214 F. Supp. 3d 877
C.D. Cal.2016Background
- Plaintiffs sued Whirlpool and Sears alleging a design defect in certain Whirlpool-made dishwashers (Rush/Rushmore ECBs, 2000–2006) that caused overheating, smoke, sparks, or fire; 18 plaintiffs across 11 states sued on behalf of a nationwide class.
- After extensive discovery and six days of mediation, parties reached a nationwide settlement (filed Sept. 11, 2015); court granted preliminary approval Nov. 12, 2015, and held final approval hearing Aug. 25, 2016.
- Settlement provides uncapped compensation to eligible claimants (full repair reimbursements; $200–$300 cash for replacements; rebates and discounts; enhanced safety warnings and training; purchase of lead plaintiff’s websites for $100,000).
- Notice program (mail, email, publication, internet ads, settlement website, IVR) reached ~3.6–4.16 million recipients; ~133,040 claims filed; 498 timely opt-outs; few objections (many from serial objectors).
- Court found no collusion, concluded the settlement is fair, reasonable, and adequate under Rule 23 and Bluetooth scrutiny for pre-certification settlements, and certified the class for settlement purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Final approval: Is the settlement fair, reasonable, and adequate under Rule 23(e)? | Settlement provides immediate monetary and injunctive relief, broad compensation (repair reimbursements, cash, rebates), and safety measures; merits strong but uncertain recovery if litigated further. | Defendants emphasized litigation risks and supported settlement; some objectors argued inadequate compensation and counsel enrichment. | Approved: Court found settlement fair, non-collusive, reached after extensive discovery and mediation; low opt-out/objection rates supported approval. |
| CAFA notice compliance | Plaintiffs: CAFA notice satisfied via defendant’s September 21, 2015 service; no CAFA objections. | Defendants provided notice and reported no adverse responses. | Held: CAFA notice satisfied; 90-day waiting period observed. |
| Fee methodology: Should fees be calculated by lodestar or percentage-of-recovery (coupon context)? | Plaintiffs: Mixed relief (monetary + coupons + injunctive), choice-of-law points to California law; lodestar appropriate; multiplier justified. | Defendants: CAFA/coupon rules argue for percentage-of-recovery tied to coupon redemption or mixed approach (percentage for coupons, lodestar for injunctive). | Held: Lodestar method appropriate (mixed relief, no common fund); court applied lodestar with a 1.68 multiplier. |
| Reasonableness of fees, costs, and service awards | Class counsel sought $8.818M lodestar (after haircut) with 1.68 multiplier = $14,814,994.70; $508,292.67 costs; $4,000 per named plaintiff; purchase of websites $100,000. | Defendants challenged rates, document-review staffing/costs, quarter-hour entries, and argued fee should be much lower relative to class benefit. | Held: Court mostly rejected challenges (approved current rates, denied deep reductions except 10% haircut to two partners for excessive quarter-hour entries), awarded fees $14,814,994.70, costs $508,292.67, service awards $4,000 each, and approved website purchase. |
Key Cases Cited
- Officers for Justice v. Civil Serv. Comm’n, 688 F.2d 615 (9th Cir. 1982) (primary Rule 23(e) concern is protection of class members during settlement)
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (standards for fairness in class settlements; percentage vs. lodestar discussion)
- In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (heightened scrutiny for settlements reached before class certification; signs of collusion)
- Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (factors for evaluating class settlement fairness and incentive awards)
- Blum v. Stenson, 465 U.S. 886 (1984) (lodestar as guide to reasonable fees)
- Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir.) (approving use of multipliers and survey of multipliers in complex class actions)
- Perdue v. Kenny A., 559 U.S. 542 (2010) (lodestar presumption and when adjustments are appropriate)
- Welch v. Metro. Life Ins. Co., 480 F.3d 942 (9th Cir. 2007) (rate determination by reference to fees charged in the relevant forum)
- Moreno v. City of Sacramento, 534 F.3d 1106 (9th Cir. 2008) (limits on court substituting its judgment for counsel’s staffing decisions)
- Gates v. Deukmejian, 987 F.2d 1392 (9th Cir. 1992) (court’s independent duty to review fee requests)
- Kerr v. Screen Extras Guild, Inc., 526 F.2d 67 (9th Cir. 1975) (factors for adjusting lodestar)
- Linney v. Cellular Alaska P’ship, 151 F.3d 1234 (9th Cir. 1998) (settlement is compromise; weight to be given to negotiation results)
- Churchill Vill., LLC v. Gen. Elec., 361 F.3d 566 (9th Cir. 2004) (class reaction as evidence supporting settlement fairness)
- Mazza v. Am. Honda Motor Co., 666 F.3d 581 (9th Cir. 2012) (difficulty of certifying nationwide classes under California law)
- Yamada v. Nobel Biocare Holding AG, 825 F.3d 536 (9th Cir. 2016) (cross-check discretionary where benefits not easily monetized)
- In re HP Inkjet Printer Litigation, 716 F.3d 1173 (9th Cir.) (treatment of coupon settlements and fee calculation)