As briefly mentioned in this (updated) blog post, the California Supreme Court ruled last week that to have standing to appeal a final judgment, a class action objector must formally intervene in the litigation. Hernandez v. Restoration Hardware, Inc., ___ Cal.5th ___ (Jan. 29, 2018). The Court discussed a couple of different procedural ways to accomplish this. Id., slip op. at 7-8. In so holding, the Court declined to overrule a 75-year-old precedent authored by Justice Traynor. Id. at 8-15 (citing Eggert v. Pacific States S. & L. Co., 20 Cal.2d 199 (1942)).
Last week, Bloomberg Law reported that "California Won't Join Federal Courts on Objector Appeals," and quoted me as saying that Hernandez would "preserve 'the ability of those with legitimate objections to raise them and if necessary, to appeal.'" I do think it will, and that the opinion strikes a fair balance between the need to deter frivolous objections while also enabling valid ones to be presented. (Having recently represented an objector for the first time in my career, while also having opposed many a frivolous objection, I can see both sides of this question.)
In Hernandez, the Supreme Court had this to say about deterring frivolous objections:
Meritless objections “can disrupt settlements by requiring class counsel to expend resources fighting appeals, and, more importantly, delaying the point at which settlements become final.” (Fitzpatrick, The End of Objector Blackmail? (2009) 62 Vand. L.Rev. 1623, 1634.) These same objectors who appear and object to proceedings in different class actions—also known as “professional objectors,” are thought to harm the class members whose interests they claim to protect. “First, professional objectors’ almost invariably groundless objections delay the provision of relief to class members who, in most instances, have already waited years for resolution. Second, by feeding off the fees earned by class counsel who took the risk of suing defendants on a purely contingent basis, as is the normal practice in class actions, professional objectors create a disincentive for class counsel to take on such risky matters. That disincentive clashes with the public interest, repeatedly recognized by courts, to incentivize class counsel to handle such cases.” (Greenberg, Keeping the Flies out of the Ointment: Restricting Objectors to Class Action Settlements (2010) 84 St. John’s L.Rev. 949, 951.)
Slip op. at 15 (hyperlinks added).
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