Levitt v. Sw. Airlines Co. (In re Sw. Airlines Voucher Litig.), 898 F.3d 740

Class action over Southwest Airlines' refusal to honor in-flight "Business Select" drink vouchers; initial settlement provided replacement vouchers and a lodestar-based attorney fee to class counsel (Siprut).
On appeal (Southwest I), the Seventh Circuit upheld the settlement and the lodestar methodology but reduced part of Siprut's fee for a disclosure failure.
Siprut sought supplemental fees after the appeal (seeking the difference between $3 million Southwest wouldn't oppose and the affirmed award); the district court awarded a reduced supplemental fee, then vacated that award for notice.
To avoid a second appeal, parties struck a deal: Markow (objector) dismissed his appeal after Southwest tripled class relief (two vouchers per claimed voucher) and Siprut accepted half the supplemental fee; district court approved and distributions occurred.
Markow later moved for $80,000 in fees and a $1,000 incentive award to be paid from Siprut's fee; the district court denied the motion. Markow appealed; the Seventh Circuit reversed and remanded, holding objectors may obtain fees from the common fund unless expressly barred by the settlement.

Issue	Plaintiff's Argument (Markow)	Defendant's Argument (Southwest / Siprut)	Held
Whether the settlement bars objector fees	Markow: agreement silent; he may seek fees for adding value	Southwest/Siprut: status reports and agreements implicitly foreclose additional objector fees; awarding fees would "undo" the settlement	Court: Silence does not bar objector fees; objectors may seek fees unless parties expressly agree otherwise
Whether Markow is entitled to fees under equitable/common-fund principles	Markow: his negotiation tripled class relief and reduced Siprut's fee; equitable restitution and common-fund permit a fee award	Defendants: fee must come from class payments or violates settlement; Markow waived fees by not asking during appeal settlement discussions	Court: Common-fund doctrine applies as default; objectors who add value can recover reasonable fees from the fund (here, from Siprut's award); waiver not established
Whether district court abused discretion in denying fees	Markow: denial was legal error; facts undisputed; law favors compensating value-adding objectors	District court: paying Markow from Siprut’s award would undo settlement expectations and parties' arrangements	Court: District court misapplied law; reversing and remanding for fee award payable from Siprut (not increasing Southwest’s payment)

US Airways, Inc. v. McCutchen, 569 U.S. 88 (2013) (common-fund doctrine as equitable principle)
Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) (attorney fee from common fund principle)
Reynolds v. Beneficial Nat'l Bank, 288 F.3d 277 (7th Cir. 2002) (objectors may receive reasonable fees when they render valuable services improving a settlement)
Wal-Mart Stores, Inc. Assocs.' Health & Welfare Plan v. Wells, 213 F.3d 398 (7th Cir. 2000) (contracts are interpreted against background legal principles; fees may be interpolated)
Pearson v. NBTY, Inc., 772 F.3d 778 (7th Cir. 2014) (value of settlement includes awards to class and to lawyers)
Kaufman v. American Express Travel Related Servs. Co., 877 F.3d 276 (7th Cir. 2017) (affirming fee award for intervenors who contributed to settlement approval)
Eubank v. Pella Corp., 753 F.3d 718 (7th Cir. 2014) (objectors who improve settlements can receive awards)
In re Trans Union Corp. Privacy Litig., 629 F.3d 741 (7th Cir. 2011) (increasing class counsel's fee out of relief awarded to class)
Mirfasihi v. Fleet Mortg. Corp., 551 F.3d 682 (7th Cir. 2008) (denying disproportionate objector fees when improvement is minimal)