Kruger v. Lely North America, Inc.

Background

Jared Kruger, Mark Van Essen, Lynn Kirschbaum, Donna and Robert Koon, and Schumacher Dairy Farms of Plainview LLC brought the case as a proposed class action on behalf of people and entities in the United States or its territories who purchased or leased a new Lely Astronaut A4 robotic milking machine. They alleged that the A4 machines were defective, caused mounting problems and costs, and did not perform as Lely had represented. The opinion identifies Lely North America, Inc., Lely Holding B.V., Maasland N.V., Lely Industries N.V., and Lely International N.V. collectively as the defendants.

After discovery and mediation, the parties reached a settlement. The court preliminarily approved the settlement on January 4, 2023, directed the parties to carry out a notice plan, and indicated that it would likely certify the class for purposes of entering judgment on the settlement. Notice was sent by first-class mail and, when an email address was available, by email. The notice described the settlement, the requested attorneys’ fees and expenses, and the requested service awards.

No class member objected to the settlement, the fees and expenses, or the service awards, and no class member opted out. Class members owning approximately 96% of the eligible A4 machines participated in the settlement. The court held a final approval hearing on July 24, 2023.

Class Certification

The court certified the following settlement class for purposes of the settlement: all persons in the United States or its territories who purchased or leased a new Lely Astronaut A4 Robot. The class excluded people or entities that purchased or leased a used A4 Robot, the court and its personnel, the defendants and specified related persons and entities, governmental entities, and people or entities that timely opted out.

The court found that the requirements of Federal Rule of Civil Procedure 23 were satisfied. It found that the class had more than 400 members, making it impracticable to join everyone in one lawsuit; that common legal and factual questions predominated; that the representatives’ claims were typical; and that the representatives and class counsel would adequately protect the class. The court also found that a class action was superior to individual litigation.

Settlement Approval

The court approved the settlement under Rule 23(e), finding it fair, reasonable, and adequate. The court relied on the representatives’ and counsel’s work, the arm’s-length negotiations after substantial litigation and three full-day mediation sessions, the settlement’s approximate value of $121,956,000, the straightforward claims process, the nearly 100% participation rate, Lely’s willingness and financial ability to meet its obligations, and the absence of opposition.

Under the settlement, class members could choose either a pro rata distribution from the cash fund or, if they still owned their A4 machine, a trade-in for a new Lely A5 machine. The court confirmed that the notice met Rule 23, due-process, and other legal requirements.

Releases and Dismissal

The order provided that, as of the settlement’s effective date, the releasing parties would waive all released claims against the released parties as defined in the settlement agreement. The court dismissed the action with prejudice, while retaining exclusive jurisdiction over the action and the parties, attorneys, and settlement class members concerning administration, interpretation, effectuation, and enforcement of the settlement agreement, the order, and the final judgment.

Attorneys’ Fees, Costs, and Service Awards

The court approved attorneys’ fees equal to 17.6% of the settlement’s full value. In reaching that amount, it considered that class counsel worked on a fully contingent basis, spent more than 13,178.25 hours on the case without a guaranteed recovery, and advanced $280,069.08 in costs. The court also considered the excellent result and the nearly 100% participation rate. The opinion notes that the requested and awarded percentage was lower than the percentage approved in an analogous settlement involving another defective robotic milking system.

The court found the submitted costs and expenses reasonably incurred and reimbursable from the settlement fund. It approved reimbursement of $280,069.08, although the settlement allowed counsel to seek up to $300,000.

The court approved service awards of $50,000 for Jared Kruger, $25,000 for Mark Van Essen, and $15,000 each for Lynn Kirschbaum, Donna and Robert Koon, and Schumacher Dairy Farms of Plainview LLC. Kruger asked at the final approval hearing for an increased award, but the opinion states that the court addressed that request in a separate order and does not state the result of that request here.

Disposition

The court granted both the motion for final approval of the class settlement and the motion for attorneys’ fees, costs, expenses, and service awards. The court also dismissed the action with prejudice and retained limited continuing jurisdiction for settlement-related matters.