Birchmeier v. Caribbean Cruise Line, Inc.
1:12-cv-04069
N.D. Ill.Aug 24, 2017Background
- Class action settled; class counsel petitioned for attorneys' fees from the common fund after mediator-assisted settlement.
- Freedom Home Care (a class member) objected to class counsel's fee request before defendants filed their response; defendants later filed similar arguments.
- The court granted class counsel a reduced fee using a sliding-scale (declining percentage by bands) with a risk premium, awarding less than class counsel sought and thereby increasing the amount allocated to class members by roughly $3–$6 million.
- Freedom Home Care moved for $59,410 in fees for its counsel (objector's counsel) and a $1,000 incentive award, arguing its objection materially benefited the class.
- Plaintiffs and defendants opposed, arguing Freedom Home Care added nothing material beyond defendants’ arguments and failed to document or justify the requested fees and incentive payment.
- The court denied Freedom Home Care’s motion, concluding the objection did not materially benefit the class and thus restitution- or incentive-based awards were not warranted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether objector's counsel is entitled to attorneys' fees from the common fund for materially benefiting the class | Freedom Home Care: its objection aided the court and advanced the sliding-scale fee approach ultimately adopted, so counsel merits fees | Plaintiffs & Defendants: defendants would and did make the same arguments; objector added nothing material and thus should not get fees | Denied — court found objector did not materially benefit the class because defendants would have and did raise the same arguments |
| Whether objector is entitled to an incentive award for representing class interests by objecting | Freedom Home Care: deserves $1,000 for representing class interests and risking harassment | Plaintiffs & Defendants: efforts were insignificant and unsupported; no incentive award warranted | Denied — objector’s efforts were not significant and not shown to merit incentive pay |
| Proper source of any objector fee (if awarded): from class counsel’s fee or class recovery | Freedom Home Care: sought fees from common fund (implicitly) | Plaintiffs & Defendants: dispute; also argue no fee due at all | Not reached substantively because no fee awarded |
| Whether timing/form of objection (before defendants’ response) justifies compensation | Freedom Home Care: filed earlier and raised arguments prior to defendants’ brief, warranting credit | Plaintiffs & Defendants: defendants had obvious interest and would oppose; objector opportunistically sought share | Court: timing insufficient — because defendants’ similar, anticipated participation meant class would have received same benefit without objector |
Key Cases Cited
- Pearson v. NBTY, Inc., 772 F.3d 778 (7th Cir.) (objectors can mitigate conflict between class counsel fees and class members’ recovery; courts may award fees to objectors who materially benefit class)
- Reynolds v. Beneficial Nat. Bank, 288 F.3d 277 (7th Cir.) (objectors may receive fees when they materially contribute; fee denial appropriate where objectors add nothing beyond other participants)