Opinion
A145891
01-12-2017
CREDIT/DEBIT CARD TYING CASES. RICHARD JOHNS et al., Plaintiffs and Respondents, v. VISA U.S.A. INC. et al., Defendants and Respondents; JAMES ATTRIDGE, Objector and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Francisco City & County Super. Ct. No. JCCP 4335)
I.
INTRODUCTION
James Attridge (appellant) appeals from an order denying his motion to recover his attorney fees and costs out of a settlement fund that was created in the Credit/Debit Card Tying Cases, a coordinated unfair competition class action against Visa, MasterCard and their affiliates.
Appellant has filed two prior appeals in the Credit/Debit Card Tying Cases, both from orders approving the named parties' settlement agreement over his objections. (See Credit/Debit Card Tying Cases (Jan. 9, 2012, A129672) [nonpub opn.] (Credit/Debit I); Credit/Debit Card Tying Cases (Oct. 30, 2014, A138984) [nonpub. opn.] (Credit/Debit II).) After a judgment approving the settlement became final, appellant filed his motion for attorney fees, costs and a service award pursuant to the equitable common fund doctrine.
Appellant's motion was denied on two independent grounds. First, the court found that appellant's request was untimely because he did not present it to the trial court prior to final approval of the settlement. Second, the court found that appellant's motion failed on its merits because the services that he and his counsel allegedly performed did not benefit the class in the Credit/Debit Card Tying Cases. We affirm.
II.
FACTS AND LITIGATION HISTORY
Detailed accounts of the factual background and litigation history of several pertinent cases are set forth in this court's unpublished decisions in Credit/Debit I and Credit/Debit II. We include an abridged summary of the salient facts necessary to provide background for our more detailed consideration of the present appeal from the denial of appellant's attorney fees request.
A. Background
In the past, Visa and MasterCard engaged in two policies which gave rise to substantial litigation against them. "First, they prohibited their member banks from issuing American Express or Discover cards (the exclusion policies). Second, they required merchants who accepted their credit cards to accept their debit cards as well (the credit/debit acceptance policies)." (Credit/Debit II, at p. 3.)
These policies were first challenged in the federal courts. In 1996, a group of merchants filed an antitrust action alleging that Visa and MasterCard's credit/debit acceptance policies constituted an illegal tying arrangement. (See In re Visa Check/Mastermoney Antitrust Litigation (E.D.N.Y. 2000) 192 F.R.D. 68.) This federal tying case was certified as a class action, and eventually settled in 2003. (Credit/Debit I, at pp. 5-6.) Meanwhile, in 1998, the Department of Justice filed a federal enforcement action alleging that Visa and MasterCard's exclusion policies violated the Sherman Antitrust Act. (See U.S. v. Visa U.S.A., Inc. (S.D.N.Y. 2001) 163 F.Supp.2d 322.) In an October 2001 judgment, the trial court found that the defendants' credit card exclusion policies constituted a horizontal restraint on trade. (Ibid.; see also Credit/Debit I, at pp. 4-6.)
In January 2000, while the federal cases were still pending, Richard Johns filed a state court consumer class action challenging Visa and MasterCard's credit/debit acceptance policies. The Johns case was stayed until the federal tying case was resolved and was subsequently coordinated with other similar cases under the rubric of the Credit/Debit Card Tying Cases. "These cases centered on allegations that the credit/debit acceptance policies permitted Visa and MasterCard to charge inflated fees to retailers for processing debit card transactions, and that retailers passed the cost of these fees along to consumers in the form of higher prices for goods and services." (Credit/Debit II, at pp. 3-4.) The Honorable Richard A. Kramer was assigned as the coordination trial judge for the Credit/Debit Card Tying Cases. (Ibid.; Credit/Debit I, at p. 6-7.)
In December 2004, appellant filed a consumer class action against Visa and MasterCard (the Attridge action). "The Attridge claims focused on the exclusion policies, as opposed to the credit/debit tying policies. The complaint in the Attridge action alleged [] that the exclusion policies permitted Visa and MasterCard to charge higher network service fees than would have been possible in a fully competitive environment, and that these fees were passed on to those holders of Visa and MasterCard credit cards who maintained revolving debt balances, in the form of higher fees and finance charges." (Credit/Debit II, at p. 4.) The Attridge action was not included in the coordinated Credit/Debit Card Tying Cases because appellant disqualified Judge Kramer under Code of Civil Procedure section 170.6. (Credit/Debit I, at p. 10.)
B. The First Settlement
1. Background
By August 2009, the class plaintiffs in the Credit/Debit Card Tying Cases had settled with both Visa and MasterCard. (Credit/Debit I, at p. 11.) The parties sought preliminary approval of their settlement agreement (the First Settlement), and Judge Kramer permitted appellant to participate in the preliminary approval proceedings as an amicus curiae. In January 2010, the court granted preliminary approval of the First Settlement, provisionally certified a class, and ordered that class members receive notice and the opportunity to opt out of the settlement. (Credit/Debit I, at pp. 11-12.)
"In its final form, the [First] [S]ettlement agreement provided that Visa and MasterCard would pay a total of $31 million into an escrow fund, from which attorney fees, litigation costs, class representative incentive awards, and administration costs would be paid. The amount remaining was to be distributed to nonprofit organizations selected by the parties and approved by the court, to be used by those organizations for financial literacy education, or other purposes relating to advocacy for children, or the indigent." (Credit/Debit I, at pp. 11-12.)
Appellant objected to the First Settlement on the ground that it would release Visa and MasterCard from liability for the Attridge claims without having to pay fair compensation for those claims. In response to this objection, the parties removed a provision from the settlement agreement which expressly released the Attridge claims. Thereafter appellant argued that the Attridge claims were still implicitly covered by the broad release contemplated by the First Settlement. Without expressly deciding whether the Attridge Claims were covered by the release, Judge Kramer filed an order finally approving the First Settlement on August 23, 2010. (Credit/Debit I, at pp. 12-14.)
2. Attorney Fees
Paragraph 8(b) of the First Settlement Agreement stated:
"Class Counsel shall make payments in amounts approved by the Court upon application, but not to exceed a total of $9,300,000.00 . . . for any and all plaintiffs' attorneys fees, litigation costs, and other expenses incurred in connection with prosecuting, handling, and settling the Action. . . . However, in the event that Attridge . . . is fully and finally dismissed because of the release in paragraph 14 below, and counsel for plaintiff in [the] Attridge [case] makes any application for attorneys' fees, litigation costs, or other expense in this Action, such an application will not be considered one that contributes to the $9,300,000.00 cap provided in this paragraph, and [the cy près award] shall be reduced to cover the payment of any sums that the Court awards to counsel for plaintiff in the Attridge case."
In Judge Kramer's January 5, 2010 order granting preliminary approval of the First Settlement, the court set a due date of July 30, 2010, for filing attorney fee applications. On July 30, 2010, counsel for the class plaintiffs (Class Counsel) filed an application for attorney fees along with their motion for final approval of the First Settlement. Appellant, however, did not file an application for his attorney fees on or before July 30, 2010. Judge Kramer made an express note of this fact at an August 6, 2010 session of the final approval hearing. At the conclusion of the August 6 hearing, Judge Kramer granted Class Counsel's fee application, awarding them $9,067,534.44 in attorney fees and $235,465.56 in costs.
On August 10, 2010, after the deadline for filing fee applications had passed, appellant filed a motion requesting that the trial court grant his counsel's application for attorney fees in the event that the First Settlement was finally approved. Specifically, appellant requested payment of a lodestar fee of $5,021,750, which consisted of (1) 4,155 hours of work by appellant's lead attorney, Lingel Winters, at a rate of $850 per hour; and (2) 3,000 hours of work by Winters's co-counsel, at an average of $497 per hour. Appellant also requested payment of $650,000 for unspecified "costs." Class plaintiffs and defendants opposed appellant's fee motion arguing, among other things, that it was not timely; that appellant had refused to participate in settlement negotiations; and that appellant had consistently obstructed progress in the case rather than making any meaningful contribution to its resolution. Thereafter, appellant withdrew his attorney fee motion.
Appellant also filed an ex parte application for an order authorizing the removal of his withdrawn fee motion from the superior court file. That ex parte application was denied.
As noted, the order granting final approval of the First Settlement was filed on August 23, 2010. That same day, the court filed an order awarding Class Counsel attorney fees, and a judgment finally approving the First Settlement. Appellant appealed from the judgment.
3. Credit/Debit I
In Credit/Debit I, this court agreed with appellant that the First Settlement included a release of the Attridge claims. (Credit/Debit I, at pp. 19-22.) We also found that the trial court abused its discretion by approving the First Settlement without making several necessary determinations with respect to the Attridge claims, including whether members of the putative class had been adequately represented with respect to those claims. (Id. at pp. 22-25.) Thus, we reversed the judgment and remanded for further proceedings.
C. The Revised Settlement
1. Background
After this case was remanded to the trial court, appellant filed a motion to disqualify Judge Kramer under Code of Civil Procedure section 170.6. (Credit/Debit II, at p. 6.) On June 11, 2012, the Credit/Debit Card Tying Cases were reassigned to the Honorable John E. Munter.
Following remand, the parties negotiated the terms of a Revised Settlement. Most of the revisions were technical wording changes that did not substantively alter the material terms of the agreement. (Credit/Debit II, at p. 6.) The "Revised Settlement, like the First Settlement, obligated Visa and MasterCard to pay a total of $31 million into a settlement fund. From this amount, funds had been expended to cover the costs incurred to give notice to the class regarding the First Settlement, and would be expended to give notice of the Revised Settlement. The Revised Settlement permitted the trial court to award up to 30 percent of the $31 million to [Class Counsel], and up to $1,000 to each of the six named class representatives for their efforts in representing the class. The remainder of the settlement fund was to be used to make cy près payments to nonprofit organizations for the benefit of the Class Plaintiffs. These provisions of the Revised Settlement were substantively identical to the equivalent provisions of the First Settlement." (Id. at p. 7, fn. omitted.)
"The most significant difference between the First Settlement and the Revised Settlement was in the language of the release granted to Visa and MasterCard on the part of the Class Plaintiffs." (Credit/Debit II, at p. 7.) Although both versions contained a broadly worded release covering all claims arising out of the defendants' conduct that were or could have been alleged in the Credit/Debit Card Tying Cases as well as the two federal antitrust cases, the release in the Revised Settlement also expressly included all of the Attridge claims. (Ibid.)
Appellant objected to the Revised Settlement on the same ground that he objected to the First Settlement, i.e., that the amount defendants were required to pay (which remained unchanged) did not account for the value of the Attridge claims. Appellant also made a new objection that counsel for the class plaintiffs had a conflict of interest due to its representation of Wells Fargo Bank in other matters, and that the class plaintiffs' expert economist, Dr. Gustavo Bamberger, also has a conflict of interest due to his consulting firm's involvement with the Attridge litigation. (Credit/Debit II, at p. 9.)
On April 11, 2013, Judge Munter filed an order granting final approval of the Revised Settlement. (Credit/Debit II, at p. 10.) In a separate order the court set forth extensive findings in support of its ruling, which established the following facts: (1) The Credit/Debit Card Tying Cases focused on the credit/debit acceptance policies, but also included allegations relating to the exclusion policies that were the subject of the Attridge claims; (2) In both the Credit/Debit Card Tying Cases and the Attridge action, the only monetary relief available was restitution as opposed to damages because the trial courts in both cases "dismissed the plaintiffs' claims for damages under the Cartwright Act (Bus. & Prof. Code, § 16700 et seq.), leaving only equitable claims under the Unfair Competition Law (UCL) (Bus. & Prof. Code[,] § 17200)"; (3) The Revised Settlement was " 'the result of extensive negotiations between experienced counsel who are highly familiar with the legal and factual issues of this case,' " and there was no evidence of collusion; (4) Class Counsel and their expert economist properly assessed the potential value of all class claims including the Attridge claims; (5) Class Counsel adequately investigated the strength and weaknesses of the plaintiffs' claims in the Credit/Debit Card Tying Cases and in the Attridge action; (6) The amount of the Revised Settlement was " 'fair, reasonable and adequate in light of the strengths and weaknesses of Plaintiffs' claims and the risks of this litigation' "; and (7) The $31 million settlement amount was " 'fair, reasonable and adequate.' " (Credit/Debit II, at pp. 10-11.)
Judge Munter also made a specific finding that "the inclusion of the Attridge claims in the release did not change its assessment that the Revised Settlement was fair, reasonable and adequate." (Credit/Debit II, at p. 11.) In making this finding, the court rejected the opinion of Attridge's economic expert, which was based on his calculation of the value of a claim for damages rather than a claim for restitution, the sole remedy available in the Attridge action. (Ibid.) The court also found that the opinion of the class plaintiffs' expert regarding the potential value of the class claims was supported by the evidence and more persuasive than testimony from the Attridge expert and, "in light of the questionable value of the Attridge claims, the relief provided by the Revised Settlement was sufficient to compensate the class members not only for the higher retail prices they had allegedly paid as a result of the credit/debit acceptance policies, but also for the inflated finance charges and fees that the Attridge claims alleged consumers with revolving card balances paid as a result of the exclusion policies." (Id. at p. 12.)
Additional circumstances which led the court to conclude that the Revised Settlement was fair included that it was strongly supported by Class Counsel who were experienced, respected, and " 'eminently qualified' " to litigate these claims; class members had reacted positively, in that only 22 had opted out, and only three objections had been filed; the net settlement amount would be distributed to deserving non profit organizations; and direct distribution to class members was impracticable and prohibitively expensive. (Credit/Debit II, at pp. 12-13.)
The court also found it was appropriate to certify a plaintiff class for settlement purposes which consisted of " 'all end-user purchasers in California of retail products or services from businesses that accepted and/or issued [Visa or MasterCard's credit or debit] cards during the class period.' The definition of the Settlement Class was objective; there were millions of class members; and common issues predominated for settlement purposes." (Credit/Debit II, at p. 13, fn. omitted.) Furthermore, the court found, there was "no reason" to certify a separate Attridge subclass because the named plaintiffs had adequately represented all members of the settlement class and there was no conflict of interest within that class. (Ibid.)
2. Attorney Fees
Paragraph 8(b) of the Revised Settlement Agreement stated:
"Class Counsel shall make payments in amounts approved by the Court in [Judge Kramer's August 23, 2010] Order Granting Plaintiffs' Motion for Attorneys' Fees, Expenses, and Incentive Awards attached as Appendix C hereto which total $9,300,000.00, plus any accrued interest on that amount at the time of payment, for any and all plaintiffs' attorneys' fees, litigation costs, and other expenses incurred in connection with . . . the Action and for service awards of $1,000.00 to each of the six Plaintiffs appointed to represent the Settlement Class for their services as such. . . . If counsel for plaintiff in [the Attridge case] makes any application for attorneys' fees, litigation costs, or other expenses in this Action, such an application will not be considered one that contributes to the $9,300,000.00 awarded in [Judge Kramer's August 23, 2010 order], and the [cy près award] shall be reduced to cover the payment of any additional sums that the Court awards to counsel for plaintiff in the Attridge case."
In Judge Munter's November 20, 2012 order granting preliminary approval of the Revised Settlement, the court ordered that "[a]ll motions and papers filed in support of final approval of the Revised Settlement Agreement shall be filed no later than three weeks prior to the Final Approval Hearing." However, Judge Munter struck a provision from the order which would have established that Judge Kramer's August 23, 2010 order granting class plaintiffs' motion for attorney fees and costs continued to be in effect with respect to the Revised Settlement.
Accordingly, on March 12, 2013, the class plaintiffs filed a renewed application for attorney fees, expenses and incentive awards pursuant to which it sought the same fees previously requested in connection with the First Settlement. Appellant did not oppose the class plaintiffs' renewed attorney fees application. Nor did he file an application for payment of his attorney fees prior to the final approval hearing.
Judge Munter conducted a hearing on class plaintiffs' renewed application for attorney fees "in conjunction with" the motion for final approval of the Revised Settlement. As noted, the order granting final approval of the Revised Settlement was filed on April 11, 2013. That same day, the court filed an order awarding Class Counsel attorney fees, and a judgment finally approving the Revised Settlement of the Credit/Debit Card Tying Cases. Again, appellant appealed from the judgment.
3. Credit/Debit II
In Credit/Debit II, this court affirmed the judgment approving the Revised Settlement, finding that appellant failed to demonstrate that the trial court abused its discretion. (Credit/Debit II, at p. 16.) We observed, among other things, that "the record makes clear that before approving the Revised Settlement, the trial court carefully considered Attridge's arguments about the value of the Attridge claims, and ultimately rejected them." (Id. at p. 23.)
Appellant sought further review by the California Supreme Court, which was denied. A remittitur issued on February 19, 2015.
D. Appellant's Postjudgment Motion
On March 30, 2015, appellant filed a "Notice of Motion and Motion in Support of Attridge Counsel's Application for Attorneys Fees, Costs, and Service Award." In support of this motion, appellant's lead attorney Lingel Winters claimed that he performed 6,105.36 hours of work in connection with this case and that $850 was a reasonable hourly rate for that work. Using those figures, Winters calculated that he was entitled to a lodestar fee of $5,189,556, but he agreed to reduce that amount to $4,057,356. Winters also claimed he was entitled to a fee enhancement for which he sought a multiplier of between 1.5 and 2.0.
In his motion papers, appellant also requested a payment of $10,387.72 for costs, and a service award of $5,000. Noting that the Revised Settlement Agreement provided that class plaintiffs in the Credit/Debit Card Tying Cases were each entitled to a $1,000 service award, appellant requested a payment of $5,000 because of his 11 years of "assisting Attridge counsel."
On May 18, 2015, a hearing on appellant's motion was held before the Honorable Mary E. Wiss. On June 3, 2015, the court filed a detailed written order denying appellant's motion on two independent grounds.
First, the court found that appellant's fee request was untimely. During the approval proceedings with respect to both the First Settlement and the Revised Settlement, the trial court set deadlines for submitting attorney fee applications prior to the final approval hearings. Because appellant did not submit a timely fee application with respect to either version of the settlement, the trial court was prevented from considering whether the payment of appellant's fees would impact the fairness of the settlement and the class was deprived of notice and the opportunity to object to appellant's claim for attorney fees. Under these circumstances, Judge Wiss found, "[h]aving twice forfeited the opportunity to apply for attorneys' fees before final approval and judgment, Mr. Attridge cannot do so now to the detriment of the class and without notice." (Fns. omitted.)
Second, the court found that appellant and his counsel "failed to demonstrate that their efforts substantially benefited the class" in the Credit/Debit Card Tying Cases. The court reasoned that although appellant's efforts required the parties to revise the First Settlement Agreement, they did not increase the dollar amount of the settlement or the amount of the cy près benefit awarded to the class. In addition, the court observed that Judge Munter's final approval of the Revised Settlement was premised on a finding that the independent value of the Attridge claims was "essentially zero," a finding which was affirmed on appeal.
III.
DISCUSSION
Appellant contends that Judge Wiss erred by denying his fee application because (1) there is no time limit for filing an equitable motion for attorney fees, and (2) the court applied incorrect standards when evaluating the merits of appellant's fee request.
An order granting or denying attorney fees in a class action case is reviewed for abuse of discretion. (Cellphone Termination Fee Cases (2009) 180 Cal.App.4th 1110, 1118 (Cellphone).) "The abuse of discretion standard is not a unified standard; the deference it calls for varies according to the aspect of a trial court's ruling under review. The trial court's findings of fact are reviewed for substantial evidence, its conclusions of law are reviewed de novo, and its application of the law to the facts is reversible only if arbitrary and capricious." (Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711-712, fns. omitted.)
A. Legal Principles
" 'California follows what is commonly referred to as the American rule, which provides that each party to a lawsuit must ordinarily pay [his, her, or its] own attorney fees. [Citations.] The Legislature codified the American rule in 1872 when it enacted Code of Civil Procedure section 1021, which states in pertinent part that "Except as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties. . . ." ' [Citation.] [¶] Various theories have developed as exceptions to this rule, some of which are created by statute and others by common law." (Abouab v. City and County of San Francisco (2006) 141 Cal.App.4th 643, 661 (Abouab).)
Two related common law doctrines are relevant here, the common fund and substantial benefit theories. Under the common fund theory, " 'one who expends attorneys' fees in winning a suit which creates a fund from which others derive benefits, may require those passive beneficiaries to bear a fair share of the litigation costs.' [Citation.] This, the so-called 'common fund' exception to the American rule regarding the award of attorneys fees . . . is grounded in 'the historic power of equity to permit the trustee of a fund or property, or a party preserving or recovering a fund for the benefit of others in addition to himself, to recover his costs, including his attorneys' fees, from the fund or property itself or directly from the other parties enjoying the benefit.' [Citation]." (Serrano v. Priest (1977) 20 Cal.3d 25, 35.)
"[T]he substantial benefit theory 'which may be viewed as an outgrowth of the "common fund" doctrine, permits the award of fees when the litigant, proceeding in a representative capacity, obtains a decision resulting in the conferral of a "substantial benefit" of a pecuniary or nonpecuniary nature. In such circumstances, the court, in the exercise of its equitable discretion, thereupon may decree that under dictates of justice those receiving the benefit should contribute to the costs of its production.' [Citation.]" (Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 943 (Woodland Hills).)
"Unlike the private attorney general concept, which . . . is intended to promote the vindication of important rights affecting the public interest, the 'substantial benefit' doctrine—like the 'common fund' doctrine from which it emerged—rests on the principle that those who have been 'unjustly enriched' at another's expense should under some circumstances bear their fair share of the costs entailed in producing the benefits they have obtained." (Woodland Hills, supra, 23 Cal.3d at p. 943.)
"The common fund and substantial benefit theories are equitable theories [citation], and equitable principles are appropriately applied in determining whether to award attorneys' fees sought under these theories." (Abouab, supra, 141 Cal.App.4th at p. 662.)
B. Appellant Did Not Make a Timely Fee Request
The record on appeal supports the superior court's finding that appellant failed to comply with two filing deadlines, set by Judge Kramer and Judge Munter respectively, for requesting attorney fees from the settlement fund. As discussed above, during proceedings before Judge Kramer, appellant filed an untimely fee request which he then withdrew, thereby creating the impression that he did not intend to seek a fee recovery from the settlement fund. Consistent with that impression, during proceedings before Judge Munter, appellant did not file a fee request, either before or after the deadline for filing motions in support of the Revised Settlement.
The court's finding that appellant's fee request was not timely is also consistent with the rules governing settlements of class action litigation in California. First, by waiting until after the judgment became final to file his fee request, appellant sought to avoid the mandatory review process that applies to all class action settlements under California law, which includes preliminary approval, class notice and a final review hearing and determination. (See Cal. Rules of Court, rule 3.769.) Because the settlement contemplated that attorney fees approved by the court would be paid out of the settlement fund, any such request needed to be considered by the court before finally approving the settlement. "The settlement of a class action requires court approval to prevent fraud, collusion, or unfairness to the class. [Citation.] 'The court must determine the settlement is fair, adequate, and reasonable. [Citations.] The purpose of the requirement is "the protection of those class members, including the named plaintiffs, whose rights may not have been given due regard by the negotiating parties." [Citation.]' [Citation.]" (Cellphone, supra, 180 Cal.App.4th at p. 1117.) Furthermore, when a class action settlement agreement contains an attorney fee provision, "the trial court has an independent duty to determine the reasonableness of the award. [Citations.]" (Id. at p. 1119.)
Second, by waiting until after final judgment to submit his fee request, appellant deprived the class of notice and the opportunity to object to the payment of appellant's attorney fees. The reactions of class members to a request for attorney fees is relevant to the fairness analysis that a trial court must undertake before approving a class action settlement. (Litwin v. iRenew Bio Energy Solutions, LLC (2014) 226 Cal.App.4th 877, 883-884.) Furthermore, "[t]o accord with due process, notice provided to class members ' " 'must fairly apprise the class members of the terms of the proposed compromise and of the options open to the dissenting class members.' " ' [Citation.]" (Id. at p. 883.)
Appellant's primary contention on appeal is that his fee application was timely because there is no statutory deadline for filing an application for "equitable" common fund attorney fees. This contention is facially meritless because the trial court did not find that appellant failed to comply with a statutory deadline. Rather, appellant's application was untimely because (1) he missed the deadline(s) set by the trial court for filing motions in support of the common fund settlement; and (2) he submitted his request after the settlement was finally approved and incorporated into a final judgment.
Appellant contends that, as an objector to the Revised Settlement, he was not required to comply with the deadline in Judge Munter's preliminary approval order which applied only to motions filed in "support of final approval" of the Revised Settlement. But, the court's order was necessary to enable the court and the parties to assess how claims for attorney fees might impact the net funds available for distribution regardless of who was making the request before the final settlement could be approved. The fact that appellant objected to the Revised Settlement on grounds that had nothing to do with the provisions governing payment of attorney fees did not excuse appellant from complying with the trial court's express order.
Appellant contends that the Revised Settlement gave him the "right" to seek attorney fees after final judgment. According to this theory, Paragraph 8(b) of the Revised Settlement Agreement established a two-step procedure for adjudicating attorney fee applications which (1) required Class Counsel to submit their request for attorney fees prior to the final approval hearing but (2) authorized appellant to file his fee request after the judgment became final, when his "right" to recover fees accrued.
Paragraph 8(b) of the Revised Agreement, which we have quoted above, addressed the possibility that appellant's counsel might file a request for attorney fees; it did not confer any "right" on appellant to either file that request or recover his fees. Furthermore, because Paragraph 8(b) provided that if appellant were to recover fees, they would be paid from the money allocated to the cy près recipients, it was incumbent on appellant to submit his request before the final approval process was completed. Nothing in Paragraph 8(b) or any other provision of the Revised Settlement conferred a right on appellant to seek his attorney fees for the first time after the judgment became final.
Appellant contends that interpreting the Revised Settlement Agreement as requiring him to wait until after final judgment to request his fees is consistent with the rationale of Citizens Against Rent Control v. City of Berkeley (1986) 181 Cal.App.3d 213 (Citizens). Citizens was an appeal from an order granting a motion for attorney fees under Code of Civil Procedure section 1021.5, the private attorney general doctrine. The appellate court affirmed the order, holding that "Section 1021.5 'provides a special motion procedure plainly intended to be initiated after the result of the action is known but subject to no express time limit.' [Citations.]" (Citizens, supra, 181 Cal.App.3d at p. 227.) This holding does not apply in the present case because appellant does not claim that section 1021.5 or any other statute entitles him to an award of attorney fees.
For the same reason, we are not persuaded by appellant's out-of-context quotations from other cases involving requests for statutory attorney fee awards, including Marini v. Municipal Court (1979) 99 Cal.App.3d 829; No Oil, Inc. v. City of Los Angeles (1984) 153 Cal.App.3d 998; and Folsom v. Butte County Assn. of Governments (1982) 32 Cal.3d 668.
With his postjudgment motion, appellant attempted to make an equitable claim for a fee recovery from a common fund created by a class action settlement. A procedure requiring appellant to present that claim during the mandatory review process applicable to the class action settlement was not only incorporated into the trial court's orders in this case, it is standard practice in class action settlement cases. (See, e.g., Munoz v. BCI Coca-Cola Bottling Co. of Los Angeles (2010) 186 Cal.App.4th 399; Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224; Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794.)
Finally, appellant contends his counsel could not have filed a fee application before the judgment became final without risking a waiver of appellant's right to appeal that judgment. As support for this argument, appellant cites Satchmed Plaza Owners Assn. v. UWMC Hospital Corp. (2008) 167 Cal.App.4th 1034, 1045, for the proposition that " 'the voluntary acceptance of the benefit of a judgment or order is a bar to the prosecution of an appeal therefrom.' " However, appellant fails to identify any authority supporting his characterization of the act of filing an attorney fee application as the acceptance of a benefit of a judgment. As discussed, any right appellant had to apply for and potentially recover fees derived from the equitable common fund doctrine, not from the Revised Settlement Agreement. Thus, filing a fee application was not the equivalent to accepting a benefit of the settlement.
Furthermore, as the trial court found, to the extent that the payment of attorney fees from the common fund could be construed as a "benefit" of the judgment, that benefit could not have been accepted by filing an application for fees because under the terms of the Revised Settlement, the common fund remained in trust until the time for all appeals was exhausted.
C. Appellant Did Not Benefit the Class
The record also supports the denial of appellant's fee application on its merits. The common fund doctrine is "based on the commonsense notion that the 'one who expends attorneys' fees in winning a suit which creates a fund from which others derive benefits, may require those passive beneficiaries to bear a fair share of the litigation costs.' [Citation.] An award of fees under the equitable common fund doctrine is ' "analogous to an action in quantum meruit: The individual seeking compensation has, by his actions, benefited another and seeks payment for the value of the service performed." ' [Citation.]" (Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Markets, Inc. (2005) 127 Cal.App.4th 387, 397.)
In this case, the trial court's conclusion that appellant and his counsel did not perform services which benefited the class in the Credit/Debit Card Tying Cases was based on two primary findings, both of which are supported by substantial evidence.
First, the court found that legal services appellant's counsel rendered in the Attridge Action did not contribute to the creation of the settlement fund in the Credit/Debit Card Tying Cases. This finding is supported by evidence that the Attridge Action was filed almost four years after the Johns case was filed; was "a near identical imitation" of the complaint in the Credit/Debit Card Tying Cases; and repeated deficient Cartwright Act claims that had already been dismissed by Judge Kramer in the Credit/Debit Card Tying Cases. Furthermore, in the four and one-half years the Attridge Action was pending before that case was stayed in anticipation of settlement, the only discovery that appellant conducted was to serve one set of form interrogatories and hold one deposition.
Second, the court found that the role appellant played in the Credit/Debit Card Tying Cases did not contribute to the creation of the common fund settlement. Evidence presented to the trial court established that appellant and his counsel were invited but refused to participate in the settlement negotiations in this case. Furthermore, despite his objections and his two prior appeals, appellant failed to substantiate credibly his basic theory that the Attridge claims had a separate and independent value apart from the claims that were already alleged in the Credit/Debit Card Tying Cases. Thus, the Attridge claims did not increase the overall value of the class settlement. Rather, in overruling appellant's objections to the Revised Settlement, Judge Munter found that the value of the Attridge claims "was essentially zero."
In this court, appellant advocates for a fundamentally different interpretation of Judge Munter's final approval order. According to appellant, that order was based on a finding that the defendants' $31 million payment was a joint settlement which "holistically" settled both the Credit/Debit Card Tying Cases and the Attridge Action as "one ball of wax." Appellant appears to contend that this alleged finding proves that he benefited the settlement class by establishing that money was paid in order to settle the Attridge claims.
We disagree with appellant's interpretation of the final approval order as well as his assumption that the defendants paid money to settle the Attridge claims. The quoted phrases appellant attributes to Judge Munter were not judicial findings, but words the court used at a hearing when attempting to characterize and clarify the arguments of the parties. As discussed earlier, Judge Munter made extensive findings and determinations in support of his order finally approving the Revised Settlement. Contrary to appellant's theory here, Judge Munter did not find that the Attridge claims had any separate value or that appellant and his counsel contributed to the creation of the settlement fund. In fact, the court concluded that including the Attridge claims in the release granted to defendants in the Revised Settlement Agreement did not change the value of the case at all. This conclusion and the other findings we have summarized above support the determination by Judge Wiss that appellant and his counsel did not substantially benefit the settlement class.
Appellant contends that (1) the only reason Judge Wiss denied his fee request was because the Attridge Action was a separate case, and (2) this reason was unsound because the law of the case doctrine establishes that the Attridge putative class was included in the Credit/Debit settlement class under both versions of the settlement. First, appellant misunderstands the court's ruling. Judge Wiss did not deny the fee request because appellant's fees were incurred in the Attridge Action, but rather because services appellant's counsel allegedly performed in the Attridge Action did not contribute to the creation of the settlement fund or otherwise benefit the class in the Credit/Debit Card Tying Cases. This finding supports the trial court's ruling. (See Lofton v. Wells Fargo Home Mortgage (2014) 230 Cal.App.4th 1050, 1064 ["A duplicative action that does nothing to contribute to a result achieved in a class action does not justify a separate award of fees."].) Second, prior orders establishing that the Attridge putative class was included in the settlement class meant that members of the Attridge putative class are entitled to the benefits of this settlement. These orders did not conclude that appellant or his attorney deserve any credit for securing those benefits.
Taking a different tack, appellant contends that Judge Wiss committed legal error by evaluating his fee request under the substantial benefit theory rather than the common fund theory. In this regard, the order denying appellant's motion for attorney fees states that appellant failed to demonstrate that he " 'substantially enhanced the benefits to the class under the settlement,' " and then quotes the following rule: "The equitable common fund/common benefit doctrine ' authorizes attorney fees only when the litigants preserve or create a common fund for the benefit of other as well as themselves.' [Citations.] In the absence of a showing that objectors substantially enhanced the benefits to the class under the settlement, as a matter of law they were not entitled to fees, and the district court did not abuse its discretion." (Vizcaino v. Microsoft Corp. (9th Cir. 2002) 290 F.3d 1043, 1051-1052, fn. omitted; see also Class Plaintiffs v. Jaffe & Schlesinger, P.A. (9th Cir. 1994) 19 F.3d 1306, 1308.)
Appellant contends the court committed reversible error by relying on Ninth Circuit authority which applied Washington law, arguing that California law draws a "clear distinction" between the common fund doctrine and the substantial benefit doctrine. According to appellant, under California law, "[t]he common fund standard applies where, as here, there is an existing common fund, whereas the substantial benefit standard applies even in the absence of an 'existing fund,' which does not apply here." Appellant fails to explain how or why this technical distinction has any substantive impact on our analysis. As we have already discussed, the substantial benefit doctrine is an extension of the common fund doctrine; both theories are premised on the equitable principle that a party who expends fees which benefit a class of plaintiffs is entitled to the payment of those fees to avoid unjust enrichment. (Woodland Hills, supra, 23 Cal.3d at p. 943.)
If appellant is suggesting he was entitled to recover his fees under the common fund doctrine even if he did not confer a substantial benefit on the settlement class, his own authority holds otherwise. (Cziraki v. Thunder Cats, Inc. (2003) 111 Cal.App.4th 552 (Cziraki).) The issue in Cziraki was whether the "common fund and substantial benefit doctrines . . . permit an award of attorney fees in a derivative suit involving a close corporation with a small number of shareholders." (Id. at p. 557.) Concluding that these equitable doctrines could be invoked in a derivative shareholder action, the court repeatedly stated that both the common fund and substantial benefit theories require proof that the fee applicant conferred a "substantial benefit" on the class of shareholders that was distinct from his individual adverse interests. (Id. at pp. 560-561, 563.)
Finally, appellant contends that the trial court employed an erroneous standard by basing its decision about whether to grant appellant's fee request on an assessment of the relative strengths and weaknesses of the Attridge claims. As discussed, the trial court properly focused on the question whether appellant and his attorney performed services that benefited the class. The prior judicial finding that the Attridge claims did not have any independent value was relevant to the attorney fee analysis because it reinforced the court's discretionary determination that appellant and his counsel did not perform any services that benefited the settlement class.
D. Remaining Issues
Appellant has filed two requests for judicial notice in connection with his appeal. In a March 7, 2016 request, appellant asks this court to take judicial notice of "Judicial Council Legal Form MC-010," a form that can be used to file a memoranda of costs. In a June 10, 2016 request, appellant seeks judicial notice of a Web site that was created in conjunction with the settlement of the Credit/Debit Card Tying Cases. "There is . . . a precondition to the taking of judicial notice in either its mandatory or permissive form—any matter to be judicially noticed must be relevant to a material issue. [Citation.]" (People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2.) Here, appellant seeks judicial notice of material that is not relevant to our disposition. Therefore, both requests are denied.
In their respondents' brief, class plaintiffs request sanctions against appellant for filing a frivolous appeal. However, respondents have not filed a separate sanctions motion as required by California Rules of Court, rule 8.276(b)(1). (See Cowan v. Krayzman (2011) 196 Cal.App.4th 907, 919.) "That reason alone is grounds to deny the request. [Citation.]" (Bak v. MCL Financial Group, Inc. (2009) 170 Cal.App.4th 1118, 1128.)
IV.
DISPOSITION
The June 3, 2015 order denying appellant's motion for attorney fees, costs, and a service award is affirmed. Respondents are awarded their costs on appeal.
/s/_________
RUVOLO, P. J. We concur: /s/_________
REARDON, J. /s/_________
RIVERA, J.