Oshana v. Coca-Cola Co.

Decision Date24 April 2007
Docket NumberCivil Action No. 04 C 3596.
Citation487 F.Supp.2d 961
PartiesCarol Billie OSHANA, Plaintiff, v. The COCA-COLA COMPANY, a Delaware Corporation, Defendant.
CourtU.S. District Court — Northern District of Illinois

Ben Barnow, Barnow & Associates, P.C., William J. Harte, Dana Marie Pesha. Peter James McCarthy, William J. Harte, Ltd., Aron David Robinson, Law Office of Aron D. Robinson, Melinda J. Morales, Michael B. Hyman, Much, Shelist, Freed, Denenberg, Ament & Rubenstein, P.C., Robert J. Stein, III, Stein Bogot, Ltd., Chicago, IL, Lance A, Harke, Sarah Clasby Engel, Harke & Clasby LLP, Miami, FL, for Plaintiff.

Michael A. Pope, Christopher. Mac Neil Murphy, David L. Hanselman, Jr., John Christian Nemeth, Rachael M. Trummel, McDermott, Will & Emery LLP, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

CONLON, District Judge.

On August 4, 2005, this court entered judgment in favor of Carol Billie Oshana and against the Coca-Cola Company in the amount of $650, plus reasonable costs and attorneys' fees. The judgment resolved Oshana's individual and class claims against Coca-Cola for unjust enrichment and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act ("the Consumer Fraud Act"), 815 ILCS §§ 505/1, et seq. The judgment, entered under Fed.R.Civ.P. 68, explicitly stated it was not an admission of Coca-Cola's liability or Oshana's damages. Dkt. No. 192 (August 4, 2005). Oshana filed a motion for attorneys' fees and expenses seeking $1,100,509.77. Dkt. No. 210 (Nov. 30, 2005). The motion was referred to Magistrate Judge Sidney L Schenkier for a report and recommendation. Fed. R.Civ.P. 54(d)(2)(D). ` Magistrate Schenkier recommended the court award no attorneys' fees or costs because even though Oshana technically prevailed, her recovery was de minimis. Dkt. No. 244 (March 19, 2007). Oshana objects to the report and recommendation. Dkt. No. 245 (April 2, 2007). For the reasons set forth below, Magistrate Schenkier's thorough and carefully analyzed report and recommendation is adopted in its entirety. Oshana's motion for attorneys' fees and expenses is denied.

BACKGROUND
I. Underlying Litigation

This diversity action was originally filed in state court on March 12, 2004. Oshana1 alleged that Coca-Cola committed fraud in connection with its disclosures regarding artificial sweeteners used in fountain diet Coke.2 Oshana alleged Coca-Cola failed to disclose that unlike diet Coke sweetened with aspartame sold in cans and bottles, fountain diet Coke was sweetened with a blend of aspartame and saccharin. Oshana, on behalf of herself and a purported class of all persons in Illinois who purchased fountain diet Coke since 1984, alleged unjust enrichment by Coca-Cola and violation of the Consumer Fraud Act. Her state court complaint expressly disclaimed individual damages in excess of $75,000. Coca-Cola asked Oshana to admit she would not individually seek total recovery for disgorgement, attorneys' fees and punitive damages in excess of $75,000. Oshana refused, and Coca-Cola removed the case to federal court. Oshana moved for remand, arguing that the case failed to meet the $75,000 jurisdictional amount. This court denied the motion, holding that the complaint's prayer for relief, combined with the value of disgorgement, established the plausibility of Coca-Cola's good faith estimate that the amount in controversy exceeded $75,000. Dkt. No. 24 (July 16, 2004).

Coca-Cola moved for summary judgment on statute of limitations grounds. This court granted the motion in part, holding that Oshana was barred from recovering on any Consumer Fraud Act violations occurring prior to March 12, 2001, and on any unjust enrichment claims for violations occurring prior to March 12, 1999. Dkt. No. 29 (July 30, 2004). Oshana filed an amended complaint reflecting the narrower recovery periods. Dkt. No. 44 (Sept. 7, 2004). The amended complaint sought $1,000 in damages, but asserted that the disgorgement remedy would total, individually and as a class, in the tens or hundreds of millions of dollars.

Oshana's motion for class certification was denied. Dkt. No. 85 (Jan. 14, 2005). Coca-Cola filed a second summary judgment motion arguing that Oshana could not obtain disgorgement of profits beyond those attributable to sales of diet Coke specifically to Oshana. During briefing on this motion, Oshana reaffirmed that she sought disgorgement in her individual capacity. This court granted Coca-Cola's motion in part, holding that Oshana could not seek disgorgement remedies for injuries allegedly suffered by other consumers, and that her claim was limited to individual damages of $650. Dkt. No. 176 (July 13, 2005).

With trial deadlines approaching, Coca-Cola made an offer of judgment pursuant to Fed.R.Civ.P. 68 in the amount of $650, plus reasonable attorneys' fees and costs. Oshana accepted the offer and judgment was entered in her favor. Dkt. No. 192 (Aug. 4, 2005). The judgment did not constitute an admission that Coca-Cola was liable, or that Oshana suffered damages, and had no effect whatsoever except in resolving the action. Id, Oshana reserved her right to appeal. Id.

II. Appeal

Oshana appealed this court's rulings on jurisdiction and class certification. Both were affirmed. Oshana v. Coca-Cola Co., 472 F.3d 506 (7th Cir.2006). The Seventh Circuit held that removal was proper because, notwithstanding the original complaint's express disclaimer of individual damages over $75,000, Oshana's refusal to admit that she would not seek more than $75,000 made it plausible that more than $75,000 was actually at stake. Id. at 511-12. Denial of class certification was also affirmed. Id. at 513-15.

III. Magistrate Judge's Report and Recommendation

On November 30, 2005, Oshana moved for attorneys' fees and expenses. Dkt. No. 210. She seeks $948,699.25 in attorneys' fees and $151,810.52 in costs, for a total of $1,100,509.77. The request for fees represents 2,581.90 hours of work performed by 19 attorneys from six firms. The motion was referred to the assigned magistrate judge for a report and recommendation. Dkt. No. 217 (Dec. 7, 2005).

By agreement of the parties, the magistrate judge stayed consideration of the motion during the pendency of the appeal. The appeal was decided on December 29, 2006; me magistrate judge's report and recommendation was issued on March 19, 2007. Dkt. No. 244. He recommended that no attorneys' fees or costs be awarded because (1) Oshana's recovery is too de minimis to reasonably warrant any award; and (2) even if her small recovery warranted an award, the amount of fees and costs she seeks is so high, and reflects such overreaching, that the reasonable award is zero. Id. at 2. The magistrate judge concluded Oshana was not entitled to any award because the difference between her judgment ($650) and the amount she sought (tens or hundreds of millions of dollars) was vast, she failed to succeed on any legal issue of significance, and the litigation did not serve a public purpose. He also recommended that costs be denied because (1) expert fees are non-taxable costs that are not explicitly authorized by the Consumer Fraud Act; and (2) Oshana waived her right to pursue taxable costs by failing to file her bill of costs within 30 days, as required by Local Rule 54.1(a). Id. at 3.

IV. Oshana's Objections

Oshana objects to the report and recommendation on four grounds. First, she argues the magistrate judge incorrectly concluded that Coca-Cola was successful in its summary judgment motions. Second, she argues the report erroneously presumed that she took the position that the case could not be settled on an individual basis. Third, the report overrides the language and purpose of the Consumer Fraud Act. Finally, she argues the report and recommendation cannot be reconciled with the Seventh Circuit's opinion, which she contends held that she did not seek more than $75,000 in damages.

DISCUSSION
I. Standard of Review

The court may refer a motion for attorneys' fees to a magistrate judge under Fed.R.Civ.P. 72(b) as if it were a dispositive pretrial matter. Fed.R.Civ.P. 54(d)(2)(D). Review of a magistrate judge's recommendation on a dispositive motion is de novo. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see also Rajaratnam v. Moyer, 47 F.3d 924 (7th Cir.1995) (district court reviews magistrate judge's factual determinations and legal conclusions on a motion for fees de novo). The reviewing court is required to "make a de novo determination of those portions of the recommendations to which objection is made." Willis v. Caterpillar, Inc., 199 F.3d 902, 904 (7th Cir.1999). The court may accept, reject, or modify the findings or recommendations made by the magistrate judge. Id. If no specific objection is made, or only a partial objection, the district court reviews the uncontested portions for clear error. Johnson v. Zema Sys. Corp., 170 F.3d 734, 739 (7th Cir. 1999).

II. Award of Fees and Costs under Rule 68 and the Consumer Fraud Act

Coca-Cola's Rule 68 offer of judgment must be interpreted in light of the fee-shifting provision of the Consumer Fraud Act. Webb v. James, 147 F.3d 617, 621 (7th Cir.1998). The Consumer Fraud Act provides that the court may award reasonable attorneys' fees and costs to the prevailing party. 815 ILCS § 505/10a(c). The court has discretion to deny fees if the prevailing party's recovery is "merely technical or de minimis." Fisher v. Kelly, 105 F.3d 350, 352 (7th Cir.1997), see also Fletcher v. City of Ft. Wayne, Ind., 162 F.3d 975, 976 (7th Cir.1998) ("for trivial recoveries, the only reasonable reward is zero"). Coca-Cola concedes Oshana is the prevailing party for purposes of awarding fees and costs, but argues that in light of her $650 recovery, the only reasonable award of fees and costs is zero. The magistrate judge agreed, concluding that Oshana was not entitled to fees because her $650 recovery was merely technical or de minimis.

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