In Laffitte v. Robert Half International Inc., the Supreme Court today holds that attorney fees for class counsel can be calculated as a percentage of a common fund preserved or recovered in the litigation. Upholding a fee award of one-third of a $19,000,000 settlement in a class action employment lawsuit, the unanimous opinion by Justice Kathryn Werdegar concludes that the court’s decision in Serrano v. Priest (1977) 20 Cal.3d 25 requiring a calculation of fees based only on attorney time applies to “private attorney general” cases. However, the court does approve of “double check[ing] the reasonableness of the percentage fee through a lodestar calculation” that considers the amount of attorney time spent on the case.
The court says that it is “join[ing] 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.”
Although signing the court’s opinion, Justice Goodwin Liu writes a separate concurrence “to suggest practices that may help to promote accuracy, transparency, and public confidence in the awarding of attorneys’ fees in class action litigation.” He does so, he says, because “[p]ublic confidence in the fairness of attorney compensation in class actions is vital to the proper enforcement of substantive law.”
The Supreme Court affirms the Second District, Division Seven, Court of Appeal. It disapproves a 1981 decision by the Second District, Division Two.
