Laffitte v. Robert Half Int'l Inc.

Decision Date11 August 2016
Docket NumberNo. S222996.,S222996.
Citation205 Cal.Rptr.3d 555,376 P.3d 672,1 Cal.5th 480
CourtCalifornia Supreme Court
PartiesMark LAFFITTE et al., Plaintiffs and Respondents, v. ROBERT HALF INTERNATIONAL INC., et al., Defendants and Respondents; David Brennan, Plaintiff and Appellant.

1 Cal.5th 480
376 P.3d 672
205 Cal.Rptr.3d 555

Mark LAFFITTE et al., Plaintiffs and Respondents
v.
ROBERT HALF INTERNATIONAL INC., et al., Defendants and Respondents;

David Brennan, Plaintiff and Appellant.

No. S222996.

Supreme Court of California

Aug. 11, 2016.


205 Cal.Rptr.3d 557

Law Office of Lawrence W. Schonbrun and Lawrence W. Schonbrun, for Plaintiff and Appellant.

Law Offices of Kevin T. Barnes, Kevin T. Barnes, Gregg Lander, Los Angeles; Law Offices of Joseph Antonelli, Joseph Antonelli, Janelle Carney, Chino Hills; Hilaire McGriff and Mika M. Hilaire, Los Angeles, for Plaintiffs and Respondents.

Paul Hastings, Judith M. Kline, Los Angeles, and M. Kirby C. Wilcox, San Francisco, for Defendants and Respondents.

Altshuler Berzon, Michael Rubin, San Francisco; Jocelyn D. Larkin, Robert Schug ; and Richard Rothschild, Los Angeles, for Impact Fund, Western Center on Law and Poverty, Asian Americans Advancing Justice–Asian Law Caucus, Bet Tzedek, Centro Legal de la Raza, California Rural Legal Assistant Foundation, Disability Rights Education and Defense

205 Cal.Rptr.3d 558

Fund, East Bay Community Law Center, Justice in Aging, Law Foundation of Silicon Valley, Legal Aid Association of California, Legal Aid Society of San Mateo County, Public Advocates, Public Counsel, The Public Interest Law Project and Worksafe as Amici Curiae on behalf of Plaintiffs and Respondents and Defendants and Respondents.

Lieff Cabraser Heiman & Bernstein, Elizabeth J. Cabraser, San Francisco, Jonathan D. Selbin ; Girard Gibbs and Jordan Elias for Professor Christine Bartholomew, Professor Erwin Chemerinsky, Professor John C. Coffee, Jr., Professor Joshua P. Davis, Professor Nora Freeman Engstrom, Professor Brian T. Fitzpatrick, Professor Arthur R. Miller and Professor Charles Silver as Amici Curiae on behalf of Plaintiffs and Respondents and Defendants and Respondents.

Capstone Law, Glenn A. Danas and Ryan H. Wu, Los Angeles, for Working Wardrobes as Amicus Curiae on behalf of Plaintiffs and Respondents and Defendants and Respondents.

Kabateck Brown Kellner, Richard L. Kellner and Brian S. Kabateck, Los Angeles, for Consumer Attorneys of California as Amicus Curiae on behalf of Plaintiffs and Respondents and Defendants and Respondents.

Law Offices of Martin N. Buchanan and Martin N. Buchanan, Oceanside, for Professor William B. Rubenstein as Amicus Curiae.

WERDEGAR, J.

376 P.3d 674
1 Cal.5th 485

A class action employment lawsuit settled before trial for $19 million, with the agreement that no more than a third of that recovery would go to class counsel as attorney fees. In seeking the trial court's approval of the settlement, class counsel sought the maximum fee amount, $6,333,333.33. After considering information from class counsel on the hours they had worked on the case, applicable hourly fees, the course of the pretrial litigation, and the potential recovery and litigation risks involved in the case, the trial court—over the objection of one class member—approved the settlement and awarded counsel the requested fee.

The objecting class member contends the trial court's award of an attorney fee calculated as a percentage of the settlement amount violates a holding of this court in

1 Cal.5th 486

Serrano v. Priest (1977) 20 Cal.3d 25, 141 Cal.Rptr. 315, 569 P.2d 1303 (Serrano III ),1 to the effect that every fee award must be calculated on the basis of time spent by the attorney or attorneys on the case. (See Serrano III, at p. 48, fn. 23, 141 Cal.Rptr. 315, 569 P.2d 1303.) We disagree. Our discussion in Serrano III of how a reasonable attorney fee is calculated was made in connection with an award under the “private attorney general” doctrine. (See id. at pp. 43–47, 141 Cal.Rptr. 315, 569 P.2d 1303.) We clarify today that when an attorney fee is awarded out of a common fund preserved or recovered by means of litigation (see Serrano III, supra, at p. 35, 141 Cal.Rptr. 315, 569 P.2d 1303 ), the award is not per se unreasonable merely because it is calculated as a percentage of the common fund.

205 Cal.Rptr.3d 559

Factual and Procedural Background

Three related wage and hour class action lawsuits were filed against Robert Half International Inc., a staffing firm, and related companies (hereafter collectively Robert Half) in Los Angeles County Superior Court. In September 2012, the parties jointly moved for an order conditionally certifying a settlement class and preliminarily approving a settlement. The trial court granted the motion and preliminarily approved the settlement. With the court's permission, the proposed settlement was amended in November 2012.

Under the settlement agreement as amended, Robert Half would pay a gross settlement amount of $19 million. It was agreed class counsel would request attorney fees of not more than $6,333,333.33 (one-third

376 P.3d 675

of the gross settlement amount), to be paid from the settlement amount. Robert Half would not oppose a fee request up to that amount, and if a smaller amount was approved by the court the remainder would be retained in the settlement amount for distribution to claimants, rather than reverting to Robert Half. The settlement agreement further provided that any unclaimed portion of the net settlement amount (resulting, for example, from class members choosing not to make claims or failing to qualify for compensation) would be reallocated to qualified claimants rather than returned to Robert Half or given to any third party.

Class member David Brennan objected to the proposed settlement on several grounds, including that the projected $6,333,333.33 attorney fee appeared to be excessive and class counsel had not provided enough information to evaluate it.

1 Cal.5th 487

Class counsel subsequently made the anticipated request for $6,333,333.33 in attorney fees. A fee equal to one-third of the settlement fund recovered for the class, counsel asserted, is within a historical range of 20 to 50 percent of a common fund and is also within the range provided in contingent fee agreements signed by the named plaintiffs. Recovery of any fee was contingent on success in the litigation, “and the case presented far more risk than the usual contingent fee case.” The requested fee, counsel also asserted, is also appropriate under the “lodestar” method, in which an attorney fee is based on the hours worked and an hourly billing rate, sometimes adjusted by a positive or negative multiplier. The firms acting as class counsel would collectively expend between 4,263 and 4,463 attorney hours, depending on whether the objector appealed approval of the settlement. Multiplying the individual attorneys' hours by rates assertedly tied to their skill and experience, counsel calculated a lodestar fee amount of between $2,968,620 and $3,118,620. The multiplier needed to reach the requested fee of $6,333,333.33 would thus be 2.03 to 2.13.

The totals of hours expended, the range of percentages in common fund cases and in the fee agreements, and the range of hourly rates applicable to class counsel were supported by data in the fee motion and supporting declarations. Class counsel Kevin T. Barnes generally described the work performed in “one of the most heavily litigated cases I have ever been a part of and the extensive research and litigation for the past 8 ½ years. This litigation included extensive written discovery, extensive law and motion practice, 68 depositions, three Motions for Summary Judgment, a Class Certification Motion, subsequent Reconsideration Motion and then another Motion to Decertify, numerous experts, consultation with an economist regarding potential damage exposure and two full day mediations.”

While tentatively approving the settlement and fee request, the trial court asked

205 Cal.Rptr.3d 560

counsel for additional information and discussion on certain points. Barnes submitted a supplemental declaration that, in part, argued the calculated multiplier over the lodestar amount (2.03 to 2.13) was reasonable in light of counsel's “hard work and determination” in a difficult case and the “enormous” risks of nonpayment counsel undertook. Barnes's declaration detailed the risks that the actions would fail at the certification stage, would be deemed barred by arbitration agreements, or would fail on the merits because of findings the class members were exempt employees.

On April 10, 2013, the trial court overruled Brennan's objections and gave the settlement and attorney fee request its final approval. In its oral ruling the court stated: “On the amount of the attorneys fees, the court considers in this case that there is a contingency case, and so I do a double check on the attorneys fees by looking at the lodestar amount. I do believe I...

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  • Laffitte v. Robert Half Int'l Inc., S222996.
    • United States
    • United States State Supreme Court (California)
    • 11 Agosto 2016
    ...1 Cal.5th 480376 P.3d 672205 Cal.Rptr.3d 555Mark LAFFITTE et al., Plaintiffs and Respondentsv.ROBERT HALF INTERNATIONAL INC., et al., Defendants and Respondents;David Brennan, Plaintiff and Appellant.No. S222996.Supreme Court of CaliforniaAug. 11, 2016.205 Cal.Rptr.3d 557 Law Office of Lawr......

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