HERNANDEZ v. RESTORATION HARDWARE, INC.

Appellant’s Response to Amicus Curiae Brief

Cal.May 10, 2017

No. 8233983 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA MIKE HERNANDEZ,et al., Plaintiffs and Respondents, SUPREME COURT LED v. MAY 10 2017 FRANCESCA MULLER, Jorge Navarrete Clerk Plaintiffand Appellant; Deputy RESTORATION HARDWARE,INC., 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 APPELLANT FRANCESCA MULLER'S ANSWER TO AMICUS CURIAE BRIEF OF CONSUMER ATTORNEYSOF CALIFORNIA LAWRENCE W. SCHONBRUN (CSBNo. 054519) LAW OFFICE OF LAWRENCE W. SCHONBRUN 86 Eucalyptus Road Berkeley, CA 94705 Telephone: (510) 547-8070 Attorneyfor PlaintiffClass Member-Appellant Francesca Muller No. 8233983 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA MIKE HERNANDEZ,et al., Plaintiffs and Respondents, V. FRANCESCA MULLER, Plaintiffand Appellant; RESTORATION HARDWARE,INC., 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 APPELLANT FRANCESCA MULLER'S ANSWER TO AMICUS CURIAE BRIEF OF CONSUMER ATTORNEYSOF CALIFORNIA 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 Francesca Muller TABLE OF CONTENTS Page Table of Authorities ........ccecccceeeecececeneceececseeseeseeseeeaeesscesecsaecareeaeeaseseeeesaeessesaeens iii INTRODUCTION 0... ceccececcccesscecessseeseneeesecsececesaeceacesseeeeaeeeesesueesaeeeseseeaeesesasesateeseeens 1 DISCUSSION1... ..ccccscccseesecsceesseececsceeesaceeeeseeeneeneseaeeeneeseeeaaeessaeessesseeeesssecesaeeesesenees 2 lL. Amicus CAOC Misstates Current California Law on Class Member-Appellate Standing... ceesesceessnceesseeeseseeeseesessessseseesseeeees 2 A. Eggert Is Not Applicable Precedent in Any Appellate District Other Than Restoration Hardware's Fourth Appellate District, Division One, and the Second Appellate District, Division SOVEDN............ccccssessseseceesseeceeceeecesssseesssstsessesssessseeas 2 B. In Point of Fact, Eggert Was Not Even Precedent in the Fourth Appellate District Prior to Restoration Hardware.................. 3 C. CAOCIgnores Eight Appellate Decisions Supporting Class Member Muller's Position...eeeeeseeeeseeeeeseeeeseeeesneessaeeaes 4 D. CAOCIgnores the Case Law on California Code of Civil Procedure § 902 That Supports Class Member Muller's Position ..........c:cccsseecesseeeeessseeseeseneeeeeeuaeseaeceacecneeessaeessesesaeesaes 5 U. Amicus CAOCMisstates Calss Member Muller's Arguments.................0000. 6 A. Amicus Mischaracterizes Class Member Muller's Primary Argumentagainst the Restoration Hardware Intervention Mandate ........ ce eeeeccccceessecceceeeesecececeneeceaeeesenseceeeeesseesseeeesseeeesseeeetseaeeaes 6 B. CAOCFalsely Asserts That Class Member Muller's Position Contradicts California Code of Civil Procedure § 902 oe. ecscccceseesecseeteneeteeeeseeaaceeeeessseseeeseesevesseeeeseeeens 7 UI. CAOC's Extended Discussion of Federal Practice Is Irrelevant to the Intervention Issue under REVICW .0.......c cee eeeeeeeeeeteeecesteeesseeesseeeesteessees 8 A. CAOC Acknowledges That Federal Practice Does Not Require Intervention for Unnamed Class Membersin Order to Obtain Appellate Standing...eeeeeseeeeeeeteeeneeeeees 8 TABLE OF CONTENTS Page B. CAOCDoesNot Identify Any Effort to Change Federal Practice As Regards Intervention ..............:.cccccccccssscsseesseseeees 8 C. The So-Called "Professional Objector Problem"Is Irrelevant to the Intervention Issue Here under Review..............000.. 9 IV. COAC's Public Policy Arguments in Support of an Intervention Requirement Are Weakat Best and Must Be Seen As Contaminated by Self-Interest 0.0.00... cecsseeeseesseeeseeeeseeeesseeeeseesseeensseees 1] A. Requiring Intervention by a Class Member/Objector Is Duplicative and Redundant 0000... cececcecseeseeeseeeseecseceseeseseeeeeees Il B. CAOC's Arguments in Favorof Intervention by a Class Member/Objector Are Vague and Unsubstantiated ...........0... cee 12 C. Neither the California nor the Federal Judiciary Recognizes a Problem with Class Action Appeals That Requires INterventiOn 0... eeceeseeceseceeseneecneecsneeeeseceeseeeensesseaeeessteceeeeeseeceneeseees 15 Dz. CAOCIs a Trade Group Whose Primary ConcernIs Promoting Its Members' Financial Interest ........0...0 cc ecceee seen eeeee 16 CONCLUSION... cecceccesseeseeescesneessnescecseececaeeeseeeaeeceaeseaeeaeeaeeseaessaeesassneceseessessseas 17 CERTIFICATE OF WORD COUNTuuu... ceecceesccceeseeesecesseeenseeseaeeesaeeesseeeneeeesens 18 CERTIFICATE OF SERVICE000... .eccceccecceccceeeeeseeeeseeeeessecenseeeseeessusensesecsnessseeeeeens 19 ii TABLE OF AUTHORITIES State Cases Page Chavez v. Netflix, Inc., 162 Cal.App.4th 43 [75 Cal.Rptr.3d 413] (1st App. Dist., Div. 1, Apr. 21, 2008) oo...cccecseeeseeeesseeenesensscessssesserens 5 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)...eee5 Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Market, Inc., 127 Cal.App.4th 387 [25 Cal.Rptr.3d 514] (2d App. Dist. Mar. 7, 2005)...cececeeeseneeeeeees 3,4 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)...... ce eeesceeeeseeneceteeeesestesseeenseeseeaes 3,5 Eggert v. Pacific States Savings and Loan Co., et al., 20 Cal.2d 199 (Apr. 21, 1942)eeeceseeeceseceeteeeeteeeeesesseeseeseeaeess passim Hernandez, et.al., Pls. and Resp'ts; Francesca Muller, Pl. and Appellantv. Restoration Hardware, Inc., Def: and Resp't, 245 Cal.App.4th 651, [199 Cal.Rptr.3d 719], 2016 Cal.App. LEXIS 185 (4th App.Dist., Div. 1, Mar. 14, 2016) oo... cccccccccsseceesscesseeeceseeeeseseeeeeessseseessseeseanens passim Life v. County ofLos Angeles, 218 Cal.App.3d 1287 [267 Cal.Rptr. 557] (2d App.Dist., Div. 3, Mar. 20, 1990)...eee5 Leoke v. County ofSan Bernardino, 249 Cal.App.2d 767 [57 Cal.Rptr. 770] (4th App. Dist., Div. 2, Mar. 29, 1967)...cece5 Marsh v. Mountain Zephyr, Inc., 43 Cal.App.4th 289 [S50 Cal.Rptr.2d 493] (4th App. Dist., Div. 1, Mar. 6, 1996)...5,6 Rebney v. Wells Fargo Bank, 220 Cal.App.3d 1117 [269 Cal.Rptr. 844] (1st App. Dist., Div. 2, May 25, 1990)...eee4 Sherman v. Allstate Ins. Co., 90 Cal.App.4th 121 [108 Cal.Rptr.2d 722] (2d App. Dist., Div. 7, June 25, 2001)...2 ili TABLE OF AUTHORITIES State Cases Page Simons v. Horowitz, et al., 151 Cal.App.3d 834 [199 Cal.Rptr. 134] (1st App. Dist., Div. 3, Feb. 7, 1984)...ceeeeeeees4 Roos v. Honeywell International, Inc., 241 Cal.App.4th 1472 [194 Cal.Rptr.3d 735] (1st App. Dist., Div. 1, Nov. 10, 2015)...ee.5 Trotsky v. Los Angeles Federal Savings and Loan Assn, etal., 48 Cal.App.3d 134 [121 Cal.Rptr. 637] (2d App. Dist., Div. 5, May 6, 1975)... ccccsccstessscsseecesssesenseeesseees Passim Wershba v. Apple Computer, 91 Cal.App.4th 224 [110 Cal.Rptr.2d 145] (6th App. Dist. July 31, 2001)...eeeeeteeeees4 Federal Cases Crawford v. Equifax Check Svcs., Inc., 201 F.3d 877, 882 (7th Cir. Jan. 3, 2000)... eceeseeeseceeseeseeeseesseceseeseeeeenes 17 Devlin v. Scardelletti, 536 U.S. 1 Sune 10, 2002) oo...eeeeeeeeeeeeeeeeeneeeeee passim In re Polyurethane Foam Antitrust Litig., 178 F.Supp.3d 635 (N.D. Ohio, Western Div., Apr. 13, 2016) oo... eececcssseccesssecceteeeseeeeneeeenees 12 Statutes, Codes, and Rules California Code of Civil Procedure SeCtiON 387 oo... ccececsssessssssssensseececeseesesseeeeeeececessessestsenseceseeeeeececeeeeeeeeseeens 7,11 SectiON 902 oo... cecececesccssseescsncecccecsecssessssssseeveseeeuessestececseeceessssssceeeseesesentneenes 5,7 California Rules of Court, Rule 3.769(f) .......ccccccccccccssseessssseeeeesseeeesteeseneees 3,11, 13 Federal Rules of Civil Procedure Proposed New Rule 23(e)(S)(A)......ccceccceeeccceseeeseeeeceecenneeessecesaeenseeeeneesees 9, 10 Proposed New Rule 23(e)(5)(B).......ceceeeecceseeeeteceseeececeeesseeesaeeessueeseesaees 9, 10 iv TABLE OF AUTHORITIES Statues, Codes, and Rules Page Preliminary Draft of Proposed Amendmentsto the Federal Rules of Appellate, Bankruptcy, Civil, and Criminal Procedure, available at www.uscourts.gov/rules-policies/proposed-amendments-published- PUDLiC-COMMENE 000... eee eeeeceseeeteeeeccceeeeesscecssnscceseeceeesseecssaeeeecssecstessteseessseeaenes 9, 10 Texts, Treatises, Other Beam, Alex, Greed on Trial, THE ATLANTIC (June 2004)...cececcseeseseeeeseeens 17 Randazzo, Sara, U.S. Suits over Volkswagen Emissions to Be Weighed in San Francisco, THE WALL STREET JOURNAL(Dec.8, 2015) ..........ce 13 INTRODUCTION The amicus curiae brief of Consumer Attorneys of California (hereinafter "CAOC"), formerly the California Trial Lawyers Association: (a) misstates current California law on class member- appellate standing; (b) —misstates Class Member-Appellant Muller's primary argument against the intervention requirement imposed by the Restoration Hardware decision!; (c) offers little convincing argumentto support its position that this Court should jettison the present de facto legal requirements for class members' appellate standing, which have been in effect since 1975. CAOCarguesinstead in favor of an intervention requirement based on Eggert v. Pacific States Savings and Loan Co., et al., 20 Cal.2d 199 (Apr. 21, 1942), a case that was decided 75 years ago and whichhas beenall but ignored’ by appellate courts throughoutthis state for the past 42 years. Whatis true, however, is that CAOC expendsthe bulk ofits brief discussing appeals in federal class action litigation (see Amicus Curiae Brief of Consumer Attorneys of California (hereinafter "CAOC Br.,"at 3- 9). CAOCprovidesnocitation to legal authority that suggests a problem with the last 42 years of California class action appellate practice — a practice under which class members have not been required to intervene to obtain appellate standing. | Hernandez, et al., Pls. and Resp'ts; Francesca Muller, Pl. and Appellant v. Restoration Hardware, Inc., Def. and Resp't, 245 Cal.App.4th 651[199 Cal.Rptr.3d 719], 2016 Cal_App. LEXIS 185 (4th App. Dist., Div. 1, Mar. 14, 2016) (hereinafter Restoration Hardware decision). * With one exception, see page 2, infra, besides the instant case. DISCUSSION I. AMICUS CAOC MISSTATES CURRENT CALIFORNIA LAW ON CLASS MEMBER-APPELLATE STANDING A. Eggert Is Not Applicable Precedent in Any Appellate District Other Than Restoration Hardware's Fourth Appellate District, Division One, and the Second Appellate District, Division Seven. 1. Amicus CAOC's statement: If objectors in California want to seek review, they must obtain party status under longstanding statutes and California Supreme Court precedent. (CAOCBr.2), is factually incorrect. While it is true that "California has developedits own bodyof class action law" (CAOC Br. 11), that development long ago left Eggert v. Pacific States Savings and Loan Co., supra, a 75-year-old- case, as an historic relic. In reality, Eggert is not "the modern seminal decision" as CAOC claim (CAOCBr. 9). The "party of record" requirement (CAOCBr.9) is satisfied without intervention. 2. Long-standing California practice is not the 75-year-old decision in Eggert, but the 42-year-old decision in Trotsky v. Los Angeles Federal Savings and Loan Ass‘n,et al., 48 Cal.App.3d 134 [121 Cal.Rptr. 637] (2d App.Dist., Div. 5, May 6, 1975). The CAOCbriefclings to the fiction that Eggert is prevailing precedent, wholly disregarding eight appellate cases dating back to 1975 that have superseded Eggert. Prior to the instant case, Eggert had been entirely ignored in the period of modern classaction litigation with the exception of one reported case, Sherman v. Allstate Ins. Co., 90 Cal.App.4th 121 [108 Cal.Rptr.2d 722] (2d App. Dist., Div. 7, June 25, 2001). (See Appellant's Opening Brief on the Merits (hereinafter "OBM") at 15, 23, and her Reply Brief on the Merits (hereinafter "RBM") at 6.) 3. California case law recognizes that California rules (see California Rules of Court (C.R.C.), Rule 3.769(f)) require that an unnamed class memberwhofiles a written objection and attends the fairness hearing at which those objections are evaluated by the court and counsel hassatisfied appellate standing requirements. At the 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 named party in Consumer Cause'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 memberdid not formally intervene in the action. (Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Market, Inc., 127 Cal.App.4th 387, 395 [25 Cal.Rptr.3d 514] (2d App. Dist. Mar. 7, 2005) (emphasis added). Thusly, CAOCis incorrect in asserting that: [F]iling an objection is not the procedural equivalent of intervening. (CAOC Br. 11.) CAOCasserts a jurisprudence (CAOCBr. 2) that has been applied in a reported case only once since 1975 — and that was 16 years ago. B. In Point of Fact, Eggert Was Not Even Precedent in the Fourth Appellate District Prior to Restoration Hardware. Prior to the Restoration Hardware decision, the operative precedent in the Fourth Appellate District was 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) (see OBM 16, 20-22). There is no basis for CAOC to claim that Eggert’s so-called "party of record" requirement (CAOCBr.9) wasan actual requirement, even in the Fourth District! C. CAOCIgnores Eight Appellate Decisions Supporting Class Member Muller's Position. CAOCintentionally (it cannot be argued otherwise’) ignores the fact that eight different California Courts of Appeal over the past 42 years have endorsed a rule of appellate standing that does not require intervention by an unnamed class memberin a class action. CAOCfails to acknowledge even the existence‘ofthese eight California appellate rulings, which constitute the current jurisprudence on absent class members’ standing to appeal. That jurisprudencerejects an intervention requirement: Trotsky v. Los Angeles Federal Savings and Loan Ass‘n, et al., 48 Cal.App.3d 134 [121 Cal.Rptr. 637] (2d App.Dist., Div. 5, May 6, 1975); Simons v. Horowitz, et al., 151 Cal.App.3d 834, [199 Cal.Rptr. 134] (ist App. Dist., Div. 3, Feb. 7, 1984); Rebney v. Wells Fargo Bank, 220 Cal.App.3d 1117, [269 Cal.Rptr. 844] (1st App. Dist., Div. 2, May 25, 1990); Wershba v. Apple Computer, 91 Cal.App.4th 224, [110 Cal.Rptr.2d 145] (6th App. Dist. July 31, 2001); Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Market, Inc., 127 Cal.App.4th 387, [25 Cal.Rptr.3d 514] (2d App. Dist. Mar. 7, 2005); 3 See Appellant's OBM 16-23 and her RBM 7. * A legitimate friend of the court does notignore cases cited by appellant's counsel. 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); Chavez v. Netflix, Inc., 162 Cal.App.4th 43 [75 Cal.Rptr.3d 413] (ist App. Dist., Div. 1, Apr. 21, 2008); Roos v. Honeywell International, Inc., 241 Cal.App.4th 1472 [194 Cal.Rptr.3d 735] (ist App. Dist., Div. 1, Nov. 10, 2015). Class Member Muller provided an extensive discussion of Trotsky, supra, and the above-cited cases in her Opening Brief on the Merits at 15- 23, and her Reply Brief on the Merits at 6-7. Her reply brief also provides a thorough analysis of the flaws in Restoration Hardware's rejection of Trotsky (RBM 8-9). D. CAOCIgnores the Case Law on California Code of Civil Procedure § 902 That Supports Class Member Muller's Position. Completing its comprehensive misstatement of California law, CAOC's extended discourse on the statutory right to appeal (CAOCBr. 8- 10; California Code of Civil Procedure § 902) fails to reference the exception to Code of Civil Procedure § 902 found in Marsh v. Mountain Zephyr, Inc., 43 Cal.App.4th 289 [50 Cal.Rptr.2d 493] (4th App. Dist., Div. 1, Mar. 6, 1996). The Marsh exception is precedent precisely on point here (see Appellant's OBM 29): One exception to the "party of record" requirement exists in cases where a judgmentor order has a res judicata effect on a nonparty. "A person who would be boundby 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 of America, et al., 141 Cal.App.4th 46, 58 [45 Cal.Rptr.3d 647] (2d App. Dist., Div. 8, July 6, 2006). If that were not enough, CAOCseeks to overturn Marsh, implicitly recognizing that its holding contradicts CAOC's argument on appellate standing: Atanyrate, this Court should notalter its reading of section 902 just for class actions [as Marsh does]. (CAOC Br.11.) IL. AMICUS CAOC MISSTATES CLASS MEMBER MULLER'S ARGUMENTS A. CAOCMischaracterizes Class Member Muller's Primary Argumentagainst the Restoration Hardware Intervention Mandate. Amicus CAOCasserts throughoutits brief that Class Member Muller's main argumentis: Eggert should be jettisoned in favor of federal practice.... (CAOCBr. 3); In [Muller's] urging that California align with federal law onthe right to appeal... (CAOC Br.8); Adopting the federal approach to appeals by absentclass members.... (CAOCBr. 12). This is not true. Class Member Muller's main position is that over the last 42 years since Trotsky, supra, eight different courts of appeal in this state have held that an unnamed class memberin a class action obtains appellate standing by (1) filing a written objection to a proposed request for approval of a class action settlement and/or a request for an attorneys' fee award and (2) appearing at the fairness hearing to defend the objection. Rather than seeking to align California practice with federal practice, she instead seeksto align Eggert, supra, and Restoration Hardware, supra, with the last 42 years of California practice, commencing with Trotsky, supra. Class Member Muller merely points out that in addition to this long- standing California practice, federal practice for the last 15 years adheresto the samerule. B. CAOCFalsely Asserts That Class Member Muller's Position Contradicts California Code of Civil Procedure § 902. l. Class Member Muller does not, contrary to CAOC's claim, seek to nullify section 902 of the California Code of Civil Procedure: Muller identifies no compelling reason to disregard section 902.... (CAOC Br. 10; emphasis added.) Code of Civil Procedure § 902 says that a class member mustbe a party: Any party aggrieved may appealin the cases prescribed inthistitle. Eight California courts of appeal have held that filing an objection and appearing at a fairness hearingsatisfies that "party of record" (CAOCBr. 11) requirement. Class Member Muller's arguments have been fully consistent with that case law. (OBM 16-23; RBM 7.) 2. Class Member Muller's argumentis that because unnamed class membersin a class action are "bound by the judgment" (Appellant's OBM7, Statementof Facts), they are "always aggrieved." Thusly, the rules under mandatory intervention are always applicable to an unnamed class memberin a class action. (See Code of Civil Procedure § 387(b).) CAOC's argumentthat: Adopting the federal approach to appeals by absent class members, moreover, would disregard California's distinct statutory framework governingthe right to appeal. (CAOCBr. 12), is legally incorrect. Ill. CAOC'S EXTENDED DISCUSSION OF FEDERAL PRACTICE IS IRRELEVANT TO THE INTERVENTION ISSUE UNDER REVIEW A. CAOC Acknowledges That Federal Practice Does Not Require Intervention for Unnamed Class Members in Order to Obtain Appellate Standing. [A] terse written objection - one filing, not even an appearance by counsel- suffices to permit an appeal under Deviin. (CAOCat 4.) B. CAOCDoesNot Identify Any Effort to Change FederalPractice As RegardsIntervention. It should most importantly be pointed out that CAOC demonstrates absolutely no intention by the Advisory Committee of Rules and Civil Procedure that the federal practice enunciated in Devlin v. Scardelletti, 536 U.S. 1 (June 10, 2002) — holding that intervention is not necessary to obtain appellate standing — should be changed in any way. It would therefore be fair to conclude that the federal court system has not determined that an intervention requirement should be imposed. CAOC's remaining discussion of federal practice is entirely irrelevant to the issue before this Court. C. The So-Called "Professional Objector Problem"Is Irrelevant to the Intervention Issue Here under Review. The so-called professional objector problem is not being addressed in the federal courts by requiring intervention. It is being addressed without modifying the Devlin, supra, holding. The federal courts have not moved to changethe rule that makes intervention unnecessary for class membersto establish appellate standing. This is in spite of amicus CAOC's accusation that "Objectors have used the heft Devlin accords to demand payoffs to dismiss their appeals." (CAOCBr.4.) The proposed changesby the Advisory Committee on Rules of Civil Procedure that CAOCreferences on page 7 of its amicus brief have nothing to do with an intervention requirement as CAOC would impose on California. Those changes would have noeffect on current federal policy regarding the nonrequirementofintervention. One proposedrule change, New Rule 23(e)(5)(B), would require judicial approval of any payments madeto objectors’ counsel to withdraw an objection or to drop an appeal: New Rule 23(e)(5)(B) will require court approval of any payments to objectors or their counsel: Court Approval Required For Payment to an Objector or Objector's Counsel. Unless approved by the court after a hearing, no paymentor other consideration may be provided to an objector or objector's counsel in connection with: (i) forgoing or withdrawing an objection, or (ii) forgoing, dismissing, or abandoning an appeal from a judgment approving the proposal. (CAOC Br.7, citing Preliminary Draft of Proposed Amendmentsto the Federal Rules of Appellate, Bankruptcy, Civil, and Criminal Procedure, available at www. uscourts.gov/rules-policies/proposed-amendments- published-public-comment (found under August Publication, Civil Rule 23(e)(5)(B), at 216.) A second proposed change, New Rule 23(e)(5)(A), will require that: "The objection must state whether it applies only to the objector, to a specific subset of the class, or to the entireclass, and also state with specificity the grounds for the objection." (CAOCBr.7, citing Preliminary Draft of Proposed Amendmentsto the Federal Rules, etc., ibid. at 215-16.) Although CAOCbelieves that both proposed rule changes "are a systemicreaction to the detrimental consequencesofthe easy appeal regime under Devlin" (CAOCBr.8), neither of them have anything to do with imposing an intervention requirement for class members’ standing to appeal. CAOC's simple but deceptive claim to support its position of an intervention requirement does so by misappropriating Devlin: The federal experience under Devlin showsthat objector participation should be subject to reasonable regulation and judicial scrutiny. (CAOC Br.8.) Despite the primary focus of CAOC's amicus brief (pp. 3 through 8) on the federal response to professional objectors, nothing in the proposed federal changes supports CAOC's call for imposing a requirement of intervention in the federal courts, much less California. On the contrary, the discussion of federal practice clearly demonstrates that intervention has been rejected as "reasonable regulation" or necessary "judicial scrutiny." CAOCattempts to paper over the absence of a federal move towards intervention: Implementing comparable requirements in California could be facilitated case by case through the procedural vehicle of intervention. (CAOCBr.8;italics added), by resorting to a non sequitur. Intervention is not a "comparable requirement" to court approval of the withdrawal of objections. 10 If indeed CAOCthinksthat the federal system has successfully addressed the objector abuse issue through "reasonable regulation” and "judicial scrutiny" (CAOCBr.8), then it should go the California Legislature and lobby to have lawsin this state implemented that are similar to the proposed Rule 23(e)(5)(B) and Rule 23(e)(5)(A). IV. CAOC'S PUBLIC POLICY ARGUMENTSIN SUPPORT OF AN INTERVENTION REQUIREMENT ARE WEAK AT BEST AND MUST BE SEEN AS CONTAMINATEDBY SELF-INTEREST A. Requiring Intervention by a Class Member/ObjectorIs Duplicative and Redundant. A complaint-in-intervention is a vehicle to outline objections with someprecision that aids both the judge andtheparties. (CAOC Br. 10.) 1. California Rules of Court Rule 3.769(f) addresses the issue. In class actions, the outlining of objections 1s clearly accomplished by the filing of a written objection. Rule 3.769(f) of the California Rules of Court requires a class memberto file a written objection and attend the court hearing to explain and defend the objection. CAOC offers no plausible explanation of how complaints in intervention, "[S]etting forth the grounds upon which the interventionrests..." (CAOC Br. 10; citing C.C.P. § 387, subd. (a)), offer anything more to courts to "evaluate objections" (CAOCBr. 2) and to highlight "baseless objections" (CAOCBr.4) than already exists. 2. Intervention offers nothing but unnecessary make-work. The intervention process will, as Class Member Muller has previously pointed out (OBM 38-40), merely make more workfor 11 objectors' counsel, for defendants' counsel, for class counsel, for trial court judges, andlikely for appellate court judges as well. 3. Intervention is not an answerto regulate the so- called "professional objector.” The Northern District of Ohio, in Jn re Polyurethane Foam Antitrust Litig., 178 F.Supp.3d 635 (N.D. Ohio, Western Div., Apr. 13, 2016), used the term "professional objector" to describe those who abuse the class action objection process. How ironic that the very characteristic of the so-called "professional" objector connotes the possession ofa skill set needed to prepare necessary court motions! An intervention requirementis not going to deter lawyers sophisticated enoughto file an intelligent objection. Furthermore, requiring intervention will do little or nothing to protect against what CAOCdescribesas the bad faith of so-called "professional objectors." (CAOC 4.) In fact, CAOC makes no argument and introduces no evidence that professional objectors would in any way be impeded by a requirementoffiling a pleading in intervention. B. CAOC's Arguments in Favor of Intervention by a Class Member/Objector are Vague and Unsubstantiated. CAOC makesa series of "seat-of-their-pants" arguments in favor of an intervention requirement that are vague and unsubstantiated. A close analysis of CAOC's argumentsreveals a total lack of evidentiary support: L. "In too many cases since Deviin...." (CAOC Br.3.) CAOCprovides no information about what "too many" cases meansin actual numbers. 2. "[O]ften the objections have nothing to do with the facts or legal principles at hand...." (CAOC Br.3.) 12 Again, there are thousands ofclass actions filed each year in California. CAOCprovides no information as to how often this asserted problem arises. 3. "[T]o weed out baseless objections." (CAOC Br.4.) CAOCprovides no evidence on the problem ofbaseless objection. It also fails to show how anintervention process would be any moreeffective at weeding out baseless objections than the existing process of trial court review of C.R.C. Rule 3.769(f) objections. Courts can inquire at the fairness hearing if more information is needed. 4, "[P]atently frivolous" objections "having no groundingin the law" (CAOCBr. 5) during the post-7rotsky period. CAOCagain provides no evidence to support the argument that such objectionsare a significant and unaddressed problem in the class action appellate process in California. 5. "The increasing difficulty in bringing class actionsis readily apparent." (CAOCBr.6.) Again, CAOCprovides no information to support this assertion. For example, nearly 500 class action complaints alleging Volkswagen pollution test fraud’ demonstrates that there is no difficulty in bringing class actions. > "More than 490 lawsuits have beenfiled, most as potential class actions, since the Environmental Protection Agency disclosed in Septemberthat Volkswagen installed software in seemingly environmentally friendly diesel vehicles that cheated emissionstests." Sara Randazzo, U.S. Suits over Volkswagen Emissions to Be Weighed in San Francisco, THE WALL STREET JOURNAL (Dec.8, 2015). 13 6. "[C]lass actions are inherently high risk." (CAOC Br. 6.) Again, CAOC doesnot state whatrisk it is talking about or what "high" means. It supplies no evidenceas to the degree of risk faced by attorneys whofile class actions. 7. "[E]normous costs." (CAOCBr.7.) Again, CAOCprovides no evidence to support its use of the term "enormous." 8. "[N]o assurance of recovery" (CAOC Br. 7.) CAOCprovides no evidence aboutthe likelihood of recoveries in class action litigation. Indeed,it is an incontrovertible fact that almost no class actions goto trial. 9. "Virtually every move byclass counsel is under the microscope." (CAOC6.) (a) CAOCprovides no information about what this means. (b) CAOC presumably also seeks to imply that objectors are unnecessaryto the class action process, again without submitting any corroborating evidence. 10. "[JJudges are parsing class counsel's submissions." (CAOC 7.) CAOCprovides no evidence to support this assertion other than citing to one federal case from 2016. One case is hardly sufficient to support its claim, muchless justify an intervention requirement. Again,this assertion seems to seek to create the impression, again without support, that objectors are unnecessary to the class action process. li. "[D]elay distribution" (CAOCBr.4.) CAOCprovides no evidenceofthe actual experience of how appeals affect class action settlement distributions, and whetherthis concern raises an important public policy issue. 14 It should be noted that the appeal in this case did not delay the distribution of settlement benefits nor the distribution of attorneys' fees to Class Counsel! In cases where only the attorneys' fee is being appealed, there is no necessary delay of settlement benefits to class members. It is only when Class Counselself-servingly structure a settlement to put the class's recovery on hold if there is an appeal of the fee award that this problem even arises. Class Counsel do this to pressure the court to approve their fee request, but delay need not follow from an appeal. C. Neither the California nor the Federal Judiciary Recognizes a Problem with Class Action Appeals That Requires Intervention. 1. CAOCconfirms that objector appealsare rare: Knisley wasa rare objector appeal that went through to an opinion. (CAOCBr.6.) 2. CAOCconfirms that few appeals get to the briefing stage: The appeal is more often dismissed without any briefing. (CAOCBr.2.) The obvious implication of these admissionsis that objectors’ appeals do not place a burden on appellate courts. It is noteworthy that although CAOCgoesto great lengths to claim that the lack of an intervention requirement is causing problems, the problems could not be serious as CAOC has madenoeffort over the last 42 years to correctthis purported problem. 3. CAOC(perhaps inadvertently) confirms that a significant numberof objector appeals are beneficial, referencing "three occasions" on which appeals were successful. (CAOCBr.6.) Working out CAOC's arithmetic, roughly 10% of cases decided on the merits result in decisions favoring the objector/appellant. 15 That figure in itself indicates that a significant numberof objections are not baseless and furthermore provides no support for an argumentthat even unsuccessful appeals are frivolous. D. CAOCIs a Trade Group Whose Primary Concern Is Promoting Its Members' Financial Interests. 1. CAOC acknowledges the reasonableness of arguments against intervention: Although there are reasonable contentions against intervention, they are outweighedbythe factors favoring it. (CAOC Br. 11.) 2. CAOCacknowledges that a requirement for intervention can "chill" (CAOC Br. 6) objectors' appeals, although they self-servingly assert to the Court that that is not their intention. But what is more important, CAOC's intention or the effect of such a requirement? CAOC,in effect, concedes that objector appeals are a business problem rather than a legal problem. CAOCseekshelp from this Court in disadvantaging those seeking court review ofplaintiffs’ class action lawyers’ settlements and/or attorneys’ fee awards. 16 CONCLUSION Amicus CAOC comesbefore the Court not as a neutral serving the public interest but instead as an advocate for the financial interests of plaintiffs’ class action attorneys. CAOC'sinterest in protecting so-called "leverage" (CAOC4)is hypocritical. The existence of leverage that plaintiffs' class action lawyers use to argue against objectors generally is the lifeblood of their class action practice: [T]he settlement is substantively troubling. Crawford [the plaintiff and class representative] and his attorney were paid handsomely to go away; the other class membersreceived nothing (not even any value from the $5,500 "donation") and lost the right to pursueclassrelief. Crawford v, Equifax Check Svcs., Inc., 201 F.3d 877, 882 (7th Cir. Jan. 3, 2000 (emphsis added). Improving the financial margins of overpaid’plaintiffs’ class action lawyersis hardly fitting role for the California Supreme Court. Class Member Muller respectfully suggests that this Court should find nothing persuasive in CAOC's amicusbrief. Dated: May 10, 2017 [cre submitted, AMIJLim © Lo ; SahVn,Water Lawrence W. Schonbrun Attorney for Plaintiff Class Member and Appellant Francesca Muller ° Alex Beam, Greed on Trial, The Atlantic (June 2004), comments by humorist Dave Barry on the tobaccolitigation: "{The states] are distributing the money as follows: (1) Legal fees; (2) Moneyfor attorneys; (3) A whole bunch of new programsthat have absolutely nothing to do with helping smokers stop smoking; and (4) Paymentsto law firms. Of course, not all the anti-tobacco settlementis being spent this way. A lot of it also goes to lawyers." 17 CERTIFICATE OF WORD COUNT Counsel of Record hereby certifies that pursuant to Rule 8.504(d)(1) of the California Rules of Court, the attached Answer to Amicus Curiae Brief of Consumer Attorneys of California contains 4,096 words of proportionally spaced Times New Roman 13-point type as recorded by the word countofthe Microsoft Office 2007 word processing system, andis in compliance with the type-volumelimitations permitted by the rules of court. Counsel relies on the word count of the computer program used to prepare this Reply Brief on the Merits. . pre\s . Granlerun Lawrence W. Schonbrun Dated: May 10, 2017 18 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, whose business address is 86 Eucalyptus Road, Berkeley, California 94705, County of Alameda. On May 10, 2017, I caused to be served a copy of the following document: APPELLANT FRANCESCA MULLER'S ANSWER TO AMICUS CURIAE BRIEF OF CONSUMER ATTORNEYS OF CALIFORNIA 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 samein the United States Mail in Alameda County, California, to the addresses set forth below: James R. Patterson, Esq. Gene J. Stonebarger, Esq. Allison Goddard, Esq. Stonebarger Law Patterson Law Group APC 75 Iron Point Circle, Ste. 145 402 W. Broadway,29th FI. Folsom, CA 95630 San Diego, CA 92101 Tel: (916) 235-7140 Tel: (619) 756-6990 Fax: (916) 235-7141 Fax: (619) 756-6991 gstonebarger@stonebargerlaw.com jim@pattersonlawgroup.com Attorneysfor PlaintiffClass eli@pattersonlawgroup.com Attorneysfor PlaintiffClass 19 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, Court of Appeal Fourth Appellate District 750 B Street, Ste. 300 San Diego, CA 92101 Gretchen M.Nelson, Esq. Nelson & Fraenkel LLP 707 Wilshire Blvd., Ste. 3600 Los Angeles, CA 90017 Tel: (213) 622-6469 Fax: (213) 622-6019 gnelson@nflawfirm.com Attorneyfor Amicus Curiae Consumer Attorneys ofCalifornia Clerk, San Diego Superior Court Central Div., County Courthouse 220 W. Broadway, 3rd FI. San Diego, CA 92101 I declare under penalty of perjury under the laws of the State of California that the foregoingis true and correct. Executed on May 10, 2017, De, California. Sandra Norris 20