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Late last month, appeal court justices in San Francisco did something unusual: They mailed out a letter asking lawyers in a massive vitamin price-fixing class action to explain a few things. Why, the First District Court of Appeal wanted to know, are so many law firms involved? How did the number of coordinated cases grow by 12 in one six-month period? How many out-of-state law firms are involved? Which of the defendants previously entered guilty or no contest pleas to criminal charges? Here were justices seeking information they obviously felt was lacking from the record — something Oakland appellate specialist Jon Eisenberg, a research attorney at the First District for 14 years, says might occur once in 100 cases. But this panel’s request went further than most. “What makes this letter unusual is that it’s not directed toward a legal issue, but the state of the legal record,” says Eisenberg, a partner with Encino’s Horvitz & Levy. “They’re not asking what the law is or what it ought to be. They’re asking what the facts are and what the procedure is.” What that means for the plaintiffs’ fee request remains to be seen, with some answers likely during oral arguments next month. But Eisenberg says the depth and nature of the questions could mean the court has big concerns, and wants to proceed on a clear record. “They are bending over backwards in a rather unusual manner,” he says. At issue in Norris v. Philion, A098354, isn’t the $80 million settlement itself — the court OK’d that in early April — but rather the additional $16 million in legal fees and $500,000 in costs that are to be divvied among at least 50 class action law firms nationwide. Berkeley solo practitioner Lawrence Schonbrun, who has built a practice around challenging class action outcomes, filed on behalf of an objector, Sandra Norris, claiming that too many lawyers are seeking too much money while the original complainants are getting nothing, “not even coupons.” The money allocated for consumers will, instead, go toward charitable and nonprofit organizations. Though the settlement has been approved, Schonbrun claims the lawyers’ fees should be denied. He argues that San Francisco Superior Court Judge John Munter improperly approved the fees and related costs without conducting a thorough analysis. “The main beneficiaries are the lawyers,” Schonbrun says. “Hopefully, the system wasn’t set up for lawyers to enrich themselves with little benefit to the people they are representing.” Naturally, Schonbrun’s opponents at Lieff Cabraser Heimann & Bernstein and Saveri & Saveri, disagree, saying the record shows that Munter reviewed extensive evidence, ranging from the class counsel’s hourly rates and experience to detailed timesheets. There is no evidence, they argue, that Munter conducted a lax analysis. In addition, they say Schonbrun’s client points to nothing that shows the hours spent on the case were unreasonable. “She simply makes blanket assertions that too many law firms spent too many hours on the case,” Saveri of counsel Geoffrey Rushing and Lieff Cabraser partner Steven Tindall wrote in court papers. The case stems from a government investigation accusing several global corporations of fixing the prices, and allocating markets for, certain bulk vitamins — tablets, breakfast cereal and weight-loss powders — and agricultural products derived from animals that were fed vitamins. Five entered guilty or no contest pleas, while a sixth cooperated with the Justice Department without doing either. In the aftermath, class actions were filed in federal and state courts nationwide. In settling the California case, the vitamin manufacturers agreed to pay $42 million to commercial complainants — companies that bought the products for resale — and $38 million to the consumer class, earmarked for charitable or nonprofit groups that promote health and nutrition. Munter — and First District Justices Paul Haerle, J. Anthony Kline and James Lambden — reasoned that the number of potential claimants in the consumer class, an estimated 30 million people, would make individual recoveries quite small and, therefore, worthless to the average person. While not happy with that result, Schonbrun has concentrated on the $16 million in legal fees — $7.6 million for the consumer class and $8.4 million for the commercial class. He argues that 52-plus law firms, many of them from out of state, should not have been allowed to pursue a class action based on violations of California law. “There’s no reason why much fewer law firms could not have handled this case,” Schonbrun says. “This is a money machine. It’s feeding at the trough. It gets to the point where it’s greed.” Judge Munter, he insists, accepted everything class counsel claimed at face value. “The trial court,” Schonbrun wrote in court documents, “failed to give any consideration to the issue of duplication of effort and efficiency, in spite of the objections raised by objector � and in spite of the well-known excesses of lawyers in class actions.” Class counsel chose not to talk about the case, but argued in court papers that Schonbrun raises a non-issue. The trial court judge’s explanations of his ruling and fee order, they said, “go well beyond the ‘minimal’ requirements.” In addition, they dispute Schonbrun’s specific arguments that some attorneys wildly overcharged. Lieff Cabraser partner William Bernstein’s $450-$500 an hour rate and Saveri partner Guido Saveri’s $475-$525 hourly rate, they said, are far below the upper range both men could charge for their decades of experience. A two-point multiplier applied by the courts for fees also is defensible, the class counsel argue, because the case was taken on a contingency basis. “Class counsel placed at risk their firms’ resources to prosecute this action for over two and a half years, with no return or guarantee of success,” Saveri’s Rushing and Lieff Cabraser’s Tindall wrote. “Although some defendants have pleaded guilty to fixing the prices for some of the vitamins at issue here, settling defendants have at no time conceded liability and have always made it clear from the outset that they would oppose class certification vigorously.” While some state courts have taken lawyers to task for high fees in recent years, Schonbrun could have a hard time convincing the First District that $16 million in fees is out of line for a case that reaps an $80 million settlement. Then again, there are those questions the court sent out last month, wanting answers about the number of law firms involved and about who did what. Which side will that help? Normally, says Eisenberg, an appellate court seeking more information tries to give appellants every benefit of the doubt in making their case, even if they’re ultimately going to lose. In this case, however, the court solicited additional facts from the respondents — the class counsel. “The court’s giving them every opportunity to fill out the record.” That, he says, is “unusual.” In the end, however, only the justices know for sure.

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