Hohenberg v. Ferrero USA, Inc

Filing 151

RESPONSE in Opposition re 145 MOTION to Vacate Judgment and for Indicative Ruling filed by Athena Hohenberg, Laura Rude-Barbato. (Attachments: # 1 Declaration of Jack Fitzgerald in Opposition to Non-Party Objectors' Motion to Vacate, # 2 Proof of Service)(Fitzgerald, John) (ag).

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1 THE WESTON FIRM GREGORY S. WESTON (239944) 2 greg@westonfirm.com JACK FITZGERALD (257370) 3 jack@westonfirm.com 4 MELANIE PERSINGER (275423) mel@westonfirm.com 5 COURTLAND CREEKMORE (182018) courtland@westonfirm.com 6 1405 Morena Blvd. Suite 201 San Diego, CA 92110 7 Telephone: (619) 798-2006 8 Facsimile: (480) 247-4553 LAW OFFICES OF RONALD A. MARRON, APLC RONALD A. MARRON (175650) ron@consumersadvocates.com B. SKYE RESENDES (278511) skye@consumersadvocates.com 3636 4th Avenue, Suite 202 San Diego, California 92103 Telephone: (619) 696-9006 Facsimile: (619) 564-6665 9 Class Counsel 10 UNITED STATES DISTRICT COURT 11 SOUTHERN DISTRICT OF CALIFORNIA 12 Case No. 3:11-cv-00205 H KSC Pleading Type: Class Action 13 14 15 16 17 18 19 20 21 IN RE FERRERO LITIGATION OPPOSITION TO NON-PARTY OBJECTORS’ MOTION TO VACATE JUDGMENT UNDER RULE 60(B) AND FOR AND INDICATIVE RULING; OR IN THE ALTERNATIVE, FOR LEAVE TO INTERVENE FOR THE PURPOSES OF FILING THIS MOTION ( DKT. NO. 145) Judge: The Honorable Marilyn L. Huff Date: December 3, 2012 Time: 10:30 a.m. Location: Courtroom 13 22 23 24 25 26 27 28 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE TABLE OF CONTENTS 1 2 TABLE OF AUTHORITIES .................................................................................................................... iii 3 INTRODUCTION ..................................................................................................................................... 1 4 5 ARGUMENT ............................................................................................................................................. 2 6 I. THE COURT SHOULD DENY OBJECTORS’ VACATUR MOTION .......................... 2 7 A. The Motion is Improper ......................................................................................... 2 8 1. Non-Party Objectors Improperly Filed the Motion Without the Court’s Leave (S.D. Cal. Civ. L.R. 5.1(h)) ................................................ 2 2. 9 Objectors’ Motion is a Deficient and Untimely Application for Reconsideration (S.D. Cal. Civ. L.R. 7.1(i)) and Asserts a New and Waived Objection ...................................................................................... 3 10 11 12 13 B. The Motion is Untimely ......................................................................................... 4 C. The Motion is Meritless ......................................................................................... 5 14 15 16 1. Legal Standard ........................................................................................... 5 17 2. Relevant Facts ............................................................................................ 6 18 a. Procedural History ......................................................................... 6 b. Objectors’ “Newly Discovered Evidence” .................................... 7 19 20 21 (i.) Elizabeth Beck’s “Baseless” Accusations of Misconduct ......................................................................... 7 (ii.) Judge Ware’s Order Denying Beck’s Termination in Unilever ................................................... 10 25 (iii.) Judge Patel’s Interim Counsel Decision in Yelp .............. 11 26 (iv.) Judge Whelan’s Order to Show Cause............................. 12 22 23 24 27 c. Plaintiffs’ Motion for Class Certification .................................... 12 28 i In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 3. 1 Objectors Have Not Demonstrated Grounds for Relief Under Rule 60(b) ......................................................................................................... 13 2 a. Objectors Do Not Assert Any “Mistake, Inadvertence, Surprise, or Excusable Neglect” Justifying Vacatur (Fed. R. Civ. P. 60(b)(1)) ............................................................. 13 b. Objectors Have Not “Discovered New Evidence” Justifying Vacatur (Fed. R. Civ. P. 60(b)(2)) .............................. 15 c. Objectors Have Not Identified Any “Fraud . . . Misrepresentation, or Misconduct by an Opposing Party” Justifying Vacatur (Fed. R. Civ. P. 60(b)(3)) ................... 15 d. Objectors Have Not Shown the Judgment is Void (Fed. R. Civ. P. 60(b)(4)) ...................................................................... 17 e. Objectors Have Not Shown that Applying the Judgment Prospectively is No Longer Equitable (Fed. R. Civ. P. 60(b)(5)) ....................................................................................... 18 f. 3 Objectors Have Not Shown Any Other Reason That Justifies Vacatur (Fed. R. Civ. P. 60(b)(6)) ................................. 19 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 II. THE COURT SHOULD DENY OBJECTORS’ REQUEST TO MODIFY THE JUDGMENT OR REQUIRE THAT ATTORNEYS’ FEES BE HELD IN TRUST ........................................................................................................................ 20 A. There is No Legal Requirement that Fees Awarded Be Held in Trust ................ 20 B. Objectors Have no Factual Basis or Standing to Request “Proof” That Fees are Being Held in Trust ............................................................................... 22 C. Objectors’ Request that the Court “Modify” the Judgment is Untimely and Improper ........................................................................................................ 23 19 20 21 22 23 1. Objectors’ Motion to Alter or Amend the Judgment is Untimely Under Rule 59(e)...................................................................................... 24 2. The Court Lacks Jurisdiction to Grant the Relief Objectors Request ...... 24 24 25 26 27 CONCLUSION ........................................................................................................................................ 24 28 ii In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 TABLE OF AUTHORITIES 2 CASES 3 Ackerman v. United States, 340 U.S. 193 (1950) ........................................................................................................................... 20 4 Alexander v. Robertson, 5 882 F.2d 421 (9th Cir. 1988) ............................................................................................................. 16 6 Allmerica Fin. Life Ins. & Annuity Co. v. Llewellyn, 139 F.3d 664 (9th Cir. 1997) ....................................................................................................... 15, 20 7 8 Allstate Ins. Co. v. Herron, 634 F.3d 1101 (9th Cir. 2001) ........................................................................................................... 24 9 Ashford v. Steuart, 10 657 F.2d 1053 (9th Cir. 1981) ............................................................................................................. 4 11 Backlund v. Barnhart, 778 F.2d 1386 (9th Cir. 1985) ........................................................................................................... 20 12 13 Bateman v. U.S. Postal Serv., 231 F.3d 1220 (9th Cir. 2000) ........................................................................................................... 13 14 BCJJ, LLC v. Lefevre, 15 2012 U.S. Dist. LEXIS 91839 (M.D. Fla. July 3, 2012)...................................................................... 9 16 Bellevue Manor Assocs. v. United States, 165 F.3d 1249 (9th Cir. 1999) ........................................................................................................... 19 17 Brandt v. Am. Bankers Ins. Co., 18 653 F.3d 1108 (9th Cir. 2011) ........................................................................................................... 14 19 Briones v. Riviera Hotel & Casino, 116 F.3d 379 (9th Cir. 1997) ............................................................................................................. 13 20 21 Brown v. Bush, 194 Fed. Appx. 879 (11th Cir. 2006) ............................................................................................... 2, 5 22 Burgess v. Sandaval, 23 2012 U.S. Dist. LEXIS 149248 (D. Nev. Oct. 16, 2012) .................................................................. 20 24 Carter v. Untied States, 973 F.2d 1479 (9th Cir. 1992) ............................................................................................................. 6 25 26 Casey v. Albertson’s Inc., 362 F.3d 1254 (9th Cir. 2004) ............................................................................................... 15, 16, 17 27 Chacanaca v. Quaker Oats Co., 28 2011 U.S. Dist. LEXIS 65023 (N.D. Cal. June 14, 2011) ................................................................. 10 iii In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 Chacanaca v. Quaker Oats Co., No. 10-cv-502-RS (N.D. Cal.) ........................................................................................................... 10 2 Costal Trasnfer Co. v. Toyota Motor Sales, U.S.A., Inc., 3 833 F.2d 208 (9th Cir. 1987) ............................................................................................................. 15 4 Crawford v. Honig, 1992 U.S. Dist. LEXIS 13677 (N.D. Cal. Aug. 31, 1992)................................................................. 17 5 6 Crawford v. Honig, 37 F.3d 485 (9th Cir. 1994) ............................................................................................................... 17 7 Dail v. City of Goldsboro, 8 2011 U.S. Dist. LEXIS 61731 (E.D.N.C. June 9, 2011)...................................................................... 3 9 Davis v. Yageo Corp., 481 F. 3d 661 (9th Cir. 2007) .............................................................................................................. 2 10 11 De Saracho v. Custom Food Machinery, Inc., 206 F.3d 874 (9th Cir. 2000) ............................................................................................................. 16 12 Delay v. Gordon, 13 475 F.3d 1039 (9th Cir. 2007) ........................................................................................................... 19 14 Dennis v. Kellogg Co., --- F.3d ---, 2012 U.S. App. LEXIS 18576 (9th Cir. Sept. 4, 2012) .................................................. 24 15 Dish Network, L.L.C. v. Sonicview USA, Inc., 16 2012 U.S. Dist. LEXIS 146838 (S.D. Cal. Oct. 11, 2012) ............................................................ 5, 19 17 Dixon v. Comm’r, 316 F.3d 1041 (9th Cir. 2003) ........................................................................................................... 16 18 19 Engleson v. Burlington N. R. Co., 972 F.2d 1038 (9th Cir. 1994) ....................................................................................................... 5, 15 20 Feature Realty, Inc. v. City of Spokane, 21 331 F.3d 1082 (9th Cir. 2003) ........................................................................................................... 15 22 First Interstate Bank of Az., N.A. v. Murphy, Weir & Butler, 210 F.3d 983 (9th Cir. 2000) ............................................................................................................... 4 23 24 Flores v. Arizona, 516 F.3d 1140 (9th Cir. 2008) ............................................................................................................. 5 25 Gallucci v. Boiron, Inc., 26 2012 U.S. Dist. LEXIS 157039 (S.D. Cal. Oct. 31, 2012) ................................................................ 10 27 Gallucci v. Boiron, Inc., No. 11-cv-2039-JAH (S.D. Cal.) ................................................................................................... 4, 10 28 iv In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 Gilmore v. California, 220 F.3d 987 (9th Cir. 2000) ............................................................................................................. 19 2 Griggs v. Provident Consumer Discount Co., 3 459 U.S. 56 (1982) ............................................................................................................................... 1 4 Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) ........................................................................................................... 24 5 6 Harvest v. Castro, 531 F.3d 737 (9th Cir. 2008) ....................................................................................................... 19, 20 7 Hohenberg v. Ferrero U.S.A., Inc., 8 2011 U.S. Dist. LEXIS 38471 (S.D. Cal. Mar. 22, 2011) ................................................................. 18 9 In re Cmty. Bank of N. Va. & Guar. Nat’l Bank of Tallahassee Second Mortg. Loan Litig., 418 F.3d 277 (3d Cir. 2005)............................................................................................................... 22 10 11 In re Cmty. Bank of N. Va. & Guar. Nat’l Bank of Tallahassee Second Mortg. Loan Litig., 622 F.3d 275 (3d Cir. 2010)............................................................................................................... 22 12 In re Diet Drugs Prods. Liab. Litig., 13 431 F.3d 141 (3d Cir. 2005)............................................................................................................... 18 14 In re Ferrero Litig., 2012 U.S. Dist. LEXIS 94900 (S.D. Cal. July 9, 2012) .................................................................... 18 15 In re Ferrero Litig., 16 278 F.R.D. 552 (S.D. Cal. 2011) ....................................................................................................... 18 17 In re Nig. Charter Flights Litig., 2011 U.S. Dist. LEXIS 155180 (E.D.N.Y. Aug. 25, 2011) ............................................................... 22 18 19 In re Pac. Far East Lines, Inc., 889 F.2d 242 (9th Cir. 1989) ............................................................................................................... 4 20 In re TFT-LCD (Flat Panel) Antitrust Litig., 21 2011 U.S. Dist. LEXIS 154288 (N.D. Cal. Dec. 27, 2011) ............................................................... 23 22 Jeff D. v. Andrus, 899 F.2d 753 (9th Cir. 1989) ............................................................................................................. 24 23 24 Kelly v. Provident Life & Accident Ins. Co., 734 F. Supp. 2d 1085 (S.D. Cal. 2010) .............................................................................................. 20 25 Kona Enters., Inc. v. Estate of Bishop, 26 229 F.3d 877 (9th Cir. 2000) ............................................................................................................... 5 27 Lafarge Conseils et Etudes S.A. v. Kaiser Cement & Gypsum Corp., 791 F.2d 1334 (9th Cir. 1986) ........................................................................................................... 20 28 v In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 Latshaw v. Trainer Wortham & Co., 452 F.3d 1097 (9th Cir. 2006) ............................................................................................... 16, 19, 20 2 Levitt v. Yelp, 3 No. 10-cv-1321-EMC (N.D. Cal.) ..................................................................................................... 11 4 Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847 (1988) ........................................................................................................................... 20 5 6 Martin v. Nicholson, 151 Fed. Appx. 928 (Fed. Cir. 2005) ................................................................................................... 3 7 McDowell v. Calderon, 8 197 F.3d 1253 (9th Cir. 1999) ..................................................................................................... 23, 24 9 Navajo Nation v. Norris, 331 F.3d 1041 (9th Cir. 2003) ............................................................................................................. 5 10 11 Oliver v. U.S. Bank, N.A., 2012 U.S. Dist. LEXIS 87126 (N.D. Cal. June 22, 2012) ................................................................... 2 12 Pac. & Arctic Ry. And Navigation Co. v. United Transp. Union, 13 952 F.2d 1144 (9th Cir. 1991) ........................................................................................................... 16 14 Perea v. Loera, 2012 U.S. Dist. LEXIS 144068 (S.D. Cal. Oct. 4, 2012) ................................................................ 2, 3 15 Perry v. Schwarzenegger, 16 790 F. Supp. 2d 1119 (N.D. Cal. 2011) ........................................................................................... 2, 4 17 Phelps v. Alameida, 569 F.3d 1120 (9th Cir. 2009) ............................................................................................................. 5 18 19 Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (1993) ........................................................................................................................... 13 20 Pitre v. Blanchard, 21 1996 U.S. Dist. LEXIS 4368 (E.D. La. Mar. 27, 1996)....................................................................... 3 22 Price v. Seydel, 961 F.2d 1470 (9th Cir. 1992) ............................................................................................................. 6 23 24 Red v. Kraft Foods, Inc., No. 10-cv-1028-GW (C.D. Cal.) ......................................................................................................... 9 25 Red v. Unilever United States, Inc., 26 No. 10-cv-00387 (N.D. Cal.) ................................................................................................... 7, 10, 11 27 Reynolds v. Lomas, 2012 U.S. Dist. LEXIS 143508 (N.D. Cal. Sept. 28, 2012) .............................................................. 20 28 vi In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 SEC v. Coldicutt, 258 F.3d 939 (9th Cir. 2001) ............................................................................................................. 19 2 Singletery v. Equifax Info. Servs., LLC, 3 2011 U.S. Dist. LEXIS 156215 (N.D. Ala. Sept. 21, 2011) .............................................................. 22 4 Skilstaf, Inc. v. CVS Caremark Corp., 669 F.3d 1005 (9th Cir. 2012) ........................................................................................................... 18 5 6 Soto v. FCM Corp., 2011 U.S. Dist. LEXIS 3436 (S.D. Cal. Jan. 13, 2011) ....................................................................... 2 7 Southern Ins. Co. v. Wastequip Mfg. Co., LLC, 8 2012 U.S. Dist. LEXIS 97663 (S.D. Cal. July 13, 2012) .............................................................. 5, 14 9 State Compensation Ins. Fund v. WPS, Inc., 70 Cal. App. 4th 644 (1999) .............................................................................................................. 21 10 11 Thomas P. Gonzalez Corp. v. Consejo Nacional De Produccion De Costa Rica, 614 F.2d 1247 (9th Cir. 1980) ........................................................................................................... 17 12 U.S. ex rel. Ramona Equip. Rentals, Inc. v. Carolina Cas. Ins. Co., 13 2011 U.S. Dist. LEXIS 149967 (S.D. Cal. Dec. 30, 2011).......................................................... 23, 24 14 United States ex rel. Technica LLC v. Carolina Cas. Ins. Co., 2012 U.S. Dist. LEXIS 67219 (S.D. Cal. May 14, 2012) .............................................................. 5, 14 15 United States ex rel. Technica, LLC v. Carolina Cas. Ins. Co., 16 2012 U.S. Dist. LEXIS 51766 (S.D. Cal. Apr. 12, 2012) .................................................................... 5 17 United States v. Berke, 170 F.3d 882 (9th Cir. 1999) ............................................................................................................. 17 18 19 United States v. Chapman, 642 F.3d 1236 (9th Cir. 2011) ........................................................................................................... 16 20 United States v. Washington, 21 394 F.3d 1152 (9th Cir. 2005) ........................................................................................................... 19 22 Waters v. Hollywood Tow Serv., 2011 U.S. Dist. LEXIS 132535 (C.D. Cal. Nov. 15, 2011) ......................................................... 15, 20 23 24 Wende v. Countrywide Home Loans, Inc., 2011 U.S. Dist. LEXIS 28724 (S.D. Cal. Mar. 21, 2011) ................................................................... 2 25 Weston Firm, P.C. v. Beck & Lee, P.A., 26 No. 10-cv-1694-W (S.D. Cal.) ........................................................................................................... 12 27 Winterrowd v. Am. Gen. Annuity Ins. Co., 556 F.3d 815 (9th Cir. 2009) ............................................................................................................. 21 28 vii In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 Yumul v. Smart Balance, 2010 U.S. Dist. LEXIS 116960 (C.D. Cal. Oct. 25, 2011) .................................................. 7, 8, 11, 14 2 Yumul v. Smart Balance, Inc., 3 No. 10-cv-00927-MMM (C.D. Cal.) ................................................................................................... 8 4 5 OTHER AUTHORITIES 6 12 James Wm. Moore et al., Moore’s Fed. Practice § 60.67[1] (3d ed. 2012) .......................................... 2 7 8 9 10 11 RULES C.D. Cal. Civ. L.R. 11-1 ............................................................................................................................ 7 Cal. R. Prof. Conduct 3-700(D)(2) .......................................................................................................... 21 Cal. R. Prof. Conduct 4-100(A)(2) .......................................................................................................... 21 12 Fed. R. Civ. P. 12(f) ................................................................................................................................... 3 13 14 15 16 Fed. R. Civ. P. 60 ..................................................................................................................................... 13 Fed. R. Civ. P. 60(b) .............................................................................................................................. 4, 5 Fed. R. Civ. P. 60(b)(1)...................................................................................................................... 13, 14 17 Fed. R. Civ. P. 60(b)(2)...................................................................................................................... 13, 15 18 Fed. R. Civ. P. 60(b)(3)............................................................................................................................ 15 19 Fed. R. Civ. P. 60(b)(4)............................................................................................................................ 17 20 Fed. R. Civ. P. 60(b)(5)............................................................................................................................ 18 21 Fed. R. Civ. P. 60(b)(6)............................................................................................................................ 19 22 Fed. R. Civ. P. 62.1 .................................................................................................................................... 1 23 Fed. R. Civ. P. 62.1(a)(2) ........................................................................................................................... 1 24 25 S.D. Cal. Civ. L.R. 5.1(h) ...................................................................................................................... 2, 7 S.D. Cal. Civ. L.R. 7.1(i) ........................................................................................................................... 3 26 27 28 viii In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 2 INTRODUCTION The Court should deny the Motion of Objector-Appellants Courtney Drey and Andrea Pridham 3 (Dkt. No. 145) to vacate or modify its July 9, 2012 Final Judgment and Order Approving Settlement 4 (Dkt. No. 127). When they took their appeal, Objectors “divest[ed] the [Court] of jurisdiction to alter, 5 amend, or modify” the Judgment. (Mot. at 11 (citing Griggs v. Provident Consumer Discount Co., 459 6 U.S. 56, 58 (1982)).) The Court might nevertheless entertain Objectors’ Motion pursuant to Fed. R. 7 Civ. P. 62.1—if it is properly brought. But the Motion is improper. 8 In violation of the Local Rules, the non-party Objectors did not seek leave to file the Motion. 9 See infra Point I.A.1. And though stated as a vacatur motion, Objectors rehash arguments the Court 10 rejected when it overruled their objection, and lodge a new objection. Thus, the motion is actually a 11 deficient and untimely Application for Reconsideration, and an out-of-time objection that has been 12 waived. See infra Point I.A.2. But even if the Motion’s filing had been proper, it is untimely under the 13 substantive law governing Rule 60(b) motions. See infra Point I.B. 14 Had Objectors properly filed a timely Rule 60(b) Motion, it would still lack merit, since they 15 fail to demonstrate that any of the reasons justifying vacatur are present. Most importantly, there is no 16 merit to the discredited accusations that Objectors cite—made in 2010 by discharged co-counsel—for 17 their contention that the Weston Firm is, or ever was, inadequate counsel. To the contrary, several 18 courts have carefully reviewed and rejected those accusations, and the firm has been repeatedly 19 appointed class counsel in the ensuing years. See infra Point I.C. 20 Objectors separately ask that the Court direct Class Counsel to “file proof” that the attorneys’ 21 fees the Court awarded are being held in trust. (Mot. at 7.) But Objectors have provided no authority 22 that this is required just because they appealed the Judgment. See infra Point II.A. Nor do Objectors 23 have a factual basis or standing for their request. See infra Point II.B. 24 Alternatively, Objectors ask that the Court “modi[y]” the Judgment by striking one of the 25 Settlement Agreement’s provisions and requiring that the fees awarded be “held by the Clerk of the 26 Court, or a special master . . . .” (Mot. at 7.) This request is untimely under Rule 59(e) and anyway, the 27 Court lacks the authority to grant that relief. See infra Point II.C. 28 Accordingly, the Court should deny Objectors’ Motion. See Fed. R. Civ. P. 62.1(a)(2). 1 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE ARGUMENT 1 2 As Objectors concede (Mot. at 11-12), “[o]nce an appeal from a judgment is filed, the district 3 court is ousted of jurisdiction to take certain actions.” Perry v. Schwarzenegger, 790 F. Supp. 2d 1119, 4 1123 (N.D. Cal. 2011) (citing Davis v. Yageo Corp., 481 F. 3d 661, 685 (9th Cir. 2007)); see also Perea 5 v. Loera, 2012 U.S. Dist. LEXIS 144068, at *3 (S.D. Cal. Oct. 4, 2012) (“The general rule is that a 6 timely notice of appeal will divest a district court of jurisdiction over the action, including divesting a 7 district court of the power to grant a Rule 60(b) motion . . . .” (quoting 12 James Wm. Moore et al., 8 Moore’s Fed. Practice § 60.67[1], at 60-229 (3d ed. 2012) (footnote and citation omitted))). Objectors 9 filed their notice of appeal on August 7, 2012. (See Dkt. No. 130.) Notwithstanding: 10 11 12 13 14 Fed. R. Civ. P. 62.1(a) provides that “[i]f a timely motion is made for relief that the court lacks authority to grant because an appeal has been docketed and is pending, the [district] court may: (1) defer considering the motion; (2) deny the motion; or (3) state either that it would grant the motion if the court of appeals remands for that purpose or that the motion raises a substantial issue.” Therefore, notwithstanding the pending appeal of the Judgment, the Court has jurisdiction to hear this [Rule 60(b)] Motion and, in doing so, to take one of the actions specified by Rule 62.1. 15 Perry, 790 F. Supp. at 1123. 16 I. THE COURT SHOULD DENY OBJECTORS’ VACATUR MOTION 17 A. 18 19 20 The Motion is Improper 1. Non-Party Objectors Improperly Filed the Motion Without the Court’s Leave (S.D. Cal. Civ. L.R. 5.1(h)) In class actions, absent intervention, “[o]bjectors are not parties to the underlying action,” 21 Brown v. Bush, 194 Fed. Appx. 879, 883 (11th Cir. 2006) (per curiam). Because Objectors are not 22 parties, they cannot file a Motion without first obtaining leave from the Court. S.D. Cal. Civ. L.R. 23 5.1(h) (“Except as provided in the federal rules, or by leave of court, no document will be filed in any 24 case by any person not a party thereto.” (emphasis added)). C.f. Wende v. Countrywide Home Loans, 25 Inc., 2011 U.S. Dist. LEXIS 28724, at *1 n.1 (S.D. Cal. Mar. 21, 2011) (movant was “not a named 26 party and therefore cannot file documents in this case” (citing S.D. Cal. Civ. L.R. 5.1(h))); Soto v. FCM 27 Corp., 2011 U.S. Dist. LEXIS 3436, at *1-2 n.1 (S.D. Cal. Jan. 13, 2011) (same); Oliver v. U.S. Bank, 28 N.A., 2012 U.S. Dist. LEXIS 87126, at *2 (N.D. Cal. June 22, 2012) (“[A]s a non-party, [movant] does 2 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 not have standing to bring this motion.”); Dail v. City of Goldsboro, 2011 U.S. Dist. LEXIS 61731, at 2 *3 (E.D.N.C. June 9, 2011) (“As a mere non-party, [movant] has no standing to file pleadings or 3 motions in this lawsuit.” (citing Fed. R. Civ. P. 12(f))); Pitre v. Blanchard, 1996 U.S. Dist. LEXIS 4 4368, at *4 n.4 (E.D. La. Mar. 27, 1996) (non-party did not have standing to file a motion). Objectors 5 could have sought leave to make their Motion prior to filing it, but chose not to. 2. 6 Objectors’ Motion is a Deficient and Untimely Application for Reconsideration (S.D. Cal. Civ. L.R. 7.1(i)) and Asserts a New and Waived Objection 7 Objectors’ original June 8 objection included a lengthy section questioning Class Counsel’s 8 9 adequacy. Guised as a motion to vacate or modify the Judgment, Objectors’ new filing is an admitted 10 rehash. (See Mot. at 2 (“In their previously filed objection, Objectors noted some serious concerns with 11 the adequacy of counsel, and specifically the way the case appeared to have been ‘manufactured’ by 12 Weston and Marron.”), 7 (“As objectors noted in their original objection[,] the class representative 13 admitted that she did not know the Weston firm [sic], never met or spoke to Weston or Fitzgerald, and 14 did not hire them.” (citing Dkt. No. 123 at 8-9)); 10 (“As noted in objectors’ original objection, . . . the 15 Defendant did not contest adequacy at either the interim class counsel stage, or at the contested class 16 certification stage.”).) Brought four months after the Court entered Judgment, and three months after they appealed it, 17 18 Objectors’ instant Motion thus not only violates the objection process in the Court’s Preliminary 19 Approval Order, 1 but also constitutes a deficient and untimely motion for reconsideration. S.D. Cal. 20 Civ. L.R. 7.1(i); c.f. Perea, 2012 U.S. Dist. LEXIS 144068, at *4-5 (denying motion for reconsideration 21 for failure to comply with L.R. 7.1(i)(1)); Martin v. Nicholson, 151 Fed. Appx. 928 (Fed. Cir. 2005) 22 (treating “motion for relief from judgment or order” as “an out of time motion for reconsideration”). Objectors do not just re-assert objections the Court overruled, but also bring a new objection, to 23 24 the Settlement Agreement’s “quick pay” provision. (See Mot. at 7.) This objection is untimely and thus 25 improper. (See Dkt. No. 108 at 6 ¶ 7(a).) It is also meritless. See infra Point II. 26 1 The Court’s January 23, 2012 Order Granting Preliminary Approval provided that “[a]ny objection must be . . . delivered to Class Counsel and Defense Counsel . . . no later than 30 days before the 27 Fairness Hearing,” which took place on July 9, 2012. (See Dkt. No. 108 at 6 ¶ 7(a).) Objectors’ Motion 28 is nearly five months late. 3 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE In an analogous situation, this District’s Honorable John A. Houston recently stuck three 1 2 objectors’ purported “response” to a stipulation that the parties had filed after the fairness hearing, 3 which slightly modified the settlement agreement. Like here, the objectors’ filing rehashed arguments 4 they had already presented and raised new ones. (See Fitzgerald Decl. Exs. 1-2 (Oct. 16, 2012 Order in 5 Gallucci et al. v. Boiron, Inc. et al., No. 3:11-cv-2039-JAH (S.D. Cal.), and Motion on which it was 6 based).) 7 B. The Motion is Untimely 8 Even if Objectors’ Motion were properly filed, it is untimely. “The timeliness of a motion to 9 vacate a judgment is governed by Fed. R. Civ. P. 60(b), which permits a court to entertain a motion to 10 relieve a party from a final judgment if the motion is made ‘at the earliest possible time after the facts 11 are discovered.’” Perry, 790 F. Supp. 2d at 1123 (citing First Interstate Bank of Az., N.A. v. Murphy, 12 Weir & Butler, 210 F.3d 983, 988 n.8 (9th Cir. 2000)). “What constitutes a reasonable time” under Rule 60(b) “depends on the facts of each case.” In re 13 14 Pac. Far East Lines, Inc., 889 F.2d 242, 249 (9th Cir. 1989) (quotation marks and citation omitted). 15 Relevant to the determination of timeliness are “the interest in finality, the reason for delay, the 16 practical ability of the litigant to learn earlier of the grounds relied upon, and prejudice to other parties.” 17 Ashford v. Steuart, 657 F.2d 1053, 1055 (9th Cir. 1981) (per curiam). Objectors assert that they only recently discovered the “facts” on which their vacatur motion is 18 19 premised, while their counsel was “doing research on an unrelated case . . . .” (Mot. at 2.) The items 20 Objectors cite, however, are not facts, but publicly-filed court decisions from 2010. (See Mot. at 3-6 & 21 Exs. A-C.) Even if such publicly-available court decisions could otherwise support the timeliness of a 22 Rule 60(b) motion, Objectors’ contention that they only recently discovered them is belied by their 23 admission that “these very cases . . . were cited by the Weston firm [sic] in support of its motion to be 24 appointed class counsel.” (Mot. at 3.) 2 That motion was, of course, available for Objectors’ review. And 25 2 Objectors also suggest that their Motion should “give the court pause about its prior decision to deny 26 discovery into the Weston firm’s practices.” (Mot. at 2-3.) Objectors never made such a request, but if 27 they had, it too would contradict their assertion that their counsel could not reasonably have discovered these publicly-available 2010 court decisions earlier than four months after the court entered Judgment 28 by showing their heightened suspicion of Class Counsel’s supposed “practices” affecting adequacy. 4 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 they did review it—their objection quoted the motion. (Dkt. No. 123 at 10:14-23.) On the other hand, 2 Objectors provide no authority for their conclusory assertion that “it would not be reasonable” for 3 absent class members who object to the adequacy of class counsel “to look at all the prior cases 4 involving the attorney[.]” (Mot. at 3.) C. 5 The Motion is Meritless 1. 6 Legal Standard The Federal Rules allow district courts to relieve a party 3 from a judgment for any enumerated 7 8 reason that justifies relief. Fed. R. Civ. P. 60(b). The Rule “provides for extraordinary relief and may be 9 invoked only upon a showing of exceptional circumstances.” Dish Network, L.L.C. v. Sonicview USA, 10 Inc., 2012 U.S. Dist. LEXIS 146838, at *4 (S.D. Cal. Oct. 11, 2012) (citing Engleson v. Burlington N. 11 R. Co., 972 F.2d 1038, 1044 (9th Cir. 1994)); see also United States ex rel. Technica, LLC v. Carolina 12 Cas. Ins. Co., 2012 U.S. Dist. LEXIS 51766, at *30-31 (S.D. Cal. Apr. 12, 2012) (Huff, J.) (Rule 60(b) 13 “is an extraordinary remedy and is only granted in exceptional circumstances.”). The Ninth Circuit has 14 “‘cautioned against the use of provisions of Rule 60(b) to circumvent the strong public interest in [the] 15 timeliness and finality’ of judgments.” Phelps v. Alameida, 569 F.3d 1120, 1135 (9th Cir. 2009) 16 (quoting Flores v. Arizona, 516 F.3d 1140, 1163 (9th Cir. 2008)). Whether to grant or deny a Rule 60(b) motion is within the sound discretion of the district court. 17 18 Southern Ins. Co. v. Wastequip Mfg. Co., LLC, 2012 U.S. Dist. LEXIS 97663, at *4 (S.D. Cal. July 13, 19 2012) (“Wastequip”) (Huff, J.) (citing Navajo Nation v. Norris, 331 F.3d 1041, 1046 (9th Cir. 2003) 20 (citing Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 883 (9th Cir. 2000))); see also United 21 States ex rel. Technica LLC v. Carolina Cas. Ins. Co., 2012 U.S. Dist. LEXIS 67219, at *6 (S.D. Cal. 22 May 14, 2012) (“Technica II”) (Huff, J.) (“Relief under Rule 60(b) is not a matter of right. Rather, it 23 rests in the trial court’s sound discretion.” (citing Carter v. Untied States, 973 F.2d 1479, 1489 (9th Cir. 24 25 26 27 28 3 Objectors assert that they have standing to bring the motion despite that Rule 60(b) provides that “the court may relieve a party or its legal representative from a final judgment, order, or proceeding” for one of the enumerated reasons, Fed. R. Civ. P. 60(b) (emphasis added), and that absent intervention, class action objectors are not parties, see Brown, 194 Fed. Appx. at 883. (See Mot. at 7-10.) Plaintiffs decline to address this argument and Objectors’ alternative assertion that they have a right or should be permitted to intervene under Rule 24, because their motion lacks merit and should be denied even if, arguendo, they have standing and/or are granted leave to intervene. 5 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 1992); Price v. Seydel, 961 F.2d 1470, 1473 (9th Cir. 1992))). 2. 2 a. 3 4 Relevant Facts Procedural History After Class Counsel obtained certification (Dkt. No. 95), and following months of negotiations, 5 including two sessions before the Honorable Cathy Ann Bencivengo, and one session before the 6 Honorable Nicholas J. Politan (Ret.), the parties reached a class action settlement that the Court, on 7 January 23, 2012, preliminarily approved (Dkt. No. 108). 8 On June 8, 2012, through their professional-objector counsel, Drey and Pridham filed an 9 objection (Dkt. No. 123), which, because it was unsigned, did not comply with the Court’s Preliminary 10 Approval Order. (See Dkt. No. 125 at 4-6.) Excusing this defect, the Court nevertheless entertained the 11 objection, which included a five-page section challenging Class Counsel’s adequacy. (Dkt. No. 123 at 12 7-11.) This included the assertions that “Defendants [sic] did not raise the issue of adequacy when Class 13 Counsel made their motion for appointment” and that “Defendant’s objection to class certification did 14 not address the adequacy” requirement. (Id. at 7.) Objectors also argued that Class Counsel had 15 “manufactured” the litigation and that the Weston Firm had supposedly represented Ms. Rude-Barbato 16 without her knowledge. (Id. at 7-10.) 17 Plaintiffs and Class Counsel responded by pointing out the Court’s consideration of detailed 18 declarations supporting Class Counsel’s adequacy, noting that “Drey and Pridham’s contention that 19 Ferrero ‘did not address the adequacy’ [requirement] . . . demonstrat[es] only that Ferrero had no 20 grounds to do so,” and addressing Objectors’ suggestion that there was some sort of impropriety in the 21 filing of Plaintiffs’ complaints or the Weston Firm’s representation of Ms. Rude-Barbato. (See Dkt. No. 22 125 at 8-11.) 23 By the time of the Fairness Hearing, during which time Objectors’ counsel presented oral 24 argument, the Court had favorably determined Class Counsels’ adequacy twice. (See Dkt. Nos. 11 at 4, 25 95 at 7.) The Court thus overruled these objections. (Dkt. No. 127 at 6-7 ¶ 13.) 26 On August 7, 2012, Objectors appealed “all prior interlocutory orders entered in the case and 27 related to preliminary or final approval of the class action settlement, orders approving attorneys’ fees 28 to class counsel, and the protective ordered entered” as well as “all interlocutory opinions and orders, 6 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 which merge into the final approval and judgment.” (Dkt. No. 130 at 1.) On October 10, 2012, Plaintiffs filed a Motion for Appeal Bond (Dkt. No. 140), and on October 2 3 29, Objectors filed their opposition (Dkt. No. 142). On November 9, the Court denied the bond motion 4 on the grounds that “Plaintiffs have provided insufficient evidence that there is a risk of nonpayment by 5 Objectors should Plaintiffs be awarded costs on appeal.” (Dkt. No. 150 at 1.) Before the Court issued its decision, however, and one week after they filed their Opposition, 6 7 Objectors filed the instant “Motion to Vacate Judgment Under Rule 60(b), and for an Indicative Ruling; 8 or, in the Alternative, for Leave to Intervene for the Purposes of Filing this Motion.” (Dkt. No. 145.) 9 They did not seek leave to file the Motion, as they were required. S.D. Cal. Civ. L.R. 5.1(h). b. 10 Objectors’ “Newly Discovered Evidence” (i.) 11 Elizabeth Beck’s “Baseless” Accusations of Misconduct More than two years ago, a dispute arose between the Weston Firm and Beck & Lee, a two- 12 13 attorney Miami law firm the Weston Firm hired as co-counsel for several cases in March 2010. Only 14 five months later, in August 2010, Beck & Lee was discharged by Mr. Weston’s clients, at his advice, 15 for a variety of reasons. Following her termination, attorney Elizabeth Beck entered a declaration in Red 16 v. Unilever United States, Inc., No. 10-cv-00387 (N.D. Cal.) (“Unilever”) making ridiculous 17 accusations of “kickbacks,” using “runners and cappers,” and improper fee splits with staff. 4 Beck’s accusations have continually been discredited. For example, in a decision granting a 18 19 Weston Firm client’s request to strike the Becks’ filings from the docket because they were made 20 without client authorization in violation of C.D. Cal. Civ. L.R. 11-1, Yumul v. Smart Balance, 2010 U.S. 21 Dist. LEXIS 116960, at *8-21 (C.D. Cal. Oct. 25, 2011), the Honorable Margaret M. Morrow also 22 denied Beck & Lee’s motion to disqualify the Weston Firm, noting that such motions “are frequently 23 pursued for tactical reasons,” id. at *11, and that “Beck & Lee’s allegations do not specifically concern 24 25 26 27 28 4 Objectors ask the Court to make negative inferences against the Weston Firm because of Mr. Weston’s previous employment with the firm now known as Robbins Geller Rudman & Dowd LLP, whose predecessor was co-founded by disbarred attorney William S. Lerach. (See Mot. at 4.) If accepted, such “guilt by prior association” would tar the reputations of the more than 140 current, and hundreds more former attorneys at Robbins Geller and its predecessor firms, including even the honorable judges J. Lawrence Irving, Jan M. Adler, and William S. Dato, who all worked at Robbins Geller’s predecessor firms much longer than Mr. Weston. 7 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 this case and no evidence has been adduced supporting them and . . . there is at least a possibility that 2 Beck & Lee made the allegations to gain a tactical advantage in its dispute with Weston . . . .” Id. at 3 *13. Notwithstanding, Judge Morrow noted that “[i]n determining whether to certify a class in this case, 4 . . . unethical conduct by plaintiff’s counsel would be a relevant consideration.” Id. at *18. She therefore 5 directed that “if defendant believes that the ethics of class counsel is an appropriate issue to raise in 6 opposition to a motion for class certification, it will bring the matter to the attention of the court.” Id. at 7 *20-21 n.9. Following Judge Morrow’s decision, the defendant carefully inquired into the Becks’ 8 9 accusations at two separate depositions of the lead plaintiff. It then opposed class certification on a 10 number of grounds—but not the adequacy of counsel. Judge Morrow noted this in her 41-page tentative 11 order granting the class certification: 12 In August 2010, the Weston Firm’s (“Weston”) former co-counsel, Beck & Lee, sought to have Weston disqualified from representing the putative class, alleging that Weston had engaged in unethical conduct, including the offering of kickbacks to named plaintiffs in other class actions. The court declined to disqualify Weston at that time, because none of the allegedly unethical conduct had taken place in this action, and because it concluded the matter was more properly considered in the context of a motion for class certification. The court granted Smart Balance’s request to modify the scheduling order to allow it to explore the alleged ethical breaches, so that it could present evidence relevant to them in opposition to any future class certification motion. As Smart Balance has not argued that either Yumul or Weston are inadequate due to their involvement in ethical violations in its opposition, the court concludes that Beck & Lee’s allegations do not compel a finding that the adequacy requirement is not satisfied. 13 14 15 16 17 18 19 20 (Fitzgerald Decl. Ex. 3 at 29-30 n.77 (emphasis added).) Accordingly, Judge Morrow tentatively 21 granted plaintiff’s motion for class certification. After the parties settled, the Court granted preliminary, 22 then final approval, affirming the adequacy of counsel each time. (See Yumul v. Smart Balance, Inc., 5 23 No. 10-cv-00927-MMM (C.D. Cal.) (“Yumul”), Dkt. Nos. 139 at 2 ¶ 4 (“The Weston Firm is qualified 24 to serve as Class Counsel.”), 161 at 2 ¶ 7 (“Having considered the factors set forth in Rule 23(g)(1), the 25 court finds that class counsel fairly and adequately represented the class in entering into and 26 implementing the settlement, and thus appoints class counsel as counsel to represent the settlement class 27 28 5 Subsequently re-styled In re Nucoa Real Margarine Litigation. 8 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 members.”).) Judge Morrow was the first, but not the only district judge to reject the contention that Beck’s 2 3 accusations weighed against the Weston Firm’s adequacy as class counsel. Considering the same 4 information that Objectors’ Motion raises, provided by a Defendant opposing class certification, the 5 Honorable George H. Wu held: [W]hile considering Plaintiffs’ previous class certification motion, the Court found that it “would have an obligation to the putative class to fully investigate” allegations launched by former co-counsel Beck & Lee of impropriety on the part of the Weston firm. The Court has now considered the detailed description of the Beck & Lee/Weston Firm dispute provided in Gregory Weston’s declaration,[ 6] and is inclined to find the accusations sufficiently groundless, and would not preclude the appointment of the Weston Firm as class counsel. Other courts have similarly considered such accusations sufficiently baseless so as not to preclude appointing the Weston Firm as class counsel. 6 7 8 9 10 11 Red v. Kraft Foods, Inc., No. 10-cv-1028-GW, Dkt. 212, slip op. at 16-17 (C.D. Cal. Apr. 4, 2012) 12 (emphasis added and citations omitted). 7 (Fitzgerald Decl. Ex. 4.) 13 Even more recently, this District’s Judge Houston, considering the same information provided 14 15 6 Referring to Red v. Kraft Foods, Inc., No. 10-cv-1028-GW (C.D. Cal.), Dkt. No. 158. 16 7 In an analogous situation, Beck & Lee was sanctioned this summer when a court found it could not: 17 18 19 20 escape the conclusion that [certain false allegations contained in an amended complaint] were cut out of whole cloth. And even if BCJJ did not affirmatively fabricate these claims, its failure to ask [certain BCJJ representatives] about their truth before making them evinces a failure to conduct reasonable inquiry into the evidentiary basis of BCJJ’s factual claims. BCJJ, LLC v. Lefevre, 2012 U.S. Dist. LEXIS 91839, at *12 (M.D. Fla. July 3, 2012). The court 21 concluded that: 22 23 24 25 26 [t]he lodging of specious claims without any reasonable evidentiary basis . . . was the result of either of two things: (1) BCJJ’s . . . failure to investigate its claims before making them . . . ; or (2) BCJJ’s fabrication of the factual allegations . . . as part of some cavalier bid to survive [the defendant’s] next motion to dismiss. The Court is unsure of which would be worse, though perhaps carelessness is better than dishonesty. Either way, BCJJ’s actions are inimical to the ends of justice and anathema to those ideals that should guide all parties when resort to the court system becomes necessary. 27 Id. at *13. After granting Rule 11 sanctions, the court then referred the matter to the magistrate to determine “whether these costs and fees should be assessed against BCJJ and/or its attorneys, Beck & 28 Lee, P.A.” Id. at *14. 9 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 by a group of objectors to a class action settlement obtained by Class Counsel here, found the objectors 2 had “present[ed] no credible evidence to support a finding that Class Counsel lack the qualifications to 3 represent the Class in this action.” Gallucci v. Boiron, Inc., 2012 U.S. Dist. LEXIS 157039, at *10 (S.D. 4 Cal. Oct. 31, 2012) (granting settlement final approval). 8 Similarly, in June 2011, the Honorable Richard Seeborg appointed the Weston Firm interim 5 6 class counsel in a contested motion, despite that another firm, competing for appointment, cited the 7 same slew of language that Objectors cite from these 2010 court decisions. Chacanaca v. Quaker Oats 8 Co., 2011 U.S. Dist. LEXIS 65023 (N.D. Cal. June 14, 2011). 9 (ii.) 9 Judge Ware’s Order Denying Beck’s Termination in Unilever Objectors rely, in part, on a September 14, 2010 Order of the Honorable James Ware in 10 11 Unilever, which they mischaracterize. (See Mot. at 3-4, 6-7 & Ex. A.) For example, Objectors contend 12 that “the Court in Red v. Unilever was advised by sworn affidavits filed by co-counsel in the case that” 13 Mr. Weston supposedly engaged in misconduct. In reality, the accusations were levied in a single 14 declaration by Beck, after she was terminated. Objectors also omit that while simply noting the 15 accusations, the court also noted “the Weston Firm denies any misconduct, and alleges a pattern of 16 interference and bad faith conduct on the part of certain attorneys at Beck & Lee. The Weston Firm also 17 submitted declarations from Ms. Higginbotham and Ms. Sutton, denying the alleged misconduct.” (See 18 Mot. Ex. A. at 2.) In any event, as Objectors point out, the Unilever court did not find the accusations to be 19 20 truthful, or the Weston Firm to be inadequate. (Mot. at 4 n.1.) Contrary to what the Objectors suppose, 21 this was not merely because there were other “adequate co-counsel . . . .” (Id.) Rather, Judge Ware 22 granted final approval to the settlement, appointed three Weston Firm clients Class Representatives, and 23 appointed the Weston Firm Class Counsel for the settlement class. (See Unilever Dkt. No. 163.) 24 25 26 8 The objectors’ argument, which cited the same decisions that Objectors here cite, is available at Gallucci v. Boiron, Inc., No. 11-cv-2039-JAH (S.D. Cal.), Dkt. No. 96 at 21-22. 9 The competing counsel’s argument, which cited the same decisions that Objectors here cite, is available at Chacanaca v. Quaker Oats Co., No. 10-cv-502-RS (N.D. Cal.) (subsequently restyled In re 28 Quaker Oats Labeling Litigation), Dkt. No. 87 at 6-7 and Exs. 1-2, 6. 27 10 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 Finally, Objectors cite the Unilever decision to argue there are “serious concerns about the 2 Weston firm’s [sic] ability to hold disputed fees in trust . . . .” (Mot. at 6.). But the concern Judge Ware 3 raised was unique to the procedural posture of that case (see Mot. Ex. A at 5) and the situation between 4 the attorneys there. See generally Unilever Dkt. No. 93 at 19-20 (attorneys had agreed to escrow 5 disputed funds in a Weston Firm account). Compare Yumul, 2010 U.S. Dist. LEXIS 116960, at *5 n.6 ( 6 7 8 9 10 11 Judge Ware determined that “because of the unanimous interest in proceeding with the settlement . . . it would be in the best interest of the class if the Court established a procedure that would permit the settlement to proceed and that would defer the attorney fees division to a later proceeding.” . . . The circumstances in this case dictate a different result. Here, there is no pending settlement. Nor, indeed, has the matter progressed beyond the initial stages of discovery.) (iii.) Judge Patel’s Interim Counsel Decision in Yelp On July 19, 2010, the Weston Firm and Beck & Lee appeared before Judge Patel for a case 12 management conference in what is now styled Levitt v. Yelp, No. 10-cv-1321-EMC (N.D. Cal.) 13 (“Yelp”). After Judge Patel ordered the case consolidated with a second, later-filed action, she ordered 14 the respective plaintiffs’ counsel to meet and confer with defendant’s counsel in the courthouse’s 15 Attorneys Lounge, to determine a schedule for filing a consolidated complaint and beginning discovery. 16 (See Fitzgerald Decl. Ex. 5 (Unilever Dkt. No. 85, Fitzgerald Decl. ¶ 8).) What ensued was described by 17 David Ongaro, plaintiff’s counsel in the later-filed action, as “a scene I have never seen in 19 years of 18 practicing law.” Defense counsel Matthew D. Brown confirmed, “I have not had a conference quite like 19 the one I experienced, in my years of practice here either.” (See id. (excerpts from the Unilever 20 Fitzgerald Declaration, including corresponding pages of the transcript of the Yelp July 19 hearing).) 21 While the contested interim counsel motion was pending before Judge Patel, the dispute 22 between the Weston Firm and Beck & Lee arose, along with Beck & Lee’s termination. Each firm then 23 submitted supplemental papers. As a result, Judge Patel elected to appoint Mr. Ongaro’s firm as interim 24 class counsel, “concerned that the dispute between the firms will preclude both firms from adequately 25 representing the interests of plaintiffs only represented by the other firm.” (Mot. Ex. B at 2.) 26 Nevertheless, Judge Patel stated she “may be willing to revisit the issue of lead counsel if the attorneys 27 are able to demonstrate a working relationship amongst themselves that will foster efficiency.” (Id. at 28 3.) Finally, after an early discovery dispute, the incident in the Attorneys Lounge, and the counsel split, 11 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 Judge Patel ordered that all attorneys in the case—not just the Weston Firm—sign a pledge to abide by 2 the California Attorney Guidelines of Civility and Professionalism. (Id. at 3-4.) (iv.) 3 4 Judge Whelan’s Order to Show Cause As part of its dispute, the Weston Firm filed a declaratory judgment action in the Southern 5 District of California on August 12, 2010, the same day it terminated Beck & Lee on behalf of its 6 clients, seeking a declaration that its joint prosecution agreement with Beck & Lee was void. Following 7 the filing, Beck & Lee engaged in a variety of objectionable behavior, including making repeated 8 attempts to contact the Weston Firm’s clients, serving invalid and harassing subpoenas on the Weston 9 Firm’s former staff, and defaming the Weston Firm in the media. As a result, the Weston Firm sought a 10 TRO in September 2010. 11 Beck & Lee opposed the TRO, arguing that the Weston firm was improperly attempting to 12 invoke the court’s authority by deception to circumvent Judge Ware’s decision denying their 13 termination. The court denied the TRO application and, based on Beck & Lee’s memorandum, ordered 14 the Weston Firm to show cause why Rule 11 sanctions should not issue. The Weston Firm submitted its 15 response, showing that Beck & Lee had failed to include the transcript of the hearing before Judge 16 Ware, but that the firm was acting in accordance with Judge Ware’s comments during the hearing, 17 which acknowledged the Southern District litigation and deferred the issue of the enforceability of the 18 joint prosecution agreement to that court. See Weston Firm, P.C. v. Beck & Lee, P.A., No. 10-cv-169419 W (S.D. Cal.), Dkt. No. 25. Beck & Lee then submitted a second memorandum arguing that the Weston 20 Firm should be sanctioned. See id., Dkt. No. 30. After reading the papers, however, Judge Whelan 21 concluded that “SANCTIONS ARE NOT WARRANTED for violation of Rule 11(b) at this time.” 22 (Fitzgerald Decl. Ex. 6.) 23 24 c. Plaintiffs’ Motion for Class Certification As the preceding facts make clear, Objectors are wrong that their “new” evidence, three 25 publicly-available court decisions from 2010, “has not been subjected to any evidentiary scrutiny or 26 adversarial process.” (Mot. at 2.) This is true even considering only Plaintiffs’ class certification motion 27 in this case. Contrary to Objectors’ assertion, Ferrero’s Wilson Sonsini attorneys presumably chose not 28 to challenge Class Counsel’s adequacy after reviewing the full record and satisfying itself that such 12 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 efforts would be in vein, not because they missed it, as Objectors claim their counsel did in failing to 2 discuss these 2010 decisions in their clients’ June 8, 2012 objection. 3 4 3. Objectors Have Not Demonstrated Grounds for Relief Under Rule 60(b) Objectors assert that “[v]acatur is appropriate for all six reasons permitted under Fed. R. Civ. P. 5 60.” (Mot. at 1.) But while they pay lip service to each prong (id. at 2-3), Objectors only discuss Rule 6 60(b)(2) (see Mot. at 2-7), which permits a court to vacate a judgment where there is “newly discovered 7 evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial 8 under Rule 59(b).” Fed. R. Civ. P. 60(b)(2). Aside from this, they make no efforts to explain with any 9 specificity why they qualify for Rule 60(b) relief. Despite Objectors’ failure to discuss the standards on 10 which they purport to rely, we take each prong of Rule 60(b) in turn. 11 a. Objectors Do Not Assert Any “Mistake, Inadvertence, Surprise, or Excusable Neglect” Justifying Vacatur (Fed. R. Civ. P. 60(b)(1)) 12 13 Without explanation, Objectors state that “to the extent the allegations of misconduct are 14 proved, this would be a basis for vacating the judgment under either of Fed. R. Civ. P. 60(b)(1), (3), (5), 15 or (6).” (Mot. at 3.) 16 “[F]or purposes of Rule 60(b), ‘excusable neglect’ is understood to encompass situations in 17 which the failure to comply with a filing deadline is attributable to negligence.” Pioneer Inv. Servs. Co. 18 v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 394 (1993). The determination of whether neglect is 19 excusable “is at bottom an equitable one, taking account of all relevant circumstances surrounding the 20 party’s omission.” Id. at 395 (discussing Bankr. R. 9006(b) and laying out a four-factor test: “[(a)] 21 danger of prejudice . . . , [(b)] the length of the delay and its potential impact on judicial proceedings, 22 [(c)] the reason for the delay, including whether it was within the reasonable control of the movant, and 23 [(d)] whether the movant acted in good faith”); see also Briones v. Riviera Hotel & Casino, 116 F.3d 24 379, 381 (9th Cir. 1997) (applying the Supreme Court’s Pioneer factors to Fed. R. Civ. P. 60(b)); 25 Bateman v. U.S. Postal Serv., 231 F.3d 1220, 1223-24 (9th Cir. 2000) (applying four Pioneer factors to 26 motion for relief under Rule 60(b)(1)). Rule 60(b)(1) is most often used to seek vacatur of a default 27 judgment, not reconsideration of a court’s decision granting final approval to a class action settlement 28 and overruling an objection to class counsel’s adequacy. See, e.g., Brandt v. Am. Bankers Ins. Co., 653 13 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 F.3d 1108, 1110 (9th Cir. 2011) (Gonzales, J., sitting by designation). Although Objectors provide no explanation of how “to the extent the allegations of misconduct 2 3 are proved” this would constitute a “mistake, inadvertence, surprise, or excusable neglect,” Fed. R. Civ. 4 P. 60(b)(1), we take them to mean that the Court’s two decisions holding that the Weston Firm was 5 adequate class counsel was supposedly the result of the Court’s mistake. In determining the Weston 6 Firm was adequate Class Counsel, however, the Court did not err because the accusations of 7 misconduct are false and do not weigh against the firm’s adequacy, as several other courts have held. 8 See Wastequip, 2012 U.S. Dist. LEXIS 97663, at *4 (denying Rule 60(b) motion where “the Court did 9 not err in granting the [underlying] motion”); see also Technica II, 2012 U.S. Dist. LEXIS 67219, at *510 6 (“A motion for reconsideration should not be granted unless . . . the court committed clear error or the 11 initial decision was manifestly unjust . . . .”). In addition, the false accusations concern supposed occurrences in 2010, in an unrelated case, 12 13 and thus do not inform the question of adequacy here. C.f. Yumul, 2010 U.S. Dist. LEXIS 116960, at 14 *12 (denying motion to disqualify Weston Firm on basis of Beck & Lee’s accusations in part because 15 they “do not specifically concern this case”). (Compare Mot. at 4 n.1 (noting Judge Ware held that the 16 Weston Firm’s dispute with Beck & Lee did not “destroy adequacy” in Unilever because “the 17 allegations related to a different case . . . .”).) 10 To the extent that Objectors assert their counsel’s failure to address these 2010 court decisions 18 19 in their objection was a result of “mistake, inadvertence, surprise, or excusable neglect,” Fed. R. Civ. P. 20 60(b)(1), this is wrong: “neither ignorance nor carelessness on the part of the litigant or his attorney 21 provide grounds for relief under Rule 60(b)(1).” Allmerica Fin. Life Ins. & Annuity Co. v. Llewellyn, 22 10 23 24 25 26 27 28 Objectors’ motion is interspersed with contentions that the issues raised in the three 2010 decisions they cite are emblematic of the Weston Firm’s practices. (See, e.g., Mot. at 6 (“If the settlement is reversed, it appears—based on counsel’s prior conduct and modus operendi—that they will force years of litigation regarding any effort to collect the fee.”), 7 (“Based on this conduct it is reasonable to infer something similar occurred in this case.”).) The reality is that each of the decisions relate to fallout from the firm’s termination of Beck & Lee, and that the Weston Firm has otherwise worked cooperatively and successfully with co-counsel on behalf of their clients in many other cases, including firms like Lieff Cabrasser Heimann & Bernstein, LLP; Schubert Jonkheer & Kole LLP; Casey, Gerry, Schenk, Francavilla, Blatt & Penfield LLP; Hiden, Rott & Oertle, LLP; Milstein Adleman, LLP; and of course, co-counsel here, the Law Offices of Ronald A. Marron, APLC. 14 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 139 F.3d 664, 666 (9th Cir. 1997) (quoting Engleson, 972 F.2d at 1043 (citation and internal quotations 2 omitted)); see also Casey v. Albertson’s Inc., 362 F.3d 1254, 1260 (9th Cir. 2004) (“As a general rule, 3 parties are bound by the actions of their lawyers, and alleged attorney malpractice does not usually 4 provide a basis to set aside a judgment pursuant to Rule 60(b)(1).”). b. 5 R. Civ. P. 60(b)(2)) 6 7 Objectors Do Not Have “Newly Discovered Evidence” Justifying Vacatur (Fed. “A rule 60(b)(2) motion can be made where newly discovered evidence would probably produce 8 a different result.” Waters v. Hollywood Tow Serv., 2011 U.S. Dist. LEXIS 132535, at *3 (C.D. Cal. 9 Nov. 15, 2011) (emphasis added) (citing Feature Realty, Inc. v. City of Spokane, 331 F.3d 1082, 1093 10 (9th Cir. 2003)). Such evidence “must be material and cannot be merely cumulative or impeaching.” Id. 11 (citation omitted). 12 Not only is Objectors’ “newly discovered evidence” comprised of 2010 court decisions that 13 have been publicly available for more than two years, but Objectors admit they were aware of these 14 cases at the time they filed their objection. (Mot. at 3 (“[T]hese very cases . . . were cited by the Weston 15 firm [sic] in support of its motion to be appointed class counsel.”).) “Evidence is not newly discovered 16 if it was ‘in the possession of the party before judgment was rendered.’” Waters, 2011 U.S. Dist. LEXIS 17 132535, at *4 (quoting Costal Trasnfer Co. v. Toyota Motor Sales, U.S.A., Inc., 833 F.2d 208, 212 (9th 18 Cir. 1987)). 19 In addition, Objectors’ “newly discovered evidence” is merely cumulative of the “evidence” 20 they offered in their objection that the Weston Firm was supposedly inadequate. Because it is false or 21 irrelevant, it is also immaterial. And Objectors’ “newly discovered evidence” would not “probably 22 produce a different result” because the same information has not prevented several other courts from 23 appointing the Weston Firm as lead and class counsel on many subsequent occasions, after each 24 carefully examined the evidence. 25 c. Objectors Have Not Identified Any “Fraud . . . Misrepresentation, or Misconduct 26 by an Opposing Party” Justifying Vacatur (Fed. R. Civ. P. 60(b)(3)) 27 To prevail under Rule 60(b)(3), “the moving party must prove by clear and convincing evidence 28 that the verdict was obtained through fraud, misrepresentation, or other misconduct and the conduct 15 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 complained of prevented the losing party from fully and fairly presenting the defense.” Casey, 362 F.3d 2 at 1260 (quoting De Saracho v. Custom Food Machinery, Inc., 206 F.3d 874, 880 (9th Cir. 2000)). The 3 fraud must “not be discover-able by due diligence before or during the proceedings.” Id. (quoting Pac. 4 & Arctic Ry. And Navigation Co. v. United Transp. Union, 952 F.2d 1144, 1148 (9th Cir. 1991)). 5 Further, the “circuit’s precedent contemplates a high[] level of culpability”: the fraud must “defile the 6 court” and “prevent[] the judicial machinery from performing . . . its impartial task of adjudging cases 7 that are presented for adjudication.” United States v. Chapman, 642 F.3d 1236, 1241 (9th Cir. 2011) 8 (internal quotations and alteration omitted) (quoting Latshaw v. Trainer Wortham & Co., 452 F.3d 9 1097, 1104 (9th Cir. 2006) (quoting Alexander v. Robertson, 882 F.2d 421, 424 (9th Cir. 1988))). 10 Misconduct that does not “amount to a ‘clear attempt to defile the court,’ or cause ‘a charade fraught 11 with concealed’ motives” does not “ris[e] to the level of a fraud on the court” under Rule 60(b)(3). Id. 12 (quoting Dixon v. Comm’r, 316 F.3d 1041, 1047 (9th Cir. 2003)). 13 Objectors have not demonstrated by “clear and convincing evidence,” or even identified or 14 discussed any “fraud” that led them to “lose” their argument that the Settlement was objectionable and 15 that Judgment should not be entered, much less a fraud meeting the high standards of Rule 60(b)(3). 16 The closest they come is arguing that “[s]ubsequent developments in the[] cases” from 2010 that their 17 counsel just discovered “were cited misleadingly to the court . . . .” (Mot. at 3.) That premise is false, 18 since none of those cases weigh against the Weston Firm’s adequacy as Class Counsel. 19 To the extent that Objectors assert the discredited accusations of Beck constitute “misconduct” 20 within the meaning of Rule 60(b)(3), this is also wrong. Even if the Weston Firm had engaged in the 21 accused misconduct in 2010, it would have been unrelated to “obtain[ing]” the verdict (or Judgment) 22 here, and did not otherwise prevent Objectors from “fully and fairly” presenting their objections to the 23 Settlement. Nor have Objectors demonstrated that the “evidence” they cite—“the[] very cases that were 24 cited by the Weston firm [sic] in support of its motion to be appointed class counsel” (Mot. at 3)—was 25 “not discover-able by due diligence.” To the contrary, Objectors admit that Class Counsel expressly 26 identified these cases in prior case pleadings that they reviewed, and thus they did not even need to 27 “discover” them. 28 Objectors’ motion is, rather, “a clear attempt to relitigate the issue” of Class Counsel’s 16 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 adequacy, raised in their objection, but “the merits of a case are not before the court on a Rule 60(b) 2 motion . . . .” Casey, 362 F.3d at 1261. d. 3 Objectors Have Not Shown the Judgment is Void (Fed. R. Civ. P. 60(b)(4)) “A final judgment is ‘void’ for purposes of Rule 60(b)(4) only if the court that considered it 4 5 lacked jurisdiction, either as to the subject matter of the dispute or over the parties to be bound, or acted 6 in a manner inconsistent with due process of law.” United States v. Berke, 170 F.3d 882, 883 (9th Cir. 7 1999) (internal citations omitted). “There is no question of discretion on the part of the court when a 8 motion is under Rule 60(b)(4).” Thomas P. Gonzalez Corp. v. Consejo Nacional De Produccion De 9 Costa Rica, 614 F.2d 1247, 1256 (9th Cir. 1980). For their argument that the “judgment is void,” Fed. R. Civ. P. 60(b)(4), Objectors cite 10 11 Crawford v. Honig, 1992 U.S. Dist. LEXIS 13677 (N.D. Cal. Aug. 31, 1992). (See Mot. at 1-2.) That 12 case is inapposite, involving a modification to an injunction affecting individuals who were not 13 represented in the underlying action, entered with a “lack of evidence and absence of any discussion . . . 14 .” See Crawford, 1992 U.S. Dist. LEXIS 13677, at *28. The court held this procedural failure violated 15 due process. By contrast, had “the modified injunction affected only those whose interests had been 16 fully examined at the trial, or had evidence been presented to support the new injunction, the 17 modification might have withstood the instant challenge.” Id.; see also Crawford v. Honig, 37 F.3d 485, 18 488 (9th Cir. 1994) (upholding lower court’s decision granting Rule 60(b)(4) motion because “the 1986 19 modification [forbidding all I.Q. testing of African-American children referred for special education 20 assessment] was not supported by the factual findings in the 1979 proceedings” where “the focus of the 21 district court’s inquiry [in 1979] was the disproportionate enrollment of African-American children in 22 dead-end E.M.R. classes, not the use of I.Q. tests generally”). Here, in contrast to the cursory proceeding in Crawford, Class Counsel’s adequacy was vetted 23 24 on three separate occasions: when they moved for appointment as interim class counsel; 11 when they 25 26 11 See Hohenberg v. Ferrero U.S.A., Inc., 2011 U.S. Dist. LEXIS 38471, at *6 (S.D. Cal. Mar. 22, 2011) (Applying factors set forth in Rule 23(g) and concluding that “[e]ach proposed class counsel 27 appears to be well qualified to represent the interests of the purported class and to manage this 28 litigation.”). 17 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 filed Plaintiffs’ contested motion for class certification; 12 and when Objectors presented their arguments 2 that Class Counsel was inadequate. 13 And unlike in Crawford, there are no non-represented persons 3 affected by the Court’s determination that Class Counsel is adequate. Rather, only class members who, 4 like Objectors, had both the opportunity to opt-out and to object, were affected. See In re Diet Drugs 5 Prods. Liab. Litig., 431 F.3d 141, 146 (3d Cir. 2005) (“Class members are not . . . entitled to unlimited 6 attacks on the class settlement. Once a court has decided that the due process protections did occur for a 7 particular class member or group of class members, the issue may not be relitigated.”); accord. Skilstaf, 8 Inc. v. CVS Caremark Corp., 669 F.3d 1005 (9th Cir. 2012) (affirming lower court’s denial of Rule 9 60(b)(4) motion by party affected by class action settlement provision comprising covenant not to sue 10 and claiming inadequate notice violated of due process). Although Objectors have not shown that the Weston Firm is, or ever was, inadequate Class 11 12 Counsel, even if they had, this prong would not support vacatur, since the Court also appointed the Law 13 Offices of Ronald A. Marron as Class Counsel, and Objectors do not assert that the Marron firm 14 inadequately represented their interests. e. 15 Objectors Have Not Shown that Applying the Judgment Prospectively is No Longer Equitable (Fed. R. Civ. P. 60(b)(5)) 16 Rule 60(b)(5) permits a party to be relieved of a final judgment when it “has been satisfied, 17 18 released or discharged,” is “based on an earlier judgment that has been reversed or vacated,” or where 19 “applying it prospectively is no longer equitable.” Fed. R. Civ. P. 60(b)(5). Objectors invoke only this 20 third portion of the rule. (See Mot. at 2 (mistakenly referring to subsection 4).) A party bringing a motion under Rule 60(b)(5) must establish that a significant change in 21 22 circumstances warrants revision of the judgment. Bellevue Manor Assocs. v. United States, 165 F.3d 23 1249, 1255 (9th Cir. 1999). The rule “codifies the long-established principle of equity practice that a 24 25 26 12 See In re Ferrero Litig., 278 F.R.D. 552, 559 (S.D. Cal. 2011) (“The Court concludes that Plaintiffs and their counsel would adequately represent the putative class.”). 13 See In re Ferrero Litig., 2012 U.S. Dist. LEXIS 94900, at *8, *11-12 (S.D. Cal. July 9, 2012) (overruling objections to class counsel’s adequacy and “reaffirm[ing] its prior order certifying the Class 28 and appointing Class Counsel and Class Representative[s].”) 27 18 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 court may, in its discretion, take cognizance of changed circumstances and relieve a party from a 2 continuing decree,” Gilmore v. California, 220 F.3d 987, 1007 (9th Cir. 2000). Accordingly, the rule is 3 usually limited to injunctions, as where changed circumstances makes an enjoined party’s compliance 4 “substantially more onerous, unworkable because of unforeseen obstacles, detrimental to the public 5 interest, or legally impermissible.” SEC v. Coldicutt, 258 F.3d 939, 942 (9th Cir. 2001). It “applies only 6 to those judgments that have prospective application.” Harvest v. Castro, 531 F.3d 737, 748 (9th Cir. 7 2008). 8 Objectors have not explained how Rule 60(b)(5) applies in this case, except to generally assert 9 that Beck’s accusations of misconduct “[if] proved, . . . would be a basis for vacating the judgment 10 under” Rule 60(b)(5). (Mot. at 3.) This is an inapt argument, as Rule 60(b)(5) requires Objectors to 11 demonstrate how their compliance with the Judgment is inequitable. And while those 2010 accusations 12 have been discredited, Objectors also fail to show that they constitute a “change of circumstances” post13 dating the Court’s July 9, 2012 Judgment. 14 15 16 f. Objectors Have Not Shown Any Other Reason That Justifies Vacatur (Fed. R. Civ. P. 60(b)(6)) Rule 60(b)(6) “is to be ‘used sparingly as an equitable remedy to prevent manifest injustice and 17 is to be utilized only where extraordinary circumstances prevented a party from taking timely action to 18 prevent or correct an erroneous judgment.’” Harvest 531 F.3d at 749 (quoting Latshaw 452 F.3d at 19 1103 (quoting United States v. Washington, 394 F.3d 1152, 1157 (9th Cir. 2005))); see also Dish 20 Network, 2012 U.S. Dist. LEXIS 146838, at *4 (“That last prong is ‘used sparingly as an equitable 21 remedy to prevent manifest injustice and is to be utilized only where extraordinary circumstances 22 prevented a party from taking timely action to prevent or correct an erroneous judgment.’” (quoting 23 Delay v. Gordon, 475 F.3d 1039, 1044 (9th Cir. 2007)). 24 A Rule 60(b)(6) argument may “not [be] premised on one of the grounds for relief enumerated 25 in clauses (b)(1) through (b)(5).” Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847, 863 26 (1988); Lafarge Conseils et Etudes S.A. v. Kaiser Cement & Gypsum Corp., 791 F.2d 1334, 1338 (9th 27 Cir. 1986) (noting that Rule 60(b)(6) is residual and exclusive of the preceding subsections); Kelly v. 28 Provident Life & Accident Ins. Co., 734 F. Supp. 2d 1085, 1105 (S.D. Cal. 2010) (“Relief under Rule 19 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 60(b)(6) is only available if none of the other categories apply and may only be granted in extraordinary 2 circumstances.” (citations omitted)); Waters, 2011 U.S. Dist. LEXIS 132535, at *4 (“Rule 60(b)(6) does 3 not apply where other sections apply.” (citation omitted)). 4 “A party moving for relief under Rule 60(b)(6) ‘must demonstrate both injury and circumstances 5 beyond his control that prevented him from proceeding with the action in a proper fashion.’” Harvest, 6 531 F.3d at 749 (quoting Latshaw, 452 F.3d at 1103). See also Llewellyn, 139 F.3d at 666 (relief under 7 Rule 60(b)(6) “requires a showing of ‘extraordinary circumstances.’” (quoting Ackerman v. United 8 States, 340 U.S. 193, 199-201 (1950))); Burgess v. Sandaval, 2012 U.S. Dist. LEXIS 149248, at *2 (D. 9 Nev. Oct. 16, 2012) (“Relief under Rule 60(b)(6) requires a finding of extraordinary circumstances.” 10 (citing Backlund v. Barnhart, 778 F.2d 1386, 1388 (9th Cir. 1985))). 11 Objectors have demonstrated neither injury nor “circumstances beyond [their] control.” They 12 have not demonstrated injury, because none of the 2010 decisions they cite would have led the Court to 13 find the Weston Firm inadequate, nor bolstered their objection to the firm’s adequacy. And their 14 counsel’s failure to carefully review the Weston Firm’s litigation history while asserting an objection to 15 their adequacy was not “beyond their control” because Objectors could have hired competent counsel, 16 or their attorneys could have located and discussed these 2010 court decisions by exercising a basic 17 level of professional skill. See Reynolds v. Lomas, 2012 U.S. Dist. LEXIS 143508, *4-5 (N.D. Cal. 18 Sept. 28, 2012) (attorney mistake is not an “extraordinary circumstance” warranting relief under Rule 19 60(b)(6)). 20 II. THE COURT SHOULD DENY OBJECTORS’ REQUEST TO MODIFY THE 21 JUDGMENT OR REQUIRE THAT ATTORNEYS’ FEES BE HELD IN TRUST 22 The Court should also deny Objectors’ request that Class Counsel “file proof that the fees are 23 being kept in trust pending appeal, or that the judgment be modified, the quick-pay provisions stricken, 24 and the funds be ordered held by the Clerk of the Court, or a special master . . . .” (Mot. at 7.) 25 A. There is No Legal Requirement that Fees Awarded Be Held in Trust 26 Objectors contend that attorneys’ fees must be held in trust because their appeal constitutes a fee 27 “dispute” governed by Rule 1.15 of the ABA Model Rules of Professional Conduct, and Rules 3-700 28 and 4-100 of the Rules of Professional Conduct of the State Bar of California. (Mot. at 7.) Without 20 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 discussing any of these rules specifically, they assert that all three rules “impose [the] obligation[] on 2 attorneys when a fee is disputed . . . to maintain those fees in trust until the fee dispute is resolved.” 3 (Id.) Their conclusory assertion is wrong. 4 Contrary to Objectors’ contention, “the ABA Model Rules . . . do not establish the ethical 5 standards in California, as they have not been adopted in California and have no legal force of their 6 own.” Winterrowd v. Am. Gen. Annuity Ins. Co., 556 F.3d 815, 833 n.10 (9th Cir. 2009) (quoting State 7 Compensation Ins. Fund v. WPS, Inc., 70 Cal. App. 4th 644, 655-56 (1999)). And while the ethical 8 duties of California attorneys are governed by the Rules of Professional Conduct, neither of the rules 9 Objectors cite (3-700 and 4-100) require fees awarded to Class Counsel upon the settlement of a class 10 action to be held in trust because an unsuccessful objector takes an appeal. 11 Rule 3-700 governs “Termination of Employment,” and its only requirement respecting fees is 12 that, when an attorney is terminated by his client, he must “[p]romptly refund any part of a fee paid in 13 advance that has not been earned.” Cal. R. Prof. Conduct 3-700(D)(2). This rule has no application here 14 because Class Counsel have neither been terminated, nor are in possession of any “unearned” fees. 15 (Accord Dkt. No. 127 at 6 ¶ 11 (holding Plaintiffs are prevailing parties entitling their counsel to “a 16 reasonable fee and expense award for their work,” and awarding fees and costs).) 17 Rule 4-100 governs an attorney’s duty to “Preserve [the] Identify of Funds and Property of a 18 Client.” One provision of the Rule states that: 19 20 21 22 23 24 All funds received or held for the benefit of clients by a member or law firm . . . shall be deposited in one or more identifiable bank accounts labeled “Trust Account,” “Client’s Funds Account” or words of similar import . . . . No funds belonging to the member or the law firm shall be deposited therein or otherwise commingled therewith except as follows: . . . In the case of funds belonging in part to a client and in part presently or potentially to the member or the law firm, the portion belonging to the member or law firm must be withdrawn at the earliest reasonable time after the member’s interest in that portion becomes fixed. However, when the right of the member or law firm to receive a portion of trust funds is disputed by the client, the disputed portion shall not be withdrawn until the dispute is finally resolved. 25 26 Cal. R. Prof. Conduct 4-100(A)(2). Although Objectors argue without authority that their appeal is a 27 “dispute” governed by this Rule, it does not apply because: (1) Objectors are not Class Counsels’ 28 21 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 “clients” within the meaning of the Rule; 14 (2) Class Counsel has not received any funds held for the 2 benefit of their clients, or absent class members, but instead only attorneys’ fees and costs awarded by 3 the Court; (3) because this is a class action settlement in which a common fund was established for the 4 benefit of absent class member-claimants, the common fund has always been held in trust by the 5 settlement administrator, as authorized by the Court, not in a Client Trust Fund maintained by Class 6 Counsel; and (4) even if absent class members were Class Counsels’ clients, the Court has jurisdiction 7 over the common fund established on their behalf, and has authorized the distribution of fees and 8 administrative costs from the fund in accordance with the Settlement Agreement. Consistent with Objectors’ lack of authority, Class Counsel’s search has not located a single 9 10 California state or federal case applying either Rule 3-700(D) or 4-100(A) (or Model Rule 1.15) in an 11 analogous situation involving a class action settlement or an objector’s appeal thereto, nor any case 12 otherwise requiring that fees awarded pursuant to a class action settlement’s final approval be held in 13 trust—for any reason—pending an objector’s appeal. B. 14 Objectors Have no Factual Basis or Standing to Request “Proof” That Fees are Being Held in Trust 15 Objectors contend that the settlement agreement’s “quick pay” provision “is of significant 16 17 concern” such that the Court should order Class Counsel to “file proof that the fees are being held in 18 trust pending the appeal . . . .” (Mot. at 7.) But their argument relies entirely on Judge Ware’s holding in 19 Unilever and the circumstances that initially concerned Judge Ware, a heated dispute between former 20 co-counsel prior to any fee award, are not present here. And contrary to Objectors’ contention, that 21 dispute was resolved without additional “litigation” (id.). 22 23 24 25 26 27 28 14 See In re Cmty. Bank of N. Va. & Guar. Nat’l Bank of Tallahassee Second Mortg. Loan Litig., 418 F.3d 277, 313 (3d Cir. 2005) (“[C]lass counsel do not possess a traditional attorney-client relationship with absent class members. . . . ‘While lead counsel owes a generalized duty to unnamed class members, the existence of such a fiduciary duty does not create an inviolate attorney-client relationship . . . .’” (citations omitted)), vacated on other grounds, 622 F.3d 275 (3d Cir. 2010); accord In re Nig. Charter Flights Litig., 2011 U.S. Dist. LEXIS 155180, at *14 (E.D.N.Y. Aug. 25, 2011) (noting that in common fund settlements, Class Counsel “recovers a common fund for the benefit of persons other than himself or his client” (quotation omitted)(emphasis added)); Singletery v. Equifax Info. Servs., LLC, 2011 U.S. Dist. LEXIS 156215, at *69-70 (N.D. Ala. Sept. 21, 2011) (“Class representatives serve the important fiduciary role of exercising the independent judgment and decision-making authority of the ‘client’ in the attorney-client relationship . . . .”). 22 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 In addition, “Federal courts . . . routinely approve settlements that provide for payment of 2 attorneys’ fees prior to final disposition in complex class actions.” In re TFT-LCD (Flat Panel) 3 Antitrust Litig., 2011 U.S. Dist. LEXIS 154288, at *1 (N.D. Cal. Dec. 27, 2011) (collecting cases). 4 Objectors “speculative assertion” that the quick pay provision here is “inherently risky because counsel 5 may be unable to repay the fees if they are reversed or reduced on appeal. . . . has no basis in fact” 6 where “[t]he repayment requirements in the . . . settlement[] . . . make all plaintiffs’ counsel firms and 7 their equity owners jointly and severally liable for any repayment, and answerable to this Court,” which 8 is “more than adequate to protect the Class and Defendants.” See id. at *1-4 (rejecting objector’s 9 request that class counsel be required to post a letter of credit or other security). (Compare Settlement 10 Agreement, Dkt. No. 107-1 at 27-28 ¶¶ 52-53 (requiring personal guarantees that jointly and severally 11 obligate the principals of the Weston Firm and the Law Offices of Ronald A. Marron, APLC, to repay 12 any reduced or overturned fees).) 13 Moreover, aside from a small amount of the fee that was taken against the common fund 14 ($85,920), Ferrero paid the fee award directly, and thus would be the only party with an interest in 15 recovering the vast majority of any fees reduced or overturned on appeal. Objectors lack standing to 16 assert any such interest by Ferrero because they would not be injured if Class Counsel defied an Order 17 of the Ninth Circuit Court of Appeals or this Court and refused to remit to Ferrero any amounts reduced 18 or reversed on appeal. But this is, of course, not a legitimate concern. Objectors have made “no showing 19 . . . that there has ever been a case where counsel, including counsel herein, have failed to repay fees 20 under such provisions. . . .” TFT, 2011 U.S. Dist. LEXIS 154288, at *3. 21 C. Objectors’ Request that the Court “Modify” the Judgment is Untimely and Improper 22 Although Objectors fail to cite the basis for their request, to the extent they seek relief that 23 would “modif[y]” the judgment (Mot. at 7), it is properly brought under Fed. R. Civ. P. 59(e). 24 “Amending a judgment after its entry [pursuant to Rule 59(e)] is ‘an extraordinary remedy which 25 should be used sparingly.’” U.S. ex rel. Ramona Equip. Rentals, Inc. v. Carolina Cas. Ins. Co., 2011 26 U.S. Dist. LEXIS 149967, at *3 (S.D. Cal. Dec. 30, 2011) (Huff, J.) (citing McDowell v. Calderon, 197 27 F.3d 1253, 1255 n.1 (9th Cir. 1999) (en banc) (per curiam)). “[T]he district court enjoys considerable 28 discretion in granting or denying the motion” and such “motions may be granted for four reasons: ‘(1) if 23 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 such motion is necessary to correct manifest errors of law or fact upon which the judgment rests; (2) if 2 such motion is necessary to present newly discovered or previously unavailable evidence; (3) if such 3 motion is necessary to prevent manifest injustice; or (4) if the amendment is justified by an intervening 4 change in controlling law.’” Id. (quoting McDowell, 197 F.3d at 1255 n.1 and Allstate Ins. Co. v. 5 Herron, 634 F.3d 1101, 1111 (9th Cir. 2001)). 6 7 1. Objectors’ Motion to Alter or Amend the Judgment is Untimely Rule 59(e) provides that “[a] motion to alter or amend a judgment must be filed no later than 28 8 days after entry of the judgment.” Objectors’ November 5, 2012 Motion was filed 119 days after the 9 July 9 Judgment. It is therefore untimely. 10 11 2. The Court Lacks Jurisdiction to Grant the Relief Objectors Request Even if Objectors’ motion to modify the judgment were timely and proper, it seeks relief the 12 Court cannot provide. The attorney fee provision over which Objectors complain is a material term of 13 the parties’ settlement. District courts lack authority to strike individual components of a class action 14 settlement for which final approval is sought. Rather, “[i]t is the settlement taken as a whole, rather than 15 the individual component parts, that must be examined for overall fairness,” and courts “cannot delete, 16 modify or substitute certain provisions. The settlement must stand or fall in its entirety.” Dennis v. 17 Kellogg Co., --- F.3d ---, 2012 U.S. App. LEXIS 18576, at *23 (9th Cir. Sept. 4, 2012) (quoting Hanlon 18 v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998) (internal quotation marks omitted)); see also 19 Jeff D. v. Andrus, 899 F.2d 753, 758 (9th Cir. 1989) (“[C]ourts are not permitted to modify settlement 20 terms or in any manner to rewrite agreements reached by parties.”). 21 22 CONCLUSION The Court should deny Objectors’ Motion. 23 24 25 26 27 28 24 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE 1 DATED: November 16, 2012 Respectfully Submitted, 2 /s/ Jack Fitzgerald Jack Fitzgerald 3 4 5 6 7 8 9 10 11 12 13 THE WESTON FIRM GREGORY S. WESTON JACK FITZGERALD MELANIE PERSINGER COURTLAND CREEKMORE 1405 Morena Blvd., Suite 201 San Diego, CA 92109 Telephone: (619) 798-2006 Facsimile: (480) 247-4553 LAW OFFICES OF RONALD A. MARRON, APLC RONALD A. MARRON B. SKYE RESENDES 3636 4th Street, Suite 202 San Diego, CA 92103 Telephone: (619) 696-9006 Facsimile: (619) 564-6665 14 Class Counsel 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC MEMORANDUM IN OPPOSITION TO OBJECTORS’ MOTION TO VACATE