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Birchmeier v. Caribbean Cruise Line, Inc.

United States Court of Appeals, Seventh Circuit

July 24, 2018

Grant Birchmeier, et al., Plaintiffs-Appellees,
v.
Caribbean Cruise Line, Inc., et al., Defendants-Appellants. Appeals of: Caribbean Cruise Line, Inc.; Vacation Ownership Marketing Tours, Inc.; The Berkley Group, Inc.; Freedom Home Care, Inc.; Kevin McCabe

          Argued February 14, 2018

          Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 12 C 4069 - Matthew F. Kennelly, Judge.

          Before Easterbrook and Rovner, Circuit Judges, and Griesbach, District Judge. [*]

          Easterbrook, Circuit Judge.

         During 2011 and 2012 a million people received phone calls asking them to take political surveys in exchange for a chance to go on a free cruise. Some recipients filed a class action under the Telephone Consumer Protection Act, 47 U.S.C. §227, seeking damages for these unsolicited communications. Caribbean Cruise Line, Vacation Ownership Marketing Tours, and the Berkley Group were named as defendants on the theory that, though they had not placed the calls, they had directed them and thus are vicariously liable. (The plaintiffs also sued the caller, which has not participated in these appeals.) The district court certified a class under Fed.R.Civ.P. 23(b)(3). Later it granted partial summary judgment in the plaintiffs' favor and scheduled a trial. 179 F.Supp.3d 817 (N.D. Ill. 2016).

         On the eve of trial the parties settled. Plaintiffs agreed to release their claims against all defendants and any of the defendants' "agents [or] independent contractors". In exchange defendants agreed to pay into a fund no less than $56 million and no more than $76 million. The total will depend on the number of approved claims that class members submit. Out of the fund will come payments to the class, incentive awards to the named representatives, about $2 million in administrative expenses, and attorneys' fees. The class will receive payments in two rounds. If some claimants do not cash the checks sent during the second round, money will be left over, and those remaining funds will go to "an appropriate cy pres recipient" to be approved by the district court. (The district court has not yet determined whether that occurs, so we need not wait for In re Google Referrer Header Privacy Litigation, 869 F.3d 737 (9th Cir. 2017), cert. granted under the name Frank v. Gaos, 138 S.Ct. 1697 (2018).)

         Over the objections of Kevin McCabe, who says he is in the class, the district court approved the settlement, estimating that each claimant will receive $400. 2017 U.S. Dist. Lexis 29400 (N.D. Ill. Mar. 2, 2017). After approving the settlement, the court entered judgment under Fed.R.Civ.P. 58. It also awarded attorneys' fees to class counsel under Fed.R.Civ.P. 23(h). The award gives counsel 36% of the first $10 million paid into the fund, 30% of the next $10 million, 24% of the next $36 million, and 18% of any additional recovery. 2017 U.S. Dist. Lexis 54080 (N.D. Ill. Apr. 10, 2017).

         We have three sets of appeals: (1) defendants and a member of the class, Freedom Home Care, contend that the award of fees overcompensates class counsel; (2) Freedom Home Care wants an incentive award and attorneys' fees for its role in objecting to class counsel's fees; and (3) McCabe complains that the settlement's approval was improper. Before we discuss the merits of these appeals, we must ensure that we have jurisdiction.

         The appeals are within our jurisdiction only if they challenge "final decisions" of the district court. 28 U.S.C. §1291. A decision on the merits is final only if it "resolves all claims of all parties". Domanus v. Locke Lord LLP, 847 F.3d 469, 477 (7th Cir. 2017) (emphasis in original). The caller (or rather, three entities that allegedly acted as the caller-Economic Strategy LLC, Economy Strategy Group, Inc., and a political committee named Economic Strategy Group) did not participate in the settlement. But the settlement releases plaintiffs' claims against the settling defendants' "agents [or] independent contractors". The parties to these appeals tell us that the caller was an "agent" or "independent contractor" of the other defendants for the purpose of this release. Consistent with that understanding, the district court's judgment states: "The Court hereby dismisses the Action"-the whole action, not just some of it-"on the merits and with prejudice". This judgment disposes of the claims against all parties, not just the claims against the settling parties, so it is a final decision on the merits. Freedom Home Care's challenge to the denial of an incentive award and fees therefore falls within the scope of §1291, as does McCabe's appeal. Cf. Devlin v. Scardelletti, 536 U.S. 1 (2002).

         Whether the same can be said about defendants' and Freedom Home Care's appeal of the decision awarding fees to class counsel requires more discussion. A decision about fees, if final, is appealable separately from the merits. See Budinich v. Becton Dickinson & Co., 486 U.S. 196 (1988). The district court wrote:

Because the process for approving claims is still ongoing, the Court awards at this time only those attorney's fees corresponding to the minimum amount defendants will be required to pay into the common fund. As discussed above, that fee amount is $14.76 million [that is, the sum of 36% of the first $10 million, 30% of the next $10 million, and 24% of the next $34 million]. Class counsel may petition the Court for the remainder of the fee award upon conclusion of the claims-approval process.

2017 U.S. Dist. Lexis 54080 at *32. This decision does not quantify the total fees that counsel will collect. It instead awards a portion of the fees ($14.76 million) and tells counsel to come back for more if the size of the pot grows.

         Interim awards of attorneys' fees can hardly be called final, cf. Sole v. Wyner, 551 U.S. 74 (2007), and such awards typically are not appealable under §1291. See, e.g., Dupuy v. Samuels, 423 F.3d 714, 717 (7th Cir. 2005); People Who Care v. Board of Education, 272 F.3d 936, 937 (7th Cir. 2001). But an award may be final if the district court lays out a formula for calculating the award's amount. See, e.g., Hyland v. Liberty Mutual Fire Insurance Co., 885 F.3d 482, 484 (7th Cir. 2018); Production & Maintenance Employees' Local 504 v. Roadmaster Corp., 954 F.2d 1397, 1401-02 (7th Cir. 1992); Parks v. Pavkovic, 753 F.2d 1397, 1401 (7th Cir. 1985). See also Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, 15B Federal Practice & Procedure §3915.2 at 279 (2d ed. 1992) ("[M]erely 'ministerial' proceedings to calculate a specific award do not defeat finality."). Such an award leaves some math but nothing for the district court to decide.

         This award does exactly that. Though the district court told counsel to "petition the Court for the remainder of the fee award," it also prescribed a formula for that remainder: 18% of the amount recovered over $56 million. The court had considered other means, such as using a multiplier of 0.15 instead of 0.18. But it landed on 18%, explained its choice, and stated that "the Court awards class counsel … 18% of the remainder." 2017 U.S. Dist. Lexis 54080 at *28-31. The total award is not yet known only because the number of approved claims is not yet known. Once the parties know that number, computing the remaining fees will be a mechanical exercise. Some tasks unrelated to the calculation of fees remain for the district court, such as (perhaps) choosing a recipient for funds unclaimed after ...


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