Nos. 16-17157 16-17158 16-17166 16-17168 16-17183 16-17185
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
July 9, 2018
D.C. No. 3:15-md-02672-CRB
OPINION
Appeal from the United States District Court for the Northern District of California
Charles R. Breyer, Senior District Judge, Presiding
Argued and Submitted December 7, 2017
Pasadena, California
Filed July 9, 2018
Opinion by Judge Berzon
SUMMARY*
Class Action / Settlement
The panel affirmed the district court‘s judgments certifying a class, approving a settlement, and denying Tori Patl‘s motion to opt out of the settlement that was entered by Volkswagen and a class of consumers after Volkswagen admitted that it had installed “defeat devices” in certain 2009-2015 model year 2.0-liter diesel cars.
The class settlement set aside ten billion dollars to fund a suite of remedies for class members. The settlement was reached before class certification. The objectors raised a variety of challenges.
The panel held that the district court did not abuse its discretion in certifying the class. The primary objection to the certification concerned whether the interests of “eligible sellers” - class members who owned vehicles with defeat devices when VW‘s scheme became public, but sold them before the proposed settlement was filed - were adequately represented during settlement negotiations. The panel held that the eligible sellers benefitted from being in the class alongside vehicle owners. The panel further held that there were no signs of an improper conflict of interest that denied absent class members adequate representation.
The panel held that the district court more than discharged its duty in ensuring that the settlement was fair and adequate to the class, and affirmed the district court‘s approval of the settlement. The panel considered the objections to the settlement, and concluded that the district court considered the proper factors, asked the correct questions, and did not abuse its discretion in approving the settlement. Except with respect to a reversion provision, the appeals did not directly challenge the substantive fairness of the settlement, and therefore the panel held that it had no reason to comment upon it.
Under the terms of the settlement, money not paid out from the settlement pool reverted to Volkswagen, and one objector alleged that this “reversion provision” made it impossible to know the true value of the settlement to the class and provided incentive to Volkswagen to discourage participation in the settlement. The panel held that the district court adequately explained why the reversion here raised no specter of collusion. The panel further held that the incentives for class members to participate in the settlement, the complementary inducement for Volkswagen to encourage them to participate, the value of the claims, and the actual trend in class member participation all indicated that the reversion clause did not, in design or in effect, allow VW to recoup a large fraction of the funding pool.
The panel held that the district court did not abuse its discretion in denying Tori Partl‘s motion to opt out of the class after the deadline to do so had passed. The panel held that the district court reasonably concluded that Partl had actual notice of the correct procedure to exclude herself from the class, she seemingly misunderstood clear directions, and such a mistake did not constitute excusable neglect or good cause.
COUNSEL
James Ben Feinman (argued), James B. Feinman & Associates, Lynchburg, Virginia, for Movant-Appellant Ronald Clark Fleshman, Jr.
Sharon Nelles (argued), William B. Monahan, and Robert J. Giuffra Jr., Sullivan & Cromwell LLP, New York, New York, for Defendants-Appellants.
N. Albert Bacharach Jr., N. Albert Bacharach Jr. P.A., Gainesville, Florida, for Objectors-Appellants Greg R. Siewert and Scott Siewert.
Bryan E. Brody, Brody & Cornwell, St. Louis, Missouri, for Objector-Appellant Tori Partl.
Brian Thomas Giles, Giles Lenox, Cincinnati, Ohio, for Objector-Appellant Derek R. Johnson.
Stephen D. Field, Stephen D. Field P.A., Hialeah, Florida, for Objector-Appellant Rudolf Sodamin.
Caroline V. Tucker, Tucker Pollard, Irvine, California, for Objector-Appellant Marcia Weese.
Kevin R. Budner, David S. Stellings, and Elizabeth J. Cabraser, Lieff Cabraser Heimann & Bernstein LLP, San Francisco, California; Benjamin L. Bailey, Bailey Glasser LLP, Charleston, West Virginia; Roland K. Tellis, Baron & Budd P.C., Encino, California; W. Daniel “Dee” Miles III, Beasley Allen Law Firm, Montgomery, Alabama; Lesley E. Weaver, Bleichmar Fonti & Auld LLP, Oakland, California; David Boies, Boies Schiller & Flexner LLP, Armonk, New York; J. Gerard Stranch IV, Branstetter Stranch & Jennings PLLC, Nashville, Tennessee; James E. Cecchi, Carella Byrne Cecchi Olstein Brody & Agnello P.C., Roseland, New Jersey; David Seabold Casey Jr., Casey Gerry Schenk Francavilla Blatt & Penfield LLP, San Diego, California; Frank Mario Pitre, Cotchett Pitre & McCarthy LLP, Burlingame, California; Rosemary M. Rivas, Levi & Korsinsky LLP, San Francisco, California; Adam J. Levitt, Dicello Levitt & Casey LLP, Chicago, Illinois; Steve W. Berman, Hagens Berman, Seattle, Washington; Michael D. Hausfeld, Hausfeld, Washington, D.C.; Michael Everett Heygood, Heygood Orr & Pearson, Irving, Texas; Lynn Lincoln Sarko, Keller Rorhback LLP, Seattle, Washington; Joseph F. Rice, Motley Rice LLC, Mount Pleasant, South Carolina; Paul J. Geller, Robbins Geller Rudman & Dowd LLP, Boca Raton, Florida; Roxanna Barton Conlin, Roxanne Conlin & Associates P.C., Des Moines, Iowa; Christopher A. Seeger, Seeger Weiss LLP, New York, New York; Jayne Conroy, Simmons Hanly Conroy LLP, New York, New York; Robin L. Greenwald, Weitz & Luxenberg P.C., New York, New York; Samuel Issacharoff, New York, New York; for Plaintiffs-Appellees.
OPINION
BERZON, Circuit Judge:
Striving to better, oft we mar what‘s well.1
Volkswagen duped half a million Americans into buying cars advertised as “clean diesel.” They were anything but. As the lawsuits piled up, the car manufacturer hammered out a ten-billion-dollar settlement with a class of consumers, agreeing to fix or buy back the affected vehicles and providing some additional money as well. Following a thorough review, the district court blessed the agreement. Of the half million class members, a handful take issue with the settlement. We consider those appeals.
BACKGROUND
I. Litigation and settlement talks
In September 2015, Volkswagen (or VW) admitted that it had installed “defeat devices” in certain of its 2009-2015 model year 2.0-liter diesel cars. These devices-bits of software in the cars-were at the center of a massive scheme by VW to cheat on U.S. emissions tests. The clever software could detect that a car was undergoing government-mandated testing and activate emissions-control mechanisms. Those mechanisms ensured that the car emitted permissible levels of atmospheric pollutants when the test was in progress. During normal road use, however, the emission-control system was dialed down considerably. As a result, the affected cars usually emitted on the road between 10 and 40 times the permissible level of nitrogen oxide, a gas that reacts with other gases to create ozone and smog. This was no small-time con: over 475,000 vehicles in the United States alone contained a defeat device.2
The scheme became public when the Environmental Protection Agency (EPA) sent a “Notice of Violation” to Volkswagen alleging that installation of the defeat devices violated the Clean Air Act,
Vehicle owners were not far behind. Within three months, hundreds of lawsuits against VW, most of them class actions, had been filed in or removed to over sixty federal district courts. See In re Volkswagen “Clean Diesel” Mktg., Sales Practices & Prods. Liab. Litig., 148 F. Supp. 3d 1367, 1368 (J.P.M.L. Dec. 8, 2015). The complaints alleged a bevy of claims under state and federal law, including-to name just a few-breach of warranty, breach of contract, unjust enrichment, and violation of consumer protection, securities, and racketeering laws.
The Judicial Panel on Multidistrict Litigation transferred all VW defeat device-related cases to Judge Charles Breyer in the Northern District of California (“district court” or “MDL court“) for “coordinated or consolidated pretrial proceedings.” Id. at 1370. In short order the district court appointed Elizabeth Cabraser lead counsel for the putative consumer class actions and chair of the Plaintiffs’ Steering Committee (PSC) charged with coordinating pretrial work on behalf
Settlement talks began early and went quickly. With the aid of a court-appointed settlement master, Robert Mueller, the parties-including the United States and the FTC-had reached agreements in principle by April 2016. Two months later-and just seven months after the cases were consolidated in the MDL court-a trio of proposed settlement agreements were filed by the private plaintiffs’ class counsel, the United States, and the FTC.4
II. The settlement agreement
The proposed class settlement set aside ten billion dollars to fund a suite of remedies for class members. A particular class member‘s choices depended on whether she owned, leased, or had previously owned, but sold, a vehicle with a defeat device:
- Owners. Owners had the option to (1) sell the car back to VW at its pre-defeat device value (the “buyback” option) or (2) have the car fixed, provided Volkswagen could develop an EPA-approved emissions modification.5 In addition, owners would receive “owner restitution.” For owners who bought their cars before September 18, 2015 (“eligible owners“), that was a cash payment of at least $5,100, but possibly more, depending on the value of the vehicle. Owners who acquired their vehicles after that date (“eligible new owners“) would receive half the eligible owner restitution described above-a cash payment of at least $2,550.
- Lessees. Lessees had the option to (1) terminate their leases without penalty or (2) have the car fixed subject to development of an approved modification. In addition, lessees would receive “lessee restitution,” a11 cash payment of $1,529 plus 10% of the vehicle‘s value.
- Sellers. “Eligible sellers“-those who sold their cars after the defeat device scheme became public but before the filing of the settlement with the court in June 2016-would receive “seller restitution” equal to one-half of full owner restitution (a cash payment of at least $2,550, but possibly more, depending on the value of the vehicle).6
The settlement figure of $10.033 billion was calculated to cover the most expensive option-the buyback-for all eligible owners, as well as the remedies selected by all non-owner class members. Any money left over in the funding pool will revert to Volkswagen after the claims period runs.7
III. Settlement approval
One month after the proposed settlement was filed with it, the district court granted preliminary approval and ordered extensive notice to the class. The following schedule was set:
| August 10, 2016 | Additional information regarding class counsel‘s prospective request for attorneys’ fees due. |
| September 16, 2016 | Class members’ objections to the settlement and requests for exclusion from it (i.e., opt out) due. |
| October 18, 2016 | Final fairness hearing on the settlement. |
Eighteen class members appeared at the fairness hearing to voice concerns about, or objections to, the settlement. By that point-just four months after the first proposed settlement was filed and three months after preliminary approval was granted-over 63% of class members had registered for benefits under the settlement. Of the 490,000 class members, some 3,300 had opted out (although the district court noted a trend of those opt outs reversing course and later claiming benefits), and 462 had timely objected to the settlement.
One week after the fairness hearing, the district court, in a 48-page order, granted final approval of the settlement. The approval order first found that (1) the class met the threshold requirements to be certified under
In her motion for final approval of the settlement, class counsel stated that she would seek no more than $333 million in attorneys’ fees and costs.8 The court‘s order granting final approval directed her to submit a motion for fees by November 8, 2016, and set a deadline for objections to that motion for six weeks after that.
Fourteen appeals from the order approving settlement were consolidated with one related appeal. Of those, this opinion addresses six.9
DISCUSSION
“Especially in the context of a case in which the parties reach a settlement agreement prior to class certification, courts must peruse the proposed compromise to ratify both the propriety of the certification and the fairness of the settlement.” Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). The settlement here was reached before class certification, so Staton‘s dual direction applies.
The objectors bring a hodgepodge of challenges. One contests the district court‘s decision to approve certification of the class. Several others dispute the fairness of the settlement itself or the adequacy of the district court‘s process in approving it. And one appeals the district court‘s denial of her motion to opt out of the class after the deadline had passed.
The district court‘s decision to certify a class action and its conclusion that a class action settlement is “fair, reasonable, and adequate” are reviewed for abuse of discretion. See id. at 960. So is its denial of a class member‘s motion to exclude herself from the class out of time. See Silber v. Mabon, 18 F.3d 1449, 1453 (9th Cir. 1994). As we explain below, the district court appropriately exercised its considerable discretion in making its determinations. We affirm.
I. Certification of the class
We begin by considering whether the class was appropriately certified. Before certifying a class, a court must ensure that it satisfies the prerequisites of Rule 23, including that “the representative parties will fairly and adequately protect the interests of the class.”
The primary objection before us to the district court‘s certification decision concerns whether the interests of “eligible sellers”10 in the class were adequately represented during settlement negotiations.
“The adequacy [of representation] inquiry under Rule 23(a)(4) serves to uncover conflicts of interest between named parties and the class they seek to represent.” Amchem, 521 U.S. at 625. Serious conflicts of interest can impair adequate representation by the named plaintiffs, yet leave absent class members bound to the final judgment, thereby violating due process. See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998) (citing Hansberry v. Lee, 311 U.S. 32, 42-43 (1940)).13
The initial inquiry in assessing adequacy of representation, then, is whether “the named plaintiffs and their counsel have any conflicts of interest with other class members.”14 Id. at 1020. That general standard must be broken down for specific application; conflicts within classes come in many guises. For example, two subgroups may have differing, even adversarial, interests in the allocation of limited settlement funds. See Amchem, 521 U.S. at 626. Class members with higher-value claims may have interests in protecting those claims from class members with much weaker ones, see Ortiz v. Fibreboard Corp., 527 U.S. 815, 857 (1999), or from being compromised by a class representative with lesser injuries who may settle more valuable claims cheaply, see Molski v. Gleich, 318 F.3d 937, 955 (9th Cir. 2003), overruled en banc on other grounds by Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571 (9th Cir. 2010), rev‘d, 564 U.S. 338 (2011). Aside from such evident structural conflicts, some proposed agreements are so unfair in their terms to one subset of class members that they cannot but be the product of inadequate representation of that subset. See, e.g., In re GMC Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 801 (3d Cir. 1995).
Perusing the settlement before us, we see no indication of an “irreparable conflict of interest,” either in the structure of the class or the terms of the settlement, that prevented the named class representatives from adequately representing sellers, or prohibited the commingling of the two in a single class. Hanlon, 150 F.3d at 1021.
Far from getting the short end of the stick, the eligible sellers gained enormously from being in the class with vehicle owners. The eligible owners-who comprise the vast majority of the class-were the ones with leverage enough to obtain benefits for the class. First, they had individually valuable and near-ironclad claims for rescission or restitution against VW. Second, the DOJ consent decree required VW to fix or buy back a large percentage-85%-of the affected vehicles. Failure to do so would result in immense fines. That Volkswagen thus needed to reach a deal with vehicle owners-a group including both eligible owners and eligible new owners-gave the class as a whole enormous collective power in bargaining.
By contrast, the eligible sellers’ claims, viewed in isolation, were fairly weak. The eligible sellers no longer had the cars whose purchase allegedly caused them injury; their theory would have been that they sold their defective cars at a loss attributable to VW‘s installation of the defeat device (and the subsequent public revelation). But it would be difficult to prove why any eligible seller chose to sell his car or the degree to which, if any, the sale price reflected a discount for the defeat device. As one class member conceded at the fairness hearing, “[n]o one forced eligible sellers to sell their vehicles.” Given the speed with which the putative classes were consolidated and settlement talks began, it is likely that many eligible sellers knew of the lawsuit, and some of the looming settlement, when they sold. The cars, moreover, were still functional and safe to drive, and the federal government made it clear from the beginning that it would not punish those driving cars with defeat devices-all of which puts a question mark over how much value the vehicles lost as a result of the scandal.15 So eligible sellers would face challenging, if not insurmountable, questions of causation and damages if they litigated their cases against VW.
Instead of getting nothing, eligible sellers received several thousand dollars in compensation. They quite possibly obtained it because they were in the same class as vehicle owners who had leverage against Volkswagen, not in spite of that inclusion. The patent upside of the settlement to eligible sellers defeats Johnson‘s central argument that the settlement was so unfair to sellers that it could only have been the result of inadequate representation.
Further, even if the eligible sellers’ claims were viable, the seller restitution, if evaluated as covering the economic losses incurred, was in an amount that generally fairly compensated for such losses. Class counsel explained at the fairness hearing that the restitution figure “in most instances” accounted for the loss realized by eligible sellers when they sold their vehicles. That Johnson and some others were not made whole by it does not render the benefit amount unreasonable,16 much less demonstrate that it was necessarily the product of inadequate representation of the sellers. See Molski, 318 F.3d at 955 (representation held inadequate because “the consent decree released almost all of the absent class members’ claims with little or no compensation“).
Moreover, the restitution payments overall more closely resemble compensatory damages awards or penalty payments, as they are for most class members an amount of money over and above the economic value of any fix or buyback. It was therefore sensible that Volkswagen should be required to pay that “bonus” amount only once per car. The fact that eligible sellers “split” the restitution payment with eligible new owners is thus fully explicable, and does not alter our analysis, demonstrate unfairness to eligible sellers, or otherwise reveal an intra-class conflict.
In sum, the eligible sellers benefitted from being in the class alongside vehicle owners. We see no signs of an “improper conflict of interest . . . which would deny absent class members adequate representation.” Hanlon, 150 F.3d
at 1021. There was no abuse of discretion in certifying the class.17
II. The settlement
We turn now to the settlement itself. Judicial review of class settlements is replete with contrasts. The district court must undertake a stringent review, “explor[ing] comprehensively all factors, and . . . giv[ing] a reasoned response to all non-frivolous objections,” Dennis v. Kellogg Co., 697 F.3d 858, 864 (9th Cir. 2012) (citation and quotation marks omitted), whereas our own review of the district court‘s reasoning is “extremely limited“; we reverse “only upon a strong showing that the district court‘s decision was a clear abuse of discretion.” Hanlon, 150 F.3d at 1026, 1027 (citation and quotation marks omitted). In another dichotomy, “we hold district courts to a high[] procedural standard” in their review of a settlement, Allen v. Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015), but we “rarely overturn an approval of a class action consent decree on appellate review for substantive reasons.” Staton, 327 F.3d at 960 (emphasis
This settlement is highly unusual. Most class members’ compensation—buybacks, fixes, or lease terminations plus some cash—is as much as, perhaps more than, they could expect to receive in a successful suit litigated to judgment. And not just some of them: the $10.033 billion set aside would fund the most expensive remedy option for every single class member. Class members did not loiter in claiming these benefits. By the time these appeals were briefed, Volkswagen had paid out or committed to pay over $7 billion. And according to the last report from the court-appointed independent claims supervisor, by May 2018 Volkswagen had fixed or removed from the road 85.8% of all affected vehicles; paid out $7.4 billion to over 350,000 class members; and paid out or committed $8.1 billion to almost 450,000 class members. Terming the settlement a “compromise” of claims, although true of most class action settlements, is largely inapt here. The district court so noted, stating that the class members generally “are made whole” by the settlement.
Not surprisingly given the scope of the remedies afforded, most of the objections to the settlement are in some sense procedural: the district court did not sufficiently examine the settlement for signs of collusion between the defendants and class counsel; or misinterpreted what signs of collusion there were; or failed to respond specifically to an objection; or did not give class members a real shot to respond to class counsel‘s fee motion. In considering these objections, we keep in mind that the fundamental issue before the district court was whether the proposed settlement is “fair, reasonable, and adequate.”
A. Review of class settlements
A proposed settlement that is “fair, adequate and free from collusion” will pass judicial muster. Hanlon, 150 F.3d at 1027. The inquiry is not a casual one; the uncommon risks posed by class action settlements demand serious review by the district court. An entire jurisprudence has grown up around the need to protect class members—who often lack the ability, positioning, or incentive to monitor negotiations between class counsel and settling defendants—from the danger of a collusive settlement. See, e.g., Staton, 327 F.3d at 959–60; In re Bluetooth, 654 F.3d at 946–47; Mirfasihi v. Fleet Mortg. Corp., 356 F.3d 781, 785 (7th Cir. 2004). Because of “the inherent tensions among class representation, defendant‘s interests in minimizing the cost of the total settlement package, and class counsel‘s interest in fees,” Staton, 327 F.3d at 972 n.22, we impose upon district courts “a fiduciary duty to look after the interests of . . . absent class members,” Allen, 787 F.3d at 1223.
At the same time, there are few, if any, hard-and-fast rules about what makes a settlement “fair” or “reasonable.” We have identified a lengthy but non-exhaustive list of factors that a district court may consider when weighing a proposed settlement.18 When, as here, the settlement was negotiated before the district court certified the class, “there is an even greater
For all these factors, considerations, “subtle signs,” and red flags, however, the underlying question remains this: Is the settlement fair? The factors and warning signs identified in Hanlon, Staton, In re Bluetooth, and other cases are useful, but in the end are just guideposts. “The relative degree of importance to be attached to any particular factor will depend upon . . . the unique facts and circumstances presented by each individual case.” Officers for Justice, 688 F.2d at 625. Deciding whether a settlement is fair is ultimately “an amalgam of delicate balancing, gross approximations and rough justice,” id. (citation omitted), best left to the district judge, who has or can develop a firsthand grasp of the claims, the class, the evidence, and the course of the proceedings—the whole gestalt of the case. Accordingly, “the decision to approve or reject a settlement is committed to the sound discretion of the trial judge.” Hanlon, 150 F.3d at 1026. “As a practical matter we will rarely overturn an approval of a class action consent decree on appellate review for substantive reasons unless the terms of the agreement contain convincing indications that the incentives favoring pursuit of self-interest rather than the class‘s interests in fact influenced the outcome of the negotiations and that the district court was wrong in concluding otherwise.” Staton, 327 F.3d at 960.
With these principles in mind, we turn to the objections.
B. The district court‘s examination of signs of possible collusion
The sole substantive objection before us to the terms of the settlement centers on its so-called “reversion clause.” Under the settlement, money not paid out from the $10.033 billion settlement pool will revert to Volkswagen. According to one objector, the potential for reversion makes it impossible to know the true value of the settlement to the class, and creates perverse incentives for Volkswagen to discourage participation in the settlement.
A “kicker” or reversion clause directs unclaimed portions of a settlement fund, or in some cases money set aside for attorneys’ fees but not awarded by the court, to be paid back to the defendant. See In re Bluetooth, 654 F.3d at 947; Mirfasihi, 356 F.3d at 783. A reversion can benefit both defendants and class counsel, and thus raise the specter of their collusion, by (1) reducing the actual amount defendants are on the hook for, especially if the individual claims are relatively low-value, or the cost of claiming benefits relatively high; and (2) giving counsel an inflated common fund value against which to base a fee motion.20 See Allen, 787 F.3d at 1224 & n.4. Given these possibilities, a reversion clause can be a tipoff that “class counsel have allowed pursuit of their own self-interests and that of certain class members to infect the negotiations.” In re Bluetooth, 654 F.3d at 947.
But reversion clauses can also have perfectly benign purposes and impacts, and so are not per se forbidden. Rather, to exercise its discretion appropriately, a district court must explain why the reversionary component of a settlement negotiated before certification is consistent with proper dealing by class counsel and defendants. See id. at 950.
The district court adequately explained why the reversion here raises no specter of collusion. First, as the district court noted, Volkswagen has every incentive to “to buy back or fix as many Eligible Vehicles as possible.” Under the terms of the DOJ consent decree, if Volkswagen fails to fix or remove from the road 85% of the affected vehicles, it will be fined $85 million for each percentage point it comes up short. Second, from a class member‘s perspective, the benefits available are quite substantial, worth at least thousands of dollars, and in some cases more, to each class member. Given the amounts at stake, there is little chance class members will forego the benefits because of the effort of lodging a claim. Indeed, we needn‘t speculate as to participation. As of the date of the fairness hearing, 336,000 class members (of 490,000 total) had already registered to claim settlement benefits, and the numbers have only grown.
The incentives for class members to participate in the settlement, the complementary inducement for Volkswagen to encourage them to participate, the value of the claims, and the actual trend in class member participation all indicate that the reversion clause did not, in design or in effect, allow VW to recoup a large fraction of the funding pool.21
The district court did not abuse its discretion in determining that the reversion clause was a reasonable provision in this settlement, given the incentives to the class to claim quite substantial benefits, and was in no way a sign of collusion or unfairness. See Allen, 787 F.3d at 1225.22
C. The district court‘s obligation to respond to every objection
One objector finds fault in the district court‘s failure to respond specifically to her objection to the settlement.
“To survive appellate review, the district court must show it has explored comprehensively all factors, and must give a reasoned response to all non-frivolous objections.” Dennis, 697 F.3d at 864 (citations and quotation marks omitted). That “procedural burden” on the district court helps to ensure the substantive
Class member Marcia Weese objected to the settlement on two grounds relevant here. First, she maintained that different claims-processing procedures for class members with liens on their vehicles meant that
As a threshold matter, even assuming Weese‘s arguments were “non-frivolous,” Dennis, 697 F.3d at 864, we would be reluctant in the extreme, on the procedural ground raised, to upset a settlement—especially one of such overall benefit to the class—that otherwise evinced no signs of collusion, unfairness, or irregularity. See Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1378–79 (9th Cir. 1993). That is all the more true here because the objector‘s complaint appears to be purely technical—it draws no link between the district court‘s supposed oversight and any substantive deficiency in the settlement. By so noting, we are not suggesting a harmless error standard for class action settlement review or otherwise disparaging the importance of procedural rigor in the review of such settlements. We merely emphasize that a reviewing court is concerned with the overall adequacy of the district court‘s fairness determination, not with parliamentary points of order about its process.
In any event, Weese‘s objections were frivolous, and so did not demand a response from the district court. In three sentences, she argues that additional claims-processing steps for class members with liens create individualized questions of law or fact that defeat predominance under
Again contrary to Weese‘s objection, the long-form notice to class members makes eminently clear how outstanding loans impact a class member‘s compensation. As the notice explains, the settlement provides additional compensation to class members with outstanding loans, over and above buyback value, to help them clean up title and deliver their vehicles to Volkswagen. The challenge to the notice was thus frivolous.24
Because Weese‘s arguments entirely lacked merit, the district court was not obligated to respond. See Dennis, 697 F.3d at 864.
Objections were raised with regard to both the timing and notice of class counsel‘s fee application.
Challenges to the notice and timing of fees under
i. The timing of objections to class counsel‘s fee motion
Several objectors contend that the district court misapplied
A court may award reasonable attorneys’ fees in a certified class action.
In In re Mercury, class members received notice describing the terms of the settlement and informing them that class counsel would seek 25% of the nine-figure settlement sum—almost $30 million—in fees. Id. at 991. The district court set a deadline for class members to object to the settlement and the “application” for attorneys’ fees. Id. But class counsel‘s actual fee application was not filed until two weeks after that deadline. Id. at 990–91. We concluded that
But
In sum, approving a settlement before class counsel has filed a fee motion does not violate
Here, the district court gave class members six weeks to object to class counsel‘s completed fee motion, and several of them did so.28 That period of time was more than enough for class members to “object to the motion.”
ii. Notice of class counsel‘s fee motion
Relatedly, two objectors argue that the district court erred by not ensuring
We do not reach this objection. No matter how construed, it is a challenge to the fee award, not to the district court‘s order approving the settlement. Unlike the
E. Remaining objections
The last objector, Ronald Clark Fleshman, Jr., asks that we overturn the district court‘s approval of the settlement because it unfairly exposes some class members to future liability under the Clean Air Act, and because it assertedly permits the ongoing unlawful use of unmodified Volkswagens.
We discussed these same arguments at length in our opinion affirming the district court‘s denial of Fleshman‘s attempted intervention in the United States’ enforcement action. See In re VW “Clean Diesel” Mktg., Sales Practices & Prods. Liab. Litig., No. 16-17060 (9th Cir. July 3, 2018). In a nutshell, Fleshman contended there, and maintains here, that under a proper reading of the Clean Air Act and its state-level implementations, it is unlawful to drive or resell an unmodified Volkswagen with a defeat device. Because the settlement allows class members to wait for an approved emissions modification—and drive their vehicles in the meantime—and because class members can decline to participate in the settlement and continue to drive their unmodified vehicles as long as they wish, the settlement permits ongoing illegal conduct. That conduct could, Fleshman maintains, expose hundreds of thousands of class members to criminal or civil liability, as well as to the possibility that their vehicles will be confiscated. At that point, Fleshman represents, the class members’ claims against Volkswagen will have been released by the settlement agreement. That concatenation of risks, and the settlement notice‘s failure to advise class members of them, says Fleshman, renders the settlement unfair and unreasonable.
That argument did not persuade us in Fleshman‘s last appeal, and it does not persuade us here. Leaving to one side whether his interpretation of the Clean Air Act is correct, his central premise—that class members may be subjected to a civil or criminal sanction for driving unmodified Volkswagens—is wholly speculative. As the district court noted, the EPA and the vast majority of states have stated unequivocally that they will permit unmodified vehicles to stay on the road, and none has specifically declared them illegal to drive. Because the risks and dangers
* * * *
Again, the district court‘s task in reviewing a settlement is to make sure it is “not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” Officers for Justice, 688 F.2d at 625. Our thorough consideration of the objections before us does not betoken any doubts on our part that the district court considered the proper factors, asked the correct questions, and did not abuse its discretion in approving this settlement. Except as noted—with respect to the reversion provision—these appeals did not directly challenge the substantive fairness of the settlement, and we therefore had no reason to comment upon it directly other than as to that provision. We do note that the settlement delivered tangible, substantial benefits to class members, seemingly the equivalent of—or superior to—those obtainable after successful litigation, and was arrived at after a momentous effort by the parties, the settlement master, and the district court. The district court more than discharged its duty in ensuring that the settlement was fair and adequate to the class. We affirm its order approving the settlement.
III. Belated opt-out
In her related appeal, Tori Partl challenges the district court‘s denial of her motion to opt out of the settlement class after the deadline to do so had passed. Discerning no abuse of discretion, we affirm.
A. Facts
Partl sued Volkswagen in 2013 for problems related to water leaks and “abnormal noises” in her vehicle. On August 7, 2016, Partl received an email regarding the class action settlement. The email included a link to the settlement webpage. Partl forwarded the email, along with the 32-page long-form settlement notice available at the settlement website, to her attorney. The relevant portions of the settlement notice read:
2. How do I claim Class Action Settlement benefits?
To claim Class Action Settlement benefits, you will need to make a claim online at www.VWCourtSettlement.com, or by mail or fax, as the Claims Supervisor provides.
. . .
50. How do I get out of the Class Action Settlement?
If you do not want to receive benefits from the Class Action Settlement, and you want to retain the right to sue Volkswagen about the legal issues in this case, then you must take steps to remove yourself from the Class Action Settlement. You may do this by asking to be excluded—sometimes referred to as “opting out” of—the Class Action Settlement. To do so, you must mail a letter or other written document to the Court-Appointed claims supervisor.
. . .
You must mail your exclusion request, postmarked no later than September 16, 2016, to Opt Out VW Settlement, P.O. Box 57424, Washington, DC 20037 (emphasis added).
Partl and her lawyer spoke by phone later that day and agreed that Partl would opt out of the settlement. After their conversation, Partl returned to the settlement website and completed what she believed were all the steps needed to opt out of the settlement. The deadline to opt out—September 16, 2016—came and went. On September 30, Partl learned at a mediation session in her state-court action that she had missed the deadline. Following that discovery, her lawyer undertook the necessary steps to be admitted pro hac vice in the MDL court so he could attempt to remedy the situation. Finally, on October 17, 2016—one month after the deadline had passed—Partl filed her belated motion to opt out of the settlement.
The district court denied her motion, noting that the long-form settlement notice “clearly provide[d]” that to opt out, class members had to mail in their notices of exclusion by September 16, 2016. The court held that Partl had actual notice of the correct procedure to exclude herself from the class. She seemingly misunderstood clear directions. Such a mistake does not constitute excusable neglect or good cause.
B. Discussion
A court may, in cases of “excusable neglect,” extend the time in which a class member may opt out of a settlement. See
The district court did not abuse its discretion in refusing to grant Partl‘s opt-out request. Properly identifying Silber as governing the excusable neglect inquiry in this context, the court zeroed in on the two Silber factors most relevant here: whether Partl received notice, and who was responsible for the delay. See id. Weighing them, the court concluded Partl‘s neglect was not excusable because (1) she had actual and timely notice of the proper method of excluding herself from the settlement; and (2) she was therefore herself squarely responsible for the failure to opt out on time. That conclusion is reasonable, supported by the record, and grounded in the relevant legal standard. Cf. Kyle v. Campbell Soup Co., 28 F.3d 928, 932 (9th Cir. 1994) (attorney‘s two-day-late filing caused by a mistake in interpreting the court‘s “nonambiguous” local rules was not excusable
CONCLUSION
The district court did not abuse its discretion in certifying the class, approving the settlement, or denying Tori Partl‘s motion to opt out of the settlement. Its judgments are AFFIRMED.