jordan l. lurie (sbn 130013) tarek h. zohdy (sbn...
TRANSCRIPT
MOTION FOR ATTORNEYS’ FEES, EXPENSES AND CLASS REPRESENTATIVE INCENTIVE AWARDS
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Jordan L. Lurie (SBN 130013) [email protected] Tarek H. Zohdy (SBN 247775) [email protected] Capstone Law APC 1840 Century Park East, Suite 450 Los Angeles, California 90067 Telephone: (310) 556-4811 Facsimile: (310) 943-0396 Attorneys for Plaintiffs Humberto Daniel Klee and David Wallak
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA—WESTERN DIVISION
HUMBERTO DANIEL KLEE and DAVID WALLAK, individually, and on behalf of a class of similarly situated individuals,
Plaintiffs,
v.
NISSAN NORTH AMERICA, INC.
Defendant.
Case No. CV12-08238 DDP (PJWx)
Hon. Dean D. Pregerson
CLASS ACTION
NOTICE OF MOTION AND MOTION FOR ATTORNEYS’ FEES, EXPENSES AND CLASS REPRESENTATIVE INCENTIVE AWARDS; MEMORANDUM OF POINTS AND AUTHORITIES
Date: November 18, 2013
Time: 10:00 am
Place: Courtroom 3
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TO THE COURT, PARTIES, AND THEIR ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE that on November 18, 2013 at 10:00 a.m., or as soon
thereafter as the matter may be heard in Courtroom 3 of the above-captioned Court,
located at 312 N. Spring Street, Los Angeles, California 90012, the Hon. Dean D.
Pregerson presiding, Plaintiffs will move this Court for an award of attorneys’ fees,
expenses, and class representative incentive awards in connection with final approval of
the Settlement in this matter. Defendant does not oppose this Motion.
This Motion is based on: (1) this Notice of Motion and Motion; (2) the
Memorandum of Points and Authorities in Support of Motion for Attorneys’ Fees,
Expenses and Class Representative Incentive Awards; (3) the Declarations of Rebecca
Labat, Jordan Lurie, Colin Johns, and exhibits thereto; (4) the [Proposed] Order; (5) the
records, pleadings, and papers filed in this action; and (6) on such other documentary
and oral evidence or argument as may be presented to the Court at the hearing of this
Motion.
Dated: September 27, 2013 Respectfully submitted, Capstone Law APC
By: /s/ Tarek H. Zohdy Jordan L. Lurie Tarek H. Zohdy Attorneys for Plaintiffs Humberto Daniel Klee and David Wallak
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TABLE OF CONTENTS
I. INTRODUCTION .................................................................................................. 1
II. FACTS AND PROCEDURE ................................................................................. 4
A. The Litigation .................................................................................................. 4
B. The Parties’ Settlement and Additional Efforts by Plaintiffs’
Counsel To Verify the Fairness Of the Settlement .......................................... 5
III. ARGUMENT .......................................................................................................... 8
A. The Negotiated Fee Is Fair And Reasonable As A Percentage of
the Benefits Achieved For the Class ............................................................... 8
1. The Court Ensures Reasonableness of Fee Awards ................................ 8
2. The Settlement Value Supports the Fee Request ..................................... 9
3. The Negotiated Attorneys’ Fees Is Reasonable Since It Is
Less Than the Ninth Circuit Benchmark ............................................... 11
4. The Amount Requested in Attorneys’ Fees Was Negotiated
Only After An Agreement Was Reached on All Class
Compensation and Notice Terms .......................................................... 12
B. Plaintiffs’ Requested Fees Are Reasonable Under This Circuit’s
Test for Reasonableness ................................................................................ 14
1. The Results Achieved Support The Court Awarding the
Negotiated Fees ..................................................................................... 14
2. The Substantial Risks of Further Litigation, Along With the
Complexity Of the Case, Support The Court Awarding The
Negotiated Fees ..................................................................................... 15
3. The Contingent Nature of Fees And Financial Burden
Carried By Plaintiffs Support The Court Awarding The
Negotiated Fees ..................................................................................... 17
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4. Awards in Similar Cases Support An Award of The
Negotiated Fees ..................................................................................... 18
5. The Lodestar Cross-Check Attests To the Reasonableness
Of the Negotiated Fee Request .............................................................. 19
C. The Expenses Advanced By Plaintiffs’ Counsel Should Be
Reimbursed As Part of the $1.9 Million Award ............................................ 24
D. Incentive Payments In The Amount Of $5,000 Should Be
Awarded To Each Of The Named Plaintiffs ................................................. 25
IV. CONCLUSION ..................................................................................................... 26
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TABLE OF AUTHORITIES
FEDERAL CASES
Acosta v. Trans Union, LLC, 243 F.R.D. 377 (C.D. Cal. 2007) .....................................16
Alberto v. GMRI, Inc., 2008 U.S. Dist. LEXIS 91691 (E.D. Cal. Nov. 12,
2008) ...........................................................................................................................24
Alin v. Honda Motor Co., No. 08-4825 (D.N.J. 2012) ....................................................19
Allapattah Servs., Inc. v. Exxon Corp., 454 F. Supp. 2d 1185 (S.D. Fla.
2006) ...........................................................................................................................12
Anderson v. Nextel Retail Stores, LLC, No. CV 07-4480) (C.D. Cal. June
20, 2010 ......................................................................................................................21
Barrera v. Gamestop Corp., No. 09-1399 (C.D. Cal. Nov. 29, 2010) ............................21
Blum v. Stenson, 465 U.S. 886 (1984) ............................................................................21
Browne v. American Honda Motor Co., Inc., No. CV 09-06750 (C.D. Cal.
2010) ...........................................................................................................................19
Falk/Zwicker v. General Motors Corp., No. C07-0291-JCC (W.D. Wash.
Nov. 7, 2008) ..............................................................................................................19
Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) ....................................... 11, 12
Hensley v. Eckehart, 461 U.S. 424 (1983) ......................................................................12
Hopson v. Hanesbrands, Inc., No. 08-0844 EDL, 2009 U.S. Dist. LEXIS
33900 (N.D. Cal. Apr. 3, 2009) ...................................................................................26
In re Bluetooth Headset Products Liab. Litig., 654 F.3d 935 (9th Cir. 2011) ............ 8, 20
In re Cont’ll Ill. Sec. Litig., 962 F.2d 566 (7th Cir. 1992) ...............................................13
In re First Capital Holdings Fin. Prod. Sec., MDL No. 901, 1992 U.S.
Dist. LEXIS 14337 (C.D. Cal. June 10, 1992) ............................................................13
In re GMC Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768 (3d
Cir. 1995) ....................................................................................................................16
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In re Heritage Bond Litig., 02-ML-1475-DT(RCx), 2005 U.S. Dist. LEXIS
13627 (C.D. Cal. June 10, 2005) .................................................................................15
In re Immune Response Sec. Litig., 497 F. Supp. 2d 1166 (S.D. Cal.
2007) ...........................................................................................................................20
In re M.D.C. Holdings Sec. Litig., No. CV 89-0090, 1990 U.S. Dist. LEXIS
15488 (S.D. Cal. Aug. 30, 1990) .................................................................................12
In re Omnivision Techs., Inc., 559 F. Supp. 2d 1036 (N.D. Cal. 2007) ............... 9, 15, 17
In re Pacific Enters. Sec. Litig., 47 F.3d 373 (9th Cir. 1995) ................................... 12, 15
In re Rite Aid Corp. Secs. Litig., 396 F.3d 294 (3d Cir. 2005) ....................................20
In re TFL-LCD (Flat Panel) Antitrust Litig., MDL No. 1827, 2013 U.S.
Dist. LEXIS 49885 (N.D. Cal. Apr. 3, 2013) ..............................................................12
In re Toyota Motor Corp., No. 8:10ML-02151-JVS, 2013 U.S. Dist.
LEXIS 94485 (C.D. Cal. June 17, 2013) ................................................... 9, 10, 11, 18
In re Washington Public Power Supply Sys. Sec. Litig., 19 F.3d 1291 (9th
Cir. 1994) ....................................................................................................... 17, 20, 23
Kakani v. Oracle Corp., 2007 U.S. Dist. LEXIS 95496 (N.D. Cal. Dec. 21,
2007) ...........................................................................................................................24
Mangold v. Calif. Public Utilities Comm’n, 67 F.3d 1470 (9th Cir. 1995) .....................22
Mazza v. American Honda Motor Co., 666 F.3d 581 (9th Cir. 2012) ............................16
O’Keefe v. Mercedes-Benz United States, LLC, 214 F.R.D. 266 (E.D. Pa.
2003) ............................................................................................................................. 9
Olson v. Volkswagon of America, No. 07-05334, Dkt. No. 94 (C.D. Cal.
Dec. 16, 2008) .............................................................................................................19
Parkinson v. Hyundai Motor America, 796 F. Supp. 2d 1160 (C.D. Cal.
2010) ...................................................................................................................... 8, 19
Radcliffe v. Experian Info. Solutions, 715 F.3d 1157 (9th Cir. 2013) .............................26
Rodriguez v. W. Pub. Corp., 563 F.3d 948 (9th Cir. 2009) .............................................25
Sadowska v. Volkswagen Group of Am., No. CV-11-00665-BRO (C.D.
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Cal. Sep. 25, 2013) ......................................................................................................19
Six Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301 (9th Cir.
1990) ...........................................................................................................................14
Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) ................................................... 8, 13
Steiner v. American Broad. Co., 248 Fed. Appx. 780 (9th Cir. 2007) ............................24
Trew v. Volvo Cars of N. Am., LLC, No. S-05-1379-RRB, 2007 U.S. Dist.
LEXIS 55305 (S.D. Cal. July 31, 2007) ................................................................. 9, 10
Trs. of the Constr. Indus. and Laborers Health and Welfare Trust v.
Redland Ins. Co., 460 F.3d 1253 (9th Cir. 2006) ........................................................25
Van Vranken v. Atlantic Richfield Co., 901 F. Supp. 294 (N.D. Cal. 1995) ....................24
Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482 (E.D. Cal. 2010) .......................25
Villegas v. J.P. Morgan Chase & Co., No: C 09-00261 SBA, 2012 U.S.
Dist. LEXIS 114597 (N.D. Cal. Aug. 8, 2012) ...........................................................26
Vizcaino v. Microsoft Corp., 142 F. Supp. 2d 1299 (W.D. Wash. 2001) ........................15
Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) ................................... passim
STATE CASES
Barboza v. West Coast Digital GSM, Inc., 179 Cal. App. 4th 540 (2009) ......................21
Chavez v. Netflix, Inc., 162 Cal. App. 4th 43 (2008) ................................................ 23, 24
Graham v. DaimlerChrysler Corp., 34 Cal. 4th 553 (2004) ...........................................24
In re Cellphone Termination Fee Cases, 180 Cal. App. 4th 1110 (2009) .......................12
In re Consumer Privacy Cases, 175 Cal. App. 4th 545 (2009) ................................ 22, 24
In re Vitamin Cases, 2004 WL 5137597 (2004) ...................................................... 18, 23
Kim v. Euromotors West/The Auto Gallery, 149 Cal. App. 4th 170 (2007) ...................... 8
Lealao v. Beneficial California, Inc., 82 Cal. App. 4th 19 (2000) ..................................23
Sutter Health Uninsured Pricing Cases, 171 Cal. App. 4th 495 (2009) .........................24
Weshba v. Apple Computer Inc., 91 Cal. App. 4th 224 (2001) .......................................22
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FEDERAL STATUTES
15 U.S.C. §§ 2301 et seq. (Magnuson-Moss Warranty Act .......................................... 8
Fed. R. Civ. P. 23(h) ........................................................................................................ 8
STATE STATUTES
Arizona Consumer Fraud Act, Ariz. Rev. Stat. §§ 44-1521 et seq. ............................... 8
Cal. Civ. Code §§ 1750 et seq. (Cons. Legal Remedies Act (CLRA)) ......................... 8
Cal. Civ. Code §§ 1790-1795.7 (Song-Beverly Consumer Warranty Act) ................... 8
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MEMORANDUM OF POINTS AND AUTHORITIES
INTRODUCTION I.
As a direct result of Plaintiffs’ Counsel’s actions in this litigation, owners and
lessees of 2011 and 2012 Nissan Leaf electric vehicles (the “Settlement Class”) will now
receive a new modified electric battery warranty that covers all 2011-2012 Nissan
LEAFs nationwide.1 By this unopposed Motion, Plaintiffs’ Counsel seek to be
compensated for their effort in achieving this extraordinary benefit on behalf of the
Class.
The First Amended Complaint alleges that the 2011-2012 Nissan LEAF, an
electric vehicle powered by a Lithium-ion battery, loses battery capacity over time that
causes the vehicles to lack the driving range represented by Defendant Nissan North
America (“Nissan” or “NNA”). To remedy the alleged defect, Plaintiffs Humberto
Daniel Klee and David Wallak sought, inter alia, injunctive relief in the form of a new
or extended warranty that provides additional battery coverage due to capacity loss. The
Settlement obtained by Plaintiffs’ Counsel achieves exactly what Plaintiffs demanded.
Pursuant to the Settlement, Nissan has agreed to provide new “Lithium-ion
Battery Capacity Coverage,” which is coverage added to, and made a part of, the 2011
and 2012 Nissan New Electric Vehicle Limited Warranty. The new modified warranty
is free for all Class Members who do not opt-out of the Settlement, involves no claims
procedure, and directly addresses the loss of battery capacity identified in Plaintiffs’
complaint. As set forth below, the new warranty coverage is worth more than $200
million to the Class and achieves a better and more immediate result than could have
been achieved at trial and without the delay or risk of further litigation.
The key components of the new warranty provided by the Settlement are:
Nissan will cover any repairs needed to return battery
1 All capitalized terms have the same definitions as in the Settlement Agreement,
¶¶ 1-27.
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capacity to a level of at least nine bars (approximately
70% capacity) on the vehicle’s battery capacity level
gauge for a period of 60 months or 60,000 miles,
whichever occurs first;
If necessary, the Lithium-ion battery components will be
repaired in eligible vehicles and the original Lithium-ion
battery will be returned to the vehicle; or
If repair is not possible, the Lithium-ion battery will be
replaced in eligible vehicles with either a new or
remanufactured Lithium-ion battery.
Four aspects of the Settlement are particularly noteworthy. First, Plaintiffs’
Counsel resolved this matter expeditiously to the benefit of the Class, obtaining Nissan’s
agreement to provide the new, modified warranty to remedy battery capacity loss that
immediately inures to the benefit of 2011-12 model year LEAF drivers while they still
own and operate their cars. In contrast, even if Plaintiffs were to prevail at trial after
years of litigation, it is difficult to see how that would result in relief more
comprehensive than that provided by the Settlement Agreement. By that time, many
LEAF owners would no longer be driving their vehicles or their warranties would have
lapsed, and any monetary compensation to former LEAF owners would involve
substantial administrative costs and complexity and still would not adequately address
the real problem: having the LEAF operate as promised. This case settled relatively
quickly in part because Plaintiffs’ Counsel arrived at the outset with a cogent and
compelling theory of class-wide liability and a willingness to consider a resolution that
provides immediate benefits to the Class.
Second, the new warranty is available automatically, without any claims
procedure whatsoever, to all Class Members who do not opt out of the Settlement. The
Class Notice advises Class Members of the new warranty provisions, and Nissan also
has separately mailed letters to all Class Members advising them of the new battery
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warranty terms and enclosing labels with the new warranty terms to affix to Class
Members’ Warranty Booklets. To be clear and as set forth in the Class Notice, the letter
was sent by Nissan after the parties negotiated the new warranty in this lawsuit and as a
result of the Settlement.
Third, the new warranty coverage is being provided at no cost whatsoever to all
Class Members who do not opt out of the Settlement and with no cap on the number of
repairs that can be made during the warranty period. Through this Settlement, Nissan
has agreed to repair or replace the battery within the new warranty period and to incur all
service costs.
Fourth, Nissan’s offer of a new modified warranty to Class Members is directly
attributable to the efforts of Plaintiffs’ Counsel. Prior to the filing of this lawsuit, Nissan
did not provide any free comprehensive warranty coverage for battery capacity loss to
Class Members. As a result of the filing of this litigation, the Settlement, and the efforts
of Plaintiffs’ Counsel, Nissan now is providing the new modified warranty coverage to
all 2011 and 2012 model year LEAF vehicles.
By any measure, the results achieved by Plaintiffs’ Counsel are exceptional. As a
consequence of this Settlement, Nissan agrees, at its own expense, to provide new
warranties to all Class Members to cover battery capacity loss. Those Class Members
who have not opted out will automatically be eligible for a repair or replacement of the
Lithium-ion battery to return it to a nine bar capacity.
The value conferred by the Settlement to Class Members more than justifies
Plaintiffs’ fee request. Plaintiffs’ expert has valued the new warranty conservatively at a
minimum of $38 million or $11,100 per LEAF owner and at a maximum of $200
million, if every Class Vehicle were to require a battery replacement. See Declaration of
Colin Johns attached as Ex. 1 to the Declaration of Jordan L. Lurie in Support of
Plaintiffs’ Motion for Award of Attorneys’ Fees etc. [“Lurie Fee Decl.”].
Based on all of the foregoing and as further supported below, Plaintiffs’ Counsel
seek a fee and expense award of $1.9 million. Nissan has agreed to pay this amount
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subject to Court approval. Set against the value of the benefit conferred on the Class by
the Settlement, Plaintiffs’ request is eminently reasonable and, at 5% of the value
conferred, well below the Ninth Circuit’s 25% benchmark. Plaintiffs’ Counsel also seek
an award of $5,000 for each of the two named Plaintiffs for their efforts in obtaining
these exceptional benefits on behalf of the Class.
FACTS AND PROCEDURE II.
A. The Litigation
The Nissan LEAF is an all-electric, battery-powered car built and sold throughout
the United States by Nissan. The LEAF is propelled by an electric motor with a
rechargeable lithium-ion battery pack. LEAF owners recharge the battery pack through
publicly available and at-home charging stations.
Prior to filing this action, Plaintiffs’ Counsel thoroughly researched and
investigated the operation of Nissan LEAF and the electric battery system. As part of
their pre-filing investigative work, Plaintiffs’ Counsel, inter alia, researched publicly
available materials and information from the National Highway Traffic and Safety
Administration (“NHTSA”); reviewed Nissan manuals and service bulletins regarding
the LEAF and the alleged defect; researched and reviewed publicly available statements
and press releases by Nissan; reviewed federal regulations and applicable standards
regarding electric vehicles and their operation; studied the tracked comments from
LEAF owners on websites and blogs; reviewed consumer and LEAF owner complaints
and concerns and vetted those concerns through Plaintiffs’ engineers and consultants;
and confirmed that Plaintiffs’ experiences with reduced LEAF battery capacity were not
isolated incidents. Lurie Fee Decl., ¶¶ 8-9. Plaintiffs’ Counsel discovered that, due to a
design defect, the Lithium-ion battery equipped in the Class Vehicles loses capacity
when the climate gets hotter. Id., ¶ 10.
The named Plaintiffs are Humberto Daniel Klee, a California resident, and David
Wallak, who lives in Phoenix, Arizona. Id., ¶ 6. Just 13 months into the lease, Mr.
Klee’s LEAF battery lost two “bars,” a capacity reduction that resulted in diminished
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driving range for his LEAF.2 Id. Within just two weeks of Mr. Wallak’s purchase, his
LEAF similarly lost two bars of battery capacity. Id.
Mr. Klee and Mr. Wallak filed a class action complaint filed on September 24,
2012 based on the defects they experienced and Plaintiffs’ Counsel’s pre-litigation
investigation. Lurie Fee Decl., ¶ 11. On December 14, 2012, Plaintiffs filed a First
Amended Complaint that expanded the geographical scope of the proposed class to
include all owners and lessees of 2011-2012 model year Nissan LEAF vehicles
nationwide and omitted Nissan Motors Co. which had not been served in the instant
action. Id., ¶ 12; Dkt. No. 22.
In their Complaint, Plaintiffs alleged that the 2011-2012 model year Nissan
LEAF vehicles contained a “thermal management” defect, losing battery capacity over
time at an excessive rate when operated in a high temperature environment, resulting in a
driving range that is shorter than what is represented by Nissan. Lurie Fee Decl., ¶ 13.
Plaintiffs brought claims against Nissan for breach of implied warranty; unjust
enrichment; intentional misrepresentation; negligent misrepresentation; and violation of
various California and Arizona consumer protection statutes. The FAC sought primarily
injunctive relief in the form of a new or extended warranty. See e.g., Dkt. No. 22, FAC,
¶ 2 (“To remedy Defendant’s misconduct, Plaintiff Humberto Daniel Klee brings this
action for injunctive relief, pursuant to California’s consumer protection statutes, on
behalf of himself and all current owners or lessees in the United States of 2011-2012
Nissan Leaf vehicles (collectively, “Class Vehicles”)).” See also id. ¶¶ 69-70. Nissan
filed an Answer to the FAC on January 11, 2013.
B. The Parties’ Settlement and Additional Efforts by Plaintiffs’ Counsel
2 The LEAF’s battery capacity is measured in “bars,” with 12 bars being the full
capacity for a new LEAF. When the battery pack loses capacity, bars begin to disappear from the “capacity gauge” (a 12-segment gauge to the immediate right of the LEAF’s 12-segment state of charge gauge). However, each “bar” does not represent the same amount of capacity. Rather, the first capacity bar loss represents a 15% loss, while each subsequent bar represents a 6.25% loss.
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To Verify the Fairness Of the Settlement
Beginning in November 2012, the parties began exploring a possible resolution of
this action, following a telephonic conference between representatives of Nissan and
Plaintiffs’ Counsel to address issues raised by and in the Complaint and a letter
Plaintiffs’ Counsel sent to Nissan detailing Plaintiff’s requested settlement relief. Lurie
Fee Decl., ¶ 15. Counsel for the parties subsequently met in person in Los Angeles for
two days of face-to-face negotiations and to discuss settlement terms. Id. On
December 5, 2012, the parties agreed on material terms and executed a Term Sheet
memorializing those terms. Id., ¶ 16. Under the new coverage, Nissan will cover any
repairs needed to return battery capacity to a level of at least nine bars (approximately
70% capacity) on the vehicle’s battery capacity level gauge for a period of 60 months or
60,000 miles, whichever occurs first. If necessary, the Lithium-ion battery components
will be repaired in eligible vehicles and the original Lithium-ion battery will be returned
to the vehicle. If repair is not possible, the Lithium-ion battery will be replaced in
eligible vehicles with either a new or remanufactured Lithium-ion battery. There is no
cap on the number of repairs that can be made, and Class Members will be assured of a
plan that covers the loss of battery capacity for the warranty period, even if the problem
recurs. See Settlement Stip. ¶¶ 8, 33.
The new, modified warranty program secured by Plaintiffs’ Counsel directly
resolves the problem at issue: a defect in the battery capacity of these all-electric Class
Vehicles that reduces their driving range. Instead of a range of 73 miles at full charge,
Plaintiffs’ vehicles fell substantially short of that range before the charge was exhausted.
Class Members thus faced further limits as to how far they can drive the Class Vehicles.
The parties then conducted over five (5) months of confirmatory discovery. Lurie
Fee Decl., ¶ 18. During that time, Plaintiffs’ Counsel provided comprehensive
document requests to which Nissan responded. Nissan provided, and Plaintiffs’ counsel
reviewed and analyzed, over 4,000 pages of documents and data covering Plaintiffs’
contentions in the FAC and a broad range of issues concerning the LEAF battery that
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could impact the Settlement terms. The documents produced included warranty
information; customer complaints regarding battery capacity loss; Nissan’s
communications with Nissan owners; studies and data about the alleged rate of capacity
loss; and confirmation that customers are protected from the manipulation of the battery
capacity gauge. Id. In the course of the confirmatory discovery process, Nissan also
produced line-by-line documentation as to each vehicle eligible to be part of the
Settlement Class on a nationwide basis. Id., ¶ 19. On the basis of that documentation,
the total number of eligible class members is estimated to be 18,588. Id.
As set forth below, Plaintiffs’ Counsel also retained an accountant and valuation
expert to conduct an independent analysis of the Settlement valuation. See id. ¶ 4, Ex. 1.
Plaintiffs’ Counsel also undertook a rigorous analysis of the Settlement’s responsiveness
to Class Members’ concerns about the LEAF battery life as expressed on blogs and
Internet message boards. Lurie Fee Decl., ¶ 20. For example, Class Members were
concerned about manipulation of the battery capacity gauge by dealers or third parties to
avoid the capacity warranty. Id. To that end, Plaintiffs’ Counsel sought and obtained a
detailed declaration under oath from a senior manager responsible for the Nissan LEAF
who concluded that it would be nearly “impossible for a dealer technician to manipulate
the vehicle’s battery capacity gauge or to install a new program that would show a
different battery capacity than that of the vehicle’s actual battery.” Id.
Plaintiffs’ Counsel also received detailed responses from Nissan representatives
regarding other issues that had been raised by Nissan LEAF owners, such as: why
Nissan determined that the battery capacity can be restored to only 9 bars (or approx.
70% capacity); why there was not more robust coverage for cars sold in hot climates;
how the 9 bars under the new warranty would be verified; and whether the new warranty
precludes buy-backs by NNA for unsatisfied customers. Lurie Fee Decl., ¶ 21.
The Court preliminarily approved the Class Action Settlement on July 10, 2013.
Dkt. No. 36. After the class notice was mailed on September 9, 2013, Plaintiffs’
Counsel began fielding and responding to comments and inquiries from Class members.
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The reaction of the Class to date is overwhelmingly positive. Lurie Fee Decl., ¶ 30.
ARGUMENT III.
A. The Negotiated Fee Is Fair And Reasonable As A Percentage of the
Benefits Achieved For the Class
1. The Court Ensures Reasonableness of Fee Awards
At the conclusion of a successful class action, Plaintiffs’ Counsel may apply to
the Court for an award of “reasonable attorneys’ fees and non-taxable costs that are
authorized by law or the parties’ agreement.” Fed. R. Civ. P. 23(h). Courts considering
a fee application from class counsel must ensure that the fees awarded are reasonable.
See In re Bluetooth Headset Products Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011). In
determining attorneys’ fees, courts may opt for either the common fund or the lodestar
method.3 See Staton v. Boeing Co., 327 F.3d 938, 972-974 (9th Cir. 2003) (authorizing
courts to consider non-monetary benefits as part of the value for the common fund if
such benefits can reasonably be valued). In the Ninth Circuit, the percentage-of-the-
recovery method is the prevailing approach for cases where the value to the class is
ascertainable. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002)
(surveying common fund cases in the Ninth Circuit). This method is preferred because it
most fairly correlates the compensation of counsel with the benefit conferred upon the
class. See In re Omnivision Techs., Inc., 559 F. Supp. 2d 1036, 1046 (N.D. Cal. 2007)
3 Under the mandatory fee-shifting provision of the CLRA, the Court “shall
award court costs and attorneys’ fees to a prevailing plaintiff in a litigation” under that section. Cal. Civ. Code § 1780(e). “[A]n award of attorney fees to ‘a prevailing plaintiff’ in an action brought pursuant to the CLRA is mandatory, even where the litigation is resolved by a pre-trial settlement agreement.” Kim v. Euromotors West/The Auto Gallery, 149 Cal. App. 4th 170, 178-179 (2007). There is no dispute that Plaintiffs, having obtained the relief they sought when they filed suit, are the prevailing party. See Parkinson v. Hyundai Motor America, 796 F. Supp. 2d 1160, 1171 (C.D. Cal. 2010) (authorizing fees under CLRA when the plaintiff obtained relief sought by way of a class action settlement). And Nissan recognized Plaintiffs’ right to recover fees by entering into the Settlement Agreement under which it would not oppose Plaintiffs’ request for attorneys’ fees and expenses in an amount no exceeding $1.9 million. (Settlement Stip. ¶ 32.) Plaintiffs are also entitled to fees under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2310(d)(2), the Song-Beverly Consumer Warranty Act, Cal. Civ. Code § 1794(d), and the Arizona Consumer Fraud Act, Ariz. Rev. Stat. §§ 44-1521 et seq.
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(describing the advantages of using the percentage method).
In automobile defect cases, courts frequently evaluate the reasonableness of a fee
request by viewing it as a percentage of the total value of the warranty provisions
conferred as a benefit to the Class. See In re Toyota Motor Corp., No. 8:10ML-02151-
JVS, 2013 U.S. Dist. LEXIS 94485, *211 (C.D. Cal. June 17, 2013) (valuing the relief
involving the installation of a break override system at $400 million); O’Keefe v.
Mercedes-Benz United States, LLC, 214 F.R.D. 266, 305-307 (E.D. Pa. 2003) (valuing
extended warranty coverage at approximately $20 million and applying a percentage
method to determine fees); Trew v. Volvo Cars of N. Am., LLC, No. S-05-1379-RRB,
2007 U.S. Dist. LEXIS 55305, *15 (S.D. Cal. July 31, 2007) (valuing the extension of
warranty replacing a throttle module at $24 million based on part replacement costs and
applying a percentage method to determine fees). The Court should use the percentage
method here to evaluate the reasonableness of Plaintiffs’ fee request.
2. The Settlement Value Supports the Fee Request
The value of the new warranty benefit conferred upon the Class by Plaintiffs’
Counsel more than supports the fee request. Using this baseline calculation, Plaintiffs’
requested fee is only 5% of the value of the benefit conferred on the Class, well below
the Ninth Circuit benchmark.
Courts have recognized that a warranty can be valued in a number of ways. See
O’Keefe, 214 F.R.D. at 305-307 (evaluating multiple methodologies for valuation). An
approach commonly accepted by Courts is simply to value the cost of replacing or
repairing the defect. For example, in Trew v. Volvo, a case where the plaintiff’s counsel
sought fees under a catalyst theory, the court considered the value of an extended
warranty providing repairs or replacements to the electronic throttle module (ETM) in
the class vehicles. 2007 U.S. Dist. LEXIS 55305, at *15. In Trew, the court valued the
warranty as the replacement cost of the ETM, which is $1,000 per module. Id. The total
value of the Trew warranty, based on 24,000 defective modules at issue, was $24
million. Id.
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Here, Plaintiffs’ expert has determined that the value of the battery if it would
need to be replaced is approximately $9,600 based on the most recent publicly available
data regarding LEAF’s battery costs.4 Johns Decl. ¶¶ 12-13. The cost that Nissan is
willing to pay the service provider to repair or replace each battery is $1,500. Lurie Fee
Decl., ¶ 23; Exh. 2. Thus, the value of the warranty to each Class Member (not counting
any incidental costs borne by Nissan, such as transporting and storing the battery), is
$11,100 per Class Vehicle. Johns Decl., ¶ 15. Multiplying the per Vehicle warranty
benefit by the total number of Class Vehicles yields a maximum Settlement benefit to
Class Members from the new warranty of over $206 million. Id., ¶ 16.
A variation on this approach endorsed by the courts calculates just the cost of
servicing of the vehicles and does not include the actual replacement part. In In re
Toyota Motor Co., the court accepted that the average retail cost of installing a brake
override system is $400 million. See 2013 U.S. Dist. LEXIS 94485, at * 207 n. 7. The
court also valued a customer service support program at $477 million. Id. As set forth
previously, the cost of service here is approximately $1,500 per vehicle. For the entire
Class, this amounts to a total value of $27,882,000. Johns Decl., ¶ 17. Of course, this
valuation does not include the most important cost: actual replacement cost of the battery
itself.
Plaintiffs’ valuation expert also offers a third approach based on Plaintiffs’
contention that high temperature is a material factor in the accelerated loss of battery
capacity in the Class Vehicles. Using data produced by Nissan with respect to the total
number of vehicles covered by the Settlement and the States in which those vehicles are
believed to be located, Plaintiffs’ expert determined that of the total 18,588 Class
Vehicles, 12,648, or 68%, were sold in a Hot Weather State (defined as states where
there are four or more consecutive months where the average high temperature is greater
4 Citing protections against disclosures of proprietary information, Nissan refused
to disclose the actual cost of producing the LEAF battery. Lurie Fee Decl. ¶ 15.
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or equal to 80°F). Johns Decl., ¶¶ 18-21.
Assuming conservatively that battery replacements were required for only 25% of
the Class Vehicles located in these Hot Weather States and for 5% of the Class Vehicles
that are not located in a Hot Weather State, the value of the Settlement would be
$38,394,900. Johns Decl., ¶¶ 22. If the incidence of battery replacements in Hot
Weather States is increased to 50%, with no other changes, the resulting estimate of the
Settlement would be $73,493,100. Id., ¶ 24. As the two named Plaintiffs are located in
California and Arizona, if only the Class Vehicles in those two States (7,902 and 499,
respectively) were included, the value of the settlement, assuming replacement of the
batteries in all of these vehicles, would be $93,251,100 (8,401 * $11,100). Id., ¶ 25.
In short, Plaintiffs’ fee request comprises a very small and reasonable percentage
of the benefits conferred by the additional warranty coverage under any of the three
court-endorsed approaches provided by a credentialed expert for valuing the warranty.
3. The Negotiated Attorneys’ Fees Is Reasonable Since It Is Less
Than the Ninth Circuit Benchmark
For cases using the percentage-of-the-award method, 25% of the overall figure is
considered the “benchmark award for attorneys’ fees.” Hanlon v. Chrysler Corp., 150
F.3d 1011, 1029 (9th Cir. 1998). Here, the total value of the Settlement, using the most
conservative estimate by Plaintiff’s expert, is $ 38 million. The negotiated attorneys’
fees, as a percentage of the Settlement value, therefore are a modest 5%.
In comparison to the extraordinary success achieved, Plaintiffs’ Counsel have
negotiated a comparatively low amount in attorneys’ fees. The requested award falls on
the extreme low end of percentage-of-the-recovery cases as “[i]n the Ninth Circuit
particularly, the most common percentages awarded were 25 percent, 30 percent and 33
percent.” In re Toyota Motors, 2013 U.S. Dist. LEXIS 94485, at *218 (citing a survey
conducted by the plaintiffs’ expert of Ninth Circuit cases from 2006 and 2007); see also
Vizcaino, 290 F.3d at 1043 (surveying fee awards from dozens of large common fund
settlements in the Ninth Circuit, finding that most fell between 20-30%).
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Indeed, courts routinely award fees greater than the 25% benchmark figure. See
In re TFL-LCD (Flat Panel) Antitrust Litig., MDL No. 1827, 2013 U.S. Dist. LEXIS
49885 (N.D. Cal. Apr. 3, 2013) (awarding 28.5 percent of a $27.5 million settlement
fund); Allapattah Servs., Inc. v. Exxon Corp., 454 F. Supp. 2d 1185 (S.D. Fla. 2006)
(awarding 31.3 percent of $1.075 billion settlement fund); In re Pacific Enters. Sec.
Litig., 47 F.3d 373, 379 (9th Cir. 1995) (awarding 33% of a $ 12 million common fund).
Even though Plaintiffs’ Counsel have secured exceptionally valuable relief for the
Class, the requested attorneys’ fees constitute a lower percentage of the total recovery
than the vast majority of the cases—5% of the total value of the Settlement. The fee
request is clearly reasonable and should be awarded.
4. The Amount Requested in Attorneys’ Fees Was Negotiated
Only After An Agreement Was Reached on All Class
Compensation and Notice Terms
Courts have encouraged litigants to resolve fee issues by agreement. See, e.g.,
Hanlon, 150 F.3d at 1029. This is in keeping with the powerful public policy of
encouraging and approving non-collusive settlements, including those in class actions.
See In re Cellphone Termination Fee Cases, 180 Cal. App. 4th 1110, 1118 (2009)
(“Public policy generally favors the compromise of class action litigation.”); see also, In
re M.D.C. Holdings Sec. Litig., No. CV 89-0090, 1990 U.S. Dist. LEXIS 15488, at *12
(S.D. Cal. Aug. 30, 1990) (“Because this Court believes the parties should be
encouraged to settle all their disputes as part of the settlement…. including the amount of
the fee... if the agreed-to fee falls within a range of reasonableness, it should be approved
as part of the negotiated settlement.”).
Conversely, the United States Supreme Court discourages a “second major
litigation” arising from a request for attorneys’ fees. Hensley v. Eckehart, 461 U.S. 424,
437 (1983) (“Ideally, of course, litigants will settle the amount of a fee.”). When the
agreed-upon fee was negotiated at arm’s-length and “there is no evidence of self-dealing
or disabling conflict of interest, the Court is reluctant to interpose its judgment as to the
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amount of attorneys’ fees in the place of the amount negotiated by adversarial parties in
the litigation.” In re First Capital Holdings Fin. Prod. Sec., MDL No. 901, 1992 U.S.
Dist. LEXIS 14337, at *13 (C.D. Cal. June 10, 1992). Rather, courts will generally defer
to the parties, applying a lower level of scrutiny. See Staton, 327 F.3d at 966 (“[T]he
court need not inquire into the reasonableness of the [negotiated] fees even at the high
end with precisely the same level of scrutiny as when the fee amount is litigated”). This
is because the negotiated fee is, in effect, the market-set price for the fees. See In re
Cont’ll Ill. Sec. Litig., 962 F.2d 566, 568 (7th Cir. 1992) (Posner, J.) (explaining that the
negotiated fee reflects a market-based price because it encompasses both parties’ best
estimate and view as to the value of the legal services and what the court might have
awarded if the matter had been litigated).
Here, the agreed-upon attorneys’ fees and expense amount of $ 1.9 million (see
Settlement Stip. ¶ 32) are the product of a non-collusive adversarial negotiation taking
into consideration Plaintiffs’ Counsel’s prior and future efforts, along with the excellent
results achieved. Nissan was represented by highly-skilled lawyers who are experienced
in this type of consumer litigation, have litigated on the defense side for many years and
are well aware of fees paid in other actions of a similar nature. In agreeing to pay fees,
defense counsel would ordinarily consider the possibility that plaintiffs’ counsel might
apply for and receive a much larger award, especially in the event of any objection or
appeal of the Settlement, which would necessarily lead to additional protracted litigation,
efforts by plaintiffs’ counsel to defend the Settlement, and the possibility of even higher
fees.
Nissan’s counsel and Plaintiffs’ Counsel conducted intense, face-to-face
settlement negotiations for two days. As a result of these arms’-length negotiations, the
parties reached a preliminary agreement, including further discovery. Lurie Fee Decl., ¶
15. To that end, Nissan produced 4,000 pages of documents and data in connection with
the Settlement. Id., ¶ 18. Only after Plaintiffs’ Counsel evaluated Nissan’s confirmatory
discovery, including follow-up responses based on questions and concerns raised by
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Class Members, did the parties finalize the Settlement. Id., ¶¶ 21-23, 25.
Significantly, to avoid any appearance of conflict, Plaintiffs’ Counsel separately
negotiated the terms of attorneys’ fees and reimbursement of litigation expenses. Lurie
Fee Decl. ¶ 24. Because the Settlement was not contingent on an agreement as to
attorneys’ fees, this process foreclosed the possibility that Plaintiffs’ Counsel made
unfavorable concessions with regard to the Class’s claims in exchange for payment of
higher fees. Id. Indeed, because this process ensures that Class Members’ interests
would not even be potentially compromised by the fee negotiations, the parties’ mutual
determination as to the fair value of Plaintiffs’ Counsel’s services should be awarded.
In short, the requested amount of $1.9 million in fees and expenses is fair and
reasonable, reflecting an arms’-length compromise that does not affect Class Members’
relief in any way. The Court should grant Plaintiffs’ request.
B. Plaintiffs’ Requested Fees Are Reasonable Under This Circuit’s Test
for Reasonableness
Courts in this Circuit have also considered additional factors in considering the
fairness of the award. These factors include: (1) the results achieved; (2) the risks of
further litigation and the complexity of the case; (3) the contingent nature of the fee; (4)
awards made in similar cases; and (5) a lodestar cross-check. See Vizcaino, 290 F.3d
1048-1050 (discussing factors); Six Mexican Workers v. Arizona Citrus Growers, 904
F.2d 1301, 1301 (9th Cir. 1990) (same). While no single factor is determinative of
reasonableness, these factors also support Plaintiffs’ reasonable fee request.
1. The Results Achieved Support The Court Awarding the
Negotiated Fees
By any measure, the results achieved by Plaintiffs’ Counsel are exceptional. As a
result of this Settlement, Nissan agrees, at its own expense, to provide new modified
warranties to all Class Members to cover battery capacity loss. Those Class Members
who have not opted out will automatically be eligible for a repair or replacement of the
Lithium-ion battery in their Nissan LEAFs to return it to a nine bar capacity during the
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warranty period.
This is the best possible solution to the diminished battery capacity problem
experienced by Class Members. The battery is the single most important component of
the LEAF, the best-selling all-electric automobile in the United States. The LEAF is
propelled by the electricity stored in the battery, and the battery capacity determines how
far an owner can travel while driving the LEAF on any given trip. The LEAF was
touted as having a 73-mile driving range on one full charge. However, many Class
Members have seen their batteries diminish to eight or fewer bars at full capacity,
resulting in a substantial loss in driving range.
These Class Members will have their batteries—estimated to cost $9,600—
repaired or replaced at no cost to them. By expeditiously resolving this critical issue for
Class Members, Plaintiffs’ Counsel has secured relief that directly attacks and resolves
the problem while Class Members still owned their vehicles.
2. The Substantial Risks of Further Litigation, Along With the
Complexity Of the Case, Support The Court Awarding The
Negotiated Fees
The risk that further litigation might result in Plaintiffs not recovering at all is an
important factor in determining a fair fee award. See Omnivision, 559 F. Supp. 2d at
1047; In re Heritage Bond Litig., 02-ML-1475-DT(RCx), 2005 U.S. Dist. LEXIS
13627, at *44 (C.D. Cal. June 10, 2005) (“The risks assumed by Class Counsel,
particularly the risk of non-payment or reimbursement of expenses, is a factor in
determining counsel’s proper fee award”). The Ninth Circuit has recognized that such
risks will often justify increasing a fee award above the 25% benchmark. Vizcaino v.
Microsoft Corp., 142 F. Supp. 2d 1299, 1303-04 (W.D. Wash. 2001) (recognizing that
the risk of litigation is one reason for increasing fees above the 25% benchmark); see
also In re Pacific Enters. Sec. Litig., 47 F.3d 373, 379 (9th Cir. 1995) (33% of the
common fund as attorneys’ fees was justified because of the complexity of the issues
and the risks involved).
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The risks of litigation also support the negotiated fees since Plaintiffs’ Counsel is
requesting fees, as a percentage of the overall Settlement value, that are substantially
below the benchmark figure of 25%. Although Plaintiffs believe that their claims have
merit, Plaintiffs’ Counsel acknowledges the significant risks and expense necessary to
prosecute Plaintiffs’ claims through trial and subsequent appeals, as well as the inherent
difficulties and delays complex litigation like this entails.
First, any case against a major automotive manufacturer alleging a defect in
thousands of vehicles has the potential to take up significant amounts of attorneys’ time
and the Court’s resources. Here, the Settlement provides actual relief to current owners
of Class Vehicles without having to wait until after years of litigation. The Settlement
does not have any obvious or hidden deficiencies. Nor does the Settlement exhibit
preferential treatment toward certain Class Members.
Second, Nissan would have aggressively opposed class certification. “The value
of a class action ‘depends largely on the certification of the class,’ and . . . class
certification undeniably represents a serious risk for plaintiffs in any class action
lawsuit.” Acosta v. Trans Union, LLC, 243 F.R.D. 377, 392 (C.D. Cal. 2007) (quoting
In re GMC Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 817 (3d Cir.
1995)). Even if the Class were certified by contested motion, there would nonetheless be
the genuine risk that the Court would revisit its ruling and decertify, or would not find
the action suitable for certification as a nationwide class, per the amended complaint.5
Finally, Plaintiffs must prove liability—specifically that there was a defect in the
design causing the loss of battery capacity rather than user error. The complexity of the
case and required expenses are sure to be exacerbated by the difficulties of evaluating the
highly-advanced technology at issue. The Lithium-ion battery of one of the world’s
most advanced all-electric vehicles is not a component that a non-specialized automobile
5 See, e.g., Mazza v. American Honda Motor Co., 666 F.3d 581 (9th Cir. 2012)
(reversing certification of nationwide class composed of consumers seeking relief under California’s consumer protection laws).
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mechanic is capable of fixing. And even if Plaintiffs prevailed at trial after years of
litigation, it is difficult to see how that would result in relief more comprehensive than
that which is provided by the Settlement Agreement. By that time, many LEAF owners
would no longer be driving their vehicles, and any monetary compensation to former
LEAF owners would involve substantive greater administrative costs and complexity
that still would not adequately address the real problem: having the LEAF operate as
promised.
In sum, the complexity of the case, as well as the continuing risk of litigation to
both Class Members and Plaintiffs’ Counsel, supports the application of the benchmark
25% of the value of the Settlement. As Plaintiffs’ Counsel have negotiated for a
considerably smaller percentage of the total value of the Settlement, that amount is
reasonable and should be awarded.
3. The Contingent Nature of Fees And Financial Burden Carried
By Plaintiffs Support The Court Awarding The Negotiated
Fees
Attorneys are entitled to a fee larger than just their lodestar when their
compensation is contingent in nature. See Vizcaino, 290 F.3d at 1049-1050. This
enhancement stems from the “established practice in the private legal market to reward
attorneys for taking the risks of non-payment by paying them a premium over their
normal hourly rates for winning contingency cases.” In re Washington Public Power
Supply Sys. Sec. Litig., 19 F.3d 1291, 1299 (9th Cir. 1994); see also Omnivision, 599 F.
Supp. 2d at 1047 (“The importance of assuring representation for plaintiffs who could
not otherwise afford competent attorneys justifies providing those attorneys who do
accept matters on a contingent-fee basis to a larger fee than if they were billing by the
hour or on a flat fee.”). Since attorneys pursuing claims on contingency will sometimes
lose after expending thousands of hours, and often advancing tens of thousands in
expenses, despite litigating diligently and expertly, an enhancement ensures that the risks
of contingency representation do not outstrip the incentives to pursue claims on behalf of
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consumers or employees.
Here, Plaintiffs’ Counsel do not even seek an enhancement of the benchmark
figure, despite being entitled to such an enhancement. Bearing substantial contingent
risk, Plaintiffs’ Counsel expended considerable attorneys’ hours and expenses, with no
guarantee that any of these expenses would be recouped.
Moreover, Plaintiffs’ Counsel should be rewarded for resolving the Class Action
expeditiously. The efficiency of the resolution improves the quality of the Settlement
because the parties can locate Class Members with greater ease and distribute benefits
more readily than if the case had dragged on. Conversely, awarding a lower amount
because Plaintiffs’ Counsel settled the matter relatively quickly would distort financial
incentives by encouraging counsel to needlessly prolong litigation. It is for this reason
that courts reject awarding a lower fee when a case is resolved early. See, e.g., In re
Vitamin Cases, 2004 WL 5137597, at *12 (San Francisco Sup. Ct., 2004) (holding that
limiting fees because the action settled early would “create a perverse financial incentive
where, as here, Plaintiffs’ Counsel negotiated an outstanding recovery without subjecting
their clients to the uncertainties of class certification or trial.”).
Thus, even in a class action resolved comparatively quickly, Plaintiffs’ Counsel’s
contingent risk is considerable and should be factored into the analysis, supporting
Plaintiffs’ Counsel’s comparatively modest fees.
4. Awards in Similar Cases Support An Award of The Negotiated
Fees
As set forth above, the most common fee percentages awarded in the Ninth
Circuit applying the percentage method were 25 percent, 30 percent and 33 percent, with
“two-thirds of the awards [] between 25 percent and 35 percent.” In re Toyota Motors
Co., 2013 U.S. Dist. LEXIS 94485, at *218. The requested percentage here falls well
below the most commonly awarded amount.
Moreover, the actual amount of the negotiated fees would fall on the low end of
awards arising from class action settlements that provided extended warranties for
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automotive defects. For instance, in Olson v. Volkswagen of America, No. 07-05334,
Dkt. No. 94 (C.D. Cal. Dec. 16, 2008) (order granting attorneys’ fees), the court
approved $2 million in fees (based on a 1.9 multiplier to the lodestar) after the plaintiff
achieved a settlement resulting in a revised maintenance schedule for timing belt
replacement and a warranty to cover engine damage for timing belt problems through
105,000 miles.
Altogether, the Settlement achieved here is superior to other comparable class
action settlements where high fees were awarded for relief that is less substantial than
that obtained by Plaintiffs’ Counsel. See Parkinson, 796 F. Supp. 2d at 1165 (awarding
$ 3.7 million for settlement of defective flywheel transmissions where class members
received 50%-100% in cash reimbursement of repair based on mileage at the time of
repair); Sadowska v. Volkswagen Group of Am., No. CV-11-00665-BRO, Dkt. No. 127
(C.D. Cal. Sep. 25, 2013) (awarding $2.2 million in fees to counsel who obtained a new
warranty for transmission parts for the class); Falk/Zwicker v. General Motors Corp.,
No. C07-0291-JCC (W.D. Wash. Nov. 7, 2008) (approving fees of $2.372 million on a
settlement providing for a 7 year/70,000 mile warranty for repair and replacement of
defective speedometer); Browne v. American Honda Motor Co., Inc., No. CV 09-06750
(C.D. Cal. 2010) (awarding $2 million in fees for settlement authorizing partial
reimbursement to class members for costs of replacing brake pads); Alin v. Honda Motor
Co., No. 08-4825 (D.N.J. 2012) (awarding $2.515 million in fees after counsel obtained
a settlement providing for reimbursement of repairs on an air conditioning part).
Whether viewed as 5 percent of the total value of the (at least) $ 38 million
Settlement, or just as total fees in comparison to other cases involving warranty benefits,
the negotiated fees fall on the low end of a reasonable range of fee awards.
5. The Lodestar Cross-Check Attests To the Reasonableness Of
the Negotiated Fee Request
As set forth above, Plaintiffs’ fee request is premised primarily on a percentage of
the Settlement value, the prevailing method in cases of this kind. After making that
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determination, this Court may also use a lodestar analysis as a final “cross-check on the
percentage method.”6 In re Washington Pub. Power Supply Sys. Sec. Litig., 19 F.3d at
1296-98.
A lodestar cross-check confirms that the negotiated fee is reasonable. The
lodestar method is calculated by multiplying “the number of hours reasonably expended
on the litigation… by a reasonable hourly rate.” Bluetooth, 654 F.3d at 941. Here,
Plaintiffs’ Counsel have submitted a detailed declaration attesting to their efforts to
prosecute this action (see Lurie Fee Decl., ¶¶ 33-36) and the total hours, hourly rates and
experience of Plaintiff’s Counsel. Declaration of Rebecca Labat [“Labat Decl.”] ¶¶ 5-
14.) The tasks performed by Plaintiffs’ Counsel include: (1) conducting a lengthy
investigation into Plaintiffs’ claims; (2) preparing the Complaint and the First Amended
Complaint, which included researching the applicable law with respect to the claims
asserted and the potential defenses thereto; (3) engaging in lengthy settlement
negotiations; (4) thoroughly reviewing and analyzing discovery produced by Nissan; (5)
analyzing the fairness and effectiveness of the proposed warranty for the Class; (6)
monitoring the comments of LEAF owners as to the vehicle’s battery performance; (7)
negotiating a carefully considered settlement on behalf of the Class that maximizes the
warranty coverage and ease of claims; (8) communicating with experts regarding
warranty coverage issues and engaging and working with an expert to value the
Settlement and the new warranty coverage; (9) preparing motions for preliminary
approval of the class action settlement and the instant motion for attorneys’ fees; and
(10) fielding and responding to class members’ inquiries regarding the warranty
information and negotiating updates for the Settlement website to provide uniform,
6 Where the use of the lodestar method is used as a cross-check, it can be
performed with a less exhaustive cataloguing and review of counsel's hours. See In re Rite Aid Corp. Secs. Litig., 396 F.3d 294, 306 (3d Cir. 2005) (“The lodestar cross-check calculation need entail neither mathematical precision nor bean-counting.”); In re Immune Response Sec. Litig., 497 F. Supp. 2d 1166 (S.D. Cal. 2007) (“Although counsel have not provided a detailed cataloging of hours spent, the Court finds the information provided to be sufficient for purposes of lodestar cross-check.”).
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public responses to Class members’ concerns. Lurie Fee Decl., ¶ 35.
Plaintiffs’ lodestar also includes hours to be billed for drafting the motion for final
approval of the Settlement and filing formal responses to any objections, in addition to
time to be spent in responding to further Class Member inquiries. Labat Decl., ¶ 5.
Plaintiffs’ Counsel expects to devote significant time to fielding Class Member inquiries
even after final approval, as Plaintiffs’ Counsel’s obligation to the Class continues after
final approval of the Settlement. Barboza v. West Coast Digital GSM, Inc., 179 Cal.
App. 4th 540, 546-547 (2009) (“[C]lass counsel must represent all of the absent class
members’ interests throughout the litigation to the extent there are class issues.”); Lurie
Fee Decl., ¶ 46. Plaintiffs’ Counsel have been responding to multiple phone calls per
day from Class Members since the mailing of the Class Notice on September 9, 2013
and expect many more such inquiries in the future. Id., ¶ 38. In addition, Plaintiffs’
Counsel must continuously monitor the performance of the Claims Administrator, and
potentially tend to post-approval disputes that Class Members may have regarding the
implementation of the warranty program. Based on the foregoing, the total number of
hours billed or will be billed by Plaintiffs’ Counsel, 1,990, is reasonable. Labat Decl., ¶
5.
Plaintiffs’ Counsel’s hourly rates, which range from $300 to $675 for a senior
attorney, are also reasonable. See Labat Decl., ¶ 11. In considering rates, courts
examine the rate “prevailing in the community for similar services by lawyers of
reasonably comparable skill, experience, and reputation.” Blum v. Stenson, 465 U.S.
886, 895 n.11 (1984). Here, the hourly rates for experienced senior counsel are
comparable to those approved in other cases in California and in the Southern California
community. See, e.g., Barrera v. Gamestop Corp., No. 09-1399 (C.D. Cal. Nov. 29,
2010) (order granting attorneys’ fees of $700 an hour for partners); Anderson v. Nextel
Retail Stores, LLC (C.D. Cal. June 20, 2010, No. CV 07-4480) ($655 to $750 an hour
for partners; $300 to $515 an hour for associates); Labat Decl., ¶ 12.
In fact, the rates of Plaintiffs’ Counsel, Capstone Law APC, have been approved
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by local courts on numerous occasions, including recently in Sheldon v. AHMC
Monterey Park Hospital LP, Case No. BC440282 (L.A. Super. Ct. Feb. 22, 2013) (“The
Court finds that the requested attorneys’ fees award is reasonable for a contingency fee
in a class action such as this. Moreover, Capstone [has] provided sufficient evidence to
establish that the award is appropriate by way of their lodestar/multiplier cross-check,
demonstrating to the Court’s satisfaction that the attorney rates and hours billed to the
litigation were reasonable.”) and Zamora v. Balboa Life & Casualty LLC, Case No.
BC360026 (L.A. Super. Ct. Feb. 13, 2013) (“Plaintiffs’ counsel have provided sufficient
evidence to establish that the award is less than the reasonable lodestar expended on this
case [i.e.] the reasonably hourly rates multiplied by time spent. . . .”).7 Labat Decl., ¶ 13.
Plaintiffs’ Counsel’s experience, reputation, and ability justify the hourly rates charged.
Based on a review of contemporaneously-recorded billing, the total hours
multiplied by reasonable rates is approximately $1,089,000, which does not include any
time billed by paralegals or administrative personnel. Labat Decl., ¶ 5. Plaintiffs’
Counsel’s litigation expenses are approximately $5,212.33 (which does not include
expenses written off by a prior firm that initially handled the case). Id., ¶¶ 5, 13.
After determining the lodestar, the Court must determine whether there should be
an enhancement to the lodestar by applying a multiplier. The factors in determining the
multiplier—results achieved, risks of litigating, complexity of the suit, as well as
continued obligation to the Class (In re Consumer Privacy Cases, 175 Cal. App. 4th
545, 551 (2009))8—overlap considerably with the factors to determine a reasonable rate
7 See also Weisbarth v. Banc West Investment Services Inc., Case No. BC422202
(L.A. Super. Ct. May 24, 2013); Glover v. Petco Animal Supplies, Inc., Case No. BC463794 (L.A. Super. Ct. May 7, 2013); Zelaya v. Destination Long Point, Inc., Case No. BC472286 (L.A. Super. Ct. May 7, 2013).
8 Because Plaintiffs also brought the action under California consumer law, California state law applies to the lodestar analysis. Mangold v. Calif. Public Utilities Comm’n, 67 F.3d 1470, 1478 (9th Cir. 1995) (holding that in diversity actions, state law applies “in determining not only the right to fees, but also in the method of calculating the fees.”). California courts have also applied a similar range of multipliers. See Weshba v. Apple Computer Inc., 91 Cal. App. 4th 224, 255 (2001) (“”Multipliers can range from 2 to 4 or even higher”); Chavez v. Netflix, Inc., 162 Cal. App. 4th 43, 66
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under the percentage method discussed above.
As previously set forth, the Settlement yielded excellent results for the Class,
while the continued risk of litigating this complex, nationwide class action involving
advanced technology would undermine Class Member interests by delaying the ability
to receive benefits. Moreover, courts award, rather than punish, plaintiffs’ counsel for
achieving excellent results without drawing out the litigation. See, e.g., Lealao v.
Beneficial California, Inc., 82 Cal. App. 4th 19, 52 (2000) (“[T]he promptness of the
settlement cannot be used to justify the refusal to apply a multiplier” without
“exacerbating the disincentive to settle promptly inherent in the lodestar methodology…
considering that our Supreme Court has placed an exceedingly high value on settlement,
it would seem counsel should be rewarded, not punished, for helping to achieve that
goal…”); In re Vitamin Cases, 2004 WL 5137597, at *12 (discussing “perverse
incentives” that would result if courts limit fees due to an early settlement).
A contingency risk factor is particularly high here. As the Ninth Circuit
explained:
‘Courts have routinely enhanced the lodestar to reflect the risk of non-payment in common fund cases…. This mirrors the established practice in the private legal market of rewarding attorneys for taking the risk of nonpayment by paying them a premium over their normal hourly rates for winning contingency cases…’ In common fund cases, ‘attorneys whose compensation depends on their winning the case [] must make up in compensation in the cases they win for the lack of compensation in the cases they lose.’
Vizcaino, 290 F.3d at 1051 (quoting Washington Pub. Power Supply Sys. Sec. Litig., 19
F.3d at 1300).
Here, the resulting multiplier of 1.759 on the lodestar cross-check is on the low to
medium end of the range of multipliers that courts regularly approve as fair and
(2008) (affirming a multiplier of 2.50). 9 Applying a multiplier of 1.75 to Plaintiffs’ Counsel’s lodestar of $1,089,000
results in the negotiated amount of $1.9 million.
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reasonable. In Vizcaino, the Ninth Circuit affirmed a fee awarded in the Central District
that equaled 28% of the settlement fund and a lodestar multiplier of 3.65, after analyzing
a table of the most commonly applied multipliers. 290 F.3d at 1051. This is within the
“3-4 range [of] common” multipliers for sophisticated class actions. Van Vranken v.
Atlantic Richfield Co., 901 F. Supp. 294, 298 (N.D. Cal. 1995). See also Steiner v.
American Broad. Co., 248 Fed. Appx. 780, 783 (9th Cir. 2007) (affirming fee award
where the lodestar multiplier was 3.65); Kakani v. Oracle Corp., 2007 U.S. Dist. LEXIS
95496 (N.D. Cal. Dec. 21, 2007) (summarizing the Vizcaino table to conclude that a 1.0
to 4.0 multiplier is “typically awarded in common-fund cases.”).10 Here, the application
of a modest 1.75 multiplier (or even a multiplier of 2 to 3) to the hours expended in
furtherance of the interests of the Class, is warranted given the excellent results achieved
for the Class and the risks and complexity of the litigation.
In short, the lodestar “cross-check” demonstrates that the negotiated amount of
$1.9 million in fees is fair and reasonable and should be awarded by this Court.
C. The Expenses Advanced By Plaintiffs’ Counsel Should Be
Reimbursed As Part of the $1.9 Million Award
Nissan has agreed to pay litigation expenses as part of the negotiated fees. (See
Settlement Stip. ¶ 70.) This is customary for benefits conferred/percentage of the fund
settlements, as it is well-settled that “an attorney who has created a common fund for the
benefit of the class is entitled to reimbursement of reasonable litigation expenses from
that fund.” Alberto v. GMRI, Inc., 2008 U.S. Dist. LEXIS 91691, *35 (E.D. Cal. Nov.
12, 2008). Here, Plaintiffs’ Counsel have expended $5,212.33, which includes copying
10 Since a lodestar analysis would be governed by California law (see n.9, infra),
California case law on the application of a multiplier is particularly instructive. The following sample of cases have applied a 1.75 or higher multiplier in awarding fees to class counsel, See, e.g., Graham v. DaimlerChrysler Corp., 34 Cal. 4th 553, 581 (2004) (affirming a 2.25 multiplier for work on the merits); Consumer Privacy Cases, 175 Cal. App. 4th 545, 558 (2009) (applying a 1.75 multiplier in a consumer class action); Sutter Health Uninsured Pricing Cases, 171 Cal. App. 4th 495, 512 (2009) (applying a 2.52 multiplier in an antitrust class action); Chavez v. Netflix, Inc., 162 Cal. App. 4th 43, 60 (2008) (applying a 2.5 multiplier in a consumer class action.
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costs and expert fees that would normally be billed to a paying client.11 Labat Decl., ¶
15. That amount is recoverable. See Trs. of the Constr. Indus. and Laborers Health and
Welfare Trust v. Redland Ins. Co., 460 F.3d 1253, 1258 (9th Cir. 2006) (citation omitted)
(awarding reimbursement of “litigation expenses…when it is ‘the prevailing practice in
the given community’ for lawyers to bill those costs separate from their hourly rates.”).
D. Incentive Payments In The Amount Of $5,000 Should Be Awarded To
Each Of The Named Plaintiffs
A payment of an incentive awards to class representatives is routinely awarded as
compensation for an individual undertaking the risk and expending time in working with
Plaintiffs’ Counsel to advance Class Members’ interests. See Rodriguez v. W. Pub.
Corp., 563 F.3d 948, 958-59 (9th Cir. 2009). Courts routinely approve incentive awards
to compensate named plaintiffs for the services they provided and the risks incurred
during the court of the class action litigation. See Vasquez v. Coast Valley Roofing, Inc.,
266 F.R.D. 482, 490 (E.D. Cal. 2010).
Here, the two named plaintiffs, Mr. Klee and Mr. Wallak committed significant
time to support a case in which they had a modest personal interest but which provided
considerable benefits to current LEAF owners—a commitment undertaken without any
guarantee of a financial award. Lurie Fee Decl., ¶ 48. Plaintiffs each provided
documents to, and consulted with, counsel about the claims in this case, and assisted
throughout the course of the litigation. Plaintiffs reviewed the allegations of the
Complaint and the Settlement Agreement, kept in constant contact with counsel
regarding the status of the case, and responded to inquiries regarding the warranty
benefit and the Class’ reaction to the Settlement. Id., ¶ 47. Plaintiffs reviewed the
allegations of the Complaint and the Settlement Agreement, kept in constant contact
with counsel regarding the status of the action and made their vehicles available for
11 Plaintiffs’ Counsel also wrote off $16,280.18 in expenses from a prior counsel,
who is not seeking a recovery of fees or expenses here. Labat Decl., ¶ 5.
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inspection. Id. Moreover, neither Mr. Klee nor Mr. Wallak was required to approve the
Settlement in order to qualify to receive the compensation.12 Id., ¶ 48.
Under the Settlement Agreement, Nissan has agreed to separately pay
compensation of $5,000 each to Mr. Klee and Mr. Wallak. (Settlement Stip. ¶ 70.) In
light of the classwide recovery obtained valued at a minimum of $38 million, the sum of
$5,000 to each of the Plaintiffs is modest and well within the range of incentive awards
that have been approved in recent class action litigation. See, e.g., Hopson v.
Hanesbrands, Inc., No. 08-0844 EDL, 2009 U.S. Dist. LEXIS 33900, *27-28 (N.D. Cal.
Apr. 3, 2009) (“In general, courts have found that $5000 incentive payments are
reasonable.”); Villegas v. J.P. Morgan Chase & Co., No: C 09-00261 SBA, 2012 U.S.
Dist. LEXIS 114597, *18 (N.D. Cal. Aug. 8, 2012) (“In this District, a $5,000 incentive
award is presumptive reasonable”).
CONCLUSION IV.
For the foregoing reasons, Plaintiffs respectfully request that the Court grant
Plaintiff’s motion and award fees and expenses in the amount of $1.9 million and an
incentive payment of $5,000 each to Mr. Klee and Mr. Wallak.
Dated: September 27, 2013 Respectfully submitted, Capstone Law APC
By: s/ Tarek H. Zohdy Jordan L. Lurie Tarek H. Zohdy Attorneys for Plaintiffs Humberto Daniel Klee and David Wallak
12 Thus, this case does not run afoul of the principle that an incentive payment
cannot be awarded when it is “conditioned on the class representatives’ support for the settlement.” Radcliffe v. Experian Info. Solutions, 715 F.3d 1157, 1160 (9th Cir. Cal. 2013).
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