Dustan Dobbs v. George McLaughlin
2016 U.S. App. LEXIS 21492
7th Cir.2016Background
- Dobbs (Illinois resident) hired McLaughlin, Gehlhausen, and Argeros on a 35% contingency to pursue a DePuy ASR hip-implant product-liability claim.
- Appellees filed the case in the DePuy ASR MDL in the Northern District of Ohio; DePuy made a global settlement offer ($250,000 for represented plaintiffs).
- Dobbs refused counsel’s repeated advice to accept the offer, discharged the lawyers, then (acting pro se) later accepted the settlement and received the represented-party amount.
- Because Dobbs had fired his attorneys before acceptance, the contingency contract was inoperative; the attorneys sought fees under quantum meruit and asserted a lien.
- The Northern District of Illinois awarded the full contingency fee as a reasonable quantum meruit recovery; Dobbs appealed, arguing the district court failed to apply Illinois quantum meruit factors in its analysis.
- The Seventh Circuit vacated and remanded, holding Illinois law governed and the district court abused its discretion by not evaluating the established quantum meruit factors before awarding the full contingency fee.
Issues
| Issue | Plaintiff's Argument (Dobbs) | Defendant's Argument (Attorneys) | Held |
|---|---|---|---|
| Choice of law | Illinois law should apply | Ohio (MDL forum) law should apply | Illinois law applies (transferor/origin treated as Illinois) |
| Effect of firing on contingency contract | Firing before settlement nullifies contract; attorneys only can recover in quantum meruit | Attorneys seek full contingency under quantum meruit because they produced the settlement | Contract is inoperative; attorneys limited to quantum meruit recovery |
| Standard for quantum meruit fee | Court must analyze Illinois factors (time, skill, benefit, customary fees, difficulty) | Full contingency is reasonable because attorneys did much work and client benefited | District court must analyze and justify fees using Illinois quantum meruit factors; remand required |
| Deference to district court | Award should be closely reviewed because transferring judge lacked firsthand knowledge | Award should be upheld as within discretion | Abuse of discretion: transferee judge needed evidentiary analysis of the Illinois factors |
Key Cases Cited
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (choice-of-law follows forum state)
- Van Dusen v. Barrack, 376 U.S. 612 (choice-of-law after transfer generally follows transferor forum)
- Goesel v. Boley Int’l (H.K.) Ltd., 806 F.3d 414 (abuse-of-discretion standard for fee awards)
- In re Estate of Callahan, 578 N.E.2d 985 (Ill.) (client may fire attorney anytime; discharged attorney may recover in quantum meruit)
- Will v. Nw. Univ., 881 N.E.2d 481 (Ill.) (illustrates the Illinois factors for reasonable attorney fees under quantum meruit)
- DeLapaz v. SelectBuild Const. Inc., 917 N.E.2d 93 (Ill.) (full contingency may be reasonable if attorney "did much work" but courts must analyze quantum meruit factors)
- Rhoades v. Norfolk & W. Ry. Co., 399 N.E.2d 969 (Ill.) (same principle regarding substantial work justifying full fee in some cases)