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Civil Procedure — class actions — attorney fees

By: WISCONSIN LAW JOURNAL STAFF//February 19, 2014//

Civil Procedure — class actions — attorney fees

By: WISCONSIN LAW JOURNAL STAFF//February 19, 2014//

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United States Court of Appeals For the Seventh Circuit

Civil

Civil Procedure — class actions — attorney fees

It was not an abuse of discretion for a district court to base attorney fees in a class action on the amount of claims filed and paid, rather than the amount of the settlement funds available.

“Americana’s argument is a non-starter. Why? Because the district court did not consider the ultimate outcome at all in calculating at a reasonable fee under the lodestar method. It considered only the lodestar amount submitted by counsel and the risk multiplier warranted by the contingent nature of the case. It did consider the paucity of the class recovery as compared to the requested fee award when deciding whether to apply the lodestar method, as opposed to the percentage method, in the first place. But that is exactly what we have suggested a district court should do. See Harman, 945 F.2d at 974 (explaining that the lodestar method has an advantage over the percentage method in that it alleviates ‘concerns that a percentage approach resulted in over-compensation for attorneys’). Moreover, the choice of methods is discretionary. Id. at 975 (citing Kirchoff v. Flynn, 786 F.2d 320, 329 n. 1 (7th Cir. 1986)). As we will explain hereafter, in our circuit, it is legally correct for a district court to choose either. Doing so is obviously not an abuse of discretion.”

Affirmed.

13-2569 Americana Art China Co., Inc., v. Foxfire Printing & Packaging, Inc.

Appeal from the United States District Court for the Northern District of Illinois, Kapala, J., Kanne, J.

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