Caitlin Ahearn v. Hyundai Motor America ( 2019 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
IN RE HYUNDAI AND KIA FUEL No. 15-56014
ECONOMY LITIGATION,
D.C. No.
2:13-ml-02424-
KEHLIE R. ESPINOSA; NICOLE MARIE GW-FFM
HUNTER; JEREMY WILTON;
KAYLENE P. BRADY; GUNTHER
KRAUTH; ERIC GRAEWINGHOLT;
REECE PHILIP THOMSON; ALEX
MATURANI; NILUFAR REZAI; JACK
ROTTNER; LYDIA KIEVIT; REBECCA
SANDERS; BOBBY BRANDON
ARMSTRONG; SERGIO TORRES;
RICHARD WOODRUFF; MARSHALL
LAWRENCE GORDON; JOEL A.
LIPMAN; JAMES GUDGALIS; MARY P.
HOESSLER; STEPHEN M. HAYES;
BRIAN REEVES; SAM HAMMOND;
MARK LEGGETT; EDWIN NAYTHONS;
MICHAEL WASHBURN; IRA D.
DUNST; BRIAN WEBER; KAMNEEL
MAHARAJ; KIM IOCOVOZZI;
HERBERT J. YOUNG; LINDA HASPER;
LESLIE BAYARD; TRICIA FELLERS;
ORLANDO ELLIOTT; JAMES
BONSIGNORE; MARGARET SETSER;
GUILLERMO QUIROZ; DOUGLAS
KURASH; ANDRES CARULLO; LAURA
S. SUTTA; GEORGIA L. THOMAS;
2 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
ERIC J. OLSON; JENNIFER MYERS;
TOM WOODWARD; JEROLD
TERHOST; CAMERON JOHN CESTARO;
DONALD BROWN; MARIA FIGUEROA;
CONSTANCE MARTYN; THOMAS
GANIM; DANIEL BALDESCHI;
LILLIAN E. LEVOFF; GIUSEPPINA
ROBERTO; ROBERT TRADER; SEAN
GOLDSBERRY; CYNTHIA NAVARRO;
OWEN CHAPMAN; MICHAEL BREIN;
TRAVIS BRISSEY; RONALD
BURKARD; ADAM CLOUTIER;
STEVEN CRAIG; JOHN J. DIXSON;
ERIN L. FANTHORPE; ERIC HADESH;
MICHAEL P. KEETH; JOHN KIRK
MACDONALD; MICHAEL MANDAHL;
NICHOLAS MCDANIEL; MARY J.
MORAN-SPICUZZA; GARY PINCAS;
BRANDON POTTER; THOMAS PURDY;
ROCCO RENGHINI; MICHELLE
SINGLTEON; KEN SMILEY; GREGORY
M. SONSTEIN; ROMAN STARNO;
GAYLE A. STEPHENSON; ANDRES
VILLICANA; RICHARD WILLIAMS;
BRADFORD L. HIRSCH; ASHLEY
CEPHAS; DAVID E. HILL; CHAD
MCKINNEY; MORDECHAI SCHIFFER;
LISA SANDS; DONALD KENDIG;
KEVIN GOBEL; ERIC LARSON; LIN
MCKINNEY; RYAN CROSS; PHILLIP
HOFFMAN; DEBRA SIMMONS;
ABELARDO MORALES; PETER
BLUMER; CAROLYN HAMMOND;
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 3
MELISSA LEGGETT; KELLY
MOFFETT; EVAN GROGAN; CARLOS
MEDINA; ALBERTO DOMINGUEZ;
CATHERINE BERNARD; MICHAEL
BREIEN; LAURA GILL; THOMAS
SCHILLE; JUDITH STANTON; RANDY
RICKERT; BRYAN ZIRKEL; JAMES
KUNDRAT; ROBERT SMITH; MARIA
KOTOVA; JOSIPA CASEY; LUAN
SNYDER; BEN BAKER; BRIAN
NGUYEN; HATTIE WILLIAMS; BILL
HOLVEY; LOURDES VARGAS;
KENDALL SNYDER; NOMER MEDINA;
SAMERIA GOFF; URSULA PYLAND;
MARCELL CHAPMAN; KAYE
KURASH; HOLLY AMROMIN; JOHN
CHAPMAN; MARY D’ANGELO;
GEORGE RUDY; AYMAN MOUSA;
SHELLY HENDERSON; JEFFREY
HATHAWAY; DENNIS J. MURPHY;
DOUGLAS A. PATTERSON; JOHN
GENTRY; LINDA RUTH SCOTT;
DANIELLE KAY GILLELAND; JOSEPH
BOWE; MICHAEL DESOUTO,
Plaintiffs-Appellees,
GREG DIRENZO,
Petitioner-Appellee,
HYUNDAI MOTOR AMERICA; KIA
MOTORS AMERICA; KIA MOTORS
CORPORATION; GROSSINGER
AUTOPLEX, INC., FKA Grossinger
4 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
Hyundai; JOHN KRAFCIK; HYUNDAI
MOTOR COMPANY; SARAH
KUNDRAT,
Defendants-Appellees,
v.
CAITLIN AHEARN; ANDREW YORK,
Objectors-Appellants.
IN RE HYUNDAI AND KIA FUEL No. 15-56025
ECONOMY LITIGATION,
D.C. No.
2:13-ml-02424-
KEHLIE R. ESPINOSA; NICOLE MARIE GW-FFM
HUNTER; JEREMY WILTON;
KAYLENE P. BRADY; GUNTHER
KRAUTH; ERIC GRAEWINGHOLT;
REECE PHILIP THOMSON; ALEX
MATURANI; NILUFAR REZAI; JACK
ROTTNER; LYDIA KIEVIT; REBECCA
SANDERS; BOBBY BRANDON
ARMSTRONG; SERGIO TORRES;
RICHARD WOODRUFF; MARSHALL
LAWRENCE GORDON; JOEL A.
LIPMAN; JAMES GUDGALIS; MARY P.
HOESSLER; STEPHEN M. HAYES;
BRIAN REEVES; SAM HAMMOND;
MARK LEGGETT; EDWIN NAYTHONS;
MICHAEL WASHBURN; IRA D.
DUNST; BRIAN WEBER; KAMNEEL
MAHARAJ; KIM IOCOVOZZI;
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 5
HERBERT J. YOUNG; LINDA HASPER;
LESLIE BAYARD; TRICIA FELLERS;
ORLANDO ELLIOTT; JAMES
BONSIGNORE; MARGARET SETSER;
GUILLERMO QUIROZ; DOUGLAS
KURASH; ANDRES CARULLO; LAURA
S. SUTTA; GEORGIA L. THOMAS;
ERIC J. OLSON; JENNIFER MYERS;
TOM WOODWARD; JEROLD
TERHOST; CAMERON JOHN CESTARO;
DONALD BROWN; MARIA FIGUEROA;
CONSTANCE MARTYN; THOMAS
GANIM; DANIEL BALDESCHI;
LILLIAN E. LEVOFF; GIUSEPPINA
ROBERTO; ROBERT TRADER; SEAN
GOLDSBERRY; CYNTHIA NAVARRO;
OWEN CHAPMAN; MICHAEL BREIN;
TRAVIS BRISSEY; RONALD
BURKARD; ADAM CLOUTIER;
STEVEN CRAIG; JOHN J. DIXSON;
ERIN L. FANTHORPE; ERIC HADESH;
MICHAEL P. KEETH; JOHN KIRK
MACDONALD; MICHAEL MANDAHL;
NICHOLAS MCDANIEL; MARY J.
MORAN-SPICUZZA; GARY PINCAS;
BRANDON POTTER; THOMAS PURDY;
ROCCO RENGHINI; MICHELLE
SINGLTEON; KEN SMILEY; GREGORY
M. SONSTEIN; ROMAN STARNO;
GAYLE A. STEPHENSON; ANDRES
VILLICANA; RICHARD WILLIAMS;
BRADFORD L. HIRSCH; ASHLEY
CEPHAS; DAVID E. HILL; CHAD
6 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
MCKINNEY; MORDECHAI SCHIFFER;
LISA SANDS; DONALD KENDIG;
KEVIN GOBEL; ERIC LARSON; LIN
MCKINNEY; RYAN CROSS; PHILLIP
HOFFMAN; DEBRA SIMMONS;
ABELARDO MORALES; PETER
BLUMER; CAROLYN HAMMOND;
MELISSA LEGGETT; KELLY
MOFFETT; EVAN GROGAN; CARLOS
MEDINA; ALBERTO DOMINGUEZ;
CATHERINE BERNARD; MICHAEL
BREIEN; LAURA GILL; THOMAS
SCHILLE; JUDITH STANTON; RANDY
RICKERT; BRYAN ZIRKEL; JAMES
KUNDRAT; ROBERT SMITH; MARIA
KOTOVA; JOSIPA CASEY; LUAN
SNYDER; BEN BAKER; BRIAN
NGUYEN; HATTIE WILLIAMS; BILL
HOLVEY; LOURDES VARGAS;
KENDALL SNYDER; NOMER MEDINA;
SAMERIA GOFF; URSULA PYLAND;
MARCELL CHAPMAN; KAYE
KURASH; HOLLY AMROMIN; JOHN
CHAPMAN; MARY D’ANGELO;
GEORGE RUDY; AYMAN MOUSA;
SHELLY HENDERSON; JEFFREY
HATHAWAY; DENNIS J. MURPHY;
DOUGLAS A. PATTERSON; JOHN
GENTRY; LINDA RUTH SCOTT;
DANIELLE KAY GILLELAND; JOSEPH
BOWE; MICHAEL DESOUTO,
Plaintiffs-Appellees,
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 7
GREG DIRENZO,
Petitioner-Appellee,
HYUNDAI MOTOR AMERICA; KIA
MOTORS AMERICA; KIA MOTORS
CORPORATION; GROSSINGER
AUTOPLEX, INC., FKA Grossinger
Hyundai; JOHN KRAFCIK; HYUNDAI
MOTOR COMPANY; SARAH
KUNDRAT,
Defendants-Appellees,
v.
ANTONIO SBERNA,
Objector-Appellant.
IN RE HYUNDAI AND KIA FUEL No. 15-56059
ECONOMY LITIGATION,
D.C. No.
2:13-ml-02424-
KEHLIE R. ESPINOSA; NICOLE MARIE GW-FFM
HUNTER; JEREMY WILTON;
KAYLENE P. BRADY; GUNTHER
KRAUTH; ERIC GRAEWINGHOLT;
REECE PHILIP THOMSON; ALEX
MATURANI; NILUFAR REZAI; JACK
ROTTNER; LYDIA KIEVIT; REBECCA
SANDERS; BOBBY BRANDON
ARMSTRONG; SERGIO TORRES;
RICHARD WOODRUFF; MARSHALL
8 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
LAWRENCE GORDON; JOEL A.
LIPMAN; JAMES GUDGALIS; MARY P.
HOESSLER; STEPHEN M. HAYES;
BRIAN REEVES; SAM HAMMOND;
MARK LEGGETT; EDWIN NAYTHONS;
MICHAEL WASHBURN; IRA D.
DUNST; BRIAN WEBER; KAMNEEL
MAHARAJ; KIM IOCOVOZZI;
HERBERT J. YOUNG; LINDA HASPER;
LESLIE BAYARD; TRICIA FELLERS;
ORLANDO ELLIOTT; JAMES
BONSIGNORE; MARGARET SETSER;
GUILLERMO QUIROZ; DOUGLAS
KURASH; ANDRES CARULLO; LAURA
S. SUTTA; GEORGIA L. THOMAS;
ERIC J. OLSON; JENNIFER MYERS;
TOM WOODWARD; JEROLD
TERHOST; CAMERON JOHN CESTARO;
DONALD BROWN; MARIA FIGUEROA;
CONSTANCE MARTYN; THOMAS
GANIM; DANIEL BALDESCHI;
LILLIAN E. LEVOFF; GIUSEPPINA
ROBERTO; ROBERT TRADER; SEAN
GOLDSBERRY; CYNTHIA NAVARRO;
OWEN CHAPMAN; MICHAEL BREIN;
TRAVIS BRISSEY; RONALD
BURKARD; ADAM CLOUTIER;
STEVEN CRAIG; JOHN J. DIXSON;
ERIN L. FANTHORPE; ERIC HADESH;
MICHAEL P. KEETH; JOHN KIRK
MACDONALD; MICHAEL MANDAHL;
NICHOLAS MCDANIEL; MARY J.
MORAN-SPICUZZA; GARY PINCAS;
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 9
BRANDON POTTER; THOMAS PURDY;
ROCCO RENGHINI; MICHELLE
SINGLTEON; KEN SMILEY; GREGORY
M. SONSTEIN; ROMAN STARNO;
GAYLE A. STEPHENSON; ANDRES
VILLICANA; RICHARD WILLIAMS;
BRADFORD L. HIRSCH; ASHLEY
CEPHAS; DAVID E. HILL; CHAD
MCKINNEY; MORDECHAI SCHIFFER;
LISA SANDS; DONALD KENDIG;
KEVIN GOBEL; ERIC LARSON; LIN
MCKINNEY; RYAN CROSS; PHILLIP
HOFFMAN; DEBRA SIMMONS;
ABELARDO MORALES; PETER
BLUMER; CAROLYN HAMMOND;
MELISSA LEGGETT; KELLY
MOFFETT; EVAN GROGAN; CARLOS
MEDINA; ALBERTO DOMINGUEZ;
CATHERINE BERNARD; MICHAEL
BREIEN; LAURA GILL; THOMAS
SCHILLE; JUDITH STANTON; RANDY
RICKERT; BRYAN ZIRKEL; JAMES
KUNDRAT; ROBERT SMITH; MARIA
KOTOVA; JOSIPA CASEY; LUAN
SNYDER; BEN BAKER; BRIAN
NGUYEN; HATTIE WILLIAMS; BILL
HOLVEY; LOURDES VARGAS;
KENDALL SNYDER; NOMER MEDINA;
SAMERIA GOFF; URSULA PYLAND;
MARCELL CHAPMAN; KAYE
KURASH; HOLLY AMROMIN; JOHN
CHAPMAN; MARY D’ANGELO;
GEORGE RUDY; AYMAN MOUSA;
10 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
SHELLY HENDERSON; JEFFREY
HATHAWAY; DENNIS J. MURPHY;
DOUGLAS A. PATTERSON; JOHN
GENTRY; LINDA RUTH SCOTT;
DANIELLE KAY GILLELAND; JOSEPH
BOWE; MICHAEL DESOUTO,
Plaintiffs-Appellees,
GREG DIRENZO,
Petitioner-Appellee,
HYUNDAI MOTOR AMERICA; KIA
MOTORS AMERICA; KIA MOTORS
CORPORATION; GROSSINGER
AUTOPLEX, INC., FKA Grossinger
Hyundai; JOHN KRAFCIK; HYUNDAI
MOTOR COMPANY; SARAH
KUNDRAT,
Defendants-Appellees,
v.
PERI FETSCH,
Objector-Appellant.
IN RE HYUNDAI AND KIA FUEL No. 15-56061
ECONOMY LITIGATION,
D.C. No.
2:13-ml-02424-
KEHLIE R. ESPINOSA; NICOLE MARIE GW-FFM
HUNTER; JEREMY WILTON;
KAYLENE P. BRADY; GUNTHER
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 11
KRAUTH; ERIC GRAEWINGHOLT;
REECE PHILIP THOMSON; ALEX
MATURANI; NILUFAR REZAI; JACK
ROTTNER; LYDIA KIEVIT; REBECCA
SANDERS; BOBBY BRANDON
ARMSTRONG; SERGIO TORRES;
RICHARD WOODRUFF; MARSHALL
LAWRENCE GORDON; JOEL A.
LIPMAN; JAMES GUDGALIS; MARY P.
HOESSLER; STEPHEN M. HAYES;
BRIAN REEVES; SAM HAMMOND;
MARK LEGGETT; EDWIN NAYTHONS;
MICHAEL WASHBURN; IRA D.
DUNST; BRIAN WEBER; KAMNEEL
MAHARAJ; KIM IOCOVOZZI;
HERBERT J. YOUNG; LINDA HASPER;
LESLIE BAYARD; TRICIA FELLERS;
ORLANDO ELLIOTT; JAMES
BONSIGNORE; MARGARET SETSER;
GUILLERMO QUIROZ; DOUGLAS
KURASH; ANDRES CARULLO; LAURA
S. SUTTA; GEORGIA L. THOMAS;
ERIC J. OLSON; JENNIFER MYERS;
TOM WOODWARD; JEROLD
TERHOST; CAMERON JOHN CESTARO;
DONALD BROWN; MARIA FIGUEROA;
CONSTANCE MARTYN; THOMAS
GANIM; DANIEL BALDESCHI;
LILLIAN E. LEVOFF; GIUSEPPINA
ROBERTO; ROBERT TRADER; SEAN
GOLDSBERRY; CYNTHIA NAVARRO;
OWEN CHAPMAN; MICHAEL BREIN;
TRAVIS BRISSEY; RONALD
12 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
BURKARD; ADAM CLOUTIER;
STEVEN CRAIG; JOHN J. DIXSON;
ERIN L. FANTHORPE; ERIC HADESH;
MICHAEL P. KEETH; JOHN KIRK
MACDONALD; MICHAEL MANDAHL;
NICHOLAS MCDANIEL; MARY J.
MORAN-SPICUZZA; GARY PINCAS;
BRANDON POTTER; THOMAS PURDY;
ROCCO RENGHINI; MICHELLE
SINGLTEON; KEN SMILEY; GREGORY
M. SONSTEIN; ROMAN STARNO;
GAYLE A. STEPHENSON; ANDRES
VILLICANA; RICHARD WILLIAMS;
BRADFORD L. HIRSCH; ASHLEY
CEPHAS; DAVID E. HILL; CHAD
MCKINNEY; MORDECHAI SCHIFFER;
LISA SANDS; DONALD KENDIG;
KEVIN GOBEL; ERIC LARSON; LIN
MCKINNEY; RYAN CROSS; PHILLIP
HOFFMAN; DEBRA SIMMONS;
ABELARDO MORALES; PETER
BLUMER; CAROLYN HAMMOND;
MELISSA LEGGETT; KELLY
MOFFETT; EVAN GROGAN; CARLOS
MEDINA; ALBERTO DOMINGUEZ;
CATHERINE BERNARD; MICHAEL
BREIEN; LAURA GILL; THOMAS
SCHILLE; JUDITH STANTON; RANDY
RICKERT; BRYAN ZIRKEL; JAMES
KUNDRAT; ROBERT SMITH; MARIA
KOTOVA; JOSIPA CASEY; LUAN
SNYDER; BEN BAKER; BRIAN
NGUYEN; HATTIE WILLIAMS; BILL
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 13
HOLVEY; LOURDES VARGAS;
KENDALL SNYDER; NOMER MEDINA;
SAMERIA GOFF; URSULA PYLAND;
MARCELL CHAPMAN; KAYE
KURASH; HOLLY AMROMIN; JOHN
CHAPMAN; MARY D’ANGELO;
GEORGE RUDY; AYMAN MOUSA;
SHELLY HENDERSON; JEFFREY
HATHAWAY; DENNIS J. MURPHY;
DOUGLAS A. PATTERSON; JOHN
GENTRY; LINDA RUTH SCOTT;
DANIELLE KAY GILLELAND; JOSEPH
BOWE; MICHAEL DESOUTO,
Plaintiffs-Appellees,
GREG DIRENZO,
Petitioner-Appellee,
HYUNDAI MOTOR AMERICA; KIA
MOTORS AMERICA; KIA MOTORS
CORPORATION; GROSSINGER
AUTOPLEX, INC., FKA Grossinger
Hyundai; JOHN KRAFCIK; HYUNDAI
MOTOR COMPANY; SARAH
KUNDRAT,
Defendants-Appellees,
v.
DANA ROLAND,
Objector-Appellant.
14 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
IN RE HYUNDAI AND KIA FUEL No. 15-56064
ECONOMY LITIGATION,
D.C. No.
2:13-ml-02424-
KEHLIE R. ESPINOSA; NICOLE MARIE GW-FFM
HUNTER; JEREMY WILTON;
KAYLENE P. BRADY; GUNTHER
KRAUTH; ERIC GRAEWINGHOLT;
REECE PHILIP THOMSON; ALEX
MATURANI; NILUFAR REZAI; JACK
ROTTNER; LYDIA KIEVIT; REBECCA
SANDERS; BOBBY BRANDON
ARMSTRONG; SERGIO TORRES;
RICHARD WOODRUFF; MARSHALL
LAWRENCE GORDON; JOEL A.
LIPMAN; JAMES GUDGALIS; MARY P.
HOESSLER; STEPHEN M. HAYES;
BRIAN REEVES; SAM HAMMOND;
MARK LEGGETT; EDWIN NAYTHONS;
MICHAEL WASHBURN; IRA D.
DUNST; BRIAN WEBER; KAMNEEL
MAHARAJ; KIM IOCOVOZZI;
HERBERT J. YOUNG; LINDA HASPER;
LESLIE BAYARD; TRICIA FELLERS;
ORLANDO ELLIOTT; JAMES
BONSIGNORE; MARGARET SETSER;
GUILLERMO QUIROZ; DOUGLAS
KURASH; ANDRES CARULLO; LAURA
S. SUTTA; GEORGIA L. THOMAS;
ERIC J. OLSON; JENNIFER MYERS;
TOM WOODWARD; JEROLD
TERHOST; CAMERON JOHN CESTARO;
DONALD BROWN; MARIA FIGUEROA;
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 15
CONSTANCE MARTYN; THOMAS
GANIM; DANIEL BALDESCHI;
LILLIAN E. LEVOFF; GIUSEPPINA
ROBERTO; ROBERT TRADER; SEAN
GOLDSBERRY; CYNTHIA NAVARRO;
OWEN CHAPMAN; MICHAEL BREIN;
TRAVIS BRISSEY; RONALD
BURKARD; ADAM CLOUTIER;
STEVEN CRAIG; JOHN J. DIXSON;
ERIN L. FANTHORPE; ERIC HADESH;
MICHAEL P. KEETH; JOHN KIRK
MACDONALD; MICHAEL MANDAHL;
NICHOLAS MCDANIEL; MARY J.
MORAN-SPICUZZA; GARY PINCAS;
BRANDON POTTER; THOMAS PURDY;
ROCCO RENGHINI; MICHELLE
SINGLTEON; KEN SMILEY; GREGORY
M. SONSTEIN; ROMAN STARNO;
GAYLE A. STEPHENSON; ANDRES
VILLICANA; RICHARD WILLIAMS;
BRADFORD L. HIRSCH; ASHLEY
CEPHAS; DAVID E. HILL; CHAD
MCKINNEY; MORDECHAI SCHIFFER;
LISA SANDS; DONALD KENDIG;
KEVIN GOBEL; ERIC LARSON; LIN
MCKINNEY; RYAN CROSS; PHILLIP
HOFFMAN; DEBRA SIMMONS;
ABELARDO MORALES; PETER
BLUMER; CAROLYN HAMMOND;
MELISSA LEGGETT; KELLY
MOFFETT; EVAN GROGAN; CARLOS
MEDINA; ALBERTO DOMINGUEZ;
CATHERINE BERNARD; MICHAEL
16 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
BREIEN; LAURA GILL; THOMAS
SCHILLE; JUDITH STANTON; RANDY
RICKERT; BRYAN ZIRKEL; JAMES
KUNDRAT; ROBERT SMITH; MARIA
KOTOVA; JOSIPA CASEY; LUAN
SNYDER; BEN BAKER; BRIAN
NGUYEN; HATTIE WILLIAMS; BILL
HOLVEY; LOURDES VARGAS;
KENDALL SNYDER; NOMER MEDINA;
SAMERIA GOFF; URSULA PYLAND;
MARCELL CHAPMAN; KAYE
KURASH; HOLLY AMROMIN; JOHN
CHAPMAN; MARY D’ANGELO;
GEORGE RUDY; AYMAN MOUSA;
SHELLY HENDERSON; JEFFREY
HATHAWAY; DENNIS J. MURPHY;
DOUGLAS A. PATTERSON; JOHN
GENTRY; DANIELLE KAY
GILLELAND; JOSEPH BOWE;
MICHAEL DESOUTO,
Plaintiffs-Appellees,
GREG DIRENZO,
Petitioner-Appellee,
HYUNDAI MOTOR AMERICA; KIA
MOTORS AMERICA; KIA MOTORS
CORPORATION; GROSSINGER
AUTOPLEX, INC., FKA Grossinger
Hyundai; JOHN KRAFCIK; HYUNDAI
MOTOR COMPANY; SARAH
KUNDRAT,
Defendants-Appellees.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 17
v.
LINDA RUTH SCOTT,
Objector-Appellant.
IN RE HYUNDAI AND KIA FUEL No. 15-56067
ECONOMY LITIGATION,
D.C. No.
2:13-ml-02424-
JOHN GENTRY; LINDA RUTH SCOTT; GW-FFM
DANIELLE KAY GILLELAND; JOSEPH
BOWE; MICHAEL DESOUTO,
Plaintiffs, OPINION
and
JAMES BEN FEINMAN,
Appellant,
v.
HYUNDAI MOTOR AMERICA; KIA
MOTORS AMERICA; KIA MOTORS
CORPORATION; GROSSINGER
AUTOPLEX, INC., FKA GROSSINGER
HYUNDAI; JOHN KRAFCIK; HYUNDAI
MOTOR COMPANY; SARAH
KUNDRAT,
Defendants-Appellees.
18 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
Appeal from the United States District Court
for the Central District of California
George H. Wu, District Judge, Presiding
Argued and Submitted En Banc September 27, 2018
Pasadena, California
Filed June 6, 2019
Before: Sidney R. Thomas, Chief Judge; and Andrew J.
Kleinfeld, William A. Fletcher, Marsha S. Berzon, Johnnie
B. Rawlinson, Jay S. Bybee, Milan D. Smith, Jr., Sandra S.
Ikuta, Morgan Christen, Jacqueline H. Nguyen, and
Andrew D. Hurwitz, Circuit Judges.
Opinion by Judge Nguyen;
Dissent by Judge Ikuta
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 19
SUMMARY*
Class Action / Attorneys’ Fees
The en banc court affirmed the district court’s orders and
judgment certifying a nationwide settlement class, approving
a settlement, and awarding attorneys’ fees in a multidistrict
litigation brought against Hyundai Motor America and Kia
Motors America regarding alleged misrepresentations about
their vehicles’ fuel economy.
Objectors challenged the certification order and fee
awards on various grounds, and the en banc court found none
of them persuasive.
Concerning the objectors’ challenge to the district court’s
findings regarding the predominance of common factual or
legal issues under Fed. R. Civ. P. 23(b)(3), the en banc court
held that the district court did not abuse its discretion in
finding that common issues predominated. Specifically, the
en banc court held that: the inclusion of used car purchasers
in the class did not defeat predominance; variations in state
law did not defeat predominance; objectors failed to meet
their burden of showing that California law did not apply; and
application of California law satisfied due process.
The en banc court rejected the objectors’ challenges to the
adequacy of class counsel.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
20 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
Concerning the objectors’ challenges to the settlement
approval, the en banc court held that: the notice to class
members provided sufficient information; the claim forms
were not overly burdensome; and there was no evidence of
collusion between class counsel and the automakers. The en
banc court held that the district court properly exercised its
discretion in calculating the fee award using the lodestar
method.
The en banc court held that the district court did not abuse
its discretion in denying fees to objector’s counsel James
Feinman because he did not meaningfully contribute to the
class settlement.
Judge Ikuta dissented because she would hold that the
district court certified a multistate class action under Fed. R.
Civ. P. 23 without determining what law applied to the
plaintiffs’ claims, in violation of Rule 23 and Supreme Court
precedent, Amchem Prods., Inc. v. Windsor, 521 U.S. 591
(1997). Judge Ikuta also stated that the majority erred in
upholding the district court's award of attorneys’ fees,
because the district court failed to determine the value of the
benefit the class derived from the settlement.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 21
COUNSEL
James B. Feinman (argued), James B. Feinman & Associates,
Lynchburg, Virginia, for Appellants James Ben Feinman,
John Gentry, Linda Ruth Scott, Danielle Kay Gilleland,
Joseph Bowe, Michael Desouto.
George W. Cochran (argued), Streetsboro, Ohio; Edward W.
Cochran, Shaker Heights, Ohio; John J. Pentz, Sudbury,
Massachusetts; for Appellants Caitlin Ahearn and Andrew
York.
Steve A. Miller, Steve A. Miller P.C., Denver, Colorado, for
Appellant Antonio Sberna.
Matthew Kurilich, Tustin, California, for Appellant Peri
Fetsch.
Dennis D. Gibson, Gibson Law Firm, Dallas, Texas, for
Appellant Dana Roland.
Elaine S. Kusel (argued), Basking Ridge; Richard D.
McCune, McCuneWright LLP, Redlands, California; for
Appellees Kehlie R. Espinosa, Lilian E. Levoff, Thomas
Ganim, and Daniel Baldeschi.
Benjamin W. Jeffers, Dommond E. Lonnie, James S.
Azadian, and Brian H. Newman, Dykema Gossett LLC, Los
Angeles, California, for Appellees Kia Motors America Inc.
and Kia Motors Corp.
Shon Morgan (argued) and Joseph R. Ashby, Quinn Emanuel
Urquhart & Sullivan LLP, Los Angeles, California; Karin
Kramer, Quinn Emanuel Urquhart & Sullivan LLP, San
22 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
Francisco, California; Dean Hansell, Hogan Lovells LLP, Los
Angeles, California; for Appellees Hyundai Motor America
and Hyundai Motor Co.
Robert B. Carey and John M. DeStefano, Hagens Berman
Sobol Shapiro LLP, Phoenix, Arizona, for Appellees Kaylene
P. Brady and Nicole Marie Hunter.
Christopher E. Appel, Philip S. Goldberg, and Cary
Silverman, Shook Hardy & Bacon LLP, Washington, D.C.,
for Amici Curiae Association of Global Automakers and
American Tort Reform Association.
Katherine I. McBride, Jason L. Lichtman, and Jonathan D.
Selbin, Lieff Cabraser Heimann & Bernstein LLP, New
York, New York; Elizabeth J. Cabraser, Roger N. Heller, and
Michael W. Sobol, Lieff Cabraser Heimann & Bernstein
LLP, San Francisco, California; for Amici Curiae Public
Justice, National Association of Consumer Advocates,
National Consumer Law Center, and The Impact Fund.
Ryan H. Wu and Glenn Danas, Capstone Law APC, Los
Angeles, California; Mark S. Greenstone and Jonathan M.
Rotter, Glancy Prongay & Murray LLP, Los Angeles,
California; for Amici Curiae Hon. Stephen G. Larson (Ret.)
and Professor David Rosenberg.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 23
OPINION
NGUYEN, Circuit Judge, with whom THOMAS, Chief
Judge, and W. FLETCHER, BERZON, BYBEE, CHRISTEN,
and HURWITZ, Circuit Judges, join in full, and with whom
RAWLINSON, Circuit Judge, joins except as to part of
section III.B.3:
We review five consolidated appeals from the district
court’s orders and judgment certifying a nationwide
settlement class, approving a settlement, and awarding
attorney’s fees in a multidistrict litigation brought against
defendants Hyundai Motor America and Kia Motors America
(the “automakers”) regarding alleged misrepresentations
about their vehicles’ fuel economy. After extensive
litigation, the lead plaintiffs’ counsel (“class counsel”) and
the automakers (collectively, the “settling parties”) negotiated
a settlement that the district court approved following eight
months of confirmatory discovery. Objectors challenged the
certification order and fee awards on various grounds.
Finding none of them persuasive, we affirm.
I. Factual and Procedural Background
On January 6, 2012, class counsel McCuneWright, LLP
filed the first of the putative nationwide class actions,
Espinosa v. Hyundai Motor America, No. 12-cv-800 (C.D.
Cal.). The Espinosa plaintiffs brought claims against
Hyundai under California consumer protection statutes and
theories of common law fraud and negligent
misrepresentation. They alleged that Hyundai misled
consumers throughout the United States by advertising
inflated fuel economy standards for the Hyundai Elantra and
Sonata vehicle model years 2011–12 based on inaccurate
24 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
estimates that Hyundai provided to the Environmental
Protection Agency (“EPA”). After several motions to
dismiss, amendments to the complaint, and class discovery,
including document production, depositions, and expert
reports, the Espinosa plaintiffs moved to certify a nationwide
litigation class of purchasers of Hyundai Elantra and Sonata
vehicles.
In November and December 2012, the district court held
hearings on the contested class certification motion in
Espinosa. Although the court issued a tentative ruling
declining to certify a nationwide litigation class in light of
potentially “material differences” among state laws, it
requested supplemental briefing and “did not make a final
ruling.”
On November 2, 2012, less than four weeks before the
Espinosa class certification hearing, the automakers issued a
press release announcing downward adjustments to the EPA
fuel economy estimates for certain of their 2011 through 2013
model year vehicles. Partially in response to an EPA
investigation, the automakers created a Lifetime
Reimbursement Program (“Reimbursement Program”) to
compensate owners and lessees of these vehicles for the
higher fuel costs associated with the revised fuel economy
estimates.
The automakers’ announcement sparked a surge of
litigation. At the time, Espinosa and one other putative class
action were the only cases pending against the automakers
regarding misrepresentations and omissions in their fuel-
economy disclosures and advertisements. After the
announcement, several similar lawsuits were filed in state and
federal courts around the country, including two, Hunter v.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 25
Hyundai Motor America, No. 12-cv-1909 (C.D. Cal. filed
Nov. 2, 2012), and Brady v. Hyundai Motor America,
No. 12-cv-1930 (C.D. Cal. filed Nov. 6, 2012), brought by
class co-counsel Hagens Berman Sobol Shapiro, LLP, and
three in Virginia brought by attorney James B. Feinman. The
federal cases were consolidated into a single multidistrict
litigation (“MDL”) in the Central District of California before
the Honorable George H. Wu. See 28 U.S.C. § 1407.
Meanwhile, Hyundai and the plaintiffs in Espinosa,
Brady, and Hunter attended multiple mediation sessions with
a mediator whom the district court found to be “respected and
experienced.” On February 14, 2013, the parties announced
a proposed nationwide settlement for Hyundai vehicles
affected by the fuel economy restatement. Kia joined this
settlement-in-principle shortly thereafter.
The district court appointed liaison counsel to act on
behalf of the plaintiffs not participating in the Espinosa,
Brady, and Hunter cases (the “non-settling plaintiffs”) and to
participate in confirmatory discovery so that the non-settling
plaintiffs could objectively evaluate the terms of the
settlement. Confirmatory discovery lasted eight months and
produced 300,000 pages of documents and under-oath
interviews of the automakers’ employees, including
Hyundai’s CEO. Liaison counsel filed status reports with
updates on the progress of confirmatory discovery and the
non-settling plaintiffs’ positions, and the court held several
status conferences to discuss issues that arose.
On December 23, 2013, the settling parties sought
preliminary approval of the nationwide class settlement and
moved to certify a settlement class. The district court ordered
multiple rounds of briefing concerning the fairness of the
26 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
settlement, sufficiency of the class notice, the claims process,
class certification, choice of law, and other issues. At four
hearings held between December 2013 and August 2014, the
parties addressed concerns raised by the court sua sponte as
well as by objectors and other non-settling plaintiffs. In
response to these concerns, the settling parties twice revised
the settlement agreement and notice provisions.
After issuing several detailed written rulings, the district
court granted preliminary approval of the settlement and
certified the class for settlement purposes on August 29,
2014. The court appointed Hagens Berman and
McCuneWright as settlement class counsel. In September
and October 2014, the district court held four additional
hearings, at which it requested that the parties make
additional changes to the settlement notices and website, such
as adding information about the Reimbursement Program,
and rewording the notices to make them easier to understand.
The amended settlement provided for class members to be
notified of the settlement in four ways: (1) a short form notice
by mail; (2) an email notification; (3) settlement websites
with the long form notice; and (4) flyers provided by dealers.
The settlement defined the class as all current and former
owners and lessees who bought or leased certain defined
vehicles on or before November 2, 2012—the date that
Defendants announced they were revising the EPA fuel
economy estimates of certain Hyundai and Kia vehicles.
Class members could receive compensation for
relinquishing any claims they might have by choosing one of
four options:
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 27
1. a lump sum payment via a debit card,
determined by vehicle type and model year,
with the cash value approximating the
additional fuel cost over a 4.75-year period
associated with the revised fuel economy
estimates;
2. a dealer service debit card worth 150% of
the value of their lump sum payment for use
at Hyundai or Kia dealers;
3. a new car purchase certificate worth
200% of their lump sum payment for use in
the purchase of a new Hyundai or Kia vehicle
by a class member or their immediate family;
or
4. enrollment in the Reimbursement
Program, which was extended as a result of
the settlement from December 31, 2013, to
July 6, 2015.
As it had before the settlement, the Reimbursement Program
provided recurring payments over the entire period of
ownership based on the updated fuel economy estimates, the
number of miles driven, and the price of gas in each
geographic region, plus a 15% bonus for the inconvenience.
Class members already participating in the Reimbursement
Program could continue to participate and, in addition,
receive a $100 or $50 lump sum payment depending on
whether their vehicles were owned or leased.
The class notice websites, which the district court tested,
offered an online calculator for class members to estimate the
28 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
benefit that they would receive through the Reimbursement
Program as compared with the lump sum payment options.
Class members could submit their claims online where the
form would pre-populate with the class members’
information after they entered their vehicle identification
number and the unique identification number contained in
their class notices.
By the end of March 2015, with more than three months
to go before the July 6, 2015, claims deadline, the automakers
reported to the district court that the total compensation they
had paid or expected to pay to the class members, based on
the claims submitted, was more than $140 million. The
Reimbursement Program accounted for more than
$97 million of this compensation. By May 31, 2015, more
than a month before the claims deadline, the participation rate
had grown to 23.0%, reflecting 200,013 claims. And when
the court included class members’ participation in the
Reimbursement Program in the analysis, the participation rate
jumped to 64.5%.
In July 2014, one month before the settlement received
preliminary approval, class counsel began negotiating with
the automakers over a fee award, assisted by the same
experienced mediator who had helped them reach the
settlement agreement. In October 2014, they reached an
agreement, pursuant to which class counsel moved for an
award of fees.
The district court expressed concern with the request by
McCuneWright for a 3.0 lodestar multiplier. On June 1,
2015, after supplemental briefing and an additional hearing,
the court awarded McCuneWright $2,850,000 in attorney’s
fees and $93,550.02 in costs based on a reduced multiplier of
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 29
1.5521. On August 5, 2015, the court awarded Hagens
Berman, class counsel in Hunter and Brady, $2,700,000 in
attorney’s fees based on a lodestar multiplier of 1.22, and
$250,000 in costs. In addition, the court awarded fees and
costs to 26 other firms that reflected lodestar reductions of
27 to 80 percent, including an award of $1,257,000 in fees
and $66,000 in costs to liaison counsel Girard Gibbs LLP.
The court declined to award fees to Feinman for his
representation of the objecting plaintiffs in the three Virginia
cases, finding that he “did not meaningfully contribute to the
class settlement” and that his “mostly meritless” objections
“did not serve to increase the settlement amount or otherwise
benefit the class members.”
On June 11, 2015, after more than three years of
litigation, including eight months of confirmatory discovery,
the court issued a 19-page order granting final approval of the
class settlement. Various objectors appealed the district
court’s orders certifying the class, approving the settlement,
and awarding attorney’s fees. A divided three-judge panel of
this court vacated the class certification decision and
remanded, holding that by failing to analyze the variations in
state law, the district court abused its discretion in certifying
the settlement class. See In re Hyundai & Kia Fuel Econ.
Litig., 881 F.3d 679 (9th Cir. 2018). A majority of the
nonrecused active judges on our court voted to rehear the case
en banc.
30 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
II. Jurisdiction and Standards of Review
The district court had jurisdiction under 28 U.S.C.
§ 1332(a) and (d). We have jurisdiction under 28 U.S.C.
§ 1291.1
In light of the “strong judicial policy that favors
settlements, particularly where complex class action litigation
is concerned,” Allen v. Bedolla, 787 F.3d 1218, 1223 (9th Cir.
2015) (quoting In re Syncor ERISA Litig., 516 F.3d 1095,
1101 (9th Cir. 2008)), we perform an “extremely limited”
review of a district court’s approval of a class settlement, In
re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 940
(9th Cir. 2011) (quoting In re Mego Fin. Corp. Sec. Litig.,
213 F.3d 454, 458 (9th Cir. 2000)). Parties seeking to
overturn the settlement approval must make a “strong
showing” that the district court clearly abused its discretion.
Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1238 (9th
Cir. 1998) (quoting Class Plaintiffs v. Seattle, 955 F.2d 1268,
1276 (9th Cir. 1992)). As long as the district court applied
the correct legal standard to findings that are not clearly
erroneous, we will affirm. Bluetooth Headset, 654 F.3d
at 940.
We review for abuse of discretion the district court’s
decision to certify a class for settlement purposes, limiting
our review “to whether the district court correctly selected
1
We reject the settling parties’ argument that objectors Ahearn and
York’s appeal from the district court’s August 5, 2015 order awarding
attorney’s fees was untimely. Another objector, Antonio Sberna, timely
appealed the order, and Ahearn and York filed their notice of appeal
within 14 days thereafter, as permitted by Federal Rule of Appellate
Procedure 4(a)(3).
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 31
and applied Rule 23’s criteria.” Parra v. Bashas’, Inc.,
536 F.3d 975, 977 (9th Cir. 2008). Likewise, we review for
abuse of discretion the district court’s award of attorney’s
fees and costs to class counsel as well as its method of
calculating the fees. In re Online DVD-Rental Antitrust
Litig., 779 F.3d 934, 942 (9th Cir. 2015). The factual
findings underlying these decisions are reviewed for clear
error. See Torres v. Mercer Canyons Inc., 835 F.3d 1125,
1132 (9th Cir. 2016) (certification); Bluetooth Headset,
654 F.3d at 940 (fees).
III. Discussion
A. Certification
Before certifying a class, the district court must assure
itself that the proposed class action satisfies four
prerequisites:
(1) the class is so numerous that joinder of all
members is impracticable;
(2) there are questions of law or fact common
to the class;
(3) the claims or defenses of the
representative parties are typical of the claims
or defenses of the class; and
(4) the representative parties will fairly and
adequately protect the interests of the class.
Fed. R. Civ. P. 23(a). In addition to meeting the numerosity,
commonality, typicality, and adequacy prerequisites, the class
32 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
action must fall within one of the three types specified in
Rule 23(b). Here, the district court certified the class under
Rule 23(b)(3), which requires that “questions of law or fact
common to class members” must “predominate over any
questions affecting only individual members,” and the class
action must be “superior to other available methods for fairly
and efficiently adjudicating the controversy.” Fed. R. Civ.
P. 23(b)(3). The district court’s Rule 23(a) and (b) analysis
must be “rigorous.” Comcast Corp. v. Behrend, 569 U.S. 27,
33 (2013) (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S.
338, 351 (2011)).
The criteria for class certification are applied differently
in litigation classes and settlement classes. In deciding
whether to certify a litigation class, a district court must be
concerned with manageability at trial. However, such
manageability is not a concern in certifying a settlement class
where, by definition, there will be no trial. On the other hand,
in deciding whether to certify a settlement class, a district
court must give heightened attention to the definition of the
class or subclasses. Amchem Prods., Inc. v. Windsor,
521 U.S. 591, 620 (1997). The Supreme Court specifically
addressed the difference between litigation and settlement
classes in Amchem. The Court wrote:
Confronted with a request for settlement-only
class certification, a district court need not
inquire whether the case, if tried, would
present intractable management problems, see
Fed. Rule Civ. Proc. 23(b)(3)(D), for the
proposal is that there be no trial. But other
specifications of the Rule—those designed to
protect absentees by blocking unwarranted or
overbroad class definitions—demand
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 33
undiluted, even heightened, attention in the
settlement context. Such attention is of vital
importance, for a court asked to certify a
settlement class will lack the opportunity,
present when a case is litigated, to adjust the
class, informed by the proceedings as they
unfold.
We addressed concerns about definitions of settlement
classes and fairness of proposed settlements in Hanlon v.
Chrysler Corp., 150 F.3d 1011, 1021 (9th Cir. 1998):
District courts must be skeptical of some
settlement agreements put before them
because they are presented with a “bargain
proffered for . . . approval without benefit of
an adversarial investigation.” [Amchem,
521 U.S. at 621].
These concerns warrant special attention
when the record suggests that settlement is
driven by fees; that is, when counsel receive a
disproportionate distribution of the settlement,
or when the class receives no monetary
distribution but class counsel are amply
rewarded.
In the case before us, however, we need not analyze all of
those criteria, for objectors challenge only the district court’s
findings regarding the predominance of common factual or
legal issues under Rule 23(b)(3) and adequacy of
representation under Rule 23(a)(4). We address those
findings in turn.
34 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
1. Predominance
The predominance inquiry under Rule 23(b)(3) “tests
whether proposed classes are sufficiently cohesive to warrant
adjudication by representation.” Amchem, 521 U.S. at 623.
It “presumes that the existence of common issues of fact or
law have been established pursuant to Rule 23(a)(2),” and
focuses on whether the “common questions present a
significant aspect of the case and they can be resolved for all
members of the class in a single adjudication”; if so, “there is
clear justification for handling the dispute on a representative
rather than on an individual basis.” Hanlon, 150 F.3d at 1022
(quoting 7A Charles Alan Wright et al., Federal Practice &
Procedure § 1777 (2d ed. 1986)).
“Predominance is not, however, a matter of nose-
counting. Rather, more important questions apt to drive the
resolution of the litigation are given more weight in the
predominance analysis over individualized questions which
are of considerably less significance to the claims of the
class.” Torres, 835 F.3d at 1134 (internal citation omitted).
Therefore, even if just one common question predominates,
“the action may be considered proper under Rule 23(b)(3)
even though other important matters will have to be tried
separately.” Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct.
1036, 1045 (2016) (quoting 7AA Charles Alan Wright et al.,
Federal Practice and Procedure § 1778 (3d ed. 2005)).
Rule 23(b)(3) lists four non-exclusive factors “pertinent”
to a predominance finding:
(A) the class members’ interests in
individual l y control l i ng the
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 35
prosecution or defense of separate
actions;
(B) the extent and nature of any litigation
concerning the controversy already
begun by or against class members;
(C) the desirability or undesirability of
concentrating the litigation of the
claims in the particular forum; and
(D) the likely difficulties in managing a
class action.
These factors must be considered in light of the reason for
which certification is sought—litigation or settlement—which
“is relevant to a class certification.” Amchem, 521 U.S.
at 619. As noted above, in deciding whether to certify a
settlement-only class, “a district court need not inquire
whether the case, if tried, would present intractable
management problems.” Id. at 620.
At the same time, a proposal to certify a settlement class
presents other concerns—the risk of collusion chief among
them—that “demand undiluted, even heightened, attention”
by the district court. Id. The adversarial nature of a trial
ensures that class definitions will be tested and allows the
district court “to adjust the class, informed by the proceedings
as they unfold.” Id. A settlement lacks these safeguards.
Therefore, the aspects of Rule 23(a) and (b) that are important
to certifying a settlement class are “those designed to protect
absentees by blocking unwarranted or overbroad class
definitions.” Id. The focus is “on whether a proposed class
36 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
has sufficient unity so that absent members can fairly be
bound by decisions of class representatives.” Id. at 621.
Objectors Peri Fetsch and Dana Roland dispute that
settlement plays any role in the predominance inquiry,
arguing that the test is “precisely the same for a settlement
class as it [is] for a litigation class.” However, they
misunderstand both Amchem and our statement in Hanlon
that “[s]ettlement benefits cannot form part of a Rule 23(b)(3)
analysis.” 150 F.3d at 1022 (emphasis added). Our point,
and the Supreme Court’s holding in Amchem, was that the
recovery secured through a settlement cannot be the basis for
finding that common issues predominate. Id.; Amchem,
521 U.S. 622–23.
In Amchem, the district court found that predominance
was satisfied based in part on class members’ common
interest in the settlement benefits—prompt and fair
compensation without the risk and cost of litigation. 521 U.S.
at 622. The Supreme Court held that this was error because
predominance looks at the cohesiveness of “the legal or
factual questions that qualify each class member’s case as a
genuine controversy, questions that preexist any settlement.”
Id. at 623. But whether a proposed class is sufficiently
cohesive to satisfy Rule 23(b)(3) is informed by whether
certification is for litigation or settlement. A class that is
certifiable for settlement may not be certifiable for litigation
if the settlement obviates the need to litigate individualized
issues that would make a trial unmanageable. See 2 William
B. Rubenstein, Newberg on Class Actions § 4:63 (5th ed.
2018) (“Courts . . . regularly certify settlement classes that
might not have been certifiable for trial purposes because of
manageability concerns.”).
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 37
The Supreme Court said as much in Amchem. There, the
Third Circuit, which reversed the district court’s certification,
held that Rule 23(a) and (b)(3)’s requirements “must be
satisfied without taking into account the settlement.” Id.
at 619 (quoting Georgine v. Amchem Prods., Inc., 83 F.3d
610, 626 (3d Cir. 1996)). Disagreeing, the Supreme Court
pointed out that the Third Circuit “should have acknowledged
that settlement is a factor in the calculus.” Id. at 622. The
Court concluded that “a remand [was] not warranted,”
however, because the class did not satisfy Rule 23’s
requirements “with or without a settlement on the table.” Id.
The Court also recognized that predominance is “readily
met” in cases alleging consumer fraud, id. at 625, and the
present case is no exception. In many consumer fraud cases,
the crux of each consumer’s claim is that a company’s mass
marketing efforts, common to all consumers, misrepresented
the company’s product—here, a vehicle’s fuel efficiency.
The class was defined as “[a]ll current and former owners and
lessees of [specified vehicles] who were the owner or lessee,
on or before November 2, 2012, of such [v]ehicle that was
registered [domestically].”2 This cohesive group of
individuals suffered the same harm in the same way because
of the automakers’ alleged conduct.
This case is a far cry from Amchem, which involved a
“sprawling” asbestos settlement class with members who had
wide-ranging injuries, some exposure-only and others
imminently fatal. 521 U.S. at 623–26. As Hanlon explained
in distinguishing Amchem, the “heart” of the problem there
2
The class definition excluded rental fleet owners, government
entities other than in their capacity as an owner or lessee, judges assigned
to any of the cases, and persons who had previously released their claims.
38 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
was the class members’ conflicting interests: current
claimants, who were sick, wanted to maximize the immediate
payout, whereas healthy claimants had a strong interest in
preserving funds in case they became ill in the future.
Hanlon, 150 F.3d at 1020–21. These vast differences in
Amchem required “caution [because] individual stakes are
high and disparities among class members great.” 521 U.S.
at 625.
In contrast, here, class members were exposed to uniform
fuel-economy misrepresentations and suffered identical
injuries within only a small range of damages. Further, as in
Hanlon, no material conflicts existed among class members.
Id. at 1021. The district court found that the following
undisputed common questions predominated over
individualized issues: (1) “[w]hether the fuel economy
statements were in fact inaccurate”; and (2) “whether [the
automakers] knew that their fuel economy statements were
false or misleading.” The court also found that the alleged
misrepresentations were “uniformly” made via “Monroney
stickers and nationwide advertising.”3 We have held that
these types of common issues, which turn on a common
course of conduct by the defendant, can establish
predominance in nationwide class actions. See Hanlon,
150 F.3d at 1022–23 (holding that “[a] common nucleus of
facts and potential legal remedies dominate[d]” over
“idiosyncratic differences between state consumer protection
3
A Monroney sticker is “the label placed on new automobiles with
the manufacturer’s suggested retail price and other consumer
information,” 49 C.F.R. § 575.401(c)(4), including information about the
vehicle’s fuel efficiency, see 49 U.S.C. § 32908(b). See also 15 U.S.C.
§ 1232. It is named after Senator A.S. Mike Monroney, a sponsor of the
Automobile Information Disclosure Act of 1958, Pub. L. No. 85-506,
72 Stat. 325 (codified as amended at 15 U.S.C. §§ 1231–1233).
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 39
laws” where a nationwide class of minivan buyers’ claims
turned on “questions of [the manufacturer’s] prior knowledge
of the [vehicle’s] deficiency, the design defect, and a
damages remedy”); Edwards v. First Am. Corp., 798 F.3d
1172, 1182–83 (9th Cir. 2015) (reversing denial of class
certification for nationwide class of homebuyers because the
alleged “common scheme, if true, present[ed] a significant
aspect of [the defendant’s] transactions that warrant[ed] class
adjudication”).
a. The Inclusion of Used Car Purchasers in the
Class Does Not Defeat Predominance
Fetsch and Roland argue that used car purchasers may not
have seen the automakers’ fuel efficiency representations,
because only new cars are required to display the Monroney
stickers, and that including used car purchasers in the class
creates a factual issue precluding predominance. Their
argument ignores the district court’s finding that the alleged
misrepresentations were made “uniformly”—not only on the
Monroney stickers, but also in “nationwide advertising.”4
When misrepresentations are made as part of a nationwide,
4
Various objectors complain that the district court failed to make
factual findings in its orders certifying the class, granting final settlement
approval, and awarding attorney’s fees. Before issuing these orders,
however, the district court had already provided its findings and reasoning
on the record, which is all that was required. See Linney, 151 F.3d at 1242
(“[A] district court need not respond to objections with findings of fact
and conclusions of law if the court ‘provide[s] a reasoned response
elsewhere in the record.’” (second alteration in original) (quoting In re
Pac. Enters. Sec. Litig., 47 F.3d 373, 377 (9th Cir. 1995))); see also
Hanlon, 150 F.3d at 1023 (explaining that the record provided “more than
adequate foundation” for review despite the district court’s “almost
conclusory” findings).
40 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
concerted marketing effort, it makes no difference to the
predominance analysis whether consumers encounter them in
different guises. See In re Tobacco II Cases, 207 P.3d 20,
40–41 (Cal. 2009); see also In re First All. Mortg. Co.,
471 F.3d 977, 991 (9th Cir. 2006) (“The exact wording of the
. . . misrepresentations . . . is not the predominant issue. It is
the underlying scheme which demands attention.” (quoting In
re Am. Cont’l Corp./Lincoln Sav. & Loan Sec. Litig.,
140 F.R.D. 425, 431 (D. Ariz. 1992))). Whether or not
Hyundai’s and Kia’s advertising was substantial enough to
support an inference of reliance under In re Tobacco II, the
potential individual questions of reliance for used-car
purchasers do not predominate in the context of this proposed
settlement class. That some individualized issues might need
to be addressed does not in and of itself defeat predominance.
The predominance inquiry is mainly concerned with “the
balance between individual and common issues.” Sali v.
Corona Reg’l Med. Ctr., 889 F.3d 623, 635 (9th Cir. 2018)
(emphasis added) (quoting Wang v. Chinese Daily News, Inc.,
737 F.3d 538, 545–46 (9th Cir. 16 2013)). Indeed, this sort
of individual question would only apply to a subset of the
class (used-car purchasers) and would primarily implicate
trial management issues, which we do not consider when
conducting a predominance analysis for a settlement class.
Amchem, 521 U.S. at 620.
Similarly, even if, as the automakers’ expert opined, used
car buyers are in a “somewhat different market” than new car
buyers and would require a different damages analysis, the
district court did not abuse its discretion by finding that
common issues of fact predominated. “[T]he mere fact that
there might be differences in damage calculations is not
sufficient to defeat class certification.” Pulaski &
Middleman, LLC v. Google, Inc., 802 F.3d 979, 987 (9th Cir.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 41
2015) (quoting Stearns v. Ticketmaster Corp., 655 F.3d 1013,
1026 (9th Cir. 2011)); see Fed. R. Civ. P. 23(b)(3) advisory
committee’s note to 1966 amendment (“[A] fraud perpetrated
on numerous persons by the use of similar misrepresentations
may be an appealing situation for a class action, and it may
remain so despite the need, if liability is found, for separate
determination of the damages suffered by individuals within
the class.”).
Nor is it clear why the damages here would need to be
calculated based on each consumer’s willingness to pay for
higher fuel efficiency. Fraud damages do not normally
correlate with the degree of reliance. Cf. Tobacco II Cases,
207 P.3d at 39 (“It is not . . . necessary that [the plaintiff’s]
reliance upon the truth of the fraudulent misrepresentation be
the sole or even the predominant or decisive factor
influencing his conduct . . . . It is enough that the
representation has played a substantial part, and so had been
a substantial factor, in influencing his decision.” (alteration in
original) (quoting Engalla v. Permanente Med. Grp., Inc.,
938 P.2d 903, 919 (Cal. 1997))). If a consumer were to
establish the threshold level of reliance, the automaker would
be liable for the consumer’s entire loss from higher-than-
expected fuel costs—an amount that can easily be calculated
on an individual basis, as it was in the Reimbursement
Program.
b. Variations in State Law Do Not Defeat
Predominance
Fetsch and Roland also argue that the district court failed
to address variations in state law affecting claims by used car
purchasers and that it was required to do so under Mazza v.
42 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
American Honda Motor Co., 666 F.3d 581 (9th Cir. 2012).
They are incorrect.
Subject to constitutional limitations and the forum state’s
choice-of-law rules, a court adjudicating a multistate class
action is free to apply the substantive law of a single state to
the entire class. Phillips Petroleum Co. v. Shutts, 472 U.S.
797, 823 (1985); see also Harmsen v. Smith, 693 F.2d 932,
946–47 (9th Cir. 1982) (explaining that a district court sitting
in diversity must “apply the substantive law of the state in
which it sits, including choice-of-law rules”); Klaxon Co. v.
Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941) (noting that
“the accident of diversity of citizenship would constantly
disturb equal administration of justice in coordinate state and
federal courts sitting side by side” if Erie Railroad Co. v.
Tompkins, 304 U.S. 64 (1938) did not apply to conflict-of-
laws rules). Here, no party argued that California’s choice-
of-law rules should not apply to this class settlement arising
from an MDL in a California court. By default, California
courts apply California law “unless a party litigant timely
invokes the law of a foreign state,” in which case it is “the
foreign law proponent” who must “shoulder the burden of
demonstrating that foreign law, rather than California law,
should apply to class claims.” Wash. Mut. Bank, FA v.
Superior Court, 15 P.3d 1071, 1080–81 (Cal. 2001) (quoting
Bernhard v. Harrah’s Club, 546 P.2d 719, 721 (Cal. 1976));
accord Pokorny v. Quixtar, Inc., 601 F.3d 987, 995 (9th Cir.
2010).
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 43
To meet their burden, the objectors must satisfy
the three-step governmental interest test.5 Wash. Mut.,
15 P.3d at 1080–81; Pokorny, 601 F.3d at 994–95. Under
that test, the objectors must prove that (1) the law of the
foreign state “materially differs from the law of California,”
Wash. Mut., 15 P.3d at 1080, meaning that the law differs
“with regard to the particular issue in question”; (2) a “true
conflict exists,” meaning that each state has an interest in the
application of its own law to “the circumstances of the
5
Relying on Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th 459,
469 (1992), the dissent argues that, rather than the governmental interest
test, the district court should have applied California’s contractual choice-
of-law analysis. Dissent at 75–77. However, the claims in Nedlloyd arose
from the contract, namely, breach of the implied covenant of good faith
and fair dealing and breach of fiduciary duty. Here, the claims arise from
the automakers’ advertising misrepresentations, not the sales contracts.
For example, Scott’s sales contract made no claim about an estimated
mileage per gallon. Moreover, as the dissent acknowledges, Dissent at 77,
California courts must consider whether the choice-of-law provisions
conflict with fundamental public policy and whether California has a
greater interest than the chosen state before applying the provisions. See,
e.g., Ruiz v. Affinity Logistics Corp., 667 F.3d 1318, 1323–25 (9th Cir.
2012); Bridge Fund Capital Corp. v. Fastbucks Franchise Corp., 622 F.3d
996, 1003–04 (9th Cir. 2010). As the automakers argued below,
California recognizes that its consumer protection statutes embody a
strong public policy and that “Virginia’s law provides significantly less
consumer protection to its citizens than California law.” Am. Online, Inc.
v. Superior Court, 108 Cal. Rptr. 2d 699, 710 (Cal. Ct. App. 2001).
Therefore, given the objectors’ cursory arguments below, the district
court’s failure to apply the sales contracts’ choice-of-law provisions was
not erroneous. See Frontier Oil Corp. v. RLI Ins. Co., 63 Cal. Rptr. 3d
816, 833 (Cal. Ct. App. 2007) (“[I]f the choice-of-law agreements were
unenforceable or did not apply to the class causes of action and the party
opposing class certification continued to assert that the law of another
state applied to nonresident class members, the trial court must apply the
governmental interest analysis to determine which state’s law to apply”)
(citing Wash. Mut., 15 P.3d at 1071).
44 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
particular case”; and (3) the foreign state’s interest would be
“more impaired” than California’s interest if California law
were applied. Kearney v. Salomon Smith Barney, Inc., 137
P.3d 914, 922 (Cal. 2006); accord Pokorny, 601 F.3d at
994–95. If the objectors fail to meet their burden at any step
in the analysis, the district court “may properly find
California law applicable without proceeding” to the rest of
the analysis. Pokorny, 601 F.3d at 995 (quoting Wash. Mut.,
15 P.3d at 1081).
i. Objectors Failed to Meet Their Burden of
Showing That California Law Does Not
Apply
Fetsch and Roland do not suggest that application of
California law gives rise to constitutional problems. And
before the district court, no objector presented an adequate
choice-of-law analysis or explained how, under the facts of
this case, the governmental interest test’s three elements were
met. Further, no objector argued that differences between the
consumer protection laws of all fifty states precluded
certification of a settlement class. Consequently, neither the
district court nor class counsel were obligated to address
choice-of-law issues beyond those raised by the objectors,
and we will not decertify a class action for lack of such
analysis.6 See Harmsen, 693 F.2d at 947 (affirming district
6
The dissent misreads the record in suggesting that the district court
entirely “failed to . . . determine what substantive body of law applied.”
Dissent at 71. To the contrary, the district court ordered supplemental
briefing from the Gentry objectors on whether Virginia law should apply
after issuing a tentative ruling that it was “not convinced that there are any
serious differences between the laws of the various states” that would
preclude finding predominance satisfied for a settlement class. The
Gentry objectors’ filings were incomplete at best, noting cursorily some
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 45
court’s application of California law to multistate class where
the proponent of foreign law “failed to show, as required by
California law, that the law of other states relating to the
[state law] claims is significantly different from California’s
and, more importantly, that the interests of other states would
be impaired by application of California law to these non-
resident plaintiffs”); Pokorny, 601 F.3d at 994–96 (affirming
application of California law because the foreign law
proponent failed to meet its burden under California’s
governmental interest test).
Mazza is readily distinguishable. There, the foreign law
proponent (the defendant) “exhaustively detailed the ways in
which California law differs from the laws of the 43 other
jurisdictions” and showed how applying the facts to those
disparate state laws made “a difference in this litigation.”
Mazza, 666 F.3d at 590–91. Unlike class counsel here, the
plaintiffs in Mazza did “not contest these differences.” Id.
at 591 n.3. Weighing these arguments and concessions, a
differences between California and Virginia law but failing to analyze the
elements of the governmental interest test. Nevertheless, the district court
held a hearing and, in a subsequent order, addressed the issues raised
before concluding that no further conflict-of-law analysis was necessary.
As the district court explained, many Virginia consumers “no longer have
access to an alleged substantially better remedy,” given the Gentry
objectors’ claim that the statute of limitations would have run in Virginia.
To the extent the dissent suggests that the district court must sua
sponte survey the law of all fifty states, no case law supports this unduly
burdensome task. For example, the dissent cites Lozano v. AT&T Wireless
Services, Inc., 504 F.3d 718, 728 (9th Cir. 2007), but that case explicitly
“reject[ed] the notion that the district court was obligated to conduct a
comprehensive survey of every state’s law” on the enforceability of an
arbitration class action waiver provision when the plaintiff failed to
provide the court with the fifty-state survey. Id.
46 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
divided panel concluded that the defendant had “met its
burden” to show that foreign law applied “[u]nder the facts
and circumstances of this case.” Id. at 591, 594.
Importantly, the Mazza class was certified for litigation
purposes. The prospect of having to apply the separate laws
of dozens of jurisdictions presented a significant issue for
trial manageability, weighing against a predominance
finding.7 See also Zinser v. Accufix Research Inst., Inc.,
253 F.3d 1180, 1190–92 (9th Cir. 2001) (treating state law
variations as a subspecies of trial manageability concerns).
In settlement cases, such as the one at hand, the district court
need not consider trial manageability issues. Amchem,
521 U.S. at 620.
In Hanlon, we affirmed certification under Rule 23(b)(3)
of a nationwide settlement class of car owners alleging
violations of various state consumer laws. 150 F.3d at 1017,
1022. We held that common questions as to the defendant’s
knowledge and the existence of the problem (the same
questions at issue here) predominated, notwithstanding
“variations in state law.” Id. at 1020, 1022–23. In rejecting
the objectors’ argument that “the idiosyncratic differences
between state consumer protection laws” defeated
predominance, we reasoned that the claims revolved around
a “common nucleus of facts” and applied the longstanding
rule that “differing remedies” do not preclude class
certification. Id. at 1022–23. That same reasoning applies
with even greater force here, where the class claims turn on
7
Even so, Mazza left open the possibility of certifying a nationwide
class “with subclasses for class members in different states, with different
jury instruction[s] for materially different bodies of state law.” 666 F.3d
at 594.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 47
the automakers’ common course of conduct—their fuel
economy statements—and no objector established that the
law of any other states applied.8
ii. Application of California Law Satisfies Due
Process
Objector Linda Ruth Scott, a lead plaintiff in a Virginia
class action that was transferred to California as part of the
MDL, argues that application of California law violates her
due process rights.9 She asserts that Virginia, unlike most
jurisdictions, does not provide cross-jurisdictional tolling of
the statutes of limitations on her claims notwithstanding that
her case was stayed upon transfer and remained pending in
Virginia at the time of certification. Thus, she argues,
certification of a nationwide class left Virginia class members
with no real opportunity to opt out because their claims would
otherwise be dismissed as time-barred.10
8
Even if the Gentry plaintiffs had adequately raised and convincingly
argued the distinctions between California and Virginia law under the
governmental interest test or the contractual choice-of-law provision, the
district court found that the potential differences in Virginia law were not
so substantial as to predominate over other common issues or to preclude
certification. That was not an abuse of discretion, and it is entirely
consistent with our analysis in Hanlon, 150 F.3d at 1022–23.
9
The settling parties assert that the district court did not apply any
state’s law to the claims at issue because the settlement eliminated the
need to resolve them. We need not address this question and assume, for
the purposes of Scott’s due process argument, that the district court
applied California law.
10
Scott’s argument has been a moving target. In opposing
certification, she failed to raise a due process claim or request certification
of a subclass. Rather, she asserted that by postponing its certification
48 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
But Scott does not dispute that she, like all class
members, had the right to opt out. See Epstein v. MCA, Inc.,
179 F.3d 641, 648 (9th Cir. 1999); see also Ortiz v.
Fibreboard Corp., 527 U.S. 815, 848 (1999) (“[B]efore an
absent class member’s right of action [is] extinguishable due
process require[s] that the member ‘receive notice plus an
opportunity to be heard and participate in the litigation,’ and
. . . ‘at a minimum . . . an absent plaintiff [must] be provided
with an opportunity to remove himself from the class.’”
(quoting Shutts, 472 U.S. at 812) (last omission and last
alteration in original)). Rather, she contends that as a
practical matter, she and other Virginia class members
“[could not] opt out of this nationwide class action settlement
because the District Court refused to certify a Virginia
subclass with recognized class representatives asserting
Virginia causes of action.”
Attorney Feinman, however, acknowledged that he filed
a class action (along with two other mass actions) in Virginia
after the creation of the MDL to toll the statute of limitations
there, preserving claims for Virginia plaintiffs who decided
to opt out of the MDL settlement. Indeed, a handful of
Virginia plaintiffs did opt out of the settlement and continued
their litigation in Virginia, along with plaintiffs who
purchased subject vehicles after November 2, 2012, without
any statute of limitations issues. See Gentry v. Hyundai
Motor Am., Inc., No. 3:13-CV-00030, 2017 WL 354251
decision until it approved the settlement, the district court violated its
obligation to rule on certification “[a]t an early practicable time,” Fed. R.
Civ. P. 23(c)(1)(A). In supplemental briefing ordered by the district court
to address cross-jurisdictional tolling, Scott then raised her due process
argument and asked the court to deny nationwide class certification “until
a Virginia sub-class is created” or remand “to allow the Virginia class the
opportunity to obtain certification to preserve the statute of limitations.”
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 49
(W.D. Va. Jan. 23, 2017), aff’d in part, dismissed in part sub
nom. Adbul-Mumit v. Alexandria Hyundai, LLC, 896 F.3d
278 (4th Cir. 2018), cert. denied, 2018 WL 5085410 (U.S.
2018).11 Ultimately, the Virginia courts dismissed two out of
the three actions for pleading deficiencies. The sole
remaining action survived the pleading stage with only one
lemon law claim regarding the onboard mileage calculator,
not the fuel economy misrepresentations at issue in the MDL.
The statute of limitations issue raised here did not feature in
the district court’s or Fourth Circuit’s decisions.
Even assuming that the statute of limitations would have
barred the claims of Virginia plaintiffs who opted out of the
settlement, Hanlon forecloses Scott’s requested relief. In
Hanlon, as here, multiple class actions were filed and then
consolidated in California following a federal agency’s
investigation, with the defendant announcing a remedial plan
and entering into a settlement only after the class moved for
certification. See 150 F.3d at 1018. Like Scott, an objector
in Hanlon filed a late class action in another state and sought
to litigate it in contravention of the district court’s orders.
See id. at 1019. We explained that while the objector was
free to opt out of the class by filing the out-of-state action, he
had no right to do so on behalf of anyone else:
The procedural due process rights of [class]
members include an opportunity to be
excluded from the action. The right to
participate, or to opt-out, is an individual one
and should not be made by the class
representative or the class counsel. There is
11
We hereby GRANT Scott’s motion for judicial notice of the
petition for writ of certiorari arising from the Fourth Circuit case.
50 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
no class action rule, statute, or case that
allows a putative class plaintiff or counsel to
exercise class rights en masse, either by
making a class-wide objection or by
attempting to effect a group-wide exclusion
from an existing class. Indeed, to do so would
infringe on the due process rights of the
individual class members, who have the right
to intelligently and individually choose
whether to continue in a suit as class
members. Additionally, to allow
representatives in variously asserted class
actions to opt a class out without the
permission of individual class members
“would lead to chaos in the management of
class actions.”
Id. at 1024 (internal citations omitted) (quoting Berry
Petroleum Co. v. Adams & Peck, 518 F.2d 402, 412 (2d Cir.
1975)).
Scott claims that the statute of limitations issue and due
process “require[] that the [Virginia] [sub]class as a whole be
remanded” (emphasis added). But what she seeks to do here
is exactly what Hanlon held was forbidden—opt out a state
subclass.
Finally, Scott argues that by “not creating a Virginia
subclass,” the district court was “using the [MDL] process
and [Rule] 23 to deny the Virginians their day in court.” But
she has it backwards. Scott seeks to displace the operation of
federal law—the MDL statute and class certification
rules—to accommodate a single state’s tolling rule. The
Supremacy Clause forecloses such an argument. See Shady
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 51
Grove Orthopedic Assocs., P.A. v. Allstate Ins., 559 U.S. 393,
398–99 (2010) (explaining that if a proposed class meets
Rule 23’s criteria, state law cannot prohibit certification).
Scott relies heavily on Shutts to support her due process
claim, but she misunderstands the due process rights it
addressed.12 Shutts distinguished the “minimum contacts
requirement” that can be asserted by “out-of-state defendants
or parties in the procedural posture of a defendant” in
multistate cases from the process due “to absent class-action
plaintiffs” based on their “constitutionally recognized
property interest” in “a chose in action.” 472 U.S. at 807.
Because absent class plaintiffs face fewer litigation-related
burdens than out-of-state defendants in nonclass suits, “the
Due Process Clause need not and does not afford the former
as much protection from . . . jurisdiction as it does the latter.”
Id. at 811. “[T]o bind an absent plaintiff concerning a claim
for money damages or similar relief at law,” the district court
is obligated to provide only “minimal procedural due process
protection.” Id. at 811–12. Shutts “identified various
procedural safeguards that are necessary to bind absent class
members, including notice, the opportunity to be heard, the
opportunity to opt out, and adequate representation,” Epstein,
179 F.3d at 648, all of which were present here.
12
The settling parties also contend that Scott’s due process argument
is unripe. We need not resolve this question because the certification issue
Scott raises is dispositive. See Ortiz., 527 U.S. at 831 (1999) (“Ordinarily,
[an] . . . Article III court must be sure of its own jurisdiction before getting
to the merits. But the class certification issues are, as they were in
Amchem, ‘logically antecedent’ to Article III concerns, and . . . may
properly be treated before [them].” (internal citations omitted) (quoting
Amchem, 521 U.S. at 612)).
52 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
As for the minimum contacts requirement, which out-of-
state defendants could raise, that the application of a state’s
law must not be “arbitrary [or] fundamentally unfair,”
California has extensive contacts that satisfy this due process
requirement here. Id. at 818. For example, Hyundai Motor
America is incorporated and has its principal place of
business in California and roughly 10.7% of the class vehicles
were sold in California.
* * *
In sum, the district court did not abuse its discretion in
finding that common issues predominated.
2. Adequacy
Separate from the predominance analysis, due process
“requires that the named plaintiff at all times adequately
represent the interests of the absent class members.” Shutts,
472 U.S. at 812. This adequacy requirement, formalized in
Rule 23(a)(4), “serves to uncover conflicts of interest
between named parties and the class they seek to represent”
as well as the “competency and conflicts of class counsel.”
Amchem, 521 U.S. at 625, 626 n.20. To determine legal
adequacy, we resolve two questions: “(1) do the named
plaintiffs and their counsel have any conflicts of interest with
other class members and (2) will the named plaintiffs and
their counsel prosecute the action vigorously on behalf of the
class?” Hanlon, 150 F.3d at 1020.
Scott contends that class counsel were inadequate because
they failed to protect the rights of absent Virginia class
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 53
members to opt out of the settlement. Since class counsel did
in fact protect Virginians’ right to opt out, this argument is
meritless.
Scott also argues that class counsel Hagens Berman, the
firm representing the Brady and Hunter plaintiffs, now has a
potential conflict with the class. She asserts that more than
two years after the settlement was signed, Hagens Berman
and the firm representing Hyundai jointly represented
consumers in a putative class action suit against Volkswagen
for alleged fraud regarding vehicle emissions. Scott identifies
no authority establishing that a co-counsel relationship
between class counsel and defense counsel in a future,
unrelated case presents a conflict.
B. Settlement Approval
A binding settlement must provide notice to the class in
a “reasonable manner” and otherwise be “fair, reasonable,
and adequate.” Fed. R. Civ. P. 23(e)(1), (2). Various
objectors allege inadequacies in the notice and claim forms
and purported collusion between class counsel and the
automakers. None of their claims have merit.
1. The Notice to Class Members Provided Sufficient
Information
Before the district court approves a class settlement under
Rule 23(e), it is “critical” that class members receive
adequate notice. Hanlon, 150 F.3d at 1025. To satisfy
Rule 23(e)(1), settlement notices must “present information
about a proposed settlement neutrally, simply, and
understandably.” Rodriguez v. W. Publ’g Corp., 563 F.3d
948, 962 (9th Cir. 2009). “Notice is satisfactory if it
54 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
‘generally describes the terms of the settlement in sufficient
detail to alert those with adverse viewpoints to investigate
and to come forward and be heard.’” Id. (quoting Churchill
Vill., LLC v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004)).
Fetsch and Roland argue that class members who were
already participating in the automakers’ voluntary
Reimbursement Program “likely were unaware that additional
compensation . . . could be received” by remaining in the
program because this information was “buried” on page 11 of
the long form notice and was omitted from the short form and
email notices. In fact, the very first page of the long form
notice informed class members: “If you previously received
money under the [Reimbursement Program], you may still be
able to receive a payment from the Settlement.”
As for the short form notice, it was designed to be, as the
name suggests, short. Its primary purpose was to alert class
members to the settlement, provide a high-level overview of
the process, including critical dates, and explain where class
members could obtain additional information, such as
eligibility information and claim forms. In addition, after
outlining some of the potential compensation, it informed
class members that “[o]ther settlement benefits exist” and
invited them to use an online calculator to estimate their
individual benefit under each of the various compensation
options based on a host of personalized factors. The short
form notice “highly recommended” that class members “use
this reimbursement calculator to evaluate [their] options
based on [their] own circumstances . . . before submitting a
claim.” This notice was more than adequate.
Nor was it misleading for the various notices to inform
class members that “[h]igh mileage drivers may receive
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 55
greater amounts by participating in the . . . Reimbursement
Program.” Since compensation under the Reimbursement
Program was proportional to the number of miles driven and
thus theoretically unlimited, that statement was true.
Moreover, it served the valuable purpose of warning high-
mileage drivers that choosing a lump sum payment might not
have been in their best interests.
Finally, in arguing that the notices did not explain in a
“step-by-step” formula how each class member’s benefit is
calculated, Fetsch and Roland seek to impose a higher
standard than is required. A settlement notice need not
“provide an exact forecast” of the award each class member
would receive, let alone a detailed mathematical breakdown;
it merely must give class members “enough information so
that those with ‘adverse viewpoints’ could investigate and
‘come forward and be heard.’” Online DVD-Rental, 779 F.3d
at 946–47 (9th Cir. 2015) (quoting Lane v. Facebook, Inc.,
696 F.3d 811, 826 (9th Cir. 2012)).
2. The Claim Forms Were Not Overly Burdensome
Objectors Ahearn and York argue that no claim forms
were necessary at all and that the automakers should have
automatically made lump sum payments to class members
who did not request another form of compensation. They cite
no evidence that this was possible. The district court found
that the automakers did “not have complete records of resales
of the class vehicles,” and Ahearn and York fail to explain
how the automakers could have identified subsequent
purchasers who were also part of the class. They do not
dispute that it was reasonable for the settlement to provide
class members with different monetary recovery options
based on miles driven and ownership status—information
56 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
also not in the automakers’ possession. Given that the
automakers lacked complete information to determine the
identities of all class members and the amounts of their
claims, the district court properly exercised its discretion in
finding that “some sort of claims process is necessary in order
to verify . . . that the claimant is a current owner, former
owner, or current or former lessee of a qualifying vehicle.”
Ahearn, York, Fetsch, and Roland contend that the claim
forms required too much documentation, such as proof of a
class member’s current address and proof of sale or
ownership, and that this documentation burden is reflected in
low claim participation rates. However, class members could
easily avoid most documentation requirements by submitting
an online claim form, which pre-populated information after
class members entered their vehicle identification number and
the unique class member identification number provided by
their notices. Fetsch and Roland cite no evidence that any
claims submitted on the paper claim form were, as they
speculate, “denied because one box was not checked or one
piece of documentation was not turned in.”
Ahearn and York contend that the 21% of class members
who had filed claims for lump sum payments as of March 31,
2015 was an unreasonably low participation rate and that the
“daunting claim form” was to blame. As of May 31,
2015—more than a month before the July 6, 2015 claims
deadline—the participation rate of lump sum claimants had
increased to 23%. We have approved class action settlements
“where less than five percent of class members file claims.”
Online DVD-Rental, 779 F.3d at 945; see also Rodriguez,
563 F.3d at 967 (holding that the district court did not abuse
its discretion in approving settlement class where 14% of
376,301 putative class members returned claim forms). And
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 57
the 23% participation rate here must be viewed in light of the
59% of class members who took advantage of the
Reimbursement Program prior to notice of the settlement. As
the district court recognized, many of these class members
“would decide not to submit a claims form at all” if they were
satisfied with the automakers’ voluntary compensation.
3. There Is No Evidence of Collusion Between Class
Counsel and the Automakers
Rule 23(e) ensures that unnamed class members are
protected “from unjust or unfair settlements affecting their
rights.” Amchem, 521 U.S. at 623 (1997). When the district
court determines that a proposed settlement is fundamentally
fair, adequate, and reasonable, our review “is extremely
limited.” Hanlon, 150 F.3d at 1026. We consider the overall
fairness of “the settlement taken as a whole, rather than the
individual component parts,” because “[n]either the district
court nor this court ha[s] the ability to ‘delete, modify or
substitute certain provisions.’” Id. (quoting Officers for
Justice v. Civil Serv. Comm’n, 688 F.2d 615, 630 (9th Cir.
1982)).
The objectors argue that the settlement reached here was
a “sweetheart deal.” To the contrary, the settlement bears
none of the typical signs of collusion between class counsel
and defendants, such as when class counsel “receive a
disproportionate distribution of the settlement,” Bluetooth
Headset, 654 F.3d at 947 (quoting Hanlon, 150 F.3d at 1021),
the agreement contains a “clear sailing” provision for
attorney’s fees “separate and apart from class funds,” id., or
unawarded fees revert to the defendants rather than to the
class, id. This case stands in contrast to Bluetooth Headset,
in which the settlement paid the class “zero dollars” and
58 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
contained a “clear sailing” provision in which “defendants
agreed not to object” to an award of attorney’s fees totaling
eight times the cy pres award, and a “kicker” clause whereby
“all fees not awarded would revert to defendants.” Id. at 938,
947. The district court there made no findings under either
the lodestar or the percentage method and instead awarded
what “defendants agreed to pay.” Id. at 943.
The settlement also bears no resemblance to the one in
Amchem, which allowed defendants to withdraw in ten years
while the class remained bound in perpetuity, limited the
number of plaintiffs who could reject it and pursue individual
claims each year, set annual caps on claims for each disease,
set numerical and dollar limits on extraordinary claims above
the fixed compensation ranges, offered no adjustments for
inflation, and provided no compensation for certain claims
and injuries. Amchem, 521 U.S. at 604–05, 627. Here, the
settlement has no clear sailing or kicker clauses, the
automakers successfully litigated a reduction in fees, the
court made findings, and the class received tens of millions
of dollars. Moreover, the settlement here “was negotiated
over multiple mediation sessions with a respected and
experienced mediator,” class counsel were “experienced,”
and class members had plenty of opportunities to raise their
concerns at seven hearings over seventeen months.
Fetsch and Roland assert that the automakers “looked for
a settling group of plaintiffs that would provide them the
lowest settlement cost,” a phenomenon known as a “reverse
auction.” See Negrete v. Allianz Life Ins. Co. of N. Am.,
523 F.3d 1091, 1099 (9th Cir. 2008). As in Negrete,
however, they have “floated out the specter of a reverse
auction, but brought forth no facts to give that eidolon more
substance.” Id.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 59
It is true, as Fetsch and Roland point out, that class action
defendants are generally indifferent to the allocation of
settlement funds between class and counsel, which can
encourage a settlement that is overly generous to counsel at
the expense of the class. But here such concerns are out of
place. No objector disputes the district court’s finding that
the settlement “provides substantial relief,” including a
“substantial cash payout, ranging from $240 to $1,420” per
class member. The settling parties agreed on the amount of
class compensation more than six months before negotiating,
“over multiple mediation sessions with a respected and
experienced mediator,” the “reasonable” attorney’s fees
provided in the settlement agreement. We have previously
approved such an approach, see Hanlon, 150 F.3d at 1029,
and “[w]e put a good deal of stock in the product of an arms-
length, non-collusive, negotiated resolution,” Rodriguez,
563 F.3d at 965.
Providing further assurance that the agreement was not
the product of collusion, class counsel McCuneWright did not
reach an agreement with the automakers regarding the
amount of attorney’s fees to which they were entitled. After
a contested fee motion, the district court awarded
McCuneWright approximately half of the fees that they had
requested.
Finally, the objectors contend that the unreasonably high
attorney’s fees award evidences collusion in the settlement.
Ahearn and York argue that the award “bears all the
hallmarks of collusion,” and Fetsch and Roland claim that
class counsel was motivated to give the automakers a “great
deal” in exchange for not opposing their requested fees.
60 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
Courts in this circuit determine attorney’s fees in class
actions using either the lodestar method or the percentage-of-
recovery method. Hanlon, 150 F.3d at 1029. “The lodestar
calculation begins with the multiplication of the number of
hours reasonably expended by a reasonable hourly rate.” Id.
The district court may then adjust the resulting figure upward
or downward to account for various factors, see Kerr v.
Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975),
including the quality of the representation, the benefit
obtained for the class, the complexity and novelty of the
issues presented, and the risk of nonpayment, Hanlon,
150 F.3d at 1029.
In class action cases where the defendants provide
monetary compensation to the plaintiffs, “courts have
discretion to employ either the lodestar method or the
percentage-of-recovery method.” Bluetooth Headset,
654 F.3d at 942. In the percentage method, “the court simply
awards the attorneys a percentage of the fund sufficient to
provide class counsel with a reasonable fee,” using 25% as a
benchmark. Hanlon, 150 F.3d at 1029. Similar to the
lodestar, the 25% benchmark can be adjusted upward or
downward, depending on the circumstances. See Six (6)
Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301,
1311 (9th Cir. 1990). When valuing the settlement is difficult
or impossible, the lodestar method may prove more
convenient, see Hanlon, 150 F.3d at 1029, but “no
presumption in favor of either the percentage or the lodestar
method encumbers the district court’s discretion to choose
one or the other,” In re Wash. Pub. Power Supply Sys. Sec.
Litig., 19 F.3d 1291, 1296 (9th Cir. 1994).
Here, the district court properly exercised its discretion in
calculating the fee award using the lodestar method. As the
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 61
district court found, the automakers “will pay attorneys’ fees
separately from the amount allocated to those covered by the
class.” Moreover, it is difficult to estimate the settlement
value’s upper bound. The settlement extended the
Reimbursement Program’s enrollment deadline by a year and
a half, allowing additional class members to participate.
These class members will continue to receive compensation
from the program for many years into the future, the present
value of which will depend on how many miles they drive
and their cost of fuel.
Ahearn and York argue that the district court erred by not
confirming that attorney’s fees were 25% or less of the
settlement’s value. However, the district court in fact cross-
checked the lodestar amount and specifically found that the
“total amount of attorney’s fees awarded in this case is far
lower than the 25% of the settlement figure used as a
‘benchmark’ in many class action cases in the Ninth Circuit.”
We have affirmed fee awards totaling a far greater percentage
of the class recovery than the fees here. See, e.g., Vizcaino v.
Microsoft Corp., 290 F.3d 1043, 1047–48 (9th Cir. 2002) (no
abuse of discretion to award fees constituting 28% of the
class’s recovery given “risk” assumed in litigating); In re
Pac. Enters. Sec. Litig., 47 F.3d 373, 379 (9th Cir. 1995) (no
abuse of discretion where the “$4 million award (thirty-three
percent [of the class’s recovery]) for attorneys’ fees is
justified because of the complexity of the issues and the
risks”).
In any event, we do not require courts employing the
lodestar method to perform a “crosscheck” using the
percentage method. This would make “little logical sense,”
5 Rubenstein, supra, § 15:92, because “the lodestar method
yields a fee that is presumptively [reasonable].” Perdue v.
62 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
Kenny A. ex rel. Winn, 559 U.S. 542, 552 (2010). The
percentage method is merely a shortcut to be used “in lieu of
the often more time-consuming task of calculating the
lodestar,” but only if “the benefit to the class is easily
quantified.” Bluetooth Headset, 654 F.3d at 942. Even then,
it is at best a rough approximation of a reasonable fee.13
13
The dissent claims that the district court relied on a preliminary,
“speculative estimate” of the settlement value and “never got [an] update”
on the actual benefit to the class. Dissent at 79–80. To the contrary, the
district court issued a detailed tentative order that directed counsel to
provide an update of the settlement value and, at the final fairness hearing
on June 11, 2015, defense counsel confirmed the participation rates and
advised the court that the calculations did not differ “in a material way”
from the numbers discussed in the court’s tentative order. The dissent also
ignores that participation rates are a mathematical predicate to valuing this
settlement. Dissent at 80 n. 8.
Further, the district court did not abuse its discretion in including the
Reimbursement Program benefits in the overall settlement value, because
the settlement extended the time for enrollment and provided additional
compensation to Reimbursement Program enrollees. Finally, the court’s
assessment was well-supported by expert reports. By March 2015, the
class recovery totaled roughly $159 million, with the claims deadline still
months away. This figure reflects the $50 million in Reimbursement
Program claims filed by the original deadline, another $65 million in
Reimbursement Program claims after the deadline was extended, and
conservatively $44 million in lump sum payments. See Dist. Ct. Dkt.
Nos. 454, 453, 452, 451, 390, 389.
Finally, in faulting the district court for failing to “subject [the
reports] to any rigorous examination,” Dissent at 81 n. 9, the dissent
misreads these reports, which treat Reimbursement Program enrollees the
same regardless of when they enrolled. Understandably, the district court
did not discuss the reports in detail in open court because they were filed
under seal and confidential.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 63
Ahearn and York also object to the district court’s use of
a lodestar multiplier. The district court, which had ably
managed this complex litigation for several years and
observed various counsel’s performance during numerous
hearings and through extensive briefing, was in the best
position to evaluate each firm’s contributions. The record
shows that the district court carefully made this assessment in
determining the appropriate amount of attorney’s fees and
explained the basis of its ruling. The district court applied
downward multipliers of 27 to 80 percent to the lodestars for
the non-settling parties’ counsel because they “had a more
minor role in the [MDL] and did not participate [in]
negotiating the primary settlement.” The court applied a
multiplier of 1.22 to the fee award for class counsel Hagens
Berman due to “the complexity and volume of work that
counsel engaged in in order to diligently pursue this case and
develop its primary theory of liability,” finding the multiplier
in line with others in comparable complex and multi-year
multidistrict litigations. And the court applied a multiplier of
1.5521 to the fees for class counsel McCuneWright because
they “assumed more risk than other firms” by being one of
the first firms to take up this cause, having filed Espinosa
nearly 10 months before the automakers announced the fuel
efficiency revisions.
These multipliers are modest or in-line with others we
have affirmed. See, e.g., Viscaino v. Microsoft Corp.,
290 F.3d 1043, 1051 (9th Cir. 2002) (upholding a lodestar
multiplier cross-check showing a multiplier of 3.65); Kelly v.
Wengler, 822 F.3d 1085, 1093, 1105 (9th Cir. 2016)
(affirming lodestar multipliers of 2.0 and 1.3). The district
court’s limited use of the multipliers was well within its
broad discretion to determine the amount of reasonable fees,
see Fox v. Vice, 563 U.S. 826, 838 (2011) (emphasizing and
64 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
instructing appellate courts to give “substantial deference” to
attorney’s fees calculations because “trial courts need not,
and indeed should not, become green-eyeshade accountants”
and because of “the district court’s superior understanding of
the litigation” (quoting Hensley v. Eckerhart, 461 U.S. 424,
437 (1983))), and does not support a finding of collusion.
C. Denial of Attorney’s Fees to Feinman
Last, Scott and her counsel Feinman challenge the district
court’s ruling that Feinman was not entitled to attorney’s fees
because he conferred no benefit on the class.14 “[W]here
objectors do not add any new legal argument or expertise, and
do not participate constructively in the litigation or confer a
benefit on the class, they are not entitled to an award
premised on equitable principles.” Rodriguez v. Disner,
688 F.3d 645, 659 (9th Cir. 2012).
The district court denied Feinman’s $800,172.79 fee
request because he “did not meaningfully contribute to the
class settlement.” Feinman sought fees on the theory that his
due process arguments, which were rejected below and we
reject here, were somehow beneficial to the class. However,
these arguments are not only baseless, but also detrimental to
the class; if adopted, they would permit Scott to hold hostage
any class recovery under the settlement until she received the
unique benefit of being certified to represent a Virginia
subclass. Furthermore, Feinman does not dispute that he
engaged in obstructive conduct throughout the litigation,
14
Feinman also takes issue with the district court’s statement that his
“work was largely duplicitous or without merit” (emphasis added). As he
acknowledged, however, the court likely intended to state that his work
was “duplicative.”
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 65
including moving for discovery despite a stay and moving to
remand despite an ongoing MDL. The district court did not
abuse its discretion in denying fees.
IV. Conclusion
Over the course of several years, the district court
performed an admirable job of managing this complex
litigation. After the settlement was announced, the district
court held multiple status conferences and requested several
rounds of briefing to ensure that all of the litigants’ concerns
were heard and addressed. It made careful findings, which
the objectors here largely do not challenge, and which more
than support the judgment.
AFFIRMED.
66 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
IKUTA, Circuit Judge, with whom KLEINFELD and
M. SMITH, Circuit Judges, join, and with whom
RAWLINSON, Circuit Judge, joins in part,* dissenting:
The district court in this case certified a multistate class
action under Rule 23 of the Federal Rules of Civil Procedure
without determining what law applied to the plaintiffs’
claims. It then awarded attorneys’ fees without determining
the value of the benefit the class derived from the settlement.
This is contrary to Rule 23 and Supreme Court precedent, see
Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997). I
dissent.
I
Defendants Hyundai and Kia overstated the fuel
efficiency of certain vehicles that they manufactured and
sold. After an EPA investigation confirmed this
overstatement, Hyundai and Kia announced that they would
lower the fuel efficiency estimates for the affected cars and
simultaneously announced that they were each instituting a
voluntary reimbursement program to compensate affected
vehicle owners and lessees for the additional fuel costs that
they had incurred and would incur in the future as a result of
the overstated fuel efficiency statements. This announcement
set off a flurry of litigation across the country. In Espinosa
v. Hyundai Motor America, an action pending in district court
in California, Hyundai filed an extensive “Appendix of
Variations in State Laws,” which detailed the differences in
the applicable state consumer protection laws and common
law fraud actions. The district court initially found these state
*
Judge Rawlinson joins the portion of the dissent concluding that the
district court gave an insufficient explanation for applying a fee multiplier.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 67
law differences so material that it tentatively ruled the class
could not be certified.
Meanwhile, the Multidistrict Litigation (MDL) judicial
panel consolidated over fifty other actions before the district
court in which Espinosa was pending. After MDL
consolidation, Hyundai and Kia moved for certification of a
nationwide class and preliminary approval of a class
settlement they had negotiated with counsel for three of the
MDL cases, Espinosa, Hunter et al. v Hyundai Motor et al.,
and Brady et al. v. Hyundai Motor et al. Objecting to class
certification, plaintiffs in Gentry et al. v. Hyundai Motor
America, an action that had been filed in a Virginia district
court before being consolidated in the MDL, argued that
variations in state law defeated the predominance of common
questions. The Virginia plaintiffs argued that they had
purchased their vehicles under sales contracts that contained
valid choice of law provisions requiring Virginia law to be
applied to any claims. The Virginia plaintiffs further claimed
that Virginia law provided a materially different remedy to
Virginia consumers for certain claims and such material
differences between Virginia and California consumer
protection law precluded certification of a nationwide class.
Despite those objections, the district court declined to
decide what law was applicable to the plaintiffs’ claims and
certified the class without ruling on this threshold legal issue
or conducting a choice of law analysis. The district court
acknowledged that the court “would need to engage in an
extensive choice of law analysis” if the case were going to
trial, but the district court erroneously thought that such an
analysis was not required to certify a settlement class. In
response to the Virginia plaintiffs’ objections, the district
court concluded that any substantial differences in state law
68 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
could be addressed as part of the Rule 23(e) fairness hearing.
See Fed. R. Civ. P. 23(e). The court certified the class and
later approved the settlement.
In its tentative ruling granting final settlement approval,
the court estimated that the settlement value was some
$210 million, relying on a rough estimate that the settling
parties had provided a year earlier. According to the
objectors, however, claims attributable to the settlement
added up to about $21 million at the time of final approval.
Although another $23 million in class claims were filed by
class members, the objectors contend that those class
members were already participating in Hyundai and Kia’s
voluntary reimbursement program before the settlement, and
therefore the value of their claims could not be attributable to
the settlement.
Relying on this estimate that some $210 million was
provided by the settlement, the district court awarded nearly
$9 million in total attorneys’ fees to class counsel. It used a
lodestar multiplier of 1.22 for the Hunter and Brady
plaintiffs’ counsel on the ground that they undertook a large
volume of complex work. It used a lodestar multiplier of
1.5521 for the Espinosa plaintiffs’ counsel on the ground that
they had assumed greater risk by filing a lawsuit before the
EPA had announced the results of its investigation. A
number of class members objected, arguing that the
attorneys’ fees award was excessive in proportion to the
actual benefit obtained on behalf of the class. The district
court summarily rejected these arguments.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 69
II
A class action “may only be certified if the trial court is
satisfied, after a rigorous analysis, that the prerequisites of
[Rule 23 of the Federal Rules of Civil Procedure] have been
satisfied.” Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161
(1982). For a class certified under Rule 23(b)(3), a court
must find that “questions of law or fact common to class
members predominate over any questions affecting only
individual members, and that a class action is superior to
other available methods for fairly and efficiently adjudicating
the controversy.” Fed. R. Civ. P. 23(b)(3).
In order to determine whether the Rule 23 prerequisites
are met, a district court must determine what state law (or
laws) apply to the plaintiffs’ claims. “Because the Rules
Enabling Act forbids interpreting Rule 23 to ‘abridge, enlarge
or modify any substantive right,’” Wal-Mart Stores, Inc. v.
Dukes, 564 U.S. 338, 367 (2011) (quoting 28 U.S.C.
§ 2072(b)), a court cannot certify a class if doing so would
deprive litigants of the benefit of the appropriate substantive
law applicable to their claims, even if a class action “would
provide the most secure, fair, and efficient means” of
compensating plaintiffs, Amchem, 521 U.S. at 628.
Identifying the applicable law is particularly crucial in a
multi-state class action, because a district court cannot
reasonably make a finding regarding predominance and
superiority without doing so. See Castano v. Am. Tobacco
Co., 84 F.3d 734, 740–41 (5th Cir. 1996) (holding that “a
district court must consider how variations in state law affect
predominance and superiority”); see also Lozano v. AT&T
Wireless Servs., Inc., 504 F.3d 718, 728 (9th Cir. 2007)
(holding that “the law on predominance requires the district
70 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
court to consider variations in state law when a class action
involves multiple jurisdictions”).
The district court must identify the law that applies to
plaintiffs’ claims regardless whether the court is certifying a
litigation class or a settlement class. While “a district court
need not inquire whether the case, if tried, would present
intractable management problems” when considering a
request to certify a settlement class, “other specifications of
the Rule—those designed to protect absentees by blocking
unwarranted or overbroad class definitions—demand
undiluted, even heightened, attention in the settlement
context.” Amchem, 521 U.S. at 620. “Such attention is of
vital importance, for a court asked to certify a settlement class
will lack the opportunity, present when a case is litigated, to
adjust the class, informed by the proceedings as they unfold.”
Id.
It is well established “that problems beyond those of just
manageability may exist when a district court is asked to
certify a single nationwide class action suit, even for
settlement purposes, when claims arise under the substantive
laws of the fifty states.” In re Warfarin Sodium Antitrust
Litig., 391 F.3d 516, 529–30 (3d Cir. 2004). If the plaintiffs
are not governed by the same legal rules, e.g., if the law of
consumer protection or the requisite mens rea differs from
jurisdiction to jurisdiction, the court may not be able to find
that “common questions of law or fact” predominate or that
“a class action is superior to other available methods” to
resolve a claim. See Lozano, 504 F.3d at 728 (holding that
the district court reasonably concluded that predominance
was defeated when the standard for upholding a class action
waiver differed from state to state). We have scrutinized state
law variations even when a class is proposed only for
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 71
settlement in order to determine whether “the idiosyncratic
differences between state consumer protection laws” were
“sufficiently substantive to predominate over the shared
claims.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1022–23
(9th Cir. 1998). Moreover, courts may not accept on faith the
parties’ assertions that there are no relevant variations in state
laws. Castano, 84 F.3d at 741. Rather, “parties seeking class
certification must show that the action is maintainable under
Rule 23(b)(1), (2), or (3).” Amchem, 521 U.S. at 614.
And, important here, Amchem clarified that federal courts
“lack authority to substitute for Rule 23’s certification criteria
a standard never adopted—that if a settlement is ‘fair,’ then
certification is proper.” Id. at 622.
III
In this action, the district court failed to discharge its
threshold responsibility to determine what substantive body
of law applied to the plaintiffs’ claims before it certified the
class. Rather than conclude that California law could be
applied to the claims of all plaintiffs, or that various state
laws applied but the differences did not defeat predominance,
the district court simply pretermitted the entire issue,
concluding that it was not necessary to consider what state
law applied, or whether the differences in state law were large
or small. The district court relied on two erroneous
assumptions in reaching this conclusion: first, that a choice
of law analysis was not necessary in the settlement context;
and second, that any state law variations could be addressed
as part of the final fairness hearing under Rule 23(e).
As explained above, both of these rationales fail. The
district court’s reliance on the settlement context to justify its
72 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
failure to consider state law variations through a choice of
law analysis violates Amchem’s rule that the predominance
inquiry concerns “questions that preexist any settlement.”
521 U.S. at 623. Nor could the district court rely on a
fairness hearing to resolve any material differences in state
law. “[A] fairness hearing under Rule 23(e) is no substitute
for rigorous adherence to those provisions of the Rule
designed to protect absentees[.]” Ortiz v. Fibreboard Corp.,
527 U.S. 815, 849 (1999) (internal quotation marks omitted).
The majority’s reasons for supporting the district court’s
decision despite its failure to conduct a necessary choice of
law analysis are equally flawed.1 While Amchem held that a
court had to give “undiluted, even heightened, attention” to
all Rule 23 prerequisites (other than management issues)
before certifying the class, 521 U.S. at 620, the majority
minimizes this direction. Instead, the majority indicates that
the absence of manageability concerns is of key importance
in certifying a settlement class. The majority follows the
district court’s lead by pretermitting any discussion of state
law variations that might affect a predominance analysis,
Maj. at 39–40, and instead suggesting that a district court
need focus on only a limited range of issues such as whether
the settlement is fair and non-collusive, and whether the
settlement class is sufficiently cohesive, Maj. at 34–39.
1
The majority seizes on the district court’s tentative ruling that it was
“not convinced” there were material differences in state law, and it also
notes that the district court ordered supplemental briefing on the choice of
law issue. Maj. at 44–45 n.6. But as the majority aptly recognizes
elsewhere in its opinion, a tentative ruling is not a final ruling, even when
supplemental briefing is requested. Maj. at 24. And as the majority
implicitly acknowledges, the district court declined to make any final
ruling, instead merely stating “that no further conflict-of-law analysis was
necessary.” Maj. at 44–45 n.6.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 73
The majority also attempts to distinguish Amchem by
limiting the case to its facts, suggesting it applies only to a
“sprawling” settlement class whose members have “wide-
ranging injuries” and other “vast differences.” Maj. at 37–38.
But Amchem’s broad articulation of its rules withstands such
mischaracterization and inappropriate narrowing. See Priests
for Life v. U.S. Dep’t of Health & Human Servs., 808 F.3d 1,
14 (D.C. Cir. 2015) (Kavanaugh, J., dissenting from denial of
rehearing en banc) (“It is not our job to re-litigate or trim or
expand Supreme Court decisions. Our job is to follow them
as closely and carefully and dispassionately as we can.”).
Amchem gave clear direction applicable to any class
certification proceeding, even stating that it was “of
overriding importance” for courts to be “mindful that the
Rule as now composed sets the requirements they are bound
to enforce.” 521 U.S. at 620.
Second, the majority justifies the district court’s failure to
identify the applicable law on the ground that as a general
rule, predominance is “readily met” in cases alleging
consumer fraud. Maj. at 37. But we have previously rejected
that very conclusion, holding there are material differences
between consumer protection laws in California and other
states. See Mazza v. Am. Honda Motor Co., 666 F.3d 581,
591 (9th Cir. 2012). As we have explained, “the California
laws at issue here have no scienter requirement, whereas
many other states’ consumer protection statutes do require
scienter. . . . California also requires named class plaintiffs to
demonstrate reliance, while some other states’ consumer
protection statutes do not.” Id.
Finally, the majority contends that a court need not
consider which state laws apply unless an objector raises this
issue. Maj. at 44. The majority states that because “no
74 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
objector presented the correct choice-of-law analysis or
explained how, under the facts of this case, the governmental
interest test’s three elements were met,” therefore the district
court was not “obligated to address choice-of-law issues, and
we will not decertify a class action for lack of such analysis.”
Maj. at 44.
This argument is clearly not supportable. First, a district
court has an independent obligation to determine what law
applies before certifying a class. See Gen. Tel. Co. of Sw.,
457 U.S. at 160–61. Given that the district court here had
reviewed Hyundai’s submission regarding the multiple
material differences in the laws of fifty states in the Espinosa
action and concluded that the prerequisites of Rule 23 were
not met for a litigation class, the court had an ample basis for
undertaking a choice of law inquiry and determining whether
it could certify a nationwide settlement class.2
But even if a court did not have an obligation to consider
this issue sua sponte, the Virginia plaintiffs expressly raised
substantial objections to the application of California law to
the district court. Assuming California choice of law rules
apply to the Virginia plaintiffs’ claims,3 the court was obliged
2
The majority objects to the unremarkable observation that a court
should apply the applicable substantive law to the case before it, claiming
that such a rule might require a court to consider variations in the laws of
multiple states. Maj. at 44–45 n.6. Such an analysis is generally provided
by the parties, however; in this case, for instance, Hyundai gave the court
a 50-state survey of potentially applicable law. See also Mazza, 666 F.3d
at 591.
3
Where a lawsuit is consolidated and transferred under the MDL
statute, see 28 U.S.C. § 1407, courts generally apply the choice of law
rules of each of the transferor courts, see Phelps v. Cont’l Ill. Nat’l Bank
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 75
to consider their objection to the application of California law
under California choice of law rules before certifying the
class.
The Virginia plaintiffs invoked two California choice of
law rules. First, California generally enforces a contractual
choice of law provision, so long as the chosen state bears “a
substantial relationship to the parties or the transaction, or []
a reasonable basis otherwise exists for the choice of law.”
Wash. Mut. Bank, F.A. v. Superior Court, 24 Cal. 4th 906,
916 (2001). The burden then falls on the opponent of the
choice of law provision to show “both that the chosen law is
contrary to a fundamental policy of California and that
California has a materially greater interest in the
determination of the particular issue.” Id.
Here, the Virginia plaintiffs expressly asked the district
court to give them the benefit of the choice of law provision
in their sales contracts, which provides that “[t]he terms and
conditions of this buyers order . . . and any Sale/Lease
hereunder will be governed by the laws of the commonwealth
of Virginia.” Their argument was more than colorable:
Virginia law bears a substantial relationship to the purchase
of cars in Virginia, and the defendants did not show that the
applicable Virginia law is contrary to a fundamental policy of
California or that California has a materially greater interest
& Trust Co. of Chi. (In re Nucorp Energy Sec. Litig.), 772 F.2d 1486,
1492 (9th Cir. 1985) (“In this case, however, we must apply the choice of
law rules of Illinois because the claims were originally filed in district
court in Illinois before they were transferred to California by the Judicial
Panel on Multidistrict Litigation.”). The district court did not address the
question whether Virginia choice of law rules, rather than California
choice of law rules, should apply.
76 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
in its law’s application in this case.4 Moreover, California
courts would interpret the broad language in the contract to
signify the intent that all disputes arising out of the
transaction should be governed by Virginia law. The
California Supreme Court has held that “[w]hen a rational
businessperson enters into an agreement establishing a
transaction or relationship and provides that disputes arising
from the agreement shall be governed by the law of an
identified jurisdiction, the logical conclusion is that he or she
intended the law to apply to all disputes arising out of the
transaction or relationship.” Nedlloyd Lines B.V. v. Superior
Court, 3 Cal. 4th 459, 469 (1992); see also Wash. Mut. Bank,
24 Cal. 4th at 918 (“[W]e conclude Nedlloyd’s analysis is
properly applied in the context of consumer adhesion
contracts.”). Likewise, “[t]he phrase ‘governed by’ is a broad
one signifying a relationship of absolute direction, control,
and restraint,” and can be read to indicate parties’ intent that
the transaction “be completely and absolutely controlled” by
the law of the chosen forum. Nedlloyd, 3 Cal. 4th at 469.5
4
The majority asserts that the district court did not have to apply the
sales contracts’ choice of law provisions because California’s consumer
protection statutes are more protective than Virginia’s. Maj. at 43 n.5.
But the majority fails to cite any case holding that California has a
materially greater interest than Virginia in claims brought by Virginia
residents arising out of car sales to Virginia residents in Virginia. Cf.
Mazza, 666 F.3d at 594 (holding that it is not necessary to apply
“California law to the claims of foreign residents concerning acts that took
place in other states where cars were purchased or leased” in order to
further California’s interest in regulating activities within California).
5
The majority’s assertion that the choice of law provisions at issue
are not broad enough to govern this suit, Maj. at 43 n.5, is therefore
incorrect. In any event, the district court should have determined the
scope of the contractual choice of law provision in the first instance; the
majority’s attempt to brush aside this issue on appeal merely highlights the
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 77
Accordingly, the district court could not avoid considering
whether Virginia law applied and prevented it from certifying
a nationwide class that included Virginia plaintiffs. Instead,
the district court did not address the issue at all.
Second, the Virginia plaintiffs argued that Virginia law
applied under California’s governmental interest analysis.
Under that rule, California law applies unless the proponent
of foreign law can show that (1) the foreign law “materially
differs from the law of California,” (2) each state has an
interest in having its law applied to the claims, and (3) the
foreign state would suffer more than California if its law were
not applied to the claims. Wash. Mut. Bank, 24 Cal. 4th
at 919–20.
The Virginia plaintiffs identified material differences
between Virginia and California consumer protection law.6
In particular, the applicable Virginia consumer protection
statute guarantees a minimum of $500 in damages, see Va.
Code Ann. § 59.1-204(A), while the applicable California
statute provides for actual damages, without a statutory
minimum, see Cal. Civ. Code § 1780(a). Moreover, the
Virginia statute allows for treble damages if the defendant’s
district court’s error in ignoring the Virginia plaintiffs’ choice of law
arguments. See Wash. Mut. Bank, 24 Cal. 4th at 916 (“[T]he trial court
should first examine the choice-of-law clause and ascertain whether the
advocate of the clause has met its burden of establishing that the various
claims of putative class members fall within its scope.”).
6
The majority concedes that California and Virginia law differ
materially. Maj. at 43 n.5. Indeed, the majority argues that the laws of the
two states are so different that California courts would refuse to apply
Virginia law, even where the parties contracted for such application. Maj.
at 43 n.5.
78 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
conduct was “willful,” Va. Code Ann. § 59.1-204(A), while
the applicable California statute allows for punitive damages
where it is proved by “clear and convincing evidence that the
defendant has been guilty of oppression, fraud, or malice,”
Cal. Civ. Code § 3294(a). Virginia plaintiffs argued that they
would be able to show the defendants had been willful, even
if the California plaintiffs could not show “that the defendant
has been guilty of oppression, fraud, or malice.” Given the
plaintiffs’ argument that they were entitled to the application
of Virginia law, the district court could not escape its
minimum obligation to determine what law applied before
certifying a class that included the Virginia plaintiffs.
The majority dismisses this argument on the ground that
the district court could “‘properly find California law
applicable without proceeding’ to the rest of the analysis.”
Maj. at 44 (quoting Pokorny v. Quixtar, Inc., 601 F.3d 987,
995 (9th Cir. 2010)). But the district court did not make any
such finding; it merely noted that “to the extent that small
differences in state laws exist, or if substantial differences in
state law are brought to light at the final fairness hearing,
those issues do not prevent the Court from certifying the class
for settlement purposes.” The court’s failure to discharge its
clear obligation in light of the Virginia plaintiffs’ objection is
reversible error.
In sum, the district court’s failure to determine the
applicable law meant it failed to fulfill its independent
obligation to “conduct a rigorous analysis to determine
whether the party seeking certification has met the
prerequisites of Rule 23.” Zinser v. Accufix Research Inst.,
Inc., 253 F.3d 1180, 1186 (9th Cir. 2001) (internal quotation
marks omitted). For this reason, the district court could not
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 79
properly certify the class. The majority errs in holding
otherwise.7
IV
The majority also errs in upholding the district court’s
award of attorneys’ fees. In the class action context, a district
court has “an independent obligation to ensure that the award
[of attorneys’ fees], like the settlement itself, is reasonable,
even if the parties have already agreed to an amount.” In re
Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th
Cir. 2011). When the court fails to provide an adequate
explanation of whether the award is proportionate to the
benefit obtained for the class, “we have no choice but to
remand the case to the district court to permit it to make the
necessary calculations and provide the necessary
explanations.” McCown v. City of Fontana, 565 F.3d 1097,
1102 (9th Cir. 2009).
Here, the district court failed to make a reasonable effort
to determine the value of the settlement, instead relying on a
speculative estimate provided by the settling parties during
7
The majority also runs afoul of Amchem by ignoring the differences
between new and used car owners. Maj. at 40–41. Unlike the new car
owners, the used car purchasers did not view the Monroney stickers. Nor
did Hyundai and Kia engage in a pervasive advertising campaign that
raised “little doubt that almost every class member had been exposed to
defendants’ misleading statements,” so a court cannot presume that used
car owners relied on misleading advertising. Mazza, 666 F.3d at 596.
Such a significant factual difference gives rise to a significant legal
difference regarding the viability of used car owners’ claims, which
defeats predominance. See Amchem, 521 U.S. at 624. The majority errs
in glossing over this issue with vague references to “trial management
issues.” Maj. at 40.
80 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
the preliminary approval process, which valued the proposed
settlement at $210,000,000. When relying on this
unsupported figure, the district court noted that it expected
“an update from the Settling Plaintiffs and defendants as to
the amount of settlement funds which class members have in
fact claimed.” But the district court never got this update,8
nor did it take any other steps to determine the benefits
provided by the settlement. Because the district court failed
to take a careful look at the claims data, it could not consider
the evidence indicating that the amount of settlement funds
claimed by class members who were not already part of the
8
The majority’s assertion that the district court received an update on
the value of the settlement at the final fairness hearing on June 11, 2015,
Maj. at 62 n.13, is unsupported by the record. At that hearing, the district
court and defense counsel engaged in the following colloquy:
The Court: I guess I have a discussion of the numbers
of class members who have agreed to the settlement in
terms of electing to participate in it. . . . And I indicated
what the figures that I have now are for those levels of
participation. I presume everybody agrees that those
numbers are the numbers.
[Hyundai’s Counsel]: Our calculations were actually
slightly different but not in a material way.
Whatever this ambiguous colloquy meant to the court and the parties
regarding the amount of settlement funds claimed by class members as of
the date of the hearing, it does not constitute a reasonable judicial effort
to determine the value of the settlement. The majority’s observation that
“participation rates are a mathematical predicate to valuing this
settlement,” Maj. at 62 n.13, highlights the problem: when a court has an
obligation to calculate the value of the settlement, it is per se unreasonable
to stop after identifying one predicate to the calculation of that value.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 81
reimbursement program was an order of magnitude less than
$210,000,000.9
Because the district court failed to reasonably estimate the
value of the settlement, despite the objectors’ cogent
arguments that this value was relatively small, the district
court did not have the information necessary for determining
whether the attorneys’ fees awards were proportionate to the
benefit obtained for the class. Accordingly, the district court
failed to assure “that the amount awarded was not
unreasonably excessive in light of the results achieved.”
Bluetooth Headset Prods. Liab. Litig., 654 F.3d at 943.
In concluding that the district court’s award of attorneys’
fees was reasonable, the majority likewise skips over this
crucial step. Rather, the majority’s analysis is based on an
assumption that the settlement provided a significant benefit
to the class. For example, the majority argues that the class
counsel did not “receive a disproportionate distribution of the
settlement.” Maj. at 57 (quoting Bluetooth Headset Prods.
9
While the majority cites expert reports to support the initial
settlement value estimate, it is not clear the district court was even aware
of these reports; it did not discuss or address them, and certainly did not
subject them to any rigorous examination. Maj. at 62 n.13. The majority
misleadingly speculates that the district court “did not discuss the reports
in detail” because they were filed under seal. Maj. at 62 n.13 (emphasis
added). Of course, the district court did not discuss the reports at all, and
there is no basis whatsoever for the majority’s speculation. Had the court
critically analyzed the reports, their questionable assumptions may have
undermined their reliability. For example, the reports assumed that car
owners who entered the lifetime reimbursement program after the
settlement would own their cars for a longer period of time than car
owners who entered the lifetime reimbursement program before the
settlement; this assumption has no reasonable basis and inflates the
perceived value of the settlement.
82 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
Liab. Litig., 654 F.3d at 947). Because the value of the
settlement is undetermined, this conclusion lacks any
reasonable foundation. Similarly, the majority argues that
“the district court properly exercised its discretion in
calculating the fee award using the lodestar method” because
it found that the attorneys’ fees award was lower than
25 percent of the settlement amount. Maj. at 60–61. But
lacking any considered estimate of the settlement’s value,
neither the district court nor the majority can reliably
compare the fee award to the settlement figure in this case.
The difference between the parties’ unsupported estimation
of settlement value and the objectors’ calculation is critical in
this context. If the settlement had conferred $210,000,000 in
value, as the parties originally speculated, a $9,000,000 total
fee award might have been justified; but a court would be
hard-pressed to justify such a fee award if the value conferred
on the class were closer to $21,000,000, as the objectors
contend. Even when it is “difficult to estimate the settlement
value’s upper bound,” Maj. at 60–61, there is no excuse for
the district court’s failure to calculate a reasonable estimate
after reviewing the facts and the parties’ arguments.
The district court likewise provided insufficient reasoning
for its application of multipliers to the lodestar amounts used
to calculate various counsels’ fee awards. The application of
a multiplier is appropriate only in “rare” or “exceptional”
cases. Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 554
(2010). Foremost among the factors that may justify a
positive (or negative) multiplier is “the benefit obtained for
the class.” Bluetooth Headset Prods. Liab. Litig., 654 F.3d
at 942. Without determining what value the settlement
provided to class members, the district court could not
determine whether this was such a rare or exceptional case
that justifies a positive multiplier. Perdue, 559 U.S. at 554.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 83
Moreover, the district court failed to resolve the objectors’
claim that the settlement provided minimal value beyond the
reimbursement voluntarily offered by Hyundai and Kia.10
Nor did the district court resolve the objectors’ argument
that class counsel did little beneficial work on the case. The
settlement of the case was announced in February 2013, only
three months after Hyundai and Kia announced their
voluntary reimbursement program. This settlement was
followed only by “confirmatory discovery,” a procedure the
parties agreed to use in lieu of actual discovery under the
federal rules. According to the objectors, Hyundai and Kia
retained significant control of this confirmatory procedure,
including by selecting the witnesses who would be
interviewed (rather than deposed) by class counsel. There is
no dispute that the confirmatory discovery process added
little or no value to the settlement. Yet the district court
offered no explanation for why fees incurred for confirmatory
discovery warranted a multiplier.
If the settlement and counsel’s confirmatory review of the
documents and witnesses produced by the defendants
provided only minimal benefit to the class, the district court’s
10
According to the majority, the district court was justified in
including the entire value of the lifetime reimbursement program—which
defendants offered before they entered the settlement—because “the
settlement extended the time for enrollment and provided additional
compensation to Reimbursement Program enrollees.” Maj. at 62 n.13.
But it is not reasonable to calculate the value of a settlement as including
the full value of a program that preexisted the settlement. The district
court reasonably could have calculated the marginal value adduced from
the extended enrollment time and additional compensation, but attributing
the pre-settlement value of the program to the settlement is not reasonably
defensible.
84 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
rationale for awarding multiplied fees—the “complexity and
volume of work” and the degree of risk assumed by Espinosa
counsel—is baseless.
The majority affirms the district court’s use of the
multipliers despite these failures, again based on the flawed
assumption that the degree of benefit to the class was known
and that we have affirmed comparable multipliers in other
cases. Maj. at 63 (citing Viscaino v. Microsoft Corp.,
290 F.3d 1043, 1051 (9th Cir. 2002); Kelly v. Wengler,
822 F.3d 1085, 1093, 1105 (9th Cir. 2016)). But this is
beside the point. The law requires a district court to provide
an adequate explanation of the award. The majority’s
repetition of the district court’s explanation does not improve
it. Accordingly, I would remand the attorneys’ fee award to
the district court so that it could reevaluate the fee award after
calculating the value of the settlement and provide adequate
reasoning for the applied multipliers.
V
Our court, like many others, leans toward approving class
certifications and class settlements, which benefit both
defendants (who are relieved of significant liability in a single
stroke) and class counsel (who are amply rewarded for their
efforts). Nevertheless, despite any such judicial inclinations,
we remain bound by Amchem’s clear direction that courts
must be rigorous in ensuring that a class meets the
prerequisites of Rule 23(b). The prospect of settlement may
mitigate management concerns, but it does not relieve a court
of this responsibility. By failing to determine what law
applied to the nationwide class of plaintiffs in this case, the
district court could not fulfill this basic obligation. And by
failing to make a reasonable determination of the value of the
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 85
settlement, the court lacked the ability to make a proportional
attorneys’ fee award. The majority’s failure to correct these
errors may be beneficial for the class action bar, but it
detracts from compliance with Supreme Court precedent.
Therefore, I dissent.