Fee Award – Claim Preclusion

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7^th Circuit Court of Appeals

Case Name: Grant Birchmeier, et al. v. Caribbean Cruise Line, Inc., et al.

Case No.: 17-1626; 17-1778; 17-1953; 17-1969; 17-1984; 17-2857

Officials: EASTERBROOK and ROVNER, Circuit Judges, and GRIESBACH, District Judge

Focus: Fee Award – Claim Preclusion

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).

Defendants take issue with the structure of the fee award. They insist that the award should give class counsel only 25% (rather than 30%) of the second tier of recovery, 20% (rather than 24%) of the third, and 15% (rather than 18%) of the remainder. To this Freedom Home Care adds that the third tier should be capped at some figure lower than $56 million. These changes to the award, they say, would align it with awards of attorneys’ fees that have been approved in other suits brought under the Act. See also In re Synthroid Marketing Litigation, 325 F.3d 974 (7th Cir. 2003).

Freedom Home Care contends that it is entitled to an incentive award and attorneys’ fees for its objection to class counsel’s fees. Last comes McCabe’s appeal. He contends that the settlement improperly releases claims outside the class period (August 2011 to August 2012) and that the notice sent to the class members was deficient. For two reasons the district court held that McCabe lacks standing to raise these objections. First, McCabe’s objections state that he is “a class member who received calls on his cell-phone number … and landline phone … outside of the class period”. The court found this statement self-contradictory; it treated McCabe’s assertion that he received calls “outside of the class period” as an assertion that he did not receive calls within the class period, and it reasoned that McCabe thus could not be in the class. Second, in 2015 McCabe won a judgment against Caribbean Cruise Line in an action he had brought in the Eastern District of New York. The court decided that any claim arising from calls McCabe received during the class period should have been brought in his separate suit, and that the doctrine of claim preclusion now bars any such claim.

We can quickly dispose of McCabe’s remaining argument: He insists that the notice sent to the class insufficiently described the process for selecting a cy-pres recipient. Not so. The notice told class members that a cy-pres recipient might be selected after the second round of payments, gave instructions for recommending recipients, and provided a website where members can learn more about the settlement. That is enough to meet the notice requirements of Fed. R. Civ. P. 23.

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.