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In re Sears

United States District Court, N.D. Illinois, Eastern Division

August 3, 2018




         Plaintiffs filed a supplemental motion for attorneys' fees to recover fees spent litigating their petition for attorneys' fees in this Court and defending the award on appeal. For the reasons stated below, Plaintiffs' Supplemental Motion for Attorneys' Fees [629] is GRANTED IN PART.

         A. Background

         Given the long history of this case, the Court provides a brief summary of the relevant background and otherwise assumes familiarity with the prior rulings and history. This is a class action brought by washing machine purchasers against Sears. Whirlpool intervened in the action. On February 29, 2016, following 10 years of litigation, this Court approved the parties' Settlement Agreement, resolving Plaintiffs' warranty claims under the Magnuson-Moss Warranty Act (“Magnuson-Moss Act”), 15 U.S.C. § 2301 et seq., as well as state law warranty claims. Under the Settlement Agreement, the parties agreed that Defendants would “pay Class Counsel reasonable attorneys' fees and costs, without reducing the amount [of] money available to pay Valid Claims submitted by Settlement Class Members.” (Dkt. 502-1 (“Settlement Agreement”), p. 34, Sec. X.A). The parties further agreed that the amount of attorneys' fees “shall be determined by the Court.” (Id. at p. 35, Sec. X.B).

         On November 16, 2015, Plaintiffs filed a fee petition requesting an award of $6 million to class counsel. (Dkts. 530, 531, “Original Fee Motion”).[1] Defendants argued that Plaintiffs' request was unreasonable and asked the Court to award no more than $890, 000. On September 13, 2016, this Court granted in part the Original Fee Motion, awarding $4, 770, 834 in fees to class counsel. Defendants appealed to the Seventh Circuit Court of Appeals arguing that class counsel should be awarded no than $900, 000. On August 14, 2017, the Seventh Circuit reversed and remanded with directions to award $2.7 million, an amount which constituted the lodestar calculated by this Court but without a multiplier. In re Sears, 867 F.3d 791, 793 (7th Cir. 2017) (“We therefore reverse the judgment of the district court and remand with directions to award $2.7 million-no more, no less-in fees to the class counsel.”). This Court entered judgment in favor of class counsel accordingly.

         Plaintiffs now seek: (1) $295, 000 for litigating their fee motion prior to the appeal (“Motion Fees”) and (2) $482, 702.25 for defending their award on appeal (“Appeal Fees”). (Dkt. 630 at 7). Defendants object arguing that: (1) Plaintiffs' request for pre-appeal fees is untimely; (2) the Seventh Circuit's opinion bars this Court from awarding any more attorneys' fees to class counsel; (3) the Settlement Agreement does not authorize any fees-on-fees; and (4) if this Court awards fees, it should use the already-approved, lower hourly rates of class counsel and reduce the amount awarded based on Plaintiffs' limited success. The Court concludes that an award of fees-on-fees is proper, albeit for less than class counsel seeks.

         B. Timeliness and Waiver

         Defendants argue that Plaintiffs waived their ability to request fees on time spent pre-appeal litigating the Original Fee Motion because they failed to meet Local Rule 54.3(b)'s 91-day deadline. See LR 54.3(b) (a fee motion must be filed “no later than 91 days after the entry of the judgment or settlement agreement on which the motion is founded”).[2] Defendants suggest three potential triggering events for the 91-day deadline, the latest being this Court's Final Approval Order on February 29, 2016. Using this date, Defendants argue, the motion for pre-appeal fees was due by May 30, 2016.

         Between the Final Approval Order on February 29, 2016 and this Court's judgment on the Original Fee Motion on September 13, 2016, the Court was considering the several legal arguments presented by the parties about how to calculate class counsel's fees. It is reasonable that Plaintiffs waited for the outcome of the Original Fee Motion before filing a motion requesting fees for preparing that Motion, and that the triggering event, under Local Rule 54.3(b), be the date the Court issued its decision on the Original Fee Motion.

         Courts have considered the triggering date to be the date of the original fee award. See Bd. of Educ. of Evanston-Skokie Cmty. Consol. Sch. Dist. 65 v. Luca, No. 12 C 5073, 2015 U.S. Dist. LEXIS 128085 at *3, 8 (N.D. Ill. Sep. 24, 2015) (finding it reasonable to file a supplemental fee petition after the original fee petition was ruled upon and measuring time for purposes of Local Rule 54.3(b) from the Court's grant of the first fee petition). In Robinson v. City of Harvey, 617 F.3d 915 (7th Cir. 2010), the Seventh Circuit described supplemental attorneys' fees awards as common and inevitable, but concluded that plaintiff's motion was filed well after the time set forth in Federal Rule of Civil Procedure 54 and Local Rule 54.3. Id. at 918- 19. The Court found that the motion was late because “Robinson took more than 1, 250 days (measured from the award of fees in October 2004) or 275 days (measured from the appellate decision in June 2007).” Id. at 918.

         Defendants argue that the timeliness discussion in Robinson is distinguishable because that case involved a civil rights plaintiff seeking to recover under a fee-shifting statute whereas this case is a non-civil rights case governed solely by a private contract, the Settlement Agreement. Robinson does not make that distinction. And Defendants fail to cite any authority to support the proposition that timeliness under Rule 54 and Local Rule 54.3 is treated differently in fee-shifting and non-fee-shifting cases. Further, as explained more fully below, this is a fee-shifting case under the Magnuson-Moss Act.

         Defendants also contend that the September 13, 2016 Order cannot be the “judgment…on which the motion is founded” (LR 54.3) but under Fed.R.Civ.P. 54, a “judgment” is defined to “include[] a decree and any order from which an appeal lies.” FRCP 54(a) (emphasis added). And Defendants appealed the September 13, 2016 Order so they are hard-pressed to argue that it is not an “order from which an appeal lies.” Although not a merits judgment, it is a judgment under Rule 54. See In re Sears, 867 F.3d at 793 (reversing the judgment of the district court) (emphasis added). The Court is also not convinced by Defendants' unsupported argument that their objection only to the reasonableness of the fee made the September 13, 2016 Order any less of a judgment for purposes of Rule 54 and Local Rule 54.3.

         The September 13, 2016 Order is the triggering event for purposes of Local Rule 54.3(b) in this case. On December 8, 2016, Plaintiffs timely informed this Court that they intended to seek fees for the work performed on the Original Fee Motion and for any work defending that ruling in the Court of Appeals.[3] Pursuant to this Court's authority to relax compliance with local rules (see Edgewood Manor Apartment Homes, LLC v. RSUI Indem. Co., 733 F.3d 761, 770 (7th Cir. 2013)) and by agreement of the parties, the Court stayed briefing on fees-on-fees pending the appellate ruling. The 86 days from September 13 to December 8, 2016 is within the 91-day deadline. There was no waiver for purposes of Rule 54 and Local Rule 54.3.

         C. Seventh Circuit Decision

         Relying on the law of the case doctrine, Defendants argue that any additional award of attorneys' fees to class counsel would violate the Seventh Circuit's mandate. Certainly the direction to award $2.7 million “no more, no less” on remand was clear; this Court entered judgment accordingly. But it is well-settled that under the law of the case doctrine (or its corollary, the mandate rule), “an appellate-court mandate is ‘controlling as to matters within its compass'” but “‘does not extend to issues an appellate court did not address.'” Lees v. Carthage Coll., 560 Fed.Appx. 614, 615 (7th Cir. 2014) (quoting Moore v. Anderson, 222 F.3d 280 (7th Cir. 2000)). “While an appellate decision establishes the ‘law of the case' for all subsequent stages of the litigation…the trial court is restrained only with respect to those issues which have been considered and resolved by the appellate court.” Holcomb v. United States, 622 F.2d 937, 940 (7th Cir. 1980). See also United States v. Robinson, 724 F.3d 878, 886-87 (7th Cir. 2013) (the law of the case doctrine established by an “actual decision of an issue, ” and courts generally use it to “refuse to reopen what has been decided, not a limit to their power.”) (internal citations and quotations omitted).

         In this case, the Seventh Circuit considered and resolved Defendants' challenge to this Court's order granting in part the Original Fee Motion. The Seventh Circuit upheld the fees based on Plaintiff's lodestar, but rejected the application of a multiplier. This Court does not believe that the Seventh Circuit's ruling that this Court erred by applying a multiplier was a ruling on the question of fees-on-fees.

         Defendants cite case law that a district court must comply with the “express or implied rulings” of the appellate court. (Dkt. 638 at 8 (citing Moore, 222 F.3d 280)). ...

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