In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 21-2653
ANGEL BAKOV, et al.,
Plaintiffs-Appellees,
v.
CONSOLIDATED WORLD TRAVEL, INC.,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 15 C 2980 — Harry D. Leinenweber, Judge.
____________________
ARGUED FEBRUARY 10, 2022 — DECIDED MAY 19, 2023
____________________
Before WOOD, KIRSCH, and JACKSON-AKIWUMI, Circuit
Judges. *
WOOD, Circuit Judge. This case presents a narrow but im-
portant question about the administration of class actions:
*
The case was originally argued before Judges Manion, Kanne, and
Jackson-Akiwumi. After Judge Kanne’s death and Judge Manion’s retire-
ment, it was reassigned to this panel.
2 No. 21-2653
what authority do district courts have to impose the cost of
class notice on a defendant that already has been found liable
to the class? The court in the case before us ruled that defend-
ant Consolidated World Travel, Inc. (CWT) had to bear those
costs. We explain below how this came about. We conclude
that in the unusual circumstances of this case, the district
court had the authority to assign these costs to CWT and that
it did not abuse its discretion in doing so. We thus affirm its
order.
I
The class asserts in this action that CWT violated the Tele-
phone Consumer Protection Act (TCPA) by calling class mem-
bers using prerecorded voice messages, a practice the law ex-
pressly prohibits. See 47 U.S.C. § 227(b)(1)(B). Operating un-
der a fictitious name, CWT employed a company called Vir-
tual Voice Technologies Pvt. Ltd. (VVT), which is based in In-
dia, to call millions of people across the United States and of-
fer them “a free cruise simply to show you a great time.” On
these calls, agents would communicate by using a sound-
board, which enabled them to choose among 47 prerecorded
prompts. For every customer who agreed to have their call
transferred from VVT to CWT and then stayed on the line for
at least 60 seconds, CWT paid VVT a $3.50 commission.
Relying on Federal Rule of Civil Procedure 23(b)(3), Plain-
tiffs initially moved to certify a nationwide class of people
who had received VVT’s calls. On March 21, 2019, the district
court granted in part and denied in part the motion. It certi-
fied a class of Illinois residents, but to the extent the motion
asked for a nationwide class, the court denied it. The judge
took this step based on his belief that the Supreme Court’s de-
cision in Bristol-Myers Squibb Co. v. Superior Court of California,
No. 21-2653 3
582 U.S. 255 (2017), required a finding of no personal jurisdic-
tion over CWT for purposes of the claims of the proposed
nonresident class members. With that decision in hand, Plain-
tiffs used two third-party service providers to identify and
send notice to the 28,239 Illinois class members. Plaintiffs cov-
ered that cost.
About six months later, the parties submitted cross-mo-
tions for summary judgment. The district court granted the
class’s motion on the TCPA claim. The court also determined
that CWT’s TCPA violations were committed willfully or
knowingly. That finding permitted an award of anything
from actual to treble damages. See 47 U.S.C. § 227(b)(3)(C).
Shortly after the liability determination, we issued our
opinion in Mussat v. IQVIA, Inc., holding that “the principles
announced in Bristol-Myers do not apply to the case of a na-
tionwide class action filed in federal court under a federal
statute.” 953 F.3d 441, 443 (7th Cir. 2020). In those circum-
stances, “the named representatives must be able to demon-
strate either general or specific personal jurisdiction, but the
unnamed class members are not required to do so.” Id. at 447.
Mussat undercut the reason behind the district court’s de-
cision to limit the class to Illinois, and so the court re-opened
that question. It ultimately granted Plaintiffs’ motion to
amend the class-certification order; the revised order certified
a nationwide class, in keeping with Plaintiffs’ original re-
quest. The court then entered summary judgment in favor of
the nationwide class for the same reasons it had entered sum-
mary judgment in favor of the Illinois class. At the same time,
it determined that the new class members were entitled to no-
tice and an opportunity to opt out. See Fed. R. Civ. P.
23(c)(3)(B). Following that decision, the court noted that it had
4 No. 21-2653
“some discretion” to shift notice costs to the defendant. It
pointed to the considerations laid out in Oppenheimer Fund,
Inc. v. Sanders, 437 U.S. 340 (1978), and asked the parties for
additional briefing on the availability and location of class
members, possible methods of notifying them, the estimated
cost, and who should pay that cost.
Plaintiffs proposed that the parties use the same method
that they had employed to identify and send notice to the Illi-
nois class members. They submitted documentation from
third-party service providers estimating that the total cost of
identifying and sending notice to the new members would be
$602,838. CWT did not oppose Plaintiffs’ plan, but it argued
that cost-shifting was not appropriate. In CWT’s view, the Su-
preme Court’s decisions in Oppenheimer and Eisen v. Carlisle &
Jacquelin, 417 U.S. 156 (1974), flatly precluded the district court
from shifting costs to defendants except in situations where
such costs were nominal for defendants.
The district court resolved this dispute in Plaintiffs’ favor,
through a minute order requiring CWT to bear the costs of
providing notice to the nationwide class. It explained that it
was doing so because CWT’s liability already had been estab-
lished through the summary judgment order. It added that it
was going to wait until the final damages determination be-
fore deciding whether Plaintiffs were also entitled to reim-
bursement of the costs of providing notice to the Illinois class
members.
Interestingly, CWT did not request that Plaintiffs be re-
quired to post a bond for the cost of notice to the nationwide
class members. It did, however, file a notice of appeal from
this order. It contended that the Supreme Court’s decision in
Eisen established that an order allocating the cost of class
No. 21-2653 5
notification to a defendant is an immediately appealable “col-
lateral order.” See Eisen, 417 U.S. at 171–72; Oppenheimer, 437
U.S. at 347 n.8. We agree with CWT that these cases support
our appellate jurisdiction, and so we proceed to the question
at hand.
II
We review a district court’s allocation of class identifica-
tion and notice costs for an abuse of discretion. See Oppenhei-
mer, 437 U.S. at 359. A decision based on an error of law rep-
resents an abuse of discretion. Lukaszczyk v. Cook County, 47
F.4th 587, 598 (7th Cir. 2022).
As the district court properly recognized, classes certified
under Rule 23(b)(3) may not go forward until the unnamed
members of the class have received notice and an opportunity
to opt out. The Rule specifies that the court “must direct to
class members the best notice that is practicable under the cir-
cumstances, including individual notice to all members who
can be identified through reasonable effort.” Fed. R. Civ. P.
23(c)(2)(B). Since 2018, it has also permitted “contemporary
methods of giving notice,” including electronic means, which
in many cases can be a great cost-saver. See Committee Note,
2018 amendments. Rule 23(d) further specifies that “the court
may issue orders that … require—to protect class members
and fairly conduct the action—giving appropriate notice to
some or all class members” and “deal with similar procedural
matters.” The Rules say nothing, however, about who must
bear the cost of whatever notice is given.
Ordinarily, the “rule is that a plaintiff must initially bear
the cost of notice to the class,” Eisen, 417 U.S. at 178, because
“it is he who seeks to maintain the suit as a class action and to
6 No. 21-2653
represent other members of his class.” Oppenheimer, 437 U.S.
at 356. Usually “there is no warrant for shifting the cost … to
the defendant” at the outset of the case. Id. Indeed, the Su-
preme Court has “caution[ed] that courts must not stray too
far” from this basic principle. Id. at 359.
These statements carry with them two related implica-
tions. First, the general rule that a plaintiff must initially bear
the cost of notice implies that the cost may later be shifted.
Second, though we take seriously the Court’s warning not to
stray too far from the usual rule, it does not purport to be all-
encompassing.
In Oppenheimer, the Court explained that it is within a dis-
trict court’s discretion to order a defendant in a class action to
perform a necessary task related to notice when “the defend-
ant may be able to perform [the] task with less difficulty or
expense than could the representative plaintiff.” 437 U.S. at
356. The Court then addressed the question of who should
bear the expense incurred in performing that task. Id. at 358.
Generally, “the test should be whether the expense is substan-
tial,” in which case it should be borne by the representative
plaintiff. Id. at 359. But if “the task ordered is one that the de-
fendant must perform in any event in the ordinary course of
its business,” then “it may be appropriate to leave the cost
where it falls.” Id.
Additionally, the Court cautioned that it is inappropriate
for a district court to place notice costs on a defendant just
because the defendant prevailed on an argument that made
notice and its attendant costs necessary. Id. at 360. That is “nei-
ther fair nor good policy.” Id. But we should not take that
principle too far. Contrary to CWT’s contention, Oppenheimer
does not say that a defendant’s victory on any argument,
No. 21-2653 7
central or trivial, precludes the district court from shifting
costs to the defendant. Oppenheimer noted only that it would
be unfair to shift costs to the defendant based solely on “[a]
bare allegation of wrongdoing,” such as what one might find
in an initial complaint. Id. at 363. Nowhere, however, did the
Court rule out cost-shifting as a matter of law.
The Oppenheimer opinion therefore left room for district
courts to tailor the allocation of costs to the specifics of a case.
The Court said as much, noting that it was “not attempt[ing]
to catalogue the instances in which a district court might be
justified in placing the expense on the defendant … .” Id. at
359. Moreover, nothing in the opinion called for district courts
mechanically to address each “factor” the Court had men-
tioned in Oppenheimer itself. Each case must be assessed on its
own.
The general rule outlined by Oppenheimer is most likely to
apply when liability has yet to be determined. Normally, the
class certification decision and the attendant notice to the class
come before any decision on the defendant’s liability. See Fed.
R. Civ. P. 23(c)(1)(A) (“At an early practicable time after a per-
son sues or is sued as a class representative, the court must
determine by order whether to certify the action as a class ac-
tion.”). At that point, a class action consists mainly of allega-
tions, and so notice costs appropriately should fall on the rep-
resentative plaintiff because “it is he who seeks to maintain
the suit as a class action and to represent other members of
his class.” Oppenheimer, 437 U.S. at 356. It makes sense that a
defendant should be responsible for the cost of a necessary
task at that stage only if the cost is insubstantial or if the de-
fendant will perform the task anyway. A contrary rule would
allow class plaintiffs to saddle potentially innocent
8 No. 21-2653
defendants with the considerable costs required to fund liti-
gation against themselves.
But not all cases fit that mold—this one, for instance. The
district court made its liability determination after it had a cer-
tified class of Illinois residents, but before class certification
and the necessary notice had been given to the non-Illinois
group. This order of events is unusual because Rule
23(c)(1)(A)’s requirement of certification “at an early practica-
ble time,” coupled with the rule against one-way interven-
tion, typically prohibit a plaintiff from obtaining a favorable
judgment on her individual claim and then seeking to multi-
ply her good fortune by belatedly certifying a class. See, e.g.,
Costello v. BeavEx, Inc., 810 F.3d 1045, 1057 (7th Cir. 2016) (ex-
plaining the rule against one-way intervention); Amati v. City
of Woodstock, 176 F.3d 952, 957 (7th Cir. 1999) (“The rule bars
potential class members from waiting on the sidelines to see
how the lawsuit turns out.”). On rare occasion, however, the
quirks of litigation result in situations where class certifica-
tion decisions are justifiably postponed or revisited after lia-
bility has been determined. See Collins v. Village of Palatine, 875
F.3d 839, 845 (7th Cir. 2017) (explaining that the term “practi-
cable” in Rule 23(c)(1)(A) “allows for wiggle room”); Fed. R.
Civ. P. 23(c)(1)(C) (“An order that grants or denies class certi-
fication may be altered or amended before final judgment.”).
In these situations, courts have relied on a finding of lia-
bility to shift notice costs to a defendant. This was the case, for
example, in Hunt v. Imperial Merchant Services., Inc., 560 F.3d
1137 (9th Cir. 2009). Hunt was a debt collection case in which
the district court certified a plaintiff class, granted partial
summary judgment for the class, and then ordered the de-
fendant, IMS, to pay the costs of notifying the class members.
No. 21-2653 9
IMS appealed, conceding “that it must pay the class notice
costs if it lo[st] the merits appeal.” Id. at 1141. Against that
backdrop, the court had this to say:
So far as we are aware, no appellate court has ad-
dressed in a published opinion whether a district
court’s determination that a class action defendant is
liable on the merits entitles the district court to shift no-
tice costs to that defendant. This absence of authority
is not surprising. … [T]he losing party in a class action
typically is responsible for class notice costs … .
Id. at 1142. By way of illustration, the Hunt opinion cited sev-
eral district court cases in which “courts have placed notice
costs on the class action defendant once the defendant’s lia-
bility has been established.” Id. at 1143; see also Fournigault v.
Indep. One Mortg. Corp., 242 F.R.D. 486, 490 (N.D. Ill. 2007)
(finding that, because plaintiffs were entitled to summary
judgment on the merits, “circumstances exist which justify the
exceptional requirement of Defendant bearing the cost of no-
tice”); Bickel v. Whitley Cnty. Sheriff, No. 8-CV-102, 2010 WL
5564634, at *3 (N.D. Ind. Dec. 27, 2010) (“[B]ecause Defend-
ant’s liability has been established on the merits, … Plaintiff’s
request to shift the costs of class action notice to Defendant
may be GRANTED.”); In re Nexium Antitrust Litig., 777 F.3d 9,
22 n.18 (1st Cir. 2015) (citing Hunt approvingly and acknowl-
edging that fee-shifting after a liability determination is dis-
cretionary).
The rule announced in Hunt has been recognized by re-
spected treatises. See 3 William B. Rubenstein, Newberg on
Class Actions § 8:33, Westlaw (database updated Dec. 2022)
(“[L]ower courts have identified four situations in which the
defendant may appropriately bear the costs of notice,”
10 No. 21-2653
including “when there has been some preliminary finding of
the defendant’s liability.”); 1 Joseph M. McLaughlin,
McLaughlin on Class Actions § 5.84, Westlaw (database up-
dated Nov. 2022) (“If the court has entered an order by sum-
mary judgment or otherwise that the defendant is liable on
the merits before notice is sent, however, some courts have
exercised their discretion to shift the cost of providing notice
to the defendants.”); 6A Stacy L. Davis et al., Federal Procedure,
Lawyer’s Edition § 12:326, Westlaw (database updated Mar.
2023) (“A district court in an appropriate case may award in-
terim costs to a plaintiff by shifting class notice costs to the
defendant even if the defendant might later be entitled to re-
cover those costs.”).
This does not mean that costs must be shifted when liabil-
ity has been found; the ultimate decision rests in the district
court’s discretion. See Hossfeld v. Lifewatch, Inc., No. 13 C 9305,
2021 WL 1422779, at *4–5 (N.D. Ill. Mar. 4, 2021); Hackler v.
Tolteca Enters., Inc., No. 18-cv-911, 2020 WL 10324562, at *3
(W.D. Tex. May 28, 2020); Barfield v. Sho-Me Power Elec. Coop.,
No. 11-cv-4321, 2014 WL 1955107, at *8 (W.D. Mo. May 14,
2014); Beeson v. Med-1 Sols., LLC, No. 6-cv-1694, 2008 WL
4809958, at *2 (S.D. Ind. Oct. 24, 2008). Oppenheimer demon-
strates the discretionary nature of such a decision. We thus
agree with the courts that have said that the district court may
elect to shift the cost of class notice (with or without a security
bond) to the defendant after the plaintiff’s success on the mer-
its has been established. We attach no weight to the fact that
the district court took this step without again invoking Oppen-
heimer; its earlier order confirms that the court realized that
the principles described in Oppenheimer were central to the
cost-shifting question. There was no need to repeat that anal-
ysis. And although a more robust discussion may be
No. 21-2653 11
warranted in cases where, for example, the defendant raises
significant concerns about undue hardship, no such argument
was presented to the district court here. See Hunt, 560 F.3d at
1144 (stating that district courts should “consider the totality
of the circumstances to decide whether shifting notice costs is
just in that particular case”). Courts have no obligation to ex-
plore factors that the parties do not draw to their attention.
The fact that the district court’s liability determination
may be reversed on appeal does not affect our decision. If the
defendant fears that the plaintiffs may not be able to reim-
burse them, then it should seek a bond (as we noted, a step
not taken here). As the Ninth Circuit reasoned in Hunt, there
is “no reason to suspend a district court’s authority to shift
notice costs based on a liability determination until after the
time period for an appeal on liability has expired.” 560 F.3d at
1143; accord Davis et al., supra, § 12:326 (“A district court in an
appropriate case may … shift[ ] class notice costs to the de-
fendant even if the defendant might later be entitled to re-
cover those costs.”). It is possible that CWT may appeal the
district court’s liability determination and prevail, in which
case it may seek to recover the notice costs. It is also possible
that the district court’s decision will be affirmed. For now,
though, the district court has ruled on liability and exercised
its discretion by shifting notice costs to CWT. We find no
abuse of discretion in its decision to do so despite a possible
appeal.
Seizing on language from Oppenheimer, CWT contends
that it should not be forced to pay class-notice costs as a pen-
alty for successfully arguing that the newly added class mem-
bers should be identified and notified of the class action. We
have no quarrel with the point that discouraging a defendant
12 No. 21-2653
“from advancing arguments entirely appropriate to the pro-
tection of his rights or the rights of absent class members”
would be “neither fair nor good policy.” Oppenheimer, 437
U.S. at 360. But there is nothing in the record to suggest that
the district court shifted costs to penalize CWT. It was obliged
to furnish notice to the new class members because of Rule
23(c)(2)(B), regardless of what CWT filed. The situation in Op-
penheimer was different—there, the district court based its de-
cision to shift costs in part because it was the defendant’s op-
position to a proposed redefinition of the class that necessi-
tated incurring the cost. Id. Shifting costs in response to a lia-
bility determination is another matter.
As a final note, we again emphasize the unusual way in
which this case unfolded. In the mine run of cases, a class-
certification decision and class notice come before a decision
on the merits. Indeed, that is how this case initially proceeded:
the district court ruled on Plaintiffs’ class certification motion,
ordered notice to the certified class, and then ruled on the
cross-motions for summary judgment. The standard operat-
ing procedure was disrupted because our intervening deci-
sion in Mussat prompted the district court to reconsider its in-
itial denial of Plaintiffs’ motion to certify a nationwide class.
Nothing we have said here would justify a delay in the class-
certification decision altogether in the hopes of obtaining a
merits ruling and a shift in costs. As Rule 23(c)(1)(A) states,
courts “must” rule on class certification “[a]t an early practi-
cable time after a person sues or is sued as a class representa-
tive.” This case is different precisely because the court
properly ruled on class certification, found a class, and pro-
ceeded to the merits. When the law changed, it was entitled
to revisit the scope of the certified class, and that is what it
did.
No. 21-2653 13
III
We conclude that the district court’s cost-allocation order
did not represent an abuse of discretion, and so we AFFIRM the
order.