Hernandez v. Restoration Hardware, Inc.
228 Cal. Rptr. 3d 106
Cal.2018Background
- Hernandez filed a class action against Restoration Hardware alleging Song‑Beverly Act ZIP‑code violations; the court certified the class and appointed class counsel.
- A June 2013 class notice offered class membership or opt‑out; Muller remained an unnamed class member and her counsel filed a notice of appearance but she did not intervene or opt out.
- After a bench trial the court entered a common‑fund judgment (~$36.4M) and reserved/approved a 25% attorney‑fee award after a fairness hearing; Muller appeared telephonically and objected to notice and fee methodology (lodestar v. percentage).
- Muller did not move to intervene or file a motion to vacate under §663; instead she appealed limited to the attorney‑fees ruling.
- The Court of Appeal dismissed the appeal for lack of standing under Eggert v. Pac. States S. & L. Co.; the California Supreme Court granted review limited to the appealability/standing issue.
Issues
| Issue | Plaintiff's Argument (Muller) | Defendant/Respondents' Argument (Representatives) | Held |
|---|---|---|---|
| Whether an unnamed class member who objects at a fairness hearing can appeal without formally intervening or moving to vacate | Muller: Eggert is outdated; follow federal rule (Devlin) and CA decisions allowing objectors who appeared/argued to appeal | Reps: Eggert remains controlling; unnamed members must become parties of record (intervene or §663) to appeal under §902 | Held: Affirmed Eggert — unnamed class members must intervene or move to vacate to obtain party status and appeal; Muller lacked standing |
| Whether Eggert should be overruled in light of federal developments (Devlin) and subsequent CA cases | Muller: Devlin and modern practice justify abandoning Eggert so objectors who timely appear may appeal | Reps: Federal rules differ; CA procedures and §902 support Eggert; overruling would invite delay and professional‑objector abuses | Held: Declined to overrule Eggert; federal authority not persuasive given California statutes/rules and stare decisis |
| Whether the Court of Appeal should follow Trotsky and its progeny granting objector‑standing based on objection alone | Muller: Relied on Trotsky/Wershba etc. to support appealability after objection | Reps: Trotsky failed to reconcile §902/Eggert and is inconsistent with precedent | Held: Disapproved Trotsky and progeny as inconsistent with Eggert and §902 |
| Merits of fee calculation method (lodestar v. percentage) — procedural posture | Muller: Trial court should have used lodestar multiplier; class members lacked adequate fee‑notice | Reps: Percentage method acceptable; no timely procedural challenge preserved | Held: Court did not reach merits because Muller lacked appellate standing; procedural issue not decided on appeal |
Key Cases Cited
- Eggert v. Pac. States S. & L. Co., 20 Cal.2d 199 (Cal. 1942) (unnamed class members must intervene or move to vacate to become parties of record and appeal)
- County of Alameda v. Carleson, 5 Cal.3d 730 (Cal. 1971) (discusses appealability and intervention; order denying intervention is appealable)
- Devlin v. Scardelletti, 536 U.S. 1 (U.S. 2002) (federal rule: unnamed class members who timely object at fairness hearing may appeal without intervening in mandatory classes)
- Trotsky v. Los Angeles Fed. Sav. & Loan Assn., 48 Cal.App.3d 134 (Cal. Ct. App. 1975) (recognized objector standing to appeal after objection; disapproved here)
- Laffitte v. Robert Half Internat., Inc., 1 Cal.5th 480 (Cal. 2016) (trial court’s fiduciary role to protect absent class members)