Opinion
Case No. 6:13-cv-921-CEM-RMN
2023-05-25
Heather VENERUS, Plaintiff, v. AVIS BUDGET CAR RENTAL, LLC and Budget Rent-A-Car System, Inc., Defendants.
Amy Lynn Judkins, Edmund A. Normand, Jacob Lawrence Phillips, Normand Law PLLC, Orlando, FL, Christopher J. Lynch, Christopher J. Lynch, P.A., South Miami, FL, for Plaintiff. Cristina Boullon Rodriguez, WolfePincavage, Miami, FL, Irene Oria, FisherBroyles, LLP, Miami, FL, Philip Glatzer, Marlow Adler Abrams Newman & Lewis, Coral Gables, FL, Robert Thomas Wright, Jr., FisherBroyles, LLP, West Palm Beach, FL, William P. Donovan, Jr., Pro Hac Vice, McDermott Will & Emery LLP, Los Angeles, CA, for Defendants.
Amy Lynn Judkins, Edmund A. Normand, Jacob Lawrence Phillips, Normand Law PLLC, Orlando, FL, Christopher J. Lynch, Christopher J. Lynch, P.A., South Miami, FL, for Plaintiff. Cristina Boullon Rodriguez, WolfePincavage, Miami, FL, Irene Oria, FisherBroyles, LLP, Miami, FL, Philip Glatzer, Marlow Adler Abrams Newman & Lewis, Coral Gables, FL, Robert Thomas Wright, Jr., FisherBroyles, LLP, West Palm Beach, FL, William P. Donovan, Jr., Pro Hac Vice, McDermott Will & Emery LLP, Los Angeles, CA, for Defendants.
ORDER
CARLOS E. MENDOZA, UNITED STATES DISTRICT JUDGE
THIS CAUSE is before the Court on Plaintiff's Unopposed Motion for Approval of Service Award (Doc. 533). The United States Magistrate Judge issued a Report and Recommendation (Doc. 535), recommending that the Motion be granted.
After review in accordance with 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72, and noting that the parties filed a Joint Notice of No Objection (Doc. 536), the Magistrate Judge's recommended disposition is accepted. Accordingly, it is ORDERED and ADJUDGED as follows:
1. The Report and Recommendation (Doc. 535) is ADOPTED and made a part of this Order.
2. The Plaintiff's Unopposed Motion for Approval of Service Award (Doc. 533) is GRANTED.
3. On or before June 26, 2023, Defendants shall pay Plaintiff a service award in the amount of $25,000.00.
DONE and ORDERED in Orlando, Florida on May 25, 2023. REPORT AND RECOMMENDATION ROBERT M. NORWAY, United States Magistrate Judge
This cause came on for consideration without oral argument on Plaintiff's Unopposed Motion for Approval of Service Award (Dkt. 533), filed April 25, 2023. Upon consideration, I respectfully recommend that the Motion be granted.
I. Background
The undersigned incorporates the factual background as stated in its previous Reports and Recommendations (Dkts. 511, 528) and restates only those facts as relevant to this Report and Recommendation.
On June 12, 2013, Plaintiff Heather Veranus, on behalf of herself and others similarly situated, filed this putative class action against Avis Budget Car Rental, LLC, and Budget Rent-A-Car System, Inc. (collectively, the "Defendants"). Dkt. 1. On March 29, 2019, District Judge Carlos E. Mendoza certified the class and designated Plaintiff as class representative. Dkt. 370. After years of litigation, the parties notified the Court that the reached a settlement in December 2022. Dkts. 504, 509.
Thereafter, on January 14, 2022, Plaintiff filed an "Unopposed Motion for Preliminary Approval of Proposed Class Action Settlement," Dkt 509, which was granted in part. Judge Mendoza deferred ruling on the issue of a "service award" to Plaintiff pending the Eleventh Circuit's consideration of an en banc review of Johnson v. NPAS Solutions, LLC, 975 F.3d 1244, 1260 (11th Cir. 2020). Dkt. 513. On October 21, 2022, Plaintiff filed a Motion for Attorneys' Fees and Costs, which included a request for a service award. Dkt. 524. The Court adopted Magistrate Judge David A. Baker's Report and Recommendation, which in part deferred ruling on the service award pending the Supreme Court's decision on whether to grant certiorari in the Johnson case. Dkt. 528.
On April 25, 2023, the Plaintiff filed the instant Motion, noting that the Supreme Court has denied the cert petition and has not provided guidance on whether state law governs service awards as part of class action settlements under Erie Railroad Company v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Dkt. 533.
II. Analysis
A. Application of Erie Railroad v. Tompkins
Plaintiff seeks a service award of $25,000, arguing that Johnson I is inapplicable to this case. Dkt. 533 at 3-8. In Johnson I, the Eleventh Circuit held that Supreme Court precedent "prohibit[s] [an] incentive award . . . that compensates a class representative for his time and rewards him for bringing a lawsuit." Johnson I, 975 F.3d at 1260. Plaintiff asserts that recent cases from the Middle District of Florida are correct in finding that Johnson I is inapplicable to the present case because that case addressed a settlement pursuant to federal law while the instant case arises out of a state law cause of action. Dkt. 533 at 4. Based on an Erie analysis, Plaintiff maintains that she is entitled to a service award pursuant to state law. Id. at 3-8.
Upon review, I agree with Plaintiff and the recent cases decided in this district. In Junior v. Infinity Ins. Co., Magistrate Judge Embry J. Kidd explained that
Johnson I examined federal common law, based on a federal cause of action, to arrive at its decision. There is nothing in Johnson I to suggest that it is applicable to cases arising under state law. The Eleventh Circuit chose not to rehear Johnson I en banc, and the denial did not provide any additional analysis. See Johnson II, 43 F.4th at 1138 ("I'm content to let the panel opinion speak for itself.") (Newson, J., concurring in denial of rehearing en banc). Accordingly, I find that an Erie analysis is appropriate to address the immediate question of Plaintiff's entitlement to a service award. See Chieftain Royalty Co. v. Enervest Energy Institutional Fund XIII-A, L.P., 888 F.3d 455, 468 (10th Cir. 2017) (noting, in a diversity action, that when analyzing a service award, "Erie requires us to apply Oklahoma law.").Junior v. Infinity Ins. Co., Case No. 6:18-cv-1598-WWB-EJK (M.D. Fla.). I agree with Magistrate Judge Kidd's analysis.
Under Erie, "federal courts sitting in diversity [as here] apply state substantive law and federal procedural law." Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996). If a state rule is not clearly substantive, the court must determine whether failure to apply it would thwart the aims of Erie. Id. The two aims of Erie are the discouragement of forum shopping and the avoidance of inequitable administration of the laws—that is, the likelihood that the applicability of substantive rights and duties would turn on the forum in which the action is brought. See Hanna v. Plumer, 380 U.S. 460, 468, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965). State rules should apply when the failure to apply them would significantly affect the outcome of the litigation, encourage forum shopping, or result in "inequitable administration of the laws." Gasperini, 518 U.S. at 428, 116 S.Ct. 2211 (quoting Hanna, 380 U.S. at 468, 85 S.Ct. 1136).
Upon consideration of the Erie factors and the recent cases in this District and other courts, I recommend that the Court apply Florida state law to determine Plaintiff's entitlement to a service award. See, e.g., Roth v. GEICO Gen. Ins. Co., No. 16-62942-civ, 2020 WL 10818393, at *3 (S.D. Fla. Oct. 8, 2020) (finding that Johnson I is inapplicable because under Erie, Florida law applied to the diversity action); see also Haas v. Burlington Cnty., No. 08-1102, 2019 WL 413530, at *10 (D.N.J. Jan. 31, 2019); Freebird, Inc. v. Merit Energy Co., No. 10-1154-KHV, 2013 WL 1151264, at *5 (D. Kan. Mar. 19, 2013); Du v. Blackford, No. 17-cv-194, 2018 WL 6604484, at *9 (D. Del. Dec. 18, 2018).
B. Plaintiff is Entitled to a Service Award Under Florida Law.
Florida law allows service awards in class action cases. In Altamonte Springs Imaging, L.C. v. State Farm Mut. Auto. Ins. Co., 12 So. 3d 850, 857 (Fla. 3d DCA 2009), the court expressly approved a $10,000 service award to a class representative, noting that "[t]he position as fiduciary for the class is less an honor than a headache."
Accordingly, I find that a service award to Plaintiff is fair and reasonable and should be approved. Plaintiff has conferred substantial benefits on the class through the expenditure of significant time and effort participating in litigation over the last ten years. Plaintiff has travelled to and from Scotland to sit for her own deposition, has contributed to discovery (including producing her own documents), participated in four mediations, and has actively taken a role in advancing litigation efforts. See Dkt. 533, at 9-10. The requested service award of $25,000 is reasonable considering the time and effort Plaintiff has put into litigating the class's claims. See, e.g., Ingram v. Coca-Cola Co., 200 F.R.D. 685, 694 (N.D. Ga. 2001) (approving an award of $300,000 to each class representative because they "expended considerable time and effort on the case" and "directly participated in the mediation process"); Wright v. Stern, 553 F. Supp. 2d 337, 345 (S.D.N.Y. 2008) (finding that a $50,000 service award "was reasonable in light of the burdens imposed by participating as a named party in litigation that spanned some ten years") (collecting cases).
Therefore, I respectfully recommend that the Court award Plaintiff a service award in the amount of $25,000, to be paid from the funds Defendant deposited in the Court registry.
IV. Conclusion
Accordingly, it is RECOMMENDED that:
1. Plaintiff's Unopposed Motion for Approval of Service Award (Dkt. 533) be GRANTED; and
2. Plaintiff should receive a service award in the amount of $25,000.00 to be paid from the funds Defendant deposited into the Court registry.
NOTICE TO PARTIES
"Within 14 days after being served with a copy of [a report and recommendation], a party may serve and file specific written objections to the proposed findings and recommendations." Fed. R. Civ. P. 72(b)(2). "A party may respond to another party's objections within 14 days after being served with a copy." Id. A party's failure to serve and file specific objections to the proposed findings and recommendations alters review by the district judge and the United States Court of Appeals for the Eleventh Circuit, including waiver of the right to challenge anything to which no specific objection was made. See Fed. R. Civ. P. 72(b)(3); 28 U.S.C. § 636(b)(1)(B); 11th Cir. R. 3-1.
Entered in Orlando, Florida, on May 23, 2023.
REPORT AND RECOMMENDATION
DAVID A. BAKER, UNITED STATES MAGISTRATE JUDGE
This cause comes before the Court without oral argument on Plaintiff's Unopposed Motion for Attorney's Fees and Costs, and Plaintiff's Service Award, filed on October 21, 2022. Doc. 524. Based on the analysis set forth below, it is respectfully RECOMMENDED that the Motion be GRANTED as to approval of the requested attorney's fees and costs.
Regarding requested approval of the "service award" (as reflected in Doc. 524 and the Response to the Court's query Doc. 523), it is further RECOMMENDED that a final decision regarding a "service award" to Plaintiff be DEFERRED in light of the currently pending petition to the Supreme Court in Johnson v. NPAS Solutions, LLC, 975 F.3d 1244, 1260 (11th Cir. 2020) ("NPAS"), rehearing en banc denied, 43 F.4th 1138 (11th Cir. 2022), pet. for cert. filed, 2022 WL 14813880, — U.S. —, — S.Ct. —, — L.Ed.2d — (Oct. 21, 2022) (No. 22-389). The Petition for Writ of Certiorari notes the split in the Circuit Courts over the issue of incentive awards in class actions, arguing that the Eleventh Circuit's decision is an outlier. See 2022 WL 14813880, at *3, — S.Ct. —. According to the Supreme Court's website, the deadline for the response to the petition for certiorari has been extended until December 21, 2022. If the Supreme Court denies the petition for certiorari, then the Eleventh Circuit's concededly novel application of venerable Supreme Court opinions from the 19th Century in NPAS will plainly be the law of this Circuit. In that event, this Court will need to determine whether the holding in NPAS encompasses the circumstances here. Of course, if certiorari is granted, the issue of service awards would be dealt with by the Supreme Court.
To cover these contingencies and avoid delay in approval of the settlement and fee awards, it is recommended that this issue be separated from consideration of the merits of the class settlement and attorneys' fees and that orders on those issues be accompanied by a final judgment under Fed. R. Civ. Pro. 54(b). In the meantime, Defendants should be ordered to deposit in the Court Registry the amount of the proposed service award ($25,000), to abide further proceedings. Because Defendants have agreed to pay this sum, the Court anticipates possible imposition of a cy pres trust on the funds, should they not be payable to the named Plaintiff.
I. BRIEF BACKGROUND
A more complete background is set forth in Doc. 511.
On June 12, 2013, Plaintiff Heather Venerus, on behalf of herself and others similarly situated, instituted this putative class action against Avis Budget Car Rental, LLC ("Avis") and Budget Rent-A-Car System, Inc. ("Budget") (collectively, the "Defendants"). Doc. 1. Following certain rulings by the District Judge initially denying class certification, Plaintiff filed an appeal, and the Eleventh Circuit reversed and remanded the certification issue. Doc. Nos. 339, 344. On March 29, 2019, District Judge Carlos Mendoza granted Plaintiff's Motion to Certify the class of international renters of Defendants' vehicles who were charged for certain insurance coverage in bundled car rental agreements; designated Plaintiff as class representative; and approved Plaintiff's counsel, Edmund Normand, Esq., Jacob Phillips, Esq., and Christopher J. Lynch, Esq., as class counsel. Doc. 370. The parties proceeded with the discovery and preparation for trial which was set for January 3, 2022. Doc. 478. They subsequently reached a settlement at mediation after ten years of litigation. Doc. 509 at 7.
Plaintiff argued that Defendants breached rental car contracts with international-in-bound renters by promising to purchase a $1 million supplemental liability insurance policy from a third-party insurer on behalf of the renters; instead, Defendants kept the premiums and directly insured the renters under "contractual self-insurance." Docs. 32, 508-2. The class definition was limited to individuals who rented vehicles after June 12, 2008, and before January 1, 2016. Doc. 377.
On January 14, 2022, Plaintiff filed an "Unopposed Motion for Preliminary Approval of Proposed Class Action Settlement." Doc. 509. On July 5, 2022, Judge Mendoza granted in part and gave preliminary approval to the settlement; he deferred a decision on the issue of a "service award" to Plaintiff pending the Eleventh Circuit's pending consideration of en banc review of the panel's decision in Johnson v. NPAS Solutions, LLC, 975 F.3d 1244, 1260 (11th Cir. 2020). Doc. 513. On September 17, 2022, the Court ordered Plaintiff to file a response following the Eleventh Circuit's final decision denying rehearing in NPAS, which effectively made the panel's decision, disallowing service awards in class actions, to become final. Doc. 521.
Plaintiff responded by filing a Motion for Service Award, noting that Plaintiff would include a duplicate of the request for service award in the motion for attorneys' fees and costs, consistent with counsel's general practice. Doc. 522 at 2-3. On October 21, 2022, Plaintiff filed a Motion for Attorney's Fees and Costs which also argued for a service award to Plaintiff of $25,000. Doc. 524. The Motion for Attorney's Fees and Costs (Doc. 524) is unopposed and ripe for review.
The Motion was filed simultaneously with the unopposed Motion for Final Approval of Proposed Class Action Settlement (Doc. 523) (which is not referred to the undersigned). Judge Mendoza cancelled the Final Settlement Approval Hearing and will address the pending motions based on the filings. Doc. 526.
II. LEGAL STANDARD
A. Attorney's Fees for Rule 23 Class Action Claims
The claims in this case were brought as a class action, and the Court must apply Federal Rule of Civil Procedure 23(h), which provides that the court may award reasonable attorneys' fees and costs as authorized by law or as agreed to by the parties. Plaintiff appropriately cites Camden I Condominium Association, Inc. v. Dunkle, 946 F.2d 768, 772 (11th Cir. 1991), which is the leading case in this Circuit dealing with the issue of attorneys' fees in common-fund class-action cases like this one. Doc. 524 at 8. The Eleventh Circuit relied on Camden I two decades later in Faught v. American Home Shield Corporation, holding "attorneys' fees awarded from a common fund shall be based on a reasonable percentage of the fund established for the benefit of the class." 668 F.3d 1233, 1242 (11th Cir. 2011) (citing Camden I, 946 F.2d at 774); see also In re Equifax Inc. Customer Data Security Breach Litigation, 999 F.3d 1247, 1278 (11th Cir. 2021) (describing the "percentage method" applied in Camden I).
"[A] lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney's fee from the fund as a whole." Arkin v. Pressman, Inc., 38 F.4th 1001, 1008 (11th Cir. 2022) (citing In re Home Depot Inc., Customer Data Sec. Breach Litig., 931 F.3d 1065, 1079 (11th Cir. 2019)). "There is no hard and fast rule mandating a certain percentage of a common fund which may be awarded as a fee because the amount of any fee must be determined upon the facts of each case." Camden, 946 F.2d at 774. The Eleventh Circuit "has often stated that the majority of fees in these [common fund] cases are reasonable where they fall between 20-25% of the claims." Faught, 668 F.3d at 1242 (citing Camden I); see Arkin, 38 F.4th at 1005 n.3 ("Since awards of up to 25% of the common fund are presumptively reasonable in this circuit, district courts must apply the twelve Johnson factors before approving a greater award to class counsel."); see also Waters v. Int'l Precious Metals Corp., 190 F.3d 1291, 1294 (11th Cir. 1999) ("The majority of common fund fee awards fall between 20% to 30% of the fund.").
"Where the requested attorneys' fee exceeds 25%, the Court is instructed to apply the twelve Johnson factors." Faught, 668 F.3d at 1242-43 (citing Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974)). The well-established Johnson factors include: (1) the time and labor required; (2) the difficulty of the issues; (3) the skill required; (4) the preclusion of other employment by the attorney because he accepted the case; (5) the customary fee in the community; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Id. (citing Hensley v. Eckerhart, 461 U.S. 424, 430 n.3, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983) and Johnson). "Other pertinent factors are the time required to reach a settlement, whether there are any substantial objections by class members or other parties to the settlement terms or the fees requested by counsel, any non-monetary benefits conferred upon the class by the settlement, and the economics involved in prosecuting a class action." Camden I, 946 F.2d at 775.
B. Plaintiff's Request for Fees and Costs
Plaintiff requests that the Court approve attorneys' fees and costs of $8,925,000 to Class Counsel, who incurred more than $400,000 in costs; thus, $8,525,000 of the request is solely for attorney's fees. Doc. 524 at 9. Avis/Budget agreed to pay $33,956,613 to resolve the claims at issue in this case. Id.; cf. Waters v. Int'l Precious Metals Corp., 190 F.3d 1291, 1296 (11th Cir. 1999) (approving fee of one-third of total fund available for claims rather than the actual payout). Therefore, the attorney's fees portion of the request is approximately 25% percent of the value of the class benefits in this case, which is the percentage in Camden I presumed to be reasonable. Plaintiff explains:
The mathematical calculation is 25.1%. Actual costs for two rounds of notice to the class and for experts, depositions, etc. were higher—though Class Counsel exercised judgment to omit these. The percentage would have been below 25% if the full costs had been included.
[T]he Settlement is highly beneficial to Class Members [because] Defendants agree to (1) pay up to $33,956,613.00 in benefits to Settlement Class Members, such that (2) members of the Settlement Class who submit a valid claim, as set forth in the Notice provisions of the Settlement Agreement, will receive at least $6.51 per rental day, plus prejudgment interest, in damages, and up to $7.46 per rental day, plus prejudgment interest, depending on whether (and in what amount) there are unclaimed funds following submission of claims As explained in the Motion for Preliminary Approval, this constitutes more than 100% of the restitution damages and 52.3-59.9% of the expectation damages that could have been recovered at trial.Doc. 524 at 4-5. Plaintiff further explains that the Settlement Agreement benefits the Class with a narrowly-tailored release specific to claims arising out of the tour voucher rental contracts at issue; the Notice to the Class was "robust and substantive, including direct, and individualized" to ensure the best possibility class members would receive notice; and the claims' process is streamlined and simple because no documentation is required aside from two straightforward attestations. Id. at 5. Plaintiff argues that this is exemplified in that 250,000 members received Notice of the terms—including the provisions for attorneys' fees and service award—and no objections have been lodged.
As Plaintiff points out, because she is not seeking fees above the 25% benchmark, the Court is not required to consider the Johnson factors in its reasonableness determination. Camden I, 946 F.2d at 774-75; Faught, 668 F.3d at 1242 (citing Camden I); see Arkin, 38 F.4th at 1005 n.3 (noting awards of up to 25% of the common fund are presumptively reasonable). Moreover, Plaintiff represents that the requested fees and costs "were negotiated at arm's length after all other terms of the proposed Settlement were reached," were "agreed to by Defendants as part of the Settlement and are reasonable under the 'percentage of the benefit' method prescribed by the Eleventh Circuit" in Camden I. Doc. 524 at 3.
C. Application of the Johnson Factors
Recognizing that the Eleventh Circuit has held that the Court can consider the Johnson factors in evaluating the percentage awarded, see Camden I, 946 F.2d at 775, and in the interest of a thorough review, the Court briefly addresses the Johnson factors.
(1) Time and labor required and (4) preclusion of other employment
Class counsel contend that substantial time and labor were required to investigate and litigate this case for more than a decade. They represent that they have invested approximately 11,021 hours, accruing a value of more than $8 million in attorney's fees. Doc. 524-1, Phillips Decl., ¶¶ 4, 7; Doc. 524-2, Normand Decl., ¶ 18; 524-3, Lynch Decl., ¶ 12. Class counsel explains that the class action "has been contested at every stage." Doc. 524 at 11; see also Doc. 509-2 at ¶¶10-30.
Counsel contends that the "extensive litigation and complex issues of fact and law . . . required substantial investment of time, especially given Class Counsel originated the theory of recovery after substantial investigation in this first-impression case." Doc. 524-2 at ¶ 7. "Prior to this case, there were no cases alleging it is a breach of contract for a rental car company to promise but not procure a supplemental liability insurance [SLI] policy from a third-party insurer and to instead purportedly intend to directly cover the renters for claims by third parties." Id.
Counsel describes the extensive litigation history—undisputed by Defendants—in this Court and at the Eleventh Circuit:
This case has been hotly contested and extensively litigated at every stage. Motion practice included multiple motions to dismiss, multiple motions to strike pleadings, eight motions to strike expert testimony, two separate cross-motions (and subsequent briefing) for summary judgment, numerous motions to compel, two motions for class certification, a motion to bifurcate trial, two motions for reconsideration of summary judgment, three motions to decertify the class, a motion for relief from judgment, briefing in the Eleventh Circuit regarding a Rule 23(f) petition, a motion for reconsideration of the order certifying the class and denying relief from judgment and to certify for interlocutory appeal, and an appeal from final judgment and of the order denying the motion for class certification. The case went to the eve of trial on three separate occasions—and all three times, the Parties filed the requisite pretrial statement, deposition designations, exhibit lists, motions in limine, jury instructions, and so forth. [Doc. 524-2] at ¶¶ 10, 15-30.Doc. 524 at 3-4.
The parties took 21 depositions, including class representatives, corporate representatives, and expert witnesses. Plaintiff reviewed over 75,000 pages of documents, spreadsheets, and rate filings produced by Avis-Budget or third parties, served seven sets of interrogatories, five sets of document requests, requests for admission, and multiple third party requests. Id. at ¶¶ 11-14. Plaintiff also analyzed millions of lines of data involving well over 200,000 claimants. Id. at ¶ 12. Class Notice was provided on two separate occasions following Orders granting class certification—and now Notice has been provided for a third time, this time informing the Class of the proposed Settlement. Id. at ¶ 26.
Mr. Normand explains that the time and labor required precluded Class Counsel from accepting numerous other employment possibilities. Id. Mr. Normand dropped virtually the entirety of his practice and focused exclusively on this case for three years—even after hiring two additional attorneys in 2015: "From 2013-2105, this case was the only case that [he] worked on and to which [he] devoted his full attention, foregoing all other profit-generating opportunities." Doc. 524-2 ¶ 9. When the case was filed, both Mr. Normand and Mr. Lynch were solo practitioners—and both turned down numerous other potential profit-generating opportunities; Mr. Phillips has also turned down work (to a lesser degree). Docs. 524-2 ¶¶ 9-10; 524-3 ¶ 8; 524-1 ¶ 9.
Plaintiff submitted the Declaration of Melvin Wright, Esq., a complex litigation practitioner in Orlando with more than 35 years of experience, who reviewed the reasonableness of Class Counsel's attorneys' fees and costs; he opines that Class Counsel's efforts achieved "an excellent result" that would "justify a higher amount" and the attorneys' fees and costs sought are reasonable. Doc. 524-4, Wright Decl., ¶¶ 23, 25. Mr. Wright opines, considering the Johnson factors, that Class Counsel "obtained a very substantial recovery for the class" in this "complex, novel case of first impression." Id. ¶24(a), (f).
The Court considers only the reasonableness of the overall fee proposed, principally because no billing records were submitted (although Class Counsel offered to submit them in camera if required - Doc. 524 at 17 n.4), and no lodestar analysis is required given the presumed reasonableness of the fee proposed. See, e.g., In re Checking Account Overdraft Litig., Case No. 1:09-MD-02836-JLK (MDL No. 2036), 2014 WL 11370115 at *15 (S.D. Fla. Jan. 6, 2014) (citing Camden I and other cases). However, Class Counsel supplied the following totals for hours spent on the case: Mr. Normand - 3,500 hours; Mr. Lynch - 3,700 hours; and Mr. Phillips 2,266 hours; their associates an additional 1,000 hours; for a total exceeding 11,000 hours. See Doc. 524-1 ¶¶ 5-8.
The time spent on the case has been extensive and has unquestionably required Class Counsel to forego other work. Moreover, the litigation and appeal process have lasted for more than a decade and these factors weigh in favor of the proposed 25% award. See, e.g., Waters, 190 F.3d at 1295 (affirming award of a fee of 33.3% of fund, in part, for the time taken to reach settlement through seven years of litigation and five months of trial).
(2) The difficulty of the issues; and (3) the skill required
Plaintiff argues that the interconnected factors of the novelty and difficulty of the questions involved and the skill requisite to successfully litigate the case both strongly support the requested fees here. See Doc. 524-4 ¶ 24(b), (c). Class Counsel explain that "[t]his case was the first of its kind" in that they were the first in the country to discover that Avis-Budget was promising to purchase a third-party policy for consumers but was failing to do so, and then was providing affidavits to claimants falsely attesting that it had indeed bought the promised third-party policy. Doc. 524 at 12 (citing Doc. 524-2 ¶¶ 4-8). Additionally, the "issues of fact and of law raised in this case of first impression were complex and (inherently) novel, ranging from regulatory law, forensic accounting, actuarial analysis, principles of economics, international law on res judicata and class litigation, Article III standing, and more." Id. The "complexity and difficulty" is exemplified in the issues the Court was required to address in "detailed and extensive Orders on summary judgment and class certification, as well as the fact that Class Counsel litigated the case to final judgment, secured a reversal of the denial of class certification on appeal, and then litigated the class claims to the eve of trial." Id. at 13 (citing Johnson, 488 F.2d at 718 ("Cases of first impression generally require more time and effort on the attorney's part . . . [they] should be appropriately compensated for accepting the challenge.")).
The result in this complex and difficult case, with the novel theory asserted by Class Counsel, was an excellent result for the class. Class counsel in the case have substantial experience in class actions and appeals and showed tenacity and perseverance during the decade of litigation and appeal in the case.
(5) Customary fee in the community and (12) awards in similar cases
As discussed above, the Eleventh Circuit has described the usual fee range for common fund cases is 20% to 30%, with 50% at the upper limit, with 25% as the benchmark. See Camden I, 946 F.2d at 774, 775. Plaintiff argues that the fee requested here is "comfortably within this customary range" and thus, these factors both support the requested attorneys' fees. See Doc. 524-4 ¶23(g), (h). Plaintiff's fees expert opines that, given the complexity and novelty of the issues involved, this case would justify a fee award above the 30% range. Id. at ¶¶ 24(h); Doc. 524 (citing cases where 30% - 33% fees were awarded).
As discussed at length above, a fee of 25% is presumed to be reasonable.
(6) Whether the fee is fixed or contingent
Representation by Class Counsel was on a contingent fee basis, presenting the very real possibility that they would have received nothing and suffered a direct out-of-pocket loss given they advanced all expenses of the litigation. Doc. 524-2 at ¶ 8. Plaintiff argues that "numerous courts have recognized that such risk deserves extra compensation and is a critical factor in determining the reasonableness of a fee" and Class Counsel expended over $400,000 in hard costs (plus additional costs). See Doc. 524-4 ¶¶ 25-26. The risk inherent in a contingent fee arrangement supports the reasonableness of the proposed 25% attorney's fee award in this case.
(8) Amount involved and the results obtained; and (9) the experience, reputation, and ability of the attorneys
Class counsel have supplied declarations describing extensive experience in their fields of complex civil litigation and class actions. "I believe the members of the class counsel team had a very high level of expertise and skill, and that their excellent reputations are well-earned" and they "obtained a very substantial recovery for the class" of more than $33 million "under difficult circumstances." Id. ¶24(d), (e). Plaintiff states that this represents 100% of most likely damages measure and 52.3-59.9% of best-case scenario which supports the requested fee, particularly given the significant difficulties and risk in this case of first impression. Doc. 524 at 15 (citing cases with lower recoveries awarding fees of 27%-33%).
As Plaintiff points out, the "most critical factor is the degree of success obtained." Doc. 524 (quoting Hensley v. Eckerhart, 461 U.S. 424, 436, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)). The results obtained in the case were substantial and this factor weighs in favor of the reward sought.
Remaining three Johnson factors
Plaintiff does not address (10) the "undesirability" of the case; (7) time limitations imposed by the client or circumstances; and (11) the nature and length of the professional relationship with the client, arguing that the three factors are "likely neutral." She argues that this case was "undesirable" in that it requires "substantial time and effort at a high risk" given the novel legal theory, but "it was not the type of case that can lessen an attorneys' reputation in the community" and counsel did have an ongoing relationship with Plaintiff, which is normal for class action litigation. Doc. 524 at 16 n.2. The Court agrees that these factors are neutral.
Additional Factors
Plaintiff additionally argues that "the economics of class actions require that counsel be adequately compensated" because, as "courts have acknowledged, the economic reality [is] that in order to encourage private attorney general-type class actions brought on behalf of persons with small individual losses, a financial incentive is necessary to entice capable attorneys, who otherwise could be paid by hourly-rate clients to devote their time to complex, time-consuming cases for which they may never be paid." Doc. 524 at 16 (quoting Mashburn v. Nat'l Healthcare, Inc., 684 F. Supp. 679, 687 (M.D. Ala. 1988)). Mr. Wright further opines that "[w]ithout a premium incentive, it simply would make no economic sense for counsel to undertake a case like this one." Doc. 524-4 ¶ 34.
Taking into consideration all of the Johnson factors discussed above, the Court finds that the proposed a total award of $8,925,000 to Class Counsel-based on attorney's fees of $8,525,000 and costs of $400,000—is reasonable under the circumstances of this case in which Avis/Budget has agreed to pay $33,956,613 in settlement.
III. CONCLUSION
In sum, it is recommended that the requested fee award be approved as reasonable as part of the Court's consideration of the propriety of the class action settlement and that a final judgment on those matters be entered under Rule 54 with the Clerk thereafter closing the case. Final consideration of the allowance of the requested service award should again be deferred pending action by the United States Supreme Court in NPAS and the parties directed to advise this Court of any activity regarding the certiorari petition. In the interim, Defendants should be ordered to deposit the amount of the proposed service award in the Court Registry to abide further proceedings, including possible creation of a cy pres trust.
NOTICE TO PARTIES
A party has fourteen days from this date to file written objections to the Report and Recommendation's factual findings and legal conclusions. A party's failure to file written objections waives that party's right to challenge on appeal any unobjected-to factual finding or legal conclusion the district judge adopts from the Report and Recommendation. See 11th Cir. R. 3-1.
Based on the foregoing, it is respectfully recommended in Orlando, Florida on December 14, 2022.