Court Opinion

ID: 4023548
Source: CourtListenerOpinion
Date Created: 2016-08-11 17:02:50.697761+00
Date Added: 2024-06-11T14:02:51.050427
License: Public Domain

Filed 8/11/16

      IN THE SUPREME COURT OF CALIFORNIA

MARK LAFFITTE et al.,                  )
                                       )
           Plaintiffs and Respondents, )
                                       )                            S222996
           v.                          )
                                       )                      Ct.App. 2/7 B249253
ROBERT HALF INTERNATIONAL INC., )
et al.,                                )
                                       )                     Los Angeles County
           Defendants and Respondents; )                   Super. Ct. No. BC321317
                                       )
DAVID BRENNAN,                         )
                                       )
            Plaintiff and Appellant.   )
____________________________________)

        A class action employment lawsuit settled before trial for $19 million, with
the agreement that no more than a third of that recovery would go to class counsel
as attorney fees. In seeking the trial court‘s approval of the settlement, class
counsel sought the maximum fee amount, $6,333,333.33. After considering
information from class counsel on the hours they had worked on the case,
applicable hourly fees, the course of the pretrial litigation, and the potential
recovery and litigation risks involved in the case, the trial court—over the
objection of one class member—approved the settlement and awarded counsel the
requested fee.
        The objecting class member contends the trial court‘s award of an attorney
fee calculated as a percentage of the settlement amount violates a holding of this

                         SEE CONCURRING OPINION
court in Serrano v. Priest (1977) 20 Cal. 3d 25 (Serrano III),1 to the effect that
every fee award must be calculated on the basis of time spent by the attorney or
attorneys on the case. (See Serrano III, at p. 48, fn. 23.) We disagree. Our
discussion in Serrano III of how a reasonable attorney fee is calculated was made
in connection with an award under the ―private attorney general‖ doctrine. (See
id. at pp. 43–47.) We clarify today that when an attorney fee is awarded out of a
common fund preserved or recovered by means of litigation (see Serrano III,
supra, at p. 35), the award is not per se unreasonable merely because it is
calculated as a percentage of the common fund.
                   FACTUAL AND PROCEDURAL BACKGROUND
       Three related wage and hour class action lawsuits were filed against Robert
Half International Inc., a staffing firm, and related companies (hereafter
collectively Robert Half) in Los Angeles County Superior Court. In September
2012, the parties jointly moved for an order conditionally certifying a settlement
class and preliminarily approving a settlement. The trial court granted the motion
and preliminarily approved the settlement. With the court‘s permission, the
proposed settlement was amended in November 2012.
       Under the settlement agreement as amended, Robert Half would pay a gross
settlement amount of $19 million. It was agreed class counsel would request
attorney fees of not more than $6,333,333.33 (one-third of the gross settlement
amount), to be paid from the settlement amount. Robert Half would not oppose a

1       In Serrano v. Priest (1971) 5 Cal. 3d 584 (Serrano I) and Serrano v. Priest
(1977) 18 Cal. 3d 728 (Serrano II), we dealt with the merits of the plaintiffs‘
constitutional challenge to California‘s then-existing system for financing public
schools. Serrano III addressed the award of attorney fees to the plaintiffs‘
attorneys. A later decision, Serrano v. Unruh (1982) 32 Cal. 3d 621 (Serrano IV),
addressed the propriety of awarding attorney fees for work done to secure an
earlier fee award.

                                          2
fee request up to that amount, and if a smaller amount was approved by the court
the remainder would be retained in the settlement amount for distribution to
claimants, rather than reverting to Robert Half. The settlement agreement further
provided that any unclaimed portion of the net settlement amount (resulting, for
example, from class members choosing not to make claims or failing to qualify for
compensation) would be reallocated to qualified claimants rather than returned to
Robert Half or given to any third party.
       Class member David Brennan objected to the proposed settlement on
several grounds, including that the projected $6,333,333.33 attorney fee appeared
to be excessive and class counsel had not provided enough information to evaluate
it.
       Class counsel subsequently made the anticipated request for $6,333,333.33
in attorney fees. A fee equal to one-third of the settlement fund recovered for the
class, counsel asserted, is within a historical range of 20 to 50 percent of a
common fund and is also within the range provided in contingent fee agreements
signed by the named plaintiffs. Recovery of any fee was contingent on success in
the litigation, ―and the case presented far more risk than the usual contingent fee
case.‖ The requested fee, counsel also asserted, is also appropriate under the
―lodestar‖ method, in which an attorney fee is based on the hours worked and an
hourly billing rate, sometimes adjusted by a positive or negative multiplier. The
firms acting as class counsel would collectively expend between 4,263 and 4,463
attorney hours, depending on whether the objector appealed approval of the
settlement. Multiplying the individual attorneys‘ hours by rates assertedly tied to
their skill and experience, counsel calculated a lodestar fee amount of between
$2,968,620 and $3,118,620. The multiplier needed to reach the requested fee of
$6,333,333.33 would thus be 2.03 to 2.13.

                                           3
       The totals of hours expended, the range of percentages in common fund
cases and in the fee agreements, and the range of hourly rates applicable to class
counsel were supported by data in the fee motion and supporting declarations.
Class counsel Kevin T. Barnes generally described the work performed in ―one of
the most heavily litigated cases I have ever been a part of and the extensive
research and litigation for the past 8½ years. This litigation included extensive
written discovery, extensive law and motion practice, 68 depositions, three
Motions for Summary Judgment, a Class Certification Motion, subsequent
Reconsideration Motion and then another Motion to Decertify, numerous experts,
consultation with an economist regarding potential damage exposure and two full
day mediations.‖
       While tentatively approving the settlement and fee request, the trial court
asked counsel for additional information and discussion on certain points. Barnes
submitted a supplemental declaration that, in part, argued the calculated multiplier
over the lodestar amount (2.03 to 2.13) was reasonable in light of counsel‘s ―hard
work and determination‖ in a difficult case and the ―enormous‖ risks of
nonpayment counsel undertook. Barnes‘s declaration detailed the risks that the
actions would fail at the certification stage, would be deemed barred by arbitration
agreements, or would fail on the merits because of findings the class members
were exempt employees.
       On April 10, 2013, the trial court overruled Brennan‘s objections and gave
the settlement and attorney fee request its final approval. In its oral ruling the
court stated: ―On the amount of the attorneys fees, the court considers in this case
that there is a contingency case, and so I do a double check on the attorneys fees
by looking at the lodestar amount. I do believe I have sufficient information on
the number of hours that were present and that the hourly rates charged therefore
were within the norm and not overstated. [¶] Given the lodestar, I then also find I

                                           4
have information in the record which supports the multiplier that would be applied
to lodestar if you‘re looking at a strict lodestar calculation, which we‘re not, we‘re
looking at a contingency calculation, the amount of the contingency is not
unreasonable. I‘m considering the novelty and difficulty of the questions
involved, the skill displayed in presenting them, the extent to which the litigation
precluded other employment by the attorneys and the inherent risk whenever there
is a fee award that is contingent. [¶] On that basis, I am granting final approval.‖
       On objector Brennan‘s appeal from the judgment entered on the settlement,
the Court of Appeal affirmed. The Court of Appeal held Serrano III did not
preclude award of a percentage fee in a common fund case, that an award of one-
third the common fund was in the range set by other class action lawsuits, and that
the trial court did not abuse its discretion by cross-checking the reasonableness of
the percentage award by calculating a lodestar fee and approving a multiplier over
lodestar of 2.03 to 2.13.
       We granted review on the objector‘s petition, which presented a single
issue: whether Serrano III permits a trial court to calculate an attorney fee award
from a class action common fund as a percentage of the fund, while using the
lodestar-multiplier method as a cross-check of the selected percentage.2
                                    DISCUSSION
       We review attorney fee awards on an abuse of discretion standard. ―The
‗experienced trial judge is the best judge of the value of professional services
rendered in his court, and while his judgment is of course subject to review, it will
not be disturbed unless the appellate court is convinced that it is clearly wrong.‘ ‖
(Serrano III, supra, 20 Cal.3d at p. 49.) ―Fees approved by the trial court are

2      The request for judicial notice by objector Brennan, filed on July 22, 2015,
is granted.

                                          5
presumed to be reasonable, and the objectors must show error in the award.‖ (In
re Consumer Privacy Cases (2009) 175 Cal. App. 4th 545, 556.) We consider here
whether a trial court abuses its discretion, when awarding a fee from a common
fund created or preserved by the litigation, by calculating the fee as a percentage
of the fund and checking the reasonableness of the fee with a lodestar calculation.
       California has long recognized, as an exception to the general American
rule that parties bear the costs of their own attorneys, the propriety of awarding an
attorney fee to a party who has recovered or preserved a monetary fund for the
benefit of himself or herself and others. In awarding a fee from the fund or from
the other benefited parties, the trial court acts within its equitable power to prevent
the other parties‘ unjust enrichment. (Serrano IV, supra, 32 Cal.3d at p. 627;
Serrano III, supra, 20 Cal.3d at p. 35; Farmers & Merchants Nat. Bank of Los
Angeles v. Peterson (1936) 5 Cal. 2d 601, 607; Fox v. Hale & Norcross Silver Min.
Co. (1895) 108 Cal. 475, 476–477; Lealao v. Beneficial California, Inc. (2000) 82
Cal. App. 4th 19, 27 (Lealao).)
       Because it distributes the cost of hiring an attorney among all the parties
benefited, a common fund fee award has sometimes been referred to as ―fee
spreading.‖ In contrast, ―fee shifting‖ refers to an award under which a party that
did not prevail in the litigation is ordered to pay fees incurred by the prevailing
party. (Lealao, supra, 82 Cal.App.4th at p. 26; Camden I Condominium Assn. v.
Dunkle (11th Cir. 1991) 946 F.2d 768, 774.) California law permits fee shifting in
favor of the prevailing party on certain statutory causes of action (e.g., Gov. Code,
§§ 12965, subd. (b), 12974, 12989.2), when a plaintiff has acted as a private
attorney general by enforcing an important right affecting the public interest (Code
Civ. Proc., § 1021.5), and in contract cases where the contract provides for an
award of fees to the prevailing party (Civ. Code, § 1717).

                                           6
       Class action litigation can result in an attorney fee award pursuant to a
statutory fee shifting provision or through the common fund doctrine when, as in
this case, a class settlement agreement establishes a relief fund from which the
attorney fee is to be drawn. Two primary methods of determining a reasonable
attorney fee in class action litigation have emerged and been elaborated in recent
decades. The percentage method calculates the fee as a percentage share of a
recovered common fund or the monetary value of plaintiffs‘ recovery. The
lodestar method, or more accurately the lodestar-multiplier method, calculates the
fee ―by multiplying the number of hours reasonably expended by counsel by a
reasonable hourly rate. Once the court has fixed the lodestar, it may increase or
decrease that amount by applying a positive or negative ‗multiplier‘ to take into
account a variety of other factors, including the quality of the representation, the
novelty and complexity of the issues, the results obtained, and the contingent risk
presented.‖ (Lealao, supra, 82 Cal.App.4th at p. 26.)
       The two approaches to determining a fee contrast in their primary foci:
―The lodestar method better accounts for the amount of work done, while the
percentage of the fund method more accurately reflects the results achieved.‖
(Rawlings v. Prudential-Bache Properties, Inc. (6th Cir. 1993) 9 F.3d 513, 516.)
Each has been championed and criticized for its respective advantages and
disadvantages. The lodestar method has been praised as providing better
accountability and encouraging plaintiffs‘ attorneys to pursue marginal increases
in recovery, but criticized for discouraging early settlement and consuming too
large an amount of judicial resources in its application. (Id. at pp. 516–517; 5
Rubenstein, Newberg on Class Actions (5th ed. 2015) § 15:65, pp. 225–226
(hereafter Newberg on Class Actions).) The percentage method ―is easy to
calculate; it establishes reasonable expectations on the part of plaintiffs‘ attorneys
as to their expected recovery; and it encourages early settlement, which avoids

                                           7
protracted litigation. However, a percentage award may also provide incentives to
attorneys to settle for too low a recovery because an early settlement provides
them with a larger fee in terms of the time invested.‖ (Rawlings v. Prudential-
Bache Properties, Inc., supra, at p. 516.) Where the class settlement is for a very
large amount, a percentage fee may be criticized as providing counsel a windfall in
relation to the amount of work performed. (Brundidge v. Glendale Federal Bank,
F.S.B. (1995) 168 Ill. 2d 235, 243; 5 Newberg on Class Actions, supra, § 15:65,
p. 224.)
       Before discussing the percentage method‘s use in California, we review the
history of the two fee calculation approaches in class action litigation nationally.

       I. Lodestar-multiplier v. Percentage of the Recovery
       The history of attorney fee awards in class actions has been one of reaction
and counterreaction, divisible into three major eras. (See Walker & Horwich, The
Ethical Imperative of a Lodestar Cross-check: Judicial Misgivings About
“Reasonable Percentage” Fees in Common Fund Cases (2005) 18 Geo. J. Legal
Ethics 1453, 1453–1454 (hereafter Walker & Horwich).)
       In the first period, from the 1966 amendments to rule 23 of the Federal
Rules of Civil Procedure (28 U.S.C.), which ―heralded the advent of the modern
class action‖ (Walker & Horwich, supra, 18 Geo. J. Legal Ethics at p. 1453), to
the middle of the 1970s, awards based on a percentage of the recovery were
common: ―Judges relied on a variety of factors in setting reasonable amounts for
fee awards, but most heavily emphasized was the size of the fund or the amount of
benefit produced for the class. Awards often reflected what the court believed was
a ‗reasonable percentage‘ of the amount recovered, with the percentages varying
considerably from case to case. However, the percentage-of-recovery system
sometimes resulted in strikingly large fee awards in a number of cases. Press

                                          8
reaction to these awards, and criticism from within the profession that the fees
were disproportionate to the actual efforts expended by the attorneys, generated
pressure to shift away from the percentage-of-recovery approach.‖ (Court
Awarded Attorney Fees: Report of the Third Circuit Task Force (1985) 108 F.R.D.
237, 242 (hereafter 1985 Task Force Report); see In re Thirteen Appeals Arising
Out of San Juan Dupont Plaza Hotel Fire Litigation (1st Cir. 1995) 56 F.3d 295,
305 [―Traditionally, counsel fees in common fund cases were computed as a
percentage of the fund, subject, of course, to considerations of reasonableness.‖].)
       The second period ran from the Third Circuit‘s Lindy decisions in the
mid-1970s (Lindy Bros. Builders, Inc. v. Am. Radiator & Standard Sanitary Corp.
(3d Cir. 1973) 487 F.2d 161 (Lindy I) and Lindy Bros. Builders, Inc. v. Am.
Radiator & Standard Sanitary Corp. (3d Cir. 1976) 540 F.2d 102), which
described and mandated the use of a lodestar-multiplier method in common fund
class action cases in the Third Circuit, to the middle of the 1980s. In this period,
the lodestar-multiplier method predominated in federal courts in fee spreading as
well as fee shifting cases. The virtue of using a lodestar to determine fees, the
court explained in Lindy I, is its seemingly direct relationship to the value of the
services rendered: ―[W]e stress . . . the importance of deciding, in each case, the
amount to which attorneys would be entitled on the basis of an hourly rate of
compensation applied to the hours worked. This figure provides the only
reasonably objective basis for valuing an attorney‘s services.‖ (Lindy I, supra,
487 F.2d at p. 167.) Quoting from a district court decision, Lindy I expressed the
fear ― ‗that the bar and bench will be brought into disrepute, and that there will be
prejudice to those whose substantive interests are at stake,‘ ‖ if fee awards were
not restrained by reference to the actual time spent and skill displayed by counsel.
(Id. at p. 168.)

                                          9
        ―The Lindy lodestar approach rather quickly gained acceptance in other
federal courts throughout the country because it was viewed as a more reasonable
approach than the percentage-of-benefit technique for making fee awards in
modern complex litigation.‖ (1985 Task Force Report, supra, 108 F.R.D. at
p. 244.) Several federal appellate courts mandated use of the lodestar-multiplier
method even in cases where class litigation had resulted in establishment of a
common fund. (See, e.g., National Treasury Employees Union v. Nixon (D.C. Cir.
1975) 521 F.2d 317, 322; City of Detroit v. Grinnell Corp. (2d Cir. 1977) 560 F.2d
1093, 1098–1099; Grunin v. International House of Pancakes (8th Cir. 1975) 513
F.3d 114, 127.) In statutory fee shifting cases, where the prevailing party‘s fees
are ordered paid by the nonprevailing party, the lodestar method was generally
adopted, with United States Supreme Court approval. (Hensley v. Eckerhart
(1983) 461 U.S. 424, 433; 5 Newberg on Class Actions, supra, § 15:38, pp. 124–
129.)
        The third period, which continues today, began in the mid-1980s. In 1984,
in a statutory fee shifting case involving a lodestar-multiplier calculation, the
United States Supreme Court distinguished common fund cases and indicated a
different method would be used in such a case: ―Unlike the calculation of
attorney‘s fees under the ‗common fund doctrine,‘ where a reasonable fee is based
on a percentage of the fund bestowed on the class, a reasonable fee under [42
U.S.C.] § 1988 reflects the amount of attorney time reasonably expended on the
litigation.‖ (Blum v. Stenson (1984) 465 U.S. 886, 900, fn. 16.)
        The next year, the Chief Judge of the Third Circuit convened a ―task force‖
of judges, academics and attorneys from around the country to address ―perceived
deficiencies and abuses‖ that had arisen in the application of the Lindy lodestar
method. (1985 Task Force Report, supra, 108 F.R.D. at p. 253.) The task force
noted the main complaints that had been lodged against the lodestar method of

                                          10
determining an appropriate fee award. Prominent among these were that the
emphasis on the number of hours worked creates a disincentive for the early
settlement of cases and encourages lawyers to expend excessive hours; that the
need for documentation and examination of detailed billing records had greatly
increased the time and effort devoted to fee matters; and that the lodestar-
multiplier method was neither as objective nor as precise as it appears facially
because, for example, many plaintiffs‘ attorneys usually work on a contingency
fee basis, making the assignment of a customary billing rate for lodestar purposes
problematic. (1985 Task Force Report, supra, 108 F.R.D. at pp. 246–248.)
       Distinguishing between fee spreading cases in which the fee award is to be
taken from a common fund (including a class action settlement fund involving
absent class members), and statutory fee shifting cases in which the award is a
product of an adversary proceeding between the prevailing and nonprevailing
parties (1985 Task Force Report, supra, 108 F.R.D. at pp. 250–251), the task force
recommended courts generally use a percentage-of-the-fund method in common
fund cases and a lodestar-multiplier method in fee shifting cases. ―Accordingly,
the Task Force recommends that in the traditional common-fund situation and in
those statutory fee cases that are likely to result in a settlement fund from which
adequate counsel fees can be paid, the district court, on motion or its own initiative
and at the earliest practicable moment, should attempt to establish a percentage fee
arrangement agreeable to the Bench and to plaintiff‘s counsel. In statutory fee
cases the negotiated fee would be applied in the event of settlement; in all fully
litigated statutory fee cases the award would continue to be determined in an
adversary manner under the basic Lindy approach,‖ with suggested modifications.
(Id. at pp. 255–256, fn. omitted.)
       By making a percentage fee award (which the task force envisioned being
set early in the proceedings) in a common fund case, ―any and all inducement or

                                         11
inclination to increase the number of Lindy hours will be reduced, since the
amount of work performed will not be permitted to alter the contingent fee.‖
(1985 Task Force Report, supra, 108 F.R.D. at p. 258.) Plaintiffs‘ counsel will
have ―a substantial inducement . . . to settle the matter quickly, since the fee scale
will have been established and counsel‘s compensation will not be enhanced by a
delay.‖ (Ibid.) Moreover, the percentage method ―will eliminate the cumbersome,
enervating, and often surrealistic process of preparing and evaluating fee petitions
that now plagues the Bench and Bar under Lindy.‖ (Ibid.) The lodestar method
would, under the task force recommendations, continue to be used in statutory fee
cases in which no common economic benefit, or only a fund insufficient to yield a
reasonable fee, has been or is likely to be produced. (Id. at p. 259.)
       In the years since the 1985 Task Force Report was released, the views
expressed in it have gained general acceptance in federal and state courts. (See
Walker & Horwich, supra, 18 Geo. J. Legal Ethics at pp. 1457–1458.) The Third
Circuit itself holds that while both methods of calculating a fee may be used,
―[t]he percentage-of-recovery method is generally favored in common fund cases
because it allows courts to award fees from the fund ‗in a manner that rewards
counsel for success and penalizes it for failure.‘ ‖ (In re Rite Aid Corp. Securities
Litigation (3d Cir. 2005) 396 F.3d 294, 300.) Currently, all the circuit courts
either mandate or allow their district courts to use the percentage method in
common fund cases; none require sole use of the lodestar method. (5 Newberg on
Class Actions, supra, § 15.66, pp. 228–231.)3 Most state courts to consider the

3      See In re Thirteen Appeals Arising Out of San Juan Dupont Plaza Hotel
Fire Litigation, supra, 56 F.3d at page 307 (1st Cir.; permitting use of either
method); McDaniel v. County of Schenectady (2d Cir. 2010) 595 F.3d 411, 417
(permitting either method); Kay Co. v. Equitable Production Co. (S.D.W.Va.
2010) 749 F. Supp. 2d 455, 463 (―The Fourth Circuit has neither announced a
                                                            (footnote continued on next page)

                                          12
question in recent decades have also concluded the percentage method of
calculating a fee award is either preferred or within the trial court‘s discretion in a
common fund case.4 Thus, ―[i]n the years since the Third Circuit‘s report . . .

(footnote continued from previous page)

preferred method for determining the reasonableness of attorneys‘ fees in common
fund class actions nor identified factors for district courts to apply when using the
percentage method.‖); Union Asset Management Holding A.G. v. Dell, Inc. (5th
Cir. 2012) 669 F.3d 632, 644 (―We join the majority of circuits in allowing our
district courts the flexibility to choose between the percentage and lodestar
methods in common fund cases . . . .‖); Rawlings v. Prudential-Bache Properties,
Inc. (6th Cir. 1993) 9 F.3d 513, 517 (―[W]e conclude that use of either the lodestar
or percentage of the fund method of calculating attorney‘s fees is appropriate in
common fund cases, and that the determination of which method is appropriate in
any given case will depend upon its circumstances.‖); Matter of Continental
Illinois Securities Litigation (7th Cir. 1992) 962 F.2d 566, 572–573 (award should
simulate the market for legal services, which can include a percentage fee award in
a contingent fee suit); Petrovic v. Amoco Oil Co. (8th Cir. 1999) 200 F.3d 1140,
1157 (approving use of percentage method); Powers v. Eichen (9th Cir. 2000) 229
F.3d 1249, 1256 (permitting either method); Brown v. Phillips Petroleum Co.
(10th Cir. 1988) 838 F.2d 451, 454 (holding ―the award of attorneys‘ fees on a
percentage basis in a common fund case is not per se an abuse of discretion.‖);
Camden I Condominium Ass’n, Inc. v. Dunkle, supra, 946 F.2d at page 774 (11th
Cir.; ―Henceforth in this circuit, attorneys‘ fees awarded from a common fund
shall be based upon a reasonable percentage of the fund established for the benefit
of the class.‖); Swedish Hosp. Corp. v. Shalala (D.C. Cir. 1993) 1 F.3d 1261, 1271
(―In sum, we join the Third Circuit Task Force and the Eleventh Circuit, among
others, in concluding that a percentage-of-the-fund method is the appropriate
mechanism for determining the attorney fees award in common fund cases.‖)
4      See, e.g., Edwards v. Alaska Pulp Co. (Alaska 1996) 920 P.2d 751, 758;
Brody v. Hellman (Colo.Ct.App. 2007) 167 P.3d 192, 201–202; Chun v. Board of
Trustees of Employees’ Retirement System of State of Hawaii (2000) 92 Hawai‘i
432, 445; Brundidge v. Glendale Federal Bank, F.S.B., supra, 168 Ill.2d at
pages 243–244; Flemming v. Barnwell Nursing Home and Health Facilities, Inc.
(N.Y.App.Div. 2008) 56 A.D.3d 162, 165, affirmed (2010) 15 N.Y.3d 375; Strawn
v. Farmers Ins. Co. of Oregon (2013) 353 Or. 210, 218–221; General Motors
Corp. v. Bloyed (Tex. 1996) 916 S.W.2d 949, 960–961; Bowles v. Washington
Dept. of Retirement Systems (1993) 121 Wash. 2d 52, 72.) Only Florida appears to
                                                            (footnote continued on next page)

                                          13
federal and state courts alike have increasingly returned to the percent-of-fund
approach [in common fund cases], either endorsing it as the only approach to use,
or agreeing that a court should have flexibility to choose between it and a lodestar
approach, depending on which method will result in the fairest determination in
the circumstances of a particular case.‖ (Strawn v. Farmers Ins. Co. of Oregon,
supra, 353 Or. at p. 219.)
        The American Law Institute has also endorsed the percentage method‘s use
in common fund cases, with the lodestar method reserved mainly for awards under
fee shifting statutes and where the percentage method cannot be applied or would
be unfair due to specific circumstances of the case. (ALI, Principles of the Law of
Aggregate Litigation (2010) § 3.13.) ―Although many courts in common-fund
cases permit use of either a percentage-of-the-fund approach or a lodestar (number
of hours multiplied by a reasonable hourly rate), most courts and commentators
now believe that the percentage method is superior. Critics of the lodestar method
note, for example, the difficulty in applying the method and cite the undesirable
incentives created by that approach—i.e., a financial incentive to extend the
litigation so that the attorneys can accrue additional hours (and thus, additional
fees). Moreover, some courts and commentators have criticized the lodestar
method because it gives counsel less of an incentive to maximize the recovery for
the class.‖ (Id., com. b.)

(footnote continued from previous page)

require use of the lodestar method in common fund cases generally. (Kuhnlein v.
Department of Revenue (Fla. 1995) 662 So. 2d 309, 312–313; see also American
Trucking Associations, Inc. v. Secretary of Admin. (1993) 415 Mass. 337, 353
[holding lodestar the appropriate method ―[i]n this case‖].)

                                          14
       While the percentage method has been generally approved in common fund
cases, courts have sought to ensure the percentage fee is reasonable by refining the
choice of a percentage or by checking the percentage result against a lodestar-
multiplier calculation. (Walker & Horwich, supra, 18 Geo. J. Legal Ethics at
pp. 1458–1461; 5 Newberg on Class Actions, supra, § 15:72, pp. 247–250.)
       Some courts have employed a benchmark percentage, with upward or
downward adjustments justified by a multifactor analysis. The Ninth Circuit has
approved a 25 percent benchmark. (See Vizcaino v. Microsoft Corp. (9th Cir.
2002) 290 F.3d 1043, 1047 [approving 28 percent fee as justified by a benchmark
of 25 percent adjusted according to specified case circumstances]; accord, In re
Bluetooth Headset Products Liability Litigation (9th Cir. 2011) 654 F.3d 935, 942
[district courts in the circuit ―typically calculate 25% of the fund as the
‗benchmark‘ for a reasonable fee award, providing adequate explanation in the
record of any ‗special circumstances‘ justifying a departure‖].) The Eleventh
Circuit, similarly, stated in 1991 that ―district courts are beginning to view the
median of this 20% to 30% range, i.e., 25%, as a ‗bench mark‘ percentage fee
award which may be adjusted in accordance with the individual circumstances of
each case . . . .‖ (Camden I Condominium Ass’n, Inc. v. Dunkle, supra, 946 F.2d
at p. 775; see also Faught v. American Home Shield Corp. (11th Cir. 2011) 668
F.3d 1233, 1242 [―this court has often stated that the majority of fees in these
cases are reasonable where they fall between 20–25% of the claims.‖].)
       Other courts have mandated or suggested a sliding scale approach, an idea
suggested by the Third Circuit‘s 1985 task force, in which the award in cases of
larger recoveries is limited to a lower percentage to account for supposed
economies of scale in litigating larger claims. (1985 Task Force Report, supra,
108 F.R.D. at p. 256; see, e.g., In re Cendant Corp. PRIDES Litigation (3d Cir.
2001) 243 F.3d 722, 736 [―[D]istrict courts setting attorneys‘ fees in cases

                                          15
involving large settlements must avoid basing their awards on percentages derived
from cases where the settlement amounts were much smaller.‖].) As the court in
Silverman v. Motorola Solutions, Inc. (7th Cir. 2013) 739 F.3d 956, 959, put the
theory, ―it is almost as expensive to conduct discovery in a $100 million case as in
a $200 million case. . . . There may be some marginal costs of bumping the
recovery from $100 million to $200 million, but as a percentage of the incremental
recovery these costs are bound to be low. It is accordingly hard to justify
awarding counsel as much of the second hundred million as of the first.‖
       A further refinement of the sliding scale, championed in the Seventh
Circuit, applies the lower percentages to the marginal amounts of the award over
each step point. ―Awarding counsel a decreasing percentage of the higher tiers of
recovery enables them to recover the principal costs of litigation from the first
bands of the award, while allowing the clients to reap more of the benefit at the
margin (yet still preserving some incentive for lawyers to strive for these higher
awards).‖ (Silverman v. Motorola Solutions, Inc., supra, 739 F.3d at p. 959.)
Even without a well-developed sliding scale approach, some courts have approved
fee awards representing a small percentage of the fund in cases involving very
large settlements, the so-called ―megafunds,‖ in view of the ―windfall‖ that would
otherwise accrue to counsel. (See, e.g., Wal-Mart Stores, Inc. v. Visa U.S.A., Inc.
(2d Cir. 2005) 396 F.3d 96, 103, 123 [where settlement fund was worth $3.05
billion, ―the sheer size of the instant fund makes a smaller percentage
appropriate‖]; In re Bluetooth Headset Products Liability Litigation, supra, 654
F.3d at p. 942 [―[W]here awarding 25% of a ‗megafund‘ would yield windfall

                                         16
profits for class counsel in light of the hours spent on the case, courts should adjust
the benchmark percentage or employ the lodestar method instead.‖].)5
       The most significant trend has been a blending of the two fee calculation
methods, an approach in which one method is used to confirm or question the
reasonableness of the other‘s result. Where the court uses the percentage method
as its primary approach, the technique is referred to as a ―lodestar cross-check,‖
and has been described as follows: ―First, the court computes a fee using the
percentage method in the traditional manner, using a benchmark fee and
adjustments as appropriate. Next, the court computes the fee using the lodestar
method (absent any multiplier) in the traditional manner as described in Lindy I.
At this point, the percentage-based fee will typically be larger than the
lodestar-based fee. Assuming that one expects rough parity between the results of
the percentage method and the lodestar method, the difference between the two
computed fees will be attributable solely to a multiplier that has yet to be applied.
Stated another way, the ratio of the percentage-based fee to the lodestar-based fee
implies a multiplier, and that implied multiplier can be evaluated for
reasonableness. If the implied multiplier is reasonable, then the cross-check
confirms the reasonableness of the percentage-based fee; if the implied multiplier
is unreasonable, the court should revisit its assumptions.‖ (Walker & Horwich,
supra, 18 Geo. J. Legal Ethics at p. 1463.)
       Many federal circuits encourage or allow their district courts to conduct a
lodestar cross-check on a percentage fee award (5 Newberg on Class Actions,

5      In giving this background on development of the percentage method, we do
not mean to endorse the use of a sliding percentage scale. That issue is not before
us and is not without controversy. (See 5 Newberg on Class Actions, supra,
§ 15:80, pp. 296–299.)

                                          17
supra, § 15:88, pp. 343–344),6 and empirical studies show the percentage method
with a lodestar cross-check ―is the most prevalent form of fee method‖ in practice.
(Id., § 15:89, p. 348; see also Walker & Horwich, supra, 18 Geo. J. Legal Ethics at
pp. 1461–1463.) We will return to the subject of lodestar cross-checks later, in
reviewing the fee calculation in this case, which included such a cross-check.
First, we address the use of the percentage method to calculate class action fee
awards in California courts.

       II. California Law After Serrano III
       ―Prior to 1977, when the California Supreme Court decided Serrano III,
supra, 20 Cal. 3d 25, California courts could award a percentage fee in a common
fund case. (See, e.g., Melendres v. City of Los Angeles (1975) 45 Cal. App. 3d 267,
284.) After Serrano III, it is not clear whether this may still be done. (See Dunk v.
Ford Motor Co. (1996) 48 Cal. App. 4th 1794, 1809 [‗The award of attorney fees
based on a percentage of a ―common fund‖ recovery is of questionable validity in
California.‘].)‖ (Lealao, supra, 82 Cal.App.4th at p. 27.) Below, we clarify that
Serrano III does not preclude award of a percentage fee in a common fund case.
       In Serrano III, we reviewed an award of fees to attorneys who had obtained
a judgment, affirmed in our Serrano II decision, that required reform of
California‘s public school financing system to bring it into constitutional
compliance. (Serrano III, supra, 20 Cal.3d at pp. 31–32.) The trial court had
made the award on a private attorney general theory, rejecting reliance on the
common fund and substantial benefit theories. (Id. at p. 33.)

6       See, e.g., In re Thirteen Appeals Arising Out of San Juan Dupont Plaza
Hotel Fire Litigation, supra, 56 F.3d 295, 308 (1st Cir.); Goldberger v. Integrated
Resources, Inc. (2d Cir. 2000) 209 F.3d 43, 50; In re AT & T Corp. (3d Cir. 2006)
455 F.3d 160, 164; Petrovic v. Amoco Oil Co., supra, 200 F.3d at page 1157 (8th
Cir.); Vizcaino v. Microsoft Corp., supra, 290 F.3d at page 1050 (9th Cir.).

                                         18
       This court first addressed the common fund theory, under which ― ‗when a
number of persons are entitled in common to a specific fund, and an action
brought by a plaintiff or plaintiffs for the benefit of all results in the creation or
preservation of that fund, such plaintiff or plaintiffs may be awarded attorney‘s
fees out of the fund.‘ ‖ (Serrano III, supra, 20 Cal.3d at p. 34.) We agreed with
the trial court that this equitable theory was inapplicable to the case because the
plaintiffs had not, by their successful litigation efforts, ―created or preserved any
‗fund‘ of money to which they should be allowed recourse for their fees.‖ (Id. at
p. 36.) To the extent the Legislature allocated additional moneys for public
education in order to implement reforms, such expenditures were not required by
the judgment itself and counsel did not propose their fee be paid out of any such
increased expenditures. (Id. at pp. 36–37.) We went on to reject the theory of
substantial benefit on similar grounds, explaining that ―concrete ‗benefits‘ can
accrue to the state or its citizens in the wake of Serrano [I & II] only insofar as the
Legislature, in its implementation of the command of equality which that case
represents, chooses to bestow them.‖ (Id. at p. 41.)
       We approved the fee award, however, under the private attorney general
theory. We held that a fee award was within the trial court‘s equitable powers at
least where the litigation had vindicated a public policy grounded in the California
Constitution, the benefits flowed to a large number of Californians, and the nature
of the litigation justified subsidizing the plaintiffs‘ efforts. (Serrano III, supra, 20
Cal.3d at pp. 46–47; see also Code Civ. Proc., § 1021.5 [codifying the private
attorney general doctrine].)
       Considering the amount of the fee, we rejected the contention by one of the
firms representing the plaintiffs that it was inadequate in light of the
circumstances. We explained that the trial court had considered the relevant
circumstances in calculating a reasonable fee, using what would now be called a

                                           19
lodestar-multiplier method: ―Fundamental to its determination—and properly
so—was a careful compilation of the time spent and reasonable hourly
compensation of each attorney and certified law student involved in the
presentation of the case. [Fn. omitted]‖ (Serrano III, supra, 20 Cal.3d at p. 48.)7
In the omitted footnote (originally numbered 23), we further addressed fee
calculation: ―We are of the view that the following sentiments of the United
States Court of Appeals for the Second Circuit, although uttered in the context of
an antitrust class action, are wholly apposite here: ‗The starting point of every fee
award, once it is recognized that the court‘s role in equity is to provide just
compensation for the attorney, must be a calculation of the attorney‘s services in
terms of the time he has expended on the case. Anchoring the analysis to this
concept is the only way of approaching the problem that can claim objectivity, a
claim which is obviously vital to the prestige of the bar and the courts.‘ (City of
Detroit v. Grinnell Corp. (2d Cir. 1974) 495 F.2d 448, 470; see also Lindy Bros.
Bldrs., Inc. of Phila. v. American R. & S. San. Corp. (3d Cir. 1973) 487 F.2d 161,
167–169; see generally Dawson, Lawyers and Involuntary Clients in Public
Interest Litigation [(1975)] 88 Harv. L.Rev. 849, especially pp. 925–929.)‖
(Serrano III, supra, 20 Cal.3d at p. 48, fn. 23.)
       For his claim that Serrano III mandates primary use of the lodestar method
in every case, the objector relies on these passages, in particular our allusions to
― ‗the court‘s role in equity‘ ‖ in awarding fees, a role that includes awards in
common fund cases, and to the lodestar as the ― ‗starting point of every fee

7       The trial court had then increased that ―touchstone‖ figure to account for a
number of factors, including the novelty and difficulty of the questions involved
and the contingent nature of the fee award. (Serrano III, supra, 20 Cal.3d at
p. 49.)

                                          20
award.‘ ‖ (Serrano III, supra, 20 Cal.3d at p. 48, fn. 23, italics added.) The
quoted text and footnote, however, concern calculation of a fee awarded under the
private attorney general theory. In Serrano III, this court simply did not address
the question of what methods of calculating a fee award may or should be used
when the fee is to be drawn from a common fund created or preserved by the
litigation. For this reason, the passages quoted cannot fairly be taken as
prohibiting the percentage method‘s use in a common fund case.
       To the contrary, in its earlier discussion of the common fund doctrine,
Serrano III cited with approval several decisions in which a percentage fee was
awarded. In Fox v. Hale & Norcross Silver Min. Co., supra, 108 Cal. at page 476,
apparently our first case approving a common fund fee award, the award was for
25 percent of the moneys the plaintiff had collected. In Farmers & Merchants
Nat. Bank of Los Angeles v. Peterson, supra, 5 Cal.2d at page 607, we held the
plaintiff in a suit for an accounting was properly awarded ―5 per cent of the
moneys received and recovered herein as an attorney‘s fee.‖ And in Glendale City
Employees’ Assn., Inc. v. City of Glendale (1975) 15 Cal. 3d 328, a labor action by
public employees, we upheld ―the portion of the judgment awarding counsel for
plaintiffs 25 percent of all retroactive salaries and wages received.‖ (Id. at p. 341,
fn. 19.) Having cited these decisions, together with a few others, as establishing
and exemplifying the common fund attorney fee doctrine in California (Serrano
III, supra, 20 Cal.3d at p. 35), the Serrano III court observed it could find no such
fund in that case (id. at p. 36). Had we meant, in our later discussion of the
lodestar calculation of a private attorney general fee, to disapprove the percentage
method of calculation used in these common fund cases, we would have said so.
       In emphasizing the objectivity provided by a lodestar calculation, Serrano
III, supra, 20 Cal. 3d 25, decided in 1977, was typical of its era. (As discussed in
part I, ante, that period is considered to have begun with the Third Circuit‘s 1973

                                          21
decision in Lindy I, supra, 487 F.2d 161, which we cited in the footnote passage
quoted above.) Because the award in Serrano III was not made from a common
fund and did not rest on the common fund theory, we had no occasion there to
consider the comparative disadvantages of the lodestar-multiplier method that
have since led the vast majority of courts nationwide to instead favor, or at least to
allow, use of the percentage-of-the-fund method in common fund cases. As
explained in part I, ante, both the Second and Third Circuits subsequently
retreated from their endorsements, in City of Detroit v. Grinnell Corp., supra, 495
F.2d 448, and Lindy I, supra, 487 F.2d 161—the two decisions cited in Serrano
III‘s footnote 23—of the lodestar method as the preferred or exclusive means of
calculating a reasonable fee. (See Goldberger v. Integrated Resources, Inc.,
supra, 209 F.3d at pp. 48–50 [2d Cir.]; In re Rite Aid Corp. Securities Litigation,
supra, 396 F.3d at p. 300 [3d Cir.].) Presenting as it did no common fund from
which an award could be made, Serrano III was not a case for entertaining the
policy grounds for allowing a common fund fee to be calculated as a percentage of
the fund, considerations that have so heavily influenced later courts‘ decisions on
this issue.
       Since Serrano III, we have several times, in fee shifting cases, endorsed the
lodestar or lodestar-multiplier method of calculating an attorney fee award; none
of our decisions involved a case where the fee was to be awarded from a common
fund created or preserved by the litigation. (See Graham v. DaimlerChrysler
Corp. (2004) 34 Cal. 4th 553, 579 [award under Code Civ. Proc., § 1021.5];
Ketchum v. Moses (2001) 24 Cal. 4th 1122, 1131–1132 [award under Code Civ.
Proc., § 425.16, subd. (c)]; PLCM Group v. Drexler (2000) 22 Cal. 4th 1084,
1094–1095 [award under Civ. Code, § 1717]; Maria P. v. Riles (1987) 43 Cal. 3d
1281, 1294–1295 [award under Code Civ. Proc., § 1021.5]; Press v. Lucky Stores,
Inc. (1983) 34 Cal. 3d 311, 321–322 [same].) And even with regard to such

                                          22
statutory fee shifting cases, we have noted the lodestar-multiplier method of
determining a reasonable fee is not necessarily exclusive: ―We emphasize,
however, that although we are persuaded that the lodestar adjustment approach
should be applied to fee awards under Code of Civil Procedure section 425.16, we
are not mandating a blanket ‗lodestar only‘ approach; every fee-shifting statute
must be construed on its own merits and nothing in Serrano jurisprudence
suggests otherwise.‖ (Ketchum v. Moses, supra, at p. 1136.)
       The objector relies on several Court of Appeal decisions, the first being
Jutkowitz v. Bourns (1981) 118 Cal. App. 3d 102 (Jutkowitz). A minority
shareholder plaintiff who had filed a putative class action over a proposed
purchase of corporate stock, leading the buyer to increase the price offered, sought
an augmented attorney fee based on the value he had created for shareholders who
sold at the increased price, even though most of them were not members of the
class. (Id. at pp. 106–109.) Although the plaintiff based his fee increase request
on the common fund theory, he neither showed that any fund had been created
from which the increased fee could be awarded nor, as far as the appellate opinion
indicates, sought any particular percentage of the asserted fund as fee. (See id. at
pp. 108–110.)
       In rejecting the plaintiff‘s attempt to have the amount of his attorney fee
enhanced, the Jutkowitz court observed: ―While the size of the class may affect
the complexity of counsel‘s task and the size of the fund created may reflect the
quality of his work, the correct amount of compensation cannot be arrived at
objectively by simply taking a percentage of that fund.‖ (Jutkowitz, supra, 118
Cal.App.3d at p. 111, italics added.) Given that no fund had in fact been created
from which an attorney fee could be taken, the italicized remark need not be read
as barring the percentage method of calculating a fee award in a true common fund

                                         23
case. To the extent it could be read broadly as expressing such a general rule,
however, we disapprove Jutkowitz v. Bourns, supra, 118 Cal. App. 3d 102.
       Salton Bay Marina, Inc. v. Imperial Irrigation Dist. (1985) 172 Cal. App. 3d
914 (Salton Bay), an inverse condemnation action, also involved no common fund.
For its conclusion that the plaintiff was only entitled to reimbursement of a
reasonable attorney fee measured by time expended by the attorney, without
regard to the contingency fee agreement between attorney and client, the appellate
court relied in part on the above passages from Serrano III and Jutkowitz. (Salton
Bay, supra, at pp. 953–954.) The decision does not speak to how a fee award
should be calculated in a class action settlement or other common fund case. Nor
does People ex rel. Dept. of Transportation v. Yuki (1995) 31 Cal. App. 4th 1754,
1767–1771 (Yuki), an eminent domain case following Salton Bay in disapproving
direct use of a contingency fee agreement to determine a fee award, address the
issue before us today.
       In Dunk v. Ford Motor Company, supra, 48 Cal. App. 4th 1794, 1809
(Dunk), in the context of a class action settlement, the court disapproved an
attorney fee award the plaintiff attempted to justify as a small percentage of the
settlement‘s value. The court gave two reasons: ―(1) The award of attorney fees
based on a percentage of a ‗common fund‘ recovery is of questionable validity in
California; and (2) even if it is valid, the true value of the fund must be easily
calculated.‖ (Ibid.) On the second point, the court explained that because the
settlement at issue provided class members with coupons for discounts on
purchases of new vehicles, its real value could not be ascertained until the end of
the coupon redemption period. (Ibid.) On the first, the court cited Jutkowitz,
supra, 118 Cal. App. 3d 102, Salton Bay, supra, 172 Cal. App. 3d 914, and Yuki,
supra, 31 Cal. App. 4th 1754, as having ―cast doubt on the use of the percentage
method to determine attorney fees in California class actions.‖ (Dunk, supra, at

                                          24
p. 1809.) The Dunk court, while finding the percentage method inapplicable to the
settlement before it due to the lack of a readily valued common fund, did not
purport to bar its usage generally in common fund cases.
       Dunk was, in turn, cited as illustrating the doubt over use of the percentage
method in California, in the passage from Lealao, supra, 82 Cal.App.4th at page
27, quoted at the beginning of this part. Lealao, a consumer class action over
prepayment penalties charged by a lender, was settled by the lender‘s agreement to
pay class members who filed claims 77 percent of the penalties they had paid, a
settlement worth almost $15 million if every class member filed a claim. (Id. at
pp. 22–23.) Though class counsel requested 24 percent of the recovery as a fee
($3.5 million, modified to $1.76 million after claims of only $7.35 million were
filed), the trial court, believing itself precluded from awarding a percentage fee
where no separate fund had been established from which the fee could be drawn,
granted only a fee of $425,000, calculated as a lodestar without multiplier. (Id. at
pp. 24–25.)
       Relying on Serrano III, supra, 20 Cal. 3d 25, the Lealao appellate court held
a pure percentage fee is improper when, as in the case before it, the settlement
does not establish a separate fund from which the fee is to be paid. (Lealao,
supra, 82 Cal.App.4th at pp. 37–39.)8 But the trial court‘s lodestar fee could
properly be enhanced through a multiplier based on the a percentage of the benefit
obtained (Lealao, at pp. 39–50), employing ―the common federal practice of

8        For this holding, Lealao cited not only footnote 23 from Serrano III, supra,
20 Cal.3d at page 48, which extolled the lodestar method‘s objectivity, but also
our earlier discussion finding the common fund theory inapplicable because the
―plaintiffs‘ efforts have not effected the creation or preservation of an identifiable
‗fund‘ of money out of which they seek to recover their attorneys fees.‖ (Serrano
III, at pp. 37–38; see Lealao, supra, 82 Cal.App.4th at p. 39.)

                                          25
‗cross-checking‘ the lodestar against the value of the class recovery.‖ (Id. at
p. 45.) Such a cross-check is not prohibited by Serrano III, Jutkowitz or Dunk
(Lealao, at pp. 44–45) and helps to determine a reasonable fee because a
percentage-of-the-benefit analysis ―provides a credible measure of the market
value of the legal services provided‖ (id. at p. 49).
       The Lealao court expressed doubt as to the wisdom of considering only the
amount of the recovery in determining a fee award, but acknowledged that ―[t]he
federal judicial experience teaches that the ‗reasonableness‘ of a fee in a
representative action will often require some consideration of the amount to be
awarded as a percentage of the class recovery.‖ (Lealao, supra, 82 Cal.App.4th at
p. 53.) Since that decision, several other Court of Appeal panels have approved
some form of percentage fee calculation. (See In re Consumer Privacy Cases,
supra, 175 Cal.App.4th at p. 558 [use of percentage method under common fund
doctrine ―is not an abuse of discretion . . . as long as the method chosen is applied
consistently using percentage figures that accurately reflect the marketplace.‖];
Chavez v. Netflix, Inc. (2008) 162 Cal. App. 4th 43, 63 [under reasoning of Lealao,
percentage calculation may be used to determine a lodestar multiplier; it was not
an abuse of discretion ―for the trial court to apply a percentage figure at the low
end of the typical contingency contractual arrangement (21.8 percent) to calculate
the multiplier in the context of this settlement‖]; Apple Computer, Inc. v. Superior
Court (2005) 126 Cal. App. 4th 1253, 1270 [observing that ―attorneys‘ fees
awarded under the common fund doctrine are based on a ‗percentage-of-the-
benefit‘ analysis‖]; Wershba v. Apple Computer, Inc. (2001) 91 Cal. App. 4th 224,
254 [―Courts recognize two methods for calculating attorney fees in civil class
actions: the lodestar/multiplier method and the percentage of recovery method.‖].)
       In summary, California decisions from Serrano III forward have shown
some uncertainty as to the role a percentage-of-the-recovery calculation may play

                                          26
in determining court-ordered attorney fees, but have not established any rule
prohibiting such a calculation when the fee is to be drawn from a common fund
created by the litigation.

       III. A Percentage Calculation with Lodestar Cross-check Is Permitted
            in a Common Fund Case.
       Whatever doubts may have been created by Serrano III, supra, 20 Cal. 3d
25, or the Court of Appeal cases that followed, we clarify today that use of the
percentage method to calculate a fee in a common fund case, where the award
serves to spread the attorney fee among all the beneficiaries of the fund, does not
in itself constitute an abuse of discretion. We join the overwhelming majority of
federal and state courts in holding that when class action litigation establishes a
monetary fund for the benefit of the class members, and the trial court in its
equitable powers awards class counsel a fee out of that fund, the court may
determine the amount of a reasonable fee by choosing an appropriate percentage
of the fund created. The recognized advantages of the percentage method—
including relative ease of calculation, alignment of incentives between counsel and
the class, a better approximation of market conditions in a contingency case, and
the encouragement it provides counsel to seek an early settlement and avoid
unnecessarily prolonging the litigation (See pt. I, ante; Lealao, supra, 82
Cal.App.4th at pp. 48–49; Rawlings v. Prudential-Bache Properties, Inc., supra, 9
F.3d at p. 516)—convince us the percentage method is a valuable tool that should
not be denied our trial courts.
       We do not address here whether or how the use of a percentage method
may be applied when there is no conventional common fund out of which the
award is to be made but only a ― ‗constructive common fund‘ ‖ created by the
defendant‘s agreement to pay claims made by class members and, separately, to
pay class counsel a reasonable fee as determined by the court (see Lealao, supra,

                                          27
82 Cal.App.4th at pp. 23–24, 28), or when a settlement agreement establishes a
fund but provides that portions not distributed in claims revert to the defendant or
be distributed to a third party or the state, making the fund‘s value to the class
depend on how many claims are made and allowed. (See 5 Newberg on Class
Actions, supra, § 15:70, pp. 236–242.) The settlement agreement in this case
provided for a true common fund fixed at $19 million, without any reversion to
defendant and with all settlement proceeds, net of specified fees and costs, going
to pay claims by class members.
       The trial court in this case thus did not violate principles established in
Serrano III, supra, 20 Cal. 3d 25, or otherwise abuse its discretion, in using a
percentage method for its primary calculation of the fee award. The choice of a
fee calculation method is generally one within the discretion of the trial court, the
goal under either the percentage or lodestar approach being the award of a
reasonable fee to compensate counsel for their efforts. (In re Consumer Privacy
Cases, supra, 175 Cal.App.4th at pp. 557–558.) Before approving the settlement
agreement and percentage fee award in this case, the trial court supplemented its
own familiarity with the case by obtaining additional information from class
counsel on the risks and potential value of the litigation; the court carefully
considered that information on contingency, novelty and difficulty together with
the skill shown by counsel, the number of hours worked and the asserted hourly
rates, which the court found were not overstated. On that basis, the trial court
determined the fee request was for a reasonable percentage of the settlement fund.
       Nor do we perceive an abuse of discretion in the court‘s decision to double
check the reasonableness of the percentage fee through a lodestar calculation. As
noted earlier, ―[t]he lodestar method better accounts for the amount of work done,
while the percentage of the fund method more accurately reflects the results
achieved.‖ (Rawlings v. Prudential-Bache Properties, Inc., supra, 9 F.3d at

                                          28
p. 516.) A lodestar cross-check thus provides a mechanism for bringing an
objective measure of the work performed into the calculation of a reasonable
attorney fee. If a comparison between the percentage and lodestar calculations
produces an imputed multiplier far outside the normal range, indicating that the
percentage fee will reward counsel for their services at an extraordinary rate even
accounting for the factors customarily used to enhance a lodestar fee, the trial
court will have reason to reexamine its choice of a percentage. (Walker &
Horwich, supra, 18 Geo. J. Legal Ethics at p. 1463.)
       The utility of a lodestar cross-check has been questioned on the ground it
tends to reintroduce the drawbacks the 1985 Task Force Report identified in
primary use of the lodestar method, especially the undue consumption of judicial
resources and the creation of an incentive to prolong the litigation. (See
5 Newberg on Class Actions, supra, § 15:86, pp. 330–334 [describing, but largely
rejecting, objections to cross-check]; Gilles & Friedman, Exploding the Class
Action Agency Costs Myth: The Social Utility of Entrepreneurial Lawyers (2006)
155 U.Pa.L.Rev. 103, 140–142 [use of lodestar method, even as cross-check,
undesirably limits deterrent potential of certain large-damages class actions by
incentivizing pretrial settlement].) We tend to agree with the amicus curiae brief
of Professor William B. Rubenstein that these concerns are likely overstated and
the benefits of having the lodestar cross-check available as a tool outweigh the
problems its use could cause in individual cases.
       With regard to expenditure of judicial resources, we note that trial courts
conducting lodestar cross-checks have generally not been required to closely
scrutinize each claimed attorney-hour, but have instead used information on
attorney time spent to ―focus on the general question of whether the fee award
appropriately reflects the degree of time and effort expended by the attorneys.‖ (5
Newberg on Class Actions, supra, § 15:86, p. 331; see, e.g., Goldberger v.

                                         29
Integrated Resources, Inc., supra, 209 F.3d at p. 50 [2d Cir.; ―where used as a
mere cross-check, the hours documented by counsel need not be exhaustively
scrutinized by the district court‖]; In re Prudential Ins. Co. America Sales Practice
Litigation Agent Actions (3d Cir. 1998) 148 F.3d 283, 342 [agreeing with district
court that ―detailed time summaries were unnecessary where, as here, it was
merely using the lodestar calculation to double check its fee award.‖]; Barbosa v.
Cargill Meat Solutions Corp. (E.D.Cal. 2013) 297 F.R.D. 431, 451 [―Where the
lodestar method is used as a cross-check to the percentage method, it can be
performed with a less exhaustive cataloguing and review of counsel‘s hours.‖].)
The trial court in the present case exercised its discretion in this manner,
performing the cross-check using counsel declarations summarizing overall time
spent, rather than demanding and scrutinizing daily time sheets in which the work
performed was broken down by individual task. Of course, trial courts retain the
discretion to consider detailed time sheets as part of a lodestar calculation, even
when performed as a cross-check on a percentage calculation.
       As to the incentives a lodestar cross-check might create for class counsel,
we emphasize the lodestar calculation, when used in this manner, does not
override the trial court‘s primary determination of the fee as a percentage of the
common fund and thus does not impose an absolute maximum or minimum on the
potential fee award. If the multiplier calculated by means of a lodestar cross-
check is extraordinarily high or low, the trial court should consider whether the
percentage used should be adjusted so as to bring the imputed multiplier within a
justifiable range, but the court is not necessarily required to make such an
adjustment. Courts using the percentage method have generally weighed the time
counsel spent on the case as an important factor in choosing a reasonable
percentage to apply. (5 Newberg on Class Actions, supra, § 15:86, pp. 332–333;
see, e.g., In re Thirteen Appeals Arising Out of San Juan Dupont Plaza Hotel Fire

                                          30
Litigation, supra, 56 F.3d at p. 307 [―even under the [percentage of fund] method,
time records tend to illuminate the attorneys‘ role in the creation of the fund, and,
thus, inform the court‘s inquiry into the reasonableness of a particular
percentage.‖].) A lodestar cross-check is simply a quantitative method for
bringing a measure of the time spent by counsel into the trial court‘s
reasonableness determination; as such, it is not likely to radically alter the
incentives created by a court‘s use of the percentage method.
       We therefore agree with the Court of Appeal below that ―[t]he percentage
of fund method survives in California class action cases, and the trial court did not
abuse its discretion in using it, in part, to approve the fee request in this class
action.‖ We hold further that trial courts have discretion to conduct a lodestar
cross-check on a percentage fee, as the court did here; they also retain the
discretion to forgo a lodestar cross-check and use other means to evaluate the
reasonableness of a requested percentage fee.

                                           31
                                DISPOSITION
     The judgment of the Court of Appeal is affirmed.
                                              WERDEGAR, J.

WE CONCUR:

CANTIL-SAKAUYE, C. J.
CHIN, J.
CORRIGAN, J.
LIU, J.
CUÉLLAR, J.
KRUGER, J.

                                     32
                     CONCURRING OPINION BY LIU, J.

       Appellant David Brennan devotes the lion‘s share of his briefing to issues
beyond today‘s holding that trial courts may use the percentage method instead of
the lodestar method to award attorneys‘ fees from a common fund. He argues that
the lodestar method as applied does not comply with Serrano v. Priest (1977) 20
Cal. 3d 25 (Serrano III); that courts demand too little documentation of attorney
hours and do not subject such documentation to careful scrutiny; that named
plaintiffs do not adequately monitor class counsel; and that courts using the
percentage method, including the trial court in this case, have applied percentage
numbers drawn from individual contingent fee cases without taking into account
the economies of scale in class representation. To remedy these alleged abuses,
Brennan urges us to explicitly state the requirements of the lodestar methodology,
to require appointment of class guardians to protect absent class members through
adversarial representation, and to appoint fee experts for absent class members
where class counsel retains such an expert.
       Although the court declines to address these arguments, I write separately
to suggest practices that may help to promote accuracy, transparency, and public
confidence in the awarding of attorneys‘ fees in class action litigation.
       First and foremost, although disputes over attorneys‘ fees often arise in the
context of a proposed settlement as in this case, courts and litigants need not and
generally should not wait until the end of litigation to set the terms of attorney
compensation. Whenever possible, the parties should negotiate, and the court
should review and conditionally approve, the terms of attorney compensation at
the start of litigation. The parties and the court may revisit the arrangement when
the litigation concludes, and the court may make adjustments if unusual or
unforeseen circumstances render the initial terms clearly unreasonable or unfair.
But in general, the parties‘ initial bargain should be given substantial weight in
determining the reasonableness of a fee award.
       The Task Force on Selection of Class Counsel convened by the United
States Court of Appeals for the Third Circuit has endorsed a version of this
approach. While acknowledging that ―a precise ex ante determination of fees is
usually unworkable,‖ the task force recommended that ―the topic of attorney fees
should be addressed at the early stages of the case as well as throughout the
prosecution of the case. At the outset of the case, the court may be well-advised to
direct counsel to propose the terms for a potential award of fees; the potential fees
might be established within ranges, with the court making it clear to the parties
that the fee remains open for further review for reasonableness. A preliminary fee
arrangement may provide a helpful structure for the court when it conducts its
reasonableness review at the end of the case.‖ (Third Circuit Task Force,
Selection of Class Counsel (2002) pp. 101−102, fns. omitted, 208 F.R.D. 340,
420–421 (Task Force Report); see Baker et al., Is the Price Right? An Empirical
Study of Fee-Setting in Securities Class Actions (2015) 115 Colum. L.Rev. 1371,
1432 (Baker et al.) [recommending ex ante fee arrangements for class actions
governed by the federal Private Securities Litigation Reform Act (PSLRA) and
urging that ―the district court should apply the agreed terms unless unforeseen
developments have rendered those terms clearly excessive or unfair‖].)
       This approach has doctrinal and practical virtues. Doctrinally, a court‘s
authority to award attorneys‘ fees from a common fund stems from its equitable
power to prevent unjust enrichment. (See Serrano v. Unruh (1982) 32 Cal. 3d 621,

                                          2
627 [the ―central theory underlying‖ fee awards from a common fund is
― ‗prevention of an unfair advantage to the others who are entitled to share in the
fund and who should bear their share of the burden of its recovery‘ ‖]; Serrano III,
supra, 20 Cal.3d at p. 35 [― ‗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 sharing of the litigation costs‘ ‖].) But a claim for
unjust enrichment typically lies where it is impractical to bargain ex ante for a
good or service in an arms-length negotiation. ―[W]hen it is feasible for parties to
bargain, restitution is typically denied to providers who confer benefits without
negotiating for payment in advance.‖ (Silver, A Restitutionary Theory of
Attorneys’ Fees in Class Actions (1991) 76 Cornell L.Rev. 656, 667.) ―The effect
of withholding compensation in contexts where parties can bargain is to
demonstrate a preference for voluntary exchange.‖ (Id. at p. 669.)
       As a practical matter, ―[t]he best time to determine [the rate of attorney
compensation] is the beginning of the case, not the end (when hindsight alters the
perception of the suit‘s riskiness, and sunk costs make it impossible for the
lawyers to walk away if the fee is too low). This is what happens in actual
markets. Individual clients and their lawyers never wait until after recovery is
secured to contract for fees. They strike their bargains before work begins.
Ethically lawyers must do this, but the same thing happens in markets for other
professional services with different (or no) ethical codes. . . . Only ex ante can
bargaining occur in the shadow of the litigation‘s uncertainty; only ex ante can the
costs and benefits of particular systems and risk multipliers be assessed
intelligently. Before the litigation occurs, a judge can design a fee structure that
emulates the incentives a private client would put in place. At the same time, both
counsel and class members can decide whether it is worthwhile to proceed with
that compensation system in place.‖ (In re Synthroid Marketing Litigation (7th

                                           3
Cir. 2001) 264 F.3d 712, 718–719.) Empirical evidence suggests that ex ante fee
negotiation is a key mechanism for reducing agency costs between counsel and the
class they represent. (See Baker et al., supra, 115 Colum. L.Rev. at p. 1394
[studying 431 securities class action settlements from 2007 through 2012, and
finding that ―fee agreements negotiated at the beginning of cases have a
substantial moderating effect on fee requests‖ where public pension funds act as
lead plaintiffs].)
       Moreover, ex ante fee arrangements do not present the conflict of interest
that inherently arises when attorneys seek fees from a common fund comprising
their clients‘ recovery. ―At the start of litigation, there is no money to divide.
There is only the prospect of forming a joint venture between a client and a lawyer
that seeks to maximize the parties‘ joint wealth by offering the lawyer
compensation terms that will motivate the lawyer to work hard on behalf of the
client. [¶] When fees are set at the end of litigation, by contrast, the amount to be
recovered is already known. This heightens the conflict between the client and the
attorney because every additional dollar for one means a dollar less for the other.‖
(Baker et al., supra, 115 Colum. L.Rev. at p. 1440.)
       Opponents of ex ante fee agreements in the class action context have
argued that (1) there is no ―functioning market‖ for plaintiffs‘ representation and
thus no reliable benchmarks that can provide a ―general solution to the problem of
market failure in setting class counsel fees‖ (ABA Tort Trial and Insurance
Practice Section, Report on Contingent Fees in Class Action Litigation (2006) 25
Rev.Litig. 459, 481, 482); (2) at the early stages of class action litigation, there are
too many uncertainties for bargaining to occur (id. at p. 482); and (3) if fee
arrangements are disclosed to defendants, this might disadvantage plaintiffs in
settlement negotiations (Baker et al., supra, 115 Colum. L.Rev. at p. 1436).

                                           4
       As to the first point, courts evaluating ex ante fee arrangements may use ―a
simple benchmark: the percentage or range of percentages prevailing in the
private market in similar contingent fee representations.‖ (Silver, Dissent from
Recommendation to Set Fees Ex Post (2006) 25 Rev.Litig. 497, 499.) ―Plaintiffs
have formed voluntary groups in mass accident cases, pollution cases, defective
product cases, securities fraud cases, and cases of other kinds. Associations,
including homeowners‘ associations, interest groups, unions, partnerships, and
corporations have sued on behalf of their members or owners thousands of
times. . . . All of these lawsuits are examples of aggregate litigation, and in all of
them lawyers‘ fees have been set ex ante via negotiations.‖ (Id. at pp. 499–500;
see In re Synthroid Marketing Litigation, supra, 264 F.3d at p. 719 [―[A] court can
learn about similar bargains. That is at least a starting point.‖].)
       As to the second point, the principal virtue of an ex ante fee arrangement is
its allocation of risk between attorney and client in the face of litigation
uncertainty. At the end of litigation, when the amount of recovery and the
outcomes of all other uncertainties are known, perceptions of risk are likely to be
distorted by hindsight bias. (Baker et al., supra, 115 Colum. L.Rev. at pp. 1441–
1444.) Uncertainty is the very reason why it is appropriate for negotiations over
fees to occur at the start of litigation; the market price for legal services can be
more accurately derived through bargaining behind the veil of ignorance. (In re
Synthroid Marketing Litigation, supra, 264 F.3d at p. 719.) Moreover, the initial
terms set by the parties and approved by the court are not etched in stone; as
noted, the court may make adjustments if unusual or unforeseen circumstances
render the initial arrangement clearly unreasonable or unfair.
       As to the third point, concerns about disclosure can be alleviated by
allowing plaintiffs and class counsel to submit their fee arrangements to the court
under seal or ―by discussing fees with class counsel in chambers on an ex parte

                                           5
basis.‖ (Baker et al., supra, 115 Colum. L.Rev. at p. 1437.) Such approaches pose
no unfairness to defendants, who ―are indifferent to fee requests because the fees
are paid out of the common fund.‖ (Id. at p. 1419.)
       Quite apart from the concerns above, a significant practical challenge to
negotiating attorneys‘ fees in many class actions, whether at the start or end of
litigation, is the lack of an active and interested class representative who can
effectively bargain with and monitor plaintiffs‘ counsel. Some class actions, such
as securities litigation, have managed to attract large institutional investors as lead
plaintiffs. In that role, they closely evaluate and choose high-quality lawyers, and
they actively bargain for favorable fee structures and secure ex ante fee
arrangements more often than do other lead plaintiffs. (Baker et al., supra, 115
Colum. L.Rev. at pp. 1393–1394; see 15 U.S.C. § 78u-4(a)(3) [establishing
process for appointment of lead plaintiff in class actions governed by the
PSLRA].) By contrast, consumer class actions and wage-and-hour disputes often
lack a class representative with sufficient incentive, resources, or expertise to
negotiate with class counsel. Moreover, although Brennan came forward in this
case as an objector, class objectors are too rare to be generally relied upon to
monitor class counsel. (Eisenberg & Miller, The Role of Opt-Outs and Objectors
in Class Action Litigation: Theoretical and Empirical Issues (2004) 57 Vand.
L.Rev. 1529, 1549 [―Across all case types, . . . the median objection rate is zero
and the mean is 1.1 percent of class members.‖].) And the few who do object
have had little to no demonstrable impact on attorneys‘ fees or settlement
amounts. (Id. at p. 1563 [―We found no significant association between the
number of dissenters and either the gross fee or the fee as a percentage of class
recovery.‖].)
       Although trial courts can exercise vigilance to ensure fairness in fee
negotiations, doing so puts the judge in the position of ―a fiduciary guarding the

                                           6
rights of absent class members‖ (In re Cendant Corp. Litigation (3d Cir. 2001)
264 F.3d 201, 231) while at the same time serving as a neutral arbiter of counsel‘s
claims concerning the reasonableness of a proposed award. As Brennan puts it,
the trial judge is asked ―to simultaneously assume the conflicting roles of impartial
judge and class advocate.‖
       In many cases, trial courts may have no choice but to walk the fine line
between protecting the interests of absent class members and impartially
evaluating the reasonableness of a proposed fee award. In cases involving
substantial sums, however, trial courts may take steps to insulate themselves from
apparent conflicts by appointing a class guardian or ―devil‘s advocate‖ so that
arguments for and against the reasonableness of a fee arrangement may be
presented in a genuinely adversarial process. (Cf. Rubenstein, The Fairness
Hearing: Adversarial and Regulatory Approaches (2006) 53 UCLA L.Rev. 1435,
1454 [proposing court-designated attorney to serve as ―devil‘s advocate‖ in
evaluating class action settlements].) The class guardian would provide
counterpoints to class counsel‘s arguments concerning the risks and difficulty of
litigating the case. Perhaps most importantly, the class guardian or a fee expert
retained by the guardian would provide information on prevailing market rates for
similar litigation. The appointment of a guardian and a full-dress adversarial
process would cost money (from the common fund) and time. But these costs,
which would serve to enhance the accuracy and legitimacy of fee awards, would
―pale[] in comparison to the significant amounts of money‖ to be divided between
plaintiffs and counsel in high-value cases. (Id. at p. 1455.)

                                          7
                                           *
       The suggestions above reflect the importance of fairness and
reasonableness in attorney compensation. Ensuring ―objectivity‖ in attorney
compensation ― ‗is obviously vital to the prestige of the bar and the courts.‘ ‖
(Serrano III, supra, 20 Cal.3d at p. 48, fn. 23.) Moreover, ―[p]robably to a unique
degree, American law relies upon private litigants to enforce substantive
provisions of law that in other legal systems are left largely to the discretion of
public enforcement agencies. . . . The key legal rules that make the private
attorney general a reality in American law today . . . [are] those rules that establish
the fee arrangements under which these plaintiff‘s attorneys are compensated.
Inevitably, these rules create an incentive structure that either encourages or chills
private enforcement of law.‖ (Coffee, Understanding the Plaintiff’s Attorney:
The Implications of Economic Theory for Private Enforcement of Law Through
Class and Derivative Actions (1986) 86 Colum. L.Rev. 669, 669−670, fns. omitted
(Coffee).) ―By setting fees too high or too law, judges would incentivize lawyers
to bring too many class actions or too few. Excessive litigation would over-deter
primary conduct that is desirable; insufficient litigation would under-deter
primary conduct that is unwanted.‖ (Baker et al., supra, 115 Colum. L.Rev. at
p. 1375.)
       It must be acknowledged that ―there is a perception among a significant
part of the nonlawyer population and even among lawyers and judges that the risk
premium is too high in class action cases and that class action plaintiffs‘ lawyers
are overcompensated for the work that they do.‖ (Task Force Rep., supra, at p. 5,
208 F.R.D. at pp. 343–344.) I express no view on the degree to which this
perception is anchored in reality. (Compare Task Force Rep., supra, at p. 5, 208
F.R.D at p. 344 [―When there is a public reaction to an attorney fee award in a
given case, the public is usually unaware of what the lawyers actually did, what

                                           8
risks they took, what investment they made, and how important their lawyering
was to victory for the class.‖] with Coffee, supra, 86 Colum. L.Rev. at p. 726 [―At
its worst, the settlement process may amount to a covert exchange of a cheap
settlement for a high award of attorney‘s fees.‖].) But the perception itself may
prompt some judges and policymakers to respond by narrowing substantive legal
protections or by curtailing procedural mechanisms of enforcement.
       Public confidence in the fairness of attorney compensation in class actions
is vital to the proper enforcement of substantive law. Although there may be no
single ―right answer‖ to how much class counsel should earn in each case, ex ante
fee arrangements with the possibility of ex post modification for unusual
circumstances may provide a useful approach to estimating market rates, reducing
the distortive effects of hindsight bias, and aligning the interests of counsel and the
class they represent. Courts and litigants should be alert to this and other
approaches that may help to promote greater public confidence in a form of
litigation on which many people rely to obtain effective access to justice.

                                                  LIU, J.

                                          9
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Laffitte v. Robert Half International, Inc.
__________________________________________________________________________________

Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 231 Cal. App. 4th 860
Rehearing Granted

__________________________________________________________________________________

Opinion No. S222996
Date Filed: August 11, 2016
__________________________________________________________________________________

Court: Superior
County: Los Angeles
Judge: Mary Strobel

__________________________________________________________________________________

Counsel:

Law Office of Lawrence W. Schonbrun and Lawrence W. Schonbrun for Plaintiff and Appellant.

Law Offices of Kevin T. Barnes, Kevin T. Barnes, Gregg Lander; Law Offices of Joseph Antonelli, Joseph
Antonelli, Janelle Carney; Hilaire McGriff and Mika M. Hilaire for Plaintiffs and Respondents.

Paul Hastings, Judith M. Kline and M. Kirby C. Wilcox for Defendants and Respondents.

Altshuler Berzon, Michael Rubin; Jocelyn D. Larkin, Robert Schug; and Richard Rothschild for Impact
Fund, Western Center on Law and Poverty, Asian Americans Advancing Justice-Asian Law Caucus, Bet
Tzedek, Centro Legal de la Raza, California Rural Legal Assistant Foundation, Disability Rights Education
and Defense Fund, East Bay Community Law Center, Justice in Aging, Law Foundation of Silicon Valley,
Legal Aid Association of California, Legal Aid Society of San Mateo County, Public Advocates, Public
Counsel, The Public Interest Law Project and Worksafe as Amici Curiae on behalf of Plaintiffs and
Respondents and Defendants and Respondents.

Lieff Cabraser Heiman & Bernstein, Elizabeth J. Cabraser, Jonathan D. Selbin; Girard Gibbs and Jordan
Elias for Professor Christine Bartholomew, Professor Erwin Chemerinsky, Professor John C. Coffee, Jr.,
Professor Joshua P. Davis, Professor Nora Freeman Engstrom, Professor Brian T. Fitzpatrick, Professor
Arthur R. Miller and Professor Charles Silver as Amici Curiae on behalf of Plaintiffs and Respondents and
Defendants and Respondents.

Capstone Law, Glenn A. Danas and Ryan H. Wu for Working Wardrobes as Amicus Curiae on behalf of
Plaintiffs and Respondents and Defendants and Respondents.

Kabateck Brown Kellner, Richard L. Kellner and Brian S. Kabateck for Consumer Attorneys of California
as Amicus Curiae on behalf of Plaintiffs and Respondents and Defendants and Respondents.

Law Offices of Martin N. Buchanan and Martin N. Buchanan for Professor William B. Rubenstein as
Amicus Curiae.
Counsel who argued in Supreme Court (not intended for publication with opinion):

Lawrence W. Schonbrun
Law Office of Lawrence W. Schonbrun
86 Eucalyptus Road
Berkeley, CA 94705
(510) 547-8070

Kevin T. Barnes
Law Offices of Kevin T. Barnes
5670 Wilshire Boulevard, Suite 1460
Los Angeles, CA 90036-5664
(323) 549-9100

Michael Rubin
Altshuler Berzon
177 Post Street, Suite 300
San Francisco, CA 94108
(415) 421-7151