Dekker v. Vivint Solar, Inc.

Background

Gerrie Dekker brought this unfair-business-practices class action individually and for customers with Vivint Solar's “Version 1” residential solar power purchase agreements. She alleged that liquidated-damages provisions in those contracts imposed unlawful penalties on customers who defaulted. The certified class consisted of 947 customers. The opinion states that the case originally involved more plaintiffs and broader claims, but many claims and plaintiffs were removed through arbitration rulings, earlier pleadings rulings, and other litigation decisions.

The settlement provided no cash to the class. Instead, it required modification of the Version 1 contracts so that customers who default and buy out their systems could do so at four dollars per watt, reduced by five percent for each year the system had been in service, rather than seven dollars per watt. The court stated that this change formalized Vivint's existing practice. In exchange, the agreement provided for dismissal of the action with prejudice and a release limited to claims asserted and settled in the action.

Settlement Approval

Under Rule 23 of the Federal Rules of Civil Procedure, the court could approve the settlement only if it was fair, reasonable, and adequate. The court considered the strength and risks of the claims, the expense and duration of further litigation, the completed discovery, the parties' negotiations, the proposed relief, and class members' reactions. Of 955 potential class members notified, four requested exclusion, and the court found that the settlement would benefit the class and treat members equitably. The court also found that the settlement was negotiated at arm's length and that the release had been properly narrowed.

The court expressly stated that it had not found that the disputed contract provisions were actually liquidated-damages provisions. It nevertheless found that the settlement's reduced buyout price provided some of the benefit sought in the litigation and approved the settlement.

Fees, Costs, and Service Award

Class counsel requested $1,859,273 in attorney's fees, $168,276.05 in costs, and a $15,000 service award for Dekker. The defendants argued for lower amounts. The court found that counsel were entitled to fees under the California Consumers Legal Remedies Act because Dekker had narrowly succeeded on a significant issue, but not under California Code of Civil Procedure Section 1021.5 because the benefit was not conferred on the general public or a sufficiently large class.

The court denied the requested attorney's-fee amount and approved $100,000 to be paid immediately. It allowed class counsel to seek additional fees in three years if more than the anticipated 15 class members invoked the modified contract provisions. Defense counsel must keep records of those events. The court denied $110,361 in expert-witness costs for Bruce McFarlane, denied $30,294 in expert-witness costs for Nora Ostrofe, approved $25,427.60 in unopposed miscellaneous litigation costs, and denied $2,193.45 for an additional class notice because that request exceeded the agreed settlement-administration cap. The additional notice was still required to issue. Finally, the court denied the requested $15,000 service award and approved $500 for Dekker.

Disposition

Final approval of the class settlement was GRANTED. The motion for attorney's fees, expenses, and a class representative service award was GRANTED to the extent stated in the order. The requested attorney's fees of $1,859,273 were DENIED; $100,000 in attorney's fees was APPROVED, with a possible later request. Costs of $25,427.60 and a $500 service award for Dekker were APPROVED.