A California federal judge has approved a revised settlement agreement between Nissan and a class of drivers who claimed the braking system in certain vehicles is prone to sudden failure. The parties agreed to increase payments to class members and to reduce attorneys’ fees after U.S. District Judge Phyllis J. Hamilton in November rejected the proposed settlement. The judge at that time said the $3.4 million in attorneys’ fees was “grossly disproportionate” to the $278,056 to be paid to about 1,500 drivers of Nissan North America Inc. trucks and sport utility vehicles.
The parties went back to the negotiating table and presented a revised settlement that provides for larger payouts to class members and reduces attorneys’ fees to $2.8 million. The order signed by Judge Hamilton stated:
The court affirms its preliminary approval of the amended settlement as fair, reasonable and adequate, and amends its preliminary approval order as set forth herein.
The settlement pertains to class members’ claims that they were forced to pay out of pocket for the replacement of a so-called delta stroke sensor, an electronic component of the affected vehicles that controls critical safety aspects of braking. Under the settlement, current and former owners of certain 2004-2008 Nissan Titans, Armadas and Infiniti QX56 vehicles across the country can file claims and seek reimbursement for what they paid to repair or replace a defective brake sensor.
The original agreement, proposed in December 2014, had capped those payments at $20 for owners of vehicles that had more than 120,000 miles at the time of repair and at $800 for vehicles that had fewer than 48,000 miles at the time of repair. Those payouts increase under the amended settlement. On the lower end, owners of vehicles with more than 100,000 miles at the time of repair are eligible to receive up to $400, while on the higher end, owners of vehicles with fewer than 60,000 miles at the time of repair are eligible to receive up to $800.
Judge Hamilton rejected the initial proposal in November for what she described as “lowballing class members.” The judge said in her order that a settlement “where 95 percent of the total payout goes to those directly participating in the litigation (i.e., class counsel, the settlement administrator and the class representatives) creates the impression that the proposed settlement has been negotiated for their benefit, at the expense of unnamed class members.”
According to the 2015 order, the total amount of the settlement fund was about $4.27 million, which included $278,056 for the claimants, $20,000 in service payments to the four class representatives, $3.4 million for class counsel and $542,508 for the settlement administrator. Reportedly, the parties participated in an additional mediation session in January and a settlement conference in April. The parties presented the revised settlement agreement to the court in late May. In total, the amended agreement increases payments to class members, reduces the attorneys’ fees, provides for certain payments to class members who submit claims pursuant to the amendment and clarifies the scope of the settlement class. A final fairness hearing has been scheduled for Sept. 21.
The named Plaintiffs, Brandon and Erin Banks, filed the suit in April 2011. The complaint against Nissan alleged that the affected vehicles posed a serious safety threat to consumers because the delta stroke sensor was prone to failure. It was said in the complaint that the defect caused drivers to be suddenly unable to stop their vehicles within a reasonably safe time and distance, or at all.
The Plaintiffs are represented by Michael F. Ram and Karl Olson of Ram Olson Cereghino & Kopcyznski LLP, F. Jerome Tapley and Hirlye R. Lutz III of Cory Watson PC, Kirk J. Wolden and Clifford L. Carter of Carter Wolden Curtis LLP and James C. Wyly and Sean F. Rommel of Wyly-Rommel PLLC. The case is in the U.S. District Court for the Northern District of California.
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