Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_08-cv-01365/USCOURTS-cand-4_08-cv-01365-24/pdf.json

Parties Involved:
Arnesha M. Garner
Plaintiff
Laura Maltin
Objector
State Farm Mutual Automobile Insurance Company
Defendant

Document Text:

JOINT PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW IN SUPPORT OF FINAL 

APPROVAL OF CLASS ACTION SETTLEMENT

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ARNESHA M. GARNER,

Plaintiff,

v.

STATE FARM MUTUAL 

AUTOMOBILE INSURANCE 

COMPANY,

Defendant.

CASE NO. CV 08 1365 CW (EMC)

FINDINGS OF FACT AND

CONCLUSIONS OF LAW IN SUPPORT 

OF FINAL APPROVAL OF CLASS 

ACTION SETTLEMENT

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Having considered all motions, memoranda and submissions made in connection with the 

proposed class action settlement agreement, together with all of its Exhibits attached thereto, 

dated December 30, 2009, (the ―Agreement‖), and the record of these proceedings, the 

representations, argument, and recommendation of counsel for the moving parties, and the 

requirements of law; the Court hereby makes the following findings of fact and conclusions of 

law in support of its Final Order and Judgment approving the proposed Settlement.1

FINDINGS OF FACT

1. From approximately March 12, 2007 until approximately February 18, 2008, State 

Farm California claims representatives used Total Loss Comparable Vehicle Valuation Reports, 

provided by Mitchell International, Inc. (―Mitchell‖), in connection with their handling of vehicle 

physical damage claims by State Farm California insureds that used a Projected Sold Adjustment 

and/or Age of Ad Adjustment. State Farm has also identified 57 Total Loss Comparable Vehicle 

Valuation Reports that Mitchell provided to State Farm California claim representatives in San 

Diego prior to March 12, 2007, the date when Mitchell became State Farm‘s primary total loss 

vendor, which also included a Projected Sold Adjustment and Age of Ad Adjustment. Those 

State Farm insureds who received payments in connection with total loss vehicles pursuant to 

these 57 Total Loss Comparable Vehicle Valuation Reports are included in the Settlement Class 

for all purposes.

2. On March 10, 2008, Plaintiff filed the above-captioned Action seeking to recover 

for (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, 

(3) violation of California Business and Professions Code § 17200 and (4) unjust enrichment. 

Plaintiff filed her First Amended Complaint on July 7, 2008.

3. Plaintiff alleged that State Farm, through its vendor Mitchell, violated Title 10 of 

California Code of Regulations § 2695.8 (the ―Total Loss Regulation‖ or ―TLR‖) by adjusting 

the asking prices of comparable vehicles used in Total Loss Comparable Vehicle Valuation 

Reports based on a computer generated prediction of what the comparable vehicles were 

 

1 Capitalized terms not otherwise defined herein are as defined in the Agreement.

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projected to sell for and made additional adjustments to the comparable vehicles based on the 

time difference between when the comparable vehicles were advertised for sale and the date of 

the total loss for the vehicle being valued. Plaintiff also alleged that State Farm and Mitchell 

failed to adequately disclose the Projected Sale Price and Age of Ad adjustments in the valuation 

reports provided to the insureds. Plaintiff alleges that the total aggregate amount of Projected 

Sale Price and Age of Ad adjustments applied to the total loss claims of the Class is 

approximately $23,500,000.

4. State Farm denies the allegations of the Complaint and further alleges that (1) the 

TLR was not in effect during the relevant time frame, (2) the Total Loss Comparable Vehicle 

Valuation Reports used by State Farm during the relevant time frame complied with the TLR, 

(3) State Farm has complied with its contractual obligations to Plaintiff and other members of the 

Settlement Class in connection with its valuation of Total Loss Vehicles; and (4) State Farm 

made payments to Plaintiff and Settlement Class Members that reflected the actual cash values of 

their Total Loss Vehicles. 

5. On April 14, 2008, State Farm made a Motion to Compel Contractual Appraisal 

and for a Stay Pending Appraisal. (Doc. 7.)

6. On June 30, 2008, this Court entered an order granting the motion to compel an 

appraisal filed by Defendant State Farm Mutual Automobile Insurance Company. This Court 

held that State Farm ―had the contractual right to demand an appraisal, and Plaintiff had the 

contractual obligation to proceed with the appraisal process. Pursuant to the terms of the 

contract, this was a precondition to Plaintiff‘s filing a lawsuit.‖ (Doc. 47, June 30, 2008 Order at 

14-15.) This Court further found that the appraisal process provided for in State Farm‘s 

insurance policy was not one-sided, was sanctioned by state statute and was not unconscionable. 

(Id. at 18-19.)

7. On November 20, 2008, State Farm made a Motion for Summary Judgment 

seeking a judicial determination that the TLR was not in effect during the relevant time frame. 

(Doc. 113.) On December 4, 2008, Plaintiff made a Cross-Motion for Summary Adjudication, 

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seeking a judicial determination that the TLR was in effect during the relevant time frame. 

(Doc. 127.)

8. On March 23, 2009, this Court entered an order denying State Farm‘s motion for 

summary judgment and granting Plaintiff‘s cross-motion for summary adjudication, holding that 

the TLR was in effect during the relevant time frame. (Doc. 159, March 23, 2009 Order at 

17-19.) In its March 23, 2009 Order, this Court found that the California Department of 

Insurance (―CDI‖) had ―informed Mitchell that the agency would be satisfied if Mitchell used the 

midpoint of the [DMV VLF Data] range in conducting [total loss] valuations.‖ (Id. at 10.) The 

Court further found that ―the $200 dollar range of sales prices that can be derived from the 

DMV‘s VLF codes constitute[d] sales price data‖ that could be used by insurers as actual sales 

price data for comparable vehicles in performing total loss valuations pursuant to the TLR. The 

Court noted that ―the CDI takes the position that VLF data relates to  ̳actual sales prices,‘ and 

thus can be used to conduct valuations in accordance with the TLR,‖ that CDI had indicated that 

the mid-range of the VLF Data could be used, and that ―the $200 [VLF] range . . . is suitable and 

is accepted by the agency in charge of enforcing the TLR.‖ (Id. at 13.)

9. On September 10, 2009, Plaintiff moved for certification of the following class: 

―All individuals insured by State Farm California under a State Farm private passenger vehicle 

policy between March 12, 2007 and February 18, 2008: (1) who received a first party total loss 

settlement or settlement offer based in whole or in part on the  ̳projected sold price‘ of 

comparable vehicles; and/or (2) whose settlement or settlement offer was reduced to account for 

the difference between the date on which a comparable vehicle was advertised for sale and the 

date of loss of the claimant‘s vehicle (known as the  ̳age of ad‘ adjustment).‖ (Docs. 193, 198.) 

State Farm filed its opposition to class certification on October 1, 2009. (Doc. 206.) 

10. On October 23, 2009, after Plaintiff‘s motion for class certification was fully 

briefed, the Parties engaged in a formal mediation before the Honorable Daniel Weinstein (Ret.) 

of JAMS in New York, NY. In anticipation of the mediation, the Parties submitted and 

exchanged written mediation briefs which highlighted the key remaining issues in this case and 

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clarified the relative strengths and weaknesses of the Parties‘ positions. During the week after 

the mediation, with the further capable assistance of Judge Weinstein, the Parties reached an 

agreement in principal. Over the next two months, the Parties worked together to finalize the 

terms of the Agreement, settlement notice, and other related documents.

11. On December 30, 2009, the Parties filed the Agreement with the Court and each 

moved for preliminary approval of the Agreement, with supporting memoranda and declarations. 

(Docs. 243, 244, 247, 248.) 

12. On January 15, 2010, this Court granted Plaintiff‘s and State Farm‘s separate 

motions seeking preliminary approval of the Settlement Agreement. (Doc. 252.) By such Order, 

the Court certified the following Settlement Class: ―Any and all persons insured under a State 

Farm vehicle insurance policy who received a first party total loss comprehensive or collision 

payment on a claim administered in California, based in whole or in part on a Total Loss 

Comparable Vehicle Valuation Report that used a Projected Sold Adjustment and/or Age of Ad 

Adjustment.‖ 

(a) ―State Farm‖ means State Farm Mutual Automobile Insurance Company 

and/or State Farm Fire and Casualty Insurance Company.

(b) ―Total Loss Comparable Vehicle Valuation Report‖ means a report 

generated by a computerized system that values a Total Loss Vehicle by identifying 

comparable vehicles and making adjustments to either the asking or selling price of such 

vehicles in an attempt to determine the actual cash value of the Total Loss Vehicle at the 

time of loss. Total Loss Comparable Vehicle Valuation Reports do not include either 

appraisals or reports that use dealer quotes.

(c) ―Projected Sold Adjustment‖ means an adjustment to the asking price of 

comparable vehicles used in Total Loss Comparable Vehicle Valuation Reports provided 

by Mitchell to State Farm in California to reflect the price for which that comparable 

vehicle was projected to sell.

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(d) ―Age of Ad Adjustment‖ means the adjustment to comparable vehicles 

used in Total Loss Comparable Vehicle Valuation Reports provided by Mitchell to State

Farm in California, to account for depreciation of a vehicle between the time that it is 

listed for sale and the date of loss. 

(e) ―Total Loss Vehicle‖ means a vehicle owned by a person within the 

Settlement Class that was determined by State Farm to be a total loss.

(Id. at 2-3.)

13. The Court appointed Arnesha M. Garner as Class Representative. (Id. at 4.)

14. The Court appointed the following persons as Class Counsel: David M. 

Birka-White of Birka-White Law Offices, and Robert J. Nelson, of Lieff, Cabraser, Heimann & 

Bernstein, LLP. (Id.) 

15. The Court also found that the Agreement was reached as a ―result of arms-length 

negotiations between the parties‖ and was ―not the result of collusion.‖ (Id. at 1.) The Court 

further found that the Agreement is ―fair, reasonable and adequate‖ (id. at 4), and ―within the 

range of possible judicial approval.‖ (Id.)

16. The Court appointed Rust Consulting, Inc. to act as Administrator of the 

Settlement. (Id. at 11.) Rust Consulting specializes in class action notification and claims 

administration, including telephone and web-based support, direct mail services, claims 

processing, and settlement fund distribution. Founded in 1976, Rust Consulting began its claims 

administration practice in 1989 and has extensive experience in class action matters, having 

provided services in class actions ranging in size from 100 to 100 million class members, and has 

provided notification and/or claims administration services for over 2,500 projects. (Decl. of 

Melissa D. Eisert, Doc. 264, ¶ 2.)

17. By separate order, the Court directed that certain changes be made to the proposed 

Settlement Notice. (Doc. 253.) The Court directed that the Administrator disseminate the 

Settlement Notice, as modified by this Court‘s Order, in accordance with the Agreement and this 

Court‘s Preliminary Approval Order. (Doc. 252 at 4-5.) 

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18. On January 20, 2010, the Parties Jointly filed a Notice of Revised Settlement 

Notice Pursuant to Court‘s Order (Docket No. 253) and attached a revised Settlement Notice 

incorporating the Court‘s revisions. (Doc. 254.)

19. The Notice Plan provided the best practicable notice to Settlement Class Members 

by: (i) requiring State Farm to provide a list of names, addresses, and claim numbers for all 

potential Settlement Class Members which may be readily identified by reference to State Farm‘s 

internal documents; (ii) requiring the Administrator to take reasonable steps to ensure that the 

addresses are current, such as running that list through the National Change of Address database; 

and (iii) mailing each identified Settlement Class Member a copy of the proposed Notice. (See

Agreement, Doc. 248, ¶¶ 5.1-5.3.)

20. The Agreement provides that within ten business days of the Court‘s Order 

granting final approval of the Agreement and entry of Final Judgment in the case, State Farm will 

fund the Settlement with a total of $15 million. (Agreement, Doc. 248, ¶ 8.1.) The Settlement 

Class Members will be entitled to the entire balance of that amount after deducting the costs of 

notice, other administrative expenses, a court-approved award of attorneys‘ fees and expenses for 

proposed Class Counsel, and any amount awarded to Plaintiff. (Id. ¶ 9.1.) 

21. Once the deductions have been made, State Farm will prepare a Distribution Plan, 

which will propose allocation of the remaining funds to each Settlement Class Member in 

proportion to the total combined dollar amount of the Projected Sold Adjustment and Age of Ad 

Adjustment on the Settlement Class Members‘ Subject Valuation Report. (Id. ¶¶ 9.2-9.4.) Class 

Counsel will have an opportunity to review and comment on the Distribution Plan. Once State 

Farm and Class Counsel agree that the Distribution Plan complies with the formula provided in 

the Agreement, the Distribution Plan will be provided to the Administrator and amounts 

provided for in the Distribution Plan will be distributed to the Settlement Class Members. (Id.

¶ 9.5.) The amount of distribution to each Settlement Class Member will vary depending on 

which adjustments were used in his or her Subject Valuation Report and the amount of those 

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adjustments. The Parties estimate a distribution between $100 and $1,000 for most Settlement 

Class Members. 

22. To ensure that funds are fully dispersed to the Class, the Agreement provides for a 

second proportional distribution of any amount reserved for administrative costs but unspent and 

uncashed settlement checks. If the amount remaining in the Settlement fund is too small to 

justify the expense of a second distribution, the remaining monies will be paid to agreed upon cy 

pres recipients. (Id. ¶ 9.7.) Moreover, the existence of opt-outs will not reduce the size of the 

Settlement fund. The Net Settlement Fund will be proportionately divided among those Class 

members who do not request to be excluded from the Settlement Class. (Id. ¶¶ 2.34, 9.2, 9.3.) 

Thus, all Settlement funds will be paid out; none will revert to State Farm.

23. The Agreement does not require the Settlement Class Member to take any action 

to be eligible for a distribution under the Agreement. All known Settlement Class Members who 

have not affirmatively opted out of the Settlement Class and are entitled to a distribution will 

receive a check in the mail. (Id. ¶¶ 6.3, 9.5.)

24. The Administrator will mail the payments in the proper amounts to the Class 

members using the same addresses used for distributing the Settlement notice (as modified by 

any address changes identified during the notice distribution process). Five days after the 

Settlement checks are sent, the Administrator will send a postcard reminder to Class members 

notifying them that they should have recently received a check. (Id. ¶ 9.5.) To the extent that any 

payments to Class members are returned with a forwarding address, the Administrator will 

re-send such payments to the new address indicated. For payments that are uncashed within 45 

days, the Administrator will send reminder letters to the relevant Class members. For payments 

greater than $50 that are uncashed within 60 days, the Administrator will attempt to call the 

relevant Class members. Any payments that are undeliverable or otherwise uncashed within 90 

days will, depending on the total amount of such uncashed payments, either be proportionally 

redistributed to those Class members who cashed their checks or become part of a cy pres fund to 

be distributed to the Volunteer Legal Services Program and Bay Area Legal Aid. (Id. ¶¶ 9.5-9.7.)

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25. State Farm has also agreed under the Settlement that going forward in California, 

it will use any one or some combination of the following for comparable vehicles used by 

Mitchell (or any other total loss vendor) when preparing a Total Loss Comparable Vehicle 

Valuation Report for State Farm: (i) the high point of VLF Data obtained from the DMV (even 

though this Court has previously found that the DMV would actually permit using the lower 

midpoint of that data); (ii) actual sales prices from other sources compliant with the TLR; or 

(iii) the asking price of advertised vehicles (without a projected sold or age of ad adjustment). 

(Id. ¶¶ 11.1, 11.2.) 

26. In exchange for the relief described above, the Agreement provides that 

Settlement Class Members generally release State Farm and certain other released parties (such 

as State Farm‘s affiliated companies, employees, and vendors) from any and all claims arising 

out of or related to State Farm‘s use of the Subject Valuation Reports. (Id. ¶¶ 12.1, 12.2.)2 

27. In accordance with the Agreement and this Court‘s orders, Rust Consulting 

obtained addresses for Settlement Class Members from State Farm, ran the list of addresses 

through the National Change of Address database and updated the list of addresses accordingly. 

Rust Consulting mailed the Settlement Notice (which included both an English and Spanish 

version) to 24,358 potential Settlement Class Members by first-class mail on February 9, 2010. 

(Decl. of Melissa D. Eisert, Doc. 260, ¶¶ 6-8.)

28. As of March 30, 2010, 768 of the more than 24,000 Settlement notices mailed by 

Rust Consulting were returned undeliverable. 65 of these notices were returned with a 

forwarding address from the United States Postal Service. Rust Consulting re-sent these notices 

to the new addresses indicated, and updated the addresses in the Class list accordingly. The 

addresses for the remaining returned notices (i.e., those returned without a forwarding address) 

were traced, and an additional 411 notices were mailed to updated addresses, and Rust 

Consulting updated the Class list accordingly. (Id. ¶ 9.) 

 

2 The description of the Agreement in paragraphs 18 through 26 is a summary only. Nothing 

herein is intended to alter or change the terms of the Agreement.

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29. Rust Consulting established, and continues to maintain, a toll-free number with an 

automated system providing information about the Agreement, with the ability to request copies 

of the Settlement notice or the Agreement and to speak with a live customer service 

representative. As of March 30, 2010, there had been 223 calls to Rust Consulting‘s toll free 

number. 141 of those callers requested to speak with a live customer service representative. (Id.

¶¶ 10-11.) 

30. Consistent with the Agreement and the Court‘s Preliminary Approval Order, the 

Court approved Settlement Notice informed Settlement Class Members of their rights to: 

(a) request exclusion from the Settlement Class; and (b) object to, and/or comment regarding, the 

Agreement. Any person within the Class definition who submitted a timely request for exclusion 

shall be excluded from the Settlement Class and shall not be bound by the Agreement. Any 

Class member who does not request to be excluded may object to the Agreement and/or appear at 

the Fairness Hearing to comment regarding the Agreement by submitting a timely 

objection/notice of intent to appear. The deadline for submitting requests for exclusion and 

objections was March 26, 2010. (Doc. 252 at 5-6; Decl. of Melissa D. Eisert, Doc. 264, Ex. A.) 

31. Class Counsel set up a toll-free number in order to receive calls from Class 

members. As of March 11, 2010, there were 20 voice messages left via Class Counsel‘s toll-free 

number. Class Counsel returned all messages promptly. (Decl. of Robert J. Nelson, Doc. 258, 

¶ 10.) 

32. As of March 30, 2010, there were 101 requests for exclusion. (Id. ¶ 12.) While 

most opt-outs simply stated that they wished to be excluded from the class, without giving a 

reason (none was required), a few noted that they were opting out because they believed they had 

been treated fairly by State Farm. (Exhs. B-D to Decl. of Laura L. Goodman, Doc. 275.)

33. Only one Settlement Class Member objected to the proposed Settlement. (Decl. 

of Laura L. Goodman, Exh. A (Doc. 275.)). This objection has since been withdrawn. (Doc. 

273.) 

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34. On January 8, 2010, the Administrator, at the direction of State Farm‘s counsel, 

sent both the Attorney General of the United States and the Commissioner of the California 

Department of Insurance a disk containing all of the information required under 28 U.S.C. 

§ 1715. (See Parks Decl., Doc. 265, ¶¶ 3-10.) 

35. In addition, because potential Settlement Class Members also reside in other 

states, Rust Consulting, at the direction of State Farm‘s counsel, also sent notice to the insurance 

commissioners in forty-two other states where potential Settlement Class Members may reside. 

(Id. ¶ 4.) In addition, each state commissioner received a list of the potential Settlement Class 

Members who may currently reside in their respective states, together with each Settlement Class 

Member‘s estimated proportionate share of the Settlement. (Id. ¶ 7.)

36. On January 26, 2010, Rust Consulting, at the direction of State Farm‘s counsel, 

served on the appropriate state and federal officials a supplemental notice indicating that this 

Court had issued its Preliminary Approval Order. (Id. ¶ 8.) The notice also contained copies of 

the (i) Preliminary Approval Order, (ii) Order on Proposed Attorneys‘ Fees and Revisions to 

Notice to Settlement Class Members, and (iii) Notice of Revised Settlement Notice Pursuant to 

Court‘s Order. (Id. ¶ 9.) In addition, the supplemental notice indicated that the Fairness Hearing 

was scheduled for April 15, 2010 at 2:00 p.m. (subject to the Court‘s schedule). (Id. ¶ 10.)

37. Rust Consulting confirmed with the United States Postal Service that all notices 

have been delivered to the appropriate State and Federal officials. (Id. ¶ 11.)

38. No government official has expressed an objection to the Settlement.

CONCLUSIONS OF LAW

I. Standards For Approval Of Class Action

The law favors the compromise and settlement of class action suits. See, e.g., Churchill 

Village, L.L.C. v. Gen. Elec., 361 F.3d 566, 576 (9th Cir. 2004); Class Plaintiffs v. City of 

Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992); Officers for Justice v. Civil Serv. Comm’n, 688 

F.2d 615, 625 (9th Cir. 1982). ―[T]he decision to approve or reject a settlement is committed to 

the sound discretion of the trial judge because he is exposed to the litigants and their strategies, 

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positions, and proof.‖ Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). 

When considering a motion for final approval of a class action settlement under Rule 

23(e), the Court‘s inquiry is whether the settlement is ―fair, adequate, and reasonable.‖ Fed. R. 

Civ. P. 23(e)(2). See Hanlon, 150 F.3d at 1026 (setting forth fairness and adequacy factors to be 

considered for approval of class settlement); accord Rodriguez v. West Publ’g Corp., 563 F.3d 

948, 963 (9th Cir. 2009); see also Class Plaintiffs, 955 F.2d at 1276. A settlement is fair, 

adequate, and reasonable when ―the interests of the class are better served by the settlement than 

by further litigation.‖ Manual for Complex Litigation (Fourth) § 21.61 (2004). The decision to 

approve or reject a proposed settlement is committed to the Court‘s sound discretion. See City of 

Seattle, 955 F.2d at 1276. In exercising this discretion, ―[t]his circuit has long deferred to the 

private consensual decision of the parties.‖ Rodriguez, 563 F.3d at 965; see also Hanlon, 150 

F.3d at 1027 (approval of class settlement proper after several months of negotiation where there 

was ―[n]o evidence of collusion‖). Thus, in evaluating whether the settlement is fair and 

adequate, the Court‘s function is not to second-guess the settlement‘s terms.

[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. 

Therefore, the settlement or fairness hearing is not to be turned into a trial or 

rehearsal for trial on the merits. Neither the trial court nor this court is to reach 

any ultimate conclusions on the contested issues of fact and law which underlie 

the merits of the dispute, for it is the very uncertainty of outcome in litigation and 

avoidance of wasteful and expensive litigation that induce consensual settlements. 

The proposed settlement is not to be judged against a hypothetical or speculative 

measure of what might have been achieved by the negotiators.

Officers for Justice v. Civil Serv. Comm’n, 688 F.2d 615, 625 (9th Cir. 1982).

3

 This is especially 

 

3

See also Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1242 (9th Cir. 1998) (― ̳The 

proposed settlement is not to be judged against a hypothetical or speculative measure of what 

might have been achieved by the negotiators.‘‖) (emphasis in original; citation omitted); In re 

Corrugated Container Antitrust Litig., 643 F.2d 195, 212 (5th Cir. Apr. 1981) (―[W]hether 

another team of negotiators might have accomplished a better settlement is a matter equally 

comprised of conjecture and irrelevance.‖); In re Enron Corp. Sec., Derivative & “ERISA”

Litig., 228 F.R.D. 541, 565 (S.D. Tex. 2005) (―[I]t is not relevant that other negotiators might 

have obtained a better settlement for the class . . . .‖).

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so ―in light of the strong judicial policy that favors settlements, particularly where complex class 

action litigation is concerned.‖ City of Seattle, 955 F.2d at 1276; see also Curtis-Bauer v. 

Morgan Stanley & Co., No. C 06-3903 TEH, 2008 WL 4667090, at *4 (N.D. Cal. Oct. 22, 2008)

(Henderson, J.) (―[T]he court must also be mindful of the Ninth Circuit‘s policy favoring 

settlement, particularly in class action law suits.‖).

Courts in the Ninth Circuit have considered, if applicable, the following eight factors in 

determining whether a proposed class action settlement is fair, reasonable, and adequate:

―[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.‖

Rodriguez, 563 F.3d at 963 (citation omitted); accord Hanlon, 150 F.3d at 1026. The relative 

importance of each factor is left to the sound discretion of the Court. See Nat’l Rural 

Telecomms., 221 F.R.D. at 526. ―Not all of these factors will apply to every class action 

settlement. Under certain circumstances, one factor alone may prove determinative in finding 

sufficient grounds for court approval.‖ Id. at 525-26. 

II. Applying The Factors To This Case

A. The Value And Strength Of Plaintiff’s Case

The first fairness factor addresses Plaintiff‘s likelihood of success on the merits and the 

range of possible recovery. See Rodriguez, 563 F.3d at 964-65. In determining the probability of 

Plaintiff‘s success on the merits, there is no ―particular formula by which that outcome must be 

tested.‖ Id. at 965. Rather, the Court‘s assessment of the likelihood of success is ―nothing more 

than an  ̳amalgam of delicate balancing, gross approximations and rough justice.‘‖ Officers for 

Justice, 688 F.2d at 625 (citation omitted). Nor, at this stage, need the Court ―reach any ultimate 

conclusions on the contested issues of fact and law which underlie the merits of the dispute, for it 

is the very uncertainty of outcome in litigation and avoidance of wasteful and expensive litigation 

that induce consensual settlements.‖ Id. Instead, the Court may presume that through 

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negotiation, the Parties, counsel, and mediator arrived at a reasonable range of settlement by 

considering Plaintiff‘s likelihood of recovery. See Rodriguez, 563 F.3d at 965.

In this case, State Farm has raised several significant challenges to Plaintiff‘s claims. 

First, State Farm contends that the TLR was not in effect during the class period. (State Farm 

Mem., Doc. 262, at 9 n.4.) While this Court has previously rejected State Farm‘s argument 

(Mar. 23, 2009 Order [Doc. 159] at 17-18), its decision would be subject to review on appeal 

absent a settlement. Second, State Farm maintains that its use of the Mitchell TLV system 

complied with the TLR, which State Farm contends permits an insurer to value total loss vehicles 

using ―a computerized automobile valuation service that produces statistically valid fair market 

values within the local market area.‖ (State Farm Mem. at 9 (citing Cal. Code Regs. tit. 10, 

§ 2695.8(b)(4)(C) (2009).)

State Farm further argues that even if Plaintiff could demonstrate that the Mitchell 

valuation reports did not comply with the TLR, a regulatory violation does not, in itself, establish 

―a breach of contract or an act [of] bad faith‖ by the insurer. (State Farm Mem. at 9 (citing 

Rattan v. United Servs. Auto. Ass’n, 84 Cal. App. 4th 715, 724 (2000); see also Safeco Ins. Co. of 

Am. v. Parks, 170 Cal. App. 4th 992, 1006 (2009) (―An insurer‘s failure to comply with [a CDI] 

regulation does not, in itself, establish a breach of contract or bad faith by the insurer.‖).) Rather, 

State Farm argues that to establish either a breach of contract claim or a bad faith claim under 

California law, Plaintiff and each of the class members must prove that they did not receive what 

they were entitled to under their insurance contracts. (State Farm Mem. at 9 (citing Aguilera v. 

Pirelli Armstrong Tire Corp., 223 F.3d 1010, 1015 (9th Cir. 2000); Amadeo v. Principal Mut. 

Life Ins. Co., 290 F.3d 1152, 1164 (9th Cir. 2002).) 

State Farm notes that the insurance policies at issue provide that, in the event a 

policyholder‘s vehicle is a total loss, State Farm will pay the policyholder ―the actual cash value‖ 

of the vehicle (less deductibles) ―at the time the loss occurred.‖ (Ex. A, Garner Policy, § IV, 

p. 17 [Doc. 210].) State Farm further argues that ―actual cash value,‖ which is the same as ―fair 

market value,‖ is ― ̳[t]he amount at which property would change hands between a willing buyer 

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and a willing seller.‘‖ (State Farm Mem. at 9 (citing In re Two “S” Corp., 875 F.2d 240, 244 n.4 

(9th Cir. 1989) (quoting Black’s Law Dictionary 536 (5th ed. 1979)); accord United States v. 

760.807 Acres of Land, 731 F.2d 1443, 1446 (9th Cir. 1984).) 

Although the Court has not decided this issue, it has previously indicated that this might 

be an appropriate way to measure damages, and expressed reservations about Plaintiff‘s proposed 

measure. (See Transcript of June 17, 2008 at 16:16-17:24; Motion to Dismiss and Compel Order, 

Doc. 47, at 5, n.2, Doc. 159; Summary Judgment Order, Doc. 159, at 5, n.1.) While Plaintiff 

strongly disagrees that State Farm‘s proposed measure would be proper, Plaintiff acknowledges 

that the issue of how Class damages should be measured was undecided at the time of the 

Settlement. Plaintiff notes that were the Court to have adopted State Farm‘s proposed measure, 

or any other measure that significantly differed from that proposed by Plaintiffs, the recovery for 

the Class in this case would almost certainly be significantly lower than the $15,000,000 

monetary payment provided for in the Agreement, even assuming Plaintiffs prevailed at trial on 

the issue of liability. The Agreement allows the Class to avoid the risk of such a result, while still 

providing Class members with a large percentage of the potential recovery under Plaintiff‘s 

proposed measure of damages. 

B. Complexity and Expense of Litigation

The second fairness factor – the complexity, expense, and likely duration of the litigation 

– also weighs in favor of approval. ―Settlement avoids the complexity, delay, risk and expense 

of continuing with the litigation and will produce a prompt, certain, and substantial recovery for 

the Plaintiff class.‖ Curtis-Bauer, 2008 WL 4667090, at *4. Indeed, there is no doubt that the 

time and expense of continuing the litigation would be substantial, and that such transactional 

costs could significantly reduce whatever judgment, if any, Plaintiff could recover through 

litigation. The Rodriguez court found that approval under this factor was favored where, as here, 

significant procedural hurdles remained, including an anticipated summary judgment motion, 

Daubert motions, and appeals. See Rodriguez, 563 F.3d at 966. Avoiding such unnecessary and 

unwarranted expenditure of resources and time would benefit all Parties and the Court. See

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Enron Corp., 228 F.R.D. at 565; In re Prudential Sec. Inc. Ltd. P’ships Litig., 163 F.R.D. 200, 

210 (S.D.N.Y. 1995). 

Thus, the Agreement also provides the Class with another significant benefit that they 

would not receive if the case proceeded to trial – prompt relief. 

C. The Risk of Maintaining Class Action Status Throughout the Trial 

The third factor, which concerns the risk of maintaining class certification, favors 

settlement as well. As discussed above, State Farm raised significant objections to Plaintiff‘s 

theory of damages, which could undermine the manageability of the proposed class action. 

D. The Settlement Amount

The fourth fairness factor, the amount of recovery offered, see Rodriguez, 563 F.3d at 

963, also strongly favors final approval of the Settlement. The Settlement Agreement was 

proposed after protracted arms-length and adversarial negotiation, during which time an 

experienced impartial mediator helped the Parties arrive at a compromise amount that both 

Parties find satisfactory. In particular, the Settlement Class Members will receive substantial 

financial benefit, as State Farm will fund the Settlement with $15 million, resulting in a recovery 

of approximately $100 to $1,000 for most Settlement Class Members. The Agreement is 

designed to maximize the recovery for each of the Settlement Class Members. The Notice Plan 

used a list of names, addresses, and claim numbers for all potential Settlement Class Members 

that was culled from State Farm‘s internal documents to provide each identified Settlement Class 

Member with actual mailed notice of the Settlement. (See Agreement ¶¶ 5.1-5.3.) All identified 

Settlement Class Members who have not affirmatively opted out of the Settlement Class and are 

entitled to a distribution will receive a check in the mail. (Id. ¶¶ 6.3, 9.5.) Finally, State Farm 

does not retain a reversionary interest in either the Gross Settlement Fund or the Net Settlement 

Fund.

Indeed, courts have recognized that even where – unlike here – ―the total settlement fund 

is small,‖ it may not be ―unreasonable in light of the perils plaintiffs face in obtaining a 

meaningful recovery on their claims.‖ In re Critical Path, Inc., No. C 01-00551 WHA, 2002 WL 

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32627559, at *7 (N.D. Cal. June 18, 2002) (Alsup, J.); accord Jaffe v. Morgan Stanley & Co., 

No. C 06-3903 TEH, 2008 WL 346417, at *9 (N.D. Cal. Feb. 7, 2008) (Henderson, J.) (―The 

settlement amount could undoubtedly be greater, but it is not obviously deficient, and a sizeable 

discount is to be expected in exchange for avoiding the uncertainties, risks, and costs that come 

with litigating a case to trial.‖); see also Hanlon, 150 F.3d at 1027 (holding that the possibility 

―that the settlement could have been better . . . does not mean the settlement presented was not 

fair, reasonable or adequate‖). As discussed above, Plaintiff certainly faces such perils here. Yet 

the proposed Settlement nevertheless provides the Settlement Class with real, substantial 

monetary benefit, notwithstanding these difficulties with their claims and the fact that they face 

serious procedural hurdles to recovery. 

Notably, Plaintiff‘s expert, Dr. Richard Drogin, opined that the total aggregate loss to the 

Settlement Class due to Mitchell‘s use of projected sales price and age of ad adjustments is 

$23,544,458. (Drogin Decl., Doc. 197, ¶¶ 10, 11.) The Gross Settlement Fund of $15 million is 

approximately 64 percent of Dr. Drogin‘s estimated loss. Even assuming that costs and fees 

reduce the Net Settlement amount to approximately $10,000,000, the Settlement Class will still 

receive approximately 42 percent of the total aggregate alleged loss according to Plaintiff‘s 

expert‘s numbers. The Ninth Circuit has found that settlement amounts of about 20 percent –

i.e., less than half of what the Settlement Class will receive here – were fair and adequate. See, 

e.g., In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000); see also Officers for 

Justice, 688 F.2d at 628 (―It is well-settled law that a cash settlement amounting to only a 

fraction of the potential recovery does not per se render the settlement inadequate or unfair.‖).

Significantly, the Agreement provides for equal and fair relief for each and every Class 

member. Pursuant to the Agreement, every Class member will receive the exact same percentage 

of the Projected Sale Price and Age of Ad adjustments that were applied to their total loss claims. 

Rather than be faced with the expense and uncertainty of what would doubtless be protracted 

litigation, members of the Settlement Class are offered certain monetary recovery now based on 

readily ascertainable criteria. In short, this Settlement affords substantial relief to the Settlement 

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Class.

In addition to the substantial monetary payment to the Class, State Farm has also agreed 

that it will no longer use the ―Projected Sold‖ or ―Age of Ad‖ adjustments in California. Rather, 

Mitchell (or any other total loss vendor used by State Farm) will use any one or some 

combination of the following for comparable vehicles when preparing a Total Loss Comparable 

Vehicle Valuation Report for State Farm: (i) the high point of VLF Data obtained from the 

DMV (even though this Court has previously found that the DMV would actually permit using 

the lower midpoint of that data); (ii) actual sales prices from other sources compliant with the 

TLR; or (iii) the asking price of advertised vehicles (without a projected sold or age of ad 

adjustment). (Id. ¶¶ 11.1, 11.2.) Accordingly, the fourth fairness factor strongly indicates that the 

proposed Settlement is fair and adequate.

E. Extent of Discovery Completed

The fifth fairness factor, the extent of discovery and the current stage of the proceedings, 

likewise supports final approval. Substantial discovery has been conducted in this case, giving 

Plaintiff ―a good grasp on the merits of [her] case before settlement talks began.‖ Rodriguez, 563 

F.3d at 967; see also Jaffe, 2008 WL 346417, at *9 (finding approval appropriate where parties 

had engaged in extensive discovery prior to settlement). 

As a result, the Agreement is informed by Class Counsel‘s thorough investigation and 

discovery efforts, and comes after extensive, hard-fought litigation by the Parties in this case. 

Class Counsel has undertaken substantial investigation and discovery in this case, including, 

without limitation: (a) reviewing and analyzing extensive email correspondence and tens of 

thousands of pages of other documents produced by State Farm, Mitchell, J.D. Power & 

Associates, and the California Department of Insurance, among other entities; (b) deposing 

employees of State Farm and Mitchell, California Department of Insurance officials, State 

Farm‘s expert witness, and other witnesses; (c) reviewing and analyzing a substantial selection of 

the more than 24,000 total loss valuation reports provided by State Farm to the Class members; 

(d) working extensively with experts regarding the complexities of the TLR and the appraisal 

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process; (e) researching the legislative history of the TLR; (f) completing a detailed statistical 

analysis, working with experts, of the valuation methodology used by Mitchell; (g) working 

extensively with experts to analyze Class damages; and (h) propounding extensive written 

discovery.

Further, this case has been heavily litigated. The Parties have litigated multiple 

dispositive and other important motions raising complex legal and factual issues, including State 

Farm‘s motion to dismiss and motion to compel appraisal, the Parties‘ cross-motions for 

summary judgment/adjudication regarding the applicability of the TLR, and Plaintiff‘s pending 

motion for class certification. The Parties further engaged in an extensive appraisal process 

regarding the Class representative‘s total loss vehicle. Moreover, both Parties have engaged 

expert witnesses and submitted expert reports, and have litigated multiple discovery disputes. 

F. Absence of Collusion

―Before approving a class action settlement, the district court must reach a reasoned 

judgment that the proposed agreement is not the product of fraud or overreaching by, or collusion 

among, the negotiating parties.‖ City of Seattle, 955 F.2d at 1290. Where a settlement is the 

product of arms-length negotiations conducted by capable and experienced counsel, the court 

begins its analysis with a presumption that the settlement is fair and reasonable. See 4 Newberg 

§ 11.41.

The Agreement here is the product of arms-length negotiations between the Parties. The 

Parties engaged in a full day mediation before an experienced mediator, Judge Daniel Weinstein, 

and thereafter reached an agreement in principle with the further capable assistance of Judge 

Weinstein. For two months thereafter, the Parties worked together extensively to finalize the 

Agreement. Both Parties were represented throughout the negotiations by counsel experienced in 

the prosecution, defense, and settlement of complex class actions, and were guided by this 

Court‘s prior rulings in this case.

G. Experience and Views of Counsel

The experience and views of counsel also weighs in favor of approving the Settlement. 

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Counsel for State Farm and proposed Class Counsel, both of whom have substantial experience 

in prosecuting and negotiating the settlement of class action and insurance litigation, concur that 

the Settlement is fair, and proposed Class Counsel have recommended approval of the proposed 

Settlement as in the best interests of the putative Settlement Class. See Rodriguez, 563 F.3d at 

967 (― ̳[P]arties represented by competent counsel are better positioned than courts to produce a 

settlement that fairly reflects each party‘s expected outcome in litigation[.]‘‖) (citation omitted); 

see also Isby v. Bayh, 75 F.3d 1191, 1200 (7th Cir. 1996) (noting that a district court is ―entitled 

to give consideration to the opinion of competent counsel that the settlement [is] fair, reasonable, 

and adequate‖).

H. The Presence of a Governmental Participant

Although no governmental entity is a party to this action, forty-four governmental entities 

– including the CDI, the United States Attorney General, and the insurance commissioners in 

forty-two other states where potential Settlement Class Members may reside – have been notified 

of the proposed Settlement pursuant to the notice provision of CAFA, 28 U.S.C. § 1715. (See

Decl. of Justin Parks re: Service of CAFA Notice, Doc. 265, ¶¶ 4, 6, 7.) Although CAFA does 

not create an affirmative duty for either state or federal officials to take any action in response to 

a class action settlement, CAFA presumes that, once put on notice, state or federal officials will 

raise any concerns that they may have during the normal course of the class action settlement 

procedures. See generally Fed. R. Civ. P. 23(e)(2) (court must conduct a fairness hearing before 

approving class action settlement). To date, no state or federal official has raised any objection 

or concern regarding the Agreement.

I. The Reaction of the Class Members to the Proposed Settlement

The reaction of the Settlement Class Members to the proposed Settlement has been 

overwhelmingly positive and strongly supports final approval. Following the Court‘s 

preliminary approval, the Parties and Rust Consulting have fully implemented the Courtapproved Notice Plan. Under the Agreement, all Settlement Class Members choosing to object 

to, or opt out of, the Settlement had until March 26, 2010 to do so. As of March 31, 2010, only 

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one Settlement Class Member has objected to the Settlement. (Decl. of Melissa D. Eisert, Doc. 

264, ¶ 13.) Courts have repeatedly recognized ―that the absence of a large number of objections 

to a proposed class action settlement raises a strong presumption that the terms of a proposed 

class settlement action are favorable to the class members.‖ Nat’l Rural Telecomms., 221 F.R.D. 

at 529. Thus, the Court ―may appropriately infer that a class action settlement is fair, adequate, 

and reasonable when few class members object to it.‖ Create-A-Card, Inc. v. Intuit, Inc., 2009 

U.S. Dist. LEXIS 93989, at *15 (N.D. Cal.); see also Barcia v. Contain-A-Way, Inc., No. 

07cv938-IEG-JMA, 2009 WL 587844, at *4 (S.D. Cal. Mar. 6, 2009) (absence of objectors 

―strongly supports the fairness, reasonableness, and adequacy of the settlement‖); Stoetzner v. 

U.S. Steel Corp., 897 F.2d 115, 118-19 (3d Cir. 1990) (finding that 29 objections out of a 281-

member class ―strongly favors settlement‖).

Moreover, the lone objector raises no concern that should preclude approval of the 

settlement.4 The objector voices concern regarding how payments to the Settlement Class 

Members are calculated. In particular, she is concerned that the Parties will have unfettered 

discretion in determining what amount she will receive under the Agreement. This is not so. 

The Agreement requires the amount that each Settlement Class Member receives be computed in 

strict compliance with the formula set out in the Agreement. (Agreement ¶ 9.3.) Class Counsel 

will then have an opportunity to review and comment on the results of State Farm‘s

computations in the Distribution Plan. Only after State Farm and Class Counsel agree that the 

Distribution Plan complies with the formula provided for in the Agreement will the 

Administrator distribute the funds to the Settlement Class Members. (Id. ¶ 9.5.)

The objector also raises a concern that State Farm may have a reversionary interest in the 

Settlement Fund, which it does not under the terms of the Agreement. The Settlement Class 

Members are entitled to the entire balance of the Settlement Fund after deducting the costs of 

notice, other administrative expenses, a court-approved award of attorneys‘ fees and expenses for 

 

4

See Exh. A to Declaration of Laura Goodman, Doc. 275. The objector has since withdrawn 

her objections.

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proposed Class Counsel, and any amount awarded to Plaintiff. (Id. ¶ 9.1.) Finally, the objector 

suggests that the payments to the Class Representative and Class Counsel are excessive. 

However, counsel fees and expenses, as well as payment to the Class Representative, are subject 

to review and approval by this Court, and are addressed by separate order.

In addition, as of March 30, 2010, only 101 out of the over 24,000 who received notice 

have elected to opt out of the Settlement Class. (Eisert Decl., Doc. 264, ¶ 12.) This means that 

over 99.5% of the recipients of the Class Notice chose to remain part of the Settlement Class, 

which is a further indication of the fairness of the Settlement. See Brailsford v. Jackson Hewitt 

Inc., No. C 06-00700 CW, 2007 WL 1302978, at *4 (N.D. Cal. May 3, 2007) (Wilken, J.) 

(observing that low opt-out rate is an indication of fairness).

Notably, the fact that a potential Settlement Class Member chooses to opt out does not 

necessarily indicate that he or she finds the Settlement objectionable. Indeed, several of the 

opt-outs indicated that they chose to exclude themselves from the class because they felt that they 

―were treated and compensated fairly and efficiently by [their] State Farm Claims Representative 

. . . and do not want to pursue any claim against State Farm‖5or ―have been customers with State 

Farm for over 50 years [and State Farm has] always dealt fairly, honestly and in a timely manner 

[with them].‖6

III. Adequate Notice Has Been Provided to the Settlement Class and to the Appropriate 

State and Federal Officials 

A. The Notice Plan Has Been Fully and Successfully Implemented

Under Federal Rule 23(c), the parties need only provide notice ― ̳reasonably certain to 

inform the absent members of the plaintiff class.‘‖ Silber v. Mabon, 18 F.3d 1449, 1454 (9th Cir. 

1994) (citation omitted). The notice need only ― ̳generally describe[] the terms of the settlement 

in sufficient detail to alert those with adverse viewpoints to investigate and to come forward and 

 

5

See Exh. B to Decl. of Laura Goodman, Doc. 275. 

6

See Exh. C to Decl. of Laura Goodman; see also Exh. D to Decl. of Laura Goodman 

(―Please exclude us from the class action suit against State Farm. We were very satisfied with 

the settlement of our claims.‖). 

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be heard.‘‖ Churchill, 361 F.3d 566, 575 (9th Cir. 2004); see also Mendoza v. Tucson Sch. Dist. 

No. 1, 623 F.2d 1338, 1351 (9th Cir. 1980) (―Notice in a class suit may consist of a very general 

description of the proposed settlement.‖). 

In its Preliminary Approval Order, the Court found that the proposed Notice Plan ―will 

provide the best practicable notice to the putative Class under the circumstances‖ (Doc. 252, 

at 1), and ―satisfies all applicable requirements of law, including, but not limited to Rule 23 of 

the Federal Rules of Civil Procedure and the Constitutional requirement of due process.‖ (Id. at 

4.) The Settlement Notice clearly and concisely informed Settlement Class Members of the 

relevant aspects of the litigation and the Settlement, including: (i) the definition of who is a 

Settlement Class Member; (ii) the history of the litigation; (iii) the terms of the Settlement; 

(iv) the binding effect of any judgment for those persons who are Settlement Class Members; 

(v) the right of Settlement Class Members to request exclusion (opt out) from the Settlement 

Class and the procedures and deadlines for doing so; (vi) the right of Settlement Class Members 

to object to any aspect of the Settlement and/or to appear at the Fairness Hearing and the 

procedures and deadlines for doing so; (vii) the date, time, and location of the Fairness Hearing; 

(viii) how to obtain additional information; (ix) the benefits of the Settlement and how to 

participate in the Settlement; and (x) information on Class Counsel‘s fees and expenses. See 

Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 811-12 (1985).

The Court-approved Notice Distribution Plan has now been fully implemented by the 

Parties and the Administrator. (See Eisert Decl., Doc. 264, ¶¶ 3-13.) Accordingly, the Court 

finds that the Settlement Notice and Notice Plan as carried out by the Administrator complied 

with this Court‘s Preliminary Approval Order [Doc. 252] dated January 15, 2010, and this 

Court‘s Order on Proposed Attorneys‘ Fees and Revisions to Notice to Class Members [Doc. 

253], and satisfied the requirements of Federal Rule of Civil Procedure 23 and due process. 

B. Notice Has Been Given to the Appropriate Federal and State Officials 

Pursuant to CAFA

CAFA requires that notice of all federal class action settlements be sent to the appropriate 

state and federal officials as a condition of obtaining court approval of the settlement. In nonCase 4:08-cv-01365-CW Document 283 Filed 04/22/10 Page 23 of 27
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banking cases, the ―appropriate federal official‖ is the Attorney General of the United States. See

28 U.S.C. § 1715(a)(1)(A). Notice must also be sent to the ―appropriate State official of each 

State in which a class member resides.‖ 28 U.S.C. § 1715(b). The ―appropriate State official‖ is

the person in the State who has the primary regulatory or supervisory 

responsibility with respect to the defendant, or who licenses or otherwise 

authorizes the defendant to conduct business in the State, if some or all of the 

matters alleged in the class action are subject to regulation by that person.

28 U.S.C. § 1715(a)(2). In this case, the CDI is the entity with the primary regulatory authority 

over State Farm in California. The Administrator provided notice of the Settlement to the 

Attorney General of the United States, the Commissioner of the California Department of 

Insurance, as well as the commissioners of insurance departments in 42 other states where 

potential Settlement Class Members reside, together with a disk containing all of the information 

required under 28 U.S.C. § 1715. (See Parks Decl., Doc. 265, ¶¶ 3-10.) In addition, each state 

commissioner received a list of the potential Settlement Class Members who may currently 

reside in their respective states, together with each Settlement Class Member‘s estimated 

proportionate share of the Settlement. (Id. ¶ 7.)

On January 26, 2010, Rust Consulting, at the direction of State Farm‘s counsel, served on 

the appropriate state and federal officials a supplemental notice indicating that this Court had 

issued its Preliminary Approval Order, and provided a copy of this Court‘s orders and the revised 

Settlement Notice. (Id. ¶ 8.) 

Accordingly, notification to appropriate federal and state officials has been given in 

accordance with CAFA. 

IV. The Court Has Considered The Objections Of The Single Objector And Overrules 

The Objections

The Court has considered the objections filed by the lone Objector, Laura Maltin, and 

finds each of her objections to be unpersuasive.7

 

7

 Although Ms. Maltin has withdrawn her objections, the Court nevertheless addresses her 

concerns.

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First, Maltin objects to the requested incentive award for the Class representative, 

Arnesha Garner. ―Incentive awards are fairly typical in class action cases.‖ Rodriguez v. West 

Publishing Corp., 563 F.3d 948, 958 (9th Cir. 2009) (emphasis in original); see also Staton v. 

Boeing Co., 327 F.3d 938, 977 (9th Cir. 2003); Van Vranken v. Atlantic Richfield Co., 901 

F.Supp. 294, 299 (N.D. Cal. 1995); Dornberger v. Metropolitan Life Ins. Co., 203 F.R.D 118, 

143 (S.D.N.Y. 2001) (―An incentive award is meant to compensate the named plaintiff for any 

personal risk incurred by the individual or any additional effort expended by the individual for 

the benefit of the lawsuit.‖) (citation and internal quotation marks omitted). 

Contrary to Maltin‘s contention, Ms. Garner‘s commitment and contribution to this case 

have been considerable. In addition to lending her name to this case, and thus subjecting herself 

to public attention, Ms. Garner has devoted considerable time and attention to this case for the 

benefit of the Class. Among other things, she has made herself available for deposition on two 

separate occasions, wherein she was subjected to questioning regarding her personal financial 

affairs and other sensitive subjects; met with Class Counsel on six separate occasions; attended 

the full-day Court-ordered appraisal hearing; spoke with Class Counsel and their staff on many 

occasions; reviewed all major pleadings; and repeatedly responded to interrogatories and 

document requests. See Docket No. 221, ¶¶ 4-5. Under the circumstances of this case, the Court 

finds that an award of $20,000 is well justified, given Ms. Garner‘s commitment to the Class.8

Moreover, unlike many class actions, where there are several class representatives, each of whom 

are entitled to incentive awards, here there was just one. 

 

8

 Numerous courts in the Ninth Circuit and elsewhere have approved incentive awards of 

$20,000 or more where, as here, the class representative has demonstrated a strong commitment 

to the class. See, e.g., Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423, 430 (2d Cir. 

2007) (approving incentive awards of $25,000 to named plaintiffs who were deposed); Cook v. 

Niedert, 142 F.3d 1004, 1016 (7th Cir. 1998) (affirming $25,000 incentive award); In re Conn. 

Gen. Life Ins. Co., 1997 WL 910387, at *14 (C.D. Cal. Feb. 13, 1997) (approving $25,000 

incentive payments); Van Vranken., 901 F.Supp. at 299-300 (awarding $50,000 incentive fee); In 

re Dun & Bradstreet Credit Serv. Customer Litig., 130 F.R.D. 366, 373-74 (S.D. Ohio 1990) (in 

estimated $18 million settlement, incentive awards ranged from $35,000 to $55,000); Enterprise 

Energy Corp. v. Columbia Gas Transmission Corp., 137 F.R.D. 240, 251 (S.D. Ohio 1991)

(awarding $50,000 incentive awards); Genden v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,

700 F.Supp. 208, 210 (S.D.N.Y. 1988) (in estimated $4 million settlement, granting a $20,085

incentive award).

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Second, Maltin objects regarding the method of calculation for each Class member‘s 

settlement payment, suggesting that the determination of payment amounts is discretionary and 

uncertain. However, the Settlement expressly requires that each Class Member‘s payment will 

be calculated in strict compliance with the formula set forth in the Settlement. (Settlement, ¶ 

9.3.) Moreover, Maltin‘s concern regarding the fairness of the payment amounts is unfounded. 

Each Class member‘s payment will be directly proportional to the amount of the ―projected sold 

price‖ and ―age of ad‖ adjustments that were applied to their total loss claims; i.e., every Class 

member will receive the exact same percentage of the adjustments that were made to their 

claims. (Settlement, ¶¶ 9.1-9.5.) Moreover, the amount of each Class member‘s settlement 

payment—estimated to be between $100 and $1000 for most Class members—is an outstanding 

result given the size of their claims and the risks and uncertainties of continued litigation. 

Maltin‘s third concern—that unspent settlement funds might revert back to State Farm—

is unfounded because the Settlement is clear that all uncashed settlement checks and any unspent 

portions of the administrative cost reserve will be distributed to Class members as part of a 

second distribution, or, if the amount remaining is not sufficient to justify the cost of a second 

distribution, then such monies will be paid to well-deserving, agreed-upon cy pres recipients. 

(Settlement, ¶ 9.7.)

Fourth, the Maltin objects that Class Counsel‘s requested fee award is excessive. 

However, for the reasons set forth in the Court‘s separate order on attorneys‘ fees and expenses, 

the Court finds that an award of $4,500,000 in attorneys‘ fees and $317,903.90 in litigation 

expenses is reasonable and appropriate under applicable law. The Court notes that if Class 

Counsel‘s fee were calculated pursuant to Maltin‘s suggested approach—i.e., $1000 for each 

Class member who receives relief—then Class Counsel‘s fee award would be considerably 

higher than the amount the Court has ordered.

/ / /

/ / /

/ / /

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CONCLUSION

For all the foregoing reasons, the Court finds that the Agreement, is fair, adequate, and 

reasonable and in the best interests of the Settlement Class; that it satisfies Federal Rule of Civil 

Procedure 23(e) and the fairness and adequacy factors of this Circuit; and should be approved 

and implemented as set out in this Court‘s Final Order and Judgment.

Dated this 22nd day of April, 2010.

The Honorable Claudia Wilken

United States District Judge

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