good morning ladies and gentlemen we are pleased this morning to have district judge grease spock of the eastern district of wisconsin sitting with us welcome and of course as you know circuit judge wrote here is participating through the courtesy of the electromagnetic spectrum so our our first case for argument this morning is mccabe against caribbean cruise line not before you even before you start i really need to know the answer to this did mr mccabe receive a phone call during the class period or not yes he did during  class period yes i stated yes he did and by stating it on page one of the objections which i think is page a one one five of the record he stated that he is a qwest member which means by definition that he received at least one called when the class period the district judge seem to misunderstand what mr mccabe stated which is a i am a qwest member hence i paid definition received a call or more through in the class period and i also ok well the class period is defined as from august two thousand and eleven through august of two thousand and twelve and by stating that he is a class member he is stating by definition that he received the call in that period of time whether it was in september of two thousand and eleven or july of two thousand and twelve has no relevance it was during the class period what the district judge misunderstood is that mr mckay also then stated that he received calls outside of the class period i think i think was just i'd beg to differ that mr mckay would have been the only person who thought so but let's talk about the settlement agreement which being that it's obviously far more specific in terms of the released claims then the class notices that controls the issue so the settlement agreement contains this and only this definition of the term released claims any and all claims regarding the alleged calls and it goes up from there but to keep is the alleged call that's the question is this do the alleged calls include calls that were alleged in the consolidated amended complaint excuse me consolidated complaint which is docket number one o t o that is calls that were made since may twenty fourth two thousand and eight and i'll just refer to that for convenience as the first complaint well the  was called during the last period no he and he was not required to do so he was only he would have been required to do so given that he was not in the defendant's records only if he had decided to make a claim but he did not try he did not make a claim he objected and the objection procedure specifically states that in order to object you must name your name and the telephone number on which you received calls during the class which he indisputably did there's and he also received calls outside of the class pure again by stating that he is a class member he is necessarily stating that he received at least one phone call during the class period yes he also received calls outside of the as a declaration or certification at all member which when he did but was one of those two he certify yes the to answer your question directly the factual assertions if he knowingly lied about any of them yes he could be theoretically could be prosecuted absolutely  each telephone call that violates the t c p a is a separate and distinct violation of the law if they cannot be lumped together now the fact that each telephone call involves the same type of conduct and involves the same type of injury and even is alleged to violate the same type of statute does not add up to claim preclusion and just by way of an example ok in an exception at least arguably would be as an example somebody attacks somebody and throws five successive punches well if each punch had occurred in isolation that would give rise to cause of action for battery but five successive profile ation per phone call so each phone call into the occurred two minutes apart which they did not but let's assume and say they did it two minutes apart each phone call gives rise to a separate and distinct cause of action again a violation of the t c p a is a statutory tort it's not based on a contract relationship it's based on legislation where the conduct the unsolicited phone call would not be a violation of the law but for the legislation but for the t the multiple each phone call again provides for a kid's rise i should say to a separate cause of action and i think we discussed the case of map which is discussed quite a bit at length in the briefs where the court recognized that two telephone calls just i think was ten days apart give rise to separate and independent causes of action another matter and this would have to wait for discovery is that by alleging that in addition to receive in cause mr mccabe received calls outside of the class period only discovery would show whether any of those were whether any of those calls were also received after he brought his action in the eastern district of new york if week in a month what have you there's no rest judicata obviously i couldn't have known about that phone call when i follow this case so even in this court worthy of you and i don't see how that's makes any sense but let's just say this quote what to say we l been all that different a bit separate and distinct violations of the d c p a too as the district court stated one a single violation of the t c pay which again makes no sense let's just suppose that were the funding of this court well obviously a call that came after mr mckay began his eastern district court action would obviously not be subject to race judicata and only discovery would show that again i don't think it is relevant because i don't think claim much is clear under the supreme court's precedent but what's also clear is that until we have a final number it's premature and my concern if it wasn't clear before  is that the district judge has said that counsel gets at least fourteen point seven six million and maybe more and i will consider later how much more so it doesn't look like we have the final qualification of the award i don't how can you appeal from something where the judges said person x gets at least y but maybe more and all figure out later how much more well i guess that my response would be that we know at a minimum the fourteen million is a concrete yes but at a minimum is not a final qualification of anything you have any cases supporting the proposition that you can appeal the first half of a field war or the first eighty percent or anything like that when the judge says expressly says i'm not done yet i don't have any on the top of my head i'd be happy i don't know i don't think off the top of your head i don't think research is going to do it because i've done some research i don't think such a case is there ok mean i'm just shocked you have an appeal from an award that the district judge expressly declares is not final and nobody points out that there is a problem with  or what objections they would be making to the deal were before preparing your own no we so i'd be happy to address the court's jurisdiction question and a subsequent briefing to the court if we think a subsequent brief is needed we will let you know ok thank you are you go ahead and discuss the merits because this is going to be your only crack done in the circuit the result is two to three billion excess of what should have been awarded and should have been should be required even if you are seeking compensation for the equivalent of four weeks so we've in our opinion there are reasonable fees and i don't and we also believe that we did play a part and and the reduction of fees by three to six million dollars  but i just want to if i can get back to that to the ex ante analysis the courts risk analysis essentially boils down to the fact that that then it's waited until late in the litigation to make a significant offer which is not not a legitimate basis for employing unprecedented risk premiums the court here extended risk premiums to each tier which no court has done in the circuit the remaining risks identified by the court just don't separate this case from that in nine sank now he ceased isn't that a way of of illustrating the contention nature of the whole few requests i think it is however in our view it's necessarily xposed it's perspective and so you look at the perspective look at the client you look at the class members and class council and say what would they have agreed to at from the outset and not what down the road at this point would they have to took this approach he said he considered the results or the outcome which is what the court did in american art but not the settlement negotiation history professor rubenstein said the point is not to look at councils risk ex post but rather to demonstrate the strength of the achievement compared to the risk ex ant and in addition to the ex post issue the remaining market factors just don't justify the unprecedented recovery the stakes of the case one billion if you go off defend its numbers or twenty five billion based on plaintiff's estimate of fifty million calls and p a s statutory damages by everyone's account played a considerable role in achieving that settlement and the quality of work quality amount of work which was four years with a poor point nine million dollars love star is not so as exceptional as to support this unprecedented recovery crafted trap number for example was on file for three years and five months before it ultimately settled and no risk premium was applied attorney's fees to remand the case to the district court with instructions to delay entry of such an award until conclusion of the claims process and limit any risk premium to the first band to cover the council do you have any comment on the jurisdictional issue i do judge easterbrook and i agree with you we argued primarily as a policy matter this was premature i agree you are correct it is a juristic service there are two questions here one is whether the award was premature for the sliding scale and it approved certain fees before knowing exactly what the approval process would would bear that that was that abuse of discretion and i agree that there is a jurisdiction this case there remain some serious liability questions that awaited resolution at trial so why wasn't an error for judge canal and he concluded there were substantial risks remaining for the class and class council right up until the moment of settlement such that the risk premium ought to extend beyond the first  over we understand that the district court weighed heavily the vicarious liability aspect we think liability be a direct liability or vicarious liability is is the biggest issue and any t c damages our sense the foregone conclusion the formulaic you just have to do the math here yes i understand the district court put a lot emphasis on the issue of a vicarious liability however at the asset outset the three complaints that were filed within months of each other all recognise that vicarious liability was an issue at that point in time there were a number of cases which determined that under the t c p a vicarious liability was a theory that could be pursued as they were there were several governmental entities will want to actually that were identified in complaints the name a g d who was warning about this calling campaign was also warning about this this calling campaign so if we look at this ex ante at the outset liability was an issue as it is in any case and the fact that the district court put so much emphasis on the on the concept of vicarious liability we do believe was an error and and  moreover the district court i think recognized this very early on in the case in december and december two thousand and twelve with a district court denied a motion to dismiss the district court found vicarious liability was a viable theory and could be pursued and i do want to get back to the point you know what drives settlements is this that the telephone consumer protection act in the damages provision what the plaintiffs have to put all their work into and therefore we think it was an abuse of discretion for the district court to find that in this case it deserved this this add on to every single band of recover bands why would the law or require that to be done you can come up with a field more that is absolutely the same even if you say the whole premium is in band one and you can do that in two  that all the premature to be stuck in band want to but we are saying is that the district court should have limited its risk premium which we don't quarrel with we believe that they should receive rescreen but it should be limited to band one and at six percent see this was a very very good result for the class wasn't it i don't i do not deny that it was it was a good result yes but again i do think that the district court  said that the plaintiffs had to overcome certain obstacles which i think that this record gave undue weight to included for example you know the relatively low interest in the plaintiff's bar i think the record be lies that  if you look at docket eighty eight the record volume two you know there was a hotly contested fight over who was going to be lead counsel this was this was the case not where there was no interest like in the silverman case they said there was especially no interest there was a securities fraud crazed case but there was essentially no interest by the played its part here i can get now i know i have had a hard time understanding why you think it was range a judge wrote or i think you know if you look at the redmond case the redmen and that's what we rely on reading case hastert says that you need to look at to determine whether or not he is reasonable you need to look at what is paid to the class for what the class receives it is true your honor we agreed to a floor in the ceiling however there is a twenty million dollars sweet spot in between there and we don't know where it will end up and and put it all to the district court's opinion i don't know and i guess that's the point we just don't know what the ultimate recovery of the class will be hasn't he given a formula i mean why didn't you wait to find out i mean  follow to nor the one of them observes that there is no appellate jurisdiction because we're premature you are you are correct your honor we made more of it as a policy argument why he should have waited we did we did raise it with the district court basically the order entered and so yes we are here moving on to some of the other obstacles that were not present i think in this case that were present in other cases other cases and this includes kind of those those four cases garrett's capital one and had some of the other cases craft what they had obstacles that were present such as the possibility of having the case dismissed based on an arbitration clause and that was in the garrett case in the capital one case which we think is very similar to this case capital one had some picks to petitions to the f c c that could have completely blown up the case there was no such obstacle in this case there was no established business relationship that was available to the defendants there was really no consent issues that was available to the defendants there was no emergency purposes that was available since these are all exceptions that in these other cases these defendants had the only exception with possibly use was the political exception but that would only apply to landlines there was still a awful lot of cell phone calls which would again put put this in a in a very high dollar amount of judgment which was again the base of a huge basis for settling the word that the district court entered in this case was just about there was a twenty seven point three percent and if you look at silverman in that case the court found that twenty seven point five percent maybe at the outer limits of reasonable this and they couldn't consider the sliding scale approach because it was raised at the district court and so here we have a t c p a case in which capital one did a very good analysis of what the mean and median ranges are and the between twenty percent twenty four percent so now we have a case though that has a twenty seven point three percent which not only bumps up against the outer limits of reason licenses in the securities fraud case but goes well beyond what we believe to be the limit of reasonable as which is twenty four percent that's why we offered the six percent risk premium and that's it which would bring you to twenty three point eight sent which would be the high end of the between twenty and twenty four percent finally your honor your honors we believe that the district court erred in not at leas considering the lodestar as a crushing load stars not required you understand that but given the amount of the settlement and given the application of a percentage that was well beyond what has ever been done in any court and to the district courts at least on a cross check to the risk premium in the cross check would would demonstrate that the award at least fifty six million level was a two point nine six multiplier and that gap further you actually look in drill down on the work that was done in four and has said double the lodestar is a sensible ceiling so we think the district court at least used that as as a guide it would have helped the district court did not do that and believe that was abuse of discretion as well surely the rest of my time for a bottle thank your honour's certainly mr romer going around or ryan andrews on behalf of plaintiffs birch where around parks and stone may please the court judge can only did not abuse his discretion in any of the orders that are at issue in this appeal the settlement agreement closely follows the best practices laid out by this court in cases such as reading versus radio shack pearson versus n b t y the palo windows case the footlong subway case there is significant cash recovery going to the class numbers there's not coupons there's not meaningless injunctive relief there's not dedicated cypre fees are only going to be paid on the amount that's recovered to the class nothing is reverting to the defendants there is a simple one page claim form there's no clear sailing agreement defendants have and continue to object to the fee and this case settled after four and a half years of litigation four days before a jury trial just to tell it was correct in approving it mr mccabe really isn't even saying information about what happened in a case can be considered so long as it's considered in the context i think of an ex ante negotiation so yes that was discussed and some things were discussed mostly in professor henderson expert report and just like in silverman this court looked at an expert report showing that the case lasted for years that plaintiffs won summary judgment and only after that when were the defendants really willing to put any money he did and judge can only only use that information in the context of a hypothetical ex ante negotiation that is exactly what this court did in silverman and i think it was completely appropriate to do  judge kelly basically followed everything this court has said to do with the fees he determine the market rate through a hypothetical ex ante negotiation he applied a sliding scale with declining rates of recovery tailored to the realities of this case and he considered the other district court opinions that my friends have cited and he explained why this case was different on numerous specters he noted that this case this risk here we see some fly by night defendants not big banks and there was this political exemption that they know this was a much more difficult case than all of the the bank cases i'd like to call them they were all basically the same case maybe we could get to the bottom line of you know the significance of the grand marshal from regent are you asking whether or not it put pressure on them i  but they are vicarious liability was going to be an issue all the way through the trial we knew this at the beginning we knew that they didn't place the phone calls like in the bank cases or there wasn't a direct agency relationship so yes  make the phone calls and the case would have been over if they prevail that vicarious liability if the issue set to be tried before a judge can now leave was essentially strictly the vicarious liability question there was another question related to the land line calls that was still an issue but the primary focus of all the prep we did for trial was vicarious liability ok wellston saxon case in your view could you spend a moment on the twenty third to think that that ruling made made your past life a lot easier here first off that ruling came after we filed this case so if we're looking at a hypothetical negotiation that would have mattered in the first instance and while the f c c did state that in t c p eight cases that the federal law of carious liability federal common law if i carries liability is applies there was already kind of some form of that going on anyway they basically just codified what had normally been happening and frankly i think they actually may have even made it harder prior to that there were at least district court decisions out there explaining it that steve language of the on behalf of a call made on behalf of someone was sufficient to not do a full blown vicarious liability agency ratification apparent authority analysis so i actually think that order may have made things harder because it clarified the standard but again it came after we filed suit in this case and was asked to think that clarifies something make something that principles of federal common law in vicarious liability apply there was never any issue before that it was solely the company that made the calls that was liable it was you know people for years have been trying to get the the other entities involved through either various sorts of agencies or various statutory language arguments this year andrews i think you're a master at seeing things both ways within a minute of each other so which is it harder easier which is clarify please i think i don't i really don't think the order made a huge difference it added clarity but i don't think it made it easier is that settlement he's only asking for expensive notice he's not a class member he needed to act as pursuant to the notice pursuant to judge can always order he needed to state the telephone number that he got the calls on during the class period if you read what he wrote even if it's under oath he simply does not say that in this court's recent coffman decision that we submitted and our twenty a j letter demonstrates that his failure to do that is dispositive on this particular issue even granting that he has absolutely no interest in this case the two calls that he does identified in the order are two calls that were released by an action he brought in the eastern district of new york if he's talking about other colleges that have to do w so george said that he had no standing and that rests on a view that any claim subject to the affirmative defense of release should be dismissed because there was never any case simply a longer ok there remains the question whether mr mckay pose a complaint about the outcome here given the affirmative defense or previous but it has nothing to do with so this course decisions look often to whether or not silverman is an example the person has an interest remaining in the case and i'm simply saying that because it is gone he no longer has an interest in claiming the release is so broad that it covers those calls another there's any question that those claims are subject to a final order that is really what i'm saying if he was talking about other calls kaufman needs to kaufman demonstrates that he needed to say that there were other calls but i think it is judge wrote or noted earlier everyone in this case plaintiff's defendants judge can only have all read the release language to mean that it's confined to the calls between august two thousand and eleven and august two thousand and twelve the  mckay points to the notice and he said as well the notice says it's confined to those calls the notice or part of the agreement the agreement should be read consistent with the notice and points out what i think it's obvious that the calls are limited to that i think his argument comes from referencing an earlier complaint that he attempts to create ambiguity from but the operative amended superseded complaint that's the subject of the language issue limits it to the calls during that period there was discussion from my friend again that basically the argument that they're making is this court you know he could not deviate from what the other judges downstairs did and capital one and the cases that came after it but they're not really arguing that just shelley abused his discretion so much as that he has no discretion to deviate from mechanical one he had to mechanically apply and that is essentially their argument as i understand  sets out several hypothetical bands and ranges that the court could have adopted before it set the final standard later which i couldn't do was ignore those decisions and he didn't also need to do was look at them let's see how they affected the market rate and explain why this case is different that's what this court did in speaking versus the catholic bishops case the courts can't just wholesale ignore those cases but just generally spends a fair amount of time in his opinion explaining why this particular case was different  i'm going to touch briefly on the final the finality of the order question that judge easterbrook started with with my friends and i there's any question that there is trouble ninety two twenty one jurisdiction excuse me set a schedule on the entire fee he provides a formula that allows for mechanical computation now the band of chippewa indians versus the state of wisconsin case says that when there's a formula and it's definite and it can be applied mechanically  i think he was looking at cases from this court such as redmond that suggests the two step approach he was worried about the fact that defendants were putting funds into the settlement over two year period so the first fifty six million dollars it's going to pay be paid out hasn't even been put into the fund yet that payment i believe is coming a month too for now they still have a whole nother year after that and it's not even a guarantee that they're going to put the twenty million dollars in we think it's a foregone conclusion that this settlement is going to hit the seventy six million dollars defendants think their challenges may make some difference but as for the first fifty six million dollars that's being paid regardless of what care whether the plaintiff is in total pain and suffering damages requires a trial which i'm now going to hold can the defendants who mediately appeal from the first million dollars of the damages awar we know course not because it's not finished yet it's that's my problem here the judges said fourteen point seven something is minimum but it's may likely go up come back to me in this i think what my friends probably should have said is what if there is no second application when were they supposed to appeal if we never apply if the twenty million dollars never goes in because they go bankrupt and between the first order and the trial there you would say that's an appealable because the possibility of bankruptcy or the possibility that the plaintiff will then cave in give up and not want the trial i  think your or your sense i'm sure entirely correct was you have to wait for the trial of course but i think that's because the case is still going on i know a long time ago before the supreme court clarified this you know feel warrants that related to a merits decision could also come up i understand that's no longer the law but i think this case differs radically from last friday's decision in cook versus jackson national life where  you know motion granted didn't put a number here we have a here we have a formula here we have maybe three quarters of a number but if it were missing the other quarter over i mean grant your point look at the it get it is obvious that this requires some attention you know there's that the rule that mechanical all warrants if this is using the mechanical if that if everything else was mechanical that might make it appeal under established order there are a couple of courts of appeals that has said if the district judge expressly breaks the feel ward into phase finale comeback was that more in the nature of if there are factors that warrant reconsideration or something like that as opposed to if things and based on the record now this is the formula apply and this is the fee the hearing and from the order is what he wants us to do is tell him how many claims there are when that process is done that is the only thing that he's going to need to plug it into a formula and then he will spit out the number on the extra money if there is any i think the real problem here is the if there is any which i think makes the order final in the first place and the time it will take to determine whether the the further briefly i didn't really get to address are the order denying or peace the primary basis for the court's denial was a bright line rule that we should have anticipated that defend its would make the same of objections and that we should have just stayed on the sidelines while defended advocated our position and i just observed that the dippin its interests here are not aligned with those of the class class council's it feels he's on appeal courting to class council and so if we had relied on the pinots we would have done so to our detriment and would be stuck with an award that we believe as an ex is excessive i just appeared to address i think judge roll nurse question about the f c c declaratory ruling the two thousand and thirteen declaratory ruling we do believe that clarified vicarious liability provided certain examples of how to get it