Artem v. Gelis

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 21-2093
ARTEM V. GELIS; BHAWAR PATEL; ROBERT
MCDONALD; JAMES V. OLSON; GREGORY HEYMAN;
SUSAN HEYMAN; DEBRA P. WARD; DARRIAN
STOVALL; ALEX MARTINEZ; AMANDA GOREY;
CHRIS WILLIAMS; ASHOK PATEL; KENNETH
GAGNON; MICHAEL CERNY; MARIA MEZA; ANDRE
MALSKE; NICOLE GUY; DAVID RICHARDSON;
STACEY TURNER; ERIC T. ZINN, individually and on
behalf of all others similarly situated
v.
BMW OF NORTH AMERICA, LLC,
Appellant
Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil Action No. 2-17-cv-07386)
Magistrate Judge: Cathy L. Waldor

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Argued on June 7, 2022
Before: AMBRO, RENDELL, and FUENTES, Circuit
Judges
(Opinion Filed: September 9, 2022)
Christopher J. Dalton (Argued)
550 Broad Street, Suite 810
Newark, NJ 07102
Jacqueline M. Weyand
Buchanan Ingersoll & Rooney
640 5th Avenue, 9th Floor
New York, NY 10019
Counsel for Appellant
Jay I. Brody
Gary S. Graifman (Argued)
Kantrowitz Goldhamer & Graifman
135 Chestnut Ridge Road, Suite 200
Montvale, NJ 07645
Randee Matloff
Bruce H. Nagel (Argued)
Nagle Rice
103 Eisenhower Parkway
Roseland, NJ 07068
Thomas P. Sobran
7 Evergreen Lane
Hingham, MA 02043
Counsel for Appellees

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OPINION
AMBRO, Circuit Judge
After the dust settles in a class action lawsuit, lawyers
often remain to squabble over class counsel fees. Trying to
avoid that fate, the parties here made an agreement: Appellant
BMW of North America, LLC would not object to an award
up to $1,500,000, and class counsel would not request an award
above $3,700,000. BMW now appeals the District Court’s
approval of a fee award at the upper limit of that range. It
argues (1) that the Court’s calculation of the “lodestar”
(essentially a multiplication of the hours counsel reasonably
bill on a case by a reasonable hourly rate) was based on an
insufficient record, and (2) that the Court erred in applying a
lodestar multiplier to the fee award. We agree with BMW that
the lodestar was based on an insufficient record and so vacate
the District Court’s judgment and remand for further
proceedings.
I. Background
This appeal stems from the settlement of a consumer
class action suit filed in 2017 against BMW and its German
parent,1 claiming they knowingly manufactured and sold
vehicles equipped with defective N20 and N26 engines. After
the District Court granted in part and denied in part BMW’s
1 The parties later stipulated to the dismissal of BMW’s parent,
Bayerische Motoren Werke Aktiengesellschaft, as a defendant.

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motion to dismiss, the named plaintiffs filed a Second
Consolidated Amended Complaint bringing 20 causes of
action under federal and state law, including an alleged breach
of warranty under the Magnuson-Moss Warranty Act, 15
U.S.C. § 2301 et seq. (a federal fee-shifting statute), breach of
the implied warranty of merchantability, violation of various
state consumer fraud and deceptive trade practice statutes, and
unjust enrichment.
The parties subsequently engaged a mediator and
reached a settlement to reimburse class members for expenses
incurred and provide them extended warranties. Because they
did not know how many consumers would be eligible or make
claims for certain benefits, the total value of the settlement was
unknown. The District Court nonetheless concluded it was
worth at least $27 million. As part of the settlement, the parties
“agree[d] to submit the issue of attorneys’ fees” to a Magistrate
Judge “for final evaluation and decision of the exact amount of
. . . fees . . . that should reasonably be awarded in this case.”
While the Court would have the final say, the parties decided
to resolve the fee issue with a “high-low” provision, stipulating
that
Settlement Class Counsel may apply to the Court
for an award of attorneys’ fees . . . and [BMW]
may object to or oppose that application,
although [BMW] will not object to Settlement
Class Counsel’s application for an award of
attorneys’ fees [of] . . . up to $1,500,000 in the
aggregate. While not agreeing to the total
amount of such an award, the Parties have agreed
that Settlement Class Counsel may apply for an

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award of attorneys’ fees . . . not to exceed
$3,700,000 in the aggregate.
Id.
Class counsel sought $3.7 million in attorneys’ fees, the
maximum allowable under the high-low provision, submitting
to the Magistrate Judge three charts (one for each plaintiffs’
firm) detailing at a summary level the time devoted to various
categories of legal work, aggregated across the entire three-
year litigation period.

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Id. at 218–19.
Id. at 241.

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Id. at 254. In addition, class counsel filed declarations that
added more detail about the work completed while still not
specifying the time spent on particular tasks, who did those
tasks, or the dates they were performed, and declarations that
described the experience of each lawyer who billed for the
case. BMW objected to the maximum fee request. It argued,
among other things, that (1) class counsel did not provide
enough documentation to support the requested lodestar award,
and (2) a lodestar multiplier (a factor by which a lodestar award
is enhanced) was unwarranted here.
The Magistrate Judge held a telephonic hearing. After
listening to the parties’ arguments, the Court ruled that the
summary charts were “more than sufficient” and provided “a
good indicator of the time spent.” Id. at 436. Applying the
lodestar approach, it adopted class counsel’s requested lodestar

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amount of $1,934,000. It then applied class counsel’s
requested multiplier of 1.9 to reach a total fee award of $3.7
million—the full amount class counsel sought. BMW now
appeals.
II. Standard of Review2
Though we look anew (or de novo) at the legal standards
used by the Court to calculate a fee award, “so long as it
employs correct standards and procedures and makes findings
of fact [that are] not clearly erroneous,” a district court has
discretion to decide the amount of an award. In re Rite Aid
Corp. Sec. Litig., 396 F.3d 294, 299 (3d Cir. 2005) (quoting
Pub. Interest Research Grp. of N.J., Inc. v. Windall, 51 F.3d
1179, 1184 (3d Cir. 1995)). We also require that district courts
“clearly set forth their reasoning for fee awards so that we will
have a sufficient basis to review for abuse of discretion.” Id.
at 301.
III. Discussion
A. Waiver of the right to appeal the District Court’s fee
determination
Before addressing the merits of BMW’s arguments, we
address a threshold issue: whether BMW waived its right to
appeal the District Court’s attorneys’ fees ruling through (1) its
purported judicial admissions, or (2) by agreeing to submit the
issue of attorneys’ fees to the District Court “for final
evaluation and decision,” Appx. at 199. We conclude no.
2 The District Court had jurisdiction under the diversity
provision of the Class Action Fairness Act of 2005, 28 U.S.C.
§ 1332(d). We have jurisdiction under 28 U.S.C. § 1291.

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As to the former, class counsel contends the “doctrine
of ‘judicial admissions’” bars BMW’s appeal here. Appellee
Br. 24 n.18. They point to an exchange between the Court and
Christopher Dalton (BMW’s counsel) that occurred
immediately after it granted class counsel’s motion for
attorneys’ fees. The Court asked Mr. Dalton if there was
“anything you need—or I need to put on the record for your
purposes.” Appx. at 437. Mr. Dalton replied: “Your Honor
has already gone through her bases and rationale for making
this determination. We put it in the hands of the Court, and
you’ve made your decision, Judge.” Id.
Case law requires that judicial admissions be
“unequivocal” or “deliberate, clear, and unambiguous.” In re
Motors Liquidation Co., 957 F.3d 357, 360 (2d Cir. 2020) (per
curiam) (collecting cases). As Mr. Dalton’s statements can be
plausibly construed as merely acknowledging the adverse
result of the hearing, they do not meet this standard.
Alternatively, class counsel argues BMW waived its
right to appeal by agreeing “to submit the issue of attorneys’
fees” to the Magistrate Judge “for final evaluation and
decision” of the fee amount “within the $1,500,000 to
$3,700,000 range agreed upon by the Parties.” Appx. at 199
(emphasis added). But the plain language of this provision
does not explicitly waive either party’s right to appeal. Rather,
it provides only that the District Court would decide the issue
after briefing and argument,3 plus it is silent as to appellate
rights.
3 Class counsel also points to non-published decisions from our
Court dealing with high-low fee provisions—Vargo v.

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Our inquiry does not end here, however. We must also
consider whether BMW waived its right to appeal by not
explicitly reserving that right in the agreement. To this, In re
Odyssey Contracting Corp., 944 F.3d 483 (3d Cir. 2019), is
instructive. There we considered whether Odyssey waived its
right to appeal a bankruptcy court’s determination of a
payment dispute in an adversary proceeding. It had signed a
stipulation stating that if the Court made a certain
determination, “all of the Parties’ pending claims will be
withdrawn and disposed of in their entirety with prejudice,”
and the proceeding “shall be deemed to be finally concluded in
all respects.” Id. at 487–88. The stipulation was silent on the
specific right to appeal. Id. at 488. After the Bankruptcy Court
made the relevant determination, Odyssey appealed the
dismissal of its claims to the District Court and, eventually, our
Court. Id. at 486. We held Odyssey had waived its right to
appeal because “the party seeking to appeal must make its
intent to do so clear at the time of the stipulation.” Id. at 489.
In that ruling we distinguished the stipulation in
Odyssey from class action settlement cases in which other
Mangus, 94 F. App’x 941 (3d Cir. 2004), and Bryan v. Erie
Cnty. Off. of Children & Youth, 637 F. App’x 693 (3d Cir.
2016)—and a New Jersey Supreme Court decision discussing
high-low agreements in the context of jury trials—Serico v.
Rothberg, 189 A.3d 343, 349–51 (N.J. 2018). But because the
attorneys’ fees provision at issue here does not include an
unambiguous, explicit waiver of appeal, the Third Circuit cases
fall off point. Serico is also out of place, as it merely involved
enforcing the upper bound of a high-low agreement according
to the agreement’s plain language. Id.

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circuits have required express waiver of the right to appeal
when the parties have stipulated that a court will decide a
certain issue. Id. (citing In re Deepwater Horizon, 785 F.3d
986, 997 (5th Cir. 2015); Montez v. Hickenlooper, 640 F.3d
1126, 1132 (10th Cir. 2011)). We explained that “[t]he interest
at stake in those cases was different from that at issue” in
Odyssey because “[i]n class actions, settlement agreements
cannot be approved unless the court determines that they are
fundamentally fair, reasonable, and adequate, the purpose of
which is to protect unnamed members of the class from unjust
or unfair settlements.” Id. at 489–90 (internal quotation marks
omitted). “[T]hat interest d[id] not apply in [Odyssey], which
involve[d] a dispute between sophisticated business entities.”
Id. at 490.
As our case presents a situation closer to the class action
cases distinguished in Odyssey, we hold that stipulations
regarding attorneys’ fees in class actions must contain an
express waiver of appeal. This tracks our case law in this area,
which recognizes that the “unique relationship among
plaintiffs’ counsel, plaintiffs, and defendants in class actions
imposes a special responsibility upon appellate courts to hear
challenges to fee awards.” In re Cendant Corp. PRIDES Litig.,
243 F.3d 722, 728 (3d Cir. 2001). Because BMW did not
expressly waive its right to appeal the District Court’s fee
determination, it preserved that right.
B. Sufficiency of the record underlying the District
Court’s lodestar calculation
With waiver out of the way, we turn to the merits.
BMW argues the District Court granted class counsel’s fee
request on an insufficient record. We agree.

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For context, there are two main ways to calculate
attorneys’ fees: the percentage-of-recovery method and the
lodestar method. See Cendant, 243 F.3d at 732. The former is
as simple as it’s named. “Lodestar,” though, is a term-of-art
used by courts to denote an award that is “calculated by
multiplying the number of hours [the lawyer] reasonably
worked on a client’s case by a reasonable hourly billing rate
for such services based on the given geographical area, the
nature of the services provided, and the experience of the
attorney[].” Rite Aid, 396 F.3d at 305. These approaches are
typically employed in different contexts. While the
“percentage-of-recovery method is generally favored in cases
involving a common fund,” the lodestar method, pioneered by
our Court in Lindy Brothers Builders, Inc. of Philadelphia v.
American Radiator & Standard Sanitary Corp., 487 F.2d 161
(3d Cir. 1973), “is more commonly applied in statutory fee-
shifting cases . . . .” In re Prudential Ins. Co. Am. Sales
Practice Litig., 148 F.3d 283, 333 (3d Cir. 1998). The lodestar
approach may also be used in cases, such as here, “where the
nature of the recovery does not allow the determination of the
settlement’s value necessary for application of the percentage-
of-recovery method.”4 Id.
As such, was the District Court’s calculation of the
lodestar award based on a sufficient record? Our case law
requires that “[a]ny hours to be used in calculating attorneys’
fees . . . be detailed with sufficient specificity.” Keenan v. City
of Philadelphia, 983 F.2d 459, 472 (1992). In other words, the
4 As BMW does not challenge the District Court’s choice to
use the lodestar method, we do not question that aspect of its
ruling.

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fee application must “be specific enough to allow the district
court to determine if the hours claimed are unreasonable for the
work performed.” Rode v. Dellarciprete, 892 F.2d 1177, 1190
(3d Cir. 1990) (internal quotation marks omitted). The petition
should therefore “include ‘some fairly definite information as
to the hours devoted to various general activities, e.g.[,] pretrial
discovery, settlement negotiations, and the hours spent by
various classes of attorneys, e.g., senior partners, junior
partners, associates.’” Keenan, 983 F.2d at 473 (quoting Rode,
892 F.2d at 1190). “[I]t is not necessary,” however, “to know
the exact number of minutes spent nor the precise activity to
which each hour was devoted nor the specific attainments of
each attorney.” Rode, 892 F.2d at 1190 (internal quotation
marks omitted).
BMW argues the summary charts submitted by class
counsel cannot justify the award because they “do not detail in
any explicit manner how the total hours worked . . . were
generated.” Appellant Br. at 14. In particular, it contends the
charts “provided no dates to inform the District Court of when
the task was performed; nor . . . information to show what any
specific activity was, how much time was devoted to any
specific activity, on any specific date, by which specific
individual, for a particular charge.” Id. at 15 (citing Appx. at
218–19, 241, 254) (emphases in original). As an initial
observation, we note that the summary charts total only three
pages but purport to summarize hours billed across a three-
year period. And while the charts do provide some information
about the hours devoted to litigation activities (such as
“Discovery Activities,” “Pre-Litigation Investigation,”
“Drafting Complaints (original/amended)”), the hours billed
by each attorney are aggregated across the entire three-year
litigation period. Appx. at 218–19, 241, 254. That sort of

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aggregation, without more detail, is an insufficient basis for an
attorneys’ fee award.5 See Keenan, 983 F.2d at 473 (portion of
fee petition consisting of summaries detailing “only monthly
cumulative totals of [attorney’s] hours” was not “sufficiently
specific”). 6 We simply cannot discern from the charts whether
certain hours are duplicative (a determination that is
particularly crucial here, given that three plaintiffs’ firms seek
fees for performing the same categories of work) or whether
the total hours billed were reasonable for the work performed.
In a last-ditch attempt to salvage the award, class
counsel asserts they “offer[ed] to provide the [District Court]
with several hundred pages of contemporaneous billing
records,” but it declined the offer. Appellees Br. at 30. While
5 Class counsel caution against restricting our review to the
summary charts, pointing to, among other things, their
declarations “describing discrete tasks engaged in by each
firm.” Appellees Br. at 30. But the declarations do not
associate the discrete tasks with particular time-keepers or the
time spent on the tasks detailed therein. More fundamentally,
there is no way to use those declarations with the summary
charts (and other information provided) to discern whether the
hours reported by class counsel were reasonable for the work
performed.
6 BMW also argues the summary charts “do not comply with
the District of New Jersey’s requirements for fee applications,”
as laid out in that Court’s local rules. See Appellant Br. at 30;
D.N.J. L. Civ. R. 54.2. While we may overturn a district
court’s ruling for failing to abide by its own local rules in some
circumstances, see Advanced Fluid Systems, Inc. v. Huber, 958
F.3d 168, 181 (3d Cir. 2020), we need not reach this issue here,
as we are overturning the fee award on an alternative ground.

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not required, “contemporaneously recorded time sheets are the
preferred practice.” Keenan, 983 F.2d at 472 (alteration
adopted) (quoting Webb v. Cnty. Bd. of Educ., 471 U.S. 234,
238 n.6 (1985)). And that preference is especially strong here,
where class counsel’s summary charts were so condensed,
high-level, and lacking in specific detail that we would likely
need the underlying billing records to parse them. So class
counsel’s mere offer to provide the District Court more
documentation does not cure the Court’s failure to take counsel
up on that offer and review the complete records. As its
lodestar award was thus based on an insufficient record, we
vacate its order and remand for further proceedings.
C. The propriety of applying a lodestar multiplier to
the fee award
BMW also argues the District Court improperly applied
a lodestar multiplier to class counsel’s fee award. It cites
Perdue v. Kenny A. ex rel. Winn, in which the Supreme Court
held that “there is a ‘strong presumption’ that the lodestar
figure is reasonable, but that presumption may be overcome in
those rare circumstances in which the lodestar does not
adequately take into account a factor that may properly be
considered in determining a reasonable fee.” 559 U.S. 542,
554 (2010). Because Perdue concerned federal fee-shifting
statutes, id. at 547, the parties disagree about whether it applies
here. Class counsel maintains Perdue does not govern, as our
matter “is not a pure statutory fee shifting case because it
encompasses common law counts including unjust enrichment,
equitable relief claims, and breach of express and implied
warranty counts which survived BMW[’s] motion to dismiss.”
Appellees Br. at 38. BMW, on the other hand, contends
“multipliers are inappropriate where fees are based on a fee-

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shifting statute, determined by a lodestar calculation, as they
were here.” Reply Br. at 11.
As we vacate and remand the District Court’s fee award
because the lodestar calculation was based on an insufficient
record, we decline to decide whether the District Court was
bound by the strictures of Perdue in considering a fee
enhancement. We do, however, note two things for the parties
and the Court to consider on remand. First, we think the
parties’ focus on the statutes under which named plaintiffs sued
is misplaced, as the “Court awarded the attorney’s fees
pursuant to a contract—the settlement agreement—not
pursuant to a statute.” In re Home Depot Inc., 931 F.3d 1065,
1082 (11th Cir. 2019); see also Brytus v. Spang & Co., 203
F.3d 238, 246 (3d Cir. 2000) (“When there has been a
settlement, the basis for the statutory fee has been discharged,
and it is only the fund that remains.”). Second, we urge the
District Court on remand to provide additional reasoning for
its decision whether to add a lodestar multiplier. In the fee
hearing, the Court explained it would add a multiplier of 1.9
because it “is well within approved multipliers in our
jurisdiction,” and because the award “falls well within the
appropriate Gunter factors.” Appx. at 437 (citing Gunter v.
Ridgewood Energy Corp., 223 F.3d 190 (3d Cir. 2000)). This
is not enough reasoning to give us “a sufficient basis to review”
its fee enhancement. Rite Aid, 396 F.3d at 301.
* * *
In their class action settlement the parties agreed to
cabin class counsel’s attorneys’ fees request within a high-low
range, subject to final determination by the District Court.
Though it granted a fee award at the high end of that range, its
calculation was not supported by the record before it. Because

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we cannot tell whether the hours class counsel billed were
reasonable for the work performed, we vacate the Court’s order
and remand for further proceedings.

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