United States District Court, S.D. Ohio, Western Division
ORDER GRANTING IN PART CLASS COUNSEL'S MOTION FOR
ATTORNEYS' FEES, COSTS, AND CLASS REPRESENTATIVE AWARDS,
GRANTING REQUEST TO RECEIVE EXPERT TESTIMONY, AND GRANTING
REQUEST FOR STATUS CONFERENCE
J. Dlott United States District Court Judge.
matter is before the Court on Class Counsel's Motion for
Attorneys' Fees, Costs, and Class Representative Service
Awards. (Doc. 42.) Plaintiffs request approval of $7, 188,
846.25 in attorneys' fees, $41, 194.77 in expenses,
$3, 000 in service awards for each of the two named
Plaintiffs. Although Defendants Vita-Mix Corporation,
Vita-Mix Management Corporation, and Vita-Mix Manufacturing
Corporation (collectively, “Vita-Mix”) do not
object to expenses or service awards, they strongly oppose
the request for attorneys' fees. For the reasons that
follow, the Court will approve an award of expenses and
service awards. Although the Court will award reasonable
attorneys' fees in this case, it is unable to issue a
final ruling on fees until it receives supplemental filings
as detailed herein.
Background and Procedural History
Case History and Settlement
consumer class action was filed on November 19, 2015.
Plaintiffs alleged that Vitamix blenders were defective because a
seal in the container deposited tiny black
polytetrafluoroethylene (“PTFE”) flecks into the
blended food and drink. (Doc. 1.) Plaintiffs filed a First
Amended Class Action Complaint on February 26, 2016, seeking
certification of a nationwide class of purchasers of Vitamix
blenders and asserting the following claims: (1) breach of
express warranty; (2) breach of implied warranty of
merchantability; (3) negligent design, engineering, and
manufacture; (4) fraud and fraudulent concealment; (5) unjust
enrichment; (6) breach of contract; and (7) violation of the
Ohio Consumer Sales Practices Act. (Doc. 18.)
April 2016, Defendants filed a motion for partial dismissal
of this action (Doc. 20) as well as an answer with a jury
demand (Doc. 21). The parties also engaged in substantial
discovery, which included written discovery, the production
of thousands of pages of documents, discovery from third
parties, product testing, a corporate representative
deposition, and depositions of several fact witnesses. (Doc.
35-2 at PageID 471.)
the dismissal motion was pending, the parties began
settlement negotiations and attended a settlement conference
before United States District Court Judge Michael R. Barrett
on August 3, 2016. Although no settlement was reached,
ongoing negotiations continued. The parties met for an
additional conference with the Honorable Michael R. Barrett
on November 30, 2016, at which the parties negotiated a
Memorandum of Understanding of substantive terms for a
settlement. The parties spent the early part of 2017
negotiating the details of a Class Action Settlement
Agreement and Release (“Settlement Agreement”)
(Doc. 35-2). However, as set forth in the Settlement
Agreement, the parties did not reach an agreement on the
amount of attorneys' fess and expenses Vita-Mix would pay
to class counsel, except that the parties agreed class
counsel is entitled to an award of attorneys' fees and
expenses and that Defendants have a right to object to and
contest a fee application. (Id. at 471.)
September 2017, Plaintiffs filed an amended motion for
preliminary approval of the Class Action Settlement. (Doc.
35.) Section 3.8 of the Settlement Agreement identified the
following Class for purposes of a settlement:
All Persons domiciled within the United States and its
territories who: (a) own a Vita-mix household blender with a
blade assembly dated on or after January 1, 2007 but before
October 1, 2016; or (b) own a Vita-mix commercial blender
that was (i) purchased on or after September 15, 2015 but
before August 9, 2016 or before April 7, 2017 in the case of
a commercial blender from the XL product line, (ii) never
used in connection with the Replacement Seal, and (iii)
purchased through a third-party, such as a dealer,
distributor, or restaurant supply store and not acquired
directly from Vita-Mix. Excluded from the Class are
Defendants and their officers and directors; Class Counsel
and their partners, associates, lawyers, and employees; and
the judicial officers and their immediate family members and
associated Court staff assigned to this case. Also excluded
from the Class are persons who own one or more of the
blenders described in this Section received as a benefit,
gift, award, or compensation directly from Vita-Mix in
connection with such person's work for Vita-Mix unless
such person separately purchased any blender(s) described in
this Section, in which case their eligibility for class
membership and benefits is limited to any such purchased
(Doc. 35-2 at PageID 476.) Those Class Members described
under Section 3.8(a), the consumer class, may select either a
Gift Card, subject to terms and conditions, or a Replacement
Blade Assembly subject to terms and conditions. (Id.
at PageID 494, § 6.3(a).) All other Class Members, or
those who purchased commercial blenders, are eligible for a
Replacement Blade Assembly. (Id. at PageID 494,
§ 6.3(b).) A Replacement Blade Assembly is a
“blade assembly containing a Replacement Seal”
and “does not include a container, lid, or anything
else for use with a Vita-Mix blender.” (Id. at
PageID 481.) A “Replacement Seal” is a
“blade assembly top seal employing different materials
and technology from the seal incorporated into Vita-Mix
household and commercial blenders beginning in January
2007” for which independent testing indicates does not
produce black flecks that prompted the lawsuit.
Card is defined as “an electronic gift card subject to
the terms and conditions set forth in Section 6.4[.]”
(Id. at PageID 478.) Gift Cards are subject to the
following terms and conditions:
a. Each Gift Card will be issued in the face amount of $70,
except as described in Section 6.4(b) below.
b. Class Members described in Section 3.8(a) above who own
multiple blenders within their household or at the same
address are eligible for a Gift Card in the face amount of
c. Defendants together with the Settlement Administrator will
design electronic Gift Cards. Class Counsel will review and
approve the form of Gift Card before they are provided to any
Class Member. Class Counsel's approval will not be
d. Each Gift Card will include a unique authorization code
identifying the Gift Card as valid.
e. Each Gift Card or unique authorization code may be used
one time for or toward the purchase of any Vita-Mix blender
or container. Any unused amount will be forfeited and will
not be refunded or credited to the user or any account
affiliated with the user.
f. Gift Cards may only be used at the Vita-Mix website
(www.vitamix.com) or any Vita-Mix Store.
g. Gift Cards are transferable, have no expiration date, and
may be used in connection with any promotion. However, no
more than two (2) Gift Cards each with a face amount of $70
or one (1) Gift Card with a face amount of $140 may be used
in a single transaction or by a single household or address.
h. Within sixty (60) days of the Effective Date, Defendants
will directly deliver by mail or electronic mail Gift Cards
to Class Members who selected them as a benefit and who
submit Valid Claims.
(Id. at PageID 494-95.) On May 3, 2018, the Court
entered an Order Granting Final Approval of Class Action
Settlement, but reserved the issue of attorneys' fees,
costs, and service awards for a separate ruling. (Doc. 91).
Litigation of Attorneys' Fees, Costs, and Class
parties' dispute over an award of attorneys' fees has
dominated the docket of this case since Plaintiffs'
Motion for Attorneys' Fees, Costs, and Class
Representative Service Awards (Doc. 42) was filed on January
31, 2018. Initially, the Motion was filed without the support
of time sheets and the professional background information of
its billing attorneys so as to understand the requested
billing rates of counsel. After the Court ordered that this
additional information be supplied, Class Counsel filed a
Supplemental Brief in Support of Motion for Attorneys'
Fees, Costs, and Class Representative Service Awards (Doc.
47) as well as supporting affidavits from the attorneys and
paralegals who worked on this case (Doc. 48) and affidavits
of the named plaintiffs (Doc. 49). Class Counsel also filed
time entries from July 14, 2015 to February 22, 2018 with a
privilege log (Doc. 50) and submitted an unredacted version
for in chambers review (Doc. 53). Class Counsel subsequently
filed an amended and corrected version of their time entries
March 14, 2018, Defendants filed a Response in Opposition to
Class Counsel's Motion for Attorneys' Fees (Doc. 72),
supported by 230 pages of exhibits (Doc. 70). Defendants also
moved the Court pursuant to 28 U.S.C. § 1712(d) to
consider expert testimony by Stephen L. Buffo. (Doc. 69).
April 10, 2018, Class Counsel filed a Reply in Support of
their Motion for Attorneys' Fees, Costs, and Class
Representative Service Awards (Doc. 87), which included an
updated lodestar calculation from January 27, 2018 through
April 6, 2018 (Doc. 87-3). They also filed redacted time
entries (Doc. 88), unredacted time entries for in camera
review by the Court (Doc. 89), and amended redacted time
entries (Doc 90).
leave of Court, on June 19, 2018, Defendants filed a Surreply
Opposing Class Counsel's Motion for Attorneys' Fees
(Doc. 109), with over 250 pages of supporting exhibits (Docs.
104, 105). On June 28, 2018, the Court held a hearing on the
matter of attorneys' fees, expenses, and service awards
(Doc. 115). At the conclusion of the hearing, the Court
requested that Class Counsel submit time records and claims
data through mid-November 2018 when claims data was expected
to be more complete. That deadline was subsequently extended
at the request of the parties.
November 30, 2018, Class Counsel filed unredacted detailed
time entries from April 7, 2018 through November 23, 2018
with a privilege log (Doc. 131), redacted time entries and
supporting affidavits (Doc. 132), updated claims data (Docs.
133, 134), and a supplemental brief (Doc. 135). On December
21, 2018, Defendants filed a Notice of a year-old Offer of
Judgment of attorneys' fees and expenses “up to $3,
100, 000.00[.]” (Doc. 137-1 at PageID 4993.) Defendants
also filed a supplemental brief (Doc. 142) supported by over
400 pages of affidavits and exhibits (Doc. 141). Despite
lengthy continued settlement negotiations, in May 2019, the
Court was advised that the parties were unable to resolve the
dispute over attorneys' fees through mediation.
following Class Members filed objections relating to an award
of attorneys' fees in this case: Kamala Bennett, Chris
Brenn, Richard Burlingame, Elizabeth M. Cosin, Thomas L. Cox,
Jr., Esq., Franklin DeJulius, Ryan Gibbs, Jon Lorenzo,
Avigail Ruth Short, and Todd A. Thomas. Gibbs also objected
to service awards. These objections will be addressed
Request for Attorneys' Fees, Expenses, and Service
Authority to Award Fees and Expenses
Counsel move the Court to approve an award of attorneys'
fees in the amount of $7, 188, 846.25 and expenses in the
amount of $41, 194.77 under Fed.R.Civ.P. 23(h) and section
5.2(b) of the Settlement Agreement. “In a certified
class action, the court may award reasonable attorney's
fees and costs that are authorized by law or by the
parties' agreement upon motion under Fed.R.Civ.P.
54(d)(2) and 23(h).” Lowther v. AK Steel
Corp., No. 1:11-cv-877, 2012 WL 6676131, at *1 (S.D.
Ohio Dec. 21, 2012).
assessing the reasonableness of a fee petition, the district
court has the discretion to select the method by which it
calculates an award of fees: either the
percentage-of-the-fund approach or the lodestar approach.
In re Cardinal Health Inc. Sec. Litig., 528
F.Supp.2d 752, 760 (S.D. Ohio 2007). The
“lodestar” is the number of hours reasonably
expended on litigation multiplied by a reasonable hourly
rate, and it is presumed to yield a reasonable fee. City
of Burlington v. Dague, 505 U.S. 557, 562 (1992);
Gonter v. Hunt Valve Co., Inc., 510 F.3d 610, 616
(6th Cir. 2007). The percentage-of-the-fund method is when
the Court determines a percentage of the settlement to award
to class counsel. In re Telectronics Pacing Sys.,
Inc., 137 F.Supp.2d 1029, 1041 (S.D. Ohio 2001).
District courts typically have discretion to select the more
appropriate method for calculating attorneys' fees in
light of the circumstances of the actual case before it.
Id. at 1044.
Court must ensure that the fee ultimately awarded is
reasonable under the circumstances in consideration of six
factors: (1) the value of the benefit to the class; (2) the
value of the services on an hourly basis; (3) whether
attorneys took the case on contingency; (4) rewarding
attorneys who produce societal benefits in order to maintain
an incentive for others; (5) the litigation's complexity;
and (6) the professional skill and standing of class and
defense counsel. Chapman v. Tristar Prods., Inc.,
Nos. 16-cv-1114, 17-cv-2298, 2018 WL 3752228, at *3 (N.D.
Ohio Aug. 3, 2018) (Gwinn, J.) (citing Bowling v. Pfizer,
Inc., 102 F.3d 777, 780 (6th Cir. 1996)).
Court finds that it has sufficient authority per the
agreement of the parties in the Settlement Agreement to award
attorneys' fees, expenses, and service awards. Rule 23(h)
states that “[i]n a certified class action, the court
may award reasonable attorney's fees and nontaxable costs
that are authorized by law or by the parties'
agreement.” Fed.R.Civ.P. 23(h). Under Section 5.2(b) of
the Settlement Agreement, the parties agreed that by January
31, 2018, Class Counsel shall file their Fee Application.
(Doc. 35-2 at PageID 511.) The “Fee Application”
is defined as “the application to be filed by Class
Counsel no later than January 31, 2018 by which they will
seek an award to be paid by Defendants of attorneys' fees
and reimbursement of costs incurred by them in prosecuting
the Lawsuit, as well as Service Awards to be paid to the
Class Representatives and reimbursement by Defendants for
Administration and Notice Expenses.” (Id. at
PageID 478.) Section X governs the Fee Application as
10.1 Class Counsel shall file a Fee Application for an award
of Attorneys' Fees and Expenses, including Administration
and Notice Expenses, no later than January 31, 2018 pursuant
to Rule 23(h), Rule 54(d)(2),  and the Court's Local Rules.
10.2 The Parties have not reached any agreement on the amount
of Attorneys' Fees and Expenses Defendants will pay to
Class Counsel, except that the Parties agree Class Counsel is
entitled to an award of Attorneys' Fees and Expenses and
that Defendants have the right to object to and to contest
Class Counsel's Fee Application. Defendants have no
liability or obligation with respect to any Attorneys'
Fees and Expenses, Administration and Notice Expenses, or
Service Award to the Named Plaintiffs except as awarded by
the Court. Class Counsel agree that upon payment to Class
Counsel of any amounts awarded by the Court, Defendants'
obligations to Class Counsel with respect to any
Attorneys' Fees and Expenses or Service Award to the
Named Plaintiffs shall be fully satisfied and discharged. It
is not a condition of the Settlement or this Agreement that
the Court award any particular amount of Attorneys' Fees
and Expenses or any particular amount as a Service Award.
Either Party has the right to appeal a Court award of
Attorneys' Fees and Expenses.
10.3 If the Court makes an award of Attorneys' Fees and
Expenses, Defendants will pay such award within ten (10)
business days following the Effective Date or following the
entry of a final, non-appealable order relating to Service
Awards or to Attorneys' Fees and Expenses, whichever is
(Id. at PageID 511-12.) “Attorneys' Fees
and Expenses” is defined as “the amount of any
attorneys' fees and reimbursement of litigation costs
awarded to Class Counsel under their Fee Application.”
(Id. at PageID 475.)
Authority to Award Service Awards
Counsel also seek $3, 000 service awards for each of the two
named Plaintiffs. In an addition to addressing the matter of
attorneys' fees and expenses, the Settlement Agreement
carves out authority for the Court to issue Service Award
payments to the named Plaintiffs:
Subject to approval by the Court, Defendants will also pay
each of the Named Plaintiffs a Service Award pursuant to the
provisions of this Section. Each Service Award will consist
of a $3, 000.00 payment to each of the Named Plaintiffs
solely as compensation for their time and effort associated
with their participation in this Lawsuit.
(Id. at PageID 510.) “Service Award” is
defined as “a reasonable payment, subject to Court
approval, made to each of the Named Plaintiffs to compensate
for his or her efforts in pursuing the Lawsuit.”
(Id. at PageID 481.) Having found that the Court has
authority to consider and award attorneys' fees,
expenses, and service awards per the agreement of the
parties, the Court will turn to the merits, starting with the
matter of attorneys' fees and expenses.
Effect of Class Action Fairness Act on Attorneys' Fee
Settlement Agreement establishes, there are two classes to
the settlement, a commercial class, eligible only for a
Replacement Blade Assembly, and a household/consumer class,
eligible for either a Replacement Blade Assembly or the Gift
Card. Defendants argue that the Gift Card option is a
“coupon, ” and the Class Action Fairness Act
(“CAFA”), 28 U.S.C. § 1712 therefore
controls the manner by which an award of attorneys' fees
is to be calculated. Plaintiffs argue that this is not a
coupon settlement because the primary benefit is a
Replacement Blade Assembly, not a Gift Card, and that CAFA
does not control calculation of attorneys' fees. The
Court will address this threshold dispute before considering
the merits of the fee request.
passed CAFA ‘primarily to curb perceived abuses of the
class action device.'” In re HP Inkjet Printer
Litig., 716 F.3d 1173, 1177 (9th Cir. 2013) (citing
Tanoh v. Dow Chem. Co., 561 F.3d 945, 952 (9th Cir.
2009)). “One such perceived abuse is the coupon
settlement, where defendants pay aggrieved class members in
coupons or vouchers but pay class counsel in cash.”
Id. (citing generally Sarah S. Vance, A
Primer on the Class Action Fairness Act of 2005, 80 Tul.
L. Rev. 1617, 1632-33 (2006); Geoffrey P. Miller & Lori
S. Singer, Nonpecuniary Class Action Settlements, 60
Law & Contemp. Probs. 97, 102, 107-12 (1997)). CAFA
codifies Congress's effort to regulate coupon settlements
through increased judicial scrutiny of coupon settlements
generally and rules governing the award of attorneys'
fees in coupon cases. Id. at 1178; 28 U.S.C.
term “coupon” is undefined by CAFA. In Tyler
v. Michaels Stores, Inc., 150 F.Supp.3d 53, 60 (D. Mass.
2015), the district court held that a “coupon”
under 28 U.S.C. § 1712 is “when class members must
transact business with the defendant to obtain the benefit of
the settlement.” For those Class Members who elect a
Gift Card benefit under the Settlement Agreement, the
definition is apt here, as Gift Cards may only be used to
purchase a blender or container directly from the Vita-Mix
website or Vita-Mix store. (Doc. 35-2 at PageID 495.) It is
undisputed that Class Members will have to spend money to
utilize their Gift Card, as Vita-Mix containers and blenders
generally exceed the $70 Gift Card face value. A quick review
of the vitamix.com website confirms that blenders start at
list price of $289.95 and blender containers start at a list
price of $144.95. Vitamix.com,
https://www.vitamix.com/us/enus/shop/Blenders (last visited
May 23, 2019). In addition to having to spend money to
utilize the Gift Cards, other limitations restrict their use.
Gift Cards are good for one-time use and unused funds are
forfeited; Gift Cards may only be redeemed directly with
Vita-Mix and not third-party retailers; such as Costco; and
no more than two Gift Cards may be stacked. The Court is
satisfied that these attributes considered together render
the Gift Cards coupons under 28 U.S.C. § 1712. See
also Chapman, 2018 WL 3752228, at *4 (finding
“credits” to be coupons under CAFA).
U.S.C. § 1712 controls calculation of attorneys'
fees involving a coupon settlement. The language of the
statute, widely agreed to be confusingly drafted,
(a) Contingent fees in coupon settlements.
-- If a proposed settlement in a class action provides for a
recovery of coupons to a class member, the portion of any
attorney's fee award to class counsel that is
attributable to the award of the coupons shall be based on