Troy Scheffler, et al. v. Forjas Taurus, S.A., et al.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-15277
Non-Argument Calendar
________________________
D.C. Docket No. 1:13-cv-24583-PAS
CHRIS P. CARTER,
individually and on behalf of all others
similarly situated,
Plaintiff-Appellee,
TROY SCHEFFLER,
STEVEN A. GLAVIANO,
RICHARD JORDAN,
Interested Parties-Appellants,
versus
FORJAS TAURUS, S.A.,
TAURUS INTERNATIONAL MANUFACTURING INC.,
TAURUS HOLDINGS INC.,
Defendants-Appellees
________________________
Appeals from the United States District Court
for the Southern District of Florida
________________________
(June 29, 2017)
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Before HULL, WILSON, and MARTIN, Circuit Judges.
PER CURIAM:
Troy Scheffler, Richard Jordan, and Steven Glaviano are unnamed class
members challenging the district court’s approval of a class-action settlement and
attorney’s fee award.1 The settlement is the result of a class action suit filed by
Chris Carter against Forjas Taurus, S.A., Taurus International Manufacturing, Inc.,
and Taurus Holdings Inc. (collectively, “Taurus”), alleging that nine Taurus gun
models had certain safety defects. After litigation and mediation, Carter reached a
settlement with Taurus on behalf of the class. Scheffler, Jordan, and Glaviano
opposed the settlement, but the district court dismissed their objections and
approved it. Each of them appeals. After careful review, we affirm the district
court.
I.
A. BACKGROUND
In 2013, Carter was a deputy with the Scott County, Iowa Sheriff’s
Department. He owned a Taurus PT140 Millennium PRO pistol. While making
an arrest, Carter’s gun fell from its holster at his waist and fired when it hit the
ground. Fortunately no one was hurt. Carter says the manual safety was engaged
1 Glaviano is proceeding pro se.
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when his gun fell, and it was still engaged when he retrieved it from the ground.
When engaged, the manual safety is supposed to prevent the gun from firing.
Carter then brought this suit against Taurus on behalf of himself and a
nationwide class of people who own certain Taurus gun models (the “class guns”).
In the amended complaint, Carter alleged his gun and other similar models
contained two defects: First, he alleged the class guns could fire even with the
manual safety engaged (the “false safety defect”). This could happen if the manual
safety was switched on while the trigger was “not in its fully forward position.”
Second, he alleged the guns could fire when dropped (the “drop-fire defect”)
because they lacked a “trigger blade safety.” Carter sued Taurus for (1) violations
of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat § 501.201; (2)
negligence; (3) strict liability; (4) breach of express warranties; (5) breach of the
implied warranty of merchantability; (6) violations of the Magnuson-Moss
Warranty Act, 15 U.S.C. § 2301; (7) negligent failure to warn, as well as
concealment and misrepresentation; and (8) fraudulent concealment and intentional
failure to warn.
At first, the parties aggressively litigated the suit. Forjas Taurus resisted
service of the complaint, as well as later document-production requests, on the
basis of its Brazilian citizenship. Taurus also moved to dismiss Carter’s amended
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complaint.2 The parties then engaged in significant discovery. Carter hired
experts who performed 500 hours of testing on Taurus guns. He represented that
the experts performed over 300 drop tests on class guns and compared the results
with tests on new Taurus guns made with trigger blade safeties.3
During discovery, the parties also spent over 90 hours in mediation and
settlement negotiations. At mediation, Carter shared his experts’ test results.
Taurus then hired their own experts to examine those results. Eventually, the
parties agreed to a settlement.
B. SETTLEMENT AGREEMENT
The settlement agreement covers a nationwide class of gun owners of one or
more of the class guns. Under the settlement, all class members can choose to turn
in their class guns and receive one of two benefits: (1) a cash payment of as much
as $200, with Taurus’s total payment for this benefit capped at $30 million; or (2)
an enhanced warranty, under which owners can exchange their guns for a similar
new model that includes a trigger blade safety. Class members will be able to
choose the cash option only during a four-month claims period, but the enhanced
warranty option is available to any current or future owner of a class gun for the
life of the gun. Finally, subject to court approval, Taurus agreed to pay up to $9
2 Taurus withdrew its motion to dismiss after Carter responded to it. Then the three
defendants separately answered the complaint.
3 The parties also represented that in 2013, Taurus stopped making the class guns and
began making different gun models that had trigger blade safeties.
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million in attorney’s fees and expenses, as well as a $15,000 incentive award to
Carter for representing the class. The parties have since agreed to modify the
attorney’s fee award to $8.3 million.
C. SETTLEMENT APPROVAL
On June 23, 2015, the district court held a preliminary approval hearing. At
the hearing, Taurus admitted the class guns all lack a trigger blade safety. After
the hearing, the district court preliminarily approved the settlement and class
notice; preliminarily certified the settlement class; and preliminarily appointed the
class representative, class counsel, and claims administrator. To preliminarily
certify the class, the court found (again, preliminarily) the class met the
requirements of Federal Rule of Civil Procedure 23(a) and (b)(3). The court also
set deadlines for class members to opt out of the settlement or object to it, and
scheduled the final approval hearing.
Before the final approval hearing, Carter submitted an expert affidavit from
Dr. Andrew Safir, who has a doctorate in economics with a specialty in
econometrics. The Safir affidavit estimated the value of the proposed settlement.
According to Dr. Safir, if all class members participated, the settlement would be
worth $239.1 million. But assuming a claim rate of 10 to 25 percent, Dr. Safir
calculated a total settlement value of $29.9 million to $73.6 million. To calculate
the value of the enhanced warranty, Dr. Safir looked at online gun auctions to
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estimate the prices of used class guns4 and the Taurus website for the list price of
new replacement guns. He determined there was an average value of $235 per
replaced gun. Using this average value plus shipping fees, Dr. Safir calculated the
enhanced warranty was worth between $20.9 million and $52.3 million. For the
cash option, Dr. Safir determined that claimants would receive between $158 and
$170 per gun, depending on the total number of claims. He estimated the value of
the cash option to be between $9 million and $21.3 million. Finally, Dr. Safir
added the estimated value ranges of the two options to calculate the total settlement
value.
Also before the final hearing about the settlement, Carter submitted
deposition testimony from Taurus’s Chief Customer Service Representative that
under the original Taurus warranty, Taurus did not replace a gun because of the
drop-fire defect. Scheffler, Jordan, and Glaviano all filed objections to the
proposed settlement. The district court held the final approval hearing on January
20, 2016, but because of concerns raised by the objectors, the court delayed final
approval and ordered that a supplemental notice be sent to the class.
The district court continued the settlement approval hearing on July 18,
2016. At this hearing, Taurus acknowledged the manual safeties on the class guns
4 The parties agreed that most of the class guns were made between 1997 and the mid-
2000s.
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could be placed in the false safety position, but attributed this to user error. In
addition, Glaviano presented his objections at the end of the hearing.5
On August 3, 2016, the district court approved the settlement and attorney’s
fees, and overruled the objections. Scheffler, Jordan, and Glaviano appeal the
district court’s order.
II.
As an initial matter we must decide whether Scheffler, Jordan, and Glaviano,
who are neither named class representatives nor intervenors, have the power to
bring this appeal. The general rule is “only parties to a lawsuit, or those that
properly become parties, may appeal an adverse judgment.” Marino v. Ortiz, 484
U.S. 301, 304, 108 S. Ct. 586, 587 (1988) (per curiam). But in Devlin v.
Scardelletti, 536 U.S. 1, 122 S. Ct. 2005 (2002), the Supreme Court held “that
nonnamed class members . . . who have objected in a timely manner to approval of
the settlement at the fairness hearing have the power to bring an appeal without
first intervening.” Id. at 14, 122 S. Ct. at 2013.
Despite differences between Devlin and this case, we will apply Devlin’s
rule to Scheffler, Jordan, and Glaviano. The objector in Devlin was part of a
mandatory class with no opt-out rights certified under Rule 23(b)(1). See id. at 5,
5 Before Glaviano spoke, the district court asked Taurus and Carter some questions to aid
in writing a final order. The court said “that’s why I’m using this hearing, to make sure that as
I’ve written out the order, I can make sure that I have the specifics in the order.”
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10–11, 122 S. Ct. at 2008, 2011. The Supreme Court recognized that because the
objector “had no ability to opt out of the settlement,” appealing the settlement was
his “only means of protecting himself from being bound by” its terms. Id. at 10–
11, 122 S. Ct. at 2011. Here in contrast, the class was certified under Rule
23(b)(3). That means Scheffler, Jordan, and Glaviano could have opted out of the
class. See Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 617, 117 S. Ct. 2231,
2246 (1997). Nevertheless, persuasive authority convinces us to apply Devlin’s
rule here. That is because “Devlin . . . is about party status and one who could
cease to be a party is still a party until opting out.” Nat’l Ass’n of Chain Drug
Stores v. New England Carpenters Health Benefits Fund, 582 F.3d 30, 40 (1st Cir.
2009); accord Poertner v. Gillette Co., 618 F. App’x 624, 627–28 (11th Cir. 2015)
(per curiam) (unpublished); Fidel v. Farley, 534 F.3d 508, 512–13 (6th Cir. 2008);
Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 572 (9th Cir. 2004); In re
Integra Realty Res., Inc., 354 F.3d 1246, 1257 (10th Cir. 2004). Therefore,
Scheffler, Jordan, and Glaviano, as objecting class members who did not opt out of
the settlement, may bring this appeal.
III.
We thus turn to the merits of the appeal. We review de novo whether named
plaintiffs have standing to assert their claims. Piazza v. Ebsco Indus., Inc., 273
F.3d 1341, 1345 (11th Cir. 2001). We review the approval of a class action
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settlement for a clear showing of abuse of discretion. Bennett v. Behring Corp.,
737 F.2d 982, 986 (11th Cir. 1984). “The proponents of class action settlements
bear the burden of developing a record demonstrating that the settlement
distribution is fair, reasonable and adequate.” Faught v. Am. Home Shield Corp.,
668 F.3d 1233, 1239 (11th Cir. 2011) (quotation omitted and alteration adopted).
We review for an abuse of discretion a district court’s award of attorney’s fees. Id.
at 1242. “We review for abuse of discretion the district court’s decisions regarding
the admissibility of expert testimony and the reliability of an expert opinion.”
Knight through Kerr v. Miami-Dade Cty., 856 F.3d 795, 808 (11th Cir. 2017)
(quotation omitted).
A. STANDING
Before certifying the class, the district court was required to find that Carter
had standing to raise each class claim. See Prado-Steiman ex rel. Prado v. Bush,
221 F.3d 1266, 1279 (11th Cir. 2000). “[A] class representative must be part of the
class and possess the same interest and suffer the same injury as the class
members.” Id. (quotation omitted). Among other things, Carter must allege he
suffered an “injury in fact” in order to demonstrate standing. Resnick v. AvMed,
Inc., 693 F.3d 1317, 1323 (11th Cir. 2012).
Glaviano challenges Carter’s standing to be the class representative,
suggesting that Carter did not suffer an actual injury. Glaviano says Carter’s gun
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does not have the false safety defect. But Carter alleged he owned a class gun that
suffered from the same defects as the rest of the class guns. Thus, Carter suffers
from the same alleged injury as the rest of the class. See Bush, 221 F.3d at 1279.
We discern no other standing defects.
B. CLASS CERTIFICATION
Glaviano next objects to the district court’s certification of the class. To
certify a class under Rule 23(b)(3), a district court must find that issues common to
the class “predominate” over issues specific to individual class members. Fed. R.
Civ. P. 23(b)(3). Glaviano argues the class does not meet this requirement because
the class guns do not have any defects, and therefore all the issues are specific to
Carter. But whether the class guns actually have the alleged defects is not relevant
for the purposes of class certification. “Rule 23(b)(3) requires a showing that
questions common to the class predominate, not that those questions will be
answered, on the merits, in favor of the class.” Amgen Inc. v. Conn. Ret. Plans &
Trust Funds, 568 U.S. 455, 133 S. Ct. 1184, 1191 (2013). As the district court
found, Carter alleged the class guns suffer from common defects because they lack
trigger blade safeties and can be placed in the false safety position. Thus,
Glaviano’s challenge fails because the factual issue he identifies concerns alleged
defects common to all the class guns. See Rutstein v. Avis Rent-A-Car Sys., Inc.,
211 F.3d 1228, 1233–34 (11th Cir. 2000) (noting that “issues in the class action
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that are subject to generalized proof, and thus applicable to the class as a whole,
must predominate over those issues that are subject only to individualized proof”
(quotation omitted)).
Glaviano also argues the district court erred in certifying the class because
the court recognized that managing the nationwide class would be difficult. See
Fed. R. Civ. P. 23(b)(3)(D). But the Supreme Court has told us when
“[c]onfronted with a request for settlement-only class certification, a district court
need not inquire whether the case, if tried, would present intractable management
problems.” Windsor, 521 U.S. at 620, 117 S. Ct. at 2248. Thus, the district court
did not abuse its discretion in this regard when it certified the class.
C. SETTLEMENT APPROVAL
Glaviano next challenges the fairness of the settlement. He argues Taurus is
no longer required to repair the class guns under the enhanced warranty and can
instead replace the guns with inferior models. Glaviano also argues the cash
option is unfair because Taurus can pay claimants half of what they originally paid
for their guns.
A district court must find that a class action settlement “is fair, adequate and
reasonable and is not the product of collusion between the parties.” Bennett, 737
F.2d at 986 (quotation omitted); see Fed. R. Civ. P. 23(e)(2). The district court
correctly found that Glaviano has no basis for his claim that his class gun is better
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than the new model. Indeed, Dr. Safir valued the class guns as worth an average of
$235 less than the new models. The district court was also correct to reject
Glaviano’s objection that Taurus was using the settlement to avoid honoring the
original warranty’s promise to repair class guns. The court pointed to deposition
testimony from Taurus’s Chief Customer Service Representative that the alleged
drop-fire defect would not have been covered under the original warranty. Neither
did the district court err in rejecting Glaviano’s claims that the cash payment is too
low. The parties agreed that most class guns are over ten years old, so they should
not be valued at their original selling price. And in any event, settlements are
compromises, providing the class members with benefits but not full
compensation. See Bennett, 737 F.2d at 986 (“[C]ompromise is the essence of
settlement.”). It was reasonable for the court to conclude that the settlement,
which provided class members the benefit of a cash payment or a replacement gun
in exchange for an allegedly defective and dangerous class gun, was “fair,
adequate and reasonable.” Id. (quotation omitted).
Scheffler and Jordan also argue the district court did not do enough to
evaluate the settlement for collusion between class counsel and Taurus.
Specifically, they argue that the “clear-sailing agreement”6 in the settlement
protected class counsel and reduced their incentive to get a better settlement for the
6 In a “clear sailing” agreement, “defendants agree[] not to object to an award of
attorneys’ fees.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 947 (9th Cir. 2011).
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class. They rely on a Ninth Circuit case noting that the combination of a clear-
sailing agreement and a separate fund for attorney’s fees can be a sign of collusion.
See In re Bluetooth, 654 F.3d at 947. But these allegations of collusion are not
supported by the record.
Instead, the record shows that the district court reviewed the settlement for
collusion. In approving the settlement, the district court noted that the parties
reached the settlement after arm’s-length negotiations at six mediation sessions.
And before that, the parties litigated for over a year, including 500 hours of expert
testing, depositions, disputes about service and discovery, and motions practice.
Therefore, despite the clear-sailing agreement, the district court did not err in this
regard when it approved the settlement.7
D. ATTORNEY’S FEES
Scheffler and Jordan challenge the district court’s award of $8.3 million in
attorney’s fees. They say that while the class could receive as much as $30
million, it is likely to receive much less because Taurus will keep any unclaimed
7 We also reject Scheffler and Jordan’s claim that the district court failed in its role as
fiduciary to absent class members because the court said it was working on the final order during
the July 2016 final approval hearing. Before the July 2016 hearing, the district court had already
held a final approval hearing in January. At that time, objectors voiced their concerns. Taking
these concerns seriously, the court ordered a supplemental notice sent to the class and delayed
final approval. The court also received the objectors’ numerous written objections before the
July final approval hearing. In addition, the court addressed these objections in its order
approving the settlement. It was well within the district court’s discretion to bring a draft order
to the final approval hearing, as well as to use that hearing to help draft the order.
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money. They argue the attorney’s fee should have been calculated based on the
amount actually paid to the class. But this is not required by our precedent.
“[N]o case has held that a district court must consider only the actual payout
in determining attorneys’ fees.” Waters v. Int’l Precious Metals Corp., 190 F.3d
1291, 1295 (11th Cir. 1999). Instead, in this circuit we have identified twenty to
thirty percent of the common fund as a “benchmark” for an attorney’s fee award.
Id. at 1294. The district court may also consider “the individual circumstances of
each case using the factors set forth in” Johnson v. Georgia Highway Express, Inc.,
488 F.2d 714 (5th Cir.1974), abrogated on other grounds Blanchard v. Bergeron,
489 U.S. 87, 109 S. Ct. 939 (1989).8 Waters, 190 F.3d at 1294 (quotation omitted).
The district court’s fee award is a reasonable percentage of the settlement
value. Here, we have a $30 million fund for any claims made under the cash
option, as well as the enhanced warranty, which is itself a significant tangible
benefit. Combining both, Dr. Safir estimated the total settlement value to be worth
over $239 million. Even if we ignore the enhanced warranty, the $8.3 million
award is 27.7% of the $30 million fund, which falls within the benchmark range.
See id.
8 In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir.1981) (en banc), we adopted as
binding precedent all decisions of the former Fifth Circuit handed down before October 1, 1981.
Id. at 1209.
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In addition, the district court found the fee award reasonable under the
factors set out in Johnson. 488 F.2d at 717–19. The court found class counsel
spent almost 8,100 hours on the case. And it found the settlement gave value to
the class, as well as promoted public safety by removing allegedly defective
weapons from the public. The court also noted class counsel’s skill and experience
in litigating class actions concerning gun manufacturing, and that class counsel
took risks litigating against a foreign company and in the highly regulated field of
guns. The district court “has great latitude in formulating attorney’s fees awards
subject only to the necessity of explaining its reasoning so that we can undertake
our review.” Waters, 190 F.3d at 1293 (quotation omitted). The district court fully
explained its reasoning for adopting the fee award. It did not abuse its discretion in
doing so. See Faught, 668 F.3d at 1242.
E. OTHER OBJECTIONS
1. Dr. Safir’s Qualifications
Glaviano challenges Dr. Safir’s qualifications as an expert and the reliability
of his methodology. Specifically, Glaviano disputes Dr. Safir’s expertise in
valuing guns. He appears to argue Dr. Safir should have used the manufacturer’s
suggested retail price (“MSRP”) for the used class guns, but should not have used
the MSRP for the new replacement guns.
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The district court did not err in relying on Dr. Safir’s expert opinion. Dr.
Safir, who has a doctorate in economics with a specialty in econometrics,
explained his methodology for valuing the guns at issue. He looked at sale prices
on gun auction websites to determine the value of the used class guns, and he used
the listed MSRPs as the values of the new replacement guns. Although Glaviano
prefers his own valuations, the district court rejected them as based on unverified
anonymous web postings. On this record, Glaviano has not shown that the district
court abused its discretion in relying on Dr. Safir’s expert opinion. See Knight,
856 F.3d at 808 (“[T]he trial judge must have considerable leeway in deciding in a
particular case how to go about determining whether particular expert testimony is
reliable.” (quotation omitted)); Debra P. by Irene P. v. Turlington, 730 F.2d 1405,
1412 (11th Cir. 1984) (“It is settled law that the weight to be accorded expert
opinion is solely within the discretion of the judge sitting without a jury . . . .”
(quotation omitted)).
2. Second Amendment
Finally, Glaviano raises a Second Amendment challenge to the settlement
agreement. He says the settlement agreement violates the right of class members
to “keep” their guns because it allows Taurus to confiscate any class guns returned
for repairs. Glaviano points to no case, and this Court has found none, that says
the Second Amendment protects against this kind of action. The Supreme Court
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has held “that the Second Amendment right is fully applicable to the States,”
McDonald v. City of Chicago, 561 U.S. 742, 750, 130 S. Ct. 3020, 3026 (2010),
but has yet to extend this right to protect gun owners against the actions of gun
manufacturers. Glaviano’s Second Amendment challenge fails.
IV.
We conclude the objectors’ challenges to the class settlement and the
attorney’s fee award are without merit.
AFFIRMED.
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