Jason Douglas v. Bethany C. Price ( 2020 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 19‐1868
JASON DOUGLAS,
Plaintiff‐Appellee,
v.
THE WESTERN UNION COMPANY,
Defendant‐Appellee,
v.
BETHANY C. PRICE,
Objector‐Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 14 C 1741 — Gary Feinerman, Judge.
____________________
ARGUED JANUARY 30, 2020 — DECIDED APRIL 13, 2020
____________________
Before BAUER, KANNE, and SYKES, Circuit Judges.
SYKES, Circuit Judge. Appellant Bethany Price objected to
a proposed class‐action settlement, but the district judge
ruled that she was not a class member and she did not
contest that ruling. Price then sought attorney’s fees and an
2 No. 19‐1868
incentive award for objecting. The judge denied her requests
because as a nonclass member, she had no standing to object
or to receive fees or an award. Price appeals the denial of her
fee and award requests, arguing that nonclass members can
be compensated for objecting. Because Price does not chal‐
lenge the ruling that she is not a class member, we conclude
that she is not a party and lacks standing to appeal. Thus we
dismiss the appeal for lack of appellate jurisdiction.
I. Background
Price objected to the proposed settlement of a class action
filed by Jason Douglas (the class representative) against The
Western Union Company. The class complaint alleged that
Western Union violated the Telephone Consumer Protection
Act of 1934 by sending unsolicited text messages. The Act
prohibits using any “automatic telephone dialing system” to
make any call “to any telephone number assigned to a …
cellular telephone service.” 47 U.S.C. § 227(b)(1)(A)(iii); see
Campbell‐Ewald Co. v. Gomez, 136 S. Ct. 663, 667 (2016) (“A
text message to a cellular telephone, it is undisputed, quali‐
fies as a ‘call’ within the compass of § 227(b)(1)(A)(iii).”). A
year into the suit, the parties agreed to settle for $8.5 million.
The proposed settlement defined the class as: “All Persons in
the United States who received one or more unsolicited text
messages sent by or on behalf of Western Union between
March 12, 2010 and November 10, 2015.”
After the parties notified the class of the proposed set‐
tlement, four people objected, including Price. She thought
she was a class member because she had received two text
messages from Western Union. Price objected to the settle‐
ment on several grounds: it inadequately compensated the
class; class counsel’s fee request was too high; the plaintiff’s
No. 19‐1868 3
incentive award was too high; the class definition was
imprecise because it did not include her; and the list of class
members had errors.
The class representative and Western Union contested
whether Price had standing to object. They argued that she
could not be a class member because she had “filled out a
form in which she expressly consented to receiving text
messages for the exact purpose for which she received one.”
Western Union said that before sending text messages to
customers, it generally obtained consent twice. Customers
would consent when they first registered and again after an
opt‐in text message asked them to confirm that they wished
to receive additional text messages.
During settlement negotiations, the parties agreed that
two groups might have received “unsolicited” text messag‐
es: (1) those who entered transactions on Western Union’s
website but did not sign up for its loyalty program, and
(2) those who transferred money via its website without
consenting to receive text messages about their transfer and
then received such a text. The parties maintained that Price
did not fall into either class group because Western Union’s
records confirmed that she had enrolled in its loyalty pro‐
gram. To enroll, Price had to check a disclaimer box consent‐
ing to receive text messages and had to consent to the loyalty
program’s terms, which stated that by providing her cell‐
phone number to Western Union, she consented to receive
text messages. Thus, Western Union concluded, the two text
messages that Price received were not “unsolicited,” so she
was not a class member.
After the class representative moved for final approval of
the settlement, the judge held a fairness hearing. Price
4 No. 19‐1868
participated despite the ongoing dispute over her status as a
class member. The judge questioned class counsel about
whether the class was properly limited to the two customer
groups, voiced concerns about counsel’s billing records
(some of which were also raised by Price), and requested
more information about counsel’s time records. Class coun‐
sel could not provide the information—he had no “detailed
time records”—so time sheets were “reconstructed” from
calendars, emails, and research records. Echoing the judge’s
concerns, Price continued to argue that the court should
reject the settlement and reduce class counsel’s fees.
With minor changes to the class definition, the judge cer‐
tified the class, ruled that Price was not a member, approved
the settlement, and reduced class counsel’s fees. He amend‐
ed the class definition to clarify that recipients of “unsolicit‐
ed” text messages were in the class if they initiated
transactions online but did not sign up for the loyalty pro‐
gram or initiated money transfers online without consenting
to text messages about the transfer. Price, the judge ex‐
plained, did not fall into either category. The judge also cut
class counsel’s requested fees from $2.8 million to $425,000,
explaining that counsel’s “reconstructed” timesheets lacked
adequate support, were misleading, and reported “grossly
excessive” hours. Price moved for reconsideration, asking
the court to find that she was “a member of the Class as
originally defined” and to redefine the class to include all
customers who received text messages, even with consent.
The judge denied the motion.
Price did not appeal her exclusion from the class and did
not seek to intervene. Instead, she sought attorney’s fees and
an incentive award. The judge invited her to address
No. 19‐1868 5
“whether a person who never fell within the class definition
(original or modified) may move for fees and an incentive
award under Rule 23.” Price responded that no law barred
her request, so she was entitled to fees and an incentive
award for her success in reducing attorney’s fees and im‐
proving the class definition. The motion was denied because
Price had cited “no authority for the highly questionable
proposition that a non‐class member can recover fees and an
incentive award under Rule 23.” Price appealed. The parties
then sought approval of a proposed settlement of her appeal
under Rules 23(e)(5)(C) and 62.1 of the Federal Rules of Civil
Procedure; the judge refused to approve it.
II. Discussion
On appeal Price does not challenge the finding that she
was not a class member. Instead, she contends that as a
nonparty she may nonetheless seek fees and an award if she
benefited the class. But her argument ignores a threshold
question: whether a nonparty to proceedings in the district
court has standing to appeal a decision that the nonparty
does not like. The Supreme Court has held that “only parties
to a lawsuit, or those that properly become parties, may
appeal an adverse judgment.” Marino v. Ortiz, 484 U.S. 301,
304 (1988). A nonparty who is dissatisfied with a ruling in
the district court must seek to intervene for purposes of
appeal (and a denial of a request to intervene is itself ap‐
pealable). Id. Price did not appeal the ruling that she was not
a class member, and after the court ruled that she was a
nonparty, she did not ask to intervene for purposes of
appealing any unwelcome rulings. Accordingly, under
Marino she lacks standing.
6 No. 19‐1868
In Devlin v. Scardelletti, the Supreme Court clarified that it
has never “restricted the right to appeal to named parties to
the litigation.” 536 U.S. 1, 7 (2002) (emphasis added). But
Devlin does not undermine the application of Marino to this
case. The Devlin appellant was an unnamed member of a
class certified under Rule 23. As a class member, the appel‐
lant had standing to appeal from the district court. Id. at 6–7,
9. The Court emphasized that in class actions, unnamed class
members may be parties for purposes of appeal when they
have properly objected in the district court. Id. at 10. But
here, Price acquiesced to the court’s decision that she was not
an unnamed class member. And under Rule 23(e)(5)(A) only
a “class member” may object to a class settlement, so the rule
does not create standing for nonclass members like Price. See
Mayfield v. Barr, 985 F.2d 1090, 1092–93 (D.C. Cir. 1993);
Gould v. Alleco, Inc., 883 F.2d 281, 284 (4th Cir. 1989).
At times we have allowed nonparties to appeal, but only
when the district court has ordered them to do something
(as with a contempt citation issued to nonparty witnesses) or
when they are agents of parties to the suit (as with attorneys
seeking fees). See Reynolds v. Beneficial Nat’l Bank, 288 F.3d
277, 287–88 (7th Cir. 2002). Those circumstances do not
apply here. Citing Reynolds’s discussion of common funds in
class actions, Price nonetheless argues that “[w]hen a lawyer
lays claim to a portion of the kitty, he becomes a real party in
interest.” Id. at 288. But that situation is distinguishable from
Price’s because those attorneys represented named or un‐
named class members, both of whom (unlike Price) would
have standing in the district court. See, e.g., In re Trans Union
Corp. Privacy Litig., 664 F.3d 1081, 1083–84 (7th Cir. 2011)
(concluding that the attorney who represented class mem‐
bers who filed individual claims could participate in the
No. 19‐1868 7
appeal filed by class counsel where the appeal would direct‐
ly impact that attorney’s fees); Reynolds, 288 F.3d at 287.
Price insists that we must have appellate jurisdiction be‐
cause her appeal is “taken from an order denying [her]
motion for attorney’s fees, making [her] an aggrieved party.”
But by acquiescing to the ruling that she was not a class
member, she had no standing after that decision and could
not be “aggrieved” by any of the later rulings. If Price
thought she had a legal interest, she should have appealed
the decision that she was not a class member or sought to
intervene to become a party. See Marino, 484 U.S. at 304(noting that if a nonparty “has an interest that is affected by”
a district‐court ruling, “the better practice is for such a
nonparty to seek intervention for purposes of appeal,” with
denials of such motions being appealable); see also Devlin,
536 U.S. at 12–13 (opining that the possibility of an objector
who is “not actually a member of the settlement class” is
likely a rare situation and could be resolved “by a standing
inquiry at the appellate level”). She did neither.
DISMISSED