ORDER RE: MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT; MOTION FOR AWARD OF ATTORNEY’S FEES AND EXPENSES
Having reviewed and considered all the briefing filed with respect to the parties’ Joint Motion for Final Approval of Class Action Settlement (Dkt. 254, “Final Approval Motion”) and plaintiffs’ Motion for Award of Attorneys’ Fees and Expenses and for Service Awards for Plaintiffs (Dkt. 218, “Fees Motion”), as well as the oral argument presented during the final approval hearing on August 25, 2016, the court concludes as follows.
On November 9, 2011, plaintiffs filed this class action against Whirlpool Corporation (“Whirlpool”), Sears Holdings Corp., and Sears, Roebuck & Co., Inc. (together with Sears Holdings Corp., “Sears”) (collectively, “defendants”). (See Dkt. 1, Complaint). The Fourth Amended Complaint (Dkt. 98, “4AC”), the operative complaint in this matter, alleges 25 causes of action for violations of: the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301, et seq.; breach of express and implied warranty; violations of the Song-Beverly Act, Cal. Civ. Code §§ 1792 et seq.; strict product liability; failure to warn; unjust enrichment/restitution; fraudulent eoncealment/nondisclosure; negligence; violations of the consumer protection statutes of the states of Ohio, California, Georgia, Illinois, Maryland, Massachusetts, Missouri, New Jersey, New York, Utah, and Virginia; and declaratory judgment, 28 U.S.C. § 2201. (See id. at ¶¶ 216-553).
After conducting extensive discovery and engaging in substantial settlement negotiations, the parties reached a settlement and filed a joint motion for preliminary approval on September 11, 2015. (See Dkt. 192, Joint Motion of All Parties for Preliminary Approval of Class Action Settlement). On November 12, 2015, the court granted preliminary approval of the settlement, (see Dkt. 199, Court’s Order of November 12, 2015 (“Preliminary Approval Order” or “PAO”) at 32), appointed Kurtz-man Carson Consultants, LLC (“KCC”) as the Claims Administrator, (see id. at 33), directed KCC to provide notice to the class members, (see id.), and scheduled a final approval hearing for June 10, 2016. (See id. at 34). At the request of the parties, the court subsequently rescheduled the final approval hearing for August 25, 2016. (See Dkt. 207, Court’s Order of February 23, 2016, at 3).
BACKGROUND
I. PLAINTIFFS’ ALLEGATIONS.
This case arises out of plaintiffs’ allegations that certain Whirlpool-manufactured dishwashers branded “Whirlpool®,” “Kenmore®,” and “KitchenAid®” had a design defect that caused overheating in high current connections to the electronic control board (“ECB”), causing the ECB consoles to smoke, emit fumes and sparks, or catch fire, thereby posing a safety risk. (See Dkt. 199, PAO at 2). Plaintiffs allege that these Overheating Events
II. SETTLEMENT TERMS.
After “litigating intensively[,]” (Dkt. 192-3, Declaration of Charles S. Fax in Support of Joint Motion for Preliminary Approval [ ] (“Fax Deck”) at ¶ 12), and
All members of the Settlement Class, including the subclasses, will receive the following benefits under the Settlement Agreement:
a full recovery of costs spent on repairs; $200 to $300 in cash for Class Members who replaced their Dishwashers; $100 or a 30% rebate on the purchase of a new - dishwasher [for] Class Members who experience an Overheating Event in the future; a rebate of 10% to 15% on the purchase of a new dishwasher to all Class Members regardless of whether they ever experience an Overheating Event; and enhanced safety warnings to service personnel about the dangers of bypassing Thermal Cut-Offs (“TCOs”) (a safety shut-off device).
(Dkt. 254-2, Pis.’ Final Approval Brief at 1; see Dkt. 199, PAO at 4-5 (describing the settlement terms)). The Settlement Agreement provides similar benefits to Non-Class Members, except that rebates will not be provided to those who have not experienced an Overheating Event. (See Dkt. 254-2, Pis.’ Final Approval Brief at 1).
III. RELEASE OF CLAIMS.
Upon final approval, Class Members who have not validly requested exclusion from the settlement will release all claims that they “now have or, absent [the settlement], may in the future have had ... by reason of any act, omission, harm, matter, cause, or event ... that relates to any of the defects, malfunctions, or inadequacies of the Class Dishwashers that are alleged or could have been alleged” in this lawsuit. (Dkt. 192-4, Settlement Agreement at 48-49, § X.A). The release includes “future injuries, damages, losses, or future consequences or results, excluding any future injury to person or to property other than the Class Dishwasher itself[,]” (id. at 50, § X.E), as well as unknown claims which would otherwise be preserved under California Civil Code § 1542. (See id. at 50-51, § X.F). The release does not extinguish “claims for personal injury or for damage to property other than to the Class Dishwasher itself.” (Id. at 49, § X.B).
IV. NOTICE TO CLASS.
The court-appointed Claims Administrator, KCC, has implemented the multi-pronged notice program previously approved by the court. (See Dkt. 254-2, Pis.’ Final Approval Brief at 7-8; see also Dkt. 199, PAO at 28-32 (approving multi-pronged notice program)). In accordance with that program, KCC: mailed and emailed summary notices and TCO repair notices to 4,162,934 Class members for whom Whirlpool’s and Sears’ records contained contact information; published notices in the national editions of certain magazines and on a variety of websites; purchased 14,000,000 internet banner impressions on a variety websites, partially targeted to reach adults 25 and older who were behaviorally categorized as “Dish-washing Machine/Home Appliance/Home Owners” on Faeebook; and maintained a settlement website, www.dishwasher settlement.com, which received a total of 249,711 visits. (See Dkt. 254-6, Suppl. Pas-sarella Decl. at ¶¶ 3-7 & 13). KCC also operated an Interactive Voice Response (“IVR”) system via a toll-free telephone number, which received a total of 20,411 calls. (See id. at ¶ 12).
As of July 7, 2016, KCC had received a total of 133,040 claims, which includes: 106,331 claims for a rebate; 15,963 claims for both a rebate and a reimbursement; 10,417 claims for a reimbursement only; and 329 claims that were received near the claims deadline and had yet to be categorized. (See Dkt. 254-6, Suppl. Passarella Decl. at ¶ 18). Of the total 26,380 reimbursement claims, KCC was “unable to estimate how many claims will be accepted, deemed deficient with an opportunity to correct, or rejected after the time to correct deficiencies has passed.” (Id.). Also, as of July 7, 2016, KCC received 498 timely requests from Class Members to be excluded from the settlement. (See id. at ¶ 15).
LEGAL STANDARD
Federal Rule of Civil Procedure 23 provides that “the claims, issues, or defenses of a certified class may be settled ... only with the court’s approval.” Fed. R. Civ. P. 23(e). “The primary concern of
In order to approve a settlement in a class action, the court must conduct a three-step inquiry. First, it must assess whether defendants have met the notice requirements under the Class Action Fairness Act (“CAFA”). See 28 U.S.C. § 1715(d). Second, it must determine whether the notice requirements of Rule 23(c)(2)(B) have been satisfied. Finally, it must conduct a hearing to determine whether the settlement agreement is “fair, reasonable, and adequate.” See Fed. R. Civ. P. 23(e)(2); Staton v. Boeing Co.,
In determining whether a settlement agreement is fair, adequate, and reasonable, the court must weigh some or all of the following factors: “(1) the strength of the plaintiffs case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the risk of maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery completed and the stage of the proceedings; (6) the experience and views of counsel; (7) the presence of a governmental participant; and (8) the reaction of the class members of the proposed settlement.” In re Bluetooth Headset Prod. Liab. Litig. (“Bluetooth”),
However, when “a settlement agreement is negotiated prior to formal class certification, consideration of these eight ... factors alone is not enough to survive appellate review.” Bluetooth,
I. FINAL APPROVAL OF CLASS SETTLEMENT.
A. Class Action Fairness Act.
CAFA requires that “[n]ot later than 10 days after a proposed settlement of a class action is filed in court, each defendant that is participating in the proposed settlement shall serve [notice of the proposed settlement] upon the appropriate State official of each State in which a class member resides and the appropriate Federal official[.]” 28 U.S.C. § 1715(b). The statute provides detailed requirements for the contents of such a notice, which must include, among other things, “any proposed or final notification to class members[,]” and “any proposed or final class action settlement.]” 28 U.S.C. §§ 1715(b)(3) & (4). The court may not grant final approval of a class action settlement until the CAFA notice requirement is met. See it at § 1715(d) (“An order giving final approval of a proposed settlement may not be issued earlier than 90 days after the later of the dates on which the appropriate Federal official and the appropriate State official are served with the notice required under [28 U.S.C. § 1715(b).]”).
Here, the Settlement Agreement was filed on September 11, 2015. (See Dkt. 192-4, Settlement Agreement). Defense counsel provided the required CAFA notice on September 21, 2015. (See Dkt. 198, Defendants’ Status Report to Confirm Compliance with CAFA’s Notice Requirements at 2). At the final approval hearing, defense counsel advised the court that no objections had been received in response to the CAFA notice.
B. Class Certification.
In its order granting preliminary approval, the court certified the class pursuant to Rule 23(b)(3). (See Dkt. 199, PAO at' 10-18 & 32). Because circumstances have not changed, and for the reasons set forth in its Order of November 12, 2015, the court hereby affirms its order certifying the class for settlement purposes under Rule 23(e). See In re Apollo Grp. Inc. Sec. Litig.,
C.Rule 23(c) Notice Requirements.
Class actions brought under Rule 23(b)(3) must satisfy the notice provisions of Rule 23(c)(2), and upon settlement of a class action, “[t]he court must direct notice in a reasonable manner to all class members who would be bound by the proposal.” Fed. R. Civ. P. 23(e)(1). Rule 23(c)(2) prescribes the “best notice that is practicable under the circumstances, including individual notice” of particular information. Fed. R. Civ. P. 23(c)(2)(B) (enumerating notice requirements for classes certified under Rule 23(b)(3)).
After undertaking the required examination, the court approved the form of the proposed class notice. (See Dkt. 199, PAO at 28-33). As discussed above, the notice program previously approved by the court has been fully implemented by KCC. (See Dkt. 254-2, Pis.’ Final Approval Brief at 7-8; Dkt. 254-6, Suppl. Passarella Decl. at ¶¶ 3-7 & 12-13). Accordingly, based on its prior findings and the record before it, the court finds that the Class Notice and the notice process fairly and adequately informed the class members of the nature of the action, the terms of the proposed settlement, the effect of the action and release of claims, their right to exclude themselves from the action, and their right to object to the proposed settlement. (See Dkt. 199, PAO at 28-33).
1. The Strength of Plaintiffs’ Case and the Risk, Expense, Complexity, and Duration of Further Litigation.
In evaluating the strength of the case, the court should assess “objectively the strengths and weaknesses inherent in the litigation and the impact of those considerations on the parties’ decisions to reach [a settlement].” Adorna,
While the merits of plaintiffs’ case appear to be fairly strong, plaintiffs have shown that defendants have, and likely would have continued to, vigorously defend the action had the parties not reached a settlement. For instance, defendants filed a motion to dismiss the 4AC, (see Dkt. 104, Partial Motion to Dismiss Plaintiffs’ Fourth Amended Complaint), in which they argued, among other things, that: Whirlpool’s limited warranty covering “defects in materials and workmanship” does not extend to the alleged design defect; plaintiffs did not satisfy all conditions precedent to warranty coverage; the defects did not manifest or were not substantially certain to manifest within the warranty period for many Class Dishwashers; the warranties were expired; and most Class Members had already received full value of the useful life of their dishwashers. (See Dkt. 254-2, Pis.’ Final Approval Brief at 9) (describing arguments in motion to dismiss).
If plaintiffs overcame defendants’ motion to dismiss, the resolution of the case would have been lengthy, complex, and expensive. As defendants stated, “[t]his litigation would be expected to include ... further expert discovery, class certification proceedings (with a potential interlocutory appeal under Rule 23(f) by the disappointed parties), summary judgment proceedings, one or more class trials, and one or more post-trial appeals.” (Dkt. 256, Defendants’ Memorandum in Support of Joint Motion for Final Approval of Class Action Settlement at 19). According to defendants, “[rjesolving the putative class claims for all putative class members in all states easily could take five additional years.” (Id.) (emphasis in original). Given that this case “has already consumed almost five years[,]” (Dkt. 254-2, Pis.’ Final Approval Brief at 10), the court finds it significant that the Class Members will receive “immediate recovery by way of the compromise to the mere possibility of relief in the future, after protracted and expensive litigation.” Nat’l Rural Telecommc’ns. Coop, v. DIRECTV, Inc.,
2. The Risk of Maintaining Class Action Status Through Trial.
Because plaintiffs had not yet filed a motion for class certification, there was a risk that the class would not be certified. That risk was magnified in this case because nationwide class certification under California law or the laws of multiple states is rare. See, e.g., Mazza v. Am. Honda Motor Co.,
3. The Amount Offered in Settlement.
“[T]he very essence of a settlement is compromise, a yielding of absolutes and an abandoning of highest hopes.” Linney v. Cellular Alaska P’ship,
4. The Extent of Discovery Completed and Stage of Proceedings.
“A settlement following sufficient discovery and genuine arms-length negotiation is presumed fair.” Nat’l Rural Telecommc’ns,
5.The Experience and Views of Counsel.
“Great weight is accorded to the recommendation of counsel, who are most closely acquainted with the facts of the underlying litigation. This is because parties represented by competent counsel are better positioned than courts to produce a settlement that fairly reflects each party’s expected outcome in the litigation.” Nat’l Rural Telecommc’ns,
6.The Presence of a Government Participant.
There is no government participant in this matter. Accordingly, this factor is inapplicable. See Wren v. RGIS Inventory Specialists,
“It is established that the absence of a large number of objections to a proposed class action settlement raises a strong presumption that the terms of a proposed class settlement action are favorable to the class members.” Nat’l Rural Telecommc’ns,
Most of the objections were filed by “serial” objectors who are well-known for routinely filing meritless objections to class action settlements for the improper purpose of extracting a fee rather than to benefit the Class. These serial objectors include: (1) Timothy R. Hanigan and Christopher Bandas, (see Dkt. 301, Court’s Order of August 12, 2016, at 3); (2) Steve A. Miller, John C. Kress, and Jonathan E. Fortman, (see Dkt. 302, Court’s Order of August 12, 2016, at 3 n. 1); (3) Patrick S. Sweeney,
The court has already stricken three objections filed by the serial objectors. The objection filed by attorney Palmer on behalf of his clients Geri Whaley and John Hightower, (Dkt. 231, Objections of Geri Whaley and John Hightower (“Palmer Obj.”)), was stricken because Mr. Palmer was not authorized to practice law at the time he filed the objection. (See Dkt. 298, Court’s Order of August 12, 2016). The objections filed by Mr. Sweeney, (see Dkt. 234, Sweeney Obj.), and Mr. McDonald, (see Dkt. 236, Objection to Proposed Settlement and Motion for Attorneys’ Fees (“McDonald Obj.”)), were stricken after class counsel confirmed that Mr. Sweeney and Mr. McDonald had refused to comply with class counsel’s discovery requests. (See Dkt. 328, Court’s Order of August 25, 2016, at ¶ 2). As the court noted during the final approval hearing, when someone objects to a class action settlement, that per
Regardless, the. court has reviewed and considered the merits of all of the objections filed by the serial objectors, including those objections stricken by the court. The objection filed by attorneys Miller, Kress, and Fortman materially misrepresents the Settlement Agreement, stating repeatedly that “only Mr. Chambers and class counsel [are] getting paid on this case[,]” (see Dkt. 226, Kelly Kress’ Objections to Class Action Settlement and Attorneys’ Fees (“Kress Obj.”) at 2), even though many Class Members will receive cash payments. (See Dkt. 199, PAO at 5 & 25). The record is replete with other examples of how Kelly Kress and her counsel failed to comprehend even the basic terms of the Settlement Agreement. (See, e.g., Dkt. 323, Plaintiffs’ Supplemental Memorandum in Response to Certain Objections [ ] (“Pis.’ Suppl. Memo”) at 13-17) (identifying inaccuracies in Ms. Kress’s objection and discussing statements made during the depositions of Ms. Kress and her counsel). The objection filed by attorneys Hani-gan and Bandas, (see Dkt. 232, First Amended Objections of Christine Knott and Kimberly Smith (“Knott Obj.”)), contradicts several statements made by their client and objector, Christine Knott, during her deposition. For example; Ms. Knott stated that she: would not object to a fee award of $27 million to class counsel, (see Dkt. 270-1, Excerpts of Deposition of Christine Knott at 76-77); agrees with the court’s approval of the sale of Steve Chambers’ websites to Whirlpool, (see Dkt. 254-5, Excerpts of Deposition of Christine Knott at 150); and believes the rebates provided under the settlement are valuable even if the rebate-holder does not purchase a new Whirlpool dishwasher. (See-id. at 212). Perhaps the lack of consistency between Ms. Knott’s deposition testimony and her written objection can be explained by the fact that she never spoke with Mr. Hanigan or Mr. Bandas before the objection was filed. (See id. at 34-38). In fact, during her deposition, Ms. Knott testified that she did not even know that Mr. Hani-gan represented her. (See id. at 38).
In short, having considered all the arguments set forth by the serial objectors, (see Dkt. 226, Kress Obj.; Dkt. 231, Palmer Obj.; Dkt. 232, Knott Obj.; Dkt. 234, Sweeney Obj.; Dkt. 235, Objection to Class Action Settlement of George Liaeo-poulos (filed by Mr. Miorelli); Dkt. 236, McDonald Obj.), the court finds their objections to be without merit. See Roberts v. Electrolux Home Prods., Inc.,
The court has also reviewed and considered all the objections submitted by non-serial objectors, and finds that they do not undermine the settlement.
Finally, one objector who experienced an Overheating Event contends that $200 is insufficient compensation, and that defendants should “modify the safety warnings in future owner’s manuals to prevent owners from experiencing what [she] experienced.” (Dkt. 239, Objection of Vicki M. Finn at 1). Given that the objector’s dishwasher functioned properly for over seven years, (see id.), the court is satisfied that the $200 payment does not render the settlement unfair. Further, changing future owners’ manuals would be ineffective because Whirlpool’s current dishwashers have a different design, (see Dkt. 254-2, Pls.’ Final Approval Brief at 25), and the enhanced safety warnings required by the settlement do help to address the objector’s concerns. (See id.). In short, under the circumstances, the limited requests for exclusion and the small number of objections filed by non-serial objectors support approval of the settlement. See Nat’l Rural Telecommc’ns,
E. Whether the Settlement is the Product of Collusion.
Because the parties negotiated and reached a settlement prior to formal certification of the class, the court must ensure that the settlement was not the product of collusion. See Bluetooth,
With respect to “signs” of collusion, the court notes that, unlike Bluetooth, where the class received no monetary award, a portion of the class members here will receive monetary relief. (See Dkt. 199, PAO at 4-5). Moreover, “[b]eeause the parties have not agreed to an amount or even a range of attorneys’ fees, and have placed the matter entirely into the Court’s hands for determination, there is no threat of the issue explicitly tainting the fairness of settlement bargaining.” Turner v. Mur
In short, there are no signs of collusion in the negotiation of the settlement. Indeed, the settlement provides substantial relief for the class and was reached via arms-length negotiations with the assistance of an experienced mediator. (See Dkt. 199, PAO at 19); see also In re HP Laser Jet Litig.,
II. AWARD OF ATTORNEY’S FEES, COSTS, AND SERVICE AWARDS.
A. Attorney’s Fee Award.
As part of the settlement, the parties agreed to “negotiate in good faith the award of attorneys’ fees and costs to be paid by [defendants] to Class Counsel, subject to court approval.” (Dkt. 192-4, Settlement Agreement at 47, § IX.B). The parties further agreed that, if they “are unable to agree on a stipulated amount of attorneys’ fees and costs to be awarded to Plaintiffs’ counsel, the parties will submit their dispute regarding the award of attorneys’ fees and costs to the Court.” (Id.). Because the parties could not agree on a stipulated amount of attorney’s fees, plaintiffs have filed a contested Fees Motion. (See Dkt. 218, Fees Motion).
1. Method of Determining the Award.
Rule 23(h) provides that, “[i]n a certified class action, the court may award reasonable attorney’s fees ... that are authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). Generally speaking, courts have discretion to choose among two different methods for calculating a reasonable attorney’s fee award. See Bluetooth,
Alternatively, under the lodestar method, the court multiplies the number of reasonable hours expended by a reasonable hourly rate. See Hanlon,
Defendants assert that CAFA requires the court to apply a pereentage-of-recovery approach, which would limit the award of attorney’s fees to a percentage of the actual redemption value of the
Further, the Settlement Agreement provides that “the rights and obligations of the Parties shall be construed and enforced in accordance with, and governed by, the laws of the State of California.” (Dkt. 192-4, Settlement Agreement at 55, § XV.G). The Settlement Agreement does not exclude attorney’s fees from its choice of law provision, (see, generally, id.), nor does CAFA preempt the parties’ choice of law clause. See Norris v. Commercial Credit Counseling Servs., Inc.,
But even assuming CAFA did apply, the court would still have discretion in choosing the method of determining attorney’s fees. Under 28 U.S.C. § 1712(a), “[i]f a proposed settlement in a class action provides for a recovery of coupons to a class member, the portion of any attorney’s fee award to class counsel that is attributable to the award of the coupons shall be based on the value to class members of the coupons that are redeemed.” In so-called “coupon settlements” — meaning settlements where the only relief afforded to class members is one or more coupons
This settlement, however, is not a pure coupon settlement. In addition to coupon relief, the settlement provides monetary and injunctive relief. (See Dkt. 199, PAO at 4-5) (describing the settlement terms). For example, qualifying class members will receive full cash reimbursement for repair costs and/or a cash payment of $200 or $300 for the purchase of a replacement dishwasher. (See id. at 4). Moreover, all Class Members — as well as Non-Class Members and the general public — will benefit from the enhanced safety instructions and revisions to Whirlpool’s service kit pointers and training bulletins required by the settlement. (See id. at 5). The settlement also provides “insurance-like” coverage for future Overheating Events for owners of the approximate 13.5 million Dishwashers still in service. (See Dkt. 276, Reply in Support of Award of Attorneys’ Fees [ ] (“Fees Reply”) at 2).
Where, as here, the settlement includes both coupon relief and monetary relief, CAFA authorizes the court to calculate attorney’s fees utilizing the lodestar method. See 28 U.S.C. § 1712(b) (“If a proposed settlement in a class action provides for a recovery of coupons to class members, and a portion of the recovery of the coupons is not used to determine the attorney’s fee to be paid to class counsel, any attorney’s fee award shall be based upon the amount of time class counsel reasonably expended working on the action.”); Davis,
Defendants argue in the alternative that the court should treat the settlement as a “mixed” settlement under 28 U.S.C. § 1712(c), which requires the court to use the percentage-of-recovery method to calculate the portion of attorney’s fees based on coupon relief, see 28 U.S.C. § 1712(c)(1), and the lodestar method to calculate the portion of attorney’s fees based on equitable relief. (See Dkt. 246, Fees Opp. at 29-30). However, this provision only applies when the settlement “provides for an award of coupons to class members and also provides for equitable relief, including injunctive relief[.]” 28 U.S.C. § 1712(c). It does not contemplate — and therefore does not apply to— settlements that involve coupon relief and monetary relief. See Shames v. Hertz Corp., 2012 WL. 5392159, *16 n. 14 (S.D. Cal. 2012) (holding that 28 U.S.C. § 1712(c) does not apply to settlements that involve “monetary relief in the form of cash payments”). Attorney’s fees for such settlements are calculated under 28 U.S.C. § 1712(b). See HP Inkjet,
Finally, defendants assert that even if the court has discretion to apply the lodestar method, the court should nevertheless use the percentage-of-recovery method because “coupons are the ‘primary’ benefit” conferred by the settlement. (See Dkt. 246, Fees Opp. at 26). According to defendants, “more than 99.8% of the Class is eligible to make a claim for only a coupon.” (Id. at 27) (emphasis in original). But even if defendants’ calculation is correct, that does not mean rebates are the primary benefit of the settlement; the crux of this action deals with the Overheating Events suffered by owners of Class Dishwashers, and the settlement entitles each of those indi
2. Lodestar Figure.
“The lodestar calculation begins with the multiplication of the number of hours reasonably expended by a reasonable hourly rate.” Hanlon,
“[T]he determination of a reasonable hourly rate is not made by reference to the rates actually charged the prevailing party[,]” but rather, “by reference to the fees that private attorneys of an ability and reputation comparable to that of prevailing counsel charge their paying clients for legal work of similar complexity.” Welch v. Metro. Life Ins. Co.,
The documentation submitted by class counsel shows an unadjusted lodestar of $8,948,487.98. (See Dkt. 218-3, Firm Time & Expense Summary at 2). This figure consists of 23,860.75 hours worked by all class counsel, (see id.), multiplied by an average hourly rate of approximately $375. (See Dkt. 218-1, Memorandum of Points
Defendants do, however, lodge a series of objections to the reasonableness of class counsel’s hourly rates and billing practices. (See Dkt. 246, Fees Opp. at 34-49). Defendants assert that the court “should reduce the base lodestar because several firms seek to charge excessive rates for document reviewf.]” (See id. at 35). In particular, defendants challenge the fees sought by three plaintiffs’ firms, Chimicles & Ti-kellis, LLP (“C & T”), Lieff Cabraser Heimann & Bernstein, LLP (“LCHB”), and Weinstein Kitchenoff & Asher LLC (“WK & A”), which collectively seek to recover approximately $2,200,000 in fees for 5,224 hours of document review, resulting in a blended rate of $421.60 per hour. (See id. at 36). Having reviewed the law firms’ time and billing records, (see Dkt. 222-1, Declaration of Timothy N. Mathews [ ] (“Mathews Deck”) (C & T); Dkt. 222-2, Declaration of Nicole D. Sugnet [ ] (“Sug-net Deck”) (LCHB); Dkt. 218-9, Declaration of Robert S. Kitchenoff [ ] (WK & A)), the court finds that the number of hours expended on document review and the hourly rates sought by counsel are reasonable.
The main thrust of defendants’ argument is that plaintiffs’ firms could have performed the same document review at less cost by hiring contract attorneys instead of keeping document review in-house. (See Dkt. 246, Fees Opp. at 37-38) (suggesting that the court “adjust the rates applicable to 75% of Class Counsel’s document review time down to a contract attorney rate of $60 per hour”). While the court “may permissibly look to the hourly rates charged by comparable attorneys for similar work,” it “may not attempt to impose its own judgment regarding the best way to operate a law firm, nor to determine if different staffing decisions might have led to different fee requests.” Moreno,
Contrary to defendants’ position, (see Dkt. 246, Fees Opp. at 37-38), it is not always appropriate to hire contract attorneys to perform document review. Arguably, when a party needs to conduct basic document review to respond to voluminous discovery requests — a task that is typically limited to “checking the box” for relevance and privilege — it might make sense to engage an agency offering a pool of temporary contract attorneys. The same is not true, however, when a small plaintiffs firm engaged in high-stakes litigation needs to review voluminous disclosures by well-
In any event, regardless of whether a task is performed by a law firm partner, a contract attorney, or a paralegal, the reasonableness of the fees depends on “[t]he difficulty and skill level of the work performed, and the result achieved[,]” Moreno,
Excluding fees attributable to Anthony Geyelin, whose role as lead attorney for the entire document review involved very little first-level review,
Next, defendants contend that the court “should reduce the base lodestar for claimed hourly rates that are unreasonably high[.]”
The rates charged by these attorneys range from $485 to $750 per hour. (See Dkt. 246, Fees Opp. at 40-41) (challenging the rates charged by Schwartz ($750/hour), Mathews ($600/hour), Sagafi ($625/hour), and Sugnet ($485/hour)). In Los Angeles, hourly rates between $485 and $750 are common. See, e.g., Counts v. Meriwether,
Defendants urge the court to ignore class counsel’s actual billing rates and instead apply the Laffey matrix, an inflation-adjusted table of hourly rates for attorneys and paralegals maintained by the U.S. Attorney’s Office for the District of Columbia. (See Dkt. 246, Fees Opp. at 42). The Ninth Circuit has questioned the reliability of the Laffey matrix, describing it as an
Defendants also challenge class counsel’s submission of their current hourly rates, and contend that those rates should be adjusted to represent the “historical” rates.for all plaintiffs’ firms. (See Dkt. 246, Fees Opp. at 45). “District courts have the discretion to compensate plaintiffs attorneys for a delay in payment by ... applying the attorneys’ current rates to all hours billed during the course of the litigationf.]” Welch,
Finally, defendants assert that the court “should reduce the lodestar for improper billing entries in quarter-hour increments.” (See Dkt. 246, Fees Opp. at 47). While quarter-hour billing is not per se unreasonable, several courts have imposed across-the-board fee reductions on the ground that this practice may have resulted in excessive billing. See, e.g., Welch,
Here, over half of the time entries claimed by C & T attorneys Schwartz and Mathews are for simple tasks that purportedly took 15 or 30 minutes to complete. (See Dkt. 222-1, Mathews Decl. at Exh. 4, ECF 5903-6078; see also Dkt. 246, Fees Opp. at 48 (identifying “857 quarter-hour and half-hour entries for emails, phone calls, and intra-office conferences” which correspond to 51.6% of Mathews’ entries and 53.4% of Schwartz’s entries)). Many of these entries are vague in describing the scope of the tasks performed. For example, one 15 minute entry refers
In short, the court calculates class counsel’s lodestar at 8,818,449.23,
3. Lodestar Multiplier.
Although the lodestar figure is presumptively reasonable, see Perdue,
Class counsel requests that the court apply a 1.68 multiplier to their unadjusted lodestar. (See Dkt. 218-1, Fees Brief at 26). In the Ninth Circuit, multipliers “ranging from one to four are frequently awarded ... when the lodestar method is applied.” Vizcaino v. Microsoft Corp.,
Here, nearly all of the Kerr factors support the requested multiplier.
Further, the results obtained by class counsel are impressive. The settlement secures monetary relief for Class Members who suffered an Overheating Event, provides insurance-like coverage for future Overheating Events, promotes public safety by creating an incentive for current owners to replace their Class Dishwashers, and requires new warnings about the dangers of removing or bypassing TCOs. (See Dkt. 199, PAO at 21). These results are particularly impressive given that class counsel began with an 11-state lawsuit and converted it into a nationwide settlement. (See id. at 2 & 21). Achieving these results undoubtedly took a high level of skill on the part of counsel whom the court has already described as “among the most capable and experienced lawyers in the country in these kind of cases.” (Id. at 14). Finally, the court notes that “one extremely important factor ... is the contingent nature of success; for every successful ... action brought, several more may be lost, and in these no fee will be received.” White v. City of Richmond,
Defendants urge the court to apply a negative multiplier of 0.5, (see Dkt. 246, Fees Opp. at 52), thereby cutting class counsel’s award in half. Defendants justify this request by reference to only one Kerr factor: the “degree of success obtained.” (Id.); see Kerr,
Every settlement will involve a disparity between the amount in controversy — an aspirational figure to begin with — and the final settlement amount; such is the nature of a settlement, “the very essence of [which] is compromise, a yielding of absolutes and an abandoning of highest hopes.” Linney,
At the final approval hearing, defendants cited several cases that purportedly justify a negative multiplier, including Roberts,
In Roberts, the court granted class counsel’s request for a positive multiplier of 1.23, see
In Tait, the court applied a negative multiplier after calculating the precise value of the settlement and finding that class counsel’s lodestar was not “reasonable in relation to the results obtained.” See
In Bluetooth II, the court applied a negative multiplier of 0.25 where “the settlement provide[d] for no monetary relief for the class at all” and “[t]he success actually obtained could (and should) have been achieved at far lower cost” as was “illustrated by Defendants’ ‘voluntary’ addition of hearing loss warnings prior to settlement.”
Finally, the court is satisfied that a “cross-check” using the percentage-of-recovery method is not required. “[W]here, as here, classwide benefits are not easily monetized, a cross-check is entirely discretionary.” Yamada v. Nobel Biocare Holding AG,
Third, assuming defendants are correct that the percentage-of-recovery method applies only to “the value of claims actually made by the Dishwasher owners[,]” (see Dkt. 246, Fees Opp. at 30), the court could not perform an accurate analysis until 2021, when the claims deadline for future Overheating Events will pass. (See Dkt. 218-1, Fees Brief at 36). On the other
In short, the court finds that the lodestar of $8,818,449.23 is reasonable and supported by adequate documentation, and that a multiplier of 1.68 is warranted in light of the Kerr factors. The court will therefore award class counsel attorney’s fees in the amount of $14,814,994.70.
4. Objections.
Most of the objections regarding class counsel’s request for attorney’s fees invoke the general theme that “the settlement does nothing for the consumers and is only a way of generating cash payments for the lawyers.” (Dkt. 202, Objection of Alexander Korzun) (urging the court to “take the 19 million dollar lawyer fees and divide that up” among the class members); (see Dkt. 203, Objection of Frances F. Wolfson) (“[TJhese unreasonable payments should be trimmed and the proceeds distributed to members of the Class[.]”); (Dkt. 213, Objection of James P. Tierney) (describing “the $19 million in attorney’s fees” as “excessive” and “highly disproportionate”). The court understands that some class members, unfamiliar with class action litigation, may be upset at the perceived disparity between their own award and the attorney’s fees recovered by class counsel.
B. Costs.
The Settlement Agreement provides that defendants will pay class counsel’s reasonable costs and expenses incurred in litigating this action. (See Dkt. 192-4, Settlement Agreement at 46, § IX.A). Class counsel have collectively incurred a total of $508,292.67 in costs. (See Dkt. 218-1, Fees Brief at 45; Dkt. 218-3, Firm Time & Expense Summary at 2). Defendants initially argued that class counsel’s request for costs should be reduced by $30,629.90, (see Dkt. 246, Fees Opp. at 54), but subsequently withdrew their opposition and consented to’ paying the full amount requested by class counsel. (See Dkt. 276, Fees Reply at 33; Dkt. 276-1, Mathews Suppl. Deck at ¶ 13). The court has reviewed the detailed listing of the costs and expenses incurred by each of class counsel’s firms, (see Dkt. 218-1, Fees Brief at 45), and finds that the costs incurred by class counsel over the course of this five-year-long lawsuit are reasonable. The court therefore awards a total of $508,292.67 in costs.
C. Service Awards.
“[Njamed plaintiffs, as opposed to designated class members who are not named plaintiffs, are eligible for reasonable incentive payments.” Staton,
Plaintiffs request the service awards “in recognition of the time and effort [plaintiffs] personally invested in this lawsuit.” (Dkt. 218-1, Fees Brief at 46). In particular, the named plaintiffs subjected themselves to public attention by lending their names to the case, responding to written discovery requests, being deposed by defendants’ counsel, allowing their dishwashers to be disassembled and inspected by defendants, reviewing and authorizing the filings of various iterations of the complaint, consulting with class counsel on a regular basis, and evaluating and supporting the proposed settlement. (See id.); see also Rodriguez v. West Publishing Corp.,
In its order granting preliminary approval, the court discussed the fairness and adequacy of the service awards at issue and outlined the careful scrutiny required in this Circuit. (See Dkt. 199, PAO at 24-26); see also Radcliffe v. Experian Info. Solutions Inc.,
“Many courts in the Ninth Circuit have ... held that a $5,000 incentive award is ‘presumptively reasonable.’ ” Hawthorne v. Umpqua Bank,
III. PURCHASE OF LEAD PLAINTIFF STEVE CHAMBERS’ WEBSITES.
Plaintiffs request that the court approve the settlement provision requiring Whirlpool to purchase lead plaintiff Steve Chambers’ websites for $100,000.00. (See Dkt. 218-1, Fees Brief at 47-49). In its.order granting preliminary approval, the court analyzed this settlement provision in depth. (See Dkt. 199, PAO at 26-28). The court reviewed the parties’ valuations of the websites, considered the “substantial role” that the websites played in the litigation, and noted the “significant investment by Mr. Chambers into the creation and maintenance” of the websites. (See id. at 26 & 27). The parties also advised the court during the final approval hearing that the websites enabled Whirlpool to learn about, and ultimately make settlement offers to, other potential class members while this litigation was pending. As a result, and for the reasons set forth in its Preliminary Approval Order, the court hereby affirms its finding that it is “fair and reasonable for Whirlpool to purchase
CONCLUSION
Based on the foregoing, IT IS ORDERED THAT:
1. The parties’ Joint Motion for Final Approval of Class Action Settlement (Document No. 254) is granted as set forth herein.
2. The court hereby grants final approval to the parties’ Class Action Settlement Agreement and Release of All Claims (“Settlement Agreement”) (Document No. 192-4). The court finds that the Settlement Agreement is fair, adequate, and reasonable; appears to be the product of arm’s-length and informed negotiations; and treats all members of the class fairly. The parties are ordered to perform their obligations pursuant to the terms of the Settlement Agreement and this Order.
3. Plaintiffs’ Motion for Award of Attorneys’ Fees and Expenses and for Service Awards for Plaintiffs (Document No. 218) is granted as set forth herein.
4. The settlement class is certified under Federal Rules of Civil Procedure 23(c): All members of the class preliminarily approved on November 12, 2015, who did not properly and timely request exclusion pursuant to the procedures specified in the Settlement Agreement.
5. The form, manner, and content of the Class Notice meet the requirements of Federal Rules of Civil Procedure 23(c)(2).
6. The court affirms the appointment of plaintiffs Steve Chambers, Lynn Van Der Veer, Kevin O’Donnell, Joseph Cicchelli, Kurt Himler, Gary LeBlanc, George Bliss, Lyndee Walker, W. David Beal, Zila Ko-swener, Pamela Walchli, Raymond Paolini, Jr., and Jackie Steffes as class representatives.
7. The court affirms the appointment of: Charles Fax of Rifkin, Weiner, Livingston, Levitan & Silver LLC; Robert Kitchenoff of Weinstein Kitchenoff & Asher LLC; Steven Schwartz and Timothy Mathews of Chimicles & Tikellis LLP; Nicole Sugnet of Lieff Cabraser Heimann & Bernstein, LLP; and Jeff Cohon of Cohon & Poliak, LLP as class counsel.
8. Defendants shall pay each named plaintiff a service award of $4,000.00 in accordance with the terms of the Settlement Agreement.
9. Defendants shall pay lead plaintiff Steve Chambers a payment of $100,000.00 for the purchase of Mr. Chambers’ websites in accordance with the terms of the Settlement Agreement.
10. Defendants shall pay class counsel attorney’s fees in the amount of $14,814,994.70 and costs in the amount $508,292.67.
11. The Claims Administrator, Kurtz-man Carson Consultants, LLC, shall be paid for its fees and expenses in connection with the administration of the Settlement Agreement, in accordance with the terms of the Settlement Agreement.
12. All class members who did not validly and timely request exclusion from the settlement have released claims against defendant, as set forth in the Settlement Agreement.
13. Except as to any class members who have validly and timely requested exclusion, this action is dismissed with prejudice, with all parties to bear their own fees and costs except as set forth herein and in the prior orders of the court.
14. Without affecting the finality of this order in any way, the court hereby retains jurisdiction over the parties, including class members, for the purpose of construing, enforcing, and administering the order and Judgment, as well as the Settlement Agreement itself.
Notes
. An "Overheating Event” is defined as "the overheating of the Dishwasher’s Electronic Control Board such that the class member or another person observed or experienced smoke, flames, fumes, sparks, or electrical arcing from the control console area of their Dishwasher.” (Dkt. 192-4, Class Action Settlement Agreement and Release of All Claims ("Settlement Agreement”) at 9-10, ¶ BB).
. Non-Class Members include individuals "who own or owned Dishwashers equipped with either a 'NewGen' or a ‘Raptor’ platform electronic control board.” (Dkt. 192-4, Settlement Agreement at 9, ¶ X). A list of model and serial numbers by which NewGen and Raptor dishwashers can be identified is attached to the Settlement Agreement as Exhibit 5. (See Dkt. 192-9, Model & Serial No. List for Raptor & NewGen).
. The Settlement Class includes "all residents in the United States and its territories who (a) purchased a new Class Dishwasher, (b) acquired a Class Dishwasher as part of the purchase or remodel of a home, or (c) received as a gift, from a donor meeting those requirements, a new Class Dishwasher not used by the donor or by anyone else after the donor purchased the Class Dishwasher and before the donor gave the Class Dishwasher to the claimant." (Dkt. 199, PAO at 3).
. "Class Dishwashers” are defined as "all KitchenAid, Kenmore, and Whirlpool-brand automatic dishwashers manufactured by Whirlpool between October 2000 and January 2006 that contained either a 'Rushmore' or 'Rush' electronic control board.” (Dkt. 192-4, Settlement Agreement at 6, ¶ I). A list of model and serial numbers for all Class Dishwashers is attached to the Settlement Agreement as Exhibit 2. (See Dkt. 192-6, Model and Serial No. List for Class Dishwashers).
. The Notice Date is defined as the date on which the Claims Administratqr completes the initial mailing of summary notices to class members, (see Dkt. 192-4, Settlement Agreement at 9, ¶¾ which was February 4, 2016. (See Dkt. 254-6, Supplemental Declaration of Patrick M. Passarella Re: Notice Procedures and Claims Filing ("Suppl. Passarella Decl.”) at ¶ 3).
. All "Rule” references are to the Federal Rules of Civil Procedure.
. In fact, Mr. Sweeney is so prolific in objecting to class action settlements that the court received another objection from him in a different case, Spann v. J.C. Penney Corp., Case No. SA CV 12-0215 FMO (KESx) (C.D. Cal.) ("Spann"), for which the court held a final approval hearing on the same day as in this case. (See id., Dkt. 265, June 30, 2016 Objection of Patrick Sweeney). What’s more, in both cases, Mr. Sweeney’s objections contain information unrelated to the subject litigation. (See id. at ECF 5) (arguing that "Class Members will be compensated for a percentage of the amount they were charged for the insurance policies” even though no insurance policies were ever at issue in the case); (Dkt. 234, Sweeney Obj. at ¶ 9) (objecting to a cy pres procedure even though no such procedure exists under the Settlement Agreement).
. Like Mr. Sweeney, Mr. Flelfand also filed a meritless objection in the Spann case. (See Spann, Dkt. 260, Objection by Walter F. Ell-ingwood (filed by Mr. Helfand)).
. One objector withdrew her objection after discovering that she was not eligible to receive compensation under the settlement. (See Dkt. 249, Request to Withdraw Objection at 2; Dkt. 227, Objection to Proposed Settlement). Another objector wrote to express her disappointment that Whirlpool had not recalled all of its dishwashers, but stated that she "do[es] not object to the' settlement[.]” (See Dkt. 237). The court has reviewed and considered the merits of the remaining objec
. Although CAFA defines a variety of terms, see 28 U.S.C. § 1711, it does not define a "coupon.” See, generally, id. Courts have generally held that “a coupon is a discount on merchandise or services offered by the defendant,” Foos v. Ann, Inc.,
. The court would apply the lodestar method, and would reach the same result with respect to the award of attorney’s fees and costs, under either California law or 28 U.S.C. § 1712(b).
. The court finds that it is appropriate to exclude Geyelin's fees from the calculation of a blended document review rate because Geyelin's work was fundamentally different from that of the first-level document reviewers. As "the central point person for the document review,” Geyelin "performed key roles with respect to deposition preparation, trial preparation, and other litigation tasks.” (Dkt. 276-1, Mathews Suppl. Decl. at ¶ 6; see Dkt. 217-2, Declaration of Timothy N. Mathews at ¶¶ 25-26).
. Even this figure may overstate the true blended hourly rate for class counsel's first-level reviewers, because it includes work performed by attorney Christina Saler, who "did not perform any first level document review. All of her work related to second level review and preparation of a detailed memorandum of facts.” (Dkt. 276, Fees Reply at 19 n. 20).
. Defendants also argue that the court “should reduce the lodestar for unsupported rates[.]” (See Dkt. 246, Fees Opp. at 47). Specifically, defendants argue that WK & A failed to submit sufficient biographical infor; mation for four billers: Eckart, Ely, Quarem-bo, and Spiegel. (See id.). To rebut this argument, class counsel submitted an additional declaration regarding the four billers, which demonstrates that they are sufficiently experienced to justify their claimed billing rates. (See Dkt. 276-5, Supplemental Declaration of Robert S. Kitchenoff [ ] at ¶¶ 12-16).
. Defendants also argue that "the price of legal services in San Francisco[,]” where LCHB is located, "is higher than in the Central District.” (See Dkt. 246, Fees Opp. at 40). However, it makes no difference whether San Francisco lawyers are generally more expensive than Los Angeles lawyers — the only question before the court is whether these particular attorneys’ rates are in line with the prevailing standards of the Central District. See Camacho,
. This figure equals the proposed lodestar of $8,948,487.98, less $130,038.75.
. Several of the Kerr factors are neutral or do not apply: (1) the record contains no evidence of whether class counsel were precluded from other employment due to accepting this case; (2) the court is not aware of a "customary” fee for a case of this magnitude and complexity; (3) class counsel has not identified any time limitations or similar circumstances imposed by their clients; and (4) the record contains no evidence of the nature or length of class counsel’s professional relationships with their clients.
. Several objectors were under the impression that class counsel would seek $19 million in attorney's fees because that figure was included on the postcard notice sent to class members. However, the actual measure of fees sought by — and awarded to — class counsel is nearly $4 million less.
