## Facts

- Five-year-old Cole Goesel suffered an eye injury when a toy robot shattered and damaged the lens of his right eye.
- Cole’s parents hired Williams, Bax & Saltzman, P.C. under a contingent-fee contract.
- The agreement provided the firm would receive one-third of any gross recovery, with litigation expenses paid from the clients’ share; if there was no recovery, no fees or expenses were owed.
- The firm filed a products-liability action in Illinois state court; defendants removed the case to federal court based on diversity jurisdiction.
- After nearly four years, the parties reached a pretrial settlement requiring judicial approval because the claimant was a minor.
- The district court refused to approve the settlement unless (i) litigation expenses were first deducted from the gross settlement and (ii) the one-third fee was calculated on the net remainder, and also disallowed separate billing for computerized legal research as an expense.
- The law firm appealed; the family did not participate, and an amicus curiae defended the district court’s ruling.

## Issues

1. Whether, in approving a minor’s settlement, a federal district court may restructure a contingent-fee agreement permitted under Illinois law based on a generalized sense of fairness.
2. Whether the district court could require expenses to be deducted before calculating the contingent fee and forbid separate charges for computerized legal research despite the parties’ agreement.

## Decision

- The Seventh Circuit reversed the order conditioning approval on a revised fee-and-expense allocation and remanded.
- The court held the district court abused its discretion by discarding a reasonable contingent-fee contract that Illinois law permits.
- The court directed approval of the settlement consistent with the parties’ agreement, including a one-third fee computed on the gross recovery and the agreed allocation of litigation expenses, including computerized legal-research charges.

## Legal Principles

- Courts have substantial discretion to protect minors in settlement approval, but that authority is limited and must be exercised according to applicable law.
- In diversity cases, state law governs whether a contingent-fee agreement is reasonable; a court may not override state-sanctioned practices based on subjective equity.
- A court may not rewrite a lawful, reasonable contingent-fee contract merely to increase a minor’s share of the settlement.
- Where state law permits and the agreement clearly allocates them, litigation expenses (including computerized legal research) may be charged as contractually provided absent a showing of unreasonableness or abuse.

## Conclusion

The Seventh Circuit held that protecting a minor in settlement approval does not authorize a court to replace Illinois standards for fee reasonableness with a personal fairness calculation, and it required enforcement of the parties’ reasonable contingent-fee and expense-allocation contract.


Goesel v. Boley Int’l (H.K.) Ltd., 806 F.3d 414 (7th Cir. 2015)