2018 IL App (1st) 172041
Ill. App. Ct.2019Background
- Plaintiffs (Clark, Schlossberg) brought a TCPA class action against Gannett; parties reached a $13.8M nonreversionary settlement and class counsel sought up to 39% in fees (~$5.38M).
- Gary Stewart filed the sole objection; Stewart was represented in filings by Illinois lawyer C. Jeffrey Thut, while Texas lawyer Christopher Bandas drafted the objection and negotiated with class counsel but never entered an appearance or signed filings.
- Class counsel (Edelson PC) alleged Bandas, Thut, and Stewart are part of a pattern of “professional objectors” who press last‑minute objections to extract fees, and moved for sanctions under Illinois Supreme Court Rule 137.
- The trial court overruled Stewart’s objection and approved the settlement and fees; a subsequent Rule 137 evidentiary hearing (limited in scope) denied sanctions and excluded evidence of Thut/Bandas’s pattern of conduct; Stewart failed to appear at that hearing and was held in contempt.
- On appeal, the court held Stewart’s notice of appeal defective (it cited a withdrawn order), so the appellate court lacked jurisdiction to review the contempt finding; but it reversed the trial court’s in‑limine exclusion of evidence and vacated the denial of Rule 137 sanctions as to Thut, remanding for a new hearing admitting evidence of pattern conduct and directing the clerk to forward the opinion to the ARDC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Is the contempt order reviewable on appeal? | Stewart sought reversal of contempt order and of the order overruling his objection. | Appellees argued appeal was defective. | Notice referenced a withdrawn order; appellate court lacks jurisdiction to review contempt finding; contempt stands. |
| 2. Whether Rule 137 sanctions against Bandas and Thut were warranted (improper purpose). | Edelson: objection was filed to extort fees; Bandas drafted objection and negotiated fee demands; sanctions required. | Bandas: he did not sign or appear; Rule 137 inapplicable to non‑signing/out‑of‑state counsel; Thut: he reviewed and filed the pleading. | Denial of sanctions vacated as to Thut/Bandas; remanded for new Rule 137 hearing allowing evidence of pattern conduct to determine improper purpose. |
| 3. Admissibility of evidence of Bandas/Thut’s conduct in other cases (motion in limine). | Edelson: pattern evidence is probative of improper purpose and should be admitted. | Bandas/Thut: prior‑case evidence is unfairly prejudicial and irrelevant. | Trial court erred to exclude such evidence; remand for hearing admitting pattern evidence. |
| 4. Unauthorized practice of law / responsibility of local counsel. | Edelson: Bandas practiced in Illinois without admission; Thut served as a conduit and failed to supervise—both should be accountable. | Bandas: nonparty, non‑signatory, not subject to Rule 137; Thut: he signed and was counsel of record. | Court found Bandas’s conduct constituted practicing law in Illinois and that Thut was a mere frontman; directed referral to ARDC and required further factfinding on sanctions. |
Key Cases Cited
- General Motors Corp. v. Pappas, 242 Ill. 2d 163 (Ill. 2011) (notice of appeal must specify orders appealed and confers appellate jurisdiction only as specified)
- Kelch v. Watson, 237 Ill. App. 3d 875 (Ill. App. 1992) (vacated order is treated as void)
- Brundidge v. Glendale Federal Bank, F.S.B., 168 Ill. 2d 235 (Ill. 1995) (trial court may dispense with lodestar under appropriate circumstances)
- Vollmer v. Selden, 350 F.3d 656 (7th Cir. 2003) (distinguishing proper objector who improves a settlement from one who seeks delay to extract payment)
- In re Cathode Ray Tube (CRT) Antitrust Litig., 281 F.R.D. 531 (N.D. Cal. 2012) (describing Bandas as routinely representing objectors for personal financial gain)
- Baksinski v. Northwestern University, 231 Ill. App. 3d 7 (Ill. App. 1992) (once counsel seeks compensation from the fund, their role shifts to claimant against the fund)