HERNANDEZ v. RESTORATION HARDWARE, INC.Appellant’s Petition for ReviewCal.April 21, 2016nO233983 Appellate No. D067091 IN THE SUPREME COURT OF CALIFORNIA MIKE HERNANDEZ,et al., Plaintiffs and Respondents, SUPREME COURT FILED FRANCESCA MULLER, APR 21 2016 Plaintiffand Appellant; Frank A. McGuire Clerk Vv. Deputy RESTORATION HARDWARE,INC., Defendant and Respondent. After a Decision of the Court of Appeal, Fourth Appellate District, Div. 1, No. D067091; San Diego Superior Court, Central Div., No. 37-2008-00094395-CU-BT-CTL Hon.William S. Dato, Judge PETITION FOR REVIEW LAWRENCEW. SCHONBRUN (CSBNo. 054519) LAW OFFICE OF LAWRENCE W. SCHONBRUN 86 Eucalyptus Road Berkeley, CA 94705 Telephone: (510) 547-8070 Attorneyfor PlaintiffClass Member-Appellant and Petitioner Francesca Muller No. Appellate No. D067091 IN THE SUPREME COURT OF CALIFORNIA MIKE HERNANDEZ,et al., Plaintiffs and Respondents, FRANCESCA MULLER, Plaintiffand Appellant; V. RESTORATION HARDWARE,INC., Defendant and Respondent. After a Decision of the Court of Appeal, Fourth Appellate District, Div. 1, No. D067091; San Diego Superior Court, Central Div., No. 37-2008-00094395-CU-BT-CTL Hon.William S. Dato, Judge PETITION FOR REVIEW LAWRENCE W. SCHONBRUN (CSB No. 054519) LAW OFFICE OF LAWRENCE W. SCHONBRUN 86 Eucalyptus Road Berkeley, CA 94705 Telephone: (510) 547-8070 Attorneyfor PlaintiffClass Member-Appellant and Petitioner Francesca Muller TABLE OF CONTENTS Page Table ofAuthorities ...........cccsccesscsssscessescesececeeseeeseeseaeeeesaaeceosseesseeeneeessseeessseesateenes ili INTRODUCTION..........cccccssccssccescesseeseseceseecseseseseseessscesesaeeesesaeseseeesaeeseeesesaeesnesenees I STATEMENTOF ISSUE PRESENTED ..........ccccceecceeeseceeesceeesseesneesseeessseeesseeeneess 2 REASONS FOR GRANTING REVIEW.......c:ccsccsecesseeeseeeeeseeeseeeeeeseessneeeseeceeseaeeaes 3 STATEMENTOF THE CASE......cccccccccsssestsetceseeeeseeeeeseeecsseeeesseeseneeeseeessecesseeeanees 10 LEGAL DISCUSSION........ccesccsssessseessssecesesssceneeeeeeesceeecnsaceessseceseeseeesseeneesenesnsens 15 I, The Restoration Hardware Court's Reliance on Eggert, a 74-Year-Old Two-Page Decision, Should be Revisited ......ceeeeeeeeeees 15 A. Restoration Hardware's Reliance on Eggert Should Be Reconsidered ............cccccccccssseeessceeessnceeeeceessneeaeceeecsaeeseesaaaaeseeeseneeens 15 I. The Restoration Hardware Decision, Requiring Intervention by Unnamed Class Members to Obtain Appellate Standing, Conflicts with Numerous California Appellate District Decisions............ 16 A. The Filing of an Objection and Appearanceat a Fairness Hearing Is Sufficient for Unnamed Class Membersto . Obtain Appellate Standing...eeeeeeceseneessssecesseeeeeeeeeeeees 16 Il. The Restoration Hardware Court's Reliance on Marsh Is Misplaced .........:cceeessscesssescesscsecssersscesesseseseeseesseenseeneeeeseseeeseersssecaeeseneseesssaeens 20 A. Restoration Hardware Cites to Marsh v. Mountain Zephyr, Inc., but Fails to Acknowledge the Significance of the Words "Generally" in the Marsh Court's Holding...eee 20 B. The Restoration Hardware Decision Cites to Marsh but Ignores Marsh's Specifically Stated "Exception"to the General Rule oo... cccceessscesssesseeseeeeceseeeesseeeecesceseceeaeeeeeeeeceeeseeeseees 2] IV. The Restoration Hardware Court's Legal Analysis of Federal Law, Which It Uses to Reject Trotsky's Reasoning, Is Simply WONG... cesccescceteeseseesecsceseesseesecseseseessseesessesneenseseaesesaeesensenscnessesseasseeneeneaies 22 A. There Is No Federal Authority Contrary to the Proposition Argued by Class Member Muller That Intervention Is Not Required under Federal Law...eeeeeceeeeeeee 22 TABLE OF CONTENTS Page B. Restoration Hardware Adopts the Rulings of Federal Courts of Appeals' Decisions That Were Overruled by Dev1inn ...ecesccesccssccesesenseeseeeseeseesecessesssenssssesesssesssassessseseaseraesensensens 23 V. Numerous Unpublished Decisions Address UnnamedClass Members' Appellate Standing Issues, Warranting Clarification by this COUrtcececescceeecssenesessessensssseeesseesesenaeeesseessessesesessasesuseeeseenseaee 25 A. The Standing Issue Is an Important Procedural Issue, Frequently Addressed by California Appellate Courts... 25 VI. The Restoration Hardware Decision Is Contrary to Public POLICY... ee eeescceseeeseeecceseeeeeseeensneceeseeceaeesseseesesssssessssseesesssescssssecesseessaeseseeeeasenea 26 A. Unnamed Class Members MayIntervene in Class Actions AS Of Right .......eeeceeeeeeseeseeeseesseeseeeseeseeecenseeessccsacesesesaeesneeenseeees 27 B. The Restoration Hardware Decision's Public Policy Arguments Cannot Withstand Scrutiny ...........c ccc cceeseeeeerreteeees 27 C. Powers v. Eichen Offers Public Policy Benefits Superior to That ofRestoration Hardware ......ccccccccsccccesssetecseeesseeessesesseenseeees 29 CONCLUSION.......cccccccsscsecssccsseceeceseneceeessseaeeseseneessessneesseeasseseseseesasesaesseesaeeeneesaes 30 Certificate of Compliance oieecccceesesseeceeessseseeeseeeeneesessessesesrseseessssesessseees 31 Certificate Of S€rviCe........ccccccsccssscescecsneceneesseseeseceeeesceesnecessuasssssssecsessaseaeseneeeneenees 32 Attachment Hernandez,et al., Pls. and Resp'ts; Francesca Muller, Pl. and Appellant v. Restoration Hardware, Inc., Def. and Resp't, No. D067091, 2016 Cal-App. LEXIS 185 (4th App. Dist., Div. 1, Mar. 14, 2016)...eeeeceeeeeseneeeeesceeeeesExhibit 1 i TABLE OF AUTHORITIES State Cases E© oO Alonzo v. First Transit, Inc., No. B253699, 2015 Cal.App. Unpub. LEXIS 7415 (2d App. Dist., Div. 7, Oct. 15, 2015)...eeceeeeseceesseseetaeceeeeetaeeeeees 6, 26 Bronk v. Talarico, No. B1854000, 2007 Cal.App.Unpub. LEXIS 1540 (2d App.Dist., Div. 3, Feb. 28, 2007) oo.eccece csssessereeeteeeaeenenaeees 6, 25 Chavez v. Netflix, Inc., 162 Cal.App.4th 43 [75 Cal.Rptr.3d 413] (1st App. Dist., Div. 1, Apr. 21, 2008) ........... 4, 18, 19 Consumer Advocacy Group, Inc. v. Kintetsu Enterprises ofAmerica, et al., 141 Cal.App.4th 46 [45 Cal.Rptr.3d 647] (2d App. Dist., Div. 8, July 6, 2006)ee 21 Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Market, Inc., 127 Cal.App.4th 387 [127 Cal.Rptr.3d 514] (2d App.Dist., Div. 7, Mar. 7, 2005)... ececceeeceescssesssssesecneeseteeseaee passim Consumer Defense Group v. Rental Housing Industry Members, 137 Cal.App.4th 1185 [40 Cal.Rptr.3d 832] (4th App. Dist., Div. 3, Mar. 24, 2006)........cecesscessecsscsseeesecseeseeeeeeneees 4,19 Eggert v. Pacific States Savings and Loan Company,et al., 20 Cal.2d 199 (Apr. 21, 1942) oo cecieccscssetsensscssessscnsnteseseseeseeresserees passim Grinberg v. Maria's Holding Corp., No. B244535, 2013 Cal.App. Unpub. LEXIS 8324 (2d App. Dist., Div. 4, Nov. 18, 2013) wo... ccesceecereeseeeeeescssseseesseseenes 6, 25 Hernandez, et al.; Francesca Muller, Pl. and Appellantv. Restoration Hardware, Inc., No. D067091, 2016 Cal.App. LEXIS 185 (4th App. Dist., Div. 1, Mar. 14, 2016). 0.0... eeeceeeseeeseeeeseersecneeneeees passim Jasmine Networks, Inc. v. The Superior Court ofSanta Clara Co., 180 Cal.App.4th 980 [103 Cal.Rptr.3d 426] (6th App. Dist. Dec. 29, 2009)...eicccessceeseereceeeceeetseeressaseassenscsseeeseseaeees 7 Jolly v. Eli Lilly & Co., 44 Cal.3d 1103 [245 Cal. Rptr. 658] (April 7, 1988)... ceceeeesecscseesseeeecsceersenesssseesesseseecseessecsssecessesecsesaeseaeeseeeeeey 10 Kullar v. Foot Locker Retail, Inc., et al., 168 Cal.App.4th 116 [85 Cal.Rptr.3d 20] (1st App. Dist. Oct. 14, 2008)...eeeceeeeeeene 9 iil TABLE OF AUTHORITIES State Cases Page Life v. County ofLos Angeles, 218 Cal.App.3d 1287 (267 Cal.Rptr. 557] (2d App. Dist., Div. 3, Mar. 20, 1990).......eee 21 Leoke v. County ofSan Bernardino, 249 Cal.App.2d 767 [57 Cal.Rptr. 770] (4th App. Dist., Div. 2, Mar. 29, 1967) «0... cceesseeeees 21 Marsh v. Mountain Zephyr, Inc., 43 Cal.App.4th 289 [50 Cal.Rptr.2d 493] (4th App. Dist., Div. 1, Mar. 6, 1996)... 20, 21 Mostajo v. Anchor General Ins. Co., No. G033640, 2005 Cal.App.Unpub. LEXIS 2525 (4th App. Dist., Div. 3, Mar. 22, 2005).......ccsccsesssessestsscsserecsseeeseeeeeeeees 6, 26 Rebney v. Wells Fargo Bank, 220 Cal.App.3d 1117 [269 Cal.Rptr. 844] (1st App. Dist., Div. 2, May 25, 1990)... 4,18 Rodriguez v. Bethlehem Steel Corp., etal., 12 Cal.3d 382 [115 Cal.Rptr. 765] (Aug. 21, 1974)weeeeeeeeee 24 Roos v. Honeywell International, Inc., 241 Cal.App.4th 1472 [194 Cal.Rptr.3d 735] (ist App. Dist., Div. 1, Nov. 10, 2015)... 4,19 Santiago v. Kia Motors America, Inc., No. G036985, 2007 Cal. App. Unpub. LEXIS 4792 (4th App. Dist., Div. 3, June 15, 2007)...ceceseeseeeeseeeetseneeneereeens 6, 7, 15 Sarti v. Salt Creek Ltd., 167 Cal.App.4th 1187 [85 Cal.Rptr.3d 506] (4th App. Dist., Div. 3, Oct. 27, 2008)... 5,6 Sherman v. Allstate Ins. Co., 90 Cal.App.4th 121 [108 Cal.Rptr.2d 722] (2d App.Dist., Div. 7, June 25, 2001).............. 3, 20 Simons v. Horowitz, et al., 151 Cal.App.3d 834 [199 Cal.Rptr. 134] (ist App. Dist., Div. 3, Feb. 7, 1984)... 4,19 Trotsky v. Los Angeles Federal Savings & Loan Ass'n,etal., 48 Cal.App.3d 134 [121 Cal.Rptr. 637] (2d App. Dist., Div. 5, May 6, 1975)...esessseeseeesseeeeteereeeeneseeseesens passim Wershba v. Apple Computer, 91 Cal.App.4th 224 [110 Cal.Rptr.2d 145] (6th App. Dist. July 31, 2001).......... 4,17, 18, 19, 22 iv TABLE OF AUTHORITIES State Cases _ Page Williams v. Bre Property Investors, et al., No. A111414, 2006 Cal.App. Unpub. LEXIS 6850 (1st App. Dist., Div. 1, Aug. 7, 2006)...ceceecseeeeseeeeseeeneseeeeneenens 6, 26 Yip v. Zia, et al., No. B188228, 2007 Cal. App. Unpub. LEXIS 3243 (2d App. Dist., Div. 3, Apr. 24, 2007)eeeeeeseeeeesessesscesseereeeseeeeeseeens 6, 26 Federal Cases Page Blair v. Equifax Check Services, Inc., 181 F.3d 832 (7th Cir. 1999)...cesses 9 Croyden Associates v. Alleco, Inc., et al., 969 F.2d 675 (8th Cir. July 13, 1992)oeeeeessceeesecsscceeeesseeseesssssessssssssesseneseraensenens 24 Devlin v. Scardelletti, 536 U.S. 1 (June 10, 2002)...eee eeeeeeeeeeee 7, 8, 22, 23, 24 Felzen v. Andreas, et al., 134 F.3d 873 (7th Cir. Jan. 21, 1998)oe23, 24 In re Cendant PRIDESLitig., 243 F.3d 722 (3d Cir. Mar. 21, 2001)... 10 Inre Prudential Ins. Co. Am. Sales Practice Litig., 148 F.3d 283 (3d Cir. July 23, 1998) ooeeeee eee tees teste cesses sesenssuseeaeees 9-10 Marino v. Ortiz, 484 U.S. 301 (1988)... ceeeseeeeceeerceeeeeseeeeesseseeseuecsseseeeeee 22, 23 Powers v. Eichen, 229 F.3d 1249 (9th Cir. Oct. 20, 2000)..........0.000 24, 25, 29, 30 Statutes, Codes and Rules Page California Civil Code, section 1747.08 (Song-Beverly Credit Card Act Of 1971) oo... ccccccscsccesscesreecesaeeeecesseessecseeeseecsseseseesonseesneens 10 California Code of Civil Procedure, section 387(D) ...........eececesceesseeeseeeeseeoees 8, 27 California Rules of Court, Rule 8.500(b)(1) ........:ceescececsssseeceesessessecsaceseesessaeeseesenes 3 INTRODUCTION Plaintiff Class Member and Appellant Francesca Muller (hereinafter "Class Member Muller") respectfully petitions this Court for review of the March 14, 2016, published opinion of the California Court ofAppeal, Fourth Appellate District, Division One, Hernandez,et al., Pls. and Resp'ts; Francesca Muller, Pl. and Appellant v. Restoration Hardware, Inc., Def: and Resp't, No. D067091, 2016 Cal.App. LEXIS 185 (4th App. Dist., Div. 1, Mar. 14, 2016) (hereinafter "Restoration Hardware Op."). A copyofthe published opinion is attached as Exhibit 1. STATEMENT OF ISSUE PRESENTED Doesthis Court's 74-year-old decision in Eggert v. Pacific States Savings and Loan Company, et al., 20 Cal.2d 199 (Apr. 21, 1942), requiring an unnamedclass memberin a class action to intervene! in the litigation in order to obtain appellate standing, continueto be the law ofthis state? Appellants were not namedasparties to the action.... Although their attorney appearedat the hearing on the petition for the paymentofthe moneyto plaintiff's attorneys and objected to such payment, he did not ask that appellants be made parties, nor did the court order them broughtinto the action. The appealis therefore dismissed... [a]s appellants have noright to appeal... Eggert at 201 (emphasis added). The Fourth Appellate District's Restoration Hardware decision, dismissing an unnamed class member's appeal of an award of attorneys' fees to Class Counsel, relies on this Court's 1942 decision in Eggert as its principal ground. Eggert appears to be on “all fours" with the present action: both involved a class action; both involved a matterlitigated to judgment; both involved a challenge to the postjudgment attorney fee award to the counsel for the namedplaintiff; both involved appellants who were membersofthe class, but not namedparties, and who had appeared through counselto object to the attorney fee award; and both involved members who took no steps to be added as namedplaintiffs. Accordingly ... we must adhere to Eggert and dismiss the appeal. Restoration Hardware Op.at *14 (footnote omitted; citation omitted; emphasis added). 1 Eggert, 20 Cal.2d at 201, sets the requirement of becoming a "party to the record," which the Restoration Hardware decision has interpreted to mean "intervening" (Op.at *21-*22) to accomplishthis status. Is this Court's 1942 Eggert decision controlling authority for the rule that, in California, an unnamed class memberin class action can only obtain appellate standing by intervening? Or should this Court adopt the position of the otherwise nearly unanimous2 California courts of appeal (see No. 1 below and pages 16-19, infra), which have recognized appellate standing for unnamed class members who do not seek to intervene but whofile an objection and appearat a fairness hearing. REASONS FOR GRANTING REVIEW 1. This Court should grant review of the Restoration Hardware decision in order to "secure uniformity" (California Rules of Court (CRC), Rule 8.500(b)(1)) in the appellate courts of California because there is now a split of authority. Restoration Hardware holds that a class member must seek intervention and moveto vacate the judgment (Op. at *21-*22)in order to obtain appellate standing. This holding conflicts with the holdings of numerousother appellate districts, which have held that a class member may obtain appellate standing by filing an objection and attending the fairness hearing. The Second Appellate District's: e 1975 decision in Trotsky v. Los Angeles Federal Savings & Loan Ass'n, et al., 48 Cal.App.3d 134 [121 Cal.Rptr. 637] (2d App. Dist., Div. 5, May 6, 1975); e 2005 decision in Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Market, Inc. (hereinafter Mrs. Gooch), 127 Cal.App.4th 387 [127 Cal.Rptr.3d 514] (2d App. Dist., Div. 7, Mar. 7, 2005). 2 But see Sherman v. Allstate Ins. Co., 90 Cal.App.4th 121 [108 Cal.Rptr.2d 722] (2d App.Dist., Div. 7, June 25, 2001), page 20, infra, denying standing to a class member whodid notintervene. The First Appellate District's: e 1984 decision in Simons v. Horowitz, et al., 151 Cal.App.3d 834 [199 Cal.Rptr. 134] (1st App. Dist., Div. 3, Feb. 7, 1984); e 1990 decision in Rebney v. Wells Fargo Bank, 220 Cal.App.3d 1117 [269 Cal.Rptr. 844] (1st App. Dist., Div. 2, May 25, 1990); e 2008 decision in Chavez v. Netflix, Inc., 162 Cal.App.4th 43 [75 Cal.Rptr.3d 413] (1st App. Dist., Div. 1, Apr. 21, 2008); e 2015 decision in Roos v. Honeywell International, Inc., 241 Cal.App.4th 1472 [194 Cal.Rptr.3d 735] (1st App. Dist., Div. 1, Nov. 10, 2015). The Sixth Appellate District's: e 2001 decision in Wershba v. Apple Computer, 91 Cal.App.4th 224 [110 Cal.Rptr.2d 145] (6th App.Dist. July 31, 2001). And, an earlier Fourth Appellate District's: e 2006 decision in Consumer Defense Group v. Rental Housing Industry Members, 137 Cal.App.4th 1185 [40 Cal.Rptr.3d 832] (4th App.Dist., Div. 3, Mar. 24, 2006). There are now two contradictory rules of law in published appellate decisions concerning how unnamed class membersin California class actions achieve appellate standing. Until the Restoration Hardware decision, thefiling of an objection and attendanceat a fairness hearing were sufficient. Restoration Hardware has changed that and created new conflicting authority. The law on standing in California's appellate courts is now unsettled. This conflict in authorities warrants this Court's attention. This court should rule on whetherits 74-year-old decision in Eggert, supra, relied upon by Restoration Hardware — requiring formalintervention — continues to be the law for unnamed class members. IfEggert is no longervalid, then Restoration Hardware should be overruled. 2. This Court should grant review of the Restoration Hardware decision becauseit is "necessary to ... settle an important question of law...." (CRC, Rule 8.500(b)(1).) (a) Class actions have becomeofparamount importancein the litigation landscape. Class membersin class actions throughoutthe state of California regularly take appeals from superior court approvals of class action settlements and/or awardsof attorneys' fees to class counsel. They need to know whether formal intervention is required. The class action mechanism's approval processcurtails thousands, indeed millions, of California class members’ property rights through the resjudicata effect of class action judgments. Our SupremeCourt recently cautioned that the class action device ... also carries with it substantial dangers of injustice to class members who may be deprived oftheir rights by the actions of the class plaintiff. Trotsky, supra, 48 Cal.App.3d at 149 (emphasis added). Unless this Court intercedes, the Restoration Hardware decision will now be available to any California Court of Appeal wishing to dismiss an appeal by an unnamed class member, without getting to the merits of the arguments. Because "there is no horizontal stare decisis in the California Court of Appeal," Sarti v. Salt Creek Ltd., 167 Cal.App.4th 1187, 1193 [85 Cal.Rptr.3d 506] (4th App.Dist., Div. 3, Oct. 27, 2008), the Restoration Hardware decision creates a procedural uncertainty that only this Court can resolve. To leave this issue in doubt will allow other appellate districts and divisions within those districts throughoutthe state to follow, as they might choose,either line of contradictory cases to grant or deny appellate review on importantissues of class action procedure. "One [court of appeal] district or division may refuse to follow a prior decision of a different district or division....""" Sarti, supra, 167 Cal.App.4th at 1194 n.4 (citations omitted). (b) Direction from this Court is necessary in light of the numberof occasions in which class action appellate decisions address standing issues in unpublished as well as published opinions. For example: e Mostajo v. Anchor General Ins. Co., No. G033640, 2005 Cal.App.Unpub. LEXIS 2525 (4th App. Dist., Div. 3, Mar. 22, 2005). e Williams v. Bre Property Investors, et al., No. A111414, 2006 Cal.App. Unpub. LEXIS 6850 (1st App. Dist., Div. 1, Aug. 7, 2006). ° Santiago v. Kia Motors America, Inc., No. G036985, 2007 Cal. App. Unpub. LEXIS 4792 (June 15, 2007). ° Bronk v. Talarico, No. B1854000, 2007 Cal.App.Unpub. LEXIS 1540 (2d App.Dist., Div. 3, Feb. 28, 2007). ° Yip v. Zia, et al., No. B188228, 2007 Cal. App. Unpub. LEXIS 3243 (2d App.Dist., Div. 3, Apr. 24, 2007). ° Grinberg v. Maria's Holding Corp., No. B244535, 2013 Cal.App. Unpub. LEXIS 8324 (2d App.Dist., Div. 4, Nov. 18, 2013). e Alonzo v. First Transit, Inc., No. B253699, 2015 Cal.App. Unpub. LEXIS 7415 (2d App. Dist., Div. 7, Oct. 15, 2015). The aforementioned cases are cited not as authority on any legal issue, but only as an indicationthat the standing issue is important and needs resolution by this Court. While these unpublished? decisions were predominately consistent with Trotsky, supra, one case, Santiago v. Kia Motors, in dismissing an unnamedclass member's appeal, relied on Eggert: A SupremeCourt decision requiring dismissal of an appeal by non-parties to a class action, Eggertv. 3 See accompanying Appellant's Motionfor Judicial Notice in Support of Petition for Review and supporting documents. Pac. States §. & L. Co. (1942) 20 Cal.2d 199 (Eggert), applies a fortiori to this case. To the degree, of course, that the rule relied on by the Mrs. Gooch court might arguably be read to contradict Eggert, the latter [Eggert] case controls. Santiago, supra, 2007 Cal. App. Unpub. LEXIS 4792 at *6 and *11, respectively. (c) Another unsettled area of law that this Court could clarify concernsthe very designation of this problem as one of standing (Restoration Hardware Op. at *21-*22). This Court's attention is directed to Jasmine Networks, Inc. v. The Superior Court ofSanta Clara Co., 180 Cal.App.4th 980 [103 Cal.Rptr.3d 426] (6th App. Dist. Dec. 29, 2009). Although discussing standingin the context of standing to sue, Jasmine raises an argumentthat appears relevant to appellate standing as well. This [standing] concept "has been largely a creature of twentieth century decisions ofthe federal courts."... It is rooted in the constitutionally limited subject matterjurisdiction of those courts.... (...["The threshold requirements are attributed to the ‘case’ and 'controversy' terms that define the federal judicial powerin Article III..."].) "There is no similar requirementin ourstate Constitution..." Id. at 990 (citations omitted). Onthe federal side, Devlin v. Scardelletti, 536 U.S. 1 (June 10, 2002), also indicates that standing is not the appropriate conceptof legal analysis regarding the right of unnamed class membersin class actions to appeal. Although the Fourth Circuit framed the issue as one of standing, [Scardelletti v. Debarr, 265 F.3d 195 (4th Cir. 2001),| at 204, we begin byclarifying that this issue does not implicate the jurisdiction of the courts under Article III of the Constitution. Nor do appeals by nonnamed class membersraise the sorts of concernsthat are ordinarily addressed as a matter of prudential standing.... Devlin, 536 U.S.at 6 and7, respectively. 3. This Court should grant review because the Restoration Hardware decision's reliance on this Court's decision in Eggert involves an important issue of public policy regarding the appellate rights of unnamed class membersin class actions. Each year millions, if not tens of millions, of Californians are involuntarily brought into class action litigation as unnamed class members. Their rights are adjudicated without their active participation and appealis the only mechanism that allows them to obtain judicial review oftrial court decisions affecting their rights. The burdensplaced on unnamed class members by Restoration Hardware in order to obtain appellate standing is a public concern that warrantsthis Court's attention. Consumers broughtinto class action litigation without their permission should not have the burden of being obligated to file complaints in intervention and motionsto vacate to protect their rights. Equally important, these burdens are unnecessary and superfluousto the extent that intervention by an unnamed class member whofiles an objection and attends a fairness hearing must be granted as a matter of right. [If the person seeking intervention claimsan interest relating to the property to transaction whichis the subject of the action and that personis so situated that the disposition of the action mayas a practical matter impair or impedethat person's ability to protect that interest, unless that person's interest is adequately represented by existing parties, the court shall, upon timely application, permit that person to intervene. (California Code of Civil Procedure, section 387(b) (emphasis added).) The Restoration Hardware's requirements of motions to intervene and motionsto vacate the judgment make unnecessary work for objectors, class counsel, defense counsel, the trial court judge, and appellate courts. They also dissuade unnamedclass members from seeking appellate review whentheir rights are violated. 4. This Court should grant review becausethere is a potential that this issue will not be raised in this Court in the foreseeable future. Class Member Muller respectfully requests that this Court grant review of the Restoration Hardware decision because the issue of unnamed class members’ ability to obtain appellate standing merits this Court's review now. Eggert, supra,isa 74-year-old, two-page decision bereft of discussion of legal principles or policy arguments. Asnoted by Seventh Circuit Court of Appeal Judge Frank H. Easterbrook, basic issues of class action jurisprudence are often left unresolved: Because a large proportion of class actionssettl[e] or [are] resolved in a way that overtakes procedural matters, some fundamental issues aboutclass actions are poorly developed.... But, the more fundamental the question and the greaterthe likelihoodthat it will escape effective disposition at the end ofthe case, the more appropriate is an appeal... Blair v. Equifax Check Services, Inc., 181 F.3d 832, 835 (7th Cir. 1999) (emphasis added). 5. This Court should grant review because the judiciary has a special responsibility to ensure the proper functioning of the class action mechanism. Theclass actionis a judicial creation. California courts have a special role ("The courts are supposed to be the guardiansofthe class." Kudlar v. Foot Locker Retail, Inc., et al.4) in ensuringthat the rights of unnamed class members in the appellate process are protected. This Court should at least reconsider Eggert in light of more current federal practice, noting that "a sea-change (sic) in the nature of class actions" has occurred (Jn re Prudential Ins. Co. Am. Sales Practice Litig., 148 F.3d 4 168 Cal.App.4th 116, 129 [85 Cal.Rptr.3d 20] (Ist App. Dist. Oct. 14, 2008) (citations omitted). 283, 323 (3d Cir. July 23, 1998)), which this Court has suggested can provide guidance to California courts. There is now confusion and uncertainty about the procedures required for unnamed class membersto protect their appellate rights. Theresponsibility of the judiciary to ensure the proper functioning of the class action mechanism extends to appellate courts as well. While the statements in In re GM Trucks and Zuckerrefer to the authority of district, not appellate, courts in connection with class action settlements, the cases make clear that reviewing courts retain an interest — a most special and predominate interest — in the fairness of class action settlements and attorneys' fee awards. Inre Cendant PRIDESLitig., 243 F.3d 722, 731 (3d Cir. Mar. 21, 2001) (emphasis added).> STATEMENT OF THE CASE The detailed facts of this case are available in the "Factual and Procedural Background" contained in the Restoration Hardware opinion (see Exhibit 1, p. 2). This Statement of the Case will highlight the issues specifically relevant to this appeal, as well as note the inaccuracies in the court of appeal's statement of "Factual and Procedural Background." Michael Hernandezfiled this class action in the San Diego Superior Court in 2008,alleging that Defendant Restoration Hardware violated Civil Code § 1747.08 of the Song-Beverly Credit Card Act of 1971 by requesting and recording zip codes from consumers whoused a credit card for purchasing items in Defendant's Californiaretail stores. 5 "[I]n the absenceofcontrolling state authority, California courts should utilize the procedures of [R/]ule 23 ofthe Federal Rules ofCivil Procedure (28 U.S.C.) to ensure fairness in the resolution of class action suits." Jolly v. Eli Lilly & Co., 44 Cal.3d 1103, 1118 [245 Cal. Rptr. 658] (Apr. 7, 1988). 10 On June 19, 2013, Plaintiff Class Member Muller filed a "Notice of Appearance of Additional Counsel" in the litigation (Appellant's Appendix ("AA")at 3): The undersigned counsel hereby appears as additional counsel on behalf of Plaintiff Class Member Francesca Mullerin the above- captioned class action. in response to a "Notice of Pendency of Class Action"she received (AA 1, 2). The June 2013 notice to potential class members advised them of the pending class action and explained they had the option of (1) remaining as part of the class and being bound by the judgment, or (2) excluding themselves from the class and not being bound by any judgment. It also advised that, if they elected to remain in the class, they had the option of entering an appearance through counsel. Restoration Hardware Op. at *3 (emphasis added). Class Member Muller "did not moveto intervenein the action, or to join as an additional class representative, or to be substituted for Michael Hernandez and Amanda Georginoas class representative." Restoration Hardware Op.at *3. The issues regarding the class's damage claims were decided at a benchtrial in January 2014. Byvirtue of the court's decision on the merits, a common fund of $36,412,350 was created. After thetrial court's decision on the merits and the establishment of a settlement fund, Class Counsel directly negotiated a settlement of their fee with the Defendant. After meeting and conferring at arms-length (sic) with Restoration Hardware to avoid furtherlitigation on this issue, Class Counsel agreed to request only 25% of the common fund and Restoration Hardwareagreed not to opposethis request. (Decl. James R. Patterson in Support of Mot. for an Award of Attorneys'Fees,etc., Respondents’ Appendix to Opposition Brief ("RA"), at 122:12-14.) Plaintiffs' counsel filed a "Notice of Motion and Motion for: 1) Award of Attorneys’ Fees,etc." (RA 87), setting September 5, 2014, as the date for the hearing 11 on the motion. Class Counsel requested a commonfund attorneys' fee award of 25% of the class's recovery, or $9,103,087.50, as a reasonable attorneys'fee. No notice was sent to class members, advising them that Class Counsel sought a fee of 25% (or $9.1 million) to be paid out of their recovery. Thusly, there was no mechanism for unnamed class membersto file objections or even become aware that Class Counselhadfiled a fee motion. On September2, 2014, Plaintiff Class Member Muller filed a "Request for Clarification and to Appear Telephonically at the September 5, 2014, Hearing" (AA 5), on Class Counsel's motion. On September 5, 2014,thetrial court held a hearing at which Class Counsel and Defendant's counsel participated, as well as counsel for Class Member Muller, who objected to the court's approval of Class Counsel's fee request: At the hearing on the attorney fee application, Muller objected that considering the attorney fees application withoutfirst giving class members notice of the fee application and the right to appear and comment on the application was a violation of class action procedures becausethis fee award was"a settlement as regards to the attorneys’ fees..." Restoration Hardware Op.at *8. Thetrial court approved the negotiated attorneys' fee as requested and filed its Final Judgment on September 29, 2014. (AA 14.) On November24, 2014, Plaintiff Class Member Mullerfiled a timely Notice of Appeal (AA 29) of the trial court's Final Judgmentto the Fourth District Court of Appeal. On March 14, 2016, the Court of Appeal for the Fourth Appellate District issued its published opinion (Exhibit 1 attached), dismissing Class Member Muller's appeal on the ground oflack of standing (without reaching the merits of her claim). 12 Errors in the Court of Appeal's "Factual and Procedural Background" 1. Three statements in the Restoration Hardware Opinion's "Factual and Procedural Background" (Exh.1, p. 2) regarding events in thetrial court are not supported by the record. (a) Thefirst incorrect factual finding was the appellate court's conclusion that Restoration Hardware wason “all fours" with Eggert (see page 2, supra, commencing with the quote "Eggert appears to be on‘all fours' with the present action....". Restoration Hardware Op.at *14). In makingthis finding, the appellate court ignores a crucial distinction in Class Member Muller's appeal regarding notice. In the Eggert case, notice was provided to class members: The court also made an order, directed to plaintiff andall other persons interested, to show cause whyit should not make an order fixing reasonable attorneys' fees. Notice of the order was published daily until the return date. Eggert, supra, 20 Cal.2d at 200 (emphasis added). Ironically, on the issue of notice, Restoration Hardware, although relying on Eggert, ignores its factual dissimilarities. Unlike Eggert, it was only after the court approved the fee for Class Counsel (AA 14)that the parties sent a "Notice of Judgmentin Class Action" (AA 25) to class members, advising class membersofthe terms of the court's decision on damages duetheplaintiff class. However, even that notice made no mention of the amountofthe attorneys' fee that the trial court had awarded to Class Counsel. (b) The secondincorrect factual finding by the appellate court stated: [A]nd the amountofthe attorney fee award was not madebythe parties during negotiations to which unnamed class members were not privy, but was instead made by the court as part of adversarial proceedings, which brings this action squarely within 13 the holding ofEggert and also obviates oneofthe concerns articulated by Powers. (See Powers, atp. 1256.) (Restoration Hardware Op.at *21 n.6 (emphasis added).) This is simply not correct. Just the opposite is true. The amountofthe attorneys' fee was negotiated solely between Plaintiffs' counsel and Defendant's counsel (see reference to Decl. of JamesR.Patterson, p. 15, supra) — a negotiation to which unnamed class members were not privy. Furthermore, the fee was not determined by the trial court as part of an adversarial proceeding as the parties had entered into a settlementofthe issue. (c) The appellate court's third incorrect factual finding was: Muller ... did not argue the amount the court's tentative ruling proposed to award was excessive. Restoration Hardware Op. at *8 (emphasis added). Class Member Muller challenged the lodestar cross-check calculation by the trial court, and in doing so argued by implication that the purported check on the percentage used by the court allowed for an excessivefee. Mr. Schonbrun: I also disagree with ... the statement in your opinion that the lodestar is the amountoftime the lawyers workedon the case at their hourly rate, which I think is a misstatement of the law. The law is — and ... I don't believe that your opinion madeclear that the lodestar approachis the reasonable numberof hours that have been worked onthe case, and that if multiplied by the prevailing market rate for the service rendered... (Reporter's AppealTr., 9/5/14, Vol. 1, at 23:3-17; emphasis added.) 14 LEGAL DISCUSSION I. THE RESTORATIONHARDWARE COURT'S RELIANCE ON EGGERT, A 74-YEAR-OLD TWO-PAGE DECISION, SHOULD BE REVISITED A. Restoration Hardware's Reliance on Eggert Should Be Reconsidered. [I]t is a settled rule of practice in this state that only a party to the record can appeal.... Appellants were not namedasparties to the action nor did they take any appropriate steps to becomeparties to the record. Eggert, supra, 20 Cal.2d at 201. [W]e begin with our analysis of whether Muller may prosecute this appeal. [B]ecause we conclude the separate "party" element is absent here. Muller does not have standing to appeal the judgment... Restoration Hardware Op.at *8, *13, *2, respectively. Indeed, in shepardizing Eggert, only one published® authority, Shermanv. Allstate Ins. Co., 90 Cal.App.4th 121 [108 Cal-Rptr.2d 722] (2d App. Dist., Div. 7, June 25, 2001) (see page 20, infra), other than Restoration Hardwarehaseverrelied on Eggert’ to support a holding that an unnamed class memberin a class action needs to intervene in order to obtain appellate standing. See County ofAlameda v. Carleson (1971) 5 Cal.3d 730, 736-737 [97 Cal. Rptr. 385, 488 P.2d 953] [only an aggrieved party has standing to appeal]; Eggert v. Pac. States S. & L. Co. (1942) 20 Cal.2d 199, 200-201 [124 P.2d 815].... 6 And one unpublished opinion, see Santiago, supra, 2007 Cal.App. Unpub. LEXIS 4792. 7 The Mrs. Gooch court (127 Cal.App.4th at 396, supra) was aware of Eggert and cited it, but only on the issue of aggrieved parties. It did not consider Eggert's "party to the record"criterion applicable. 15 Mrs. Gooch, supra, 127 Cal.App.4th at 396. I. THE RESTORATIONHARDWARE DECISION, REQUIRING INTERVENTION BY UNNAMED CLASS MEMBERSTO OBTAIN APPELLATE STANDING, CONFLICTS WITH NUMEROUS CALIFORNIA APPELLATE DISTRICT DECISIONS A. The Filing of an Objection and Appearance at a Fairness HearingIs Sufficient for Unnamed Class Members to Obtain Appellate Standing. 1. The Restoration Hardware decision contradicts the Second Appellate District, Division Five's 1975 decision in Trotsky, supra, which held: As a memberofthe affected class who appeared at the hearing in response to the notice, and whose objections to the proposed settlement were overruled, appellant is a party agerieved, and has standing to appeal. Trotsky, 48 Cal.App.3d at 139 (emphasis added). The Restoration Hardware court found that Trotsky incorrectly basedits analysis on federal class action procedures, and also that federal procedure was in dispute. However, Trotsky did not ... make any effort to reconcile its conclusion with Eggert's holding that unnamed class members whose only appearance wasto objectto the attorneys’ fees had no standing to appeal because they were not "parties" and did not avail themselves of the "ample opportunity ... to becomeparties of record...." (Eggert, supra, 20 Cal.2d at p. 201.) Trotsky's analysis is also flawed becauseit relied primarily on federal cases.... Thus, because Trotsky relies on federal authority that has been at least undermined by contrary federal authority,... we conclude the cases on which Muller relies should not be followed. Restoration Hardware Op.at *17-18 (citation omitted), *18, and *20, respectively. 16 However, Trotsky's holding is consistent with current United States Supreme Court jurisprudence. See pages 22 through 25, infra. 2. The Second Appellate District's decision in Mrs. Gooch, supra, contradicts the Restoration Hardware Decision. Mrs. Gooch directly rejected the not-a-named-party argument upon which the Restoration Hardware's holding is based. Atthe threshold we reject Whole Foods' contention Giampietro lacks standing to appeal the court's order denying his motion for attorney fees because he was not a namedparty in ConsumerCause's lawsuit. A class member who appears at a fairness hearing and objects to a settlement affecting that class member has standing to appeal an adverse decision notwithstanding the fact that the member did not formally intervene in the action. Mrs. Gooch, 127 Cal.App.4th at 395 (emphasis added). 3. The Sixth Appellate District's decision in Wershba, supra, contradicts the Restoration Hardware Decision: Wershba held: In the context of a class settlement, objecting is the procedural equivalent of intervening. Class members who appearat a final fairness hearing and object to the proposed settlement have standing to appeal. Wershba, 91 Cal.App.4th at 253 and 235 (emphasis added), respectively. Restoration Hardwareheld, contradicting Wershba: [W]e conclude 7rotsky’'s analysis of standing is flawed and that Trotsky .... should not be followed. Restoration Hardware Op.at *18 (citations omitted). The Restoration Hardware court ruled that Wershba, supra, and Mrs. Gooch, supra, both relied upon a purportedly flawed 1975 decision in Trotsky, 17 which Restoration Hardware asserts failed to consider Eggert and was based on a misinterpretation of federal law. However, neither of the cases cited by Muller, Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Markets, Inc.... and Wershba v. Apple Computer, Inc. ..., made any effort to reconcile their conclusions with Eggert, and instead rooted their conclusions in the analysis contained in Trotsky v. Los Angeles Fed. Sav. & Loan Assn..... Restoration Hardware Op. at *15-*16 (citations omitted). The Restoration Hardware decision contradicts the First Appellate District's 1990 decision in Rebney, supra, which held: [A]ll they [unnamed class members]have to do is appear as objectors at the fairness hearing and then take an appeal. Rebney, 220 Cal.App.3d at 1131 (emphasis added). 4. The First Appellate District, Division One's decision in Chavez, supra, contradicts the Restoration Hardware opinion: In fact, a class member whotimely objects to a settlement has standing to appeal regardless of whether the member formally intervened in the action. Chavez, 162 Cal.App.4th at 51 (emphasis added). The Restoration Hardware court ignored: (a) Chavez: The Restoration Hardware decision contradicts the First Appellate District's 2008 decision in Chavez, supra, which held: In fact, a class member whotimely objects to a settlement has standing to appeal regardless ofwhether the member formally intervened in the action. Chavez, 162 Cal.App.4th at 51 (emphasis added); 18 (b) Simons: The Restoration Hardware decision contradicts the First Appellate District's 1984 decision in Simons, supra, which held: As a memberofthat class, Horowitz was an aggrieved party to the action.... Horowitz therefore did not need to obtain "permission" to intervene, and could simply appealthetrial court's judgmentby filing a notice of appeal. Simons, 151 Cal.App.3d at 843 (citation omitted; emphasis added); and, (c) Roos v. Honeywell International, Inc.: The Restoration Hardware decision contradicts the First Appellate District's 2015 decision in Roos, supra, which held: [T]he objectors sufficiently demonstrated their standing by asserting in their objections that they were class members and by otherwise complying with the prerequisites for filing objections set forth in the notice of settlement. Roos, 241 Cal.App.4th at 1483-84 (emphasis added). 5. The Fourth Appellate District, Division Three's decision in Consumer Defense Group, supra, contradicts the Fourth Appellate District, Division One's decision in Restoration Hardware: [I]t is enough that objectors appear and object to the settlement in the trial court for there to be a right to appeal. Consumer Defense Group, 137 Cal.App.4th at 1207 (emphasis added). The Restoration Hardwaredecision surprisingly does not mention Consumer Defense Group. However, becausethat case did not consider Eggert andis based on federal authorities, it would presumably be categorized along with and suffer that same analysis as Wershba, Trotsky, and Mrs. Gooch. 19 6. Except for Restoration Hardware, the only other published decision that requires intervention by unnamed class members is the Second Appellate District's decision in Sherman v. Allstate, supra, which relies in part on Eggert: Eggert found that unnamed class members whose only appearance wasto objectto the attorneys’ fees had no standing to appeal on the ground they were notparties and had "ample opportunity ... to becomeparties ofrecord..." (Eggert v. Pac. States S. & L. Co., supra,, 20 Cal.2d at p. 201.) Wefind, however, that mere participation in the proceedingsis insufficient to confer appellate standing. Sherman, supra, 90 Cal.App.4th at 127. Hil. THE RESTORATIONHARDWARE COURT'S RELIANCE ON MARSH IS MISPLACED A. Restoration Hardware Cites to Marsh v. Mountain Zephyr, Inc., but Fails to Acknowledgethe Significance of the Word "Generally" in the Marsh Court's Holding. Marshstates: Thus, to have standing to appeal, a person generally must be both a party of record and sufficiently "aggrieved" by the judgmentor order. Marsh v. Mountain Zephyr, Inc., 43 Cal.App.4th 289, 295, 295 [50 Cal.Rptr.2d 493] (4th App. Dist., Div. 1, Mar. 6, 1996) (emphasis added). Restoration Hardwareuncritically repeats several times the language "generally" from Marsh: [B]ecause we concludethe separate "party" elementis absent here. (See, e.g., Marsh, supra, 43 Cal.App.4that p. 295 ["to have standing to appeal, a person generally must be 20 both a party of record and sufficiently "aggrieved" by the judgmentor order"];.... As a generalrule, only parties of record may appeal... (See, e.g., Marsh v. Mountain Zephyr, Inc. (1996) 43 Cal.App.4th 289, 295 [50 Cal. Rptr. 2d 493] (Marsh)["to have standing to appeal, a person generally must be both a party of record and sufficiently 'aggrieved' by the judgment or order"}.) (Restoration Hardware Op.at *13 n.4 and *10 (emphasis added)), without considering the exceptions to the general rule that Marsh specifically identified. B. The Restoration Hardware Decision Cites to Marsh but Ignores Marsh's Specifically Stated "Exception" to the General Rule. Restoration Hardwarerepeats the "generally" qualification to the rule, but fails to address the exception identified in Marsh, namely that because unnamedclass members are "bound by the judgment" (Restoration Hardware Op.at *3), they need not become "parties to the record" in order to havethe right to appeal. One exception to the "party of record" requirement exists in cases where a judgmentor orderhas a res judicata effect on a nonparty. "A person who would be bound by the doctrine of res judicata, whether or not a party of record,is ... [entitled] to appeal." Marsh, supra, 43 Cal.App.4th at 295 (citations omitted). Accord, Life v. County ofLos Angeles, 218 Cal.App.3d 1287, 1292 [267 Cal.Rptr. 557] (2d App. Dist., Div. 3, Mar. 20, 1990); Leoke v. County ofSan Bernardino, 249 Cal.App.2d 767, 771[57 Cal.Rptr. 770] (4th App. Dist., Div. 2, Mar. 29, 1967); and Consumer Advocacy Group, Inc. v. Kintetsu Enterprises ofAmerica,et al., 141 Cal.App.4th 46, 58 [45 Cal.Rptr.3d 647] (2d App. Dist., Div. 8, July 6, 2006). 21 IV. THE RESTORATIONHARDWARE COURT'S LEGAL ANALYSIS OF FEDERAL LAW, WHICH IT USES TO REJECT TROTSKY'S REASONING,IS SIMPLY WRONG A. There Is No Federal Authority Contrary to the Proposition Argued by Class Member Muller That Intervention Is Not Required under Federal Law. 1. The Restoration Hardware court is wrongin its review of federal authorities. It holds that the Mrs. Gooch and Wershba decisionsrely on Trotsky and should not be followed because Trotsky had wrongly interpreted federal jurisprudence. See page 16, supra, of this Petition, commencing with the quote "Thus, because Trotsky relies on federal authority..." Restoration Hardware Op.at *20. The Restoration Hardware decision incorrectly interprets the United States Supreme Court's decision in Marino v. Ortiz, 484 U.S. 301 (1988), to support its assertion that there is no consistent federal rule on the question of an intervention requirement for unnamed class members in class actions to obtain appellate standing: We acknowledge the federal decisions, even from the United States Supreme Court (compare Marino v. Ortiz (1988) 484 U.S. 301 [nonparty class members whodid not seek to intervene may not appeal approval of settlement] with Devlin v. Scardelletti (2002) 536 U.S. 1 [reaching opposite conclusion without disapproving Marino}), are not uniform. Restoration Hardware Op. at *20 n.6 (emphasis added). 2. Restoration Hardware's assertion that a comparison between the Marino v. Ortiz, 484 U.S. 301 (1988), and Devlin v. Scardelletti, 536 U.S. 1 (2002), decisions confirms a lack of uniformity at the Supreme Court level is based on a misunderstanding ofMarino. [B]ecause petitioners were not parties to the underlying lawsuit, and because they failed to intervene for purposes of appeal, they may not appeal from the consent decree approving that lawsuit's settlement.... 22 U C A S A N H R N R S A E o c Marino, supra, 484 U.S. at 304. United States Supreme Court rulings on unnamed class members'rightto appellate standing are not in conflict. Restoration Hardware missesa crucial distinction between non-named class members(as noted in Devlin) and non-named parties (persons not membersofthe class (as noted in Marino). The Devlin decision clearly identifies this distinction. As Devlin specifically points out, Marino is not in conflict because Marino did not involve an issue of an unnamed class member, but rather persons who were outside oftheclass. Wegranted certiorari ... to resolve a disagreement among the Circuits as to whether nonnamed class members who fail to properly intervene may bring an appeal ofthe approvalof a settlement. Marino v. Ortiz, supra, is not to the contrary. In that case, werefused to allow an appealof a settlement by a group of white police officers who were not members ofthe class of minority officers that had brought a racial discrimination claim against the New York Police Department. Wehold that nonnamed class memberslike petitioner who have objected in a timely mannerto approval of the settlement at the fairness hearing have the powerto bring an appeal withoutfirst intervening. Devlin, supra, 536 U.S.at 6, 9, and 14, respectively (emphasis added). 4. It should also be noted that Restoration Hardwarecites no post-Devlin legal commentary that raises the issue of a lack of uniformity at the federal level on the issue of appellate standing for unnamed class members. B. ‘Restoration Hardware Adopts the Rulings of Federal Courts of Appeals' Decisions That Were Overruled by Deviin. 1. The 1992 and 1998 federal authorities relied on by the Restoration Hardware decision, Felzen v. Andreas, et al., 134 F.3d 873 (7th Cir. Jan. 21, 1998), 23 and Croyden Associates v. Alleco, Inc., et al., 969 F.2d 675 (8th Cir. July 13, 1992), have been superseded8 by the 2002 Devlin decisionasit pertains to unnamed class members’ appellate rights. Restoration Hardwarecites Felzen: [Slee also Felzen v. Andreas (7th Cir. 1998) 134 F.3d 873 [class members must interveneas parties in order to appeal from adverse decisions]... [A]ccord, Felzen v. Andreas, supra, 134 F.3d 873.... (Restoration Hardware Op. at *18 and *19, respectively), and Croyden Associates: However,it appears numerousfederal courts have subsequently held that nonparty class members may not appeal a judgment. (See Croyden Associates v. Alleco, Inc. (8th Cir. 1992) 969 F.2d 675, 678, 678-680 [noting the "circuits are divided on this issue, and some have inconsistent holdings"... (Restoration Hardware Op. at *18; citations omitted), in support ofits holding, but fails to appreciate that both have been overruled by the United States Supreme Court in Devlin, supra. 2. Powers v. Eichen, 229 F.3d 1249 (9th Cir. Oct. 20, 2000). The Restoration Hardware court's reliance on Powers reflects a misunderstanding of the proceedings in the superior court as discussed on pages 13-14, supra. Moreover, whatever merit Powers‘s rationale might have in the context of a proposed settlement ofa classaction ... the amountofthe attorney fees awarded was not madeby the parties during negotiations to which unnamedclass members were not privy, but was instead madeby the court as part of adversarial proceedings... 8 "The phenomenonofreliance on subsequently overruled authority is [not unique]." Rodriguez v. Bethlehem Steel Corp., et al., 12 Cal.3d 382, 391-92 [115 Cal.Rptr. 765] (Aug. 21, 1974). 24 Restoration Hardware Op.at *21 n.6. In the first place, the amount ofthe attorneys’ fee waspart of a negotiation process between Class Counsel and Defendants, and unnamedclass members werenot privy to that process. Secondly, the fee award was not made by the trial court as a result of an adversary proceeding betweenthe parties. (See pages 13- 14, supra, regarding errors in the "Factual and Procedural Background"ofthe Restoration Hardware Opinion.) Finally, the Restoration Hardware decision misapplies the Powers decision — which concerned appeals of attorneys' fee awards — by asserting "whatever merit Powers' rationale might have in the context of a proposed settlementof a class action..." (Restoration Hardware Op. at *21; emphasisin original.) V. NUMEROUS UNPUBLISHED DECISIONS ADDRESS UNNAMED CLASS MEMBERS' APPELLATE STANDINGISSUES, WARRANTING CLARIFICATION BY THIS COURT A. The Standing Issue Is an Important Procedural Issue, Frequently Addressed by California Appellate Courts. In class actions, an unnamed class memberordinarily lacks standing to challenge the judgmentin a class action. (See Eggert v. Pac. States S. & L. Co. ....) However, "[i]n the context of a class settlement, objecting is the procedural equivalent of intervening." (Wershba v. Apple Computer, Inc.....) Grinberg v. Maria's Holding Corp., supra, 2013 Cal.App. Unpub. LEXIS 8324at *16, relying on Eggert, 20 Cal.2d at 200-01, and citing Wershba, 91 Cal.App.4th at 253. Furthermore, there is no question that as a memberoftheclass, Bronk... was aggrieved.... [S]he has standing to appeal.... Bronk v. Talarico, supra, 2007 Cal.App.Unpub. LEXIS 1540 at *16 n.4 (citation omitted). 25 ([Slee Devlin v. Scardelletti ... {an unnamed class member who objected to a settlementin a class action is a party for purposes of appeal].) Yip v. Zia, supra, 2007 Cal. App. Unpub. LEXIS 3243 at *37-*38, relying on Devlin, 536 US.at 6-11. A nonparty may havestanding to appeal, however, where "a judgmentor order hasa res judicata effect on the nonparty." Alonzo v. First Transit, Inc., supra, 2015 Cal.App. Unpub. LEXIS 7415, at *11 (citation omitted). " ..'A person who would be bound by the doctrineofres judicata, whetheror nota party of record,is . . . [entitled] to appeal.'..." Mostajo v. Anchor GeneralIns. Co., supra, 2005 Cal.App.Unpub. LEXIS 2525 at *11, citing Marsh, supra, 43 Cal.App.4th at 295 (internal citation omitted). In any event, unnamed class members whohavenot appearedin the proceeding, and are not aggrieved bythetrial court's decision, lack standing to appeal. (Code Civ. Proc., § 902; see Eggertv. Pac. States S. & L. Co. (1942) 20 Cal.2d 199, 201....) [C]onsideredparties to it for purposes of res judicata.... Williams v. Bre Property Investors, et al., supra, 2006 Cal.App. Unpub. LEXIS 6850, at *8, *9 (citations omitted). VI. THE RESTORATIONHARDWARE DECISION IS CONTRARY TO PUBLIC POLICY The Restoration Hardware court references the public policy benefits of intervention; however, the federal courts, in examining the benefits and detriments of an intervention requirement, have cometo the opposite conclusion. Equally important, an overwhelming numberofappellate courts in this state have cometo this same conclusion as the federal courts (see pages 15-20, supra). Intervention not only places 26 unwarranted procedural obstacles upon unnamed class members, but creates unnecessary costs and burdenson class counsel, defendants, and the courts as well. A. Unnamed Class Members MayIntervenein Class Actions Asof Right. According to Restoration Hardware, an unnamed class member mustfile a complaint in intervention and a motion to vacate the judgment (Op. *22-*23), and,if denied, appeal the denialofthe intervention motion. Thisis all an unnecessary expenditure ofthe parties' time and judicial resources. Code of Civil Procedure section 387(b) recognizes the right of individuals that have been affected by a judgmentto interveneasofright. If any provision of law confers an unconditionalrightto intervene or if the person seeking intervention claims an interest relating to the property to transaction whichis the subject of the action and that person is so situated that the disposition of the action may as a practical matter impair or impede that person's ability to protect that interest, unless that person's interest is adequately represented by existing parties, the court shall, upon timely application, permit that person to intervene. California Code of Civil Procedure, § 387(b) (emphasis added). Because an unnamedclass member whohasobjected to a settlement and/or fee approval will, by definition, be affected by the judgment, and, as an objector cannot be represented by the existing parties who favor approval of the settlement to which the class memberobjects, intervention is of right. There is no point in requiring such unnamed class member/objector to go through the motions (no punintended) of a process whose outcome is mandated by law. B. The Restoration Hardware Decision's Public Policy Arguments Cannot Withstand Scrutiny. The Restoration Hardware decision makes the unsupportedassertion that intervention furthers the objectives of the class action mechanism: 27 Intervention in the instant action would have permitted Muller to opposethe attorney fee award and preserve the objectives of the class action: orderliness, efficiency, and fairness to other class members. (Restoration Hardware Op. at *22.) The decision offers no showing that appeals by unnamed class members have imposed any kind of burden on the courts, or in any way interfered with "orderliness, efficiency, or fairness to other class members" (Op.at *22). All its references are to hypothetical burdens (Op. at *21 n.6). At the same time, the Restoration Hardware Decision imposessignificant burdens on potential appellants and creates its own inefficiencies on everyone involvedin the litigation. It should be clear that the costs imposed by the intervention/motion to vacate procedures on an unnamedclass member,as well as class counsel, defendants, and the courts, in time and expenseare hardly minimal. However,it is the benefits conferred that are actually minimal. For example: [I]ntervention would put the class defendant on notice of a possible appeal from the judgment. (Restoration Hardware at *22.) The decision offers no explanation of whythis benefit is significant. Intervention would havethe effect of giving Muller a clear avenue from which to challenge the attorney fee award, because as a party Muller could not be ignored by the court, the class plaintiffs, or the class defendant... Restoration Hardware Op. at *22. This purported benefit ignores the fact that filing an objection and appearing at a fairness hearing could provide the same opportunity. [A]dhering to Eggert's approach would not leave nonparty class members without protection or appellate recourse. Under California law, where class members are given the option of opting out, they are not bound by the judgmentin the class action but instead may pursue their own action. 28 (Restoration Hardware Op. at *21.) This statement ignores the fact that opting out is typically required no later than the timeto file objections, before the court has ruled on any objection. Indeed, in the instant case, the June 2013 Notice ofPendency of Class Action (AA2), advising class membersoftheir right to exclude themselves from the litigation, occurred well before the January 2014 benchtrial took place. The opt-out procedureis not a protection for class members becauseit occurs in advance of any rulings on the settlement and attorneys' fees. Restoration Hardwarealso fails to appreciate that an unnamed class member whoobjects to a class action settlementor attorneys’ fee award need not (and doesnot) representthe class in orderto file a valid objection and pursue it on appeal. First, unnamed class members cannotrepresent the class absent the procedures outlined in Rule 23 becausethetrial court has not conducted hearings to determine whetherthe appellants wouldsatisfactorily represent the interests of the other class members. Restoration Hardware Op. at *18-*19 (emphasis added). C. Powers v. Eichen Offers Public Policy Benefits Superior to That of Restoration Hardware. The Restoration Hardware decision claims Powers v. Eichen, supra, failed to confront the intervention issue. Powers ignored that permitting unnamed class membersto appeal a judgmentwithout seeking to intervene would create the same delays and burdens... Restoration Hardware Op.at *20-*21. This is not true. Complaints in intervention — and subsequent motionsto set aside the judgment — create delays and burdensnot only for the prospective appellant but also for class counsel, the defendants, andthetrial court (and potentially appellate court) judges. These are burdensand delays that would be in addition to the burdens and delays of an appeal. 29 Powers addressesthe public policy justifications forits rejection of the requirement of intervention: Assuring fair and adequate fee awards outweighs the dangerthat allowing appeals by non-intervening unnamedparties will complicate the settlement process. "Assuring fair and adequate settlements outweighs concernsthat non-intervening objectors will render the representativelitigation ‘unwieldy. Powers, supra, 229 F.3d at 1256 and 1255 (citation omitted), respectively. CONCLUSION The Restoration Hardware decision has created disagreement and confusion amongthe courts of appealof this state regarding how an unnamed class memberin a class action may obtain appellate standing. That fact, in addition to the other reasons raised in this Petition, makes a review of an issue that this Court has not addressed in 74 years necessary at the present time. Class Member Muller respectfully requests that the California Supreme Court grant this Petition for Review. Dated: April 21, 2016. Respectfully submitted, LauroWQhadun Lawrence W. Schonbrun Attorney for Plaintiff-Appellant and Petitioner Francesca Muller 30 CERTIFICATE OF COMPLIANCE Counsel of Record herebycertifies that pursuant to Rule 8.504(d)(1) ofthe California Rules of Court, the attached Petition for Review contains 7,983 words of proportionally spaced Times New Roman 13-point type as recorded by the word count of the Microsoft Office 2007 word processing system, andis in compliance with the type-volumelimitations permitted by the rules of court. Counselrelies on the word count of the computer program usedto preparethis Petition. Dated: April 21, 2016 Lawrence W. Schonbrun 31 CERTIFICATE OF SERVICE I declare that: I am overthe age of 18 years and not party to the within action. I am employed in the law firm of Lawrence W. Schonbrun, whosebusiness address is 86 Eucalyptus Road, Berkeley, California 94705, County ofAlameda. On April 21, 2016, I caused to be served a copy of the following document: PETITION FOR REVIEW _x_ by mail on the below-namedparties in said action, in accordance with CCP § 1013, by placing true and accurate copies thereof in a sealed envelope, with postage thereon fully prepaid, and depositing the same in the United States Mail in Alameda County, California, to the addresses set forth below: James R.Patterson, Esq. Allison Goddard, Esq. Patterson Law Group APC 402 W. Broadway, 29th FI. San Diego, CA 92101 Tel: (619) 756-6990 Fax: (619) 756-6991 jim@pattersonlawgroup.com Attorneysfor PlaintiffClass David F. McDowell Jr., Esq. Purvi G.Patel, Esq. Morrison & Foerster LLP 707 Wilshire Blvd., Ste. 6000 Los Angeles, CA 90017 Tel: (213) 892-5200 Fax: (213) 892-5454 dmcdowell@mofo.com PPatel@mofo.com Attorneysfor Defendant Restoration Hardware, Inc. Clerk, San Diego Superior Court Central Div., County Courthouse 220 W. Broadway,3rd FI. San Diego, CA 92101 Gene J. Stonebarger, Esq. Stonebarger Law 75 Iron Point Circle, Ste. 145 Folsom, CA 95630 Tel: (916) 235-7140 Fax: (916) 235-7141 gstonebarger@stonebargerlaw.com Attorneysfor PlaintiffClass Clerk, Court of Appeal Fourth Appellate District 750 B Street, Ste. 300 San Diego, CA 92101 32 I declare under penalty of perjury under the laws of the State of California that the foregoingis true and correct. Executed on April 21, 2016, at Berkeley, California. Murdee oro, Sandra Norris 33 Hernandez, et al., Pls. and Resp'ts; Francesca Muller, Pl. and Appellant v. Restoration Hardware, Inc., Def. and Resp't No. D067091, 2016 Cal.App. LEXIS 185 (4th App. Dist., Div. 1, Mar. 14, 2016) EXHIBIT 1 Page 1 2016 Cal. App. LEXIS 185,* ® * » ~— @LexisNexis’ 2 of 13 DOCUMENTS MIKE HERNANDEZetal, Plaintiffs and Respondents; FRANCESCA MULLER, Plaintiff and Appellant, v. RESTORATION HARDWARE,INC., Defendant and Respondent. D067091 COURT OF APPEAL OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION ONE 2016 Cal. App. LEXIS 185 March 14, 2016, Opinion Filed PRIOR HISTORY: {*1] APPEAL from a judg- ment of the Superior Court of San Diego County, No. 37-2008-00094395-CU-BT-CTL, William 5S. Dato, Judge. DISPOSITION: Appeal dismissed. SUMMARY: CALIFORNIA OFFICIAL REPORTS SUMMARY Thetrial court made a postjudgment award ofattor- ney fees in a consumerclass action that had been litigat- ed to judgment. (Superior Court of San Diego County, No. 37-2008-00094395-CU-BT-CTL, William S. Dato, Judge.) The Court of Appeal dismissed an attempted appeal by an absent class member who had appeared through counsel to object to the award. The court held that the absent class member lacked standing to appeal (Code Civ. Proc., § 902), even if aggrieved, because the absent class member was nota party of record and had taken no steps to be added as a namedplaintiff, despite having ample opportunity to do so. The court observed that Cal- ifornia Supreme Court precedent was controlling, that federal authority was inconsistent, and that a bright-line rule requiring party status to appeal a class action was appropriate because the cost of intervention was minimal and the benefits to both the parties and the court system were substantial. (Opinion by McDonald, J., with Huff man, Acting P. J., and Nares, J., concurring.) HEADNOTES CALIFORNIA OFFICIAL REPORTS HEADNOTES (1) Appellate Review § 7--Parties--Aggrieved and of Record.--Only a party aggrieved may appeal from a judgment (Code Civ. Proc., § 902). As a general rule, only parties of record may appeal, and the courts have interpreted § 902 to require the appellant both to have been a party below and to have been aggrieved by the judgment. (2) Parties § 6--Class Actions--Absent Members.--A class action is one prosecuted by named representative plaintiffs, who have a fiduciary responsibility to prose- cute the action on behalf of the absent parties. The class action structure relieves the unnamed class members of the burden of participating in the action, hiring counsel, and incurring costs. Indeed, the structure of the class action does not allow absent class members to become active parties, since to the extent the absent class mem- bers are compelled to participate in the trial of the law- suit, the effectiveness of the class action device is de- stroyed. Although unnamed class members may be deemed parties for the limited purposes of discovery, unnamed class members are not otherwise considered parties to the litigation. (3) Appellate Review § 7--Parties--Class Ac- tions--Absent Members--Standing to Ap- peal.--California Supreme Court precedent appeared to be on all fours with the present action: both involved a class action; both involved a matter litigated to judg- ment; both involved a challenge to the postjudgment attorney fee award to the counsel for the namedplaintiff; Exhibit 1-1 Page 2 2016 Cal. App. LEXIS 185, * both involved appellants who were membersofthe class, but not named parties, and who had appeared through counsel to object to the attorney fee award; and both in- volved members whotook no steps to be added as named plaintiffs. Accordingly, it was necessary to adhereto this precedent and dismiss the appeal. [Cal. Forms of Pleading and Practice (2015) ch. 40, Appeal: An Overview, § 40.13.] (4) Appellate Review § 7--Parties--Class Ac- tions--Absent Members--Standing to Ap- peal.--Unnamed class members whose only appearance was to object to the attorney fees have no standing to appeal because they are not parties and did not avail themselves of the ample opportunity to becomeparties of record. The party requirement of Code Civ. Proc., § 902, is not met merely because the "aggrieved" requirement of § 902 might also be satisfied as to a nonparty class member. (5) Appellate Review § 7--Parties--Class Ac- tions--Absent Members--Standing to Appeal.--Under California law, where class members are given the option of opting out, they are not bound by the judgmentin the class action but instead may pursue their ownaction. Even if they remain, California law provides that a per- son who is a nonparty may acquire appellate standing by intervening and moving to vacate the judgment (Code Civ. Proc., § 378). They may then appeal the order denying the motionto vacate. A bright-line rule requiring party status to appeal a class action is appropriate where the cost of intervention is minimal and benefits, to both the parties and to the court system, are substantial. COUNSEL:Law Office of Lawrence W. Schonbrun and Lawrence W. Schonbrun for Plaintiff and Appellant. Patterson Law Group, James R. Patterson, Allison H. Goddard; Stonebarger Law and Gene J. Stonebarger for Plaintiffs and Respondents. Noappearance for Defendant and Respondent. JUDGES: Opinion by McDonald, J., with Huffman, Acting P. J., and Nares, J., concurring. OPINION BY: McDonald, J. OPINION McDONALD,J.--In this class action, the class rep- resentatives alleged defendant Restoration Hardware, Inc. (RHI, committed numerousviolations of Civil Code section 1747.08, part of the Song-Beverly Credit Card Act of 1971 Ud., § 1747 et seq.). After a benchtrial, the trial court found RHI was liable for as many as 1,213,745 violations of that statute and set a penalty re- covery in the amount of $30 per violation, subject to RHI's right to dispute any specific claim. Under that judgment, RHI faced a total maximum liability of $36,412,350. In posttrial proceedings, class representatives re- quested the court order an award of attorney fees of $9, 103,087.50 (25 percent of the total maximum fund of $36,412,350 created by the judgment) to be payable to [*2] class counsel from the fund. RHI agreed it would not contest that request. Francesca Muller, a class mem- ber and the person prosecuting the present appeal, re- quested the court order notice of the attorney fee motion be sent to all class members. The court denied Muller's request, granted the attorney fee motion, and entered judgment in the action. Mullerthen filed a notice of ap- peal from the judgment. Muller asserts the court erred when it declined to order that notice be given to all class members of the hearing on the attorney fee award, and that the award was calculated in violation of applicable standards and procedures. Muller also claims the court's award was an abuse ofits discretion. Class representative Mike Her- nandez asserts Muller does not have standing to appeal the judgment and that the appeal should therefore be dismissed. Hernandez alternatively argues (1) no notice to the class of the attorney fee hearing was mandated and (2) the amount awarded as fees, as well as the procedure employed by the trial court for determining the amount of the attorney fee award, was proper. I FACTUAL AND PROCEDURAL BACKGROUND A. The Class Action Michae! Hernandezfiled this action in 2008 alleging [*3] defendant RHI violated Civil Code section 1747.08 by requesting and recording ZIP codes from consumers who used a credit card in purchase transactions in RHI's California retail stores. After years oflitigation, the court ultimately certified the case as a class action, appointed Michael Hernandez and Amanda Georginoasclass rep- resentatives (together Hernandez), and appointed Patter- son Law Group and Stonebarger Law as counsel for the class. The June 2013 notice to potential class members ad- vised them of the pending class action and explained they had the option of (1) remaining as part of the class and being bound by the judgment, or (2) excluding themselves from the class and not being bound by any judgment. It also advised that, if they elected to remain Exhibit 1-2 Page 3 2016 Cal. App. LEXIS 185,* in the class, they had the option of entering an appear- ance through counsel. Two weeks later, Attorney Schonbrun entered an appearancein the action on behalf of Muller. However, Muller did not moveto intervene in the action, or to join as an additional class representative, or to be substituted for Michael Hernandez and Amanda Georgino as class representative. B. The Verdict and Common FundAward After a benchtrial, the court issued its decision in favor [*4] of the class. The court found RHI committed “as many as" 1,213,745 violations of section 1747.08, subdivision (a)(2), for credit card transactions that oc- curred during the class period because RHI requested, obtained and recorded the customer's ZIP codeas part of the credit card transaction.’ The court also concluded the appropriate penalty under section 1747.08, subdivision (e), for each violation would be $30, for a total recovery by the class of up to $36,412,350. 1 However, the court's decision specified the maximum numberof violations was "subject to reduction" if information obtained during the claims process provided RHI with evidence to show that a particular credit card transaction did not result in a violation of section 1747.08, sub- division (a)(2), because RHI inaccurately rec- orded the customer's ZIP code. The court accept- ed class counsel's suggestion that RHI could be given the opportunity to challenge an individual class member's claim during the claims process if RHI could show the ZIP code recorded by RHI for the particular customer did not match the customer's actual ZIP code. The court ordered the parties to meet and confer “on the scope and par- ticulars of an appropriate claims process, includ- ing a means for RHIto challenge the accuracy of any recorded ZIP codes." Because [*5] the court's decision ordered the par- ties to meet and confer regarding an appropriate claims process, the parties met and agreed on a claims process, and a process for distributing the total award (the claims procedures). The parties' stipulation proposed the final judgment awardof $36,412,350 be "treated as a common fund inclusive of any attorneys’ fees, costs, and class representative enhancements" subsequently ordered by the court, and also include administrative costs associat- ed with administering the claims process. The parties proposedthat, after deduction of attorney fees, costs, and class representative enhancements, the net remaining fund (the Net Fund) would be distributed to class mem- bers as (1) a prorated share of the Net Fund up to $30 per violation cash payment to persons submitting valid claims and who elected cash payments, and (2) the "coupon option” to persons submitting valid claims (if they did not elect the cash award)for 33 percentoff of an up to $10,000 purchase of nonexcluded RHI merchan- dise valid for one year from issuance of the coupon. The parties' proposal also contained a provision that, at the end of the coupon period, if the payouts from the Net Fund in [*6] cash or from coupon savings did not ex- haust the Net Fund, an additional coupon would be is- sued with a dollar cap sufficient to exhaust the Net Fund. C. The Attorney Fees Determination - Hernandez subsequently moved for an attorney fee award seeking an award ofattorney fees equivalent to 25 percent of the total judgment recovered for the class. The court, although acknowledging a percentage award might ultimately be the appropriate method to calculate the fee award, also directed class counsel to supplement the motion for fees with a filing that employed tradi- tional "lodestar" calculation. Hernandez subsequently submitted the lodestar calculation and analysis, which showed class counsel had spent over 3,500 hours,total- ing nearly $2.7 million in costs advanced and fees in- curred, and detailed the attorneys involved, the tasks performed, and the reasonableness of the hourly rates for those attorneys. Hernandez's submission also articulated the reasons that supported application of a "multiplier" to the lodestar calculation. 2 Class counsel declared RHI agreed not to oppose a court award of the requested amount as long as class counsel sought the minimum 25 percent amountand,absent that [*7] stipulation, class counsel would have requested a higher amount. Analogous "clear sailing" stipulations have been determined to be appropriate by other courts. (See, e.g., Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 552-556 [96 Cal. Rptr. 3d 127].) Muller, who was served with the attorney fee mo- tions, did not file any objection contesting the propriety of the amount sought by Hernandez as attorney fees. Instead, Muller filed an August 29, 2014, "Request for Clarification," asking for clarification on whether class members would receive notice of the fee application and the right to appear and commenton the application. Pri- or to the hearing on the attorney fees, the court issuedits tentative ruling determining (1) a percentage award in a “common fund" case was permitted by California law, (2) a 25 percent fee was a percentage courts use as a "starting benchmark," and (3) a fee at or above that benchmark was “particularly appropriate" considering the risks undertaken, and results obtained, by counsel! in this action. Exhibit 1-3 Page 4 2016 Cal. App. LEXIS 185,* 3 Muller also sought clarification of whether class counsel would be required to file "lodestar information." However, the court had already or- dered class counsel to file lodestar information and, on August 29, 2014, Hernandez did file and serve [*8] the required lodestar information. At the hearing on the attorney fee application, Mul- ler objected that considering the attorney fees application without first giving class members notice of the fee ap- plication and the right to appear and comment on the application was a violation of class action procedures because this fee award was "a settlement as regards to the attorneys' fees ... [because] [class] counsel and de- fendants negotiated a settlement on the question of at- torneys' fees." Muller also argued, for thefirst time at the hearing, that a court must use the "lodestar multiplier approach" (rather than a percentage of the fund ap- proach) whencalculating the fee award, but did not ar- gue the amount the court's tentative ruling proposed to award was excessive. D. The Judgment The court's final judgment, which apparently tracked the parties' proposed claims procedures process, provided for awarding $36,412,350, to be “treated as a common fund inclusive of any attorneys’ fees, costs, and class representative incentive enhancements ordered by the Court and any administrative costs associated with ad- ministering the claims process ... ." The court awarded attorney fees of $9,103,087.50, [*9] or 25 percent of the total maximum fund of $36,412,350 created by the judgment, as wellas litigation costs and class representa- tive incentive enhancements, and directed the remainder of the fund (less administrative costs of administering the claims process) be distributed as specified by the judg- ment. Muller filed her notice of appeal within the time specified by law. II ANALYSIS Muller raises numerous claimsofalleged errorin the judgmententered below.First, she claims the court could not adjudicate the attorney fee motion withoutfirst giv- ing notice to the class of Hernandez's motion to set the appropriate attorney fee award, and giving all class members an opportunity to object to the motion, and the failure to do so in this case violated both due process protections and California's class action procedures. Se- cond, Muller argues the court, by calculating the award based on a percentage of the common fundrather than by a properly rigorous lodestar multiplier approach, trans- gressed controlling California precedent. Finally, Muller argues class counsel breached its fiduciary duty to the class by "negotiating" with RHI over the amountoffees to be paid by the commonfund. Hernandez [*10] contests each of Muller's claims of error. However, Hernandez raises a jurisdictional challenge to this court's ability to entertain the appeal, arguing that because Muller was neither a "party" nor “aggrieved” by the judgment, she does not have standing to pursue this appeal and the appeal must therefore be dismissed. Because this claim is jurisdictional (Life v. County of Los Angeles (1990) 218 Cal.App.3d 1287, 1292, fn. 3 [267 Cal. Rptr. 557] ["standing to appeal is jurisdictional"]; In re Marriage of Tushinsky (1988) 203 Cal.App.3d 136, 141-143 [249 Cal. Rptr. 611]), we begin with our analysis of whether Muller may prosecute this appeal. A. General Principles (1) Only a "party aggrieved may appeal" from a judgment. (Code Civ. Proc., § 902.) As a generalrule, only parties of record may appeal (County ofAlameda v. Carleson (1971) 5 Cal.3d 730, 736 [97 Cal. Rptr. 385, 488 P.2d 953]), and the courts have interpreted section 902 to require the appellant both to have been a "party" below and to have been "aggrieved" by the judgment. (See, e.g., Marsh v. Mountain Zephyr, Inc. (1996) 43 Cal.App.4th 289, 295 [50 Cal. Rptr. 2d 493] (Marsh) ["to have standing to appeal, a person generally must be both a party of record and sufficiently ‘aggrieved’ by the judgmentor order"].) (2) A class action is one prosecuted by namedrep- resentative plaintiffs, who have a fiduciary responsibility to prosecute the action on behalf of the absent parties. (Earley v. Superior Court (2000) 79 Cal.App.4th 1420, 1434 [95 Cal. Rptr. 2d 57].) The class action structure relieves the unnamed class members of the burden of participating in the action, hiring counsel, and incurring [*11] costs. (/bid.) Indeed, "[t]he structure of the class action does not allow absent class members to become active parties, since ‘to the extent the absent class mem- bers are compelled to participate in the trial of the law- suit, the effectiveness of the class action device is de- stroyed." (bid, fn. omitted.) Although unnamed class members may be deemed "parties" for the limited pur- poses of discovery (Southern California Edison Co. v. Superior Court (1972) 7 Cal.3d 832, 840 [103 Cal. Rptr. 709, 500 P.2d 621]), unnamed class members are not otherwise considered "parties" to the litigation (cf. Na- tional Solar Equipment Owners' Assn. v. Grumman Corp. (1991) 235 Cal.App.3d 1273, 1282 [1 Cal. Rptr. 2d 325] ("unnamed class members do not 'stand on the same footing as namedparties...""]). B. Analysis Exhibit 1-4 Page 5 2016 Cal. App. LEXIS 185, * Hernandez argues that, because Muller is not a par- ty, the appeal should be dismissed under Eggert v. Pac. States §. & L. Co. (1942) 20 Cal.2d 199 [124 P.2d 815] (Eggert). In Eggert, the court addressed whether an un- named class member could appeal from a judgment en- tered in the class action. There, the named plaintiff (Eggert) commenced an action against the savings and loan company on behalf of himself and some 1,500 per- sons who werecertificate holders. The court held the suit a proper class action, and in its judgment for Eggert and the other certificate holders whom he represented de- creed that they recover from the defendant over $1.8 million to be apportioned pro rata among them after [*12] deduction of expenses and fees, and reserved ju- risdiction to determine the fees to be paid to the plain- tiffs attorneys. After appointing a receiver to facilitate the collection and payment of the judgment, the court also issued an order, directed to the plaintiff and all other personsinterested, to show cause whyit should not make an order fixing reasonable attorney fees. Two certificate holders appeared and objected to the amount ordered as attorney fees for the plaintiffs attorneys, and subse- quently appealed from the order rejecting their objec- tions. (Eggert, supra, 20 Cal.2d at pp. 199-200.) The class representative moved to dismiss the appeal, and our Supreme Court granted the motion to dismiss the appeal, explaining "it is a settled rule ofpractice in this state that only a party to the record can appeal. [Citations.] Appel- lants were not namedas parties to the action nor did they take any appropriate steps to becomeparties to the rec- ord. The fact that their names and the extent of their in- terest in the action appeared in an exhibit attached to the complaint and the judgment did not make them parties... . [Citations.] Although their attorney appeared at the hearing on the petition for the payment of the money to plaintiffs [*13] attorneys and objected to such pay- ment, he did not ask that appellants be made parties, nor did the court order them brought into the action. [Cita- tion.] Appellants had ample opportunity even after the court had madeits orders to become parties of record by moving to vacate the orders to which they objected. They could then have appealed from the order denying the motion." (Eggert, at p. 201.) Accordingly, the Supreme Court ordered the appeal dismissed. (/bid.) 4 Hernandez also argues the appeal should be dismissed because Muller was not "aggrieved" by any of the purported errors committed below, and the parties vigorously contest whether the "ag- grieved" element is satisfied here. It is unneces- sary to address the "aggrieved" element of appel- late standing, and we do not examine the bulk of the cases relied on by Muller addressing that is- sue, because we conclude the separate “party" element is absent here. (See, e.g., Marsh, supra, 43 Cal.App.4th at p. 295 ["to have standing to appeal, a person generally must be both a party of record and sufficiently ‘aggrieved' by the judg- ment or order"); In re Miguel E. (2004) 120 Cal.App.4th 521, 538-544 [15 Cal. Rptr. 3d 530] [although grandparents were aggrieved by order, grandparents' appeal was dismissed because they were not parties to action]; Rose v. Rose (1952) 110 Cal.App.2d 812, 813 [243 P.2d 578] {child appealed from order denying [*14] mother's ap- plication for increased child support for child; court ordered appeal dismissed because, although child's beneficial interest in such increase was harmed byorder, child “was not namedas a party to the action, did not take any appropriate steps to become a party to the record, and since the court did not order her brought into the action, she has no right to appeal from the order"].) (3) Eggert appears to be on "ail fours" with the pre- sent action: both involved a class action; both involved a matterlitigated to judgment; both involved a challenge to the postjudgment attorney fee award to the counsel for the named plaintiff; both involved appellants who were members of the class, but not named parties, and who had appeared through counsel to object to the attorney fee award; and both involved members who took no steps to be added as namedplaintiffs.’ Accordingly, un- der Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450 [20 Cal. Rptr. 321, 369 P.2d 937], we must adhere to Eggert and dismiss the appeal. 5 On appeal, Muller asserts Hernandez has "ignore[d] the legal ramifications" of entering an appearance and of objecting to the attorney fee award and "never... provide[d] legal authority ... for a proposition that [such actions are] insuffi- cient to confer appellate standing." [*15] How- ever, we believe Eggert does explain the legal effect such actions have on appellate standing, andis fatal to Muller's contrary argument. Muller argues we may disregard Eggert and enter- tain this appeal, but we are unpersuaded by her argu- ments. Muller argues, for example, that Eggert was de- cided before the 1966 revisions to rule 23 of the Federal Rules of Civil Procedure (28 U.S.C.) and those federal rules are persuasive in modern California class action jurisprudence (see, e.g., Arias v. Superior Court (2009) 46 Cal.4th 969, 989 [95 Cal. Rptr. 3d 588, 209 P.3d 923] (conc. opn. of Werdegar, J.)), and because Eggert predated those rule changesit is no longer relevant to the issue of appellate standing. However, Muller cites no authority suggesting that changes to federal procedural rules for managing class actions at trial undermine the analysis of a state statute that limits the standing of par- Exhibit 1-5 Page 6 2016 Cal. App. LEXIS 185, * ties entitled to appeal, and we are aware of no relevant authority that doesso. Muller also cites several cases in which California appellate courts stated a class member who was not a party to the action obtains appellate standing to challenge the judgment merely by interposing an objection to the judgment below. However, neither of the cases cited by Muller, Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Markets, Inc. (2005) 127 Cal.App.4th 387 [25 Cal. Rptr. 3d 514] and Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224 [110 Cal. Rptr. 2d 145], made any effort to reconcile their conclusions with Eggert, and instead [*16] rooted their conclusions in the analysis contained in Trotsky v. Los Angeles Fed. Sav. & Loan Assn. (1975) 48 Cal.App.3d 134 [121 Cal. Rptr. 637] (Trotsky). (See Wershba, at pp. 235-236{cit- ing only Trotsky on issue of standing}; Consumer Cause, at pp. 395-396 [citing Trotsky and Wershba on issue of standing].) Accordingly, we examine Trotsky. In Trotsky, the appellants were unnamed members of the affected class who appeared at a settlement hearing and objected to a proposed settlement of a class action lawsuit. Trotsky, discussing the standing to appeal issue, stated: "[A]ppellant is a party aggrieved, and has stand- ing to appeal. (Code Civ. Proc., § 902.) This is true even though appellant could instead have ‘opted out,' i-e., re- quested exclusion from the judgment. [Citation.] As stated by the court in Ace Heating & Plumbing [Co.] v. Crane [Co.] (3d Cir. 1971) 453 F.2d 30, 33, deciding a similar question under rule 23 of the Federal rules of Civil Procedure,'... It is possible that, within a class, a group of small claimants might be unfavorably treated by the terms of a proposed settlement. For them, the option to join is in reality no option at all. Rule 23 recognizes the fact that many small claimants frequently have no litigable claims unless aggregated. So, without court ap- proval and a subsequent right to ask for review, such claimants would be faced with equally unpalatable alter- natives--accept either nothing at all or a possibly [*17] unfair settlement. We conclude that appellants have standing to appeal ... .' [Citations.] Were the rule other- wise, a class member whoobjectedin thetrial court to the terms of the settlement would be unable to secure appellate review of the court's order approving the set- tlement." (Trotsky, supra, 48 Cal.App.3d at pp. 139-140, fn. omitted.) (4) Thus, Trotsky focused primarily on whether an objector to a settlement was "aggrieved" within the meaning of Code of Civil Procedure section 902, con- cluding objectors were aggrieved because "i]t is possi- ble that, within a class, a group of small claimants might be unfavorably treated by the terms of a proposed set- tlement. For them, the option to join is in reality no op- tion at all," and reasoning that because those claimants might. be forced to choose between “equally unpalatable alternatives"--of accepting either nothing or an unfair settlement--those parties were sufficiently aggrieved for purposes of the right to appeal. (Trotsky, supra, 48 Cal.App.3d at pp. 139-140.) However, Trotsky did not examine the distinct "party" element of Code of Civil Procedure section 902, nor make any effort to reconcile its conclusion with Eggert's holding that unnamed class members whose only appearance was to object to the attorney fees had no standing to appeal because they were not "parties" and did not avail themselves of [*18] the "ample opportunity ... to becomeparties ofrecord ... ." (Eggert, supra, 20 Cal.2d at p. 201.) Because Eggert teaches the "party" requirement of Code of Civil Proce- dure section 902 is not met merely because the "ag- grieved" requirement of section 902 might also besatis- fied as to a nonparty class member, we conclude Trot- sky's analysis of standing is flawed and that Trotsky and its progeny (which includes both Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Markets, Inc., supra, 127 Cal.App.4th 387 and Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th 224) should not be followed. Trotsky's analysis is also flawed because it relied primarily on federal cases, including Ace Heating & Plumbing Co. v. Crane Co., supra, 453 F.2d 30, in which the federal courts concluded an objecting class member had standing to appeal without seeking to be made a party to the proceedings below. However, it appears nu- merous federal courts have subsequently held that non- party class members may not appeal a judgment. (See Croyden Associates v. Alleco, Inc. (8th Cir. 1992) 969 F.2d 675, 678, 678-680 [noting the "circuits are divided on this issue, and some have inconsistent holdings"; holding nonparty class memberlacks standing to appeal]; see also Felzen v. Andreas (7th Cir. 1998) 134 F.3d 873 [class members must intervene as parties in order to ap- peal from adverse decisions]; Walker v. Mesquite (5th Cir. 1988) 858 F.2d 1071 [nonparty class member lacks standing to appeal].)* The rationale, as explained by the Croyden court, is threefold. First, unnamed class mem- bers cannot represent the class absent the procedures outlined in rule 23 of the Federal Rules of Civil Proce- dure (28 U.S.C.) because the trial [*19] court has not conducted hearings to determine whether the appellants would satisfactorily represent the interests of the other class members. (Croyden Associates vy. Alleco, Inc., su- pra, 969 F.2d at p. 678.) Second, Croyden observedthat unnamed class members who disagree with the class action have other adequate procedures through which their interests can be protected, pointing out that class members may move to intervene and, if their motion to intervene is denied, they may appeal that decision. Croyden observed that merely objecting to the settlement did not confer standing to appeal; rather, the unnamed class member muststill move to intervene. (Croyden, at Exhibit 1-6 Page 7 2016 Cal. App. LEXIS 185, * pp. 678-679; accord, Felzen v. Andreas, supra, 134 F.3d 873 [class members must interveneas parties in order to appeal from adverse decisions].) Alternatively, a dissat- isfied class member may opt out. (Croyden, at p. 678.) Finally, Croyden pointed out that class actions would become unmanageable and unproductive if each class membercould individually appeal. (/bid.) The purpose of class actions is to "render manageable litigation involv- ing numerous class members who otherwise would all have access to the court through individual lawsuits" (ibid.) and it would defeat the purpose ofinstituting the litigation as a class action in the first place if any andall [*20] class members could appeal from rulings and judgments (ibid.). Thus, because Trotsky relies on federal authority that has been at least undermined by contrary federal authority, and disregarded Eggert's contrary (and controlling) approach, we conclude the cases on which Muller relies should not be followed. 6 We acknowledge the federal decisions, even from the United States Supreme Court (compare Marino v. Ortiz (1988) 484 U.S. 301 [98 L. Ed. 2d 629, 108 S. Ct. 586] [nonparty class members who did not seek to intervene may not appeal ap- proval of settlement] with Devlin v. Scardelletti (2002) 536 U.S. 1 [153 L. Ed. 2d 27, 122 S. Ct. 2005] [reaching opposite conclusion without disapproving Marino]), are not uniform. For ex- ample, in Powers v. Eichen (9th Cir. 2000) 229 F.3d 1249, the court concluded that, at least in the context of a court approval of a proposedset- tlement of a class action, a nonparty class mem- ber could appeal without intervening. Ud. at p. 1256.) However, the principal rationale for Powers's conclusion appears to have been the conclusion that conditioning the right to appeal on a class member's motion to intervene under Federal Rules of Civil Procedure, rule 24 (28 U.S.C.) would “createf[] a procedural hurdle that would delay the ultimate resolution of the case and unnecessarily burden those involved." (Pow- ers, at p. 1256.) Powers ignored that permitting unnamed class members to appeal a judgment without seeking to intervene would create the [*21] same delays and burdens, because a judgment could be delayed and burdened by ap- pellate challenges mounted by numerous(or, as here, over 400,000) notices of appeal by disgrun- tled class members. Moreover, whatever merit Powers’s rationale might have in the context of a proposed settlement of a class action, the present action involved a court judgment in which the amount of the recovery and the amountof the at- torney fee award was not made by the parties during negotiations to which unnamed class members were not privy, but was instead made by the court as part of adversarial proceedings, which brings this action squarely within the holding of Eggert and also obviates one of the concernsarticulated by Powers. (See Powers, at p. 1256.) (5) Even were wefree to disregard Eggert, which we are not (Auto Equity Sales, Inc. v. Superior Court, supra, 57 Cal.2d 450), adhering to Eggert's approach would not leave nonparty class members without protection or ap- pellate recourse. Under California law, where class members are given the option of opting out, they are not bound by the judgment in the class action but instead may pursue their own action. (Home Sav. & Loan Assn. v. Superior Court (1974) 42 Cal.App.3d 1006, 1010 [117 Cal. Rptr. 485].) Even if they remain, California law provides that a person who is a nonparty may acquire appellate standing by intervening [*22] and moving to vacate the judgment. (Code Civ. Proc., § 378; Marsh, supra, 43 Cal.App.4th at p. 295.) They may then appeal the order denying the motion to vacate. (Eggert, supra, 20 Cal.2d at p. 201.) Based on these rationales, Muller's argument--that merely filing a notice of appearance (and subsequently objecting to the attorney fee award) con- ferred standing on her to appeal from the court's judg- ment--must fail. Intervention in the instant action would have permitted Muller to oppose the attorney fee award and preserve the objectives of the class action: orderli- ness, efficiency, and fairness to other class members. Similarly, we do not see how intervention would fail to address the “unpalatable alternatives" that animated the Trotsky court. Intervention would have the effect of giv- ing Muller a clear avenue from which to challenge the attorney fee award, because as a party Muller could not be ignored by the court, the class plaintiffs, or the class defendant; furthermore, intervention would put the class defendant on notice of a possible appeal from the judg- ment. Moreover, we believe a bright-line rule requiring party status to appeal a class action would be appropriate wherethe cost of intervention is minimal and benefits, to both the parties and to the court system, are substantial. [*23] DISPOSITION The appeal is dismissed. Class representatives shall recover costs on appeal. Huffman, Acting P. J., and Nares, J., concurred. Exhibit 1-7
