Date: 03-18-2018

Case Style:

Case Number: 17-2195

Judge: Kanne

Court: United States Court of Appeals for the Seventh Circuit on appeal from the Northern District of Illinois (Cook County)

Plaintiff's Attorney: Christopher Paul Keleher, Stephanie L. Stewart, John C. Wasserman and John A. Landry

Defendant's Attorney: Deirdre R. Kole, George Edward McLaughlin, Susan M. Sharko, Robert C. Tucker and Kristen L. Mayer

Description: George McLaughlin represented
Dustan Dobbs in a products liability suit against DePuy Orthopaedics.
After DePuy offered to settle the suit, but a few
2 No. 17‐2195
months before Dobbs accepted that offer, Dobbs terminated
the representation contract and removed McLaughlin as
counsel. Now, McLaughlin seeks attorneys’ fees in quantum
meruit for the services he and his cocounsel, Anthony Argeros,
rendered in Dobbs’s case. He brought this action on his
own behalf, on behalf of his employer at the time he took
Dobbs’s case, and on behalf of Anthony Argeros’s estate.
In a previous appeal, we vacated a fee award to McLaughlin
because the district court did not adequately address all
the requisite quantum meruit factors. On remand, the district
court evaluated each factor and awarded McLaughlin
$87,500. For the reasons that follow, we affirm that award.
I. BACKGROUND
In August 2012, Dustan Dobbs hired George McLaughlin
(who was at that time employed at John Gelhausen, P.C.) and
Anthony Argeros to represent him in a products liability suit
against DePuy. The attorneys took Dobbs’s case on a 35% contingency
fee agreement. Two days after retention, McLaughlin
and Argeros filed Dobbs’s complaint in the DePuy ASR
Hip Implant Multidistrict Litigation in the Northern District
of Ohio.
A year later, DePuy proposed a settlement, offering parties
represented by counsel on a certain date $250,000 and parties
not represented on that date $177,500. Dobbs told his attorneys
that he wanted to receive information about the settlement
but didn’t want to actually settle. McLaughlin advised
Dobbs to accept the settlement due to the costs of going to
trial. Frustrated because he felt McLaughlin was trying to
force him to settle his case, Dobbs filed a motion to remove
No. 17‐2195 3
McLaughlin as his counsel on October 17, 2014.1 McLaughlin
moved to withdraw on December 30, 2014, which was
granted on January 8, 2015, leaving Dobbs unrepresented.
Thereafter, in February 2015, Dobbs ultimately decided to
accept the settlement offer. Though he was unrepresented at
the time that he accepted the settlement, he was considered a
represented party under the settlement terms, entitling him to
a base award of $250,000.
Because Dobbs terminated his contract with McLaughlin
before accepting the settlement, McLaughlin could not recover
under the contingency fee agreement. So McLaughlin
asserted a lien on Dobbs’s settlement award and sought attorneys’
fees under quantum meruit. The fee dispute was transferred
from the multidistrict litigation’s venue to the Northern
District of Illinois. There, the district court awarded
McLaughlin 35% of Dobbs’s base settlement award, or
$87,500. Dobbs appealed.
In December 2016, we held that the district court abused
its discretion in granting McLaughlin $87,500 because the
court did not adequately address the necessary quantum meruit
factors. We made clear, though, that our decision did not
address the substantive reasonableness of the award: the
court could award the same sum on remand so long as it adequately
addressed the requisite factors.
On remand, the district court considered evidence from
the parties, addressed each quantum meruit factor, and again
1 Argeros died during the course of the representation, and McLaughlin
left John Gehlhausen, P.C. Both Argeros’s estate and Gehlhausen, P.C. remain
entitled to a portion of any attorneys’ fees McLaughlin receives.
4 No. 17‐2195
awarded McLaughlin $87,500. Dobbs appeals this second decision,
and we review it again for an abuse of discretion. See
Dobbs v. DePuy Orthopedics, Inc., 842 F.3d 1045, 1048, 1050 (7th
Cir. 2016) (noting that, because the district court that awarded
the attorneys’ fees was not the same court that presided over
the relevant litigation, the abuse of discretion standard required
the district court that awarded the attorneys’ fees to
engage in an adequate discussion of the relevant factors).
II. ANALYSIS
We apply state law to determine whether the district
court’s award of attorneys’ fees is reasonable. See Fednav Int’l
Ltd. v. Cont’l Ins. Co., 624 F.3d 834, 838 (7th Cir. 2010). As we
noted in Dobbs’s prior appeal, Illinois law applies. See Dobbs,
842 F.3d at 1049.
When a client fires an attorney who was retained on a contingency
fee contract, that contract ceases to be effective and
the attorney can no longer recover under it. See Thompson v.
Buncik, 961 N.E.2d 280, 283 (Ill. App. Ct. 2011). But the discharged
attorney can recover a reasonable sum for services
rendered based on quantum meruit (“as much as he deserves”).
Id. When determining a reasonable fee for services
rendered, Illinois courts consider “the time and labor required,
the attorney’s skill and standing, the nature of the
cause, the novelty and difficulty of the subject matter, the attorney’s
degree of responsibility in managing the case, the
usual and customary charge for that type of work in the community,
and the benefits resulting to the client.” Will v. Nw.
Univ., 881 N.E.2d 481, 504–05 (Ill. App. Ct. 2007).
No. 17‐2195 5
On remand, the district court took and considered evidence
related to these factors, engaged in a thorough discussion
of them, and determined that McLaughlin was entitled
to $87,500 in quantum meruit—a sum equal to the full contingency
fee for Dobbs’s base settlement award. That determination
was not an abuse of discretion, and we are unpersuaded
by Dobbs’s arguments that it was.
Dobbs first insists that the law precludes an attorney from
recovering any amount of fees—even in quantum meruit—
when the attorney breaches a contract or a fiduciary duty, or
when the contingency fee contract violates ethics rules. He believes
that all three occurred here, and that the district court
thus abused its discretion in awarding McLaughlin a fee at all.
But Dobbs raised this issue in his first appeal, and we implicitly
rejected it. “[O]nce an appellate court either expressly or
by necessary implication decides an issue, the decision [is]
binding upon all subsequent proceedings in the same case”
under the law‐of‐the‐case doctrine. Key v. Sullivan, 925 F.2d
1056, 1060 (7th Cir. 1991); see also United States v. Barnes, 660
F.3d 1000, 1006 (7th Cir. 2011) (“The Court’s silence on an issue
raised on appeal means ‘it is not available for consideration
on remand.’” (quoting United States v. Husband, 312 F.3d
247, 251 (7th Cir. 2002))).
Next, Dobbs argues that the district court abused its discretion
on remand because it relied on clearly erroneous factual
findings in its analysis of Illinois’s quantum meruit factors.
Indeed, a district court abuses its discretion when it bases its
decision upon clearly erroneous factual findings. See, e.g.,
Sherrod v. Lingle, 223 F.3d 605, 610 (7th Cir. 2000). But the presence
of some factual errors in a district court’s findings are not
a ground for reversal if “there is enough evidence to support
6 No. 17‐2195
the judge’s conclusions” and “his findings … do not reflect so
fundamental or pervasive a confusion as to invalidate his conclusions.”
Kwasny v. United States, 823 F.2d 194, 196 (7th Cir.
1987); see also Fed. R. Civ. P. 61.
After reviewing the district court’s order and the evidence
in the record, we conclude that the district court had ample
support for its decision to award McLaughlin $87,500. Even
accepting Dobbs’s argument that some factual findings were
clearly erroneous, there are a number of factual findings in
the district court’s analysis that are not. Those alone are sufficient
to justify its award, and we briefly summarize them below.
To the extent that Dobbs has challenged some of the findings
we have included in this summary, we are not left with
a definite and firm conviction that the district court made a
mistake in including them in its analysis. See Hernandez v. Cardoso,
844 F.3d 692, 695 (7th Cir. 2016).
Time and Labor Required. McLaughlin and Argeros each
worked approximately 25 hours from retention to discharge,
and the staff of McLaughlin’s firm worked 102.6 hours. In that
time, the attorneys prepared and filed the complaint two days
after retention and took all the steps necessary to participate
in the multidistrict litigation. See Dobbs v. DePuy Orthopaedics,
Inc., No. 15 cv 8032, 2017 WL 4572497, at *3 (N.D. Ill. May 9,
2017) (detailing those steps necessary for participation).
Attorney’s Skill and Standing. McLaughlin is highly qualified,
and the district court’s findings on this point are uncontested.
(Appellant’s Br. at 24.) See also Dobbs, 2017 WL 4572497,
at *3 (detailing McLaughlin’s skill and standing).
Nature of the Cause and Novelty and Difficulty of the Matter.
The attorneys were hired to prepare for and participate in a
No. 17‐2195 7
complex products liability matter, which was part of a multidistrict
litigation with its own set of rules and procedures.
Attorneys’ Responsibility. “McLaughlin and Argeros, prior
to his death, were responsible for all aspects of the representation
as lead counsel.” Id.
The Usual and Customary Charge.2 McLaughlin attested that
a 40% contingency fee agreement is the usual and customary
charge in the community for a complex products liability case.
“The typical contingent fee is between 33 and 40 percent,”
Gaskill v. Gordon, 160 F.3d 361, 362 (7th Cir. 1998), and Dobbs’s
agreement with McLaughlin was for 35%. Moreover, in this
particular products liability action, represented parties were
entitled to $250,000 while unrepresented parties received
$177,500 (and had to pay common benefit fees).
The Benefit to the Client. All that remained for Dobbs to do
to accept a $250,000 base settlement award, rather than the
$177,500 awarded to unrepresented parties, at the time he terminated
McLaughlin as counsel was to complete the online
enrollment form. He did so shortly after terminating
McLaughlin. Moreover, McLaughlin counseled him on both
settlement and trial, advising him to settle because of the costs
of litigation.
In light of these findings, the district court appropriately
concluded that the quantum meruit factors weighed in favor of
2 Dobbs argues that courts must use the lodestar method in analyzing this
factor, multiplying the reasonable number of hours by the market rate. But
Dobbs points to no Illinois case employing the lodestar method in a quantum
meruit, contingency‐fee case like the one here, let alone one requiring
it. Thus, he has failed to show that the court abused its discretion by not
employing the lodestar method here.
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awarding McLaughlin the entire contract fee as the reasonable
value of services rendered. See Will, 881 N.E.2d at 505
(When an attorney has done much of the work but is fired
immediately before a settlement, the quantum meruit factors
may “justify a finding that the entire contract fee is the reasonable
value of services rendered.” (quoting Wegner v. Arnold,
713 N.E.2d 247, 250 (Ill. App. Ct. 1999))).

Outcome: When we remanded this case, we expected the district
court to assure us that it had considered all of the relevant
evidence and engaged in a thoughtful analysis of those factors
required by Illinois law, particularly because it was not the
court that presided over the underlying litigation. On remand,
it did so.
AFFIRMED.

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