                              In the

United States Court of Appeals
               For the Seventh Circuit

No. 07-3402

M AV M IRFASIHI, individually and on behalf of all
   others similarly situated,
                                        Plaintiff-Appellee,
                            v.


F LEET M ORTGAGE C ORPORATION,

                                                 Defendant-Appellee.

A PPEAL OF:

   A NGELA P ERRY and M ICHAEL E. G REEN,

                                               Objectors-Appellants.


             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
           No. 01 C 0722—Joan Humphrey Lefkow, Judge.


   A RGUED D ECEMBER 4, 2008—D ECIDED D ECEMBER 30, 2008




 Before B AUER, P OSNER, and W ILLIAMS, Circuit Judges.
  P OSNER, Circuit Judge. This class-action suit is before
us for the third time; our previous opinions are reported
2                                              No. 07-3402

at 356 F.3d 781 (7th Cir. 2004), and 450 F.3d 745 (7th
Cir. 2006). The current appeal like the previous ones
presents questions concerning class-action procedure.
  The suit was brought eight years ago on behalf of
approximately 1.6 million persons whose home mort-
gages were owned by Fleet Mortgage Corporation. The
complaint charges that without their permission Fleet
transmitted information about these persons’ finances
(plus other personal information, such as phone num-
bers), obtained from their mortgage files, to telemarketing
companies which then, in conjunction with Fleet, used
that information and deceptive practices to try to sell
them financial and other services that they otherwise
would not have been interested in. Fleet’s transmission
of the information to the telemarketers was alleged to
violate, among other laws, the federal Fair Credit Report-
ing Act and state consumer protection statutes. Two
plaintiff classes were proposed—a “pure” “information-
sharing” class of 1.4 million customers of Fleet whose
financial information Fleet transmitted to the tele-
marketers but who did not buy anything from them, and
a separate “telemarketing” class composed of 190,000
customers of Fleet who made purchases from the
telemarketers. The second class is not directly involved
in this appeal.
  The parties negotiated a settlement, which the judge
approved in 2002 simultaneously with certifying the
classes. But he did not explain why he thought certifica-
tion proper; he merely recited the criteria in Rule 23.
The settlement gave nothing to the information-sharing
No. 07-3402                                            3

class, while barring its members from bringing individual
suits. The treatment of that class was one of the grounds
for our reversing, at the behest of two class members
who had objected to the settlement and intervened in
the litigation, the district court’s judgment approving
the settlement.
  On remand the parties negotiated a new settlement,
which the district court (a different judge) approved.
This settlement required Fleet to pay to public interest
law firms (or other charitable groups) concerned with
consumer privacy the $243,000 that Fleet had earned
from its sale of information to the telemarketers, plus
any of the funds earmarked for the members of the
telemarketing class that ended up being unclaimed,
minus, however, considerable expenses. As far as the
information-sharing class was concerned, the basis of the
district judge’s approval of the new settlement, which
again gave that class nothing, was that the value of the
class members’ claim was zero: they had no chance of
obtaining damages if the case went to trial and judgment.
  We again reversed at the behest of the objecting class
members, ruling that the district judge had not made an
adequate effort to value the claims of the information-
sharing class. Among other things, she had considered
the consumer protection statutes of only a few states,
even though there were members of the information-
sharing class in every state.
  On remand she conducted a more complete survey of
state law and again concluded that the claims had no
value. The objecting class members again appeal, arguing
4                                               No. 07-3402

not only that the claims have value (perhaps in excess of
a billion dollars!) but also that the objectors should have
been awarded a much larger legal fee than the $18,750
that the judge awarded them.
   There is no evidence that any members of the
information-sharing class suffered any harm from
F leet’s d isclosin g in form a tion abou t th e m t o
telemarketers. Nineteen states plus the District of Colum-
bia, however, permit an award of statutory damages,
ranging from $25 in Massachusetts to $10,000 in Kansas
but averaging $1,046.25, for violations of their consumer
protection statutes. (These figures are based on a table
in the supplemental appendix to the appellees’ brief in
this court, and are not contested by the appellants. We
exclude two states, California and Idaho, that allow a
$1,000 award of statutory damages in a class action only
to the class as a whole.)
  It is arguable that the unauthorized disclosure of finan-
cial information violated those statutes. But the statutes
do not permit the award of such damages in a class
action. The objectors do not challenge the application
of that limitation to a class action filed in federal
district court. Yet we have held that unless based on state
substantive law such a limitation does not bind a federal
court in a class action litigated in that court. Thorogood v.
Sears, Roebuck & Co., 547 F.3d 742, 746 (7th Cir. 2008).
Having failed to preserve the issue, the objectors cannot
invoke that ruling—and anyway they haven’t tried to.
  They do argue that even if the claims of the members
of the information-sharing class have no value in a class
No. 07-3402                                                  5

action, they have value in individual actions. A number of
states do as we just noted authorize statutory damages
in such actions, and conceivably some of the 1.4 million
members of the class (not all of whom live in such
states, however) would sue if not precluded by the set-
tlement. That preclusion is a benefit to Fleet, and the
objectors argue that Fleet should pay the class for it. But
after eight years of litigation, the objectors are unable
to identify a single member of the class who would sue
on his own dime to collect the modest statutory damages
available in an individual suit. Cf. id. at 747.
  The objectors point out that state consumer protection
laws to one side, the federal Fair Credit Reporting Act, 15
U.S.C. §§ 1681 et seq., authorizes the award of statutory
damages of not less than $100 or more than $1000 for
a willful violation of the Act, without need to prove
harm. § 1681n(a)(1)(A); see Safeco Ins. Co. v. Burr, 127 S. Ct.
2201, 2206 (2007); compare § 1681o(a). But although the
Act was mentioned in the complaint, the objectors first
sought to apply it to the information-sharing class after
our first remand. That was too late. United States v. Hus-
band, 312 F.3d 247, 251 (7th Cir. 2002) (a party “ ‘cannot use
the accident of remand as an opportunity to reopen
waived issues’ ”). On the second appeal, which followed
that remand, the parties to the settlement pointed out
that the objectors had indeed forfeited their claim under
the Act. We did not discuss the Act in our second opinion,
but implicitly excluded it from further consideration by
stating that “on remand, the district court should
consider and analyze the full cross-section of potentially
applicable state law.” 450 F.3d at 751 (emphasis added).
6                                              No. 07-3402

  On remand, the district judge nevertheless discussed
(and rejected) the applicability of the Act to the class.
She should not have wasted her time on the issue. United
States v. Husband, supra, 312 F.3d at 251. The objectors
argue that the scope of the remand was ambiguous; it
was not; but if the objectors thought it was, or, more
plausibly, wanted us to reconsider the scope of the
remand, they should have petitioned us for clarification
or reconsideration, and they did not. Had they done so,
the parties to the settlement would have argued forfeiture
and lack of merit, and we would have ruled against the
objectors and cut off further litigation on the issue,
saving the district judge time and the parties cost. For
besides having been forfeited, the claim that Fleet vio-
lated the Fair Credit Reporting Act has no possible
merit, and in fact is frivolous.
  The Act regulates “consumer report[s]” issued by
“consumer reporting agenc[ies].” 15 U.S.C. § 1681a(d)(1).
A consumer reporting agency, so far as pertains to this
case, is “any person which . . . regularly engages in whole
or in part in the practice of assembling or evaluating
consumer credit information or other information on
consumers for the purpose of furnishing consumer
reports to third parties.” § 1681a(f). Fleet does not
regularly engage in such practices; it is not a consumer
reporting agency—it is a bank. Frederick v. Marquette
National Bank, 911 F.2d 1, 2 (7th Cir. 1990). “Consumer
reporting agencies naturally depend on suppliers of
credit to furnish them with credit information. It is the
consumer reporting agency that is charged with assuring
the accuracy, confidentiality and proper dissemination
No. 07-3402                                                     7

of this information, however. The [Fair Credit Reporting
Act] does not impose obligations upon a creditor who
merely passes along information concerning particular
debts owed to it.” DiGianni v. Stern’s, 26 F.3d 346, 349 (2d
Cir. 1994).
   Furthermore, “a creditor who merely passes along
information concerning particular debts owed to it” is not
a purveyor of “consumer reports.” For excluded from
the definition of consumer report is a “report con-
taining information solely as to transactions or ex-
periences between the consumer and the person making
the report.” § 1681a(d)(2)(A)(i). What Fleet sold the
t e le m a rk e te rs w a s “ in f or m a t io n so le l y a s t o
transactions . . . between the consumer [the Fleet mort-
gagor] and the person making the report [Fleet].” See
DiGianni v. Stern’s, supra, 26 F.3d at 349; Smith v. First
National Bank, 837 F.2d 1575, 1578 (11th Cir. 1988) (per
curiam).
  So the claims of the information-sharing class are
indeed worthless, and if so even $243,000 might seem
excessive compensation—and the amount will grow if not
all the settlement money allocated to the telemarketing
class is claimed by members of the class—and maybe
therefore those claims ought simply to be dismissed. But
even if the settlement is merely a nuisance settlement,
such settlements are permitted; defendants can be
trusted to make such settlements only if it is in their
best interest to do so.
  We are disheartened that the litigation by the
information-sharing class has been allowed to drag on
8                                               No. 07-3402

for eight years, when it had no merit—and that as a
matter of law, without need to take evidence. It is an
example of the typical pathology of class action litiga-
tion, which is riven with conflicts of interest, as we dis-
cussed recently in Thorogood v. Sears, Roebuck & Co., supra,
547 F.3d at 744-46. The lawyers for the class could not
concede the utter worthlessness of their claim because
they wanted an award of attorneys’ fees. The lawyers for
Fleet were reluctant to argue the utter worthlessness of the
claim because they were able to negotiate a settlement
that cost their client virtually nothing—provided they
did not take such a strong stand that it jeopardized the
class lawyers’ shot at a generous award of attorneys’ fees,
and hence the settlement. And the objectors were moti-
vated to exaggerate the value of the claim of the
information-sharing class so that they could get a gen-
erous award of attorneys’ fees. At the very outset of the
case, before certifying the class, the district court should
have required the parties to present the belatedly pre-
sented survey of the consumer protection laws of the
50 states, plus argument concerning the scope of the Fair
Credit Reporting Act, to demonstrate the existence of a
colorable claim.
  With what can only be described as chutzpah, defined
by Leo Rosten as “gall, brazen nerve, effrontery,
incredible ‘guts,’ presumption plus arrogance such as no
other word and no other language can do justice to,” the
objectors ask us to substitute them for the lawyers for
the information-sharing class and award them the
entire $750,000 in attorneys’ fees that the district judge
awarded those lawyers; in other words, the objectors are
No. 07-3402                                                 9

asking us for 40 times the $18,750 attorneys’ fee that
she awarded them. The request is preposterous.
  It is true that they twice prevailed on appeal and that
the sequel to the first appeal was a genuine improve-
ment in the settlement with respect to the telemarketing
class. But the sequel to the second appeal was only a very
slight improvement in the settlement with respect to the
information-sharing class; and it was an improvement
less because the $243,000 went to charity, rather than to
the other class, than because that figure may grow
(though only to a maximum of $804,000, because of the
expenses we mentioned). The benefit to the information-
sharing class would still be meager no matter how
much money went to a public interest law firm or a
charity rather than to the members of the class.
  As important to a proper evaluation of the objectors’
contribution as the meagerness of the relief that they
obtained by extending the litigation by several years is
their lack of constructive activity in the district court.
They did not propose terms of settlement or otherwise
participate constructively in the litigation other than to
appeal. A proper attorneys’ fee award is based on
success obtained and expense (including opportunity
cost of time) incurred. See, e.g., Farrar v. Hobby, 506 U.S.
103, 114-15 (1992); Hensley v. Eckerhart, 461 U.S. 424, 435-37
(1983); Cole v. Wodziak, 169 F.3d 486, 487-88 (7th Cir. 1999).
The success obtained by the objectors was meager, as we
have said, and the cost incurred—unknown. The fee
applications that they submitted to the district court
were barren of the detail required for an assessment of
10                                                No. 07-3402

that cost. Moreover, the district judge initially determined
their fee to be $37,500, and only later cut it in half as a
sanction for their irresponsible litigation tactics (paralleled
in this court by the many inaccurate and misleading
statements in their briefs and post-argument submission)
that exasperated a very patient district judge.
  We are mindful that “it is desirable to have as broad
a range of participants in the [class action] fairness
hearing as possible because of the risk of collusion over
attorneys’ fees and the terms of settlement generally,” and
that “this participation is encouraged by permitting
lawyers who contribute materially to the proceeding to
obtain a fee.” Reynolds v. Beneficial National Bank, 288
F.3d 277, 288 (7th Cir. 2002). But “the principles of restitu-
tion that authorize such a result also require . . . that the
objectors produce an improvement in the settlement
worth more than the fee they are seeking; otherwise
they have rendered no benefit to the class.” Id. The im-
provement that the objectors produced in this case,
minus the detriment caused by their courtroom antics,
barely justified the modest fee that the judge awarded
them.
  This case is finito.
                                                   A FFIRMED.




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