Opinion ID: 3152589
Heading Depth: 2
Heading Rank: 2

Heading: Guideposts for the Exercise of Discretion

Text: Less clear-cut is what exactly Illinois law prescribes as the appropriate analytical framework in the minorsettlement context. We review a court’s award of attorney’s No. 13-2434 7 fees under a “highly deferential abuse of discretion standard,” but even this “‘wide latitude’ is not unlimited latitude, and the district court still bears the responsibility of justifying its conclusions.” Pickett v. Sheridan Health Care Ctr., 664 F.3d 632, 639 (7th Cir. 2011) (quoting Sottoriva v. Claps, 617 F.3d 971, 975 (7th Cir. 2010)). The Illinois Probate Act does not expressly channel the trial court’s discretion. Rather it simply requires that the minor’s representative obtain “leave of court” before “compound[ing] or compromis[ing] any claim or any interest of the ward.” 755 ILL. COMP. STAT. 5/19-8. Even though the statute itself doesn’t specify limits on the court’s discretion, “[w]e have it on good authority that ‘a motion to [a court’s] discretion is a motion, not to its inclination, but to its judgment; and its judgment is to be guided by sound legal principles.’” Martin v. Franklin Capital Corp. 546 U.S. 132, 139 (2005) (quoting United States v. Burr, 25 F. Cas. 30, 35 (No. 14692D) (C.C. Va. 1807)) (second alteration in original). “Discretion is not whim, and limiting discretion according to legal standards helps promote the basic principle of justice that like cases should be decided alike.” Id. Although “the text of the provision does not specify any limits [on] the district court[’s] discretion to allow or disallow fees, in a system of laws discretion is rarely without limits.” Indep. Fed'n of Flight Attendants v. Zipes, 491 U.S. 754, 758 (1989). Our challenge is determining where those limits lie. The law firm contends that any judicial review of attorney’s fees begins and ends with reasonableness, which should be determined by reference either to the market rate for the services rendered or to the factors enumerated in the 8 No. 13-2434 Illinois Rules of Professional Conduct. However, at oral argument the firm conceded that it was unable to locate any Illinois cases applying these tests to litigation involving minors. The amicus argues that the trial judge enjoys broad discretion to safeguard the interests of minors but likewise acknowledges that Illinois caselaw offers no “detailed instructions” to structure this discretion. Neither approach in isolation provides an appropriate framework for the trial judge’s determination, much less for appellate review. But reading Illinois caselaw on attorney’s fees together with cases involving minor settlements yields some appropriate criteria. There’s no dispute that minors receive at least as much protection as adult litigants, so the court’s review of attorney’s fees in minor-settlement cases can be no less searching than in cases involving adults. Thus, the reasonableness of the fee structure serves as the floor for judicial review of minor settlements—and the appropriate starting point for our inquiry.
The first measure of the objective reasonableness of an arrangement for attorney’s fees is its consistency with the prevailing market rate. See Palm v. 2800 Lake Shore Drive Condo. Ass'n, 988 N.E.2d 75, 86 (Ill. 2013) (“The phrase ‘reasonable attorney fees’ has generally been interpreted to require use of the prevailing market rate in calculating a fee award.”). In the contingent-fee context, this inquiry can take the form of a side-by-side comparison between the fee ultimately recovered and the lodestar, or what the client would have been charged under a fixed hourly billing No. 13-2434 9 arrangement. Watson v. S. Shore Nursing & Rehab. Ctr., LLC, 965 N.E.2d 1200, 1213 (Ill. App. Ct. 2012) (“Under the lodestar approach, the starting point for calculating the amount of a reasonable attorney fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983))). No one contends that the firm’s fee exceeded the market value of its services. Before the district court intervened, the firm would have been entitled to $229,166.67. The firm pegs the relevant lodestar comparator at $283,554, calculated by multiplying the 1,194.9 hours billed at a rate of $300 for partners and $180 for associates. The amicus did not contest this figure, which the firm asserts is actually “below the market for Chicago.” The judge acknowledged that he had “looked at the lodestar” and on that basis concluded that the attorney’s fee “would be justified in ordinary terms.” Thus, as a purely empirical matter, there was nothing unreasonable about the fee as calculated under the terms of the retainer agreement. Nor was the fee excessive under the second, more qualitative test of reasonableness. Rule 1.5 of the Illinois Rules of Professional Conduct lists eight “factors to be considered in determining the reasonableness of a fee”:
difficulty of the questions involved, and the skill requisite to perform the legal service properly; 10 No. 13-2434 (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results ob- tained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional re- lationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent. The Illinois courts have largely incorporated these factors into their reasonableness analysis, suggesting on multiple occasions that the trial court should consider a variety of ad- ditional factors such as the skill and standing of the attorneys, the nature of the case, the novelty and/or difficulty of the issues and work involved, the importance of the matter, the degree of responsibility required, the usual and customary charges for comparable ser- vices, the benefit to the client, and whether there is a reasonable connection between the fees and the amount involved in the litigation. No. 13-2434 11 LaHood v. Couri, 603 N.E.2d 1165, 1171 (Ill. App. Ct. 1992) (citations omitted); accord 1010 Lake Shore Ass'n v. Deutsche Bank Nat’l Trust Co., 19 N.E.3d 1, 9 (Ill. App. Ct. 2014); Jacobs v. James, 574 N.E.2d 1292, 1296 (Ill. App. Ct. 1991). On this analysis, the firm’s fee easily passes muster. At the initial hearing regarding the settlement, the judge acknowledged that the firm “did a terrific job for the client.” In his final order, the judge took note of “the extensive time spent by plaintiffs’ counsel in the hard-fought battle.” There is no disagreement about the complexity of the litigation, which necessitated expansive discovery and the retention of numerous expert witnesses. After all, it was this degree of time-consuming and labor-intensive preparation that drove the litigation expenses deeply (in the district court’s view, too deeply) into the Goesels’ share of the recovery. It’s ironic, then, that the “difficulty of the question[] involved”—which should work in the firm’s favor here—served as a basis for the judge to reduce the firm’s fee. Without either a quantitative or qualitative basis for objection, the firm’s bargained-for compensation cannot be called unreasonable.
Having cleared the standard hurdle for judicial review of attorney’s fees, the firm must now contend with Illinois’s “strong public policy of protecting the interests of [the] minor.” First Nat’l Bank of LaGrange v. Lowrey, 872 N.E.2d 447, 486 (Ill. App. Ct. 2007). As relevant here, Illinois courts conceptualize the interests of minor litigants in two ways. 12 No. 13-2434 The first is the tangible well-being of the particular minor involved in the litigation. Leonard C. Arnold, Ltd. v. N. Trust Co., 506 N.E.2d 1279, 1281, 1283 (Ill. 1987) (“Courts are imbued with both the power and the duty to protect minors involved in litigation. … Simply because an attorney may not be subject to discipline for entering into a contingent agreement for a particular fee, it does not follow that the courts—which have a special duty to protect minors—must permit him to enforce an agreement for representing a minor in that amount.”). To that end, the firm advised the court that “the portion of the settlement proceeds which Cole will receive after payment of attorney’s fees and expenses … is sufficient to not only cover any future medical needs but is also sufficient to compensate him for his pain and suffering.” Rather than addressing whether the sum was inadequate as a factual matter, the judge seemed offended that the firm even offered an opinion on this point. He speculated that in the event of a trial, “plaintiffs’ counsel would have been arguing strenuously for a big-ticket figure for that intangible component of a damages award.” He also criticized the firm’s “subjective comment on the asserted value of the minor’s pain and suffering” as “inappropriate[].” The degree of vexation here is puzzling given that the judge inquired about this factor in the first place. During the initial hearing on the settlement, the judge expressed con- cern about Cole’s “reasonable prospect of having continuing problems as a result of this terrible accident.” That the firm addressed this concern in its amended submission is not only unobjectionable but fully consistent with its responsibility to advise the court on issues touching the minor’s interests. It makes little sense to criticize the firm’s opinion No. 13-2434 13 regarding the settlement’s sufficiency to protect the child when that’s the very issue at the heart of the court’s inquiry. Lost in the kerfuffle was any attempt by the judge to engage substantively with the factual question of the adequacy of the settlement to protect the child’s interests—which, of course, leaves it beyond our grasp as a basis for affirmance. The second, perhaps less obvious consideration is the court’s duty to safeguard prospectively the interests of minor litigants as a class; that is to say, the incentives communicated to the bar by the court’s rewriting of a private contract for legal representation of a minor. Noting that “[c]ontingent fee contracts … are the poor man’s key to the courthouse door,” the Illinois Supreme Court has held that the “duty to protect minors is consistent with the policy of promoting access to the courts through reasonable contingent-fee agreements.” Leonard C. Arnold, Ltd., 506 N.E.2d at 1281 (internal quotation marks omitted). If these contracts were categorically unavailable to minor litigants—or the risk of retrospective judicial abrogation rendered them so unappealing that the plaintiffs’ bar would be wary of representing children—then “the likely result would be to deprive many minors of quality legal representation.” Id. That outcome would conflict with Illinois public policy “that the rights of minors be guarded carefully.” Villalobos v. Cicero Sch. Dist. 99, 841 N.E.2d 87, 93 (Ill. App. Ct. 2005). Those rights cannot be safeguarded if minor litigants can’t make it into court in the first place. Accordingly, a court should depart from the terms of a retainer agreement only when it has a good reason for doing so. Here, the firm’s representation was competent, conscientious, and ultimately successful; the judge made no factual 14 No. 13-2434 findings that the minor’s recovery was inadequate; and the fee was unquestionably reasonable under both the marketcomparison and professional-responsibility rubrics. Among the criteria that Illinois courts have enumerated to govern attorney’s fees in general and minor settlements in particular, none support abrogating the retainer agreement and rewriting the terms of the representation after the fact.