Seventh Circuit Clarifies “Representative-Sample” Rule for Ex-Ante Attorney-Fee Calculations
Introduction
The Court of Appeals for the Seventh Circuit has issued its second opinion in the sprawling “Broiler Chicken” multidistrict antitrust litigation, this time revisiting the proper methodology for setting class-counsel fees when no fee agreement existed at the litigation’s outset. John Andren v. End User Consumer Class (2025) arose from an objection to the district court’s fee award of 30% ($51.66 million) of a \$181 million settlement fund. Objector John Andren contested both the inputs and the statistical method the district court employed to replicate the “hypothetical ex ante bargain”—the fee that rational class members and counsel would have negotiated at the moment the case was filed.
The Seventh Circuit largely approved the district court’s rigorous, spreadsheet-based approach, but found one defect: the court’s inclusion of “cherry-picked” fee awards (all ≥33%) supplied by class counsel’s expert. By removing those skewed data points, the appellate panel reduced the percentage to 26.6%. Although the dollar difference is modest, the opinion announces a concrete methodological rule that will guide future fee determinations nationwide.
Summary of the Judgment
- The Seventh Circuit affirmed the district court’s 2024 fee order as modified.
- It reduced the fee from 30% to 26.6% of the net common fund (a \$4.46 million decrease).
- The lone methodological error: reliance on a non-representative set of ex-post fee awards that excluded all awards below 33%.
- The court reiterated that courts may—and often must—use ex-post fee awards to simulate an ex-ante market, but the sample must be statistically and substantively representative.
- Other challenges—discounting of counsel’s prior “declining-scale” bids, exclusion of certain Ninth Circuit awards, and stage-of-litigation arguments—were rejected.
Analysis
Precedents Cited and Their Influence
- In re Synthroid Marketing Litigation (I) & (II) (7th Cir. 2001 & 2003) – Originated the “hypothetical ex-ante bargain” framework; also allowed appellate courts to modify fee percentages directly.
- Williams v. Rohm & Haas Pension Plan (7th Cir. 2011) – Endorsed use of fee awards from analogous cases when reconstructing the market.
- Silverman v. Motorola Solutions, Inc. (7th Cir. 2013) – Warned against “cherry-picking” isolated fee awards and demanded broader data sets.
- Birchmeier v. Caribbean Cruise Line, Inc. (7th Cir. 2018) – Allowed higher fees where present case was riskier than past comparators.
- In re Stericycle Securities Litigation (7th Cir. 2022) – Emphasised that ex-ante agreements are “particularly useful” but ex-post awards remain relevant.
- In re Broiler Chicken Antitrust Litigation (Broiler I), 80 F.4th 797 (7th Cir. 2023) – First appeal; mandated consideration of declining-scale bids and Ninth Circuit fee data.
Legal Reasoning
The Seventh Circuit assessed two layers of review. First, it confirmed de novo that the district court had embraced the correct methodology—constructing a market-rate fee as of filing. Second, under deferential abuse-of-discretion review, it examined how that methodology was applied.
The panel praised the district court’s three-source spreadsheet (ex-post awards nationwide; counsel’s own previous awards; and one negotiated ex-ante exemplar from Interest Rate Swaps litigation). However, the inclusion of Professor Klonoff’s list of only ≥33% awards violated the “representative sample” principle articulated in Silverman. Because the court had already limited its universe to settlements between \$100 million and \$1 billion, inserting a one-sided subset artificially inflated the mean and median.
Rather than remand again, the appellate court replicated the district court’s spreadsheet, deleted the skewed entries, and recomputed the mean (27.1%) and median (26.6%). Accepting 26.6% —the top end of objector Andren’s requested range—resolved the lone error without disturbing the lower court’s other discretionary calls.
Impact of the Decision
- Representative-Sample Requirement. District courts must examine whether the comparison set mirrors the full spectrum of relevant fee awards, not merely the high end or the low end.
- Guidance for Practitioners. Class counsel can no longer rely on selective “high-water-mark” compilations. Experts submitting fee surveys must disclose selection criteria and provide a balanced universe.
- Judicial Efficiency. By modifying the fee itself (rather than remanding), the court underscores appellate willingness to make arithmetic corrections where the underlying methodology is sound—discouraging needless “second major litigations” over fees.
- Interaction with Ninth Circuit “Megafund” Rule. Although the Seventh Circuit again resisted importing the Ninth Circuit’s fee caps wholesale, it clarified that capped awards may still inform market expectations and should not be discarded unless demonstrably unrepresentative.
- Spreadsheet Transparency. The opinion effectively endorses detailed, data-driven fee analyses—inviting district courts to publish the underlying calculations for appellate and public scrutiny.
Complex Concepts Simplified
- Ex-Ante vs. Ex-Post. “Ex-ante” looks forward from the lawsuit’s start, capturing the uncertainty and risk facing counsel; “ex-post” looks backward after results are known.
- Common Fund Doctrine. When a settlement creates a pool of money for the whole class, class counsel are paid as a percentage of that fund.
- Declining (or Sliding) Fee Scale. A structure where counsel’s percentage decreases as the recovery increases, aligning incentives for larger settlements.
- Megafund Rule (Ninth Circuit). A judicially created cap that ratchets down fee percentages once the recovery surpasses threshold amounts (e.g., \$500 million).
- Cherry-Picking. Selecting only favorable data points (here, high fee awards) while ignoring contrary evidence, leading to statistical distortion.
Conclusion
John Andren v. End User Consumer Class cements a practical, data-integrity rule in attorney-fee jurisprudence: when courts use ex-post awards to model an ex-ante market, the comparison set must be demonstrably representative. By eliminating skewed data rather than questioning the broader methodology, the Seventh Circuit offers a roadmap for both judges and practitioners: amass diverse fee data, disclose selection criteria, and let arithmetic—not advocacy—drive the ultimate number. The decision will reverberate well beyond antitrust litigation, shaping fee contests in securities, consumer, and mass-tort class actions across the United States.
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