McKnight v. Uber Technologies, Inc.
4:14-cv-05615
N.D. Cal.Aug 13, 2019Background
- Plaintiffs brought a nationwide putative class action against Uber asserting breach of implied contract and consumer-protection claims based on representations about a "Safe Rides Fee" and Uber’s safety measures; the class covered app/website riders from Jan 1, 2013 to Jan 31, 2016 (≈22.4 million members).
- Parties negotiated a $32.5 million non-reversionary settlement fund, with an average cash share of about $1.07 per class member; default relief for most class members is Uber ride credit, with cash available by claim form or in limited circumstances later.
- The court previously granted preliminary approval and conditional class certification, and held a fairness hearing; notice was sent (≈94.3% reach) and few objections/opt-outs were submitted.
- Objectors challenged the settlement as coupon-like under CAFA, the adequacy of relief (tiny per-member recovery), and the requested attorneys’ fees; plaintiffs countered that many objectors are serial objectors and defended the fee request.
- The court concluded the settlement is sufficiently coupon-like to trigger CAFA scrutiny but found the settlement fair, reasonable, and adequate and granted final approval.
- The court granted $500 incentive awards to each named plaintiff and approved $3,200.63 in costs, but denied plaintiffs’ fee request and other cost claims without prejudice, directing a renewed fee submission compliant with CAFA’s coupon-settlement fee principles.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether notice to the class was adequate | Notice plan (mail, website, ads, phone) reached the class and satisfied Rule 23 requirements | No opposition | Notice was adequate; court previously approved procedures and administrator reached ≈94.3% of class. |
| Whether the settlement is coupon-like such that CAFA §1712 applies | Settlement offers cash option and passive conversion to cash if credits unused, so not purely coupon | No opposition on applying CAFA; factual emphasis on credits as limited value | Settlement is sufficiently coupon-like to warrant CAFA’s heightened scrutiny. |
| Final fairness of the settlement under Rule 23 and CAFA | Settlement fairly resolves risks, delays, and complexity despite small per-member payments; injunctive changes and cy pres address residuals | No opposition | Settlement is fair, adequate, and reasonable; final approval granted. |
| Attorneys’ fees and costs calculation under CAFA | Requested percentage fee (25%) and lodestar multiplier; recoverable costs listed; seek incentive awards | Objectors argued fees disproportionate to class recovery and challenged cost detail and fee method | Court denied fee motion without prejudice and ordered amended fee filing consistent with CAFA rules (coupon redemption valuation + lodestar for non-coupon relief); approved $3,200.63 in costs and $500 incentives each. |
Key Cases Cited
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (standard for assessing fairness of class-action settlements)
- Churchill Vill., LLC v. Gen. Elec., 361 F.3d 566 (9th Cir. 2004) (factors for evaluating class settlement fairness)
- In re Online DVD-Rental Antitrust Litig., 779 F.3d 934 (9th Cir. 2015) (distinguishing coupon vs. non-coupon settlements and applying CAFA concerns)
- In re HP Inkjet Printer Litig., 716 F.3d 1173 (9th Cir. 2013) (CAFA fee rules: redemption-based fees for coupons and lodestar for non-coupon relief)
- In re Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539 (9th Cir. 2019) (en banc) (limits on choice-of-law requirements for nationwide settlements)
- Rodriguez v. West Publ’g Corp., 563 F.3d 948 (9th Cir. 2009) (standards for incentive awards and class representative adequacy)
- Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (factors for evaluating incentive awards)
- Lane v. Facebook, Inc., 696 F.3d 811 (9th Cir. 2012) (cy pres and distributional considerations in class settlements)
