Lee v. Enterprise Leasing Company-West, LLC

RESPONSE to 135 Notice

D. Nev.April 27, 2015

CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) BOWEN HALL Dan C. Bowen (SBN 1555) 555 South Center Street Reno, Nevada 89501 Telephone: (775) 323-8678 Facsimile: (775) 786-6631 CROWELL & MORING LLP Gregory D. Call (admitted pro hac vice) Janine L. Scancarelli (admitted pro hac vice) J. Daniel Sharp (admitted pro hac vice) 275 Battery Street, 23rd Floor San Francisco, CA 94111 Telephone: (415) 986-2800 Facsimile: (415) 986-2827 Attorneys for Defendants Enterprise Leasing Company-West, LLC and Vanguard Car Rental USA, LLC UNITED STATES DISTRICT COURT IN AND FOR THE DISTRICT OF NEVADA LYDIA LEE and CAROLYN BISSONETTE, individually and on behalf of all others similarly situated, Plaintiffs, v. ENTERPRISE LEASING COMPANY- WEST, LLC, a Delaware LLC, and VANGUARD CAR RENTAL USA, LLC, a Delaware LLC, Defendants. Case No. 3:10-CV-00326-LRH-(WGC) DEFENDANTS ENTERPRISE LEASING COMPANY-WEST, LLC AND VANGUARD CAR RENTAL USA, LLC’S RESPONSE TO OBJECTIONS Date: May 12, 2015 Time: 10:00 a.m. Place: Courtroom No. 3 Judge: Hon. Larry R. Hicks Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 1 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page -i- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) INTRODUCTION ................................................................................................................. 1 ARGUMENT ............................................................................................................................. 2 I. Objector Markich Overlooks the Facts that Many Class Members Can Recover More Than They Paid, and Many Can Recover More Than $5 and More Than One Day’s Rental ...................................................................... 3 II. Objector Elledge Overlooks the Facts that the Settlement Is a Compromise and that Many Class Members Can Recover More Than $5 .................................. 3 III. Objector Sterling ................................................................................................ 4 A. Sterling’s Difficulty in Using a Voucher Issued in the Shames Case Does Not Justify Disapproval of the Settlement ....... .............................. 4 B. Courts Routinely Approve Claims-Made Settlements i Class Actions .............................................................................................. 5 IV. Objector Andrews Mischaracterizes the Settlement as a “Coupon Settlement” ......................................................................................................... 7 A. The Settlement Here Is Not a “Coupon Settlement” for Purposes of the Class Action Fairness Act: It Is A Cash Settlement, in Which Claimants Can Elect Vouchers if They So Choose ........ ......................... 7 B. The Fee Agreement in the Settlement Is Not a “Kicker” Arrangement that Can Deprive Class Members of Any Benefits ............... 8 C. Allowing Class Members to Submit Claims After the Fairness Hearing Will Increase the Number of Claims ....................................... 9 D. The Reaction of Class Members to the Proposed Settlem nt Supports Approval .............................................................................. 10 V. Objector Elasali Overlooks the Fact that the Complaint in this Case Alleges Only Violations of a Nevada Statute Before September 30, 2009 ........................ 11 CONCLUSION ................................................................................................................... 11 Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 2 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -ii- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) TABLE OF AUTHORITIES Page(s) Cases In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) ............................................................................................9 Churchill Vill. v. Gen. Electric, 361 F.3d 566 (9th Cir. 2004) ..................................................................................3, 4, 10 Hanlon v. Chrysler Corp., 150 F. 3d 1011 (9th Cir. 1998) .........................................................................................7 Monteferrante v. The Container Store, Inc., 2015 U.S. Dist. LEXIS 13212 (D. Mass. Feb. 4. 2015) .......................................................10 Moody v. Sears Roebuck & Co., 664 S.E.2d 569 (N.C. App. 2008) ........................................................................................11 In re Online DVD-Rental Antitrust Litig., 779 F.3d 934 (9th Cir. 2015) ..................................................................................6, 7, 10 Pearson v. NBTY, Inc., 772 F.3d 778 (7th Cir. 2014) ..........................................................................................10 Pelletz v. Weyerhaeuser Co., 255 F.R.D. 537 (W.D. Wash. 2009) ......................................................................................6 Redman v. RadioShack Corp., 768 F.3d 622 (7th Cir. 2014) ......................................................................................8, 10 Shames v. The Hertz Corp., 2012 U.S. Dist. LEXIS 158577 (S.D. Cal. Nov. 5, 201) ................................................4, 6, 10 Sobel v. The Hertz Corp., Case No. 3:06-cv-00545 (D. Nev. June 27, 2011) ........ ...................................................10 Synfuel Technologics, Inc. v. DHL Express (USA), Inc., 463 F.3d 646 (7th Cir. 2006) ............................................................................................7 True v. American Honda Motor Co., 749 F. Supp. 2d 1052 (C.D. Cal. 2010)...........................................................................8 Union Fidelity Life Ins. Co. v. McCurdy, 781 So.2d 186 (Ala. 2000) .............................................................................................11 Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 3 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -iii- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) Statutes 28 U.S.C. § 1712 ................................................................................................................7, 8 N.R.S. § 482.31575 ..............................................................................................................11 Other Authority S. Rep. No. 109-14 (2005) .......................................................................................................7, 8 Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 4 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -1- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) INTRODUCTION Defendants Enterprise Leasing Company - West, LLC (“Enterprise”) and Vanguard Car Rental USA, LLC (“Vanguard”) hereby respond to the objections filed with the Court by Class Members, and respectfully request that the objections be overruled and the Settlement be approved.1 As the Court is aware, the Settlement provides a choice of cash or vouchers for free rental days (time and mileage) to Class Members who registr for benefits. Every member of the Class has the opportunity to receive cash. Registration is a quick and simple process, requiing a Class Member to do nothing more than dial a toll-free number or access a web site (www.RentalCarSettlementNevada.com), and then enter a ight-digit registration number. At that point, the Class Member is informed of the dollar amount of cash to which he or she is entitled (representing 80% of the contested airport c ncession recovery fee he or she paid on base rates at Nevada airports during the class period) an the number of free-rental-day vouchers to which he or he is entitled, and chooses between those two forms of benefit. As of April 20, 2015, about 140,000 Class Members had registered for benefits; the registration period remains open for more than two additional months. Decl. of Donald J. Andra Regarding Settlement Administration and Resp. to Class Notice [ECF No. 136] (“Andra Decl.”) at ¶ 14; Settlement Agreement [ECF No. 113-1]( “Settlement Agreement”) at ¶ 2.1(d). Of the Class Members who have responded to the Class Notice, ver 99% have registered for settlement benefits, with about 58% electing cash and about 42% electing vouchers. Andra Decl. at ¶ 14. Fewer than 1% of those responding have elected to exclude themselves. Id. So far, with time remaining for Class Members to register for benefits, Class Members have claimed about $1.4 million in cash, and about 80,000 vouchers for free rental days. Id at ¶ 15. Plaintiffs’ Counsel have used $40 as the estimated value of each voucher, in view of the 1 Documents in the Court’s docket in this case, including filed objections, are identified by the number they have been assigned in the electroni d cket (i.e., “ECF No. X”). Unless otherwise noted, capitalized terms in this Response hav the meanings set for the in the Settlement Agreement [ECF No. 113-1]. Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 5 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) fact that the cost of a day’s rental will vary depending upon the brand, the size of the car, and the date, place and duration of the rental. See Joint Decl. of G. David Robertson and Arthur Stock [ECF No. 124-1] (“Joint Decl.”) at ¶¶ 34-35. To look at the value of the benefits that Class Members have claimed so far in a slightly different way, consider that if the Class Members who selected vouchers had instead selected cash, they would have claimed about $800,000 in cash. Andra Decl. ¶ 16. These Class Members presumably view the vouchers as more valuable than cash - and indeed, each voucher can potentially be redeemed for a rental worth $40 or more. Joint Decl. at ¶¶ 34-35. But even under the most c nservative view, with each Class Member’s voucher option valued exactly the same as that Class Member’s cash option, Class Members have claimed $2.2 million in value so far ($1.4 million in cash, and $800,000 of cash exchanged for vouchers). Seven Class Members have filed papers with the Court. One of them asks to be excluded from the Settlement (John H. English, see ECF No. 119), and six of them state objections. One of those six, Bruce J. Downey II [ECF No. 117] objects only to the fees requested by Plaintiffs’ Counsel, who can address Mr. Downey’s objection in their response. None of the objections justifies disapproving the Settlement. ARGUMENT None of the objectors disputes two crucial facts that e Court must consider in evaluating this Settlement: First , the Settlement allows every Class Members to recover a cash benefit representing a substantial percentage (at least 80%) of the actual amount contested with respect to his or her rentals; because the minimum payment is $5, a substantial number of Class Members can recover more than they paid in contested ACRF. Second, if this Settlement is not approved, Class Members face the certainty that this litigation will continue, and the risk that they will not prevail on appeal. At the Ninth Circuit, an appellate panel will consider de novo a range of issues pertaining to liability and the avail bility of restitution, including issues that have not been raised in the Sobel v. The Hertz Corp. case, which is currently before Ninth Circuit. Even if Class Members do prevail on appeal, any Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 6 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) recovery would be far in the future. These considerations support approval of the Settlement. Churchill Vill. v. Gen. Electric, 361 F.3d 566, 575 (9th Cir. 2004). Defendants here respond to the five objections that raise issues beyond the amount of attorneys’ fees requested by Plaintiffs’ Counsel. I. Objector Markich Overlooks the Facts that Many Class Members Can Recover More Than They Paid, and Many Can Recover More Than $5 and More Than One Day’s Rental Objector George Markich [ECF No. 118] objects that t e case has not been dismissed. He also objects to Plaintiffs’ Counsel’s request for attorneys’ fees and service awards, particularly in view of the relief available to Class Members in the Settlement. Plaintiffs’ Counsel can address their request for attorneys’ fees and service awards in their response. Defendants respond here to Mr. Markich’s incorrect statement that all Class Members other than the two named plaintiffs “will receive a day’s car rental or $5” under the terms of the Settlement. As reflected in paragraph 13 in the Declaration of Nicholas J. DeMattee, filed on November 18, 2014 [ECF No. 114-2] (“DeMattee Decl.”), about 180,000 Class Members paid $5 or less in airport concession recovery fees (“ACRF”) on base rental rates, which cover time and mileage. Those Class Members can choose between a day’s car rental or $5 cash (which represents at least the full amount they paid in contested ACRF). Other Class Members can choose 80% of the amount they paid in ACRF on base r tes, with a minimum payment of $5, or one or more free days’ rental, up to five days, depending upon the amount they paid in ACRF. Settlement Agreement at ¶ 2.1(a) and (b). So, for example, about 335,000 Class Members paid $20 or more in ACRF on base rates - each of these Class Members can choose between cash and two or more days’ rental. DeMattee Decl. at ¶ 13. Of those, about 25,000 Class Members can choose between cash and five days’ rental. See id. II. Objector Elledge Overlooks the Facts that the Settlement Is a Compromise and that Many Class Members Can Recover More Than $5 Objector Thomas S. Elledge, Jr. [ECF No. 120] objects to the amount of recovery to Class Members as well as to the amount of attorneys’ fees r quested by Plaintiffs’ Counsel. Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 7 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) Mr. Elledge opines that the Settlement should involve payment of the full ACRF paid, ignoring the fact that the $5 minimum is more than many Class Members paid in ACRF. See DeMattee Decl. at ¶ 13. Also, in stating that Class Members r ceive $5, Mr. Elledge overlooks the fact that many Class Members can recover more than the $5 minimum payment that the Settlement provides, as discussed in Section I., above. More generally, however, the Settlement represents a compromise of claims and, as such, does not purport to refund the full amounts paid by Class Members in ACRF. Considering all the appropriate factors, including the possibility that Class Members will recover nothing at all (if this Court’s rulings are reversed on appeal) and the certainty that even if Class Members do recover as a result of a judgment in their favor, their recovery will be far in the future, the value that this Settlement provides to Class Members is fair, reasonable and adequate. S e Churchill Vill., 361 F.3d at 576-77. III. Objector Sterling Objector Raymond Sterling [ECF Nos. 126 and 131] objects to the Settlement on two grounds, neither of which is cause for disapproval f the settlement. A. Sterling’s Difficulty in Using a Voucher Issued in the Shames Case Does Not Justify Disapproval of the Settlement First, Sterling objects that the vouchers distributed in a previous class action settlement “simply do not work and are worthless,” and suggests that the vouchers available in this Settlement are likewise worthless. ECF No. 126. In support of his argument, he describes the difficulties he had in using a voucher that was issued to him in connection with the settlement of Shames, et al. v. The Hertz Corporation, et al. (Case No. 3:07-02174-MMA(WMC), Southern District of California): he was not able to use his voucher in connection with an Entertainment.com discount code, and he received an erro eous message that his voucher could not be used on a rental that would begin in April 2015, before the expiration date of the voucher. See ECF No. 131. National regrets these difficulties. When they were first called to its attention, National corrected the programming error that led to the erroneous message regarding expiration. Decl. of Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 8 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) Mae Pratzel Regarding Vouchers Issued by National Car Rental (“Pratzel Decl.”), filed herewith, ¶¶ 7-12. National has also offered to honor the voucher beyond its stated expiration date. Decl. of Janine L. Scancarelli in Support of Defs’ Resp. to Objections, filed herewith, ¶ 5. As explained to Mr. Sterling, the reason he could not use his Shames voucher in connection with an Entertainment.com discount, is that that although the Shames voucher was not restricted in its use, the Entertainment.com discount was restricted, and therefore the two could not be used together. Pratzel Decl. at ¶ 10; Apr. 2, 2015 Scancarelli Email to Mr. Sterling, included in ECF No. 131. With regard to the erroneous expiration date, Mr. Sterling suggests, incorrectly, that “thousands of customers” tried to use Shames vouchers and were unable to do so, and that no Shames vouchers could be redeemed until after November 6, 2014. ECF No. 131. In fact, however, Mr. Sterling’s was the only complaint regarding the expiration date of the National, Alamo or Enterprise Shames vouchers of which Enterprise Holdings, Inc. is aware. Pratzel Decl. at ¶¶ 5-6, 14-15. Mr. Sterling appears to believe that until November 6, 2014, all customers received the erroneous message that the vouchers had expired, ECF No. 131, when in fact the only customers who would have received that message are customers who, before November 6, 2014, attempted to use Shames vouchers for rentals that would begin on March 1, 2015 or later. Id. at ¶ 13. And that number is likely very small, because the vast majority of National, Alamo and Enterprise renters reserve their cars less than 30 days in advance. Id. at ¶ 14 Thus, the Shames vouchers were not - and are not - “worthless.” Andthe vouchers to be issued in this case will not be worthless. See Joint Decl. at ¶ 32-35. The Settlement does not force Class Members to take Settlement benefits as vouchers - Class Members may elect vouchers, but are not required to do so. And it is no more difficult for Class Members to request cash than to request vouchers - there are no special forms or procedural requirements for Class Members who elect to receive their Settlement benefits as cash. B. Courts Routinely Approve Claims-Made Settlements in Class Actions Second, Sterling objects to the fact that Class Members must register for Settlement benefits. ECF No. 126. But there is nothing inherently objectionable about a claims-submission process, and courts routinely approve claims-made settlements, including settlements with claims Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 9 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) processes that require class members to provide proof of their claim, something that is not required here. See In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 940-41 (9th Cir. 2015) (affirming approval of class action settlement where relief was provided only to class members who registered and where class members could hoose between cash and gift cards as relief, with gift cards available via website, e-mail or mail, but cash available only by mailing a claim that included the last four digits of class member’s social security number; in that case notice was provided to 35 million class members; about 1.2 million claims were submitted, of which about 740,000 were for gift cards and about 430,000 were for cash); see also Shames v. The Hertz Corp., No. 07-CV-2174-MMA(WMC) 2012 U.S. Dist. LEXIS 15877, at *31 (S.D. Cal. Nov. 5, 2012); Pelletz v. Weyerhaeuser Co., 255 F.R.D. 537, 544 (W.D. Wash. 2009) (approving claims-made settlement where class members w re required to “answer two reasonable claim forms and submit a total of 10 photographs” of mold spotting). The claims process in the Settlement here allows Cla s Members the opportunity to choose between a cash option and a voucher option. In the absence of a registration process, Defendants cannot know which option a Class Member would elect, and in fact Class Members have elected both options in substantial, though not exactly equal, numbers: almost 58% of the claims have been for cash; almost 42% have been for vouchers. Andra Decl. ¶ 14. Defendants’ obligation to pay cash claims and to issue and redeem vouchers is uncapped - Defendants have accepted the risk of providing relief to as many Class Members as request it. And any Class Member can request a check for 80% of the amount he or she paid in contested ACRF during the class period, with no dollar limit on the amount of a check that any individual can receive. See Settlement Agreement at ¶ 2.1. Moreover, the registration process, which can be completed in minutes via the Internet or via a toll-free number, is quick, convenient, and costless to Class Members. Class Members do not have to provide any documentation or certification o receive their benefits, and there are no special procedures for Class Members to follow if they want to receive cash benefits, as opposed to vouchers. Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 10 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) IV. Objector Andrews Mischaracterizes the Settlement as a “Coupon Settlement” Objector William Andrews [ECF No. 133] objects to the Settlement on the grounds that the Class Action Fairness Act (“CAFA”) requires heightened judicial scrutiny of the fairness of the settlement, and on the grounds that the requested attorneys’ fees do not comply with CAFA and are excessive. Plaintiffs’ Counsel can address their request for attorneys’ fees in their response; here, Defendants address the fairness of the Settlement as a whole. A. The Settlement Here Is Not a “Coupon Settlement” for Purposes of the Class Action Fairness Act: It Is A Cash Settlement, in Which Claimants Can Elect Vouchers if They So Choose Andrews cites Synfuel Technologics, Inc. v. DHL Express (USA), Inc., 463 F.3d 646 (7th Cir. 2006) for the proposition that in this case, “CAFA requires heightened judicial scrutiny of fairness.” ECF No. 133 at 1:8. In fact, CAFA simply requires that in a settlement “under which class members would be awarded coupons, the court may approve the proposed settlement only after a hearing to determine whether, and making a written finding that, the settlement is fair, reasonable, and adequate for class members.” 28 U.S.C. § 1712(e). Even if the Court were to find that the Settlement here is one “under which class members would be awarded coupons” (even though Class Members here are given the choice between receiving cash relief and vouchers for a free day’s rental), the standard for the approval of the Settlement is the same as in other class action settlements: the settlement as a whole must be fair, reasonable, and adequate. Hanlon v. Chrysler Corp., 150 F. 3d 1011, 1025 (9th Cir. 1998). But in fact, this is not a “coupon settlement,” even if the vouchers offered here were to be regarded as “coupons.” This is a cash settlement: very Class Member is entitled to claim cash, with a minimum payment of $5; if a Class Member prefers, he or she can claim vouchers instead. Settlement Agreement at ¶ 2.1. It has often been observed that Congress did not define the term “coupon” in CAFA. See In re Online DVD-Rental Antitrust Litig., 779 F.3d at 950. The Senate Judiciary Committee’s Report on CAFA explains that “coupon settlements” are those “in which class members receive nothing more than promotional coupons to purchase more products from the defendants.” S. Rep. No. 109-14, at 15 (2005). That is not the case her, where Class Members make their own choice Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 11 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -8- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) between receiving a substantial cash refund (80% of the contested amount) and vouchers. The Senate Report gives numerous examples of disfavored “coupon settlements”: although some of those settlements provided Class Members with options ( ne offered a crib repair kit or a coupon for a future purchase; another offered discounts or free water), none of them gave Class Members the option to receive a substantial cash refund.2 Similarly, in Redman v. RadioShack Corp., 768 F.3d 622, 628 (7th Cir. 2014), the “coupon settlement” did not provide any option for cash payments to class members: class members who registered for benefits would receive a coupon worth $10 at a RadioShack store. The Senate’s primary objection to “coupon settlements” was that in “coupon settlements” the only recipients of cash are Plaintiffs’ Counsel. S. Rep. No. 109- 14, at 15-20 (2005). That is not the case here, whre every Class Member can register for cash relief, and tens of thousands have already done so, with tens of thousands more affirmatively selecting vouchers instead of the cash they could have claimed had they preferred it.3 B. The Fee Agreement in the Settlement Is Not a “Kicker” Arrangement that Can Deprive Class Members of Any Benefits. Andrews suggests that if the Court should award Plaintiffs’ Counsel less than the amount they request, the “excess returns to defendants rather than the class.” ECF No. 133 at 18:15. The argument presumes, incorrectly, that there is a setfund of which some money is allocated to Class Members and some is allocated to Plaintiffs’ Counsel. Andrews points to the Bluetooth case, in which the defendants agreed, among other things, to post safety information on their websites and in their product manuals and packaging, and to pay a total amount of up to about $2.2 million, some of which was allocated to notice (up 2 In True v. American Honda Motor Co., 749 F. Supp. 2d 1052 (C.D. Cal. 2010), the “coupon settlement” would have involved all class members receiving a DVD that showed how to maximize fuel economy for the vehicles at issue in the case. In addition, class members could register to receive a discount of $1000 or $500 on a future purchase of an eligible car. Id. at 1060. Unlike the Settlement here, True offered no cash to class members; the settlement was disapproved. Id. at 1083. 3 Andrews also suggests that the Settlement here must be regarded as a “coupon settlement” if 28 U.S.C. § 1712(c) is to be properly understood. But 28 U.S.C. § 1712(c) has no application here, because, even if the Settlement provided for an award of “coupons” (and it does not), it does not provide for any equitable relief, which is a prerequisite for application of 28 U.S.C. § 1712(c). Cf. ECF No. 133 at 8:24-26. Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 12 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -9- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) to $1.2 million), some to cy pres awards ($100,000), some to class counsel as fees and costs (up to $850,000), and some to class representatives as incentive awards (up to $12,000). In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 939-40 (9th Cir. 2011). The “settlement package” in that case was, accordingly, $2.2 million, and the court viewed that any “savings” on the attorneys’ fees represented money that could otherwise have benefited the class. Id at 949. The Settlement here is different. There is no set fund in this Settlement, because Defendants have committed to paying all of the claims made, regardless of the total amount. See Settlement Agreement at ¶ 2.1. The fee arrangement was negotiated after the parties had agreed that Class Members would be entitled to relief on a claims-made basis, with each Class Member to elect cash (80% of the amount paid in ACRF on base r tes, with a minimum payment of $5) or vouchers (up to five per Class Member, depending upon the amount paid in ACRF). Decl. of G. David Robertson, Esq. [ECF No. 125-3] ¶¶ 15-18. Any “savings” on fees to Plaintiffs’ Counsel could not “return” to Class Members, because they never had any claim on it - that money was never part of the fund from which they can receive relief. Because the attorneys’ fees in the Settlement are separate from the relief to Class Members, and will have no impact at all on the amount that the Class Members recover, the fee agreement here does not implicate the concerns that were at issue in the Bluetooth settlement. Cf. In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d at 949. C. Allowing Class Members to Submit Claims After the Fairness Hearing Will Increase the Number of Claims. Contrary to Andrews’ insinuation, there is nothing sinister about allowing claims to be submitted after the Fairness Hearing. Andrews Objection [ECF No. 133] at 19:3-25. The claims period was not structured “to insulate the fee request from a comparison with the actual number of claims received” or “to prevent valuation of the actual class recovery.” Id. at 11:20-21, 19:24. It was structured in order to allow Class Members more time to submit claims, while setting the Fairness Hearing at an early date, compatible with the provision of notice, so as to provide certainty to the parties. Andrews’ objection to the extended claims period is puzzling in view of his position as to Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 13 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -10- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) the award of attorneys’ fees. Andrews maintains that t e value of class recovery cannot be determined until the end of the voucher redemption period. See id. at 12:7-9. If that were the case, the mere fact that claims can be made for several weeks after the Fairness Hearing would have no effect on the time for determining the value of class recovery. D. The Reaction of Class Members to the Proposed Settlment Supports Approval. Andrews does not deny that in evaluating the Settlement the Court should consider the reaction of Class Members. See Churchill Vill., 361 F.3d at 577. But Andrews ignores the fact that Class Members’ response to Class Notice has been overwhelmingly positive, as evidenced by comparing the response in this case (in which about 11% of Class Members have already made claims, with more than two months remaining in the claims period) to the response in the cases that Andrews cites. Indeed, the response rate to the Settlement here is far greater than the response rate in the Online DVD Rental case, which Andrews cites extensively, and in which a claims-made settlement was approved where fewer than 4% of class members made claims. In re Online DVD-Rental Antitrust Litig., 779 F.3d at 941. Many class action settlements have been approved with claims rates far lower than the claims rate here. See Shames v. The Hertz Corp., 2012 U.S. Dist. LEXIS 158577, at *47-49 (discussing class action cases in which settlements were approved with response rates of 5% or less). In his brief (Andrews Objection [ECF No. 133] at 16 n.7), Andrews cites the following cases as examples of cases with low response rates, bu these cases cannot appropriately be compared with the Settlement here, which has a response rate much greater than any of them: • Sobel v. The Hertz Corp., Case No. 3:06-cv-00545 LRH-RAM (D. Nev. June 27, 2011) (84,000 claims from class of almost 2.5 million) - 3.36%. • Pearson v. NBTY, Inc., 772 F.3d 778, 787 (7th Cir. 2014) (“one-fourth of one percent”) - 0.25%. • Redman, 768 F.3d at 628 (“a little more than one half of one percent”) - 0.5%. • Monteferrante v. The Container Store, Inc., Case No. 13-11362-RGS, 2015 U.S. Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 14 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -11- DEFENDANTS’ RESPONSE TO OBJECTIONS; CASE NO. 3:10-CV-00326-LRH-(WGC) Dist. LEXIS 13212, at *2 (D. Mass. Feb. 4. 2015) (1,627 claims from class of 87,000) - about 2%. • Moody v. Sears Roebuck & Co., 664 S.E.2d 569, 572 (N.C. App. 2008) (317 valid claims from class of between 750,000 - 1.5 million members) - less than 0.1%. • Union Fidelity Life Ins. Co. v. McCurdy, 781 So.2d 186, 188 (Ala. 2000) (113 claims from class of 104,000 - 0.1%. The fact that there may be cases in which few class members make claims on a claims- made fund is not an appropriate objection to this Settlement, where many Class Members have in fact responded. V. Objector Elasali Overlooks the Fact that the Complaint in this Case Alleges Only Violations of a Nevada Statute Before September 30, 2009. Objector Noureddine Elasali [ECF No. 135] objects to the Settlement on the basis of the erroneous belief that Defendants continue to charge illegal concession fees in other states. This case, however, concerns only the manner of stating ACRF in Nevada. As this Court is aware, the manner of stating ACRF at issue in this case has long been permitted in other states. In addition, since October 1, 2009, it has been unambiguously permitt d by Nevada law. N.R.S. § 482.31575. CONCLUSION For the reasons discussed above and in the Parties’ o her submissions to the Court regarding the proposed Settlement, Defendants Enterpris and Vanguard respectfully request the Court to overrule all objections and grant final approval of the Settlement. Dated: April 27, 2015 CROWELL & MORING LLP /s/ Janine L. Scancarelli Janine L. Scancarelli Attorneys for Defendants Enterprise Leasing Company-West, LLC and Vanguard Car Rental USA, LLC SFACTIVE-129055.0002097/903658734.7 Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 15 of 16 CROWELL & MORING LLP ATTO RN EY S AT LA W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 26 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE; CASE NO. 3:10-CV-00326-LRH-(WGC) CERTIFICATE OF SERVICE Pursuant to FRCP 5(b) and Local Rule 5-4, I hereby certify that I am an employee of CROWELL & MORING LLP, over the age of eighteen, and not a party to the within action. I further certify that on the 27th day of April, 2015, I electronically filed the foregoing document and, thus, pursuant to LR 5-4, caused same to be served by electronic mail on the following Filing Users: Arthur Stock astock@bm.net G. David Robertson gdavid@nvlawyers.com Richard D. Williamson rich@nvlawyers.com Jonathan J. Tew jon@nvlawyers.com Robert W. DeLong rdelong@parsonsbehle.com Shoshana T. Savett stsavett@bm.net I also hereby certify that on the 27th day of April, 2015, I caused to be deposited in the U.S. Mail, first-class postage fully prepaid, a true and correct copy of the foregoing document addressed to the following: Melissa A. Holyoak Center for Class Action Fairness 1718 M Street, NW, No. 236 Washington, DC 20036 /s/ Janine L. Scancarelli Janine L. Scancarelli Case 3:10-cv-00326-LRH-WGC Document 137 Filed 04/27/15 Page 16 of 16