CELLPHONE FEE
TERMINATION

>CASES

>





Filed 6/28/10 ; partial pub.
order & mod. 7/27/10 (see end of
opn.)



IN THE
COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE






>

CELLPHONE FEE TERMINATION CASES.

A124038 A124048 (Alameda County Super. Ct. No. RG04-137699, JCCP No. 4332)

This
is a consolidated appeal in one of several coordinated class actions that
challenge wireless telephone carriers' imposition of early termination fees
(ETF's) on customers seeking to cancel cellular telephone contracts. The defendant/respondent in this proceeding
is Cellco Partnership doing business as Verizon Wireless (Verizon). The case against Verizon ( >White v. Cellco Partnership (RG04‑137699)
(White)) proceeded to jury trial on
June 16, 2008, in the Alameda
County Superior Court on the claims of California class members. On July 8, 2008, after plaintiffs/respondents[1] had rested their case and the defense presentation
had commenced, the parties advised the court that they had signed a memorandum
of understanding outlining the terms of settlement. The settlement also encompassed claims of nationwide
certified class claimants (excluding California class members) in a proceeding then pending before
the American Arbitration Association (AAA), as well as two actions filed in
federal district courts.

The
terms of the settlement required Verizon to provide a common fund of
$21 million, from which all legal fees and costs, including notice and
administrative costs, would be paid and from which class members who had
actually paid or had been assessed an ETF would be reimbursed, with pro rata
reduction, if required, based on the number of claimants. The trial court granted preliminary approval
on July 11, 2008. At a noticed hearing on November 6,
2008, appellants[2] objected to final approval, contending that notice
of the settlement was inadequate, and that the settlement terms were not fair,
reasonable and adequate. Appellants
further challenge the propriety of incentive payments awarded to four named
class representatives. The trial court
approved the settlement. We affirm.

I. Factual and Procedural Background

Verizon is a national cellular
telephone service provider. In common
with a number of other providers, Verizon charged ETF's to subscribers who
cancelled service agreements prior to the scheduled termination dates. Verizon charged a flat fee of $175,
regardless of when the cancellation occurred in the contract term.

Plaintiffs in the underlying case
initially filed suit on July 23, 2003, in Alameda County against Verizon and six other cellular service providers alleging that
the ETF's violated California
consumer protection laws, and constituted unauthorized penalties under Civil
Code section 1671.[3] ( >Marlowe v. AT&T Corporation (Super.
Ct. Alameda County, complaint filed 2003, No. RG03-108118).) This action and others were coordinated under
Judicial Council order (Code Civ. Proc., § 404.3; Cal. Rules of Court,
rule 3.524)[4] before Judge Ronald Sabraw in the Alameda County
Superior Court as the Cellphone Termination Fee Cases (JCCP
No. 4332).) (Gatton, supra, 152 Cal.App.4th at p. 575, fn. 1.)

Pursuant to case management orders
in the coordination proceedings, the ETF claims against Verizon were separately
pled in a consolidated amended complaint in White. On June 9, 2006, Judge Ronald Sabraw certified
a class in that action and in related cases defined as: â€