72% Of Fee Request Approved Under Clear Sailing Provision.
In Choi v. Restaino, Case No. B257480 (2d Dist., Div. 3 June 21, 2016) (partially published; fee discussion unpublished), a class of healing cream purchasers sued defendant under the Consumer Legal Remedies Act, among other claims, based on overpaying for creams based on inadequate ingredient disclosures. A settlement was reached under which defendant agreed to not sell creams without disclosing all ingredients, agreed to provide each class member with an allowable claim a $45 certificate for use to buy another product within 180 days/nontransferable, conditioned the settlement upon there being no release of any personal injury claims, and conditioned the compromise upon the defense’s agreement to a “clear sailing” provision under which the defense would not challenge an attorney’s fees request of no more than $1.2 million (which was the request made by class counsel). The lower court approved the settlement, and awarded $864,342 in fees—72% of the $1.2 million request.
The Second District, Division 3, in an opinion authored by Justice Aldrich, affirmed. In so doing, in an unpublished section, the panel showed some of the factors used in looking at a fee award and also rejected appellants/objectors’ only challenge that the “clear sailing” provision was excessive/collusive (on this latter point, observing there is no absolute prohibition and such settlement provisions are common, citing Consumer Privacy Cases, 175 Cal.App.4th 545, 553 (2009)). The factors considered on reasonableness were these: (1) there were 86,000 potential class members, and the claim rate was 14%, more than 3 times the normal 5% rate in these type of consumer cases; (2) the total value of the settlement was around $2.4 million (with the value including the $895,365 in allowed claims, settlement administration/expenses, and class counsel fees of potentially $1.2 million); and (3) the trial judge did reduce the fee request, allowing a lodestar hourly rate of $600/hour and a multiplier of 1.8 on the lodestar work effort.