United States District Court, N.D. California
ORDER GRANTING IN PART RENEWED MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS Re: Dkt. No. 142
YVONNE GONZALEZ ROGERS, District Judge.
On September 23, 2014, plaintiffs filed their renewed motion for an award of attorneys' fees and costs, seeking a total of $500, 000 for prosecuting and settling the instant action. (Dkt. No. 142 ("Mot.").) Defendant OfficeMax North America, Inc. ("OfficeMax") opposes the motion only to the extent that plaintiffs seek more than $200, 000 in fees and costs. (Dkt. No. 143 ("Oppo.").) On October 14, 2014, plaintiffs filed their reply. (Dkt. No. 144 ("Reply").) The Court vacated the hearing on the motion, finding it was appropriately subject to decision without oral argument. (Dkt. No. 145.) Having carefully considered the papers submitted and the record in this case, and for the reasons set forth below, the Court awards attorneys' fees and costs in the amount of $200, 000. Therefore, the motion is GRANTED IN PART and DENIED IN PART.
I. RELEVANT FACTS
The instant case was filed as a putative class action on March 1, 2011, alleging violations of California's Song-Beverly Credit Card Act of 1971, Civil Code § 1747.08 ("Song-Beverly Credit Card Act"), by OfficeMax. (Dkt. No. 1.) OfficeMax previously requested and recorded customer credit card numbers and personal identification information, namely ZIP codes, at the point of sale. Section 1747.08 prohibits businesses, in certain circumstances, from requesting "the cardholder to provide personal identification information, which the... corporation accepting the credit card writes, causes to be written, or otherwise records...." Cal. Civ. Code § 1747.08(a)(2); see also Pineda v. Williams-Sonoma Stores, Inc., 51 Cal.4th 524, 527 (2011) ("In light of the statute's plain language, protective purpose, and legislative history, we conclude a ZIP code constitutes personal identification information' as that phrase is used in section 1747.08."). OfficeMax claims it "immediately" ceased collecting ZIP codes at its California stores after the Pineda ruling issued on February 10, 2011 and prior to the filing of the instant lawsuit on March 1, 2011. (Oppo. at 10 (emphasis omitted).) Plaintiffs do not dispute this claim. However, the Court's June 25, 2012 Order held that "the Pineda decision applies retrospectively in this case." (Dkt. No. 58 at 1.)
The parties eventually entered into a settlement agreement. In the process of reaching that agreement, they did not negotiate the amount of attorneys' fees and costs until after the other material terms of the settlement had been reached. (Dkt. No. 133-5 (Declaration of H. Tim Hoffman in Support of Plaintiffs' Motion for Attorneys' Fees, Costs, and Incentive Award) at ¶ 3.) The Court ultimately approved a settlement that would provide $5 and $10 "Merchandise Vouchers" to class members and others. (Dkt. No. 140; see also Dkt. No. 126-3 ("Settlement Agreement").) In the settlement agreement, the parties "agreed to a floor of $200, 000.00 and a ceiling of $500, 000.00 in attorneys' fees and costs, " to be determined by the Court after the conclusion of the voucher redemption period. (Settlement Agreement § 2.4.) The parties agreed not to appeal an award falling within that range and for the fees to be paid by OfficeMax within ten (10) business days of the Court's Order. ( Id. ) No class members objected to the proposed settlement, including the fee range.
Vouchers with a face value of more than $600, 000 in the aggregate were distributed. (Dkt. No. 143-4 (Declaration of Elham Marder Regarding Redemption of Merchandise Vouchers) at ¶¶ 9, 11.) Ultimately, by the conclusion of the redemption period, only 579 of the $10 vouchers and 6, 846 of the $5 vouchers had been redeemed, with a total value of $40, 020. ( Id. at ¶¶ 10, 12.) Because only the $10 vouchers were distributed through the claim form process, much of the total amount may not have gone to members of the class.
The Supreme Court has recognized that, while it is appropriate for a district court to exercise its discretion in determining an award of attorneys' fees, it remains important for the court to provide "a concise but clear explanation of its reasons for the fee award." Hensley v. Eckerhart, 461 U.S. 424 (1983); see also Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. 1998) ("We review a district court's award of attorneys fees for an abuse of discretion."). The Court considers three issues to determine the appropriate amount of such fees: (i) the approved Settlement Agreement, (ii) the requirements of the Class Action Fairness Act of 2005 ("CAFA"), and (iii) California Code of Civil Procedure section 1021.5.
A. Settlement Agreement
No dispute exists that the parties resolved this action with a term allowing for attorneys' fees to be awarded in an amount no less than $200, 000 and no more than $500, 000. The Court understands that the parties and the lawyers in this action are collectively sophisticated and versed in this legal arena. Counsel for the defense has provided examples of similar litigation where the defendant paid fees in the range of $200, 000. However, at the time of the settlement, no one was able to determine whether the redemption of the Merchandise Vouchers was to be closer to the issuance amount of approximately $600, 000 or, as was the case here, a much lower amount of $40, 020.
In determining an appropriate fee award, the Court considers the existence and fairness of the Settlement Agreement, the arms-length negotiation of fees to resolve the dispute, the lack of financial impact on the class itself, and the relative experience and sophistication of the parties. These factors weigh heavily in ordering an award within the agreed-upon range.
B. Class Action Fairness Act
i. Legal Framework
"Congress passed CAFA primarily to curb perceived abuses of the class action device.' One such perceived abuse is the coupon settlement, where defendants pay aggrieved class members in coupons or vouchers but pay class counsel in cash." In re HP Inkjet Printer Litig., 716 F.3d 1173, 1177 (9th Cir. 2013) (internal citations omitted). CAFA has a section dedicated to attorneys' fees calculations in the case of "coupon settlements." 28 U.S.C. § 1712. Generally, "the attorneys' fees provisions of § 1712 are intended to put an end to the inequities' that arise when class counsel receive attorneys' fees that are grossly ...