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Riaubia v. Hyundai Motor America

United States District Court, E.D. Pennsylvania

August 7, 2019

JOSHUA RIAUBIA, individually and on behalf of all others similarly situated, Plaintiff,
v.
HYUNDAI MOTOR AMERICA Defendant.

          MEMORANDUM

          Lynne A. Sitarski United States Magistrate Judge.

         Pending before the Court is Plaintiff's Unopposed Motion for Certification of Settlement Class, Preliminary Approval of Settlement, Appointment of Class Counsel, and Approval of Class Notice (ECF No. 42).[1] Plaintiff Joshua Riaubia (“Plaintiff”) and Defendant Hyundai Motor America (“Defendant”) have agreed to a class action settlement that will resolve the instant matter, in which Plaintiff alleges that Defendant's 2015, 2016, and 2017 Hyundai Sonata U.S. specification vehicles equipped with the Smart Trunk feature were defective, as their hands-free, proximity-activated trunks did not fully open. For the following reasons, Plaintiff's Motion will be GRANTED.

         I. BACKGROUND

         A. Factual Background and Procedural History

         In August of 2014, Plaintiff purchased a 2015 Hyundai Sonata Limited equipped with the Smart Trunk Feature. (Complaint ¶ 9, ECF No. 1). The Smart Trunk allowed consumers to open their vehicles' trunks “hands-free” by standing directly behind the vehicle while holding a key fob. (Id. ¶¶ 14, 17). Plaintiff's Smart Trunk opened only a few inches. (Id. ¶ 76). Plaintiff consulted with counsel, who discovered dozens of similar complaints from owners of Hyundai Sonatas. Thus, on September 28, 2016, Plaintiff filed the instant class action on behalf of himself and others similarly situated. (Pl.'s Br. 2). In response, on December 23, 2016, Defendant filed a Motion to Dismiss, (ECF No. 2), which Judge Jones denied in full on August 22, 2017. (ECF No. 22). Thereafter, on October 6, 2017, Defendant filed its Answer. (ECF No. 29).

         The parties then began discussing the possibility of mediation, and filed a joint stipulation requesting to stay the litigation proceedings pending mediation. (Stipulation, ECF No. 31). During their initial mediation session before David Geronemus of JAMS, held in New York City on January 9, 2018, the parties made some progress towards reaching a resolution. (Pl.'s Br. 5). On May 15, 2018, a second mediation session was held, and the parties executed a term sheet wherein they set forth the majority of terms that would be agreed to in the eventual settlement. (Id.) On February 15, 2019, Plaintiff filed the instant unopposed Motion. By Order dated July 3, 2019, Judge Jones referred the Motion to me for disposition. (Order, ECF No. 45).

         B. The Proposed Class Action Settlement

         The terms of the proposed class action settlement are set forth in the Settlement Agreement, (Declaration of Natalie Finkelman Bennett Ex. 1, ECF No. 42-3), and are outlined below.

         1. The Proposed Settlement Class

         The Settlement Agreement provides for a Settlement Class defined as follows:

All persons or entities in the fifty United States and the District of Columbia who currently own or lease, or previously owned or leased, a model year 2015 to 2017 U.S. specification Hyundai Sonata vehicle equipped with the Smart Trunk feature purchased in the fifty United States and the District of Columbia.

(Pl.'s Br. 5-6). Excluded from the Settlement Class are:

Defendant, as well as Defendant's affiliates, employees, suppliers, officers, and directors, attorneys, agents, insurers, and dealers; third-party providers of extended warranty/service contracts; independent repair/service facilities; the attorneys representing Defendant in this case; the judges and mediator to whom this case is assigned and their immediate family members; all persons and entities who request exclusion from (opt-out of) the Settlement; all persons and entities who previously released any claims encompassed in this Settlement or whose vehicle was permanently transported outside the United States; and all persons or entities claiming personal injury or property damage other than to a Class Vehicle or claiming subrogation of such claims.

(Id. at 6).

         2. The Proposed Settlement Terms

         In exchange for a release of Settlement Class members' claims against Defendant, the Settlement Agreement states that Defendant will provide Settlement Class members with: (1) a cash payment in the form of a $50 debit card or $100 dealer credit; (2) replacement of the defective parts of Class vehicle trunks, followed by a second replacement if necessary; (3) a warranty extension; and (4) reimbursement of any previous repair costs they incurred in their efforts to fix the Smart Trunk feature of the Class vehicle. (Pl.'s Br. 6).

         Defendant will be responsible for bearing the cost of providing Class members with notice of the Settlement Agreement. Defendant's Consumer Affairs Division, serving as the Settlement Administrator, will be responsible for providing Class members with notice, as well as appropriate state and federal officials, in accordance with the Class Action Fairness Act, 28 U.S.C. § 1715. (Id. at 9). The Administrator will send Class members notice via first class mail, and will resend any returned notices that contain an address correction or forwarding address. (Id. at 10). The Administrator will also maintain a website where Class members can get more information about the Settlement Agreement, and where they can submit claims either online or via email. (Id.).

         II. LEGAL STANDARD

         Under Federal Rule of Civil Procedure 23(e), the settlement of a class action requires court approval. Fed.R.Civ.P. 23(e)(2). “Thus, when a district court is presented with a class settlement agreement, the court must first determine that the requirements for class certification under Rule 23(a) and (b) are met, and must separately determine that the settlement is fair to the class under [Rule] 23(e).” In re Nat'l Football League Players Concussion Injury Litig., 775 F.3d 570, 581 (3d Cir. 2014) (citations and internal quotation marks omitted). These procedures aim to provide “transparency for class members and authority to the district court to act as a fiduciary for putative class members by ‘guarding the claims and rights of absent class members.'” Id. (quoting Ehrheart v. Verizon Wireless, 609 F.3d 590, 593 (3d Cir. 2010)).

         Review of a proposed class action settlement generally occurs in two stages. At this preliminary stage, counsel submits the proposed settlement terms to the Court, and the Court then makes a “preliminary fairness evaluation.” In re Nat'l Football League Players' Concussion Injury Litig., at 582 (quoting Manual for Complex Litigation § 21.632). “If the proposed settlement is preliminarily acceptable, the court then directs that notice be provided to all class members who would be bound by the proposed settlement to afford them an opportunity to be heard, opt out of the class, or object to the settlement.” Silvis v. Ambit Energy L.P., No. 14-5005 2018 WL 1010812 at *3 (E.D. Pa. Feb. 22, 2018) (citing Fed.R.Civ.P. 23(c)(3), (e)(1), (e)(5); Manual for Complex Litigation § 21.633). Once notification has occurred, the Court then conducts the formal “fairness hearing” provided for in Rule 23(e)(2). Id. (citing Manual for Complex Litigation § 21.633). After the Court determines that the settlement is “fair, reasonable, and adequate, ” it gives the settlement its final approval. Fed.R.Civ.P. 23(e)(2).

         Courts sitting in this procedural posture:

should make clear that they are making a ‘preliminary determination' on class-action certification for the purpose of issuing notice of settlement, and that they are reserving the issuance of a certification order until after a fairness hearing. The certification order ultimately issued must necessarily be entered before the district court approves the class settlement but need not occur before providing notice under Rule 23(e)(1). Permitting a district court to manage a settlement class in this manner provides the flexibility needed to protect absent class members' interests and efficiently evaluate the issues of class certification and approval of a settlement agreement.

In re Nat'l Football League Players Concussion Injury Litig., 775 F.3d at 586 (internal citations omitted).

         III. ...


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