Caitlin Ahearn v. Hyundai Motor America , 881 F.3d 679 ( 2018 )

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.
In Re, 2:13-ml-02424-
GW-FFM
KEHLIE R. ESPINOSA; NICOLE MARIE
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.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 5
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;
BRANDON POTTER; THOMAS PURDY;
ROCCO RENGHINI; MICHELLE
SINGLTEON; KEN SMILEY; GREGORY
M. SONSTEIN; ROMAN STARNO;
GAYLE A. STEPHENSON; ANDRES
VILLICANA; RICHARD WILLIAMS;
6 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
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;
SHELLY HENDERSON; JEFFREY
HATHAWAY; DENNIS J. MURPHY;
DOUGLAS A. PATTERSON; JOHN
GENTRY; LINDA RUTH SCOTT;
DANIELLE KAY GILLELAND; JOSEPH
BOWE; MICHAEL DESOUTO,
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 7
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.
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;
8 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
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
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.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 9
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
HOLVEY; LOURDES VARGAS;
KENDALL SNYDER; NOMER MEDINA;
SAMERIA GOFF; URSULA PYLAND;
MARCELL CHAPMAN; KAYE
KURASH; HOLLY AMROMIN; JOHN
CHAPMAN; MARY D’ANGELO;
10 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
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.
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;
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 11
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;
CONSTANCE MARTYN; THOMAS
GANIM; DANIEL BALDESCHI;
LILLIAN E. LEVOFF; GIUSEPPINA
ROBERTO; ROBERT TRADER; SEAN
GOLDSBERRY; CYNTHIA NAVARRO;
OWEN CHAPMAN; MICHAEL BREIN;
12 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
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
BREIEN; LAURA GILL; THOMAS
SCHILLE; JUDITH STANTON; RANDY
RICKERT; BRYAN ZIRKEL; JAMES
KUNDRAT; ROBERT SMITH; MARIA
KOTOVA; JOSIPA CASEY; LUAN
SNYDER; BEN BAKER; BRIAN
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 13
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
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 February 10, 2017
Pasadena, California
Filed January 23, 2018
Before: Andrew J. Kleinfeld, Sandra S. Ikuta,
and Jacqueline H. Nguyen, Circuit Judges.
Opinion by Judge Ikuta;
Dissent by Judge Nguyen
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 19
SUMMARY*
Class Action
The panel vacated the district court’s order granting class
certification in a nationwide class action settlement arising
out of misstatements by defendants Hyundai Motor America,
Inc. and its affiliate, Kia Motors, Inc., regarding the fuel
efficiency of their vehicles; and remanded for further
proceedings.
The district court had jurisdiction under the Class Action
Fairness Act (“CAFA”). In June 2015, the district court gave
its final approval of the class settlement. Objectors brought
five consolidated appeals raising challenges to class
certification, approval of the settlement as fair and adequate,
and approval of attorneys’ fees as reasonable in proportion to
the benefit conferred on the class.
The panel held that the district court abused its discretion
in concluding that common questions predominated, and in
certifying the settlement class under Fed. R. Civ. P. 23(b)(3).
The panel noted that Rule 23(b)(3)’s predominance inquiry
was far more demanding than Rule 23(a)’s commonality
requirement. The panel further noted that where plaintiffs
bring a nationwide class action under CAFA and invoke Rule
23(b)(3), a court must consider the impact of potentially
varying state laws. Finally, in determining whether
predominance was defeated by variations in state law, the
*
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.
panel proceeded through several steps as outlined in Mazza
v. Am. Honda Motor Co., 666 F.3d 581, 590 (9th Cir. 2012).
The panel held that in failing to apply California choice
of law rules, the district court committed a legal error. The
panel further held that the district court’s reasoning - that the
settlement context relieved it of its obligation to undertake a
choice of law analysis and to ensure that a class met all of the
prerequisites of Rule 23 – was wrong as a matter of law.
The panel held that the district court erred in failing to
define the relevant class “in such a way as to include only
members who were exposed to advertising that is alleged to
be materially misleading,” Mazza, 688 F.3d at 596, because
the record did not support the presumption that used car
owners were exposed to and relied on misleading advertising.
Because the district court could determine, after a
rigorous Rule 23 analysis, that it would certify a settlement
class and approve a settlement, the panel briefly clarified
some principles of attorneys’ fee approval for the district
court on remand.
Judge Nguyen dissented because she believed that the
district court committed no error, and she would affirm.
Judge Nguyen wrote that in decertifying the class, the
majority relied on arguments never raised by the objectors,
contravened precedent, and disregarded reasonable factual
findings made by the district court after years of extensive
litigation. Judge Nguyen further wrote that contrary to Ninth
Circuit case law and that of other circuits, the majority shifted
the burden of proving whether foreign law governed from the
foreign law proponent – here, the objectors – to the district
court or class counsel, thereby creating a circuit split and
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 21
violating the doctrine of Erie R.R. v. Tompkins, 304 U.S. 64
(1938). Also, Judge Nguyen wrote that in excluding used car
owners from the class, the majority misapplied the rule that
consumer claims merely required proof that the public – not
any individual – was likely to be deceived. Finally, Judge
Nguyen wrote that the majority based its clarification of the
district court’s attorneys’ fees award on a flawed reading of
the record and a disregard of deferential review.
22 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
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.
Edward W. Cochran (argued), Shaker Heights, Ohio; George
W. Cochran, Streetsboro, 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 Gibson, 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 and Dommond E. Lonnie, Dykema
Gossett PLLC, 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
Francisco, California; Dean Hansell, Hogan Lovells LLP, Los
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 23
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.
24 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
OPINION
IKUTA, Circuit Judge:
This appeal involves a nationwide class action settlement
arising out of misstatements by defendants Hyundai Motor
America, Inc. (Hyundai) and its affiliate, Kia Motors
America, Inc. (Kia)1 regarding the fuel efficiency of their
vehicles. The district court had jurisdiction under the Class
Action Fairness Act (CAFA), 28 U.S.C. § 1332(d), because
the matter in controversy exceeded $5,000,000, the putative
class comprised at least 100 plaintiffs, and at least one
plaintiff class member was a citizen of a state different from
that of at least one defendant. We have jurisdiction pursuant
to 28 U.S.C. § 1291. We hold that the district court abused
its discretion in concluding that common questions
predominate and certifying this settlement class under Rule
23(b)(3) of the Federal Rules of Civil Procedure, and we
remand to the district court for further proceedings consistent
with this opinion. Because the district court may still certify
a class on remand, we briefly clarify some principles of
attorneys’ fees awards in the class action context for the
district court on remand.
I
“The class action is an exception to the usual rule that
litigation is conducted by and on behalf of the individual
named parties only.” Wal-Mart Stores, Inc. v. Dukes,
1
Defendants-Appellees also include Hyundai and Kia affiliates Kia
Motors Corporation; Grossinger Autoplex, Inc., FKA Grossinger Hyundai;
John Krafcik; Hyundai Motor Company; and Sarah Kundrat. We refer to
all Hyundai entities as “Hyundai” and all Kia entities as “Kia.”
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 25
564 U.S. 338, 348 (2011) (internal quotation marks omitted).
“To come within the exception, a party seeking to maintain
a class action must affirmatively demonstrate his compliance
with Rule 23.” Comcast Corp. v. Behrend, 569 U.S. 27, 33
(2013) (internal quotation marks omitted). “Before certifying
a class, the trial court must 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). A district court’s certification “must be
supported by sufficient findings to be afforded the traditional
deference given to such a determination.” Molski v. Gleich,
318 F.3d 937, 946–47 (9th Cir. 2003) (internal quotation
marks omitted). “When a district court, as here, certifies for
class action settlement only, the moment of certification
requires heightened attention[.]” Ortiz v. Fibreboard Corp.,
527 U.S. 815, 848–49 (1999) (internal quotation marks and
citation omitted).
We review the district court’s decision to certify a class
for an abuse of discretion. Parra v. Bashas’, Inc., 536 F.3d
975, 977 (9th Cir. 2008). A district court abuses its discretion
when it makes an error of law or when its “application of the
correct legal standard was (1) illogical, (2) implausible, or
(3) without support in inferences that may be drawn from the
facts in the record.” United States v. Hinkson, 585 F.3d 1247,
1262 (9th Cir. 2009) (en banc) (internal quotations omitted).
“We reverse if the district court’s certification is premised on
legal error.” Molski, 318 F.3d at 947.
Rule 23 “does not set forth a mere pleading standard.”
Comcast, 569 U.S. at 33. The plaintiff seeking class
certification bears the burden of demonstrating that all the
requirements of Rule 23 have been met. See Zinser, 253 F.3d
26 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
at 1188. This requirement means that the plaintiff must first
demonstrate through evidentiary proof that the class meets
the prerequisites of Rule 23(a), which provides that class
certification is proper only if: “(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); see also Comcast, 569 U.S. at
33. The Rule 23(a) prerequisites “effectively limit the class
claims to those fairly encompassed by the named plaintiff’s
claims.” Dukes, 564 U.S. at 349 (internal quotation marks
omitted). To meet the commonality requirement of Rule
23(a)(2), the plaintiffs’ claims “must depend upon a common
contention” that is “of such a nature that it is capable of
classwide resolution—which means that determination of its
truth or falsity will resolve an issue that is central to the
validity of each one of the claims in one stroke.” Id. at 350.
After carrying its burden of satisfying Rule 23(a)’s
prerequisites, the plaintiff must establish that the class meets
the prerequisites of at least one of the three types of class
actions set forth in Rule 23(b). Fed. R. Civ. P. 23(b);
Comcast, 569 U.S. at 33. Here, the district court certified the
class under Rule 23(b)(3), which provides that a class action
may be maintained only if “the court finds that the 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,” and which lists
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 27
a number of matters “pertinent to these findings.” Fed. R.
Civ. P. 23(b)(3).2
The Rule 23(b)(3) predominance inquiry is “far more
demanding” than Rule 23(a)’s commonality requirement.
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 624 (1997).
The “presence of commonality alone is not sufficient to fulfill
Rule 23(b)(3).” Hanlon v. Chrysler Corp., 150 F.3d 1011,
1022 (9th Cir. 1998). Rather, a court has a “duty to take a
close look at whether common questions predominate over
individual ones,” and ensure that individual questions do not
2
Rule 23(b) provides, in relevant part:
A class action may be maintained if Rule 23(a) is
satisfied and if: . . .
(3) the court finds that the 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. The
matters pertinent to these findings include:
(A) the class members’ interests in individually
controlling the 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.
28 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
“overwhelm questions common to the class.” Comcast,
569 U.S. at 34 (internal quotation marks omitted). In short,
“[t]he main concern of the predominance inquiry under Rule
23(b)(3) is the balance between individual and common
issues.” Wang v. Chinese Daily News, Inc., 737 F.3d 538,
545–46 (9th Cir. 2013) (internal quotation marks omitted).
Where plaintiffs bring a nationwide class action under
CAFA and invoke Rule 23(b)(3), a court must consider the
impact of potentially varying state laws, because “[i]n a
multi-state class action, variations in state law may swamp
any common issues and defeat predominance.” Castano v.
Am. Tobacco Co., 84 F.3d 734, 741 (5th Cir. 1996).
“Variations in state law do not necessarily preclude a 23(b)(3)
action.” Hanlon, 150 F.3d at 1022. For instance, even when
some class members “possess slightly differing remedies
based on state statute or common law,” there may still be
“sufficient common issues to warrant a class action.” Id. at
1022–23; see also Sullivan v. DB Investments, Inc., 667 F.3d
273, 301–02 (3d Cir. 2011) (discussing the “pragmatic
response to certifications of common claims arising under
varying state laws,” and citing a case that affirmed “the
district court’s decision to subsume the relatively minor
differences in state law within a single class” as illustrative)
(citing In re Prudential Ins. Co. of Am. Sales Practice Litig.
Agent Actions, 148 F.3d 283, 315 (3d Cir. 1998)); In re Mex.
Money Transfer Litig., 267 F.3d 743, 747 (7th Cir. 2001)
(noting that even though “state laws may differ in ways that
could prevent class treatment if they supplied the principal
theories of recovery,” class representatives in that case met
the predominance requirement in part by limiting “their
theories to federal law plus aspects of state law that are
uniform”). On the other hand, where “the consumer-
protection laws of the affected States vary in material ways,
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 29
no common legal issues favor a class-action approach to
resolving [a] dispute.” Pilgrim v. Universal Health Card,
LLC, 660 F.3d 943, 947 (6th Cir. 2011).
In determining whether predominance is defeated by
variations in state law, we proceed through several steps. See
Mazza v. Am. Honda Motor Co., 666 F.3d 581, 590 (9th Cir.
2012). First, the class action proponent must establish that
the forum state’s substantive law may be constitutionally
applied to the claims of a nationwide class. Id. at 589–90.3
If the forum state’s law meets this requirement, the district
court must use the forum state’s choice of law rules to
determine whether the forum state’s law or the law of
multiple states apply to the claims. Id. at 590. “[I]f the
forum state’s choice-of-law rules require the application of
only one state’s laws to the entire class, then the
representation of multiple states within the class does not
pose a barrier to class certification.” Johnson v. Nextel
Commc'ns Inc., 780 F.3d 128, 141 (2d Cir. 2015). But if
class claims “will require adjudication under the laws of
multiple states,” Wash. Mut. Bank, FA v. Superior Court,
24 Cal. 4th 906, 922 (2001), then the court must determine
whether common questions will predominate over individual
issues and whether litigation of a nationwide class may be
managed fairly and efficiently. Id. As with any other
requirement of Rule 23, plaintiffs seeking class certification
bear the burden of demonstrating through evidentiary proof
3
The Supreme Court has explained that in order to apply the forum
state’s law to out-of-state defendants, the state must have a “significant
contact or significant aggregation of contacts” to the claims asserted by
each member of the plaintiff class. Phillips Petroleum Co. v. Shutts,
472 U.S. 797, 822 (1985). There is no dispute that California has
significant contacts with the defendants in this case.
30 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
that the laws of the affected states do not vary in material
ways that preclude a finding that common legal issues
predominate. See Castano, 84 F.3d at 741 (indicating that
class action proponents must show that variations in state
laws will not affect predominance; “[a] court cannot accept
such an assertion on faith.”) (quoting Walsh v. Ford Motor
Co., 807 F.2d 1000, 1016 (D.C. Cir. 1986) (Ruth Bader
Ginsburg, J.)).
We undertook this predominance inquiry in Mazza v.
American Honda Motor Co., which is closely analogous to
our case. Mazza considered a car manufacturer’s challenge
to a district court’s decision to certify a nationwide class of
consumers claiming that Honda had misrepresented material
information regarding Acura RLs. Honda contended that the
district court erred in certifying this class under Rule
23(b)(3), because “California’s consumer protection statutes
may not be applied to a nationwide class with members in
44 jurisdictions,” Mazza, 666 F.3d at 589, and therefore
plaintiffs had not demonstrated “that the questions of law or
fact common to class members predominate over any
questions affecting only individual members.” Fed. R. Civ.
Pro. 23(b)(3).
Mazza addressed this argument by undertaking the
following analysis. The plaintiffs first established that
defendants had adequate contacts to the forum state, and
therefore the court should apply California’s choice of law
rules. 666 F.3d at 590.4 Under these rules, the foreign law
4
Under California choice of law rules, there are “two different
analyses for selecting which law should be applied in an action”: one
considering a contractual choice-of-law provision, and the other requiring
an application of the governmental interest test. See Wash. Mut. Bank,
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 31
proponent had the burden of showing that the law of multiple
states, rather than California law, applied to class claims. Id.
Mazza therefore walked through the three parts of
California’s governmental interest test. First, we determined
that Honda showed there were material differences between
the plaintiffs’ California misrepresentation claims and the
laws of other states. Id. at 591. Second, we determined that
each of the 44 different states where the car sales took place
“has a strong interest in applying its own consumer protection
laws to those transactions.” Id. at 592. Turning to the third
step of the test, we determined that “if California law were
applied to the entire class, foreign states would be impaired
in their ability to calibrate liability to foster commerce.” Id.
at 593. Therefore, we held that “each class member’s
consumer protection claim should be governed by the
consumer protection laws of the jurisdiction in which the
transaction took place.” Id. at 594.
Our conclusion that the plaintiffs’ class claims “will
require adjudication under the laws of multiple states,” Wash.
Mut. Bank, 24 Cal. 4th at 922, led to the next question:
whether this conclusion defeated predominance. Although
Mazza did not expressly address the predominance question,
24 Cal. 4th at 914–15. The governmental interest test has three steps.
“Under the first step of the governmental interest approach, the foreign
law proponent must identify the applicable rule of law in each potentially
concerned state and must show it materially differs from the law of
California.” Id. at 920. If “the trial court finds the laws are materially
different, it must proceed to the second step and determine what interest,
if any, each state has in having its own law applied to the case.” Id. If
“each state has an interest in having its own law applied, thus reflecting
an actual conflict” the court “must select the law of the state whose
interests would be more impaired if its law were not applied.” Id.; see
also Mazza, 666 F.3d at 589–90.
32 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
its vacatur of the district court’s class certification order
established that plaintiffs had failed to show that common
questions would predominate over individual issues.5
Because the Rule 23(b)(3) predominance inquiry focuses
on “questions that preexist any settlement,” namely, “the
legal or factual questions that qualify each class member’s
case as a genuine controversy,” Amchem, 521 U.S. at 623, a
district court may not relax its “rigorous” predominance
inquiry when it considers certification of a settlement class,
Zinser, 253 F.3d at 1186. To be sure, when “[c]onfronted
with a request for settlement-only class certification, a district
court need not inquire whether the case, if tried, would
present intractable management problems, for the proposal is
that there be no trial.” Amchem, 521 U.S. at 620 (citation
omitted). But “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.” Id.
“Heightened” attention is necessary in part because 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. Indeed, in Amchem
itself, the court determined that both factual differences
among class members and differences in the state laws
5
California takes the same approach in applying a choice-of-law
analysis to class claims. Under California law, if the court concludes “that
class claims will require adjudication under the laws of multiple states,”
then “the court must determine “whether common questions will
predominate over individual issues and whether litigation of a nationwide
class may be managed fairly and efficiently.” Wash. Mut. Bank, 24 Cal.
4th at 922. In California, “the class action proponent bears the burden of
establishing the propriety of class certification.” Id.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 33
applicable to class members’ claims defeated predominance
for a single nationwide settlement class. Id. at 624.
A court may not justify its decision to certify a settlement
class on the ground that the proposed settlement is fair to all
putative class members.6 Indeed, 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; see also Ortiz, 527 U.S. at
849 (holding that “a fairness hearing under Rule 23(e) is no
substitute for rigorous adherence to those provisions of the
Rule designed to protect absentees[.]”) (internal quotation
marks omitted)). This prohibition makes sense: “[i]f a
common interest in a fair compromise could satisfy the
predominance requirement of Rule 23(b)(3), that vital
prescription would be stripped of any meaning in the
settlement context,” and the safeguards provided by the Rule,
which “serve to inhibit appraisals of the chancellor’s foot
kind—class certifications dependent upon the court’s gestalt
judgment or overarching impression of the settlement’s
fairness,” would be eviscerated. Amchem, 521 U.S. at 621,
623.
II
We now turn to the facts of this case. Under the Clean
Air Act, all new vehicles sold in the United States must be
covered by an Environmental Protection Agency (EPA)
certificate of conformity demonstrating compliance with fuel
6
A court must make such a fairness finding under Rule 23(e) of the
Federal Rules of Civil Procedure, which prohibits a court from approving
a settlement unless it concludes that “it is fair, reasonable, and adequate.”
Fed. R. Civ. P. 23(e)(2).
34 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
efficiency and greenhouse gas emission standards. See
42 U.S.C. § 7522(a)(1). To obtain such a certificate, a
vehicle manufacturer must submit an application to the EPA
with information about the fuel efficiency for each model
year. Id. § 7525(a)(1). In November 2011, a consumer
advocacy group sent a letter to the EPA regarding complaints
that Hyundai and Kia had overstated the fuel efficiency of a
number of their vehicles and asked the EPA to audit the
manufacturers. In response, the EPA initiated an
investigation into Hyundai’s and Kia’s fuel efficiency test
procedures. About a year later, in November 2012, the EPA
investigation confirmed that Hyundai and Kia used improper
test procedures to develop the fuel efficiency information
submitted for certain 2011, 2012, and 2013 models.7 These
improper procedures resulted in overstated fuel efficiency
estimates.
At the same time as the EPA announced its findings,
Hyundai and Kia announced that they would lower their fuel
efficiency estimates for approximately 900,000 Hyundai and
Kia vehicles from model years 2011, 2012, and 2013. At the
same time, Hyundai and Kia announced the institution of a
voluntary Lifetime Reimbursement Program (LRP) to
compensate affected vehicle owners and lessees for the
additional fuel costs they had incurred and would incur in the
future as a result of the overstated fuel efficiency estimates.
Under the LRP, anyone who owned or leased an affected
7
According to the EPA, the improper procedures included selecting
results from test runs that were aided by a tailwind, selecting only
favorable results from test runs rather than averaging a broader set of
results, restricting testing times to periods when the temperature allowed
vehicles to coast farther and faster, and preparing vehicle tires to improve
the test results.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 35
Hyundai or Kia vehicle on or before November 2, 2012 was
entitled to periodic reimbursements based on the number of
miles driven, the difference between the original and revised
fuel efficiency estimate, and the average fuel price in the area
where the car was driven, plus an extra 15 percent to account
for the inconvenience caused by the overstated fuel efficiency
estimates. In order to receive these benefits, class members
could enroll in the LRP and then periodically visit a Hyundai
or Kia dealership to verify their odometer readings. Car
owners could register for the LRP until December 31, 2013,
although the program would continue for those who
registered for as long as they owned or leased their vehicles.8
After the EPA commenced its investigation, but before
announcing its results, a number of plaintiffs filed suit against
Hyundai and Kia. In January 2012, plaintiffs filed a putative
nationwide class action in state court in Los Angeles County.
See Espinosa v. Hyundai Motor Am., No. BC 476445 (Cal.
Super. Ct. filed Jan. 6, 2012). The complaint raised claims
under California’s consumer protection laws and common
law, alleging that Hyundai had falsely advertised that its 2011
and 2012 Elantra and Sonata vehicles got 40 miles per gallon
(MPG) on the highway, when in fact these vehicles got far
lower MPG.9 The plaintiffs sought damages, rescission,
8
In October 2014, Hyundai and Kia entered into a $100 million
consent decree with the United States and the California Air Resources
Board to settle claims arising from the EPA investigation.
9
Specifically, the Espinosa plaintiffs asserted claims for violations of
California Unfair Competition Law, Cal. Bus. & Prof. Code
§§ 17200–17209; violations of California False Advertising Law, id.
§§ 17500–17509; violations of California Consumer Legal Remedies Act,
id. §§ 1750–1784; fraud; negligent misrepresentation; and deceit, id.
§ 1710.
36 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
restitution, and injunctive relief in the form of corrective
advertising on behalf of a putative nationwide class of owners
of specified vehicles who purchased or leased their vehicles
in the United States.
After Hyundai removed the Espinosa action to federal
court, see No. 2:12-cv-800 (C.D. Cal. filed Jan. 30, 2012), the
plaintiffs moved for certification of a nationwide class. In its
opposition to class certification, Hyundai argued, among
other things, that differences in state consumer protection
laws precluded the application of California law to consumers
who are not Californians and defeated predominance.
Hyundai supported this argument with a thirty-four page
“Appendix of Variations in State Laws,” which detailed the
numerous differences in the burden of proof, liability,
damages, statutes of limitations, and attorneys’ fees awards
under different state consumer protection laws and common
law fraud actions. Hyundai also argued that there were
individual questions regarding whether each class member
was exposed to or relied on Hyundai’s advertising, and that
these questions prevented class certification.10
10
During the period from January 2012, when the Espinosa plaintiffs
filed their complaint, until November 2012, the date the EPA announced
the result of its investigation and Honda announced its LRP program, the
Espinosa plaintiffs focused their efforts on certifying a class. The
plaintiffs otherwise limited their actions to filing two amended complaints
(one to join additional class representatives) and responding to Hyundai’s
motion to dismiss, which was denied by the district court on April 24,
2012. (Hyundai’s prior motion to dismiss had been vacated when
Espinosa filed its amended complaint.) Hunter v. Hyundai Motor
America, No. 8:12-CV-01909 (C.D. Cal. filed Nov. 2, 2012), and Brady
v. Hyundai Motor America, No. 8:12-cv-1930 (C.D. Cal. filed Nov. 6,
2012) were not filed until after the LRP program was announced.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 37
In November 2012, the district court issued a tentative
ruling on the motion for class certification in Espinosa.
Plaintiffs sought to certify two classes, an Elantra class
(including purchasers and lessees of 2011–12 model year
Elantras) and a Sonata class (including all purchasers and
lessees of 2011–2012 model year Sonatas). The court stated
it would likely find that the plaintiffs demonstrated both the
Rule 23(a) commonality and Rule 23(b)(3) predominance
requirements were met as to statutory, but not common law
claims. With respect to the question whether plaintiffs could
show individualized reliance on advertising, the court stated
that it would likely find that class-wide reliance on the
challenged advertising could be presumed due to the
“extensive sweep” of Hyundai’s marketing efforts.11
Turning to the question whether plaintiffs could certify a
nationwide class, despite the fact that their complaint invoked
only California law, the district court held it was required to
perform a choice of law analysis. The court stated that
California had sufficient contacts to support the
extraterritorial application of California law to all claims, but
“just as in Mazza, the three-part choice of law test . . . comes
out in Defendant’s favor.” In reaching this conclusion, the
court relied on three factors. First, Hyundai’s submission of
its appendix of variations in state law “unquestionably
demonstrates that there are material differences as between
11
Although the court indicated that the marketing efforts related to
“the fuel efficiency of the Elantra and Sonata vehicles,” the campaign
identified by the court was limited to the 2011 Elantra. Specifically, the
court noted that Hyundai had purchased advertising for the 2011 Elantra
during the NFL playoffs, the Super Bowl, and the Academy Awards,
placed Elantra ads on Amazon, Facebook, Yahoo, and other internet sites,
used print advertising, and placed billboard ads for the 2011 Elantra in
Times Square in New York and on certain California freeways.
38 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
the various states’ laws that would ‘make a difference in this
litigation.’” (quoting Mazza, 666 F.3d at 590–91, specifically
considering the scienter requirements and remedies). Second,
the court ruled that as in Mazza, each of the states “has an
interest in balancing the range of products and prices offered
to consumers with the legal protections afforded to them.”
Mazza, 666 F.3d at 592. Third, the court determined that “the
interests of the other states would be more impaired were
California law imposed upon their citizens than California
would be impaired were this action limited to a class of only
California consumers.” In sum, the court found “that
certification of a nationwide class where California law is
applied to out-of state consumers is foreclosed by the Ninth
Circuit’s decision in Mazza, a case virtually on all fours with
the instant matter.”
Because California law could not be applied to out-of-
state class members, the court thought it was obvious that the
class could not be certified: “were the laws of the other
various states applied to out-of-state purchasers, class
certification would be precluded because common questions
of law and fact would no longer predominate.” The court
held that it would consider certifying a class of California
consumers, defined to include only those California
consumers who actually viewed one of the challenged
advertisements or marketing materials. On November 29,
2012, the Court held a hearing on the class certification
motion pending in Espinosa, but did not make a final ruling,
instead requesting supplemental briefing.
Immediately following Hyundai’s November 2, 2012
announcement of the LRP, and before the Espinosa court
could make a final ruling on class certification, plaintiffs
across the country filed a flurry of putative class actions
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 39
alleging that Hyundai and Kia misrepresented the fuel
efficiency of their vehicles through advertising and Monroney
Stickers.12 Among other actions, plaintiffs filed Hunter v.
Hyundai Motor America, No. 8:12-CV-01909 (C.D. Cal. filed
Nov. 2, 2012), and Brady v. Hyundai Motor America, No.
8:12-cv-1930 (C.D. Cal. filed Nov. 6, 2012), in the Central
District of California. Both actions claimed violations of
California consumer protection laws and common law on
behalf of putative nationwide classes of all persons who
owned or leased a Hyundai or Kia vehicle that had been
identified in the EPA investigation.13 In December 2012, the
district court requested further supplemental briefing on the
class certification motion in light of Hyundai’s November 2,
2012 announcement.
Plaintiffs in one putative nationwide class action, see
Krauth v. Hyundai Motor Am., No. 8:12-cv-01935 (C.D. Cal.
filed Nov. 6, 2012), initiated proceedings before the
Multidistrict Litigation (MDL) judicial panel pursuant to
28 U.S.C. § 1407, requesting that twelve putative class
12
A Monroney Sticker is named after Senator A.S. Mike Monroney,
sponsor of the Automobile Information Disclosure Act of 1958, 15 U.S.C.
§§ 1231–1233. The Act requires a car manufacturer to affix a label
displaying information about the car’s fuel efficiency to the window of
every new vehicle sold in the United States. See 15 U.S.C. §§ 1232–1233;
see also 49 U.S.C. § 32908; 49 C.F.R. § 575.401 (2012). Monroney
stickers are not required for sales of used cars. See 15 U.S.C.
§§ 1232–1233.
13
Specifically, the Hunter and Brady plaintiffs asserted claims under
California Unfair Competition Law, Cal. Bus. & Prof. Code
§§ 17200–17209; California False Advertising Law, id. §§ 17500–17509;
California Consumer Legal Remedies Act, id. §§ 1750–1784; for fraud;
for negligent misrepresentation; for unjust enrichment; and for breach of
express warranty, Cal. Com. Code § 2313.
40 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
actions against Hyundai and Kia (including Espinosa, Hunter,
and Brady) relating to the marketing and advertising of the
fuel efficiency estimates of Hyundai and Kia vehicles be
transferred to a single district for coordinated pretrial
proceedings. On February 6, 2013, the MDL judicial panel
transferred those actions as MDL No. 2424 to the court that
was already presiding over the Espinosa action. The MDL
judicial panel noted that any other related actions were
potential tag-along actions.14 In total, 56 actions were
ultimately transferred to the MDL.
One week after the MDL judicial panel issued its transfer
order, and approximately three months after the
announcement of the EPA investigation and LRP, the district
court held a status conference in the Espinosa matter. At that
status conference, the Espinosa plaintiffs informed the district
court that they (along with the plaintiffs in Hunter and Brady)
had reached a settlement with Hyundai for a single
nationwide class. Shortly thereafter, the parties informed the
court that Kia had agreed to the same settlement terms as
Hyundai.
The proposed settlement agreement had the following
terms. The parties agreed that the district court should certify
a nationwide class of all persons who were current and former
owners and lessees of specified Hyundai and Kia vehicles on
14
See Rule 1.1(h), Rules of Procedure of the United States Judicial
Panel on Multidistrict Litigation (“‘Tag-along action’ refers to a civil
action pending in a district court which involves common questions of fact
with either (1) actions on a pending motion to transfer to create an MDL
or (2) actions previously transferred to an existing MDL, and which the
Panel would consider transferring under Section 1407.”).
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 41
or before November 2, 2012.15 Hyundai and Kia would offer
class members several alternative methods of compensation.
First, class members could opt to receive the cash equivalent
of the pre-existing LRP program. Specifically, class
members could choose to receive a single lump sum payment
rather than the periodic payments offered through the
preexisting LRP. The lump sum payment for current owners
was calculated based on an average 4.75-year term of
ownership, 15,000 miles driven each year, and gas prices
between $3.00 and $3.70.16 The predicted average total lump
sum payment was $353 for class members owning or leasing
Hyundais and $667 for class members owning or leasing
Kias. A class member who had begun participating in the
LRP before the settlement but elected to switch to the lump
sum payment option would receive a smaller lump sum,
reduced by any amount the class member had already
received through the LRP. The class members would receive
their lump sum payment in the form of a debit card that
would expire one year after it was issued; any unused amount
would revert to Hyundai or Kia unless the class member
timely deposited the residual amount in a bank account.
Two other compensation options offered consumers a
credit that was nominally larger than the lump sum value of
the existing LRP program, but which could be used only for
purchasing more services or products from Hyundai or Kia.
First, class members could choose to receive a Hyundai or
Kia dealer service credit worth 150 percent of the value of the
lump sum payment. The credit expired after two years.
15
The settlement agreement covered 41 different Hyundai models and
35 different Kia models from 2011 to 2013.
16
For lessees, the lump sum payment was based on a 2.75-year term.
42 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
Alternatively, class members could choose to receive a new
car rebate certificate worth 200 percent of the lump sum
payment, which could be used toward the purchase of a new
Hyundai or Kia vehicle. The certificate would expire after
three years.
Finally, class members who were already participating in
the preexisting LRP could choose to forego any of the
settlement options and simply remain in the preexisting LRP.
The deadline for enrolling in the LRP was extended to July 6,
2015, giving class members who had not enrolled in the LRP
by the original December 31, 2013 deadline an additional
18 months to do so. Class members who were current owners
or lessees of certain Hyundai vehicles who elected to remain
in the LRP could receive an additional $100 for current
original owners and $50 for current lessees and fleet
owners.17
Used car owners were included in the proposed settlement
class, but received only half the amounts available to new car
owners. The settling parties justified this settlement amount
on the ground that used car owners’ “reliance on the
Monroney numbers is less clear and potentially
individualized” because Monroney stickers are not required
for sales of used cars. See 15 U.S.C. §§ 1232–1233.
17
In January 2014, the settling parties filed an addendum to the
proposed settlement that extended the additional $100 offer to former
owners of these Hyundai models. In May 2014, the settling parties filed
a second addendum to the settlement agreement allowing class members
to submit claims through the settlement website and requiring defendants
to follow certain procedures for distributing class members’ payments.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 43
The proposed settlement provided a process for class
members to opt out of the settlement by mailing a request for
exclusion. However, upon the district court’s final approval
of the settlement agreement, the district court would dismiss
“all other lawsuits centralized in the MDL in which the
named plaintiffs in such lawsuit(s) did not timely exclude
themselves from the settlement.”
In addition to paying the requisite amounts for class
members, Hyundai and Kia agreed to pay class counsel
reasonable attorneys’ fees. The amount of attorneys’ fees
would be negotiated and awarded separately from the relief
provided to class members.
Following the February 2013 announcement of this
proposed settlement, the court ordered discovery in April
2013 to confirm the facts on which the settlement was based
and to allow plaintiffs to evaluate the terms of the settlement.
Hyundai and Kia produced several hundred thousand pages
of documents and allowed plaintiffs to interview
11 employees.
While this confirmatory discovery was ongoing, a
different group of plaintiffs filed another action against
Hyundai in the Western District of Virginia. See Gentry v.
Hyundai Motor Am., No. 3:13-cv-0030 (W.D. Va. filed Oct.
14, 2013). The Gentry plaintiffs asserted claims under
Virginia consumer protection, false advertising, and vehicle
warranty laws on behalf of a putative class of all persons who
had purchased a model year 2011, 2012, or 2013 Hyundai
44 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
Elantra in Virginia.18 Claiming that Hyundai’s false
advertising was willful, the complaint demanded the greater
of treble damages or $1000 for each class member under the
Virginia Consumer Protection Act. See Va. Code Ann.
§59.1-204(A). On November 6, 2013, the MDL judicial
panel identified the Gentry action as a tag-along action, and
transferred it to the Central District of California as part of
MDL No. 2424.
In December 2013, after approximately eight months of
confirmatory discovery, the Hunter, Brady, and Espinosa
plaintiffs moved for class certification and preliminary
approval of the nationwide class settlement. According to
these plaintiffs, confirmatory discovery had failed to reveal
any evidence that Hyundai and Kia had engaged in deceptive
conduct, knowing concealment, or other bad acts. In their
motion for certification of a settlement class, the settling
parties contended that common questions of fact or law
predominated under Rule 23(b)(3) with respect to California
causes of action.
The Gentry plaintiffs opposed class certification and
sought remand of their action to the Western District of
Virginia. In their memorandum opposing class certification
filed May 2014, the Gentry plaintiffs argued that California
choice of law rules did not allow certification of the class.
The memorandum discussed elements of both the
governmental interest test and the contractual choice-of-law
provision. First, with respect to their contractual claim, the
18
The Gentry plaintiffs alleged violations of the Virginia Motor
Vehicle Warranty Enforcement Act, Va. Code Ann. §§ 59.1-207.9 to
207.16:1, the Virginia Consumer Protection Act, id. § 59.1-200(14), and
Virginia’s false advertising statute, id. § 18.2-216.
 IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 45
plaintiffs stated that the Virginia plaintiffs had purchased
their vehicles by means of a contract with a Virginia choice
of law provision and under California law, “an otherwise
enforceable choice-of-law agreement may not be disregarded
merely because it may hinder the prosecution of a multistate
or nationwide class action or result in the exclusion of
nonresident consumers from a California-based class action.”
Wash. Mut. Bank, 24 Cal. 4th at 918. Second, under the
elements of California’s governmental interest test, the
Gentry plaintiffs noted that “[n]umerous courts have
recognized that conflicts exist among State substantive laws”
applicable to analogous consumer fraud claims, and argued
that there were “material and significant conflicts in the law
of Virginia as compared to the law and remedy sought to be
applied by Espinosa, Hunter, and Brady.”19 Moreover, the
memorandum contended, not only were the Virginia causes
of action “materially different from those asserted by the
Settling Plaintiffs,” but Virginia also had a strong interest in
having its law apply. Accordingly, even without the
contractual choice-of-law provisions, the Gentry plaintiffs
argued, California law would require courts to apply Virginia
19
The Gentry plaintiffs argued that the Virginia Consumer Protection
Act provides for a minimum of $500 in statutory damages for individuals
who suffer damage as a result of a violation of the act, see Va. Code Ann.
§ 59.1-204(A), while California’s Consumer Legal Remedies Act sets no
statutory minimum damages for individuals who suffer violations of the
act, see Cal. Civ. Code § 1780(a). This statutory minimum of $500 is
superior to the average maximum lump sum benefit of $353 that Hyundai
class members are entitled to under the settlement. In addition, under the
Virginia Consumer Protection Act, the trier of fact can award treble
damages within its discretion if it finds that the violation was “willful,”
see Va. Code Ann. § 59.1-204; Holmes v. LG Marion Corp., 258 Va. 473,
478 (1999), whereas, under California’s Legal Remedies Act, the trier of
fact can only award punitive damages if it finds “clear and convincing
evidence” of “oppression, fraud, or malice,” Cal. Civ. Code. § 3294(a).
46 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
law.20 Three sets of plaintiffs, including the Gentry plaintiffs,
also filed objections to the terms of the settlement.21
In June 2014, the district court circulated a tentative
ruling granting the plaintiffs’ motion for certification of the
settlement class. The court acknowledged that it “would need
to engage in an extensive choice of law analysis” if the case
were going to trial. Nevertheless, the court thought such an
analysis was not warranted in the settlement context, because
notwithstanding the Gentry plaintiffs’ objections to class
certification “on the grounds that Virginia law provides a
materially different remedy to Virginia consumers” for
certain claims, state law variations were less of a concern and
could be addressed as part of the final fairness hearing under
Rule 23(e). Accordingly, the district court declined to apply
California’s choice of law rules to determine whether
20
The dissent contends that we should disregard the Gentry plaintiffs’
argument regarding California choice of law rules because they
alternatively argue on appeal that the failure to include a Virginia subclass
would violate their due process rights. See Dissent at 66–67, n.3. This
claim is based on the Gentry plaintiffs’ interpretation of a Virginia
Supreme Court case as holding that the commencement of a class action
in California that does not include a Virginia cause of action will not toll
the statute of limitations in Virginia, and thus they would be time-barred
from bringing their Virginia-specific claims. Recognizing this
interpretation is in dispute, the Gentry plaintiffs alternatively urged us to
certify this question to the Virginia Supreme Court. Because the Gentry
plaintiffs raised their choice-of-law argument to the district court, we do
not place any significance on the fact that they later also raised an
alternative argument.
21
In addition to the Gentry plaintiffs, the objectors included the
named plaintiffs in two other actions transferred to the district court as part
of MDL No. 2424, Krauth and Wilson v. Kia Motors America, Inc., No.
13-cv-1069 (D.N.J. filed Jan. 24, 2013). These plaintiffs are not objectors
in this appeal.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 47
California law was applicable to the class, or to make any
choice of law ruling, and instead held that even 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
adhered to this position in its subsequent rulings.
In August 2014, the court granted class certification
without ever addressing variations in state law.22 At the same
time, the district court granted preliminary approval of the
proposed settlement, finding it sufficiently fair, reasonable,
and adequate to merit disseminating notice of the settlement
to the class. The court noted the settling parties’ agreement
that an aggregate amount of $210 million represented the
total lump sum compensation that would be available to class
members.
In December 2014, counsel for the Espinosa, Hunter, and
Brady plaintiffs, as well as counsel for plaintiffs in other
actions that had been transferred to the district court, filed
applications for attorneys’ fees. Through a series of hearings
beginning in March 2015, the district court approved
$2,700,000 in attorneys’ fees to class co-counsel who
represented the plaintiffs in the Hunter and Brady cases,
$2,850,000 in attorneys’ fees to class co-counsel who
represented the plaintiffs in the Espinosa case, and
collectively over $3 million to counsel for other plaintiffs. In
calculating attorneys’ fees, the district court began with the
22
The class was defined as: “[a]ll current and former owners and
lessees of a Class Vehicle (i) who were the owner or lessee, on or before
November 2, 2012, of such Class Vehicle that was registered in the
District of Columbia or one of the fifty (50) states of the United States,”
with several small exceptions.
48 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
lodestar method (multiplying the number of hours the
prevailing party reasonably expended on the litigation by a
reasonable hourly rate). The court then determined that the
Hunter and Brady counsel were entitled to a lodestar
enhancement in light of the complexity and volume of work
and the amount of the settlement, and multiplied the lodestar
amount by a 1.22 multiplier. The district court also
determined that the Espinosa counsel was entitled to a
lodestar enhancement due to the risk of filing a lawsuit before
the November 2, 2012 EPA announcement, and multiplied
the lodestar amount by a 1.5521 multiplier. In total, the
district court awarded approximately $9 million in attorneys’
fees and costs.
In March 2015, the Hunter, Brady, and Espinosa
plaintiffs, along with Hyundai and Kia, jointly moved for
final approval of class settlement. In support of this motion,
Hyundai and Kia submitted declarations reporting on
response rates of class members. The reports established that
approximately 21 percent of class members had filed claims
for some $44,000,000 in total value. Of the class members
filing claims, more than two-thirds began participating in the
LRP before the settlement. Therefore, the portion of the class
filing new claims accounted for only a small fraction of the
$44 million in total value.
In June 2015, the district court gave its final approval of
the class settlement. The court reaffirmed its prior conclusion
that the certification of the class for settlement was proper
under Rule 23(b)(3) and that the settlement was fair, relying
in part on its August 2014 finding that the settlement would
provide an estimated $210 million to the class. In rejecting
objections that the proposed attorneys’ fees awards were
excessive and not in proportion to the benefit conferred on the
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 49
class, the district court noted that the attorneys’ fees did not
impact class recovery because they were awarded separately,
and so the issue of collusion did not arise. Further, the court
stated that the fees were in most cases less than the amount
requested by counsel. Finally, the court dismissed all
lawsuits in MDL No. 2424 except for those in which the
named plaintiffs had timely excluded themselves from the
settlement.
III
Objectors now bring five consolidated appeals raising
challenges to class certification, approval of the settlement as
fair and adequate, and approval of attorneys’ fees as
reasonable in proportion to the benefit conferred on the class.
A
We first address objectors’ arguments that the district
court abused its discretion by failing to conduct a choice of
law analysis or rigorously analyze potential differences in
state consumer protection laws before certifying a single
nationwide settlement class under Rule 23(b)(3). As
explained in Mazza, the district court was required to apply
California’s choice of law rules to determine whether
California law could apply to all plaintiffs in the nationwide
class, or whether the court had to apply the law of each state,
and if so, whether variations in state law defeated
predominance. 666 F.3d at 588–89. Under California’s
choice of law rules, this required the district court to apply
the California governmental interest test. Id. at 590. There
is no dispute that the district court did not do so. The parties
acknowledge that the district court did not conduct a choice
of law analysis, and did not apply California law or the law
50 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
of any particular state in deciding to certify the class for
settlement.
In failing to apply California choice of law rules, the
district court committed a legal error. “A federal court sitting
in diversity must look to the forum state’s choice of law rules
to determine the controlling substantive law.” Id. (quoting
Zinser, 253 F.3d at 1187). The district court made a further
error by failing to acknowledge, as it had in its tentative
ruling, that Hyundai and the Gentry plaintiffs submitted
evidence that the laws in various states were materially
different than those in California, and that these variations
prevented the court from applying only California law.
Finally, the court erred by failing to make a final ruling as to
whether the material variations in state law defeated
predominance under Rule 23(b)(3). Because “variations in
state law may swamp any common issues and defeat
predominance,” Castano, 84 F.3d at 741, a court must
analyze whether “the consumer-protection laws of the
affected States vary in material ways,” Pilgrim, 660 F.3d at
947, even if the court ultimately determines that “the
common, aggregation-enabling, issues in the case are more
prevalent or important than the non-common, aggregation-
defeating, individual issues,” Tyson Foods, Inc. v.
Bouaphakeo, 136 S. Ct. 1036, 1045 (2016) (citation omitted).
The district court’s reasoning that the settlement context
relieved it of its obligation to undertake a choice of law
analysis and to ensure that a class meets all of the
prerequisites of Rule 23, is wrong as a matter of law. While
the district court was correct that it need not consider
litigation management issues in determining whether to
certify a class, the Rule 23(b)(3) predominance inquiry
focuses on whether common questions outweigh individual
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 51
questions, an issue that preexists any settlement. Amchem,
521 U.S. at 623. Therefore, factors such as whether the
named plaintiffs were in favor of the settlement or whether
other class members had an opportunity to opt out are
irrelevant to the determination whether a class can be
certified.
If anything, this case highlights the reasons underlying
Amchem’s warning that district courts must give “undiluted,
even heightened, attention in the settlement context,”
Amchem, 521 U.S. at 620, to scrutinize proposed settlement
classes.23 Because the district court made clear that it would
be unlikely to certify the same class for litigation purposes,
the class representatives were well aware that they would be
unlikely to succeed in any efforts to certify a nationwide
litigation class. Thus, by “permitting class designation
despite the impossibility of litigation, both class counsel and
court [were] disarmed.” Id. at 621. Hyundai and Kia knew
that there was little risk that they would face a nationwide
litigation class action if they did not reach a settlement
agreement. Accordingly, “[c]lass counsel confined to
settlement negotiations could not use the threat of litigation
to press for a better offer, and the court [faced] a bargain
proffered for its approval without benefit of adversarial
investigation.” Id. (citation omitted).
23
The dissent argues that we fail to apply the correct standard of
review. See Dissent at 75. In making this argument, the dissent echoes
the dissenting justices in Amchem, which likewise argued that the majority
had erred in failing to give sufficient deference to the district court.
Amchem, 521 U.S. at 630 (Breyer, J., concurring in part and dissenting in
part). But we are bound by the Amchem majority, which indicates that a
district court makes a legal error, and thus abuses its discretion, when it
fails to scrutinize a settlement class to the same extent as a litigation class.
Id. at 620.
52 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
Finally, the district court erred in holding that it could
avoid considering the potential applicability of the laws of
multiple states on the ground that the proposed settlement
was fair. “[A] fairness hearing under Rule 23(e) is no
substitute for rigorous adherence to those provisions of the
Rule designed to protect absentees[.]” Ortiz, 527 U.S. at 849.
Because the district court erred in certifying a settlement
class, we must vacate the class certification. This does not
mean that the court is foreclosed from certifying a class (or
subclasses) on remand. We make no ruling on this issue, and
merely note that Mazza determined that no such class was
possible in a closely analogous case.
B
Even if the district court had restricted the class to
California consumers (as the court indicated it would do in its
tentative ruling in Espinosa), we would still have to consider
the objectors’ argument that the district court abused its
discretion in certifying a settlement class under Rule 23(b)(3)
that includes used car owners without analyzing whether
these class members were exposed to, and therefore could
have relied on Hyundai’s and Kia’s misleading statements.
According to the objectors, individual questions of reliance
preclude the inclusion of used car owners in this class.
In Mazza, we provided guidance on how a district court
should determine whether a court can presume that class
members relied on misleading advertising. On the one hand,
we explained, “[a]n inference of classwide reliance cannot be
made where there is no evidence that the allegedly false
representations were uniformly made to all members of the
proposed class.” Mazza, 666 F.3d at 595 (quoting
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 53
Davis–Miller v. Automobile Club of Southern California, 201
Cal. App. 4th 106, 125 (2011)). Rather, the class proponent
must establish that the scope of the advertising makes it
reasonable to assume that all class members were exposed to
the allegedly misleading advertisements. Id. On the other
hand, we noted the California Supreme Court’s exception to
this general rule in In re Tobacco II Cases. Tobacco II
presumed that class members had relied on a pervasive
advertising campaign for cigarettes, extending over 40 years
by 11 different defendants, which “misled the smoking public
of the health risks and addictive nature of smoking and
targeted the putative class uniformly in an alleged class-wide
effort to seduce and induce people to smoke.” 46 Cal. 4th
298, 309, 327–28 (2009) (Tobacco II). Distinguishing
Tobacco II, Mazza explained that “in the context of a
decades-long tobacco advertising campaign where there was
little doubt that almost every class member had been exposed
to defendants’ misleading statements,” class members did not
need to demonstrate individualized reliance. 666 F.3d at 596.
Harmonizing these rules, Mazza concluded that “[i]n the
absence of the kind of massive advertising campaign at issue
in Tobacco II, the relevant class must be defined in such a
way as to include only members who were exposed to
advertising that is alleged to be materially misleading.” Id.24
24
California courts have likewise read Tobacco II narrowly, and have
rejected the argument that class-wide reliance can be presumed “whenever
there is a showing that a misrepresentation was material.” Tucker v.
Pacific Bell Mobile Services, 208 Cal. App. 4th 201, 226–27 (2012)
(citing Tobacco II, 46 Cal. 4th at 327). As indicated in Mazza, reliance
can be presumed only when there is the sort of massive decades-long
advertising campaign at issue in Tobacco II. 666 F 3d. at 596. Regardless
whether the Hyundai and Kia advertising campaign here was more
extensive than the campaign in Mazza, see Dissent at 78, it does not come
close to the level of cigarette advertising from the 1960s to the 2000s.
54 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
We held that the defendant’s scope of advertising in Mazza
did not rise to that level, and therefore an individualized case
had to be made for each member showing reliance. Id. For
this reason, we held that common questions of fact did not
predominate where the class included members who were not
exposed to the false advertising or who purchased products
after learning of the misrepresentations, and therefore it was
an error to certify the class. Id.
The district court addressed the question whether class
members could have relied on Hyundai’s and Kia’s
misleading statements in its June 14, 2014 ruling, and
concluded that it could presume that all class members relied
on the misleading statements because “misrepresentations
were uniformly made to all consumers by virtue of Monroney
stickers and nationwide advertising.” In reaching this
conclusion, the district court failed to reference any evidence
in the record regarding the extent of the advertising campaign
for the 41 different Hyundai models and 35 different Kia
models from 2011 to 2013; nor did it provide any reasoning
regarding how this advertising reached the level of the
cigarette advertising campaign (extending over 40 years by
11 defendants) discussed in Tobacco II.25 Furthermore, the
25
The district court’s statement in its November 2012 ruling that
class-wide reliance on the challenged advertising could be presumed due
to the “extensive sweep” of Hyundai’s marketing efforts focused solely on
the 2011 Elantra model; the Sonata model is merely mentioned in an
aside. The court did not address either the 35 other Hyundai models or
any Kia models. This is not surprising, given that the district court relied
on a declaration that focused almost exclusively on the 2011 Elantras,
with only limited mention made of the 2011 Sonata models or any 2012
models. Moreover, because the advertising was limited in time (under a
year) and scope, it does not come close to the pervasive campaign
(extending over 40 years by 11 separate companies) described in
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 55
district court’s ruling is based on a factual error, because
there is no requirement that Monroney stickers be provided
to purchasers of used cars, and there is no evidence in the
record that used car owners were uniformly exposed to such
stickers. In fact, the settlement itself relied on this difference
in exposure to misleading information in awarding used car
owners only half the amounts awarded to new car owners.
See supra, at p. 42. Nor can we conclude that this error was
harmless because exposure to the defendant’s advertising can
be presumed. The settling parties have not identified any
evidence in the record of this sort of massive advertising
campaign that could give rise to such a presumption with
respect to used car owners.
The settling parties argue that even if there are
individualized questions regarding exposure to the nationwide
advertising, these questions do not predominate in the
settlement context, where there is no manageability concern.
This argument is contrary to Amchem, where the Court held
that factual differences among class members, such as the
ways that class members were exposed to asbestos and the
length of those exposures, translated into significant legal
differences, thereby defeating predominance for a settlement
class. 521 U.S. at 624. Similarly here, factual differences
regarding used car owners’ exposure to the misleading
statements translate into significant legal differences
regarding the viability of these class members’ claims.
In sum, because the record does not support the
presumption that used car owners were exposed to and relied
on misleading advertising, the district court had an obligation
to define the relevant class “in such a way as to include only
Tobacco II.
56 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
members who were exposed to advertising that is alleged to
be materially misleading.” Mazza, 666 F.3d at 596. The
district court erred by failing to do so here.
C
Because a court’s obligations under Rule 23 are
heightened in the settlement-class context, Amchem, 521 U.S.
at 620, a district court’s obligation to conduct a “rigorous
analysis” to ensure that the prerequisites of Rule 23 have been
met, Comcast, 569 U.S. at 33, is heightened as well. Here,
the district court failed to conduct a rigorous inquiry into
whether the proposed class could meet the Rule 23
prerequisites on the mistaken assumption that the standard for
certification was lessened in the settlement context. Because
our precedent raises grave concerns about the viability of a
nationwide class in this context, see Mazza, 666 F.3d at
596–97, this certification decision cannot stand.
IV
Because the district court may yet determine, after a
rigorous Rule 23 analysis, that it may certify a settlement
class and approve a settlement, we briefly clarify some
principles of attorneys’ fee approval for the district court on
remand. See, e.g., In re Gen. Motors Corp. Pick-Up Truck
Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 820–22 (3d Cir.
1995). When awarding attorneys’ fees in a class action, the
district court has “an independent obligation to ensure that the
award, 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). Therefore, we have “encouraged courts to guard
against an unreasonable result by cross-checking their
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 57
calculations against a second method.” Id. at 944. “In this
circuit, there are two primary methods to calculate attorneys
fees: the lodestar method and the percentage-of-recovery
method.” In re Online DVD-Rental Antitrust Litig., 779 F.3d
934, 949 (9th Cir. 2015). “Under the percentage-of-recovery
method, the attorneys’ fees equal some percentage of the
common settlement fund; in this circuit, the benchmark
percentage is 25%.” Id. (citing Bluetooth Headset Prods.
Liab. Litig., 654 F.3d at 942); see also Hanlon, 150 F.3d at
1029. If the district court employs the lodestar method, but
calculates an award that “overcompensates the attorneys
according to the 25% benchmark standard, then a second look
to evaluate the reasonableness of the hours worked and rates
claimed is appropriate.” In re Coordinated Pretrial
Proceedings in Petroleum Prod. Antitrust Litig., 109 F.3d
602, 607 (9th Cir. 1997). When a district court fails to
conduct a “comparison between the settlement’s attorneys’
fees award and the benefit to the class or degree of success in
the litigation” or a “comparison between the lodestar amount
and a reasonable percentage award,” we may remand the case
to the district court for further consideration. Bluetooth
Headset Prods. Liab. Litig., 654 F.3d at 943; see also In re
HP Inkjet Printer Litig., 716 F.3d 1173, 1190 (9th Cir. 2013).
Indeed, in the absence of 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 used the lodestar method to
calculate attorneys’ fees, awarding approximately $9 million
in attorneys’ fees and costs. However, the court failed to
calculate the value of the settlement in order to ensure that the
58 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
attorneys’ fees were not excessive in proportion to the
settlement value. Although the court mentioned that the
settling parties had earlier estimated the value of the proposed
settlement at $210 million, it did not make a finding
regarding the actual value of the settlement based on claims
made, and the claims data in the record indicates that the
amount of settlement funds claimed by class members was far
lower.26 Moreover, the court failed to address objectors’
reasonable questions about the value of the settlement, for
example, whether the value for class members who began
participating in the LRP before the settlement, and who
elected to remain in the LRP or who switched from the LRP
to the lump sum option, could be attributed to the attorneys’
efforts in this litigation.27 Because the district court could not
compare the fees award to the settlement value without
considering these questions and determining the actual
26
Although the settling parties filed expert reports, the district court
did not discuss or address them in any way. An examination of the
reports, would have likely led the district court to probe some of expert’s
questionable assumptions, such as the assumption that car owners who
entered the LRP program before the settlement would own their cars for
a shorter period of time than car owners who entered the LRP program
after the settlement, and the assumption that all of the class members who
entered the LRP program after the settlement would not have done so of
their own accord regardless of the settlement.
27
The dissent contends that “we have rejected objectors’ arguments
that a federal investigation merits a reduction in class counsel’s fees,”
citing Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1048 n.3 (9th Cir.
2002). See Dissent at 80. This is incorrect. Vizcaino concluded that the
federal investigation was irrelevant to the pivotal issue in the suit, and
therefore concluded that it did not merit a reduction in fees. By contrast,
the EPA investigation here established that Hyundai and Kia had
misstated fuel efficiency estimates for certain models, which was the
pivotal issue in this class action, and which directly led Hyundai and Kia
to implement the LRP program.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 59
settlement value, it failed “to assure itself—and us—that the
amount awarded was not unreasonably excessive in light of
the results achieved.” Bluetooth Headset Prods. Liab. Litig.,
654 F.3d at 943.
A district court must also provide adequate justification
for the use of a multiplier, which is appropriate in only “rare”
or “exceptional” cases. See Perdue v. Kenny A. ex rel. Winn,
559 U.S. 542, 554 (2010). Here, the district court’s reasoning
for enhancing the lodestar amount by a multiplier for class
counsel, namely that the Hunter and Brady multiplier was
warranted by the “complexity and volume of work that
counsel engaged in,” and that the Espinosa multiplier was
warranted by the risk that Espinosa counsel assumed by filing
a lawsuit before the announcement of the LRP, is insufficient
to explain why an enhancement is warranted, particularly
given objectors’ concerns that the settlement confers only
modest benefits to the class, see Bluetooth Headset Prod.
Liab. Litig., 654 F.3d at 942 (holding that district courts
should “award only that amount of fees that is reasonable in
relation to the results obtained,” even where counting all
hours reasonably spent would produce a larger fees award)
(quoting Hensley v. Eckerhart, 461 U.S. 424, 440 (1983)).28
28
We also disagree with the district court’s conclusion that “the issue
of collusion is not present in the attorney[s’] fees context” because “the
attorney[s’] fees were awarded separately from the class recovery and did
not impact class recovery.” The district court’s responsibility to conduct
an independent inquiry into the reasonableness of attorneys’ fees is of
equal, if not greater, importance when attorneys’ fees are awarded
separately from the class award. See Bluetooth Headset Prods. Liab.
Litig., 654 F.3d at 943. Indeed, we have identified this exact arrangement
as one of the “subtle signs” of collusion in the settlement context. See id.
at 947. Similar to the “clear sailing agreement” examined in Bluetooth
Headset Prods. Liab. Litig., the parties reached an agreement on the
60 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
On remand, if the district court properly approves class
certification and a settlement, the district court must
determine what value was created by the settlement and take
a closer look at the reasonableness of the attorneys’ fees in
light of the results achieved.29
V
We conclude that the district court abused its discretion
in certifying a nationwide settlement class without conducting
a rigorous predominance analysis under Rule 23(b)(3) to
determine whether variations in state consumer protection
laws, or individual factual questions regarding exposure to
the misleading statements, precluded certification.30 We
vacate class certification and remand to the district court for
amount of attorneys’ fees to be paid in the Hunter and Brady actions, and
the defendants did not contest the fees before the district court.
29
In light of our decision that the district court abused its discretion
in certifying a settlement class under Rule 23(b)(3) without conducting a
choice of law analysis and considering differences in state consumer
protection laws, we do not reach the objection raised by James Feinman,
counsel for the Gentry plaintiffs, that the district court abused its
discretion in not awarding him attorneys’ fees.
30
Objectors raised a number of additional arguments, including
claims that: the district court abused its discretion in certifying the
settlement class because named plaintiffs did not adequately represent the
interests of the class, as required under Rule 23(a)(4); the district court’s
failure to conduct a choice of law analysis violated absent class members’
due process rights; the district court’s failure to certify a Virginia subclass
violated class members’ due process rights; and the settlement was not fair
and adequate under Rule 23(e). Because we conclude that the district
court abused its discretion in certifying the class under Rule 23(b)(3), we
do not consider these arguments. See Wang, 737 F.3d at 546.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 61
further proceedings consistent with this opinion. Each party
will bear its own costs on appeal.
VACATED AND REMANDED.
NGUYEN, Circuit Judge, dissenting:
“Economic reality dictates” that this consumer lawsuit
“proceed as a class action or not at all.” Eisen v. Carlisle &
Jacquelin, 417 U.S. 156, 161 (1974). By championing the
cause of a handful of objectors and their attorneys (who were
denied fees below) to decertify the class, the majority
deprives thousands of consumers of any chance to recover
what is, conservatively speaking, a more than $159 million
settlement.1 In doing so, the majority relies on arguments
never raised by the objectors, contravenes precedent, and
disregards reasonable factual findings made by the district
court after years of extensive litigation.
The majority also deals a major blow to multistate class
actions. Contrary to our case law and that of our sister
circuits, the majority shifts the burden of proving whether
foreign law governs class claims from the foreign law
proponent—here, the objectors—to the district court or class
counsel. This newly invented standard significantly burdens
1
The majority attempts to soften its decision by noting that its vacatur
of the class certification “does not mean that the court is foreclosed from
certifying a class (or subclasses) on remand.” Opinion at 52. But this
sentiment is undercut by the majority’s acknowledged “grave concerns
about the viability of a nationwide class in this [case’s] context.” Opinion
at 56.
62 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
our overloaded district courts, creates a circuit split, and runs
afoul of the doctrine established long ago in Erie R.R. v.
Tompkins, 304 U.S. 64 (1938). Next, in excluding used car
owners from the class, the majority misapplies the rule that
consumer claims merely require proof that the public—not
any individual—is likely to be deceived. Lastly, the majority
bases its clarification of the district court’s attorneys’ fees
award on a flawed reading of the record and a disregard of
our usual deferential review.
I. Rule 23’s predominance inquiry was readily met
Both we and our sister circuits have long held that a
nationwide class action cannot be decertified simply because
there are “differences between state consumer protection
laws.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1022–23
(9th Cir. 1998); In re Mex. Money Transfer Litig., 267 F.3d
743, 747 (7th Cir. 2001) (“[N]ationwide classes are certified
routinely even though every state has its own [laws.]”). Far
from imposing geographic limitations, the predominance
inquiry under Rule 23(b)(3) simply tests whether questions
common to the class “are more prevalent or important” than
individual ones, Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct.
1036, 1045 (2016) (citation omitted), a standard which is
“readily met” in consumer class actions, Amchem Products,
Inc. v. Windsor, 521 U.S. 591, 625 (1997). “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 v. Mercer
Canyons Inc., 835 F.3d 1125, 1134 (9th Cir. 2016) (citation
omitted). Therefore, even if just one common question
predominates, “the action may be considered proper under
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 63
Rule 23(b)(3) even though other important matters will have
to be tried separately, such as damages or some affirmative
defenses peculiar to some individual class members.” Tyson,
136 S. Ct. at 1045 (citation omitted).
Here, the district court concluded that the following
undisputed common questions predominated over
individualized issues: “[w]hether the fuel economy
statements were in fact accurate” and “whether defendants
knew that their fuel economy statements were false or
misleading.” The district court also found that the class
claims were subject to common proof because the fuel
economy statements were “uniformly” made by Defendants
via “Monroney stickers and nationwide advertising.” These
types of common issues, which turn on a common course of
conduct by the defendant, establish predominance in
nationwide class actions. Hanlon, 150 F.3d at 1022–23
(affirming certification of a nationwide settlement class of car
owners because common questions as to defendant’s
knowledge and existence of the problem predominated over
state law variations); Edwards v. First Am. Corp., 798 F.3d
1172, 1182–83 (9th Cir. 2015) (reversing denial of a
nationwide consumer class certification because the
defendants’ “common scheme, if true, presents a significant
aspect of [defendants’] transactions”). Neither the objectors
nor the majority adhere to these precedents.
II. Neither the district court nor class counsel had a
duty to raise arguments on objectors’ behalf, nor can a
class action be decertified for failure to do so
The majority’s first misstep in the predominance analysis
is a subtle, but dispositive, departure from our nationwide
class action jurisprudence. In violation of controlling choice-
64 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
of-law rules, the majority places the burden on the district
court or class counsel to extensively canvass every state’s
laws and determine that none other than California’s apply.
Opinion at 28, 52. This is wrong for three reasons. First,
because the objectors here bore the burden and failed to meet
it, the class claims are controlled by California law. Second,
the majority’s reassignment of the burden cannot be justified
under Rule 23, which is silent on choice-of-law issues and
requires class counsel to prove predominance, but not a
negative. Nor can the majority rely on the combination of
Rule 23 and CAFA diversity jurisdiction to flip the burden.
Doing so violates the Erie doctrine, which requires a
California federal court sitting in diversity jurisdiction to
apply California’s choice-of-law rules, even where a federal
rule is involved. Third, the majority’s heavy reliance on
Amchem is misplaced because that case did not address
choice-of-law issues and involved conflicts between potential
claimants that are not present here.
A. The objectors failed to meet their choice-of-law
burden
As the majority acknowledges, California’s choice-of-law
rules control the outcome of this case. Opinion at 29, 50.
Under these rules, California law applies “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) (citation omitted); Pokorny v. Quixtar, Inc., 601 F.3d
987, 995 (9th Cir. 2010). The “foreign law proponent” here,
of course, is the objectors.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 65
To meet their burden, the objectors must satisfy the three-
step governmental interest test. 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 1080–81, 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 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); 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).2
The majority faults the district court for not sua sponte
surveying all 50 states’ laws to prove that none other than
California’s should apply. But, to the extent anyone was
obliged to analyze the laws of other states, that burden fell
squarely on the objectors—and they failed to meet it. No
objector even mentioned, much less conducted, the correct
2
The objectors’ burden is not the “modest” burden applicable when
an out-of-state defendant invokes its due process right to be free from
arbitrarily applied state law. Phillips Petroleum Co. v. Shutts, 472 U.S.
797, 818 (1985). We cannot conflate the due process rights of out-of-state
defendants with those of objectors given that the “burdens placed by a
State upon an absent class-action plaintiff are not of the same order or
magnitude as those it places upon an absent defendant.” Id. at 808. While
the objectors have a due process right to opt out of the settlement, they
have no due process right to dictate which state’s law applies to the class.
See id. at 814 (rejecting objectors’ due process challenge to settlement).
66 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
choice-of-law analysis. Nor did any objector explain how,
under the facts of this case, they satisfied the governmental
interest test’s three elements. “Where, as here, parties do not
address choice-of-law issues, California courts presumptively
apply California law.” Johnson v. Lucent Techs. Inc.,
653 F.3d 1000, 1008 (9th Cir. 2011). Given the objectors’
failure to prove that the law of a state other than California
applied, the district court acted well within its discretion in
certifying the class.
The majority acknowledges, as it must, that the objectors
carry the burden. Opinion at 30. But it does not
acknowledge that the objectors entirely failed to do so here.
Instead, the majority implies that a few sentences in the
objectors’ opposition to class certification constitute a
developed choice of law analysis. Opinion at 44–46. But in
that opposition, the Gentry objectors clearly argue that
California contractual choice of law provisions should
govern, citing explicitly to three contracts entered into by
their named class representatives. “California has two
different analyses for selecting which law should be applied
in an action”: the contractual choice-of-law provisions
analysis from Nedlloyd Lines B.V. v. Super. Ct., 834 P.2d
1148 (Cal. 1992), and, “[a]lternatively,” the governmental
interests test. Wash. Mut., 15 P.3d at 1077. Apart from a
passing reference to Washington Mutual, the objectors never
even addressed the governmental interests test before the
district court. They certainly did not meet their burden of
showing that foreign law should apply.3
3
Indeed, the lead plaintiff in the Gentry tag-along action (the only
Gentry objector to appeal) sought to hold hostage any class recovery under
the settlement unless she and her attorney were certified to represent a
Virginia subclass that, by her own concession, would recover nothing
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 67
Our precedent recognizes that when, as here, the foreign
law proponent fails to meet its burden, neither the district
court nor class counsel is obligated to address choice-of-law
issues, nor will a class action be decertified for lack of such
analysis. In Harmsen v. Smith, for example, we rejected the
argument that California law could not be applied to a class
which included non-Californians, even though the district
court conducted no choice-of-law analysis. 693 F.2d 932,
946–47 (9th Cir. 1982). There, the foreign law proponent
challenged the ability of non-California class members to
recover under California fraud and tort claims that, like the
claims here, arose from the defendants’ misrepresentations.
Id. at 946, 935–37. The district court rejected the argument
on a procedural ground, which we did not embrace on appeal.
Id. at 946. However, we did not fault the district court for
failing to raise and then refute arguments favoring another
state’s law. Instead, we placed the onus where it belonged:
on the foreign law proponent who “failed to show, as required
by California law, that the law of other states relating to the
[class] 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.” Id. at 947; accord 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).
because her claim was “time-barred” under Virginia law. Given that
concession, any textual differences between the two states’ statutes are not
“material” because they do not “make a difference in this litigation”: they
do not result in a greater recovery under Virginia rather than California
law. Mazza v. Am. Honda Motor Co., Inc., 666 F.3d 581, 590 (9th Cir.
2012).
68 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
This case is even more straightforward than Harmsen, as
the objectors here did not advance any argument under the
governmental interest test, and therefore we must “apply
California law.” Johnson, 653 F.3d at 1008. The objectors’
silence is a far cry from Mazza—the only case from this
circuit to which the majority analogizes. 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 v. Am. Honda Motor Co., Inc., 666 F.3d
581, 590–91 (9th Cir. 2012). Unlike class counsel here, the
plaintiffs in Mazza did “not contest these differences[.]” Id.
at 591 n.3. Weighing these arguments and concessions, a
divided panel concluded it was error to find that the defendant
had “not met its burden” to show that foreign law applied
“[u]nder the facts and circumstances of this case.” Id. at 591,
594. In light of that unique record, Mazza stands as a rare
exception to the general rule that “[p]redominance is a test
readily met” in consumer class actions. Amchem, 521 U.S. at
625.
We have never held, in Mazza or any other case, that a
class cannot be certified unless a district court sua sponte
raises and refutes arguments on the objectors’ behalf in
support of foreign law. Rather, we have made clear that, if
the “parties do not address choice-of-law issues, California
courts presumptively apply California law.” Johnson,
653 F.3d at 1008 (emphasis added). After all, the court, as an
impartial arbiter, need not do a party’s “work for it, either by
manufacturing its legal arguments, or by combing the record
on its behalf for factual support.” See W. Radio Servs. Co. v.
Qwest Corp., 678 F.3d 970, 979 (9th Cir. 2012). Nor is any
duty triggered if a district court becomes aware that multiple
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 69
states’ laws may apply; as Mazza confirmed, the mere “fact
that two or more states are involved does not itself indicate
that there is a conflict of law.” 666 F.3d at 590 (quoting
Wash. Mut., 15 P.3d at 1080). The district court therefore had
no duty to dig up briefing from two years earlier in the
Espinosa action and refashion those arguments for the
objectors’ benefit.
B. Under the Erie doctrine, CAFA and Rule 23 cannot
reassign the foreign law proponent’s burden because it
is substantive state law
The majority’s reassignment of the burden under
California’s choice-of-law rules also violates the Erie
doctrine. A federal court sitting in diversity jurisdiction must
“apply the substantive law of the state in which it sits,
including choice-of-law rules”—even where a federal rule or
statute is involved. Harmsen, 693 F.2d at 946–47; Manalis
Fin. Co. v. United States, 611 F.2d 1270, 1272 (9th Cir. 1980)
(“[W]hen application of a federal statute depends on an issue
of state law, a federal court should defer to the ruling of the
highest court of the state on that issue.”).
Because California’s choice-of-law rules are substantive
state law for which the California Supreme Court is the final
arbiter, the majority is not free to disregard them. Harmsen,
693 F.2d at 946–47; Klaxon Co. v. Stentor Elec. Mfg. Co.,
313 U.S. 487, 496 (1941). The California Supreme Court has
unequivocally held that California law governs unless a
foreign law proponent meets its burden to prove otherwise
under the governmental interest test, Wash. Mut., 15 P.3d at
1080–82, as we have repeatedly recognized. See, e.g.,
Pokorny, 601 F.3d at 995. Moreover, the California Supreme
Court has made clear that the foreign law proponent bears the
70 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
burden even “when a nationwide class action is at issue,”
rejecting the idea that the “proponent of class certification
[should] affirmatively demonstrate[] that California law is
more properly applied.” Wash. Mut., 15 P.3d at 1081. Yet
that is exactly what the majority demands here.
By flouting the applicable choice-of-law rules, the
majority denies relief that the class would have obtained in
state court.4 In doing so, the majority’s ruling creates exactly
the “variations between state and federal” outcomes that the
Erie doctrine is designed to combat. Gasperini v. Ctr. for
Humanities, Inc., 518 U.S. 415, 430 (1996); Beeman v.
Anthem Prescription Mgmt., LLC, 689 F.3d 1002, 1005 (9th
Cir. 2012) (en banc) (critiquing panel’s misapplication of
state law for violating Erie by creating “inconsistent” results
in state and federal courts). The Supreme Court has stressed
the need to prevent inconsistent state and federal outcomes as
the basis for its holding that federal courts must apply state
choice-of-law rules. Klaxon, 313 U.S. at 496. As the Court
explained, failure to follow these rules would allow “the
accident of diversity of citizenship [to] disturb equal
administration of justice in . . . state and federal courts sitting
side by side,” which would “do violence to the principle of
uniformity within a state upon which the [Erie] decision is
based.” Id.
4
See, e.g., Rutledge v. Hewlett-Packard Co., 190 Cal. Rptr. 3d 411,
431–32 (Cal. Ct. App. 2015) (reversing denial of nationwide consumer
class certification where lower “court improperly placed the burden” on
class counsel because “the burden was on [the foreign law proponent] to
demonstrate that the interests of other state’s laws were greater than
California’s interests”).
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 71
Nor can the majority rely on the general principle that a
district court should “protect” the class by conducting a
“heightened” or “rigorous” analysis of whether class counsel
has satisfied certain Rule 23 prerequisites. Opinion at 32, 51,
56–57. Rule 23 says nothing about how choice-of-law issues
should be resolved, nor does it require class counsel or the
district court to make choice-of-law arguments on the
objectors’ behalf. We should avoid importing into the class
certification process “an additional hurdle” found nowhere in
the Rule. Briseno v. ConAgra Foods, Inc., 844 F.3d 1121,
1126 (9th Cir. 2017).
Moreover, the majority’s position puts us at odds with the
reasoned decisions of other circuits. The prevailing view
amongst our sister circuits is that “variations in the rights and
remedies available to injured class members under the
various laws of the fifty states [do] not defeat commonality
and predominance.” Sullivan v. DB Investments, Inc.,
667 F.3d 273, 301 (3d Cir. 2011) (en banc) (alteration in
original) (quoting In re Warfarin Sodium Antitrust Litig.,
391 F.3d 516, 529 (3d Cir. 2004)). These circuits reject the
notion that Rule 23 places the burden on anyone other than
the objector to prove which law applies. See Mex. Money,
267 F.3d at 747 (“Why [class counsel] should have an
obligation to find some way to defeat class treatment is a
mystery.”). As Judge Easterbrook has explained:
It is best to bypass marginal theories if their
presence would spoil the use of an
aggregation device that on the whole is
favorable to holders of small claims. Instead
of requiring the plaintiffs to conduct what
may be a snipe hunt, district judges should do
what the court did here: Invite objectors to
72 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
identify an available state-law theory that the
representatives should have raised, and that if
presented would have either increased the
recovery or demonstrated the
inappropriateness of class treatment.
Id. This burden allocation makes sense because Rule 23 does
not come into play until after a foreign law proponent has
proven that the class claims are governed by multiple states’
laws. The majority’s contrary holding sends a district court
on exactly the “snipe hunt” that the Seventh Circuit warns
against.
The problem created by the majority can easily be
avoided simply by adhering to our own precedent, which is
on all fours. In Hanlon v. Chrysler Corp., we affirmed
certification under Rule 23(b)(3) of a nationwide settlement
class of car owners alleging violations of state consumer
laws. 150 F.3d at 1017, 1022. There, 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. Id. at 1018. Like
the Gentry objector in our appeal, 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. Id. at 1019. 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
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 73
preclude class certification. Id. at 1022–23. That same
reasoning applies with even greater force here, where the
class claims turn on the Defendants’ common course of
conduct (its fuel economy statements) and no objector
established that the law of any other states applied.
C. The settlement raises no concerns about collusion
The majority implies that the settlement here raises the
same concerns about collusion between class and defense
counsel that animated Amchem. Opinion at 51. But this case
is nothing like Amchem, which was the most “sprawling”
class the Court had ever seen. 521 U.S. at 624. There,
asbestos manufacturers agreed to settle with class counsel for
several pending products liability cases only upon receiving
a global release for as-yet-unfiled lawsuits by future
claimants, who class counsel did not represent. Id. at 601.
Unlike class counsel here, who litigated for years, the settling
parties in Amchem never intended to litigate the future
claimants’ lawsuits. Id. at 601. Instead, within a single day,
they filed a complaint, an answer, a proposed settlement, and
a motion to certify a class of current and future claimants
under various state products liability laws—none of which are
implicated here. Id. at 601–03. The class encompassed
individuals “exposed to different asbestos-containing
products, for different amounts of time, in different ways, and
over different periods,” rendering some class members sick
while others suffered “no physical injury.” Id. at 624. But
while the class definition was expansive, the remedies were
anemic. The settlement allowed the defendants to unilaterally
set the compensation for claims, capped the number of claims
payable per year regardless of how many were filed, and
bound the class in perpetuity despite allowing the defendants
to withdraw after ten years. Id. at 604–05.
74 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
Unsurprisingly, the Court found the class untenable on
multiple grounds, including inadequate representation,
because of class members’ conflicting interests. Id. at
627–28. Whereas current claimants, who suffered from lung
cancer and other asbestos-related illnesses, wanted to
maximize the current payout, future claimants, who were
healthy at the time, had a strong interest in preserving funds
should they become sick. Id. at 624. The Court also
highlighted unexplained disparities between class members’
recovery, with some class members receiving no
compensation at all and others receiving hundreds of
thousands less than the average recovery for that claim. Id.
at 604, 610 n.14. It was in this collusive context that Amchem
chided the district court for not devoting “undiluted, even
heightened, attention” to Rule 23 criteria “designed to
protect” absent class members and their right to proper notice
and adequate representation. Id. at 620 (citing Rule 23(c) and
(d)). Moreover, the Court expressly distinguished the case
before it, where “individual stakes are high and disparities
among class members great,” from consumer class actions,
where the predominance requirement is “readily met.” Id. at
625.
The consumer class certified here raises none of the
concerns identified in Amchem. As Hanlon explained in
distinguishing Amchem, the “heart” of the problem there 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. Here, like in Hanlon, there are no such conflicts
because all class members suffer from “the same
problem”—cars with a fuel economy that is worse than
advertised—for which they are all compensated, without any
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 75
of the onerous terms that Amchem found objectionable. See
id. at 1021.
Nor does Amchem support decertification on the ground
urged by the majority, namely, that the district court should
have sua sponte catalogued the laws of all 50 state law to
identify any variations and competing state interests.
Amchem did not address, much less conduct, a choice-of-law
analysis. The fundamental problem in Amchem was the
factual differences between class members that created a
conflict between potential claimants. Id. at 1020–21. And
that conflict would have existed even if all the state laws at
issue were identical.
Finally, faulting the district court at every turn, the
majority fails to adhere to our deferential standard of review.
When reviewing an order granting class certification, “we
accord the district court noticeably more deference than when
we review a denial.” Torres, 835 F.3d at 1132 (quoting
Abdullah v. U.S. Sec. Assocs., Inc., 731 F.3d 952, 956 (9th
Cir. 2013)). Our review of a class action settlement is “very
limited” and we will “reverse only upon a strong showing that
the district court’s decision was a clear abuse of discretion.”
Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1238 (9th
Cir. 1998) (internal quotation marks omitted) (quoting Class
Plaintiffs v. Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992)).
“This is especially true in light of the strong judicial policy
that favors settlements, particularly where complex class
action litigation is concerned.” Id. (quoting Class Plaintiffs,
955 F.2d at 1276); see also Rodriguez v. W. Publ’g Corp.,
563 F.3d 948, 963–64 (9th Cir. 2009). The majority’s failure
to apply a deferential standard of review is reflected in the
opinion’s unusual reliance on a tentative order in the
Espinosa class action, which the district court never adopted.
76 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
See Opinion at 37–39, 52. But it is only the district court’s
final rulings—issued after it had the benefit of additional
briefing, hearings, and over eight more months of
discovery—which we are reviewing here.
III. Used car owners need not offer individualized proof
under the reasonable consumer test, which asks only if
the public is likely to be deceived
In excluding used car owners from the class, the majority
again focuses on an argument not raised by the objectors and
belied by the record. The reliance element of California
consumer protection laws “does not require individualized
proof” that each plaintiff was exposed to a specific
misrepresentation. Pulaski & Middleman, LLC v. Google,
Inc., 802 F.3d 979, 986 (9th Cir. 2015) (internal quotation
mark omitted) (quoting In re Tobacco II Cases, 207 P.3d 20,
35 (Cal. 2009)). Rather, under the “reasonable consumer
test,” reliance is presumed if “members of the public are
likely to be deceived” by the defendant’s misrepresentation.
Rubio v. Capital One Bank, 613 F.3d 1195, 1204 (9th Cir.
2010) (quoting Williams v. Gerber Prods. Co., 552 F.3d 934,
938 (9th Cir. 2008); Tobacco II, 207 P.3d at 29. In fact, the
California Supreme Court has expressly rejected the view that
a claim requires proof that purchasers “heard and had relied
on specific misrepresentations.” Tobacco II, 207 P.3d at 40.
Applying this standard, we routinely affirm class
certification without demanding proof of every class
member’s exposure to the same misrepresentation. In
Gutierrez v. Wells Fargo Bank, NA, for example, we upheld
class certification because common issues predominated as to
whether the public was likely to be deceived (and thus
reliance could be presumed) by a bank’s “misleading
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 77
marketing materials.” 704 F.3d 712, 728–79 (9th Cir. 2012).
The district court identified four exhibits that contained the
bank’s misleading marketing of its overdraft fees: a website,
a 2001 and 2005 brochure, and a new account jacket from
2004 that was “customarily provided” at the opening of a new
account. Id. at 729. On appeal, we did not limit the class to
only those new account holders who read the jacket; instead,
we upheld certification of a class that included all account
holders who had incurred overdraft fees from 2004 to 2008.
Id. at 718, 728–29. As we explained, the class was not
overbroad because the “pervasive nature” of the marketing
materials established reliance, as similar statements appeared
in other advertising, which was enough to show reliance
under California law. Id. at 729; accord Blackie v. Barrack,
524 F.2d 891, 902 (9th Cir.1975) (where there are “similar
misrepresentations, . . . the class is united by a common
interest in determining whether a defendant’s course of
conduct is in its broad outlines actionable, which is not
defeated by slight differences in class members’ positions”).
Similarly, the district court here did not limit the class to
those who saw the Monroney stickers on new cars because
the fuel economy statements were also “uniformly” made in
“nationwide advertising.” The advertising campaign here
was even more pervasive than in Gutierrez, with more than
$100 million spent on a large number of print magazines,
billboards, and TV commercials during the NFL playoffs, the
Super Bowl, and the Academy Awards. The objectors do not
refute any of this evidence, which in any event requires us to
defer to the district court’s factual finding even if another
view “is equally or more” plausible. Cooper v. Harris, 137 S.
Ct. 1455, 1465 (2017).
78 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
The omissions in the advertising campaign here bear no
resemblance to the “smaller-scale” advertisements of “quite
disparate information” in Mazza, to which the majority (but
not the objectors) analogizes. 666 F.3d at 586, 595–96. We
have distinguished Mazza to uphold class certification where,
as here, the class suffers from an “informational injury,”
meaning “a common policy of non-disclosure” by the
defendant. Torres, 835 F.3d at 1135. As we have explained,
the outcome in Mazza was due to the defendant having
“subjected only a small segment of an expansive class of car
buyers to misleading material as part of a ‘very limited’
advertising campaign.” Id. at 1137 (quoting Mazza, 666 F.3d
at 595). But where there exists “a common failure to disclose
information, and not merely a disparate series of affirmative
statements,” predominance is easily established. Id. at
1137–38; accord In re First All. Mortg. Co., 471 F.3d 977,
985, 990–91 (9th Cir. 2006) (affirming consumer class
certification under California law based on defendants’
omissions and misrepresentations communicated through
various loan officers).
Rather than apply clear error review, the majority faults
the settling parties for purportedly “not identify[ing] any
evidence in the record of [a] massive advertising campaign.”
Opinion at 55. But the settling parties directed us to such
evidence, including the TV and print advertising discussed
above. And, contrary to the majority’s assertion, the
advertisements’ misleading fuel statements were not limited
to only Elantra vehicles. Importantly, the settling parties
might well have identified more evidence had the objectors
actually made the argument that the majority advances here.
The objectors’ failure to do so waived the issue. See W.
Radio, 678 F.3d at 979.
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 79
Finally, the majority mistakenly equates the uniform
advertising campaign here with the asbestos exposure in
Amchem, Opinion at 55, which involved different substantive
state law. Unlike the products liability claims in Amchem, the
consumer claims here do not turn on individualized proof of
exposure. See Rubio, 613 F.3d at 1204. Moreover,
predominance is not defeated simply because there may be
“important matters . . . peculiar to some individual class
members.” Tyson, 136 S. Ct. at 1045; Local Joint Exec. Bd.
of Culinary/Bartender Tr. Fund v. Las Vegas Sands, Inc., 244
F.3d 1152, 1163 (9th Cir. 2001) (reversing denial of class
certification despite “some variation” in claims and “some
potential difficulty in proof”).
IV. The attorneys’ fees award was not an abuse of
discretion
The district court correctly calculated the attorney’s fee
award using the lodestar method and then cross-checked that
figure against the settlement’s estimated value to make the
factual finding that the “total amount of attorney’s fees
awarded in this case is far lower than . . . 25% of the
settlement figure.” The majority does not dispute this
methodology, but criticizes the award based on its own
miscalculation of the settlement’s value and the mistaken
belief that the court failed to address the objectors’ questions.
Opinion at 57–59. These are curious grounds for disapproval,
as the objectors do not rely on them, instead confirming at
oral argument that that their “only disagreement is with the
multiplier that was applied to a portion of the fees.” Oral
Argument at 17:01– 17:25. In fact, the concerns that the
objectors raised were addressed by the district court in several
hearings and rounds of supplemental briefing.
80 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
The majority states that the court failed to answer the
objectors’ questions about whether the Lifetime
Reimbursement Program (“LRP”) portion of the settlement
“could be attributed to the attorneys’ efforts in this litigation,”
implying that the LRP was instead the result of the EPA
investigation. Opinion at 58. But these questions were not
raised by the objectors and, in any event, are answered by the
district court’s finding that the investigation only played a
“part” in Defendants’ announcement of the LRP on
November 2, 2012. The LRP announcement came only after
almost a year of dispositive motions, discovery, depositions,
and expert reports, and just three weeks before a class
certification hearing. It is therefore more than reasonable to
infer, as the district court did, that this litigation pressured
Defendants to announce the LRP.
Certainly, the claims here were bolstered by the EPA’s
finding that Defendants’ fuel economy representations were
inflated. Yet other important elements of the class claims
remained unresolved. Where, as here, other “pivotal issue[s]”
remain, we have rejected objectors’ arguments that a federal
investigation merits a reduction in class counsel’s fees.
Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1048 n.3 (9th
Cir. 2002). And we have never before conjured arguments
not advanced by objectors to discredit class counsel’s role in
diligently litigating a case to settlement simply because, along
the way, an agency’s findings confirmed the claims’ viability.
To the contrary, we have upheld certification of nationwide
class actions even when they were filed after a federal
agency’s investigation established liability. See Hanlon,
150 F.3d at 1018.
Moreover, the record supports the district court’s finding
that attorneys’ fees were “far lower” than 25% of the
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 81
settlement value even if we count only the portion of the
settlement that is indisputably attributable to class counsel’s
efforts: LRP claims filed after December 31, 2013 (the
original LRP enrollment deadline that the settlement
extended). As reflected in several expert5 and other reports,
the net present value of LRP claims filed after that date
totaled more than $65 million by March 26, 2015, which was
still several months away from the July 6, 2015, claim
deadline.6 An attorneys’ fees award of $8.9 million is less
than 14% of this $65 million portion of the settlement.
The majority wrongly suggests that all class claims were
worth less than “$44,000,000 in total value.” Opinion at 48.
The reports from which it plucks that number make clear that
the $44 million reflected only lump sum payments for roughly
100,000 “completed claims” as of March 2015. That number
does not include the $65 million in LRP claims filed after
December 2013, nor the almost 42,000 “pending claims” that
had not yet been paid, nor any other claims to be submitted in
the more than three months before the July 6, 2015, claim
deadline. Not only that, the majority’s concerns about how
to account for class members who switched from the LRP to
a lump sum payment were addressed in expert reports that
5
These expert reports were filed in appeal No. 15-56014 on March
10, 2016.
6
That $65 million figure is the sum of the net present value of LRP
claims filed from January through December 2014 with Hyundai
($13,698,496) and Kai ($12,535,120), plus net present value of LRP
claims filed after that date with Hyundai ($21,862,156) and Kia
($17,655,276).
82 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
calculated the “incremental value” of the lump sum
payments. These reports were never challenged below.7
The majority also suggests that “this exact arrangement”
has been found to be “one of the ‘subtle signs’ of collusion.”
Opinion at 59–60 n.28 (quoting In re Bluetooth Headset
Prod. Liab. Litig., 654 F.3d 935, 943, 947 (9th Cir. 2011)).
This case could not be more different than Bluetooth, in
which the settlement paid the class “zero dollars” and
contained a “clear sailing” provision in which “defendants
agreed not to object” to an award of attorneys’ fees totaling
eight times the cy pres award, and a “kicker” clause whereby
“all fees not awarded would revert to defendants.” 654 F.3d
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. 943. Here, the
settlement has no clear sailing or kicker clauses, Defendants
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
7
These reports reflect a total settlement value of, conservatively
speaking, more than $159 million as of March 2015—three months before
the July 6, 2015, claim deadline. That $159 million reflects the sum of the
$65 million in LRP claims filed after December 31, 2013, another $50
million in LRP claims filed before that date, and $44 million in lump sum
payments. Given that the settlement totaled $159 million well before the
claim deadline, the district court was correct that the claims process was
on track to reach an estimated $210 million. Where, as here, a settlement
involves “a complicated formula from which valuable considerations of
several kinds are provided to the class members,” it is no abuse of
discretion to use a settlement’s “estimated value” when calculating fees.
Wing v. Asarco Inc., 114 F.3d 986, 990 (9th Cir. 1997).
IN RE HYUNDAI AND KIA FUEL ECON. LITIG. 83
members had plenty of opportunities to raise their concerns
at seven hearings over seventeen months. The majority has
“floated out the specter” of collusion, “but brought forth no
facts to give that eidolon more substance.” Negrete v. Allianz
Life Ins. Co. of N. Am., 523 F.3d 1091, 1099 (9th Cir. 2008).
Given that the objectors’ sole quibble is with the
multiplier used by the district court, and reviewing factual
findings for clear error, affirmance should be an easy call.
The district court’s findings about the “complexity” of the
work and the “risk” class counsel assumed by litigating this
case are exactly the kind of findings that justify an upward
lodestar adjustment. Hanlon, 150 F.3d at 1029. Based on
similar findings, we have affirmed fee awards totaling a far
greater percentage of the class recovery than the fees here.
See, e.g., Vizcaino, 290 F.3d at 1047–48 (no abuse of
discretion to award fees constituting 28% of the class’s
recovery given the “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”). The majority’s disregard of our usual deferential
review is deeply troubling.
* * *
In decertifying this class of hundreds of thousands of car
owners who were deceived, the majority effectively ensures
that “no one will recover anything.” In re Mego Fin. Corp.
Sec. Litig., 213 F.3d 454, 463 (9th Cir. 2000), as amended
(June 19, 2000). “Settlement at least allows damages for
some members of the class where damages might otherwise
84 IN RE HYUNDAI AND KIA FUEL ECON. LITIG.
be unobtainable for any member of the class.” Id. Because
the district court committed no error, I would affirm.