Robert Ponzio, et al v. Emily Pinon, et al v., No. 21-14503 (11th Cir. 2023)
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Mercedes-Benz USA and Daimler AG have sold and leased a number of different Mercedes-Benz vehicles painted in a color called 590 Mars Red. Either due to a defect in the paint or some other reasons the paint on some of these vehicles has deteriorated. Emily Pinon is the owner/lessee of a Mercedes-Benz vehicle painted in Mars Red. Ms. Pinon asserted numerous claims under federal and state law. The third amended class action complaint, the operative pleading, named six other individuals as plaintiffs: (collectively the “Pinon plaintiffs”). The Pinon plaintiffs submitted a motion for preliminary approval of the proposed class action settlement agreement and preliminary certification of the nationwide settlement. Collaboration between the Pinon plaintiffs and the plaintiffs in the District of New Jersey action (collectively the “Ponzio objectors”) failed. The district court rejected the contention of the Ponzio objectors that the settlement agreement failed to provide benefits to the great majority of the class members.
The Eleventh Circuit affirmed. The court held that the district court did not abuse its discretion in approving the class action settlement. The court explained that it rejects the Ponzio objectors’ argument that “the economic interests of substantial portions of the [c]lass [m]embers are in substantial conflict” and the “interests of the [Pinon] class representatives are not aligned with, and are actually antagonistic to, the interests of a majority of [c]lass [m]embers. The court explained that it was satisfied that the district court took the objections of the Ponzio objectors seriously and, after rejecting those objections, acted within its discretion in approving the settlement agreement.
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USCA11 Case: 21-14503 Document: 70-1 Date Filed: 11/27/2023 Page: 1 of 42 [PUBLISH] In the United States Court of Appeals For the Eleventh Circuit ____________________ No. 21-14503 ____________________ ROBERT PONZIO, ALEX ACUNA, BRIAN MADSEN, VANESSA M. MONTGOMERY, ROBERT MULL, HADIYA NELTHROPE, SAMUEL SALGADO, FREDERICK J. PARKER, On behalf of themselves and all others similarly situated, Interested Parties-Appellants, versus EMILY PINON, GARY C. KLEIN, KIM BROWN, USCA11 Case: 21-14503 Document: 70-1 2 Date Filed: 11/27/2023 Opinion of the Court Page: 2 of 42 21-14503 JOSHUA FRANKUM, TODD BRYAN, DINEZ WEBSTER, Plainti s-Appellees, DAIMLER AG, MERCEDES BENZ USA, LLC, Defendants-Appellees. ____________________ Appeal from the United States District Court for the Northern District of Georgia D.C. Docket No. 1:18-cv-03984-MHC ____________________ Before JORDAN, NEWSOM, and ED CARNES, Circuit Judges. JORDAN, Circuit Judge: In this class action case, objectors to a proposed settlement agreement claimed that it left 80% of the class members without any benefits whatsoever. The district court took the allegation seriously, addressed it at the fairness hearing, and ultimately rejected it as meritless. We come to the same conclusion and hold that the USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 3 of 42 3 district court did not abuse its discretion in approving the class action settlement. I According to Michel Pastoureau, a historian of colors, red was “the first color humans mastered, fabricated, reproduced, and broke down into different shades[.]” Michel Pastoureau, Red: The History of a Color 7 (Jody Gladding trans., Princeton Univ. Press 2017). “It was with red that humans [conducted] their first color experiments, achieved their first successes, and then constructed a chromatic universe.” Id. at 12. Centuries later, humans continue to fabricate and reproduce shades of red, sometimes with varied degrees of success. One particular shade of the color is where this case begins. For years, Mercedes-Benz USA and Daimler AG have sold and leased a number of different Mercedes-Benz vehicles painted in a color called 590 Mars Red. Either due to a defect in the paint or some other reasons—the answer is not clear—the paint on some of these vehicles has deteriorated. Emily Pinon is the owner/lessee of a Mercedes-Benz vehicle painted in Mars Red. Soon after she purchased her car in 2016, she began to have issues with the paint—“it looked as though the clear coat was bubbling and peeling.” D.E. 1 at 8. In August of 2018, she filed a class action lawsuit in the Northern District of Georgia against Mercedes-Benz and Daimler. Ms. Pinon asserted numerous claims under federal and state law “for the design, manufacturing, marketing, and sale of vehicles with defective paint.” Id. at 1. USCA11 Case: 21-14503 4 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 4 of 42 21-14503 She alleged that her vehicle, and thousands of others like it, “suffer[ed] from an irreparable defect in the exterior paint that result[ed] in peeling, flaking, bubbling, erosion, and microblistering of the clearcoat.” Id. at 13. 1 The third amended class action complaint, the operative pleading, named six other individuals as plaintiffs: Gary Klein, Kim Brown, Joshua Frankum, Nancy Pearsall, Dinez Webster, and Todd Bryan (collectively the “Pinon plaintiffs”). And it identified a number of “Class Vehicles”—vehicles painted in Mars Red—which allegedly “ha[d] a serious latent defect that cause[d] the exterior surfaces of the vehicles to microblister, peel, and bubble absent any external or environmental influence.” D.E. 55 at 2. The Pinon plaintiffs asserted twelve legal claims and requested that the district court certify the class, appoint them and their counsel to represent the class, grant declaratory and injunctive relief, and award compensatory damages, punitive damages, and attorneys’ fees. The Pinon plaintiffs, individually and on behalf of a proposed nationwide settlement class, advised the district court in December of 2020 that they had reached a settlement with MercedesBenz and Daimler. The Pinon plaintiffs submitted a motion for preliminary approval of the proposed class action settlement agreement and preliminary certification of the nationwide settlement. The motion indicated that the proposed settlement “offer[ed] A couple of weeks before Ms. Pinon filed suit, other owners/lessees of Mercedes-Benz vehicles painted in Mars Red instituted a similar federal class action in New Jersey. More on that action soon. 1 USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 5 of 42 5 monetary reimbursement for [q]ualified [p]ast [r]epairs and extended warranty coverage for [q]ualified [f]uture [r]epairs and . . . provide[d] direct benefits to current and former owners and lessees of over 72,500 Subject Vehicles sold and/or leased in the United States, which will likely include over one hundred thousand individuals.” D.E. 70 at 9. So far, all of this seemed pretty routine for a class action. But this case seems to be as much about disputes between lawyers concerning control and money as it is about Mars Red paint. As noted, about two weeks before Ms. Pinon lodged her initial complaint, Robert Ponzio and others filed a similar class action complaint against the same defendants (Mercedes-Benz and Daimler) in the District of New Jersey. See Ponzio, et al. v. Mercedes-Benz USA, LLC et al., Case No: 1:18-cv-12544 (D. N.J.). Like the Pinon plaintiffs’ complaint in the Northern District of Georgia, the complaint filed in the District of New Jersey was based on alleged defects with the Mars Red paint on Mercedes-Benz vehicles. Collaboration between the Pinon plaintiffs and the plaintiffs in the District of New Jersey action (collectively the “Ponzio objectors”) may have initially been forged with the goal of presenting a united front against Mercedes-Benz and Daimler in the two actions, but coordination and cooperation fell apart. 2 2 The record is replete with accusations made by one set of lawyers against the other. For example, the Ponzio objectors’ counsel say that “the [Pinon] parties kept [Ponzio] counsel in the dark about covert negotiations.” Br. for Appellants at 20. They also claim that the [Pinon] litigation was a “copycat class action.” D.E. 72 at 6. For their part, the Pinon plaintiffs’ counsel claim that USCA11 Case: 21-14503 6 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 6 of 42 21-14503 After the Pinon plaintiffs submitted their motion for preliminary approval of the settlement agreement in the Northern District of Georgia, the Ponzio objectors filed a motion to intervene and to continue the hearing for preliminary approval. According to the Ponzio objectors, “the proposed settlement would release the primary economic loss suffered by [c]lass members for diminution in value of their vehicles without any compensation whatsoever.” D.E. 72 at 9–10 (emphasis in original). Among other things, the Ponzio objectors asserted that “the timing and secrecy of the proposed settlement . . . raise[d] a red flag as to whether it was the product of a collusive ‘reverse auction.’” Id. at 23. The Pinon plaintiffs, Mercedes-Benz, and Daimler submitted responses in opposition. The district court denied the Ponzio objectors’ motion and granted the Pinon plaintiffs’ motion for preliminary approval of the proposed class action settlement agreement. Notice to the class was provided and, several months later, the Pinon plaintiffs sought final approval of the class settlement agreement. As required by Rule 23(e)(2), the district court held a fairness hearing. Counsel for the Pinon plaintiffs, the defendants, and the Ponzio objectors all presented arguments at the hearing. After the “[Ponzio] counsel . . . us[ed] and benefit[ed] from the work [Pinon counsel] did,” and that “[i]t was apparent that [Ponzio] counsel’s definition of ‘coordination’ meant that [Pinon counsel] would relinquish control of [Pinon] and abide by whatever decisions were made by [Ponzio] counsel, which belied the notion of ‘coordination.’” D.E. 76 at 14, 18. USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 7 of 42 7 hearing, the district court accepted supplemental briefing from the parties and from the Ponzio objectors. Following its review and consideration of the post-hearing supplemental submissions, the district court approved the settlement agreement, certified the settlement class, confirmed appointment of class counsel, and granted in part and denied in part the Pinon plaintiffs’ unopposed motion for attorneys’ fees, expenses, and class representative service awards. As relevant here, and as discussed in more detail later, the district court rejected the contention of the Ponzio objectors that the settlement agreement failed to provide benefits to the great majority of the class members. II We review the approval of a class action settlement for abuse of discretion, with factual findings subject to the clear error standard. See Holmes v. Continental Can Co., 706 F.2d 1144, 1147 (11th Cir. 1983); In re Equifax Inc. Customer Data Security Breach Litigation, 999 F.3d 1247, 1273 (11th Cir. 2021); Williams v. Reckitt Benckiser LLC, 65 F.4th 1243, 1251 (11th Cir. 2023). The abuse of discretion standard generally provides a district court with a range of choice, which in practice means that we will sometimes affirm even though we might have resolved the matter differently in the first instance. See Doe v. Rollins College, 77 F.4th 1340, 1347 (11th Cir. 2023); Waters v. Intern. Precious Metals Corp., 190 F.3d 1291, 1293 (11th Cir. 1999). Our “judgment” in reviewing the district court’s approval of the settlement agreement is further “informed by the strong judicial policy favoring settlement as well as by the USCA11 Case: 21-14503 8 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 8 of 42 21-14503 realization that compromise is the essence of settlement.” Bennett v. Behring Corp., 737 F.2d 982, 986 (11th Cir. 1984). See also In re U.S. Oil & Gas Litig., 967 F.2d 489, 493 (11th Cir. 1992) (“Public policy strongly favors the pretrial settlement of class action lawsuits.”); William B. Rubenstein, 4 Newberg on Class Actions § 13:44 (6th ed. 2022) (“The law favors settlement, particularly in class actions and other complex cases where substantial resources can be conserved by avoiding lengthy trials and appeals.”). III Under Rule 23(e)(2), a district court may approve a class action settlement that binds class members “only after a hearing and only on nding that it is fair, reasonable, and adequate[.]” Since 2018, Rule 23(e)(2)—in subsections (A)-(D)—has set out four core concerns the district court must consider in making this determination. These are whether “[t]he class representatives and class counsel adequately represented the class”; whether “the proposal was negotiated at arm’s length”; whether “the relief provided for the class is adequate” (“taking into account” the “costs, risks and delay of trial and appeal,” “the e ectiveness of any proposed method of distributing relief to the class, including the method of processing class-member claims,” the “terms of any proposed award of attorney’s fees, including timing of payment,” and “any agreement required to be identi ed under Rule 23(e)(3)”); and whether “the proposal treats class members equitably relative to each other.” See Rubenstein, 4 Newberg on Class Actions § 13:58 (explaining that “Rule 23 gave no further meaning” to the “fair, reasonable, and adequate” standard until Rule 23(e)(2) codi ed a list USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 9 of 42 9 of “four ‘core concerns’ that the Advisory Committee labeled ‘the primary procedural considerations and substantive qualities that should always matter to the decision whether to approve the proposal’”). See also Fed. R. Civ. P. 23(e)(2), Advisory Committee’s Note to 2018 Amendment. Before the 2018 amendment to Rule 23(e)(2), we “also instructed district courts to consider several additional factors called the Bennett factors.” In re Equifax Inc., 999 F.3d at 1273 (citing Bennett, 737 F.2d at 986). These factors are (1) the likelihood of success at trial; (2) the range of possible recovery; (3) the point on or below the range of possible recovery at which a settlement is fair, adequate and reasonable; (4) the complexity, expense and duration of litigation; (5) the substance and amount of opposition to the settlement; and (6) the stage of proceedings at which the settlement was achieved. Bennett, 737 F.2d at 986. At the end of the day, the district court acts “as a duciary for the class.” In re Equifax Inc., 999 F.3d at 1265. See also 7B Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1797 (3d ed. & April 2023 update) (“The purpose of subdivision (e) is to protect the nonparty class members from unjust or unfair settlements a ecting their rights when the representatives become fainthearted before the action is adjudicated or are able to secure satisfaction of their individual claims by a compromise, abandoning the claims of the absent class members.”). We have not yet interpreted the 2018 amendment to Rule 23(e)(2), see In re Blue Cross Blue Shield Antitrust Litigation MDL 2406, USCA11 Case: 21-14503 10 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 10 of 42 21-14503 ___ F.3d ___, 2023 WL 7012247, at *9 (11th Cir. Oct. 25, 2023), or examined its e ect on the Bennett factors. The 2018 amendment to Rule 23(e)(2) is not meant “to displace” the factors previously identi ed by courts in reviewing class action settlement agreements, but “rather to focus the court and the lawyers on the core concerns of procedure and substance that should guide the decision whether to approve the proposal.” Fed. R. Civ. Pro 23(e)(2), Advisory Committee’s Note to 2018 Amendment. The four core concerns set out in Rule 23(e)(2) provide the primary considerations in evaluating proposed agreements, see Williams, 65 F.3d at 1261, but we think that the Bennett factors can, where appropriate, complement those core concerns. For example, Bennett factors (1), (2), (4), and (6) can inform “whether the relief provided to the class is adequate” (core concern three). And Bennett factors (3) and (5) can inform “whether the proposal treats class members equitably relative to each other” (core concern four). The “[p]roponents of class action settlements bear the burden of developing a record demonstrating that the settlement distribution is fair, reasonable and adequate.” Holmes, 706 F.2d at 1147. Accord Faught v. Am. Home Shield Corp., 668 F.3d 1233, 1239 (11th Cir. 2011); Ault v. Disney World Co., 692 F.3d 1212, 1216 (11th Cir. 2012). Before addressing the Ponzio objectors’ challenges to the settlement agreement, we describe the agreement and the proceedings below in detail. USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 11 of 42 11 A The settlement class is de ned as “all current owners, former owners, current lessees, and former lessees of Subject Vehicles who purchased or leased their Subject Vehicle in the United States.” D.E. 125 at 6. The term “Subject Vehicle” is de ned as any Mercedes-Benz vehicle originally painted in the 590 Mars Red color and purchased or leased in the United States. See D.E. 70-1, Exh.1 (Class Action Settlement Agreement and Release) at § 1.35. The class excludes certain persons. Not included in the class are those “who have settled with, released, or otherwise had claims adjudicated on the merits against [d]efendants that are substantially similar to the claims asserted . . . (i.e., alleging that 590 Mars Red paint is inadequate, of poor or insu cient quality or design, or defective, due to peeling, aking, bubbling, fading, discoloration, or poor adhesion of the paint or clearcoat)[.]” D.E. 125 at 6-7. Under the settlement agreement, class members—those within the de nition of the settlement class who have not elected to opt out—receive two types of bene ts: (1) reimbursement for quali ed past repairs, and (2) coverage for quali ed future repairs. Id. at 7. We describe each bene t below. Reimbursement for Quali ed Past Repairs. Class members can receive reimbursement for a quali ed past repair. Such a repair is de ned as “a repair that occurred before the E ective Date” of the settlement agreement—which is 14 days after the date on which any nal order and judgment entered becomes nal— “related to repainting any non-plastic exterior surface of a Subject USCA11 Case: 21-14503 12 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 12 of 42 21-14503 Vehicle because of bubbling, peeling or aking of the exterior clear coat and not caused by external in uences such as automobile accidents, scratches, or road debris.” D.E. 70-1, Exh. 1 at § 1.27. The settlement agreement provides di erent reimbursement amounts based on the Subject Vehicle’s age and mileage. With certain limitations, a repair that occurred fewer than seven years or 105,000 miles from the vehicle’s original in-service date (whichever occurred rst) would yield a 100% reimbursement of the cost incurred to perform the repair. A vehicle not within that category that is fewer than ten years or 150,000 miles from the vehicle’s original in-service date (whichever occurred rst) would yield a 50% reimbursement of the cost incurred. And a vehicle not within either of those categories that is fewer than fteen years or 150,000 miles from the vehicle’s original in-service date (again, whichever occurred rst) would yield a 25% reimbursement of the cost incurred to perform the repair. This leaves one nal category—vehicles with a past repair more than fteen years or 150,000 miles from their original in-service date (whichever occurred rst). Under the agreement, Mercedes-Benz and Daimler are not required to o er any reimbursement for past repairs of these vehicles. The settlement agreement also provides for reimbursement for past repairs performed by “Independent Service Centers,” namely vehicle repair service providers that were not speci cally authorized “at the time of repair or presentment to provide warranty services for Mercedes-Benz vehicles.” Id. at §§ 1.5, 1.15. USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 13 of 42 13 Speci cally, these reimbursement claims are subject to the same age and mileage categories noted above with the caveat that “the reasonable repair cost to be reimbursed shall not exceed 10% of what the same repair would have cost if it were performed at an Authorized Service Center.” Id. at § 4.2. As the district court noted, “[t]here is no limit to the number of claims or total amount of money that Mercedes-Benz will pay to reimburse quali ed past repairs, except for the per claim cap on claims performed by Independent Services Providers.” D.E. 125 at 8 (citing D.E. 70-1, Exh. 1 at §§ 4.2, 5.1). Coverage for Quali ed Future Repairs. Class members also receive coverage for quali ed future repairs. As with reimbursement for past repairs, coverage for future repairs is determined based on the vehicle’s age and mileage. For a vehicle needing a future repair less than seven years or 105,000 miles from its original in-service date (whichever occurs rst), a class member who presents the vehicle at an authorized service center with a qualifying claim will receive 100% coverage for the repair. For a vehicle needing a repair that does not fall within that category and is less than ten years or 150,000 miles after the vehicle’s original inservice date (whichever occurs rst), the class member will receive 50% coverage for the repair. For a vehicle that does not fall within either of those categories, and that is fewer than fteen years or 150,000 miles after the vehicle’s original in-service date (again, whichever occurs rst), the class member will receive 25% coverage for the repair. USCA11 Case: 21-14503 14 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 14 of 42 21-14503 The settlement agreement also provides parameters for relief for class members whose vehicles will need future repairs but which, at the time of the settlement notice date, were more than fteen years or 150,000 miles after their original in-service date (whichever occurs rst). In these instances, a class member “may submit documentary evidence showing that (i) he or she presented the [vehicle] to an Authorized Service Center for a qualifying repair or provided notice . . . when the vehicle had less than [ fteen] years . . . and 150,000 or fewer miles . . . and (ii) that he or she was denied warranty or goodwill coverage for such repair at the time.” D.E. 70-1, Exh. 1 at § 4.4(d). If the claim is approved, the percentage of coverage provided is determined by the age and mileage of the vehicle at the time it was originally presented for the qualifying repair or when notice was given. For vehicles that do not fall within this category, and that are more than fteen years or 150,000 miles after their original in-service date, the agreement expressly provides that Mercedes-Benz and Daimler are not required to o er any coverage. B The court-appointed settlement administrator, JND Legal Administration LLC, provided notice of the proposed settlement “to all class members who could be identi ed with reasonable effort.” This notice went out through a postcard via the United States Postal Service.3 JND’s CEO, Jennifer Keough, submitted a declaration explaining how direct notice was provided to class members. See D.E. 100-1. Mercedes-Benz and Daimler “provided JND with a list of all eligible Vehicle Identi cation 3 USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 15 of 42 15 Notice was also published on a “Settlement Website” maintained by JND. As of July 28, 2020 (two days before the ling of the motion for nal settlement approval), “the Settlement Website had tracked a total of 11,373 unique users who registered 54,908 page views.” D.E. 100-1 at 6. JND also maintained an email address and a toll-free telephone number to receive and respond to class members’ inquiries. As of July 28, 2020, JND had received 708 emails and 2,100 calls. See id. at 6–7. Counsel for the Pinon plainti s indicated that they also received hundreds of emails and phone calls. See D.E. 100 at 14. The postcard notice informed class members “that anyone who wished to object to the [s]ettlement could do so by ling an objection” with the district court on or before July 27, 2021. As of July 28, 2021, JND “[was] aware of four [ ] objections from eleven [c]lass [m]embers being led[.]” D.E. 100-1 at 7. The postcard notice further informed class members that all those who wished to be excluded from the settlement “w[ere] required to notify the [s]ettlement [a]dministrator . . . of their intent to opt out” by July 27, 2021. Id. at 8. As of July 30, 2021, JND had received ten “timely and valid exclusion requests.” Id. Numbers (“VINs”) representing the Subject Vehicles included in the [settlement] [a]greement.” Id. at 2. JND then sent the VINs to the respective department of motor vehicles to gather mailing addresses and contact information. Before mailing the postcard notice, “JND reviewed the mailing data . . . to identify any undeliverable addresses and duplicate records based on name and address.” Id. at 3. On May 28, 2021, JND mailed the postcard notice to 168,817 potential settlement class members. See id. at 4. USCA11 Case: 21-14503 16 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 16 of 42 21-14503 For “quali ed past repairs,” the postcard notice advised class members that they could submit a claim “by July 27, 2021, for repairs that occurred before May 28, 2021, and within 60 days of the date of repair for repairs that occurred after May 28, 2021, and before the E ective Date.” Id. For “quali ed future repairs,” the postcard notice advised class members of the following: “[I]f their Subject Vehicle had 150,000 miles or more or was [ fteen] years or more from the original in-service date as of May 28, 2021, and they were previously denied warranty or goodwill coverage for a qualifying repair at a time the Subject Vehicle had both fewer than [ fteen] years from the original in-service date and fewer than 150,000 miles,” they could participate in the settlement and receive reimbursement by submitting a claim electronically or by mail postmarked by July 27, 2021. See id. As of July 28, 2021, JND had “received 1,532 [c]laim [f ]orms.” “[T]he average claimed reimbursement amount per [q]uali ed [p]ast [r]epair (excluding claimed amounts of $20,000 or more) [was] between $2,000 and $3,000.” Id. at 9. C The district court held a fairness hearing on the settlement agreement. The Pinon plainti s, Mercedes-Benz, and Daimler spoke in support of the settlement agreement. The district court also heard from the Ponzio objectors and from Cindy Wensell, another objector to the agreement. As relevant here, the Ponzio objectors asserted at the hearing that “the vast majority of class members are left completely USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 17 of 42 17 uncompensated.” D.E. 116 at 39. They claimed that “the proposed settlement forces tens of thousands of class members to give up their claims against [the defendants] but provides them nothing in exchange,” that “only [ ] a small number of class members [ ] are actually entitled to” 100 percent payment, and that “[t]he other class members are destined to the 25 or 50 percent discounts”—a “dubious value because of the fact that if a consumer is going to make a decision as to whether to repaint a portion of the vehicle or the entire vehicle, they’re going to look at what they have to spend and what they would get back if they spent.” Id. at 41, 52–53. The district court found this last claim to be “ awed because you don’t have to do a full paint job on a car to be able to correct the bubbling.” Id. at 54. The Ponzio objectors also told the district court that the Pinon plainti s had failed to provide an estimate of the range of possible recovery and that, without such an estimate, “it’s impossible to determine the expected value going to trial, and likewise, impossible . . . or di cult for this [c]ourt [ ] and the class members to evaluate what they are giving up in exchange for the proposed settlement. Id. at 58. Moreover, the Ponzio objectors argued that while compensation for a vehicle’s diminished value did not necessarily have to be included in the settlement, the agreement “has to include something. You can’t ask the people to release their claims . . . without giving them something.” Id. at 98. Given the issues raised during the hearing, the district court asked for supplemental brie ng. After receiving that supplemental USCA11 Case: 21-14503 18 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 18 of 42 21-14503 brie ng, the district court issued an order certifying the class and approving the settlement agreement. With respect to the Ponzio objectors’ contentions and arguments, the district court found that “none . . . [were] su cient to overcome the fairness of the [s]ettlement [a]greement.” D.E. 125 at 25. First, the district court “observe[d] that out of the 168,817 potential settlement class members, the total number of objectors (both timely and untimely) represent[ed] 0.007 percent of the class and . . . eleven objectors (one of whom submitted his objection outof-time) were submitted by Ponzio’s [i]nterim [c]lass [c]ounsel.” Id. at 29 (italics omitted). Second, as to the assertion that most class members would receive no relief, the district court found that the Ponzio objectors and their experts reached that conclusion “based upon a signi cantly awed premise—that every Subject Vehicle presented for repair will have to be repainted in its entirety.” Id. at 31 (emphasis in original). The district court explained that the settlement agreement “speci cally provides that ‘quali ed’ repairs are limited to ‘re nishing of a ected areas only’”—“anyone who has had their vehicle damaged in an accident is aware that when a quarter panel, hood, trunk, or other separate unit is damaged but the rest of the automobile is not, there is a repainting of the damaged unit, not the entire vehicle[.]” Id. at 33. Ultimately, the district court concluded that because the Ponzio objectors’ “argument as to the inadequacy of the settlement is based on this awed premise, none of their statements about most [c]lass [m]embers receiving USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 19 of 42 19 ‘nothing’ can be seriously considered.” Id. The district court provided this explanation: [A]ll owners and lessees of Subject Vehicles whose automobiles were placed in service prior to seven years ago with less than 150,000 miles will not be getting ‘nothing’ but are eligible for reimbursement for quali ed past repairs up to 100% of the amount paid for the repairs. Those same persons whose vehicles were placed in service between seven and fteen years ago are eligible for quali ed past repairs at a rate of 25% to 50% depending upon the age of the vehicle. Even those vehicles who were placed in service over fteen years ago or with over 150,000 miles are eligible for a quali ed future repair if they can show they presented their vehicles for such a previous repair or noti ed [d]efendants of the need for the repair prior to the expiration of 15 years or meeting the 150,000 mile limit. Id. at 33–34. Third, the district court rejected the Ponzio objectors’ argument that the settlement agreement was inadequate because it did not provide for the diminution in value of the vehicle after it is repainted. The district court noted that the Ponzio objectors had failed to provide any case authority for the proposition that there had to be compensation for diminished value. Indeed, the case law suggested the opposite. See id. at 36 (citing cases approving settlement agreements that did not compensate for diminution in value). USCA11 Case: 21-14503 20 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 20 of 42 21-14503 After we heard oral argument, we requested supplemental brie ng from the parties on a number of matters. One of them concerned how many class members were ineligible for bene ts (reimbursement or future coverage) under the settlement agreement. IV The Ponzio objectors raise four arguments on appeal. They assert that the district court abused its discretion in (1) “granting nal approval of the class action settlement where 80% of the class members are required to release their claims in exchange for no relief[,]” (2) “failing to properly assess the Rule 23(e)(2) and Bennett factors[,]” (3) “approving a settlement brokered by class representatives and class counsel who did not fairly and adequately represent the class[,]” and (4) “approving a class settlement where there was indicia of collusion, a reverse auction, and a coupon settlement.” Br. of Appellants at 18. It is “our obligation to closely review the issues [the Ponzio objectors] present,” In re Equifax Custom Data Security Breach Litigation, 999 F.3d 1247, 1257 (11th Cir. 2021), but we note that they have, during the course of proceedings in the district court and on appeal, provided various di erent (some would say shifting) explanations as to why they believe that the “vast majority” of the class members are ineligible for any relief under the settlement agreement. Normally we only consider the arguments presented to the district court, see, e.g., Harbourside Place, LLC v. Town of Jupiter, 958 F.3d 1308, 1323 (11th Cir. 2020), but in an abundance of caution, we USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 21 of 42 21 will discuss all of the permutations presented by the Ponzio objectors on appeal. We have never provided a detailed explanation of what burden, if any, is borne by objectors to a proposed class action settlement. Given that this appeal concerns objections to the resolution of a class action complaint, we take the opportunity to set out some parameters. Just as the proponents of a class action settlement bear the burden of developing a record demonstrating that the settlement is fair, reasonable, and adequate, see Holmes, 706 F.2d at 1147, objectors to the settlement have some obligations of their own. Rule 23(e)(5)(A) requires that they “state with speci city” the grounds for an objection. This means that objections “must provide su cient speci cs to enable the parties to respond to them and the court to evaluate them.” Fed. R. Civ. P. 23(e)(5)(A), Advisory Committee’s Note to 2018 Amendment. And when the objections are factual in nature, they cannot be conclusory. See 1988 Trust for Allen Children Dated 8/8/88 v. Banner Life Ins. Co., 28 F.4th 513, 520-21 (4th Cir. 2022) (explaining that the standard is “somewhat analogous” to notice pleading under Rule 8(a)); Guidance on New Rule 23 Class Action Settlement Provisions, 102 Judicature 15, 21 (Nov. 2018) (asserting that the amended Rule 23(e)(5)(A) “requires greater speci city of objections”). See also In re Corrugated Container Antitrust Litig., 643 F.2d 195, 213 (5th Cir. 1981) (“[W]here there are objectors, the court is aided in its task; the proponents can be expected to present evidence and arguments suggesting that the settlements are within USCA11 Case: 21-14503 22 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 22 of 42 21-14503 ‘a range of reasonableness’ and the objectors will do the same for the contrary position.”). Once proper objections are lodged, the proponents of the settlement must show that the matters raised do not a ect the fairness, reasonableness, or adequacy of the agreement. See 1988 Trust, 28 F.4th at 521. “The showing necessary to prevent an objection from derailing the settlement will, of course, vary with the strength of the objection itself.” Id. See also Cotton v. Hinton, 559 F.2d 1326, 1331(5th Cir. 1977) (“The trial court must extend to the objectors leave to be heard. However, this is not to say that the trial judge is required to open to question and debate every provision of the proposed compromise.”). A “challenge for the [district court] is to distinguish between a meritorious objection and those advanced for improper purposes.” David F. Herr, Annotated Manual for Complex Litigation § 21.643 (4th ed. & May 2023 update). A The Ponzio objectors’ rst argument is that the settlement agreement is “fatally awed because it releases claims for 100% of the class even though 80% are ineligible for any bene ts.” Br. of Appellants at 44. The claim that 80% of the class is ineligible for relief is our starting point because it is repeated throughout the Ponzio objectors’ brie ng. Whether the contention has merit will necessarily inform our assessment of the remaining arguments on appeal. In their initial brief, the Ponzio objectors claim that “the overwhelming majority of class members will receive no bene ts USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 23 of 42 23 under the settlement.” Id. at 46. They say that if there are 168,817 class members, as the Pinon plainti s estimate, 99,702 (or 59%) are former owners or former lessees “who are obviously ineligible for future repainting bene ts because they no longer possess their Subject Vehicles.” Id. In a footnote, they acknowledge that “[c]onceivably, there may be a tiny fraction of former owners or lessees who paid to repaint their vehicles while still in possession of them, and who led a claim for reimbursement,” but they say that “this is all speculation” and “this gure would be at most 1,532 if 100% of all claims were made by former owners and lessees.” Id. at 46 n.9. This calculation, according to the Ponzio objectors, leaves 69,115 class members who are current owners and lessees. In their view, the “[Pinon] [p]lainti s’ estimates reveal 35,397 are ineligible due to the settlement’s age and mileage restrictions. Thus, taken together, roughly 135,099 of the 168,817 [c]lass [m]embers (80.03%) are ineligible for future bene ts under the settlement approved by the district court.” Id. at 47 (emphasis added). Like the district court, we conclude that the Ponzio objectors’ contention is signi cantly awed. Although the task of explaining why is laborious, it is necessary. First, the underlying calculation of the Ponzio objectors does not account for vehicle owners/lessees who have not experienced (and will not experience) any paint defect on their vehicles. In this respect, it is worth recalling that the complaint led by the Pinon plainti s alleged that the defect with the Mars Red paint was latent, meaning that the bubbling may or may not take place during USCA11 Case: 21-14503 24 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 24 of 42 21-14503 the ownership, lease, or life of the vehicle. See generally Black’s Law Dictionary 508 (10th ed. 2014) (de ning a hidden defect as a “product imperfection that is not discoverable by reasonable inspection and for which a seller or lessor is generally liable if the aw causes harm”) (emphasis added). Second, the calculation fails to recognize that there are class members who satisfy the requirements for reimbursement but choose not to le a claim, as well as class members who do not le a claim because they fail to meet the requirements for past or future coverage. These two categories of class members cannot be con ated into one group to gure out how many class members are categorically ineligible (in the Ponzio objectors’ words) to receive bene ts under the settlement agreement. The former group, though eligible, is uninterested in seeking reimbursement for one reason or another, and the decision of class members in that group to not le a claim does not mean that the settlement agreement provided no bene ts to those in the group. Third, the calculation ignores the settlement agreement’s provision for relief to class members who, at the time of the settlement notice date, have vehicles that are older than fteen years or have more than 150,000 miles and will need a future repair. See generally D.E. 70-1, Exh. 1 at 15–16. Recall that “a [s]ettlement [c]lass [m]ember may submit documentary evidence showing that (i) he or she presented the Subject Vehicle to an Authorized Service Center for a qualifying repair or provided notice to [d]efendants at a time when the vehicle had less than 15 years . . . and 150,000 or USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 25 of 42 25 fewer miles . . . and (ii) that he or she was denied warranty or goodwill coverage for such repair at the time. Such [s]ettlement [c]lass [m]ember shall be entitled to submit to the [s]ettlement [a]dministrator . . . a completed and signed Quali ed Future Repair Claim Form” and, if approved, will receive coverage “determined by the age and mileage of the Subject Vehicle at the time it was originally presented for the qualifying repair or notice was given to [d]efendants[.]” Id. at § 4.4. The Ponzio objectors state that 35,397 of the 69,115 class members who are current owners and lessees are ineligible for relief because of the settlement agreement’s age and mileage restrictions. But this calculation ignores the bene t described in the paragraph above and assumes—without explanation or evidence— that no class members would fall within this category of relief. Indeed, the Ponzio objectors rmly represent that “a class member who no longer possesses their Subject Vehicle . . . , or whose Subject Vehicle has exceeded the age or mileage restrictions of the settlement (of which there are approximately 35,000 of these class members), cannot receive either a full or a partial repainting at all.” Br. for Appellants at 48 (emphasis in original). As noted, this ignores the relief provided to those who had warranty or goodwill coverage denied. Fourth, the Ponzio objectors’ own supplemental brie ng further undermines the claim that 80% of class members are ineligible for relief. We asked the parties to tell us how many class members are “categorically ineligible” to bene t from the USCA11 Case: 21-14503 26 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 26 of 42 21-14503 settlement agreement—i.e., class members who cannot receive from the settlement any compensation, in the form of monetary reimbursement, future coverage for repairs, or any other thing of monetary value—because at the time the settlement was reached, (1) their vehicles were more than fteen years old or had more than 150,000 miles on them and (2) they had not had their vehicles’ paint or clearcoat xed or given notice to Mercedes-Benz that their vehicles’ paint or clearcoat was peeling, aking, bubbling, fading, discoloring, or poorly adhering. See Supp. Brie ng Notice at 1. According to the Ponzio objectors, “the [Pinon plainti s] have answered this question by stating that the ‘vast majority’ of class members are not eligible . . . because they didn’t experience the paint defect” and, in the alternative, the “possible range is between one [c]lass [m]ember (~.00001%) and 35,396 [c]lass [m]embers (~20.97%), with the answer likely being much closer to 21% than 0%.” Supp. Br. for Appellants at 23–24 (footnote omitted). The Ponzio objectors do not adequately explain why the ineligibility percentage (even under the alternative scenario) is closer to 21% other than stating that “it is very unlikely that many of these [c]lass [m]embers previously repainted their Subject Vehicles or provided su cient notice to [Mercedes-Benz] of the defect to render them eligible now.” Id. at 24. Rather, they articulate a mathematical equation that highlights why, as the district court noted, “these absolute statements” just are not true. See D.E. 116 at 39. 4 4 Understandably, the district court thought little of the Ponzio objectors’ blan- ket assertions that the “vast majority of class members get zero dollars.” D.E. USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 27 of 42 27 The equation pro ered by the Ponzio objectors is as follows: X=A+B–C–D–E X represents the number of class members who are categorically ineligible for relief; A is the number of Subject Vehicles that are more than fteen years old; B is the number of Subject Vehicles that have more than 150,000 miles; C is the number of Subject 116 at 39. The district court noted “that’s not true for [Ponzio’s] own objectors. They don’t get zero dollars. . . . they are treated just like everyone else.” Id. The district court then addressed each of the eight objectors: Objector Montgomery complain[ed] about receiving ‘nothing,’ but her vehicle was totaled, she apparently incurred no costs to repaint her vehicle, she received an insurance payment about the market value of the vehicle, and she offer[ed] no evidence that the [s]ettlement [a]greement adversely affect[ed] her in the slightest. Objector Acuna appear[ed] not to have incurred any costs to repair his Subject Vehicle (he could recover those costs if he did and submitted a claim) and suffered no loss in the market value of the vehicle after his trade-in. Objectors Nelthrope’s, Ponzio’s, and Madsen’s Subject Vehicles are eligible for a repair at 50% of cost. Objector Mull has had his Subject Vehicle repainted twice, once where [d]efendants actually paid for the repaint . . . and the second repaint came at a time when Mull would be eligible for a full reimbursement if he timely submits his claim. Although Objector Salgado’s mileage takes his Subject Vehicle out of automatic coverage, if he can show he presented his automobile to an Authorized Service Center or notified [d]efendants within the first fifteen years, he is entitled to coverage similar to others. Objector Parker sold his vehicle in 2020 and does not contend that he received less than the market value of that vehicle. D.E. 125 at 35. USCA11 Case: 21-14503 28 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 28 of 42 21-14503 Vehicles more than fteen years old and more than 150,00 miles— which is subtracted to avoid double counting; D is the number of otherwise ineligible Subject Vehicles that were repainted; and E is the number of otherwise ineligible Subject Vehicles that were not repainted but made a claim prior to becoming ineligible. The Ponzio objectors have lled in the equation with the information they say they have: X = 12,814 + 32,833 – 10,251 – D – E Critically, what is missing is D and E—the numbers of otherwise ineligible vehicles that were repaired/repainted and those that were not but whose owners made a claim prior to the vehicles becoming ineligible. The Ponzio objectors say that “it is likely impossible to determine [D] with speci city,” and E “is likely very low due to the onerous notice provisions of the [s]ettlement.” Supp. Br. for Appellants at 26–27. In their view, it is unlikely that class members received documentation or chose to hold on to such documentation of a rejected claim for a repair that did not take place.5 As far as we can tell, there is only one class member, Samuel Salgado, who is ineligible under this category. But the record is not clear if he is ineligible because of the allegedly “onerous notice provisions” described. See Supp. Br. of Appellants at 24 n.13. Mr. Salgado submitted a declaration stating that his vehicle currently has 180,000 miles, that he has experienced “peeling, flaking, or bubbling” of the exterior paint or clearcoat, and that he has not had his vehicle repainted. See D.E. 96-5. Significantly, however, he does not say why he has not had his vehicle repainted or whether he has ever presented the vehicle to an Authorized Service Center or elsewhere for repairs. See id. 5 USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 29 of 42 29 So we are left with X = 35,396 – D – E, and the Ponzio objectors’ assertion that “it is likely that the values for D and E are quite low.” Supp. Br. for Appellants at 26. This latter claim is unsupported, and the Ponzio objectors acknowledge that the range of “categorically ineligible” class members on this basis is anywhere between zero and 35,396. We also asked the parties to tell us how many class members are “categorically ineligible” to bene t from the settlement agreement because, at the time the agreement was reached, (1) they were former owners or lessees and (2) they did not, while they owned or leased their class vehicles and while their vehicles were fteen or fewer years old and had 150,000 or fewer miles on them, either have their vehicles’ paint or clearcoat xed or give notice to Mercedes-Benz that their vehicles’ paint or clearcoat was peeling, aking, bubbling, fading, discoloring, or poorly adhering. See Supp. Brie ng Notice at 1. Again, in response to this question, the Ponzio objectors claim that the Pinon parties have answered this question (we assume they mean that the vast majority of owners/lessees did not experience a paint defect) and, alternatively, they assert that the possible range they can calculate “is between three [c]lass [m]embers (~.00002%) and 99,702 [c]lass [m]embers (~59.06%), with the answer likely being much closer to 59% than 0%[.]” Supp. Br. For Appellants at 29. As for why they believe that the actual number is closer to 59%, they say—again, without support—that “it is very unlikely that many of these [c]lass [m]embers previously repainted their Subject Vehicles and whether they provided su cient notice USCA11 Case: 21-14503 30 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 30 of 42 21-14503 to Mercedes of the defect is irrelevant to former owners and lessees.” Id. Even accepting the Ponzio objectors’ proposed ranges, the number of class members categorically ineligible for relief spans anywhere from ~0.00001% and ~20.97% plus anywhere from ~.00002% and ~59.06%. In other words, the number is anywhere from .00003% to 80.03% or “between four [c]lass [m]embers and 135,098 [c]lass [m]embers.” Id. at 31. The breadth of this range makes it clear that the district court did not abuse its discretion in weighing the Ponzio objectors’ purported “evidence” against the proponents’ evidence and determining that the settlement agreement was fair, reasonable, and adequate. It is simply not true—at least not on this record—that the settlement agreement failed to provide any relief for 80% of class members. See, e.g., Cotton, 559 F.2d at 1330 (“The [district] court should not make a proponent of a proposed settlement justify each term of settlement against a hypothetical or speculative measure of what concessions might have been gained; inherent in compromise is a yielding of absolutes and an abandoning of highest hopes.”) (internal quotation marks omitted). B In tandem with their assertion that the district court abused its discretion because it approved a settlement agreement that leaves 80% of the class ineligible for relief, the Ponzio objectors also argue that the court ignored a number of red ags and committed a series of legal errors. USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 31 of 42 31 1 The Ponzio objectors argue that the district court failed to adequately address the Bennett factors and the Rule 23(e)(2) criteria. As part of this argument, they rst state that the district court “summarily rejected” their objections “in a single sentence . . . and thus made no nding or conclusions that might facilitate appellate review; instead, [it] o ered only rote, boilerplate pronouncements” which is “itself a basis for reversal.” Br. for Appellants at 54 (internal quotation marks and citation omitted). A review of the district court’s 58-page order, as well as the transcript of the fairness hearing, belies the claim of summary adjudication. See D.E. 125 at 26–44. The district court discussed the quantity and identity of the objectors—noting that they comprised only .007% of the class members—and then proceeded to consider the various objections made, including objections to the adequacy of relief, objections to the terms of the attorneys’ fee application, and objections as to the adequacy of class counsel and class representatives. See id. at 26–43. The district court also addressed the objection that the settlement agreement was the result of collusion and a reverse auction, as well as the objection that the proposed settlement failed to satisfy the Bennett factors. See id. at 43–44. The district court’s analysis of the Bennett factors cites to its earlier analysis in the order—in Part III.B at pages 20–26—which examined the likelihood of success at trial and the complexity, expense, and duration of litigation; the range of possible recovery and the point at which the settlement is fair, adequate, and reasonable; the substance and amount of opposition to the settlement; the state of the USCA11 Case: 21-14503 32 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 32 of 42 21-14503 proceedings at which the settlement agreement was achieved; and the judgment of class counsel. This is not a case where the district court “made no ndings or conclusions that might facilitate appellate review,” Johnson v. NPAS Sols., LLC, 975 F.3d 1244, 1248–49 (11th Cir. 2020), as the Ponzio objectors claim. Next, the Ponzio objectors claim that the district court “failed to address the range of possible recovery for the [Pinon] [p]lainti s’ claims and the point on or below the range of possible recovery at which the settlement is fair, adequate and reasonable.” Br. for Appellants at 54–55. “Determining the fairness of the settlement is left to the sound discretion of the trial court and we will not overturn the court’s decision absent a clear showing of abuse of that discretion.” Bennett, 737 F.2d at 986. See also Faught, 668 F.3d at 1240. The parties to the settlement agreement initially submitted a declaration from Lee M. Bowron, an actuary with Kerper and Bowron LLC, a consulting and actuarial rm. See D.E. 92-2. Class counsel had requested that Mr. Bowron’s rm calculate a range of the economic impact of the then-proposed settlement agreement. See id. at 3. During the fairness hearing, the district court discussed and identi ed certain issues it had with Mr. Bowron’s declaration. For example, it had concern with Mr. Bowron incorporating in his calculation certain costs to Mercedes-Benz (e.g., marketing and administrative costs) because that’s “looking at it . . . from [MercedesBenz’s] stead, not from the plainti s’ stead.” D.E. 116 at 15. In other words, the district court was directly (and correctly) USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 33 of 42 33 concerned with “what [the agreement is] worth to the class, not what the cost to [Mercedes-Benz] is.” Id. at 17. Indeed, the district court made clear that [f ]rankly, [it didn’t] care a whole lot about that . . . . [Mercedes-Benz and Daimler] are sucking it up to settle this case . . . . the value to the class is how many vehicles are going to get repaired, what’s going to be the average cost of the repair from a low and a high standpoint. That’s the value to the class. And that would be the value of an extended warranty to the class members. Not what the cost is to [MercedesBenz]. Id. at 17–18. Given its concern with “look[ing] at it as to the bene t to the class, not the cost to [Mercedes-Benz],” the district court allowed the proponents of the settlement to submit an amended declaration from Mr. Bowron after the fairness hearing. See id. at 20. See also D.E. 125 at 39. 6 In his supplemental declaration, Mr. Bowron provided an estimate of the amounts that Mercedes-Benz was expected to pay. His revised calculation excluded “costs related to administering and selling the hypothetical extended warranty and the estimated value of past repairs”—the latter, because actual values of past repairs were determined. See D.E. 117-2 at 4–5. Mr. Bowron estimated the value of future repairs to be $13,130,000, with a range between a The district court also allowed the Ponzio objectors to supplement the record after the fairness hearing. 6 USCA11 Case: 21-14503 34 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 34 of 42 21-14503 low of $10,504,000 and a high of $15,756,000. See id. at 6. “Including the value of the 1,532 claims for repairs submitted by [c]lass [m]embers ranging from $3.1 million to $4.6 million . . . the total value of the settlement [was] now estimated by [the] [p]lainti s as averaging between $16.2 million and $17.7 million.” See D.E. 125 at 39–40. The Ponzio objectors submitted their own supplemental declaration by Richard Eichmann, a managing director for NERA Economic Consulting. See D.E. 121-2. Mr. Eichmann rejected Mr. Bowron’s analysis and estimated the potential value of future qualifying repairs to be $6.26 million. See D.E. 121-2 at 20. On its review of this evidence, the district court found Mr. Bowron’s revised analysis to be reliable. But it also noted that even if it rejected that analysis and credited the Ponzio objectors’ valuation of future repairs as set forth in Mr. Eichmann’s declaration, it would still nd that the relief a orded under the settlement agreement was adequate. See D.E. 125 at 40. This was not an abuse of discretion. The district court carefully reviewed the evidence on valuation of the settlement agreement, discussed its concerns with class counsel and the objectors during the fairness hearing, required additional evidence when it found the evidence to be lacking and not adequately focused on the class members, and reconsidered the parties’ supplemental brie ng before reaching its conclusion. The district court clearly “[took] on a type of duciary role for the class,” see In re Equifax Inc., 999 F.3d at 1265, when it ensured that the value of the settlement be determined from the class USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 35 of 42 35 members’ perspective, and not that of Mercedes-Benz and Daimler. See D.E. 116 at 17. We are also unpersuaded by the Ponzio objectors’ contention that the district court improperly analyzed the rst, fourth, and sixth Bennett factors. These factors are, respectively, “the likelihood of success at trial,” “the complexity, expense and duration of litigation,” and “the state of proceedings at which the settlement was achieved.” Bennett, 737 F.2d at 986. During the fairness hearing, the district court noted that the Pinon plainti s (and the Ponzio objectors in their action in the District of New Jersey) had “a lot of their claims” dismissed at the motion to dismiss stage of the litigation. D.E. 116 at 41. In its nal order, the district court explained that there was “signi cant uncertainty as to whether [p]lainti s could succeed on their remaining claims . . . either at the summary judgment phase or at trial” and “[e]ven if a jury awarded the settlement class more in damages that [sic] they will receive under the [s]ettlement [a]greement, such an outcome is far from guaranteed and any such relief would occur, if at all, after years of protracted litigation, including appeals.” D.E. 125 at 17–18. One of the main contentions the Ponzio objectors asserted below was that the agreement did not provide relief for diminution in value of the vehicles caused by the latent paint defect. To obtain such monetary relief would require not only survival at the summary judgment phase, but ultimate success at trial on both liability and on a diminution-of-value damages theory—a feat the district court expressly found to be “highly unlikely.” Id. at 22. And even USCA11 Case: 21-14503 36 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 36 of 42 21-14503 then, the district court noted, “the case would likely undergo a protracted appellate process with an a rmance of the district court’s decision far from certain.” Id. at 22–23. As we explained in Ault v. Walt Disney World Co., 692 F.3d 1212, 1218 (11th Cir. 2012), “[t]he issue before us is not who prevails over whom, but rather the question is whether the district abused its discretion in its nding regarding who was most likely to prevail at trial.” To add to the uncertainty of success, and without expressing a view on the issue, we note that “a number of courts presented with class action claims for the diminution in value of allegedly defective vehicles have honed in on the inherent di culties in attempting to calculate such damages on a classwide basis,” and—at least as of a decade ago—case law “regarding the use and availability of subclasses to address diminution in value issues in vehicle class actions [wa]s sparse.” Scott Elder & Travis Thompson, Recent Developments in Automobile Consumer Class Actions, 41 Brief 44, 47–48 (A.B.A. 2011). The Ponzio objectors have presented no recent data to the contrary. The district court considered the likelihood of class members’ success at trial and, in doing so, deemed the settlement agreement fair and reasonable. Neither Rule 23 nor the Bennett factors require a district court to nd that a settlement agreement provides the same scope of relief that could be obtained if class members were wholly successful at trial. See Bennett, 737 F.2d at 986 (“[O]ur judgment is informed . . . by the realization that compromise is the essence of settlement.”); Cotton, 559 F.2d at 1330 (“Neither should it be forgotten that compromise is the essence of a settlement.”). USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 37 of 42 37 “As we have emphasized elsewhere, ‘a just result is often no more than an arbitrary point between competing notions of reasonableness.’” Bennett, 737 F.2d at 987 (quoting In re Corrugated Container Antitrust Litig., 659 F.2d at 1325). Finally, in its analysis, the district court also found it “signi cant that few civil trials in [its] district [had] been scheduled since the beginning of the COVID-19 pandemic and, given the backlog of criminal cases . . . and the likelihood of dispositive motions being led . . . it is unlikely that this case would be tried within the next two years, if then.” D.E. 125 at 18 n.7. And during this “protracted litigation process, [c]lass [m]embers, many of whom possess vehicles with model years over a decade old, would be without any remedy while their vehicles experience further depreciation from age or wear and tear.” Id. at 23. We see no abuse of discretion with this reasoning either.7 2 The Ponzio objectors argue that the settlement agreement has the “[h]allmarks of [i]nadequacy of [c]ounsel.” Br. for Appellants at 62. They state that “the class representatives receive[d] signi cantly better treatment than the majority of class members who su ered the same damages from identical conduct.” Id. at 63. This argument largely rests on the underlying claim that “80% of the The Ponzio objectors’ remaining arguments against the district court’s analysis of the Rule 23 criteria are based on the claim that 80% of the class members receive nothing. Because we have already rejected that claim, we do not further discuss these remaining arguments. 7 USCA11 Case: 21-14503 38 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 38 of 42 21-14503 class members [ ] are ineligible for any bene ts.” Id. But for the reasons already explained, we are unpersuaded by this claim. So the assertion that “[n]o competent counsel or class representative, tasked with representing the 80% who receive nothing, would ever have agreed to such a settlement,” id. at 64, while seemingly correct as an abstract principle, is inapplicable here. The district court was “entitled to rely upon the judgment of experienced counsel for the parties. Indeed, the [court], absent fraud, collusion, or the like, should be hesitant to substitute its own judgment for that of counsel.” Cotton, 559 F.2d at 1330. For essentially the same reason, we also reject the Ponzio objectors’ argument that “the economic interests of substantial portions of the [c]lass [m]embers are in substantial con ict” and the “interests of the [Pinon] class representatives are not aligned with, and are actually antagonistic to, the interests of a majority of [c]lass [m]embers—those who are not eligible for any relief and those eligible for less relief than the class representatives for no legitimate reason.” Br. for Appellants at 76. Again, the Ponzio objectors’ argument here is based on the claim that the “vast majority [of the class] get[s] nothing.” Br. for Appellants 74–75. As we have explained, that is simply not the case. 3 The Ponzio objectors assert that the settlement agreement re ected collusion, a reverse auction, and the absence of arm’slength negotiations. The district court rejected these assertions, and determined that the settlement agreement “was not the USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 39 of 42 39 product of fraud or collusion but negotiated at an arm’s-length formal mediation conducted by a neutral, highly respected mediator[,]” former United States District Judge James F. Holderman. D.E. 125 at 17. The record before the district court included a declaration from Judge Holderman stating, among other things, that he “personally witnessed that each side and their [c]ounsel conducted their mediated settlement negotiations in an adversarial, arm’s length, and non-collusive manner” and that “both sides approached the settlement negotiations in good faith and worked accordingly while vigorously maintaining integrity to their positions.” D.E. 70-3 at 3. Judge Holderman also indicated that “after the agreement-in-principle was reached . . . as to the terms and conditions of the proposed class settlement, each side’s [c]ounsel then mediated attorney fees, expenses, and class incentive awards to reach an agreement on those issues.” Id. at 3–4. Thus, “[t]he issue of attorney fees, expenses, and class incentive awards had not been discussed prior to the [p]arties reaching an agreement-in-principle on the terms and conditions of the proposed class settlement.” Id. at 4. This sequence helps avoid a claim of con ict on the part of class counsel. See Herr, Annotated Manual for Complex Litigation § 21.7 (“Separate negotiation of the class settlement before an agreement on fees is generally preferable.”). The district court acted within its discretion in crediting Judge Holderman’s perspective and opinion. As it explained, “[t]he close participation of . . . Judge Holderman in multiple mediation USCA11 Case: 21-14503 40 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 40 of 42 21-14503 sessions support[ed] the procedural fairness of the [s]ettlement [a]greement.” D.E. 125 at 17. The Ponzio objectors have shown no error, much less reversible error. See, e.g., Robinson v. Nat’l Student Clearinghouse, 14 F.4th 56, 59 (1st Cir. 2021) (concluding that a class action settlement agreement reached in mediation before a retired judge was the product of arm’s length negotiations). 8 4 Finally, the Ponzio objectors assert that the settlement constitutes a disfavored coupon settlement that required, but did not receive, heightened scrutiny. See, e.g., In re HP Ink Jet Printer Litigation, 716 F.3d 1173, 1178 n.4 (9th Cir. 2013) (stating that coupon settlements are “generally disfavored,” but explaining that they can sometimes “be appropriate”). We again disagree. Coupon or paper settlements “typically involve the extension or expansion of an existing warranty or coupons for rebates on future purchases from defendants.” Davis v. Carl Cannon Chevrolet-Olds, Inc., 182 F.3d 792, 798 (11th Cir. 1999) (Nangle, J. concurring). See also Rubenstein, 4 Newberg on Class Actions § 12:8 (“In a coupon settlement, a class action is litigated, and the class’[ ] claims are settled in return for a coupon or voucher applicable to future purchases of the defendant’s products.”). The district court 8 For the same reasons, we are also unpersuaded by the Ponzio objectors’ char- acterization of the settlement agreement as a reverse auction—a scenario “in which a defendant picks out a plaintiff with weaker claims and weaker counsel in an effort to negotiate a more favorable settlement.” Tech. Training Assocs., Inc. v. Buccaneers Ltd. P’ship, 874 F.3d 692, 695 (11th Cir. 2017). USCA11 Case: 21-14503 21-14503 Document: 70-1 Date Filed: 11/27/2023 Opinion of the Court Page: 41 of 42 41 concluded that the settlement agreement was not an “improper coupon settlement” because it “does not involve any coupons or vouchers but direct cash payments to those [c]lass [m]embers who previously paid for repairs or coverage for future repairs.” D.E. 125 at 37. The Ponzio objectors argue that “[t]he 20% of class members eligible for relief receive no cash for possible future repairs . . . and this 20% is merely eligible for discounts on possible future repairs at an Authorized [Mercedes-Benz] Service Center.” Br. for Appellants at 79. We are, in part for reasons already discussed, unpersuaded. The settlement agreement, as the district court correctly noted, does not involve coupons or vouchers. Rather, § 9.8 of the agreement provides that “[s]ettlement [c]lass [m]embers may elect to receive payment of their claims via electronic payment (e.g.[,] Venmo or PayPal) in a form agreed to by the [s]ettling [p]arties, or by written check.” D.E. 70-1, Exh. 1 at § 9.8. V We have carefully reviewed the parties’ briefs and the record, including the transcript of the fairness hearing, the supplemental brie ng below and on appeal, and the order approving the class action settlement. We are satis ed that the district court took the objections of the Ponzio objectors seriously and, after rejecting USCA11 Case: 21-14503 Document: 70-1 42 Date Filed: 11/27/2023 Opinion of the Court Page: 42 of 42 21-14503 those objections, acted within its discretion in approving the settlement agreement. 9 AFFIRMED. The Ponzio objectors request that the district court replace the Pinon plainti s’ counsel and their class representatives “with adequate counsel and representatives” and “consider the creation of subclasses with separate class representatives and separate counsel to ensure adequate structural protection of the interests of absent class members.” Br. for Appellants at 81. Because we do not nd that the district court abused its discretion in approving the settlement agreement, this request is denied as moot. 9
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