LAFFITTE v. ROBERT HALF INTERNATIONAL (BRENNAN)

Respondent, Mark Laffitte, Answer to Petition for Review

Cal.January 12, 2015

S222996 suPiem ecoury 1 Bee tse, La No. B249253 JES 49 2045 IN THE SUPREME COURT CALIFORNIA rag ee, MeGuire Clerk “Fy, HONNeateML maetp eputy David Brennan, PlaintiffClass Member/Objector and Appellant. MARK LAFFITTE,on behalf of himself and on behalf of others similarly situated, Class Plaintiffs and Respondents, VS. ROBERT HALF INTERNATIONALINC., ROBERT HALF OF CALIFORNIA, INC., ROBERT HALF INCORPORATEDand ROBERT HALF CORPORATIONdba RHC, Defendants and Respondents. ANSWERTO PETITION FOR REVIEW (Class Plaintiffs and Respondents) 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 Attorneys for Class Plaintiffs and Respondents MARK LAFFITTE (AdditionalPlaintiffs' counsel listed on Proof of Service) No. B249253 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 Plaintiffs and Respondents, VS. ROBERT HALF INTERNATIONALINC., ROBERT HALF OF CALIFORNIA, INC., ROBERT HALF INCORPORATED and ROBERT HALF CORPORATIONdba RHC, Defendants and Respondents. ANSWERTO PETITION FOR REVIEW (Class Plaintiffs and Respondents) 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 Attorneys for Class Plaintiffs and Respondents MARK LAFFITTE (Additional Plaintiffs' counsellisted on Proof of Service) TABLE OF CONTENTS Number INTRODUCTION... 0...eeteen eae 1 STATEMENT OF THE CASE. ........0.00 00000 ce cece eee e eens2 1. The Complaint... 0.0...cence tenes 2 2. The Settlement Agreement. ... 0.0.0.0... ccc cece eee eee eens2 3. Class Counsel's Request For Attorneys’ Fees...............00053 4. The Trial Court's Tentative Ruling. ......... 0.0... c cece ee eee3 5. The Trial Court's Ruling. 2.0...0.tenes3 6. The Appellate Court's Ruling. .....0... 0... ccc cece eee4 LEGAL DISCUSSION. ... 0.0...eect eee ne nes 6 1, No California Appellate Court Has Ever Directly Held That Awarding Attorneys' Fees Based On The Percentage MethodIs Inappropriate In A Common Fund Case...............0.. 0000.6 A. Serrano II And The Common Fund Doctrine. ........... 6 B. The California Supreme Court Continues To Acknowledge The Common Fund Theory............. 00.00 c ee eeeee 8 C. Numerous Post-Serrano HI Appellate Court Decisions Acknowledge The Common Fund Theory............... 9 D. There Is No Split Of Authorities As The Cases On Which Mr. Brennan Relies Do Not Involve A Common Fund..... 12 1. Lealao is not a commonfund case............... 13 2. Dunk v. Ford Motor Co. is not a common fund Case... 2. eee cee teen teens 15 3. Jutkowitz v. Bourns is not a commonfund case..... 16 4. Yuki and Salton Bay are not common fundcases. .. .18 E. Laffitte Is Wholly Consistent With Serrano III........... 19 F, Dicta From Various Cases Does Not Create An Actual Conflict... 0. cece ccc cc eect eee enneas 20 1. JutkowitzToi.ccc ccc eee nee21 2 Salton BAY... c ccc ccc ccc cece cece eens22 3, YURIccccnc e nent n ec enens 23 4 DUNK.ccccece c eee e ns24 5. LODO...eeetenn eens25 2. Trial Courts Have Broad Discretion To Award Attorneys’ Fees. . . 26 3. Mr. Brennan's Remaining Arguments Fail To Demonstrate Review Is Warranted. ... 2.0...ceenene 27 CONCLUSION... 0...ceeene e eens 28 li 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.2d 777. ........0......0005 26 Abouab v. City and County ofSan Francisco (2006) 141 Cal.App.4th 643, 46 Cal.Rptr.3d 206 .................000.9 Apple Computer, Inc. v. Superior Court (2005) 126 Cal.App.4th 1253, 24 Cal.Rptr.3d 818.................9,12 Bank ofAmerica v. Cory (1985) 164 Cal.App.3d 66, 210 Cal.Rptr. 351.........0 0.00. cece eee 11 Braude v. Automobile Club ofSouthern Cal. (1986) 178 Cal.App.3d 994, 223 Cal.Rptr.914.......0..00...0....08.. 11 Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 75 Cal.Rptr.3d 413 ...........00....4,12,27 Conservatorship ofBerry (1989) 210 Cal.App.3d 706, 258 Cal.Rptr.655......... 0.0.00. 00 008 11 Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Markets, Inc. (2005) 127 Cal.App.4th 387, 25 Cal.Rptr.3d514.............5,9 Consumers Lobby Against Monopolies v. Public Utilities Com. (1979) 25 Cal.3d 891, 160 Cal.Rptr. 124..........0..000.0.0.. 9 In re Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 96 Cal.Rptr.3d 127........0.... 4, 12, 26, 27 Copley v. Copley (1981) 126 Cal.App.3d 248, 178 Cal.Rptr. 842....... 11 County ofInyo v. City ofLos Angeles (1978) 78 Cal.App.3d 82, 144 Cal-Rptr. 71 ......0.0. 00.0 cc cece eae 10 Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 56 Cal.Rptr.2d 483............00...passim Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629, 71 Cal.Rptr.2d 632..........0......005. 10 Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 198 Cal.Rptr. 551. ......0 00.00. cece eee8 Harper v. 24 Hour Fitness, Inc. (2008) 167Cal.App.4th 966, 84 Cal.Rptr.3d 532 .....0... 000... cee eee9 Jacobson v. Simmons Real Estate (1994) 23 Cal.App.4th 1285, 28 Cal.Rptr.2d 699.000.0000. 0. eee 11 ili Jordan v. California Dept. ofMotor Vehicles (2002) 100 Cal.App.4th 431, 123 Cal.Rptr.2d 122 .................... 10 Jutkowitz v. Bourns, Inc. (1981) 118 Cal.App.3d 102, 173 Cal.Rptr. 248 ..................passim Kowis v. Howard (1992) 3 Cal.4th 888, 12 Cal.Rptr.2d 728............ 9 Laffitte v. Robert HalfInternational Inc., 231 Cal.App.4th 860, 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... cece eee passim Long Beach City Employees Assn., Inc. v. City ofLong Beach (1981) 120 Cal_App.3d 950, 172 Cal.Rptr. 277...........0000059 Northwest Energetic Services, LLC v. California Franchise Tax Bd. (2008) 159 Cal.App.4th 841, 71 Cal.Rptr.3d 642............... 9 People ex rel. Dep't of Transp. v. Yuki (1995) 31 Cal.App.4th 1754, 37 Cal.Rptr.2d 616.............. 18, 23, 24 Rider v. County ofSan Diego (1992) 11 Cal.App.4th 1410, 14 Cal.Rptr.2d 885 .................08. 11 Salton Bay Marina, Inc. v. Imperial Irrigation Dist. (1985) 172 Cal.App.3d 914, 218 Cal.Rptr. 839..............00.. passim Sam Andrews' Sons v. Agricultural Labor Relations Bad. (1988) 47 Cal.3d 157, 253 Cal.Rptr. 30... 0.0.0.0... cece eee8 Sears v. Baccaglio (1998) 60 Cal.App.4th 1136, 70 Cal.Rptr.2d 769. .... 1] 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.............9 Thayer v. Wells Fargo Bank, N.A. (2001) 92 Cal.App.4th 819, 112 Cal.Rptr.2d 284....... beeen eees 19 n.3 Trope v. Katz (1995) 11 Cal.4th 274, 45 Cal.Rptr.2d 241............8,11 In re Vitamin Cases (2003) 110 Cal.App.4th 1041, 2 Cal.Rptr.3d 358. ................ 19n.3 Walsh v. Woods (1986) 187 Cal.App.3d 1273, 232 Cal.Rptr. 629....... 10 Werschkull v. United California Bank (1978) 85 Cal.App.3d 981, 149 CalRptr. 829... 0.0... cece cece eee 10 Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 110 Cal.Rptr.2d 145. ................. 5, 26 iv OTHER AUTHORITIES Cal. Rules of Court, Rule 8.500(b). 0.0...ceeae 28 INTRODUCTION For more than 10 years, experienced class counsel vigorously litigated this complex wage and hourclass action against a formidable, experienced and well-financed adversary. Class counsel worked more than 4,000 hours (excluding appellate proceedings which havesignificantly increased the hours) pursuing claims on behalf of the Class Plaintiffs — with no guarantee that counsel would ever receive compensation for their efforts. Class Plaintiffs and their employer ultimately agreed to a $19 million settlement which, by any standard of measurement, was an outstanding result for the Class Plaintiffs. Thetrial court granted class counsel's request for attorneys' fees equal to 33.33% ofthe gross settlement amount, concluding that the fee request wasfair and reasonable. In awardingfees,thetrial court applied the equitable common fundtheory 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 times the hourly rates charged). The cross-check confirmedthatthe fee award was‘reasonable. After the objector appealed, the appellate court affirmed, concluding that the calculation of fees based on a percentage of the common fund — was proper and reasonable. Undeterred, the objector filed a Petition for Review,arguing that review is warranted because the appellate court's approval of a fee award pursuantto the percentage method (with a lodestar cross-check) in a common fundcase contradicts the Supreme Court's decision in Serranov. Priest (1977) 20 Cal.3d 25, 141 Cal.Rptr. 315, andis inconsistent with other appellate court opinions. That interpretation of California law is simply incorrect as no California appellate court has ever held that a fee award based on a percentage ofthe fundis inappropriate in a true commonfund case. Thus, -1- the appellate court's decision is wholly consistent with Serrano and presents no conflict with other California authorities regarding the common fund theory. For these reasons, and those set forth below, this Court should deny the Petition, finally bringing this action to an end. STATEMENT OF THE CASE 1. The Complaint On September 10, 2004, Plaintiff Mark Laffitte filed a putative class-action Complaint asserting various wage and hourclaims against 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., 231 Cal.App.4th 860, 180 Cal.Rptr.3d 136, 138 (Cal-App. 2 Dist., Oct. 29, 2014). On September 18, 2006 thetrial 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 settlementofthe three class actions. Jd! Thereafter, the trial court granted preliminary approval of the settlement. On November 13, 2012,the trial court approved an amended the 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 actual litigation costs. Jd. at 139-40. On ' The twoother class actions were Williamson v. Robert HalfInternational Inc. (Los Angeles County Superior Court Case No. BC377930) and Apolinario v. Robert HalfInternational Inc. (Los Angeles County Superior Court Case No. BC455499). See Laffitte, 180 Cal.Rptr.3d at 139 n.1. -2- January 28, 2013, class member David Brennan objected arguing,in part, that the fee request was excessive. /d. at 140. 3. Class Counsel's Request For Attorneys' Fees On February 28, 2013, the class representatives filed a motion requesting $6,333,333.33 in attorneys' fees (one-third of the gross settlement) pursuant to a common fund theory. Jd. Class counsel also submitted evidence that 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 amountas $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 March22, 2013, the trial court held a hearing andtentatively approvedthe settlement and fee request. The ruling stated, in part, that: (1) the percentage method of calculating attorneys’ fees in a common fund 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. 5. The Trial Court’s Ruling On April 10, 2013, the trial court held another hearing and overruled Mr. Brennan's objections. /d. at 142. The trial court also conducted cross- check on the fees awarded pursuantto the percentage of the fund method and analyzed the lodestar amount. /d. at 143. Thetrial court concluded that the hours worked and hourly rates charged were within the norm. The trial court also found sufficient information to support the multiplier. The trial court then granted final approval of class action settlement and awarded $6,333,333.33 in attorneys’ fees and $127,304.08 in costs. Jd. 6. The Appellate Court’s Ruling On appeal, Mr. Brennan argued, inter alia, that the trial court erred by awarding fees pursuantto the percentage of the fund method,rather than the lodestar method. Jd. at 147. The appellate court rejected this argument, stating: "[T]he percentage approach may be proper where, as here, there is a commonfund." Jd. The Laffitte Court acknowledged that the California Supreme Court established the "primacy of the lodestar method in California" in Serranov. Priest (1977) 20 Cal.3d 25, 141 Cal.Rptr. 315. Laffitte, 180 Cal.Rptr.3d at 147 (quoting Lealao, 82 Cal.App.4th at 26). Nevertheless, the Laffitte Court held that "[s]ubsequent judicial opinions have madeit clear that a percentagefee award in a commonfundcase 'maystill be done." Id. at 148 (emphasis added) (citing cases). In reaching this conclusion, the . Laffitte Court specifically relied on several California appellate decisions which recognized the propriety of awarding attorneys' fees based on a percentage of a commonfund,including: e Inre Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 96 Cal.Rptr.3d 127, which held that the ultimate goalis the award of a reasonablefee "[r]egardless of whether attorney fees are determined using the lodestar method or awarded based on a ‘percentage-of-the-benefit' analysis" and "irrespective of the method of calculation." Jd. at 557-58 (quotation omitted); e Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 75 Cal.Rptr.3d 413, which held: "It is not an abuse ofdiscretion to choose one method over another as long as the method chosenis applied consistently using percentage figures that accurately reflect the marketplace." Jd. at 65-66; e Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Markets, Inc. (2005) 127 Cal.App.4th 387, 25 Cal.Rptr.3d 514, which recognized that the common fund doctrine is "frequently applied in class actions when the efforts of the attorney for the named class representatives produce monetary benefits for the entire class ...." Jd. at 397; e Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 110 Cal.Rptr.2d 145, which holds: "Courts recognize two methods for calculating attorney fees in civil class actions: the lodestar/multiplier method and the percentage of recovery method." /d. at 254; and e Lealao, which held that "fees based on a percentage of the benefits are in fact appropriate in large class actions whenthe benefit per class memberis relatively low... ." Lealao, 82 Cal.App.4th at 63. See Laffitte, 180 Cal.Rptr.3d at 148-49. Based onthese authorities, the Laffitte Court held that in common fund cases, the "percentage of fund method survives in California class action cases, andthetrial court did not abuseits discretion in usingit, in part, to approve the fee requestin this class action." /d. at 149. The Laffitte Court also concludedthat the "trial court's use of a percentage of 33 1/3 percent of the commonfundis consistent with, and in the range of, awardsin otherclass action lawsuits." Jd. (citing cases). Finally, the Laffitte Court approvedofthetrial court's lodestar cross- check,stating: Thetrial court did not use the percentage of fund method exclusively to determine whether the amountofattorneys’ fees requested was reasonable and appropriate. Thetrial court also performeda lodestar calculation to cross-check the reasonableness of the percentage of fund award. This was entirely proper. Id. at 149-50. The Laffitte Court also held that the trial court "did not abuseits discretion in performing a lodestar calculation based on the declarations of class counsel to cross-check the percentage of fund award." /d. at 151. In addition, the Laffitte Court held that thetrial court's "use of a multiplier of 2.13 was not an abuse ofdiscretion"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." Jd. LEGAL DISCUSSION 1. No California Appellate Court Has Ever Directly Held That Awarding Attorneys’ Fees Based On The Percentage Method Is Inappropriate In A Common Fund Case. Asis relevant here, Laffitte held that thetrial court did not abuseits discretion in awarding fees pursuant to the percentage methodinthis common fund case. Mr. Brennanessentially argues that this holding contradicts Supreme Court precedent and conflicts with other California appellate court decisions. A review of the relevant authorities, however, reveals that no actual conflict exists. Thus, review is not warranted. A. Serrano III And The Common Fund Doctrine. In Serrano v. Priest (1977) 20 Cal.3d 25, 141 Cal.Rptr. 315 ("Serrano III"), the plaintiffs obtained a judgmentholdingthat: (1) California's public school financing system violated state equal protection laws; and (2) the system mustbe broughtinto constitutional compliance within six years. Jd. at 31, Plaintiffs' counsel then sought attorneys' fees from variousstate officials (in their official capacity) based on three equitable theories: (1) the common fund theory; (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. /d. at 33. Plaintiffs argued,in turn, that the trial court erred in refusing to also base its award on the commonfund and substantial benefit theories. Id. 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 agreementby 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 whenthelitigation creates a common fund: "[T]he well-established ‘commonfund' principle [applies] when a numberofpersonsare entitled in commonto a specific fund, and an action broughtby a plaintiff or plaintiffs for the benefit of all results in the creation or preservation of that fund, such plaintiff or plaintiffs may be awardedattorneys fees out of the fund." Jd. Pursuant to the common fundtheory, "one who expendsattorneys' fees in winninga 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 tohimself, to recover his costs, including his attorneys’ fees, from the fundorproperty itself or directly from the other parties enjoying the benefit." Jd. (quotation omitted). The Serrano II] Court further noted that the California Supreme Court first approved of the common fund theory in 1895 andthat the common fund theory "has since been applied by the courts ofthis state in numerous cases." /d. 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 of moneyout of which sum or'fund' the fees are to be paid." Jd. (emphasis added). In sum, the Serrano IIT Court acknowledged the well-settled principle of awarding fees out of a common fund but merely concludedthat the common fund approach wasinappropriate in that case because the litigation did not create a commonfund. Serrano IH, 20 Cal.3d at 35-38. Here, the class representatives’ efforts created an easily calculable sum of money — a $19 million settlement — which benefits all class members. Thus, the Laffitte Court's approval of the percentage methodto award attorneys' fees in this commonfundcasesis fully consistent with SerranoIII, B. The California Supreme Court Continues To Acknowledge The Common Fund Theory. Since SerranoIIT, the California Supreme Court has repeatedly acknowledgedthat viability of the common fundtheory as a basis for awardingattorneys’ fees. See, e.g., Trope v. Katz (1995) 11 Cal.4th 274, 279, 45 Cal.Rptr.2d 241 (noting that the California Supreme Court has relied onits "inherent equitable authority" to develop the common fund theory of recovery); Sam Andrews' Sons v. Agricultural Labor Relations Bd. (1988) 47 Cal.3d 157, 172 n.10, 253 Cal.Rptr. 30 ("This court has generally recognized only three exceptionsto the application of [Code of Civil Procedure] section 1021: the commonfund, substantial benefit, and private attorney general theories.") (emphasis added); Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 505, 198 Cal.Rptr. 551 ("[I]f the litigation has succeededin creating or preserving a commonfundfor the benefit of a numberof persons, the plaintiff may be awarded attorney fees out of that fund."); Serrano v. Unruh ("Serrano IV") (1982) 32 Cal.3d 621, 627, 186 Cal.Rptr. 754 (recognizing that the commonfund theory was a well-established exception to the general rule that counsel fees are not recoverable absent statute or enforceable agreement); Consumers Lobby Against Monopolies v. Public Utilities Com. (1979) 25 Cal.3d 891, 908, 160 Cal.Rptr. 124 (recognizing the common fundtheoryas a basis for awarding attorneys’ fees and holding that the California Public Utilities Commission "possesses equitable power to award attorney fees under the commonfund doctrine in quasi-judicial reparation actions."), disapproved on another point in Kowis v. Howard (1992) 3 Cal.4th 888, 12 Cal.Rptr.2d 728. OF Numerous Post-Serrano III Appellate Court Decisions Acknowledge The Common Fund Theory. Numerous California appellate courts have followed Serrano II and acknowledged the common fund theory as proper means for awarding attorneys’ fees in a commonfund case. Indeed, the "cases are legion which recognize and apply the ‘common fund' principle in this state." Long Beach City Employees Assn., Inc. v. City ofLong Beach (1981) 120 Cal.App.3d 950, 959, 172 Cal.Rptr. 277 (citation omitted). Consider, for example: e Harper v. 24 Hour Fitness, Inc. (2008) 167 Cal.App.4th 966, | 976, 84 Cal.Rptr.3d 532 (acknowledging the applicability of the commonfund theory asa basis for an award ofattorneys' fees); e Northwest Energetic Services, LLC v. California Franchise Tax Bd. (2008) 159 Cal.App.4th 841, 878, 71 Cal.Rptr.3d 642 ("Under the commonfund doctrine, reasonable attorney fees may be awarded wherethe litigation created a fund from which,in equity, the successful plaintiff's attorney should be paid."); Abouab vy. City and County ofSan Francisco (2006) 141 Cal.App.4th 643, 662, 46 Cal.Rptr.3d 206 (recognizing the commonfund theory as an equitable theory and concluding that "equitable principles are appropriately applied in determining whether to award attorneys’ fees" under the commonfund theory); Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Markets, Inc. (2005) 127 Cal.App.4th 387, 397, 25 Cal.Rptr.3d 514 (recognizing that the common fund doctrine is "frequently applied in class actions whentheefforts of the attorney for the namedclass representatives produce monetary benefits for the entire class . . ."); Apple Computer, Inc. v. Superior Court (2005) 126 Cal.App.4th 1253, 1269, 24 Cal.Rptr.3d 818 ("The common fund doctrine . . . is simply an exception to the ‘American rule,' which provides that parties to a lawsuit mustordinarily pay their own attorney fees."); Jordan v. California Dept. ofMotor Vehicles (2002) 100 Cal.App.4th 431, 446, 123 Cal.Rptr.2d 122 (acknowledging SerranoIII and the viability of the common fund doctrine); Walsh v. Woods (1986) 187 Cal.App.3d 1273, 1276, 232 Cal.Rptr. 629 (same); Werschkull v. United California Bank (1978) 85 CalApp.3d 981, 1006, 149 Cal.Rptr. 829 (same); County ofInyo v. City ofLos Angeles (1978) 78 Cal.App.3d 82, 86, 144 Cal.Rptr. 71 (same); Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629, 634 n.3, 71 Cal_Rptr.2d 632 (noting that the -10- California "Supreme Court hasrelied on its inherent equitable authority" to permit an award of fees pursuant to the “commonfund" theory); Sears v. Baccaglio (1998) 60 Cal.App.4th 1136, 1144, 70 Cal.Rptr.2d 769 (same); Jacobson v. Simmons Real Estate (1994) 23 Cal.App.4th 1285, 1292, 28 Cal.Rptr.2d 699 (recognizing the common fund exception), disapproved on other grounds in Tropev. Katz (1995) 11 Cal.4th 274, 292, 45 Cal.Rptr.2d 241; Rider v. County ofSan Diego (1992) 11 Cal.App.4th 1410, 1422, 14 Cal.Rptr.2d 885 (approving common fund theory to support award of attorneys’ fees); Conservatorship ofBerry (1989) 210 Cal.App.3d 706, 718- 19, 258 Cal.Rptr. 655 ("Court-created exceptions to the generalrule include circumstances. . . in which thelitigation for which fees are requested has created or preserved a common fund for the benefit of a number of people (the ‘common fund' doctrine)."). Braude v. Automobile Club ofSouthern Cal. (1986) 178 Cal.App.3d 994, 1005, 223 Cal.Rptr. 914 (recognizing the - commonfund theory as an equitable exceptionto the general rule that attorney fee awards must be basedeither on statute or on the agreementofthe parties); Bank ofAmerica v. Cory (1985) 164 Cal.App.3d 66, 92, 210 Cal.Rptr. 351 (modifying judgmentto clarify that the award of attorneys’ fees is based on the common fund theory); Copley v. Copley (1981) 126 Cal.App.3d 248, 293, 178 Cal.Rptr. 842 ("[T]his case clearly falls within the confines of the commonfund doctrine relating to attorneys' fees."); and -ll- e Long Beach City Employees Assn. ,120 Cal.App.3d at 959 (approving awardof attorneys' fees pursuant to commonfund theory). Moreover, California Courts generally apply the percentage method to award attorneys' fees where a settlement creates a common fundfor the benefit of the claimants. See Jn re Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 557, 96 Cal.Rptr.3d 127 ("[A] fee award may not be justified solely as a percentage of the recovery whenthat award will not come from the settlement fund.") (emphasis added); Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 63, 75 Cal.Rptr.3d 413 ("[FJees 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 v. Beneficial California Inc. (2000) 82 Cal.App.4th 19, 27, 97 Cal.Rptr.2d 797 ("Percentage fees havetraditionally been allowed in . .. common fundcases."). D. There Is No Split Of Authorities As The Cases On Which Mr. Brennan Relies Do Not Involve A Common Fund. Despite the California Supreme Court's unambiguous approvalofthe commonfund theory and despite numerousappellate courts acknowledging the viability of the common fund theory (whereby fees may be awarded pursuant to the percentage method), Mr. Brennan arguesthat a "conflict" exists concerning the use of the percentage method to award attorneys' fees in a commonfundcase. As discussed below, Mr. Brennan's argumentfails for one primary reason — the authorities on whichherelies as the source of the purported conflict were not commonfund cases. As such, they do not and cannotcreate a conflict regarding the use of the percentage methodin a common fundcase. -12- 1. Lealao is not a common fundcase. The key authority on which Mr. Brennanrelies is Lealaov. Beneficial California. In Lealao, however, the class action settlement did not create a commonfund. As such, class counsel could not recover attorneys’ fees based on a commonfund theory. Thus, Leal/ao does not support Mr. Brennan's misguided contention that a conflict of authority exists concerning the use of the percentage method in a common fund case. In Lealao,plaintiffs commenced a 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. Jd. at 23. The parties disputed whetherthe settlement created a common fund. Jd. 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. /d. In granting attorneys' fees and costs to class counsel, the trial court unequivocally held that no commonfund had been established and thus awarded fees pursuantto a lodestar calculation. Jd. at 24-25. The trial court believed that it had no discretion to award a percentage fee becausethe class benefits were not in the form of a common fund. /d. at 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 ofthe class recovery. Id. 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, "theprimary method for establishing the amountof ‘reasonable’ -13- 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. /d. "Percentage fees have traditionally been allowed in such commonfund cases, although ... the lodestar methodology mayalso beutilized in this context." Id. (emphasis added). The Lealao Court then stated that in Serrano III, this Court established the "primacy of the lodestar method in California." Jd. Nevertheless, the Lealao Court acknowledged: "Despite its primacy, the lodestar methodis not necessarily utilized in commonfund cases." Id. at 27 (emphasis added). The Lealao Court then analyzed California law, noting that Serrano II, provided California precedent "[w]ith respect to the propriety of a pure percentage fee award." Jd. at 38. The Lealao Court specifically noted that, pursuant to SerranoIII, the common fund 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 thatthe trial court properly declined to apply the commonfund theory becausethe class benefits were not in the form of acommon fund. Id.’ 2. Dunk v. Ford Motor Co. is not a commonfundcase. Mr. Brennan's reliance on Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 56 Cal.Rptr.2d 483, as a source of a purported conflict regarding the viability of the common fundtheory is also misplaced. In ? The Lealao Court also noted: "Evenifthe ascertainable amount of money respondenthasactually paid to satisfy valid claims were deemeda 'fund,' class counsel has never suggestedthat their fee should come from this source." Lealao, 82 Cal.App.4th at 39. -14- Dunk there was no common fund andnoeasily calculable sum of money. As such, the Court unremarkably held that the commonfund theory was not an appropriate method for awarding attorneys’ fees. That holding is consistent with Serrano I/I and the application of the common fund theory in cases were a commonfundexists. In Dunk,plaintiffs filed a putative class action against Ford Motor Companyalleging that Ford defectively constructed a door on certain Mustangconvertibles. /d. 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 memberwith a redeemable coupon for $400 off the price of any new Ford carorlight truck purchased within one year; and (2) pay attorney fees and costs not to exceed $1.5 million. Jd. Plaintiffs requested attorneys' fees based on a commonfund theory. Jd. at 1810. The trial court ultimately approved the settlement and awarded class counsel nearly $1 million in attorneys' fees and costs. /d. at 1800. The appellate court reversed the fee award, concluding that "the common fund 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 that "the evidence demonstrates the attorneys were notto 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 common fund andnoeasily calculable sum of money. The Court explained that the common fund theory "should only be used where the amount was a ‘certain or easily calculable sum of money." Id. In Dunk,the ultimate settlementvalueto 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 -15- type of settlement that lends itself to the common fund approach." Jd. at 1809 (quotation omitted). 3. Jutkowitz v. Bourns is not a common fundcase. Mr. Brennan's reliance on Jutkowitz v. Bourns, Inc. (1981) 118 Cal.App.3d 102, 173 Cal.Rptr. 248 ("Jutkowitz II"), is similarly misplaced because it was not a common fundcase. In Jutkowitz II, a public corporation (Bourns, Inc.) owned primarily by the Bourns family, sought to retire the 10% of outstanding public shares, consisting of 265,000 shares held by 2,300 shareholders. Jd. 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 of the outstanding public shares at $24.00 per share. Thereafter, the trial court certified Jutkowitz Ias a class action, on behalf of the remaining 34,327 public shares. Jutkowitz IJ then settled with each share valued at $28.75 (with $26.00 allocated to share value and $2.75 allocated to all other shareholder claims). Jd. at 107. Bourns, Inc. agreed not to oppose an award ofattorneys' 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 werenotpart of the Jutkowitz II 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. -16- On appeal, Jutkowitz conceded that an attorneys’ fees ruling in a 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 of 225,000 shares. In other words, counsel demanded an increased fee because of a purported benefit received by non-class members. /d. at 108-09. The appellate court rejected this argumentand affirmed the $90,000 fee award. The Jutkowitz IJ Court stated: "To the extent that plaintiff's claim is grounded onthe benefit he allegedly procured for the minority shareholders by raising the price from $17.00 to $24.00, it is a resort to the common fund principle which has been developed in equity." /d. at 109. First, the Jutkowitz IT Court noted that the commonfund doctrine did not apply because there was no attorney-client relationship, stating: "[P]laintiff'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 IJ Court expressly (and properly) distinguished those authorities that applied the commonfund doctrine onthe "critical point" that in those cases a common "fund wascreated from whichtheattorney fees could be paid." /d. at 110. In other words, the Jutkowitz IJ Court recognized that the commonfund doctrine did not apply because there was no commonfundin Jutkowitz I. In short, the Jutkowitz IJ Court did not categorically reject the commonfund theory. Rather, it held that the common fund 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 bythelitigation. -17- 4, Yuki and Salton Bay are not common fundcases. Finally, Mr. Brennan's citation of and reliance on People exrel. 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 involvedclassactionlitigation and neither involved the consideration or application of the percentage method in a common fund case. In Yuki, for example, the trial court awarded statutory attorneys' fees to the Yuki family in an eminent domain action. Yuki, 31 Cal.App.4th at 1759. The Court of Appeal reversed the fee award on the groundthatit contained an improper surcharge. Jd. at 1768-69. That holdingis utterly irrelevant to any issue pertaining to the continued viability of the equitable commonfundtheory in class actions. 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 court was required to determine the reasonablenessofthe fee only by looking at the actual fee arrangement between the client. Id. 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 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). Jd. 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 commonfundtheory. Accordingly, neither Yuki -18- nor Salton Bay have any bearing on the central question raised by Mr. Brennan's Petition — whethera conflict exists among California authorities regardingthe useof the percentage method in commonfund cases.? E. Laffitte Is Wholly Consistent With Serrano III. Mr. Brennanarguesthat the Laffitte opinion has "repudiated" Serrano III. (Petition at 4). Mr. Brennan's argumentts based on a statement in Serrano III that the "starting point of every fee award . . . must be a calculation of the attorney's services in termsof the time he has expendedon the case." Serrano III, 20 Cal.3d at 48 n.23. Mr. Brennan's reliance on this excerpt is misplaced. First, as noted above, in Serrano II// this Court noted that the commonfund 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 ofa certain oreasily calculable sum of money out of which sum or'fund' the fees are to be paid." Id. Here,it is undisputed thatthe litigation resulted in a $19 million settlement — an easily calculable sum of moneybenefitting all class members. Thus, Laffitte is entirely consistent with SerranoIII. Second, this Court extensively discussed the commonfund doctrine in Section II(a) of the Serrano III opinion. Id. at 34-38. The excerpt on which Mr. Brennanrelies, however, appears in a footnote in Section V of the opinion. In fact, in Section H(a), the Serrano IZ Court merely concluded that the commonfund approach wasinappropriate in that particular case becausethelitigation did not create a common fund. In Section III of the Opinion, this Court approvedthetrial court's award of 3 Mr. Brennan's reliance on other non-commonfundcasesis similarly misplaced. (Petition at 20) (citing In re Vitamin Cases (2003) 110 Cal.App.4th 1041, 1059, 2 Cal.Rptr.3d 358; Thayer v. Wells Fargo Bank, N.A. (2001) 92 Cal.App.4th 819, 112 Cal.Rptr.2d 284. -19- attorneys' fees underthe private attorney general theory. /d. at 47 ("[T]he trial court acted within the properlimits of its inherent equitable powers whenit concluded that reasonable attorneys fees should be awarded to plaintiffs' attorneys on the'private attorney general’ theory.") (footnote omitted). Then, in Section V of the opinion, the court addressed class counsel's argument that the fee awarded underthe private attorney general theory was "inadequate" given the circumstances, /d. at 48-49. In Section V, the Serrano III Court held 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 rendered in his court." Jd. at 49 (quotation omitted). Thus, the Court madeits statement concerning the “starting point" for fee awards in the context of analyzing the amountofthe award pursuant to the private attorney general theory. This statement was not made in connection with the commonfund theory. In fact, this statement has no application to the common fund theory because whenthe commonfund theory applies, the proper methodology for awardingfeesis to apply the percentage method whereby fees are awarded based on a percentage of the common fund. F. Dicta From Various Cases Does Not Create An Actual Conflict. Mr. Brennan contendsthat several other cases reveal an actual conflict with Serrano III. (Petition at 4-9). A careful review of the authorities on which Mr. Brennan relies demonstrates that this argumentis without merit. 1. Jutkowitz I Thepurported genesis of Mr. Brennan'sill-conceived "split of authority” argument beginswith two statementsin Jutkowitz IT (1) "the clear thrust of the holding in Serrano[III] . . . is a rejection of any ‘contingentfee' principle in cases involving equitable compensation for -20- lawyers in class actions or other types of representative suits." (Jutkowitz IT, 118 Cal.App.3d at 106) (quoted in Petition at page 6); and (2) "the correct amount of compensation cannotbearrived at objectively by simply taking a percentage of [the] fund [created]." /d. at 111. Asnoted above, Jutkowitz [J] was not a common fundcase and thus could not and did notcreate a split in authority regarding the use of the percentagemethod in a common fund case. Moreover, the language on which Mr. Brennanrelies is taken entirely out of context. When considered in context, it is evident that it does not support Mr. Brennan's theory that a conflict exists regarding either the percentage method or the commonfund theory. Asnoted above, in Jutkowitz IT, 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 noattorney- client relationship with the unrepresented shareholders; and (2) the litigation did not create a commonfund from whichattorneys' fees could be paid. Jd. at 109-10. The Jutkowitz IT Court emphatically stated that the "critical point" for application of the commonfundtheory is the creation of a commonfund "from which the attorney fees could be paid." Jd. at 110. In short, Jutkowitz II merely held that absent an attorney-clientrelationship and absent the creation of a common fund, the commonfund theory did not apply. In dicta, the Jutkowitz IJ Court construed counsel's request for additional fees (based onthe benefit to unrepresented shareholders) as an ill-conceived "attempt to engraft a 'contingent fee' concept onto the equitable common funddoctrine." /d. at 110. Thus, the statements in -21- Jutkowitz IT on which Mr. Brennanrelies simply rejected the adoption of contingent fee principles to award feeds where: (1) counsel does not represent the parties that received a benefit; and (2) no common fundexists. Thedicta in Jutkowitz IT 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 IT is based entirely on language found in Section V of the Serrano ITI opinion. Seeid. at 108, 110 (citing Serrano IT, 20 Cal.3d at 48 n.23). As noted above, Section V of the Serrano III opinion (containing language regarding the “starting point" for fee awards) was madein the context of analyzing the amount of an award pursuantto the private attorney general theory. That statement was not madein connection with the common fundtheory (which was discussed exclusively in Section II(a)). This further underminesany claim that Jutkowitz II called into question the viability of the percentage methodor the common fundtheory. 2. Salton Bay The next step in the purported evolution of Mr. Brennan's misguided "split of authority" argument is based on the following statement in Salton Bay: "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 957-58 (citing Serrano IIT, 20 Cal.3d at 48 n.23) (quoted in Petition at page 21). As noted above, however, Salton Bay involved an awardofstatutory attorneys’ fees in an inverse condemnation action based upon a contingency fee agreement. Jd. at 950-51. Salton Bay did not involveclass 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 the continuing validity of the common fundtheory. -22- Moreover, as in Jutkowitz II, Salton Bay's statementis based entirely on language found in Section V of the Serrano III opinion. Salton Bay, 172 Cal.App.3d at 957-58 (citing Serrano ITI, 20 Cal.3d at 48 n.23). Section V of the Serrano II opinion, however, was not related to the applicability or viability of the commonfund theory. Thus, Sa/ton Bay does not support Mr.Brennan's claim that there is a conflict among California authorities regarding the use of the percentage method in commonfundcases. 3. Yuki Mr. Brennan nextrelies on the following language in Yusi to supports his conflict theory: "The State . . . contendsthat it is improper for the trial court to start with the amountof the contingency fee and then work backwards, applying the various other factors in order to justify that amount." Yuki, 31 Cal.App.4th at 1771 (quoted in Petition at page 21). Mr. Brennan's reliance on Yuki is misplaced. First, the cited languageis not even part of the Court's holding. In fact, the Court reversed the fee award on the groundsthat the surcharge awarded wasimproperand "not reasonably related to the services performed." Jd. at 1772. As such, the Court expressly stated: "We need not resolve this question of methodology." Jd. Second, as noted above, Yuki involved an award ofstatutory attorneys’ fees in an eminent domain action which wasreversed on the groundthatit contained an improper surcharge. Jd. at 1759, 1768-69. As such, Yuki's holdingis utterly irrelevant regarding the continued viability of the common fundtheory. Finally, Yuki, like its predecessors, specifically relies on the "starting point" language found in Section V of the Serrano II opinion. Id. at 1771 (quoting Serrano III, 20 Cal.3d at 48 n. 23). For this additional, reason,it has no bearing on the viability of the percentage method in common fund cases. -23- 4. 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'common fund' recovery is of questionable validity in California."; and (2) "Later cases have cast doubton the use of the percentage method to determine attorney fees in California class actions." Dunk, 48 Cal.App.4th at 1809 (quoted in Petition at page 6). Here, too, Mr. Brennan's reliance on Dunkis utterly misplaced. First, as noted above, Dunk was not a common fund case as there wasno easily calculable sum of money. /d. at 1809, 1810. As such, the Court unremarkably held that the commonfund theory was not an appropriate method for awarding attorneys' fees. That holding is consistent with Serrano III and the application of the commonfund theory in cases were a commonfundexists. Second, the statements on which Mr. Brennanrelies are plainly dicta. Because the Dunk Court concluded that no commonfundexists, any statements concerning the application of the percentage method in common fund cases were notessential to its holding and were meredicta. Third, 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 common fundcases;(2) their holdings were consistent with SerranoIII; (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 III which did not discuss the common fund theory. Ml -24- 5. Lealao Finally, in Lealao v. Beneficial California, the Court stated: "Prior to [Serrano II], California courts could award a percentage fee in a common fund case. After Serrano III, it is not clear whether this maystill be done. Lealao, 82 Cal.App.4th at 27 (citing Dunk, 48 Cal.App.4th at 1809). The Lealao Court also stated that language found "elsewhere"in Serrano III (1.e., Section V), regarding the "starting point" for every fee award "arguably renders it questionable whether a pure percentage fee can be awarded even in a conventional common fund case." Jd. at 39 (quoting Serrano IIT, 20 Cal.3d at 48 n.23). Mr. Brennan seizes uponthis language and argues that a conflict exists regarding the continued application of the percentage method in common fund cases. Here, too, his claim fails. 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 as this in whichthere is not a conventional common fund"). As such, these statements in Lealao concerning the percentage method in common fund cases are dicta. Moreover, in questioning the percentage method in common fund cases, the Zealao Court relied on Section V ofSerrano III (which is unrelated to the commonfund theory) and Dunk which, as noted above,fails to present a conflict regarding the continued viability of the percentage method in commonfundcases. In sum, no California appellate court has ever directly held that awardingfees based on the percentage methodis inappropriate in commonfundcase. Thus, Laffitte does not contradict Serrano III and does not conflict with other California appellate authorities. Hf -25- 2. Trial Courts Have Broad Discretion To Award Attorneys’ Fees. The Laffitte Court's approval of the percentage method in a true commonfundcase falls well within the bounds of the broad judicial discretion regarding attorneys’ fees. "|What 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 approvedbythetrial court are presumed to be reasonable, and the objectors must showerrorin the award." Dunk, 48 Cal.App.4th at 1809. "A trial judge's determination of a reasonable amountof attorney fees will not be disturbed on appeal unless the appellate court is convincedthat 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 ofattorneys' fees in the settlement of a class action under an abuse ofdiscretion standard." 7-Eleven Ownersfor Fair Franchising v. Southland Corp. (2000) 85 Cal.App.4th 1135, 1164, 102 Cal.Rptr.2d 777. Here, the trial court acted properly and within its broad discretion by applying the percentage method to award attorneys' fees in this common fund case. Moreover, the trial court went beyond any requirement imposed by the percentage method and also performeda lodestar cross-check in concluding that the fee award wasreasonable. . 3. Mr. Brennan's Remaining Arguments Fail To Demonstrate Review Is Warranted. Mr. Brennan contends that review is warranted to settle an important question of law. (Petition at page 10). As noted above, however,thereis no actual conflict among California courts regarding the viability of the percentage of the fund methodin a true commonfund case. As such, there is no importantissue of law to settle. -26 - Mr. Brennanalso raises several arguments against application of the percentage method in common fund cases. (Petition at pages 10-14). However, the percentage method has been recognized and applied since 1895 and no California appellate court has ever held that an attorneys' fees award based on a percentageofthe fund is inappropriate in a common fund case. Thus, Mr. Brennan's various grievances concerning the percentage method provide no grounds for reviewing the methodology utilized in this case. Of course, even if the percentage method was somehow flawed, Mr. Brennanfails to acknowledgethat the trial court actually conducted a lodestar analysis as a cross-check on the reasonableness of the fee award. By doingso,the trial court ensured that the fee award was reasonable when taken into account the wide-ranging factors includedin a lodestar analysis. Because thetrial court actually applied a lodestar methodology in this case, Mr. Brennan's concernsfanciful "public policy" concerns regarding the percentage method are immaterial. Mr. Brennanalso fails to explain why the percentage method must be usedfirst when,as the case here, both methods (percentage method and lodestar) were analyzed and achieved an identical fee award. For example, if the trial court had applied the lodestar methodfirst and applied the percentage methodas a cross-check, the result would have been the same and the trial court would have awarded $6.3 million in attorneys' fees. See, e.g., Chavez, 162 Cal.App.4th at 66 n.11 ("Empirical studies show that, regardless whether the percentage methodorthe lodestar methodis 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). Finally, Mr. Brennan contends that review is warranted by making the bald, unsupported claim that it is "unlikely this issue will be raised again soon." (Petition at page 15). Mr. Brennan offers no evidenceforthis -27- statement. Regardless, this is not a specified ground for review. See Cal. Rules of Court, Rule 8.500(b). This argumentalso actually weighs against granting the Petition, particularly when this appeal stems from single objector out of 4,000 class members. CONCLUSION Forall these reasons, this Court should denythe Petition. Dated: January 12, 2015 LAW OFFICE OF KEVIN T. BARNES LAW OFFICES OF JOSEPH ANTONELLI APPELL HILAIRE BENA LLP KEVIN T. BARNES Attorneys for Class Plaintiffs and Respondents MARK LAFFITTE - 28 - CERTIFICATE OF WORD COUNT Pursuant to Rule 8.204(c)(1) of the California Rules of Court, the AnswerTo Petition For Review (Class Plaintiffs and Respondents) is proportionately spaced, has a typeface of 13 points or more and contains 8,208 words, including footnotes as counted by the Microsoft Word word- processing program used to generatethebrief. Dated: January 12, 2015 LAW OFFICE OF KEVIN T. BARNES LAW OFFICES OF JOSEPH ANTONELLI APPELL HILAIRE BENA LP B KEVIN T.BARNES Attorneys for Class Plaintiffs and Respondents MARK LAFFITTE -29- o C O o N S D N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ~ BARNES (1 SHIRE LITE 1460 3ELES,CA 65-5614 1) 549-9700 1) 549-0101 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, which is located in Los Angeles County, where the service herein occurred. On the date of execution hereof, I served the attached document(s) describedas: ANSWERTO PETITION FOR REVIEW on the interested parties in this action, addressed as follows: Attorneys for Defendants: M.Kirby C. Wilcox, Esq./ * PAUL HASTINGS LLP 55 SecondStreet, 24" Floor San Francisco, CA 94105 Tel.: (415) 856-7000 / Fax: (415) 856-7100 Email: KirbyWilcox@paulhastings.com Judith M. Kline, Esq./ * PAUL HASTINGS LLP 515 South FlowerStreet, 25" Floor Los Angeles, CA 90071 Tel.: (213) 683-6000 / Fax: (213) 627-0705 Email: JudyKline@paulhastings.com Attorney for Objector David Brennan: Lawrence W. Schonbrun,Esq./ ** Law Office of Lawrence W. Schonbrun 86 Eucalyptus Road Berkeley, CA 94705 Tel.: (510) 547-8070 / Fax: (510) 923-0627 Email:Lschon@inreach.com Honorable Mary H.Strobel / ** Los Angeles Superior Court 111 N. Hill Street, Dept. 32 Los Angeles, CA 90012-3014 Second Appellate District / ** 300 South Spring Street 2nd Floor, North Tower Los Angeles, CA 90013 Hf Hf {il Ml Attorneys for Plaintiffs: Joseph Antonelli, Esq. / * Janelle Carney, Esq. LAW OFFICE OF JOSEPH ANTONELLI 14758 Pipeline Avenue, Suite E Chino Hills, CA 91709-6025 Tel.: (909) 393-0223 / Fax: (909) 393-0471 Email: JAntonelli@antonellilaw.com Barry M. Appell, Esq. / * Mika M.Hilaire, Esq. APPELL| HILAIRE | BENARDO LLP 15233 Ventura Boulevard, Suite 420 Sherman Oaks, CA 91403 Tel: (818) 788-2300 / Fax: (818) 788-2464 Email: Mika@ahblegal.com -1- PROOF OF SERVICE oO o O o NS N D N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BARNES SHIRE ATE £460 ELES, CA S614 ) 549-9100 ) 549-0101 using the following service method(s): * VIA MAIL:I deposited the document(s) to be served at: 5670 Wilshire Boulevard, Los Angeles, CA, which is a mailboxor otherlike 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. ** VIA PERSONAL DELIVERY:I personally arranged for the delivery of such sealed envelope(s) by handto the offices of the addressee(s) pursuant to California Code of Civil Procedure §1011. I DECLARE underpenalty of perjury that the foregoingis true and correct. Executed on January 12, 2015, at Los Angeles,PA Cindy Rivas -2- PROOF OF SERVICE