The Kroll Lens: Monitoring Class Action Settlements—2024, Volume VIII

Ponzio v. Pinon,

No. 21-14503, 2023 WL 8183241 (11th Cir. Nov. 27, 2023) (Jordan, J.)

A class of settlement objectors in a case over a defect in automobile paint claimed that the settlement agreement left 80% of the class of automobile owners and lessees without any benefit. The United States District Court for the Northern District of Georgia rejected this argument and approved the settlement. On appeal, the 11th Circuit affirmed the final approval order.

In support of its ruling, the Court reviewed the district court’s decision for abuse of discretion and factual findings for clear error.

The objectors’ first argument contended that the agreement releases claims for the whole class, even though 80% are ineligible for benefits due to not having experienced problems with the paint on their vehicles. The Court reasoned that this contention was flawed in that there is a possibility the paint defect was "latent" and could exist without discovery of the condition through inspection and cause problems later. The Court also found the objectors' calculation of the number of class members without benefit did not account for those who did not file a claim but were eligible, or those who filed and were not eligible, and whether these benefited from the agreement in some way. The objectors had also not accounted for those beyond warranty or goodwill coverage who had received repairs already. More significantly, the Court found that the objectors had put in their supplemental briefing an alternate estimate of about 21% of the class. After reviewing the calculation methods employed by objectors, the Court found that no firm estimate had been arrived at to show how many class members might be ineligible for relief.