Dr. David S. Muransky v. Godiva Chocolatier, Inc.
922 F.3d 1175
| 11th Cir. | 2019Background
- Dr. David Muransky sued Godiva under FACTA, alleging a receipt printed more than the last five digits of his credit card number, creating a heightened risk of identity theft; he sought class relief for similarly situated customers.
- Parties reached a classwide settlement: $6.3 million fund (approx. $235 per valid claim before fees), class counsel sought one-third ($2.1M) in fees, and Muransky sought a $10,000 incentive award; notice was sent to ~318,000 class members; ~47,000 claims returned and 15 opt-outs.
- Two objectors (Price and Isaacson) challenged the settlement approval, arguing inadequate notice of the fee motion, improper fee amount (lodestar vs. percentage), and that the $10,000 incentive award was excessive; Isaacson also challenged Muransky’s Article III standing.
- The District Court approved the settlement, awarded the full $2.1M in fees and the $10,000 incentive, and overruled objections; objectors appealed.
- On appeal the Eleventh Circuit addressed: (1) whether objectors had appeal rights as class members, (2) Article III standing of Muransky, (3) adequacy of notice under Rule 23(h), (4) reasonableness of the fee award, and (5) propriety/size of the incentive award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing of named plaintiff (Muransky) | Muransky: printing extra digits caused a concrete, particularized injury — a heightened risk of identity theft; sufficient under Spokeo because Congress enacted FACTA to prevent that risk. | Objectors: risk is speculative; absent actual identity theft or disclosure, no concrete injury. | Held: Muransky has Article III standing. Congress’s judgment in FACTA that truncation reduces identity-theft risk and analogy to breach-of-confidence make the alleged heightened risk a concrete, particularized injury. |
| Objectors’ right to appeal | Objectors: as class members who objected and did not opt out, they may appeal settlement approval. | Godiva/Muransky: (implicit) objectors are bound but may have limited rights. | Held: Objectors are parties for appeal purposes under Devlin and Eleventh Circuit precedent; they may appeal. |
| Adequacy of notice of fee motion under Rule 23(h) | Objectors: notice only said fees "not to exceed" one-third; final fee filing occurred after objection deadline, depriving class of opportunity to object to the actual motion. | Muransky: preliminary notice disclosed the fee cap; objectors filed detailed objections and the court considered them. | Held: District Court erred in procedure (fee motion filed after objection deadline), but no reversal because objectors (Price, Isaacson) adequately preserved and presented objections and no prejudice to absent class members was shown. |
| Attorney's fees: percentage vs. lodestar and amount | Objectors: fees should be decided by lodestar (Perdue) or, if percentage, not exceed Camden I benchmark (25%) absent strong justification. | Muransky: common-fund recovery supports a percentage approach; Camden I benchmark applies and district court properly adjusted upward considering Johnson factors. | Held: Affirmed. Camden I percentage-of-fund governs common-fund awards (Perdue does not apply here); the District Court did not abuse discretion in awarding 33% after applying Johnson/Camden factors. |
| Incentive award to class representative ($10,000) | Objectors: incentive awards improper in common-fund settlements or $10,000 is excessive given limited time/effort by Muransky. | Muransky: incentive awards are routine to compensate/class representative risks and efforts; $10,000 justified by settlement size and representative’s commitment. | Held: Affirmed. Incentive awards are permissible; $10,000 was supported by legitimate considerations (effort, inconvenience, and class benefit) and did not indicate collusion or abuse of discretion. |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (U.S. 2016) (clarified concreteness requirement for injury-in-fact and held statutory procedural violations can suffice when they pose a risk of real harm)
- Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (U.S. 2007) (explained willfulness standard under FCRA/FACTA context)
- Devlin v. Scardelletti, 536 U.S. 1 (U.S. 2002) (nonnamed class members who object at fairness hearing have party status to appeal settlement approval)
- Marino v. Ortiz, 484 U.S. 301 (U.S. 1988) (only parties or those who properly become parties may appeal)
- Camden I Condominium Ass'n v. Dunkle, 946 F.2d 768 (11th Cir. 1991) (common-fund attorney's fees based on reasonable percentage of fund; 25% benchmark)
- Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (U.S. 2010) (addressed lodestar enhancement under fee-shifting statutes; not controlling for common-fund percentage awards)
- Nicklaw v. CitiMortgage, Inc., 839 F.3d 998 (11th Cir. 2016) (distinguished; standing requires the risk of harm to persist at suit time)