Exum v. Nat'l Tire & Battery
| Decision Date | 01 September 2020 |
| Docket Number | Case No. 9:19-cv-80121-Matthewman |
| Parties | Bruce Exum, Jr., and Emilie Palmer, individually and on behalf of all others similarly situated, Plaintiffs, v. National Tire and Battery, and TBC Corp., Defendants. |
| Court | U.S. District Court — Southern District of Florida |
THIS CAUSE is before the Court on the Plaintiffs' Unopposed Motion for Approval of Class Settlement and for Class Certification of Settlement Class, [DE 95], and upon Plaintiffs' Motion for an Award of Attorneys' Fees and Reimbursement of Expenses to Settlement Class Counsel and Payment of Service Award to Representative Plaintiffs. [DE 101]. The Motions are unopposed by the parties.
However, one objection was filed by a purported class member. [DE 103]. The Court ordered expedited briefing on the Objection. [DE 104]. The Court held a Final Approval Hearing, at which it also heard arguments related to the Objection, via Zoom video teleconference ("VTC") on July 17, 2020. [DE 104]. Thus, this matter is now ripe for review.
Having considered the briefing, the terms of the settlement agreement, the Objection and response thereto, the arguments of counsel and the Objector, the relevant caselaw, statutory and regulatory framework, and the other matters on file in this action, the Court GRANTS the motion for final approval.
In 1966, Congress passed the Safety Act "to prescribe motor vehicle safety standards for motor vehicles and motor vehicle equipment in interstate commerce[.]" 49 U.S.C. § 30101(1). Under the Act, the Secretary of Transportation and, through the Secretary, the NHSTA, are authorized to promulgate the regulations necessary to carry out and enforce the Act. See 49 U.S.C. §§ 105(d), 322(a); 49 C.F.R. §§ 1.81(a)(3), 1.95(a) (2019).
The Regulation at issue in this case, 49 C.F.R. § 574.8, requires independent tire dealers to register with the manufacturer new tires sold to consumers by (1) physically giving the purchaser a paper copy of the tire registration form; (2) electronically transmitting the registration form to the purchaser within 30 days of the date of sale; or (3) providing the manufacturer with the paper tire registration form and the purchaser's contact information. See 49 C.F.R. § 574.8(a)(1)(i)-(iii).
The Safety Act provides "its own extensive array of administrative remedies for a violation of its notification obligations." Ayres, 234 F.3d at 522. For example, the Secretary may determine that a motor vehicle or a piece of a motor vehicle (such as a tire) is defective and either order the manufacturer to notify the owners of the defect or "take specified action." 49 U.S.C. §§ 30118(b), (e). Either the Secretary or "any interested person" may request a hearing to determine whether a "manufacturer has reasonably met the notification requirements under this section." Id. at § 30118(e). Finally, the Attorney General is authorized to bring civil actionsagainst dealers that violate the Safety Act's notification requirements with violations punishable by fines of up to $1,000 per violation and up to $800,000 for a series of related violations. 49 U.S.C. §§ 30163(a), 30165(a).
Defendant NTB is an independent tire dealer incorporated in Delaware with its principal place of business in Florida. NTB is a wholly-owned subsidiary of Defendant TBC. [DE 1 ¶¶ 12-14]. TBC is an independent tire dealer incorporated in Delaware with its principal place of business in Florida. [DE 1 ¶ 15]. NTB allegedly "maintains and operates more than 1200 locations in 41 states," the District of Columbia, and Canada. Id.
Plaintiffs Bruce Exum, Jr., and Emilie Palmer, both of Virginia, allegedly purchased tires from NTB in January, 2019. [DE 1 ¶¶ 42, 43]. But, according to the Complaint, NTB failed to provide either of them with a tire registration form or transmit their registration forms to the tire manufacturers, as required under 49 C.F.R. § 574.8. Id.
On January 29, 2019, Plaintiffs filed their Complaint against Defendants, asserting seven causes of action, all related to Defendants' alleged failure to comply with 49 C.F.R. § 574.8's tire registration requirement.1 [DE 1]. Plaintiffs also sought certification of a class of similarly situated plaintiffs who all purchased allegedly unregistered tires from Defendants. [DE 49]. Defendants opposed Plaintiffs' motion to certify the class. [DE 50].
Defendants moved to dismiss the Complaint with prejudice.2 [DE 30]. By Order dated January 28, 2020 [DE 84], the Court granted in part and denied in part the Motion to Dismiss,finding that (1) Plaintiffs had standing under Article III to bring this suit; (2) the lack of a private right of action in the Safety Act and the Regulation does not necessarily preclude Plaintiffs' claims; (3) Plaintiffs had alleged sufficient facts to support their claims; and (4) Plaintiffs had adequately pleaded Counts I, II, IV, V, and VI. Counts III and VII, however, were dismissed without prejudice.
The parties proceeded to discovery and engaged in substantial motion practice, see DEs 44, 48, 53, 60, 62, 63, 87. Discovery activities included production by Defendants of nearly 3,000 documents, and depositions of the named Plaintiffs and three of Defendants' current or former employees, and a partial deposition under Fed. R. Civ. P. 30(b)(6). The parties participated in a mediation before Mediator Rodney Max. [DE 81]. The mediation took place on November 8, 2019, but was ultimately unsuccessful. Litigation continued. Then, on February 7, 2020, the parties filed a Stipulation of Settlement, notifying the Court that "the matter has been fully compromised and settled this day." [DE 89]. The Court entered an order staying the case and denying all pending motions as moot.
In Plaintiffs' Unopposed Motion for Approval of Class Settlement and for Class Certification of Settlement Class [DE 95], Plaintiffs moved for class certification pursuant to Rules 23(a) and (b)(2), to be defined as:
All persons in the United States and its territories who purchased a tire from Defendants or their company-owned subsidiaries during the Class Period for their personal use, rather than for resale or distribution, where Defendants did not provide them with a registration card, send in a card to the manufacturer for them, or electronically transmit their information to the tire manufacturer within 30 days of purchased. Excluded from this Class areDefendants' current or former officers, directors, employees, Defendants' parent entities, or any entity in which Defendants have a controlling interest; counsel for Plaintiffs and Defendants; and the judicial officer to whom this lawsuit is assigned.
Plaintiffs also submitted to the Court the proposed Settlement Agreement [DE 95-2], where, generally, the Defendants have agreed to (1) change their tire-registration practices; (2) pay an incentive award of $7,500 to each of the two named class representatives; and (3) pay $645,000 in attorneys' fees and costs plus additional costs related to a second February 7, 2020 mediation between the parties. The primary paragraphs of the Settlement Agreement are as follows:
The Court preliminarily approved the Class Settlement and Certified the Settlement Class under Federal Rule of Civil Procedure 23(a) and (b)(2). See [DE 98]. The Court preliminarily found that (a) the Class is so numerous that joinder of all members is impracticable; (b) there are questions of law or fact common to the Class; (c) Plaintiffs' claims are typical of those of the Class; and (d) Plaintiffs will fairly and adequately protect the interests of the Class.
Additionally, after balancing the benefits of formal notice to the Settlement Class withthe risks and costs associated therewith, the Court declined to require formal notice. The Court found that, because the Settlement Class was so numerous and geographically disparate, the costs would deter the pursuit of class relief, which sought to remedy a violation of important federal consumer safety regulations. To that end, the Settlement Class contained more than one thousand customers each year, see [DE 49-1], during the Class Period, which began on January 29, 2014, and continues to this day. Counsel represented that the costs associated with directing notice to each member of the class could exceed $1.00 per member. Despite the foregoing, the Court ensured that Notice of the Settlement...
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