Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 1 of 25 Page ID #:7421 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 Case No. CV-12-08388 AB (FFMx) OMAR VARGAS, et al., 11 Plaintiffs, 12 13 14 ORDER GRANTING RENEWED MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT v. FORD MOTOR COMPANY, 15 Defendant. 16 Before the Court is Plaintiffs’ unopposed Renewed Motion for Final Approval 17 18 of Class Action Settlement (“Motion,” Dkt. No. 297). The Motion was heard on 19 February 28, 2020. For the following reasons, the Motion is GRANTED. 20 21 22 I. BACKGROUND A. Factual and Procedural Background In this class action, Plaintiffs allege that Ford Motor Company (“Ford”) 23 manufactured, marketed, and sold them vehicles equipped with an alleged undisclosed 24 defect in the DPS6 or dual clutch PowerShift automatic transmission 25 (“Transmission”) that caused the vehicles slip, buck, jerk, and suffer sudden or 26 delayed acceleration and delays in downshifts. See Compl. Plaintiffs alleged that 27 nearly 1.5 million vehicles were equipped with the allegedly defective Transmission, 28 and there are nearly 2 million class members. Following the consolidation of similar 1. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 2 of 25 Page ID #:7422 1 cases with Vargas—Klipfel v. Ford Motor Co., No. 2:15-cv-02140-AB (C.D. Cal.), 2 Cusick v. Ford Motor Company, Case No. 2:15-cv-08831-AB (C.D. Cal.), and 3 Anderson v. Ford Motor Co., No. 1:16-cv-01632 (N.D. Ill.)—the First Amended 4 Complaint in Cusick was deemed the operative complaint. See First Amended 5 Complaint (“FAC,” Dkt. No. 118). The FAC asserted 18 claims under various states’ 6 consumer protection laws1; claims for breach of express and implied warranty under 7 the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., (“MMWA”), and under 8 state warranty law; and fraud and related claims. The FAC sought damages and 9 injunctive relief. See generally FAC. 10 Plaintiffs extensively investigated their claims, consulted with automotive 11 experts, and propounded discovery on Ford that yielded 1.5 million documents and on 12 Ford’s third-party vendors that yielded tens of thousands of documents. See Wu Decl. 13 (Dkt. No. 279-1) ¶¶ 9, 10. Plaintiffs also deposed key witnesses from Ford and third- 14 party vendor Getrag. Paul Decl. (Dkt. No. 279-2) ¶¶ 7-11. Plaintiffs also fielded 15 contacts from tens of thousands of class members to report problems with their 16 vehicles and seek relief, incorporating these complaints into their plans for litigation 17 and settlement. Wu Decl. ¶ 9. 18 Beginning in August 2015, the parties worked with Professor Eric D. Green of 19 Resolutions LLC over the course of four mediation sessions to negotiate a settlement. 20 Dr. Green is considered one of the top mediators in the automotive defects field. The 21 terms of relief for the class were negotiated in the first three sessions, and only after 22 those terms were confirmed did the parties participate in a fourth mediation session 23 with Dr. Green focused solely on the issues of attorneys’ fees, costs, and service 24 awards. Wu Decl. ¶¶15-16. Thereafter, the Court granted a motion for preliminary 25 approval, preliminarily certifying the class under Fed. R. Civ. P. (“Rule”) 23(b)(3), 26 27 28 1 Claims were filed under the laws of Arizona, California, Colorado, Illinois, New Jersey, New York, Oregon, Pennsylvania, and Washington. 2. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 3 of 25 Page ID #:7423 1 finding that the class settlement’s terms were fair, reasonable and adequate such that 2 preliminary approval was warranted, approving the proposed form and plan of notice, 3 and appointing Capstone Law APC, Berger & Montague, P.C., and Zimmerman Law 4 Offices, P.C., as Class Counsel and designating Capstone as Lead Class Counsel. 5 (Dkt. No. 133.) Thereafter, the approved class notice plan was executed. See Wyatt 6 Decl. (Dkt. No. 279-4) ¶¶ 3-16. As of the opt-out deadline, about 10,350 class 7 members validly opted out, and fifteen members timely objected. Wu Decl. ¶¶ 22, 23. 8 Plaintiffs then moved for final approval of the settlement, and for attorneys’ 9 fees, costs, and service awards. See Dkt. Nos. 150, 146. After a several-hour hearing, 10 the Court issued an Order granting final approval, overruling the objections, awarding 11 Plaintiffs their fees, costs, and incentive awards, and entered judgment. See Orders at 12 Dkt. Nos. 192, 193, 196. The Lott Objectors and objector Jason DeBolt appealed. The 13 Ninth Circuit found that the Order approving the settlement omitted certain elements 14 of the necessary analysis, and vacated it and remanded for further proceedings. 15 Following the Ninth Circuit decision, Plaintiffs, Ford, the Lott Objectors, and 16 objector DeBolt engaged in further mediation with the assistance of Dr. Green and 17 agreed to significant additional class benefits that address the objections. The instant 18 Renewed Motion for Final Approval of the Amended Settlement Agreement (Dkt. No. 19 279), as did Notices from the Lott Objectors and objector DeBolt withdrawing their 20 objections. See Notices Withdrawing Objections (Dkt. Nos. 285, 287.) 21 22 B. Material Terms of the Settlement Agreement The Settlement Agreement (“Settlement” or “Settlement Agreement”) consists 23 of the original Settlement Agreement and the Amendment thereto. See Wu Decl. ¶¶ 2, 24 3; Exs. 1, 2 (original Settlement Agreement (“Sett. Agmt.”) and Amendment), Suppl. 25 Wu Decl. (Dkt. No. 281) Ex. 6 (fully-executed Amendment). The primary benefits of 26 the Settlement are Cash Payments and a Repurchase/Arbitration program. The 27 28 3. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 4 of 25 Page ID #:7424 1 material terms and features of the Settlement are as follows2: 2 Cash Payments for service visits guaranteed at $30 million. The Settlement 3 provides cash payments to Class Members who have had three or more qualifying 4 Service Visits to authorized Ford dealers. The purpose of this benefit is to compensate 5 Class Members for the inconvenience associated with having to get their vehicles 6 repeatedly serviced due to Transmissions problems. There are three subcategories of 7 the cash payment benefit. First, Class Members who have made three or more visits to 8 authorized Ford dealers (“Service Visits”) to replace certain Transmission components 9 (“Transmission Hardware Replacements”) are entitled to either a cash payment or a 10 discount certificate, valued at twice the amount of the cash payment, toward the 11 purchase or lease of a new Ford vehicle. (Sett. Agmt. ¶ II.C.) Payments start with 12 $200 for the third Service Visit, an additional $275 for the next Service Visit, and an 13 additional $350 after that, and so on, up to a cumulative $2,325 after the eighth Visit. 14 Second, Class Members who do not qualify for Transmission Hardware Replacement 15 payments may qualify to receive compensation for multiple updates of the 16 Transmission Control Module (“Software Flashes), starting with the third, which 17 entitles them to cash payments of $50 for each, up to $600, performed within the same 18 7 year/100,000 mile limitation. (Sett. Agmt. ¶ II.B.) Third, Class Members who 19 complained about Transmission problems but were denied repairs by a Ford Dealer 20 may receive $20 cash by attesting to those facts under penalty of perjury. 21 (Amendment ¶ 8.) This will provide relief to Class Members who have reported being 22 denied repairs by a Ford Dealer. For these payments, Ford has guaranteed a minimum 23 net payout of $30 million. (Amendment ¶ 9.) The last date to submit claims is October 24 21, 2024. If the total payout after that is less than $30 million, Ford will distribute the 25 entire residue, on a per capita basis, to all Class Members who have received cash 26 payments or benefits following a notice of intent to arbitrate, and thereafter any 27 28 2 This summary is adapted from the memorandum filed in support of the motion. 4. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 5 of 25 Page ID #:7425 1 unclaimed residue will be distributed to a cy pres beneficiary to ensure that nothing 2 reverts to Ford. 3 Repurchases Through the Arbitration Program. Class Members may obtain a 4 Repurchase of their Class Vehicles if they qualify under their state’s lemon law or 5 under a Settlement-created fall back standard. (Sett. Agmt. ¶ II.N.) For Claimants who 6 prevail, Ford refunds the actual amount that the Class Member paid for the vehicle 7 including finance charges, less a reasonable allowance for use. For leased vehicles, 8 Ford refunds the payments made, less a reasonable allowance for use. The Repurchase 9 remedy is awarded through an Arbitration Program that enhances Class Members’ 10 rights in several ways. First, the Program resolves Class Members’ lemon law claims 11 within two or three months of submission, rather than the year or more for state court 12 lemon law suits. Second, the Program extends the applicable statute of limitations, 13 preserving claims for six years from the date of original sale or six months of the 14 Effective Date of the Settlement, whichever is later for both current and former 15 owner/lessees. (Id. ¶ II.N.1.d.; Amendment ¶ 12.) 16 Claims for Repurchase will be governed either by the state lemon law 17 applicable to each Class Member or, if the claims do not qualify under state lemon 18 law, by the Settlement’s consumer-friendly fallback standard under which the 19 Arbitrator may award a repurchase if 4 or more Transmission Hardware Replacements 20 were performed within 5 years/60,000 miles, and the vehicle continues to malfunction. 21 (Sett. Agmt. ¶ II.N.1.e.) This is more generous to consumers than most state lemon 22 laws. Ford will pay a maximum of $6,000 in attorneys’ fees to each Class Member 23 who prevails on his or her claim in arbitration. (Id. ¶ II.N.1.h.) And, Class Members 24 can appeal an adverse decision to a JAMS arbitrator, while Ford has no right to appeal 25 except for an award of civil penalties. (Id. ¶ II.N.1.g.) 26 The Amendment removes several prior limitations on Repurchases. First, it 27 eliminated the original Settlement’s requirement allowing Ford to perform one final 28 repair attempt after receiving a notice of intent to arbitrate from a Claimant with three 5. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 6 of 25 Page ID #:7426 1 or fewer repair attempts. (Amendment ¶ 10.) Second, it permits Class Members to 2 recover civil penalties not to exceed the amount of the Repurchase award, if (a) their 3 state’s law authorizes civil penalties, (b) Ford knew of its obligation under state law or 4 the Settlement Agreement, as amended, to repurchase the vehicle, and (c) prior to the 5 arbitrator’s award, Ford declined to repurchase after being provided with the 6 Claimant’s notice of intent to proceed to arbitration under the Settlement Agreement. 7 (Id. ¶ 15.) Third, the identical statute of limitations period extension for current 8 owners/lessees will be extended to former owners/lessees. (Id. ¶ 12.) Fourth, a former 9 owner/lessee may obtain a Repurchase award if they meet the Settlement’s fallback 10 standard, even if her state’s lemon law does not allow repurchase for former 11 owners/lessees. (Id. ¶ 11.) 12 Due to the Settlement’s consumer-friendly rules and speed of resolution, most 13 Class Members would do better under the Arbitration Program rather than in court. As 14 of the end of 2019, Ford had paid $47.4 million to Class Members to repurchase 15 approximately 2,666 vehicles under the Settlement’s Repurchase remedy. See Barron 16 Decl. (Dkt. No. 279-3) ¶ 3. 17 Ford Must Perform Repairs or Reimburse Class Members Through the 18 Arbitration Program. Class Members who have incurred out-of-pocket expenses for 19 repairs they believe should have been covered by Ford’s New Vehicle Limited 20 Warranty (“Warranty”) or who believe that a Ford dealer improperly denied Warranty 21 repairs are eligible to pursue their claims in a qualified version of the Program 22 (“Warranty Arbitration”). (Sett. Agmt. ¶ II.N.2.) Ford will pay the costs of each 23 Warranty Arbitration, and the Arbitrator is authorized to award reimbursement, a free 24 repair, an extension of warranty by Ford, or any combination thereof. 25 Reimbursements for Clutch Replacement. Class Members who own or lease a 26 Class Vehicle manufactured after June 5, 2013, and who had two clutches replaced 27 during the 5-year/60,000-mile Powertrain Warranty, are entitled to reimbursement for 28 out-of-pocket costs for a third clutch replacement made within 7 years/100,000 miles 6. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 7 of 25 Page ID #:7427 1 from delivery to the first retail customer. (Sett. Agmt. ¶ II.G.) The replacement clutch 2 will also be covered by a two-year warranty. Ford’s Customer Satisfaction Program 3 19N08, issued in August 2019, improves on this provision. Under Program 19N08 and 4 the previously issued Program 14M01, the clutches on most if not all Class Vehicles 5 are covered by an extended warranty of 7 years/100,000 miles. 6 Ongoing Claims Process Open to Class Members for Years. The Settlement 7 requires Class Members to submit documentation typically required to substantiate 8 such claims. (Sett. Agmt. ¶ II.E.) Except for the sworn declaration payment, Class 9 Members need only provide (either electronically through the Claims Administrator’s 10 website portal or by mail) a receipt, repair order, or other invoice containing standard 11 information, (e.g., repair date, a description of the vehicle, the dealership or facility 12 where the work was performed, the vehicle’ mileage at the time of repair, an itemized 13 list of parts and labor), along with proof of ownership and a sworn written statement 14 attesting to the authenticity of the documents provided. (Id.) Subsequent claims for 15 cash payments will have a reduced standard for proof, as the Claims Administrator 16 will retain previous submissions. (Id. ¶ II.E.4.) For those who were denied repairs and 17 therefore cannot document Service Visits, the Amended Settlement provides a cash 18 payment of $20, if the Class Member attests to those facts. (Amendment ¶ 8.) 19 Claims can be submitted through the Settlement website. A portal will walk 20 Class Members through a series of prompts and fields in which to provide the 21 information required. The site provides clear instructions, and the portal permits Class 22 Members to upload scanned documents supporting their claims. 23 Ford will pay the Claims Administrator to process Class Members’ claims 24 expeditiously following the Effective Date. (Sett. Agmt. ¶ II.O.) Class Members who 25 are entitled to a cash payment or Certificate will be paid promptly following the claim 26 submission or after the Effective Date, whichever is later. (Id.) The Claims 27 Administrator’s duties will continue for many years due to the ongoing claims 28 process. So long as a Service Visit for a Transmission Hardware Replacement or 7. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 8 of 25 Page ID #:7428 1 Software Flash is made within the 7 year/100,000 mile period of eligibility, the Class 2 Member may continue to submit claims for qualifying Service Visits made after the 3 Effective Date. Class Members will have up to 180 days from the qualifying visit to 4 submit such claims. Some Class Members may have up to October 2024 to submit a 5 claim for cash payments. 6 The Program is also streamlined. A Class Member initiates the process by 7 calling a dedicated phone number or by submitting a form through the Settlement 8 website or by mail, indicating directly to Ford his or her intent to submit a claim for 9 repurchase or breach of warranty. (Sett. Agmt. ¶ II.N.1.) Ford will then have ten days 10 to resolve the matter informally with the Class Member. (Id.) After that, the Class 11 Member may proceed directly to arbitration. 12 The Limited Release. The Settlement specifically excludes from the Settlement 13 Class consumers with suits related to the Transmission pending as of July 14, 2017, 14 while giving them the choice to opt-in to the Settlement. (Sett. Agmt. ¶¶ I.L.) In 15 addition, while Class Members do not release personal injury and property claims 16 under the Settlement, they will release claims that were or could have been asserted by 17 them in connection with the Alleged Transmission Defect. (Id. ¶ I.CC.) 18 Ford’s Payment of Claims Administration Costs, Attorneys’ Fees and Costs, 19 and Service Payments. Ford will pay the Claims Administration costs, including the 20 Arbitration Administrator’s costs, attorneys’ fees and costs, and service awards to the 21 Class Representatives. (Sett. Agmt. ¶¶ II.N., II.P, III.C.) 22 II. 23 LEGAL STANDARD Federal Rule of Civil Procedure 23 provides that “the claims, issues, or 24 defenses of a certified class may be settled . . . only with the court’s approval.” Fed. R. 25 Civ. P. 23(e). “The primary concern of [Rule 23(e) ] is the protection of th[e] class 26 members, including the named plaintiffs, whose rights may not have been given due 27 regard by the negotiating parties.” Officers for Justice v. Civil Serv. Comm’n of City & 28 Cnty. of S.F., 688 F.2d 615, 624 (9th Cir. 1982), cert. denied, 459 U.S. 1217, 103 8. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 9 of 25 Page ID #:7429 1 S.Ct. 1219, 75 L.Ed.2d 456 (1983). Whether to approve a class action settlement is 2 “committed to the sound discretion of the trial judge[,]” Class Plaintiffs v. City of 3 Seattle, 955 F.2d 1268, 1276 (9th Cir.), cert. denied, 506 U.S. 953, 113 S.Ct. 408, 121 4 L.Ed.2d 333 (1992), who must examine the settlement for “overall fairness.” Hanlon 5 v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). Neither district courts nor 6 appellate courts “have the ability to delete, modify or substitute certain provisions. 7 The settlement must stand or fall in its entirety.” Id. (internal quotation marks and 8 citation omitted). 9 A court deciding whether to approve a class action settlement must conduct a 10 four-step inquiry. First, the court must assess whether defendants have met the notice 11 requirements under the Class Action Fairness Act (“CAFA”). See 28 U.S.C. § 12 1715(b), (d). Second, the court must determine whether the notice requirements of 13 Rule 23(c)(2)(B) have been satisfied. Third, the court must determine whether the 14 class satisfies Rule 23. And where, as here, the parties reached a settlement before any 15 class was certified, the court must pay “ ‘undiluted, even heightened, attention’ ” to 16 class certification requirements that protect absent class members. Hanlon, 150 F.3d at 17 1019 (citing Amchem Products, Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 2248, 18 138 L.Ed.2d 689 (1997) (“Amchem”). Finally, the court must conduct a hearing to 19 determine whether the settlement agreement is “fair, reasonable, and adequate.” See 20 Fed. R. Civ. P. 23(e)(2); Staton v. Boeing Co., 327 F.3d 938, 959 (9th Cir. 2003) 21 (discussing the Rule 23(e)(2) standard). 22 23 A. CAFA Notice Requirements are Satisfied. CAFA requires “[n]ot later than 10 days after a proposed settlement of a class 24 action is filed in court, each defendant that is participating in the proposed settlement 25 shall serve [notice of the proposed settlement] upon the appropriate State official of 26 each State in which a class member resides and the appropriate Federal official.” 28 27 U.S.C. § 1715(b). Here, on April 3, 2017, 10 days after the filing of Plaintiffs’ Motion 28 for Preliminary Approval, the Claims Administrator Kurtzman Carson Consultants 9. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 10 of 25 Page ID #:7430 1 (“KCC”) timely and properly sent notices to the Attorney General of the United States 2 and the attorneys general of all 50 states and the relevant U.S. territories and districts, 3 informing them of the proposed Settlement. (Wyatt Decl. ¶ 3.) No governmental 4 authority has objected to the Settlement. See In re Linkedin User Privacy Litig., 309 5 F.R.D. 573, 589 (N.D. Cal. 2015) ( “CAFA presumes that, once put on notice, state or 6 federal officials will raise any concerns that they may have during the normal course 7 of the class action settlement procedures.”). This requirement is satisfied. 8 B. Rule 23(c) Notice Requirements Are Satisfied. 9 Class actions brought under Rule 23(b)(3) must satisfy the notice provisions of 10 Rule 23(c)(2), and upon settlement of a class action, “[t]he court must direct notice in 11 a reasonable manner to all class members who would be bound by the proposal.” Fed. 12 R. Civ. P. 23(e)(1). Rule 23(c)(2) prescribes the “best notice that is practicable under 13 the circumstances, including individual notice” of particular information. Fed. R. Civ. 14 P. 23(c)(2)(B) (enumerating notice requirements for classes certified under Rule 15 23(b)(3)). 16 The Settlement proposed a notice procedure and forms, see Sett. Agmt. III.C., 17 which the Court preliminarily approved as satisfying Rule 23(c). In brief, Ford was to 18 pay for KCC to mail a court-approved Short-Form Class Notice to all class members. 19 KCC was also to establish and maintain a website where the approved Long-Form 20 Notice was to be posted, and arrange for publication notice in USA Today. 21 Project manager Kathleen Wyatt submitted a declaration detailing KCC’s 22 efforts to implement this notice plan. See Wyatt Decl. ¶¶ 4-16. KCC mailed over 2.15 23 million Short Form Notices, 129,996 were returned as undeliverable, and after running 24 additional searches KCC re-mailed 87,342 class notices. Id. ¶16. In addition, the 25 website providing additional notice and information, and serving as the primary 26 claims portal, was established. In light of the unchallenged representations in the 27 Wyatt Declaration, the Court finds that the court-approved notice plan was effectively 28 implemented and that it satisfies Rule 23(c). 10. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 11 of 25 Page ID #:7431 1 Because the Amendment to the Settlement Agreement only increases the 2 benefits available to the class, with no reduction in benefits, no new notice to the 3 Class is required. See In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales 4 Practices, & Prod. Liab. Litig., No. 810ML02151JVSFMOX, 2013 WL 12327929, at 5 *12 n.15 (C.D. Cal. July 24, 2013) (“Where the benefit to the class is increased by 6 changes to proposed class action settlements, courts have held that supplemental direct 7 notice to the class is not required. … This is so because an increase to a class 8 member's recovery is not the type of change that would cause a class member to 9 request exclusion from the class settlement.”). Nevertheless, the parties agreed to mail 10 within 14 days of the effective date of the Settlement an additional postcard notice to 11 class members to inform them that the Settlement has been amended with 12 improvements, and directing them to further information on the website. The Court 13 will order the parties to undertake this step. 14 C. Class Certification Requirements are Met. 15 A class may be certified if it satisfies all of the prerequisites of Rule 23(a) and 16 is one of the types of class actions defined in Rule 23(b). Plaintiffs seek to certify the 17 following class under Rule 23(b)(3): 18 All current residents of the United States (including territories of the United 19 States) who, prior to the Preliminary Approval Order, purchased or leased 20 new or used Class Vehicles that (1) were originally sold in the United States 21 (including territories of the United States) and (2) were equipped with the 22 PowerShift Transmission. 23 Sett. Agmt. I(L) (defining the class, subject to routine exceptions). The Court finds 24 that this class satisfies Rules 23(a) and (b)(3) for settlement purposes only. 25 First the Rule 23(a) prerequisites of (1) numerosity, (2) commonality, (3) 26 typicality, and (4) adequacy of representation are plainly met in this case. Numerosity 27 is satisfied because there are over 1 million members in the class, so their joinder is 28 impracticable. Commonality is satisfied because all class members took possession of 11. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 12 of 25 Page ID #:7432 1 a class vehicle that had the undisclosed alleged defect. The derivative factual and legal 2 questions—for example, whether the transmission is defective, when and whether 3 Ford knew of the alleged defect, what Ford’s legal obligations were—are also 4 common to all class members. Typicality is also satisfied because the Plaintiffs’ and 5 absent class members’ claims all arise from the same alleged conduct on Ford’s part: 6 its manufacture and sale of a defective product. As such, the Plaintiffs’ and the absent 7 class members’ claims are sufficiently co-extensive to satisfy the typicality 8 requirement. See Hanlon, 150 F.3d at 1020 (“[u]nder the rule’s permissive standards, 9 representative claims are ‘typical’ if they are reasonably co-extensive with those of 10 absent class members; they need not be substantially identical.”). Finally, adequacy of 11 representation is established here as the named Plaintiffs do not have interests that are 12 antagonistic to or in conflict with the interests of the class. 13 The Court also finds that this class merits certification under Rule 23(b)(3), 14 which requires that “questions of law or fact common to class members predominate 15 over any questions affecting only individual members, and that a class action is 16 superior to other available methods for fairly and efficiently adjudicating the 17 controversy.” Fed. R. Civ. P. 23(b)(3). Even if just one common question 18 predominates, “the action may be considered proper under Rule 23(b)(3) even though 19 other important matters will have to be tried separately.” Tyson Foods, Inc. v. 20 Bouaphakeo, ––– U.S. ––––, 136 S. Ct. 1036, 1045, 194 L.Ed.2d 124 (2016) (quoting 21 7AA C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 1778 pp. 22 123-124 (3d ed. 2005)). 23 Rule 23(b)(3) lists four non-exclusive factors “pertinent” to a predominance 24 finding: “(A) the class members’ interests in individually controlling the prosecution 25 or defense of separate actions; (B) the extent and nature of any litigation concerning 26 the controversy already begun by or against class members; (C) the desirability or 27 undesirability of concentrating the litigation of the claims in the particular forum; and 28 (D) the likely difficulties in managing a class action.” Fed. R. Civ. P. 23(b)(3). 12. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 13 of 25 Page ID #:7433 1 Predominance is plainly satisfied in this case. First, the Supreme Court has 2 observed that predominance is “readily met” in cases alleging consumer fraud. 3 Amchem, 521 U.S. at 625. The crux of all of the claims in issue here is that Ford sold 4 or leased the Class Members vehicles equipped with transmissions Ford knew were 5 defective. Variations in the applicable state law and the remedies available under them 6 do not thwart the predominance of common issues because they are simply “local 7 variations of a generally homogenous collection of causes which include products 8 liability, breaches of express and implied warranties, and ‘lemon laws’.” Hanlon, 150 9 F.3d at 1022–23 (affirming certification under Rule 23(b)(3) because “the 10 idiosyncratic differences between state consumer protection laws are not sufficiently 11 substantive to predominate over the shared claims.”). Resolution via a class action is 12 also superior method of adjudicating this controversy because it provides an efficient 13 and certain means of resolution, in contrast to the inefficiency, delay, and uncertainty 14 that would inhere in tens of thousands of individual lawsuits. 15 The Court also finds that none of the four potentially-relevant factors stated in 16 Rule 23(b)(3) weigh against certification. “From either a judicial or litigant 17 viewpoint, there is no advantage in individual members controlling the prosecution of 18 separate actions. There would be less litigation or settlement leverage, significantly 19 reduced resources and no greater prospect for recovery.” Hanlon, 150 F.3d at 1023. 20 As for other litigation, there is presently an MDL ongoing in this district, and after 21 about two years, only two cases out of about 1,000 have been brought to trial, with 22 complex post-trial motions still pending, and appeals sure to follow. The Court is also 23 aware of consolidated proceedings in California state court (involving several hundred 24 cases), and a larger proceeding in Michigan state courts, but nothing about those 25 proceedings counsels against approving the settlement here. The question of whether 26 consolidating the cases in this forum is desirable and manageability concerns are not 27 pertinent here, as the premise of the settlement is that the matter will not be further 28 litigated. See In re Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539, 556 (9th Cir. 13. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 14 of 25 Page ID #:7434 1 2019) (en banc) (“manageability is not a concern in certifying a settlement class 2 where, by definition, there will be no trial.”). In sum, “ ‘common questions present a 3 significant aspect of the case and they can be resolved for all members of the class in a 4 single adjudication,’ ” so the Court finds that “there is clear justification for handling 5 the dispute on a representative rather than on an individual basis’ ” under Rule 6 23(b)(3). Hanlon, 150 F.3d at 1022 (quoting Wright & Miller, § 1778). 7 D. The Settlement is Fair, Adequate, and Reasonable. 8 1. Legal Standard 9 To determine whether a settlement agreement is fair, adequate, and reasonable, 10 the court must weigh some or all of the following factors: “[1] the strength of the 11 plaintiff’s case; [2] the risk, expense, complexity, and likely duration of further 12 litigation; [3] the risk of maintaining class action status throughout the trial; [4] the 13 amount offered in settlement; [5] the extent of discovery completed and the stage of 14 the proceedings; [6] the experience and views of counsel; [7] the presence of a 15 governmental participant; and [8] the reaction of the class members of the proposed 16 settlement.” See Hanlon, 150 F.3d at 1026 (“Hanlon factors”). 17 The recent amendments to Rule 23 direct the Court to consider a similar list of 18 factors, including whether: (A) the class representatives and class counsel have 19 adequately represented the class; (B) the proposal was negotiated at arm’s length; (C) 20 the relief provided for the class is adequate, taking into account: (i) the costs, risks, 21 and delay of trial and appeal; (ii) the effectiveness of any proposed method of 22 distributing relief to the class, including the method of processing class-member 23 claims; (iii) the terms of any proposed award of attorney’s fees, including timing of 24 payment; and (iv) any agreement required to be identified under Rule 23(e)(3); and 25 (D) the proposal treats class members equitably relative to each other. Fed. R. Civ. P. 26 23(e)(2). The Advisory Committee’s notes clarify that this list of factors does not 27 “displace” the Hanlon factors, “but instead aim to focus the court and attorneys on 28 ‘the core concerns of procedure and substance that should guide the decision whether 14. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 15 of 25 Page ID #:7435 1 to approve the proposal.’” In re Extreme Networks, Inc. Sec. Litig., No. 15-04883, 2 2019 WL 3290770, at *6 (N.D. Cal. July 22, 2019) (quoting Rule 23(e)(2) advisory 3 committee’s note to 2018 amendment). 4 In addition, when, “a settlement agreement is negotiated prior to formal class 5 certification, consideration of these [] . . . . factors alone is not enough to survive 6 appellate review.” In re Bluetooth Headset Prod. Liab. Litig. (“Bluetooth”), 654 F.3d 7 935, 946 (9th Cir. 2011) (emphasis in original). This is because “[p]rior to formal 8 class certification, there is an even greater potential for a breach of fiduciary duty 9 owed the class during settlement.” Id. Therefore, district courts must also determine 10 “that the settlement is not the product of collusion among the negotiating parties.” Id. 11 at 947 (internal quotation and alteration marks omitted). 12 To make that determination, courts should look for signs of collusion, including 13 “(1) when counsel receive a disproportionate distribution of the settlement, or when 14 the class receives no monetary distribution but class counsel are amply rewarded[;]” 15 “(2) when the parties negotiate a clear sailing arrangement providing for the payment 16 of attorneys’ fees separate and apart from class funds[;]” and “(3) when the parties 17 arrange for fees not awarded to revert to defendants rather than be added to the class 18 fund[.]” Id. at 947 (internal quotation marks, citations omitted) (“Bluetooth factors”). 19 2. The Hanlon / Rule 23(e)(2) Factors Are Satisfied. 20 The Court has considered all of the applicable factors set forth in Hanlon and 21 the related factors set forth in Rule 23(e)(2), and finds that they strongly favor final 22 approval of the settlement. 23 24 a. The Class Was Adequately Represented And The Settlement Was Negotiated At Arm’s Length. 25 First, the Court finds that the class representatives and class counsel have 26 adequately represented the class, and that the proposal was negotiated at arm’s length, 27 satisfying Rule 23(e)(2)(A) and (B). Counsel—Plaintiffs’ counsel and the former 28 objectors’ counsel included—have ably and vigorously represented their clients 15. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 16 of 25 Page ID #:7436 1 through years of litigation, securing the original Settlement and obtaining additional 2 benefits in the Amendment through further negotiations with the assistance of the 3 objectors. There is no evidence or suggestion of any conflict between class counsel 4 and representatives on one hand, and the class members on the other. Both the original 5 Settlement and the Amended Settlement were the products of arm’s-length 6 negotiations presided by renowned mediator Eric Green, through multiple contentious 7 in-person sessions over a year and a half, and then again after the Ninth Circuit 8 mandate. Wu Decl. ¶¶ 14-16, 26. The former objectors’ counsel likewise adequately 9 represented their clients and secured additional benefits for the class. Following the 10 Amendment, the former objectors now agree that the Settlement is a fair, reasonable 11 and adequate resolution of the claims here. The adequacy of representation and the 12 arms-length negotiations presided over by an experienced mediator tend to support 13 that the settlement warrants approval. 14 b. The Settlement Affords Significant Relief To The Class. 15 Second, the Settlement affords significant relief to the Class, satisfying Rule 16 23(e)(2)(C) and the first 3 Hanlon factors. Rule 23(e)(2)(C) requires the Court to 17 examine “the relief to the Class in light of the costs, risks, and delay of trial and 18 appeal, the effectiveness of any proposed method of distributing relief to the class, 19 including the method of processing class-member claims, the terms of any proposed 20 award of attorney’s fees, including timing of payment; and any agreement required to 21 be identified.” Similarly, the first three Hanlon factors consider the strength of the 22 plaintiff’s case balanced against the risk, expense, complexity and likely duration of 23 further litigation, the risk of maintaining class certification through trial, and the 24 amount of settlement. In assessing the settlement’s value, courts are instructed to take 25 into account that “the very essence of a settlement is compromise, ‘a yielding of 26 absolutes and an abandoning of highest hopes.’” Officers for Justice, 688 F.2d at 624 27 (citations omitted). 28 The relief secured to the class is substantial. As of the filing of the renewed 16. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 17 of 25 Page ID #:7437 1 motion for final approval, Ford has paid out over $47.4 million in payments for 2 repurchases of 2,666 vehicles.3 Counsel represented at oral argument that this amount 3 is certain to increase significantly as because many Class Members are waiting to 4 participate until the Settlement is finally approved. In addition, the Amended 5 Settlement provides for cash payments of up to $2,325 for multiple service visits 6 (which were generally under warranty and for which Class Members generally had no 7 out of pocket costs) and the guaranteed payout will be at least $30 million. Thus, the 8 settlement guarantees at least $77.4 million in payments to Class Members. By 9 comparison, the MyFord Touch settlement, recently approved by District Judge 10 Edward Chen, primarily provides cash payments of up to $445 for multiple warranty 11 repairs (on a part that the plaintiffs claim to cause a safety problem) and a minimum 12 guaranteed payout of $17 million, and does not offer a repurchase remedy but instead 13 releases all such claims that could arise under lemon law and related claims. See In re 14 MyFord Touch Consumer Litg., No. 13-03072-EMC, 2019 WL 1411510 (N.D. Cal. 15 Mar. 28, 2019) (order granting preliminary approval). The terms of the present 16 settlement strike the Court as significantly more advantageous to Class Members. 17 Furthermore, non-monetary features of the Arbitration Program (through which 18 Class Members may seek a Repurchase) are advantageous to Class Members. For 19 example, it extends the statute of limitations to six years from date of sale or six 20 months after the approval date (whichever is later), whereas many state lemon laws 21 require claims to be brought within one and a half to three years of purchase. See 22 Motion 28:4-8, fn.. 23 (listing states whose lemon laws have statutes of limitations of 23 up to three years). In addition, where a Class Member cannot meet the requirements of 24 25 26 27 28 3 Because the Settlement Agreement would not take effect until all appeals are exhausted, in order to meet Class Member demand for the proffered remedies, the parties instituted a voluntary arbitration program that operates in the same way as he Arbitration Program under the Agreement. Given the relationship of the voluntary arbitration program to the Settlement Agreement, the payments made under the voluntary program are plainly a benefit of the Settlement Agreement. 17. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 18 of 25 Page ID #:7438 1 their state’s lemon law, the Arbitration Program provides a fall-back standard where 2 the arbitrator can award a buyback for a vehicle that had 4 or more Transmission 3 Hardware Replacements performed within 5 years/60,000 miles, and the vehicle 4 continues to malfunction. (Sett. Agmt. ¶ II(N)(1)(e).) Finally, under the Arbitration 5 Program, claims will be resolved within three months, whereas lemon law suits in 6 state court can take far longer. This much quicker route to relief supports approving 7 the settlement. See Browne v. Am. Honda Motor Co., No. CV 09-06750 MMM 8 DTBX, 2010 WL 9499072, at *13 (C.D. Cal. July 29, 2010) (finding that, despite the 9 fact that class members may not be fully compensated by the proposed reimbursement 10 program, immediate relief conferred by settlement supports final approval); see also 11 In re Mego Financial Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000) (approving 12 settlement that provides immediate relief constituting one-sixth of the potential 13 recovery in light of the difficulties of continued litigation). 14 Rule 23(e)(2)(C)(ii) requires the Court to go beyond the benefits offered and 15 review of the method of distribution of the benefits. The method of distribution of the 16 primary benefits here is reasonable and not onerous. For example, the Repurchase 17 benefit is provided through a streamlined arbitration process that a Class Member can 18 start simply by providing a Notice of Intent to Arbitrate. Claims for cash payments for 19 service visits can be submitted by a claim form that is pre-populated with certain 20 information. While Class Members must submit documentation for service visits, this 21 requirement is reasonable and standard. See Keegan, v. Am. Honda Motor Co., No. 22 10-09508-MMM, 2014 WL 12551213, *15 (C.D. Cal. Jan. 21, 2014) (“Courts 23 frequently approve settlements that require class members to submit receipts or other 24 documentation.”). This requirement should be easy to comply with because most 25 states have record-retention laws, and “dealerships and service centers routinely 26 maintain such records; thus, to the extent that class members do not have an invoice in 27 their possession, it is likely that they would be able to secure such documentation.” 28 Asghari v. Volkswagen Grp. of Am., No. 13-02529-MMM, 2015 WL 12732462, at 18. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 19 of 25 Page ID #:7439 1 *29 (C.D. Cal. May 29, 2015) (overruling objection that requiring claimants to submit 2 proof of compliance with scheduled oil changes in warranty maintenance manual is 3 unfair and overly burdensome). The Amendment permits those who attempted to 4 make repairs, but were turned away by a Ford Dealer, to submit claims for $20 5 without any documentation other than an attestation under oath. (Amendment ¶ 8.) 6 Finally, any residue left from the guaranteed minimum $30 million in cash payments 7 benefit will be distributed on a pro rata basis to members who submitted a valid claim 8 for cash payment or who received a payment through the Repurchase process. These 9 are appropriate methods of distributing the Settlement benefits. 10 On the other side of the ledger, under Rule 23(e)(2)(C)(ii), are significant risks 11 associated with continuing to litigate this factually and legally complicated case. To 12 prevail at trial, Plaintiffs would have to prove that the problems experienced by Class 13 Members can be traced to a transmission design defect, that the defected persisted in 14 multiple versions of the Transmission and multiple engine/transmission combinations, 15 that Ford had pre-sale knowledge of the Alleged Defect, that it acted on that 16 knowledge, and that Class Members were damaged. Plaintiffs would have to 17 overcome Ford’s affirmative defenses, which include, among others, that no 18 Transmission defect exists, or that, even if the Alleged Defect existed, Plaintiffs 19 would not be able to show that it constitutes a safety concern. In addition, Plaintiffs 20 would have to maintain class certification through trial, which is not a given in light of 21 all of the variables at play. For example, as a result of changes in the manufacturing 22 process, design, and software, there are multiple versions of the Transmission, 23 potentially precluding the likelihood that one common defect exists, which further 24 calls into question whether common questions predominate. Furthermore, in member 25 cases of the parallel MDL proceeding, this Court rejected certain factual theories 26 underlying comparable fraud claims, and also found that the plaintiff could not 27 establish damages stemming from the fraud claim. See Pedante v. Ford Motor Co., 28 No. 18-ML-2814-AB (C.D. Cal. Oct. 29, 2019), ECF No. 605., at 5-14. Thus, the 19. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 20 of 25 Page ID #:7440 1 fraud claim was disposed of before trial. Although these decisions will be appealed, 2 they nevertheless reflect the sorts of obstacles Plaintiffs here would encounter in 3 pursuing their fraud claims. See In re Portal Software, Inc. Sec. Litig., No. C-03-5138 4 VRW, 2007 WL 4171201, at *3 (N.D. Cal. Nov. 26, 2007) (recognizing that “inherent 5 risks of proceeding to . . . trial and appeal also support the settlement”). Finally, to 6 continue to litigate this case, Plaintiffs’ counsel would have to take extraordinary risk 7 by advancing the costs and other expenses associated with litigation, for an uncertain 8 outcome, over a long period of protracted litigation. In light of all of these challenges 9 inherent in continued complex litigation, the substantial benefits afforded by the 10 Settlement are particularly attractive. Eisen v. Porsche Cars North American, Inc., No. 11 11-09405-CAS, 2014 WL 439006, at *3 (C.D. Cal. Jan. 30, 2014) (“unless the 12 settlement is clearly inadequate, its acceptance and approval are preferable to lengthy 13 and expensive litigation with uncertain results.”). These considerations favor approval. 14 Rule 23(e)(2)(C)(iii) and (iv) require the Court to look at the terms and timing 15 of an attorneys’ fee award, and any other agreement referenced in Rule 23(e)(3). The 16 Settlement here does include fee awards for Plaintiffs’ counsel and former objectors’ 17 counsel that Ford will not oppose, but the parties negotiated these fees only after they 18 negotiated the relief afforded to Plaintiffs. Plaintiffs’ counsel and attorneys for the 19 former objectors have filed fee applications for the Court’s scrutiny, and fee payments 20 will be made within 14 days of the Effective Date. Finally, regarding “other 21 agreements,” Counsel have fee-sharing agreements with both Class Counsel Berger & 22 Montague and Class Counsel Zimmerman Law Offices P.C. (“Zimmerman”), each of 23 which has been consented to by each firm’s respective clients. These agreements were 24 previously disclosed (Dkt. No. 167), and the parties aver that there are no other 25 agreements. In sum, nothing about the substance or timing of the attorneys’ fees 26 requests here, or other agreements, detracts from the value, fairness, or significance of 27 the benefits the Settlement offers to Class Members. 28 Having considered the first three Hanlon factors and Rule 23(e)(2)(C), the 20. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 21 of 25 Page ID #:7441 1 Court therefore finds that the relief provided to the class is adequate 2 c. The Settlement Treats Class Members Equitably. 3 Third, the Settlement treats class members equitably relative to each other. See 4 Fed. R. Civ. P. 23(e)(2)(D). The Settlement does not give preferential treatment to 5 any subset of the class. For example, former owners/lessees and current 6 owners/lessees are subject to the same requirements and may secure the same benefits. 7 And while the Settlement was structured to deliver the most complete relief to those 8 Class Members that experienced persistent defects (e.g., those with more service visits 9 will receive a greater cash payment), this is an objective and logical explanation for 10 the variations in monetary recovery. See In re Citric Acid Antitrust Litig., 145 F. Supp. 11 2d 1152, 1154 (N.D. Cal. 2001) (“A plan of allocation that reimburses class members 12 based on the type and extent of their injuries is generally reasonable.”). The Court 13 finds that the Settlement treats all Class Members equitably and satisfies Rule 14 23(e)(2)(D). 15 d. The Last Four Hanlon Factors Favor Approval 16 Finally, the four remaining Hanlon factors favor approval. As described above, 17 the Settlement was achieved after extensive discovery, and accordingly, Plaintiffs had 18 ample information and opportunity to assess their claims and take appropriate 19 negotiating positions. Eisen, 2014 WL 439006, at *13 (finding that counsel had 20 “ample information and opportunity to assess the strengths and weaknesses of their 21 claims” despite “discovery [being] limited because the parties decided to pursue 22 settlement discussions early on.”). Counsel, including Plaintiffs’ counsel, Ford’s 23 counsel, and counsel representing the former objectors, are highly experienced and 24 respected litigators, and they all favor approval. Notably, the Lott Group former 25 objectors were represented in part by Michael Kirkpatrick, who litigates on behalf of 26 Public Citizen, a highly regarded public interest organization that regularly advocates 27 on behalf of consumers and employees before the U.S. Supreme Court. (See 28 Amendment.) That his clients have withdrawn their objections and that he now favors 21. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 22 of 25 Page ID #:7442 1 the Settlement speaks to its fairness, reasonableness, and adequacy. There are no 2 governmental participants here, so this factor is not relevant. 3 Finally, the reaction of Class Members favors approval. Approximately 10,350 4 of the 1.9 million Class Members, or under 1 percent of the Class, have opted out. 5 (Wu Decl. ¶ 22; ECF No. 240, Ex. A.) This small percentage of exclusions 6 demonstrate that Class Members have reacted favorably to the Settlement, supporting 7 final approval. See, e.g., Churchill Vill. v. Gen. Elec., 361 F.3d 566, 577 (9th Cir. 8 2004) (affirming final approval where “only 45” of the approximately 90,000 class 9 members objected and 500 opted out). 10 Furthermore, there were only 15 timely objections from Class Members, and 11 none of them warrants rejecting the Settlement. See Dennis v. Kellogg Co., 697 F.3d 12 858, 864 (9th Cir. 2012) (the district court “must give a reasoned response to all non- 13 frivolous objections”) (citations and quotation marks omitted). As stated above, the 14 six objectors who appealed (the Lott Group and Mr. DeBolt) have withdrawn their 15 objections and now support final approval. The Court has reviewed the former 16 objectors’ explanations for why they are now satisfied with the Settlement, have 17 withdrawn their objections, and support final approval, and they are persuasive. The 18 other nine timely objections were from pro se class members. See Suppl. Memo (Dkt. 19 No. 170) p. 39-41, and Exhibits referenced therein. These pro se objections boil down 20 to arguing that the settlement should provide additional forms of relief, e.g., canceling 21 leases or compensation for diminution in value, or more relief, e.g., higher cash 22 payments. But simply wanting a more favorable settlement is not a sufficient basis for 23 an objection to a class action settlement that is otherwise fair, adequate, and 24 reasonable. See Linney v. Cellular Alaska Partnership, 151 F.3d 1234, 1242 (9th Cir. 25 1998) (“[I]t is well settled that a proposed settlement may be acceptable even though it 26 may amount to a fraction of the potential recovery that might be available to class 27 members at trial.”).The timely pro se objections are therefore overruled. 28 The Court has since received two more putative objections: from Class Member 22. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 23 of 25 Page ID #:7443 1 Ayanna Maharry (Dkt. No. 277) and from Robert Earl Case (Dkt. No. 296). The Court 2 strikes these objections as untimely. The deadline for objecting was September 7, 3 2017, and both objected more than two years later: Ms. Maharry in October 2019 and 4 Mr. Case in February 2020. Their papers reflect no good cause for this delay. 5 Although Ms. Maharry briefly describes “serious life situations” concerning family 6 matters, this is not sufficient cause to accept an objection more than 2 years late. And 7 Mr. Case provides no cogent explanation for his delay. In the alternative, the 8 objections are without merit. Ms. Maharry is actually seeking to opt-out, but it is too 9 late to opt-out. In addition, Ms. Marharry’s objection that Ford offered her only a buy- 10 back and that she could not seek civil penalties (under the original settlement) is 11 essentially a complaint that the settlement could have been better. This is not a valid 12 ground for disapproving a settlement. Furthermore, under the Amended Settlement, 13 Class Members may now obtain a civil penalty under specified circumstances. Mr. 14 Case’s objection is hard to understand. He is an attorney who represented a class 15 member in a lemon law suit in Florida and to whom that client later assigned a 16 putative small claims lawsuit relating to her vehicle. It recounts, at length, arbitration 17 proceedings in which his client was ultimately awarded a buyback, and his attempt to 18 pursue some unspecified remaining claims in small claims court. But the lengthy 19 submission does not object to anything specific about this settlement. The objection is 20 overruled. 21 For the foregoing reasons, the last four Hanlon factors favor final approval. 22 3. The Settlement Satisfies the Bluetooth Factors. 23 Pre-certification settlements require further inquiry for “more subtle signs” of 24 potential collusion between class counsel and defendant. In re Bluetooth, 654 F.3d at 25 946-47. None of the three factors identified in Bluetooth are indicative of collusion 26 here. 27 28 The first factor asks whether counsel will receive a disproportionate distribution of the settlement, or whether class will receive no monetary distribution but class 23. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 24 of 25 Page ID #:7444 1 counsel are amply rewarded. The answer to both questions is no. Plaintiffs’ counsel 2 are seeking fees and costs of $8.85 million, which is less than 12% of the $77.4 3 million minimum class payout. This is decidedly not disproportionate to Class’s 4 benefits. In addition, the class members have already received—and will continue to 5 receive—substantial cash payouts. This factor does not suggest collusion in this case. 6 The second Bluetooth factor asks whether there is a clear-sailing provision, 7 such that the defendant will not object to the plaintiffs’ counsel’s fee request, and 8 whether this payment is separate from the class fund. However, clear-sailing 9 provisions are not inherently problematic: if a fee is not disproportionate to the class 10 award, is negotiated separately from the class benefits, and particularly with the help 11 of a mediator, the mere existence of a clear-sailing provision is not indicative of 12 collusion. See, e.g., Schuchardt v. Law Office of Rory W. Clark, 314 F.R.D. 673, 687 13 (N.D. Cal. 2016) (clear-sailing provision does not signal collusion when the agreed- 14 upon fees are reasonable and the relief negotiated for the class is favorable). Here, 15 there is a clear-sailing provision but it is not problematic: the fee is not 16 disproportionate to the class benefits, and was negotiated separately from the relief for 17 the class and with the assistance of an experienced mediator. And, as set forth in 18 Plaintiffs’ renewed fee application, the requested fees represent a negative multiplier 19 on Class Counsel’s $10,541,276.65 lodestar. “[C]ourts view self-reduced fees” 20 representing a negative multiplier on the lodestar “favorably.” MyFord Touch, 2019 21 WL 1411510, at *7 (quoting Schuchardt, 314 F.R.D. at 690). Furthermore, the 22 settlement entitles the class to substantial relief. Accordingly, there are no signs of 23 collusion relative to Plaintiffs’ attorneys’ fees. 24 The Court also expressly finds that none of the Bluetooth factors are evident in 25 the participation of the Lott Group’s or DeBolt’s counsel in this case. The Lott 26 Group’s counsel will seek fees and costs of about $350,000, and DeBolt’s counsel will 27 seek fees and costs of about $98,000. First, these fees are not disproportionate to the 28 class benefits. It is difficult to quantify the value of the service the objectors rendered 24. Case 2:12-cv-08388-AB-FFM Document 301 Filed 03/05/20 Page 25 of 25 Page ID #:7445 1 to the class, but the Court is confident that it is substantial: because the objectors 2 appealed the original final approval order, pressed their objections, and engaged in 3 negotiations, they were able to secure for the class the additional benefits reflected in 4 the Amendment. The Court has little difficulty concluding that the fees they are 5 seeking are not disproportionate to the value they added to the settlement. Second, 6 while Ford has agreed to not object to their fee request, this clear sailing provision is 7 not problematic for the reasons discussed above: the fee is not disproportionate, and 8 was negotiated separately from the relief for the class and with the assistance of 9 Professor Green. 10 11 Finally, the third Bluetooth factor is absent, as no class benefits will revert to Ford. 12 In sum, none of the Bluetooth indicia of collusion are present in this case to 13 undermine the fairness, reasonableness, and adequacy of the settlement. 14 III. 15 CONCLUSION Having carefully considered all of the factors reflected in Rule 23 and the case 16 law, the Court finds that the Settlement is fair, reasonable, and adequate, and warrants 17 final approval. The Court hereby GRANTS the Motion and finally approves the 18 Settlement. Concurrently with this Order, the Court will also adopt Plaintiffs’ 19 proposed Order granting the Motion, and will enter their proposed Judgment. 20 21 IT IS SO ORDERED. 22 23 24 DATED: March 5, 2020 ______________________________________ HONORABLE ANDRÉ BIROTTE JR. UNITED STATES DISTRICT COURT JUDGE 25 26 27 28 25.