Roos v. Honeywell Int'l, Inc.

• Decision Date: 10 November 2015
• Docket Number: A142156
• Citation: 194 Cal.Rptr.3d 735,241 Cal.App.4th 1472
• Court: California Court of Appeals Court of Appeals
• Parties: Joel I. ROOS et al., Plaintiffs and Respondents, v. HONEYWELL INTERNATIONAL, INC., Defendant and Respondent, Art Rogerset al., Objectors and Appellants.

241 Cal.App.4th 1472

194 Cal.Rptr.3d 735

Joel I. ROOS et al., Plaintiffs and Respondents,

v. HONEYWELL INTERNATIONAL, INC., Defendant and Respondent,Art Rogerset al., Objectors and Appellants.

A142156

Court of Appeal, First District, Division 1, California.

Filed November 10, 2015

Counsel for Objector and Appellant Art Rogers: Law Offices of Darrell Palmer, Joseph Darrell Palmer.

Counsel for Objector and Appellant Amanda Waldenville: Koch & Scow, Steven B. Scow.

Counsel for Objector and Appellant Chuck Congdon: Denise H. Gibbon.

Counsel for Objector and Appellant Richard Moser: Law Office of Michael Creamer.

Counsel for Plaintiff and Respondent Joel I. Roos: The Mogin Law Firm, Daniel J. Mogin, Jodie M. Williams, Sarah B. Abshear; Abbey Spanier, Stephen T. Rodd; Shaheen & Gordon, Christine Craig; Gross & Belsky, Terry Gross, Adam C. Belsky, Monique Alonso; Law Offices of Alexander M. Schack, Alexander M. Schack.

Counsel for Defendant and Respondent Honeywell International, Inc.: O'Melveny & Myers LLP, Michael Frederick Tubach, Christina J. Brown.

Opinion

Humes, P.J.Four objectors—Art Rogers, Chuck Congdon, Richard Moser, and Amanda Waldenville—appeal from the trial court's order approving an $8.15 million settlement of a class action against Honeywell International Inc. and awarding a portion of the settlement as fees to class counsel. The trial court found that the objectors failed to establish they had standing, but it then rejected Rogers's objection on timeliness grounds and rejected the other three objectors' objections on their merits. Except for the ruling on standing, we affirm. In doing so, we reject the objectors' arguments that the court improperly (1) approved the distribution of residual settlement funds and (2) awarded class counsel excessive attorney fees because the award amounted to 37.5 percent of the settlement fund.

Background

This case began over a decade ago. The complaint generally alleged that respondent Honeywell engaged in uncompetitive and illegal conduct to increase its market share of round thermostats and to use its dominant market position to overcharge customers. Honeywell denied the allegations, “substantial motion practice and discovery” ensued, the parties “vigorously litigated the case,” and protracted settlement discussions were “[d]ifficult and contentious.” The plaintiff class certified in February 2012 is composed of “persons residing in California who purchased one or more ... [r]ound [t]hermostats ... indirectly from ... Honeywell ... in California during the [c]lass [p]eriod for their own use and not for resale.” The class period is defined as from June 30, 1986, to December 5, 2013.

In 2013, the parties reached a settlement and asked the trial court to preliminarily approve it. The court initially declined to do so because it had concerns about the notice proposed to be sent to class members to inform them about the details of the deal. These concerns were subsequently addressed to the court's satisfaction, and on February 4, 2014, the court preliminarily approved the settlement. The notice of settlement was subsequently published and distributed to class members in a manner that is not challenged in this appeal.

The notice included both short and long forms. The long version was distributed and posted on a website, and the short version was published in various print publications. These notices were written in plain English, and they included a number of advisements. In the long form, the class and class period were defined, and the amount of the proposed monetary settlement was stated, as follows: “If you are a resident of California and bought one or more Honeywell round thermostats any time between June 30, 1986 and December 5, 2013, for your own use and not for resale [¶] you could get money from an $8,150,000 settlement.” (Initial capitals changed to lower case, boldface omitted.) It explained that “[a]fter deduction of attorneys' fees, the notice and claims administration costs, a service award to Class Plaintiffs, and litigation expenses, approximately $4.25 million is estimated to be available for distribution to eligible class member claimants.” The short form stated, “If you bought a Honeywell Round Thermostat in California you could get $18 or more from a settlement.” (Initial capitals changed to lower case, boldface omitted.)

The long form described how the funds available to claimants would be distributed: “The distribution plan provides for a payment of $18 for each Honeywell Round Thermostat purchased by an eligible claimant,” and it described how remaining funds not used to pay claims, attorney fees, or costs would be distributed: “[I]f the Settlement Fund is not depleted by the payment to eligible claimants, the remaining money will be distributed to public or non-profit organizations, primarily in California and Vermont. Any distributions will be approved by the Court and will further the purposes of the lawsuit or promote justice. If the total amount claimed from the Settlement exceeds the amount of the Settlement Fund, the distribution to each claimant would be reduced proportionately.” Throughout this opinion, we will refer to the settlement provision authorizing the distribution of residual funds as the “cy prèsterm.”¹

The notice also told class members how class counsel would be paid: “How will the lawyers be paid? [¶] ... Class Counsel, who have advanced significant sums over many years in litigating these cases, will ask the Court for attorneys' fees of up to 37.5% of the total Settlement Funds, plus reimbursement of their costs and expenses.” The notice explained that a hearing on counsel's request for fees would be held: “The Court will hold a hearing on May 2, 2014 to consider whether to approve the Settlement and a request for attorneys' fees of up to 37.5%.” (Boldface omitted.) Class members were informed that additional information about counsel's fee request was available: “The attorneys' motion for fees, costs, and expenses including payments to the Plaintiff Class Representatives will be available when filed on or about April 25, 2014, at www.RoundThermostats.com.”

Finally, class members were notified how they could object or exclude themselves from the settlement: “How do I object to or comment on the Settlement? [¶] ... Any response must be postmarked by April 18, 2014, and mailed to [address].” (Boldface omitted.) “If you stay in the Settlement Class, you may object to the Settlement by April 18, 2014.” Class members who wanted to exclude themselves from the settlement were told that “[m]ore information on how to exclude yourself from or object to the Settlement is included in a detailed notice available at www.RoundThermostats.com.”

In response to the notice, thousands of claims were submitted and no class member sought to be excluded. But four people, the objectors, filed objections. The three objectors other than Rogers, whom we discuss separately below, opposed the cy prèsterm and the amount of the potential award for attorney fees. Congdon stated that he was “a member of the settlement class” and asserted “under oath that [he] purchased one or more products covered by the settlement.” He objected to “the lawyers['] plan to ask for attorneys' fees in the amount of 37.5% of the settlement fund” because “there is no explanation, much less a credible explanation why [they] should recover such a high percentage.” Moser asserted “under oath that [he] purchased on[e] or more products covered by the proposed settlement,” and he objected that “[t]he requested attorneys' fees in the amount of 37.5% is excessive” and “[t]he proposed cy près benefit is inappropriate.” Waldenville also stated she was “a member of this class action settlement” and asserted “under oath that [she] purchased one Honeywell round thermostat as referenced in the notice.” She objected on the basis that, in her view, Honeywell's conduct justified an award higher than $18 per thermostat, “especially relative to legal fees of over $3,000,000, which seems like an outrageous amount[,] almost 40%.”

Meanwhile, on April 25, 2014, class counsel filed a motion for reimbursement of their fees and costs. The motion sought an award of fees in the amount of $3,056,250 plus accumulated interest. This amount represented 37.5 percent of the settlement fund, which was the limit on the amount of fees that could be awarded as represented in the settlement notice to the class. According to class counsel, the amount sought was only 20 percent of the total fees they incurred. They submitted evidence that they had spent “nearly 36,000 hours” on the case, and they maintained that their lodestar “exceeds $15 million.” The objectors did not object to this evidence or offer any contradictory evidence.

A hearing to consider final approval of the settlement and the award of class counsel's fees was held on May 2, 2014. (Cal. Rules of Court, rule 3.769(g)[“Before final approval, the court must conduct an inquiry into the fairness of the proposed settlement”].) None of the objectors appeared at the hearing. The trial court then issued its final written order and judgment on May 30, 2014. It found that the settlement was “fair[,] reasonable[,] and adequate.” It noted that the settlement provided up to $18 per thermostat and that this amount “captures approximately 78% of Plaintiffs' estimated damages.” And it found that “Class Members who submit claims stand to recoup more than 2 times the overcharge estimated by plaintiffs' expert and between 68–99% of the retail price of the [round thermostat].”

The trial court rejected the objectors' objections. It found that Rogers failed to file his objection within the prescribed time period, and it found that this failure constituted a “waiver of the Class Member's right to object.” The court also found that, “[l]ike the other Objectors, Mr. Rogers has not established that he is a member of the class.”

In a section entitled “Standing of Objectors as Class Members,” the...