End Result Was Four Class Representatives Were Hit With Routine Costs Of $123,134.94.
Class action practitioners should read this next post on how CCP § 998 costs shifting can result in routine costs exposure to class representatives, especially where “pocketbook” financial evidence is not properly presented.
In Keller v. Bd. of Trustees, Cal. State University (CSU), Case Nos. A147029/A147941 (1st Dist., Div. 2 Apr. 19, 2018) (unpublished), plaintiff students, in an eventually certified subclass, lost an action where they sued for non-resident tuition fee increases by CSU. CSU then sought $477,613.25 in routine costs, $329,981.44 of which happened to be expert witness fees after plaintiffs rejected a CCP § 998 offer by CSU. The trial court refused to award the expert witness fees, reducing the costs request somewhat to eventually award $123,134.94 against four named class representatives. Cross-appeals by both sides did not change the result on appeal.
With respect to the $123,134.94 award against the class representatives, the appellate court found that the routine costs were mandatory in nature and the trial judge was not out of bounds to reject that there was unfairness to the representatives, especially given the lack of specific proof that they would be financially distressed by the award. Here is what the appellate court said: “Plaintiffs have failed to provide authority that a court abuses its discretion in refusing to limit recoverable costs in a class action to either the named plaintiffs’ maximum potential recovery or to the amount of costs incurred defending against individual claims. In refusing to require absent class members to shoulder a proportionate share of costs, California authority has recognized that it may be appropriate to hold class representatives responsible for costs that may outstrip their personal potential recovery. “‘While imposition of the entire cost burden on the named plaintiffs may have a chilling effect on the willingness of plaintiffs to bring class action suits, this effect easily may be outweighed by the potential recovery. All potential litigants [i.e., the representative plaintiffs] must weigh costs of suit against likelihood of success and possible recovery before deciding to file suit. Those who choose to take the risks of litigation should be the ones who bear the cost when they are unsuccessful, not those who did not make the choice.’ (Van de Kamp v. Bank of America, [(1988)] 204 Cal.App.3d [819,] 869.)” (Earley v. Superior Court (2000) 79 Cal.App.4th 1420, 1433– 1434.) Plaintiffs’ arguments to the contrary are more properly addressed to the Legislature.” [Keep in mind this award had no relationship to the rejected 998 offer.]
Concern then shifted to CSU’s cross-appeal challenging the failure to award it expert witness fees based on the 998 offer. The lower court did not err in declining expert witness fees because the plaintiff subclass members had different damages such that it was impossible to evaluate the defense offer on this specific issue—the offer was invalid based on the failure to apportion.
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