The defendant in these consolidated class actions appeals from an order denying its motion to disqualify the attorneys for parties who have objected to the proposed settlement agreement in the first of these cases and are the plaintiffs in the second action in which a class has not yet been
This court previously vacated an order of the trial court approving a settlement of the class action brought on behalf of employees of Foot Locker Retail, Inc. (Foot Locker), against Foot Locker. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116 [85 Cal.Rptr.3d 20].) The appeal resulting in that disposition was prosecuted by the law firm of Qualls & Workman, LLP (Q&W), on behalf of three objectors to the settlement, Crystal Echeverria, John Kissinger and Nichole Payton. This court held that the information that had been presented to the trial court was insufficient to support its determination that the settlement agreement was fair, reasonable and adequate, and we "remand[ed] the matter to permit the trial court to reconsider the fairness and adequacy of the settlement in light of such additional information as the parties may present concerning the value of the class members' claims should they prevail in the litigation and the likelihood of their so prevailing." (Id. at p. 120.)
Prior to the trial court's approval of the settlement in the Kullar action (Kullar v. Footlocker, No. CGC-05-447044 (Kullar)), Echeverria, represented by the same attorneys, had filed a partially overlapping putative class action against Foot Locker and others in the Alameda County Superior Court (Echeverria v. Foot Locker, Inc., No. RG07317036 (Echeverria I)). Because of the pendency of the settlement in the Kullar action, the Alameda court entered an order staying Echeverria I, which remained in effect through the pendency of the Kullar appeal. On April 15, 2009, one month after issuance of the remittitur in Kullar, Echeverria and the two other objectors represented by Q&W filed an action in the San Francisco Superior Court, where Kullar was pending, asserting the same claims as were alleged in the stayed Alameda action (Echeverria v. Footlocker, No. CGC-09-487345 (Echeverria II)). Based on the pendency of identical claims in Echeverria I, the San Francisco court on July 29, 2009, stayed proceedings in Echeverria II. In subsequent proceedings in Kullar, the court considered the additional showing made to establish the fairness of the proposed settlement, the three objectors' renewed objections to settlement approval, and on October 22, 2009, the court again granted final approval of the class settlement.
The proposed settlement agreement in Kullar settles claims of a class of designated employees of Foot Locker during the period between November 23, 2001, and May 25, 2007. The claims are based on numerous alleged violations of law, including the failure to compensate employees for the compulsory purchase of certain shoes and uniforms, the failure to compensate employees for time devoted to security searches, and the failure to provide mandated meal and rest periods and to pay appropriate wages by failing to compensate for time designated as meal periods when the employees were required to work. The complaint in Echeverria II seeks recovery on behalf of those employed by Foot Locker on an hourly basis during the period between four years of the filing of the Echeverria I complaint, i.e., March 22, 2003, and the filing of the complaint in Echeverria II, April 15, 2009, based solely on Foot Locker's alleged failure to provide those employees with meal periods and as a consequence to compensate them appropriately.
Foot Locker's motion to disqualify Q&W is based on the fact that members of the putative class described in Echeverria II are also members of the class covered by the proposed settlement agreement in Kullar. Foot Locker contends that "a simultaneous conflict of interest" arises from the attorneys purporting to represent these employees in Echeverria II and at the same time, representing objectors to the Kullar settlement, thereby "taking actions to block distribution of over one million dollars in settlement money to over 1,500 current and former Foot Locker employees," among whom are putative class members they seek to represent in Echeverria II. Foot Locker argues that by representing those who object to the settlement, the attorneys
Initially, since no class has yet been certified in Echeverria II (and no class was ever certified in Echeverria I), no attorney-client relationship has yet arisen between Q&W and the members of the putative class. (Atari, Inc. v. Superior Court (1985) 166 Cal.App.3d 867, 873 [212 Cal.Rptr. 773] ["We cannot accept the suggestion that a potential (but as yet unapproached) class member should be deemed `a party ... represented by counsel' even before the class is certified; we respectfully disagree to this extent with the federal courts which apparently would accept it."]; Sharp v. Next Entertainment Inc. (2008) 163 Cal.App.4th 410, 433 [78 Cal.Rptr.3d 37], citing com. 25 to rule 1.7 of the ABA Model Rules of Prof. Conduct ["When a lawyer represents or seeks to represent a class of plaintiffs or defendants in a class-action lawsuit, unnamed members of the class are ordinarily not considered to be clients of the lawyer for purposes of applying paragraph (a)(1) of this Rule [that restricts representation when there are concurrent conflicts of interest]."]; In re McKesson HBOC, Inc. Securities Litigation (N.D.Cal. 2000) 126 F.Supp.2d 1239, 1245; Cal. Compendium on Prof. Responsibility, L.A. County Bar Assn. Formal Opn. No. 481 (Mar. 20, 1995).)
The authority that comes closest to supporting Foot Locker's position is a decision rendered by a member of this panel when sitting on the District Court. (Moreno v. AutoZone, Inc. (N.D.Cal., Dec. 6, 2007, No. C05-04432 MJJ) 2007 U.S.Dist. Lexis 98250.) However, the situation in that case was significantly different from the situation here. In Moreno, the court disqualified attorneys from continuing to represent a putative class because, without obtaining waivers, the attorneys represented members of the putative class in opposing the settlement of a related class action and the putative class also included members who favored settlement of the other case. Unlike the situation here, the putative class members who favored settlement of the other action were not unknown or unspecified individuals with whom no attorney-client relationship had yet developed, but three identified persons from whom the attorneys had obtained declarations and who the attorneys personally represented at depositions in the action in which they were disqualified. While the attorneys were representing persons who objected to the settlement of the other action, the three individuals with whom they also had an attorney-client relationship "approved the settlement, submitted claim forms, and await payment." (Id. at p. *13.) Moreover, the attorneys had withheld information from the three clients who favored the settlement. Still further, the court found that the attorneys had committed two other ethical breaches while involved in the litigation from which they were disqualified. There was no similar misconduct by Q&W in this case. The logic of Moreno does not require disqualification here.
The order denying the motions to disqualify counsel in both cases is affirmed.
McGuiness, P. J., and Jenkins, J., concurred.