Nicklos Ciolino v. Theodore Frank

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

IN RE: HP INKJET PRINTER No. 11-16097

LITIGATION,

D.C. No. 5:05-cv-03580- NICKLOS CIOLINO, individually and JF on behalf of all those similarly situated; DANIEL FEDER, Plaintiffs-Appellees, OPINION

v.

THEODORE H. FRANK; KIMBERLY

SCHRATWIESER,

Objectors-Appellants,

v.

HEWLETT-PACKARD COMPANY,

Defendant-Appellee.

Appeal from the United States District Court for the Northern District of California Jeremy D. Fogel, District Judge, Presiding

Argued and Submitted November 5, 2012—San Francisco, California

Filed May 15, 2013 IN RE: HP INKJET PRINTER LITIGATION

Before: Ronald M. Gould, Marsha S. Berzon, and Milan D. Smith, Jr., Circuit Judges.

Opinion by Judge Milan D. Smith, Jr.; Dissent by Judge Berzon

SUMMARY*

Class Action Fairness Act / Attorneys’ Fees

The panel reversed the district court’s orders granting final approval to a class action settlement between Hewlett- Packard Company and a nationwide class of consumers who purchased certain HP inkjet printers, and awarding attorneys’ fees.

The panel held that the attorneys’ fee award to class counsel…

Objectors Kimberly Schratwieser and Theodore Frank (Objectors) appeal the district court’s orders granting final approval to a class action settlement between Hewlett-Packard Company (HP) and a nationwide class of consumers who purchased certain HP inkjet printers between September 6, 2001 and September 1, 2010. The district court approved a settlement that provides both coupon and injunctive relief to the class members. The district court also approved an award of attorneys’ fees in the amount of $1,500,000 and costs in the amount of $596,990.70.

Objectors argue that the settlement is neither fair, reasonable, nor adequate, as required by Federal Rule of Civil Procedure 23(e)(2) and Section 3 of the Class Action Fairness Act (CAFA), codified at § 28 U.S.C. 1712(e). Objectors contend that the settlement is the product of tacit collusion between class counsel and HP. Objectors also challenge the fee award, arguing it too violates CAFA, and specifically § 1712(a)-(c), which govern the calculation of attorneys’ fees in class action cases containing a coupon component. Because we agree that the fees award violates CAFA, we do not address any of Objectors’ other contentions.…

dissenting:

I respectfully dissent. I decidedly disagree with the majority’s analysis of the fee award’s compliance with 28 U.S.C. § 1712 , 1 the coupon settlement provision of the Class Action Fairness Act of 2005 (“CAFA”), Pub. L. No. 109-2, 119 Stat. 4 (codified in scattered sections of 28 U.S.C.).

The majority interprets CAFA as requiring that any attorney’s fees awarded for work done toward a coupon settlement be calculated as a percentage of the value of coupons redeemed. That interpretation of § 1712 would allow lodestar fees for work resulting in injunctive relief, but not for work resulting in coupons. As to the latter, the majority insists that the district court must award fees as a percentage of the coupons actually redeemed, rather than calculating fees on the basis of hourly rates for time reasonably expended, under a lodestar approach. See Lane v. Facebook, Inc., 696 F.3d 811, 818 (9th Cir.2012). That is not what the statute says.

On my reading of the statute, CAFA allows the use of a lodestar to calculate attorney’s fees on the basis of hours reasonably expended on the class action as a whole, rather than as a percentage of the value of the class recovery. That…