i

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

Civil Action No. 11-4052 (JLL) (JAD)

Civil Action No. 12-7300 (JLL) (JAD)

Motion Day August 1, 2016

BRIEF IN OPPOSITION TO PLAINTIFFS’ MOTION TO COMPEL 

OBJECTOR-APPELLANT MARK RAY TO POST AN APPEAL BOND, 

PURSUANT TO FED. R. APP. P. 7

EDWARD SCHWARTZ, on behalf 

of himself and others similarly 

situated,

 Plaintiff, 

 

vs.

AVIS RENT A CAR SYSTEM, 

LLC, and AVIS BUDGET GROUP, 

INC.,

 Defendants.

DANIEL KLEIN and 

STEPHANIE KLEIN, on behalf of 

themselves and others similarly

situated,

 Plaintiffs,

vs. 

BUDGET RENT A CAR SYSTEM, 

INC. and AVIS BUDGET GROUP, 

INC.,

 Defendants.

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TABLE OF CONTENTS

 Page

I. PRELIMINARY STATEMENT................................................................... 1

II. BACKGROUND.................................................................................... 2

III. NUTELLA, AN UNPUBLISHED THIRD CIRCUIT OPINION WITH 

VIRTUALLY NO ANALYSIS, AND WHICH RUNS COUNTER TO AUTHORITY FROM 

OTHER CIRCUIT COURTS OF APPEALS, IS NOT THE LAW OF THE THIRD 

CIRCUIT..................................................................................... 4

IV. AUTHORITY FROM OTHER CIRCUIT COURTS REJECTS THE PROPOSED 

BOND................................................................................................ 7

V. CLASS COUNSEL DID NOT MOVE FOR A SUPERSEDEAS BOND, AND DELAY 

 COSTS CANNOT BE INCLUDED IN AN APPEAL BOND.......................... 8

VI. MR. RAY’S OBJECTIONS ARE NOT FRIVOLOUS..................................... 10

CONCLUSION AND PRAYER........................................................................ 15

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TABLE OF AUTHORITIES

Cases

); In re American President Lines, Inc., 779 F.2d 714, 717-18 (D.C. Cir. 1985)...................................... 10

28 U.S.C.A. § 1920 ........................................................................................................................... 8

American President Lines, 779 F.2d at 716............................................................................................ 9

American President Lines, 779 F.2d at 716, 718-19 ............................................................................... 9

Blessing v. Sirius XM Radio, Inc., 2011 WL 5873383, No. 09 CV 10035(HB) (S.D.N.Y. Nov. 22, 2011)

................................................................................................................................................... 10

FED. R. APP. 39(e)............................................................................................................................ 2

FED. R. APP. P. 39(E).................................................................................................................... 6, 8

FED. R. APP. P. 8.......................................................................................................................... 8, 9

FED. R. CIV. P. 62(d) ........................................................................................................................ 9

Hirschensohn v. Lawyers Title Insurance Corp., No. 12–3457, 1997 WL 307777 (3rd. Cir. June 10, 1997) 

(unpublished) ............................................................................................................................... 2

Id. at 1256 ........................................................................................................................................ 8

in FED. R. APP. P. 39 ........................................................................................................................ 8

In re Air Cargo Shipping Svcs. Antitrust Litig., 2010 WL 1049269, No. 06-MD-1775 (JG)(VVP) 

(E.D.N.Y. Mar. 22, 2010)........................................................................................................... 10

In re American President Lines, Inc., 779 F.2d 714, 716 (D.C.Cir.1985). ................................................. 6

In re American President Lines, Inc., 779 F.2d 714, 717-18 (D.C. Cir. 1985)........................................... 9

In re Diet Drugs Products Liability Litigation, 2000 WL 1665134 (E.D.Pa. 2000). ................................... 9

In re Dry Max Pampers Litig., 724 F.3d 713, 717 (6th Cir. 2013)........................................................ 13

In re Dry Max Pampers Litig., 724 F.3d 713, 717-18 (6th Cir. 2013).................................................... 13

In re Dry Max Pampers Litigation, 724 F.3d 713 (6th Cir 2013) .......................................................... 11

In re Lawnmower Engine Horsepower Mktg. & Sales Practices Litig., 2010 WL 4630846, MDL No. 08-1999 

(E.D. Wisc. Nov. 2, 2010) .......................................................................................................... 10

In re Nutella Mktg. and Sales Practice Litig., 589 Fed. Appx. 53, 61 (3d Cir. 2014)(unpublished)............ 1

In re Nutella Mktg. and Sales Practice Litig., 589 Fed. Appx. 53, 61 (3d Cir. 2014)(unpublished)............ 1

In re Southwest Voucher Litigation, 799 F.3d 701, 712 (7th Cir. 2015) ................................................... 14

In re Time Warner, Inc. Securities and “ERISA” Litigation, 2007 WL 2741033 (S.D.N.Y. 2007). ............. 8

Jamison v. Klem, 544 F.3d 266, 278 n. 11 (3d Cir. 2008)...................................................................... 4

Lovett v. U.S., CIV. 09-1659JLL, 2009 WL 2998962, at *4 (D.N.J. Sept. 17, 2009) (Linares, D.J.) 

(citing Jamison v. Klem, 544 F.3d 266, 278 n. 11 (3d Cir. 2008)). ..................................................... 4

Malchman v. Davis, 761 F.2d 893, 908 (2d Cir. 1985)........................................................................ 13

Nutella, 589 Fed. Appx. at 61............................................................................................................ 5

Pallister v. Blue Cross and Blue Shield of Montana, 285 P.3d 562 (Mont. 2012)....................................... 11

Piambino v. Bailey, 757 F.2d 1112 (11th Cir. 1985)............................................................................ 14

Piambino v. Bailey, 757 F.2d 1112, 1139 (11th Cir. 1985) .................................................................. 14

Rossi v. The Proctor & Gamble Co., No. 11-7238, 2014 WL 1050658, *1 (D.N.J. Mar. 17, 2014) 

(Linares, D.J.)............................................................................................................................... 2

Southwest Voucher, 799 F.3d at 712................................................................................................... 14

Tennille v. Western Union Co., 774 F.3d 1249 (10th Cir. 2014)............................................................... 2

Tennille v. Western Union Co., 774 F.3d 1249 (10th Cir. 2014). .............................................................. 2

Tennille, 774 F.3d at 1254 .............................................................................................................. 9

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Third Circuit Internal Operating Procedure 5.3................................................................................ 5

True v. American Honda Motor Co., 749 F. Supp. 2d. 1052, 1079 (C.D. Cal. 2010).............................. 10

UFCW Loc. 880-Retail Food Employers Jt. Pension Fund v. Newmont Min. Corp., 352 Fed. Appx. 232 (10th 

Cir. 2009) ................................................................................................................................... 11

Vaughn v. Am. Honda Motor Co., 507 F.3d 295, 295-99 (5th Cir. 2007)............................................. 10

Vaughn v. Am. Honda Motor Co., 507 F.3d 295, 298-99 (5th Cir. 2007)............................................... 9

Rules

FED. R. APP. 39(e)............................................................................................................................ 2

Fed. R. Civ. P. 23 ........................................................................................................................... 14

Rule 23(e)....................................................................................................................................... 11

Rule 23(h) ...................................................................................................................................... 11

Third Circuit Internal Operating Procedure 5.3, 5.7 ....................................................................................5

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I. Preliminary Statement.

Class Counsel request a bond for costs of appeal between $10,000 and 

$25,000, with no supporting evidence.

1 As if that were not enough, they reach far 

beyond the parameters of Rule 7, and ask for $59,000 in administrative costs of the 

settlement during the pendency of the appeal.2

Their authority for the latter request is a Third Circuit Court of Appeals’ 

opinion, which Class Counsel failed to identify as unpublished and carrying no 

precedential weight. In re Nutella Mktg. and Sales Practice Litig., 589 Fed. Appx. 53, 61 

(3d Cir. 2014)(unpublished). Although arguably persuasive authority, the single 

paragraph in the opinion discussing whether the inclusion of administrative costs is 

permissible contains essentially no analysis. It makes no reference to authority even 

contemplating the idea that administrative costs can be included in an appeal bond. 

This is significant because under the reasoning of an earlier Third Circuit 

opinion, which refused to include attorney’s fees in an appeal bond, administrative 

expenses should not be included in an appeal bond since they are not listed as “costs” 

 

1 Memorandum of Law in Support of Plaintiffs’ Motion to Compel Objector-Appellant Mark Ray to 

Post an Appeal Bond, Pursuant to Fed. R. App. P. 7, ECF. No. 76-1, at 9 (“Plaintiffs request a 

minimum of $10,000, or (in the Court’s discretion) up to $25,000 as a reasonable amount to cover 

the Appellate Rule 39 costs of Ray’s appeal”). Objection is made to the failure to submit any 

evidence in support of the requested $10,000-$25,000 in costs of appeal. Objection is further made 

to the declaration of Lori L. Castaneda supporting the requested $59,000 in administrative expenses, 

which does not break down the claimed expenses and is impermissibly conclusory.

2

Id. at 12 (“request[ing] a bond in the total amount of at least $69,000 (or, in the Court’s discretion, 

up to $84,000), which represents Rule 7 costs of $10,000 (or up to $25,000, in the Court’s discretion, 

as in Ins. Brokerage) plus administrative costs during the pendency of Ray’s appeal of $59,000”).

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under FED. R. APP. 39(e). Hirschensohn v. Lawyers Title Insurance Corp., No. 12–3457, 

1997 WL 307777 (3rd. Cir. June 10, 1997) (unpublished). In fact, this Court reached 

this precise conclusion in Rossi v. The Proctor & Gamble Co., No. 11-7238, 2014 WL 

1050658, *1 (D.N.J. Mar. 17, 2014) (Linares, D.J.). 

Moreover, there is considerable authority from other Circuit Courts making

clear that settlement administrative expenses are not authorized in an appeal bond. 

See e.g., Tennille v. Western Union Co., 774 F.3d 1249 (10th Cir. 2014). By contrast, from 

Objector’s review it appears that there are no published opinions from any circuit 

court that would allow the particular appeal bond sought here. There is no reason for 

this Court to depart from Rossi given the unpublished outlier opinion in Nutella that 

fails to provide any substantive analysis. 

As discussed infra, this outrageous bond request is just the latest inappropriate 

attempt by Class Counsel to intimidate Class Member Mark Ray into dropping his 

legitimate objection to the settlement.

II. Background.

Mark Ray is an undisputed member of this class action. Believing the 

settlement unfair to the class and the requested attorneys’ fees of $3.05 million 

excessive (representing approximately 57.3% of the money that will be made 

available to the settlement class), Mr. Ray filed a timely objection on April 6, 2016, in 

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accordance with the procedures outlined by the notice provided to the class.3

Rather than respond to the merits of Mr. Ray’s objections, Class Counsel took 

a harassing and abusive deposition of Mr. Ray on May 2, 2016 in Corpus Christi, 

Texas. During the deposition, Daniel Karon, one of the attorneys for Class Counsel, 

made threats to Mr. Karon’s business and family, attempting to intimidate him into 

dropping his objections.4

Judge Nelva Gonzalez Ramos of the Southern District of Texas condemned 

Mr. Karon’s abusive during a hearing, stating, after “reading what’s been presented to 

me, . . . your questioning of the witness, whether harassing or threatening, 

intimidating regarding his business, regarding his family, I just found that to be out of 

line[.]”

5

Judge Ramos repeatedly found Mr. Karon’s questioning “improper” and only 

agreed to deny a motion for protective order as moot after Mr. Karon committed on 

the record not repeat the misconduct.

6

 

Judge Ramos believed sanctions were warranted, but that any such motion 

should be considered in this Court, specifically instructing: “I’m encouraging you to 

bring it to the attention of the Court there” and “[y]ou can certainly bring it to the 

attention of the Court in New Jersey and you probably should.”7

Class Counsel agreed to, and in fact paid for Mr. Ray’s attorneys’ fees and 

 

3

See Objection of Mark Ray, ECF No. 182.

4

See Exhibit 1, Transcript of the Deposition of Mark Ray, at 31-36, 64-65, 95-96.

5

See Exhibit 2, Transcript of May 18, 2016 Hearing, at 4-6, 9-10.

6

Id. at 4-6, 14-15. 

7

Id. at 15-16. 

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expenses associated with having to respond to the abusive discovery. 

The unreasonable request for an appeal bond between $69,000 and $84,000 

represents the latest inappropriate attempt to force Mr. Ray out of the litigation. 

III. Nutella, an Unpublished Third Circuit Opinion with Virtually No 

Analysis, and Which Runs Counter to Authority from Other Circuit 

Courts of Appeals, is Not the Law of the Third Circuit.

The central issue before this Court is whether it has authority to enter a Rule 7 

cost bond against Objector and his counsel for administrative expenses of the 

settlement while this case is on appeal. Published opinions from other circuit courts of 

appeals have answered that administrative expenses are not available in a Rule 7 bond.

Class Counsel rely on Nutella, which discusses inclusion of administrative

expenses in a single paragraph, and makes no reference to authority that would allow 

administrative expenses in an appeal bond. 589 Fed. Appx. 53, 61 (3d Cir. 

2014)(unpublished). This is not the type of unpublished opinion that should be relied 

upon in determining and applying the law of the Circuit.

“This Court is aware of the Third Circuit's admonitions regarding the citation 

to its unpublished, non-precedential opinions[.]” Lovett v. U.S., CIV. 09-1659JLL, 2009 

WL 2998962, at *4 (D.N.J. Sept. 17, 2009) (Linares, D.J.) (citing Jamison v. Klem, 544 

F.3d 266, 278 n. 11 (3d Cir. 2008)). As the Third Circuit explained in Jamison:

We have steadfastly attempted to discourage District 

Courts as well as attorneys from relying on nonprecedential 

opinions of this court. We do not accept these opinions as 

binding precedent because, unlike precedential opinions, 

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they do not circulate to the entire court before they are 

filed. Accordingly, not every judge on the court has had an 

opportunity to express his/her views about the opinion 

before it is filed.

Jamison, 544 F.3d at 278 n. 11 (citation omitted); see also Third Circuit Internal 

Operating Procedure 5.3 (noting such opinions “appear[] to have value only to the 

trial court or the parties”); Rule 5.7 ([s]uch opinions are not regarded as precedents 

that bind the court because they do not circulate to the full court before filing”).

Any persuasive value Nutella might otherwise have is negated by the absence of 

legal analysis on this issue, which in its entirety, is as follows:

Second, the District Court's imposition of a bond of 

$22,500 was not an abuse of discretion. The plaintiffs 

requested an appeal bond of $42,500, where the plaintiffs 

estimated their costs at $2,500 and an additional $40,000 of 

expenses in administering the settlement fund over a twoyear period. The District Court determined, over the 

Bochenek Appellants' objection, that administrative costs 

could be secured by a Rule 7 bond. We do not find that 

determination to be in error. Furthermore, the District 

Court decreased the $40,000 request by half, to $20,000 in 

administrative costs, in order to limit the amount of 

administrative costs related to the settlement fund to a oneyear period. Accordingly, the District Court's imposition of 

an appeal bond of $22,500 in this case, collectively on all 

ten appealing objectors, was not an abuse of discretion.

Nutella, 589 Fed. Appx. at 61. That is it. There is no reference to any opinion that 

allowed or disallowed administrative expenses as part of an appeal bond.

If this Court is inclined to rely on an unpublished opinion on what is 

permissible to include in a Rule 7 cost bond, it should refer back to Hirschensohn. 

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Although Hirschensohn considered attorney’s fees and not administrative costs, the 

Court explained the framework for determining what costs are authorized in a Rule 7 

appeal bond:

“Costs” referred to in Rule 7 are those that may be taxed 

against an unsuccessful litigant under Federal Rule of 

Appellate Procedure 39. In re American President Lines, Inc., 

779 F.2d 714, 716 (D.C.Cir.1985).

Rule 39, in turn, lists “costs” as including printing and 

producing copies of briefs, appendices, records, court 

reporter transcripts, premiums or costs for supersedeas 

bonds, or other bonds to secure rights pending appeal, and 

fees for filing the notice of appeal. These various items 

have their source in 28 U.S.C. § 1920. Attorneys' fees are 

not among the expenses that are described as costs for 

purposes of Rule 39.

Hirschensohn, 1997 WL 307777, at *1.

Hirschensohn outlined the framework for determining what costs are permissible 

in an appeal bond. Rule 7 allows for an appeal bond for “costs on appeal.” FED. R.

APP. P. 7. Rule 39, in turn, lists what those costs are: “(1) the preparation and 

transmission of the record; (2) the reporter's transcript, if needed to determine the 

appeal; (3) premiums paid for a supersedeas bond or other bond to preserve rights 

pending appeal; and (4) the fee for filing the notice of appeal.” FED. R. APP. P. 39(e). 

If not listed in Rule 39(e), then the expense is not included as “costs” for an appeal 

bond. Hirschensohn, 1997 WL 307777, at *3 (“we conclude that Rule 7 does not 

authorize a bond to cover estimated costs of attorneys' fees.”).

This Court adhered to the Hirschenshohn analysis in its Rossi opinion:

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This Court thus denies inclusion of any administrative costs 

that are not specifically enumerated in Rule 39. See 

Hirschensohn, 1997 WL 307777, at * 2–3 (holding that 

attorneys' fees may not be included in a Rule 7 appeal bond 

because they are not listed in Rule 39). Because Rule 39 

does not enumerate any additional administrative costs 

caused by delay in the disbursement of settlement funds, 

inclusion of these costs is denied.

Rossi, 2014 WL 1050658, *1.

As in Rossi, administrative costs are not listed in Rule 39, and cannot be 

included in an appeal bond here. This Court should not depart from its holding in 

Rossi based on Nutella, an unpublished opinion with no analysis.

IV. Authority from Other Circuit Courts Rejects the Proposed Bond.

The published opinions from other circuit courts confirm that administrative 

costs for maintaining a settlement are not properly included in an appeal bond. In 

December, 2014, the Tenth Circuit resolved the issue of what costs are properly 

included in a Rule 7 bond and, in so doing, provided a comprehensive survey of the 

circuit courts of appeal that had already resolved that issue. See Tennille v. Western Union 

Co., 774 F.3d 1249 (10th Cir. 2014). 

The court observed that: “[a]lthough Plaintiffs can point to several unreported 

district court cases imposing appeal bonds that cover delay damages or increased 

administrative costs to maintain a class settlement pending appeal, we do not find the 

reasoning of those cases persuasive in light of the unanimous circuit authority 

restricting an appeal bond to costs expressly permitted by rule or statute.” Id. at 

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1256 (emphasis added). According to the survey conducted by the Tenth Circuit, the 

following circuit courts of appeal have already resolved this issue: First, Second, 

Third, Fifth, Sixth, Ninth, Eleventh and D.C. Now in Tennille, the Tenth Circuit has 

resolved this issue as well. Id. at 1254-55.

And, Tennille specifically noted that under Hirschensohn, the “Third Circuit[] 

restrict[s] an appeal bond to only costs listed in FED. R. APP. P. 39, which include ‘(1) 

the preparation and transmission of the record; (2) the reporter's transcript, if needed 

to determine the appeal; (3) premiums paid for a supersedeas bond or other bond to 

preserve rights pending appeal; and (4) the fee for filing the notice of appeal.’” Id. at 

1255 (citing Hirschensohn, 1997 WL 307777, at *13).

Although there is some variance among the circuit courts on nuances of Rule 7, 

from Objector’s review of authority, it appears that no circuit court of appeals to 

entertain this issue has issued a published opinion permitting a Rule 7 bond such as 

the suggested bond in the instant case.

V. Class Counsel Did Not Move for a Supersedeas Bond, and Delay 

Costs Cannot be Included in an Appeal Bond.

Administrative expenses for the settlement are not authorized as delay costs, 

which are not listed as costs in FED. R. APP. P. 39(e) and 28 U.S.C.A. § 1920. See In re 

Time Warner, Inc. Securities and “ERISA” Litigation, 2007 WL 2741033 (S.D.N.Y. 2007).

The “costs of delay” are only permitted in a supersedeas bond, available under FED.

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R. APP. P. 8 or FED. R. CIV. P. 62(d). Vaughn v. Am. Honda Motor Co., 507 F.3d 295, 

298-99 (5th Cir. 2007); In re American President Lines, Inc., 779 F.2d 714, 717-18 (D.C. 

Cir. 1985); see In re Diet Drugs Products Liability Litigation, 2000 WL 1665134 (E.D.Pa. 

2000).

As explained in Tennille:

A Rule 7 appeal bond is similar to, but distinguishable 

from, a supersedeas bond, which a court can require to 

preserve a money judgment when staying execution of that 

judgment pending appeal, FED. R. CIV. P. 62(d); FED. R.

APP. P. 8(a)(2)(E). See 16A Wright, et al., Federal Practice & 

Procedure § 3953 (noting a Rule 7 appeal bond “should not 

be confused with a supersedeas bond”). “[A] ‘supersedeas 

bond’ is retrospective covering sums related to the merits 

of the underlying judgment (and stay of its execution), 

whereas a [Rule 7 appeal or] ‘cost bond’ is prospective 

relating to the potential expenses of litigating an appeal.” 

Adsani, 139 F.3d at 70 n. 2 (2d Cir.). And, whereas a Rule 7 

appeal bond is restricted to costs on appeal, see FED. R.

APP. P. 7, a supersedeas bond usually covers the full 

amount of the money judgment, “together with costs, 

interest, and damages for delay,” 11 Charles Alan Wright et 

al., Federal Practice & Procedure § 2905 (3d ed. Apr.2013).

Tennille, 774 F.3d at 1254.

A district court does not have any “inherent or rule-based power” to impose an 

appeal bond beyond “security for payment of costs on appeal.” American President 

Lines, 779 F.2d at 716, 718-19. Moreover, the “costs referred to [in Rule 7] are simply 

those that may be taxed against an unsuccessful litigant under Federal Appellate Rule 

39.” American President Lines, 779 F.2d at 716. 

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Class counsel did not move for a supersedeas bond in this Court, and therefore 

Rule 39(e)(3) does not apply on its face. It also bears mentioning that it has been held 

to be reversible error to impose a supersedeas bond under Rule 8 ostensibly under the 

authority of a Rule 7 cost bond. See e.g., Vaughn v. Am. Honda Motor Co., 507 F.3d 295, 

295-99 (5th Cir. 2007); In re American President Lines, Inc., 779 F.2d 714, 717-18 (D.C. 

Cir. 1985). 

VI. Mr. Ray’s Objections are Not Frivolous.

Class Counsel suggest a bond is appropriate because Mr. Ray’s general counsel 

has asserted objections in other cases, and therefore, Mr. Ray’s objection must be 

frivolous. But the representation of objectors in other class actions “has no greater 

bearing on the merits of the objection raised [in this class action] than a plaintiff’s 

counsel’s experience in filing class actions speaks to the merits of claims he 

brings.” True v. American Honda Motor Co., 749 F. Supp. 2d. 1052, 1079 (C.D. Cal. 

2010). “Merely characterizing some of the attorneys as ‘professional objectors’

without specifying what, exactly, they have done that is either in bad faith or 

vexatious, is not enough.” Blessing v. Sirius XM Radio, Inc., 2011 WL 5873383, No. 09 

CV 10035(HB) (S.D.N.Y. Nov. 22, 2011); see also In re Lawnmower Engine Horsepower 

Mktg. & Sales Practices Litig., 2010 WL 4630846, MDL No. 08-1999 (E.D. Wisc. Nov. 

2, 2010); In re Air Cargo Shipping Svcs. Antitrust Litig., 2010 WL 1049269, No. 06-MD1775 (JG)(VVP) (E.D.N.Y. Mar. 22, 2010).

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It is neither logically nor legally permissible to conclude that an objection is 

valid or invalid from outcomes in other cases, especially when those outcomes are 

mixed. Further, many courts recognize that objectors serve as a vital check on the 

class action settlement process where the interests of the class are not always 

protected. In re Dry Max Pampers Litigation, 724 F.3d 713, 715 (6th Cir 2013)

(“Pampers”) (“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”). 

“Objectors can encourage scrutiny of a proposed settlement and identify areas that 

need improvement. They can provide important information regarding the fairness, 

adequacy, and reasonableness of the settlement terms.” Pallister v. Blue Cross and Blue 

Shield of Montana, 285 P.3d 562, 568 (Mont. 2012). “Objectors can also “add value to 

the class-action settlement process by . . . preventing collusion between lead plaintiff 

and defendants.” UFCW Loc. 880-Retail Food Employers Jt. Pension Fund v. Newmont Min. 

Corp., 352 Fed. Appx. 232, 236 (10th Cir. 2009) (citation omitted); see also 2003 

Committee Note, Rule 23(h) (“In some situations, there may be a basis for making an 

award to other counsel whose work produced a beneficial result for the class, such as . 

. . attorneys who represented objectors to a proposed settlement under Rule 23(e) or 

to the fee motion of Class Counsel”).

Regardless, only the merits of the objections should be of concern to the Court 

and Class Counsel. Mr. Ray’s objections to the settlement and $3.05 million in 

attorney’s fees are valid and well reasoned. 

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The injunctive relief in this case is illusory because it benefits individuals who 

are not members of the class and it appears likely the defendants would make these 

changes without an injunction; they certainly would have business reasons to do so. In 

fact, the measures and improvements discussed in the agreement were already in place 

before approval of the settlement.8

The only real measurable value of this settlement lies in the claims-made relief 

and the $3.05 million attorneys’ fee fund. Based on Class Counsels’ calculations,

however, the money made available to the class relative to Class Counsels’ recovery

and the prodigious size of the class is unfair.

9

According to Class Counsel, if every Avis class member were to select a cash

payment (as opposed to opting to spend more money with the same companies who 

perpetrated fraud against them, so that they can receive a 10% discount),

10 the value 

would be $4,126,135.

11 If all members of the Budget class opted for cash, the value of 

the settlement would be $1,195,782.12 The total cash made available to the settlement 

class is thus $5,321,917. But this $5.3 million is guaranteed never to be realized by the 

class because of the claims-made structure of the settlement. The class will receive far 

 

8

See Class Notice, at 8, at ¶ 13.

9

See Objection of Mark Ray, ECF No. 182.

10 Synfuel Techs., Inc. v. DHL Express (USA), Inc., 463 F.3d 646, 654 (7th Cir. 2006)(rebates or coupons 

in a settlement “’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”).

11 Memorandum of Law of Plaintiffs and the Classes in Support of Unopposed Motion for 

Preliminary Approval of Class Action Settlement. ECF No. 60-1, at 9.

12 Memorandum of Law of Plaintiffs and the Classes in Support of Unopposed Motion for 

Preliminary Approval of Class Action Settlement, ECF No. 60-1, at 6.

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less than $5.3 million, which is astonishing considering Class Counsel take a 

substantial $3.05 million. 

The most common settlement defects are ones of allocation. This is because 

“the adversarial process—or ‘hard-fought’ negotiations—extends only to the amount 

the defendant will pay, not the manner in which that amount is allocated between the 

class representatives, class counsel, and unnamed class members.” In re Dry Max 

Pampers Litig., 724 F.3d 713, 717 (6th Cir. 2013) (“Pampers”) (emphasis in original). 

Adversarial negotiation does not ensure that class relief is “commensurate with [the] 

fee award.” Id. at 720. “[I]f the ‘fees are unreasonably high, the likelihood is that the 

defendant obtained an economically beneficial concession with regard to the merits 

provisions, in the form of lower monetary payments to class members or less 

injunctive relief for the class than could otherwise have been obtained.’” Id. at 718 

(quoting Staton v. Boeing Co., 327 F.3d 938, 964 (9th Cir. 2003)).

Although this is not a common fund settlement, and Class Counsel structured 

the settlement so that any reduction in fees will not go to the class, the $3.05 million 

represents consideration that Defendants were willing to pay. Some of it should have 

been allocated to the class. 

It must be remembered that the defendant is indifferent as to the allocation of 

any settlement payments between the class and Class Counsel. See, eg., Malchman v. 

Davis, 761 F.2d 893, 908 (2d Cir. 1985) (Jon O. Newman, concurring), cert. denied, 475 

U.S. 1143 (1986); In re Dry Max Pampers Litig., 724 F.3d 713, 717-18 (6th Cir. 2013). A 

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settling defendant only cares about its total settlement payments and keeping them as 

low as possible. In re Southwest Voucher Litigation, 799 F.3d 701, 712 (7th Cir. 2015); 

Piambino v. Bailey, 757 F.2d 1112, 1139 (11th Cir. 1985) (“Piambino II”) ( when class 

counsel “negotiates simultaneously for the settlement fund and for individual counsel 

fees there is an inherent conflict of interest. The defendant . . . is ‘uninterested in what 

portion of the total payment will go to the class and what percentage will go to the 

class attorney;’ accordingly, the defense operates as no brake against the invidious 

effects of such a conflict of interest.”) (quoting Foster v. Boise-Cascade, Inc., 420 F. Supp. 

674, 686 (S.D. Tex. 1976), aff’d 577 F.2d 335 (5th Cir. 1978)).

At the same time, Class Counsel have a natural incentive to enrich themselves 

at the expense of the unnamed members of the class. See Southwest Voucher, 799 F.3d at 

712 (“[j]udicial scrutiny of class action fee awards and class settlements more generally 

is based on the assumption that class counsel behave as economically rational actors 

who seek to serve their own interests first and foremost”). “For these actors, but not 

for the class members, the ideal settlement may be a moderate sum favorable to the 

defendant but disbursed mostly to class counsel.” Id.

Given the inadequate relief secured for the class, and an excessive amount of 

attorneys’ fees for Class Counsel, the settlement was not fair, adequate, and 

reasonable under Fed. R. Civ. P. 23, and Mr. Ray’s objections were well founded. 

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Conclusion and Prayer

There is no legally tenable basis for the requested bond amount between 

$69,000 and $84,000, and this unreasonable request is just the latest improper attempt 

to curtail Mr. Ray from pursuing his valid objections to the settlement. Mr. Ray urges 

this Court to deny Mr. Ray’s motion for bond.

Dated: July 15, 2016.

/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 

Attorney for Objector Mark Ray

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Certificate of Service

The undersigned certifies that today she filed the foregoing Brief in Opposition

on ECF which will send electronic notification to all attorneys registered for ECFfiling. The undersigned further certifies she caused to be served via USPS First Class 

Mail, postage prepaid, a copy of this Notice of Appeal upon the following:

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

Dated: July 15, 2016 /s/ Janet L. Gold, Esquire

Janet L. Gold, Esquire

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