Larson v. Harman-Management Corporation
1:16-cv-00219
E.D. Cal.Jun 19, 2020Background
- Plaintiff Larson alleged Harman sent unauthorized automated text messages in violation of the TCPA to members of the A&W Text Club (messages sent Feb 17, 2012 through preliminary-approval date); class defined by unique cellphone numbers (233,026).
- Parties reached a class-wide, non-reversionary $4,000,000 common-fund settlement: net fund after fees, costs, incentive and admin = $2,737,012.61.
- Notice: postcard + longform; 171,563 (74%) of class members received actual notice; settlement website active; 17,439 valid claims (~7.5% of class), each receiving about $156.95.
- Fee/costs/incentive/admin requests: class counsel sought 25% ($1,000,000) in fees and $42,987.39 costs; $10,000 incentive for Larson; KCC to be paid up to $210,000 for administration.
- Court held a final fairness hearing (no objectors appeared), found notice adequate, evaluated Churchill factors and Bluetooth collusion concerns, approved settlement, fees, costs, incentive, cy pres, and dismissed the action with prejudice while retaining jurisdiction to enforce the settlement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Class certification / final approval | Settlement class members meet Rule 23 criteria; class should be certified for settlement purposes | No opposition to final approval; parties previously contested certification | Court affirmed final certification for the settlement class and approved settlement as fair, reasonable, adequate |
| Adequacy of notice | Mailed postcard + online longform suffice as "best practicable" notice; notice disclosed fees and opt-out rights | No opposition | Court found notice adequate (74% actual notice; website visits) and satisfied Rule 23(e)(1) |
| Fairness of settlement (Churchill factors) | Settlement provides immediate recovery, avoids litigation risks (uncertain ATDS, consent, class status), reached after extensive discovery and negotiation | Harman had strong defenses and argued issues (ATDS, consent, class issues) that would make trial risky for plaintiff; also contested liabilities | Court balanced factors (strength, risk, amount, discovery, counsel experience, class reaction) and found settlement fair and reasonable; no collusion signs under Bluetooth |
| Attorneys’ fees & lodestar cross-check | Seek 25% ($1,000,000); counsel prosecuted contingency for ~1,798 hours and incurred ~$42,987.39 in costs; reduced requested fee from 33% to 25% | No opposition; defendant did not contest fee request | Court granted $1,000,000 (25% benchmark), found lodestar (~$839,275) and a modest multiplier (1.19) support the award; approved costs $42,987.39 |
| Incentive award and administration/cy pres | $10,000 incentive to Larson justified by his active participation (discovery, deposition, surrendering phones); KCC fees reasonable; uncashed amounts to cy pres (Privacy Rights Clearinghouse) | No opposition | Court approved $10,000 incentive, administrative costs up to $210,000, and PRC as cy pres recipient for unclaimed funds |
Key Cases Cited
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (standard for adequacy of class notice and settlement fairness review)
- Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566 (9th Cir. 2004) (list of factors for evaluating class settlements)
- Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (court’s fiduciary role and notice of attorneys’ fees in class settlements)
- In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (heightened scrutiny for pre-cert settlements and signs of collusion)
- Lane v. Facebook, Inc., 696 F.3d 811 (9th Cir. 2012) (clear-sailing / fee agreement concerns in class settlements)
- Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (percentage-of-fund and lodestar cross-check guidance for fee awards)
- In re Mercury Interactive Corp. Secs. Litig., 618 F.3d 988 (9th Cir. 2010) (court’s fiduciary obligations when awarding fees from a common fund)
- Officers for Justice v. Civil Serv. Comm’n of S.F., 688 F.2d 615 (9th Cir. 1982) (settlement reviewed as a whole for fairness)
- Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc., 390 U.S. 414 (U.S. 1968) (compare settlement terms to likely litigation rewards)