California Supreme Court Affirms 75-Year-Old Rule Protecting Consumers

On January 29, 2018, the California Supreme Court issued a ruling in Hernandez v. Restoration Hardware, Inc. preserving a 75-year-old decision requiring class members to enter as a party to the lawsuit before they seek to appeal a class settlement or final judgment of the case.

How does this ruling help consumers? The California Supreme Court provided two reasons. First, the rule defends against “meritless objections” raised by “professional objectors”. Professional objectors are normally attorneys who represent absent class members attempting to receive a payoff to revoke their objection. As the Court notes, these objectors not only drive up the cost of litigation for parties and our judicial system, but they often delay recovery for the class. Second, the ruling incentivizes Consumer Protection attorneys to accept riskier class action cases, ensuring that the general public receives the relief they deserve. In reaching its holding, the Court made clear that unnamed class members are not harmed because California law ensures that trial courts protect the classes’ best interests.

The California Supreme Court’s preservation of this historic ruling serves as a boon to California consumers and a strong signal against individuals seeking to disrupt class settlements for their own monetary gain. The ruling does not prohibit class members who have sincere objections to the settlement or judgment. They may still seek to intervene in the lawsuit after establishing that they have an interest in the litigation or if they seek to vacate the class judgment. Without a doubt, consumers only benefit from the California Supreme Court’s ruling.

Disclaimer: The foregoing in no way constitutes legal advice from any attorney or from Faruqi & Faruqi, LLP. The opinions expressed herein are the opinions of attorney Joshua Nassir and in no way reflect the opinions of Faruqi & Faruqi, LLP.