Objectors want more than massages from class action settlement that provides $7.8M in attorneys fees

By John O'Brien | Jul 29, 2015

SAN DIEGO (Legal Newsline) – A proposed class action settlement that provides massages to class members and nearly $8 million to attorneys is facing resistance.

On June 29, 16 objections were filed in a 2012 case brought by plaintiffs Gail Hahn, Chaille Duncan and Alexis Hernandez against Massage Envy. The suit, filed in San Diego federal court, alleges the company wrongly would not honor monthly 50-minute massages that customers did not use before they cancelled their membership.

Former members of Massage Envy would receive a six-month reinstatement of approximately 75 percent of the unused massages.

One objector is Fumiko Robinson, who filed her own class action lawsuit against the company in late 2014 in Florida. Her lawsuit has been stayed while the court ponders the Hahn settlement.

Robinson, who says she has five massages owed to her, is upset that there is no monetary relief for class members in the proposed settlement.

“Class members should be entitled to reimbursement of their purchase price for all forfeited massages,” wrote Robinson’s attorneys, Benjamin Lopatin and Joshua Eggnatz of Eggnatz, Lopatin & Pascucci.

“At the time the Hahn settlement was reached, there was a potential for monetary recovery – as a result of the settlement, there is not. If the Hahn settlement is approved, it may eviscerate class members’ rights nationwide to obtain financial relief.”

Class members should at least be able to choose a refund or the massages, Robinson feels. Her attorneys also wrote that 100 percent – not 75 – of the forfeited massages should be reinstated, and that class members should have seven – not six – months to use them.

Robinson also objects to a provision that requires Massage Envy to make certain disclosures for two years.

“There is no legitimate reason to agree for Massage Envy to be able to resume its unfair business practice that this Court has already granted summary judgment against after two years,” Robinson’s attorneys wrote.

Another objector took issue with the amount of attorneys fees requested by the plaintiffs’ counsel.

Clifford Hardwick also filed his objection on June 29. He called it a “coupon settlement” that will disenfranchise Massage Envy clients who no longer want to transact any business with the company.

“(T)he proposed settlement is not fair nor reasonable in that class members such as Mr. Hardwick who no longer wish to utilize the services of Massage Envy will get no benefit,” wrote Hardwick’s attorney, Steve Miller of Denver.

Hardwick argues that the attorneys fees request of $7.8 million should be rejected because it isn’t based on the number of vouchers that will actually be redeemed.

The class action attorneys are claiming the value of the settlement is between $179 million and $225 million, which assumes nearly 100 percent of the vouchers are redeemed, Hardwick claims.

“Class counsel boasts that its fee is less than three percent of the value of the settlement to the class,” Hardwick’s objection says.

“Class counsel further argues that the percentage it seeks as fees is well below the 25 percent benchmark used in this circuit.

“However, without actual data as to the percentage of former members who not only request reinstatement of unutilized massages but who also actually go into a Massage Envy location to take advantage of the reinstated massage, class counsel’s valuation is nothing more than voodoo economics.”

Attorneys for the Hahn class – Jeffrey Krinsk, Mark Knutson and William Restis - filed a response on Friday. Their response says there were 32 objectors out of 2.68 million class members who were provided notice of the proposed settlement.

Their response says Hardwick’s attorney is “a recognized serial objector.”

“Hardwick’s objections boil down to a disagreement over the value of the class claims and the bona fides of the requested attorneys’ fees,” the response says.

According to a website created by the class action firm Anderson + Wanca, Miller has objected to nine class action settlements as an attorney.

The response of Krinsk and his colleagues also addressed Robinson’s objections, claiming the settlement is fair and reasonable.

“Here, despite claiming that the Representatives could have done better, none of the objectors state that the ability to redeem prepaid massages, three-fourths of which were previously forfeited to Massage Envy, is not a real and substantial benefit,” the response says.

“Indeed, this settlement provides former Massage Envy members with exactly what they paid for but failed to receive.”

The plaintiffs attorneys on Friday also filed a supplemental brief addressing the valuation of the settlement that defends its fees request. It says their approach to calculating their fees mirrors what is done in an ordinary common fund case.

According to court records, Hahn recently passed away.

From Legal Newsline: Reach editor John O’Brien at jobrienwv@gmail.com.

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