Seventh Circuit So Decides, Also Resolving Appealability Issue And Rejecting That An Objector Should Be Awarded Fees.
In Birchmeier v. Caribbean Cruise Line, Inc., Nos. 17-1626 et al. (7th Cir. July 24, 2018) (published), the Seventh Circuit was reviewing the propriety of awarding class counsel fees on a “sliding scale” approach by which it received payments depending on the tranches of money paid into the settlement fund, namely, 36% of the first $10 million, 30% of the next $10 million, 24% of the next $36 million, and 18% of any additional recovery after the settlement had a cy pres recipient feature. The class action case involved Telephone Consumer Protection Act vicarious liability theories against Caribbean Cruise Line and affiliates, arguing they were vicariously liable for directing calls—a much riskier case with regard to proof. A settlement was reached by which a settlement fund of $56 – 76 million was agreed to be created, complete with a cy pres feature for left over money, such that each claimant was estimated to receive $400 for receiving calls indicating each claimant had a chance for a free cruise If he/she participated in political surveys. The district court approved the settlement, with one objector appealing.
The Seventh Circuit first faced a jurisdictional issue and found that the fee award was appealable because it set forth a formula for calculating fees such that there was an indicia of finality. The fee award was bigger than awards in other suits, but it was not too big based on the riskier undertaking by class counsel on the vicarious liability theory of recovery. The tiered fee payment pyramid was just fine, because it came to the same result as a percentage award based on other settlement fund estimates. In Circuit Judge Easterbrook’s colorful retort: “Bands and percentage can be juggled, but, unless the bottom line changes, what’s the point? … What got multiplied with what else to produce a market-approximating outcome does not matter.” Objector wanted fees for proposing the tiered payment system, but that was rejected because the proposal did not add marginal value to the litigation given that class counsel discussed such an approach in its fees motion and the district court could consider that possibility independently.