Laffitte v. Robert Half Internat. ( 2014 )

Filed 10/29/14; pub. & mod. order 11/21/14 (see end of opn.)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
MARK LAFFITTE et al., B249253
Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No. BC321317)
v.
ROBERT HALF INTERNATIONAL INC.
et al.,
Defendants and Respondents,
DAVID BRENNAN,
Plaintiff and Appellant.
APPEAL from an order of the Superior Court of Los Angeles County, Mary
Strobel, Judge. Affirmed.
Law Office of Lawrence W. Schonbrun and Lawrence W. Schonbrun for Plaintiff
and Appellant.
Law Offices of Kevin T. Barnes, Kevin T. Barnes and Gregg Lander for Plaintiffs
and Respondents.
Paul Hastings, Judith M. Kline and M. Kirby C. Wilcox for Defendants and
Respondents.
_____________________
INTRODUCTION
Plaintiff Mark Laffitte, on behalf of himself and other class members, settled a
class action lawsuit against defendants Robert Half International Inc., Robert Half of
California, Inc., Robert Half Incorporated, and Robert Half Corporation doing business as
RHC (collectively Robert Half or the Robert Half defendants) for $19 million. David
Brennan, a member of the class, objected to the settlement. The trial court overruled his
objections and approved the settlement, which included an award of attorneys’ fees to
class counsel of one-third of the settlement, or approximately $6.3 million. Brennan
appeals from the order approving the settlement and entering final judgment, challenging
both the class action settlement notice regarding the award of attorneys’ fees and the
amount of attorneys’ fees awarded. Laffitte asks that we affirm the trial court’s order.
The Robert Half defendants state that the attorneys’ fees issue does not affect them
directly because class counsel will receive their fees from the common fund the Robert
Half defendants agreed to pay to settle the case, but they ask that we affirm the order “in
order to bring this lawsuit to closure.” We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
On September 10, 2004 Laffitte filed a wage and hour class action suit against
Robert Half. The complaint alleged five causes of action based on violations of the
Labor Code: misclassification of staffing professionals as exempt and failure to pay
statutorily mandated wages, failure to provide adequate meal periods (premium wages),
failure to provide rest periods, failure to furnish timely and accurate wage statements, and
“waiting time” penalties. The complaint also alleged unfair business practices in
violation of Business and Professions Code section 17200 et seq.
On March 13, 2006 the trial court denied Robert Half’s motion for summary
judgment or in the alternative for summary adjudication. On September 18, 2006 the
court denied Robert Half’s motion to strike the class allegations, and granted Laffitte’s
2
motion for class certification with respect to the wage, wage statements, waiting time,
and unfair business practices causes of action. The court denied Robert Half’s
subsequent motion for reconsideration of the class certification order.
The parties participated in a mediation. After a second session of the mediation on
June 18, 2012 Laffitte and the class representatives in two other class actions against
Robert Half involving similar claims and allegations reached a settlement of the three
class actions.1
On September 5, 2012 the class representatives filed a joint motion for conditional
certification of the class and preliminary approval of the settlement. The trial court, after
relating the three class actions, granted the motion, conditionally certified the class, and
preliminarily approved the settlement. The court also approved the proposed class notice
and related materials, appointed a settlement administrator, and scheduled a hearing for
final approval on October 19, 2012.
On November 13, 2012 the trial court granted the parties’ ex parte application for
an order amending the settlement agreement, class notice, and claim form. Among other
things, the amended settlement agreement provided that Robert Half would pay a gross
settlement amount of $19,000,000. Subject to court approval, the settlement agreement
provided that the following payments would be made from the gross settlement amount:
class counsel attorneys’ fees of not more than $6,333,333.33 (33.33 percent of the gross
settlement amount) and costs not to exceed counsel’s actual costs, class representative
payments not to exceed $80,000, settlement administrator fees not to exceed $79,000,
civil penalties owed to the California Labor and Workforce Development Agency, and
applicable payroll taxes on the employees’ recovery. The amended settlement agreement
1 The two other class actions were Williamson v. Robert Half International Inc.
(Super. Ct. L.A. County, 2013, No. BC377930) and Apolinario v. Robert Half
International Inc. (Super. Ct. L.A. County, 2013, No. BC455499).
3
also included a “clear sailing” provision stating that class counsel would apply for their
attorneys’ fees “and Robert Half will not oppose their request.”2
On January 28, 2013 Brennan objected to the proposed settlement. Relying in part
on rule 23 of the Federal Rules of Civil Procedure, Brennan made the following
objections: (1) the attorneys’ fee request was excessive; (2) “[m]oney to charity should
not be a part of the Court’s attorneys’ fee award calculation”; (3) information necessary
for class members to intelligently object to or comment on the proposed settlement was
missing from the notice and the pleadings; (4) the clear sailing provision warranted the
appointment of a class guardian; (5) the notice to the class was deceptive regarding the
responsibility for payment of attorneys’ fees; (6) class counsel and counsel for Robert
Half had not filed a report, as required by the amended settlement agreement; (7) the
notice did not disclose that unclaimed funds would be donated to a charity of the Robert
Half defendants’ choice; and (8) certain other provisions of the settlement were improper.
On February 28, 2013 the class representatives and Robert Half filed a joint
motion for final approval of the class action settlement and a response to Brennan’s
objections. The class representatives reported that they had sent class notices to 3,996
class members and had received only two objections: an objection from Brennan and an
“objection” that was actually a dispute over the amount the individual class member was
to receive. The class representatives also filed a motion for attorneys’ fees, costs, and
class representative enhancements. The motion requested $6,333,333.33 in attorneys’
fees for class counsel, $127,304.08 in costs, $79,000 in settlement administrator
expenses, and $80,000 in class representative enhancement payments. The class
representatives explained that class counsel were requesting as attorneys’ fees one-third
2 Clear sailing provisions “allow counsel for the plaintiff class (class counsel) to
seek an award of attorney fees from the trial court, with the assurance that defendant will
not oppose the fee application if the amount sought is less than or equal to a specified
dollar amount.” (Ruiz v. California State Automobile Assn. Inter-Insurance Bureau
(2013) 222 Cal.App.4th 596, 598; see Concepcion v. Amscan Holdings, Inc. (2014) 223
Cal.App.4th 1309, 1323, fn. 7.)
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of the gross settlement, which constituted a common fund for the benefit of class
members, and argued that this amount was reasonable and appropriate. Class counsel
asserted that their hourly rates and number of hours worked were fair and reasonable and
that the successful result, the difficulty of the issues in the case, the quality of their
representation, the contingency risk, and the preclusion of other employment justified a
lodestar multiplier.
In support of their motion for attorneys’ fees, class counsel submitted declarations
from the attorneys in each of the three law firms serving as class counsel. The attorneys
did not submit detailed time records. The declarations stated that Kevin T. Barnes, who
served as lead counsel supervised and handled all aspects of the litigation, worked
2,259.5 hours on the case at an hourly rate of $750, and his partner, Gregg Lander,
worked 807.3 hours at an hourly rate of $600. Joseph Antonelli worked 709.3 hours on
the case at an hourly rate of $750, and his partner, Janelle Carney, worked 14.4 hours at
an hourly rate of $600. Finally, Mika Hilaire worked 423 hours on the case at her hourly
rate of $500. Barnes determined that class counsel worked a total of 4,263.5 hours on the
case (and anticipated working 200 hours on the appeal) and, using the hourly rate for
each attorney, calculated that the total lodestar amount was $2,968,620 ($3,118,620
including the appeal). Class counsel requested a lodestar multiplier of between 2.03 to
2.13 for a total requested attorneys’ fee award of $6,333,333.33.
Barnes also described the contentious nature of the litigation and summarized the
work class counsel had performed: “The settlement that has been reached is the product
of tremendous effort, and a great deal of expense by the parties and their counsel. The
parties’ assessment of the matter is based on one of the most heavily litigated cases I have
ever been a part of and the extensive research and litigation for the past 8 ½ years. This
litigation included extensive written discovery, extensive law and motion practice, 68
depositions, three Motions for Summary Judgment, a Class Certification Motion,
subsequent Reconsideration Motion and then another Motion to Decertify, numerous
experts, consultation with an economist regarding potential damage exposure and two full
day mediations.”
5
On March 22, 2013 the trial court held a hearing on the motion for approval of the
settlement and the motion for attorneys’ fees. The court stated in a tentative ruling that
the requested fee amount “amounts to 33 1/3[] percent of the gross settlement amount,
and is not an atypical contingency agreement in a class action. The primary factor for
determining whether an attorney fee award is fair is whether the fee bears a reasonable
relationship to the value of the attorney’s work.” The court stated that the 4,263.5
attorney hours spent by class counsel litigating this action “is a fairly reasonable number
of hours to have billed on a class action matter that was heavily litigated for 8.5
years . . . .” The court noted that “Class Counsel billed $2,968,620 on this amount of
time, based on hourly rates of $750/hour for Barnes and Antonelli, $600/hour for Lander
and Carney, and $500/hour for Hilaire. . . . This rate is justified by the high level of Class
Counsel’s experience in litigating wage and hour claims/class actions.” The court stated
that, “[b]ased on the reasonable number of hours billed and the legitimate hourly rate,
Class Counsel’s lodestar is $2,968,620.” The court acknowledged Brennan’s objections
to the proposed settlement but stated that rule 3.769 of the California Rules of Court, not
rule 23 of the Federal Rules of Civil Procedure, governed the requirements of a class
action settlement notice. The court stated that “[t]he Parties’ method of calculation of
attorneys’ fees is supported under California law. The court in Lealao v. Beneficial
California Inc. (2000) 82 Cal.App.4th 19, 27 approved of the use of a common fund
whereby attorneys’ fees are calculated as a percentage of the amount recovered.”
During the hearing the court found that the class action notice “that was given
fully complies with California law, with due process and is not misleading.” The court
also found that “the tasks that were performed by class counsel and the number of hours
that they spent on those tasks were reasonable and that . . . [t]he hourly fees, if you’re
looking at lodestar, are within the range of what is reasonable for this type of work in this
community.” Nevertheless, the court also asked for further briefing on (1) “how the
attorneys’ fees are to be allocated” among the three law firms serving as class counsel
“and whether named Plaintiffs have signed a fee sharing agreement”; (2) “the amount
that is [in] controversy and how it is calculated, estimates as to realistic ranges of
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outcomes” if the case were to go to trial, “and why the risks of litigation make the
settlement fair, reasonable and adequate”; and (3) support for a multiplier of two on “the
lodestar figure.” The court noted that some of the statements in Barnes’ declaration were
“a bit conclusory,” asked for further explanation about class counsel’s statement that the
case involved “novel and complex legal issues,” and “asked for further briefing on the
reasonable range of expected outcomes versus the settlement amount . . . .”
Barnes subsequently submitted an 18-page supplemental declaration responding to
the court’s questions and providing additional information regarding the work class
counsel had performed during the eight and one-half years of the litigation. Barnes
calculated, based on the average number of hours per week and the number of
workweeks of the class members, that “the total amount in controversy in the Laffitte
class is approximately $90,690,000 and the total amount in controversy in the Apolinario
class is approximately $25,800.000.” Barnes stated, however, “there were numerous
risks in both cases related to both class certification and the merits,” including loss of
class certification in Laffitte, changes in the law “as to certification in exempt
misclassification cases (making it much harder today to obtain and/or maintain class
certification),” the United States Supreme Court’s recent decision in Wal-Mart Stores,
Inc. v. Dukes (June 20, 2011, No. 10-277) ___ U.S. ___ [131 S.Ct. 2541, 180 L.Ed.2d
374], and California Supreme Court’s decision in Harris v. Superior Court (2011) 53
Cal.4th 170 and decision to grant review in Duran v. U.S. Bank National Assn. (2012)
203 Cal.App.4th 212, review granted May 16, 2012 and affirmed by Duran v. U.S. Bank
National Assn. (2014) 59 Cal.4th 1. Barnes stated that, after applying a 70 percent class
certification risk factor for the Laffitte class action and a 25 percent class certification risk
factor for the Apolinario class action, and a 50 percent merits risk factor for both, “the
total settlement exposure for the class claims is approximately $34,966,500,”3 so that the
3 Using the “70 [percent] chance of maintaining class certification in Laffitte” and
“25 [percent] chance of obtaining class certification in Apolinario,” class counsel
calculated that the value of the two class actions was $69,933,000 ($63,483,000 +
$6,450,000). Class counsel then reduced this figure by a “50 [percent] chance of
7
$19,000,000 settlement represented “54[] percent of the value of the total claim, which
Plaintiffs believe is outstanding considering the risk of prevailing on class certification,
prevailing on the merits, and maintaining any part of Plaintiffs’ victory through appeal.”4
Barnes also provided further information and argument in support of a multiplier. Barnes
concluded that “[a]ll this hard work and determination resulted in the settlement of
$19,000,000. . . . [T]he average Class Member award is over $4,300 and the highest
award is over $48,000 [citation]. . . . [¶] . . . The risks of this class action case were
enormous. Litigating this wage and hour class action . . . took between 4,263.5 and
4,463.5 attorney hours and involved litigation costs of $127,304.08 . . . .”
The trial court held another hearing on Brennan’s objections on April 10, 2013.
The trial court overruled Brennan’s objections and concluded that it had “sufficient
information at this point to determine that this is a fair and reasonable settlement.” The
court stated that “[t]he supplemental declaration from Mr. Barnes has addressed the
court’s question about how the attorneys fees are to be allocated between the firms
representing plaintiffs, whether the named plaintiffs have signed a fee sharing agreement,
and addressed the requirement under the California Rules of Court that the terms of any
attorneys fees agreement be set forth in full.” The court also stated that it “received
sufficient information to evaluate the strength of plaintiffs’ case, detailed information
about the factual and legal risks involved, the valuation on a claim by claim basis and the
discount factor that plaintiff[s] applied in coming up with a reasonable range of
outcomes.” The court further acknowledged receipt of “significant information on the
risk, expense, complexity and likely duration of further litigation; the risk of maintaining
prevailing on the merits,” giving a total value of $34,966,500. Class counsel valued the
Williamson class action at $0 because they “felt that there was virtually no chance of
prevailing at the time of class certification and/or the merits” of that case.
4 Actually, the $19,000,000 settlement represented approximately 16 percent
(excluding any appellate risk) of the value of the total claim of $116,490,000
($90,690,000 for Laffitte + $25,800,000 for Apolinario), because class counsel had
already discounted the total value of the claim for the risk of prevailing on class
certification and the merits.
8
a class action status throughout trial; the extent of discovery completed; the experience
and views of counsel; and the views of the class members.” The court found that “[t]hese
three actions have a lengthy procedural history including one class certification, a motion
to decertify in another case, a class certification not yet having been granted, [and] the
uncertainties introduced by case law in this area . . . throwing into significant doubt the
maintenance of the certification . . . .”
Turning to the amount of attorneys’ fees, the court stated it “considers in this case
that there is a contingency case, and so I do a double check on the attorneys fees by
looking at the lodestar amount. I do believe I have sufficient information on the number
of hours that were present and that the hourly rates charged therefore were within the
norm and not overstated. Given the lodestar, I then also find I have information in the
record which supports the multiplier that would be applied to lodestar if you’re looking at
a strict lodestar calculation, which we’re not, we’re looking at a contingency calculation,
the amount of the contingency is not unreasonable. I’m considering the novelty and
difficulty of the questions involved, the skill displayed in presenting them, the extent to
which the litigation precluded other employment by the attorneys and the inherent risk
whenever there is a fee award that is contingent. On that basis, I am granting final
approval.” The trial court granted final approval of class action settlement and awarded
$6,333,333.33 in attorneys’ fees, $127,304.08 in costs, $79,000 in settlement
administrator expenses, and $80,000 in class representative enhancement payments.
Laffitte served a notice of ruling on the parties on April 12, 2013. Brennan timely
filed a notice of appeal on June 10, 2013.
DISCUSSION
Brennan argues that the notice to the class members denied them due process
because the nature and timing of the settlement approval procedure set forth in the notice
was unfair, and because the language in the notice describing a class member’s financial
responsibility for attorneys’ fees was misleading. Brennan also argues that, in reviewing
9
the class counsel’s request for attorneys’ fees, the trial court erred by using the
percentage of fund method and then made mistakes when performing lodestar
calculations. Finally, Brennan contends that class counsel breached their fiduciary duty
to the class members by including a collusive clear sailing provision in the amended
settlement agreement.
A. The Class Notice Did Not Violate the Class Members’ Due Process Rights
1. Timing of Objections
The class notice describing the preliminarily-approved settlement included the
proposed attorneys’ fees award for class counsel, a schedule for final approval, and the
procedure for making objections. The notice stated: “Class Counsel, consisting of Law
Offices of Kevin T. Barnes, Law Office of Joseph Antonelli, and Appell | Hilaire |
Benardo LLP, will seek approval from the Court for the payment in an amount not more
than $6,333,333.33 for their attorneys’ fees in connection with their work in the Actions,
and an amount not more than $200,000 in reimbursement of their actual litigation
expenses that were advanced in connection with the Actions. Class Counsel’s attorneys’
fees and litigation expenses as approved by the Court will be paid out of the Gross
Settlement Amount.” The trial court did not require class counsel to file, and they did not
file, their motion for attorneys’ fees until February 28, 2013, which was after the January
28, 2013 deadline stated in the notice for class members to file their objections.
Brennan argues that requiring class members to file objections to the proposed
settlement and request for attorneys’ fees before class counsel filed their motion for
attorneys’ fees was a violation of due process and a breach of fiduciary duty. Brennan
asserts that the statement in the notice that class counsel would request not more than
$6,333,333.33 did not give the class members sufficient information to evaluate whether
to object to the request. In support of his contention Brennan relies on Federal Rules of
10
Civil Procedure, rules 23 (rule 23) and 54 (rule 54) (28 U.S.C.),5 and the Ninth Circuit’s
opinion in In re Mercury Interactive Corp. Securities Litigation (9th Cir. 2010) 618 F.3d
988, 993-995.
Under rule 23 class counsel must file a motion for attorneys’ fees prior to the time
class members must file objections to the settlement (rule 23(h)(1)-(4)), and the motion
must include not only the settlement agreement’s provisions but also the actual amount
sought or a “fair estimate” (rule 54(d)(2)(B)(iii)). In Mercury the Ninth Circuit,
interpreting rule 23(h), held that, with respect to the timing of a motion for attorneys’
fees, “a schedule that requires objections to be filed before the fee motion itself is filed
denies the class the full and fair opportunity to examine and oppose the motion that Rule
23(h) contemplates.” (In re Mercury Interactive Corp. Securities Litigation, supra, 618
F.3d at p. 995.)
Rule 23 does not control in California. “As a general rule, California courts are
not bound by the federal rules of procedure but may look to them and to the federal cases
5 Rule 23(h) provides: “In a certified class action, the court may award reasonable
attorney’s fees and nontaxable costs that are authorized by law or by the parties’
agreement. The following procedures apply: [¶] (1) A claim for an award must be made
by motion under Rule 54(d)(2), subject to the provisions of this subdivision (h), at a time
the court sets. Notice of the motion must be served on all parties and, for motions by
class counsel, directed to class members in a reasonable manner. [¶] (2) A class
member, or a party from whom payment is sought, may object to the motion. [¶] (3) The
court may hold a hearing and must find the facts and state its legal conclusions under
Rule 52(a). [¶] (4) The court may refer issues related to the amount of the award to a
special master or a magistrate judge, as provided in Rule 54(d)(2)(D).”
Rule 54(d)(2) provides in part: “Costs; Attorney’s Fees. [¶] . . . [¶]
(2) Attorney’s Fees. [¶] (A) Claim to Be by Motion. A claim for attorney’s fees and
related nontaxable expenses must be made by motion unless the substantive law requires
those fees to be proved at trial as an element of damages. [¶] (B) Timing and Contents
of the Motion. Unless a statute or a court order provides otherwise, the motion must: [¶]
(i) be filed no later than 14 days after the entry of judgment; [¶] (ii) specify the judgment
and the statute, rule, or other grounds entitling the movant to the award; [¶] (iii) state the
amount sought or provide a fair estimate of it; and [¶] (iv) disclose, if the court so orders,
the terms of any agreement about fees for the services for which the claim is made.”
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interpreting them for guidance or where California precedent is lacking. [Citations.]
California courts have never adopted Rule 23 as ‘a procedural strait jacket. To the
contrary, trial courts [are] urged to exercise pragmatism and flexibility in dealing with
class actions.’ [Citations.]” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th
224, 239-240; see Cartt v. Superior Court (1975) 50 Cal.App.3d 960, 970, fn. 16 [“[w]e
note the obvious: Rule 23, as such, does not bind California courts”].) California courts
follow the federal rules for class action only in the absence of controlling state authority
and only “look to Rule 23 for guidance where California precedent is lacking.” (Los
Angeles Gay & Lesbian Center v. Superior Court (2011) 194 Cal.App.4th 288, 301, fn. 7;
see Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1118 [“in the absence of controlling
state authority, California courts should utilize the procedures of rule 23”]; La Sala v.
American Sav. & Loan Assn. (1971) 5 Cal.3d 864, 872 [“trial courts, in the absence of
controlling California authority, [should] utilize the class action procedures of the federal
rules”].)6
California precedent and authority governing court approval of class action
settlements and attorneys’ fees applications, however, are not lacking. Rule 3.769 of the
California Rules of Court states the procedure for including an attorneys’ fees provision
in a class action settlement agreement and for giving notice of the final approval hearing
on the proposed settlement. Under rule 3.769(b) of the California Rules of Court, “[a]ny
agreement, express or implied, that has been entered into with respect to the payment of
attorney’s fees or the submission of an application for the approval of attorney’s fees
must be set forth in full in any application for approval of the dismissal or settlement of
an action that has been certified as a class action.” This rule “protect[s] class members
from potential conflicts of interest with their attorneys by requiring the full disclosure of
6 The cases cited by Brennan contain similar statements. (See, e.g., Lealao v.
Beneficial California, Inc., supra, 82 Cal.App.4th at p. 38 [“when there is no relevant
California precedent on point, federal precedent should be consulted”]; Dunk v. Ford
Motor Co. (1996) 48 Cal.App.4th 1794, 1801, fn. 7 [“[i]n the absence of California law
on the subject, California courts look to federal authority”].)
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all fee agreements in any application for dismissal or settlement of a class action.” (Mark
v. Spencer (2008) 166 Cal.App.4th 219, 223.) “Under the California Rules of Court
governing class actions, ‘notice of the final approval hearing must be given to the class
members in the manner specified by the court. The notice must contain an explanation of
the proposed settlement and procedures for class members to follow in filing written
objections to it and in arranging to appear at the settlement hearing and state any
objections to the proposed settlement.’ (Cal. Rules of Court, rule 3.769(f).)” (Litwin v.
iRenew Bio Energy Solutions, LLC (2014) 226 Cal.App.4th 877, 883; accord, Cellphone
Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1390.)
The notice given to the class members complied with California Rules of Court
rule 3.769 by apprising them of the agreement concerning attorneys’ fees. The notice
told the class members that class counsel could receive up to $6.3 million in attorneys’
fees. The notice also advised the class members of the procedures for objecting to the
proposed settlement and appearing at the settlement hearing, where they could present
their objections to any aspect of the settlement, including the amount of attorneys’ fees to
be awarded to class counsel. Such objections could include an objection to the amount of
information available regarding class counsel’s attorneys’ fees and, if appropriate, a
continuance of the hearing to obtain more information (which is exactly what Brennan
did). (See Cal. Rules of Court, rule 3.769(f); Litwin v. iRenew Bio Energy Solutions,
LLC, supra, 226 Cal.App.4th at p. 883 [“[p]rocedural due process requires that affected
parties be provided with ‘the right to be heard at a meaningful time and in a meaningful
manner’”]; In re Vitamin Cases (2003) 107 Cal.App.4th 820, 829 [“[t]he primary purpose
of procedural due process is to provide affected parties with the right to be heard at a
meaningful time and in a meaningful manner,” but “[i]t does not guarantee any particular
procedure but is rather an ‘elusive concept,’ requiring only ‘“notice reasonably calculated
to apprise interested parties of the pendency of the action affecting their property interest
and an opportunity to present their objections”’”].) The notice in this case “‘“fairly
apprise[d] the class members of the terms of the proposed compromise and of the options
open to dissenting class members.”’ [Citation.]” (Cho v. Seagate Technology Holdings,
13
Inc. (2009) 177 Cal.App.4th 734, 746.) The notice did not violate the class members’
due process rights.
2. Responsibility for Attorneys’ Fees
The notice of settlement states: “The Court will also be asked to approve Class
Counsel’s request for attorneys’ fees and costs and the class representative payments. A
Class Member who does not request exclusion from the settlement may, but is not
required to, enter an appearance through counsel. As a Class Member, you will not be
responsible for the payment of attorneys’ fees . . . unless you retain your own counsel, in
which event you will be responsible for your own attorneys’ fees and costs.” (Italics
added.) Brennan argues that the statement “you will not be responsible for . . . attorneys’
fees” is deceptive and misleading because class counsel were to receive their attorneys’
fees from the common fund and each class member is economically responsible for his or
her share of the attorneys’ fees award out of the gross settlement amount. Brennan also
argues that the phrase “you will be responsible for your own attorney’s fees” is “(1)
wrong as a matter of law; and (2) had the effect of discouraging class members from
seeking the assistance of their own counsel.”
When the “settlement agreement is read in its entirety and placed into context”
Owens v. County of Los Angeles (2013) 220 Cal.App.4th 107, 119), the meanings of
these phrases are straightforward and not misleading. (See People ex rel. Lockyer v. R.J.
Reynolds Tobacco Co. (2003) 107 Cal.App.4th 516, 527 [phrase in settlement agreement
“reasonably read in context”].) The reasonable interpretation of these provisions is that
attorneys’ fees for class counsel are part of the settlement amount. (See Kurtin v. Elieff
(2013) 215 Cal.App.4th 455, 471-472 [“courts prefer a more natural reading of text to a
less natural one, whether that text be found in a statute . . . or a contract”].) A class
member will not be individually billed and obligated to pay for class counsel’s fees. If,
however, the class member chooses to retain an attorney to object to some aspect of the
settlement, the class member will be responsible for paying that attorney.
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Brennan also argues that the “misinformation” about responsibility for attorneys’
fees “is compounded by the fact that the Notice failed to advise class members that they
even had a right to object to Class Counsel’s attorneys’ fee request.” The notice,
however, states: “If you are dissatisfied with any of the terms of the Settlement you may
object to the Settlement.” The notice also states: “The Court will hold a final approval
hearing . . . to determine whether the Settlement should be finally approved as fair,
reasonable, and adequate. The Court will also be asked to approve Class Counsel’s
request for attorneys’ fees and costs and the Class Representative payments. . . .” The
notice advises the class members that settlement will be reduced by “Class Counsel’s fees
not to exceed $6,333,333.33 . . . .” The notice, read reasonably and considered in its
entirety, sufficiently advises class members of the amount of attorneys’ fees class counsel
were requesting and of the class members’ right to object to the request.
B. The Trial Court’s Method for Calculating Attorneys’ Fees Was Proper
and the Award Was Reasonable
Brennan argues that the trial court erred by calculating the amount of class
counsel’s attorneys’ fees based on a percentage of the common fund, rather than the
lodestar method. He cites the statement in Lealao v. Beneficial California, Inc., supra, 82
Cal.App.4th 19 that the “primary method for establishing the amount of ‘reasonable’
attorney fees is the lodestar method.” (Id. at p. 26.) While Brennan is correct that, as a
general rule, the lodestar method is the primary method for calculating attorneys’ fees,
the percentage approach may be proper where, as here, there is a common fund.
1. Standard of Review
We review an award of attorneys’ fees in a class action settlement under an abuse
of discretion standard. (Carter v. City of Los Angeles (2014) 224 Cal.App.4th 808, 819;
Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 1004.) “‘“The
‘experienced trial judge is the best judge of the value of professional services rendered in
his court, and while his judgment is of course subject to review, it will not be disturbed
15
unless the appellate court is convinced that it is clearly wrong[’]”—meaning that it
abused its discretion. [Citations.]’ [Citation.] ‘“‘“[T]he appropriate test for abuse of
discretion is whether the trial court exceeded the bounds of reason.”’ [Citations.]”
[Citation.] . . . We defer to the trial court’s discretion “because of its ‘superior
understanding of the litigation and the desirability of avoiding frequent appellate review
of what essentially are factual matters.’ [Citation.]” [Citation.]’ [Citation.]” (Taylor v.
Nabors Drilling USA, LP (2014) 222 Cal.App.4th 1228, 1249; accord, Holguin v. DISH
Network LLC (2014) 229 Cal.App.4th 1310, 1329; Collins v. City of Los Angeles (2012)
205 Cal.App.4th 140, 159.) The “[f]ees approved by the trial court are presumed to be
reasonable, and the objectors must show error in the award.” (Consumer Privacy Cases
(2009) 175 Cal.App.4th 545, 556; see Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at
p. 1809.)
2. Percentage of the Common Fund
In Lealao v. Beneficial California, Inc., supra, 82 Cal.App.4th 19 the court stated
that “[t]he primacy of the lodestar method in California was established in 1977 in
Serrano [v. Priest (1977)] 20 Cal.3d 25. . . . [O]ur Supreme Court declared: ‘“The
starting point of every fee award . . . must be a calculation of the attorney’s services in
terms of the time he has expended on the case.”’” (Id. at p. 26.) The court added that
“[i]n so-called fee shifting cases, in which the responsibility to pay attorney fees is
statutorily or otherwise transferred from the prevailing plaintiff or class to the defendant,
the primary method for establishing the amount of ‘reasonable’ attorney fees is the
lodestar method. The lodestar (or touchstone) is produced by multiplying the number of
hours reasonably expended by counsel by a reasonable hourly rate. Once the court has
fixed the lodestar, it may increase or decrease that amount by applying a positive or
negative ‘multiplier’ to take into account a variety of other factors, including the quality
16
of the representation, the novelty and complexity of the issues, the results obtained, and
the contingent risk presented. [Citation.]”7 (Ibid.)
The court in Lealao was discussing the circumstances in which trial courts could
use the percentage of fund method, rather than the lodestar method, to calculate the
amount of attorneys’ fees to award to class counsel. The court explained that “[f]ee
spreading occurs when a settlement or adjudication results in the establishment of a
separate or so-called common fund for the benefit of the class. Because the fee awarded
class counsel comes from this fund, it is said that the expense is borne by the
beneficiaries. Percentage fees have traditionally been allowed in such common fund
cases, although, as will be seen, the lodestar methodology may also be utilized in this
context.” (Lealao v. Beneficial California, Inc., supra, 82 Cal.App.4th at p. 26.) The
court noted that, “[b]ecause the common fund doctrine ‘rest[s] squarely on the principle
of avoiding unjust enrichment’ [citations], attorney fees awarded under this doctrine are
not assessed directly against the losing party (fee shifting), but come out of the fund
established by the litigation, so that the beneficiaries of the litigation, not the defendant,
bear this cost (fee spreading). Under federal law, the amount of fees awarded in a
common fund case may be determined under either the lodestar method or the
percentage-of-the-benefit approach [citation], although, about a decade ago, as the Ninth
Circuit then noted, there commenced a ‘ground swell of support for mandating the
percentage-of-the-fund approach in common fund cases.’ [Citation.] Prior to 1977,
7 “‘[T]he lodestar is the basic fee for comparable legal services in the community; it
may be adjusted by the court based on factors including . . . (1) the novelty and difficulty
of the questions involved, (2) the skill displayed in presenting them, (3) the extent to
which the nature of the litigation precluded other employment by the attorneys, (4) the
contingent nature of the fee award. [Citation.] The purpose of such adjustment is to fix a
fee at the fair market value for the particular action. In effect, the court determines,
retrospectively, whether the litigation involved a contingent risk or required extraordinary
legal skill justifying augmentation of the unadorned lodestar in order to approximate the
fair market rate for such services.’” (Graham v. DaimlerChrysler Corp. (2004) 34
Cal.4th 553, 579; see Chodos v. Borman (2014) 227 Cal.App.4th 76, 92.)
17
when the California Supreme Court decided Serrano [v. Priest], supra, 20 Cal.3d 25,
California courts could award a percentage fee in a common fund case. [Citation.] After
Serrano . . . , it is not clear whether this may still be done.” (Id. at p. 27.)
Subsequent judicial opinions have made it clear that a percentage fee award in a
common fund case “may still be done.” For example, in Chavez v. Netflix, Inc. (2008)
162 Cal.App.4th 43 the court stated that “the Lealao court did not purport to mandate the
use of one particular formula in class action cases. The method the trial court used here
and that [was] discussed in Lealao are merely different ways of using the same data—the
amount of the proposed award and the monetized value of the class benefits—to
accomplish the same purpose: to cross-check the fee award against an estimate of what
the market would pay for comparable litigation services rendered pursuant to a fee
agreement. [Citation.]” (Id. at p. 65.) Therefore, “fees based on a percentage of the
benefits are in fact appropriate in large class actions when the benefit per class member is
relatively low . . . .” (Id. at p. 63.)
In Consumer Privacy Cases, supra, 175 Cal.App.4th 545 the court explained that
“[r]egardless of whether attorney fees are determined using the lodestar method or
awarded based on a ‘percentage-of-the-benefit’ analysis under the common fund
doctrine, ‘“[t]he ultimate goal . . . is the award of a ‘reasonable’ fee to compensate
counsel for their efforts, irrespective of the method of calculation.” [Citations.]’
[Citation.] It is not an abuse of discretion to choose one method over another as long as
the method chosen is applied consistently using percentage figures that accurately reflect
the marketplace. [Citation.]” (Id. at pp. 557-558; accord, Chavez v. Netflix, Inc., supra,162 Cal.App.4th at pp. 65-66; see Consumer Cause, Inc. v. Mrs. Gooch’s Natural Food
Markets, Inc. (2005) 127 Cal.App.4th 387, 397 [the common fund doctrine is “frequently
applied in class actions when the efforts of the attorney for the named class
representatives produce monetary benefits for the entire class”]; Wershba v. Apple
Computer, Inc., supra, 91 Cal.App.4th at p. 254 [“[c]ourts recognize two methods for
calculating attorney fees in civil class actions: the lodestar/multiplier method and the
18
percentage of recovery method”].)8 The percentage of fund method survives in
California class action cases, and the trial court did not abuse its discretion in using it, in
part, to approve the fee request in this class action.
Finally, contrary to Brennan’s assertion, the trial court’s use of a percentage of 33
1/3 percent of the common fund is consistent with, and in the range of, awards in other
class action lawsuits. In Chavez v. Netflix, Inc., supra, 162 Cal.App.4th 43 the court held
that attorneys’ fees of 27.9 percent of the class benefit awarded was “not out of line with
class action fee awards calculated using the percentage-of-the-benefit method:
‘Empirical studies show that, regardless whether the percentage method or the lodestar
method is used, fee awards in class actions average around one-third of the recovery.’
[Citation.]” (Id. at p. 66, fn. 11; see Bell v. Farmers Ins. Exchange (2004) 115
Cal.App.4th 715, 726 [“the court awarded to [class] counsel attorney fees in the amount
of 25 percent of the total damages fund recovered for the class”]; Fischel v. Equitable
Life Assur. Society of U.S. (9th Cir. 2002) 307 F.3d 997, 1006 [recognizing “a 25 percent
‘benchmark’ in percentage-of-the-fund cases that can be ‘adjusted upward or downward
to account for any unusual circumstances involved in [the] case’”].)
3. Lodestar Cross-check
The trial court did not use the percentage of fund method exclusively to determine
whether the amount of attorneys’ fees requested was reasonable and appropriate. The
8 The Supreme Court in Serrano even recognized the viability of the “percentage of
the common fund” method. The court observed that “the so-called ‘common fund’
exception to the American rule regarding the award of attorneys fees (i.e., the rule set
forth in section 1021 of our Code of Civil Procedure), is grounded in ‘the historic power
of equity to permit the trustee of a fund or property, or a party preserving or recovering a
fund for the benefit of others in addition to himself, to recover his costs, including his
attorneys’ fees, from the fund of property itself or directly from the other parties enjoying
the benefit.’ [Citation.] [¶] First approved by this court in the early case of Fox v. Hale
& Norcross S. M. Co. (1895) 108 Cal. 475 . . . , the ‘common fund’ exception has since
been applied by the courts of this state in numerous cases. [Citations.]” (Serrano v.
Priest, supra, 20 Cal.3d at p. 35.)
19
trial court also performed a lodestar calculation to cross-check the reasonableness of the
percentage of fund award. This was entirely proper. “[A]lthough attorney fees awarded
under the common fund doctrine are based on a ‘percentage-of-the-benefit’ analysis,
while those under a fee-shifting statute are determined using the lodestar method, ‘[t]he
ultimate goal . . . is the award of a “reasonable” fee to compensate counsel for their
efforts, irrespective of the method of calculation.’ [Citations.]” (Apple Computer, Inc. v.
Superior Court (2005) 126 Cal.App.4th 1253, 1270.) It therefore is appropriate for the
trial court to cross-check an award of attorneys’ fees calculated by one method against an
award calculated by the other method in order to confirm whether the award is
reasonable. (See Consumer Privacy Cases, supra, 175 Cal.App.4th at p. 557; Cundiff v.
Verizon California, Inc. (2008) 167 Cal.App.4th 718, 724; see also In re Bluetooth
Headset Products Liability Litigation (9th Cir. 2011) 654 F.3d 935, 944, 945 (Bluetooth)
[“we have also encouraged courts to guard against an unreasonable result by cross-
checking their calculations against a second method,” and “the lodestar method can
‘confirm that a percentage of recovery amount does not award counsel an exorbitant
hourly rate’”]; Shaffer v. Continental Cas. Co. (9th Cir. 2010) 362 Fed.Appx. 627, 632
[district court properly “used the lodestar method to cross-check the percentage
method”]; Vizcaino v. Microsoft Corp. (9th Cir. 2002) 290 F.3d 1043, 1050 [district court
did not abuse its discretion in “apply[ing] the lodestar method as a cross-check of the
percentage method” because “the lodestar may provide a useful perspective on the
reasonableness of a given percentage award”].)
Brennan argues that, in connection with the court’s lodestar calculations, class
counsel did not submit detailed attorney time records. Such detailed time records,
however, are not required. “It is well established that ‘California courts do not require
detailed time records, and trial courts have discretion to award fees based on declarations
of counsel describing the work they have done and the court’s own view of the number of
hours reasonably spent. [Citations.]’ [Citations.]” (Syers Properties III, Inc. v. Rankin
(2014) 226 Cal.App.4th 691, 698-699; Chavez v. Netflix, Inc., supra, 162 Cal.App.4th at
p. 64 [“detailed timesheets are not required of class counsel to support fee awards in class
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action cases”].) The trial court did not abuse its discretion by relying on the hours
worked and hourly rates provided by each of the class attorneys, and the description of
the work the attorneys performed, in calculating a lodestar cross-check on the award.
The trial court followed a process similar to the one approved in Sutter Health
Uninsured Pricing Cases (2009) 171 Cal.App.4th 495. There, the Court of Appeal
affirmed the trial court’s order approving class counsel attorneys’ fees as a percentage of
a common fund after a lodestar “‘cross-check to test the reasonableness of [the]
amount.’” (Id. at pp. 503, 512.) The court observed that “several law firms worked for
class plaintiffs and all submitted declarations attesting to the hours worked and hourly
rates of the various specific attorneys who worked on this case. Most of these
declarations were summaries and . . . the lead firm . . . did not submit hourly timesheets.
[¶] Courts have held that such detail is not required. [Citations.] We see no reason why
[the trial court] could not accept the declarations of counsel attesting to the hours worked,
particularly as [the court] was in the best position to verify those claims by reference to
the various proceedings in the case.” (Id. at p. 512.) The trial court here did not abuse its
discretion in performing a lodestar calculation based on the declarations of class counsel
to cross-check the percentage of fund award.
4. Lodestar 2.13 Multiplier
Class counsel’s proposed lodestar was $2,968,620 without an appeal and
$3,118,620 including an appeal. Class counsel asked the court to apply a multiplier of
2.02 to 2.13 to the lodestar cross-check to support the total fee request of $6,333,333.33.
Brennan acknowledges that “[m]ultipliers can range from 2 to 4 or even higher.”
(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 255; accord, In re Lugo
(2008) 164 Cal.App.4th 1522, 1546; see Chavez v. Netflix, Inc., supra, 162 Cal.App.4th
at p. 66 [multiplier of 2.5 was not “out of line with prevailing case law”].)9 He argues,
9 Even the authority Brennan relies on, Judge Richard Posner, has acknowledged
that “[t]he need for such [a multiplier] adjustment is particularly acute in class action
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however, that the trial court erred in applying the multiplier because the court did not
have sufficiently detailed attorney time records. Brennan argues that he “seeks to
establish a bright-line standard so that class action attorneys who do not submit sufficient
evidence to allow the court to ‘carefully compile the time spent,’ ‘carefully review
attorneys’ documentation of hours,’ and ‘thoroughly review fee applications’ to
determine a reasonable lodestar cannot be awarded an enhancement to the lodestar.” (Fn.
and underscoring omitted.)
As noted, the “bright line standard” is not the law in California. The trial court in
each case determines how much information and documentation the court needs in order
to make a reasonable attorneys’ fees award. (See G.R. v. Intelligator (2010) 185
Cal.App.4th 606, 620 [trial court did not abuse its discretion in choosing “to accept the
declaration of [defendant’s] attorney as sufficient proof of the attorney’s hourly rate, the
time spent, and the reasonableness of the time spent”].) Moreover, the trial court
considered the proper lodestar multiplier factors in determining whether to apply a
multiplier, including the difficulty of the issues in this case, the skill of class counsel, the
contingent nature of the case, and the preclusion of other employment. (See Graham v.
DaimlerChrysler Corp., supra, 34 Cal.4th at p. 579; Chodos v. Borman, supra, 227
Cal.App.4th at p. 92.) Even where, unlike here, the trial court fails to give any
explanation for its selection of the multiplier, such a failure does not justify reversal.
(Taylor v. Nabors Drilling USA, LP, supra, 222 Cal.App.4th at p. 1249.) “‘In reviewing
a challenged award of attorney fees and costs, we presume that the trial court considered
all appropriate factors in selecting a multiplier and applying it to the lodestar figure.
[Citation.] This is in keeping with the overall review standard of abuse of discretion,
which is found only where no reasonable basis for the court’s action can be shown.
[Citation.]’ [Citations.]” (Id. at pp. 1249-1250.) The use of a multiplier of 2.13 was not
an abuse of discretion.
suits.” (Matter of Continental Illinois Securities Litigation (7th Cir. 1992) 962 F.2d 566,
569.)
22
Brennan contends the trial court’s use of 2012 hourly rates “for work done
between 2005 and 2011 amounted to a de facto multiplier.” Brennan’s contention is
based on a misreading of the record. The trial court did not mistakenly apply 2012
hourly rates to work performed in prior years. The trial court determined that the hourly
rates for the attorneys who worked on the case were reasonable for all years of the
litigation. And the trial court had ample basis for making that determination, including
evidence of hourly rates from 2002 to 2012. Barnes’ declaration included a report based
on a survey by the National Law Journal showing hourly rates for 2002 ranging from
$500 to $850. The supporting declaration of Richard M. Pearl, an expert on hourly rates
of attorneys’ fees in California, included a review of hourly rates approved by California
courts ranging from $750 to $875. He also reported the result of surveys for 2009
showing hourly rates ranging from $775 to $950. The trial court did not abuse its
discretion by using the hourly rates of the attorneys serving as class counsel, nor did the
court’s use of those rates constitute a de facto multiplier.
Brennan also asserts that “[t]he awarding of any multiplier, much less a multiplier
that compensated each attorney’s hour at $1,485.65, constituted a basic violation of the
common fund doctrine,” citing Garabedian v. Los Angeles Cellular Telephone Co.
(2004) 118 Cal.App.4th 123, 128. Garabedian does not prohibit the use of a multiplier.
The court in Garabedian held that, “[e]ven where the parties agree as to the amount of
attorney fees in . . . a settlement agreement, courts properly review and modify the
agreed-upon fees if the amount is not reasonable.” (Id. at p. 127.) Thus, “the judicial
determination of ‘reasonable’ attorney fees . . . does not depend solely upon hourly rates
and the number of hours devoted to the case. While these two factors are ‘the starting
point of every fee award’ [citation], numerous other factors must also be considered,
including the novelty and difficulty of the issues presented, the quality of counsel’s
services, the time limitations imposed by the litigation, the amount at stake, and the result
obtained by counsel. [Citations.]” (City of Oakland v. Oakland Raiders (1988) 203
Cal.App.3d 78, 83; see Center for Biological Diversity v. County of San Bernardino
(2010) 188 Cal.App.4th 603, 616 [“[a]fter making the lodestar calculation, the court may
23
augment or diminish that amount based on a number of factors specific to the case,
including the novelty and difficulty of the issues, the attorneys’ skill in presenting the
issues, the extent to which the case precluded the attorneys from accepting other work,
and the contingent nature of the work”].) The fact that the multiplier applied may have
resulted in an effective increase in the hourly rate does not, without more, establish that
the attorneys’ fees award was unreasonable.
C. Clear Sailing Provision in Settlement Agreement
Brennan argues that the inclusion of a clear sailing provision in the settlement
agreement was a breach of the fiduciary duty by class counsel in the negotiation of the
settlement. This provision states: “Class Counsel will apply to the Court for an award of
not more than $6,333,333.33 (33.33 [percent] of the Gross Settlement Amount) as their
Class Counsel Fees Payment . . . , and Robert Half will not oppose their request. . . .
Brennan relies on the Ninth Circuit’s opinion in Bluetooth, supra, 654 F.3d 935, which
includes this statement: “One inherent risk [in class action settlements] is that class
counsel may collude with the defendants, ‘tacitly reducing the overall settlement in return
for a higher attorney’s fee.’ [Citations.]” (Id. at p. 946.) One sign of such collusion is
“when the parties negotiate a ‘clear sailing’ arrangement providing for the payment of
attorneys’ fees separate and apart from class funds, which carries ‘the potential of
enabling a defendant to pay class counsel excessive fees and costs in exchange for
counsel accepting an unfair settlement on behalf of the class’ [citations] . . . .” (Id. at
p. 947.) There is, however, no prohibition on clear sailing provisions, nor is there any
evidence that the clear sailing provision in this case reflected any collusion between
Laffitte and Robert Half.
“While it is true that the propriety of ‘clear sailing’ attorney fee agreements has
been debated in scholarly circles [citations], commentators have also noted that class
action ‘settlement agreement[s] typically include[] a “clear sailing” clause . . . .’
[Citation.] In fact, commentators have agreed that such an agreement is proper. ‘[A]n
agreement by the defendant to pay such sum of reasonable fees as may be awarded by the
24
court, and agreeing also not to object to a fee award up to a certain sum, is probably still a
proper and ethical practice. This practice serves to facilitate settlements and avoids a
conflict, and yet it gives the defendant a predictable measure of exposure of total
monetary liability for the judgment and fees in a case. To the extent it facilitates
completion of settlements, this practice should not be discouraged.’ [Citation.]”
(Consumer Privacy Cases, supra, 175 Cal.App.4th at p. 553, fn. omitted; see Cellphone
Termination Fee Cases (2009) 180 Cal.App.4th 1110, 1120 [“[c]lass action settlements
frequently contain a ‘clear sailing’ agreement, whereby the defendant agrees not to object
to an attorney fee award up to a certain amount”].)
In Bluetooth, supra, 654 F.3d 935 the Ninth Circuit stated that “[c]ollusion may
not always be evident on the face of a settlement, and courts therefore must be
particularly vigilant not only for explicit collusion, but also for more subtle signs that
class counsel have allowed pursuit of their own self-interests and that of certain class
members to infect the negotiations. [Citations.] A few such signs are: [¶] (1) ‘when
counsel receive a disproportionate distribution of the settlement, or when the class
receives no monetary distribution but class counsel are amply rewarded,’ [citations]; [¶]
(2) when the parties negotiate a ‘clear sailing’ arrangement providing for the payment of
attorneys’ fees separate and apart from class funds, which carries ‘the potential of
enabling a defendant to pay class counsel excessive fees and costs in exchange for
counsel accepting an unfair settlement on behalf of the class,’ [citation]; and [¶] (3) when
the parties arrange for fees not awarded to revert to defendants rather than be added to the
class fund, [citation].” (Id. at p. 947.) Even Judge Posner, on whose writings Brennan
relies, has written that “[c]lear-sailing clauses have not been held to be unlawful per se,
but [where the case] involv[es] a non-cash settlement award to the class, such a clause
should be subjected to intense critical scrutiny . . . .” (Redman v. RadioShack Corp. (7th
Cir., Sept. 19, 2014, Nos. 14-1470, 14-1471, 14-1658, 14-1320) ___ F.3d ___, ___, [2014
WL 4654477 at p. 13].)
Unlike Bluetooth, where the “settlement agreement included all three of these
warning signs” (Bluetooth, supra, 654 F.3d at p. 947), the settlement agreement here
25
contains none of them. As discussed, class counsel received a percentage of the recovery
commensurate with percentages awarded in other cases, and the class members received
a significant monetary distribution. The clear sailing agreement did not provide for a
payment of attorneys’ fees separate and apart from the common fund but provided for a
payment of attorneys’ fees out of the fund. Finally, there was no arrangement that fees
not awarded would revert to the Robert Half defendants. (See In re Toys “R” Us-
Delaware, Inc.—Fair and Accurate Credit Transactions Act (FCTA) Litigation (C.D.Cal.
2014) 295 F.R.D. 438, 458 [“despite the clear sailing provision,” the “absence of a
‘kicker provision’ in the parties’ settlement and the fact that the class is receiving
reasonable value reduces the likelihood that plaintiffs and [the defendant] colluded to
confer benefits on each other at the expense of class members”]; Larsen v. Trader Joe’s
Company (N.D.Cal. 2014) 2014 WL 3404531 at p. 8 [“clear sailing provisions generally
do not raise concerns where, as here, the fees are to come from the settlement fund,” as
opposed to “where attorneys’ fees are paid on top of the settlement fund”].) In the
absence of any of the recognized warning signs of collusion or other evidence of
collusion, the inclusion of a clear sailing provision in the settlement agreement did not
constitute a breach of fiduciary duty on the part of class counsel.
26
DISPOSITION
The order entering final judgment is affirmed. The Laffitte class plaintiffs and the
Robert Half defendants are to recover their costs on appeal.
SEGAL, J.*
We concur:
WOODS, Acting P. J.
ZELON, J.
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
27
Filed 11/21/14
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
MARK LAFFITTE et al., B249253
Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No. BC321317)
v.
ROBERT HALF INTERNATIONAL INC. ORDER MODIFYING OPINION
et al., AND CERTIFYING FOR
PUBLICATION;
Defendants and Respondents, NO CHANGE IN JUDGMENT
DAVID BRENNAN,
Plaintiff and Appellant.
THE COURT:
It is ordered that the opinion filed herein on October 29, 2014, be modified as
follows:
1. On page 2, under the Introduction heading, add the following paragraph as the
first paragraph:
This appeal arises from an order overruling objections to a
settlement of several wage and hour class actions, and approving the
settlement. We hold that rule 3.769 of the California Rules of Court, not
rule 23 of the Federal Rules of Civil Procedure, establishes the
requirements in California for settlement notices to class members. We
also confirm that the percentage of recovery method for calculating an
award of attorneys’ fees is still viable in common fund cases. Finally, we
hold that the presence of a clear sailing provision in a class action
settlement does not, without more, invalidate the agreement as collusive.
28
2. On page 5, line 4 of the first full paragraph, add the word “and” between the
words “counsel” and “supervised” so that the sentence reads in part:
The declarations stated that Kevin T. Barnes, who served as lead counsel
and supervised and handled all aspects of the litigation, . . .
3. On page 20, second line from the bottom, add the word “see” before the
citation Chavez v. Netflix, Inc., supra, 162 Cal.App.4th at p. 64.
4. On page 23, at the beginning of line 10 of the first full paragraph, change the
word “of” to “and” so that the sentence reads in part as follows:
The supporting declaration of Richard M. Pearl, an expert on hourly rates
and attorneys’ fees in California, . . .
5. On page 24, line 5 of the paragraph following subheading C, at the end of that
line after the ellipses, add a closed quotation mark so that line 5 reads as follows:
. . . Class Counsel Fees Payment . . . , and Robert Half will not oppose their
request. . . .”
6. On page 25, the citation at the end of the first full paragraph should be revised
to read as follows:
(Redman v. RadioShack Corp. (7th Cir. 2014) 768 F.3d 622, 637.)
There is no change in the judgment.
The opinion in the above-entitled matter filed on October 29, 2014 was not
certified for publication in the Official Reports. For good cause it now appears that the
opinion meets the standards for publication specified in California Rules of Court,
rule 8.1105(c), and
29
IT IS HEREBY ORDERED that the words “Not to be Published in the Official
Reports” appearing on page 1 of said opinion be deleted and the opinion be published in
the Official Reports.
___________________ ___________________ ___________________
WOODS, Acting P. J. ZELON, J. SEGAL, J.*
*
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article
VI, section 6 of the California Constitution.
30