Golba v. Dick's Sporting Goods, Inc.

Filed 7/14/15; pub. order 7/24/15 (see end of opn.)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
LESLIE GOLBA et al.,
Plaintiffs and Appellants, G049611
v. (Super. Ct. No. 30-2011-00472227)
DICK’S SPORTING GOODS, INC., OPINION
Defendant and Respondent.
Appeal from an order of the Superior Court of Orange County,
Kim Garlin Dunning, Judge. Affirmed.
Siprut, Todd C. Atkins and Joseph J. Siprut for Plaintiffs and Appellants.
No appearance for Defendant and Respondent.
* * *
INTRODUCTION
A fundamental principle of California law, enshrined in the State Bar Act
(Bus. & Prof. Code, § 6000 et seq.), is that no person may “practice law in California”
unless that person is an active member of the State Bar. (Bus. & Prof. Code, § 6125
(section 6125).) As a corollary principle, no person may recover compensation for
practicing law “in California” unless that person was a member of the State Bar or
admitted pro hac vice at the time the services were performed, or the legal services fall
within an exception. (Birbrower, Montalbano, Condon & Frank v. Superior Court
(1998) 17 Cal. 4th 119, 127, 136-137 (Birbrower).)
In this case, those principles lead us to conclude the trial court did not err
by denying recovery of attorney fees for work performed by out-of-state counsel who
represented the named plaintiff in a class action in California but who had not been
admitted pro hac vice. We affirm the trial court’s order awarding $11,000 in attorney
fees and costs out of the $210,000 sought as part of a class action settlement. We also
affirm the trial court’s decision to reduce the amount of the plaintiff incentive award.
FACTS AND PROCEDURAL HISTORY
I.
The Class Action and Settlement
This class action was filed in May 2011 by Leslie Golba (Plaintiff),
individually and on behalf of all others similarly situated, against Dick’s Sporting Goods,
Inc. (Dick’s). The class action complaint alleged violations of the Song-Beverly Credit
Card Act of 1971 (Civ. Code, § 1747 et seq.) (specifically, Civil Code section 1747.08),
based on Dick’s alleged practice of requesting personal information from consumers
during credit card transactions.
The litigants reached a settlement providing for class members to receive
vouchers worth $15 off any merchandise purchase of $75 or more, $10 off any
merchandise purchase of $50 or more, or $5 off a merchandise purchase with no
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minimum amount required. In addition, Dick’s agreed not to request and record personal
identification information, including ZIP codes, from California customers paying by
credit card. The agreement stated, “as a condition of this Agreement, Dick’s agrees to
continue to comply with California Civil Code section 1747.08, and will not request and
record Personal Identification Information, including, but not limited to, Zip codes, of
California Dick’s store customers who pay for merchandise using a credit card in a
manner prohibited by the statute.”
Notice of the class and settlement was to be provided in three ways:
(1) physically posting notice in each of Dick’s California stores, (2) posting notice on
Dick’s Web site, and (3) posting notice on a specially created settlement Web site. The
proposed settlement also provided that Dick’s would not oppose class counsel’s
application for court approval of attorney fees and costs in the amount of $210,000 and
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payment to Plaintiff of an “incentive award” in the amount of $3,500. If approved by
the court, those payments were to be made by Dick’s directly, separately, and apart from
the class benefits bestowed by the settlement agreement.
II.
The Two Applications for Out-of-state Counsel
to Appear Pro Hac Vice
The initial complaint listed Plaintiff’s counsel of record as Sean Reis,
California State Bar No. 184044, of the law firm of Edelson McGuire, LLP, and several
other out-of-state attorneys with the notation “[p]ro hac vice admittance to be sought.”
1
The settlement agreement stated: “Dick’s agrees not to oppose Class Counsel’s
application for attorneys’ fees and costs of $210,000 (total), subject to Court approval.
Plaintiff agrees to not petition the Court for more than $210,000 (total) for attorneys’ fees
and costs. . . . If the Court approves the Settlement of this Action and an award of
attorneys’ fees and costs to Class Counsel, Dick’s agrees to pay the attorneys’ fees and
costs approved by the Court up to $210,000 (total) to Class Counsel within fourteen (14)
days after (a) the Final Settlement Date, or (b) Plaintiff’s Counsel provides Dick’s with
its Form W-9, whichever is later.”
3
2
The out-of-state attorneys included Joseph J. Siprut of Siprut PC in Chicago, Illinois.
Reis signed the complaint and signed an amended complaint filed in June 2011.
In July 2011, Reis filed an application on behalf of Joseph Siprut for his
admission to practice pro hac vice. With the application, Joseph Siprut submitted a
declaration stating he had not applied for admission pro hac vice in California within the
previous two years. When submitting the application, Reis did not send proper payment
and notice to the California State Bar. A court clerk handwrote “No compliance w/
Rule 9.40” across the caption page of the pro hac vice application, which bears a second
file-stamped date of September 7, 2011. No order was issued on the pro hac vice
application, and no docket entry was made to reflect the clerk’s handwritten notation.
While accepting responsibility for monitoring the pro hac vice application,
Reis was not aware the application had been denied and, apparently, assumed the pro hac
vice application had been granted. The name of Joseph Siprut and Siprut PC appeared on
various pleadings and court-filed documents, including several stipulations and orders,
with the notation Joseph Siprut was appearing pro hac vice. Unaware the court had not
approved the pro hac vice application, Joseph Siprut and an associate at his law firm
“expended hundreds of hours prosecuting this case.”
Once the proposed class action settlement had been reached, the parties set
a hearing date of November 14, 2012, for an unopposed motion for preliminary approval
of the settlement. While preparing for this hearing, Joseph Siprut and his staff reviewed
the file and were unable to locate an order granting the pro hac vice application. He
double-checked the online docket, where he could find no order on the application, then
accessed the original docket entry for the application, where he did find the court clerk’s
notation regarding noncompliance with rule 9.40 of the California Rules of Court. He
could not find a minute order on the pro hac vice application.
2
Joseph Siprut filed an application to appear in the Court of Appeal pro hac vice. The
application was granted.
4
On November 9, 2012, soon after learning of the status of the pro hac vice
application, Reis filed a new application to admit Joseph Siprut pro hac vice. On
November 14, the trial court set a hearing for December 5, 2012 on for the second pro
hac vice application and continued to that date the hearing on the motion for preliminary
approval of the class action settlement.
On December 4, 2012, the trial court issued a tentative ruling denying the
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second pro hac vice application. Citing rule 9.40(b) of the California Rules of Court, the
court stated that application would be denied due to the “great number of pro hac vice
applications” that Joseph Siprut had made during the past year.
Joseph Siprut appeared at the hearing on December 5, 2012, along with
Todd Atkins, an attorney from Siprut PC, who was a member of the California State Bar.
Reis did not appear. The court, affirming the tentative ruling, denied the pro hac vice
application on the ground that Joseph Siprut had made 12 pro hac vice applications in the
prior 11 months and there were no special circumstances under rule 9.40(b) of the
California Rules of Court which would support granting the application. The court
declined to recognize Atkins as counsel of record for Plaintiff because Siprut PC was not
counsel of record and no association of counsel for Atkins had been filed. The court took
the motion for preliminary approval of the class action settlement off calendar with the
option for Plaintiff to refile it at a later time.
III.
Approval of Settlement and the Motions for Attorney Fees
In January 2013, Reis filed a consent to associate Atkins as counsel of
record for Plaintiff. Atkins thereafter represented Plaintiff at the court hearings and
reviewed, edited, and filed documents related to the proposed class settlement.
3
Rule 9.40(b) of the California Rules of Court states: “Absent special circumstances,
repeated appearances by any person under this rule is a cause for denial of an
application.”
5
In March 2013, a renewed motion for preliminary approval of proposed
class settlement was filed. Reis and Atkins appeared on the motion papers as counsel of
record for Plaintiff and the putative class. A hearing on the motion was held on March 27
and April 24, 2013, at which Reis and Atkins appeared. In April 2013, Plaintiff filed a
motion for attorney fees, costs, expenses, and an incentive award, which sought $210,000
in attorney fees and costs for work performed by class counsel. Dick’s honored its
agreement not to oppose the motion. On April 24, 2013, at a hearing on the motion for
preliminary approval of the settlement, the trial court advised Plaintiff’s counsel to refile
the attorney fees motion and set it for a hearing on the same date as the hearing on the
request for final approval of the settlement.
By order dated May 2, 2013, the trial court granted preliminary approval of
the class settlement and provisional class certification.
In August 2013, Plaintiff filed a “Renewed Unopposed Motion” for
attorney fees and for an incentive award (which we call the motion for attorney fees).
Reis and Atkins appeared on the motion as counsel of record for Plaintiff and the putative
class. The motion for attorney fees included declarations from Reis, Atkins, Joseph
Siprut, and Plaintiff.
In September 2013, Plaintiff filed an unopposed motion for final approval
of the class action settlement. Reis and Atkins appeared on the motion as counsel of
record for Plaintiff and the settlement class. On October 2, 2013, a hearing was held on
the motion for final approval. Reis and Atkins appeared at the hearing as Plaintiff’s
counsel.
At the hearing on October 2, Plaintiff’s counsel explained that the time to
submit a claim was to expire on November 18, 2013, but only two people out of 232,000
potential class members had submitted claims. During a discussion on the issue of
attorney fees, the trial court stated: “So you would have, dripping wet, a handful of
people out of 232,000 who want this coupon, and yet you want $210,000 in attorney’s
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fees for other than Mr. Reis’s appearances and your appearances here . . . .” The court
could find “absolutely no benefit really to anybody based on your claims record” and
noted that most of the attorney fees sought were incurred by two out-of-state attorneys
who had never been admitted pro hac vice. The court stated, “I don’t think there’s any
authority to award attorney’s fees to somebody who’s not admitted to practice in
California or admitted specifically for the purpose of a particular case.”
The court granted the motion for final approval of the class action
settlement and continued the hearing on the motion for attorney fees to December 4, 2013
to permit Plaintiff’s counsel to submit additional briefing. An order granting final
approval of the class action settlement was entered on October 11, 2013. On November
15, 2013, Plaintiff’s counsel submitted supplemental briefing, which for the first time
suggested the court grant Joseph Siprut’s pro hac vice application for admission nunc pro
tunc to the date of the first application.
IV.
The Trial Court’s Order on the Motion for Attorney Fees
On December 4, 2013, the trial court issued a minute order on the motion
for attorney fees. The court awarded attorney fees and costs of $11,000 and awarded a
plaintiff incentive award of $500.
The court’s minute order stated: “As part of the settlement of this class
action lawsuit, Plaintiff seeks $210,000 in attorney’s fees and costs. Defendant agreed
not to contest this request. Per the chart submitted with the first motion for attorney’s
fees (filed April 15, 2013), counsel represented that this sum includes a lodestar amount
of $156,709.50 (based on a total of 317.5 hours spent by 4 different attorneys), expenses
of $1,201.83, and a positive multiplier of 1.33. [¶] $120,419.00 was billed by two
attorneys who are not admitted to the practice of law in California. On two separate
occasions, this court denied Mr. Joseph Siprut’s pro hac vice application to represent
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plaintiff in this case. . . . [¶] Mr. Siprut first applied for pro hac vice admission on
July 7, 2011. He simply filed a request for admission and a proposed order; he did not
serve either on local California counsel or defense counsel. There is no indication that he
paid the State Bar fee for the application or that he served the application on the State
Bar. While he put a hearing date and time on the application, he did not appear for a
hearing. The court denied the request for failure to comply with Rule 9.40 of the
California Rules of Court. The court file with the denial of his motion has always been
available to Mr. Siprut online . . . . [¶] Eighteen months later, after the court declined to
permit Mr. Siprut to argue the motion for preliminary approval because he was not
admitted, he renewed his pro hac vice application, this time serving it on opposing
counsel and the State Bar of California. The court denied the application on the merits
based on the number of California cases in which Mr. Siprut has represented litigants
(Cal. Rules of Court, rule 9.40(b)). Thereafter, Mr. Siprut’s firm established a California
presence through attorney Todd Atkins. By that time, the motion for preliminary
approval of the class action settlement had already been continued once because no
attorney admitted in California appeared in court for the first hearing date.”
The court disallowed all attorney fees for work performed by out-of-state
counsel: “Moving party has not cited any authority that permits this court to award
attorney’s fees to individuals who are not members of the State Bar of California or
admitted to practice pro hac vice. To the extent this court has discretion to award
attorney’s fees to out-of-state counsel, this court exercises it to deny attorney’s fees to
out-of-state counsel.” The court rejected the argument that Joseph Siprut could and
should be admitted pro hac vice nunc pro tunc to the date of the first application.
The court allowed attorney fees only for work performed by Reis and
Atkins. The lodestar figure for their work was $36,290.50. The court found that much of
their work was duplicated by the work of the out-of-state attorneys. The court also found
the settlement bestowed no benefit to the class because, of the 232,000 potential class
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members, only two had submitted claims for coupons and the essence of the settlement
was simply that Dick’s would comply with California law. The court concluded, “[t]his
is not the type of case that justifies a positive multiplier.” For the work performed by
Reis and Atkins, the court found that an hourly rate of $300 was appropriate and the
reasonable number of hours expended was 33. Thus, the court awarded $11,000 in
attorney fees and costs. In addition, the court reduced the requested incentive award to
Plaintiff from $3,500 to $500. Plaintiff timely filed a notice of appeal from the order on
the motion for attorney fees.
DISCUSSION
I.
The Trial Court Did Not Err by Denying Recovery of
Attorney Fees for Work Performed by the Siprut PC
Out-of-state Attorneys.
A. An Unlicensed Attorney May Not Be Compensated for
Engaging in the Practice of Law in California.
Plaintiff’s reliance on federal authorities and scant mention of California
law lead us to begin by stating what should be obvious: Admission to practice law in
California state court is governed by California law. Section 6125 provides that “[n]o
person shall practice law in California unless the person is an active member of the State
Bar.” A violation of section 6125 is a misdemeanor. (Bus. & Prof. Code, § 6126,
subd. (a).) “Since the passage of the State Bar Act in 1927, persons may represent their
own interests in legal proceedings, but may not represent the interests of another unless
they are active members of the State Bar.” (Hansen v. Hansen (2003) 114 Cal. App. 4th
618, 621.)
No one may recover compensation for services as an attorney at law in
California unless that person was a member of the State Bar at the time those services
9
were performed. (Birbrower, supra, 17 Cal.4th at p. 127, citing Hardy v. San Fernando
Valley C. of C. (1950) 99 Cal. App. 2d 572, 576.) “‘Authority to engage in the practice of
law conferred in any jurisdiction is not per se a grant of the right to practice elsewhere,
and it is improper for a lawyer to engage in practice where he [or she] is not permitted by
law or by court order to do so. . . .’” (Birbrower, supra, at p. 129.)
Birbrower, supra, 17 Cal. 4th 119, is the seminal case on the issue of the
4
meaning of the phrase “practice law in California” in section 6125. In Birbrower, the
Supreme Court concluded that an out-of-state law firm could not recover its fees to the
extent those fees were generated for legal services performed “in California” because
neither the firm nor its lawyers were authorized to practice law in this state. (Birbrower,
supra, at pp. 124, 135-136.). In Birbrower, a New York law firm entered into an
agreement with a client in California to provide legal services pertaining to the
investigation and prosecution of claims arising out of a software development and
marketing agreement with a corporation having its principal place of business in
California. (Id. at pp. 124-125.) None of the attorneys with the New York law firm was
licensed to practice law in California during the period of representation. (Id. at p. 124.)
Attorneys from the New York law firm made trips to California, where they discussed
matters related to the legal dispute, provided legal advice, and made strategic
recommendations. (Id. at p. 125.) The dispute settled and never went to arbitration.
(Ibid.) A dispute arose between the New York law firm and the client: The client sued
for legal malpractice, and the law firm sued to recover fees. (Id. at p. 126.)
The trial court concluded the fee agreement was unenforceable because the
New York law firm had provided legal services in California without having been
admitted to practice in the state. (Birbrower, supra, 17 Cal.4th at p. 126.) The Court of
4
Plaintiff relegates Birbrower to a “Cf.” citation in a footnote at page 20 of the
appellant’s opening brief and does not cite section 6125 or any part of the State Bar Act
at all.
10
Appeal denied the New York law firm’s petition for a writ of mandate and affirmed the
trial court’s order. (Id. at p. 127.) The Court of Appeal held the New York law firm had
violated section 6125. (Birbrower, supra, at p. 127.)
The California Supreme Court addressed the as yet unresolved issue of the
meaning of the term “practice law in California” (italics added) under section 6125.
(Birbrower, supra, 17 Cal.4th at p. 128.) The court rejected the proposition that the term
“practice law in California” is limited to the situation in which an attorney is physically
present in the state when legal services are rendered. (Id. at pp. 128-129.) Instead, the
court adopted this definition: “In our view, the practice of law ‘in California’ entails
sufficient contact with the California client to render the nature of the legal service a clear
legal representation. In addition to a quantitative analysis, we must consider the nature of
the unlicensed lawyer’s activities in the state. Mere fortuitous or attenuated contacts will
not sustain a finding that the unlicensed lawyer practiced law ‘in California.’ The
primary inquiry is whether the unlicensed lawyer engaged in sufficient activities in the
state, or created a continuing relationship with the California client that included legal
duties and obligations.” (Id. at p. 128.)
The court explained its definition did not “necessarily depend on or require
the unlicensed lawyer’s physical presence in the state.” (Birbrower, supra, 17 Cal.4th at
p. 128.) Rather, physical presence in California is one factor to consider in deciding
whether the unlicensed lawyer has violated section 6125. (Birbrower, supra, at p. 128.)
“For example, one may practice law in the state in violation of section 6125 although not
physically present here by advising a California client on California law in connection
with a California legal dispute by telephone, fax, computer, or other modern
technological means. Conversely, although we decline to provide a comprehensive list of
what activities constitute sufficient contact with the state, we do reject the notion that a
person automatically practices law ‘in California’ whenever that person practices
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California law anywhere, or ‘virtually’ enters the state by telephone, fax, e-mail, or
satellite.” (Id. at pp. 128-129.)
The California Supreme Court held that, under its definition, the New York
law firm had practiced law in California in violation of section 6125. (Birbrower, supra,
17 Cal.4th at pp. 131-135, 140.) The New York law firm had not been admitted pro hac
vice and did not come within any exception that would permit recovery of fees. (Id. at
pp. 135-137.) As a consequence, the New York law firm could not receive compensation
under the fee agreement for any services performed in California. (Id. at p. 137.)
“Enforcing the fee agreement in its entirety would include payment for the unauthorized
practice of law in California and would allow [the New York law firm] to enforce an
illegal contract.” (Ibid.) The court concluded the fee agreement was enforceable “to the
extent it is possible to sever the portions of the consideration attributable to [the New
York law firm]’s services illegally rendered in California from those attributable to [the
New York law firm]’s New York services.” (Id. at p. 140.)
B. Siprut PC Attorneys Engaged in the Practice of Law in California
Without Being Admitted Pro Hac Vice.
The motion for attorney fees sought $120,419 in fees (with a multiplier of
1.33) for services rendered by Joseph Siprut and Aleksandra Vold, an associate attorney
from Joseph Siprut’s law firm. Joseph Siprut was not a member of the California State
Bar and was never admitted pro hac vice to practice law in California. The first
application to admit him pro hac vice was denied for failure to comply with rule 9.40 of
the California Rules of Court. The second application was denied on the merits. Vold
was not a member of the California State Bar, and no application to appear pro hac vice
was ever filed on her behalf.
Joseph Siprut and Vold engaged in the practice of law in California in
violation of section 6125. The class action complaint alleged Dick’s engaged in a
practice that violated California law. Plaintiff and all of the putative class members were
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California residents. Plaintiff retained Joseph Siprut and Siprut PC to prosecute the case
with the intent that Siprut PC would serve as lead counsel. Siprut PC, not Plaintiff,
retained Reis and his law firm and did so only because they had an office in California.
In his declaration submitted in support of the motion for attorney fees, Joseph Siprut
stated that it was intended that Siprut PC attorneys “would lead the case.” In his
declaration, Reis stated, “Siprut PC retained me and my firm as Siprut’s local counsel
because I have a California office.” Joseph Siprut and Siprut PC appeared on all the
pleadings and court-filed documents up to the point when Joseph Siprut learned the first
pro hac vice application had been denied. Vold appeared telephonically at a status
conference on April 18, 2012.
The settlement agreement identifies class counsel as “Joseph J. Siprut” of
“Siprut PC.” In his declarations submitted in support of the motions for attorney fees,
Joseph Siprut stated: “Throughout this action, my firm has expended a substantial
amount of time and advanced costs to prosecute a statewide class action suit with no
guarantee of compensation or reimbursement in the hope of prevailing against a large,
sophisticated company represented by first-rate attorneys. Nonetheless, believing in the
importance of consumer class actions, Siprut PC prosecuted the case with the type of
vigor and skill required to ensure justice for the Class while simultaneously refusing
alternative employment opportunities with higher likelihoods of success and guarantees
of fee payment.” (Italics added.) The motion for attorney fees sought compensation for a
total of 317.5 hours. Of that amount, 235.8 hours or 74.27 percent was for activities
performed by Joseph Siprut (168.4 hours) and Vold (67.4 hours).
The class action complaint, the class action settlement, the motions for
attorneys fees, and the declarations submitted with those motions established that Joseph
Siprut and Vold, though not physically present in California, had “sufficient contact with
the California client to render the nature of the legal service a clear legal representation”
and “created a continuing relationship with the California client that included legal duties
13
and obligations.” (Birbrower, supra, 17 Cal.4th at p. 128.) The attorney fees provision
of the settlement agreement is illegal to the extent it includes fees for services rendered
by Joseph Siprut and Vold because neither was a member of the California State Bar and
neither had been admitted pro hac vice. Their services rendered in this case, therefore,
were not compensable. (Birbrower, supra, at pp. 135, 137.)
C. The Trial Court Did Not Err by Denying Pro Hac Vice
Admission Nunc Pro Tunc.
Plaintiff argues Joseph Siprut’s second pro hac vice application could, and
should, have been granted nunc pro tunc to the date of the first application. The matter of
nunc pro tunc admission pro hac vice for Joseph Siprut was first raised in Plaintiff’s
supplemental briefing in support of the motion for attorney fees, filed in November 2013,
5
a full year after denial of the second pro hac vice application. The trial court considered
class counsel’s request to grant the second pro hac vice application nunc pro tunc, and
denied the request.
The trial court has discretion to enter a nunc pro tunc order granting pro
hac vice admission. (United States Golf Assn. v. Arroyo Software Corp. (1999) 69
Cal. App. 4th 607, 624 (Arroyo Software).) We review the trial court’s order denying pro
hac vice admission nunc pro tunc under the abuse of discretion standard. (Ibid.) We find
no abuse of discretion.
The California Supreme Court has circumscribed the grounds on which an
order may be entered nunc pro tunc. “A court can always correct a clerical, as
distinguished from a judicial error which appears on the face of a decree by a nunc pro
tunc order. [Citations.] It cannot, however, change an order which has become final
even though made in error, if in fact the order made was that intended to be made. . . .
‘The function of a nunc pro tunc order is merely to correct the record of the judgment and
5
The second pro hac vice application did not request an order nunc pro tunc. Neither
motion for attorney fees requested nunc pro tunc admission pro hac vice.
14
not to alter the judgment actually rendered—not to make an order now for then, but to
enter now for then an order previously made. The question presented to the court on a
hearing of a motion for a nunc pro tunc order is: What order was in fact made at the time
by the trial judge?’” (Estate of Eckstrom (1960) 54 Cal. 2d 540, 544.) “It is only when
the form of the judgment fails to coincide with the substance thereof, as intended at the
time of the rendition of the judgment, that it can be reached by a corrective nunc pro tunc
order.” (Id. at p. 545; see Estate of Careaga (1964) 61 Cal. 2d 471, 475 [court may
correct an order nunc pro tunc if “[s]uch a correction does not change the meaning or
legal effect of the decree”]; Mather v. Mather (1943) 22 Cal. 2d 713, 719 [purpose of
nunc pro tunc order is to correct and to express the true intention of the court as of the
6
earlier date “and thus conform to verity”].)
Here, there were no grounds for entry nunc pro tunc of an order granting
pro hac vice admission to Joseph Siprut. The first pro hac vice application was not
approved for failure to comply with rule 9.40 of the California Rules of Court. Plaintiff
does not dispute—and concedes—the application did not comply with rule 9.40. There
was no mistake and no clerical error. Rejection of the first pro hac vice application
became final.
The second pro hac vice application was filed 16 months after the first
application was filed and, apparently, 14 months after it was not approved. The second
application did not request admission nunc pro tunc. The trial court denied the second
pro hac vice application because Joseph Siprut had appeared 12 times in California state
6
“‘The power of the court [to enter a judgment nunc pro tunc] is to make the journal
entry speak the truth by correcting clerical errors and omissions, and it does not extend
beyond such function. Although grounds may exist for opening, modifying, or vacating
the judgment itself, in the absence of such grounds, the court may not, under the guise of
an amendment of its records, revise or change the judgment in substance and have such
amended judgment entered nunc pro tunc. . . .’” (Hamilton v. Laine (1997) 57
Cal. App. 4th 885, 891, italics added.)
15
courts within the prior 11 months. The order expressed the trial court’s true intention and
its form coincided with its substance. That order too became final, and there was no
mistake or clerical error. When, a year later, Plaintiff first requested pro hac vice
admission for Joseph Siprut nunc pro tunc, the trial court had twice rejected his
applications for pro hac vice admission, and the record correctly expressed the trial
court’s intentions.
Thus, a nunc pro tunc order was unnecessary to correct a clerical error or
mistake, to make the form of the order coincide with its substance, or to express the trial
court’s true intention. Indeed, the trial court had no authority to enter a nunc pro tunc
order because such an order would have altered the substance of the two prior actions
rejecting pro hac vice admission to Joseph Siprut. (Estate of Eckstrom, supra, 54 Cal.2d
at p. 544 [“‘The function of a nunc pro tunc order is merely to correct the record of the
judgment and not to alter the judgment actually rendered . . . .’”].)
In the trial court, Plaintiff relied on Arroyo Software, supra, 69 Cal.App.4th
at page 624, in which the Court of Appeal held the trial court did not abuse its discretion
by entering nunc pro tunc orders granting motions for admission pro hac vice. The trial
court distinguished Arroyo Software on the ground it “does not appear to have involved
an out-of-state lawyer whose pro hac vice motions had been denied by the court, only
those in which they were belatedly made.” We agree. In Arroyo Software, there is no
mention of prior motions for pro hac vice admission having been denied.
On appeal, Plaintiff relies on In re Sheehan Memorial Hospital (Bankr.
W.D.N.Y. 2007) 380 B.R. 299 (Sheehan), in which the bankruptcy court granted
admission pro hac vice on a nunc pro tunc basis in order to consider an application for
attorney fees. In Sheehan, the unsecured creditors’ committee was represented by a law
firm of which only one attorney had been admitted to practice in the bankruptcy court.
(Id. at p. 303.) That attorney ended his relationship with the law firm, but no other
attorney from the firm sought admission pro hac vice. (Id. at p. 304.) For a significant
16
period of its representation, the law firm filed papers and appeared in the bankruptcy
court with proper qualification. (Ibid.) The law firm sought to recover attorney fees for
the period of time for which no attorney from the firm had applied for admission pro hac
vice. (Ibid.) The failure to file a pro hac vice application was due to an oversight. (Ibid.)
The bankruptcy court, finding the oversight to have been “innocent” and “without any
intent to deceive the court,” treated counsel’s fee application as a request for nunc pro
tunc admission pro hac vice. (Ibid.) The court granted the request and proceeded to
consider the merits of the fee application. (Ibid.)
Sheehan is inapposite because the bankruptcy court had not previously
denied a request for admission pro hac vice. By entering a nunc pro tunc order granting
admission pro hac vice, the bankruptcy court was not changing an order which had
become final. And, of course, federal case authority does not bind us on matters of state
law. (People v. Avena (1996) 13 Cal. 4th 394, 431; Donley v. Davi (2009) 180
Cal. App. 4th 447, 461; Howard Contracting, Inc. v. G. A. MacDonald Construction Co.
(1998) 71 Cal. App. 4th 38, 52.)
D. Plaintiff’s Representation by California Counsel Did Not
Make Out-of-state Counsel’s Work Compensable.
Plaintiff argues that at all times she and the putative class were represented
by a licensed California attorney in that Reis signed the complaints and his name
appeared on all court-filed documents. Having a licensed California attorney on the
pleadings meant that Plaintiff and the putative class were properly represented by
qualified counsel at all relevant times. Compensation for attorney services is, however, a
different matter. Reis was not a partner, employee, or member of Siprut PC. The work
by Joseph Siprut and Vold for which recovery was sought was conducted before Atkins,
a Siprut PC attorney licensed to practice in California, had been associated as counsel.
Plaintiff argues that “in modern practice, where many law firms have
offices, lawyers and clients across the country, it is common for a case to be filed in a
17
particular jurisdiction where the lead lawyer may not be admitted.” According to
Plaintiff, so long as a matter has a “lead lawyer” licensed to practice in California,
out-of-state attorneys “sitting at their desks in Chicago, New York, Florida, or wherever,”
may bill time and be compensated on the case without having to be admitted pro hac
vice. In some situations that might be correct. Under Birbrower, supra, 17 Cal.4th at
page 129, performance of legal services outside of California for a California client does
not automatically constitute the practice of law in California. But in this case, the “lead
attorney” was Joseph Siprut, who was not admitted to practice in California, and, as we
have explained, Joseph Siprut and Vold did “practice law in California” (§ 6125), as that
term was defined in Birbrower, and, therefore, they violated section 6125.
Plaintiff cites Winterrowd v. American General Annuity Ins. Co. (9th Cir.
2009) 556 F.3d 815, 824 (Winterrowd), as supporting the proposition that work by
out-of-state attorneys is compensable so long as it is “filtered through a licensed in-state
attorney, who is admitted to the local court and subject to its discipline.” In Winterrowd,
the Ninth Circuit Court of Appeals considered whether the plaintiffs could recover, under
Labor Code section 218.5, attorney fees generated by a member of the Oregon State Bar
(William Wheatley, Sr.), who assisted a member of the California State Bar in litigating a
case before the United States District Court for the Central District of California.
(Winterrowd, supra, at p. 817.) Based on Birbrower, the district court had determined
the fees generated by Wheatley, Sr., could not be recovered because he had not been
admitted to practice law in the State of California and the Central District of California.
(Winterrowd, supra, at p. 820.)
The Ninth Circuit, reversing, held the district court erred by relying on
Birbrower because California state court rules do not govern practice in the federal court.
(Winterrowd, supra, 556 F.3d at p. 820.) The Ninth Circuit nonetheless analyzed
Birbrower and concluded it was distinguishable: “The activities of the Birbrower firm
constituted the practice of law in California because it entered into a retainer agreement
18
with a client in California to provide legal services there and its attorneys came to
California for that purpose. By contrast, Wheatley, Sr. did not enter into a retainer
agreement with the Winterrowd plaintiffs. Instead, the member of the California State
Bar whom they retained entered into an agreement with Wheatley, Sr. to provide him
with assistance in prosecuting an action against the defendants . . . . Thus, the case turned
more on that issue than any issue regarding California law.” (Winterrowd, supra, at
pp. 821-822.)
The Ninth Circuit also found that the arrangement between Wheatley, Sr.,
and the California attorney who retained him was “closely analogous to a partnership”
and was “for all practical purposes a partnership for the purpose of prosecuting the case.”
(Winterrowd, supra, 556 F.3d at p. 822.) The Ninth Circuit interpreted Birbrower as
permitting recovery of attorney fees generated by an out-of-state attorney if at least one
member of the out-of-state attorney’s law firm was admitted in California. (Winterrowd,
supra, at p. 822.) Since at least one member of the de facto law partnership was admitted
to practice in California, the Ninth Circuit concluded that Wheatley, Sr., would be
entitled to be compensated under California Labor Code section 218.5. (Winterrowd,
supra, at p. 822.)
The Ninth Circuit’s discussion of Birbrower and conclusion that Wheatley,
Sr.’s attorney fees were recoverable under California law are dicta because, as the Ninth
Circuit recognized, admission to practice in the Central District of California is governed
by the local rules of the Central District of California and federal case law. (Winterrowd,
supra, 556 F.3d at p. 822.) In addition, as we have noted, federal decisional authority
does not bind us on matters of state law. (People v. Avena, supra, 13 Cal.4th at p. 431.)
Winterrowd is distinguishable in two significant ways. First, in
Winterrowd, the California attorney retained Wheatley, Sr., to assist in the litigation. In
contrast, in this case, the out-of-state law firm, Siprut PC, retained the California attorney
(Reis) and his law firm as Siprut PC’s local California counsel because Siprut PC did not
19
have a California office. Joseph Siprut, not Reis, was retained by Plaintiff to prosecute
the case. Siprut PC acted as lead counsel. Joseph Siprut and Vold did not merely
perform “back-office functions” or serve as consultants, but performed most of the legal
work in the case, including appearances at court and telephonic conferences. Reis’s sole
function apparently was to act as local counsel under whose name and state bar number
pleadings could be signed and filed until Joseph Siprut was admitted pro hac vice.
Second, nothing in the declarations submitted by Reis and Joseph Siprut
suggests their relationship was “closely analogous to a partnership” (Winterrowd, supra,
556 F.3d at p. 822). Reis was a salaried employee of The Reis Law Firm A.P.C., and
Joseph Siprut had his own law firm, Siprut PC. The two law firms had a fee agreement
by which they agreed to allocate attorney fees pursuant to each firm’s lodestar time.
II.
The Trial Court Did Not Err by Awarding a Total of
$11,000 in Attorney Fees and Costs.
The services rendered in this case by the two attorneys admitted to practice
in California—Reis and Atkins—were compensable. The lodestar figure for their work
was $36,290.50. That figure was based on 44.8 hours billed by Reis at $460 per hour and
36.9 hours billed by Atkins at $425 per hour. The trial court awarded $11,000 in attorney
fees and costs based on the work performed by Reis and Atkins.
The amount of fees to be awarded is within the trial court’s discretion, and
“‘[t]he value of legal services performed in a case is a matter in which the trial court has
its own expertise.’” (PLCM Group, Inc. v. Drexler (2000) 22 Cal. 4th 1084, 1096.) “The
‘“experienced trial judge is the best judge of the value of professional services rendered
in his [or her] court, and while his [or her] judgment is of course subject to review, it will
not be disturbed unless the appellate court is convinced that it is clearly wrong.”’”
(Ketchum v. Moses (2001) 24 Cal. 4th 1122, 1132.) The trial court has “wide discretion”
20
in reducing the fees sought based on the court’s estimate of time spent on
noncompensable activities. (Chavez v. Netflix, Inc. (2008) 162 Cal. App. 4th 43, 64.)
Abuse of discretion standard applies to the trial court’s determination of the lodestar
figure and application of any multiplier. (Taylor v. Nabors Drilling USA, LP (2014) 222
Cal. App. 4th 1228, 1250.) “Fees approved by the trial court are presumed to be
reasonable, and the objectors must show error in the award.” (Consumer Privacy Cases
(2009) 175 Cal. App. 4th 545, 556.)
We find no abuse of discretion. The trial court found the rate of $300 per
hour was appropriate and 33 hours was the reasonable amount of time. Of the 81.7 hours
billed by Reis and Atkins, the court found: “[A]lmost one-half of that time was spent
‘corresponding with Co-Counsel.’ These attorneys did not communicate with the named
plaintiff or defense counsel. They did not draft or edit any documents filed in this case,
but they did review the documents prepared by co-counsel. They did make personal
appearances at several court hearings. They claim hours of work to research and review
motions prepared by co-counsel and also to prepare for the hearings. Much of this time
seems duplicative.” The court considered the fact only two of the 232,000 class members
had submitted claims and found that a multiplier was not justified because “[g]iven the
extremely poor class response,” the settlement did not produce a “true benefit to the
class.” In addition, the court found that “[m]ore appearances were made than were
necessary because paperwork was not complete on the first attempt.”
Plaintiff does not challenge any of the trial court’s findings or argue they
were not supported by substantial evidence. Instead, she argues, “[t]he rates and hours
were not challenged by anyone, and were not even the subject of discussion” until the
trial court made its order awarding $11,000 in attorney fees and costs. Because the
parties agreed on the amount of fees, Plaintiff asserts (without citing California law) that
“the law does [not] contemplate the trial court auditing or criticizing specific billable
tasks.” Wrong. Under California law, “[t]he court has a duty, independent of any
21
objection, to assure that the amount and mode of payment of attorney fees are fair and
proper, and may not simply act as a rubberstamp for the parties’ agreement.” (Consumer
Privacy Cases, supra, 175 Cal.App.4th at p. 555.) Federal law is in accord: “‘The evil
feared in some settlements—unscrupulous attorneys negotiating large attorney’s fees at
the expense of an inadequate settlement for the client—can best be met by a careful . . .
judge, sensitive to the problem, properly evaluating the adequacy of the settlement for the
class and determining and setting a reasonable attorney’s fee . . . .’” (Zucker v.
Occidental Petroleum Corp. (9th Cir. 1999) 192 F.3d 1323, 1328, fn. 20.)
The trial court in this case properly exercised its responsibility to
independently determine whether the number of hours billed by Reis and Atkins and their
respective billing rates were reasonable under the circumstances. We agree with the trial
court in finding a multiplier was unjustified. The trial court’s decision to award $11,000
in attorney fees and costs to Plaintiff was not wrong, much less “‘“clearly wrong.”’”
(Ketchum v. Moses, supra, 24 Cal.4th at p. 1132.)
III.
The Trial Court Did Not Err by Reducing the Plaintiff
Incentive Award to $500.
Plaintiff argues the trial court erred by reducing her negotiated incentive fee
from $3,500 to $500. We conclude otherwise.
Incentive awards to class representatives are intended to compensate class
representatives for the work and risk undertaken on behalf of the class, to reimburse
expenses incurred in the class litigation, and sometimes to recognize the willingness of
class representatives to act as a private attorney general. (Cellphone Termination Fee
Cases (2010) 186 Cal. App. 4th 1380, 1393-1394.) An incentive award may be
appropriate to induce someone to serve as a class representative. In determining whether
to make an incentive award, the court may consider (1) the risk, both financial and
22
otherwise, the class representative faced in bringing the suit; (2) the notoriety and
personal difficulties encountered by the class representative; (3) the amount of time and
effort spent by the class representative; (4) the duration of the litigation; and (5) the
personal benefit received by the class representative as a result of the litigation. (Id. at
pp. 1394-1395.)
Incentive awards to class representatives are discretionary, and there is no
presumption of fairness in reviewing them. (Cellphone Termination Fee Cases, supra,
186 Cal.App.4th at pp. 1393, 1395.)
The trial court considered the appropriate factors and found: “Leslie Golba
seeks an enhancement of $3500.00[.] Her declaration does not address what happened
during any purchase at one of defendant’s stores. It appears fairly boilerplate. She
estimated she spent 16 hours working with Mr. Siprut on this matter (Mr. Siprut
represents her as the class representative in at least two other California actions). The
total ‘payout’ from this settlement, in the form of the two coupons issued to [the] class,
was a minimum of $10.00 and a maximum of $30.00. The court awards Ms. Golba a
plaintiff’s enhancement of $500.00.”
Substantial evidence supported those findings. The declaration submitted
by Plaintiff in support of the motion for attorney fees does not reveal that she undertook
any particular risk, had any unreimbursed expenses, or encountered any unusual
difficulties in serving as class representative. Plaintiff did not testify at a trial and her
declaration does not state whether she was deposed or prepared answers to written
discovery. Over a period of about 24 months, Plaintiff spent about 16 hours—or 40
minutes a month—assisting with the case. The trial court did not err by reducing the
amount of the incentive award.
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DISPOSITION
The order on the motion for attorney fees is affirmed. Inasmuch as
respondent did not appear on appeal, no costs are awarded.
FYBEL, ACTING P. J.
WE CONCUR:
IKOLA, J.
THOMPSON, J.
24
Filed 7/24/15
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
LESLIE GOLBA et al.,
Plaintiffs and Appellants, G049611
v. (Super. Ct. No. 30-2011-00472227)
DICK’S SPORTING GOODS, INC., ORDER GRANTING REQUEST
FOR PUBLICATION
Defendant and Respondent.
Attorney Gerald G. Knapton of Ropers, Majeski, Kohn & Bentley has
requested that our opinion, filed on July 14, 2015, be certified for publication. It appears
that our opinion meets the standards set forth in California Rules of Court,
rule 8.1105(c)(2), (3), (4), and (6). The request is GRANTED. The opinion is ordered
published in the Official Reports.
FYBEL, ACTING P. J.
WE CONCUR:
IKOLA, J.
THOMPSON, J.
25