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UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF TENNESSEE

NASHVILLE DIVISION

CHEYNE NORMAN and SOPHIA WESCOTT,

individually, and on behalf of a class of similarly

situated individuals,

DEFENDANT.

Case No. 3:18-cv-00534

Judge Eli J. Richardson

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’

MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT

TABLE OF CONTENTS

I.

II. FACTS AND PROCEDURE ............................................................................................ 2

TABLE OF AUTHORITIES

C

ASES



Al's Pals Pet Care v. Woodforest Nat'l Bank, NA, 2019 WL 387409 (S.D. Tex. Jan. 30,

Chambers v. Whirlpool Corp., 214 F. Supp. 3d 877 (C.D. Cal. 2016) ............................................... 8

Eisen v. Porsche Cars N. Am., No. 11-09405-CAS, 2014 U.S. Dist. LEXIS 14301 (C.D.

Cal. Jan. 30, 2014) ............................................................................................................. 12, 16

Gascho v. Glob. Fitness Holdings, LLC, No. 2:11-CV-00436, 2014 WL 3543819 (S.D.

Ohio July 16, 2014), aff'd, 822 F.3d 269 (6th Cir. 2016) ............................................................... 7

In re Media Cent., Inc., 190 B.R. 316 (E.D. Tenn. 1994) ................................................................ 12

In re Regions Morgan Keegan Sec., Derivative, & ERISA Litig., No. 07-2784, 2016 WL

8290089 (W.D. Tenn. Aug. 2, 2016) .......................................................................................... 9

In re Skechers Toning Shoe Prods. Liab Litig., 2013 WL 2010702 (W.D. Ky. May 13,

Corp., 497 F.3d 615 (6th Cir. 2007) .......................................................................................... 17

Klee v. Nissan N. Am., Inc., 2015 WL 4538426 (C.D. Cal. July 7, 2015) ......................................... 12

Laskey v. Int'l Union, 638 F.2d 954 (6th Cir. 1981) ........................................................................ 15

iii

Tenn. Aug. 11, 1999) ............................................................................................................... 12

Marcus v. BMW of N. Am., LLC, 687 F.3d 583 (3d Cir. 2012) ........................................................ 13

McGee v. Continental Tire N. Am., Inc., 2009 WL 539893 (D. N.J. Mar. 4, 2009) .......................... 16

McLennan v. LG Electronics USA, Inc., 2012 WL 686020 (D. N.J. Mar. 2, 2012) .......................... 16

Milligan v. Toyota Motor Sales, U.S.A., No. 09-05418-RS, 2012 U.S. Dist. LEXIS

189782 (N.D. Cal. Jan. 6, 2012) ............................................................................................... 16

Yaeger v. Subaru of America, No. 14-4490-JBS, 2016 WL 4541861 (D.N.J. Aug. 31,

2016) ...................................................................................................................................... 16

S

C

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Samuel-Bassett v. Kia Motors America, Inc., 34 A.3d 1 (PA. 2011) ................................................ 14

F

S

Fed. R. Civ. P. 23 ........................................................................................................................ 15

Fed. R. Civ. P. 23(a) ...................................................................................................................... 8

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of their Motion for Final Approval of the Proposed Class Action Settlement on behalf of all current and

former owners and lessees of 2013-2017 Nissan Juke vehicles equipped with a type of transmission

resolves allegations that the Continuously Variable Transmissions (“CVTs”) equipped in the Class

Vehicles manufactured by Nissan North America, Inc., (“Nissan”) were defectively designed, causing

them to shudder, judder, hesitate, fail to accelerate and abruptly decelerate, creating an unreasonable

safety risk, and requiring the transmission to be replaced prematurely (these allegations are collectively

referred to as the “Alleged CVT Failures”). Nissan denies these allegations.

and valuable relief, primarily in the form of: (1) a warranty extension on all Class Vehicles providing free

superior, remedies to what they could otherwise have expected to receive were the cases successfully

tried, but without the delay and risks associated with continued litigation and trial. Notably, Nissan’s

financial obligations to the Class under the Extended Warranty are not capped, and thus there is no risk, as

with other settlements, of a fixed settlement fund being exhausted. Moreover, the Extended Warranty and

“pay-as-you-go” nature of the Settlement alleviates any distribution problems.

Plaintiffs if litigation continued, including the uncertainty of certifying the Class based on the alleged

defect, prevailing at trial, and surviving an appeal. Accordingly, Plaintiffs respectfully request that the

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Court enter an order (a) granting final approval of the Settlement and overruling the objections, (b) finally

certifying the Settlement Class, (c) granting Plaintiffs’ Motion for Attorneys’ Fees, Costs, and Service

Awards, and (d) entering the concurrently-filed proposed Final Order and Judgment.

Plaintiff Patricia Weckwerth, who is no longer a party to this action

, filed suit against Nissan North

America, Inc., (the United States subsidiary) and Nissan Motor Co., Ltd. (the Japanese parent company)

in the Middle District of Tennessee on June 26, 2018 on behalf of themselves and other persons who

purchased or leased any 2013-2017 Nissan Versa, Versa Note or Juke equipped with an Xtronic CVT.

(Declaration of Cody R. Padgett [“Padgett Decl.”] at ¶ 3.) The Parties negotiated a discovery and tolling

agreement whereby Nissan Japan agreed to be subject to discovery in exchange for a dismissal without

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12, 2018, the Norman Plaintiffs served Plaintiffs’ First Request for Production of Documents, to which

Defendant Nissan responded on November 12, 2018. Defendant Nissan produced thousands of pages of

documents in response, including more than 10,000 pages of confidential documents. Id. at ¶ 5

of Requests for Production to each of Plaintiff Sophia Wescott, Cheyne Norman and Patricia Weckwerth.

Plaintiffs responded to each of these requests on December 7, 2018. Id. at ¶ 6.

data, on February 19, 2019, counsel for Plaintiffs and Defendant participated in an all-day mediation

before Mr. Hunter R. Hughes III, an experienced mediator, in Atlanta, Georgia, to explore resolution of

claims pertaining to the Nissan Juke, Versa, and Sentra vehicles. Pad Mr. Hughes is a “a nationally-

conducted a second in-person all-day face-to-face negotiation in Chicago, Illinois. At the close of this

second session, the Parties had agreed on the principal terms of the proposed class relief.

Later in April,

further evolution of the settlement terms took place in conjunction with the negotiations of the related

the Parties had agreed on the framework and material terms for settlement in Chicago, they began

negotiating through telephonic conferences, via email, and with the assistance of Mr. Hughes, and

ultimately agreed upon an appropriate request for service awards and Plaintiffs’ attorneys’ fees and

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expenses. In May 2019, the Parties finally were able to document the formal terms of their agreement to

resolve the litigation. All of the terms of the Settlement are the result of extensive, adversarial, and arms’

length negotiations between experienced counsel for both sides.

settlements involving three vehicle and transmission model groups, and there were three actions pending

in the Middle District of Tennessee before this Court. The Parties agreed that it was most logical and

efficient to amend the pleadings in the three pending cases to group Plaintiffs according to the settlements

to which they were a party. Accordingly, the Complaint in the instant case (No. 3:18-cv-00534),

originally captioned as Madrid, was amended to add Norman and Wescott who, respectively, own and

lease Nissan Juke vehicles and seek approval of the Juke settlement. Plaintiff Madrid, a Nissan Altima

owner, was added to the Complaint in Gann, Case No. 3:18-cv-00966, and is no longer a Plaintiff in the

of the Class Vehicles which were sold in the United States and its territories, including Puerto Rico. The

principal terms of the Settlement are as follows:

mileage durational limits for powertrain coverage under the applicable New Vehicle Limited Warranty

for Class Vehicles, to the extent it applies to the transmission assembly and automatic transmission

control unit (“ATCU”), by 24 months or 24,000 miles, whichever occurs first (“Extended Warranty”),

whichever occurs first) has expired. (Settlement Agreement ¶¶ 42, 43.) The Extended Warranty will be

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subject to the terms and conditions of the original Nissan New Vehicle Limited Warranty. (Settlement

Agreement ¶ 56.) Notably, Nissan’s financial obligations to the Class under the Extended Warranty are

Members experience problems with their CVTs going forward.

Class Member for replacement of, or repairs to, the transmission assembly or ATCU if the repairs were

made within the durational limits of the new Extended Warranty. Parts and labor actually paid by the

Class Member will be reimbursed 100% if the repair was performed by an authorized Nissan dealer

(Settlement Agreement ¶ 57(A)) and up to a cap of $5,000 if the repair was performed by a non-Nissan

establishing that a Nissan dealer, within the Warranty Extension Period, diagnosed and recommended a

repair to the transmission assembly or ATCU of the Class Vehicle. In this scenario, the Class Member is

entitled to reimbursement (subject to the $5,000 cap mentioned above for repairs by a non-Nissan

obtained the recommended repair or replacement by January 30, 2020, or prior to the Class Vehicle

exceeding 90,000 miles, whichever occurs first. (Settlement Agreement ¶ 58.)

lease of a single new Nissan or Infiniti vehicle per Class Vehicle that had two or more replacements or

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submit claims for full or partial reimbursement of parts and labor charges actually paid for qualifying

repairs to their transmissions, and this relief extends to former owners and lessees who paid for qualifying

members equitably relative to each other. Significantly, the Settlement does not require Class Members to

submit any individualized proof or a claim form to receive the extended warranty—all Class Members

that do not opt to be excluded will be automatically credited with the extended warranty for their Class

Vehicles, guaranteeing 100% participation after settlement administration. As Nissan’s commitment

under the extended warranty is not subject to a financial cap, the amount Nissan will pay will depend on

the extent Class Members experience problems with their CVTs going forward, assuring that the remedy

Settlement in this case is well within the range of reasonableness that would merit judicial approval. See

Aug. 11, 1999) (“This valuable relief falls well within the “range of reasonableness” required for

settlement approval.”); In re Media Cent., Inc., 190 B.R. 316, 321 (E.D. Tenn. 1994) (the court “should

canvass the issues and determine whether the proposed settlement falls within the range of reasonableness

in the case, but without trying the case or otherwise deciding the issues of law and fact presented.”).

Indeed, this settlement provides to class members remedies similar to what they could otherwise expect to

receive if they succeeded at trial but without the risk of delay or risks associated with trial or any

subsequent appeal.

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numerous courts. See Klee v. Nissan N. Am., Inc., 2015 WL 4538426, at *8 (C.D. Cal. July 7, 2015)

(extended warranty was fair settlement consideration because it was directed at repairing the alleged harm

and noting that other courts had approved extended warranties with age and mileage restrictions as

settlement considerations); Eisen v. Porsche Cars N. Am., Inc., 2014 WL 43900, at *8 (C.D. Cal. Jan. 30,

2014) (approving settlement agreement with an extended warranty and noting that “it is significant that

the Settlement Agreement provides extended warranty coverage that exceeded the warranties provided”

at the time of purchase).

been conservatively valued at between $17,081,000 and $22,841,000 by Plaintiffs’ expert, Lee M.

Bowron, ACAS, MAAA, an actuary who specializes in pricing and valuing extended service contracts

reviewed or modified before trial, and a class may be decertified at any time. See, e.g., Marcus v. BMW of

N. Am., LLC, 687 F.3d 583 (3d Cir. 2012) (Third Circuit reversed certification of consumer class action

case involving BMW vehicles equipped with allegedly defective run flat tires). Moreover, the relief

provided is substantially similar to another automotive defect settlement involving Nissan vehicles

equipped with CVT transmissions that was approved in the United States District Court, Southern District

of Florida. See Batista v. Nissan North America, Inc., No. 1:14-cv-24728-RNS (S.D. Fla. June 29, 2019)

(the district court found that the “benefits to the Settlement Class constitute fair value given in exchange

for the release of the claims of the Settlement Class . . . [and that] the consideration to be provided under

the Settlement is reasonable considering the facts and circumstances of [the] case, the types of claims and

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defenses asserted in the lawsuit, and the risks associated with the continued litigation of these claims.”).

Nissan absent the settlement would continue to vigorously contest the merits of Class Members’ claims,

as well as the named Plaintiffs’ ability to obtain class relief. Nissan denies that it engaged in any wrongful

conduct. In addition, Nissan has interposed several defenses to the claims asserted, including that the

CVTs are not defective and that the level of problems experienced is small compared to the

approximately 140,000 Class Vehicles on the road; that Nissan had no knowledge of any alleged defect

prior to sale and no intent to deceive its consumers; and that the Class Members suffered no compensable

certainly to appeal by one side or the other. Other defenses are fact-based and would be determined by the

trier of fact if the case proceeded to trial. There is, in short, no guarantee that Plaintiffs would ultimately

prevail on these legal and factual issues. Thus, the risk of losing must be considered in evaluating the

comparable parts, an expert on consumer expectations, and a damages expert—resulting in significant

additional expenses.

against Nissan, there is no guarantee that the judgment would be superior to the settlement obtained here.

See, e.g., Samuel-Bassett v. Kia Motors America, Inc., 34 A.3d 1 (PA. 2011) (nearly 12 years after the

trial, post-trial motions, and appeal to the Superior Court—the Supreme Court of Pennsylvania ultimately

affirmed an award of $600 for brake repairs for each Class Member which was based on the class vehicle

having a useful life of 100,000 miles).

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and ongoing cost of the contentious litigation, the scope of relief that was being sought and that might be

provided, the cost and benefit of such relief, the potential damages at issue, the risks of trying the matter,

and the possibility of appeals of any judgment in the trial court—adding to the expense, delay and

uncertainty of litigation. The Parties believe that the settlement is fair, reasonable, and adequate given the

uncertainties of continued litigation and the value of the consideration given to current and former owners

and lessees of Class Vehicles. The Court should reach the same conclusion, certify the Settlement Class,

and grant final approval to the Settlement.

Counsel will seek approval from the Court of their attorneys’ fees and litigation expenses of up to

$615,000. This request is manifestly reasonable in light of the facts and circumstances of the cases,

include whether the apportionment of relief among class members takes appropriate account of

differences among their claims, and whether the scope of the release may affect class members in

different ways that bear on the apportionment of relief.” Fed. R. Civ. P. 23 advisory committee's note to

2018 amendment. As set forth above, the plan for distribution is fair and Class Members are being treated

equitably.

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submit a supplemental brief advising the Court of the final figures and responding to objections. To date,

only 6 of the 237,099 Class Members, or 0.0025 percent, have chosen to opt out, and only 3 or 0.0013%

have submitted objections. (Lucchesi Decl. ¶ 8, 17.)

demonstrates the fairness, adequacy, and reasonableness of the Settlement. Whitford v. First Nationwide

Bank, 147 F.R.D. 135, 141 (W.D. Ky.1992) (“[t]he small number of objectors is a good indication of the

fairness of the settlement”) citing Laskey v. Int'l Union, 638 F.2d 954 (6th Cir. 1981); McGee v.

Continental Tire N. Am., Inc., 2009 WL 539893 (D. N.J. Mar. 4, 2009) (75 opt outs from a class of

285,998 shows that “the Class [ ] strongly favors approval of the Settlement”); Yaeger v. Subaru of

only a small number are received, the fact can be viewed as indicative of the adequacy of the

settlement,” and “[a] court should not withhold approval of a settlement merely because some class

members object.” In re Skechers Toning Shoe Prods. Liab Litig., 2013 WL 2010702, at *7 (W.D. Ky.

elected to remain in the Settlement Class, without objection, constitutes the ‘reaction of the class,’ as a

whole, and demonstrates that the Settlement is ‘fair, reasonable, and adequate.’” In re Cardizem CD

Case 3:18-cv-00534 Document 98 Filed 01/27/20 Page 20 of 23 PageID #: 1753

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approved by federal courts. See, e.g., Eisen v. Porsche Cars N. Am., No. 11-09405-CAS, 2014 U.S. Dist.

LEXIS 14301, *15 (C.D. Cal. Jan. 30, 2014) (“Although 235,152 class notices were sent, 243 class

members have asked to be excluded, and only 53 have filed objections to the settlement.”); Milligan v.

2012) (finding favorable reaction where 364 individuals opted out [0.06%] and 67 filed objections

[0.01%] following a mailing of 613,960 notices); Browne v. Am. Honda Motor Co., No. 09-06750-

where, following a mailing of 740,000 class notices, 480 (0.065%) opted out and 117 (0.016%) objected).

Tenn. Nov. 15, 2010) (same).

///

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///

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IV. CONCLUSION

the standard for final approval. Accordingly, Plaintiffs respectfully move the Court to enter the Final

Order and Judgment granting final approval of the Settlement Agreement and grant such other and

additional relief as the Court may deem appropriate.

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Caroline Ramsey Taylor

John C. Whitfield

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