(San Francisco City & County Super. Ct. No. JCCP 4211). Trial Judge: Honorable Richard A. Kramer.
The opinion of the court was delivered by: Bruiniers, J.*fn15
CERTIFIED FOR PARTIAL PUBLICATION*fn1
Appellants in this action are objectors to a class action settlement. They maintain that class members were not given adequate notice of the settlement, that the settlement was not fair, reasonable and adequate, and that the court erred in approving attorneys' fees to class counsel. We conclude the court did not abuse its discretion, and affirm.
PROCEDURAL AND FACTUAL BACKGROUND
This case originated in 1999 as a suit against Bank of America, N.A. and related entities (Bank) by the Utility Consumers' Action Network, (UCAN) acting on behalf of its affiliate the Privacy Rights Clearinghouse. The case was coordinated with two similar actions against Bank, Slayton v. Bank of America NT& SA, and Asatryan v. Bank of America NT & SA., and assigned to the Honorable Richard Kramer as the coordination trial judge. A consolidated class action complaint was filed on April 30, 2003, pursuant to court order, with named plaintiffs Donovan Collier, Juan Duron, Terry Wolbert, Ki Won Rhee, Do Young Cho and Frank Cho.
The complaint alleged causes of action for unlawful and fraudulent business practices, false or misleading advertising, invasion of privacy in violation of the common law and the California Constitution, and unjust enrichment. Plaintiffs alleged that Bank, despite representations to the contrary, disclosed personal and confidential information to third party telemarketers and direct mail marketers for a fee, to enable them to market services to plaintiffs. They alleged the confidential information disclosed included account numbers, account balances, credit limits, social security numbers and other ―sensitive‖ information.
The parties first attempted settlement in 2004, when they engaged in three mediation sessions with former U.S. Magistrate Judge Edward Infante. The court tentatively certified a California class on March 9, 2005, but deferred ruling on a nationwide class to allow further discovery. The parties continued settlement negotiations over the years, and finally reached a settlement agreement in early 2007.
The settlement agreement provided that Bank would provide the following to class members: (1) waiver of deposited item return fees; (2) waiver of fees for telephone calls to its Voice Response Unit; (3) vouchers for a $200 discount on loan fees for class members who take out a new residential first mortgage or refinance an existing residential mortgage; and (4) for class members who had a Bank-branded consumer credit card, either 12 free months of the Card Registry Service, with a retail value of $30 or 90 days of the Privacy Assist Identity Theft Protection service, with a retail value of $17.85. The Bank guaranteed it would continue to provide these benefits to class members until the aggregate benefit reached $10.75 million. The Bank also agreed to provide a ―Privacy Toolkit‖; an informational package with instructions on protecting financial privacy, to every class member who requested one. The value of the Privacy Toolkit would not count toward the aggregate benefit of $10.75 million. Additionally, the settlement agreement provided that Bank would pay a total of $3.25 million to a privacy-related cy près fund.
The parties agreed that Bank would not oppose class counsel's application for an award of attorneys' fees and expenses to be determined by the court, but not to exceed $4 million. They also agreed that Bank would not oppose the request for an award of $5,000 to each of the six named class representatives, to be paid from ―any award of attorneys' fees and costs.‖
Following hearings to consider objections, the court entered an order approving the settlement. Pursuant to the parties' settlement agreement, the court awarded $1.75 million to the ―Rose Foundation for cy près distribution to one or more non-profit entities that specialize in privacy-related research,‖ education, or policy development. The court also awarded a total of $1.5 million to the following entities: Center for Democracy and Technology ($253,000); Samuelson Law, Technology, & Public Policy Clinic, University of California Berkeley School of Law ($300,000); World Privacy Forum ($275,000); American Civil Liberties Union of Northern California ($300,000); Electronic Privacy Information Center ($150,000); and Consumer Action ($222,000).
The court also certified for the purposes of settlement a ―Settlement Class,‖ as follows: ―Any person who, at any time between September 9, 1995 and May 31, 2007, was a U.S. resident and ‗(1) Had a Bank of America non-business checking or savings account; (2) Was a borrower on a non-business loan issued by (or acquired by) Bank of America secured by residential real estate within the United States; or (3) Had a Bank of America branded consumer credit card and a California mailing address for purposes of communicating with Bank of America. . . .' ‖*fn2
The court entered a judgment of dismissal on October 4, 2007. Following further hearings, and after ordering supplemental submissions by the parties, the court entered a separate order awarding attorneys' fees and expenses. The court awarded class counsel $2,907,982 in attorneys' fees (based on a lodestar sum of $1,6671,704, with a 1.75 multiplier) and $110,373 in expenses. The fees were awarded alternatively under the common fund doctrine, and under the ―private attorney general‖ provisions of Code of Civil Procedure section 1021.5.*fn3 The court denied $951,450 in claimed attorneys' fees and $40,000 in claimed costs, finding that certain law firms had failed to meet their burden of proving the amount of fees sought. From the award of attorneys' fees, the court ordered that $5,000 be paid to each of the six individual class representatives.
Four objectors in the trial court filed appeals. Michael and Elizabeth Savage filed a timely appeal from the order approving settlement and the judgment of dismissal. Renee Garvin filed a timely appeal from the order approving settlement, the judgment of dismissal, and the order awarding attorneys' fees and expenses. Elaine Savage filed a timely appeal from the order awarding attorneys' fees and expenses and the ―Order allowing filing of Order Approving Class Action Settlement Nunc Pro Tunc entered on December 4, 2007.‖ We consider the three appeals, raising related issues, together, and issue a single opinion.*fn4
In a class action, the trial court has ―broad discretion‖ to determine ―whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper. . . .‖ (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235.) ―Our review is therefore limited to a determination whether the record shows ‗a clear abuse of discretion.' ‖ (Id. at p. 235, quoting Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1802 (Dunk); see also In re Microsoft I--V Cases (2006) 135 Cal.App.4th 706, 723.)
In reviewing the fairness of a class action settlement, ― ‗[d]ue regard' . . . ‗should be given to what is otherwise a private consensual agreement between the parties. The inquiry ―must be limited to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.‖ ' ‖ (7-Eleven Owners for Fair Franchising v. Southland Corp. (2000) 85 Cal.App.4th 1135, 1145, quoting Dunk, supra, 48 Cal.App.4th at p. 1801.)
In considering whether a settlement is reasonable, the trial court should consider relevant factors, which may include, but are not limited to ― ‗the strength of plaintiffs' case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.' ‖ (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128 (Kullar), quoting Dunk, supra, 48 Cal.App.4th at p. 1801; see also In re Microsoft I-V Cases, supra, 135 Cal.App.4th at p. 723.) A ― ‗presumption of fairness exists where: (1) the settlement is reached through arm's-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; ...