In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 16-2135

DUSTAN DOBBS,

Plaintiff-Appellant,

v.

DEPUY ORTHOPEDICS, INC. et al.,

Defendants,

v.

GEORGE E. MCLAUGHLIN, on behalf of JOHN GEHLHAUSEN,

P.C., and on behalf of ANTHONY G. ARGEROS, P.C.,

Appellee.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

Case No. 15 cv 8032 — Sharon Johnson Coleman, Judge.

____________________

ARGUED NOVEMBER 4, 2016 — DECIDED DECEMBER 1, 2016

____________________
2 No. 16-2135

Before FLAUM and KANNE, Circuit Judges, and MAGNUSSTINSON, District Judge.∗

KANNE, Circuit Judge. Dustan Dobbs hired Appellees 

George McLaughlin, John Gehlhausen, and Anthony Argeros as his attorneys on a contingency fee basis. Appellees 

filed Dobbs’s product-liability claim against DePuy Orthopedics in the DePuy ASR Hip Implant Multidistrict Litigation in the Northern District of Ohio. DePuy subsequently 

offered to settle all claims in that litigation. 

Despite advice and pressure from McLaughlin, Dobbs refused to settle and discharged Appellees. Later, Dobbs 

changed his mind and decided to accept the settlement offer. 

Because the employment contract was inoperative when 

Dobbs settled, Appellees sought compensation under a quantum meruit theory. The district court awarded attorneys’ fees 

in the full amount of the original contract. Dobbs argues that 

the district court abused its discretion by not analyzing the 

factors that Illinois courts look to when calculating reasonable attorneys’ fees under quantum meruit. We agree. 

I. BACKGROUND

Doctors replaced Dobbs’s left hip with a DePuy ASR artificial hip. Unfortunately, the ASR model was defective. And 

those defects caused Dobbs pain and other hip problems. 

Roughly four years after the surgery, Dobbs hired Appellees 

to represent him in a product-liability suit against DePuy. 

Appellees took the case on a 35 percent contingency fee.

 ∗The Honorable Jane Magnus-Stinson, of the United States District Court 

for the Southern District of Indiana, sitting by designation. 
No. 16-2135 3

Appellees filed Dobbs’s complaint in the DePuy ASR Hip 

Implant Multidistrict Litigation in the Northern District of 

Ohio. A year later, DePuy proposed a “Global Settlement” in 

that litigation. DePuy offered represented parties $250,000 

and unrepresented parties $165,000.1

McLaughlin advised Dobbs to accept the settlement offer

because going to trial would be expensive, time consuming, 

and risky. Dobbs told McLaughlin that he wanted to register 

for the settlement but that he did not want to “agree with the 

settlement offer,” “waive any rights to a trial,” or “be forced 

to accept the present settlement offer from DePuy.” (R. 32-1 

at 8.) Despite McLaughlin’s continued insistence that Dobbs’s

best option was to take the settlement, Dobbs decided that 

the base award did not properly compensate him for his injuries. Dobbs became frustrated with McLaughlin, believing 

that McLaughlin was trying to force him to settle his case 

when he wanted to take it to trial.

Dobbs then filed a motion to remove McLaughlin as his 

attorney on October 17, 2014.2 McLaughlin acknowledged 

that he no longer represented Dobbs and moved to withdraw as counsel on December 30, 2014. Acting pro se, Dobbs 

 

1 Plaintiffs who meet additional criteria also have a chance to file claims 

for enhancements to the base award. Dobbs is in the process of seeking 

enhancements, but Appellees have expressly waived their right to attorneys’ fees based on any enhancement Dobbs may receive. 

2 Argeros died during the course of representation, and, as a solo practitioner, his representation of Dobbs ended. Moreover, McLaughlin left 

John Gehlhausen, P.C. Gehlhausen remains entitled to a third of any 

share McLaughlin receives even though he stopped representing Dobbs 

in early April 2014. 
4 No. 16-2135

ultimately chose to accept the settlement offer on February 5, 

2015. But because he was considered “represented” for purposes of the settlement offer, Dobbs received $250,000. 

Because Dobbs terminated the contract before he accepted the settlement offer, Appellees could not recover the contingency fee. McLaughlin then asserted a lien on the award 

and sought attorneys’ fees under a quantum meruit theory. 

Judge Katz in the Northern District of Ohio ordered mediation and personally mediated the negotiations. When the 

parties could not resolve the dispute, Judge Katz transferred 

the case to the Northern District of Illinois. There, Judge 

Coleman held that the full contingency fee was a reasonable 

award under quantum meruit. Dobbs now appeals that decision. 

II. ANALYSIS

We review a district court’s award of attorneys’ fees for 

an abuse of discretion. Goesel v. Boley Int’l (H.K.) Ltd., 806 

F.3d 414, 419 (7th Cir. 2015); Gautreaux v. Chi. Hous. Auth., 491 

F.3d 649, 654 (7th Cir. 2007). We have described that standard 

of review as “highly deferential” because the district court is 

in the best position to determine the reasonableness of an 

award for work done on litigation in that court. Montanez v. 

Simon, 755 F.3d 547, 552–53 (7th Cir. 2014); Gautreaux, 491 

F.3d at 659. Highly deferential review, however, does not

give the district court unfettered discretion. The district 

court “still bears the responsibility of justifying its conclusions.” Sottoriva v. Claps, 617 F.3d 971, 975 (7th Cir. 2010). 

We apply state law to determine whether the district 

court’s award is reasonable. See Fednav Int'l Ltd. v. Cont'l Ins. 

Co., 624 F.3d 834, 838 (7th Cir. 2010). A federal court sitting in 
No. 16-2135 5

diversity jurisdiction typically applies the choice-of-law 

rules of the state in which it sits. Klaxon Co. v. Stentor Elec. 

Mfg. Co., 313 U.S. 487, 496–97 (1941). Generally, when a case 

is transferred from a district court with proper venue to another district court, the transferee court will apply the 

choice-of-law rules of the state in which the transferor court 

sits. See Van Dusen v. Barrack, 376 U.S. 612, 639 (1964). Here, 

that suggests that Ohio substantive law—including its 

choice-of-law rules—would apply. Dobbs’s claim, however, 

was filed in the Northern District of Ohio only because the 

DePuy multidistrict litigation was already in progress there. 

Dobbs’s complaint stated that the Northern District of Illinois was the appropriate venue absent the multidistrict litigation. That advises treating the Northern District of Illinois 

as the original venue. 

In fact, district courts in our circuit have taken that approach: foreign cases filed directly in a district court as a part 

of ongoing multidistrict litigation are treated as having originated outside of that district. E.g., In re Watson Fentanyl 

Patch Prods. Liab. Litig., 977 F. Supp. 2d 885, 888–89 (N.D. Ill. 

2013); In re Yasmin & Yaz (Drospirenone) Mktg., Sales Practices 

& Prods. Liab. Litig., No. 3:09-MD-02100-DRH, 2011 WL 

1375011, at *5 (S.D. Ill. Apr. 12, 2011). We ratify that approach 

here and apply Illinois’s choice-of-law rules. 

Illinois applies the choice-of-law analysis from the Restatement (Second) of Conflict of Laws. Morris B. Chapman & 

Assocs., Ltd. v. Kitzman, 739 N.E.2d 1263, 1269 (Ill. 2000). Section 221 of the Restatement governs restitution cases and instructs courts to apply the law of the state with the most significant relationship to the restitution claim. The Restatement lists several factors courts should consider, including:
6 No. 16-2135

the place where the parties’ relationship centers; the place 

where the benefit was conferred and received; and the parties’ domiciles, residences, and places of incorporation or 

business. Restatement (Second) of Conflict of Laws § 221. 

Illinois has the most significant relationship to this dispute. The contract was entered into in Illinois, Dobbs is an 

Illinois resident, Argeros resided and did business in Illinois, 

and the events giving rise to the underlying lawsuit occurred 

in Illinois. The only contact with Ohio was the venue of the 

multidistrict litigation. Thus, Illinois law applies.

Under Illinois law, a client can fire an “attorney at any 

time with or without cause.” In re Estate of Callahan, 578 

N.E.2d 985, 987 (Ill. 1991). If a client terminates the services 

of an attorney who was retained on a contingency fee contract, the contract ceases to be effective and the attorney can 

no longer recover under that contract. Id. at 988; Todd W. 

Musburger, Ltd. v. Meier, 914 N.E.2d 1195, 1208 (Ill. App. Ct.

2009). A discharged attorney is left to recover compensation 

for services rendered under a theory of quantum meruit only. 

Thompson v. Buncik, 961 N.E.2d 280, 283 (Ill. App. Ct. 2011); 

Meier, 914 N.E.2d at 1208–09. Quantum meruit means “as 

much as he deserves.” Thompson, 961 N.E.2d at 283 (internal 

quotation marks omitted); see also Black’s Law Dictionary 1276 

(8th ed. 2004) (defining quantum meruit as “[t]he reasonable 

value of services; damages awarded in an amount considered reasonable to compensate a person who has rendered 

services in a quasi-contractual relationship”). The analysis 

therefore requires an investigation into what fees the attorney earned before being fired. 

Courts must examine the attorneys’ work to decide what 

a reasonable fee would be, and the “burden of proof is on 
No. 16-2135 7

the attorney to establish the value of his services.” Thompson, 

961 N.E.2d at 283. 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) (citing 

In re Estate of Callahan, 578 N.E.2d at 990). Although an attorney may not recover under the original contingency fee contract, “in cases in which an attorney who has done much 

work is fired immediately before a settlement is reached, the 

factors involved in determining a reasonable fee would justify a finding that the entire contract fee is the reasonable value of services rendered.” DeLapaz v. SelectBuild Const. Inc., 

917 N.E.2d 93, 97 (Ill. App. Ct. 2009) (quoting Rhoades v. Norfolk & W. Ry. Co., 399 N.E.2d 969, 975 (Ill. 1979)). 

In this case, the district court abused its discretion by not 

properly analyzing whether awarding the full value of the 

contingency fee was reasonable. First, although we have described our abuse-of-discretion standard in this context as 

“highly deferential,” the reason for doing so is inapplicable 

here. We give district courts wide latitude in this context because the judge making the attorneys’ fees decision is usually the same judge before whom the litigation giving rise to

the attorneys’ fees occurred. Consequently, that judge is 

normally in the best position to determine whether a given 

fee is consistent with the attorneys’ efforts in the case. Here, 

Appellees’ litigation work occurred in the Northern District 

of Ohio. The attorneys’ fees dispute was transferred to the 

Northern District of Illinois only after Judge Katz held that 
8 No. 16-2135

he couldn’t rule on the issue because he had served as the 

parties’ mediator. Because Judge Coleman did not have 

firsthand knowledge about the litigation giving rise to Appellees’ claim for attorneys’ fees, she needed to analyze the 

factors Illinois courts have held are important when awarding attorneys’ fees under quantum meruit. 

The district court’s decision contains limited discussion 

of the relevant factors. The court listed the factors mentioned 

above but did not consider evidence related to the factors; 

rather, the judge merely recited Appellees’ claim that they 

“adhered to all case management orders, collected Dobbs[’s]

medical records, act sheets, monitored the DePuy litigation, 

and attended to all details of maintaining Dobbs’[s] case.” 

(R. 42 at 7.) The only factor specifically addressed in the 

opinion was that Dobbs “undoubtedly benefitted” from Appellees’ work. (R. 42 at 7.) The analysis left a whole host of 

relevant factors unaccounted for. How many hours did Appellees spend on Dobbs’s case? How difficult or novel was 

the underlying product-liability claim? How much would an 

attorney ordinarily charge for this type of work? What were 

Appellees’ skill and standing in the legal community? See

Will, 881 N.E.2d at 504–05 (citing In re Estate of Callahan, 578 

N.E.2d at 990). 

The district court also relied in part on the rule that when 

“an attorney who has done much work is fired immediately 

before a settlement is reached, the factors involved in determining a reasonable fee would justify a finding that the entire contract fee is the reasonable value of services rendered.” DeLapaz, 917 N.E.2d at 97 (quoting Rhoades, 399 

N.E.2d at 975). Although this is a correct articulation of Illinois law, the district court’s analysis does not comply with 
No. 16-2135 9

how Illinois courts have applied the rule in the past. The rule 

applies when the attorney did “much work,” which still requires analyzing the factors used to determine a reasonable 

fee under quantum meruit. See DeLapaz, 917 N.E.2d at 98; Will, 

881 N.E.2d at 505; Wegner v. Arnold, 713 N.E.2d 247, 251 (Ill. 

App. Ct. 1999). Without more, we cannot know if the attorneys’ fees award was reasonable.

On remand, the district court may conclude that the full 

contingency fee is a reasonable award. We do not intend to 

insinuate that some lesser award is required. Our conclusion 

is limited to the ruling that the district court erred by failing 

to consider evidence related to the relevant factors under Illinois law for determining reasonable attorneys’ fees under

quantum meruit.

III. CONCLUSION

For the foregoing reasons, we VACATE the district 

court’s award of attorneys’ fees and REMAND the case for 

further proceedings consistent with this opinion.