Blessing v. Sirius Xm Radio Inc.Blessing v. Sirius Xm Radio Inc.
Todd R. Geremia (John M. Majoras, Thomas Demitrack, on the brief), Jones Day, New York, New York, for Defendants-Appellee.
Theodore H. Frank, Center for Class Action Fairness LLC, Washington, District of Columbia, Paul S. Rothstein, Gainesville, Florida (Michael Hartlieb, pro se, Brian David Goe, pro se, N. Albert Bacharach, Jr., Gainesville, Florida, R. Stephen Griffis, Hoover, Alabama, Charles M. Thompson, Birmingham, Alabama, Joseph Darrell Palmer, Law Offices of Darrell Palmer P.C., Solana Beach, California, Steve A. Miller, Denver, Colorado, on the briefs), for Objectors-Appellants.
This Court reviews for abuse of discretion a district court‘s approval of a proposed class action settlement, D‘Amato v. Deutsche Bank, 236 F.3d 78, 85 (2d Cir. 2001), and its award of attorneys’ fees, In re Nortel Networks Corp. Sec. Litig., 539 F.3d 129, 134 (2d Cir.2008).
Collectively, objectors argue, inter alia, that the district court erred when it: (1) found that the proposed settlement was fair, reasonable, and adequate; (2) found that the attorneys’ fee award was reasonable; and (3) directed the sole candidate for class counsel to address diversity concerns in staffing the case. We address each of these arguments in turn.
1. The Proposed Settlement
A district court‘s approval of a settlement is contingent on a finding that the settlement is “fair, reasonable, and adequate.”
Here, the proposed settlement provided, in part, that defendant-appellant Sirius XM Radio Inc. (“Sirius XM“) would not raise its prices for five months. Furthermore, class members received no cash remedy. The case was settled on the eve of trial, after nearly three years of litigation, including extensive fact and expert discovery. Moreover, competent counsel appeared on both sides, and settlement was reached only after contentious negotiations. Thus, the district court did not abuse its discretion when it presumed the proposed settlement was procedurally fair, see McReynolds, 588 F.3d at 803, and objectors presented no evidence to rebut that presumption.
The record also supports a finding of substantive fairness. The district court conducted a fairness hearing, where it considered objectors’ arguments. The district court‘s opinion and order approving the proposed settlement also noted that it had considered the oral and written submissions of the objectors. Moreover, although objectors now complain that the district court did not thoroughly evaluate the value of the settlement, no one requested an evidentiary hearing to ascertain the settlement‘s value, more time to identify expert witnesses, or an opportunity to present any witnesses.
Finally, the Grinnell factors supported the district court‘s determination that the
2. Reasonableness of the Attorneys’ Fee Award
Except as otherwise required by statute, fees awarded pursuant to a class action suit must be calculated as either a “percentage of the fund” or by applying the lodestar method. See, e.g., Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423, 436 (2d Cir.2007); Wal-Mart Stores, 396 F.3d at 121. The reasonableness of a fee calculated by either of these methods, however, is determined by the factors outlined in our decision in Goldberger v. Integrated Res., Inc., 209 F.3d 43, 50 (2d Cir. 2000). See Masters, 473 F.3d at 436.
Objectors contend that the $13 million fee was unreasonable because of the clear-sailing and reversionary provisions written into the settlement, and in light of the limited recovery to the class. To the extent objectors argue that the clear-sailing and reversionary provisions suggest improper collusion between class counsel and Sirius XM, we note that such provisions, without more, do not provide grounds for vacating the fee. See Malchman v. Davis, 761 F.2d 893, 905 & n. 5 (2d Cir.1985) (addressing clear-sailing provision), abrogated on other grounds, Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997). Moreover, the fee was negotiated only after settlement terms had been decided and did not, as the district court found, reduce what the class ultimately received. See id. (such factors favored respecting the fee); Thompson v. Metro. Life Ins. Co., 216 F.R.D. 55, 71 (S.D.N.Y. 2003) (same). Finally, the district court independently inspected applicable time and expense records before judging the reasonableness of the requested fee, which—after accounting for expenses—represented less than sixty percent of the lodestar calculation. Thus, as the record supports a finding that the $13 million award was reasonable, the district court did not abuse its discretion in granting the fee award.
Objectors also argue that the price freeze offered in the proposed settlement was the equivalent of a “coupon” and, therefore, should have been subject to the attorneys’ fee provisions applicable to coupon settlements under the Class Action Fairness Act of 2005 (“CAFA“). See
Thus, even assuming the price freeze was the equivalent of a coupon, no “portion of [the] attorney‘s fee award ... is attributable to the award of the coupons.”
3. Diversity of Class Counsel
In the class certification order, the district court requested that class counsel consider diversity when staffing the case,1 a provision objectors now contest. To establish standing to bring a claim, a plaintiff must show (1) injury-in-fact, (2) causation, and (3) redressability. Town of Babylon v. Fed. Hous. Fin. Agency, 699 F.3d 221, 228 (2d Cir.2012). An injury-in-fact is a “‘concrete and particularized’ harm to a ‘legally protected interest.‘” Selevan v. N.Y. Thruway Auth., 584 F.3d 82, 89 (2d Cir. 2009); see also W.R. Huff Asset Mgmt. Co., LLC v. Deloitte & Touche LLP, 549 F.3d 100, 107 (2d Cir.2008) (“[P]laintiff must have personally suffered an injury.“). Although objectors allege that staffing a case with an eye to diversity “may interfere with [counsel‘s] ability to provide the best representation for the class,” J.A. 829, they never contend that class counsel‘s representation was actually inferior. As objectors failed to state an injury-in-fact, we find that they lack standing to challenge the district court‘s diversity request in its class certification order.
We have considered objectors’ remaining arguments and conclude they are without merit. For the foregoing reasons, we AFFIRM the orders and judgment of the district court.