Sobel v. Hertz Corp.

• Decision Date: 09 October 2014
• Docket Number: No. 3:06–CV–00545–LRH–RAM.,3:06–CV–00545–LRH–RAM.
• Citation: 53 F.Supp.3d 1319
• Parties: Janet SOBEL and Daniel Dugan, Ph.D., individually and on behalf of all others similarly situated, Plaintiffs, v. The HERTZ CORPORATION, a Delaware corporation, Defendant.
• Court: U.S. District Court — District of Nevada

53 F.Supp.3d 1319

Janet SOBEL and Daniel Dugan, Ph.D., individually and on behalf of all others similarly situated, Plaintiffs,

v.The HERTZ CORPORATION, a Delaware corporation, Defendant.

No. 3:06–CV–00545–LRH–RAM.

United States District Court, D. Nevada.

Signed Oct. 9, 2014.

Arthur Stock, Susan S. Thomas, Berger & Montague, P.C., Philadelphia, PA, David B. Zlotnick, Krause Kalfayan, San Diego, CA, Jarrad C. Miller, Jonathan J. Tew, Richard D. Williamson, Robertson, Johnson, Miller & Williamson, John Albrecht, Truckee Meadows Community College, General Counsel RDMT 200, Reno, NV, for Plaintiffs.

G. David Robertson, Robertson, Johnson, Miller & Williamson, Reno, NV, for Plaintiffs and Defendant.

Dan C. Bowen, Bowen Hall Ohlson & Osborne, William E. Peterson, Snell & Wilmer, L.L.P., Reno, NV, Michael T. Brody, Ross B. Bricker, Jenner & Block LLP, Chicago, IL, for Defendant.

ORDER

LARRY R. HICKS, District Judge.

Before the Court is Plaintiffs Janet Sobel and Daniel Dugan's (“Plaintiffs”) Motion for Attorney Fees. Doc. # 411.¹ Defendant The Hertz Corporation (“Hertz”) filed a Response, Doc. # 432, to which Plaintiffs replied. Doc. # 441.

Also before the Court is Objectors William Andrews (“Andrews”) and Walter Weber's (“Weber”) Motion for Attorney Fees. Doc. # 409.² Plaintiffs filed a Response, Doc. # 434, to which Andrews and Weber replied. Doc. # 437. Hertz also filed a Response, Doc. # 431, to which Andrews and Weber replied. Doc. # 437.

Also before the Court is Objector Scott Schutzman's (“Schutzman”) Motion for Attorney's Fees. Doc. # 410; Doc. # 446. Plaintiffs filed a Response, Doc. # 433, to which Schutzman replied. Doc. # 438. Hertz also filed a Response, Doc. # 431, to which Schutzman did not reply.³

I. Facts and Procedural History

This is a class action filed on behalf of persons who rented cars from Hertz at the Reno and Las Vegas, Nevada airports. In return for the right to operate on-site at the Reno and Las Vegas airports, rental car companies like Hertz are required to pay a percentage of their gross revenues to the airports as “concession fees.” These companies, including Hertz, pass along the fees to their customers as surcharges labeled “airport concession recovery fees.” ⁴ At all relevant times, Hertz “unbundled” the surcharges from the base rental rate, such that the rental rate quoted to customers did not include the additional “airport concession recovery fee,” which was itemized separately in the rental agreement. Plaintiffs alleged that this practice violated Nevada Revised Statute (“NRS”) 482.31575, and the Court agreed. Doc. # 332.

On October 13, 2006, individual Plaintiffs Janet Sobel, Daniel Dugan, Ph.D., and Lydia Lee filed a Complaint against Defendants Hertz and Enterprise Rent–a–Car Company (“Enterprise”). Shortly thereafter, Enterprise was voluntarily dismissed without prejudice, Doc. # 5, and Lee's claims against Hertz were voluntarily dismissed with prejudice. Doc. # 50. Followingthe Court's denial of Hertz's Motion to Dismiss and the Ninth Circuit's denial of interlocutory review, the Court approved the parties' stipulation to bifurcate liability and damages, and to defer class certification proceedings. Doc. # 52. The parties then filed cross-motions for summary judgment on the issue of liability. Doc. # 78; Doc. # 81. On the relevant claim—Hertz's violation of NRS § 482.31575—the Court found in Plaintiffs' favor. Doc. # 111.

Following the Court's ruling on liability, Plaintiffs filed a motion for class certification on behalf of all Hertz customers who paid an airport concession recovery fee at Nevada airports between October 13, 2003, and September 20, 2009. Doc. # 112. The parties also commenced discovery on the issue of damages. About three months after the Court's liability ruling, the parties entered into settlement negotiations. After they reached an agreement in July 2010, the Court approved a stipulation staying all litigation pending further negotiations, documentation, and approval of a class action settlement. Doc. # 118.

On October 5, 2010, after further negotiations, Plaintiffs filed a motion seeking (1) preliminary approval of the settlement, (2) conditional certification of the settlement class, (3) approval of the form and manner of notice to the settlement class and the procedures for class members to register for settlement benefits, and (4) a schedule for proceedings leading to final approval of the settlement—all stipulated to by the parties for purposes of settlement only. Doc. # 123. The parties also stipulated to consolidate the Sobel case with former plaintiff Lee's reinstated action against Enterprise, docketed as Case No. 3:10–cv–326–LRH–VPC. The Court approved the stipulation to consolidate the Sobel and Lee cases, allowing Plaintiffs to file a Second Amended Complaint and staying all proceedings (except those relating to settlement) pending final approval of the proposed settlement. Plaintiffs filed their Second Amended Complaint on November 5, 2010. Doc. # 133.

Four days later, the Court held a hearing on Plaintiffs' motion for preliminary approval of settlement, conditional certification of the settlement class, and approval of the form of notice. Doc. # 123. After hearing arguments and taking the matter under submission, the Court entered two orders on November 23, 2010, granting conditional certification of the settlement class, Doc. # 135, and granting preliminary approval of the settlement and approving the form of notice. Doc. # 136. In particular, the Court (1) conditionally certified the settlement class under Fed.R.Civ.P. 23(b)(3), “in connection with and solely for purposes of settlement”; (2) appointed as class representatives the named plaintiffs, Janet Sobel; Daniel Dugan, Ph.D.; Lydia Lee; and Mark Singer; (3) appointed as class counsel the Law Office of David Zlotnick; Berger & Montague, P.C.; and Robertson & Benevento; (4) preliminarily approved the settlement; (5) entered a scheduling order for further motions; and (6) approved the form and manner of notice to the settlement class. From February 7 to 18, 2011, nearly 2.5 million notices were sent to class members. Of those, 1,217,894 notices were mailed or emailed to Hertz customers. Doc. # 229 at 3. After approximately two months, nearly 35,482 Hertz customers had registered for the benefits of the settlement—coupons whose value depended on the number of rentals that the customer had purchased. Id. Additionally, 2,068 opt-outs had been processed for Hertz. Id.

On May 17, 2011, the Court held a fairness hearing on Plaintiffs' motion for final approval of the settlement. Doc. # 185. After hearing arguments from Plaintiffs, Defendants, and appearing Objectors, includingAndrews, Weber, and Schutzman, the Court indicated that the motion for final approval would be denied, with a written order addressing all pending motions to follow. Doc. # 250. Through the terms of their earlier stipulations, the Court's denial of final approval nullified the parties' pre-settlement filings, including the stipulation to consolidate and the Second Amended Complaint. Consequently, the First Amended Complaint—with plaintiffs Sobel and Dugan and defendant Hertz—again governed the parties and claims before the Court in the Sobel action.

Thereafter, the stay on damages discovery lifted. Plaintiffs subsequently filed a motion to certify a class, Doc. # 255, and both parties filed motions for summary judgment on the issue of remedies. Doc. # 295; Doc. # 298. After an October 18, 2012 hearing and a further three-month stay for the purposes of renewed settlement negotiations, the Court certified Plaintiffs' class under Fed.R.Civ.P. 23(b) and found in favor of Plaintiffs on the issue of remedies. Doc. # 332. Specifically, the Court held that class members are entitled to the restitution of any airport concession recovery fees they paid to Hertz during the class period. Id. Thereafter, the Court approved notice to the class members and further ordered that Hertz bear the expense of notice. Doc. # 362. Hertz filed an interlocutory appeal before the Ninth Circuit challenging the Court's order directing Hertz to bear the cost of notice. Doc. # 365. On June 25, 2014, notice was sent to the class members. See Doc. # 408. Also on June 25, 2014, Plaintiffs and Objectors filed the present Motions for Attorney Fees. Doc. # 409; Doc. # 410: Doc. # 411.

II. DiscussionA. Class Counsel

This is a “hybrid” class action—it was initiated under a statute with a fee-shifting provision, but it reached a judgment creating a common fund. SeeNewberg on Class Actions, § 14:10 (4th ed.). Plaintiffs request an award of class counsel fees in the amount of twenty-five percent of the judgment, including prejudgment interest, as well as reimbursement of expenses in the amount of $432,211.39 to be paid by Hertz. Plaintiffs also request an incentive award for both of the named plaintiffs (Sobel and Dugan) in the amount of $10,000 each, to be paid by Hertz. Plaintiffs seek the above fee and cost award under the fee-shifting provisions of the Nevada statute that Hertz violated. The governing section states:

A short-term lessee may bring an action against a short-term lessor for the recovery of damages and appropriate equitable relief for any violation of NRS 482.3151 to 482.3159, inclusive. The prevailing party is entitled to recover reasonable attorney's fees and costs.

NRS. 482.31585 (emphasis added). Alternatively, Plaintiffs seek the above fee and cost award under the “common fund” doctrine, the common-law rule which permits recovery of fees from the damage award obtained. See Six (6) Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1311 (9th Cir.1990). As a practical matter, a fee award under the fee-shifting statute would not affect the amount of compensation that Plaintiffs and class members receive because the fee would be assessed against Hertz on top of any liability to Plaintiffs. In contrast, a fee award...