LAFFITTE v. ROBERT HALF INTERNATIONAL (BRENNAN)

Respondent, Mark Laffitte, Answer Brief on the Merits

Cal.August 26, 2015

SUPREME GOURT AUG 2 6 201 Cy No. 8222996 IN THE SUPREME COURT CALIFORNIA Panik A. McGuire Clerk Seputy David Brennan, PlaintiffClass Member/Objector and Appellant. MARK LAFFITTE,on behalf of himself and on behalf of others similarly situated, Class Plaintiffand Respondent, VS. ROBERT HALF INTERNATIONAL INC., ROBERT HALF OF CALIFORNIA, INC., ROBERT HALF INCORPORATED and ROBERT HALF CORPORATIONdba RHC, Defendants and Respondents. ANSWERBRIEF ON THE MERITS (CLASS PLAINTIFF AND RESPONDENT MARK LAFFITTE) After a Decision by the Court ofAppeal, Second District, Division 7, Case No. B249253 LAW OFFICES OF KEVIN T. BARNES Kevin T. Barnes, Esq. (SBN 138477) Gregg Lander, Esq. (SBN 194018) 5670 Wilshire Boulevard, Suite 1460 Los Angeles, CA 90036-5664 Telephone: (323) 549-9100 Facsimile: (323) 549-0101 Attorneys for Class Plaintiff and Respondent MARK LAFFITTE (Additional Class Plaintiffs counsel listed on Proof of Service) No. S222996 IN THE SUPREME COURT CALIFORNIA David Brennan, PlaintiffClass Member/Objector and Appellant. MARK LAFFITTE,on behalf of himself and on behalf of others similarly situated, Class Plaintiffand Respondent, VS. ROBERT HALF INTERNATIONAL INC., ROBERT HALF OF CALIFORNIA, INC., ROBERT HALF INCORPORATED and ROBERT HALF CORPORATIONdba RHC, Defendants and Respondents. ANSWERBRIEF ON THE MERITS (CLASS PLAINTIFF AND RESPONDENT MARKLAFFITTE) After a Decision by the Court of Appeal, Second District, Division 7, Case No. B249253 LAW OFFICES OF KEVIN T. BARNES Kevin T. Barnes, Esq. (SBN 138477) Gregg Lander, Esq. (SBN 194018) 5670 Wilshire Boulevard, Suite 1460 Los Angeles, CA 90036-5664 Telephone: (323) 549-9100 Facsimile: (323) 549-0101 Attomeys for Class Plaintiff and Respondent MARK LAFFITTE (Additional Class Plaintiff's counsellisted on Proof of Service) TABLE OF CONTENTS Page Number INTRODUCTION. ...0..00 00000eeeeee eee l STATEMENT OF THE CASE. ...........00 000 cee eee eee5 1. The Complaint. ........0000 000 ccc eceee eee 5 2. The Settlement Agreement... 0.0.2.2eee5 3. Class Counsel’s Request For Attorneys’ Fees. ..............0.. 6 4, The Trial Court’s Tentative Ruling. ............... 00... 0008. 6 5. The Trial Court’s Ruling. ...... 2.0.0... 00 ccc eee eee 7 6. The Appellate Court’s Ruling. 2.0.0.2...eeeee7 7. This Court Grants Review. .......... 2000 c cece eee eee 8 LEGAL DISCUSSION...........0 000.0 eee eee nee ene 9 l. AnHistorical Perspective On Percentage Fee Awards In Common Fund Cases .... 2.2.6... : ce eee eee eee eee eens9 2. All Federal Circuits Approve The Percentage MethodIn Common Fund Cases.......... 0.00 cee eee eee eee 12 A. Two Federal Circuits Require Courts To Utilize The Percentage Method In Common Fund Cases............ 12 B. The Remaining Federal Circuits Permit Courts To Utilize The Percentage Method In Common Fund Cases......... 12 Virtually Every State Has Endorsed The Percentage Method. .... 15 4, Serrano III Did Not Ban The Percentage Method In Common Fund Cases. ........ 0.0 e cece ence een eens 19 A. Serrano III Was Not A Common Fund Case............ 19 B. Serrano IIT Did Not Require Courts To Use The Lodestar Method In Common Fund Cases..............21 C. Since Serrano II, Appellate Courts Have Repeatedly Endorsed The Percentage Method. ..................0.24 D. The Authorities Mr. Brennan Cites Are Inapposite, As They Are Not Common Fund Cases. .................. 25 1. Lealao is not a commonfund case...............24 2. Dunk v. Ford Motor Co. is not a common fund case... . 0... eece eee ee eens27 3. Jutkowitz v. Bourns is not a common fund case.....28 4. Yuki and Salton Bay are not common fundcases.. . .30 E, Selective Dicta From Various Cases Does Not Bar Use Of The Percentage Method In Common Fund Cases. ..... 31 1. JUtKOWUZooeeeeee 31 2. Salton Bay... 0.0 ccceee teens33 3. Dunk.ooceneens34 5. LOA.cents35 5. The Percentage Method Provides Significant Benefits.......... 35 A. Administrative Ease/Conserving Scarce Judicial ReSOUFCES. 20. eet teen enna36 B. Counsel Is Rewarded For The Results Obtained..........36 C. Aligned Interests Of Class Members And Class Counsel. . .37 D. Efficiency Is Rewarded... 0.0.2... eee eee37 E. Reasonable Compensation At Market Value.............38 F, Predictability... 0.0.00... eee cece cc eee eens 39 G. Prompt Payment... 1.0.02... 6.2 cece eee eens 39 6. Requiring Courts To Apply The Lodestar Method In Common Fund Cases Will Create Significant Problems. ................ 40 A. The Lodestar Method Imposes A "Massive Time Burden" On Scarce Judicial Resources. ... 2.0.0... 00 e eee eee 41 B. The Lodestar Method Encourages Excessive Billing And Padded Hours... 0.0.2.2... cee eee eens42 C. The Lodestar Method Discourages Early Settlement. ..... 42 D. The Lodestar Method Results In Substantial Delay. ...... 42 7. Courts Needs Flexibility To Award Reasonable Attorneys’ Fe@S.0eeeee eee eee eens 43 8. This Court Should Ignore Mr. Brennan’s Additional Arguments Concerning How Courts Should Apply The Lodestar Method. .. . 44 CONCLUSION.......... 0.06eeeeens 46 ii TABLE OF AUTHORITIES Page Number CALIFORNIA STATE CASES 7-Eleven Ownersfor Fair Franchising v. Southland Corp. (2000) 85 Cal.App.4th 1135, 102 Cal.Rptr.2d777...............0.0. 44 Apple Computer, Inc. v. Superior Court (2005) 126 Cal.App.4th 1253, 24 Cal.Rptr.3d 818 ...............00.0.24 Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 75 Cal.Rptr.3d 413 ................7, 24, 46 Consumer Cause, Inc. v. Mrs. Gooch’s Natural Food Markets, Inc. (2005) 127 Cal.App.4th 387, 25 Cal.Rptr.3d514...............7 In re Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 96 Cal.Rptr.3d 127............ 7, 24, 44, 46 Consumers Lobby Against Monopolies v. Public Utilities Com. (1979) 25 Cal.3d 891, 160 Cal.Rptr. 124.................... 24 Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 56 Cal.Rptr.2d 483.................passim Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 198 CalRptr. S51. ..... 0.0... eee eee eee24 Jutkowitz v. Bourns, Inc. (1981) 118 Cal.App.3d 102, 173 Cal-Rptr. 248 ...........0.......passim Laffitte v. Robert HalfInternationalInc., 180 Cal.Rptr.3d 136 (Cal.App. 2 Dist., Oct. 29, 2014)...... passim Lealao v. Beneficial California, Inc. (2000) 82 Cal.App.4th 19, 97 Cal.Rptr.2d 797.0... 0.0.0... 0000. passim People ex rel. Dep’t ofTransp. v. Yuki (1995) 31 Cal.App.4th 1754, 37 Cal.Rptr.2d616.............. 30, 31, 34 Salton Bay Marina, Inc. v. Imperial Irrigation Dist. (1985) 172 Cal.App.3d 914, 218 Cal.Rptr. 839..............0... passim Sam Andrews’ Sons v. Agricultural Labor Relations Bd. (1988) 47 Cal.3d 157, 253 Cal.Rptr. 30............0.0...02.0.24 Serrano v. Priest (1977) 20 Cal.3d 25, 141 Cal.Rptr.315......... passim Serrano v. Unruh (1982) 32 Cal.3d 621, 186 Cal.Rptr. 754............24 Trope v. Katz (1995) 11 Cal.4th 274, 45 Cal.Rptr.2d 241. ..........0..24 iii Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 110 Cal_Rptr.2d 145.........0......... 7,44 FEDERAL CASES In re Activision Sec. Litig., 723 F.Supp. 1373 (N.D.Cal.1989)..........0. 2.0 .002000539, 40, 41 Americana Art China Co., Inc. v. Foxfire Printing and Packaging, Inc., 743 F.3d 243 (7th Cir. 2014) 20...eeeee14 Archbold v. Wells Fargo Bank, N.A., 2015 WL 4276295 (S.D. W.Va. July 14, 2015)... 02.2.2. .00.. 13 Inre Bluetooth Headset Products Liability Lit., 654 F.3d 935 (9th Cir. 2011)...eeeee12 Blum v. Stenson, 465 U.S. 886 (1984)... 0...ceneee 10 Boeing Co. v. Van Gemert, 444 U.S. 472 (1980)... 0.0... ..2-0005. 10 n.3 In re Cendant Corp. PRIDESLitig., 243 F.3d 722 (3d Cir. 2001)... 2.0... eee 13, 23 Central R.R. & Banking Co. v. Pettus, 113 U.S. 116 (1885)............ 9 City ofDetroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) ......22, 23 Inre Coordinated Pretrial Proceedings in Petroleum Products Antitrust Lit., 109 F.3d 602 (9th Cir. 1997)... 0.2.0... eee.43 Brownv. Phillips Petroleum Co., 838 F.2d 451 (10th Cir. 1988) ....... 15 Feuerstein v. Burns, 569 F.Supp. 268 (S.D. Cal. 1983)... ............42 Florin v. Nationsbank ofGa., N.A., 34 F.3d 560 (7th Cir. 1994). ....... 14 Goldberger v. Integrated Resources, Inc., 209 F.3d 43 (2d Cir. 2000)... 2...eeeee 13, 23 Gottlieb v. Barry, 43 F.3d 474 (10th Cir. 1994) .........0.........25, 14 Inre Ikon Office Solutions, Inc. Sec. Litig., 194 F.R.D. 166 (E.D.Pa.2000)....... 0.0... ce eee eee 37 Johnson v. Ga. Highway Express, Inc., 488 F.2d 714 (Sth Cir. 1974)...eee eee 14n.4 Johnston v. Comerica Mortg. Corp., 83 F.3d 241 (8th Cir. 1996)....... 14 Jones v. Dominion Resources Services, Inc., 601 F.Supp.2d 756 (S.D.W.Va.2009) ... 0... eee eee 38 Inre King Resources Co. Sec. Litig., 420 F. Supp. 610 (D. Colo. 1976) ...... 0... 2 cece eee37 iV Kirchoffv. Flynn, 786 F.2d 320 (7th Cir. 1986). .............04..41 n.9 Lindy Bros. Builders, Inc. ofPhiladelphia v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973) ..........22 Lopez v. Youngblood, 2011 WL 10483569 (E.D. Cal. Sep. 2, 2011) ..............37, 40 Masters v. Wilhelmina Model Agency,Inc., 473 F.3d 423 (2d Cir. 2007)... 0.02.ceeee 13 Inre M.D.C. Holdings Securities Litig., 1990 WL 454747 (S.D. Cal. Aug. 30, 1990) .........35, 36, 38, 39 Inre Oracle Securities Litig., 131 F.R.D. 688 (N.D. Cal. 1990)... 0.2... eee eee 37, 40 Inre Oracle Securities Litig., 136 F.R.D. 639 (N.D. Cal. 1991) ........40 Petrovic v. Amoco Oil Co., 200 F.3d 1140 (8th Cir. 1999). ........... 14 Inre Prudential Ins. Co. America Sales Practice Lit. Agent Actions, 148 F.3d 283 (d Cir. 1998)...eee 13 Rawlings v. Prudential—Bache Props., Inc., 9 F.3d 513 (6th Cir. 1993)... . 0. eeeee14 Savoie v. Merchants Bank, 166 F.3d 456 (2d Cir. 1999) .............. 36 Skelton v. General Motors Corp., 860 F.2d 250 (7th Cir. 1988)........ 4] Steiner v. Hercules Inc., 835 F.Supp. 771 (D.Del.1993) ........... 38, 39 Swedish Hosp. Corp. v. Shalala, | F.3d 1261 (D.C. Cir. 1993)..... passim Thirteen Appeals Arising Out ofSan Juan Dupont Plaza HotelFire Lit., 56 F.3d 295 (ist Cir. 1995)...eeepassim Trustees v. Greenough, 105 U.S. 527 (1881)... 2... 0... cee eee9 Union Asset Management Holding A.G. v. Dell, Inc., 669 F.3d 632 (Sth Cir. 2012)..............0... 10 n.3, 14, 1404 In re Union Carbide Corp. Consumer Prods. Business Sec. Litig., 724 F.Supp. 160 (S.D.N.Y.1989) 0...eeeeee 4] Inre Unisys Corp. Retiree Medical Benefits ERISA Litig., 886 F.Supp. 445 (E.D.Pa.1995) 0. ecceeene39 U.S. v. 8.0 Acres ofLand, 197 F.3d 24 (Ast Cir. 1999) 0.0.0.0... 0.006. 13 In re Vioxx Products Liability Litig., 2013 WL 5295707 (E.D.La. Sep. 18, 2013) ............0..000. 39 Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) ........... 42 In re Wachovia Corp. ERISA Litig., 2011 WL 7787962 (W.D.N.C. Oct. 24, 2011) ..............0. 43 Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005)...eee37 In re Washington Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291 (9th Cir. 1994)...0.eee12 NON-CALIFORNIA STATE CASES American Trucking Associations, Inc. v. Secretary ofAdmin., 415 Mass. 337, 613 N.E.2d 95 (1993)... 2... eee eee eee 19 Americas Mining Corp. v. Theriault, 51 A.3d 1213 (Del. 2012)........ 16 Arizona Dept. ofAdmin. v. Cox, 222 Ariz. 270, 213 P.3d 707 (App. 2009). ........... 02.0005. 16 Avants v. Kennedy, 837 So.2d 647 (La.App. 1 Cir. 2002)............. 17 Bowles v. Washington Dept. ofRetirement Systems, 121 Wash.2d 52, 847 P.2d 440 (1993)... 1.6... eee eee eee 19 Braun v. Wal-Mart Stores, Inc., 24 A.3d 875, 979 (Pa.Super.2011)..... 18 Brody v. Hellman, 167 P.3d 192 (Colo. 2007)... 6.0.6.0 eee eee eee 16 Brundidge v. Glendale Federal Bank, F.S.B., 168 Il1.2d 235, 659 N.E.2d 909 (1995)... eee eee ee, 16 Chun v. Board ofTrustees ofEmployees’ Retirement System of State ofHawaii, 92 Hawai’i 432, 992 P.2d 127 (2000).......... 15 Citizens Action Coalition ofIndiana, Inc. v. PSI Energy, Inc., 664 N.E.2d 401 (Ind. 1996)......... bbc t eee eee ee eeees 17 College Retirement Equities Fund, Corp. v. Rink, 2015 WL 226112 (Ky. App. Jan. 16, 2015) .............02...0. 17 Edelman & Combs v. Law, 663 So.2d 957 (1995) .. 0... eee eee 15 Edwards v. Alaska Pulp Corp., 920 P.2d 751 (1996)... 0.2... 62.02.00. 16 Flemming v. Barnwell Nursing Home & Health Facilities, Inc., 56 A.D.3d 162, 865 N.Y.S.2d 706 (N.Y.App. Div.3d Dep’t 2008)... 0...ene 18 Friedrich v. Fidelity Nat. Bank, 247 Ga.App. 704, 545 S.E.2d 107 Q001)................22.. 16 General Motors Corp. v. Bloyed, 916 S.W.2d 949 (Tex. 1996)......... 19 Gigot v. Cities Service Oil Co., 241 Kan. 304, 737 P.2d 18 (1987)...... 16 v1 Haggev. lowa Dept. ofRevenue and Finance, 539 N.W.2d 148 (lowa 1995)...eeeee 17 Heller v Schwan’s Sales Enterprises, Inc., 548 NW2d 287 (Minn.CtApp. 1996) .... 2... eee17 Hsu v. County ofClark, 123 Nev. 625, 173 P.3d 724 (2007) ..........- 17 Kuhnlein v. Dep’t ofRevenue, 662 So.2d 309 (Fla. 1995) ............. 19 Laymanv. State, 376 S.C. 434, 658 $.E.2d 320 (2008)... .........05- 18 Long v. Abbott Laboratories, 1999 WL 33545517 (N.C.Super. July 30, 1999) ............... 18 In re N.M. Indirect Purchasers Microsoft Corp., 140 N.M.879, 149 P.3d 976 (2006)... 2.6 eee eee 18 Plein v. Dep't ofLabor, Licensing and Regulation, 369 Md. 421, 800 A.2d 757 (2002)... 26. ee ee eee17 n.6 Steiner v. Van Dorn Co., 104 Ohio App.3d 51, 660 N.E.2d 1256 (1995)... ....-.....0-- 18 Strawn v. Farmers Ins. Co. ofOregon, 353 Or. 210, 297 P.3d 439 (2013)... 2... ee eee15, 18 Sutter v. Horizon Blue Cross Blue Shield ofN.J., 406 N.J.Super. 86, 966 A.2d 508 (N.J.App.Div.2009).......... 17 Towns ofNew Hartford and Barkhamsted v. Connecticut Resources Recovery Authority, 2007 WL 4634074 (Conn. Dec. 7, 2007) .. . .16 United Cable Television ofBaltimore Ltd. Partnership v. Burch, 354 Md. 658, 732 A.2d 887 (1999)... ee eee eee 17 Wisconsin Retired Teachers Ass’n, Inc. v. Employe Trust Funds Bd., 207 Wis.2d 1, 558 N.W.2d 83 (1997)... 0.cee19 OTHER AUTHORITIES Conte & Newberg, 4 Newberg on Class Actions, § 13:80.......... 15, 43 Monique Lapointe, Note, Attorney’s Fees in Common Fund Actions, 59 Fordham L.Rev. 843 (1991)... 2.0... eee eee39, 41 Reportofthe Third Circuit Task Force, Court Awarded Attorney Fees, 108 F.R.D. 237 (1985) 2...e 10 Silber and Goodrich, Common Funds And Common Problems: Fee Objections And Class Counsel’s Response, 17 Rev.Litig. 525 (1998)... 0.0.6 eee eee eee35, 36, 37, 38, 39 vil INTRODUCTION For more than 10 years, experienced class counsel vigorously and extensively litigated this complex wage and hourclass action against a formidable, skilled and well-financed adversary. In pursuing claims on behalf of the Class Plaintiffs, class counsel advanced more than $100,000 in costs, worked without compensation and lost the opportunity to work on other potentially profitable matters — all with no guarantee that class counsel would ever receive any compensation for their efforts. Ultimately, Class Plaintiffs and their employer agreed to a $19 million settlement which, by any standard of measurement, was an outstandingresult for nearly 4,000 Class Plaintiffs (resulting in an average class member award of nearly $4,400). Thetrial court granted class counsel’s request for attorneys’ fees equal to 33.33% of the gross settlement amount, concluding that the fee request wasfair and reasonable. In awardingfees,the trial court applied the equitable common fund theory and calculated the fees as a percentage of the recovery. Thetrial court also conducted a discretionary cross-check of the fee award by calculating the lodestar (the reasonable hours worked multiplied by the hourly rates charged) and multiplier. The cross-check confirmed that the fee award was reasonable. After an objector appealed, the appellate court affirmed, concluding that the calculation of fees based on a percentage of the common fund was proper and reasonable. The objectorfiled a Petition for Review, arguing that review is warranted because the appellate court’s approval of a fee award pursuant to the percentage method (with a lodestar cross-check) in a commonfundcase contradicts the Supreme Court’s decision in Serranov. Priest (‘Serrano IT’) (1977) 20 Cal.3d 25, 141 Cal.Rptr. 315, and is inconsistent with other appellate court opinions. This Court granted review,identifying a single issue: “Does [Serrano III] permit a trial court to anchorits calculation of a reasonable attorney’s fees award in a class action on a percentage of the common fund recovered?” As shownbythis Court’s own precedents, both pre- and post- Serrano III, as well as the overwhelming majority of federal and state appellate opinions to address this question since Serrano III, the answeris simple and resounding: Yes. First, Serrano III did not ban the percentage method in common fundcases. Serrano III was neither a commonfundcase norheld that courts must utilize the lodestar method in common fund cases. In fact, Objector and Appellant David Brennan’s argumentis fundamentally flawed, as he selectively extracts dicta from a footnote in Serrano II] and improperly treats it as creating an unequivocal ban on the use of the percentage method in common fund cases. That dicta, however, did not apply to common fund cases. Moreover, the dicta is based on two decisionsthat are no longer reliable — a Second Circuit decision which has since been abrogated and a Third Circuit decision which has been eviscerated by numerous, more recent Third Circuit decisions which have repeatedly confirmed that courts may utilize the percentage method to award attorneys’ fees in common fund cases. Indeed, in the nearly 40 years since this Court issued Serrano IIT, both State and Federal courts analyzing this issue have almost universally confirmed — based upon decades of experience dealing with fee awards in class action cases — that the percentage method is an appropriate tool to calculate reasonable attorneys’ fees. Not surprisingly, California appellate courts have followed suit and — since Serrano III — routinely apply the percentage method to award attorneys’ fees in commonfund. In short, the time has comefor this Court to fully endorse the percentage method in commonfundcases.! Second,as a matterofpolicy, utilizing the percentage method in commonfund cases makes eminently good sense. The percentage method is easy to administer, conserves judicial resources, rewards counselfor the results obtained, rewardsefficiency, aligns the interests of the class and counsel(both benefit from a large award that is obtained efficiently), provides reasonable compensation at market value and provides predictability to the class and counsel before litigation commences, which allowsa proper weighingofthe risks/reward inherent in thelitigation before filing. However, applying the lodestar method removesthat predictability, making it far more difficult for counsel to accurately assess the risk/reward in a given case. For example, counsel will not know the hourly rate the Court will award, counsel may not be fully compensated for the years of delay in payments for services rendered and counsel will not know if a multiplier will be applied (muchless the amount of any multiplier). The lack of predictability created by the lodestar method will haveat least one clear consequence: Class counsel will be less inclined to take on complex class action suits against large, well-financedinstitutions. Thus,application of the lodestar method will effectively close the courthouse door to millions ofpoor and low-wage workers whowill no longerbe able to retain counsel to vindicate valid wage and hour (and other) class action claims. If the concept of “equal justice under the law”is ' David Brennancites several authorities for the proposition that the lodestar method must be utilized in common fund cases. Those authorities, however, fail to support Mr. Brennan’s position, as those were not common fund cases. In fact, no California appellate court has ever directly held that awarding fees based on the percentage method is inappropriate in common fund cases. valid, it must mean thatall persons, whether rich or poor, may hire a lawyer to represent them. Third, as a matter of policy, the lodestar method is simply unworkable in the common fund context. Indeed, courts and commentators are virtually unanimousin condemning the lodestar method in common fund cases and haveidentified numeroussignificant problemsin implementing the lodestar method in common fund cases. For example, the lodestar method: (1) imposes a massive time burden on scarcejudicial resources; (2) encourages excessive billing and padded hours; (3) discourages early settlement; (4) results in substantial delay (as is the case here); (5) lacks objectivity; (6) is subject to manipulation; (7) lacks predictability; (8) abandons the adversary process (requiring the court to set aside its impartiality and champion the interests of somelitigants); (9) requires judges to make an after-the-fact assessment of class counsel’s strategic decisions duringlitigation; (10) increases the amountoffee litigation; and (11) puts counsel and the class in an adverserelationship. These problemsare eliminated by applying the percentage method in commonfund cases. Fourth, every federal circuit has concluded that the percentage method maybe utilized to determine reasonable attorneys’ fees in a commonfund case. In fact, two circuits (the Eleventh andthe District of Columbia) haveheldthat trial courts must utilize the percentage method in commonfund cases. Fifth, nearly every state that has considered the issue has concluded that the percentage method is an appropriate means for determining reasonable attorney fees in a common fundcase. In fact, only two states have expressly rejected the use of the percentage method to determine attorneys’ fees in a common fund case. Finally, given the numerous well-documented deficiencies with the lodestar method, this Court should follow the nearly universal trend of permitting trial courts to exercise their discretion to apply the percentage methodor the lodestar method or some combination of the two (as was the case here) to reach a reasonable fee award. Forthese reasons, and those set forth below, this Court should affirm the appellate court’s ruling. STATEMENT OF THE CASE 1. The Complaint On September 10, 2004, Class Plaintiff and Respondent Mark Laffitte, on behalf of himself and on behalf of others similarly situated (“Class Plaintiffs”), filed a putative class-action complaint asserting various wage and hourclaimsagainst Robert Half International, Inc., Robert Half of California, Inc., Robert Half Incorporated and Robert Half Corporation dba RHC(collectively “Robert Half”). Laffitte v. Robert HalfInternational Inc., 180 Cal.Rptr.3d 136, 138 (Cal-App. 2 Dist., Oct. 29, 2014). On September 18, 2006,the trial court granted Laffitte’s motion for class certification with respect to several causes of action. Jd. at 139. 2. The Settlement Agreement 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 ofthe three class actions. Id. Thereafter, the trial court granted preliminary approval of the settlement. On November 13, 2012, the trial court approved an amended settlement agreement which provided,in part, that: (1) Robert Half would pay a gross settlement amount of $19,000,000; and (2) class counsel would apply for attorneys’ fees up to $6,333,333.33 (33.33% ofthe gross settlement amount) and counsel’s actuallitigation costs. Jd. at 139-40. Although the Court-approved Class Notice wassent to 3,996 class members, there were only two objections. Id. at 140. On January 28, 2013, class member David Brennan objected, arguing, in part, that the fee request was excessive. Id. 3. Class Counsel’s Request For Attorneys’ Fees On February 28, 2013, the Class Plaintiffs filed a motion requesting $6,333,333.33 in attorneys’ fees (one-third of the gross settlement) pursuant to acommonfundtheory. Jd. Class counsel also submitted evidencethat counsel worked 4,263.5 hours on the case (and anticipated working 200 hours on the appeal) and provided hourly rates for each attorney. Based on the hourly rate and hours worked for each attorney, class counsel calculated that the total lodestar amount as $2,968,620 ($3,118,620 including the appeal). Class counsel also requested a lodestar multiplier of between 2.03 to 2.13 for a total requested attorneys’ fee award of $6,333,333.33. Id. 4. The Trial Court’s Tentative Ruling On March 22, 2013, the trial court held a hearing and tentatively approved the settlement and fee request. The ruling stated, in part, that: (1) the percentage method ofcalculating attorneys’ fees in a commonfund case was supported by Lealao v. Beneficial California Inc. (2000) 82 Cal.App.4th 19, 27, 97 Cal.Rptr.2d 797; (2) the hours worked by class counsel were reasonable; and (3) the hourly rates for class counsel were justified. Jd. at 140-41. Atthis hearing,the trial court stated: WhatI didn’t say in mytentative and should havesaid that in looking at the loadstar, I do find that the tasks that were performedbyclass counsel and the numberofhours that they spent on those tasks were reasonable and that fees were within the range. The hourly fees, if you’re looking at loadstar, are within the range of what is reasonable for this type of work in this community. (RT 32). 5. The Trial Court’s Ruling On April 10, 2013, the trial court held another hearing and overruled Mr. Brennan’s objections. Jd. at 142. Thetrial court also conducted a cross-check on the fees awarded pursuantto the percentage method and analyzed the lodestar amount. Jd. at 143. Thetrial court concluded that the hours worked and hourly rates charged were within the norm. Thetrial court also found sufficient information to support the multiplier. Thetrial court then granted final approvalofthe class action settlement and awarded $6,333,333.33 in attorneys’ fees and $127,304.08 in costs. Id. 6. The Appellate Court’s Ruling Mr. Brennan appealed and argued, inter alia, that the trial court erred by awarding fees pursuant to the percentage method rather than the lodestar method. Jd. at 147. The Laffitte Court rejected this argument, stating: “[T]he percentage approach may be proper where,as here, there is a common fund.” Id. . The Laffitte Court acknowledgedthat in Serrano IH, the California Supreme Court established the “primacy of the lodestar method in California.” Laffitte, 180 Cal.Rptr.3d at 147 (quoting Lealao, 82 Cal.App.4th at 26). Nevertheless, the Court held that “[sJubsequentjudicial opinions have madeit clear that apercentagefee award in a commonfund case ‘maystill be done.” Id. at 148 (emphasis added)(citing In re ConsumerPrivacy Cases (2009) 175 Cal.App.4th 545, 96 Cal-Rptr.3d 127; Chavezv. Netflix, Inc. (2008) 162 Cal-App.4th 43, 75 Cal.Rptr.3d 413; Consumer Cause, Inc. v. Mrs. Gooch’s Natural Food Markets, Inc. (2005) 127 Cal.App.4th 387, 25 Cal.Rptr.3d 514; Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 110 Cal.Rptr.2d 145). Based on these authorities, the Laffitte Court held that in common fund cases, the “percentage of fund method survives in California class action cases, and the trial court did not abuseits discretion in usingit, in part, to approve the fee request in this class action.” Jd. at 149. The Laffitte Court concludedthat the “trial court’s use of a percentage of 33 1/3 percent of the common fundis consistent with, and in the range of, awards in other class action lawsuits.” Jd. (citing cases). The Laffitte Court next approved ofthe trial court’s lodestar cross- check,stating: Thetrial court did not use the percentage of fund method exclusively to determine whether the amountof attorneys’ fees requested was reasonable and appropriate. The trial court also performed a lodestar calculation to cross-check the reasonableness of the percentage of fund award. This was entirely proper. Id. at 149-50. The Laffitte Court specifically held that the trial court “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.” Id. at 151. The Laffitte Court also held that the trial court’s “use of a multiplier of 2.13 was not an abuseofdiscretion,” as the trial court properly considered “the proper lodestar multiplier factors in determining whetherto 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.” Id. 7. This Court Grants Review On February 25, 2015, this Court granted Mr. Brennan’s Petition for Review. In doing so, this Court certified the following question for review: “Does Serrano v. Priest (1977) 20 Cal.3d 25 permit a trial court to anchor its calculation of a reasonable attorney’s fees award in a class action on a percentage of the common fund recovered?” -8- LEGAL DISCUSSION 1. An Historical Perspective On Percentage Fee Awards In Common Fund Cases To fully understand why Serrano I/T permits California trial courts to utilize the percentage methodas the anchorto calculate reasonable attorney’s fees in common fundcases,it is necessary to understand the history ofpercentage fee awards. “The common fund . . . doctrine . . . is a venerable exception to the general American rule disfavoring attorney fees in the absence of statutory or contractual authorization.” Lealao, 82 Cal.App.4th at 27 (citing Trustees v. Greenough, 105 U.S. 527 (1881)). “Traditionally, counsel fees in common fund cases were computed as a percentage of the fund, subject, of course, to considerations of reasonableness.” Thirteen Appeals Arising Out ofSan Juan Dupont Plaza Hotel Fire Lit. (“Dupont Plaza”), 56 F.3d 295, 305 (1st Cir. 1995) (citing Central R.R. & Banking Co. v. Pettus, 113 U.S. 116, 127-28 (1885)). Prior to 1977 — when the California Supreme Court decided Serrano IT — it was undisputed that “California courts could award a percentage fee in a common fund case.” Lealao, 82 Cal.App.4th at 27. In the mid-1970s, however, the “judicial infatuation with the lodestar methodstarted to spread.” Dupont Plaza, 56 F.3d at 305; see also Swedish Hosp. Corp.v. Shalala, | F.3d 1261, 1266 (D.C. Cir. 1993) (“The application of a percentage-of-the-fund approach sometimesresulted in large fee awards, and in the 1970s several courts began a movementto alternative methods of calculating attorneys’ fees.”’). “In 1973, the Third Circuit led the way in Lindy Bros. Builders, Inc. ofPhiladelphia v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973), instructing judges in that circuit to first compute the product of the reasonable hours expended and the reasonable hourly rate to arrive at the ‘lodestar.’” Swedish Hosp., | F.3d at 1266. This new application of the lodestar method “shifted the emphasis from a fair percentage of recovery to the value of the time expended by counsel.” Jd.; see also Lealao, 82 Cal.App.4th at 27 (noting that Lindy “pioneered adoption of the lodestar methodology”andthat the Lindy lodestar method “quickly gained wide acceptance amongthe federal circuits”). “Many courts embraced the new approach, and a wall of cases soon arose.” DupontPlaza, 56 F.3d at 305. In 1984, however, a “crack in the wall appeared” when the United States Supreme Court distinguished betweenthe calculation of counsel’s fees underfee-shifting statutes from the calculation of counsel’s fees under the common fund doctrine. Jd. (citing Blum v. Stenson, 465 U.S. 886 (1984)). In Blum, the United States Supreme Court stated (in dicta) that in common fund cases, “a reasonable fee is based on apercentage ofthefund bestowedon the class.” Blum, 465 U.S. at 900 n.16 (emphasis added).? Oneyear after the Blum decision, “the Third Circuit, which had been in the forefront of the movement toward the lodestar method, sounded a note of caution.” Dupont Plaza, 56 F.3d at 306. The Third Circuit formed a task force headed by Professor Arthur Miller and comprised ofjudges and attomeys, to study court-awarded attorneys’ fees. See Report ofthe Third Circuit Task Force, Court AwardedAttorney Fees (“Third Circuit Report’), 108 F.R.D. 237 (1985). This “blue-ribbon task force . . . concluded that all 2 In this context, this Court issued its decision in Serrano III in 1977. 3 Although the language in Blum wasdicta (as Blum involved no common fund), it is entirely consistent with a prior United States Supreme Court decision approving a fee award based on the percentage method in a commonfund case. Swedish Hosp., 1 F.3d at 1268 (citing Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)). Thus, the United States Supreme Court “has indicated, obliquely, that the percentage methodisat least appropriate.” Union Asset Management Holding A.G. v. Dell, Inc., 669 F.3d 632, 643 n.28 (Sth Cir. 2012). -10- fee awards in commonfundcases should be structured as a percentage of thefund.” Dupont Plaza, 56 F.3d at 306 (emphasis added)(citing Third Circuit Report at 255). Professor Miller’s task force found the lodestar method to be a “cumbersome, enervating, and often surrealistic process of preparing and evaluating fee petitions that now plagues the Bench and Bar.” Lealao, 82 Cal.App.4th at 29 (citing Third Circuit Report at 258). The task force identified nine deficiencies in the lodestar method, concludingthatit: (1) “ancreases the workload of an already overtaxed judicial system”; (2) is “insufficiently objective and produce[s] results that are far from homogeneous”; (3) “creates a sense of mathematical precision that is unwarranted in termsofthe realities of the practice of law’; (4) “is subject to manipulation by judges whoprefer to calibrate fees in terms of percentages of the settlement fund or the amounts recovered by the plaintiffs or of an overalldollar amount’; (5) is subject to abusesas it “encourages lawyers to expend excessive hours, and ... engage in duplicative and unjustified work”; (6) “creates a disincentive for the early settlement of cases”; (7) deprivestrial courts of “flexibility to reward or deter lawyers so that desirable objectives, such as early settlement, will be fostered”; (8) “worksto the particular disadvantage of the public interest bar” because the “lodestar”is set lowerin civil rights cases than in securities and antitrust cases; and (9) results in “considerable confusion and lack of predictability.” Id. at 29 (quoting Third Circuit Report at 246-49). The Third Circuit Report has been “influential” and the “criticisms of the lodestar approach set forth in this Report are now echoed by many authorities, who have been most vocal about the manner in whichit exacerbates the problem of ‘cheap settlements’ and burdensalready overworkedtrial judges.” Jd. at 29-30. “Together, footnote 16 [in Blum] and the Third Circuit Report led to a thoroughgoing reexaminationofthe -ll- suitability of using the lodestar method in commonfund cases. This reexamination, in turn, led to more frequent application ofthe [percentage] method in such cases.” Dupont Plaza, 56 F.3d at 306. Today, virtually every state and federal jurisdiction to pass on this issue has held that the percentage method is an appropriate method to calculate reasonable attorneys’ fees in common fundcases. 2. All Federal Circuits Approve The Percentage Method In CommonFund Cases A. Two Federal Circuits Require Courts To Utilize The Percentage Method In Common Fund Cases In the Eleventh Circuit, courts must apply the percentage method in common fund cases. See, e.g., Camden I Condominium Ass’n v. Dunkle, 946 F.2d 768, 774 (11th Cir. 1991) (“Henceforth in this circuit, attorneys’ fees awarded from a common fund shall be based upon a reasonable percentage of the fund established for the benefit of the class.”) (emphasis added); see also Faught v. American Home Shield Corp., 668 F.3d 1233, 1242 (11th Cir. 2011) (same). Similarly, in the District of Columbia Circuit, courts must apply the percentage method in commonfund cases. See, e.g. Swedish Hosp., 1 F.3d at 1272 (“[W]e conclude that percentage-of-the-fund is the proper method for calculating fees in a commonfundcase.”). B. The Remaining Federal Circuits Permit Courts To Utilize The Percentage Method In CommonFund Cases Ninth Circuit: In re Bluetooth Headset Products Liability Lit., 654 F.3d 935, 942 (9th Cir. 2011) (‘Where a settlement produces a common fund for the benefit of the entire class, courts have discretion to employ either the lodestar method or the percentage-of-recovery method.”’); Jn re Washington Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291, 1295 (9th Cir. 1994) (In the Ninth Circuit, “the district court has discretion to use -12- either [the percentage method or the lodestar] method in common fund cases.”). First Circuit: U.S. v. 8.0 Acres ofLand, 197 F.3d 24, 33 (ist Cir. 1999) (“Thetrial court enjoys ‘extremely broad’ latitude in determining the appropriate shares of the common fund, and may calculate such an award either on the basis of a reasonable percentage of the fund, or using a lodestar method . . . .”); Dupont Plaza, 56 F.3d at 307 (“[W]e hold that in a common fund casethe district court, in the exercise of its informed discretion, may calculate counsel fees either on a percentage of the fund basis or by fashioning a lodestar.”). Second Circuit: Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423, 436 (2d Cir. 2007) (“The District Court properly utilized the ‘percentage of the fund’ methodin calculating counsel fees, applying the lodestar method “as a ‘cross check’ on the reasonablenessofthe requested percentage.’”); Goldberger v. Integrated Resources, Inc., 209 F.3d 43, 50 (2d Cir. 2000) (“W]e hold that both the lodestar and the percentage ofthe fund methodsare available to district judges in calculating attorneys’ fees in common fund cases.”). Third Circuit: Jn re Cendant Corp. PRIDESLitig., 243 F.3d 722, 734 (3d Cir. 2001) (“The percentage-of-recovery method has long been used in this Circuit in common-fundcases.”’); In re Prudential Ins. Co. America Sales Practice Lit. Agent Actions, 148 F.3d 283, 333 (3d Cir. 1998) (“The percentage-of-recovery method is generally favored in cases involving a common fund, and is designed to allow courts to award fees from the fund ‘in a mannerthat rewards counsel for success and penalizesit for failure.’”) (quotation omitted). Fourth Circuit: “(T]he Fourth Circuit has not determined the preferred method for calculating attorneys’ fees where the common fund has been generated on behalf of a class.” Archbold v. Wells Fargo Bank, -13- N.A., 2015 WL 4276295, *4 (S.D. W.Va. July 14, 2015). Nevertheless, “[d]istrict courts within the Fourth Circuit have consistently endorsed the percentage method.” Jd. (citing cases). Fifth Circuit: The Fifth Circuit has been “amenable”to the use of the percentage method in commonfund cases. Union Asset, 669 F.3dat 643.4 Sixth Circuit: Rawlings v. Prudential-Bache Props., Inc., 9 F.3d 513, 517 (6th Cir. 1993) (“{W]e concludethat use of either the lodestar or percentage of the fund method ofcalculating attorney’s fees is appropriate in commonfundcases... .”). Seventh Circuit: Americana Art China Co., Inc. v. Foxfire Printing and Packaging, Inc., 743 F.3d 243, 247 (7th Cir. 2014) (“[T]he choice of methodsis discretionary. . . . [I]n our circuit, it is legally correct for a district court to chooseeither.”); Florin v. Nationsbank ofGa., N.A., 34 F.3d 560, 566 (7th Cir. 1994) (“[I]n common fund cases, the decision whether to use a percentage method or a lodestar method remains in the discretion of the district court.’’). Eighth Circuit: Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1157 (8th Cir. 1999) (“It is well established in this circuit that a district court may use the ‘percentage of the fund’ methodology to evaluate attorney fees in a common-fund settlement . . . .”); Johnston v. Comerica Mortg. Corp., 83 F.3d 241, 246 (8th Cir. 1996) (“It is within the discretion of the district court to choose which method to apply.”). Tenth Circuit: Gottlieb v. Barry, 43 F.3d 474, 483 (10th Cir. 1994) (“In our circuit, .. . either [the percentage methodor the lodestar] methodis “ Fifth Circuit courts applying the percentage method mustalso apply twelve “Johnson factors” to ensure “‘a reasonable fee.” Union Asset, 669 F.3d at 642 n.25 (citing Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (Sth Cir. 1974), overruled on other grounds, Blanchardv. Bergeron, 489 U.S. 87 (1989). -14- permissible in common fund cases.”); Brown v. Phillips Petroleum Co., 838 F.2d 451, 454 (10th Cir. 1988) (“We hold, therefore, that the award of attorneys’ fees on a percentage basis in a commonfund caseis not per se an abuse ofdiscretion.”).° 3. Virtually Every State Has Endorsed The Percentage Method “In recent years, state courts have overwhelmingly awarded fees pursuantto the percentage method, rather than the lodestar method.” Conte & Newberg, 4 Newberg on Class Actions (“Newberg”), § 13:80 at 496 (emphasis added). “The vast majority of [state] jurisdictions do not use the lodestar method when a common fundis created.” Jd., § 13:80 at 495. “In common fund cases, ... federal and state courts alike have increasingly returned to the percent-of-fund approach, either endorsingit as the only approachto use, or agreeing that a court should have flexibility to choose between it and a lodestar approach, depending on which method will result in the fairest determination in the circumstances of a particular case.” Strawn v. Farmers Ins. Co. ofOregon, 353 Or. 210, 219, 297 P.3d 439 (2013). The following states have endorsed the percentage method as a proper means for determining the reasonable attorneys’ fees in common fund cases: Alabama: Edelman & Combs v. Law, 663 So.2d 957, 959 (1995) (“Wehold that in a class action wherethe plaintiff class prevails and the lawyer’s efforts result in a recovery of a fund, by way ofsettlementortrial, > Mr. Brennan grudgingly concedes, as he must, that federal courts have permitted use of the percentage method. (Appellant’s Opening Brief (“AOB”) at 31 n.14) (“Federal law regarding the primacyofthe lodestar analysis has changedsince . . . the late 1970s. In the federal system, most, if not all circuits, permit courts to choose either the lodestar or percentage approaches.”). -15- a reasonable attorney fee should be determined as a percentage of the amount agreed upon in settlement or recovered attrial.”). Alaska: Edwards v. Alaska Pulp Corp., 920 P.2d 751, 758 (1996) (“[A] trial court applying the common fund doctrine has the discretion to determine whetherto apply the percentage of the fund methodor the modified lodestar method in orderto calculate attorney’s fees.”). Arizona: Arizona Dept. ofAdmin. v. Cox, 222 Ariz. 270, 279, 213 P.3d 707 (App. 2009) (approving use of the percentage methodin a commonfund caseto calculate attorneys’ fees). Colorado: Brody v. Hellman, 167 P.3d 192, 201 (Colo. 2007) (approving use of the percentage method in a commonfund case). Connecticut: Towns ofNew Hartford and Barkhamstedv. Connecticut Resources Recovery Authority, 2007 WL 4634074, *11-12 (Conn. Dec. 7, 2007) (awarding fees ina commonfundcase pursuantto the percentage method). Delaware: Americas Mining Corp. v. Theriault, 51 A.3d 1213, 1262 (Del. 2012) (approving fee award pursuant to the percentage method). Georgia: Friedrich v. Fidelity Nat. Bank, 247 Ga.App. 704, 707, 545 S.E.2d 107 (2001) (“when assessing attorney fees in a common fund case, a percentage of the fund analysis is the preferred method of determining these fees”). Hawaii: Chun v. Board ofTrustees ofEmployees’ Retirement System ofState ofHawaii, 92 Hawai’i 432, 445, 992 P.2d 127 (2000) (“{IJn common fundcases, the decision whether to employ the percentage method or the lodestar method be reposed within the discretion ofthe trial court.”). Illinois: Brundidge v. Glendale Federal Bank, F-.S.B., 168 Ui).2d 235, 243-44, 659 N.E.2d 909 (1995) C‘[W]e hold that the circuit court is vested with the discretionary authority to choose the percentage-of-the-award -16- method or the lodestar method to determine the amountof fees to be granted plaintiffs’ counsel in common fundclass action litigation.”). Indiana: Citizens Action Coalition ofIndiana, Inc. v. PSI Energy, Inc., 664 N.E.2d 401, 407 (Ind. 1996)(trial court has discretion to apply the percentage method). Iowa: Hagge v. lowa Dept. ofRevenue and Finance, 539 N.W.2d 148, 152 (lowa 1995) (approving use of the percentage method, but finding no common fundexisted in this particular case). Kansas: Gigot v. Cities Service Oil Co., 241 Kan. 304, 319, 737 P.2d 18 (1987) (approving fee award as percentage of commonfund). Kentucky: College Retirement Equities Fund, Corp. v. Rink, 2015 WL 226112, *7 (Ky. App. Jan. 16, 2015) (approving use of the percentage method in commonfund case). Louisiana: Avants v. Kennedy, 837 So.2d 647, 658 (La.App. 1 Cir. 2002) (approving use of the percentage method in a common fundcase). Maryland: United Cable Television ofBaltimore Ltd. Partnership v. Burch, 354 Md. 658, 687, 732 A.2d 887 (1999)(trial court has discretion to apply the percentage method in common fundcases).° Minnesota: Heller v Schwan’s Sales Enterprises, Inc., 548 NW2d 287 (Minn.CtApp. 1996) (“{A]llocating attorneys’ fees as a proportion of the recovery for each class memberis acceptable as an application of the common-fund doctrine.”). Nevada: Hsu v. County ofClark, 123 Nev. 625, 636, 173 P.3d 724 (2007) (“attorney fees awarded pursuant to Nevada law may be based on either a ‘lodestar’ amountor a contingency fee”). New Jersey: Sutter v. Horizon Blue Cross Blue Shield ofN.J., 406 N.J.Super. 86, 103-04, 966 A.2d 508 (N.J.App.Div.2009) (“A court may ° Supersededby statute on other grounds. See Plein v. Dep’t ofLabor, Licensing and Regulation, 369 Md. 421, 800 A.2d 757 (2002). -|7- consider two different methods for determining class action fees: the lodestar method and the percentage of recovery method.”). New York: Flemming v. Barnwell Nursing Home & Health Facilities, Inc., 56 A.D.3d 162, 165, 865 N.Y.S.2d 706 (N.Y.App. Div.3d Dep’t 2008) (recognizing the percentage method as an acceptable option for calculating attorneys’ fees in class action litigation). New Mexico: In re N.M. Indirect Purchasers Microsoft Corp., 140 N.M. 879, 896, 149 P.3d 976 (2006) (“[W]e join the majority of jurisdictions and hold that the choice of methodis within the district court’s discretion.”). North Carolina: Long v. Abbott Laboratories, 1999 WL 33545517, *5 (N.C.Super. July 30, 1999) (“In commonfund cases, the North Carolina trial courts have routinely adopted a multiple factor or hybrid approach to determining attorney fees which uses both the percentage of the fund method and the lodestar method... .”). Ohio: Steiner v. Van Dorn Co., 104 Ohio App.3d 51, 53 n.2, 660 N.E.2d 1256 (1995) (“Two different methods of determining attorney fees are traditionally used when courts award fees in common fund cases, the lodestar method and the reasonable percentage method.”). Oregon: Strawn, 353 Or. at 220-21 (approving the percentage method in commonfund cases). Pennsylvania: Braun v. Wal-Mart Stores, Inc., 24 A.3d 875, 979 (Pa.Super.2011) (‘{C]ourts are permitted to award a reasonable fee pursuantto a lodestar, a percentage of the common fund,or, if necessary, a hybrid approach.”’). South Carolina: Laymanv. State, 376 S.C. 434, 454, 658 S.E.2d 320 (2008) (“percentage-of-the-recovery approach may be appropriate under circumstances in which a court is given jurisdiction over a common -18- fund from whichit must allocate attorneys’ fees among a benefited group oflitigants”). Texas: General Motors Corp. v. Bloyed, 916 S.W.2d 949, 960 (Tex. 1996) (approving use of the percentage method). Washington: Bowles v. Washington Dept. ofRetirement Systems, 121 Wash.2d 52, 72, 847 P.2d 440 (1993) (en banc) (“[T]he percentage of recovery approachis used in calculating fees under the common fund doctrine.”). Wisconsin: Wisconsin Retired Teachers Ass’n, Inc. v. Employe Trust Funds Bd., 207 Wis.2d 1, 38, 558 N.W.2d 83 (1997) (approving use of the percentage method in a common fundcase). In fact, it appears that only Florida and Massachusetts have specifically rejected application of the percentage method in common fund cases. See, e.g., Kuhnlein v. Dep’t ofRevenue, 662 So.2d 309, 311-12 (Fla. 1995); American Trucking Associations, Inc. v. Secretary ofAdmin., 415 Mass.337, 353, 613 N.E.2d 95 (1993). 4. Serrano [TI Did Not Ban The Percentage Method In Common Fund Cases A. Serrano ITI Was Not A Common Fund Case In SerranoIIT, the plaintiffs obtained ajudgmentholdingthat: (1) California’s public school financing system violated state equal protection laws; and (2) the system must be brought into constitutional compliance within six years. Serrano IT, 20 Cal.3d at 31. The plaintiffs’ counsel then sought attorneys’ fees from variousstate officials (in their official capacity) based on three equitable theories: (1) the common fundtheory; (2) the substantial benefit theory; and (3) the private attorney general theory. Jd. at 31-32. Thetrial court awarded fees pursuantto the private attorney general theory. /d. at 32. On appeal, defendants argued, inter alia, that the award of attorneys’ fees was improper underany ofthese three theories. Jd. at 33. -19- Theplaintiffs argued, in turn, that the trial court erred in refusing to also base its award on the common fund and substantial benefit theories. Jd. In Section II(a) of the opinion, this Court extensively discussed the commonfund theory. /d. at 34-38. This Court first noted the general rule that each party pays its own attorneys’ fees, absent a specific statute or agreement by the parties. Jd. at 34 (citing Cal. Civ. Proc. Code § 1021). Despite this rule, the Serrano II Court acknowledged the well-recognized, equitable exception to the general rule whereby courts may award attorneys’ fees whenthe litigation creates a common fund: “[T]he well- established ‘common fund’ principle [applies] when a number ofpersons are entitled in commonto a specific fund, and an action brought by a plaintiff or plaintiffs for the benefit of all results in the creation or preservation ofthat fund, such plaintiff or plaintiffs may be awarded attorneys fees out of the fund.” Jd. Pursuant to the commonfund theory, “one who expendsattorneys’ fees in winning a suit which creates a fund from which others derive benefits, may require those passive beneficiaries to bear a fair share ofthe litigation costs.” Jd. at 35 (quotation omitted). This Court also noted that courts have the “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 or propertyitself or directly from the other parties enjoying the benefit.” Jd. (quotation omitted). Serrano III further noted that the California Supreme Court first approved of the commonfund theory in 1895 and that the common fund theory “has since been applied by the courts of this state in numerous cases.” Id. The Court specifically noted that the common fund theory applies when“the activities of the party awarded fees have resulted in the preservation or recovery of a certain or easily calculable sum ofmoney out of which sum or ‘fund’ the fees are to be paid.” Jd. (emphasis added). In -20- sum, the Serrano III Court acknowledged the well-settled principle of awarding fees out of a commonfund but ultimately concluded that the common fund approach was inappropriate in that case because that litigation did not create a commonfund. Id. at 35-38. Thus, Serrano IIT did not preclude courts from utilizing the percentage method in commonfund cases. B. Serrano III Did Not Require Courts To Use The Lodestar Method In Common Fund Cases Mr. Brennan argues that Serrano IIT requires California courts to utilize the lodestar method in commonfundcases because Serrano III states (in a footnote) that 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.” Serrano II, 20 Cal.3d at 48 n.23. This argumentis misguided. First, as noted above, in Serrano I/I this Court readily acknowledged that the common fund theory: (1) has been continuously applied by California courts since 1895; and (2) applies when “the activities of the party awarded fees have resulted in the preservation or recovery of a certain or easily calculable sum of money out ofwhich sum or‘fund’ the fees are to be paid.” Jd. at 35. The Court merely concludedthat the commonfund wasinappropriate in that case becausethelitigation did not create a common fund. Because Serrano IIIT was not a commonfundcase, it neither mandated use of the lodestar method norbarred use of the percentage method in commonfundcases. Second, this Court extensively discussed the common fund doctrine in Section II(a) of the Serrano III opinion. /d. at 34-38. The excerpt on which Mr. Brennanrelies, however, appears in a footnote in Section Vof the opinion. In fact, in Section II(a), the Serrano I/T Court merely concludedthat the common fund approach was inappropriate because, in -21- that particular case, the litigation did not create a common fund. Jd. at 37- 38. In Section III of the Serrano II opinion, the Court approvedthetrial court’s award of attorneys’ fees underthe private attorney general theory. Id. at 47 (“[T]he trial court acted within the proper limits of its inherent equitable powers whenit concluded that reasonable attorneys fees should be awardedto plaintiffs’ attorneys on the ‘private attorney general’ theory.”) (footnote omitted). Then, in Section V ofthe opinion, the Court addressed class counsel’s argumentthat the fee awarded underthe private attorney general theory was “inadequate” under the circumstances. Jd. at 48-49. There, the Serrano II] Court held that the trial court did not abuse its discretion in awarding fees, concluding that the “experiencedtrial judge is the best judge of the value of professional services renderedin his court.” Id. at 49 (quotation omitted). Thus, the Court madeits statement concerning the “starting point” for fee awardsin the context of analyzing the amountofthe awardpursuant to the private attorney general theory. This statement was not made in connection with the commonfundtheory. Finally, Mr. Brennan argues that California courts may never use the percentage method because SerranoIII states (in a footnote) that the “starting point of every fee award . . . must be a calculation of the attorney’s services in termsofthe time he has expendedon thecase.” (AOBat 7) (quoting Serrano III, 20 Cal.3d at 48 n.23). The support for the “starting point” language is based on two authorities: City ofDetroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) and Lindy Bros. Builders, Inc. ofPhiladelphia v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973). These authorities, however, have been undermined by the same courts that issued them. For example, in City ofDetroit, the Second Circuit reversed and remanded a 15% fee award with instructions to base all future awards 22 - pursuant to the lodestar method. City ofDetroit, 495 F.2d at 470-71. In 2000, however, the Second Circuit abrogated City ofDetroit and expressly approved the percentage method,stating that “both the lodestar and the percentage of the fund methodsare available to district judges in calculating attorneys’ fees in common fund cases.” Goldberger, 209 F.3d at 50. Similarly, in Lindy Bros., the Third Circuitinitially set forth the lodestar method as the means to determine reasonable attorneys’ fees. Since 1985, however, the Third Circuit has repeatedly “reaffirmed that application of a percentage-of-recovery method is appropriate in common- fund cases.” Cendant, 243 F.3d at 734. Thus, to the extent City ofDetroit and Lindy Bros. previously adopted the lodestar method in common fund cases, those holdings are no longer valid. As such, these authorities no longer support Serrano IIIs statementthat the lodestar methodis the only “starting point” for determining fee awards in common fundcases. For all these reasons, it is evident that Serrano III did not and does not bar California courts from applying the percentage method in common fund cases.’ 7 Mr. Brennanalso arguesthat this Court’s decision in Ketchum v. Moses (2001) 24 Cal.4th 1122, 104 Cal.Rptr.2d 377, supports the conclusion that the lodestar methodis the “first step” in calculating attorneys’ fees. (AOB at 12). Mr. Brennan’s reliance on Ketchum is misplaced, as it was not a commonfund case. Rather, Ketchum addressed a statutory fee award. As such, Ketchum shedsnolight on the propriety of the percentage methodin common fund cases. Notably, however, Ketchum did state that the lodestar method was not the sole method for determining statutory fee awards, explaining: “We emphasize, . . . that although we are persuaded that the lodestar adjustment approach should be applied to fee awards under Code of Civil Procedure section 425.16, we are not mandating a blanket ‘lodestar only’ approach; every fee-shifting statute must be construed on its own merits and nothing in Serrano jurisprudence suggests otherwise.” Ketchum, 24 Cal.4th at 1136 (emphasis added). -23- Cc. Since Serrano II, Appellate Courts Have Repeatedly Endorsed The Percentage Method Since Serrano III, this Court has repeatedly acknowledged the viability of the common fund theory as a basis for awarding attorneys’ fees. See, e.g., Trope v. Katz (1995) 11 Cal.4th 274, 279, 45 Cal.Rptr.2d 241; Sam Andrews’ Sons v. Agricultural Labor Relations Bd. (1988) 47 Cal.3d 157, 172 n.10, 253 Cal.Rptr. 30; Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 505, 198 Cal.Rptr. 551; Serrano vy. Unruh (“Serrano IV’) (1982) 32 Cal.3d 621, 627, 186 Cal.Rptr. 754; Consumers Lobby Against Monopolies v. Public Utilities Com. (1979) 25 Cal.3d 891, 908, 160 Cal.Rptr. 124, disapproved on another point in Kowis v. Howard (1992) 3 Cal.4th 888, 12 Cal.Rptr.2d 728. Moreover, since Serrano III, California appellate courts routinely apply the percentage method to award attorneys’ fees in common fund cases. See, e.g., Inre Consumer Privacy Cases, 175 Cal.App.4th at 558 (“It is not an abuse of discretion to choose [the percentage] method over [the lodestar method] as long as the method chosenis applied consistently using percentage figures that accurately reflect the marketplace.”); Chavez, 162 Cal.App.4th at 63 (“[F]ees based on a percentage of the benefits are... appropriate in large class actions when the benefit per class memberis relatively low... .”); Apple Computer, Inc. v. Superior Court (2005) 126 Cal.App.4th 1253, 1271, 24 Cal.Rptr.3d 818 (¢‘[A]ttorneys’ fees awarded under the commonfund doctrine are based on a ‘percentage-of-the-benefit’ analysis ... .”); Lealao, 82 Cal.App.4th at 27 (“Percentage fees have traditionally been allowed in... common fund cases.”). D. The Authorities Mr. Brennan Cites Are Inapposite, As They Are Not Common Fund Cases Despite this Court’s unambiguous approval of the common fund theory and despite numerous appellate courts acknowledgingthe viability of the common fund theory (whereby fees may be awarded pursuantto the -24- percentage method), Mr. Brennan argues that several appellate decisions compel the conclusion that the lodestar method (and not the percentage method) must be utilized to determine reasonable attorneys’ fees. (AOB at 12-16). However, this argumentfails, as not one of the authorities on which Mr. Brennanrelies is a common fund case. As such, they do not support the conclusion that the lodestar method must be applied in common fund cases. 1. Lealao is not a common fund case In Lealao v. Beneficial California, the class action settlement did not create a commonfund. As such, class counsel could not recover attorneys’ fees based on a commonfund theory. Thus, Lealao does not support Mr. Brennan’s contention that the lodestar method must be utilized in common fund cases. In Lealao,the plaintiffs commenceda putative class action against a major lender, alleging that the lender imposed improper prepayment penalties in connection with loans secured by their home. Lealao, 82 Cal.App.4th at 22. After the trial court certified the matter as a class action, the parties reached a settlement agreement. /d. at 23. The parties disputed whether the settlement created a commonfund. /d. at 24. Class counsel then sought attorneys’ fees from the trial court under twoalternative theories: (1) a common fund theory; and (2) the lodestar method of calculating fees. Jd. In granting attorneys’ fees and costs to class counsel, the trial court unequivocally held that no commonfund had been established and thus awarded fees pursuant to a lodestar calculation. Jd. at 24-25. The trial court believed that it had no discretion to award a percentage fee because the class benefits were not in the form of a common fund. Jd. at 25. -25- The appellate court held, inter alia, that the trial court did not abuse its discretion in refusing to award class counsel a fee based purely on a common fund theory as a percentage of the class recovery. /d. at 39. The Lealao Court acknowledged the difference between “fee shifting” cases and “fee spreading”cases. Infee shifting cases, the “responsibility to pay attorney fees is statutorily or otherwise transferred from the prevailing plaintiff or class to the defendant.” Jd. at 26. In such cases, “the primary method for establishing the amountof ‘reasonable’ attorney fees is the lodestar method.” Jd. Infee spreading cases, a settlement or adjudication results in the establishment of a common fund for the benefit of the class. Because the fee awarded class counsel comes from this fund, the expense is*borne by the beneficiaries. Jd. “Percentage fees have traditionally been allowed in such commonfund cases, although ... the lodestar methodology may also beutilized in this context.” Jd. (emphasis added). The Lealao Court then stated that in SerranoIII, this Court established the “primacy of the lodestar method in California.” Id. Nevertheless, the Lealao Court acknowledged: “Despite its primacy, the lodestar methodis not necessarily utilized in commonfundcases.” Id. at 27 (emphasis added). The Lealao Court then analyzed California law, noting that Serrano ‘IIT provided California precedent “[w]ith respect to the propriety of a pure percentage fee award.” Id. at 38. The Lealao Court specifically noted that, pursuant to Serrano IIT, the commonfund theory was inapplicable where class counsel’s efforts did not create an identifiable fund from which they seek attorneys’ fees. Jd. at 39 (citing Serrano III, 20 Cal.3d at 37-38). Thus, the Lealao Court held that the trial court properly declined to apply - 26 - the commonfund theory becausethe class benefits were not in the form of acommonfund. /d.® 2. Dunk v. Ford Motor Co. is nota commonfund case Mr. Brennan’s reliance on Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 56 Cal.Rptr.2d 483, is also misplaced. In Dunk there was no commonfund and noeasily calculable sum of money. As such, the Court unremarkably held that the common fund theory was not an appropriate method forawarding attorneys’ fees. That holding does not support the conclusion that the lodestar method must be utilized in common fund cases. In Dunk, the plaintiffs filed a putative class action against Ford Motor Companyalleging that Ford defectively constructed a door on certain Mustang convertibles. Jd. at 1799. After the trial court certified the matter as a class action, the parties reached a settlement agreement. /d. at 1800. The parties stipulated that Ford would: (1) provide each class member with a redeemable coupon for $400 off the price of any new Ford car or light truck purchased within one year; and (2) pay attorneys’ fees and costs not to exceed $1.5 million. Jd. The plaintiffs requested attorneys’ fees based on a commonfund theory. /d. at 1810. Thetrial court ultimately approved the settlement and awarded class counsel nearly $1 million in attorneys’ fees and costs. Jd. at 1800. The appellate court reversed the fee award, concluding that “‘the commonfund approach is improperin this case” because:(1) the fees were notpaidfrom a commonfund; and (2) the value of any purported fund was not easily calculated. Jd. at 1809-10. The Dunk Court specifically noted ® The Lealao Court also noted: “Evenifthe ascertainable amount of money respondenthasactually paid to satisfy valid claims were deemeda ‘fund,’ class counsel has never suggested that their fee should come from this source.” Lealao, 82 Cal.App.4th at 39. -27- that “the evidence demonstrates the attorneys were not to be paid from the ‘coupon fund,’ but from a distinct amount not exceeding $1.5 million.” Jd. at 1809. The Dunk Court ultimately clarified that it reversed the fee award because there was no commonfund andnoeasily calculable sum of money. The Court explained that the commonfund theory “should only be used where the amount wasa ‘certain or easily calculable sum of money.’” Jd. In Dunk,the ultimate settlement value to the plaintiffs (which could be as high as $26 million) could not be determined until the one-year coupon redemption period expires. Thus, the Court concluded: “This is not the type of settlement that lends itself to the common fund approach.” Jd. at 1809 (quotation omitted). 3. Jutkowitz v. Bourns is not a common fund case Mr. Brennan’s reliance on Jutkowitz v. Bourns, Inc. (1981) 118 Cal.App.3d 102, 173 Cal.Rptr. 248 is similarly misplaced, because it was also not a common fund case. In Jutkowitz, a public corporation (Bourns, Inc.), owned primarily by the Bourns family, soughtto retire 10% of outstanding public shares, consisting of 265,000 shares held by 2,300 shareholders. Id. at 105. Jutkowitz initiated a putative class action, seeking to enjoin Bourns,Inc. from settling a class action filed by different shareholders by paying those shareholders $17.00 per share. Jd. at 106. Thetrial court issued a preliminary injunction precluding Bourns, Inc. from completing a corporate transaction that compelled the retirement of outstanding public shares. Nevertheless, the trial court permitted Bourns, Inc. and shareholders to agree upona price at which the shareholders could voluntarily sell their shares. Jd. at 106-07. Bourns Inc. subsequently acquired 225,000 ofthe outstanding public shares at $24.00 per share. Thereafter, the trial court certified Jutkowitz as a class action, on behalf of the remaining 34,327 public shares. Jutkowitz then settled with each share valued at $28.75 (with - 28 - $26.00 allocated to share value and $2.75 allocatedto all other shareholder claims). /d. at 107. Bourns, Inc. agreed not to oppose an award of attorneys’ fees up to $90,000. Jd. at 108. Jutkowitz’ counsel then filed a motion seeking to require Bourns, Inc. to pay an additional $451,000 for services provided to those shareholders who were notpart of the Jutkowitz class action but accepted the $24.00 per share settlement offer. The trial court rejected this claim and awarded Jutkowitz’ counsel $90,000 in attorneys’ fees. Id. Onappeal, Jutkowitz conceded that an attorneys’ fees ruling ina prior proceeding — that no commonfund had been generated — was“res judicata as to any claim by him for fees for legal services rendered in connection therewith.” Jd. at 106. Nevertheless, Jutkowitz’ counsel argued that although the class only consisted of holders of 34,000 shares, the preliminary injunction he obtained resulted in an increased settlement offer accepted by holders of225,000 shares. In other words, counsel demanded an increased fee because of a purported benefit received by non-class members. Id. at 108-09. The appellate court rejected this argument and affirmed the $90,000 fee award. The Jutkowitz Court stated: “To the extent that plaintiff's claim is grounded on the benefit he allegedly procured for the minority shareholders by raising the price from $17.00 to $24.00,it is a resort to the commonfund principle which has been developed in equity.” Jd. at 109. First, the Jutkowitz Court noted that the commonfund doctrine did not apply because there was no attorney-client relationship, stating that the “plaintiff's counsel did not enjoy an attorney-client relationship with the holders of the above mentioned 225,000 shares, either by direct contract or as a result of being part of the class he purported to represent.” Jd. Second, the Jutkowitz Court expressly (and properly) distinguished those authorities that applied the commonfund doctrine on the “critical point” that in those -29 - cases, a common“fund wascreated from whichthe attorney fees could be paid.” /d. at 110. In other words, the Jutkowitz Court recognized that the commonfund doctrine did not apply because there was no commonfund in Jutkowitz. In short, the Jutkowitz Court did not categorically reject the common fund theory (or the percentage method). Rather, it held that the commonfund theory could not provide a basis for awarding attorneys’ fees in that case because:(1) there was no attorney-client relationship; and (2) no common fund wascreated by thelitigation. 4. Yuki and Salton Bay are not common fund cases. Finally, Mr. Brennan’scitation of and reliance on People ex rel. Dep’t ofTransp. v. Yuki (“Yuki’) (1995) 31 Cal.App.4th 1754, 37 Cal.Rptr.2d 616 and Salton Bay Marina, Inc. v. Imperial Irrigation Dist. (1985) 172 Cal.App.3d 914, 218 Cal.Rptr. 839, is also unfounded. Neither Yuki nor Salton Bay involved class action litigation and neither involved the consideration or application of the percentage method in a common fund case. For example, in Yuki, the trial court awarded statutory attorneys’ fees to the Yuki family in an eminent domainaction. Yuki, 31 Cal.App.4th at 1759. The Court of Appeal reversed the fee award on the groundthatit contained an improper surcharge. Id. at 1768-69. That holdingis utterly irrelevant to the issue presently before this Court — whether the percentage method may beutilized in commonfundcases. Similarly, in Salton Bay, the trial court awarded statutory attorneys’ fees in an inverse condemnation action based upon a contingency fee agreement. Salton Bay, 172 Cal-App.3d at 950-51. On appeal, the court rejected the argumentthat the reasonableness of the fee must be based solely on the fee arrangement between the attorney and client. Jd. at 957. Instead, the Salton Bay Court held that the trial court should determine a reasonable fee by considering the time spent, a reasonable hourly rate and - 30 - other factors (such as the contingent nature of the case, its complexity and the extent the case prevented the attorney from working on other matters). Td. at 957-58. Neither Yuki nor Salton Bay wasa class action. Moreover, in both cases the court considered a statutory fee award and did not consider the award of attorneys’ fees pursuant to equitable principles. Finally, neither Yuki nor Salton Bay involved the creation of a common fund, muchless an award of fees based on a commonfund theory. Accordingly, neither Yuki nor Salton Bay have any bearing on the central question here — whether California courts mayutilize the percentage method to award attorneys’ fees in common fund cases. In sum, noneofthe authorities on which Mr. Brennanrelies supports the conclusion that the lodestar method must be used in common fund cases. Indeed, no California appellate court has ever directly held that awarding fees based on the percentage methodis inappropriate in common fund cases. E. Selective Dicta From Various Cases Does Not Bar Use Of .. The Percentage Method In Common Fund Cases Mr. Brennan’s relies on selective dicta from several cases to supportshis ill-conceived contention that the lodestar method must be applied in common fund cases. A careful review of the authorities on which Mr. Brennanrelies demonstrates that this argument is without merit. 1. Jutkowitz Mr. Brennanrelies on two statements in Jutkowitz: (1) “in none of the “common fund’cases. . . is there any suggestion that the size of the fund controls the determination of what is adequate compensation”; and (2) “the clear thrust of the holding in Serrano [/I]] . . . is a rejection of any ‘contingent fee’ principle in cases involving equitable compensation for lawyers in class actions or other types of representative suits.” Jutkowitz, -31- 118 Cal.App.3d at 110. Mr. Brennan’s reliance on these excerpts is misplaced. . First, as noted above, Jutkowitz was not a common fund case and thus could not bar the use of the percentage method in a common fund case. Second, the language on which Mr. Brennanrelies is taken entirely out of context. In Jutkowitz, the court issued an attorneys’ fees award based on those shareholders that were represented by class counsel. Class counsel, however, sought additional fees based on unrepresented shareholders who benefitted from the class litigation (but accepted a settlement offer prior to class certification). The appellate court rejected the claim for additional fees because: (1) class counsel had no attorney-client relationship with the unrepresented shareholders; and (2)the litigation did not create a common fund from which attorneys’ fees could be paid. Jd. at 109-10. The Jutkowitz Court emphatically stated that the “critical point” for application of the commonfund theory is the creation of a common fund “from which the attorney fees could be paid.” Jd. at 110. In short, Jutkowitz merely held that absent an attorney-client relationship and absentthe creation of a common fund, the commonfund theory did not apply. In dicta, the Jutkowitz Court construed counsel’s request for additional fees (based on the benefit to unrepresented shareholders) as an ill-conceived “attempt to engraft a ‘contingent fee’ concept onto the equitable commonfund doctrine.” Jd. at 110. Thus, the statements in Jutkowitz on which Mr. Brennanrelies simply rejected the adoption of contingent fee principles to award fees where: (1) counsel does not represent the parties that received a benefit; and (2) no commonfundexists. The dicta in Jutkowitz does not repudiate the well-established rule that the common fundtheory is viable method for awarding attorneys’ fees. Finally, it is worth noting that the dicta in Jutkowitz is based entirely on language found in Section Vof the Serrano II opinion. See id. at 108, -32- 110 (citing Serrano ITT, 20 Cal.3d at 48 n.23). As noted above, Section V of the Serrano [II opinion (containing language regarding the “starting point” for fee awards) was madein the context of analyzing the amountof an award pursuantto the private attorney general theory. That statement was not madein connection with the common fund theory (which was discussed exclusively in Section II(a)). For this additional reasons, Jutkowitz did not bar the percentage method in common fundcases. 2. Salton Bay Mr. Brennannextrelies on the following statements in Salton Bay: (1) “the correct amount of compensation cannotbe arrived at objectively by simply taking a percentage of that fund”; and (2) “On remand,the court should begin its analysis with a calculation of the attorney services in terms oftime the attorneys actually expended on the case.” Salton Bay, 172 Cal.App.3d at 954. First, the initial statementis a direct quote from Jutkowitz. Thus, Mr. Brennan’s reliance on this statement is unavailing for the same reasons his reliance on Jutkowitz is misplaced. Second, Salton Bay involved an award of statutory attorneys’ fees in an inverse condemnation action based upon a contingency fee agreement. Id. at 950-51. Salton Bay did not involve class action litigation and, more importantly, did not involve or consider the application of the common fund theory. Thus, the statement in Salton Bay concerning the calculation of fees on remandis utterly irrelevant to determining whether the percentage method maybeutilized a common fundcase. Finally, as in Jutkowitz, Salton Bay’s statements are based entirely on language found in Section V of the Serrano IH opinion. Salton Bay, 172 Cal.App.3d at 953-54, 957-58 (citing Serrano III, 20 Cal.3d at 48 n.23). Section V of the Serrano IIT opinion, however, was not related to the applicability or viability of the common fund theory. Thus, Salton Bay -33- does not support Mr. Brennan’s claim that the lodestar method must be used in commonfundcases. 3. Dunk Mr. Brennan nextrelies on the following statements from Dunkv. Ford Motor Co.: (1) “The award of attorney fees based on a percentage of a ‘commonfund’ recovery is of questionable validity in California”; and (2) “Later cases have cast doubt on the use of the percentage method to determine attorney fees in California class actions.” Dunk, 48 Cal-App.4th at 1809. Here, too, Mr. Brennan’s reliance on Dunk is utterly misplaced. First, as noted above, Dunk was not a commonfund case,as there was noeasily calculable sum of money. /d. at 1809-10. As such, the Court unremarkably held that the common fund theory was not an appropriate method for awarding attorneys’ fees. That holding shedsnolight on the issue before this Court — whether the percentage method maybeutilized to determine attorneys’ fees where a common fundexists. Second, the statements on which Mr. Brennanrelies are plainly dicta. Because the Dunk Court concluded that no common fundexists, any statements concerning the application of the percentage method in common fund cases were notessential to its holding and were meredicta. Finally, the “later cases” to which the Dunk Court referred consisted ofJutkowitz, Salton Bay and Yuki. See id. at 1809 (citing Yuki, 31 Cal.App.4th at 1769; Salton Bay, 172 Cal.App.3d at 954; Jutkowitz, 118 Cal.App.3d a 110). As discussed above, those three cases fail to support the conclusion that the percentage methodis inappropriate in common fund cases because: (1) they were not commonfund cases; (2) their holdings were consistent with Serrano IIT; (3) the excerpts from those cases are clearly dicta; and/or (4) the out-of-context excerpts from those cases are unrelated to the common fund doctrine and/or based on a portion of Serrano IIIT which did not discuss the common fundtheory. - 34 - 4. Lealao Finally, Mr. Brennan relies on the following statement in Lealaov. Beneficial California: “[I}t [is] questionable whether a pure percentage fee can be awarded even in a conventional common fund case.” Lealao, 82 Cal.App.4th at 39. Mr. Brennan’s reliance on this dicta is also misplaced. First, the class action settlement in Lealao did not create a common fund. As such, the Court simply held that attorneys’ fees based on the percentage method could not be awarded pursuant to a common fund theory in that case. See id. at 37 (“[P/ure percentage fees have been rejected by the California Supreme Court, at least in cases such asthis in which there is not a conventional common fund’). Thus, the statement in Lealao concerning the percentage method in commonfund cases is dicta. Second, in questioning the percentage method in common fund cases, the Lealao Court relied on Section V ofSerrano III which, as previously noted, is unrelated to the common fund theory). Thus, Mr. Brennan’s reliance on Lealao is unavailing as it does not preclude courts from applying the percentage method in common fund cases. ~ In sum,no California appellate court has ever directly held that awarding fees based on the percentage method is inappropriate in common fund case. 5. The Percentage Method Provides Significant Benefits For numerousreasons, application of the percentage method in common fundcases “makes eminently good sense.” In re M.D.C. Holdings Securities Litig., 1990 WL 454747, *8 (S.D. Cal. Aug. 30, 1990). As detailed below, the percentage method provides “substantial benefits to the class members and to the judiciary.” Silber and Goodrich, Common Funds And Common Problems: Fee Objections And Class Counsel’s Response (“Silber”), 17 Rev.Litig. 525, 533 (1998). -35- A. Administrative Ease/Conserving Scarce Judicial Resources “[A] percentage-of-the-fund approach is less demanding of scarce judicial resources than the lodestar method.” Swedish Hosp., 1 F.3d at 1269; see also Dupont Plaza, 56 F.3d at 307 (“In complexlitigation—and commonfund cases, by and large, tend to be complex—the [percentage-of- the-fund] approach is often less burdensometo administer than the lodestar method.”). “It is much easier to calculate a percentage-of-the-fund fee than to review hourly billing practices over a long, complex litigation.” Swedish Hosp., \ F.3d at 1270; see also Savoie v. Merchants Bank, 166 F.3d 456, 460 (2d Cir. 1999) (The percentage method “is a simpler calculation of the fee award... .”). “[T]he application of a percentage-of-the-fund methodologyis relatively straightforward and muchless time consuming.” Swedish Hosp., | F.3d at 1270; see also M.D.C. Holdings, 1990 WL 454747 at *8 (“use of the percentage method decreases the burden imposed upon the court by . . . the lodestar method”); Silber at 534 (The percentage method “saves judicial energy,” as the court “does not have to sift through thousandsoftime entries and evaluate the reasonablenessofboth the time spent by class counsel and the hourlyrate.”’). B. Counsel Is Rewarded For The Results Obtained “In the commonfundcase, . . . the monetary amountof the victory is often the true measure of success, and therefore it is most efficient that it influence the fee award.” Swedish Hosp., 1 F.3d at 1269. Moreover, “given the uncertainties and hazardsoflitigation,” class counsel “must necessarily be result-oriented. It matters little to the class how much the attorney spendsin time or moneyto reach a successful result.” Jd. In short, it is entirely appropriate to base compensation on the results obtained, not the numberofhours expendedor resources devoured. As one court explained: - 36 - Where success is a condition precedent to compensation, ‘hours of time expended’is a nebulous, highly variable standard, of limited significance. One thousand plodding hours maybe far less productive than one imaginative, brilliant hour. A surgeon whoskillfully performs an appendectomy in seven minutes is entitled to no smaller fee than one whotakes an hour; many a patient would think heis entitled to more. Inre King Resources Co. Sec. Litig., 420 F. Supp. 610, 631 (D. Colo. 1976) (quotation omitted). Cc. Aligned Interests Of Class Members And Class Counsel The percentage method “aligns the interests of the counsel and the class, i.e., class counsel directly benefit from increasing the size of the class fund and workingin the mostefficient manner.” Lopez v. Youngblood, 2011 WL 10483569, *3 (E.D. Cal. Sep. 2, 2011); see also In re Oracle Securities Litig. (“Oracle I’), 131 F.R.D. 688, 694 (N.D. Cal. 1990) (“{T]he contingent fee serves ‘to align the interests of lawyer and client. The lawyer gains only to the extent his client gains.’” re Ikon Office Solutions, Inc. Sec. Litig., 194 F.R.D. 166, 193 ) (quotation omitted); see also In (E.D.Pa.2000) (“[A] larger recovery with fewer hours expendedbenefits all parties.”). In short, “under the percentage approach, the class members and the class counsel have the sameinterest—maximizing the recovery of the class.” Silber at 534. D. Efficiency Is Rewarded The percentage method “provides a powerful incentive for the efficient prosecution and early resolution oflitigation.” Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 121 (2d Cir. 2005) (quotation omitted). “One of the primary benefits of the percentage method overthe lodestar methodis its allowance for rewards to attorneys for efficient work -37- and these attorneys should be rewarded accordingly.” Jones v. Dominion Resources Services, Inc., 601 F.Supp.2d 756, 761 (S.D.W.Va.2009); see also Swedish Hosp., 1 F.3d at 1269 (Under the percentage method, “inefficiently expended hours only serve to reduce the per hour compensation of the attorney expending them.”). As one commentator explained: [T]he percentage approach encouragesefficient use of the attorneys’ time and money; excessive work does not produce an additional fee. Regardless of the number of hours expended on the case or the number of motions argued before the court, class counsel receives the same percentage of the recovery. Thus, class counsel is motivated to make the best use of legal resources because wasted time and resources reduce the net fee for the case. The efficiency of class counsel ensures that class members pay only for effective representation. Silber at 533. E. Reasonable Compensation At Market Value Because the percentage method “‘is result-oriented rather than process-oriented, it better approximates the workings of the marketplace.” Lealao, 82 Cal.App.4th at 48 (quotation omitted); see also Swedish Hosp., 1 F.3d at 1269 (The percentage method “most closely approximates the manner in which attorneys are compensatedin the marketplace for these types of cases.”). “The percentage method is widely usedin the legal marketplace in contingent fee agreements and better reflects what a client, at the outset ofthe litigation, is willing to pay.” Steiner v. Hercules Inc., 835 F.Supp. 771, 792 (D.Del.1993) (quotation omitted); see also M_D.C. Holdings, 1990 WL 454747at *8 (The percentage methodreflects the - 38 - “private marketplace where contingent fee attorneys are customarily compensated on a percentage of the recovery method.”). F. Predictability The percentage method provides “a degree of predictability to fee awards.” Jn re Activision Sec. Litig., 723 F.Supp. 1373, 1376 (N.D.Cal.1989); see also In re Vioxx Products Liability Litig., 2013 WL 5295707, *2 (E.D.La. Sep. 18, 2013) (“courts find that the percentage method provides more predictability to attorneys and class members”) (quotation omitted); Steiner, 835 F.Supp. at 792 (The percentage method “is predictable and allowsall parties to know what the attorneys’ compensation will be.”) (quotation omitted). As a result, both class counsel and class memberscan “rationally decide the propriety ofpursuing an action based on a prediction of their expected recoveries.” Monique Lapointe, Note, Attorney’s Fees in Common FundActions, 59 Fordham L.Rev. 843, 867 (1991); see also Silber at 533 (The percentage method also “permits class counsel to develop reasonable expectations concerning the likely fee recovery so that the attorney is more willing to invest time and moneyin the class action.”). G. Prompt Payment The percentage method“assures that class members do not experience unduedelay in receiving their share of the proceeds ofthe settlement due to protracted fee proceedings.” M.D.C. Holdings, 1990 WL 454747 at *8. Similarly, “the savings in time borne by use of a percentage approach would ‘reduce the delay period between the settlement of a common fund case and the award of fees to counsel.’” In re Unisys Corp. Retiree Medical Benefits ERISA Litig., 886 F.Supp. 445, 460 (E.D.Pa.1995) (quotation omitted). | /// /f1 -39- 6. Requiring Courts To Apply The Lodestar Method In Common Fund Cases Will Create Significant Problems To say that the lodestar method has beencriticized (particularly when compared to the percentage method) is an understatement. The lodestar method provides utterly “rudderless standards.” Jn re Oracle Securities Litig. “Oracle IT’), 136 F.R.D. 639, 650 n.25 (N.D. Cal. 1991). Indeed, the lodestar method has been “thoroughly discredited by experience.” Oracle I, 131 F.R.D. at 689. One federal district court explained that the lodestar method is “unworkable” because, inter alia, it: (1) abandons the adversary process; (2) requires judges to makean after-the-fact assessment of class counsel’s strategic decisions during litigation; (3) further delays the recovery ofclass members; and (4) requires the court to set aside its impartiality and championtheinterests of somelitigants. Jd. Another federal district court noted that the lodestar method has numerous additional, significant drawbacks, including: (1) it “increases the amountoffee litigation”; (2) it “lacks objectivity’; (3) it “can result in churning, padding of hours, andinefficient use of resources”; (4) it providesa disincentive to early settlement becauseit “reduces the amount of time available for the attorneys to record hours”; and (5)it “inadequately respondsto the problem ofrisk.” Lopez, 2011 WL 10483569at *4. Yet another district court pointedly stated that the lodestar method “does not achieve the stated purposes of proportionality, predictability and protection of the class. It encourages abuses such as unjustified work and protracting the litigation. It adds to the work load of already overworked district courts. In short, it does not encourage efficiency, but rather, it adds inefficiency to the process.” Activision, 723 FSupp. at 1378. In sum, “when compared to the murkycriteria of the lodestar approach, contingent fee compensation is vastly superior.” Oracle J, 131 - 40 - F.R.D. at 694. Someofthe numerous deficiencies in the lodestar method are detailed below. A. The Lodestar Method Imposes A “Massive Time Burden” On Scarce Judicial Resources “The lodestar method makes considerable demands upon judicial resourcessince it can be exceptionally difficult for a court to review attorney billing information overthe life of a complex litigation and make a determination about whether the time devotedto the litigation was necessary or reasonable.” Swedish Hosp., 1 F.3d at 1269-70. “TC]onvoluted judicial efforts to evaluate the lodestar, and seeto it that the lodestar hours were reasonable and necessary, and that the case was not overmannedor the time overbooked, are extremely difficult to say the least, and unrewarding. Such efforts produce muchjudicial papershuffling,in manycases with no real assurance that an accurate or fair result has been achieved.” Jn re Union Carbide Corp. Consumer Prods. Business Sec. Litig., 724 F.Supp. 160, 165 (S.D.N.Y.1989). Moreover, in common fund cases, “the court becomesthe fiduciary for the fund’s beneficiaries and must carefully monitor disbursement to the attorneys by scrutinizing the fee applications.” Skelton v. General Motors Corp., 860 F.2d 250, 253 (7th Cir. 1988). “[T]he court receives little help in performing this cumbersome task.” Lapointe at 847; see also Activision, 723 F.Supp. at 1374 (“the court is abandoned by the adversary system andleft to the plaintiff's unilateral application”).? /// ° As the Seventh Circuit aptly noted: “The ‘lodestar’ method makesofthe court a public utilities commission, regulating the fees of counsel after the services have been performed, thereby combiningthe difficulties of rate regulation with the inequities of retrospective rate-setting.” Kirchoffv. Flynn, 786 F.2d 320, 325 (7th Cir. 1986). -4] - B. The Lodestar Method Encourages Excessive Billing And Padded Hours “T]he lodestar method creates incentives for counsel to expend more hours than may be necessary on litigating a case so as to recover a reasonable fee.” Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1050 n.5 (9th Cir. 2002). Under the lodestar method,“attorneys are given incentive to spend as many hoursas possible, billable to a firm’s most expensive attorneys.” Swedish Hosp., 1 F.3d at 1268; see also Dupont Plaza, 56 F.3d at 307 (Underthe lodestar method, attorneys “have a monetary incentive to spend as many hoursas possible (and bill for them) . . . .”); Feuerstein v. Burns, 569 F.Supp. 268 (S.D. Cal. 1983) (criticizing the lodestar method for “overemphasizing the numberofhours expended,and thus allowing counselto artificially inflate attorneys’ fees requests”). Moreover, “the attorney inefficiently expending an excess amount of time doesstand to gain by that inefficiency ....” Swedish Hosp., 1 F.3d at 1269. C. The Lodestar Method Discourages Early Settlement Underthe lodestar method “there is a strong incentive against early settlement since attorneys will earn more the longera litigation lasts.” Swedish Hosp., | F.3d at 1268; see also Vizcaino, 290 F.3d at 1050 n.5 (“the lodestar method does not reward early settlement”); Dupont Plaza, 56 F.3d at 307 (Underthe lodestar method, counsel“face a strong disincentive to early settlement.”). D. The Lodestar Method Results In Substantial Delay The lodestar approach also “often results in a substantial delay in distribution of the common fundto the class” and class counsel. Swedish Hosp., | F.3d at 1270. The lodestar procedure requires detailed involvementby the District Court, evaluating the reasonableness of expenditure of attorney time and effort, and making comparative inquiries - 42 - on reasonable rates for those services. Given the complexity of many class action lawsuits, combined with the degree of detailed review required and considering the heavy workload of most district court judges, lodestar calculationis likely to cause significant delay between the creation of a common fund and remuneration of class counsel. Td. Here, the dispute over fees (prosecuted by one objector out of a class of nearly 4,000 employees) has spawned a second majorlitigation. It has also deprived class membersofthe fruits of this litigation. Such a result is particularly disturbing as the parties reached a settlement more than 3 years ago andthe trial court approved the settlement more than two years ago. Forall these reasons, there are ample policy reasons for this Court to concludethat it should permit California courts to continue to apply the percentage method in commonfund cases. 7. Courts Needs Flexibility To Award Reasonable Attorneys’ Fees Whentrial courts are tasked with determining a reasonable attorney fee, they require great flexibility, not rigid uniformity. For this additional reason, this Court should approve the continuing use of the percentage method as a permissible means for ensuring that a fee awardedis reasonable. See In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Lit., 109 F.3d 602, 607 (9th Cir. 1997) (““Reasonableness is the goal, and mechanical or formulaic application of either [the percentage methodor the lodestar] method, where it yields an unreasonable result, can be an abuseofdiscretion.”); see also In re Wachovia Corp. ERISA Litig., 2011 WL 7787962, *2 (W.D.N.C. Oct. 24, 2011) (“The percentage methodalso gives courts ‘more flexibility to award attorneys for the efficient settlement of a case.’”) (quotation omitted); Newberg, § 13:80 - 43 - at 498 (“Givingtrial courts the flexibility to decide between percentage and lodestar allows the fairest determination of reasonable attorney’s fees in eachsituation.”). Providing trial court with the flexibility to apply the percentage method in common fundcasesis fully consistent with the discretion affordedtrial courts in assessing attorneys’ fees. “[W]hat constitutes a reasonable fee in a representative action is a complex question to which there are no easy answers.” Consumer Privacy Cases, 175 Cal.App.4th at 558. “[T]he fees approvedbythe trial court are presumedto be reasonable, and the objectors must showerror in the award.” Dunk, 48 Cal.App.4th at 1809. “A trial judge’s determination of a reasonable amount ofattorney fees will not be disturbed on appeal unless the appellate court is convinced that it is clearly wrong.” Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 255, 110 Cal.Rptr.2d 145. “An appellate court reviews an award of attorneys’ fees in the settlement of a class action under an abuse of discretion standard.” 7-Eleven Ownersfor Fair Franchisingv. Southland Corp. (2000) 85 Cal.App.4th 1135, 1164, 102 Cal.-Rptr.2d 777. This Court should confirm that trial courts continue to have the discretion to apply the percentage method to award attorneys’ fees in common fund cases. Moreover, the exercise of such discretion is plainly proper where,as here, the trial court also performed a lodestar cross-check to confirm that its application of the percentage method to award attorneys’ fees was reasonable. 8. This Court Should Ignore Mr. Brennan’s Additional Arguments Concerning How Courts Should Apply The Lodestar Method This Court identified a single issue — whethera trial court may “anchorits calculation of a reasonable attorney’s fees award in a class action on a percentage of the common fund recovered.” Inexplicably, Mr. Brennan spends 23 pages arguing that California courts (including the -44- Laffitte Court) fail to properly apply the /odestar method. (AOBat 20-42). Mr. Brennan goes even further, arguing that this Court should identify certain documents as “required submissions” when applying the lodestar method. (AOBat 49-53).!° These matters are far beyond the scope of the limited issue raised before this Court. These matters werealso notlitigated in either the appellate court or the trial court. For this reason alone, the Court should ignore these additional, irrelevant arguments. Mr. Brennanalso ignores the irony of his argument. Mr. Brennan complains that the lodestar method “can be manipulated” and that California courts have “ignored” the lodestar requirements. (AOBat 18- 19). Assuming these arguments have some merit, they would actually support utilization of the percentage method in commonfund cases. The percentage methodis easy to administer, conserves judicial resources, rewards counsel for the results obtained, aligns the interests of counsel and the class, rewards efficiency, provides reasonable compensation at market value andis predictable (before litigation commences). Thus, Mr. Brennan’s lengthy diatribe against the mannerin which the lodestar method is applied only bolsters the conclusion that this Court should require (if not, at least permit) California courts to utilize the percentage method to award fees in commonfund cases. In sum, the percentage method avoids each of the perceived harmsarising from the application of the lodestar method. 10 For example, Mr. Brennan argues that this Court must require trial courts to appoint a “class guardian” to ease the burden on courts applying the lodestar method. (AOBat 45-47). Mr. Brennan also presents a “wishlist” of items which he believes that this Court should unilaterally require in all future fee awards (pursuantto the lodestar method), including: (1) a prohibition on the discussion of fees between class counsel and defendants; (2) changing the reasonable hourly rate standard to a competent or capable attorney’s standard; (3) eliminating multipliers (or modifying them in contingentfee litigation); and (4) limiting enhancements for quality of performance. (AOBat 54-59). -45- Finally, Mr. Brennan’s myopic focus on the “starting point” for fee awardsfails to explain why the lodestar method must be usedfirst where, as here, the trial court utilized both methods (the percentage method with a lodestar cross-check) and concluded that both methodsresulted in an identical fee award. In other words,if the trial court had applied the lodestar methodfirst and applied the percentage methodas a cross-check, the result would have been the sameandthetrial court would have awarded the requested fees. See, e.g., Chavez, 162 Cal.App.4th at 66 n.11 (“Empirical studies show that, regardless whether the percentage method or the lodestar method is used, fee awardsin class actions average around one- third of the recovery.”) (quotation omitted); Consumer Privacy Cases, 175 Cal.App.4th at 558 n.13 (same). CONCLUSION Forall these reasons, this Court should affirm the appellate court’s opinion and hold that California courts may anchorthe calculation of a reasonable attorney’s fees award in a class action on a percentage of the common fund recovered. Dated: August 25, 2015 LAW OFFICEOF KEVIN T. BARNES LAW OFFICES OF JOSEPH ANTONELLI HILAIRE MCGRIFF PC KEVIN T. BARNES Attorneys for Class Plaintiff and Respondent MARK LAFFITTE - 46 - CERTIFICATE OF WORD COUNT Pursuant to Rule 8.204(c)(1) of the California Rules of Court, the Answer Brief On The Merits (Class Plaintiff And Respondent Mark Laffitte) is proportionately spaced, has a typeface of 13 points or more and contains 13,821 words, including footnotes as counted by the Microsoft Word word-processing program used to generate the brief. Dated: August 25, 2015 LAW OFFICE OF KEVIN T. BARNES LAW OFFICES OF JOSEPH ANTONELLI HILAIRE MCGRIFF PC “KEVIN T. BARNES Attorneys for Class Plaintiff and Respondent MARK LAFFITTE 47 - 1 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES I am overthe age of 18 years and not a party to this action. My business address is 5670 Wilshire Boulevard, Suite 1460, Los Angeles, California 90036-5664, whichis located in Los Angeles County, where the service herein occurred.me W N NH N Onthe date of execution hereof, I served the attached document(s) described as: ' ANSWERBRIEF ON THE MERITS (CLASS PLAINTIFF AND RESPONDENT MARK LAFFITTE) on the interésted partiesin this action, addressed as follows: Attorneys for Defendants: Attorneys for Plaintiffs: M.Kirby C. Wilcox, Esq./ * Joseph Antonelli, Esq. / ** 10 PAUL HASTINGS LLP Janelle Carney, Esq. 55 Second Street, 24" Floor LAW OFFICE OF JOSEPH ANTONELLI 11 San Francisco, CA 94105 14758 Pipeline Avenue, Suite E Tel.: (415) 856-7000 / Fax: (415) 856-7100 Chino Hills, CA 91709-6025 12 Email: KirbyWilcox@paulhastings.com Tel.: (909) 393-0223 / Fax: (909) 393-0471 Email: JAntonelli@antonellilaw.com O o C O ~ T N D ~ N 13 Judith M. Kline, Esq. / * PAUL HASTINGS LLP Mika M.Hilaire, Esq. / ** 14 515 South FlowerStreet, 25" Floor HILAIRE MCGRIFF PC Los Angeles, CA 90071 601 S. Figueroa Street, Suite 4050 15 Tel.: (213) 683-6000 / Fax: (213) 627-0705 Los Angeles, CA 90017 Email: JudyKline@paulhastings.com Tel: (213) 330-4260 / Fax: (213) 402-5577 16 Email: Mika@hilairemcgriff.com 17 Attorney for Objector David Brennan: 18 Lawrence W. Schonbrun, Esq./* LAW OFFICE OF,LAWRENCE W. SCHONBRUN 19 86 Eucalyptus Road Berkeley, CA 94705 20 Tel.: (510) 547-8070 / Fax: (510) 923-0627 Email: Lschon@inreach.com 21 . Myron Moskovitz, Esq./ * 22 {190 Crocker Avenue Piedmont, CA 94611 23 Tel: (510) 384-0354 Email: MyronMoskovitz@gmail.com 24 : Honorable Mary HiStrobel/ *** 25 ||Los Angeles Superior Court | 111 North Hill Street, Dept. 32 26 ||Los Angeles, CA 90012-3014 27 Clerk, Court of Appeal / *** Second Appellate District 28 300 South Spring Street wes |{Los Angeles, CA 90013-1230 (SHORE TE 1460, , LES CA >ia 1 549-9100 549-0101 . PROOF OF SERVICE “ s D o o 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BARNES 1 SHIRE TT: 1460 LES.CA 5614 549-9100 539-0101 using the following service method(s): * VIA EXPRESS MAIL:I caused the document(s) to be served to be deposited in a box or other facility regularly maintained by the express service carrier, or delivered to an authorized courier or driver authorized by the express service carrier to receive documents, in a sealed envelope or package designated by the express service carrier with delivery fees paid or provided for, addressed to the person(s) on whom the document(s)is/are to be served,at the office address as last given by that/those person(s), otherwise at that/those person(s)’ place(s) of residence. ** VIA MAIL:I deposited the document(s) to be served at: 5670 Wilshire Boulevard, Los Angeles, CA, which is a mailbox or other like facility regularly maintained by the United States Postal Service, in a sealed envelope, with postage paid, addressed to the person(s) on whom the document(s) is/are to be served, at the office address as last given by that/those person(s), otherwise at that/those person(s)’ place(s) of residence. I am aware that.on motion of any party served, service is presumed invalid if the postal cancellation date or postage meter date is more than one (1) day after the date of deposit for mailing stated herein. t *** VIA PERSONAL DELIVERY:I caused the document(s) to be served to be personally delivered by handto the addressee(s) pursuant to California Code of Civil Procedure §1011. I DECLARE underpenalty of perjury that the foregoingis true and correct. Executed on August 26, 2015, at Los Angeles, California Cindy Rivas -2- PROOF OF SERVICE