Nguyen v. Wells Fargo & Co., Case No. B256375 (2d Dist., Div. 4 Jan. 6, 2014) (unpublished) is an interesting class action fee case, given that it basically affirms a trial judge’s decision to base a fee award in a “copycat” class action based on the hours worked and hourly rates awarded in a prior class action resulting in a more “rich” result from a class action settlement perspective but involving very similar claims.
What occurred here, boiling down all of the facts/circumstances, is that Class Counsel in a “copycat” follow-up wage/hour class action settled a class action case by which defendant would pay the class a $400,000 fund and would reserve up to $600,000 for class counsel fees and costs, with the trial judge to “fix” those fees/costs and with any non-awarded reversion going back to the defense. Twenty-five percent of the class participated in fund distributions, meaning each class member got about $368 for alleged wage/hour violation conduct.
Class Counsel then moved to recoup between $584,055.46 - $607,308 in fees, with the trial judge awarding $297,700 instead, based principally on the hours and hourly rate awarded in the prior class action where an even larger settlement fund was garnered. No multiplier was awarded, although requested by Class Counsel.
The Second District, Division 4 affirmed, in a 3-0 unpublished decision authored by Justice Collins.
The interesting aspect of this decision was that the appellate court upheld the trial judge’s use of the work effort/hourly rates awarded in the prior class action (given that the class action before it was strikingly similar in other ways, the “copycat” terminology used by the defense). Just as opposing counsel time/work effort may be considered when determining the reasonableness of fees requests by plaintiff (Maughan, 143 Cal.App.4th at pp. 1250-1251 [SLAPP motion case authored by former Presiding Justice Mallano, now retired], the Second District found is was proper for the trial judge to use fees awarded in a prior class action involving similar claims, especially where the prior case was more risky and complex.
The trial judge also reduced the fee recovery for limited success, given that only the Subclass VI claims settled versus the other subclass claims. Beyond that, the decision to award no multiplier was proper given that the second class action was not unique, was not risky, and was not that complex.
The lower court also cross-checked the lodestar amount against the percentage of recovery, determining that Class Counsel was receiving a 75% contingency well over the expected amount. Use of POR to cross-check, if not even used as the primary measure, is justified under recent Second District precedent depending on the nature of the class action case. (See Lafitte, 2014 WL 6613057 [discussed in our Nov. 7, 2014 post when unpublished, but later certified for publication].)
Class Counsel challenged the trial judge’s failure to rule on evidentiary objections, but this was deemed waived because the failure to rule was an implied overruling of the objections.
Finally, Class Counsel was not entitled to fees on appeal—after all, it was not successful in obtaining any different result.