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Ernest Thayer realized he probably had problems Wednesday when three San Francisco appellate justices hearing a fee dispute in a huge class action told him they wanted no arguments about alleged criminal conduct by the opposing, big-name law firms. The San Francisco solo practitioner — who had raised criminal allegations in his court papers — knew he was in trouble for sure, however, when the justices asked his opponents not one question, after having grilled him for 20 minutes or more. “It was not a good sign,” Thayer said. “I was fairly flabbergasted that the court took no interest in uncontroverted evidence of perjury, unlicensed practice of the law and fraud on the court.” Thayer had accused five firms, including San Francisco’s Lieff Cabraser Heimann & Bernstein and The Sturdevant Law Firm, of charging exorbitant fees in a class action accusing Providian Financial Corp., a San Francisco-based credit card provider, of promoting products that increased fees for unwitting consumers. The consolidated cases were eventually settled for $105 million. Stuart Pollak, a First District Court of Appeal justice who was then on the San Francisco Superior Court, awarded $12.8 million in attorneys fees. About $9 million of it went to Lieff Cabraser and the other four co-lead counsel — Sturdevant, San Francisco’s Green & Jigarjian, New York’s Kaplan Fox & Kilsheimer and Philadelphia’s Fine, Kaplan & Black. In court papers, Thayer argued that none of the firms deserved attorneys fees, alleging that besides there being no need for five co-lead plaintiffs firms, many of the out-of-state lawyers didn’t have licenses to practice law in California, and some in-state as well as out-of-state attorneys had perjured themselves by lying to judges about their representation status. On Wednesday, though, First District Justice Lawrence Stevens told Thayer that he and Justices Mark Simons and Linda Gemello had no interest in those allegations. Focus instead, he advised Thayer, on why he felt class members were denied due process through a supposed lack of notice about the amount of fees being requested. “It appears, at least on the surface,” Stevens said, “that notice was given.” Clearly surprised, Thayer adjusted quickly and told Stevens that the notice provided no specific numbers, only that lawyers would be seeking fees up to 25 percent of the $105 million settlement. “The notice needs to specify what amount would be sought,” he said, “and it doesn’t do that.” But Justice Simons noted that Kelly Moreau, Thayer’s own client, filed an objection to the notice. “How can you complain that notice was inadequate when it was adequate for your client?” he asked. “How were your client’s due process rights violated?” Thayer — who was awarded about $100,000 in fees for his work on the cases — said Moreau had specific knowledge that notice was inadequate and had the duty to object on behalf of the whole class. “The vast majority,” he argued, “didn’t know what Kelly Moreau knew.” When her turn at the podium came, Lieff Cabraser partner Elizabeth Cabraser went through her entire argument without facing a single question. Since the settlement in the Providian cases, she said, state rules on notice have changed to provide clearer language, but at the time, class members got all the notice and information “they were entitled to” under federal guidelines used by Pollak. In fact, Cabraser argued, Pollak had full discretion to appoint multiple co-lead counsel and to set a proper fee award — which he actually reduced to 17 percent of the total settlement. “We are in the strange position of defending on appeal a fee decision that disappointed us,” she said. “Judge Pollak gave none of us everything we asked for. Judge Pollak always did what was best for the case, best for the class.” After the arguments, Moreau, an administrative assistant who lives in Alameda, expressed disappointment at the court’s questioning. “It’s an important case,” she said. “It brings to light this kind of action with attorney fees — that they are exorbitant. It kind of strips the honor of the class action suit.” The case is In re Providian Credit Card Cases, A097482.

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