Stare Decisis Carries the Day

Hernandez v. Restoration Hardware, No. S233983 (Cal. Jan. 29, 2018)

I wrote about this case when it was decided by the Court of Appeal in early 2016. Basically, the court held that because Code of Civil Procedure § 902 permits only a “party aggrieved” to appeal, a member of a certified class who objects to a settlement cannot appeal the overruling of her objection unless she formally intervenes and becomes a party. The court realized that result was inconsistent with a number of prior Court of Appeal decisions as well as federal class action practice. See Devlin v. Scardelletti, 536 U.S. 1, 14 (2002). But it felt bound by Eggert v. Pac. States S. & L. Co., 20 Cal. 2d 199 (1942), in which the California Supreme Court held, before the advent of modern class actions, that to have standing to appeal, a settlement objector needs to either formally intervene or file a motion to vacate the judgment under § 663. 

As I noted, the split was the kind of thing the Supreme Court needed to step in to sort out. And it did. And—somewhat surprisingly to me, at least—the Court affirms in an essentially unanimous opinion by Justice Chin. Basically, the general annoyingness of needing to move to intervene or vacate isn’t enough to overcome the stare decisis effect of Eggert, which rested on a reasonable interpretation of § 902. While federal courts and courts of other states might disagree, they don’t have § 902 to contend with. 

Justice Liu concurs to note that Eggert is out of wack with current class action practice federally and in other jurisdictions, and to explain that the policy rationale for it doesn’t make a lot of sense. But since it’s based on the interpretation of a statute that the Legislature could fix were it so inclined, Justice Liu agrees that stare decisis carries the day.

Affirmed.

Class Action Objectors Get No Ticket to the Appellate Party

Hernandez v. Restoration Hardware, No. D067091 (D4d1 Mar. 14, 2016)

Plaintiff won a $36.4 million bench verdict in a rare class action that actually went to trial. The court awarded 25 percent of the judgment as a fee award to the plaintiffs’ attorneys. Subject to the parties post-trial “clear sailing” agreement, the Defendant didn’t contest the award. But a class member objected, both on the basis that the court didn’t give the class notice of the fee hearing, and on the merits of the award itself. The trial court rejected the objection and entered a judgment including the 25 percent award. The objector appealed.