and other similarly situated,

OPINION

Ptaint(ff

V.

AVIS RENT A CAR SYSTEM, LLC, andAVIS BUDGET GROUP, INC.,

Defendants.

DANIEL KLEIN and STEPHANIE KLEIN, Civil Action No.: 12-7300 (JLL)on behalf ofthemselves and others similarlysituated,

Plaintffs,

V.

BUDGET RENT A CAR SYSTEM, INC. and

AVIS BUDGET CAR RENTAL, LLC.

Defendants.

LINARES, District Judge.

Pending before the Court are Plaintiffs’ motions for final approval of a class action

settlement of the above-captioned cases, approval of incentive awards to class members, andapproval of an award of attorneys’ fees and expenses. (1l-cv-4052, ECF No. 186; 12-cv-7300,

ECF No. 62). The Court granted preliminary approval ofthe proposed settlement ofthese putative

class action lawsuits (“Settlement Agreement”) on February 16, 2016. (ECF No. 180,

1
appeared through his attorney. The court has considered all submissions filed in support of and in

opposition to these motions, as well as the arguments presented at the May 25UI hearing. for thereasons set forth below, Plaintiffs’ motions are granted in full.

I. BACKGROUND

A. Procedural History

The above-captioned matters involve allegations of breach of contract and violations of the

New Jersey Consumer fraud Act against Avis Rent A Car System, LLC, Avis Budget Group., Inc.

(jointly, “Avis”),Budget Rent A Car System, Inc., and Avis Budget Car Rental, LLC (jointly,

“Budget”) (collectively, “Defendants”). Specifically, Mr. Edward Schwartz, who filed his lawsuit

against Avis in July 2011 (ECF No. 1), and Mr. Daniel Klein and Mrs. Stephanie Klein (the

“Kleins”), who filed their suit against Budget in November 2012 (12-cv-7300, ECF No. 1), allegethat Defendants misrepresented and intentionally concealed charges from their customers who

rented vehicles online through their websites and accepted Defendants’ offer of frequent-flyer

miles in connection with those rentals.

After years of discovery and extensive motion practice, on August 28, 2014, the Court granted

Mr. Schwartz’s motion for nationwide class certification with respect to the Schwartz action. (ECf

No. 157, Schwartz Cert. Op., ECF No. 15$, Class Cert. Order). The Third Circuit denied a Rule

Unless otherwise indicated, citations to the record are to the docket in the Sclnt’artz matter, I I-cv-4052.

2
settlement and notice plan on February 16, 2016. (ECF No. 180, Preliminary Approval Order). In

that same Order, the Court preliminarily certified the following two Settlement Classes:

Schwartz: All Persons who, at any time from July 14, 2005 through June 14, 2012, were

members of the Avis Preferred Service Program, rented a vehicle in the United States through

www.avis.com, and paid a Frequent Traveler Program Surcharge (an “FTP Surcharge”) for

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

Klein: All Persons who, at any time from November 27, 2006 through February 17, 2013, were

members of the Budget Rapid Rez with Fastbreak Program, rented a vehicle in the United

States through www.budgct.com, and paid and FTP Surcharge for receiving frequent-flyer

miles from any of Budget’s travel partners.

(Preliminary Approval Order, at 3-4).

B. Settlement Negotiation and Terms

i. Benefits to Class Members

The Settlement Agreement provides class members with the option of a choice of cash or a 10

percent discount on future vehicles rentals. (ECF No. 178-2, Declaration of Bruce D. Greenberg,

“Greenberg Dccl.”, Exh. 1, Settlement Agreement § 5). The amount of cash class members mayreceive, and the number of rental days that class members can use the 10 percent discount, is

calculated by the total amount of Frequent Traveler Program (“FTP”) surcharges the class member

paid. (Id.). The Settlement Agreement also provides injunctive relief, requiring Defendants to

maintain improved disclosures on their websites relating to the FTP Surcharge for at least fiveyears from the effective Settlement Date. (Id. § 6).

ii. Release and Waiver

3
represents an agreement by the class member to “release and forever discharge the Released Parties

from each and every such Release Claim.” (Id. § 13.d). The Settlement Agreement defines“Released Claims” as:

[Amy and all claims, damages, suits, demands, liabilities, judgments, losses, and causes of

action relating to the imposition of an FTP Surcharge in connection with vehicle rentalsfrom Avis or Budget, of any kind or character, whether known or unknown, matured or

unmatured, sounding in law or equity, seeking damages or any other relief (including

attorneys’ fees), that are now recognized by law or that may be created or recognized in

the future by statute, regulation, judicial decision, or in any other manner, based upon any

federal or state statutory or common law, including but not limited to, claims sounding in

tort, contract, and the consumer protection laws ofthe United States or of any state or other

jurisdiction within the United States, and all claims, damages, suits, demands, liabilities,judgments, losses or causes of action which have been, might have been, are now, or could

be asserted by any Plaintiff or any Settlement Class Member arising out of, based upon, or

related to, in whole or in part, the facts and circumstances underlying the claims and causesof action set forth in the Litigation.

(Id. at 6).

In short, under the terms of this Settlement Agreement, all class members who do not opt

out of the class will be prohibited from litigating any present or future claims against the

Defendants relating to the FTP Surcharge.

iii. Attorneys’ Fees and Incentive Awards

The Settling Parties have agreed on compensation for Plaintiffs’ attorneys’ fees and expenses,

as well as incentive awards to Mr. Schwartz and the Kleins. (Id. § 12). Specifically, Defendants

have agreed not to dispute a requested fee and expenses award greater than $3,050,000.00 for both

cases combined. (Id. § 12.b). Moreover, Defendants have agreed not to oppose the payment of a

4
the Settling Parties’ comprehensive notice plan. (See Settlement Agreement, § 3). Defendants,rather than the Class, were responsible for paying for the notice distribution and also for paying a

Claims Administrator to establish and maintain a settlement website, which included a copy ofthe

notice and claim fonm (Id.). Those class members whose email addresses were on file with

Defendants received notice via email, with a direct link to a settlement website. (Id.). All

remaining class members received hard copies of the notice and claim form. (Id.). Notice wasalso published in a 1/6 page advertisement in USA Today’s Marketplace section. (Id.).

In addition to being apprised ofthe substantive terms of the Settlement Agreement, the notice

advises class members that they have the option to exclude themselves from the class or to object

to the Settlement Agreement. (Id., Exh. B., Notice at 12-15). Plaintiffs have represented that over

11 million rental transactions involved the FTP Surcharge, and that the Claims Administrator has

received over 51,000 claims. (ECF No. 186-3, “Pis.’ Br.” at 6).

Only four individuals have objected to the Settlement Agreement. Out of those four

individuals, only one objector, Todd Payne, appeared, though his attorney, at this Court’s May 25,

2016 fairness hearing. The objectors’ positions are addressed in detail below.

II. FINAL CERTIFICATION OF THE SETTLEMENT CLASSES

Before approving the final Settlement Agreement, the Court must “definitively certify the

class[es] and satisfy [itself] that the requisites of Rule 23 have been satisfied.” In re General

Motors Corp. Pick-Up Truck Fttel Tank Prods. Liab. Litig., 55 F.3d 768, 797 (3d Cir. 1995).

5
23(a); see also In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 309, n.6 (3d Cir. 200$).

Additionally, as Plaintiffs seeking certification of a Rule 23(b)(3) class, the Court must also be

satisfied that “(1) common questions predominate over any questions affecting only individual

class members (predominance) and (2) class resolution is superior to other available methods todecide the controversy (superiority).” In re National Football League Players Concussion Injury

Litig., (“NFL”)-- F.3d. --,2016 WL 1552205, *6 (3d Cir. Apr. 1$, 2016); Fed. R. Civ. P. 23(b)(3).

This Court has already engaged in a class certification analysis with respect to the Schwartz

action, and has found the requirements of Rule 23(a) and (b) satisfied as to that action. (See

SchwartzCert. Opp.). Given the overlapping factual and legal allegations asserted in the Klein

action, and for the reasons below, the Court finds that the Klein action is similarly appropriate forcertification as a settlement class.

A. Numerosity is SatisfiedA putative class may only be certified if it “is so numerous that joinder of all member is

impracticable.” Fed. R. Civ. P. 23(a)(1). “[G]enerally ifthe named plaintiff demonstrates that the

potential number of plaintiffs exceeds 40, the [numerosity] prong has been met.” Stewart v.

Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001). Plaintiffs have represented, and neither

Defendants nor any objectors have disputed that “{n]early 11.9 million rental transactions involved

a frequent-flyer surcharge. . . and, to date, the [Claims] Administrator has received over 51,000claims.” (Pls.’ Br. at 6). Accordingly, numerosity is easily satisfied in these cases.

6
Litig., 391 F.3d 516, 528 (3d Cir. 2004) (“[T]he nile 23(b)(3) predominance requirement, which

is far more demanding, incorporates the Rule 23(a) commonality requirement. Accordingly, we

analyze the two factors together, with a particular focus on the predominance requirement.”)(citations omitted).

Under Rule 23(a)(2), commonality is satisfied if “there are questions oflaw or fact common

to the class.” Fed. R. Civ. P. 23(a)(2). Not all claims or facts must be common to all class

members; “[a] putative class satisfies Rule 23(a)’s commonality requirement if ‘the namedplaintiffs share at least one question of fact or law with the grievances of the prospective class.”

Rodriguez v. Nat’l Cite Bank, 726 F.3d 372, 382 (3d Cir. 2013) (quoting Baby Neal v. Casey, 43

f.3d 4$, 56 (3d Cir. 1994)).

However, for a class that is certified under Rule 23(b)(3), which the Plaintiffs are here

seeking, the Court must also find that these common questions predominate over individual issues.

In re Prudential Ins. Co. ofAm. Sales Practices Litig. (“Prttdential I”), 962 F. Supp. 450, 510-511

(D.N.J. 1997). “To assess predominance, a court at the certification stage must examine eachelement of a legal claim ‘through the prism’ of Rule 23(b)(3).” Marcus v. BMWofNorth Am., 687F.3d 583, 600 (3d Cir. 2012) (quotingln reDVI, Inc. Sec. Litig., 639 f.3d 623, 630 (3d Cir. 2011)).

Furthermore, a plaintiff must “demonstrate that the element of [the legal claim] is capable of proof

at trial through evidence that is common to the class rather than individual to its members.” Id.(quoting Hydrogen Peroxide, 552 F .3 d at 311) (alterations in Marcus). “In cases where it is alleged

that the defendant made similar misrepresentations, non-disclosures, or engaged in a common

7
and ultimately held that these elements were satisfied as to both claims. As to the NJCFA claim,

the Court noted that a plaintiff must show: (a) unlawful conduct by the defendant; (b) that the

plaintiff suffered an ascertainable loss; and, (c) a causal connection between defendant’s unlawful

conduct and plaintiffs ascertainable loss. (Schwartz Cert. Op. at 16, citing Int’l Union of

Operating Eng’rs Local No. 68 Welfare fund v. Merck & Co., Inc., 929 A.2d 1076, 1086 (N.J.

2007) (quoting N.J.$.A. § 56:8-2)). The Court held that Plaintiff will be able to prove Avis’s

unlawful conduct by “using common evidence given the fact that Avis entered into a standard form

contract with millions of customers over the class period and that the surcharge information was

presented in similar manner to most Avis customers for that period.” (Id. at 16). Moreover, theCourt determined that Plaintiffs could prove ascertainable loss with common evidence by usingAvis’s transaction data. (Id.). Finally, based upon its thorough review of the competing expert

opinions of Mr. Schwartz and Avis, the Court determined that the alleged omissions were “not

knowable” to the class members, thereby satisfying the causal connection requirement under Third

Circuit precedent. (Id. at 17-22)(citing Marctts, 687 F.3d at 610.)

With respect to Plaintiffs breach of contract claims, the Court noted that: (1) the terms of

the contract between Plaintiff and Defendants are substantially similar to those entered between

the putative class members and Avis; (2) Defendants’ behavior is uniform for all members of the

putative class as the question of whether Defendants charged a hidden surcharge for frequent-flyer

miles is one that will be answered equally for all members of the class, and; (3) whether the class

8
Nor has any party or objector argued that Plaintiffs do not satisfy these requirements. Moreover,

given the identical nature ofthe lawsuits filed by the Kleins, the Court finds that the putative Kleinclass similarly satisfies both the commonality and predominance prongs.

C. Plaintiffs’ Claims are Typical of the Absent Class Members’ Claims and Plaintiffs

and their Attorneys will Adequate Represent the Class

Plaintiffs must show that “the claims or defenses ofthe representative parties are typical of

the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). “The typicality inquiry is intended

to assess whether the action can be efficiently maintained as a class and whether the named

plaintiffs have incentives that align with those of absent class members so to assure that the

absentees’ interests will be fairly represented.” Baby Nealfor and by Kanter v. C’asev, 43 F.3d 48,

58 (3d Cir. 1994). Moreover, “[i]f a plaintiffs claim arises from the same event, practice or course

of conduct that gives rise to the claims of the class members, factual differences will not render

that claim atypical if it is based on the same legal theory as the claims of the class. Marcus, 687

F.3d at 59$ (citing Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912, 923 (3d Cir. 1992)).

In a similar vein, Rule 23(a)(4) requires that “the representative parties [must] fairly and

adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). Courts consider the

following two factors in their analysis as to adequacy ofrepresentation: “(1) the plaintiffs attorney

must be qualified, experienced, and generally able to conduct the proposed litigation, and (2) theplaintiff must not have interests antagonistic to those of the class.” Prttdential I, 962 F. $upp. at

519 (D.N.J. 1997) (citing Hoxworth, 980 F.2d at 923).

9
below. No argument has been raised with respect to the competency or qualifications of Plaintiffs’

attorneys, and the Court finds that all of Plaintiffs’ attorneys easily meet these requirements.

Therefore, the Court finds that the classes satisfy Rule 23(a)’s typicality and adequacyrequirements.

B. The Class Action is Superior to Alternative Methods of Adjudication

Lastly, the Class Members’ individual claims are, as compared to the costs oflitigation or even

the risks of arbitration, de minimis; thus, the Court finds that maintaining individual actions in this

case would be prohibitively expensive. A class action is, therefore, the superior method of fairlyadjudicating the controversy. Thus, the Settlement Class satisfies the superiority requirements of

Rule 23(b)(3).

The Court finds that both the Scwartz and Klein settlement class satisfy the requirements of

Rules 23(a) and (b)(3), and accordingly grants final certification of these settlement classes.

III. FINAL SETTLEMENT APPROVAL

Pursuant to Rule 23, a court may only approve a class settlement after it has held a hearing

and determined that the settlement is “fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2).

The Third Circuit has enumerated the following nine factors, to be utilized by the Court in making

this detenTlination:

(1) the complexity, expense and likely duration of the litigation...;(2) the reaction of the class to the settlement. . .; (3) the stage ofthe

proceedings and the amount of discovery completed. . .; (4) the risks

10
Girsh v. Jepson, 521 F.2d 153, 157 (3d Cir.1975) (quoting, in full, City of Detroit v. GrinnellCorp., 495 F.2d 448 (2d Cir. 1974)). Additionally, a presumption of fairness exists where a

settlement has been negotiated at arm’s length, discovery was sufficient, the settlement proponents

are experienced in similar matters, and there are few objectors. In re Warfarin, 391 f.3d at 535.

finally, settlement oflitigation is generally favored by courts, especially in the class action

setting. See Id. “The law favors settlement, particularly in class actions and other complex cases

where substantial judicial resources can be conserved by avoiding formal litigation.” In re General

Motors, 55 f.3d at 784; see also In re Waifarin, 391 F.3d at 535 (“There is an overriding public

interest in settling class action litigation, and it should therefore be encouraged.”). At the same

time, the district court functions “as a fiduciary who must serve as a guardian ofthe rights of absent

class members” by ensuring that the proposed settlement is fair, reasonable, and adequate. In re

General Motors, 55 f.3d at 785.

The Court, in analyzing each of the Girsh factors, specifically finds as follows for an

ultimate determination that this Settlement Agreement is “fair, reasonable, and adequate.” fed.

R. Civ. P. 23(e)(2).

A. Complexity, Expense and Likely Duration of the Litigation

The first Girsh factor considers whether the settlement avoids a lengthy, complex and

expensive continuation of litigation. “This factor ‘captures the probable costs, in both time and

money, of continued litigation.” In re Cendant Corp. Litig., 264 f.3d 201, 233—34 (3d Cir.2001)

11
depositions, likely resulting in a second motion for summary judgment. Klein would have

required even more work, including additional interrogatories and requests for production

and deposition (none of which had yet been taken at the time of the settlement) on classdiscovery. As in Schwartz, a behavioral economist’s opinion would have been required.

And class certification and summary judgment would have required extensive briefing and

evidence. Both cases would have required extensive trial preparation. The lengthy trial

would have involved pretrial motions concerning complex legal and factual questions. And

if Plaintiffs won, Defendants would have likely appealed.

(PIs.’ Br. at 15). None of the objectors have disputed that settling the class actions would enable

the parties to avoid a lengthy, expensive, and complex thai. Importantly, of course, the settlementalso provides the Class with immediate and definite relief.

For all of these reasons, the Court finds that the first Girsh factor weighs in favor of

approval.

B. Reaction of the Class to the Settlement

The second Girsh “factor attempts to gauge whether members of the class support the

Settlement.” In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions (“Prudential II”),

148 F.3d 283, 318 (3d Cir. 199$). In order to properly evaluate it, “the number and vociferousness

of the objectors” must be examined. In re General Motors., 55 F.3d at $12. Generally, “silenceconstitutes tacit consent to the agreement.” Id. (quoting, in full, Belt Atlantic Corp. V. Botger, 2

F.3d 1304, 1313 n.15 (3d Cir. 1993)). Where the number of objectors relevant to the number of

class members is small, this factor “militates in favor of the settlement.” Bell Ati. Corp. V. Bolger,2 F.3d 1304, 1314 (3d Cir. 1993) (finding this factor favors settlement where “[hess than 30 of

approximately 1.1 million shareholders objected”); see also Stoetzner v. US. Steel Corp., $97 F.2d

12
ECF No. 186-2, Declaration of Lori L. Castaneda, Vice President of Operations at Garden City

Group, LLC). The Claims Administrator has received 51,547 claims for both Avis and Budget

clients by April 27, 2016. (Id. ¶ 13). Only eight individuals requested to opt-out ofthe settlement

(Id. ¶ 16), and only four individuals have objected to the settlement.

While it is clear that the settlement has very strong support from the class, the Court has

nevertheless considered the arguments proferred by the objectors.. Of the four objectors, two—Todd Payne and Mark Ray—are represented by counsel. The two remaining objectors, Bruce

David Eisen and Doug Jeffries, have objected on their own behalf.2 The majority ofthe objectionsrelate to counsels’ application for attorneys’ fees rather than to the substantive terms of the

Settlement, which the Court addresses in further detail below. (See 12-cv-7300, ECF No. 63,

Eisen Objection; ECF No. 188-11, Exh. J, Jeffries Objection; ECF No. 182, Ray Objection). To

the extent that the objections bear on the fairness or adequacy of the Settlement Agreement itselfor notice to class members, the Court now turns to these arguments.

Only Mark Ray has objected to the substantive terms of the Settlement Agreement. (ECF

No. 182, Ray Objection).3 Mr. Ray argues that the Agreement’s provision that gives class

2 Although the objection of Doug Jeffries has not been filed on the docket. Plaintiffs’ counsel has attached Jeffries’one-page objection to the declaration filed in support of counsels’ brief for an award of attorneys’ fees and costs. (See

ECF No. 188-11, Exh. J). Although Mr. Jeffries has not indicated the settlement class to which he belongs, as he was

required to do, the Court has nevertheless considered his arguments, and addresses same below. -Mr. Ray is represented by Chris Bandas, Esq., who Class Counsel maintains is a “serial objector” whose objections

should be discredited. Although Class Counsel’s point is well taken, and while this Court is certainly aware of the

numerous cases in which Mr. Bandas has been reprimanded for his conduct in objecting to class settlements, the Courtrejects Mr. Ray’s objections on the merits.

13
class includes many members who have expressed interest in a defendant’s goods or services, or

who do repeat business with defendants, discounts or coupon benefits are an appropriate form ofrelief.” (Pis.’ Br. at 2 1-22). In any event, to the extent a class member does decide not to continue

doing business with Defendants, that class member has the option ofseeking a cash recovery. (See

Settlement Agreement § 5).

Similarly unconvincing is Mr. Ray’s argument that the Settlement Agreement’s

requirement that Defendants include certain disclosures on their websites relating to the FTP

Surcharges is valueless because Defendants have already improved these disclosures. (Ray Br. at

9). As Plaintiffs explain, absent this injunctive relief, Defendants would not be required to

maintain these changes to their websites.

Lastly, Mr. Ray summarily states: “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. Objection is additionally made that the value of the settlement to the class is furtherdiminished 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.” (Ray Br. at 9-10). The Court does

not view Mr. Ray’s reference to the millions of class members of this case as an argument. As to

the objection to the claims process, it is perfectly appropriate to require class members to submit

certain information proving that they are entitled to collect the relief awarded in this case. See,

e.g., In re Orthopedic Bone Screw Products Liability Litig., 246 F.3d 315, 317-318 (3d Cir. 2001)

14
which form of relief (either cash or discounts) each class member would prefer.

i. Objections of Todd Payne

Objector Todd Payne is a member of the Avis settlement class. (ECF No. 65, Payne

Objection, at 1). Mr. Payne’s objections primarily relate to a putative class action currently

pending in the Superior Court ofNew Jersey, Law Division, Morris County, in which Mr. Payne’swife, $herra Payne, is the named Plaintiff. (Id. at 2). As in the pending Schwartz action, the Payne

action alleges claims for breach of contract and violation of the New Jersey Consumer Fraud Act.(Id. at 3). However, the putative class in the Payne action constitutes a sub-class ofthe Schwartz

class members—specifically, the class includes only those who paid a Surcharge in connection

with frequent flyer miles for their American Airlines AAdvantage or Delta Air Lines Sky Miles

accounts. (Id. ). Additionally, where the Schwartz settlement class period extends from July 14,

2005 through June 14, 2012, the Payne class period extends into 2016. Mrs. Payne commencedthe Payne action on October 16, 2015. (Id. ).

Payne argues the settlement notice is deficient because it fails to specifically notify the

Schwartz class members who also fall into the Payne American/Delta classes of the pending State

action. (Id. at 5). Thus, according to Payne, these sub-class members may be unaware that byagreeing to the Settlement Agreement’s release and waiver provisions, they are giving up their

right to participate in the Payne action. (Id.).

15
The notice here plainly advised potential class members that, by participating in the

settlement, they agree to “releas[e] Avis and Budget . . . from any liability or claims associated

with or relating to the imposition of FTP Surcharges during rental transactions.” (Greenberg Dccl.,

Exh. B, Class Notice § 14). The Notice further directed Plaintiffs to the specific terms of the

release in the Parties’ Settlement Agreement. (Id.). This clear explanation is sufficient to advise

any interested class members in any parallel state litigation that their claim regarding the FTP

Surcharge is included within the settlement.

The Third Circuit has held this type of notice sufficient, Bell Ati. Corp., 2. F.3d at 1318,

and accordingly it passes muster in this case. See Maher i’. Zapata Coip., 714 F.2d 435, 450 (5thCir. 1983) (quoted at length in Bolger) (“[W]e feel that notice was so worded as to make reasonably

clear to the minimally sophisticated layman that approval of the settlement would bar claims

beyond those asserted in the Texas action.”) (internal quotations omitted); see also In re Ins.Brokerage Antitrust Litig., 282 F.R.D. 92, 112 (D.N.J. 2012) (Cecchi, J.) (“[N]otice of another

class action lawsuit is not required to obtain an acceptable settlement . . .[N]otice of ‘a pendingsuit that might offer only remote prospects ofsuccess might confuse class members and precipitate

imprudent opting out.”) (quoting ivlatfasihi fleet Mort. Corp., 356 F.3d 781, 785 (7th Cir.

2004)),

Payne next argues that “{t]he claims of the AmericanlDelta sub-class members are

substantively different than the other class members, but no class representative was dedicated to

16
American/Delta sub-class members be excluded as a group from the Schwartz class action so that

they can pursue their “substantially different” damages in State court. (Id. at 2$).

As stated above, this Court has already determined that Mr. Schwartz is a typical and

adequate representative for the Schwartz class who can fairly represent the interests ofthe absentclass members. Thus, the Court’s analysis of the typicality and adequacy of Mr. Schwartz as a

named Plaintiff remains the law of the case, and accordingly will not be dismantled. See In re

ContinentalAirtines, Inc., 279 F.3d 226, 233 (3d Cir. 2002) (“[W]hen a court decides upon a rule

of law, that decision should govern the same issues in subsequent stages of the same case.”)

(quoting, in full, 18 JAMES WM. MOORE FT AL, MOORE’S FEDERAL PRACTICE ¶ 134.20

(3d ed. 1999)). Mr. Payne has not shown any changed circumstances between this Court’s August

28, 2014 Opinion to warrant a finding that Mr. Schwartz cannot adequately represent the absent

class members’ interests—including the American/Delta class members. Nor hasMr. Payneconvinced the Court of the need to carve out the American/Delta sub-class from the certified

Schwartz class.

In any event, the Class Notice very clearly advises class members—including those who

would also fit within the Payne class definition—oftheir right to opt-out ofthe class. (Class Notice

§ 17). Thus, to the extent a member of both the Payne putative class and the Schwartz class

believes that his or her rights are better served in the State Court action, he or she can opt out ofthis matter. (See id.).

17
releases class members’ claims for Surcharges imposed afler the Schwartz settlement class’s June

14, 2012 end-date. (Id.). However, as Plaintiffs explain, the Schwartz class does not cover renters

who did not rent during the June 14, 2005 through June 14, 2012 class period. (Pl.’s Br. at 18).Accordingly, “any FTP Surcharge-related claims alleged by Preferred Service members who didnot rent between June 14, 2005 and June 14, 2012—call them, new Preferred Service renters—are

outside the settlement class, and any claims they have remain available to pursue.” (Id.). To theextent that an individual who fits within the Schwartz class definition has claims from beyond the

Schwartz class’s June 14, 2012 end-date that he or she wishes to pursue, that class member may,

of course, chose to exclude him or herself from the Settlement Agreement. (See Class Notice §

17).

Generally, a class settlement may release claims that are factually tied to the complaint’s

allegations, even if the claims are not specifically identified in the complaint. See Prudential II,

14$ F.3d at 326 (3d Cir. 1998) (“The crux ofthe plaintiffs’ complaint was that Prudential engaged

in a common scheme of deceptive sales practices. Although the Second Amended ConsolidatedComplaint specifically lists three types of deceptive sales claims . . . other allegations addressconduct which supports the common scheme theory and which does not fall neatly within the threeenumerated categories. Therefore, we agree with the district court the ‘other claims’ were properly

released.”). Here, the settlement only releases claims “arising out of, based upon, or related to, inwhole or in part, the facts and circumstances underlying the claims and causes of action set forth

1$
to Payne’s objections, the Court finds the release language to be appropriately tailored to the class

complaints and squarely within the boundaries of the release language permitted by the Third

Circuit.

C. The Stage of the Proceedings and the Amount of Discovery Completed

“The third Girsh factor captures the degree of case development that class counsel [had]

accomplished prior to settlement. Through this lens, courts can determine whether counsel had an

appropriate appreciation of the merits of the case before negotiating.” NFL, 2016 WL 1552205,

*19 (quoting in full Warfarin, 391 F.3d at 537).

The Court is easily convinced that counsel for all parties are akin to the merits of these

cases such that they were adequately prepared to meet at the negotiating table. Both matters have

been pending for several years with the parties having engaged in expert and class discovery.

Additionally, counsel have prepared extensive briefing on motions to dismiss, a motion for

summary judgment, a Daztbert motion, and the Schwartz motion for class certification.

Accordingly, this factor weighs heavily in favor of approval.

D. Risks of Establishing Liability and Damages

“The fourth and fifth Girsh factors survey the possible risks oflitigation in order to balance

the likelihood of success and the potential damage award if the case were taken to trial against the

benefits of an immediate settlement.” Prudential II. 14$ F.3d at 319; see also McGee v. Cont’l

Tire North America, Inc., 06-cv-6234, 2009 WL 539893, at *5 (D.N.J. March 4, 2009) (crediting

19
for any wrongful conduct, in which case Plaintiffs will be left with nothing. Moreover, asdiscussed below, there is a risk that the classes could be decertified, in which case would-be class

members would be left with no recovery. Given such risks, the Court finds that this factor weighs

in favor of approval.

E. Risks of Maintaining the Class Action through Trial

Because the prospects for obtaining and maintaining class certification have a great impact

on the range of recovery one can expect to obtain in a class action, In re General Motors, 55 F.3dat 817, the Court must measure the likelihood of maintaining a certified class ifthe action were to

proceed to trial. Girsh, 521 f.2d at 157. Despite the Court’s certification of the Schwartz class,

Plaintiffs anticipate that absent settlement, Defendants would move to decertify that class and

would contest certification ofthe Klein class. (Pls.’ Br. at 29). Additionally, this Court could sua

sponte “decertify or modify the class at any time during the litigation if it proves to be

unmanageable.” In re Warfarin, 391 F.3d at 537. Given these risks ofmaintaining the class actionthrough trial, the Court finds that this factor, although of marginal value in the settlement context,tips in favor of settlement. see NFL, 2016 WL 1552205, *20.

F. Ability of the Defendants to Withstand a Greater Judgement

The seventh Girsh factor “is concerned with whether the defendants could withstand a

judgment for an amount significantly greater than the settlement.” In re Cendant Corp., 264 F.3d

at 240. However, as recently explained by the Third Circuit, this “factor is most relevant when the

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Liability Litg., 269 F.R.D. 468, 489 (stating that “because ability to pay was not an issue in the

settlement negotiations, this factor is neutral”).

Here, Plaintiffs concede that Defendants could withstand a greater judgnient than the

amount ofthe Settlement. (Id. at 30). Accordingly, the Court deems this Girsh factor to be neutral

as to the settlement’s fairness.

G. Range of Reasonableness of the Settlement fund in Light of the Best Possible

Recovery and Range of Reasonableness of the Settlement Fund to a PossibleRecovery in Light of all the Attendant Risks of Litigation

The last two Girsh factors are usually considered together and require the Court to evaluate

“whether the settlement is reasonable in light ofthe best possible recovery and the risks the parties

would face if the case went to trial.” Prudential II, 148 F.3d at 322. “The fact that a proposedsettlement may only amount to a fraction of the potential recovery does not, in and of itself, mean

that the proposed settlement is grossly inadequate and should be disapproved.” In re AT&T Corp.,455 f.3d 160, 170 (3d Cir. 2006) (citations and quotations omitted). “Rather, the percentage

recovery, ‘must represent a material percentage recovery to [the] plaintiff in light of all the risks

considered under Girsh.” Id. (quoting In re AT & I Corp. Sec. Litig., 00-cv-1399, 2005 WL

671604, *6 (D.N.J. Apr. 25, 2005)).. “Tn order to assess the reasonableness of a settlement in cases

seeking primarily monetary relief, ‘the present value ofthe damages plaintiffs would likely recover

ifsuccessful, appropriately discounted for the risk of not prevailing, should be compared with the

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attribute a specific monetary value to the settlement which permits class members to opt for a 10

percent discount on future rentals or a cash recovery. (Fairness Hearing Tr. at 8:8-16). However,Plaintiffs have represented that “the value of the settlement minimally is approximately 50 percent

of what discovery showed the damages were, and optimally more than a hundred percent of what

those damages are depending on the mix of how many people opt for cash and how many opt for

discounts.” (id.). That is, if all class members chose the discounts, the settlement would have a

value of close to $11 million. (Pls.’ Br. at 31). Conversely, if all class members opt for cash, the

settlement would have a value of over $4 million. (Id.).

Accordingly, having thoroughly evaluated the Girsh factors, the Court finds that the

Settlement warrants final approval by this Court. Of particular influence on this Court are the

small number of objectors—who primarily oppose the distribution of attorneys’ fees as opposed

to the substantive terms of the Settlement Agreement—as well as the risks to class membersassociated with continuing this litigation. For all ofthe above reasons, the Court grants Plaintiffs’

motion for final approval of the class action settlement.

IV. ATTORNEYS’ FEES

Plaintiffs’ class counsel move pursuant to Federal Rules of Civil Procedure 23(h) “approval of

an award of $3,050,000 for attorneys’ fees and reimbursement of expenses, in connection with

their work on behalf of Settlement Class Members in these two cases.” (ECF No. 188, Pls.’ Mot.

for Fees at 1). Defendants have agreed not to oppose an award up to this amount. (See Class

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The awarding of fees is within the district court’s discretion. See Gunter v. Ridgewood Energy

Corp., 223 f.3d 190, 195 (3d Cir. 2000). However, even where the parties have consented to the

requested fee award, the court must thoroughly analyze and clearly articulate the reasons

supporting its conclusion. See In re Diet Dritgs, 582 F.3d 524, 538 (3d Cir.2009); see also In re

General Motors, 55 F.3d at 820. Generally, a court will use either the percentage-of-recovery

method or the lodestar method to determine the fee award. In re General Motors, 55 F.3d at 820-21. The lodestar method is considered most appropriate in statutory fee-shifling cases, and has the

advantage of resembling a traditional fee calculation, whereas the percentage-of-recovery method

is viewed as best approximating a contingent fee award in a common fund recovery. See In re

Cendant Corp. PRIDES Litg., 243 F.3d 722, 732 (3d Cir. 2001); see generally In re Diet Drttgs,

582 f.3d at 540.

The Court finds application ofthe lodestar method, as opposed to the common-fund approach,

to be appropriate in this case. First, there is no common settlement fund from which Plaintiffs’

counsel seeks to pull out their fees, nor is there a readily available method for calculating a definite

monetary value of the settlement here, given the nature of the relief available in the form of cashor discounts. As Plaintiffs’ counsel explains, “[t]hough the value of the settlements may range up

to $ 13.778 million, the total value will vary depending on how many Settlement Class Members

opt for cash and how many chose discounts on future rentals.” (Pls.’ Mot. for Fees at 6).

Moreover, the NJCFA, on which Plaintiffs base some of their claims, provides for fee-shifling.

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To calculate the lodestar award, the court multiplies the hourly rates of the class counsel by

the number of hours counsel expended on the matter. See Gunter, 223 F.3d at 193-94. This

simple fonnula arrives at a “lodestar amount,” which is indicative of the amount of fees class

counsel would have earned had they billed their clients on an hourly basis. Next, the Court divides

the proposed fee award by the calculated lodestar figure, which provides a number known as the

“multiplier.” In re Ins. Brokerage Antitrust Litig., 579 F.3d 241, 280 (3d Cir. 2009); see also

Milliron e. T—Mobile USA. Inc., No. 08—cv-4149, 2009 WL 3345762, *14 (D.N.J. Sept. 10, 2009).

The purpose ofthe lodestar multiplier is for the Court to assess the reasonableness of applying the

multiplier in each individual case to adjust the attorneys’ fees. In re Ins. Broker, 579 F.3d at 280.

Here, class counsel has submitted a summary of fees and expenses totaling thousands of hours,

equaling S2,492,979.00 in lodestar and S$0,547.70 in expenses. (ECF No. 188-1, Joint DecI. ¶ 36,Exh. A-D). The Court finds that the number of hours billed is reasonable given the lengthy history

of this highly contested litigation in which Plaintiffs’ attorneys were engaged in extensive andcomplex motion practice and accompanying discovery demands. The Court also finds that theaverage hourly billing rates submitted by the Class Counsel are consistent with the experience and

skill of the lawyers involved and are within the normal range for cases of similar complexity andsubject matter.

Class counsel requests that the court apply a multiplier of approximately 1.19 for a total amount

of fees of $2,966,294. (Joint Decl. ¶ 36). The Court finds that the application of this multiplier is

justified in this matter. Specifically, Plaintiffs’ counsel has been litigating these matters for no

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which placed at risk their own resources, with no guarantee of recovery”). Moreover, the

approximately 1.19 multiplier is well within the range of multipliers accepted within this district.

Frederick v. Range Res.-Appalachia, LLC, No. 08—cv-288, 2011 WL 1045665, *13 (W.D. Pa.

Mar. 17, 2011) (“Federal courts in this circuit have frequently approved fee award multipliers in

the range of ito 4.”) (collecting cases); Halt v. AT & TMobility LLC, 2010 WL 4053547 (D.N.J.

Oct. 13, 2010) (“In fact, in Cendant PRIDES, the Third Circuit approved a lodestar multiplier of

2.99 in a case it described as ‘relatively simple in terms of proof in which ‘discovery was virtuallynonexistent.”); In re Schering—Plough Corp. Enhance ERISA Litig., No. 08—cv-1432, 2012 WL

1964451, *8 (D.N.J. May 31, 2012) (stating that a multiplier of 1.6 “is an amount commonly

approved by courts of this Circuit”).

Additionally, Class Counsel has certified that “the issue of attorneys’ fees was not discussed

until after settlement terms for the Settlement Class Members were agreed to.” (Joint Decl. ¶ 31).Thus, the Court is satisfied that Class Counsel did not sacrifice the interests of Settlement Class

Members in order obtain the requested fee.

ii. The Percentage-of-Recovery Cross-Check“Regardless of the method chosen, [the Third Circuit has] suggested it is sensible for a court

to use a second method of fee approval to cross-check its initial fee calculation.” In re Rite Aid

Corp. Sec. Litig., 396 F.3d 294, 300 (3d Cir. 2005). As already discussed, the method ofrecovery

in this case is not amenable to a definitive calculation as to the monetary value of the class

25
less than 45% of the total settlement value, the upper limit for fees in this Circuit.

(Pls.’ Mot. for Fees at 10). The Third Circuit has noted that fee awards generally range from 19

percent to 45 percent of the settlement fund when the percentage-of-recovery method is used to

assess the reasonableness of requested attorneys’ fees. See In re General Motors, 55 F.3d at $22.Given that class members have the option of choosing cash or discounts, the total class recovery

is likely to exceed (by sufficient number) the requested attorneys’ fee award and fall within the

range accepted within this Circuit in common-fund cases.

iii. Objections to Fee AwardOnly three class members have objected to the proposed fee award. The Court addresses each

of their arguments, in turn.

Bruce David Eisen filed a single-page opposition in which he deems the proposed award

“unconscionable” and “propose[s] that the attorneys receive no more than one million dollars with

the remaining two million dollars going to repay the plaintiffs the monies that were wrongfully

taken from them.” (ECF No. 63, Eisen Objection). As discussed at length above, the Court has

determined that the proposed fee award is fair and reasonable, and was negotiated separate andapart from the negotiation of the substantive terms of the Settlement Agreement. Mr. Eisen’s

objection has not swayed the Court otherwise.

Separately, Doug Jeffries, like Mr. Eisen, maintains that the award is “beyond ridiculous.”

(Joint Decl., Exh J). Specifically, Mr. Jeffries argues that this amount is “inflated” because Class

26
above, is represented in part by serial objector Mark Bandas. Mr. Ray summarily argues that: (1)Class Counsel will be recovering more than the value of the settlement; (2) the Settlement

Agreement improperly segregates the attorneys’ fees from the class recovery; and (3) the

Settlement Agreement contains an improper “clear sailing clause.” (Ray Objection at 10-12). Mr.

Ray’s first two arguments appear to be grounded in an understanding that this case involves a

common fund. In any event, as discussed above, the Court finds that the attorneys’ fee award is

reasonable and was appropriately negotiated after the parties had settled on the Agreement’s

substantive terms. Moreover, Mr. Ray’s objection to the “clear sailing clause” —in which

Defendants have agreed not to dispute an award of fees up to $3,050.00—is undermined by recent

Third Circuit precedent holding that such clauses are permissible so long as the district court

“review[s] the process and substance ofthe settlement and satisffies] itselfthat the agreement does

not indicate collusion or otherwise pose a problem.” NFL, 2016 WL 1552205, * 28. Having

already made these determinations, the Court rejects Mr. Ray’s objection to the “clear sailingclause.”

In summary, the Court has carefully reviewed the exhibits submitted in support of the motion

for attorneys’ fees, and as satisfied that the requested fee award is supported by the documented

efforts of Class Counsel in this matter and was agreed-upon after the Parties resolved any material

Mr. Jeffries apparently sees the requested fee award as a reflection of what he perceives as an “out of control” justice

system. (Id.). To the extent Mr. Jeffries takes issue with the legal system, these arguments are not appropriately raised

herein and the Court declines to address same.

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Class Counsel also moves for an incentive award to the named class members, as provided for

in the Settlement Agreement. (Pls.’ Mot. for Fees at 23-24). Specifically, Class Counsel is

requesting a $5,000 incentive award to Mr. Schwartz and a $5,000 award to be split between the

Kleins on their terms. (Id.; Settlement Agreement § 1 2.d).

No class member has objected to these proposed awards. As such, and given the number of

years in which the Kleins and Mr. Schwartz have been involved in this litigation, the Court finds

the requested award warranted.

VI. CONCLUSIONFor the reasons stated herein, the Court grants Plaintiffs’ motions for final approval ofthe class

action settlement and for an award of attorneys’ fees and reimbursement of expenses as well as foran incentive award to class representatives. (1 1-cv-4052, ECF No. 1 $6; 12-cv-7300, ECf No. 6$).

An appropriate Order accompanies this Opinion.

IT IS SO ORDERED.DATED: June 9f,20l6

L. LINARES, U.S.D.J.

2$