UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

Civil Action No. 11-4052 (JLL) 

(JAD)

OBJECTION OF MARK RAY

EDWARD SCHWARTZ, on behalf of himself

and others similarly situated,

 Plaintiff,

vs.

AVIS RENT A CAR SYSTEM, LLC, and

AVIS BUDGET GROUP, INC.,

 

 Defendants.

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INTRODUCTION

The proposed settlement is not fair, adequate and reasonable; it creates intraclass conflicts and implicates adequacy problems; and the proposed award of 

attorneys’ fees is excessive.

STANDING AND PROCEDURES TO OBJECT

Objector’s full name, address and telephone number are as follows:

Mark Ray

210 S. Carancahua

Corpus Christi, Texas 78401

Tel: (361) 813-6949

Email: mray@bordenins.com

Objector is a class member who has timely filed a claim and therefore has 

standing to make this objection. See Declaration of Mark Ray, Exhibit A hereto,

incorporated by reference as though set forth in full. My Budget Rapid Rez with 

Fastbreak Program membership number is HT327P. Objector is represented by 

Eisenberg, Gold, Cettei & Agrawal, P.C. and Bandas Law Firm, PC. Chris Bandas of 

Bandas Law Firm does not presently intend on making an appearance for himself or 

his firm. The statement of the objections and the grounds therefor are set forth 

below. Objector does not intend on appearing at the fairness hearing either in person 

or through counsel but asks that this objection be submitted on the papers for ruling 

at that time. Objector relies upon the documents contained in the Court’s file in 

support of these objections. Objection is made to any procedures or requirements to 

object in this case that require information or documents other than those that are 

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contained herein on grounds that such requirements seek irrelevant information to the 

objections, are unnecessary, unduly burdensome, are calculated to drive down the 

number and quality of objections to the settlement and violate Objector’s and 

counsel's due process rights and/or Rule 23.

PRELIMINARY BACKGROUND

This is a proposed claims-made settlement agreement brought on behalf of 

customers of Avis and Budget who were members of the Avis Preferred Service 

Program and/or the Budget Rapid Rez with Fastbreak Program, rented vehicles 

through the respective companies via their websites, and were wrongfully charged an 

“FTP” surcharge for receiving frequent-flyer miles from the companies’ travel 

partners during the class period. 

Claims were brought against Avis and Budget based on allegations that they 

represented that frequent flyer miles would be provided without charge, as most 

frequent flyer miles are; but, in fact, Avis and Budget would charge $.75 per rental day 

for the receipt of frequent flyer miles. Plaintiffs alleged that Avis and Budget violated 

the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. (“CFA”), and also alleged 

that their conduct constituted a breach of contract.

Litigation drew out for nearly five years before the parties finally reached a 

settlement. See Class Notice, at 9, ¶ 16 (“To earn these fees and expenses, Plaintiffs’ 

counsel spent almost five years of time and effort”). Under the agreement, the 

settlement classes are defined as follows:

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Avis Settlement Class

All members of the Avis Preferred Service Program who rented a vehicle 

in the United States through www.avis.com, and paid an FTP Surcharge 

for receiving frequent-flyer miles from any of Avis’s travel partners at 

any time between July 14, 2005 and June 14, 2012, and who did not 

properly or timely exercise their rights to opt out of the settlement. 

Budget Settlement Class 

All members of the Budget Rapid Rez with Fastbreak Program who 

rented a vehicle in the United States through www.budget.com, and paid 

an FTP Surcharge for receiving frequent-flyer miles from any of 

Budget’s travel partners at any time between November 27, 2006 and 

February 17, 2013, and who did not properly or timely exercise their 

rights to opt out of the settlement. 

Class Notice, at 4.

The settlement sets up a claims procedure in which members of the class can 

elect (1) a 10% discount off a future Avis or Budget rental, or (2) a cash payment 

based on the total FTP surcharge paid by the class member.

According to the district court’s opinion certifying the class as to Avis, “11.9 

million rental transactions” that “involved a frequent-flyer surcharge” occurred 

through Avis’s website during the class period. 11004052, Opinion, Doc. 157, p. 14. 

Presumably, millions of rental transactions involving a FTP surcharge likewise 

occurred through Budget’s website during the class period as well.

According to class counsel, if all members of the Avis settlement class chose 

discounts, the value would be $10,924,556. Meanwhile, if every Avis settlement class 

member chose cash, the value would be $4,126,135, which class counsel claims would 

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be an “extraordinary 50% recovery.” Memorandum of Law of Plaintiffs and the 

Classes in Support of Unopposed Motion for Preliminary Approval of Class Action 

Settlement. Doc. 60-1, p. 9. 

Also according to class counsel, if all members of the Budget settlement class 

chose discounts, the value would be $2,853,525, while if everyone opted for cash, the 

value of that settlement would be $1,195,782. Memorandum of Law of Plaintiffs and 

the Classes in Support of Unopposed Motion for Preliminary Approval of Class 

Action Settlement, Doc. 60-1, at 6.

Meanwhile, under the settlement agreement class counsel have agreed to 

attorneys’ fees in the amount of $3,050,000. Notably, Avis and Budget have agreed 

not to contest the award of attorneys’ fees and expenses to Plaintiffs for any amount 

up to $3,050,000. Settlement Agreement, Doc 178-2, at 20, ¶ 12. While there is 

apparently no language discussing what happens in the event that less than the 

$3,050,000 is awarded, since the settlement is structured on a claims-made basis, any 

money that would have otherwise been paid by the Defendants in attorneys’ fees will 

remain in the hands of the Defendants.

OBJECTIONS

The Proposed Settlement Is Not Fair Adequate And Reasonable. 

Objector asserts that the settlement agreement is patently unfair to both Avis 

and Budget class members in that it awards class counsel an extraordinary sum of 

attorneys’ fees at the expense of the recovery of the class. 

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Class action settlements obviously “present unique due process concerns for 

absent class members[.]” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir.1998). 

As the Sixth Circuit explained in In re Dry Max Pampers Litigation: 

Class-action settlements are different from other 

settlements. The parties to an ordinary settlement bargain 

away only their own rights—which is why ordinary 

settlements do not require court approval. In contrast, 

class-action settlements affect not only the interests of the 

parties and counsel who negotiate them, but also the 

interests of unnamed class members who by definition are 

not present during the negotiations. And thus, there is 

always the danger that the parties and counsel will bargain 

away the interests of unnamed class members in order to 

maximize their own.

724 F.3d 713, 715 (6th Cir 2013) (“Pampers”).

Given these concerns, district courts have a duty, akin to that of a fiduciary, to 

protect the interests of the absent class members. Allen v. Bedolla, 787 F.3d 1218, 

1223-24 (9th Cir. 2015); Figueroa v. Sharper Image Corp., 517 F. Supp. 2d 1292, 1320 

(S.D. Fla. 2007) (“The district court’s duty to absent class members is “akin to the 

high duty of care that the law requires of fiduciaries”) (quoting Synfuel Techs., Inc. v. 

DHL Express (USA), Inc., 463 F.3d 646, 652 (7th Cir. 2006)); see also Sullivan v. DB 

Invs., Inc., 667 F.3d 273, 319 (3d Cir.2011) (“trial judges bear the important 

responsibility of protecting absent class members, and must be assur[ed] that the 

settlement represents adequate compensation for the release of the class claims”); 

Reynolds v. Beneficial Nat'l Bank, 288 F.3d 277, 280 (7th Cir.2002) (at the settlement 

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phase, the district judge is “a fiduciary of the class,” subject “to the high duty of care 

that the law requires of fiduciaries”). Thus, district courts must “[c]areful[ly] 

scrutin[ize]” class action settlements “‘to guard against settlements that may benefit 

the class representatives or their attorneys at the expense of the absent class 

members.’” Holmes v. Cont’l Can Co., 706 F.2d 1144, 1147 (11th Cir. 1983) (quoting 

U.S. v. City of Miami, 614 F.2d 1322, 1331 (5th Cir. 1980), modified on other grounds, 664

F.2d 435 (5th Cir. 1981) (en banc)); see also Pettway v. Am. Cast Iron Pipe Co., 576 F.2d 

1157, 1215–16 (5th Cir. 1978) (commanding district courts to “always consider the 

possibility that that an agreement reached by the class attorney is not in the best 

interest of the class” and to beware of settlements that enrich class counsel to a 

greater degree than they do the absent class). “[T]he district judge has a heavy duty to 

ensure that any settlement is ‘fair, reasonable, and adequate’ and that the fee awarded 

plaintiffs’ counsel is entirely appropriate.” Piambino, 757 F.2d at 1139; see also General 

Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 801 (3d Cir. 1995) 

(“Beyond their ethical obligations to their clients, class attorneys, purporting to 

represent a class, also owe the entire class a fiduciary duty once the class complaint is 

filed”) (citations omitted).

The district court’s oversight role does not end at making sure that the settling 

parties engaged in adversarial arm’s length settlement negotiations. Redman v. 

RadioShack Corp., 768 F.3d 622, 628 (7th Cir. 2014). Because “[t]he defendant, and 

therefore its counsel, is uninterested in what portion of the total payment will go to 

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the class and what percentage will go to the class attorney,” Piambino II, 757 F.2d at 

1143 (quoting Foster v. Boise-Cascade, Inc., 420 F. Supp. 674, 686 (S.D. Tex. 1976), aff’d

577 F.2d 335 (5th Cir. 1978)), it is the district court’s place to review the settlement 

for “subtle signs that class counsel have allowed pursuit of their own self-interest and 

that of certain class members to infect the negotiations.” Pampers, 724 F.3d at 718

(internal quotation omitted). 

The burden of proving the fairness of the settlement is on the proponents. Gen. 

Motors., 55 F.3d 768, 785 (3d Cir.1995), cert. denied, 516 U.S. 824, 116 S.Ct. 88, 133 

L.Ed.2d 45 (1995); In re Certain Teed Cor. Roofing Shingle Prods. Liab. Litig., 269 F.R.D. 

468, 483 (E.D. Pa. 2010); see also Holmes, 706 F.2d at 1147. An actual showing is 

required, beyond a court’s “complete confidence in the ability and integrity of 

counsel.” Day v. Persels & Assocs., LLC, 729 F.3d 1309, 1315 (11th Cir. 2013). 

Here, under the best case scenario in which every single class member files a 

claim, which is guaranteed not to occur, Budget class members take home a diminutive 

$1,195,782, which is less than half of class counsels’ recovery. At the same time, under 

this theoretical best case scenario, Avis class members will receive $4,126,135, only 

slightly more than class counsels’ more than $3 million. In the aggregate, Avis and 

Budget class members will receive $5,321,917 compared to class counsels’ more than 

$3 million in attorneys’ fees. The attorneys’ fees are thus 57.3% of the best-case 

scenario recovery by class members! Objection is made to this is grossly inadequate 

amount of recovery for class members.

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Objection is further made that the 10% discount is of no value to class 

members given the alleged consumer fraud committed by both Defendants. Several 

courts have interpreted the Class Action Fairness Act as imposing a heightened level 

of scrutiny in reviewing such settlements. See, e.g., Synfuel Techs., Inc. v. DHL Express 

(USA), Inc., 463 F.3d 646, 654 (7th Cir.2006); Figueroa, 517 F.Supp.2d at 1321. See also

S.Rep. No. 109–14, at 27 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 27 (Section 5 of 

CAFA “requires greater scrutiny of coupon settlements”); FED. R. CIV. P. 23(h), 2003 

Advisory Committee Notes (“Settlements involving nonmonetary provisions for class 

members also deserve careful scrutiny to ensure that these provisions have actual 

value to the class.”).

The discounts here are of limited value because they “‘require the claimant to 

return to the Defendant to do business with him,’ something at least some class 

members likely would prefer not to do.” Synfuel Techs., Inc. v. DHL Express (USA), Inc., 

463 F.3d 646, 654 (7th Cir. 2006). Here, class members are only entitled to a 10% 

discount after spending additional money with one of the defendant/tortfeasors. 

Further, the purported injunctive relief offered in the proposed settlement is 

entirely illusory. The agreement simply keeps measures and improvements already 

taken by Avis and Budget on their websites in place. See Class Notice, at 8, at ¶ 13. 

This supposed recovery has no value whatsoever to class members. 

Objection is further made to the diminutive value of the settlement given the 

11 million Avis class members and unknown millions of Budget class members. 

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Objection is additionally made that the value of the settlement to the class is further 

diminished by the claims-made structure of the settlement, which will ensure that class 

counsel ends up with far in excess of 57.3% of the settlement value. For these 

reasons, the proposed settlement is not fair, adequate and reasonable and the 

proponents of this settlement have failed to discharge their burden of proof on the 

issue of fairness. 

Class Counsel’s Fee Request Is Excessive. 

Objection is made to the disproportionately excessive attorneys’ fees relative to 

class recovery. Class counsel should not be permitted to recover more than half the 

value of the settlement as proposed here. 

Objection is also made to the structure of the settlement as segregating the

attorneys’ fees from class recovery. It should be noted at the outset that Avis and 

Budget are indifferent as to the allocation of any settlement payments between the 

consumers and attorneys’ fees. See, eg., Malchman v. Davis, 761 F.2d 893, 908 (2d Cir. 

1985) (Jon O. Newman, concurring), cert. denied, 475 U.S. 1143 (1986); see also Pampers, 

724 F.3d at 717-18. The existence of segregated funds in this case should be viewed 

for what it is: an artifact of class counsel’s deliberate choice.1 

 

1 GMC Trucks, 55 F.3d at 820 (A severable fee structure “is, for practical purposes, a constructive common fund.”); Id. at 

821 (“[P]rivate agreements to structure artificially separate fee and settlement arrangements cannot transform what is in 

economic reality a common fund situation into a statutory fee shifting case.”); see also Redman, supra; Eubank, supra; In re 

Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935, 947-49 (9th Cir. 2011).

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The proposed settlement contains a “clear sailing clause,” which stipulates that 

attorneys’ fee awards up to a certain amount will not be contested by the Defendants. 

“Such a clause by its very nature deprives the court of the advantages of the adversary 

process.” Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518, 525 (1st Cir. 1991). A 

clear sailing clause lays the groundwork for class counsel to “urge a class settlement 

... on a less-than-optimal basis in exchange for red-carpet treatment on fees.” Id. at 

524; accord Bluetooth, 654 F.3d at 947. Although the proposed settlement agreement 

ostensibly does not explain what happens in the event that all $3,050,000 are not 

awarded, since this is a claims-made settlement, any amount not awarded in attorneys’ 

fees will necessarily revert or remain in the hands of the defendants. This is 

tantamount to a “kicker arrangement,” which stipulates that any reverting attorneys’ 

fees goes to Avis and Budget and not the consumers. See Bluetooth, 654 F.3d at 949. 

“The clear sailing provision reveals the defendant’s willingness to pay, but the kicker 

deprives the class of that full potential benefit if class counsel negotiates too much for 

its fees.” Id. The kicker, like the clear-sailing agreement, is a sign “that class counsel 

have allowed pursuit of their own self-interests ... to infect the negotiations.” Id. at 

947. 

In an ordinary common fund settlement with unsegregated fees, the District 

Court can correct any allocation issues because any fees not paid to class counsel 

simply reverts to the plaintiffs. See, e.g., In re Citigroup Sec. Litig., 965 F. Supp. 2d 369 

(S.D.N.Y. 2013) (reducing excessive fee request by $26.7M for benefit of 

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shareholders). If “class counsel agreed to accept excessive fees and costs to the 

detriment of class plaintiffs, then class counsel breached their fiduciary duty to the 

class.” Lobatz v. U.S. West Cellular of Cal., Inc., 222 F.3d 1142, 1147 (9th Cir. 2000). 

Objection is made on this basis. But see Blessing v. Sirius XM Radio Inc., 507 Fed. Appx. 

1 (2d Cir. 2012) (not selected for publication in Federal Reporter).

Objection is further made that the lodestar multiplier of 1.3 should be reduced 

to below 1 given the exceptionally poor value of the settlement.

Objector incorporates by reference all other objections, if any, filed in 

opposition to this proposed settlement or award of attorneys’ fees that are not 

inconsistent with this objection.

CONCLUSION

Objector request that this settlement be rejected. In the alternative, Objector

requests that the proposed award of attorneys’ fees be rejected or, at minimum, 

substantially reduced.

DATED: April 6, 2016 Respectfully submitted,

/s/ Janet L. Gold, Esquire

Janet L. Gold, Esquire

Eisenberg, Gold, Cettei & Agrawal, P.C.

1040 North Kings Highway, Suite 200

Cherry Hill, New Jersey 08034

Telephone: (856) 330-6200

Facsimile: (856) 330-6207

Email: jgold@egclawfirm.com

Attorneys for Objector/Class Member

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For the foregoing reasons, we. object to this settlement. 

DATED: Apr.il6, 2016 

--------·-·--··---··----

Mru:kRay 

2l 0 S. Carancahua 

Corpus Christi, Texas 78401 

(361) 813-6949 

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Certificate of Service

The undersigned certifies that today he filed the foregoing objection and 

associated declarations on ECF which will send electronic notification to all attorneys 

registered for ECF-filing. The undersigned further certifies he caused to be served via 

USPS First Class Mail, postage prepaid, a copy of this Objection and associated 

exhibits upon the following.

DATED: April 6, 2016

Daniel R. Karon, Esq.Karon LLC

700 West St. Clair Avenue, Suite 200

Cleveland, Ohio 44113

Bruce D. Greenberg, Esq.

Lite DePalma Greenberg, LLC

570 Broad Street, Suite 1201

Newark, New Jersey 07102

Philip R. Sellinger, Esq.

Greenberg Traurig, LLP

500 Campus Drive

Florham Park, New Jersey 07932

/s/ Janet L. Gold, Esquire

Janet L. Gold, Esquire

Eisenberg, Gold, Cettei & Agrawal, P.C.

1040 North Kings Highway, Suite 200

Cherry Hill, New Jersey 08034

Telephone: (856) 330-6200

Facsimile: (856) 330-6207

Email: jgold@egclawfirm.com

Attorneys for Objector/Class Member

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