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Friday, March 18, 2016

Hernandez v. Restoration Hardware: Objecting Class Member Lacks Standing to Appeal Class Action Judgment

Hernandez v. Restoration Hardware, Inc. (Cal.App. 3/15/16), is not an employment law case, but it deals with attorney fees after trial, and people doing class action work should know about it.

In Hernandez, the trial court found Restoration Hardware liable for violating the Song-Beverly Credit Card Act (Civ. Code section 1747.08) and assessed a penalty of $30 per violation, for a maximum total of approximately $36 million. The parties stipulated that this amount would be treated as a common fund, inclusive of fees and costs, and that class members filing claims would receive an amount equal to $30 per violation, less a prorated share of attorney fees and costs.

Plaintiff's counsel then asked for an attorney fee award of 25%, or $9 million, to be paid from the common fund. Francesca Muller, a class member, asked the court to order notice of the attorney fee motion be sent to all absent class members. The court denied the request, granted the attorney fee motion, and entered judgment. The Court of Appeal dismissed Muller's appeal, holding as follows:

Only a "party aggrieved may appeal" from a judgment. Civ. Code section 902. To appeal, Muller must have been both a party of record and aggrieved by the judgment. Although unnamed class members may be deemed parties for the limited purposes of discovery, they do not stand on the same footing as named plaintiffs and are not otherwise considered parties to the litigation. Muller was not a party to the action, took no steps to become a party to the action, and could not maintain her appeal.

The court rejected Muller's contention that she gained standing to appeal by objecting to the judgment below. While cases have held that an objecting class member may be "aggrieved" by an underlying judgment, they did not address whether such a class member was a party to the action.

Muller could have gained standing by intervening and moving to vacate the judgment, but she did not do so.

The opinion is available here

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