Seventh Circuit Shoots Down Professional Objector

The American Lawyer recently called him a "holdup artist," "the outlaw of class action litigation," and a "notorious class action objector." You see, for those of you not yet lucky enough to meet John Pentz, he is the lawyer who calls his firm the "Class Action Fairness Group" (guess the old title of the "Objector's Group" was a little too obvious, but it still seems a bit odd to refer to yourself as a "Group"). O.K., O.K., but you be the judge if he was being resourceful or just plain shameless for filing an objection on behalf of his late grandmother in an AT&T/Lucent settlement a couple years ago in Madison County, Illinois. "That's my Johnny, such a good boy."

Anyway, seems Mr. Pentz, who started his objecting organization back in 2000 after several years as an associate at Berman DeValerio, is still stirring things up today. This time around its about 300 clicks north at the headquarters of the Chicago School of Economics, the Seventh Circuit. Seems Mr. Pentz' client, Hannah Feldman, wasn't too keen on the $7.25 million settlement in the Aon securities class action. Never mind the fact that "an SEC investigation essentially cleared Aon of any perceived wrongdoing," or the fact that the District Court held that it "was not an easy case," or that "counsel was taking on a significant degree of risk of nonpayment with the case." No, the Class Action Fairness Group was here with Ms. Feldman (the only objector by the way) to save the day by trying to torpedo lead counsel's 30% fee. Can't we all just get along?

But alas, seems Circuit Judges Kanne, Bauer, and Ripple didn't see it Pentz' way. First they held that he failed to articulate an "argument regarding fee-setting methodology to the court below," and thus "waived the argument." Then, the court proceeded to the less stringent abuse of discretion standard, but again rejected the objector's arguments, pointing out "thirteen cases in the Northern District of Illinois where counsel was awarded fees amounting to 30-39% of the settlement fund," and that "attorneys' fees from analogous class action settlements are indicative of a rational relationship between the record in this similar case and the fees awarded by the district court." As for the "objector's quarrel" with the $111,000 expense award, the Seventh Circuit noted that it "barely warants comment."

So 30% it is.

You can read the decision, issued July 5, 2005, at 2005 U.S. App. LEXIS 13310.

Nugget: "District courts are far better suited than appellate courts to assess a reasonable fee in light of the case's history."