Rodriguez O'Donnell Gonzalez & Williams P.C. v. Yusen Logistics (Americas) Inc.
1:15-cv-03030
N.D. Ill.Sep 12, 2017Background
- ROGW (law firm) represented Yusen from ~1997 and entered a written contingency-fee agreement (25%) in Nov. 2007 to pursue Yusen’s claims in a multidistrict air-cargo antitrust class action.
- ROGW performed data collection, claim preparation/submission, communications with claims administrator and class counsel, and advised Yusen on risks (including an "affiliate" issue).
- ROGW filed claims for Settlements 1 and 2; the claims administrator later used Settlement 2 data to calculate awards for Settlements 3–5, reducing the need for new submissions.
- Yusen terminated ROGW in Oct. 2014, hired new counsel for later submissions, and received additional settlement payments after termination.
- ROGW sued to recover its 25% contingency fee on post-termination payments (quantum meruit); Yusen counterclaimed for breach of fiduciary duty and disgorgement alleging an excessive fee and inadequate work.
- The district court granted summary judgment to ROGW, denied Yusen’s cross-motion: Yusen’s fiduciary-duty counterclaim was time-barred; ROGW was entitled to 25% of post-termination payments attributable to work ROGW performed before termination.
Issues
| Issue | Plaintiff's Argument (ROGW) | Defendant's Argument (Yusen) | Held |
|---|---|---|---|
| Timeliness of Yusen’s breach-of-fiduciary-duty counterclaim | N/A (ROGW argued claim is time-barred) | Counterclaim timely because Yusen could not assess alleged excessive fee until after later payments (post‑2013) | Counterclaim barred by Illinois 2-year accrual rule; accrued by Mar. 20, 2012, so time‑barred |
| Presumption of undue influence from prior retainer | ROGW: agreement was negotiated, understood, and not the product of undue influence | Yusen: long prior retainer creates presumption of undue influence; ROGW performed only perfunctory/admin work | Presumption rebutted: ROGW produced clear and convincing undisputed evidence that Yusen understood and voluntarily agreed to the contingency fee |
| Breach of fiduciary duty / excessive fee | ROGW: 25% contingency reasonable given risk, market practice, and services provided | Yusen: ROGW did little legal work, mostly administrative, so 25% is a windfall and should be disgorged | Fee not excessive as a matter of law; court considered lodestar and Rule 1.5 factors and found 25% reasonable |
| Quantum meruit entitlement to post-termination payments | ROGW: entitled to reasonable quantum meruit for services performed before termination; 25% of subsequent payments are attributable to ROGW’s work | Yusen: ROGW’s work didn’t justify recovery on later payments; fee unreasonable | ROGW entitled to recover on quantum meruit for pre‑termination work; awarded 25% of payments Yusen received that derived from ROGW’s earlier services; parties to brief precise calculation |
Key Cases Cited
- In re Teichner, 104 Ill.2d 150 (Illinois Supreme Court) (courts supervise reasonableness of contingency fees)
- In re Doyle, 144 Ill.2d 451 (Illinois Supreme Court) (contingency agreement valid at formation may later be deemed excessive)
- Goesel v. Boley Int'l (H.K.) Ltd., 806 F.3d 414 (7th Cir.) (lodestar as comparative data point for contingency fee reasonableness)
- Hensley v. Eckerhart, 461 U.S. 424 (U.S. Supreme Court) (contingency risk justifies higher award than hourly rates)
- In re Marriage of Pagano, 154 Ill.2d 174 (Illinois Supreme Court) (presumption of undue influence when previously retained attorney enters transaction with client)
- Will v. Northwestern University, 378 Ill.App.3d 280 (Illinois Appellate Court) (quantum meruit recovery after client fires contingency counsel)