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Ersler v. Toshiba America

February 24, 2009


The opinion of the court was delivered by: Gold, S., U.S.M.J.



On September 18, 2009, I entered an order granting the parties' motion for preliminary approval of a class action settlement. I have today entered an order finally approving the settlement agreement, certifying the class, and approving the attorney's fees sought by plaintiffs' counsel subject to the terms of the parties' settlement agreement. This memorandum, together with the statements I made during the fairness hearing held on February 18, 2009, sets forth my reasons for entering that order.

The facts and circumstances of this case closely resemble those that led the court to certify a class and approve the terms of a settlement and an award of attorney's fees in In re Sony SXRD Rear Projection Television Class Action Litig., 2008 WL 1956267 (S.D.N.Y. May 1, 2008) ("Sony"). Moreover, there is little controversial about the final approval and certification sought by the parties in this action. Accordingly, rather than recite the well-established case law governing class certification and final approval of class action settlements, I will track the court's decision in the Sony case and incorporate the case law relied upon in that decision by reference.


The amended complaint in this action, Docket Entry 18, alleges that certain high-end televisions manufactured and marketed by defendants had defective bulbs that ceased to function early on in their expected useful life. The complaint names five plaintiffs who purchased defendants' televisions -- to the extent indicated in the complaint, at prices of more than $2,000 -- and were required to replace the original bulbs within three to thirty months of purchase. Some of the plaintiffs purchased replacement bulbs at costs of $200 to $233, only to find that the replacement bulbs failed early on in their useful lives as well. Plaintiffs assert claims under the New Jersey Consumer Fraud Act or, in the alternative, under the "substantially similar consumer protection laws of the 50 states and the District of Columbia." Am. Compl. ¶ 19.

The settlement agreement reached by the parties permits class members who experienced bulb failures within certain specified time frames to obtain reimbursement for the replacement bulbs they purchased. The agreement also extends the warranty on replacement bulbs from six months to twelve months.

My order preliminarily approving the parties' settlement provided for direct hard copy or electronic mail notice to class members whose street or e-mail addresses were known, distribution of the class notice for posting at retailers that sold the covered television models, and publication on a dedicated website and in two national newspapers and a magazine. Order Granting Motion for Preliminary Approval at 8-9; Docket Entry 29-2 at 45-46. This notice was, of course, provided.

The parties estimate that the class is comprised of approximately 265,000 persons. Mem. of Law in Supp. of Joint Mot. for Final Approval at 9. A claims administrator provided notice by direct hard copy mail to approximately 75,000 class members, and by electronic mail to approximately 13,000 additional class members. Keough Aff. ¶ 4. The web site maintained by the class administrator was visited almost 14,000 times, and more than 4,000 telephone calls were made to the administrator's offices. Id. ¶¶ 6-7. More than 7,000 claims for reimbursement have been submitted by class members. Id. ¶ 5. Ten class members have exercised their right to opt out of the settlement, although six of the ten appear to have done so because they are satisfied with assistance they have already received from defendants and not because they seek to bring individual lawsuits. Id. ¶¶ 8-9. Sixteen objections have been filed, most of which seek more extensive warranties, broader reimbursement rights, or new television sets.


A. Final Approval of the Settlement

The process leading to the settlement was fair. I held several conferences with counsel, in person and by telephone, during the course of the negotiations. See Minute Entries for proceedings held on Sept. 20, 2007, Feb. 6, 2008, May 30, 2008 and June 12, 2008. I am satisfied that the settlement was the result of arms-length negotiations conducted by highly experienced and capable counsel.

In reviewing the substantive fairness of the settlement, I consider the factors set forth in Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974). See also Sony, 2008 WL 1956267, at *6. First, this litigation is fairly complex and proceeding to trial would be expensive. Plaintiffs' claims depend upon highly technical expert testimony establishing that defendants' bulbs were somehow defective. Although it seems plaintiffs could muster strong anecdotal evidence of premature bulb failure, a successful litigation strategy would undoubtedly include expert testimony explaining the cause of the early bulb failures. Defendants would no doubt present competing expert reports, and Daubert hearings would likely ensue. Finally, by the time the litigation concluded, the covered television sets would be nearing the end of their useful lives. The settlement permits class members to continue receiving the benefit of their expensive purchase secure in the knowledge that any replacement bulbs they require will carry an extended warranty.

The reaction of the class similarly supports final approval. As indicated above, more than 7,000 claims have been submitted in response to the class notice, while only ...

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