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Cobell v. Norton

December 19, 2005

ELOUISE PEPION COBELL, ET AL., PLAINTIFFS,
v.
GALE A. NORTON, SECRETARY OF THE INTERIOR, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Royce C. Lamberth, United States District Judge

MEMORANDUM OPINION

Before the Court is plaintiffs' Equal Access to Justice Act Petition for Interim Fees Through the Phase 1.0 Proceeding ("Interim Fee Petition"). Plaintiffs seek fees and expenses in the amount of $14,528,467.21 for their efforts "resolv[ing] issues" central to Phase 1.0 of the case and "set[ting] the stage for future relief." Cobell v. Norton, 319 F.Supp.2d 36, 41 (D.D.C. 2004). Defendants oppose the Interim Fee Petition, citing both plaintiffs' failure to demonstrate a legal entitlement to an award under the Equal Access to Justice Act as well as plaintiffs' submission of poorly documented, excessive, redundant, and otherwise defective time records. Defendants maintain that, to the extent an award is warranted, it should not exceed $4,313,047. Opposition to plaintiffs' Equal Access to Justice Act Petition for Interim Fees Through the Phase 1.0 Proceeding ("Defendants' Opposition"), at 78. Plaintiffs, in response, press the Court to immediately grant an award for all "uncontested" hours at "market rates" and postpone deciding the "contested" hours until a later date. Plaintiffs' Reply, at 67.

After examining the record and considering the briefs presented, the Court, for the reasons set out more fully below, awards plaintiffs fees in the amount of $4,534,275.97 and expenses in the amount of $2,532,195.08, for a total Interim Fee Award of $7,066,471.05.

BACKGROUND

Plaintiffs initiated this class action in 1996 on behalf of more than 350,000 Native Americans against the Secretaries of the Interior and the Treasury as trustee-delegates, seeking equitable relief to redress mismanagement of the trust fund accounts. Cobell v. Babbitt, 30 F.Supp.2d 24 (D.D.C. 1998). The class was initially represented by five-named plaintiffs, Elouise Pepion Cobell, Thomas Maulson, James Louis Larose, Penny Cleghorn, and Earl Old Person, until the Court, on March 5, 2003, removed Old Person as a class representative.

Plaintiffs sought both a "retrospective" accounting of the government's Individual Indian Money (IIM) trust account system as well as a "prospective" order demanding that the Departments of the Interior and the Treasury manage Indian accounts in accordance with their statutory and common-law duties. Plaintiffs grounded their claims on a long line of Congressional Acts including the General Allotment Act of 1887, ch. 119, 24 Stat. 388 (vesting beneficial title of certain lands in the United States as trustee for individual Native Americans); the Indian Reorganization Act of 1934, 48 Stat. 984 (halting allotment of Native American lands and returning surplus land to tribal ownership); the Indian Self-Determination and Education Assistance Act, 88 Stat. 2203 (1975) (granting tribal management over certain functions previously administered by the Bureau of Indian Affairs and the Office of Trust Fund Management); and the more recently promulgated Indian Trust Fund Management Reform Act ("Trust Reform Act"), 108 Stat. 423q (codified as amended at 25 U.S.C. §162a(d) (1994)).

On November 5, 1998, this Court bifurcated the proceedings into two "phases." Phase 1.0 was "a trial to determine the extent to which the defendants have violated their trust duties"; while Phase 2.0 is projected to be "a trial on the extent to which the defendants have remedied those breaches." Cobell v. Norton, 226 F.R.D. 67, 73 (D.D.C. 2005).

On December 21, 1999, after conducting a six-week bench trial addressing plaintiffs' Phase 1.0 claims, the Court issued a Memorandum Opinion containing detailed factual findings and conclusions of law. Cobell v. Babbitt, 91 F.Supp.2d 1 (D.D.C. 1999) (hereinafter referred to as "Cobell V" (see Cobell, 226 F.R.D. at 73 n.4)). In Cobell V, the Court found defendants in breach of their statutory trust duties and issued a declaratory judgment requiring defendants: (1) to provide plaintiffs an accurate accounting; (2) to retrieve and retain all information necessary to render an accurate accounting of all money in the IIM trust; and (3) to establish written policies and procedures for complying with their statutory obligations and for rectifying those breaches identified by the Court. Cobell, 91 F.Supp.2d at 57. The Court also retained jurisdiction for a period of five years and ordered defendants to file quarterly status reports "setting forth and explaining the steps that defendants have taken to rectify the breaches of trust declared today and to bring themselves into compliance with their statutory trust duties." Id.

The Court denied, however, plaintiffs' requests for the appointment of a monitor with investigatory powers, id. at 52, and for prospective relief. Id. at 56. The Court also dismissed with prejudice plaintiffs' common-law claims as well as their allegations that defendants obstructed the operation of the Special Trustee. Id. at 57.

On February 23, 2001, the United States Court of Appeals for the District of Columbia affirmed this Court's rulings and held that: (1) the District Court could consider plaintiffs' claims absent final administrative action; (2) the Secretary of the Treasury breached his fiduciary obligations toward beneficiaries by failing to maintain documents necessary to perform accounting; (3) there was ample evidence supporting the Court's finding that defendants failed to take reasonable steps to discharge their trust obligations; (4) management of a trust and rendering of an adequate accounting required locating and retaining records, operational computer systems, and adequate staffing; and (5) the Court's continued oversight was mandatory. Cobell v. Norton, 240 F.3d 1081, 1098 (D.C. Cir. 2001) (hereinafter referred to as "Cobell VI" (see Cobell, 226 F.R.D. 73 n.4)).

Plaintiffs request reimbursement for fees and costs incurred by attorneys Dennis Gingold, Thaddeus Holt, and Mark Brown; the Native American Rights Fund ("NARF"); the law firm of Kilpatrick Stockton ("KS"); accountant and litigation consultant Geoffrey Rempel; and the accounting firm, PricewaterhouseCoopers ("PwC"), for bringing about these rulings.

Defendants challenge plaintiffs' Interim Fee Petition on every conceivable front, alleging: (1) that plaintiffs' petition runs afoul of the notice requirements of Fed. R. Civ. P. 23(h)(1); (2) that plaintiffs failed to demonstrate "eligibility" under section 2412(d)(2)(B); (3) that plaintiffs are not "prevailing parties" entitled to recover under section 2412(d); (4) that defendants' position was, at all relevant times, "substantially justified;" (5) that plaintiffs failed to submit "contemporaneous" time records; (6) that plaintiffs' time entries are inadequately documented, excessive, and non-compensable under EAJA; and (7) that plaintiffs are not entitled to a fee enhancement under Section 2412(b).

Defendants' objections are considered below.

ANALYSIS

The Equal Access to Justice Act ("EAJA") provides, in pertinent part, that:

[A] court shall award to a prevailing party other than the United States fees and other expenses . . . incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States . . . , unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

28 U.S.C. §2412(d)(1)(A).

In enacting EAJA, Congress sought to "ensure that individuals . . . [would] not be deterred from seeking review of, or defending against, unjustified governmental action because of the expense involved in securing the vindication of their rights." Sullivan v. Hudson, 490 U.S. 877, 883 (1989) (quoting H.R. Rep. No.120, 99th Cong., 1st Sess. 4 (1985)). The Act effectuates this legislative purpose by requiring the federal government to pay attorneys' fees and expenses incurred by the victims of its unreasonable action. The Court is satisfied the Indian beneficiaries were just such victims.

I. NOTICE PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 23(h)

Defendants argue that plaintiffs are not entitled to a recovery under EAJA, having failed to comply with the notice requirement of Fed. R. Civ. P. 23(h)(1). Opposition, at 8. Rule 23(h)(1) requires that claims for attorneys' fees be made by motion with notice served on all parties and class members "in a reasonable manner." ((23(h)(1)). The rule was promulgated to "ensure that the amount and mode of payment of attorney fees are fair and proper whether the fees come from a common fund or are otherwise paid." Rule 23 Advisory Committee's Note (2003 Amend.).

The record reveals that plaintiffs originally provided copies of the Interim Fee Petition only to the four-named class representatives. Interim Fee Petition, at 16, n.4. Defendants take issue with this limited notice on the grounds that plaintiffs not only bypassed the remaining class members but deviated from their usual practice of posting their court filings on their web site. Opposition, at 8, n. 3.

Plaintiffs respond that notice requirements of Rule 23(h)(1) do not apply to the Interim Fee Petition because the rule only became effective on December 1, 2003 -- long after the initiation of this litigation. Plaintiffs' Reply, at 19.

Plaintiffs' argument is unpersuasive as it overlooks the fact that Rule 23(h), as a procedural rule, may be "applied in suits arising before their enactment without raising concerns about retroactivity." Landgraf v. USI Film Products, 511 U.S. 244, 275 (1994). Keeping faith with this principle, courts have consistently applied Rule 23(h) to litigation initiated before its enactment. See, e.g., In re Livent, Inc. Noteholders Securities Litigation, 355 F.Supp.2d 722 (S.D.N.Y. 2005) (Securities Class Action Complaint filed on Oct. 09, 1998); In re WorldCom, Inc., Erisa Litigation, 2004 WL 2338151 (S.D.N.Y. Oct. 18, 2004) (ERISA class action filed on June 21, 2002); Latino Officers Assen City of New York, Inc. v. City of New York, 2004 WL 2066605 (S.D.N.Y. Sept. 15, 2004) (Title VII action filed in September 1999).

What constitutes "reasonable notice" under Rule 23(h)(1), however, remains an open question. Even defendants concede, "it is not clear what will constitute adequate 'notice' of the Interim Petition that must be provided to the class members under Rule 23(h)." Opposition, at 8, n.3. This Court, however, on July 12, 2005, recognized it has considerable latitude to determine whether plaintiffs' notice "provides the class with sufficient information to question objectionable fee requests and to scrutinize any potential conflicts of interest that arise from certain payment scenarios." Cobell v. Norton, 229 F.R.D. 5, 21 (D.D.C. 2005).

The class in this case is comprised of approximately 500,000 current and former IIM Trust beneficiaries. Even Interior has, to date, been unable to identify all of the current beneficiaries of the trust. Notice to every class member, an ideal objective, is far from practicable much less reasonable. Throughout the course of this litigation, class counsel has surmounted this obstacle by utilizing their website as the primary vehicle to communicate with the beneficiaries. Accordingly, on November 8, 2005, the Court held that "it is reasonable to conclude" that notification on plaintiffs' website "is adequate for purposes of Rule 23(h)(1)." See Mem. Op. (November 8, 2005). The Court also ordered plaintiffs to publish the Interim Fee Petition in the Native American Times, Indian Country Today and News From Indian Country -- generally considered among the most widely read periodicals in Indian Country. The Native American Times, alone, boasts "a proven readership of over 36,000" and a website that "is now averaging over a million hits monthly." See http://nativetimes.com/.

In accordance with the November 8, 2005 Order, plaintiffs posted and published the Interim Fee Petition allowing the class 30 days to file any comments and objections with the Court. The Court finds plaintiffs' compliance with its November 8 Order sufficient to satisfy the demands of Rule 23(h)(1), and defendants' objections are now moot.

OBJECTIONS

Pursuant to the Court's November 8, 2005 Order, plaintiffs received one objection, from Mr. Eddie Jacobs, to "Plaintiffs' Petition for an [Interim] Award of Attorneys' Fees Pursuant to the Equal Access to Justice Act." It is to be noted that other than Mr. Jacobs, no trust beneficiary among the 500,000 or more in the plaintiff class has objected or commented to the interim fee petition by telephone or e-mail. SeePlaintiffs' Exhibit 1 (Declaration of Mari Keenan) at ¶¶ 3-4.

Mr. Jacobs objects that the petition is "totally offensive and disrespectful to American Indian beneficiaries" because plaintiffs' attorneys are getting compensation when the beneficiaries "have not received one cent from this class action lawsuit." See Eddie Jacobs Obj. Mr. Jacob's objection has no substantive comment on plaintiffs' interim fee petition. Mr. Jacob's frustration is the same as plaintiffs in that all would like the IIM beneficiaries to receive just compensation in a timely manner and before their attorneys. But this has been, and continues to be, an extremely arduous and complex process. The Court sympathizes with Mr. Jacobs but finds that his lone objection does not take issue with the merits of plaintiffs' application.

II. ELIGIBILITY TO RECEIVE AN EAJA AWARD PURSUANT TO 28 U.S.C.A. §2412(D)(2)(B)(I)

To receive an award under EAJA, a party must demonstrate "net worth [that] did not exceed $2,000,000 at the time the civil action was filed." 28 U.S.C.A. §2412(d)(2)(B)(I). Defendants maintain that plaintiffs failed to comply with the statute, having merely "alleged" and not "shown" eligibility. Opposition, at 12. Defendants' contention is without merit.

On September 13, 2004, plaintiffs filed their Notice of Filing Named Plaintiff' Affidavits in Support of Plaintiffs' Equal Access to Justice Act Petition for Interim Fees Through the Phase 1.0 Proceeding. Attached to the Notice were affidavits signed by the class representatives, attesting to the fact that their net worth fell within EAJA statutory guidelines at the time the litigation was initiated. The Court finds these submissions amply satisfy the requirements of the statute for the entire class. See Olenhouse v. Commodity Credit Corp., 922 F.Supp. 489, 493 (D. Kan. 1996) (as "[t]he agency has not shown that the named farmers were unrepresentative of the class or that unnamed members of the class were willing and able to bear the cost of the litigation," the farmers need only demonstrate "that the named plaintiffs, i.e., those who prosecuted the claim and seek the EAJA award -- each met the net worth").

III. PREVAILING PARTIES

EAJA allows a "prevailing party" to collect fees and expenses unless a court determines that such an award would be unjust or that "the position of the United States was substantially justified." 28 U.S.C. §2412(d)(1)(A). Defendants concede that, "[u]nder EAJA standards, plaintiffs are probably prevailing parties for Phase 1 trial," Opposition, at 16, and that Cobell V was "largely affirmed on appeal." Defendants qualify their characterization of plaintiffs' success, however, in an attempt to reduce that award with the time plaintiffs spent litigating those claims which may not have succeeded. For the reasons demonstrated below, no reduction is warranted.

In federal fee-shifting statutes, a "prevailing party" must demonstrate: (1) that it is "a party in whose favor a judgment is rendered, regardless of the amount of damages awarded"; (2) the existence of "a court-ordered change in the legal relationship between the plaintiff and the defendant"; and (3) that it has done more than "having acquired a judicial pronouncement unaccompanied by judicial relief." Select Milk Producers, Inc. v. Johanns, 400 F.3d 939, 946-47 (D.C. Cir. 2005). Plaintiffs have successfully carried that burden.

There can be no dispute that the Court's December 21, 1999 declaratory judgment was just that, a "judgment" or "decree and any order from which an appeal lies." BLACK'S LAW DICTIONARY 846 (7th ed. 1999) (citing Fed.R.Civ.P. 54). Cobell V provided "judicial relief" that required defendants to take "some action (or cessation of action)," Thomas v. Nat'l Sci. Found., 330 F.3d 486 at 493 (quoting Hewitt v. Helms, 482 U.S. 755, 761 (1987)), and significantly altered the legal relationship between plaintiffs and the trustee-delegates. See Buckhannon Bd. & Care Home, Inc. v. West Virginia Dep't of Health & Human Resources, 532 U.S. 598, 604 (2001). See also, Tex. State Teachers Assen v. Garland Indep. Sch. Dist., 489 U.S. 782, 792 (1989).

Cobell V also required defendants to provide plaintiffs an accurate accounting; to retrieve and retain all information necessary to render an accurate accounting of all money in the IIM trust; to establish written policies and procedures for collecting from outside sources missing information necessary to render an accurate accounting; and to retain IIM-related trust documents necessary to render an accurate accounting of the IIM trust. Cobell V, 91 F.Supp.2d 1, 58 (D.D.C. 1999). This was not "a case in which the Government voluntarily changed its ways before judicial action was taken," rendering moot the need for litigation "through voluntary cessation before there was a judicially sanctioned change in the legal relationship of the parties." Johanns, 400 F.3d at 949. As the Court of Appeals observed, what "little progress" was made was "more due to the litigation than diligence in discharging its fiduciary obligations." Cobell VI, 240 F.3d at 1097.

Defendants' representations notwithstanding, plaintiffs' status as a "prevailing party" and their entitlement to a fee award is not tempered by the fact that they may not have technically prevailed on all aspects of their claims. Defendants suggest that any fee recovery must be reduced pro rata to reflect those claims for which plaintiffs were unsuccessful. While there is support for the proposition that, where "some but not all of the government's defenses are substantially justified the prevailing party should be compensated for combating those that are not," Cinciarelli v. Reagan, 729 F.2d 801, 805 (D.C. Cir. 1984), the Court finds this principle trumped by one of greater compelling application:

[w]here a plaintiff has obtained excellent results his attorney should recover a fully compensatory fee. Normally this will encompass all hours reasonably expended on the litigation, and indeed in some cases of exceptional success an enhanced award may be justified. In these circumstances the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit. Litigants in good faith may raise alternative legal grounds for a desired outcome, and the court's rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee. The result is what matters. Hensley v. Eckerhart, 461 U.S. 424, 435 (1983).

Here, plaintiffs achieved more than "excellent results," they achieved a "stunning victory." Cobell V, 91 F.Supp.2d at 51. And this victory was in no way diluted by plaintiffs' inability to convince the Court: (1) that the trustee-delegates breached their common-law duties;

(2) to appoint a Court monitor or special master to oversee compliance with the Court's orders; (3) to grant prospective relief about "unclaimed moneys" or "miscellaneous receipts" accounts at Treasury; or (4) that defendants impeded the ability of the Special Trustee to perform his functions.

In the first instance, plaintiffs' "common-law claims for breach of trust against these federal officials in the context of financial mismanagement of the IIM trust," Cobell V, 91F.Supp.2d at 28, did not vitiate plaintiffs' claim that the trustee-delegates violated their statutory duties under the Trust Reform Act. Plaintiffs' "common law" arguments represented an "alternative legal ground" to their contention that defendants violated the Trust Reform Act and thus breached their fiduciary duties toward Indian beneficiaries. Hensley, 461 U.S. at 435. Plaintiffs successfully persuaded the Court of Appeals that the Trust Reform Act constituted both a reaffirmation as well as a codification of the United States' common-law trust responsibilities, and that defendants violated these statutory duties. See Cobell VI, 240 F.3d at 1100 ("The Indian Trust Fund Management Reform Act reaffirmed and clarified pre-existing duties; it did not create them. It further sought to remedy the government's long-standing failure to discharge its trust [i.e., common law] obligations"). In short, plaintiffs may have been unable to impress this Court that defendants violated their "common law duties," but they achieved the identical goal by demonstrating, in the alternative, that the government violated the Trust Reform Act. And "[g]iven [petitioner's] success in the case, [] the time its attorneys spent on alternative grounds should not be used to reduce its award." Davis County Solid Waste Management and Energy Recovery Special, 169 F.3d 755, 760 n.8 (D.C. Cir. 1999) (citations omitted). See also, Copeland, 641 F.2d 880, 891-92 (D.C. Cir. 1980) (en banc). ("it sometimes will be the case that a lawsuit will seek recovery under a variety of legal theories complaining of essentially the same injury. A district judge must take care not to reduce a fee award arbitrarily simply because a plaintiff did not prevail under one or more of these legal theories").

Similarly, the Court's refusal to appoint a court monitor or special master did not diminish plaintiffs' success. Cobell V makes clear that the very duties plaintiffs asked the Court to delegate to a third-party monitor were, in fact, retained by the Court. For example, "to ensure that trust reform is successfully completed," the Court ordered defendants to "file with the court and serve upon plaintiffs quarterly status reports setting forth and explaining the steps that defendants have taken to rectify the breaches of trust declared today and to bring themselves into compliance with their statutory trust duties embodied in the Indian Trust Fund Management Reform Act of 1994 and other applicable statutes and regulations governing the IIM trust"). Cobell V, 91 F.Supp 2d at 56. By reserving these duties for itself, the Court did not deny plaintiffs' request that defendants' activities be monitored. No reduction in fees is warranted.

With respect to plaintiffs' claim for prospective relief, defendants correctly observe that the Court rejected plaintiffs' request as little more than "vague accusations about certain money purportedly kept in the 'unclaimed moneys' or 'miscellaneous receipts' accounts at Treasury." Cobell V, 91 F.Supp.2d at 23. Counsel's individual time entries, however, reveal a de minimis effort on the part of plaintiffs that in no measurable way detracted from their overall success.

Finally, the Court's denial of plaintiffs' claims of obstruction against the Office of the Special Trustee does not warrant a proportional reduction in fees. By the time the Phase 1.0 trial was underway, plaintiffs had "all but withdrawn their claims for 'obstruction' of the discharge of the Special Trustee's duties by defendant Babbitt's meager funding requests and reorganization of OST." Cobell V, at 51. The Court's review of plaintiffs' time entries confirms that plaintiffs expended an imperceptibly small fraction of time on these claims with no discernible impact on the ultimate results.

In sum, the Court's position on these claims neither detracts from plaintiffs' victory nor warrants a reduction in fees based on "a mathematical approach comparing the total number of issues in the case with those actually prevailed upon." Hensley, 461 U.S. at 435-36, n.11.

IV. SUBSTANTIAL JUSTIFICATION

Eligibility for a fee award under the EAJA requires, among other things, that the Government's position was not "substantially justified," 28 U.S.C. §2412(d) (1) (A), i.e., one that "a reasonable person could think it correct, that is, if it has a reasonable basis in law and fact." Pierce v. Underwood, 487 U.S. 552, 566, n.2 (1988). Defendants, at all times, "bear[] the burden of establishing that its position meets the substantial justification threshold," Lundin v. Mecham, 980 F.2d 1450, 1459 (D.C. Cir. 1992)), and demonstrating "the reasonableness not only of its litigation position, but also of the agency's actions." American Wrecking Corp. v. Secretary of Labor, 364 F.3d 321 (D.C. Cir. 2004) (emphasis added and in original). See 28 U.S.C. §2412(d)(2)(D) (providing that "'position of the United States' means, in addition to the position taken by the United States in the civil action, the action or failure to act by the agency upon which the civil action is based") (emphasis added). See also, Halverson v. Slater, 206 F.3d 1205, 1208 (government must show "that its position, including both the underlying agency action and the arguments defending that action in court, was 'substantially justified' within the meaning of the Act." (D.C. Cir. 2000)).

Defendants contend the government's position was, at all times, "reasonable" and thus "substantially justified." Opposition, at 18, 19. They urge this Court not to conflate their loss both at trial and on appeal with the "reasonableness" of their position. Opposition, at 18 (citing Cooper v. United States R.R. Ret. Bd., 24 F.3d 1414, 1416 (D.C. Cir. 1994)). The Court finds defendants' position not well taken. At all relevant times, defendants acted in a manner flatly at odds with controlling authority that could not be "justified to a degree that could satisfy a reasonable person." Underwood, 487 U.S. at 565.

The record on this point is clear. Recognizing "the magnitude of government malfeasance and potential prejudice to the plaintiffs' class," the Court of Appeals stripped defendants of the deference normally conferred upon agencies as a matter of course and entrusted this Court with an unparalleled level of oversight. Cobell VI, 240 F.3d at 1109. ("[w]hile ordinarily we defer to an agency's interpretations of ambiguous statutes entrusted to it for administration, deference is not applicable in this case") (citing Chevron U.S.A., Inc. v. Nat. Resources Def. Council, Inc., 467 U.S. 837 (1984)).

Beyond this, the Circuit repeatedly underscored that defendants' conduct, both at the agency level and during litigation, at all relevant times, was "fundamentally unreasonable." F.J. Vollmer Co., Inc. v. Magaw, 102 F.3d 591, 596 (D.C. Cir. 1996). See Cobell VI, 240 F.3d at 1093 ("The "egregious" failure of defendants to produce documents, in violation of a Court order "was only compounded by the Treasury Department's contemporaneous destruction of documents potentially responsive to the court's production order, and the failure of government officials to apprise the court or the plaintiffs of the defendants' unwillingness and self-inflicted inability to comply with the production orders"); Cobell VI, 240 F.3d at 1097 ("For these reasons, we find no basis for disturbing the district court's conclusion that appellants unreasonably delayed the discharge of their fiduciary obligations"); Cobell VI, 240 F.3d at 1096 ("That Congress enacted its own remedial statute to address this unconscionable delay does not mitigate the egregious amount of time plaintiffs have waited for, as discussed below, the 1994 Act is not the source of plaintiffs' rights").

Finally, it is undisputed that, "[f]ederal officials [,] [] aware of their fiduciary obligations long before the passage of the 1994 Act," Cobell VI, 240 F.3d at 1097, "unlawfully withheld" or "unreasonably delayed" faithful execution of their trust obligations. Id. at 1094. By any yardstick, defendants' conduct can not reasonably be characterized was as "substantially justified."

Defendants parenthetically argue that "the greatest indicator that its position was nonetheless justified is that the Court certified its December 21, 1999 order for interlocutory appeal." Opposition, at 19. Defendants' argument is without merit as it misconstrues the rationale behind the Court's grant of interlocutory certification. 28 U.S.C. §1292(b) vests the Court with the authority to certify any order that "involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation." This Court found both trustee-delegates unreasonably breached their clearly delineated fiduciary responsibilities toward plaintiff class. Not only was there no "substantial ground for difference of opinion" as to defendants' culpability, see Cobell VI, 240 F.3d at 1096, but defendants are incorrect if they interpret the Court's efforts to "materially advance" the termination of the litigation as an implicit validation of their position.

THE INTERIM FEE PETITION

In its May 27, 2004 Opinion, this Court instructed plaintiffs that "any fee petition submitted as to Phase 1.0 should, by necessity, include all appropriate time expended by plaintiffs since the inception of the suit with the exception of the Court's award of fees for the first contempt trial." See Cobell v. Norton, 319 F.Supp.2d 36, 42 (D.D.C. 2004) (citing Cobell v. Babbitt, 188 F.R.D. 122 (D.D.C.1999)). In determining what constitutes "appropriate time," the Court starts with the proposition that plaintiffs, at all times, maintain the burden of establishing the reasonableness of both their entitlement to the hours expended and the hourly rates. Hensley, 461 U.S. at 436. Defendants, for their part, carry the burden of rebuttal, requiring "submission of evidence to the district court challenging the accuracy and reasonableness of the hours charged." Blum v. Stenson, 465 U.S. 886, 892 n.5 (1984) (citation omitted).

Plaintiffs, in support of the Interim Fee Petition, submitted 1,129 pages of time records, 11 affidavits, 7 supplemental affidavits, and a Law Firm Statistical Survey performed by PricewaterhouseCoopers attesting to the range of hourly rates normally charged by attorneys in the Washington, D.C.; Atlanta, Georgia; and Winston Salem, North Carolina areas ("PwC Survey"). In total, plaintiffs' petition seeks fees and costs on behalf of 34 attorneys, 3 paralegals, 3 law librarians, 9 law clerks, and 44 experts.

Defendants maintain that the Interim Fee Petition, as a whole, represents an unreasonable request for fees. They object to plaintiffs's claim as unsupported by contemporaneous time records; beyond the scope of the Phase I proceedings; being duplicative of awards rendered in other proceedings; related to unsuccessful settlement and mediation efforts; unsupported by adequate documentation; excessive; and not recoverable, as a matter of law.

After reviewing the parties' submissions and time entries, the Court undertook a three-step process. It first excluded from the fee calculation those hours that strayed beyond the scope of Phase 1.0, violated EAJA's statutory guidelines, or sought compensation already awarded. The Court next analyzed the remaining hours to determine whether they were "reasonable," and deducted those it found excessive, unnecessary, redundant, or improperly documented. Finally, the Court multiplied the remaining hours by an appropriate hourly rate.

I. ERRORS IN CALCULATION

Examining plaintiffs' time entries and affidavits, the Court uncovered several arithmetic errors. For example, Gingold requests compensation for 9,114.4 hours spent on Phase 1.0 proceedings. The Court calculated, however, that Gingold expended 10,092.4 hours on these activities. (Defendants represent Gingold's time to be 10,101.8 hours, see Opposition, at Exhibit 9.) The Court finds this discrepancy stems from the fact that Gingold inadvertently omitted from his total request, the 978 hours he spent during 1996 and 1997. Unlike those entries where Gingold consciously discounted his time, see, e.g., Gingold Affidavit at 3 ("Where the issue is unclear, I discounted the recorded time by 50% to reflect a fair and appropriate allocation"); Gingold [Reply] Affidavit at 11 ("As I stated in my original affidavit, I have discounted my time materially to ensure a fair allocation of time and that no double recovery would occur"), this discrepancy is obviously a mathematical miscalculation and not a conscious attempt by Gingold to reduce his invoice. Accordingly, the Court relied on and awarded an amount based on its own calculation. See American Petroleum Institute v. United States E.P.A., 72 F.3d 907, 912 (D.C. Cir. 1996). ("We first note that the petition reflects an apparent arithmetic error of $1,000. The fee request seeks fees of $287,370 for representation from June, 1994, to February, 1995. Monthly billing statements for that time period document only $286,370. We therefore first deduct $1,000 to correct the apparent error in calculation").

II. CONTEMPORANEOUS TIME ENTRIES

Defendants urge the Court to reject the Interim Fee Petition on the grounds that plaintiffs failed to submit "contemporaneous records of exact time spent on the case, by whom, their status and usual billing rates, as well as a breakdown of expenses such as the amounts spent copying documents, telephone bills, mail costs and other expenditures related to the case." Opposition, at 8 (quoting Cmty. Hearing & Plumbing Co. v. Garrett, 2 F.2d 1143, 1146 (Fed. Cir. 1993)).

Defendants take issue, for example, with plaintiffs' stated practice of transferring time entries from hard copy to computer. The record reveals that Gingold recorded his time in a diary and then input the information into his computer, Gingold Aff., at &¶ 1 and 2; Keith Harper, John Echohawk, and Lorna Babby maintained daily records that were subsequently entered on a weekly or monthly basis on a computer database, Harper Aff., at & 2, Echohawk Aff., at ¶ 2, Babby Aff., at ¶ 2; and Stacy Gingold Bear "maintained [her] time records in an annual hard copy diary . . . . [f]rom this diary, . . entered [her] time electronically into a Quattro Pro software application." Gingold Bear Aff., at ¶ 2.

Defendants next accuse plaintiffs of improperly "modifying," Opposition, at 10, "editing," id., and "altering" id. n.4, their time records. Defendants cite to those entries where plaintiffs "added clarity where contemporaneous entries had been made in abbreviated, coded, short-hand, or summary form," Gingold Aff., at ¶ 2 (August 16, 2004); or, "slightly modified some of the descriptions to clarify the task completed," Babby Aff., at ¶ 3; or "edited some of the original description to fix obvious recording errors . . . . because of the need for increased clarity . . . [and] slightly modified some of the descriptions so as to clarify the task that I was completing," Echohawk Aff., at ¶ 3; or "edited some of the original descriptions to fix obvious recording errors . . . . because of the need for increased clarity . . . slightly modified some of the descriptions so as to clarify the task that [he] was completing," Rempel Aff., at ¶ 4; or "added clarity where contemporaneous entries had been made in abbreviated, coded, short-hand, or summary form." Gingold Bear Aff., at ¶ 2.

The Court finds defendants' objections to plaintiffs' practice of transferring records from one medium to another and clarifying records to facilitate judicial review, meritless.

In the first instance, defendants put forth no evidence supporting their challenge. "[A] respondent to a fee application must file affidavits in opposition [] where the respondent challenges the factual accuracy of the fee petition. Joy Mfg. Corp. v. Pullman-Peabody Co., 742 F.Supp. 911, 915 (W.D. Pa. 1990). Defendants, having been present at all proceedings and having reviewed all filings could easily have "submit[ted] to the District Court any evidence challenging the . . . the facts asserted in the affidavits submitted by respondents' counsel," Blum v. Stenson, 465 U.S. 886, 892 n.5 (1984) (citing City of Detroit v. Grinnell Corporation, 495 F.2d 448, 472-473 (2d Cir. 1974)). Instead, defendants offer only innuendo and speculation.

Beyond this, defendants' interpretation of the "contemporaneous time records" requirement is draconian. A time record is "contemporaneous" if its descriptions are both "accurate and current," In re Hudson & Manhattan R. R. Co., 339 F.2d 114, 115 (2d Cir. 1964), and includes "for each attorney, the date, the hours expended, and the nature of the work done." New York Assen for Retarded Children v. Carey, 711 F.2d 1136, 1148 (2d Cir.1983). While the need to "maintain contemporaneous, complete and standardized time records which accurately reflect the work done by each attorney" is "particularly apt" in EAJA petitions since "the fee requirements will be satisfied from the United States Treasury," In re Donovan, 877 F.2d 982, 994 (D.C. Cir. 1989), this Court does not share defendants' obsession with the medium in which plaintiffs' time records were entered or with the fact that abbreviated notations were clarified and mistakes corrected to assist the Court's review.

What is significant is that plaintiffs' time entries do not constitute "casual after-the-fact estimates." Action on Smoking and Health v. C.A.B., 724 F.2d 211, 220 (D.C. Cir. 1984). The Court has no reason to question the veracity of plaintiffs' sworn affirmations that they clarified abbreviated notations and shorthand to allow "this Court to make an informed decision about the relevance and appropriateness of the entry," (Gingold Bear Aff., at ¶ 2), or that they were "diligent to check the time claimed with contemporaneous records, briefs or memoranda to ensure against recording errors." Echohawk Aff., at ¶ 3. In short, the Court finds defendants' exceptions to plaintiffs' entries on the grounds that they do not constitute contemporaneous records to be without foundation.

III. SCOPE OF RECOVERABLE FEES

1. NON COMPENSABLE TIME

a. Claims for Which Plaintiffs Already Received Compensation

Plaintiffs seek compensation for "time expended from the development of Complaint in 1996 through the affirmance of this Court Phase 1.0 decision by the Court of Appeals on February 23, 2001." Interim Fee Petition, at 4. Defendants argue that this request is overbroad and asks the Court to purge the Interim Fee Petition of those hours for which fees have already been awarded. Opposition, at 49. In support, defendants provide the Court with a chart segregating the time Gingold spent litigating claims related to Phase 1.0 and the time he expended related to Contempt I and Mona Infield's retaliation complaint -- claims for which fees have already been granted. Gingold responds that he discounted his time materially "to ensure a fair allocation of time and that no double recovery would occur." Gingold [Supplemental] Aff., at ¶ 11.

To prevent duplication of awards, the Court independently reviewed Gingold's time entries, segregated those hours for which he was already awarded fees, and deducted those hours ...


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