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Miller v. Holzmann

August 12, 2008

RICHARD F. MILLER, PLAINTIFF,
v.
PHILIPP HOLZMANN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Royce C. Lamberth, Chief Judge

MEMORANDUM OPINION

Winston Churchill prescribed magnanimity in victory. See Winston S. Churchill, THE SECOND WORLD WAR, VOLUMEI: THEGATHERINGSTORMxiii (1948).

But Churchill, of course, spoke of war, not litigation.

On August 10, 2007, relator emerged victorious in this False Claims Act ("FCA") suit of epic duration when this Court entered judgment against six defendants*fn1 for over $90 million.*fn2

(See generally Judgment [883].) He now seeks another $20 million in attorneys' fees and costs.

Now before the Court are plaintiffs' bills of costs [928, 929, 933] and relator's motion for attorneys' fees, costs, and expenses [930]. Pursuant to Federal Rule of Civil Procedure 54(d)(1) and Local Civil Rule 54.1, the United States asks the Court to tax its $54,437.87 in costs to defendants.*fn3 Relator, in turn, requests reimbursement for $31,973.96 in costs.*fn4 Separately, relator seeks $9,945,765.25 in attorneys' fees*fn5 and $511,723.06 in associated costs and expenses.*fn6 Finally, he proposes a 100 percent enhancement of his attorneys' fees based on exceptional quality of representation, thus raising his overall demand to $20,403,253.56.

Defendants, naturally, oppose plaintiffs' requests.*fn7 This Opinion first considers Anderson's argument that he shares liability only for the government's costs. It then examines defendants' challenges to plaintiffs' bills of costs, to relator's attorneys' fees, and to his expenses.

I. Anderson's Liability

Although the jury found for the government on its sole, live claim against Anderson, this Court dismissed relator's claims against Anderson as time-barred. (See Verdict Form [858] at 4, 7, 11; Mem. Op. of June 14, 2007 [872] at 29.) In opposing relator's fee petition, Anderson contends the FCA permits only "prevailing parties" to recover fees and costs from a defendant, that relator is not a "prevailing party" as against him, and that accordingly, he is not liable to relator. (Anderson's Opp'n at 2-7.) Relator, however, insists the FCA does not limit fee and cost recovery to prevailing parties, and that because the government prevailed on its claim against Anderson, Anderson is jointly and severally liable with the other defendants for relator's fees and costs. (Reply to Anderson's Opp'n at 1.)

As the parties (at least, implicitly) concede, this issue is one of first impression. (See id. at 4; Anderson's Opp'n at 5.)

In incorporating a fee-shifting provision, the FCA is far from unique among federal statutes that create private, civil causes of action. Compare 31 U.S.C. § 3730(d)(1) (2008) (qui tam relator may recover "expenses . . . necessarily incurred, plus reasonable attorneys' fees and costs," from the defendants), with 42 U.S.C. § 1988(b) (2008) (court has discretion to award "reasonable attorney's fee as part of [] costs" to successful civil rights plaintiffs).

Under many other fee-shifting schemes, a plaintiff may recover his attorneys' fees and expenses from the defendant only when he is a "prevailing party."*fn8 See, e.g., Richlin Sec. Serv. Co. v. Chertoff, 128 S.Ct. 2007, 2011 (2008) (Equal Access to Justice Act, 5 U.S.C. section 504(a)(1), "permits an eligible prevailing party to recover 'fees and other expenses incurred by that party in connection with' a proceeding before an administrative agency"); Winkelman v. Parma City Sch. Dist., 127 S.Ct. 1994, 2002 (2007) (Individuals with Disabilities Education Act, 20 U.S.C. section 1315(i)(3)(B)(i)(I), "allow[s] an award [of attorney's fees] 'to a prevailing party who is the parent of a child with a disability'"); Farrar v. Hobby, 506 U.S. 103, 109 (1992) ("in order to qualify for attorney's fees under [the Civil Rights Attorney's Fees Awards Act, 42 U.S.C.] § 1988, a plaintiff must be a 'prevailing party'"). Cf. FED. R. CIV. P. 54.1(d) (providing for recovery of costs other than attorney's fees by "the prevailing party" in civil litigation).

The FCA does not expressly limit fee recovery to "prevailing" relators, but its description of which relators may recoup their fees is not exactly a model of clarity:

If the Government proceeds with an action brought by a [relator], such person shall . . . receive at least 15 percent but not more than 25 percent of the proceeds of the action or settlement of the claim . . . . Where the action is one which the court finds to be based primarily on disclosures of specific information (other than information provided by the person bringing the action) relating to allegations or transactions [that have been publicly disclosed] the court may award . . . no [] more than 10 percent of the proceeds . . . . Any payment to a person under the first or second sentence shall be made from the proceeds. Any such person shall also receive an amount for reasonable expenses . . . necessarily incurred, plus reasonable attorneys' fees and costs. All such expenses, fees, and costs shall be awarded against the defendant.

31 U.S.C. § 3730(d)(1) (2008) (emphasis added).*fn9 Cf. 42 U.S.C. § 1988(b) (2008) (court has discretion to award reasonable attorney's fee to "prevailing party" in suits brought pursuant to certain civil rights statutes).

To interpret the vague phrase "any such person," the Court must look to its context. See Davis v. Mich. Dep't of Treasury, 489 U.S. 803, 809 (1989) ("It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme."). In light of the immediately preceding sentence, "any such person" must mean any person who receives payment under the statute's first or second sentences. See 31 U.S.C. § 3730(d)(1) (2008). Those two sentences merely establish the percentage bounty a relator should receive when the government intervenes in the action he has brought and ultimately secures payment for its damages. See id. The internal cross-reference thus suggests that whenever the government intervenes and obtains relief, no matter the circumstances, the relator should receive both a share of the government's proceeds and reasonable attorneys' fees.

This reading, however, would yield absurd results -- at least some of which Congress clearly did not intend. For example, 31 U.S.C. section 3730(e) provides that no court shall have jurisdiction over certain actions, such as those "based upon the public disclosure of allegations or transactions . . . unless . . . the person bringing the action is an original source of the information" -- that is, "an individual who has direct and independent knowledge of the information on which the allegations are based and [who] has voluntarily provided the information to the Government" before filing his qui tam complaint. See 31 U.S.C. § 3730(e)(4) (2008). Logically, having erected a jurisdictional bar to these relators' claims, Congress could not have intended them to receive attorneys' fees. See Fed. Recovery Servs., Inc., 72 F.3d at 449-50, 453 (affirming district court's denial of attorneys' fees to relator whose claims were dismissed as barred under section 3730(e)(4)). Cf. United States ex rel. Merena v. Smithkline Beecham Corp., 205 F.3d 97, 106 (3d Cir. 2000) (Alito, J.) (reversing district court's award of relator's share to relator whose claims were subject to dismissal under section 3730(e)(4)). On the contrary, Congress has sought to prevent, not reward, "opportunistic suits by private persons who heard of fraud but played no part in exposing it." Cooper v. Blue Cross & Blue Shield of Fla., Inc., 19 F.3d 562, 565 (11th Cir. 1994) (emphasis added) (discussing comprehensive 1986 FCA amendments).

The fee-shifting provision itself does not appear to draw this line -- nor, for that matter, any other.*fn10 Relator suggests the Court should interpret this inscrutable language in light of the FCA's goals, which he argues support awarding attorneys' fees to relators, like himself, whose claims are dismissed due to "procedural," vice jurisdictional, defects. (See Reply to Anderson's Opp'n at 4-5.) Courts rightly balk at engaging in this sort of arbitrary line-drawing. E.g., Colgrove v. Battin, 413 U.S. 149, 182 (1973) (Marshall, J., dissenting) ("Normally, in our system we leave the inevitable process of arbitrary line drawing to the Legislative Branch, which is far better equipped to make ad hoc compromises.").

Happily, here, Congress left an additional, unambiguous clue to its intent in drafting the FCA attorneys' fees provision. In its report accompanying the 1986 amendments, the Senate Judiciary Committee characterized the FCA's fee-shifting scheme as applying to "prevailing qui tam relators." S. Rep. No. 99-345, at 29 (1986), as reprinted in 1986 U.S.C.C.A.N. 5266, 5294 (emphasis added). As explained above, the qualifier "prevailing" appears in numerous other federal fee-shifting provisions, and its meaning is well-established. See, e.g., Farrar, 506 U.S. at 109-11. Its application here would harmonize the fee-shifting provision with the jurisdictional exclusions in subsection (e) and with more fundamental jurisdictional concerns.*fn11 See Fed. Recovery Servs., Inc., 72 F.3d at 450, 452 (government's intervention does not cure existing jurisdictional defect in relator's complaint so as to permit dismissed relator to recover attorneys' fees); United States ex rel. Taxpayers Against Fraud v. Gen. Elec. Co., 41 F.3d 1032, 1044 (6th Cir. 1994) (despite government's intervention and settlement with defendant, if district court on remand determined co-relator lacked standing, it could not recoup attorneys' fees).

As the Supreme Court has observed, "[r]espect for ordinary language requires that a plaintiff receive at least some relief on the merits of his claim before he can be said to prevail."

Hewitt v. Helms, 482 U.S. 755, 760 (1987), overruled in part on other grounds by Sandin v. Conner, 515 U.S. 472 (1995). The Senate Report's "ordinary language" undercuts relator's contention that Anderson, against whom his claims garnered no relief whatever, should share liability for his attorneys' fees and costs.

Furthermore, contrary to relator's arguments, declining to assess relator's attorneys' fees against Anderson comports with the FCA's underlying purposes. Relator insists Congress enacted the FCA "to encourage the filing of this very kind of lawsuit," in which relator from the outset fingered Anderson as a ringleader in the fraud. (Reply to Anderson's Opp'n at 3-4.)

First, to answer relator's implicit proposition most directly, this Court is confident that potential relators will not be discouraged from filing meritorious FCA claims by a holding that 31 U.S.C. section 3730(d)(1) does not permit attorneys' fee awards against defendants who obtain judgment as a matter of law on the relator's claims.*fn12

Second, this Court has encapsulated the FCA's purposes as follows:

The False Claims Act seeks, first and foremost, to detect, punish, and deter the submission of false claims, while seeking to restore funds to the federal fisc. The qui tam provisions enlist private individuals, often motivated largely by self-interest, to report and prosecute alleged false claims. Those provisions seek to strike a balance between the interests of the government and the self-interest of relators.

United States ex rel. Pogue v. Diabetes Treatment Ctrs. of Am., 474 F. Supp. 2d 75, 87 (D.D.C. 2007) (Lamberth, J.). "The [FCA's] statute of limitations," this Court reasoned, "advances those governmental interests." Id. Yet statutes of limitations, by their nature, also "facilitat[e] the administration of claims[] . . . [and] promot[e] judicial efficiency." John R. Sand & Gravel Co. v. United States, 128 S.Ct. 750, 753 (2008) (citations omitted). Thus, Congress clearly did not seek "to encourage the filing of this very kind of lawsuit" at the expense of these governmental interests and prudential considerations.*fn13 Denying attorneys' fees to relators whose claims are time-barred strikes this balance.

Accordingly, the Court concludes that because relator's claims against Anderson were dismissed in their entirety, relator may not recover attorneys' fees, costs, or expenses from Anderson under the FCA. Under Federal Rule of Civil Procedure 54(d)(1), only a "prevailing party" may recover costs, other than attorneys' fees, from a private defendant. FED. R. CIV. P. 54(d)(1). Because relator's legal relationship to Anderson remains wholly unchanged, he may not recover costs from Anderson under this Rule. See Tex. State Teachers Ass'n, 489 U.S. at 792-93; Graham, 473 U.S. at 168.

II. Plaintiffs' Taxable Costs

As stated above, Rule 54(d)(1) permits a "prevailing party" to recoup his costs, other than attorneys' fees, from a private defendant. FED. R. CIV. P. 54(d)(1). Cf. 31 U.S.C. §3729(a) (U.S. may recover "the costs of a civil action" brought to recover FCA penalty or damages). While Rule 54(d)(1) affords the court some discretion in awarding costs, the Courts of Appeals have consistently treated the allowance as presumptive, holding "that a court may neither deny nor reduce a prevailing party's request for costs without first articulating some good reason for doing so." Baez v. U.S. Dep't of Justice, 684 F.2d 999, 1004 (D.C. Cir. 1982) (en banc) (per curiam).

The unsuccessful party bears the burden of supplying this "good reason," and "trial judges have rarely denied costs to a prevailing party whose conduct has not been vexatious when the losing party has been capable of paying such costs." Id.; see, e.g., Bell v. Gonzales, No. 03-163, 2006 U.S. Dist. LEXIS 69415, at *7-8 (D.D.C. Sept. 27, 2006) (Bates, J.) (sharply reducing government's "plainly inflated Bill of Costs," where costs were "not well supported factually or legally" and comprised "a punitive effort . . . against an unsuccessful discrimination plaintiff").

In particular, by statute, a prevailing party may recover "[f]ees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case." 28 U.S.C. § 1920(2) (2008). This Court's local rules refine this allowance:

(6) the costs, at the reporter's standard rate, of the original and one copy of any deposition noticed by the prevailing party, and of one copy of any deposition noticed by any other party, if the deposition was used on the record, at a hearing or trial; (7) the cost, at the reporter's standard rate, of the original and one copy of the reporter's transcript of a hearing or trial if the transcript: (i) is alleged by the prevailing party to have been necessary for the determination of an appeal within the meaning of Rule 39(e), Federal Rules of Appellate Procedure, or (ii) was required by the court to be transcribed[.]

Local Civ. R. 54.1(d).

Defendants' sole objection to plaintiffs' bills of costs concerns allegedly duplicative charges for transcripts. Specifically, the United States and relator have each billed for an original and one copy of thirteen individuals' deposition transcripts.*fn14 In some of these cases, it is clear that plaintiffs wish defendants to pay for four copies of exactly the same document.*fn15 Further, the United States and relator each seek reimbursement for an original and one copy of each afternoon's trial transcript. (See Ex. 1 to U.S. Bill of Costs [928] at 3-4; Ex. 4 to Relator's Bill of Costs [929] at 1-2.) Again, they repeatedly paid for four copies of the same document, at a premium for expedited preparation.

Such expenditures hardly seem reasonable. The Court does not suggest that as co- plaintiffs, the United States and relator must necessarily have shared a single transcript, prepared according to the court reporter's regular schedule. But for each plaintiff to bill for two copies of an expedited transcript strikes the Court as possibly excessive.*fn16

Nevertheless, this practice does not fall outside the letter of Local Rule 54.1. The Rule refers to "[a] prevailing party," and its choice of article ("a" rather than "the") implies that any prevailing party, even if there is more than one, may invoke its provisions. Local Civ. R. 54.1(a).

Further, the Rule specifically provides for reimbursement for an original and one copy of deposition and trial transcripts. Local Civ. R. 54.1(d). Defendants, who bear the burden of demonstrating a "good reason" for denying plaintiffs' costs, offer no authority and little argument for deviating from this presumptive allowance. See Baez, 684 F.2d at 1004. Moreover, plaintiffs' "conduct has not been vexatious," and it appears defendants are "capable of paying [these] costs." See id. Accordingly, the Court concludes defendants' meager opposition does not overcome the strong presumption in plaintiffs' favor.

Plaintiffs' bills of costs [928, 929] shall be granted in full.*fn17

III. Relator's Attorneys' Fees

Relator also seeks an award of "reasonable attorneys' fees" against defendants under the FCA. "The initial estimate of a reasonable attorney's fee is properly calculated by multiplying the number of hours reasonably expended on the litigation times a reasonable hourly rate." Blum v. Stenson, 465 U.S. 886, 888 (1984).*fn18 A strong presumption exists that the product of these two variables -- the "lodestar figure" -- represents a "reasonable fee." Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 546, 565 (1986). Upward adjustments of the lodestar are warranted only in "rare" and "exceptional" cases, where supported by "specific evidence" and detailed findings. Blum, 465 U.S. at 899-901.

In calculating relator's fee award, the Court must thus make three separate determinations: (1) what constitutes a "reasonable hourly rate" for his counsel's services; (2) which among his counsel's claimed work hours were "reasonably expended on the litigation"; and (3) whether relator has offered "specific evidence" demonstrating this to be the "rare" case in which a lodestar enhancement is appropriate, and if so, in what amount. The Court considers each issue in turn.

A. Reasonable Rate

In calculating this component of the lodestar, the Court must resolve two contested issues: (1) which source(s) should supply the reasonable rate; and (2) whether current or historical rates should apply to work performed prior to 2007.*fn19

1. Established v. Matrix-Derived Rates

In this Circuit, "an attorney's usual billing rate is presumptively the reasonable rate, provided that this rate is 'in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.'" Kattan by Thomas v. District of Columbia, 995 F.2d 274, 278 (D.C. Cir. 1993) (quoting Blum, 465 U.S. at 896 n.11).

[W]hen fixed market rates already exist, there is no good reason to tolerate the substantial costs of turning every attorneys fee case into a major ratemaking proceeding. In almost every case, the firms' established billing rates will provide fair compensation. The established rates represent the opportunity cost of what the firm turned away in order to take the litigation; they represent the lawyers' own assessment of the value of their time.

Laffey v. Northwest Airlines, Inc., 746 F.2d 4, 24 (D.C. Cir. 1984) (emphasis in original), overruled on other grounds by Save Our Cumberland Mountains, Inc. v. Hodel, 857 F.2d 1516 (D.C. Cir. 1988).*fn20 "[T]he burden is on the fee applicant to produce satisfactory evidence -- in addition to the attorney's own affidavits -- that the requested rates" align with prevailing rates.

Blum, 465 U.S. at 896 n.11. See also Covington v. District of Columbia, 57 F.3d 1101, 1107 (D.C. Cir. 1995) ("a fee applicant's burden in establishing a reasonable hourly rate entails a showing of at least three elements: the attorneys' billing practices; the attorneys' skill, experience, and reputation; and the prevailing market rates in the relevant community").

a. Wilmer Hale

Relator asks that his attorneys be compensated at their standard billing rates, and he has submitted a declaration from his lead counsel, Robert Bell, that provides these standard rates for Wilmer Hale personnel. (See Bell Decl. ¶ 108, Ex. 2 to Mot. for Fees, Costs, and Expenses [930].) As one might expect, Bell avows that the requested rates are within the range of prevailing market rates charged by large law firms in the District of Columbia for lawyers and paralegals of similar experience and qualifications. (See id. ¶¶ 104, 109.)

To supplement Bell's own assertions, relator offers declarations from two local attorneys.

The first, Stephen L. Braga, now a partner at Baker Botts -- like Wilmer Hale, a large, international law firm -- has practiced complex, civil litigation in the District since 1982. (Braga Decl. ¶ 1, Ex. 3 to [930].) Since 1993, Braga has also instructed law students on the subject of attorneys' fees as an adjunct professor at the Georgetown University Law Center. (Id. ¶ 1(g).)

Beyond arguing that "[u]nder basic economic principles," Wilmer Hale's standard rates must be considered competitive within the D.C. market, Braga compares rates for four Wilmer Hale partners with those charged by his own firm and other large, D.C. litigation firms for partners with similar backgrounds and litigation experience. (Id. ¶ 6.) He asserts that Robert Cultice, Jennifer O'Connor, and Jonathan Cedarbaum could command higher hourly rates, and that Robert Bell's rate "appears to be set right where it should be in the Washington legal market."

(Id.) Braga concludes that Wilmer Hale's established rates "fall squarely within the prevailing market rates in the District of Columbia for experienced counsel to handle complex civil litigation." (Id.)

The second attorney declarant, Steven K. Davidson, currently a partner at Steptoe & Johnson -- another large, international law firm -- has practiced commercial litigation in the District since 1985. (Davidson Decl. ¶ 2, Ex. 5 to [930].) As a member of his firm's Executive Committee, he has assisted with setting professionals' billing rates. (Id. ¶¶ 2, 16.) Davidson offers an opinion based not only on anecdotal knowledge of his and competitor firms' standard billing rates but also on two external sources. (Id. ¶¶ 19-21.) First, The National Law Journal's 2006 annual survey of billing rates indicates that Wilmer Hale's rates are comparable to those reported by other large firms with D.C. offices. (Id. ¶ 19; see id. Ex. A.) Second, Wilmer Hale's rates also align with those delineated in the Laffey matrix, as updated by relator's economist using the nationwide legal services component of the Consumer Price Index, a methodology approved in Salazar v. District of Columbia, 123 F. Supp. 2d 8 (D.D.C. 2000) (Kessler, J.).*fn21 (Id. ¶ 20; see also Kavanaugh Decl. ¶¶ 9-15, Ex. 4 to [930].) Davidson thus concludes that Wilmer Hale's rates "are comparable to the prevailing market rates and [] well within the reasonable range of rates for a law firm such as WilmerHale undertaking matters of the magnitude and complexity of those involved here." (Davidson Decl. ¶ 16, Ex. 5 to [930].)

Relator's evidence demonstrates that Wilmer Hale's established billing rates -- those charged to all litigation clients -- align with the established rates of lawyers of reasonably comparable skill, experience, and reputation in the D.C. legal community.*fn22 See Kattan, 995 F.2d at 278. Thus, the Court will accord these rates a presumption of reasonableness. See Covington, 57 F.3d at 1110.

Defendants' rebuttal to this evidentiary showing rests on a single proposition. Under Blum, a reasonable rate must align with "those prevailing in the community for similar services . . . ." 465 U.S. at 896 n.11. Whereas relator appears to define "similar services" in terms of complex, federal-court civil litigation, defendants insist "similar" must be construed more narrowly. (See HII's Opp'n [949] at 30-34.) In their view, the hourly rates typically charged by FCA relators' counsel are the benchmark against which this Court should evaluate relator's requested rates. (Id. at 32-33.)

This contention fails for three reasons. First, the authority on which defendants rely does not support their argument.*fn23 Second, case law in this Circuit does not support the Balkanized approach to fee calculation that defendants advocate. In 1983, then-Chief Judge Aubrey Robinson adopted an hourly rates scheme for complex, federal litigation under which an attorney's years of experience determined his reasonable hourly rate. Laffey v. Northwest Airlines, Inc., 572 F. Supp. 354, 371-75 (D.D.C. 1983). In the ensuing twenty-five years, this scheme, the Laffey matrix, has achieved broad acceptance in this Circuit and has served as a guide in nearly every conceivable type of case. See, e.g., Hansson v. Norton, 411 F.3d 231, 236 (D.C. Cir. 2005) (employment discrimination); Role Models Am., Inc. v. Brownlee, 353 F.3d 962, 970 (D.C. Cir. 2004) (Administrative Procedures Act); Covington, 57 F.3d at 1110 (civil rights); Judicial Watch, Inc. v. BLM, No. 07-1570, 2008 U.S. Dist. LEXIS 49069, at *40 (D.D.C. June 27, 2008) (Lamberth, J.) (Freedom of Information Act); MacClarence v. Johnson, 539 F. Supp. 2d 155, 160 (D.D.C. 2008) (Facciola, M.J.) (Clean Air Act). The generic matrix's use in such a diverse range of cases cuts against defendants' argument that reasonable rates can be derived only from data peculiar to a case's legal specialty area.

Third, and most critically, defendants have failed to demonstrate that for purposes of calculating a reasonable hourly rate, qui tam litigation differs in any meaningful way from other complex, civil litigation that occurs in federal court.*fn24 Defendants contend that "FCA litigation, particularly for relator's counsel, is a specialized, niche practice that is distinct from other types of civil litigation, and certainly differs from the defense-oriented commercial litigation practiced by firms like WilmerHale." (HII's Opp'n [949] at 33.) If, as defendants suggest, qui tam litigation is a "niche" field because FCA-specific treatises and hornbooks, legal symposia, and professional organizations exist, then virtually every type of litigated case could be so characterized. The allegation that some attorneys "dedicate their entire practice to representing relators" is no more persuasive. (Id. at 34.) Defendants contend the rates charged by FCA specialists at Cincinnati's Helmer, Martins, Rice & Popham ("HMRP") establish the benchmark for reasonableness. (Id. at 35-38.) "[E]ven assuming, arguendo, the existence of [] a [FCA litigation] submarket," rates charged by a single, Ohio firm do not constitute "evidence that submarket rates are lower than the prevailing rates in the broader legal market." See Covington, 57 F.3d at 1111.

Defendants point out that HMRP's rates conform almost precisely to those outlined in the Laffey matrix, as updated by the U.S. Attorney's Office ("USAO"), and that using rates from either source would reduce relator's requested fee award by 38%. (HII's Opp'n [949] at 38-39.) This tremendous disparity gives the Court pause. But two factors overcome its skepticism.

First, simple reference to the Laffey matrix cannot defeat the presumption of reasonableness accorded relator's requested rates. Though it "serves as a useful starting point for determining prevailing market rates in the District of Columbia," Cobell, 407 F. Supp. 2d at 170, the Laffey matrix is not the only acceptable starting point. Our Court of Appeals has never held that Laffey rates are the only rates that a court may consider reasonable. Instead, it has advised that "an attorney's usual billing rate is presumptively the reasonable rate, provided that this rate" aligns with prevailing community rates. Kattan by Thomas v. District of Columbia, 995 F.2d 274, 278 (D.C. Cir. 1993). "[F]ee claimants must provide the court with specific evidence of the prevailing community rate." Jordan, 691 F.2d at 521. See also Blum, 465 U.S. at 896 n.11 (fee applicant must "produce satisfactory evidence -- in addition to the attorney's own affidavits -- that the requested rates" align with prevailing rates). This evidence may include the Laffey matrix, in its original form and/or as updated by the USAO. See Covington, 57 F.3d at 1110. But it may also consist of comparable fee awards or affidavits from knowledgeable local practitioners, such as those relator has submitted here. See Jordan, 691 F.2d at 521. If non-conformity with updated USAO Laffey rates could doom a petitioner's request, this would moot the evidentiary showing envisioned by Blum.*fn25 See 465 U.S. at 896 n.11. It would effectively impose a ceiling on the rates courts can award pursuant to fee-shifting statutes -- a ceiling never endorsed by Congress. Neither it nor the courts have ever "propose[d] . . . that all attorneys be remunerated at the same rate, regardless of their competence, experience, and marketability." Save Our Cumberland Mountains, Inc. v. Hodel, 857 F.2d 1516, 1522 n.4 (D.C. Cir. 1988).

Second, the Supreme Court clarified in Blum that a reasonable hourly rate should ordinarily reflect the quality of counsel's representation. See 465 U.S. at 899. Defendants balk at the "mega-law firm rates" relator seeks. (HII's Opp'n [949] at 30.) But these rates reflect counsel's "mega-law firm"-quality representation. Having observed more than a few attorneys in the past twenty years, this Court is well-suited to judge the quality of counsel's representation, both in the courtroom and in written submissions. By this Court's assessment, relator's counsel -- particularly the more junior trial team members -- acquitted themselves admirably. Their zealous, polished, and astute advocacy justifies, and is reflected in, their established billing rates.

Further, according to government counsel,

[t]he availability of Relator's counsel from WilmerHale was essential in meeting the overwhelming demands of discovery and ultimately of the trial in this matter. Indeed, attorneys and support staff from WilmerHale played a vital role in getting this case ready for trial and ultimately in successfully trying it.

(Morgan Decl. ¶ 7, Ex. 1 to Mot. for Fees, Costs, and Expenses [930].) During the discovery period alone, relator's counsel reviewed 665 boxes of documents, from which they culled over 97,000 documents with over 320,000 pages, attended 40 depositions, taking a leading role in some, and participated in two evidentiary hearings. (Bell Decl. ¶¶ 74-75, 78, 85, Ex. 2 to [930].) Had Wilmer Hale not been able to call on its "mega-law firm" resources, plaintiffs might have struggled to meet these "overwhelming demands." See Wilcox v. Sisson, No. 02-1455, 2006 U.S. Dist. LEXIS 33404, at *8 (D.D.C. May 25, 2006) (Collyer, J.) ("The market generally accepts higher rates from attorneys at firms with more than 100 lawyers than from those at smaller firms -- presumably because of their greater resources and investments . . . .").

For all these reasons, the Court finds defendants have failed to rebut relator's evidentiary showing that the requested rates -- Wilmer Hale's established rates -- align "with those prevailing in [this] community for similar services by lawyers of reasonably comparable skill, experience and reputation." See Blum, 465 U.S. at 896 n.11. Wilmer Hale's established billing scale will supply the reasonable hourly rates with which this Court will calculate the lodestar.*fn26

b. Wiley Rein

Relator also seeks compensation for work performed by four Wiley Rein attorneys (other than Bell) and two paralegals. (Bell Decl. ¶103, Ex. 2 to Mot. for Fees, Costs, and Expenses [930].) Of these six individuals, only one, Michael Sturm, remains at Wiley Rein. (Id. ¶ 104.)

In light of the Court's conclusion concerning Wilmer Hale's rates, Sturm's established billing rate is eminently reasonable.*fn27

For the other five professionals, however, relator has provided neither their current billing rates nor those of their Wiley Rein peers. Instead, he asks that their work be compensated at rates derived from economist Kavanaugh's Laffey matrix. (See id. ¶ 104.) Unlike the USAO's matrix, which calculates inflation based on the metropolitan D.C. Consumer Price Index ("CPI"), Kavanaugh's version relies on a legal services sub-component of the broader, national CPI. (See Kavanaugh Decl. ¶ 9, Ex. 4 to Mot. for Fees, Costs, and Expenses [930].)

Kavanaugh's alternative methodology has achieved only limited acceptance in this District.*fn28 As he did in Salazar, Kavanaugh presents a well-reasoned, if condensed, economic argument for his index's superiority. (See id. ¶¶ 9-14.) Nevertheless, after reviewing his declarations, the Court is not convinced. Kavanaugh's matrix incorporates price inflation data specific to the market for legal services, while the USAO matrix relies on data specific to the Washington, D.C. metropolitan area. (Id. ¶ 9.) Kavanaugh's matrix thus reflects national inflation trends, while the USAO matrix accounts for price inflation within the local community -- a crucial distinction. As the Supreme Court and our Court of Appeals have both emphasized, rates used in calculating the lodestar should accord with those "prevailing in the community."

Blum, 465 U.S. at 896 n.11 (emphasis added); see also Covington v. District of Columbia, 57 F.3d 1101, 1108 (D.C. Cir. 1995) ("plaintiff must produce data concerning the prevailing market rates in the relevant community") (emphasis added). Kavanaugh's matrix does not comply with this mandate for geographic specificity. Hence, with due respect to its colleagues, the Court declines to adopt Kavanaugh's methodology. It will thus award fees for the remaining five Wiley Rein professionals at USAO Laffey matrix rates.*fn29

2. Current v. Historical Rates

The time entries included in relator's fee petition span a thirteen-year period: Wiley Rein personnel devoted time to this case from 1995-1999, and Wilmer Hale's involvement has stretched from 1999-2007. (See Exs. B-2, D-2, to Bell Decl., Ex. 2 to Mot. for Fees, Costs, and Expenses [930].) Relator seeks to recover all fees at current billing rates, (Mot. for Fees, Costs, and Expenses [930] at 12), while defendants favor using historical rates corresponding to the years when the work was performed, (see HII's Opp'n [949] at 40-43; BHIC and HUK's Opp'n [948] at 19-21.)

In 1911, Ambrose Bierce described litigation as "[a] machine which you go into as a pig and come out of as a sausage." AMBROSE BIERCE, THE DEVIL'SDICTIONARY72 (1979 ed.).

Since Bierce's day, the process has become, if anything, more drawn out and contentious.

Recognizing that in many cases, an attorney may put in years of effort before realizing any tangible return, the Supreme Court has held that a "reasonable attorney's fee" awarded pursuant to a fee-shifting statute should account for delay in payment. See Missouri v. Jenkins, 491 U.S. 274, 282 (1989).*fn30 "Clearly, compensation received several years after the services were rendered -- as it frequently is in complex [qui tam] litigation -- is not equivalent to the same dollar amount received reasonably promptly as the legal services are performed . . . ." Id. at 283. Thus, courts should make "an appropriate adjustment for delay in payment -- whether by the application of current rather than historic hourly rates or otherwise." Id. at 284.

Courts in this Circuit have frequently employed the Supreme Court's suggested method of adjustment. See, e.g., Murray v. Weinberger, 741 F.2d 1423, 1433 (D.C. Cir. 1984) ("Current market rates have been used in numerous cases to calculate the lodestar figure when the legal services were provided over a multiple-year period and when use of the current rates does not result in a windfall for the attorneys."); Muldrow, 397 F. Supp. 2d at 4 n.4 ("Nor does the Court object to plaintiff's use of the Laffey rates for 2005-06 even though much of the litigation took place several years ago. The Supreme Court has held that it is acceptable to use current market rates, rather than historic rates, as a convenient method of compensating prevailing parties for a delay in receiving payment."). See also Copeland v. Marshall, 641 F.2d 880, 893 n.23 (D.C. Cir. 1980) (en banc) (noting that lodestar may be "based on present hourly rates, rather than the lesser rates applicable to the time period in which the services were rendered," to reduce or eliminate "harm resulting from delay in payment").

Several observations are in order. First, though relator seeks compensation for 24,584.6 billable hours, spread over thirteen years, roughly half those hours were billed in 2007, the year for which relator has provided Wilmer Hale's standard billing rates. (See Exs. C-2, C-4 to Bell Supplemental Decl., Ex. 1 to Reply to HII's Opp'n [957].) Indeed, only 1,826.3 hours -- 7.4 percent of the total -- were billed prior to 2006. (See id.) Thus, defendants' "windfall" objection, discussed below, pertains to only a small portion of relator's overall fee request.

Second, according to Robert Bell, Wilmer Hale's billing cycle averages 89 days. (See Bell Supplemental Decl. ¶¶ 23-24, Ex. 1 to [957].) By contrast, here, by the time Wilmer Hale receives payment pursuant to the instant fee award, at least a full year will have passed since it billed the last hours addressed therein.

Third, as relator's economist points out, accounting for delay by applying current rates across the board boasts distinct, practical advantages:

There may be other ways to compensate [for delay in payment] -- that is, to restore the firm that provided the legal services to the level of wealth it could have obtained had it been paid at the time the service was performed -- but the other compensation methods are more complex, have higher transaction costs, raise the specter of interest payments and may not be any better than simply using the current prevailing market rates.

(Kavanaugh Decl. ¶ 18, Ex. 5 to Mot. for Fees, Costs, and Expenses [930].) See also Murray, 741 F.2d at 1433 ("Ease of administration is an important objective . . . because there is a pressing need for simple rules in attorney's fees cases."). Moreover, Kavanaugh's alternative proposed method of compensating for delay -- using the historical prime rate to calculate the present value of a timely payment stream for the hours billed -- produces a lodestar figure 1.6 percent higher than that requested by relator. (Kavanaugh Supplemental Decl. ¶¶ 6-12, Ex. 4 to Reply to HII's Opp'n [957].)

Notwithstanding these various points, defendants oppose applying current rates to compensate for delay for two reasons.*fn31 First, they contend that application of current rates will result in a forbidden "windfall" to relator's counsel. (See HII's Opp'n [949] at 40-41; BHIC and HUK's Opp'n [948] at 19-21.) They insist that fee awards must reflect lawyers' experience levels at the time they performed the work, lest they be afforded credit for experience -- and the heightened skill, productivity, and efficiency that usually accompany it -- they did not then possess. (See HII's Opp'n [949] at 40-41; BHIC and HUK's Opp'n [948] at 19-21.) This argument has some superficial appeal, but it misunderstands the rationale behind compensating for delay in payment. "[C]ompensation received several years after the services were rendered . . . is not equivalent to the same dollar amount received reasonably promptly as the legal services are performed." Jenkins, 491 U.S. at 283. Paying counsel at historical, or even current, rates based on their experience levels when they performed the work would not achieve this equivalence because it ignores the time value of money: one dollar received today is more valuable than it would be if received five years from now for two reasons -- first, because it will buy more now than it will after five years of price inflation, and second, because of the interest that can be earned from it in the interim. Paying counsel at their current, established billing rates does not result in a windfall; it simply takes the this second factor into account.

Second, they contend that relator bears responsibility for the delay, and that consequently, he should not be rewarded with a fees adjustment therefor. (HII's Opp'n [949] at 42-43.) Both components of this argument are flawed. Responsibility for the first period of delay defendants cite -- June 1995 to March 2001 -- can be laid at the government's feet, but not relator's. Under the FCA's qui tam provisions, once he files his complaint under seal, a relator must simply await the government's decision on intervention. See 31 U.S.C. § 3730(b) (2008). As this Court expressed in an earlier opinion in this case, the government's "unreasonable inaction" precipitated this first period of delay. (See Mem. Op. of June 14, 2007 [872] at 30.) All parties contributed to the next, post-seal period of delay: defendants opposed plaintiffs' request to commence discovery in 2003, (see Joint Rule 16.3 Report of Nov. 13, 2003 [148] at 2), and plaintiffs repeatedly amended their complaints, (e.g., Relator's Third Am. Compl. [233] (filed Mar. 9, 2006); Government's First Am. Compl. [237] (filed Mar. 9, 2006)).

Moreover, regardless of who caused what period of delay, defendants' authorities for denying the responsible party compensation for delay merely confirm that a court's decision to account for delay in awarding attorneys' fees is discretionary. See Sands v. Runyon, 28 F.3d 1323, 1334 (2d Cir. 1994) (finding no abuse of discretion where district court refused to "apply multiplier to the basic hourly rate to account for the delay between the investment of time and the receipt of the fee award" because plaintiff had caused unnecessary delay); Paris v. Dallas Airmotive, Inc., No. 97-0208, 2004 U.S. Dist. LEXIS 18893, at *35-36 (N.D. Tex. Sept. 21, 2004) (declining to exercise discretion to award fees at current market rates because, but for plaintiff's actions, case could have been concluded at least three years earlier).

Here, having concluded that no "windfall" will result, and in light of the practical advantages to be derived, the Court will exercise its discretion to compensate relator's counsel for delay in payment by applying current rates in calculating the lodestar.

Appendix I delineates the rates the Court will use for both Wiley Rein and Wilmer Hale professionals.

B. Reasonable Hours

Several principles govern the Court's calculation of this second component of the lodestar, "the number of hours reasonably expended on the litigation." See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). First, the fee petitioner must submit evidence that justifies the hours he claims his counsel have worked. Id. "Where the documentation of hours is inadequate, the district court may reduce the award accordingly." Id. A "fee application need not present the exact number of minutes spent[,] nor the precise activity to which each hour was devoted[,] nor the specific attainments of each attorney." Nat'l Ass'n of Concerned Veterans v. Sec'y of Def., 675 F.2d 1319,1327 (D.C. Cir. 1982) (internal quotation marks omitted). But where time entries "are so vaguely generic that the Court can not determine with certainty whether the activities they purport to describe were . . . reasonable," the petitioner has not met his burden. Cobell v. Norton, 407 F. Supp. 2d 140, 158 ...


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