Saturday, December 13, 2014

Objector Overruled...

Laffitte v. Robert Half Intern., No. B249253 (D2d7 Nov. 21, 2014)

An objector appeals from an order approving a settlement in a wage and hour class action. The court of appeal affirms, finding each of the objections without merit.

First, the objector complained that the notice to the class, which explained that the plaintiffs’ attorneys were seeking a fee award of 33 percent of the $19 million settlement fund, was improper because the attorneys had not yet filed their fee motion.  Although having a fee motion on file before objections are due is required under the federal rules, see Fed. R. Civ. P. 23(h); In re Mercury Interactive Corp. Secs. Litig., 618 F.3d 988 (9th Cir. 2010), the California Rules of Court contain no such requirement. While a California notice must generally explain the settlement terms—including the fees sought by the attorneys—nothing in the rules requires that the fee motion to be on file at the time the notice is sent or before objections are due.

Second, the objector complained that the court’s fee award—calculated as a third of the common fund and cross-checked with a lodestar analysis—was improper. But nothing about the methodology was improper. California courts can permissibly use the percentage of fund calculation in a class action settlement and the 33 percent figure—while on the high end—was within the trial court’s discretion to award. Further the trial court’s award was bolstered by its lodestar analysis. In conducting that analysis, the court was permitted to rely upon general summaries of the plaintiffs attorneys’ rates and the number of hours worked on the ligation. The court did not abuse its discretion by failing to require the plaintiffs’ attorneys to submit detailed billing documents. And the lodestar multiplier that was arrived at by the court—2.13—was within the norm for a reasonable attorneys

Finally, the objector was dissatisfied that the settlement agreement included a clear sailing provision—an agreement that defendants would not object to a fee award within a negotiated limit. But California law does not prohibit clear sailing provisions, and in the absence of any evidence of collusion between the defendant and the plaintiff’s lawyer, there was nothing improper about agreeing to one in this case. Notably, the cases in which clear sailing clauses have come under fire involve non-monetary settlements for the plaintiff class. In contrast, this case entailed a significant monetary award to the plaintiff class so there was no reason to believe that the only beneficiary of the litigation would be the plaintiff lawyers.


**Update: The Supreme Court granted review of this case on Feb. 26, 2015.

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