7th Circuit slams lawyer, sets new law on fees

An Indianapolis attorney who appealed a class-action lawsuit seeking a share of his clients’ compensation on top of a statutory award of fees was called out by the 7th Circuit Court of Appeals, which denied his appeal and affirmed the judgment of the U.S. District Court for the Southern District of Indiana.

The court also used the opinion to draw a new line on attorney fees in class action suits.

Ronald Weldy represented a class of 741 former Visteon Corp. workers. They successfully sued after Visteon failed to timely notify workers of their rights to extend insurance coverage through COBRA when they were laid off. Weldy was paid $302,780 as class counsel, but in this appeal sought a share of the compensation clients received – $1,250 each following Visteon’s bankruptcy reorganization.

“(E)ven if it were sometimes appropriate to give a lawyer a slice of the class’s recovery on top of a fee-shifting award, this would not be the case to do it in,” Circuit Judge Frank Easterbrook wrote for the panel in Darryl Pierce and Sharon Pierce, et al. v. Visteon Corp. and Visteon Systems, LLC, 14-2542.

“We’ve mentioned two reasons: Weldy bungled the appeal, costing the class an opportunity to seek greater compensation, and his demand for fees from the class goes directly against his clients’ interests, yet he did nothing to help them protect themselves,” Easterbrook wrote. “And this isn’t the only respect in which Weldy has tried to undermine his clients’ interests. The lead argument in his brief is – that some members of the class will get too much money! … (I)t is unfathomable that the class’s lawyer would try to sabotage the recovery of some of his own clients.”

Easterbrook continued, “The brief’s writing is careless to boot; it conveys the impression of ‘dictated but not read.’ Here are two sentences: ‘This Court should be entered a high daily statutory penalty in this matter. Respectfully, the award of the District Court to the contrary law and an abuse of discretion.’ There’s more, equally ungrammatical. Weldy is in no position to contend that his compensation is too low.’”

The panel also used the case to fix new law concerning fees.

“We suggested in Evans v. Evanston, 941 F.2d 473, 479 (7th Cir. 1991) that clients should not be ordered to pay counsel who are compensated under a fee-shifting statute; today, that suggestion becomes a holding,” Easterbrook wrote.