ROYCE C. LAMBERTH, Chief Judge.
Four years ago one individual and five corporate entities
Though this matter concerns sordid acts and this suit has a substantial history, the Court sets forth only the facts and procedural history necessary to the resolution of the issue before it.
In 1995, Richard F. Miller, who was then Vice President of a construction company
In conjunction with FCA procedures, Mr. Miller's complaint was filed in camera and remained under seal while the United States evaluated its statutory options to either (1) intervene and proceed with the action itself, (2) decline to take over the action, in which case the relator may pursue the suit, or (3) petition the Court for an extension of the 60-day period during which the complaint remains sealed. 31 U.S.C. § 3730(b). In this case, the United States chose to pursue criminal investigations into the alleged conspiracy and ultimately obtained guilty pleas or convictions from at least five U.S. entities. Throughout this period, the United States filed several motions to keep Miller's complaint under seal.
Nearly six years after Mr. Miller filed suit, the United States permitted the unsealing of his complaint and simultaneously filed its own civil complaint against the defendants now before the Court. This new complaint repeated Mr. Miller's allegations as to Contract 20A and the broader scheme, while adding new claims relating to two other projects: Contract 29, which concerned the building of a wastewater treatment plant near Cairo, and Contract 07, which involved the construction of sewers in Alexandria. Mr. Miller subsequently amended his own complaint to mirror the pleadings filed by the United States, and the plaintiffs jointly pursued prosecution of these civil claims against all defendants.
After five years of discovery and motion practice,
Following the verdict, the Court entered judgment against all defendants. United States ex rel. Miller v. Bill Harbert Int'l Constr., Inc., 501 F.Supp.2d 51 (D.D.C.2007) ("Miller I"). In that opinion, the Court held that it lacked personal jurisdiction over HUK with respect to claims relating to Contracts 29 and 07, and therefore entered judgment against that particular defendant only for claims arising from Contract 20A. Id. at 53. Pursuant to the FCA, the Court then trebled the damages against all defendants, 31 U.S.C. § 3729(a), and entered a final judgment in excess of $90 million. Id. at 57-58. After several months of extensive briefing, the Court subsequently re-affirmed final judgment in a lengthy opinion denying defendants' motions seeking judgment notwithstanding the verdict, a new trial or alteration of the original judgment. Miller v. Holzmann, 563 F.Supp.2d 54 (D.D.C.2008) ("Miller II").
Two months later, the Court turned to Mr. Miller's request for fees and costs. Miller v. Holzmann, 575 F.Supp.2d 2 (D.D.C.2008) ("Miller III"). Having prevailed on all claims, Mr. Miller was entitled to receive compensation for reasonable expenses pursuant to 31 U.S.C. § 3730(d). In a 95-page opinion, the Court tediously reviewed over 70 pages of billing records, and concluded that defendants were obligated to pay more than $7 million in attorneys' fees and almost $300,000 in expenses and costs to plaintiff Miller. Id. at 58. Shortly thereafter, Mr. Miller requested — and received — supplemental awards for additional attorneys' fees and costs (collectively, the "fee award"). Order, Feb. 26, 2009 [1053]. Following entry of this award, defendants filed notice of their intention to appeal both the Court's denial of a directed verdict or new trial, as well as its award of litigation costs and attorneys' fees to Mr. Miller.
In an opinion release in the Summer of 2010, the D.C. Circuit surveyed several legal matters — including the proper application of relevant statutes of limitations, questions of preemption, jurisdiction and settlement, several evidentiary matters at trial, and arguments concerning the overall sufficiency of the evidence — to reverse in part and affirm in part this Court's entry of judgment against all defendants. United States ex rel. Miller v. Bill Harbert Int'l Constr., Inc., 608 F.3d 871 (D.C.Cir. 2010) ("Miller IV"). A total of three legal decisions were called into question by the opinion: first, the Circuit Court held that the statute of limitations had run on all claims relating to Contracts 29 and 07, which were only added after the suit was unsealed in 2001, id. at 880-82; second, it found error in this Court's decision to permit the United States to present evidence that BHIC existed throughout a particular period of time notwithstanding an agreed-upon stipulation to the contrary, id. at 888-89; and third, it concluded that this Court's admission of testimony concerning the wealth of defendants HII and HC was prejudicial and warranted a new trial. Id. at 896-98. The cumulative result of these three errors is that (1) judgment as to all defendants on claims relating to Contracts 29 and 07 has been reversed and those claims have been dismissed, (2) judgment as to defendants BHIC, HII and HC on claims relating to Contract 20A has been
The D.C. Circuit's opinion on the merits did not address defendants' appeal from the Court's entry of the fee award against all defendants, but instead directed this Court to "consider the appellants' requests for vacatur of the [fee orders], and to modify the award of fees and costs in a manner consistent with this court's opinion and judgment." Mandate, Dec. 30, 2010 [1079]. In response, defendants split into two groups and moved to vacate the fee award. The first group of defendants include BHIC, HII and HC — the three defendants who successfully obtained reversals as to all claims against them. In their motion, this group argues that because the underlying judgment against them has been vacated, the predicate basis for the fee award no longer exists. Motion of HII, HC and BHIC to Vacate Awards of Costs and Attorneys' Fees 3-4, Mar. 4, 2011 [1080]. In response, Mr. Miller concedes that vacatur is appropriate for these three defendants, but reserves the right to seek reinstatement of the fee award should he prevail in a new trial. Response to the HI-HC-BHC Motion to Vacate Fee Awards 1, Mar. 18, 2011 [1083].
The second group of defendants — HUK and BIE — also initially requested that the Court vacate the fee award. HUK and BIE's Motion to Vacate Awards of Costs and Attorneys' Fees, Mar. 9, 2011 [1081] ("Ds.' Mtn."). These defendants argue that plaintiff Miller cannot collect fees incurred in pursuing claims upon which he did not prevail, and that the Circuit Court's reversal of judgment against HUK and BIE with respect to Contracts 29 and 07 means that Miller did not prevail on those claims. Id. at 1-4. In addition, these defendants assert that "because the Court of Appeals vacated the judgment against HII, HC and BHIC in full, relator was not the `prevailing party' with respect to claims against those parties and cannot recover fees incurred in pursuing those claims against those parties from any party, including [HUK and BIE]." Id. at 4. In essence, these defendants maintain that because at least some of the fees generated in pursuit of claims relating to Contract 20A are tied to claims asserted against BHIC, HII and HC, Mr. Miller cannot collect any fees from any party.
In response to this motion, plaintiff Miller opposes complete vacatur of the fee award as unsupported by established law, Opposition to the Bilhar-HUK Motion to Vacate Fee Awards, Mar. 23, 2011 [1084] ("P's Opp."), and simultaneously cross-moves for an adjustment of the fee award to account for the dismissal of all claims concerning Contracts 29 and 07. Motion to Adjust Fee Awards as to Bilhar and HUK, Mar. 23, 2011 [1085] ("P's Cross-Mtn."). In his cross-motion, Mr. Miller indicates that some reduction in the fee award might be appropriate, id. at 1-2, and suggests that any such discount should mirror the 12.89% reduction to the damage award that resulted from the dismissal of certain claims by the Circuit Court. Id. at 3-4.
For the reasons set forth below, the Court will vacate the fee award as to BHIC, HII and HC, but will affirm that award as to BIE and HUK. Consistent with the following discussion, the Court will also amend the fee award as appropriate.
The False Claims Act provides that where "the Government proceeds with an action brought by a person ... such person shall ... receive at least 15 percent but not more than 25 percent of the proceeds.... Any such person shall also receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorneys' fees and costs." 31 U.S.C. § 3730(d)(1). This provision ensures that the attorneys' fees and costs incurred by any prevailing relator are reimbursed by the violators of the Act. Miller III, 575 F.Supp.2d at 8. In the wake of the Circuit Court's partial reversal of judgment against defendants, two questions concerning the continuing validity of the fee award now linger. First, does Mr. Miller remain a "prevailing party" against any or all defendants? Second, does the dismissal of certain claims advanced by Mr. Miller necessitate a reduction to the fee award beyond the discounts previously provided? The Court addresses each of these questions in turn.
A party seeking fees under a "prevailing party" statute must have obtained some form of relief from the court. District of Columbia v. Straus, 590 F.3d 898, 901 (D.C.Cir.2010). After the Circuit Court's opinion in Miller IV, plaintiff no longer has any right to relief against BHIC, HII or HC, see supra Section II.C, and as a result Mr. Miller no longer constitutes a prevailing party. See Straus, 590 F.3d at 901 (including "judicial pronouncement ... accompanied by judicial relief" among requirements to qualify as "prevailing party"). The Court thus vacates the fee award against these three defendants pending the outcome of any subsequent proceedings.
With respect to defendants BIE and HUK, however, the Court concludes that Mr. Miller remains a prevailing party. The law is settled that a party need not obtain favorable outcomes on every claim or argument to be considered a "prevailing party" for these purposes; instead, a prevailing party need only "succeed on any significant issue in litigation which achieves some of the benefit the part[y] sought in bringing suit." Raton Gas Transmission Co. v. FERC, 891 F.2d 323, 327 (D.C.Cir.1989). And the other argument
In Hensley v. Eckerhart, the Supreme Court addressed the problem of awarding attorneys' fees pursuant to fee-shifting statutes where the prevailing party was successful on some — but not all — of her claims. 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). The Hensley Court articulated two questions for a trial court facing this scenario, and the D.C. Circuit has fashioned those questions into a two-stage inquiry for the calculation of attorneys' fees in cases of partial success:
George Hyman Constr. Co. v. Brooks, 963 F.2d 1532, 1535 (D.C.Cir.1992); see also Int'l Ctr. for Tech. Assessment v. Vilsack, 602 F.Supp.2d 228, 231 (D.D.C.2009) ("The Supreme Court has held that where a plaintiff succeeds on only some of his claims, two critical questions must be addressed. First, did the plaintiff fail to prevail on claims that were unrelated to the claims on which he succeeded? Second, did the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award?") (quotations omitted).
The two phases in this inquiry are distinct. In the first, the Court reviews the particulars of a plaintiff's claims to determine whether the overlap in the facts or legal issues renders the construction of any easy divisions between various tasks performed by counsel in pursuit of particular claims impossible. Hensley, 461 U.S.
"If a party succeeded on only some of its claims, then the Court must ask whether the claims on which the plaintiff succeeded were `related to the claims upon which the plaintiff was unsuccessful.'" Lake Pilots Ass'n, Inc. v. Coast Guard, 310 F.Supp.2d 333, 344 (D.D.C. 2004) (quoting Hensley, 461 U.S. at 434, 103 S.Ct. 1933). This inquiry requires the Court to conduct an issue-by-issue assessment of a plaintiff's claims. Am. Lands, 525 F.Supp.2d at 146. Recognizing that work on a case often blends across multiple claims, the test for unrelatedness is a stringent one: "Fees for time spent on claims that ultimately were unsuccessful should be excluded only when the claims are `distinctly different' in all respects, both legal and factual, from plaintiff's successful claims." Morgan v. District of Columbia, 824 F.2d 1049, 1066 (D.C.Cir.1987) (quoting Hensley, 461 U.S. at 434, 103 S.Ct. 1933). A party attempting to establish that certain claims are related therefore need not show "a virtually complete factual overlap" between the claims, but must only demonstrate that the claims share a "common core of facts." Goos I, 997 F.2d at 1570. At the same time, a party asserting unrelatedness must do more than highlight distinct elements among particular claims or portions of attorneys' work that are unmistakably limited to certain claims; he must establish substantial differences between the factual development and legal theories underlying the particular claims. Pigford, 613 F.Supp.2d at 83.
The Court has little doubt that all claims brought by Mr. Miller are "related" under this standard. At its core, this case is not an amalgamation of independent contract disputes into a single lawsuit, but is best understood as an action concerning an overarching conspiracy between the defendants to rig the bidding system in order to extract excessive payments from USAID for development projects in Egypt. For example, in denying defendants' post-trial motions, the Court noted that "[i]n their pleadings and at trial, plaintiffs alleged that defendants colluded on Contracts
Another factor weighing in favor of relatedness is the evidence itself. Throughout trial, witnesses frequently discussed various agreements among all the defendants and described bidding processes in general terms, and they were rarely limited to testimony concerning a single Contract. Similarly, key documents detailed the overarching conspiracy, and were often relevant to more than one of the construction projects. In developing this evidence, Mr. Miller's counsel undoubtedly spent most of their time investigating and reviewing generally-applicable evidence, rather than narrowly focusing on proof of isolated conduct. "Where plaintiffs' claims for relief involve a common core of facts... much of counsel's time will be devoted generally to the litigation as a whole and the focus should be on the significance of the overall relief obtained." Int'l Ctr. for Tech., 602 F.Supp.2d at 232. In other words, plaintiff's inability to prevail on claims — due to the operation of statutes of limitations — concerning every project identified in this suit does not compel the Court to slash the fee award where the majority of work performed was in pursuit of evidence establishing the scheme and actions taken in furtherance of it. See Pub. Citizen Health Research Grp. v. Young, 909 F.2d 546, 552 (D.C.Cir.1990) (explaining that under Hensley "a district court should not reduce the award for unsuccessful theories if the issue was all part and parcel of one matter"); see also Goos v. Nat'l Ass'n of Realtors, 68 F.3d 1380, 1384 (D.C.Cir.1995) ("It is a plaintiff's overall success, and not the number of counts she prevails on, that determines the amount of fees she is entitled to.") ("Goos II").
Finally, and perhaps most importantly, both parties in their briefing fail to discuss the Court's prior rulings as to whether claims arising from Contracts 29 or 07 are related to those arising from Contract 20A. In resolving the parties' original dispute over plaintiff's claim for fees, the Court was presented with two arguments concerning divisions among the claims: first, defendants jointly asserted that any fees incurred while developing claims against Harbert — who had been previously dismissed on statute of limitations grounds — were non-compensable; and second, defendant HUK individually maintained that it should not be equally liable for Mr. Miller's attorneys' fees since it had only been found liable on claims related to Contract 20A. Miller III, 575 F.Supp.2d at 31-32. The Court rejected both of these positions. As to the former, the Court explained that "[p]laintiffs alleged an overarching conspiracy to rig bids on government contracts of which Harbert was a ringleader.
Here, the claims emanating from each of the three development projects were part of a continuous process of U.S.-funded development in Egypt which defendants conspired to profit from, and counsel's efforts in prosecuting this action were directed primarily toward exposing the fraudulent acts undertaken in the name of this seedy conspiracy. In light of these facts, the same rationales that informed the Court's earlier decisions in Miller III apply with equal force in this context, and defendants BIE and HUK provide no justification for the Court's abandonment of its prior holding.
Having determined that the claims arising from Contracts 29 and 07 are related to claims arising from Contract 20A, the second step of the Hensley analysis is to determine whether "the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount." Id. at 1571.
Goos II, 68 F.3d at 1387. While a failure to prevail on related claims does not mandate a strict reduction in fee awards, it does serve as evidence that some discount may be appropriate. See Raton, 891 F.2d at 330 ("Since Raton did not prevail on all of its contentions, it is evident that some reduction in the amount is called for."). Ultimately, the appropriate size of the fee reduction is a matter of discretion for the Court, as there is no standard method for calculating such cuts. Id. at 330; see also Dickens v. Friendship-Edison PCS, 724 F.Supp.2d 113, 121 (D.D.C.2010) ("It is within a court's discretion to reduce the overall fee award to reflect that degree of success, regardless of whether the total number of hours expended was reasonable.").
There is no requirement — particularly in a substantial and far-ranging dispute such as this — that the Court undertake the burdensome task of going line-by-line through counsel's billing statements to pinpoint the specific tasks that were related only to Contract 20A or the conspiracy. Copeland, 641 F.2d at 903. Indeed, the parties do not suggest that such an approach is necessary, P's Mtn. at 3-4; Ds.' Mtn. at 3, but instead offer competing plans for reducing the fee award to account for Mr. Miller's reduced level of success. For their part, BIE and HUK argue that because Mr. Miller prevailed on claims related to only one of the three development projects, the attorneys' fees award should be reduced by two-thirds. Ds.' Opp. at 5-6. The Court cannot accept this mechanical reduction in counsel's fees. Apart from concerns with its underlying logical foundation, see Raton, 891 F.2d at 331 (noting that this "approach could rest logically only upon the highly unlikely premise that [plaintiff] devoted an equal amount of time to each" claim); see also Pigford, 613 F.Supp.2d at 85 ("[S]imply reducing [the] fee by a fraction corresponding to the number of unsuccessful claims is not likely to result in a fair and reasonable fee."), this approach would merely replicate the first stage of the Hensley inquiry, which focuses solely on the nature of the claims and does not account for the level of success achieved by plaintiff — a key element in the latter stage of the Hensley inquiry. Indeed, at least one court in this district has held that Hensley mandates rejection of a purely mathematical reduction in fees equal to the percentage of claims that were unsuccessful, Am. Lands, 525 F.Supp.2d at 147, while the D.C. Circuit has cited with approval a Tenth Circuit opinion rebuking a lower court for adopting this approach. Goos II, 68 F.3d at 1385 (citing Jane L. v. Bangerter, 61 F.3d 1505, 1512 (10th Cir. 1995)); see also Int'l Ctr. for Tech., 602 F.Supp.2d at 233 (rejecting "excessive" reduction of one-third where plaintiff was unsuccessful on one of three claims); Thomas v. District of Columbia, No. 03 Civ. 1791, 2007 WL 891367, at *5, 2007 U.S. Dist. LEXIS 20236, at *13-14 (D.D.C. Mar. 22, 2007) (rejecting 80% reduction where plaintiff succeeded on only one of five claims). A reduction in fees strictly tied to the percentage of unsuccessful claims is therefore inappropriate absent some indicia that the resulting discount (1) accurately reflects the actual time expended
For his part, Mr. Miller suggests that the appropriate reduction in attorneys' fees should mirror the reduction in overall damages resulting from the D.C. Circuit's reversal of portions of the judgment. P's Mtn. at 4. The Court cannot accept this metric either. The fundamental question in the second stage of the Hensley inquiry is whether the fees sought by counsel are proper when compared to the level of success achieved. Evaluating this question requires the Court to balance two factors: the extent of energy expended by counsel, and the results achieved by the litigation. Plaintiff's proposed method, however, only takes the latter factor into account while ignoring entirely the question of how much time and effort counsel put into developing claims concerning Contracts 29 and 07. Thus, in the same way that an approach that looks only to the number of claims upon which a plaintiff succeeded risks under-awarding efforts in cases where attorneys achieved great successes, Mr. Miller's proposal risks awarding excessive fees for efforts directed towards fruitless endeavors. An appropriate award therefore accounts both for energy expended and success achieved.
To measure the effort expended by counsel on particular claims, a common practice is to review the time allocation of certain practices throughout the case. See, e.g., Raton Gas, 891 F.2d at 331; Dickens, 724 F.Supp.2d at 121. For example, in one recent unpublished opinion awarding fees at the appellate level, the D.C. Circuit used the number of pages devoted to each claim as a metric for appropriating attorney's efforts. Judicial Watch, Inc. v. Dep't of Commerce, No. 05-5366, 2007 U.S.App. LEXIS 2337, at *3-4 (D.C.Cir. Jan. 31, 2007) (per curiam). Adopting a similar tack here, the Court readily confirms what it recalls from pretrial litigation and the trial itself: the majority of the efforts undertaken by Mr. Miller in this case focused on claims arising from Contract 20A or the development of the overarching conspiracy, and not to matters solely related to Contracts 29 or 07. For example, in the Court's opinion denying most of the defendants' challenges to final judgment, "Contract 20A" was mentioned 92 times and the "conspiracy" was mentioned 155 times; meanwhile "Contract 29" and "Contract 07" were only discussed 86 times combined. In that same opinion, the Court's discussion as to the sufficiency of the evidence related to Contract 20A went on for more pages than the combined discussions concerning Contracts 29 or 07. Contract 20A also remained the center of attention for all parties involved on appeal. In Mr. Miller's brief on appeal, for example, Contract 20A was discussed for 7 pages in the fact section and another 5 when examining the sufficiency of the evidence-fifty percent more than the discussion of Contracts 29 and 07 combined. And this pattern of contributing significantly more time and effort to claims related to Contract 20A was also present in defendants' briefing on reply, in which Contract 20A received 10 pages worth of discussion while Contracts 29 and 07 only garnered four.
The Court is thus presented with two figures to evaluate in weighing a reduction of the fee award. On the one hand, the various measures above indicate that Mr. Miller's counsel invested roughly 70% of their efforts to support claims related to Contract 20A and the overall conspiracy, and the rest on Contracts 29 and 07. On the other hand, in terms of overall damages, Mr. Miller still achieved tremendous success in this action, as nearly 88% of the original damage award remains intact. In light of Mr. Miller's significant achievements in this suit — including the fulfillment of his original and primary goals of exposing defendants' underhanded scheme and establishing the fraudulent nature of their conduct with respect to Contract 20A — and mindful that under any metric it is clear that Mr. Miller's counsel focused the majority of their efforts on these tasks, the Court concludes that Mr. Miller should retain 80% of his fee award.
After seven years of investigation and litigation, and seven weeks of intensive trial work, several citizens of the United States concluded what Mr. Miller had long suspected — defendants, along with others, engaged in sordid and deceptive practices to defraud the United States and extract millions in undeserved payments intended to benefit people in developing nations. The D.C. Circuit's subsequent holdings, while mandating a new trial for certain defendants, do not undermine the jury's conclusions as to BIE and HUK. The Court is thus unwilling to release these defendants from their obligations to compensate Mr. Miller's counsel for their extensive and tireless work, which resulted in what the Court views as nothing less than a tremendous victory. In such circumstances, and for the reasons set forth above, the Court holds that 20% reduction to reflect the dismissal of certain claims is appropriate.
A separate Order consistent with these findings shall issue this date.