Class Counsel in Uber Safe Rides Suit Can Keep $8.12 Million Fee

Lawyers who secured a $32 million class settlement in a lawsuit against Uber over alleged misrepresentations about rider safety are entitled to keep their $8.12 million fee award, the Ninth Circuit said Wednesday.

Three objectors challenged the award, and one appealed, arguing that the deal should have been treated as a coupon settlement subject to attorney fee restrictions under the Class Action Fairness Act.

But after applying factors laid out in the US Court of Appeals for the Ninth Circuit’s decision in Online DVD-Rental Antitrust Litigation, the appeals court said CAFA’s coupon settlement restriction didn’t apply.

Under CAFA, if a proposed class settlement provides for a recovery of “coupons,” the portion of attorney’s fees attributable to the award of the coupons “shall be based on the value to class members of the coupons that are redeemed.”

To determine whether class relief is a coupon, courts ask whether class members must “hand over more of their own money before they can take advantage of” the coupon, whether the coupon can be used only “for select products or services,” and how flexibly the coupon can be used, “including whether it expires or is freely transferrable.”

The class members’ credits can only be used for Uber services, but the other two factors weigh against treating the relief here as coupon relief under CAFA, the court said.

Although most class members’ awards are too small to purchase an Uber ride without paying more out of pocket and are not otherwise transferable, the class members can elect to claim their reward in cash and may also passively receive cash if they do not use their credit, the court said.

The class payouts are based on the number of “Safe Rides Fees” that each individual class member incurred, with an average award of approximately $1.07, and a majority of class members will receive $0.35 or less, the court said.

“To be sure, the amounts to be distributed are modest, even minuscule,” the court said. “However, the amount paid in settlement is properly the subject of a fairness hearing; unless the amount is disproportionate to the actual value, it is not determinative of whether the Settlement is a coupon settlement or not.”

The court rejected the objectors’ remaining arguments that the district court abused its discretion. The lower court found that the multiplier applied to the attorneys’ base fees was reasonable compared to other awards, the court said.

The class is represented by Ahdoot & Wolfson PC and Arias Sanguinetti Wang & Torrijos LLP.

The objector who appealed, Jennifer Hinojosa, is represented by N. Albert Bacharach Jr. of Gainesville, Fla.

Uber is represented by Irell & Menalla LLP.

The case is McKnight v. Uber Tech. Inc., 9th Cir., No. 21-16623, 11/30/22.