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7-Eleven Owners For Fair Franchising v. Southland Corp.12/29/2000
CERTIFIED FOR PUBLICATION
In Rebney v. Wells Fargo Bank (1990) 220 Cal.App.3d 1117, an appeal from a judgment entered on a class action settlement, Justice Benson, then a member of this court, began his opinion this way: "According to the parties, the appeals are about either collusion or fantasy. Appellants contend the [class action] settlements were the product of a collusive sellout between class counsel and the banks. Respondents claim the appeals are attributable to appellants' fantasy vision of wondrously large money judgments." (Id. at p. 1124.) That wry description might easily fit these appeals as well.
Several "objectors" to a class action settlement agreement reached between the plaintiff class representatives and the corporate defendant, and approved by the Alameda County Superior Court following several evidentiary hearings, appeal from the ensuing judgment, contending in substance that the settlement agreement was the product of collusion among succeeding class counsel, the class representatives, and defendant Southland Corporation and its counsel; was not fair, adequate, and reasonable; and was grossly undervalued. The objectors also contend that the national class was improperly certified, and that the attorneys' fees awarded objectors' counsel by the trial court were inadequate. Objectors also present a miscellany of satellite claims going to the validity of the settlement agreement and the judgment on it. Current class counsel and defendant Southland have filed briefs defending the settlement as a reasonable outcome to prolonged and heatedly contested litigation, one in which the trial court had before it a sufficient evidentiary basis to support its finding that the settlement was fair, adequate, and reasonable, that the plaintiff class was properly certified as a national class, and that the $2.3 million in fees awarded objectors' counsel were not unreasonable. We affirm.
I. BACKGROUND
Southland is the national franchiser of the 7-Eleven stores; the plaintiff national class is composed of all present and former 7-Eleven franchisees since 1987. The litigation began in 1993, when plaintiffs, represented by California attorney David Franklin and others (the Franklin group) filed a complaint in the Alameda County Superior Court. In brief, the named plaintiffs alleged Southland had breached its franchise agreements with them by failing to share ratably in certain "returns, discounts and allowances" (RDAs) over a period of several years. In effect, plaintiffs' RDA claims presented questions of the interpretation of a provision of the 7-Eleven franchise agreement. The complaint relied on the following provision of the standard franchise agreement between Southland and its franchisees: "Retailer discounts and allowances (including promotional and display allowances) paid to 7- Eleven and allocated or reasonably traceable to Purchases shall be credited to Cost of Goods Sold, except that 7-ELEVEN shall retain reimbursements for its expenditures pursuant to vendors' co-operative advertising or other similar programs where 7-Eleven is partially or wholly reimbursed (or where costs are shared) for advertising expenditure programs." Plaintiffs' theory of recovery was that, by failing to credit ratably individual franchise accounts with the RDAs, Southland had breached this provision of the franchise agreement.
The RDA categories contested by plaintiffs numbered four: advertising allowances paid to Southland by store advertisers; allowances paid Southland by its wholesalers for purchases; equipment RDAs paid to the company by vendors for equipment furnished to retail outlets; and the "McLane Transition Allowance," named after the McLane Corporation
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