HEATHER VENERUS v. AVIS BUDGET CAR RENTAL LLC BUDGET RENT CAR SYSTEM INC (2023)

ORDER

THIS CAUSE is before the Court on Plaintiff's Unopposed Motion for Approval of Service Award (Doc. 533). The United States Magistrate Judge issued a Report and Recommendation (Doc. 535), recommending that the Motion be granted.

After review in accordance with 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72, and noting that the parties filed a Joint Notice of No Objection (Doc. 536), the Magistrate Judge's recommended disposition is accepted. Accordingly, it is ORDERED and ADJUDGED as follows:

1. The Report and Recommendation (Doc. 535) is ADOPTED and made a part of this Order.

2. The Plaintiff's Unopposed Motion for Approval of Service Award (Doc. 533) is GRANTED.

3. On or before June 26, 2023, Defendants shall pay Plaintiff a service award in the amount of $25,000.00.

DONE and ORDERED in Orlando, Florida on May 25, 2023.

UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF FLORIDA

ORLANDO DIVISION

HEATHER VENERUS, individually and on behalf of all others similarly situated, Plaintiff,

v.

AVIS BUDGET CAR RENTAL, LLC; and BUDGET RENT-A-CAR SYSTEM, INC., Defendant.

Case No. 6:13-cv-921-CEM-RMN

REPORT AND RECOMMENDATION

This cause came on for consideration without oral argument on Plaintiff's Unopposed Motion for Approval of Service Award (Dkt. 533), filed April 25, 2023. Upon consideration, I respectfully recommend that the Motion be granted.

I. Background

The undersigned incorporates the factual background as stated in its previous Reports and Recommendations (Dkts. 511, 528) and restates only those facts as relevant to this Report and Recommendation.

On June 12, 2013, Plaintiff Heather Veranus, on behalf of herself and others similarly situated, filed this putative class action against Avis Budget Car Rental, LLC, and Budget Rent-A-Car System, Inc. (collectively, the “Defendants”). Dkt. 1. On March 29, 2019, District Judge Carlos E. Mendoza certified the class and designated Plaintiff as class representative. Dkt. 370. After years of litigation, the parties notified the Court that the reached a settlement in December 2022. Dkts. 504, 509.

Thereafter, on January 14, 2022, Plaintiff filed an “Unopposed Motion for Preliminary Approval of Proposed Class Action Settlement,” Dkt 509, which was granted in part. Judge Mendoza deferred ruling on the issue of a “service award” to Plaintiff pending the Eleventh Circuit's consideration of an en banc review of Johnson v. NPAS Solutions, LLC, 975 F.3d 1244, 1260 (11th Cir. 2020). Dkt. 513. On October 21, 2022, Plaintiff filed a Motion for Attorneys’ Fees and Costs, which included a request for a service award. Dkt. 524. The Court adopted Magistrate Judge David A. Baker's Report and Recommendation, which in part deferred ruling on the service award pending the Supreme Court's decision on whether to grant certiorari in the Johnson case. Dkt. 528.

On April 25, 2023, the Plaintiff filed the instant Motion, noting that the Supreme Court has denied the cert petition and has not provided guidance on whether state law governs service awards as part of class action settlements under Erie Railroad Company v. Tompkins, 304 U.S. 64 (1938). Dkt. 533.

II. Analysis

A. Application of Erie Railroad v. Tompkins

Plaintiff seeks a service award of $25,000, arguing that Johnson I is inapplicable to this case. Dkt. 533 at 3–8. In Johnson I, the Eleventh Circuit held that Supreme Court precedent “prohibit[s] [an] incentive award ․ that compensates a class representative for his time and rewards him for bringing a lawsuit.” Johnson I, 975 F.3d at 1260. Plaintiff asserts that recent cases from the Middle District of Florida are correct in finding that Johnson I is inapplicable to the present case because that case addressed a settlement pursuant to federal law while the instant case arises out of a state law cause of action. Dkt. 533 at 4. Based on an Erie analysis, Plaintiff maintains that she is entitled to a service award pursuant to state law. Id. at 3–8.

Upon review, I agree with Plaintiff and the recent cases decided in this district. In Junior v. Infinity Ins. Co., Magistrate Judge Embry J. Kidd explained that

Johnson I examined federal common law, based on a federal cause of action, to arrive at its decision. There is nothing in Johnson I to suggest that it is applicable to cases arising under state law. The Eleventh Circuit chose not to rehear Johnson I en banc, and the denial did not provide any additional analysis. See Johnson II, 43 F.4th at 1138 (“I'm content to let the panel opinion speak for itself.”) (Newson, J., concurring in denial of rehearing en banc). Accordingly, I find that an Erie analysis is appropriate to address the immediate question of Plaintiff's entitlement to a service award. See Chieftain Royalty Co. v. Enervest Energy Institutional Fund XIII-A, L.P., 888 F.3d 455, 468 (10th Cir. 2017) (noting, in a diversity action, that when analyzing a service award, “Erie requires us to apply Oklahoma law.”).

Junior v. Infinity Ins. Co., Case No. 6:18-cv-1598-WWB-EJK (M.D. Fla.). I agree with Magistrate Judge Kidd's analysis.

Under Erie, “federal courts sitting in diversity [as here] apply state substantive law and federal procedural law.” Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427 (1996). If a state rule is not clearly substantive, the court must determine whether failure to apply it would thwart the aims of Erie. Id. The two aims of Erie are the discouragement of forum shopping and the avoidance of inequitable administration of the laws—that is, the likelihood that the applicability of substantive rights and duties would turn on the forum in which the action is brought. See Hanna v. Plumer, 380 U.S. 460, 468 (1965). State rules should apply when the failure to apply them would significantly affect the outcome of the litigation, encourage forum shopping, or result in “inequitable administration of the laws.” Gasperini, 518 U.S. at 428 (quoting Hanna, 380 U.S. at 468).

Upon consideration of the Erie factors and the recent cases in this District and other courts, I recommend that the Court apply Florida state law to determine Plaintiff's entitlement to a service award. See, e.g., Roth v. GEICO Gen. Ins. Co., No. 16-62942-civ, 2020 WL 10818393, at *3 (S.D. Fla. Oct. 8, 2020) (finding that Johnson I is inapplicable because under Erie, Florida law applied to the diversity action); see also Haas v. Burlington Cnty., No. 08-1102, 2019 WL 413530, at *10 (D.N.J. Jan. 31, 2019); Freebird, Inc. v. Merit Energy Co., No. 10-1154-KHV, 2013 WL 1151264, at *5 (D. Kan. Mar. 19, 2013); Du v. Blackford, No. 17-cv-194, 2018 WL 6604484, at *9 (D. Del. Dec. 18, 2018).

B. Plaintiff is Entitled to a Service Award Under Florida Law.

Florida law allows service awards in class action cases. In Altamonte Springs Imaging, L.C. v. State Farm Mut. Auto. Ins. Co., 12 So. 3d 850, 857 (Fla. 3d DCA 2009), the court expressly approved a $10,000 service award to a class representative, noting that “[t]he position as fiduciary for the class is less an honor than a headache.”

Accordingly, I find that a service award to Plaintiff is fair and reasonable and should be approved. Plaintiff has conferred substantial benefits on the class through the expenditure of significant time and effort participating in litigation over the last ten years. Plaintiff has travelled to and from Scotland to sit for her own deposition, has contributed to discovery (including producing her own documents), participated in four mediations, and has actively taken a role in advancing litigation efforts. See Dkt. 533, at 9–10. The requested service award of $25,000 is reasonable considering the time and effort Plaintiff has put into litigating the class's claims. See, e.g., Ingram v. Coca-Cola Co., 200 F.R.D. 685, 694 (N.D. Ga. 2001) (approving an award of $300,000 to each class representative because they “expended considerable time and effort on the case” and “directly participated in the mediation process”); Wright v. Stern, 553 F. Supp. 2d 337, 345 (S.D.N.Y. 2008) (finding that a $50,000 service award “was reasonable in light of the burdens imposed by participating as a named party in litigation that spanned some ten years”) (collecting cases).

Therefore, I respectfully recommend that the Court award Plaintiff a service award in the amount of $25,000, to be paid from the funds Defendant deposited in the Court registry.

IV. Conclusion

Accordingly, it is RECOMMENDED that:

1. Plaintiff's Unopposed Motion for Approval of Service Award (Dkt. 533) be GRANTED; and

2. Plaintiff should receive a service award in the amount of $25,000.00 to be paid from the funds Defendant deposited into the Court registry.

NOTICE TO PARTIES

“Within 14 days after being served with a copy of [a report and recommendation], a party may serve and file specific written objections to the proposed findings and recommendations.” Fed. R. Civ. P. 72(b)(2). “A party may respond to another party's objections within 14 days after being served with a copy.” Id. A party's failure to serve and file specific objections to the proposed findings and recommendations alters review by the district judge and the United States Court of Appeals for the Eleventh Circuit, including waiver of the right to challenge anything to which no specific objection was made. See Fed. R. Civ. P. 72(b)(3); 28 U.S.C. § 636(b)(1)(B); 11th Cir. R. 3-1.

Entered in Orlando, Florida, on May 23, 2023.

[illegible text]

ROBERT M. NORWAY

United States Magistrate Judge

CARLOS E. MENDOZA UNITED STATES DISTRICT JUDGE