Caitlin Ahearn v. Hyundai Motor America
926 F.3d 539
| 9th Cir. | 2019Background
- Multidistrict litigation in the C.D. Cal. consolidated dozens of consumer suits against Hyundai and Kia alleging they overstated EPA fuel-economy estimates and then applied a voluntary Reimbursement Program; lead plaintiffs negotiated a nationwide settlement.
- The settlement (approved for a certified settlement class) offered four relief options: lump-sum debit cards, enhanced dealer credit, new‑car purchase certificates, or enrollment/extension in the Reimbursement Program (recurring payments based on miles driven).
- The district court supervised extensive (eight months) confirmatory discovery, approved notice and a claims process, and awarded attorneys’ fees using a lodestar plus modest multipliers.
- Multiple objectors appealed certification, settlement approval, and fee awards arguing (inter alia) that state‑law variations (esp. Virginia), inclusion of used‑car buyers, and notice/claims burdens defeated Rule 23 requirements; they also challenged the fee calculation and denial of fees to objector‑counsel Feinman.
- A three‑judge panel vacated class certification for insufficient analysis of state‑law variations; the Ninth Circuit reheard en banc and affirmed the district court in a majority opinion; Judge Ikuta dissented.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 23(b)(3) predominance supports certification of the nationwide settlement class | Objectors: variations in state law (and differences between new vs used purchasers) defeat predominance and require choice‑of‑law analysis before certification | Settling parties: common course of conduct (uniform fuel‑economy statements, Monroney stickers, nationwide advertising) creates common liability questions that predominate; settlement context reduces manageability concerns | Affirmed: district court did not abuse discretion; common issues (accuracy of statements and defendants’ knowledge) predominate for a settlement class |
| Inclusion of used‑car purchasers | Used‑car buyers may not have seen Monroney stickers or same ads; individualized reliance/damages issues predominate | Misrepresentations were nationwide and uniform (stickers and advertising); individualized issues affect only a subset and do not defeat predominance in a settlement class | Affirmed: inclusion of used‑car purchasers does not defeat predominance for settlement class |
| Choice‑of‑law / state law variations (esp. Virginia) | Objectors: forum/state law differences (contract choice‑of‑law, statutes, tolling) materially affect claims and require full choice‑of‑law analysis (Mazza) before certification | Settling parties: no party timely proved foreign law should apply; California’s choice‑of‑law rules govern and objectors bore burden to show material differences; settlement context permits certification if no party meets that burden | Affirmed: objectors failed to meet burden to displace California law; district court permissibly applied California law and satisfied due process |
| Adequacy of class counsel / conflicts | Objectors: counsel conflicts, reverse auction, and insufficient protection of absent class (esp. Virginians) | Settling parties: counsel were experienced, negotiated at arm’s length, court reduced some fee requests, and opt‑out rights/notice protected absent members | Affirmed: counsel were adequate; no evidence of collusion; court addressed conflicts and reduced fees where appropriate |
| Notice and claims process fairness | Objectors: notices buried key information; claim forms were burdensome; participation rates show inadequacy | Settling parties: notices (short/long form, web, email) gave sufficient information and tools (online calculator, pre‑populated claims); claims process necessary due to incomplete defendant records | Affirmed: notice met Rule 23(e) and claims process was reasonable; participation rates comparable to approved settlements |
| Attorneys’ fees valuation and method | Objectors: district court failed to (or relied on speculative figures instead of actual claims data) value the benefit to the class before awarding fees; multipliers unjustified | Settling parties: lodestar appropriate where settlement value is hard to quantify; court cross‑checked and applied modest multipliers reflecting risk and work; fees paid separately by defendants | Affirmed: district court did not abuse discretion using lodestar and modest multipliers; denial of Feinman’s fee request affirmed for lack of meaningful contribution |
Key Cases Cited
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (heightened scrutiny of settlement‑only class definitions; Rule 23 requirements must be rigorously applied)
- Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (rigorous Rule 23(b)(3) predominance inquiry)
- Wal‑Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (rigorous analysis of Rule 23 prerequisites)
- Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (review standards for class settlements and caution against collusive settlements)
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (settlement class certification analysis; common nucleus of operative fact can support predominance)
- Mazza v. American Honda Motor Co., 666 F.3d 581 (9th Cir. 2012) (requires careful attention to state‑law variations in multistate consumer classes)
- Shutts, 472 U.S. 797 (1985) (due process and procedural protections for absent class members)
- Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010) (standards for applying lodestar multipliers)