CALIFORNIA CLASS ACTION LAW

Category: Attorneys’ Fees

Ninth Circuit Reverses Approval of Class Settlement Where Incentive Awards Were Conditioned on Representatives’ Support for Settlement

Experian in Ruddington Fields

Experian in Ruddington Fields (Photo credit: Ruddington Photos)

Today, the Ninth Circuit reversed a district court’s approval of a class action settlement against credit reporting agencies under the Fair Credit Report Act, citing a failure by the class representatives and class counsel to adequately represent the class.  Radcliffe, et al v. Experian Information Solutions, Inc., et al., Case No. 11-56376, __ F.3d __ (Apr. 22, 2013).  The court took issue with the incentive awards to the class representatives that were conditioned on the class representatives’ support for the settlement.  The agreement provided for incentive awards:

On or before October 19, 2009, Proposed 23(b)(3) Settlement Class Counsel shall file an application or applications to the Court for an incentive award, to each of the Named Plaintiffs serving as class representatives in support of the Settlement, and each such award not to exceed $5,000.00.

The court concluded that these conditional awards caused a divergence of interests between the representatives and the class: Read the rest of this entry »

Advertisements

Central District Grants Final Approval to Injunctive Relief Settlement in Qunol CoQ10 Liquid Labeling Litigation

DSC_9962

DSC_9962 (Photo credit: k_haruna)

On March 13, 2013, Judge David O. Carter granted final approval to a class action based on claims that Defendants mislabeled their “Qunol” product as “six times more effective” than other similar products.  Bruno v. Quten Research Institute, LLC, et al. (In re Qunol CoQ10 Liquid Labeling Litigation), No. SACV 11–00173 DOC (Ex), 2013 WL 990495 (C.D. Cal. March 13, 2013) (slip op.).

Class

All excluding officers, directors, and employees of Quten Research Institute, LLC or Tishcon Corp. and their immediate families, who on or after January 31, 2007 purchased Qunol CoQ10 in the United States for personal or household uses, rather than resale or distribution, in packaging stating that Qunol offers six times better absorption or effectiveness. Read the rest of this entry »

Magistrate Judge Elizabeth LaPorte Grants Final Approval For Settlement With Attorneys Fees of 25% of the Common Fund and $5,000 Incentive Award

STERLING HEIGHTS, MI - MAY 24:  Chrysler Group...

Image by Getty Images via @daylife

Magistrate Judge Elizabeth D. LaPorte granted final approval for a class of individuals who obtained an Option ARM loan originated by U.S. Financial Funding, Inc. with certain characteristics.  Lymburner v. U.S. Financial Funding, Inc., No. C0800325, 2012 WL 398816 (N.D. Cal., Feb. 7, 2012) (slip op.).  The net settlement amount was approximately $93,750, and the court granted plaintiff’s motion for attorneys’ fees in the amount of $36,250.  Id.

Background

Plaintiff Dian C. Lymburner brought a putative class action against Defendant U.S. Financial Funding alleging claims for fraudulent omissions, breach of contract, and breach of the implied covenant of good faith and fair dealing.  Id.  Plaintiff filed a motion to certify the class, and on January 22, 2010, the Court granted that motion.  Id.  After extensive negotiation, the parties reached a settlement. Id. After notice was mailed, no class members filed an objection or exclusion request. Id.

Discussion

With respect to the total settlement amount, the court noted that “importantly, the Settlement Agreement is premised on Defendant’s limited asset.”  Id.  “Defendant has no other source of funding other than an eroding insurance policy, which was valued at $174,000, and which is now valued at $145,000, which is the total settlement amount.”  Id.  The Court approved the settlement amount, in addition to $36,250 in fees and expenses, which is 25% of the estimated value of the settlement.  Id.  At this amount, Plaintiff’s attorneys received less than their lodestar.  Id.

Judge and Attorneys

United States Magistrate Judge Elizabeth D. LaPorte.

Edward Young Lee, Lee & Fields, A.P.C., Christopher Peter Fields, Los Angeles, CA, Jeffrey K. Berns, Arbogast & Berns LLP, Tarzana, CA, Michael C. Eyerly, Patrick Deblase, Paul R. Kiesel, Kiesel Boucher & Larson LLP, Beverly Hills, CA, for Plaintiff.

Shahram Nassi, Roger Scott Raphael, Lewis Brisbois Bisgaard & Smith, San Francisco, CA, for Defendant.

By CHARLES JUNG

Enhanced by Zemanta

Central District Denies Twombly Challenge to Wage & Hour Class Action Pleadings, Holds That FLSA Is a Proper Predicate for a UCL Claim, but Strikes Fees Prayer Under C.C.P. § 1021.5

countrywide
Image by TheTruthAbout via Flickr

The United States District Court for the Central District of California held that (1) relatively formulaic pleadings in a wage and hour case were sufficient to meet the pleading requirements of Rule 8, even under Twombly and Iqbal; (2) the FLSA is a proper predicate for a UCL claim; and (3) plaintiffs’ prayer for attorneys fees under Cal. Code Civ. Proc. section 1021.5 should be stricken. Whitaker v. Countrywide Financial Corp., No. CV CAS 09-5898 (PJWx), 2010 WL 4537098 (C.D. Cal. Nov. 1, 2010).

Background

A putative class action was brought on behalf of current and former employees of Countrywide Financial Corporation and Countrywide Home Loans, Inc. (the “Countrywide Defendants”) against the Countrywide Defendants and Bank of America, the alleged successor employer and/or successor in liability to the Countrywide Defendants. Id. *1. The FAC alleges claims for: (1) failure to pay overtime in violation of Cal. Labor Code s 510 and s 1194 and IWC Wage Order 4-2001; (2) Cal. Labor Code s 203 waiting penalties; (3) failure to provide an accurate itemized wage statement pursuant to Cal. Labor Code s 226; (4) failure to pay minimum wage in violation of Cal. Labor Code s 1194 and IWC Wage Order No. 4-2001; (5) failure to pay minimum and overtime wages in violation of the Fair Labor Standards Act, 29 U.S.C. s 206(a); and (7) unfair competition pursuant to Cal. Business & Professions Code, s 17200 et seq. Id. Defendants moved to dismiss or strike plaintiffs’ first amended complaint.  Id.

Discussion

Defendants argued that plaintiffs’ claims should be dismissed because they are factually devoid and simply “parrot the statutory language and proffer purely conclusory allegations”, thereby running afoul of the standards set out in Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007) and Ashcroft v. Iqbal, 556 U.S. ___, 129 S.Ct. 1937 (2009). Read the rest of this entry »

Central District Strikes Opposition Filed by Terminated Former Co-Counsel in Putative Class Action

Treasure fight
Image via Wikipedia

In the latest round of an apparent falling out between law firms, the Central District of California struck a terminated firm’s  request to strike the notice of its termination, and considered but did not rule on the remaining firm’s alleged ethics violations.  Yumul v. Smart Balance, Inc., No. CV 10-00927 MMM (AJWx), 2010 WL 4352723 (C.D. Cal. Oct. 8, 2010).

Background

Plaintiff Rebecca Yumul filed a notice of termination of counsel, terminating Beck & Lee Business Trial Lawyers (“Beck & Lee”) as her counsel.  Id. *1. The notice was filed by Beck & Lee’s former co-counsel, the Weston firm (“Weston”), which continues to represent Yumul.  Id. Beck & Lee filed a pleading requesting that the court strike the notice of termination, alleging ethical violations by the Weston, and seeking Weston’s disqualification. Id. Beck & Lee asserts that Weston has filed a suit in the Southern District of California to determine the validity of the Joint Prosecution Agreement (“JPA”) that governed Beck & Lee’s co-counsel relationship with Weston in this and other class actions. Id. Yumul filed an ex parte application to strike Beck & Lee’s filings. Id.

Motion to Strike Terminated Counsel’s Opposition

The court granted plaintiff’s motion to strike Beck & Lee’s opposition to the notice of termination on the grounds that it interferes with her absolute right to discharge her attorney.  Id. Read the rest of this entry »

Second District Finds Actual Controversy in Declaratory Judgment Action Between Two Former Co-Counsel Relating to Distribution of Attorneys Fees

Male lions fight for the prey in the Etosha Na...
Image via Wikipedia

In a dispute over the distribution of attorneys fees between two former co-counsel in a class action lawsuit, the Court of Appeal for the Second District reversed a trial court’s denial of relief in a declaratory action.  Leonard Carder, LLP v. Patten, Faith & Sandford, No. B221940, — Cal.Rptr.3d —-, 2010 WL 3961275 (Cal. Ct. App. 2d Dist. Oct. 12, 2010).

Plaintiff and appellant Leonard Carder, LLP filed a declaratory relief action against his former co-counsel Patten, Faith & Sandford (Patten) regarding the distribution of attorney fees awarded in a stipulated judgment in a class action lawsuit.  Id. *1.  The trial court entered a judgment denying all relief to Leonard Carder on the basis the complaint did not present a case or controversy and that jurisdiction had been reserved with the judge who approved the class action settlement.  Id. The Second District reversed, holding that the complaint did articulate a justiciable case or controversy, and the class action court specifically declined to retain exclusive jurisdiction over the distribution of attorney fees.  Id.

Background

Leonard Carder and Patten were appointed class counsel in an action tried in 2004 before the Honorable Howard J. Schwab, with the bulk of the work on behalf of the plaintiff class performed by Leonard Carder.  Id. The plaintiff class was determined to be entitled to an award of approximately $14.4 million.  A loadstar chart in support of the motion for attorneys fees  showed 11,414 hours worked by Leonard Carder and 673 by Patten.  Id. The loadstar chart justified total fees of $10,879,272 for Leonard Carder and $373,040 for Patten.  Id. Judge Highberger signed the parties’ stipulation to reasonable attorney fees and costs in the total amount of $12,475,000 to be paid within 45 days to Leonard Carder “as trustees for distribution to all counsel in accordance with the approved stipulation.” Id. The final provision in the stipulated judgment was that “[t]his court shall retain jurisdiction over the parties to enforce the terms of this Stipulated Judgment.”  Id. *2. Judge Highberger orally stated that if there were unresolved issues regarding distribution of the fees, “you’ll find some other forum to resolve them. They don’t automatically come to me as a matter of exclusive jurisdiction.”  Id. All counsel expressed agreement with the court’s statement regarding exclusive jurisdiction.  Id. Read the rest of this entry »

Magistrate Judge Donna Ryu Approves Petition for Attorneys Fees of $287,589 From a $359,000 Total Settlement Fund

Bounced Check Policy...Post to Wall of Shame
Image by BrentDPayne via Flickr

United States Magistrate Judge Donna M. Ryu of the Northern District of California granted a petition for attorneys fees and costs in a FDCPA class action of up to $23,539.31 in costs and up to $287,589.25 in attorneys’ fees from a $359,000 total settlement fund.  Hunt v. Imperial Merchant Services, No. C-05-04993 DMR, 2010 WL 3958726, *1 (N.D. Cal. Oct. 7, 2010) (slip op.).

Plaintiffs filed a consolidated class action against Defendant Imperial Merchant Services, Inc., doing business as Check Recovery Systems (“IMS”), for violating the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. section 1692 et seq. Id. *1. Plaintiffs claimed that IMS’ practice of demanding 10% interest, in addition to a statutory service charge for dishonored checks, was not permitted by California law and was unlawful under the FDCPA. Id.

Plaintiffs obtained class certification, and the parties reached a class-wide settlement, which generated a $359,000 total settlement fund.  Id. Specifically, the settlement funds are to be used first to pay class notice costs incurred by Plaintiffs’ counsel as well as expenses for administering the class settlement.  Id. Next, the two class representatives will receive $2,000 each, and qualifying class members will be entitled to a pro rata share of the $100,000 Damages Class Fund, up to 100% of an individual class members’ damages. Id. The settlement funds are then be used to pay attorneys’ fees and expenses.  Id. And any remaining settlement funds are to be distributed to designated cy pres recipients. Id. Subject to the terms of the above plan of distribution, the court granted the motion for reimbursement of up to $287,589.25 in attorneys’ fees.  Id.

Legal Standard Read the rest of this entry »

Northern District Grants Final Approval of $3.5 Million Class Action Settlement, Reducing Requested Attorneys Fees to 25% From Requested 30%, and Granting $20,000 Enhancement Awards to Each Representative Plaintiff

Door of The National Bank of D. O. Mills and C...
Image by sporkwrapper via Flickr

The Northern District of California granted final approval of a settlement in a meal and rest break class action in Ross v. US Bank National Association, No. C 07-02951 SI, 2010 WL 3833922 (N.D. Cal. Sept. 29, 2010).  The complaint was filed on behalf of all hourly employees who worked at a California U.S. Bank in-store branch.  See Memorandum of Points and Authorities in Support of Plaintiff’s Motion for Preliminary Approval of Class Action Settlement (“MPA”) at 1.  Plaintiffs alleged that they and other hourly paid employees have not been provided a legally compliant meal and rest period on Sundays and worked off the clock pre and post shift and during their meal breaks. Id. The parties settled the case, and the settlement agreement provides for the payment of compensation to each Participating Class Member based on his or her total workweeks in a Class position during a certain period.  Ross, 2010 WL 3833922, *1.   The court approved a non-reversionary settlement of $3,500,000 for approximately 3,300 settlement class members.  MPA at 2.

Attorneys’ Fees and Costs

Plaintiffs’ counsel sought an award of 30% of the settlement fund,  $1,050,000.00, as attorneys’ fees.  Ross, 2010 WL 3833922, *1.   Plaintiffs estimate that the total time spent litigating this case, including time overseeing claims administration, will be approximately 2647.7 hours.  Id. Plaintiffs’ counsel listed hourly rates ranging from $185 an hour to $650 an hour.  MPA at 14.  The court reduced the award to 25%: Read the rest of this entry »

Ninth Circuit Affirms in All Respects Trial Court’s Entry of Judgment and Award of Attorneys Fees After Jury and Bench Trial of California Labor Code Class Action and FLSA Collective Action Claims

Daily News
Image by swanksalot via Flickr

On Monday, the U.S. Court of Appeals for the Ninth Circuit affirmed in “all respects” the trial court’s grant of partial summary judgment to plaintiffs, a judgment after jury and bench trials, and an award of attorney’s fees to plaintiffs.  Wang v. Chinese Daily News, Inc., Nos. 08-55483, 08-56740, — F.3d —-, 2010 WL 3733568 (9th Cir. Sept. 27, 2010).  Among other things, the Ninth Circuit held that plaintiff newspaper reporters were non-exempt. (Thank you to Randy Renick for bringing this case to my attention.)

Background

Employees of Chinese Daily News, Inc. (“CDN”), a Chinese-language newspaper, filed suit against CDN on behalf of current, former, and future CDN employees based in CDN’s San Francisco and Monterey Park (Los Angeles), California locations.  Id. *1.  Plaintiffs claimed violations of the FLSA, California’s Labor Code, and California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, alleging that employees were made to work in excess of eight hours per day and forty hours per week. Id. They further alleged that they were wrongfully denied overtime compensation, meal and rest breaks, accurate and itemized wage statements, and penalties for wages due but not promptly paid at termination. Id. The district court certified the FLSA claim as a collective action, and it certified the state-law claims as a class action under Rule 23(b)(2) and, alternatively, under Rule 23(b)(3). Id. Read the rest of this entry »

Second District Reverses Judgment in a Class Action of $99,000 and Attorneys Fees of $881,715

A TOSLINK fiber optic cable with a clear jacke...
Image via Wikipedia

The Second District reversed a trial court’s judgment in favor of employees in a class action trial.  Pearline Zalewa v. Tempo Research Corporation, B210429, 2010 WL 3735240 (Cal. Ct. App. 2d Dist. Sept. 27, 2010).  Defendant  fiber-optic equipment manufacturer was sued in a class action by its former employees who claimed that the manufacturer breached an obligation to pay them annual bonuses, an obligation that allegedly continued for years after they were laid off from work during a business downturn.  Id. The court concluded that the employees are not entitled to any recovery: “All but two of the employees relinquished their right to sue when they were laid off, in return for compensation that exceeded their earned severance pay. In any event, there was no promise made to pay bonuses to the employees after they were laid off.”  Id.

The Trial Court’s Judgment

The trial court conducted a bench trial in January 2008, finding that plaintiffs were entitled to recover a direct bonus under theories of breach of contract, promissory estoppel, accounting, and unfair business practices. Id. The court deemed the bonus payments to be “wages” under the Labor Code. Id. And because the bonus payments are wages, plaintiffs were awarded prejudgment interest and attorney fees under the Labor Code. Id. The court enumerated the amount of the award for each employee, less offsets for monies already paid by defendants, plus interest. Id. The total amount of the award, including interest, was approximately $99,000, and plaintiffs’ counsel was awarded attorney fees of $881,715.  Id. Read the rest of this entry »