                FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


IN RE ONLINE DVD-RENTAL                 No. 12-15705
ANTITRUST LITIGATION,
                                          D.C. No.
                                       4:09-md-02029-
ANDREA RESNICK; BRYAN                       PJH
EASTMAN; AMY LATHAM; MELANIE
MISCIOSCIA; STAN MAGEE;
MICHAEL OROZCO; LISA SIVEK;
MICHAEL WIENER,
               Plaintiffs-Appellees,

                 v.

THEODORE H. FRANK,
              Objector-Appellant,

                 v.

NETFLIX, INC.; WAL-MART STORES,
INC.; WALMART.COM USA LLC,
               Defendants-Appellees.
2    IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

IN RE ONLINE DVD-RENTAL                 No. 12-15889
ANTITRUST LITIGATION,
                                          D.C. No.
                                       4:09-md-02029-
ANDREA RESNICK; BRYAN                       PJH
EASTMAN; AMY LATHAM; MELANIE
MISCIOSCIA; STAN MAGEE;
MICHAEL OROZCO; LISA SIVEK;
MICHAEL WIENER,
               Plaintiffs-Appellees,

                 v.

JON M. ZIMMERMAN,
              Objector-Appellant,

                 v.

NETFLIX, INC.; WAL-MART STORES,
INC.; WALMART.COM USA LLC,
               Defendants-Appellees.
     IN RE ONLINE DVD RENTAL ANTITRUST LITIG.          3

IN RE ONLINE DVD-RENTAL                 No. 12-15957
ANTITRUST LITIGATION,
                                          D.C. No.
                                       4:09-md-02029-
ANDREA RESNICK; BRYAN                       PJH
EASTMAN; AMY LATHAM; MELANIE
MISCIOSCIA; STAN MAGEE;
MICHAEL OROZCO; LISA SIVEK;
MICHAEL WIENER,
               Plaintiffs-Appellees,

                 v.

EDMUND F. BANDAS,
              Objector-Appellant,

                 v.

NETFLIX, INC.; WAL-MART STORES,
INC.; WALMART.COM USA LLC,
               Defendants-Appellees.
4    IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

IN RE ONLINE DVD-RENTAL                 No. 12-15996
ANTITRUST LITIGATION,
                                          D.C. No.
                                       4:09-md-02029-
ANDREA RESNICK; BRYAN                       PJH
EASTMAN; AMY LATHAM; MELANIE
MISCIOSCIA; STAN MAGEE;
MICHAEL OROZCO; LISA SIVEK;
MICHAEL WIENER,
               Plaintiffs-Appellees,

                 v.

MARIA COPE,
                Objector-Appellant,

                 v.

NETFLIX, INC.; WAL-MART STORES,
INC.; WALMART.COM USA LLC,
               Defendants-Appellees.
     IN RE ONLINE DVD RENTAL ANTITRUST LITIG.          5

IN RE ONLINE DVD-RENTAL                 No. 12-16010
ANTITRUST LITIGATION,
                                          D.C. No.
                                       4:09-md-02029-
ANDREA RESNICK; BRYAN                       PJH
EASTMAN; AMY LATHAM; MELANIE
MISCIOSCIA; STAN MAGEE;
MICHAEL OROZCO; LISA SIVEK;
MICHAEL WIENER,
               Plaintiffs-Appellees,

                 v.

JOHN SULLIVAN,
                 Objector-Appellant,

                 v.

NETFLIX, INC.; WAL-MART STORES,
INC.; WALMART.COM USA LLC,
               Defendants-Appellees.
6    IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

IN RE ONLINE DVD-RENTAL                    No. 12-16038
ANTITRUST LITIGATION,
                                             D.C. No.
                                          4:09-md-02029-
ANDREA RESNICK; BRYAN                          PJH
EASTMAN; AMY LATHAM; MELANIE
MISCIOSCIA; STAN MAGEE;
MICHAEL OROZCO; LISA SIVEK;                  OPINION
MICHAEL WIENER,
               Plaintiffs-Appellees,

                 v.

TRACEY KLINGE COX,
              Objector-Appellant,

                 v.

NETFLIX, INC.; WAL-MART STORES,
INC.; WALMART.COM USA LLC,
               Defendants-Appellees.


      Appeal from the United States District Court
         for the Northern District of California
      Phyllis J. Hamilton, District Judge, Presiding

                Argued and Submitted
     February 13, 2014—San Francisco, California

                Filed February 27, 2015
         IN RE ONLINE DVD RENTAL ANTITRUST LITIG.                      7

        Before: Sidney R. Thomas, Chief Judge, Stephen
      Reinhardt, Circuit Judge, and Lloyd D. George, Senior
                          District Judge.*

                Opinion by Chief Judge Thomas


                           SUMMARY**


                             Settlement

    The panel affirmed the district court’s approval of a
settlement between Walmart and a class of Netflix DVD
subscribers in a class action challenging as anti-competitive
an agreement under which Netflix and Walmart divided up
DVD-related business.

    In the settlement agreement, Walmart agreed to pay a
total amount of $27,250,000, comprising both a “Cash
Component” and a “Gift Card Component.”

    The panel held that the district court did not abuse its
discretion in certifying the settlement class under Fed. R.
Civ. P. 23(a) and (b). The panel concluded that the class
representatives were adequate even though they received
incentive awards.



  *
   The Honorable Lloyd D. George, Senior District Judge for the U.S.
District Court for the District of Nevada, sitting by designation.
  **
     This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
8      IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

    The panel concluded that, even though few class members
actually filed claims, the district court did not err in using the
claimant fund sharing approach, whereby each class member
who submits a claim receives an equal share of the settlement
fund, regardless of the harm he or she suffered.

    The panel concluded that the district court’s notice of
settlement did not violate either Rule 23 or due process.

    The panel held that the district court did not err in
approving the settlement as fair, reasonable, and adequate
under Rule 23(e). The panel rejected arguments that the
incentive awards were unreasonably large, that a reverter
provision and a confidential opt-out provision were unfair,
and that the district court failed adequately to explain its
decision.

     The panel held that the district court did not err in
awarding attorneys’ fees of 25% of the overall settlement
fund under Rule 23(h). The panel held that the fee award was
not subject to provisions of the Class Action Fairness Act
governing “coupon settlements” because the portion of the
settlement to be paid in Walmart gift cards was not a “coupon
settlement” within the meaning of CAFA. In addition, the
district court provided adequate notice to the class of the
attorneys’ fee petition and provided an adequate explanation
of its rationale.
       IN RE ONLINE DVD RENTAL ANTITRUST LITIG.                    9

                           COUNSEL

Theodore H. Frank (argued), Center for Class Action
Fairness, Washington, D.C.; Gary Sibley, Dallas, Texas;
Joseph Darrell Palmer, Law Offices of Darrell Palmer PC,
Solana Beach, California; Christopher A. Bandas, Bandas
Law Firm, P.C., Corpus Christi, Texas; Christopher V.
Langone and Grenville Pridham, Law Office of Christopher
Langone, Ithaca, New York; Joshua R. Furman (argued),
Joshua R. Furman Law Corp., Los Angeles, California, for
Objector-Appellants Frank, Cope, Cox, Bandas, Sullivan, and
Zimmerman.

Todd A. Seaver, (argued), Joseph J. Tabacco, Jr., and
Christopher T. Heffelfinger, Berman DeValerio, San
Francisco, California, for Plaintiffs-Appellees.


                            OPINION

THOMAS, Chief Judge:

    In this appeal, class members challenge the district court’s
approval of a settlement between Walmart1 and a class of
Netflix DVD subscribers arguing, among other matters, that
the gift card portion of the settlement constituted a coupon
settlement within the meaning of the Class Action Fairness
Act (“CAFA”), Pub. L. No. 109–2, 119 Stat. 4 (2005). We
hold that the settlement was fair and that the fee award was
proper, and we affirm the district court.


 1
  For ease of reference, “Wal-Mart Stores, Inc.” and “walmart.com USA
LLC” shall be collectively referred to as “Walmart” throughout this
opinion.
10    IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

                               I

    Before its focus changed to streaming video, Netflix’s
primary business was renting DVDs to subscribers online and
shipping them out by mail. Other companies, including retail
giant Walmart, tried to compete. Netflix reached an
agreement with Walmart that divided up DVD-related
business between the two companies. Under the agreement,
Netflix stopped selling DVDs, and focused solely on its DVD
rental business. In return, Walmart wound down its own
burgeoning online rental service, but continued to act as a
major DVD seller.

    In 2009, Andrea Resnick and seven other class
representatives (“plaintiffs”) filed a consolidated amended
class action complaint against Netflix and Walmart,
challenging the agreement as anti-competitive. Plaintiffs
assert that as a result of the agreement and Walmart’s
subsequent departure from the rental business, Netflix
charged its customers unfairly high monthly subscription
prices.

    The district court granted plaintiffs’ motion for
certification of a litigation class of Netflix subscribers. The
court denied approval of an initial settlement agreement
between Walmart and a global class of both Netflix
subscribers and subscribers to Blockbuster’s online DVD
rental service. However, a class of just Netflix subscribers
then reached a settlement agreement with Walmart. The
court conditionally approved the Netflix settlement class and
also gave preliminary approval of the settlement, and the
          IN RE ONLINE DVD RENTAL ANTITRUST LITIG.                  11

form and plan of notice. The court denied a renewed motion
by Netflix to decertify the Netflix litigation class.2

    In the settlement agreement, Walmart agreed to pay a
total amount of $27,250,000, comprising both a “Cash
Component” and a “Gift Card Component,” in exchange for
dismissal with prejudice of all claims asserted in the
complaint. The class consists of:

          any person or entity residing in the United
          States or Puerto Rico that paid a subscription
          fee to rent DVDs online from Netflix on or
          after May 19, 2005, up to and including the
          date the Court grants Preliminary Approval of
          the Settlement, or some other date to be
          agreed to by the parties to this Agreement.3

The Cash Component funded attorneys’ fees and expenses,
costs of notice and administration, and incentive payments to
class representatives. The amount remaining constituted the
Gift Card Component and was used to provide class members
with either gift cards or, if they so chose, the cash equivalent
of a gift card. The gift card could only be used at the
Walmart website and was freely transferrable, although it
could not be resold. To receive payment, a class member was
required to submit a claim form. A claimant could submit a


  2
   Netflix had alleged that Plaintiffs’ lead counsel, Robert G. Abrams,
had a conflict of interest because he had moved to a new firm, Baker &
Hostetler, LLP, that represents Walmart on other, unrelated matters.
      3
    The court chose an ending date for the class (i.e., a person who
subscribes to Netflix after the ending date is not a class member) of
September 2, 2011.
12     IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

claim for a gift card via e-mail, the class action website, or
regular mail. A claimant could submit a claim for cash by
regular mail only, and had to include the last four digits of his
or her Social Security Number. Each claimant received an
equal share of the Gift Card Component. In other words, the
Gift Card Component (the amount remaining after subtracting
attorneys’ fees and expenses, notice and administration costs,
and incentive payments) was split evenly among all valid
claimants, regardless of the specific damages each individual
claimant incurred.

     Initial e-mail notice of the settlement was provided to
some 35 million class members. Notice was mailed to more
than 9 million class members whose email addresses were
invalid such that the email notice “bounced back.” The
notice informed class members about the settlement and
claims-submission process; stated that class counsel would
seek $1.7 million in reimbursement of litigation expenses and
fees of 25% of the total settlement fund of $27,250,000 and
that Class Representatives would receive $5,000 each in
incentive payments; it also set a deadline for filing a claim,
leaving the class, or objecting to the settlement of February
14, 2012. The notice encouraged class members to visit the
class website for more details. In response to the notice,
1,183,444 claims were submitted. 744,202 requests were for
gift cards and 434,253 were for the equivalent value in cash.
722 class members opted out of the class and 30 lodged
objections.

    The appellants in this consolidated appeal, members of
the proposed class, all objected to the settlement. At a March
14, 2012 fairness hearing and in the accompanying March 29,
2012 orders, the court gave final approval to the settlement
and settlement class and awarded attorneys’ fees. The judge
        IN RE ONLINE DVD RENTAL ANTITRUST LITIG.                       13

rejected all objections, concluding that not “one objection
was sufficient [] – singular or in the aggregate – to preclude
[her] from approving this settlement.” The court determined
that CAFA’s coupon-settlement provisions should not apply
because the Walmart gift cards were sufficiently different
from coupons–especially given the fact that claimants could
choose between gift cards and cash, the gift cards were freely
transferrable, and they had no expiration date.

    The court concluded the attorneys’ fees were properly
calculated as 25% of the settlement fund, including
administration and notice costs. It decided the percentage
amount was fair, especially given that the alternative lodestar
calculation would have resulted in attorneys’ fees three times
larger than the amount class counsel requested. The court
approved attorneys’ fees of $6,812,500 (25% of the total fund
of $27,250,000), reimbursement of some litigation expenses
totaling $1,700,000, incentive awards of $5,000 each for nine
class representatives (totaling $45,000), and payment of
notice and administration costs out of the fund.
Administration and notice costs totaled roughly $4.5 million,
leaving roughly $14.1 million in the settlement fund for the
Gift Card Component. Divided among almost 1.2 million
claims, the Gift Card Component will provide claimants with
roughly $12 each.4




 4
   Prior to final approval of the Walmart settlement, but after preliminary
approval and after the initial notice was e-mailed to class members, the
court granted Netflix’s motion for summary judgment on November 23,
2011. The settlement website was updated to reflect the court’s decision
to grant Netflix’s summary judgment motion. The version of the notice
that was subsequently mailed to class members who did not receive an
email was also updated.
14     IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

    Following the court’s approval of the settlement, six
objectors, Theodore Frank, Tracey Klinge Cox, Maria Cope,
Edmund F. Bandas, John Sullivan, and Jon M. Zimmerman
(“Objectors”), timely appealed and their cases were
consolidated.

    We have jurisdiction under 28 U.S.C. § 1291. We review
a district court’s decision to approve a class action settlement
“for clear abuse of discretion.” In re Bluetooth Headset
Prods. Liab. Litig., 654 F.3d 935, 940 (9th Cir. 2011) (citing
Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 963 (9th Cir.
2009)). Similarly, we review a court’s “award of fees and
costs to class counsel, as well as its method of calculation”
for abuse of discretion. Id. (citing Lobatz v. U.S. W. Cellular
of Cal., Inc., 222 F.3d 1142, 1148–49 (9th Cir. 2000)). We
review a court’s “order on class certification for an abuse of
discretion,” as well. Parra v. Bashas’, Inc., 536 F.3d 975,
977 (9th Cir. 2008).

                               II

    The district court did not abuse its discretion in certifying
the settlement class. In Amchem Products, Inc. v. Windsor,
521 U.S. 591, 620–21 (1997), the Supreme Court clarified the
difference between certifying a litigation class under Federal
Rule of Civil Procedure 23(a) and (b) and certifying a
settlement class under Rule 23(e). The Court noted that Rule
23(e) “was designed to function as an additional requirement,
not a superseding direction, for the ‘class action’ to which
Rule 23(e) refers is one qualified for certification under Rule
23(a) and (b).” Id. Thus, just because a settlement appears
to be fair, reasonable, and adequate under Rule 23(e) does not
mean a class has met the certification requirements of Rule
23(a) and (b). Id. at 621 (“[I]f a fairness inquiry under Rule
       IN RE ONLINE DVD RENTAL ANTITRUST LITIG.                15

23(e) controlled certification, eclipsing Rules 23(a) and (b),
and permitting class designation despite the impossibility of
litigation, both class counsel and court would be disarmed.”).
Here, the district court certified the settlement class of Netflix
subscribers pursuant to Rules 23(a) and (b)(3).

    We have observed that “[e]xamination of potential
conflicts of interest has long been an important prerequisite
to class certification” and “is especially critical when the a
[sic] class settlement is tendered along with a motion for class
certification.” Hanlon v. Chrysler Corp., 150 F.3d 1011,
1020 (9th Cir. 1998). However, we do not “favor denial of
class certification on the basis of speculative conflicts.”
Cummings v. Connell, 316 F.3d 886, 896 (9th Cir. 2003).
Nor does a district court abuse its discretion when conflicts
are trivial. Abbott v. Lockheed Martin Corp., 725 F.3d 803,
813 (7th Cir. 2013). “Only conflicts that are fundamental to
the suit and that go to the heart of the litigation prevent a
plaintiff from meeting the Rule 23(a)(4) adequacy
requirement.” 1 William B. Rubenstein et al., Newberg on
Class Actions § 3.58 (5th ed. 2011). A conflict is
fundamental when it goes to the specific issues in
controversy. Id.

    Cox argues the district court certified a class in violation
of Rule 23(a), because the class representatives are not able
to adequately represent the class. Relying on Dewey v.
Volkswagen Aktiengesellschaft, 681 F.3d 170, 187–89 (3d
Cir. 2012), Cox argues the representatives are not capable of
adequately representing the class because the nine class
representatives’ awards under the settlement, at $5,000 each,
are significantly larger than the $12 each unnamed class
member will receive. Cox argues that, like in Dewey, there
16    IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

is an arbitrary line drawn in this case between class
representatives and all other class members.

    However, incentive awards that are intended to
compensate class representatives for work undertaken on
behalf of a class “are fairly typical in class action cases.”
Rodriguez, 563 F.3d at 958. Incentive payments to class
representatives do not, by themselves, create an
impermissible conflict between class members and their
representatives. Cobell v. Salazar, 679 F.3d 909, 922, (D.C.
Cir. 2012); White v. Nat'l Football League, 41 F.3d 402, 408
(8th Cir. 1994), abrogated on other grounds by Amchem
Prods. v. Windsor, 521 U.S. 591 (1997).                Rather,
“[r]esolution of two questions determines legal adequacy:
(1) do the named plaintiffs and their counsel have any
conflicts of interest with other class members and (2) will the
named plaintiffs and their counsel prosecute the action
vigorously on behalf of the class?” Hanlon, 150 F.3d at
1020. As to the latter question, “[t]he relevant inquiry is
whether the plaintiffs maintain a sufficient interest in, and
nexus with, the class so as to ensure vigorous representation.”
Roper v. Consurve, Inc., 578 F.2d 1106, 1112 (5th Cir. 1978).

    Here, as in Hanlon, there were no structural differences
in the claims of the class representatives and the other class
members. Hanlon, 150 F.3d at 1021. This case does not
involve an ex ante incentive agreement between the class
representatives and class counsel, which we criticized in
Rodriguez, 563 F.3d at 958–60. Nor does it involve a
settlement which explicitly conditioned the incentive awards
on the class representatives’ support for the settlement, as
was the case in Radcliffe v. Experian Information Solutions
Inc., 715 F.3d 1157, 1164 (9th Cir. 2013). In this case, as in
Cobell, the class settlement agreement provided no guarantee
      IN RE ONLINE DVD RENTAL ANTITRUST LITIG.             17

that the class representatives would receive incentive
payments, leaving that decision to later discretion of the
district court. Cobell, 679 F.3d at 922. The amount sought
and awarded was relatively small, well within the usual
norms of “modest compensation” paid to class representatives
for services performed in the class action. Phillips v. Asset
Acceptance, LLC, 736 F.3d 1076, 1080 (7th Cir. 2013).
Indeed, we approved an identical incentive fee in In re Mego
Fin. Corp. Sec. Litig., 213 F.3d 454, 463 (9th Cir. 2000).
Thus, the district court did not abuse its discretion in
certifying the settlement class.

    Dewey is not to the contrary. The settlement in that case
was structured far differently than in this case. Id. at 187.
The class in Dewey was split up into two groups: a
reimbursement group and a residual group. Id. All of the
class representatives were in the reimbursement group. As a
result, the class representatives were apt to favor the
reimbursement group’s interests over the residual group’s,
which the court held was an impermissible conflict under
Rule 23(a). Id. This case involved only one settlement class,
with no subclasses. Each class member was entitled to the
same distribution, so the class representatives had no
incentive to favor one subclass over another. In short, this
case does not involve the intra-class structural conflict that
concerned the court in Dewey. Indeed, read properly, in its
extensive discussion of what conflicts are “fundamental,”
Dewey supports our conclusion that there was no fundamental
conflict between the class representatives and class members
that would prevent settlement class certification. Therefore,
18      IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

the district court did not abuse its discretion in certifying the
settlement class.5

                                     III

    The district court did not err in approving the settlement.
We have previously recognized that settlements in class
actions “present unique due process concerns for absent class
members,” including the risk that class counsel “may collude
with the defendants.” In re Bluetooth Headset Prods. Liab.
Litig., 654 F.3d at 946 (internal quotation marks omitted).

    To guard against these dangers, Federal Rule of Civil
Procedure 23(e) “requires court approval of all class action
settlements, which may be granted only after a fairness
hearing and a determination that the settlement taken as a
whole is fair, reasonable, and adequate.” Id. at 946. To
assess the fairness of a settlement, we look to the eight
Churchill factors, including:

         (1) the strength of the plaintiff’s case; (2) the
         risk, expense, complexity, and likely duration
         of further litigation; (3) the risk of
         maintaining class action status throughout the
         trial; (4) the amount offered in settlement;
         (5) the extent of discovery completed and the
         stage of the proceedings; (6) the experience

  5
    Incorporating Frank’s arguments regarding the attorneys’ fees in this
case, Cox also claims class counsel “over-inflated their own fee award at
the expense of unnamed class members,” thereby creating a conflict of
interest that bars certification. Because we reject Frank’s arguments that
the attorneys’ fees in this case are unreasonable or over-inflated, infra, we
also reject Cox’s arguments that their fee request presents a conflict of
interest.
        IN RE ONLINE DVD RENTAL ANTITRUST LITIG.                           19

         and view of counsel; (7) the presence of a
         governmental participant; and (8) the reaction
         of the class members of the proposed
         settlement.

Id. (quoting Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d
566, 575 (9th Cir. 2004)); see also Torrisi v. Tucson Elec.
Power Co., 8 F.3d 1370, 1375 (9th Cir. 1993).6 “Our review
of the district court’s decision to approve a class action
settlement is extremely limited. It is the settlement taken as
a whole, rather than the individual component parts, that must
be examined for overall fitness.” Hanlon, 150 F.3d at 1026
(internal citation omitted). Keeping this standard in mind, we


  6
     Settlements in which the settlement agreement is negotiated prior to
formal class certification require “an even higher level of scrutiny.” In re
Bluetooth Headset Prods. Liab. Litig., 654 F.3d at 946. Here, the court
gave preliminary certification of the settlement class after the settlement
agreement had been reached, and final approval did not occur until the
court’s March 29, 2012 order. Unlike in In re Bluetooth, however, the
court did certify a Netflix litigation class in the action against both Netflix
and Walmart before a settlement was reached. See In re Bluetooth
Headset Prods. Liab. Litig., 654 F.3d at 939 (noting that “before any
motion was made to certify a class for merits purposes,” the parties
reached a settlement agreement); see also William B. Rubenstein,
Newberg on Class Actions § 11:27 (4th ed. 2002) (“The Manual [of
Complex Litigation] also notes that approval under Rule 23(e) of
settlements involving settlement classes, however, requires closer judicial
scrutiny than approval of settlements where class certification has been
litigated.”). The litigation and settlement classes in this case are
substantially the same. Thus, since the district court did not apply any
heightened scrutiny, and since the parties have not raised this issue on
appeal, we assume, without deciding, that the heightened scrutiny in In re
Bluetooth does not apply here. See Rodriguez, 563 F.3d at 963–64
(applying the eight Churchill factors, but not heightened scrutiny, in a case
in which settlement negotiations came after certification of a litigation
class but before certification of a settlement class).
20     IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

review Objectors’ various challenges to the district court’s
decision to approve the settlement agreement.

                               A

    The district court did not err in using the claimant fund
mechanism. Zimmerman argues that because so few class
members actually filed claims, the settlement should not have
used the claimant fund sharing approach—whereby each
class member who submits a claim receives an equal share of
the settlement fund, regardless of the harm he or she suffered.
Labeling claimant fund sharing a type of fluid recovery,
Zimmerman argues that both state and federal courts disfavor
fluid recovery distribution methods, especially when only a
small proportion of class members participate.                See
Democratic Cent. Comm. of the Dist. of Columbia v.
Washington Metro. Area Transit Comm’n, 84 F.3d 451, 455
n.2 (D.C. Cir. 1996) (“Implementing fluid recovery . . . in
federal class actions is controversial.”); see also State v. Levi
Strauss & Co., 41 Cal. 3d 460, 476 (Cal. 1986) (“Hence, the
advantages of claimant fund sharing can only be realized
where a large proportion of class members participate and
submit accurate claims.”).

    The district court did not abuse its discretion in approving
this claimant-fund-sharing settlement. First, we are careful
not to conflate the concepts of “claimant fund approach” and
“fluid recovery.” Indeed, we have previously used “fluid
recovery” interchangeably with “cy pres” distributions to
describe a distribution that confers an indirect benefit on class
members. Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th
Cir. 2012) (“A cy pres remedy, sometimes called ‘fluid
recovery,’ is a settlement structure wherein class members
receive an indirect benefit (usually through defendant
       IN RE ONLINE DVD RENTAL ANTITRUST LITIG.                21

donations to a third party) rather than a direct monetary
payment.” (internal citation omitted)). The claimant fund
approach in this case, however, provides direct compensation
to class members.

    Zimmerman cites the California Supreme Court, which
has called claimant fund sharing one “method[] of fluid
recovery” and has noted that claimant fund sharing is unique
among fluid recovery methods because it provides actual
compensatory benefits to class members. Levi Strauss & Co.,
41 Cal. 3d at 476 (explaining that claimant fund sharing “uses
the entire class recovery to provide monetary compensation
to individual class members”). Nevertheless, Zimmerman
does not cite any binding or persuasive federal authority for
the proposition that claimant fund sharing is prohibited when
only a small number of class members file settlement claims.
In Six (6) Mexican Workers v. Arizona Citrus Growers, we
noted that settlements have been approved where less than
five percent of class members file claims. 904 F.2d 1301,
1306 (9th Cir. 1990).

    Moreover, we have employed similar methodology in
other cases. See, e.g., Dennis v. Kellogg Co., 697 F.3d 858,
862–63, 868 (9th Cir. 2012) (rejecting a settlement because
the cy pres portion of the award lacked specificity; another
part of the settlement fund was distributed to claimants who
submitted claims and not to silent class members). Finally,
because this case involves a settlement agreement with a class
of plaintiffs who were allegedly harmed by paying
excessively high Netflix subscription prices, the concerns we
have raised before regarding fluid recovery are not implicated
here. See Six (6) Mexican Workers, 904 F.2d at 1306 (noting,
following a class action antitrust case tried to a judge, that the
Second and Ninth Circuit’s concerns over fluid recovery
22     IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

involve “the impermissible circumvention of individual proof
requirements” rather than the allocation of unclaimed
damages). The district court did not abuse its discretion in
employing the claimant fund mechanism.

                               B

    The district court’s notice of the settlement did not violate
either Federal Rule of Civil Procedure 23 or due process.
Federal Rule of Civil Procedure 23(e)(1) requires a court to
“direct notice [of a proposed settlement] in a reasonable
manner to all [settlement] class members who would be
bound by the proposal.” Rule 23(e) requires notice that
describes “the terms of the settlement in sufficient detail to
alert those with adverse viewpoints to investigate and to come
forward and be heard.” Lane, 696 F.3d at 826 (internal
quotation marks omitted). However, Rule 23(e) “does not
require detailed analysis of the statutes or causes of action
forming the basis for the plaintiff class’s claims, and it does
not require an estimate of the potential value of those claims.”
Id.

    Objectors argue that the notice provided in this settlement
to class members violated Rule 23 and class members’ due
process rights. See Mendoza v. Tucson School Dist. No. 1,
623 F.2d 1338, 1350–51 (9th Cir. 1980) (“Although [Rule
23(e)] accords a wide discretion to the District Court as to the
form and content of the notice, due process requires its
presence and constitutional adequacy.”). We review “de
novo whether notice of a proposed settlement satisfies due
process.” Torrisi, 8 F.3d at 1374.

     Cope and Bandas argue that the notice was deficient for
failing to provide an estimate as to how much of an award
       IN RE ONLINE DVD RENTAL ANTITRUST LITIG.              23

each claimant would receive, not disclosing what cost an
average claimant had incurred due to the anti-competitive
conduct at issue, neglecting to state the fact that
administration costs would be deducted from the settlement
fund, and not revealing that, according to Cope and Bandas,
state class attorneys could claim fees from the settlement fund
that would further reduce the amount available to class
members and drive the attorneys’ fees request over 25%.
Sullivan contends that the dual notice provided to class
members—including both information regarding the ongoing
Netflix litigation and the settlement with Walmart—was
misleading and constitutionally and statutorily deficient.

    The notice provided in this settlement, in both mail and e-
mail form, was sufficient under the Constitution and Rule
23(e). First, none of the cases Objectors cite require the level
of specificity they claim is needed. Indeed, as we made clear
in Lane, Rule 23(e) requires sufficient detail simply “to alert
those with adverse viewpoints to investigate and to come
forward and be heard.” Lane, 696 F.3d at 826 (internal
quotation marks omitted); see also Rodriguez, 563 F.3d at
962 (holding that a notice contained “adequate information”
when it did not exaggerate class representative support for the
settlement and described “the aggregate amount of the
settlement fund and the plan for allocation”). Here, the notice
meets the requirements articulated in Lane and Rodriguez.
The email notice provides simple and straightforward
information about the class action, about the status of the
cases against both Netflix and Walmart, about what action
class members may take in either case, and about the
uncertain nature of the Netflix litigation and the need to check
the website for more detail. Most importantly, the notice
states the amount of the settlement fund with Walmart, the
amount class counsel will seek in fees, litigation expenses,
24     IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

and incentive awards, the fact that class counsel will seek
payment for other costs from the fund, the fact that class
members will need to submit a claim to obtain relief, an
internet link and phone number to obtain a claim form, and
the deadline for objecting or submitting a claim. The mail
form is substantially the same. The e-mail and mail notices,
which did not need to and could not provide an exact forecast
of how much each class member would receive, gave class
members enough information so that those with “adverse
viewpoints” could investigate and “come forward and be
heard.” Lane, 696 F.3d at 826.

    To the extent Cope and Bandas argue the notice fails to
inform class members of the possibility that state class
counsel will request attorneys’ fees, in addition to the 25% in
the fee request in this case, the district court was within its
discretion to reject that argument. Paragraph 13.2 of the
Settlement Agreement clarifies that state attorneys’ fees and
other costs will come from the fees requested pursuant to
Paragraph 6.1.1.1. And, pursuant to Paragraph 6.1.1.1, class
counsel requested attorneys’ fees totaling 25% of the
settlement fund. Class counsel made clear at the fairness
hearing that any fee request from state class counsel would
come from the fee award granted in this case. The court did
not abuse its discretion in interpreting Paragraph 13.2 as class
counsel recommended.

    Finally, we disagree with Sullivan that notice was
deficient because class members received information about
both the Netflix and Walmart cases in one notice and because
the e-mail did not include information about the district
court’s decision to grant summary judgment for the defendant
in the Netflix case. While it is true that the initial e-mail
notice came out shortly before the summary judgment
       IN RE ONLINE DVD RENTAL ANTITRUST LITIG.               25

decision but did not forecast it, the notice sent by regular mail
was promptly updated, and the website was too. The notice
in this case was not perfect, but the court did not abuse its
discretion in approving the notice plan and ultimately
approving the settlement.

                               C

    The district court did not err in approving the settlement
as fair, reasonable, and adequate. As noted above, we
consider the eight Churchill factors when assessing whether
a settlement is fair, reasonable, and adequate under Federal
Rule of Civil Procedure 23(e). In re Bluetooth Headset
Prods. Liab. Litig., 654 F.3d at 946. Cox points to specific
provisions in the agreement to argue that the settlement was
not fair, reasonable, and adequate, and she contends that the
district court failed to adequately explain its decision. We
consider each argument in turn.

                               1

    Cox argues the incentive awards in this case—$5,000 for
each of nine class representatives—were unreasonably large
and thus unfair. Cox cites to Staton v. Boeing, Co., 327 F.3d
938 (9th Cir. 2003),with the $12 each claimant will receive.
But Staton does not support her argument. In Staton, we
reversed in part due to incentive awards that averaged
$30,000 for 29 class representatives, totaling $890,000.
Staton, 327 F.3d at 976–77. Thus, the average incentive
award was 30 times the $1000 that unnamed class members
received. Id. at 948–49, 976–77. More importantly, the
incentive payments as a whole made up roughly 6% of the
total settlement (estimated, on the large end, to be $14.8
million). Id. In contrasting the Staton facts with other cases
26     IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

and reversing because the Staton incentive awards were too
large, we looked to “the number of named plaintiffs receiving
incentive payments, the proportion of the payments relative
to the settlement amount, and the size of each payment.” Id.
at 977. In this case, nine class representatives receive $5,000,
totaling $45,000, while unnamed class members receive $12.
While it is true that a $5,000 incentive award is roughly 417
times larger than the $12 individual award, we focused less
on that fact in Staton and more on the number of class
representatives, the average incentive award amount, and the
proportion of the total settlement that is spent on incentive
awards. Id. at 977. Here, incentive awards are $5,000, an
amount we said was reasonable in Staton. Id. at 976–77.
$5,000 is considerably less than the average of $30,000 in
Staton. There are nine class representatives, compared with
the 29 in Staton. Id. Finally, the $45,000 in incentive awards
makes up a mere .17% of the total settlement fund of
$27,250,000, which is far less than the 6% of the settlement
fund in Staton that went to incentive awards. Id. at 948–49,
976–77. Thus, under Staton, the district court did not abuse
its discretion in approving the settlement awards, especially
considering its conclusion that the litigation was
“complicated” and took up quite a bit of the class
representatives’ time. Further, as we noted previously, we
approved an identical incentive fee in In re Mego Fin. Corp.
Sec. Litig., 213 F.3d at 463.

                               2

    Cox also argues that two provisions in the settlement
agreement, a reverter provision that she alleges allows
Walmart to keep excess settlement funds and a confidential
opt-out provision that allows Walmart to leave the settlement
agreement at any time, make the agreement unfair. We
        IN RE ONLINE DVD RENTAL ANTITRUST LITIG.                       27

disagree. One clause of the reverter provision, Paragraph
11.1.1, applies only if the settlement is not approved, so any
argument regarding that clause is moot. The other relevant
clause, Paragraph 11.1.4, allows a return of funds to Walmart
only if “Wal-Mart has transferred monies in excess of the
amount needed to pay” all costs and claims under the
settlement. The district court did not abuse its discretion in
deciding that these provisions do not allow for any improper
reversion of allocated settlement funds to Walmart. The opt-
out provision, Paragraph 9.4, allows Walmart to opt out if a
certain percentage of class members opt out of the
settlement.7 Only the exact threshold, for practical reasons,
was kept confidential. And because the court has granted
final approval of the settlement, that threshold necessarily has
not been met and the court therefore did not abuse its
discretion in holding this issue was moot.

                                    3

     Finally, Cox argues the court abused its discretion by
failing to fully explain its decision under the Churchill
factors. Cox cites Linney v. Cellular Alaska Partnership,
151 F.3d 1234, 1242–43 (9th Cir. 1998) for the proposition
that the district court needed to provide a detailed explanation
of its decision to approve the settlement, along with a
response to objections, in a written order. Cox misreads
Linney. In that case, we stated instead that a court needs to
provide a reasoned explanation, along with a response to
objections, either in an order or somewhere else in the record.
Linney, 151 F.3d at 1242–43. Moreover, it is important to


 7
  Class counsel argues Cox waived this argument by not raising it below.
Since the district court did rule on it, however, we consider it on appeal.
United States v. Northrop Corp., 59 F.3d 953, 957 n.2 (9th Cir. 1995).
28     IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

remember that our review of a fairness determination is
“‘extremely limited,’ and we will set aside that determination
only upon a ‘strong showing that the district court’s decision
was a clear abuse of discretion.’” Lane, 696 F.3d at 818
(quoting Hanlon, 150 F.3d at 1026–27).

    Here, the district court did not abuse its discretion. At the
March 14, 2012 hearing, the judge considered many of the
objections to the settlement and explained her decision to
reject each of them. The record reflects that she considered
the Churchill factors, most importantly the class’s chance of
success if it continued to pursue litigation. Given her
decision in the corresponding Netflix case and the length and
complexity of the case thus far, she reasoned that the
settlement was fair in large part because it would provide
class members with their only chance at relief. In her March
29, 2012 written order, she provided additional reasoning,
explaining that the settlement was in the public interest and
followed vigorous arm’s length negotiation between both
sides of the litigation. She also listed the Churchill factors,
noting briefly that she had considered each, as is reflected in
the record. Between the order and the fairness hearing, the
court provided sufficient explanation for its decision and did
not abuse its considerable discretion in approving a
settlement. See Lane, 696 F.3d at 818.

                               IV

    The district court did not err in approving the fee award.
Plaintiffs’ class counsel asked for attorneys’ fees in the
amount of 25% of the overall settlement fund of $27,250,000
and the district court granted class counsels’ request. In
awarding attorneys’ fees under Federal Rule of Civil
Procedure 23(h), “courts have an independent obligation to
       IN RE ONLINE DVD RENTAL ANTITRUST LITIG.               29

ensure that the award, like the settlement itself, is
reasonable.” In re Bluetooth Headset Prods. Liab. Litig.,
654 F.3d at 941. In this circuit, there are two primary
methods to calculate attorneys fees: the lodestar method and
the percentage-of-recovery method. Id. at 941–42. Under the
percentage-of-recovery method, the attorneys’ fees equal
some percentage of the common settlement fund; in this
circuit, the benchmark percentage is 25%. Id. at 942. The
lodestar method requires “multiplying the number of hours
the prevailing party reasonably expended on the litigation (as
supported by adequate documentation) by a reasonable hourly
rate for the region and for the experience of the lawyer.” Id.
at 941.

    While a district court has discretion in calculating fees, or
approving a fee request, we have held that a district court
“abuses that discretion when it uses a mechanical or
formulaic approach that results in an unreasonable reward.”
In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 992
(9th Cir. 2010) (internal quotation marks omitted). One way
that a court may demonstrate that its use of a particular
method or the amount awarded is reasonable is by conducting
a cross-check using the other method. For example, a cross-
check using the lodestar method “can ‘confirm that a
percentage of recovery amount does not award counsel an
exorbitant hourly rate.’” In re Bluetooth Headset Prods. Liab.
Litig., 654 F.3d at 945 (quoting In re Gen. Motors Corp.
Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768,
821 n.40 (3d Cir. 1995)).

                               A

    We first consider the argument, advanced by several
objectors, that the attorneys’ fee award must comply with
30      IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

provisions of CAFA governing “coupon settlements.” We
conclude the district court properly decided that the portion
of the settlement that will be paid in Walmart gift cards was
not a “coupon settlement” within the meaning of CAFA.
CAFA directs courts to apply heightened scrutiny to coupon
settlements. 28 U.S.C. § 1712(e); see also In re HP Inkjet
Printer Litig., 716 F.3d 1173, 1178 (9th Cir. 2013) (citing
Synfuel Tech., Inc. v. DHL Express (USA), Inc., 463 F.3d 646,
654 (7th Cir. 2006) (“[W]e note that in that statute Congress
required heightened judicial scrutiny of coupon-based
settlements . . . .”)). Objectors’ primary reason for raising
CAFA is Section 1712’s requirement that “the portion of any
attorney’s fee award to class counsel that is attributable to the
award of the coupons shall be based on the value to class
members of the coupons that are redeemed.” 28 U.S.C.
§1712(a). In other words, Objectors contend that the
Walmart gift cards are coupons and fall under CAFA and, as
a result, the district court erred by calculating the fee award
as a percentage of the overall settlement fund, including the
total dollar value of the gift cards, instead of calculating the
portion of the fee award based on the gift cards as a
percentage of the gift cards that were actually redeemed.

    The district court correctly held that the Walmart gift
cards in this settlement do not constitute a coupon settlement
that falls under the umbrella of CAFA.8 In construing a
statute, we first determine whether the statutory language is


  8
    Frank argues that the issue of whether CAFA applies to the gift card
portion of the settlement is an issue of statutory interpretation that should
be reviewed de novo. Bush v. Cheaptickets, Inc., 425 F.3d 683, 686 (9th
Cir. 2005) (“As we consider CAFA’s requirements, we may review the
construction, interpretation, or applicability of a statute de novo.”). Even
under de novo review, we hold that CAFA does not apply.
      IN RE ONLINE DVD RENTAL ANTITRUST LITIG.              31

plain and unambiguous, examining not only the text, but “the
structure of the statute as a whole, including its object and
policy.” Children's Hosp. & Health Ctr. v. Belshe, 188 F.3d
1090, 1096 (9th Cir. 1999). If the plain language is
unambiguous, our inquiry is at an end. Carson Harbor Vill.,
Ltd. v. Unocal Corp., 270 F.3d 863, 877–78 (9th Cir. 2001)
(en banc).

    Because Congress does not define the ambiguous term
“coupon” within the statute, see 28 U.S.C. § 1711; see also In
re EasySaver Rewards Litig., 921 F. Supp. 2d 1040, 1047
(S.D. Cal. 2013) (“[CAFA] does not define what constitutes
a ‘coupon.’”), “we may ‘look to other interpretive tools,
including the legislative history’ in order to determine the
statute’s best meaning.” In re HP Inkjet Printer Litig.,
716 F.3d at 1181 (quoting Exxon Mobil Corp. v. Allapattah
Servs., Inc., 545 U.S. 546, 567 (2005)). CAFA’s legislative
history, along with the decisions of district courts that have
considered the issue, convince us that these gift cards are not
coupons.

     In CAFA’s findings and purposes, Congress emphasized
its concern about settlements when class members receive
little or no value, including settlements in which “counsel are
awarded large fees, while leaving class members with
coupons or other awards of little or no value.” Class Action
Fairness Act of 2005, Pub. L. No. 109-2, § 2, 119 Stat. 4
(2005). The Senate Judiciary Committee’s Report offers
more detail, stating that congressional hearings have exposed
class action settlements in which “class members receive
nothing more than promotional coupons to purchase more
products from the defendants.” S. Rep. No. 109-14, at 15
(2005). The report goes on to give twenty-nine examples of
problematic coupon settlements. Id. at 15–20. The report
32    IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

cites and criticizes coupon settlement awards that provide
class members with “$30 to $40 discounts” on a future cruise,
“a $5 to $10 voucher good for future purchases of particular
computer hardware or software products”, “$1 off every
subsequent $5 purchase” at a chain of restaurants, “a 30
percent discount on selected products” during a one-week
time period, $55 to use on a purchase of a new crib from a
defendant crib producer accused of making defective cribs,
“$1.25 off a $25 dollar [video] game”, and so on. Id. at
15–17.

    The Walmart-Netflix settlement differs from the
settlements that drew the attention of Congress. Affording
over 1 million class members $12 in cash or $12 to spend at
a low-priced retailer does not leave them with “little or no
value.” The district court did not err when it stated simply
that “$12, while not a lot of money these days even at Wal-
Mart, is $12.” Moreover, this case is distinguishable from
every single coupon-settlement example in the Senate report.
The report focuses on settlements that involve a
discount—frequently a small one—on class members’
purchases from the settling defendant. S. Rep. No. 109-14, at
15–20; see also True v. Am. Honda Motor Co., 749 F. Supp.
2d 1052, 1069 (C.D. Cal. 2010) (stating that $500 or $1000
rebates off the purchase of a new Honda or Acura vehicle are
coupons and quoting Fleury v. Richemont North America,
Inc., No. C-05-4525 EMC, 2008 WL 3287154, at *2 (N.D.
Cal. Aug. 6, 2008) for the proposition that coupons offer only
“‘a discount on another product or service offered by the
defendant in the lawsuit’”). These discounts require class
members to hand over more of their own money before they
can take advantage of the coupon, and they often are only
valid for select products or services. The gift cards in this
case are different. Instead of merely offering class members
        IN RE ONLINE DVD RENTAL ANTITRUST LITIG.                        33

the chance to receive a percentage discount on a purchase of
a specific item or set of items at Walmart, the settlement
gives class members $12 to spend on any item carried on the
website of a giant, low-cost retailer. The class member need
not spend any of his or her own money and can choose from
a large number of potential items to purchase. Even if the gift
card is only worth $12, it gives class members considerably
more flexibility than any of the coupon settlements listed in
the Senate report.

    District courts that have considered the issue have not
classified gift cards as coupon settlements falling under
CAFA. See Reibstein v. Rite Aid Corp., 761 F. Supp. 2d 241,
255–56 (E.D. Pa. 2011) (holding that $20 Rite Aid gift cards
with “actual cash value,” that will be mailed to “(mostly)
regular customers, have no expiration date, are freely
transferrable, and can be used for literally thousands of
products for which ordinary consumers . . . have need”, are
“more like ‘cash’ than ‘coupons’”)9; Fernandez v. Victoria
Secret Stores, LLC, No. CV 06-04149, 2008 WL 8150856, at
*2, *4–16 (C.D. Cal. Jul. 21, 2008) (approving a settlement
and attorneys’ fees award, outside the strictures of CAFA,
that provides class members with gift cards to Victoria’s


  9
    Frank attempts to distinguish Reibstein from this case by arguing the
gift cards in Reibsten, unlike in this case, “‘have actual cash value’ and
‘are freely transferrable.’” However, the Reibstein gift cards are not
significantly different than in this case. The Reibstein court clarifies,
elsewhere in the decision, that the Rite Aid gift cards are “‘not redeemable
for cash’” and simply that they are “freely transferrable.” Reibstein,
761 F. Supp. 2d at 246. Similarly, the gift cards in this settlement
agreement are “fully transferrable,” though they cannot be resold. Both
appear to be equally freely transferrable and, to the extent they have cash
value, it is because they are equal to a certain dollar amount and can be
spent on a variety of useful goods.
34    IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

Secret); Petersen v. Lowe’s HIW, Inc., Nos. C 11-01996 RS,
C 11-03231 RS, C 11-02193 RS (N.D. Cal. Aug. 24, 2012)
(approving a settlement and attorneys’ fees award, outside the
strictures of CAFA, that provides class members with $9 gift
cards to Lowe’s); see also In re Bisphenol-A (BPA)
Polycarbonate Plastic Prods. Liab. Litig., MDL No. 1967,
Master Case No. 08-1967, 2011 WL 1790603, at *2–4 (W.D.
Mo. 2011) (holding that a settlement that provides class
members with vouchers to obtain new products was not a
coupon settlement because the vouchers do not require class
members to spend their own money and do not require class
members to purchase the same or similar products as those
that gave rise to the litigation). Similar to the gift cards in
these cases, the Walmart gift cards can be used for any
products on walmart.com, are freely transferrable (though
they cannot be resold on a secondary market) and do not
expire, and do not require consumers to spend their own
money.

     Our conclusion that the settlement does not constitute a
“coupon settlement” within the meaning of CAFA does not
conflict with the Seventh Circuit’s decision in Synfuel
Technologies, Inc., 463 F.3d at 654, as Frank suggests. The
pre-paid shipping envelopes in Synfuel are different than the
Walmart gift cards. Unlike a pre-paid shipping envelope, a
gift card to walmart.com does not simply offer class members
one type of complete product. It offers them a set amount of
money to use on their choice of a large number of products
from a large retailer. Like the gift cards to Rite Aid in
Reibstein, part of what separates a Walmart gift card from a
coupon is not merely the ability to purchase an entire product
as opposed to simply reducing the purchase price, but also the
ability to purchase one of many different types of products.
That distinction also separates these gift cards from the e-
       IN RE ONLINE DVD RENTAL ANTITRUST LITIG.               35

credits we deemed coupons in In re HP Inkjet Printer Litig.,
716 F.3d at 1176 (labeling e-credits, which could be used to
obtain Hewlett-Packard “printers and printer supplies,”
coupons).

    Frank also argues that failing to apply CAFA to these gift
cards will “eviscerate the Class Action Fairness Act,” because
settlements will be able to avoid CAFA merely by labeling
their coupons as gift cards. Our holding will have no such
effect. First, gift cards are a fundamentally distinct concept
in American life from coupons. Cf. 15 U.S.C. § 1693l-1
(regulating gift cards, under the 1978 Electronic Fund
Transfer Act and the Credit Card Accountability
Responsibility and Disclosure Act of 2009, as an electronic
form of cash (i.e., similar to credit or debit cards)). District
courts are more than capable of ferreting out the deceitful
coupon settlement that merely co-opts the term “gift card” to
avoid CAFA’s requirements. Second, our holding is limited.
We conclude only that the gift cards in this case are not
subject to CAFA, without making a broader pronouncement
about every type of gift card that might appear.

    Finally, Frank raises the concerns that these gift cards will
not disgorge Walmart of ill-gotten gains and will force class
members to buy from the defendant in their class action. But,
giving thousands of consumers the ability to purchase $12 in
goods from the Walmart website for free will not be
insignificant to the retailer. Moreover, this case does not
present the same problems as one like Young v. Polo Retail,
LLC, in which the class members were former Polo Retail
employees who complained about being forced to purchase
Polo clothing and were then given Polo Retail gift cards. No.
C-02-4546, 2006 WL 3050861, at *3–5 (N.D. Cal. 2006)
(“[W]hy would former employees, who allegedly were forced
36      IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

to buy a great deal of unwanted Polo products, desire product
vouchers so that they could purchase even more clothes?”).
Here, class members are suing due to an online-DVD rental
agreement between Walmart and Netflix. Since Walmart
sells many products beyond DVDs, class members have less
reason to be wary of a gift card to the defendant retailer than
did the plaintiffs in Young. Moreover, the claimants in this
case had the option of obtaining cash instead of a gift card,
undercutting the argument that the settlement forces them to
buy from the defendant. In sum, we hold that the Walmart
gift cards in this case are not coupons that fall under the
umbrella of CAFA.10 The district court did not err in failing
to apply CAFA to this case.11


 10
   Because we reject Objectors’ argument that this settlement should fall
under CAFA, we also reject Objectors’ argument that the case should be
remanded for the district court to analyze the settlement itself under the
heightened scrutiny required by CAFA.
  11
     Pointing to empirical studies, Zimmerman also argues gift cards are
generally not worth their face value. He raises this point, however, in the
context of arguing the gift cards in this case are coupons. Since we have
held that CAFA does not apply to this settlement, we need not consider
this argument. Nevertheless, courts still have an obligation to review a
settlement carefully, whether CAFA applies or not. Fed. R. Civ. P.
23(e)(2). Indeed, some district courts have valued gift cards, in
settlements, at less than their dollar value. Fernandez, 2008 WL at
*10–11 (valuing Victoria’s Secret gift cards at 85% of their face value and
thus valuing the $10 million gift card settlement fund at $8.5 million “for
[the] purposes of evaluating counsel’s fee request”). Even if we construed
Zimmerman’s argument to mean he seeks a remand regardless of whether
CAFA applies, we still would conclude the court did not abuse its
discretion in valuing the Walmart gift cards at 100% of their face value.
Although the court did not explicitly consider on the record whether the
gift cards might be worth less than face value, the court did note that the
“vast majority” of class members elected to obtain gift cards, concluding
this settlement was similar to an all-cash settlement. Moreover, unlike the
        IN RE ONLINE DVD RENTAL ANTITRUST LITIG.                        37

                                    B

     The district court did not err in calculating the attorneys’
fees award by calculating it as a percentage of the total
settlement fund, including notice and administrative costs,
and litigation expenses. Frank argues the $4.5 million in
notice and administrative costs, which facilitate alerting class
members to the settlement and processing claims submitted
by class members, do not inure to the benefit of the class. See
In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d at 942
(noting that a percentage-of-recovery fee award is calculated
by taking a percentage of the “common fund for the benefit
of the entire class” (emphasis added)). He argues the district
court’s mode of calculation fails to encourage class counsel
to reduce notice and administrative costs. He also contends
that by basing the fee award on the entire common fund,
some of class counsels’ fees are simply a percentage of their
litigation expenses award—thus their work is being “double-
count[ed].”

    The district court did not abuse its discretion in
calculating the fee award as a percentage of the total
settlement fund, including notice and administrative costs,
and litigation expenses. We have repeatedly held “that the
reasonableness of attorneys’ fees is not measured by the
choice of the denominator.” Powers v. Eichen, 229 F.3d
1249, 1258 (9th Cir. 2000) (rejecting an objector’s argument
that a fee award in a securities settlement should be based on
“net recovery,” which does not include “expert fees, litigation


gift cards in Fernandez or the vouchers in Young, these gift cards provide
class members with the ability to purchase a wide variety of items. Thus,
the court was within its discretion to value the gift cards at 100% of their
face value.
38      IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

costs, and other expenses”); see also Staton, 327 F.3d at
974–75 (“The district court also did not abuse its discretion
by including the cost of providing notice to the class . . . as
part of its putative fund valuation . . . . We have said that ‘the
choice of whether to base an attorneys’ fee award on either
net or gross recovery should not make a difference so long as
the end result is reasonable.’” (quoting Powers, 229 F.3d at
1258)). Here, the district court concluded that class counsels’
fee request, which applied the 25% benchmark percentage to
the entire common fund, was reasonable. Indeed, the court
explicitly explained how administrative costs in particular
make it possible to distribute a settlement award “in a
meaningful and significant way.” Similarly, notice costs
allow class members to learn about a settlement and litigation
expenses make the entire action possible. Thus, the court
acted within its discretion under this court’s precedent in
Powers and Staton.12

                                    C

    The district court provided adequate notice to the class of
the attorneys’ fee petition. Federal Rule of Civil Procedure
23(h)(1) requires a claim for attorneys’ fees to be made by
motion under Rule 54(d)(2) and for “[n]otice of the motion


  12
      Sullivan briefly argues that some of the litigation expenses are not
properly reimbursable, because they relate to the related litigation against
Netflix. We disagree and hold that the district court did not abuse its
discretion in approving class counsel’s request for $1.7 million in
litigation expenses. The court oversaw both the Walmart settlement and
the litigation against Netflix and interacted with attorneys on both sides.
It was within its discretion to accept class counsels’ contentions that the
expenses requested were “only approximately half the expenditures by
Class Counsel” on the litigation and that certain experts were needed in
the Walmart litigation to help push the company toward settlement.
        IN RE ONLINE DVD RENTAL ANTITRUST LITIG.                        39

[to] be served on all parties and, for motions by class counsel,
directed to class members in a reasonable manner.” In re
Mercury Interactive Corp. Securities Litigation, 618 F.3d at
993–95, analyzed the rule and rejected as insufficient Rule
23(h) notice when the motion for attorneys’ fees was due
after the deadline for class members to object to the
attorneys’ fees motion. In other words, even though class
counsel had provided preliminary notice of the total amount
they would seek in fees, they had not provided class members
with “an adequate opportunity to object to the motion itself
because, by the time they were served with the motion, the
time within which they were required to file their objections
had already expired.” Id. at 994.

    Citing In re Mercury, Objectors argue that class counsel
here failed to provide adequate notice of their attorneys’ fee
petition to class members under Rule 23(h).13 See In re
Mercury Interactive Corp. Sec. Litig., 618 F.3d at 993–94
(“The plain text of [Rule 23(h)] requires that any class
member be allowed an opportunity to object to the fee
‘motion’ itself, not merely the preliminary notice that such a
motion will be filed.”). Objectors argue that by stating in the
email and mail notices only that class counsel would seek
attorneys’ fees in the amount of 25% of the common fund,


  13
     Sullivan contends that because class counsels’ notice regarding the
settlement, including the notice of the attorneys’ fee request, violates due
process, the court should review the issue de novo. See Torrisi, 8 F.3d at
1374 (“We review de novo whether notice of a proposed settlement
satisfies due process.”). Sullivan’s argument, however, focuses on
whether the notice of the attorneys’ fees request violates Rule 23(h).
Thus, we review this argument for abuse of discretion. In re Mercury
Interactive Corp. Sec. Litig., 618 F.3d at 993 (reviewing a challenge under
Rule 23(h) to notice of an attorneys’ fee motion under the abuse of
discretion standard).
40     IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

class counsel did not provide the “[n]otice of the motion”
required by Rule 23(h).

    The district court did not abuse its discretion in its
approval of the attorneys’ fees request. Here, the notice e-
mailed and mailed to class members informed them that class
counsel would be seeking fees in the amount of 25% of the
total settlement fund of $27,250,000. The notice also gave
class members a clear deadline of Feb. 14, 2012 for filing an
objection. The district court set the deadline for filing a fee
motion fifteen days before the deadline for filing an
objection. Indeed, the motion was filed on January 30, 2012,
and the objection deadline was February 14, 2012. This
schedule satisfies the requirements of In re Mercury.

                                  D

    The district court provided an adequate explanation of its
rationale. In Vizcaino v. Microsoft Corp., 290 F.3d 1043,
1047–50 (9th Cir. 2002), we listed several factors courts may
consider in assessing a request for attorneys’ fees that was
calculated using the percentage-of-recovery method. These
factors include the extent to which class counsel “achieved
exceptional results for the class,” whether the case was risky
for class counsel, whether counsel’s performance “generated
benefits beyond the cash settlement fund,” the market rate for
the particular field of law (in some circumstances), the
burdens class counsel experienced while litigating the case
(e.g., cost, duration, foregoing other work), and whether the
case was handled on a contingency basis.14 See id. at


 14
   Although the Supreme Court in City of Burlington v. Dague, 505 U.S.
557, 566 (1992) rejected using a case’s contingency status for “the
determination of a reasonable fee,” it did so in the context of using a
        IN RE ONLINE DVD RENTAL ANTITRUST LITIG.                         41

1048–50 (internal quotation marks omitted). In addition, a
court may cross-check its percentage-of-recovery figure
against a lodestar calculation. Id. at 1050.

    Sullivan argues the district court failed to adequately
explain its attorneys’ fee award, and that the case should be
remanded for the court to apply the list of six factors he
gleaned from Craft v. County of San Bernadino, 624 F. Supp.
2d 1113, 1116–17 (C.D. Cal. 2008).15 While there are no
doubt many factors that a court could apply in assessing an
attorneys’ fees award and while Vizcaino does not purport to
establish an exhaustive list, we conclude the district court did
not abuse its discretion in its analysis, explanation, and
approval of class counsels’ request for attorneys’ fees.




lodestar method to calculate the fee. See In re Bluetooth Headset Prods.
Liab. Litig., 654 F.3d at 942 n.7 (noting, in a discussion of the lodestar
calculation method, that the Supreme Court had rejected the
“contingency” factor that this court established in Kerr v. Screen Extras
Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975)). Thus, the Vizcaino court, in
analyzing a percentage-of-recovery fee request, appropriately noted that
class counsel had litigated the action on contingency for eleven years.
Vizcaino, 290 F.3d at 1050.
  15
      In addition to arguing for remand, Sullivan also argues that “six
‘special circumstances’ justify (and mandate) an award of less than the
‘benchmark’” in this case. These special circumstances include
undisclosed conflicts of interest on the part of class counsel, the lack of
risk and low level of skill needed to litigate the Netflix and Walmart cases,
and the “partial” nature of the settlement. Because it appears these
“circumstances” are what Sullivan believes the district court should
properly apply on remand to reduce the attorneys’ fees award, and because
we hold that the district court did not abuse its discretion in approving the
fee award or in its explanation of that decision, we do not address each of
these “special circumstances” individually.
42      IN RE ONLINE DVD RENTAL ANTITRUST LITIG.

    First, class counsel requested, and the court awarded, the
25% benchmark award only. While the benchmark is not per
se valid, it is a helpful “starting point.” Vizcaino, 290 F.3d at
1048. Second, the court did compare the benchmark to the
summary lodestar numbers provided by class counsel and
concluded those lodestar estimates were three times the
benchmark. The district judge noted that while she frequently
reduces a lodestar request, she has never reduced one by half.
Thus, where, as here, the lodestar amount was three times the
benchmark, it was not an abuse of discretion for the district
court to accept the benchmark using a quick cross-check of
class counsel’s lodestar summary figures. Third, the judge
did provide a reasoned explanation for her decision to
approve the fee request, both in her order and in an oral
ruling. The judge addressed many of Objectors’ arguments,
summarized her lodestar cross-check, and, applying a number
of the Vizcaino factors, correctly noted that class counsel
risked great time and effort and advanced significant costs on
behalf of the class action. Thus, the court did not abuse its
discretion in the explanation of its decision to approve the
attorneys’ fees award.16

                                    V

    In sum, we affirm the district court’s decision to approve
the settlement between the class of Netflix subscribers and


  16
     Cope and Bandas also argue that the district court failed to properly
respond to their argument that class counsels’ fee petition was
substantively insufficient. We conclude, however, that the district court
did provide a reasoned explanation. Moreover, Cope and Bandas’s
citation to In re Bluetooth, which involves a lodestar fee request, does not
support its contention that class counsel’s fee motion was insufficiently
detailed.
      IN RE ONLINE DVD RENTAL ANTITRUST LITIG.           43

Walmart, to certify the settlement class, and to grant class
counsels’ motion for attorneys’ fees.

   AFFIRMED.
