FOR PUBLICATION



### UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

J ASON M. Y AMADA , D.D.S. , on

behalf of himself and others similarly

situated,

Plaintiff

- Appellee

,

v.

N OBEL B IOCARE H OLDING AG;

N OBEL B IOCARE AB; N OBEL

B IOCARE USA, LLC

, Defendants

- Appellants. No. 14

- 55263

D.C. No.

2:10

- cv

- 04849

-

MWF

- PLA

ORDER AND

AMENDED

OPINION

Appeal from the United States District Court

for the Central District of California

Michael W. Fitzgerald, District Judge, Presiding

Argued and Submitted

February 12, 2016

— Pasadena, California

Filed April 20 , 2016

Amended June 9, 2016

Before: Marsha S. Berzon and John B. Owens, Circuit

Judges

, and Algenon L. Marbley, * District Judge

.

Opinion by Judge Marbley

* The Honorable Algenon L. Marbley, District Judge for the U.S.

District Court for the Southern District of Ohio, sitting by designation.2 Y AMADA V

. N OBEL B IOCARE

SUMMARY **

Attorneys’ Fees

The panel vacated the district court’s order awarding

class counsel more than $2.3 million in attorneys’ fees,

which the district court awarded based on the terms of a

settlement agreement, California Code of Civil Procedure

§ 1021 under the substantial benefit theory, and the private

attorney general theory under California Code of Civil

Procedure § 1021.5; and remanded.

Dr. Jason Yamada , a dentist, filed a class action

complaint against defendants Nobel Biocare AG, and related

entities, alleging defects in the NobelDirect implants.

The lodestar method (calculated by multiplying the

number of reasonable hours the prevailing party expen ded

by a reasonable hourly rate for the region and for the

attorneys’ experience) may be used in certain class actions

to calculate attorneys’ fees. The court may adjust the

lodestar figure by an appropriate upward or negative

multiplier reflecting a host of “reasonableness” factors.

The panel held that defendants did not waive their due

process argument. The panel also held that the district

court’s use over defendants’ objection of ex parte, in camera

submissions to support its fee order violated defen dants’ due

process rights. On remand, the panel held that the district

court must allow defendants access to timesheets,

appropriately redacted to remove privileged information, so

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.Y AMADA V

. N OBEL B IOCARE 3

they can inspect them and present whatever objections that

they might have concerning the fairness and reasonableness

of plaintiffs’ fee request.

The panel held that the district court’s discount of the

lodestar for lack of success was not erroneous because the

district court concisely and clearly explained its reduction of

the lodestar, and because there was sufficient support for its

finding that plaintiffs’ claims were related to a common goal.

The panel also held that the district court’s cross

- check of

the lodestar was entirely discretionary where, as here,

classwide benef its were not easily monetized.

COUNSEL

Eric Y. Kizirian (argued) and Michael K. Grimaldi, Lewis

Brisbois Bisgaard & Smith LLP, Los Angeles, California ;

Jeffry A. Miller, Lewis Brisbois Bisgaard & Smith LLP

, San

Diego, California, for Defendants

- Appellants.

Myron Moskovitz (argued), Piedmont, California; William

M. Audet, and Jonas P. Mann, Audet & Partners, LLP

, San

Francisco, California, for Plaintiff

- Appellee.4 Y AMADA V

. N OBEL B IOCARE

ORDER

The opinion filed on April 20, 2016 and appearing at

2016 WL 1579705 is hereby amended. The amended

opinion will be filed concurrently with this order.

The opinion is amended as follows:

On page 13, line 6 <normally> has been added. The

sentence now reads: <Accordingly, we have previously hel d

that an opposing party normally has a right to see the

timesheets on which a district court relied in issuing a fee

award.>

On page 15, line 5 <Here> has been added. The sentence

now reads <Here, the Due Process Clause requires that

opposing counsel hav e access to the timesheets relied on to

support the fee order.>

On page 15, footnote 7 has been added. Footnote 7 reads

<This case is different from United States v. Eyraud , in

which we held that the district court’s denial of a defendant’s

request for ac cess to the original billing invoices used for

restitution purposes to determine compensable attorneys’

fees did not violate her right to Due Process. 809 F.3d 462,

471 (9th Cir. 2015). Eyraud “had access to the [victim’s] law

firm’s declaration describing the work it performed relating

to Eyraud’s fraud and the invoice summaries listing the

amount of time that work took.” Id. It was only to verify that

those disclosed “documents accurately reflected the

pertinent information contained in the privileged bil ling

records,” the court examined the original in camera. Id. The

court then confirmed that the summaries relating to work and

time spent that had been extracted from the privileged

material were accurate, i.e., “simply corroborative of what

counsel alread y had seen.” Id. With the accurate summariesY AMADA V

. N OBEL B IOCARE 5

in hand, we held that Eyraud was “able to challenge the legal

basis for the court’s order.” Id. Thus, she had been “afforded

adequate notice [of the facts] and a meaningful opportunity

to be heard.” Id. By contr ast, here the court made an

independent determination of appropriate fees, but it did not

reveal the actual basis of its ruling or provide Nobel with

access to the information used to reach that ruling. Thus,

unlike Eyraud, Nobel was denied a meaningful op portunity

to review and to litigate the merits of the award.>

The parties may not file petitions for rehearing or

rehearing en banc in response to the amended opinion. The

mandate shall issue forthwith.

OPINION

MARBLEY , District Judge:

Defendants

- Appellants Nobel Biocare Holding AG,

Nobel Biocare AB, and Nobel Biocare USA, LLC

(collectively, “Nobel”) appeal the district court’s order

awarding class counsel more than $2.3 million in attorneys’

fees. Defendants appeal on four bases. First, they contend

that the district court violated their due process rights by

basing its fee order on an ex parte, in camera review of

timesheets that they could not review or challenge. Second,

they argue that the district court did not adequately discount

the lodestar. Third, they assert that the district court’s cross

check of the lodestar was flawed. Finally, they submit that the

district court erred in awarding a multiplier based solely on

the contingent risk factor of the litigation. Plaintiffs argue

that Defendants have waived the first argument by failing to

raise the issue timely or adequately.6 Y AMADA V

. N OBEL B IOCARE

We find that Defendants have not waived their due

process argument, and we vacate the district court’s fee order

and remand with instructions.

BACKGROUND

Named Plaintiff Dr. Jason Yamada, DDS is a Torrance,

California

- based dentist specializing in tooth implants. Dr.

Yamada attended a promotional symposium in 2004 hosted

by Nobel featuring their NobelDirect dental implants.

Following the symposium, Dr. Yamada implanted dozens of

NobelDirect implants into his patients but noticed that the

implants failed at a rate he deemed unusually high. Just over

a year after the implant’s launch, two Swedish professors at

the University of Gothenburg warned that the implants were

causing bone loss, and they urged Nobel to withdraw the

implants from the market. In response to those allegations,

Nobel contacted the Swedish Medical Products Agency

(“SMPA”), a government agency akin to the United States

Food and Drug Administration, to investigate. In February of

2008, the SMPA formally closed its investigation with no

adverse findings as to the implants’ safety or efficacy.

Nevertheless, at least a dozen of Dr. Yamada’s patients’

NobelDirect implants failed, which necessitated explant

surgery

— that is, removal of the implants

— oral

reconstruction, implant replacement, and continued

monitoring. Dr. Yamada performed those necessary

reparative surgeries at his own expense.

On June 30, 2010, Dr. Yamada filed a class action

complaint against Nobel alleging a defect in the NobelDirect

implant. The complaint alleged causes of action for

declaratory relief, implied indemnity, breach of express and

warranty, and a violation of California Unfair Competition

Law (“UCL”), California Business and Professions Code

§§ 17200, et seq

.Y AMADA V

. N OBEL B IOCARE 7

On November 5, 2010, Nobel filed a motion to dismiss

Dr. Yamada’s first amended complaint. On January 20,

2011, the district court (the Honorable Jacqueline Nguyen)

denied the motion as to all but the implied indemnity claim,

which it dismissed with prejudice. That same day, the district

court ordered Dr. Yamada to file his motion for class

certification by February 28, 2011. Meanwhile, the parties

filed their preliminary report under Rule 26(f) of the Federal

Rules of Civil Procedure. The report was filed prior to

discovery, and it noted that Defendants had sole possession

of the vast majority of key documents in the litigation.

Plaintiffs sought compensatory damages (both past and

projected loss), restitution, and declaratory relief to protect

the class, essentially a form of indemnity. Projected class

wide damages were estimated at $450 million and were

calculated as follows: $8 million for the price of the 20,000 1

failed implants, representing an estimated 20% failure rate

out of 100,000 total implants at $400 per implant; $70

– 100

million for the surgical replacement of the 20,000 implants

at $3,500 per procedure; $60 million to repair or restore teeth

adjacent to the implant; and $325 million for monitoring and

medical costs.

On August 12, 2011, the district court certified a

nationwide class and appointed Dr. Yamada class

representative. On May 11, 2012, the case was reassigned to

the Honorable Michael Fitzgerald. On June 11, 2012, Nobel

moved both for summary judgment as to all outstanding

claims and for reconsideration of class certification or,

alternatively, decertification of the class, arguing that two

1 The report reaches the figure of $60 million by estimating 3,000

procedures at a cost of $20,000 each. This equation is likely mistaken.

3,000 dollars per procedure for 20,000 procedures (the estimated number

of failed implants) is the likelier equation.8 Y AMADA V

. N OBEL B IOCARE

recently decided cases materially changed the applicable law.

The district court denied Nobel’s motion for summary

judgment but ordered supplemental briefing on the motion

for reconsideration, finding well taken Defendants’ argument

that Mazza v. American Honda Motor Co.

, 666 F.3d 581 (9th

Cir. 2012), and American Honda Motor Co. v. Superior

Court

, 199 Cal. App. 4th 1367 (2011), represented material

changes of law under Civil Local Rule 7

- 18. 2 Mazza held that

“California law may only be used on a classwide basis if ‘the

interests of other states are not found to outweigh

California’s interest in having its law applied.’” 666 F.3d at

590 (quoting Wash. Mut. Bank v. Super. Ct.

, 24 Cal. 4th 906,

921 (2001)). In making that determination, Mazza requires

courts to conduct “a three

- step governmental interest test.” 3

2 Civil Local Rule 7

- 18 provides :

A motion for reconsideration of the decision on any

motion may be made only on the grounds of (a) a

material difference in fact or law from that

presented to the Court before such decision that

in the exercise of reasonable diligence could not

have been known to the party moving for

reconsideration at the time of such decision, or

(b) the emergence of new material facts or a change of

law occurring after the time of such decision, or

(c) a manifest showing of a failure to consider

material facts presented to the Court before such

decision. No motion for reconsideration shall in any

manner repeat any oral or written argument made in

support of or in opposition to the original motion.

3 First, the court determines whether the relevant law of

each of the potentially affected jurisdictions with

regard to the particular issue in question is the same or

different.Y AMADA V

. N OBEL B IOCARE 9

Id. The district court conducted the test and ultimately denied

Defendants’ motion for reconsideration under Mazza due to,

among other reasons, “the overwhelming connections

between California and [Defendants’] conduct relevant to

[the] case.”

The material change under American Honda concerned

causation. In American Honda

, the California Court of

Appeal stated that for a California breach of warranty claim

to proceed, the movant for class certification must provide

“substantial evidence of a defect that is substantially certain

to result in malfunction during the useful life of the product.”

199 Cal. App. 4th at 1375. To do that, the movant must

demonstrate through expert testimony that “there was an

inherent defect and that it caused the product to malfunction

or that it was substantially certain the product would

malfunction as a result of the defect.” Id. at 1377. The district

court found that the record demonstrated hundreds of

potential causes for implant failures, and that the cause of any

Second, if there is a difference, the court examines

each jurisdiction’s interest in the application of its

own law under the circumstances of the particular

case to determine whether a true conflict exists.

Third, if the court finds that there is a true conflict, it

carefully evaluates and compares the nature and

strength of the interest of each jurisdiction in the

application of its own law to determine which

state’s interest would be more impaired if its policy

were subordinated to the policy of the other state, and

then ultimately applies the law of the state whose

interest would be more impaired if its law were not

applied.

Mazza

, 666 F.3d at 590 (quoting McCann v. Foster Wheeler LLC

, 48 Cal.

4th 68, 81

– 82 (2010)).10 Y AMADA V

. N OBEL B IOCARE

particular failure was uncertain. Accordingly, the district

court granted in part Defendants’ motion and decertified the

class as to the claims for declaratory relief, breach of express

warranty, and breach of implied warranty. The court left

standing the claims for unfair and fraudulent business

practices under California’s UCL.

The parties settled the remaining claims. On May 21,

2013, the district court issued an order granting preliminary

approval of the settlement. The settlement agreement

provided compensation for class members as follows: all

implantees whose NobelDirect implants failed before the

effective date of the settlement agreement and who had not

yet received a replacement for the implants under Nobel’s

warranty plan would receive either compensation for the

actual amount paid for the failed implants or, if Nobel had no

record of the actual amount paid, $450.00 for each failed

implant; and all implantees whose NobelDirect implants

failed after the effective date of the settlement agreement

would receive either reimbursement of the actual amount

paid or any single replacement Nobel implant.

The settlement enhanced Nobel’s original warranty.

Before the settlement, Nobel’s warranty was for 10 years and

provided only for another NobelDirect implant. Further, the

original warranty gave Nobel the right to deny claims if they

suspected that the implant failure was caused by patient

misuse, and the burden was on the patient to prove otherwise.

The prior warranty also required the patient to return the

extracted implant to recover. The settlement provided class

members a lifetime warranty, and those who experienced

past failures could recover merely by signing a declaration

attesting that to their knowledge, the patient was not the

exclusive cause of the failure.Y AMADA V

. N OBEL B IOCARE 11

On September 8, 2013, class counsel filed two motions:

one for attorneys’ fees and litigation expenses and the other

for approval of the class action settlement. In the motion for

attorneys’ fees, counsel requested $4,156,631.85 in fees and

$223,989.06 in expenses. The fee request was based on a

$2,771,087.9 0 lodestar and a multiplier of 1.5 to account for

the contingent nature of the litigation.

Nobel opposed class counsel’s motion for attorneys’ fees.

At a hearing on the motion, the district court ruled that the

summary nature of the time records and declarations

provided by class counsel prevented the court from

adequately evaluating whether the number of hours expended

on the litigation were reasonable or duplicative. To remedy

that defect, the court ordered class counsel to provide

unredacted time records under seal and in camera to the court

only, after which the court would determine whether copies

of the time records should be redacted and provided to

Nobel’s counsel. Nobel asked for copies of the records, but

the district court denied the request, subject to

reconsideration.

On November 4, 2013, class counsel filed the timesheets

under seal for the district court’s in camera review. After

reviewing the timesheets, the court held a hearing on January

14, 2014. At that hearing, Nobel renewed its request to

examine the timesheets submitted by class counsel. The

district court overruled the objection, stating:

I think that [counsel for Nobel] are grossly

overstating [their] ability to dictate to

someone who managed his own law firm for

close to 20 years to read through these bills

and make a determination on [them]. Every

month I had to send out bills to

exceedingly demanding clients, either12 Y AMADA V

. N OBEL B IOCARE

corporate clients or insurance companies and

make sure that they would be paid, and I have

the ability to look at that and say would

this pass muster with

— you know, with an

insurance company? And, obviously, I think

the order speaks for itself. The alternative

is to force everybody to go through and

decide what is privileged and what’s not and

then what

— for [them] to advocate on the

basis of what’s left over and I just don’t

think that’s a good use of anybody’s time.

Shortly after the hearing, the district court entered an

order awarding fees to class counsel on three grounds: the

terms of the settlement agreement; California Code of Civil

Procedure § 1021 under the substantial benefit theory; 4 and

the private attorney general theory under California Code of

Civil Procedure § 1021.5. 5

4 The substantial benefit theory provides for attorneys’ fees in suits that:

(1) invoke the court’s equitable powers; (2) are commenced and

maintained as a representative action; and (3) result in a disposition that

confers substantial benefits (either pecuniary or nonpecuniary) upon the

persons represented. Coal. for L.A. Cty. Planning etc. Interest v. Bd. of

Supervisors

, 76 Cal. App. 3d 241, 248 (1977).

5 Section 1021.5 provides that

a court may award attorneys’ fees to a successful party

against one or more opposing parties in any action

which has resulted in the enforcement of an important

right affecting the public interest if: (a) a significant

benefit, whether pecuniary or nonpecuniary, has been

conferred on the general public or a large class of

persons, (b) the necessity and financial burden of

private enforcement

. . . are such as to make theY AMADA V

. N OBEL B IOCARE 13

The court deemed it necessary, however, to reduce the

requested fees substantially due to vagueness in time entries,

improper inclusion of clerical work and other work not

properly billed for, inflation of hours due to rounding up of

billing in large time increments, and the use of block billing.

Nobel timely appealed the final fee award to this court.

STANDARD OF REVIEW

We review a district court’s award of attorneys’ fees for

abuse of discretion. Intel Corp. v. Terabyte Int’l, Inc.

, 6 F.3d

614, 621 (9th Cir. 1993) (quoting Lindy Pen Co. v. Bic Pen

Corp.

, 982 F.2d 1400, 1409 (9th Cir. 1993)). A district court

abuses its discretion when “its decision is based on an

erroneous conclusion of law or if the record contains no

evidence on which it rationally could have based its

decision.” In re Mercury Interactive Corp. Sec. Litig.

, 618 F.3d 988, 992 (9th Cir. 2010) (citations omitted).

DISCUSSION

A. Waiver

Generally, an appellate court will not hear an issue raised

for the first time on appeal. Whittaker Corp. v. Execuair

Corp.

, 953 F.2d 510, 515 (9th Cir. 1992). There is “no ‘bright

line rule’.

. . to determine whether a matter has been properly

raised below.” Id. The standard “is that the argument must be

raised sufficiently for the trial court to rule on it.” Id. (quoting

In re E.R. Fegert, Inc.

, 887 F.2d 955, 957 (9th Cir. 1989)).

Accordingly, when a party takes a position and the district

court rules on it, there is no waiver. See W. Watersheds

award appropriate, and (c) such fees should not in

the interest of justice be paid out of the recovery, if any.14 Y AMADA V

. N OBEL B IOCARE

Project v. U.S. Dep’t of Interior

, 677 F.3d 922, 925 (9th Cir.

2012) (explaining that there is “no waiver if the issue was

raised, the party took a position, and the district court ruled

on it”).

Plaintiffs contend that Defendants waived their due

process argument by failing to raise the issue until after the

briefing on the matter of attorneys’ fees was complete. This

argument is specious. It was not until the first fee hearing,

two weeks after completion of briefing, that the issue first

arose. Defendants asked to view the timesheets at that

hearing, saying: “[W]e respectfully submit we should see

[the timesheets], your honor, though I understand there are

privilege[] concerns and that’s been handled in other cases

by way of redaction of confidential information.” Class

counsel objected to Defendants’ request for access even to

redacted timesheets, after which the court indicated that it

“might direct that certain redactions be made [to the

timesheets] and that those be provided

. . . pursuant to a

protective order” once the court had “a better sense of just

what they are and what they say, [and] how detailed they

are.” Not until one day before the second fee hearing, held

on January 14, 2014, did the district court first decide that it

would base the fee order entirely on the in camera

timesheets. Defendants renewed their request to examine the

timesheets at that hearing. The district court responded by

telling defense counsel that they overstated the impact of

their anticipated advocacy. The district court’s written order

also addressed Defendants’ objection:

At the hearing held on January 14, 2014,

defense counsel objected to the fact that he

has not had an opportunity to review Class

Counsel’s time records. As indicated above,

Class Counsel did not provide time records

to Defendants in the first instance due toY AMADA V

. N OBEL B IOCARE 15

concerns that the records contained

privileged information. In light of the

Court’ s “independent obligation to ensure

that the award

. . . is reasonable,” [citation],

this court found that a more efficient use of

time and resources was to review the records

in camera

, as opposed to requiring Class

Counsel to redact the time records and

provide a copy to Defendants.

The record demonstrates that Defendants raised the issue

with sufficient specificity and vigor. The parties took

positions on the issue of Nobel’s access to the timesheets, the

basis for this appeal, and the district court ruled on it.

Defendants did not waive their argument.

B. Due Process

A district court abuses its broad discretion in awarding

attorneys’ fees when it makes an error of law. Mercury

Interactive

, 618 F.3d at 993 (citing Koon v. United States

, 518 U.S. 81, 100 (1996)). We find such error here: the district

court’s use over Defendants’ objection of ex parte, in camera

submissions to support its fee order violated Defendants’ due

process rights.

Our adversarial system of justice “is premised on the

well

- tested principle that truth

— as well as fairness

— is best

discovered by powerful statements on both sides of the

question.” Penson v. Ohio

, 488 U.S. 75, 84 (1988) (citation

omitted). Accordingly, we have previously held that an

opposing party normally has a right to see the timesheets on

which a district court relied in issuing a fee award.

In Intel Corp.

, we vacated a district court’s order

awarding attorneys’ fees due in part to the fact that the16 Y AMADA V

. N OBEL B IOCARE

district court did not make available to opposing counsel the

timesheets it used to support the fee order. 6 F.3d at 623. We

declared that “[u]nder our adversary system, [opposing

counsel is] entitled to see just what was charged and why,”

and that opposing counsel has a “ need and right to peruse and

parse [the] fee demand.” Id. (emphases added). MGIC

Indemnity Corp. v. Weisman similarly concerned a fee order

based on ex parte, in camera submissions. See 803 F.2d 500,

505 (9th Cir. 1986). We remanded the matter to the district

court to give opposing counsel an opportunity to inspect the

timesheets and challenge the reasonableness of the fee

award. Id.

Plaintiffs argue that Intel and MGIC are distinguishable

because those fee orders were issued without explanation. In

Intel

, the district court “merely awarded the fees without

elaboration,” having made “no findings that the hours

expended were reasonable [or] that the hourly rates were

customary.” 6 F.3d at 623. In MGIC

, the district court

provided “[n]o reason

. . . why the timesheets should not

have been made available to [opposing counsel] and

[opposing counsel] given the opportunity to challenge them.”

803 F.2d at 505. Here, on the other hand, the district court

issued a detailed, 33

- page order evincing thoughtful and

well

- informed consideration of the submissions. And the

court offered a reason why it refused Defendants’ access to

the documents: the court found “a more efficient use of time

and resources was to review the records in camera

, as

opposed to requiring Class Counsel to redact the time records

and provide a copy to Defendants.” So the question is

whether judicial efficiency may eclipse Defendants’Y AMADA V

. N OBEL B IOCARE 17

fundamental right to inspect and challenge the documents. It

may not. 6

“[W]hen a judge constructs a process for setting fees, the

process must contain at least the procedural minima that the

Due Process Clause requires.” In re Nineteen Appeals

Arising Out of San Juan Dupont Plaza Hotel Fire Litig.

, 982 F. 2d 603, 614 (1st Cir. 1992). Here, t he Due Process

Clause requires that opposing counsel have access to the

timesheets relied on to support the fee order. 7 The district

6 The parties argue extensively regarding the application of

Concepcion v. Amscan Holdings , 223 Cal. App. 4th 1309 (2014), to the

due process question in this case. Although informative, Concepcion

does not control the question, for two reasons: (1) the question at issue

is a procedural one, which, under Erie Railroad Co. v. Tomkins, 304 U.S.

64 (1938), should be decided under federal law; and, perhaps more

importantly, (2) Defendants have raised a federal due process challenge

to the district court’s ex parte review procedure. What constitutes a

federal due process violation is a question of federal, not state,

substantive law. Accordingly, we do not discuss Concepcion here, other

than to say that it supports Defendants’ contention that the in camera

procedure implemented here was a violation of their due process rights.

7 This case is different from United States v. Eyraud , in which we held

that the district court’s denial of a defendant’s request for access to the

original billing invoices used for restitution purposes to determine

compensable attorneys’ fees did not viola t e her right to Due Process.

809 F.3d 462, 471 (9th Cir. 2015). Eyraud “had access to the [victim’s]

law firm’s declaration describing the work it performed relating to

Eyraud’s fraud and the invoice summaries listing the amount of time that

work took.” Id

. It was only to verify that those disclosed “documents

accurately reflected the pertinent information contained in the privileged

billing records,” the court examined the original in camera. Id. The court

then confirmed that the summaries relating to work and time spent that

had been extracted from the privileged material were accurate, i.e.,

“simply corroborative of what counsel already had seen.” Id. With the

accurate summaries in hand, we held that Eyraud was “able to challenge

the legal basis for the c ourt’s order.” Id. Thus, she had been “afforded18 Y AMADA V

. N OBEL B IOCARE

court abused its discretion by denying Defendants such

access.

On remand, the district court must allow Defendants

access to the timesheets, appropriately redacted to remove

privileged information, so they can inspect them and present

whatever objections they might have concerning the fairness

and reasonableness of Plaintiffs’ fee request. Plaintiffs must

then be allowed to respond to Defendants’ objections and

Defendants must be granted an opportunity to reply. The

district court will then decide the appropriate fee award. See

Hensley v. Eckerhart

, 461 U.S. 424, 433

– 34 (1983).

Vacating the fee order obviates the need for us to reach

the merits of Defendants’ remaining claims. In the interest of

efficient eventual resolution of this dispute, however, we

further hold as follows.

C. Discount of Lodestar

Attorneys’ fees and costs may be awarded in a certified

class action when authorized by law or the parties’

agreement. In re Bluetooth Headset Prods. Liab. Litig.

, 654 F.3d 935, 941 (9th Cir. 2011); Fed. R. Civ. P. 23(h). The

“lodestar method” is appropriate in class actions where the

relief sought and obtained is not easily monetized, ensuring

compensation for counsel who undertake socially beneficial

litigation. Id. “The lodestar figure is calculated by

multiplying the number of hours the prevailing party

adequate notice [of the facts] and a meaningful opportunity to be heard.”

Id. By contrast, here the court made an independent determination of

appropriate fees, but it did not reveal the actual basis of its r uling or

provide Nobel with access to the information used to reach that ruling.

Thus, unlike Eyraud, Nobel was denied a meaningful opportunity to

review and to litigate the merits of the award.Y AMADA V

. N OBEL B IOCARE 19

reasonably expended on the litigation (as supported by

adequate documentation) by a reasonable hourly rate for the

region and for the experience of the lawyer.” Id. Although

the lodestar figure is “presumptively reasonable,”

Cunningham v. Cty. of L.A.

, 879 F.2d 481, 488 (9th Cir.

1988), “the court may adjust it upward or downward by an

appropriate positive or negative multiplier reflecting a host

of ‘reasonableness’ factors, ‘including the quality of

representation, the benefit obtained for the class, the

complexity and novelty of the issues presented, and the risk

of nonpayment,’” In re Bluetooth

, 654 F.3d at 941

– 42

(quoting Hanlon v. Chrysler Corp.

, 150 F.3d 1011, 1029 (9th

Cir. 1998)). Of those factors, a party’s success in the

litigation is the “most critical.” Hensley

, 461 U.S. at 436.

Defendants argue that the district court made two

dispositive errors: it (1) gave inadequate weight to what it

acknowledged was class counsel’s limited success; and

(2) compounded the mistake by assuming that Plaintiffs’ five

claims were different legal theories addressing the same

alleged violation.

As to Defendants’ first argument, Hensley requires the

district court to provide “a concise but clear explanation of

its reasons for the fee award.” 461 U.S. at 437. Hensley

further states that “[w]hen an adjustment is requested on the

basis of either the exceptional or limited nature of the relief

obtained by the plaintiff, the district court should make clear

that it has considered the relationship between the amount of

the fee awarded and the results obtained.” Id. Here, the

district court did just that. It reduced the lodestar by 20%

because of class counsel’s success on only the UCL claim,

citing Hamed v. Macy’s West Stores, Inc.

., No. 10

- 2790 JCS,

2011 WL 5183856, at *7 (N.D. Cal. Oct. 31, 2011). In

Hamed

, the district court reduced a fee award by 10%20 Y AMADA V

. N OBEL B IOCARE

because the plaintiff had succeeded on only one of five

original claims. Id.

As to Defendants’ second argument, the district court

fairly characterized Plaintiffs’ claims as different theories in

pursuit of the same objective. Hensley provides that the hours

spent on unsuccessful claims should be excluded “[w]here

the plaintiff has failed to prevail on a claim that is distinct in

all respects from his successful claims.” 461 U.S. at 440

(emphasis added); see Winterrowd v. Am. Gen. Annuity Ins.

Co.

, 556 F.3d 815, 827 (9th Cir. 2009) (“[W]here a lawsuit

consists of related claims, a plaintiff who has won substantial

relief should not have [her] attorney’s fee reduced simply

because t h e trial court did not adopt each contention raised.”

(alterations omitted) (quoting Hogar v. Cmty. Dev. Comm’n

of Escondido

, 157 Cal. App. 4th 1358, 1369 (2007))). Here,

all of the relief Plaintiffs sought was for those harmed by

Defendants’ dental implants, which relief Plaintiffs received.

Defendants argue that Winterrowd is distinguishable

because the plaintiffs there obtained 100% of the relief

originally sought. This is true but unpersuasive for three

reasons. First, Plaintiffs here filed their complaint when

many of the key documents in discovery were in Defendants’

sole possession. Plaintiffs did not have access to some

documents until after the case’s Rule 26 scheduling

conference. This circumstance is unlike that in Winterrowd

, where the complaint concerned breach of a severance

contract. See 556 F.3d at 818. Plaintiffs here filed their

complaint while somewhat in the dark, while the Winterrowd

plaintiffs filed theirs when aware of both the contract and the

operative facts concerning its breach.

Second, it was easier to determine the amount of recovery

in Winterrowd and indeed the damages were ultimately

calculated to the cent: $288,240.56. Id. The relief here isY AMADA V

. N OBEL B IOCARE 21

difficult to monetize because it includes injunctive relief and

intangible benefits, including the peace of mind that comes

with the enhanced warranty and streamlined claims process

provided by the settlement.

Third, all but one of Plaintiffs’ original claims here were

frustrated by intervening changes in law announced after

Plaintiffs filed the complaint.

Because the district court concisely and clearly explained

its reduction of the lodestar, and because there was sufficient

support for its finding that Plaintiffs’ claims were related to a

common goal, the district court’s discount of the lodestar for

lack of success was not erroneous.

D. Cross

- Check of Lodestar

Defendants argue that the district court’s cross

- check of

the lodestar was flawed because its valuation of the

settlement was based on an unrealistically high estimated

implant failure rate. Purporting to quote our holding in In re

Bluetooth

, Defendants further argue that “the district court

must guard against an unreasonable result by cross

- checking

its calculations against a second method.”

We agree that the district court likely overstated its

monetary valuation of the settlement. But where, as here,

classwide benefits are not easily monetized, a cross

- check is

entirely discretionary. Defendants’ argument to the contrary

is either mistaken or a deliberate misrepresentation of the

law. In re Bluetooth in fact provides that “even though the

lodestar method may be a perfectly appropriate method of

fee calculation, we have also encouraged courts to guard

against an unreasonable result by cross

- checking their

calculations against a second method.” 654 F.3d at 944

(emphasis added). California courts agree. See In re22 Y AMADA V

. N OBEL B IOCARE

Consumer Privacy Cases

, 175 Cal. App. 4th 545, 557 (2009)

(“While the court has discretion to [conduct a cross

- check]

where appropriate, it is not required [to do so].”); Ramos v.

Countrywide Home Loans, Inc.

, 82 Cal. App. 4th 615, 628

(2000); Lealao v. Beneficial Cal., Inc.

, 82 Cal. App. 4th 19,

49

– 50 (2000).

CONCLUSION

We VACATE the fee order and REMAND this matter to

the district court for further proceedings. Class counsel will

submit their timesheets to the district court and may propose

that certain information is privileged. The district court will

then determine what, if any, information is privileged. After

the district court makes its privilege determination, class

counsel will then file redacted timesheets that comply with

the district court’s determination. Counsel for Defendants

will then have an opportunity to submit arguments as to the

reasonableness of the submission. Plaintiffs will then have

an opportunity to respond before the district court renders its

decision concerning fees, and Defendants will have an

opportunity to reply.

VACATED AND REMANDED.