Opinion ID: 4553695
Heading Depth: 3
Heading Rank: 3

Heading: Buckley’s Arguments

Text: Buckley’s arguments are also unpersuasive. He argues ﬁrst that Frank lacks standing to appeal. His theory is that because the district court found “nothing untoward about the objector settlements,” Frank cannot “pursue the matter further.” This argument confuses standing with the merits. Contra, e.g., Arreola v. Godinez, 546 F.3d 788, 794–95 (7th Cir. 2008), among many others. We would have little business as an appellate court if a party’s loss in the district court showed lack of standing to appeal. Buckley does no better to argue Frank never had standing to ﬁle his motion in the ﬁrst place. Frank had standing in the district court and has standing now for the same reason that Buckley and the other objectors had standing in the appeals that precipitated Frank’s motion: a class member has standing to defend the class, whose interest he shares, against sell-outs by the self-appointed representatives who control the interests of all. See Devlin, 536 U.S. at 6–9; Young, 324 U.S. at 212 (without addressing standing); In re Subway Footlong Sandwich Litig., 869 F.3d 551, 556 (7th Cir. 2017) (“as a class member who is bound by the settlement, Frank clearly has standing to appeal”). An equitable remedy for breach of the objectors’ limited representative, ﬁduciary duty is just one instance of the “[m]any traditional remedies,” “such as for . . . unjust enrichment,” which “are not contingent on a plaintiﬀ’s allegation of damages beyond the violation of his private legal 16 No. 19-3095 right.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1551 (2016) (Thomas, J., concurring). Buckley argues further that his fee-only objection would not have increased defendants’ liability even if it had been successful. That is correct, and it raises the question: why did defendants pay Buckley to settle his objection? He pleads ignorance, but there is only one reasonable answer: the value to defendants in paying oﬀ Buckley lay in ﬁnally being rid of the Pearson litigation as a whole. And even if class counsel instead of defendants had been the ones to settle with Buckley (on which more in a moment), Buckley’s responsibility to the class depended not on whether defendants would have been required to pay more but on whether the class would have been entitled to receive more. See Young, 324 U.S. at 212 (“the appeal was taken on the assumption[] that the less the junior claimants were awarded the more all the preferred stockholders would receive”). It would have, as Buckley himself demonstrated by appealing the denial of his objection. See Pearson I, 772 F.3d at 786 (“If the class cannot beneﬁt from the reduction in the award of attorneys’ fees, then the objector, as a member of the class, would not have standing to object”). That is because the Pearson II settlement took class counsel fees out of the common fund, a feature correctly advertised at the time of settlement approval as an improvement over the Pearson I settlement. See id. (faulting earlier reversion clause providing that “if the judge reduces the amount of fees . . . the savings shall enure not to the class but to the defendant” as “a gimmick for defeating objectors”). Sustaining Buckley’s objection would have directly beneﬁted the class. Buckley argues along parallel lines that defendants independently paid him from their own pockets, without dipping No. 19-3095 17 into the common fund. The district court relied heavily on this contention in denying Frank’s motion. It would not alter our analysis if it were true. (In Young, neither Potts nor Boag directly picked the pockets of the other preferred shareholders; they held what was not theirs to hold. 324 U.S. at 213–14.) But it is not true as a matter of fact. In the district court, class counsel acknowledged that they had paid $22,500 out of their own fees toward the total of $130,000 paid to settle with the three objectors. Again, under the Pearson II settlement these fees were taken from the common fund. Money that class counsel were willing to part with to ﬁnally resolve the litigation consisted of savings that ought to have enured to the class—not to defendants, the three objectors, or their lawyers. See Pearson I, 772 F.3d at 786.