed the Court’s entry of judgment in the Commission’s favor on

“state action immunity” grounds, the panel reversed itself after granting Plaintiffs’ petition for

rehearing. Thus, Class Counsel’s work in this case resulted in published case law even before the

case concluded. See generally Shames v. Cal. Travel & Tourism Comm’n, 626 F.3d 1079 (9th Cir.

2010). Finally, counsel always faced the specter of nonpayment, which included $764,664 in out-ofpocket advanced costs, in the event they did not recover for the class. Thus, although the Court

could have justifiably adjusted the lodestar upward based on these factors, the Court chooses not to

disturb the parties’ negotiated attorneys’ fees amount.

In finding that $5,123,336.00 is a reasonable fee award, it bears emphasizing that the

antitrust nature of this case played a significant role in the Court’s decision to use the lodestar

method. The Court acknowledges that some observers may view this award as being unjustifiably

large when compared to the ultimate value of cash and voucher redemptions. In today’s

environment of hostility towards class actions based on the perceived motivations behind such

lawsuits, it would be far too easy to unfairly paint all class actions with the same broad brush. But,

where, as here, an antitrust action truly seeks to vindicate the public’s interest when it otherwise may

have been ignored, many benefits may also inure in favor society at large. For instance, while

antitrust actions may often compensate class members aggrieved in the past, they may also halt

practices that will benefit the public at large in unquantifiable ways in the future. The Third Circuit

Court of Appeals has cogently explained the unique nature of “socially beneficial” actions like this

one and why a court may find the lodestar method beneficial in such a case:

Courts generally regard the lodestar method, which uses the number of hours

reasonably expended as its starting point, as the appropriate method in statutory fee

shifting cases. Because the lodestar award is de-coupled from the class recovery, the

lodestar assures counsel undertaking socially beneficial litigation (as legislatively

identified by the statutory fee shifting provision) an adequate fee irrespective of the

monetary value of the final relief achieved for the class.

This de-coupling has the added benefit of avoiding subjective evaluations of

the monetary worth of the intangible rights often litigated in civil rights actions. 

Outside the pure statutory fee case, the lodestar rationale has appeal where as here, the

nature of the settlement evades the precise evaluation needed for the percentage of

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recovery method. The lodestar method has the added benefit of resembling modes of

fee determination in conventional bipolar litigation. On the other hand, the lodestar

method has been criticized as giving class counsel the incentive to delay settlement in

order to run up fees while still failing to align the interests of the class and its counsel,

and for not rewarding counsel incrementally for undertaking the risk of going to trial.

Courts use the percentage of recovery method in common fund cases on the

theory that the class would be unjustly enriched if it did not compensate the counsel

responsible for generating the valuable fund bestowed on the class. Because these

[type of common fund] cases are not presumed to serve the public interest (as

evidenced by the lack of a fee statute), there is no social policy reason that demands

an adequate fee. Instead, the court apportions the fund between the class and its

counsel in a manner that rewards counsel for success and penalizes it for failure.

In re GMC Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 821 (3d Cir. 1995) (citations

and footnote omitted; emphasis added). Although the Third Circuit’s explanation referred to civil

rights cases, the Courts finds no meaningful distinction between the unquantifiable, intangible rights

litigated in civil rights cases and the unquantifiable future benefits bestowed upon the public at large

in antitrust cases such as the one before the Court. Here, in addition to the existence of express fee

shifting statutes, the settlement potentially had the effect of halting a practice that allegedly would

have injured the public for years to come. Not only does the settlement substantially compensate

aggrieved class members for alleged past harms, it potentially prevents future harm. This outcome

potentially results in millions upon millions of dollars in savings for an untold number of future

California leisure renters. The unrelenting cynic may perhaps scoff at the “trivial” few dollars each

future renter may save for each rental day and question the public benefit achieved here, but the

aggregate benefit of this settlement to the traveling public in California will be great. How great? 

This difficult question is precisely why the lodestar method is appropriate in this case. It is also why

comparison of the Court’s fee award with the final value of redemptions is a patently unfair way to

compensate class counsel in this case. Such a comparison discounts the value of the benefit

achieved for the class and undervalues class counsel’s substantial efforts and the resulting long-term

public benefits they secured.17

17 The Court’s discussion here should not be interpreted as the Court’s belief that Defendants

actually engaged in the conduct alleged in the First Amended Complaint or that they are legally liable

for any of the alleged conduct therein. The Court merely wishes to emphasize the nature of this antitrust

case and the intangible public benefit such cases often may pursue. In this case, Plaintiffs indeed sought

public benefits, as evidenced by their First Amended Complaint, and the settlement contains non-

(continued...)

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Finally, class counsel seek reimbursement of their out-of-pocket expenses in the amount of

$746,664. As with fees, reimbursement of costs here will be paid directly by Defendants and will

not reduce the funds available to the Class. Class counsel are entitled to reimbursement of the

out-of-pocket costs they reasonably incurred investigating and prosecuting this case. See In re

Media Vision Tech. Sec. Litig., 913 F. Supp. 1362, 1366 (N.D. Cal. 1996) (citing Mills v. Electric

Auto-Lite Co., 396 U.S. 375, 391-92 (1970)); Staton v. Boeing Co., 327 F.3d 938, 974 (9th Cir.

2003). Given the length and scope of this litigation, the Court finds that class counsels’

out-of-pocket costs were reasonably incurred in connection with the prosecution of this litigation,

were advanced by class counsel for the benefit of the Class, and shall be reimbursed in full in the

amount requested.

3. Conclusion

The Court APPROVES the award of attorneys’ fees, as well as Class Counsel’s request for

litigation costs and expenses, in the total amount of $5,870,000.00.18

17(...continued)

monetary provisions that have potential to benefit the public at large. The Court’s discussion is in no

way an indication of Defendants’ culpability.

18 The Court disagrees that In re Petroleum Prods. Antitrust Litig., 109 F.3d 602, 607 (9th Cir.

1997), compels a different result here. That case involved a $5,120,000 common-fund settlement, where

the total settlement funds available to the class were reduced by the amount of attorneys’ fees awarded

to class counsel. It was under those circumstances that the Ninth Circuit wrote:

When Dunne’s earlier fee award was appealed, we vacated and remanded because

the district court had not considered the burden to the common fund of the other pending

fee applications. State of Florida v. Dunne, 915 F.2d 542, 546 (9th Cir. 1990). “The fact

that seventy-two percent of the common fund could be distributed in attorney’s fees and

costs in this case is disturbing.” Id. . . . . It is reasonable for the district court to compare the lodestar fee, or sum of lodestar

fees, to the 25% benchmark, as one measure of the reasonableness of the attorneys’ hours

and rates. . . . . The district court should evaluate whether the combined effect of granting

the fee applications in toto would be to reduce substantially the size of the common fund

available for distribution to the plaintiff class. The plaintiff class should ordinarily receive

75% of the wealth the attorneys brought them, according to the 25% proper benchmark,

at least where the size of the common fund does not make that benchmark arbitrary. If the

lodestar amount overcompensates the attorneys according to the 25% benchmark standard,

then a second look to evaluate the reasonableness of the hours worked and rates claimed

is appropriate.

Id. (emphasis added; some internal quotations and citations omitted). Petroleum Products is

(continued...)

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C. Class Representative Incentive Payment

1. Relevant Law

In assessing the reasonableness of an incentive award, several district courts in the Ninth

Circuit have applied the five-factor test set forth in Van Vranken v. Atl. Richfield Co., 901 F. Supp.

294, 299 (N.D. Cal. 1995), which analyzes (1) the risk to the class representative in commencing a

class action, both financial and otherwise; (2) the notoriety and personal difficulties encountered by

the class representative; (3) the amount of time and effort spent by the class representative; (4) the

duration of the litigation; and (5) the personal benefit, or lack thereof, enjoyed by the class

representative as a result of the litigation. See, e.g., Carter v. Anderson Merchs., LP, 2010 U.S. Dist.

LEXIS 55629 (C.D. Cal. May 11, 2010).

2. Analysis

The only Class Representative in this case is Plaintiff Gary Gramkow. Plaintiff Michael

Shames, though a named plaintiff, has not been put forth as a class representative and does not seek

an incentive award. No class member has objected to Plaintiffs’ intent to seek an incentive award of

$2,000 to Mr. Gramkow. Moreover, class counsel aver that Mr. Gramkow “cooperated in discovery

and conferred with counsel on matters such as progress of the case and settlement and otherwise

assisted counsel in the prosecution of the case as requested.” The Court finds the arguably nominal

$2,000 incentive award for five years of service is well within the acceptable range of approval and

does not appear to be the result of collusion. See, e.g., Villegas v. J.P. Morgan Chase & Co., 2012

U.S. Dist. LEXIS 114597, at *18 (N.D. Cal. Aug. 8, 2012) (“[T]he Settlement provides for an

incentive award to the Plaintiff in the amount of $10,000. In this District, a $5,000 incentive award

is presumptively reasonable.”); Williams, 2010 U.S. Dist. LEXIS 67731, at *19-*20 (approving

18(...continued)

distinguishable. Here, the settlement did not create a common fund. Cf. id. at 605 (“The settlements

produced a common fund of $5,120,000 for the people of Florida.”). Moreover, the “wealth” available

to the class is wholly independent of any attorneys’ fees award, which will not reduce the amount

available to the class in any way. Thus, there is no danger here that a large portion of the wealth

available to the class–embodied in a common fund–will be diverted to class counsel to the detriment

of the class. Cf. id. (quoting State of Fl. v. Dunne, 915 F.2d 542, 546 (9th Cir. 1990) (“The fact that

seventy-two percent of the common fund could be distributed in attorney’s fees and costs in this case

is disturbing.”)).

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$5,000 award in an antitrust case settling for $440,000).

3. Conclusion

The Court APPROVES the $2,000 incentive award to Plaintiff Gary Gramkow. 

III. CONCLUSION

 The Court OVERRULES all objections to the class settlement and fee award and 

GRANTS Plaintiffs’ motions in their entirety, finding the proposed settlement of this class action

appropriate for final approval pursuant to Federal Rule of Civil Procedure 23(e). In doing so, the

Court finds that the proposed settlement appears to be the product of serious, informed,

non-collusive negotiations, has no obvious deficiencies, and does not improperly grant preferential

treatment to any individuals. The Court finds that the settlement was entered into in good faith; that

the settlement is fair, reasonable and adequate; and that Plaintiffs have satisfied the standards for

final approval of a class action settlement under federal law. Furthermore, as set forth above, the

Court finds the negotiated attorneys’ fees and costs amount eminently reasonable in light of the

reasonableness of the number of hours and hourly rate used to calculate the lodestar and the

significant discount off the lodestar the negotiated award represents. Finally, the class

representative incentive payment is reasonable.

JUDGMENT AND ORDER OF DISMISSAL

This Court APPROVES the settlement and ORDERS the parties to effectuate the settlement

agreement according to its terms.

The Court DISMISSES this case on the merits and with prejudice, pursuant to the terms of

the parties’ settlement agreement.

Upon the effective date, the Plaintiff, and each and every class member, and anyone claiming

through or on behalf of any of them, shall be deemed to have, and by operation of this Judgment

shall have, fully, finally, and forever waived, released, relinquished, discharged, and dismissed each

and every one of the released claims against each and every one of the Released Persons, regardless

whether such class member shares in the settlement benefits. Names of the persons who have

submitted timely and valid requests for exclusion from the class are set forth in Appendix 1 to this

Order. This judgment shall have no binding effect on the persons named in Appendix 1.

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If this Judgment and the settlement do not become final and effective in accord with the

terms of the settlement agreement, then this Judgment and all orders entered in connection therewith

shall be deemed null and void and shall be vacated.

The Court shall not retain continuing jurisdiction over implementation of the settlement or

future disputes over construing, enforcing, or administering the settlement.

IT IS SO ORDERED.

DATED: November 5, 2012

Hon. Michael M. Anello

United States District Judge

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07-CV-2174-MMA(WMC)

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07-CV-2174-MMA(WMC)

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07-CV-2174-MMA(WMC)

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07-CV-2174-MMA(WMC)

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