Northeastern Engineers Federal Credit Union v. Home Depot, Inc.

USCA11 Case: 20-10667 Date Filed: 01/05/2022 Page: 1 of 13
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 20-10667
____________________
NORTHEASTERN ENGINEERS FEDERAL
CREDIT UNION,
PITTSFIELD COOPERATIVE BANK,
PHENIX-GIRARD BANK,
KELSEY O'BRIEN,
FIRST FINANCIAL CREDIT UNION,
et al.,
Plaintiffs-Appellees,
versus
HOME DEPOT, INC.,
THE HOME DEPOT U.S.A., INC.,
Defendants-Appellants.
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2 Opinion of the Court 20-10667
____________________
Appeal from the United States District Court
for the Northern District of Georgia
D.C. Docket No. 1:14-md-02583-TWT
____________________
Before WILSON, GRANT, and TJOFLAT, Circuit Judges.
PER CURIAM:
In a previous appeal in this class action, In re Home Depot
Inc., Customer Data Security Breach Litigation (Home Depot I),
931 F.3d 1065, 1072 (11th Cir. 2019), we considered Home Depot’s
challenge to the attorney’s fee the District Court awarded to Class
Counsel pursuant to a fee-shifting provision contained in the par-
ties’ court-approved settlement agreement. The District Court
awarded an attorney’s fee of $15.3 million. It did so by multiplying
a lodestar amount of $11.733 million by a multiplier of 1.3; the mul-
tiplier was to compensate Class Counsel for the risk they under-
took in representing the plaintiff class. We affirmed the lodestar
amount but reversed the District Court’s use of the multiplier to
enhance it. We therefore remanded the case for the award of an
attorney’s fee of $11.733 million.
On remand, the District Court awarded Class Counsel an at-
torney’s fee of $14.1 million, which was thirty-three percent of the
benefit the class purportedly received pursuant to the settlement
agreement. The law of the case doctrine and Home Depot I’s man-
date precluded the District Court from awarding Class Counsel an
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20-10667 Opinion of the Court 3
attorney’s fee other than the $11.733 million lodestar plus interest.
We therefore remand the case and instruct the District Court to
enter an order requiring Home Depot to pay Class Counsel the
sum of $11.733 million plus interest from the date of the amended
fee award.
I.
Our opinion in Home Depot I sets out the facts in full, so we
provide an abbreviated version here. Between April 2014 and Sep-
tember 2014, Home Depot was the subject of a massive data
breach. Hackers stole the debit and credit card information of ap-
proximately 56 million Home Depot customers and sold that infor-
mation to thieves who then made thousands of fraudulent transac-
tions using the customers’ credit and debit card numbers. Id at
1076.
Following the data breach, the customers and the financial
institutions that issued the compromised cards filed a series of class
actions, alleging that Home Depot failed to secure its customers’
data. Id. The United States Panel on Multidistrict Litigation con-
solidated the actions in the Northern District of Georgia, where the
District Court split the litigation into two separate tracks: a con-
sumer track and a bank track. Id. Home Depot I involved the so-
called “bank track” comprised of a number of different financial in-
stitutions. Id.In brief, the Class Representatives and Home Depot reached
a settlement agreement, and the District Court approved it. Id. at
1075. As part of the agreement, Home Depot agreed to pay Class
Counsel “reasonable attorneys’ fees, costs, and expenses” as
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4 Opinion of the Court 20-10667
determined by the District Court. Id. The agreement, however,
did not specify what a “reasonable” fee would be. Id. Nor did it
specify the method the District Court should use in determining
the fee.
Once the District Court approved the settlement agree-
ment, Class Counsel moved the court for an attorney’s fee award
of $18 million. Class Counsel argued that this amount was reason-
able under either the percentage method or the lodestar method
and did not take a stance on which method the District Court
should use.1 Home Depot I, 931 F.3d at 1076. Home Depot, on
1 Ordinarily, there are two methods for calculating attorney’s fees in class ac-
tions: the percentage method and the lodestar method. The percentage
method is ordinarily used in “common fund” cases; the court awards the at-
torney’s fee based on a percentage of the common fund. See Camden I
Condo. Ass’n v. Dunkle, 946 F.2d 768, 774 (11th Cir. 1991). The common fund
consists of any benefits resulting from the litigation that flow to the class mem-
bers. This benefit includes the funds ultimately used to pay the class members’
attorney’s fee. Id.The lodestar method is used in “fee-shifting” cases; the court awards
the attorney’s fee pursuant to a contract between the parties, as in the instant
case, or pursuant to statute. Home Depot I, 931 F.3d at 1081-82; see, e.g., 42
U.S.C. § 1988. Under this method, the court awards class counsel an attorney’s
fee based on the hours reasonably spent on the case; the court multiplies the
number of reasonable hours times a reasonable hourly rate. Hensley v. Eck-
erhart, 461 U.S. 424, 433, 103 S. Ct. 1933, 1939 (1983). Importantly, the de-
fendant pays the attorney’s fee using its own funds rather than the common
fund received by the class members. See Home Depot I, 931 F.3d at 1079.
To reach $18 million under the lodestar method, Class Counsel sug-
gested a lodestar of $11.733 million and a multiplier of 1.53. To get to $18
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20-10667 Opinion of the Court 5
the other hand, argued that the Court was required to use the lode-
star method and suggested that a fee of $5.6 million was reasona-
ble. Id.
The District Court found that the lodestar approach was the
proper method of calculating attorney’s fees and accepted the lode-
star proposed by Class Counsel. Id. To account for the “excep-
tional litigation risk that class counsel took in litigating this case,”
the Court then applied a multiplier of 1.3 to arrive at a total fee
award of $15.3 million. Id. As a means of justifying the $15.3 mil-
lion award, the District Court compared, i.e., “cross-checked,” that
award with the attorney’s fee it would have awarded Class Counsel
under the percentage method (had it decided the percentage
method was the appropriate method). Id. at 1076–77. According
to the cross-check, the Court would have awarded Class Counsel
$14.1 million, one-third of an estimated $42.5 million common
fund.2 In short, the attorney’s fee the Court awarded, $15.3
million under the percentage method, Class Counsel suggested that the class
benefit was $60.85 million and that 29.7% of that totaled $18 million.
2 In Home Depot I, we noted that “[c]ourts often use a cross-check to ensure
that the fee produced by the chosen method is in the ballpark of an appropriate
fee.” 931 F.3d at 1091 (citing In re Gen. Motors Corp., 55 F.3d 768, 820 (3d Cir.
1995)). We also noted that it is not necessary to use a cross-check in a fee-
shifting case like this and that in most fee-shifting cases doing so is not viable.
Id. at 1091 n. 25. Indeed, a closer look at the use of percentage cross-checks
shows that “the circumstances in which the percentage cross-check may be
logically deployed are so few that the term itself can be found in only about a
dozen cases.” 5 William B. Rubenstein, Newberg on Class Actions § 15:92.
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6 Opinion of the Court 20-10667
million, exceeded the fee it would have awarded had it used the
percentage method.
Home Depot appealed the District Court’s attorney’s fee
award, arguing that the attorney’s fee award was excessive and
therefore not “reasonable” within the meaning of the attorney’s fee
provision of the settlement. See id. at 1077–1078. It was excessive,
Home Depot contended, because the District Court (1) included
time Class Counsel spent on unrelated matters 3 and (2) erroneously
applied a “multiplier” to the lodestar to account for Class Counsel’s
risk in undertaking the plaintiffs’ representation. Id.
Class Counsel countered Home Depot’s arguments head on
and defended the District Court’s attorney’s fee decision. Class
Counsel also filed a “conditional cross-appeal” in which they chal-
lenged the District Court’s application of the percentage cross-
check. Id. at 1078. Class Counsel asked that if we reversed or mod-
ified the attorney’s fee award and remanded the case for reconsid-
eration, we instruct the District Court to include the fee award in
the class benefit when performing the cross-check of a new lode-
star. Id.
3 Specifically, Home Depot argued that Class Counsel should not have been
given credit for hours spent opposing Home Depot’s attempts to secure re-
leases from the smaller financial institutions or in soliciting class representa-
tives. More generally, Home Depot also argued that the District Court failed
to provide sufficient detail in its fee award to allow for meaningful review.
Home Depot did not dispute the rates requested by Class Counsel.
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20-10667 Opinion of the Court 7
On July 25, 2019, this Court issued an opinion affirming the
District Court’s attorney’s fee award “in all respects except one.”
Id. at 1072. We found no error in the District Court’s calculation
of the lodestar of $11.733 million and therefore affirmed its use in
fixing the attorney’s fee award. Id. at 1086–91. But we found error
in the Court’s use of the 1.3 multiplier to compensate Class Coun-
sel for the risk in undertaking the plaintiffs’ representation because
the lodestar already took such risk into account. Id. at 1085 (citing
Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 553, 130 S. Ct. 1662,
1673 (2010)). Compensating Class Counsel for risk via the multi-
plier would have resulted in a windfall to Class Counsel. Id. As for
Class Counsel’s conditional cross-appeal, we found no error in Dis-
trict Court’s calculation of the class benefit in cross-checking its
$15.3 million attorney’s fee award. 4 Id. at 1091–93. We then re-
manded the case for “further proceedings consistent with [our]
opinion.” Id. at 1094.
Following our decision, Class Counsel and Home Depot dis-
agreed as to Home Depot I’s holdings and the District Court’s task
on remand. Home Depot contended that we affirmed the $15.3
million attorney’s fee award with one exception: the District Court
erred in enhancing the $11.733 million lodestar with a 1.3 multi-
plier. The District Court’s task on remand was ministerial: enter
judgment for Class Counsel for $11.733 million plus interest.
4 Actually, whether or not the District Court erred was of no moment because
the District Court was not required to conduct a cross-check in the first place.
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8 Opinion of the Court 20-10667
Class Counsel contended that we vacated the attorney’s fee
award in its entirety and remanded the case with the instruction
that the District Court redetermine the attorney’s fee from scratch.
Class Counsel read our opinion as holding that the District Court’s
error in applying the 1.3 multiplier somehow rendered its correct
application of the lodestar infirm and therefore required the vaca-
tion of the attorney’s fee award entirely. 5
According to Class Counsel, we left the District Court free
to assess the attorney’s fee pursuant to the lodestar method or the
percentage method. If the Court fixed the fee pursuant to the lode-
star method, the law of the case doctrine precluded it from using a
multiplier to compensate Class Counsel for the risk it undertook in
representing the plaintiff class. If the Court fixed the fee pursuant
to the percentage method, it should assume a class benefit of $42.5
million (the benefit the Court calculated earlier in cross-checking
its original $15.3 million fee award) and award an attorney’s fee of
one-third of that benefit, i.e., $14.1 million.
The District Court chose the percentage method Class
Counsel proffered. The Court awarded Class Counsel $14.1 mil-
lion plus interest from the date of the $15.3 million fee award, for
a total of $14,532,418.31, and entered an order accordingly.
Home Depot now appeals the District Court’s new fee
award. Home Depot argues the increased fee award should be re-
versed with instructions that the District Court award Class
5 Class Counsel thereby implied that we would have affirmed the attorney’s
fee award had the District Court not erred by applying the multiplier.
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20-10667 Opinion of the Court 9
Counsel attorney’s fees in the sum of $11.733 million plus interest.
Class Counsel disagrees and defends the District Court’s new fee
award.
II.
A.
The law of the case doctrine holds that “the findings of fact
and conclusions of law by an appellate court are generally binding
in all subsequent proceedings in the same case in the trial court or
on a later appeal.” Heathcoat v. Potts, 905 F.2d 367, 370 (11th Cir.
1990) (internal quotation mark omitted). And “while the doctrine
encompasses only those issues previously determined, . . . the law
is clear that it comprehends things decided by necessary implica-
tion as well as those decided explicitly.” Wheeler v. City of Pleas-
ant Grove, 746 F.2d 1437, 1440 (11th Cir. 1984) (emphasis in origi-
nal) (internal citations and quotations omitted) (collecting cases).
On remand, in addition to applying the law of the case, the
trial court must “implement both the letter and the spirit of the
[appellate court’s] mandate.” 6 Piambino v. Bailey, 757 F.2d 1112,
6 The “mandate rule” is simply a “specific application of the ‘law of the case’
doctrine.” Piambino, 757 F.2d at 1120 (citing Greater Boston Television Corp.
v. Fed. Commc’ns Comm’n, 463 F.2d 268, 279 (D.C. Cir. 1971), cert denied,
406 U.S. 950, 92 S. Ct. 2402 (1972)). It “stands for the proposition that an ap-
pellate decision on an issue must be followed in all subsequent trial court pro-
ceedings unless the presentation of new evidence or an intervening change in
the controlling law dictates a different result, or the appellate decision is clearly
erroneous and, if implemented, would work a manifest injustice.” Id. (citing
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1119 (11th Cir. 1985) (citing Nixon v. Richey, 513 F.2d 430, 435–36
(D.C. Cir. 1975), aff’d on other grounds, 433 U.S. 425, 97 S. Ct. 2777(1977)). Thus, the trial court “may not alter, amend, or examine
the mandate, or give any further relief or review, but must enter
an order in strict compliance with the mandate.” Id. (citing In re
Sanford Fork & Tool Co., 160 U.S. 247, 255, 16 S. Ct. 291, 293
(1895)). One final point: the mandate is, by necessity, responsive
to the issues presented on appeal and resolved. See id.We look to the parties’ briefs for the issues they presented
to the Home Depot I panel. Home Depot essentially presented
one issue: whether the attorney’s fee award was excessive. Home
Depot argued that it was excessive on two grounds.7 First, the Dis-
trict Court erred when it included in the lodestar the hours Class
Counsel spent soliciting plaintiffs and opposing the card-brand re-
covery process. Home Depot I, 931 F.3d at 1087–88. Second, the
District Court erred in using a multiplier to account for Class Coun-
sel’s risk in taking the case. Id. at 1082. Class Counsel disagreed.
They argued that the attorney’s fee was not excessive—that the
District Court did not err in calculating the lodestar or in applying
the multiplier.
Westbrook v. Zant, 743 F.2d 764, 768–69 (11th Cir. 1984); Baumer v. United
States, 685 F.2d 1318, 1320 (11th Cir. 1982)).
7Home Depot also questioned whether the District Court’s ruling was ame-
nable to appellate review. Home Depot I, 931 F.3d at 1088. We found this
argument to be without merit. Id. at 1091.
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20-10667 Opinion of the Court 11
In Home Depot I, we rejected the first ground of Home De-
pot’s excessiveness argument but sustained its second ground. Id.
at 1086, 1088. We therefore affirmed the attorney’s fee award “in
all respects except one”: the enhancement of the $11.733 million
lodestar via the 1.3 multiplier. Id. at 1072. We held that in a fee-
shifting case like this one, it is inappropriate to use a multiplier to
account for risk. See id. at 1085 (noting that one reason the Su-
preme Court has limited the use of multipliers to rare circum-
stances is because it leads to a windfall for attorneys). The inappro-
priate enhancement of the lodestar via the 1.3 multiplier, however,
did not render the lodestar infirm. To the contrary, we found the
lodestar fully supported by the record. See id. at 1088. The lodestar
represented a reasonable fee under the fee-shifting provision of the
settlement agreement. The District Court erred in disregarding
that implicit holding, which was included in the law of the case,
and in opting to award an attorney’s fee pursuant to the percentage
method. The Court should have awarded the fee called for by the
lodestar sans multiplier. 8
B.
As a final matter, we address the issue of interest. On re-
mand, the District Court awarded Class Counsel interest on the
$14.1 million percentage cross-check award from the date of the
8This is a task we have asked district courts to perform previously. See, e.g.,
McKenzie v. Cooper, Levins & Pastko, Inc., 990 F.2d 1183, 1186 (11th Cir.
1993) (reversing the fee award only insofar as it included a multiplier).
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12 Opinion of the Court 20-10667
original fee award (October 11, 2017). Home Depot argues that
the District Court erred. We look first to the settlement agree-
ment. The settlement agreement states that “[i]f an appeal is taken
from an order approving Class Counsel’s fee request, Home Depot
will pay interest on the amount awarded, as ultimately approved
or reduced on appeal, at the same rate as applicable to any final
judgment.” This language thus directs the rate that should be used
to calculate the interest but does not designate at what date the
interest should begin to accrue.
We therefore turn to the Federal Rules of Appellate Proce-
dure. Rule 37 governs the award of postjudgment interest by a dis-
trict court after an appeal. See Fed. R. App. P. 37. When the ap-
pellate court affirms “a money judgment in a civil case,” postjudg-
ment interest “is payable from the date when the district court’s
[original] judgment was entered,” unless the law provides other-
wise. Fed. R. App. P. 37(a). If the appellate court modifies or re-
verses a judgment, as was the case here, the mandate “must con-
tain instructions about the allowance of interest.” Fed. R. App. P.
37(b). If the mandate is silent on the issue of interest, “the district
court on remand [has] no choice but to begin postjudgment inter-
est on the date of the amended judgment.” SEB S.A. v. Sunbeam
Corp., 476 F.3d 1317, 1319 (11th Cir. 2007). Because we did not
provide instructions regarding interest in our prior opinion, the
District Court was required to award interest from the date of the
amended fee award (January 23, 2020).
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20-10667 Opinion of the Court 13
III.
For the forgoing reasons, we vacate the District Court’s or-
der and remand with instructions that the District Court award
Class Counsel attorney’s fees in the original lodestar amount of
$11,773,932 plus interest from January 23, 2020.
VACATED AND REMANDED