Court Opinion

ID: 1086845
Source: CourtListenerOpinion
Date Created: 2013-10-24 18:24:55.689293+00
Date Added: 2024-06-11T12:06:54.863882
License: Public Domain

Filed 10/24/13 In re COMPLETE Cases CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

                                                                       G046913

In re COMPLETE CASES.                                                  (JCCP No. 4521; O.C. Super Ct. Nos.
                                                                        07CC01296 & 07CC01297)

                                                                       OPINION

                   Appeal from a judgment of the Superior Court of Orange County, Nancy
Wieben Stock, Judge. Affirmed.
                   The Martini Law Group and Steven D. Martini for Appellant.
                   The Senators (Ret.) Firm, Thomas M. Moore and Ronald T. Labriola for
Respondents Nicole Lazar, Cameron Smith and the Class.
                   Venable LLP, Ben D. Whitwell and Ryan M. Andrews for Respondent
Abbott Medical Optics, Inc.
                                          *                  *                  *
              The unusual title of this case reflects the fact it arises out of the settlement
of a class action suit brought against Advanced Medical Optics, now known as Abbott
Medical Optics (AMO), for allegedly making misleading statements concerning the
disinfecting capabilities of the company’s “COMPLETE MoisturePLUS” multipurpose
contact lens solution (the “Complete Contact Lens Solution”) in the mid-2000’s. The
basic theory of the class action was that the product had been marketed as a
“multipurpose” contact lens solution with the ability to “disinfect” contact lenses, when,
in fact, it did not disinfect lenses of a microorganism known as Acanthamoeba whose
presence in the eye can cause Acanthamoeba keratitis, which in turn can lead to corneal
ulcers and even blindness. Prominent in the pleadings was the recall of the Complete
Contact Lens Solution after a report by the United States Centers for Disease Control
noted an increased risk of Acanthamoeba kerititis in users of the solution.
              The class action suit was settled in 2011. Besides requiring the product to
be pulled from the market, the settlement consisted of two basic components: The first
part involved reimbursements to class members. AMO would pay 100 percent of the
price of every bottle of the contact lens solution purchased if the class member submitted
proof of purchase. If a class member didn’t have proof of purchase but did have bottles
of the solution, the class member would be reimbursed a small amount of money
depending on the size of the bottle ($4 for a 2 ounce bottle, $5 for a 4 ounce bottle, $6 for
“an Active Pack” and $9 for 12 and 16 ounce bottles.) And if class members had no
proof of purchase or bottles, they could, by declaring under penalty of perjury they
purchased the solution, receive a coupon for $10 worth of other AMO products. The
settlement also contemplated a payment by AMO of some $1,847,529 in attorney fees
and costs.
              The second part involved the establishment of a cy pres fund in the event
the total amount of reimbursements to class members did not reach $650,000. Any
difference was to be paid to Guide Dogs of America (with funding earmarked for

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California residents) and Children’s Vision First. Guide Dogs of America is self-
descriptive in its mission. Children’s Vision First provides free eye exams and
prescription glasses to needy children.
                   A final fairness hearing was scheduled for March 23, 2012. On March 7,
appellant Camille Jacinto Hale sent a letter to the court, objecting to the proposed
settlement. Besides asserting she had received an inadequate notice of her right to
object,1 Hale’s letter objected to the beneficiaries of the cy pres fund, and also asserted
the attorney fees were too high.
                   Hale did not show up for the fairness hearing, which was held on time on
March 23, 2012. The trial judge approved the cy pres portion of the settlement, but cut
the attorneys fee request to $750,000. The judge reasoned that if the $650,000 fund were
analogized to a contingency fee of somewhere between 30 and 40 percent, then, given a
multiplier of three, the result would be a fee “in the range of $750,000,” which was the
figure she chose. The formal judgment was filed that very day, and within about 50 days
Hale filed this appeal.
                   We affirm the judgment. In California, cy pres funds pursuant to class
action settlements are governed by section 384 of the Code of Civil Procedure. We quote
the relevant subdivisions of the statute in a footnote, and, as the italicized words show,
the fit between the litigation generating the fund and the beneficiaries of the fund need
not be coterminous.2 Rather, the standard is, as the court said in In re Microsoft I-V

          1         She argued the notice she received did not “make clear” her right to object or contain a “clear
deadline,” though the notice certainly did give March 23, 2012 in Department CX-105 as the date and place of the
hearing. In this appeal Hale does not raise the issue of inadequate notice so we need not discuss the matter further.
          2         The statute consists of three subdivisions, (a), (b), and (c), but subdivision (c) simply says the first
two subdivisions don’t apply to class actions against governmental entities or employees. Subdivisions (a) and (b)
provide:
                    “(a) It is the intent of the Legislature in enacting this section to ensure that the unpaid residuals in
class action litigation are distributed, to the extent possible, in a manner designed either to further the purposes of
the underlying causes of action, or to promote justice for all Californians. The Legislature finds that the use of
funds collected by the State Bar pursuant to this section for these purposes is in the public interest, is a proper use of
the funds, and is consistent with essential public and governmental purposes.

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Cases (2006) 135 Cal.App.4th 706, is appropriate usefulness in fulfilling the objects of
the litigation. (Id. at p. 724 [“The court’s proper focus in this context is not so much
whether another type of distribution might be better, but whether the distribution, as
proposed, is appropriately useful in fulfilling the purposes of the underlying cause of
action.”].)3
                  The standard of review that governs this case is abuse of discretion.
(Microsoft I-V, supra, 135 Cal.App.4th at p. 723 [“Our task is limited to a review of the
record to determine whether it discloses a clear abuse of discretion when the trial court’s
determination of fairness is challenged on appeal.”].) Here, we can hardly say that
charities which either (a) directly aid blind people or (b) provide poor kids with eye
exams and glasses are too remote or inconsistent with the basic object of the litigation to
constitute an abuse of discretion. The themes of eye care and blindness obviously
predominate. The purpose of the litigation was to provide some sort of redress for
consumers who ran some risk of eye damage or actual blindness from the product. Such
a nexus certainly compares favorably to Microsoft I-V’s approval of vouchers for low-
income public school students in what had started as essentially an anti-trust suit and the
general legislative goal of promoting justice in cy pres distributions. (See id. at p. 727

                    “(b) Except as provided in subdivision (c), prior to the entry of any judgment in a class action
established pursuant to Section 382, the court shall determine the total amount that will be payable to all class
members, if all class members are paid the amount to which they are entitled pursuant to the judgment. The court
shall also set a date when the parties shall report to the court the total amount that was actually paid to the class
members. After the report is received, the court shall amend the judgment to direct the defendant to pay the sum of
the unpaid residue, plus interest on that sum at the legal rate of interest from the date of entry of the initial judgment,
to nonprofit organizations or foundations to support projects that will benefit the class or similarly situated persons,
or that promote the law consistent with the objectives and purposes of the underlying cause of action, to child
advocacy programs, or to nonprofit organizations providing civil legal services to the indigent. The court shall
ensure that the distribution of any unpaid residual derived from multistate or national cases brought under California
law shall provide substantial or commensurate benefit to California consumers.” (Italics added.)
          3         We pause to note that it is well known that California’s case law and statute governing cy pres
funds is more liberal than the approach of the Ninth Circuit. (See Tsai and Harlow, Cy Pres: The Next Best Thing –
Or Not (Oct. 2013) California Lawyer pp. 35, 36-38 [asserting result in Microsoft I-V of approving cy pres fund to
provide vouchers to low-income public school students would not have been the same in Ninth Circuit]; cf. Six (6)
Mexican Workers v. Ariz. Citrus Growers (9th Cir. 1990) 904 F.2d 1301, 1308 [“The district court’s proposal
benefits a group far too remote from the plaintiff class. . . . The district court’s plan permits distribution to areas
where the class members may live, but there is no reasonable certainty that any member will be benefited.”].)

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[“The fact that the compensatory effect for class members was indirect, as compared with
the more direct benefit to low-income students having little correlation with the plaintiff
class, does not alter this conclusion.”].)
                  Likewise Hale’s challenge to the attorney fee award is governed by an
abuse of discretion standard. (Cellphone Termination Fee Cases (2009) 180 Cal.App.4th
1110, 1118 [“Trial court orders approving class action settlements and awarding attorney
fees are reviewed for abuse of discretion.”].) Again, we cannot say the trial court’s
determination of $750,000 in class counsel fees was so high as to be unreasonable.
                  The four “Ketchum factors” are all present: (1) novelty and difficulty of the
case, (2) the necessity of a high level of skill; (3) the preclusion of other employment, and
(4) the contingent nature of any fee recovery. (See Ketchum v. Moses (2001) 24 Cal.4th
1122, 1132.) Taking the Ketchum factors in reverse order, we note the contingent nature
of the litigation is a given. Further, the record shows class counsel spent over 6,000
hours on the case, hence preclusion of other employment is also shown. And the case
involved both the need for skill and novel questions, given the scientific nature of the
issues and the statistical correlation between any defect in the product and injury.4 Most
telling is this: 6,000 hours for $750,000 works out to an average $125 an hour, which,
for better or worse in early 21st century California, is way below the prevailing market
rate for most lawyers, even rookies. (Cf. Heritage Pacific Financial, LLC v. Monroy
(2013) 215 Cal.App.4th 972, 1009 [$450 upheld for attorney of 15 years of experience in
mortgage litigation in Richmond, California]; Cordero-Sacks v. Housing Authority of
City of Los Angeles (2011) 200 Cal.App.4th 1267, 1286 [$450 upheld in retaliation suit in
Los Angeles]; Chacon v. Litke (2010) 181 Cal.App.4th 1234, 1260 [upholding $350 an
hour in San Francisco rent control litigation]; Graciano v. Robinson Ford Sales, Inc.

          4       Consider for example the issue of whether Acanthamoeba can afflict contact lens wearers who are
simply sloppy in the way they store, clean and insert their contact lenses, regardless of the effect of even the best
solution.

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(2006) 144 Cal.App.4th 140, 156 [$250 an hour held too low in litigation against auto
dealer in Imperial County in mid-2000’s].)
              That leaves us with the request of both class counsel and AMO to impose
sanctions against Ms. Hale for frivolous appeal. That’s a matter on which we have
discretion. (See Winick Corp. v. County Sanitation Dist. No. 2 (1986) 185 Cal.App.3d
1170, 1181-1182.) In light of the “no reasonable attorney” standard laid down in In re
Marriage of Flaherty (1982) 31 Cal.3d 637, 650, we decline to impose sanctions.
              “Sanctions are serious business. They deserve more thought than the
choice of a salad dressing. ‘I’ll have the sanctions, please. No, on second thought, bring
me the balsamic; I’m trying to lose a few pounds.’ . . .” (See Kim v. Westmoore Partners,
Inc. (2011) 201 Cal.App.4th 267, 293.) Here, we cannot say that Hale’s appeal was so
unreasonable that “no reasonable attorney could have thought it meritorious.” (In re
Marriage of Flaherty, supra, 31 Cal.3d at p. 650.)
              Both of Hale’s arguments have something going for them. The choice of
Children’s Vision First as a beneficiary for the cy pres fund, for example, meant
settlement money would be going to people who did not, by definition, buy the product –
children whose parents can’t afford eye exams are not going to be consumers of contact
lens solution prior to any exam. And the $750,000 award, though reasonable given the
ultimate result of a $125 an hour return, might be considered a tad high given that it
means a recovery for the attorneys in excess of the total payout to the class. The trial
court here thus did a pretty good job of splitting the difference and coming up with a
reasonable attorney fee award.

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              So we affirm the judgment, but deny the motion for sanctions. Each side
will bear its own costs on appeal.

                                               BEDSWORTH, J.

WE CONCUR:

RYLAARSDAM, ACTING P. J.

FYBEL, J.

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