Marcum LLP v. United States
| Decision Date | 02 August 2013 |
| Docket Number | No. 13-189C,13-189C |
| Parties | MARCUM LLP, Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Motion to Dismiss; Lack of Subject Matter Jurisdiction; Criminal Justice Act,
18 U.S.C. § 3006A; Fifth Amendment Takings Claim.
Joseph A. DiRuzzo, III, Fuerst Ittleman David & Joseph, PL, Miami, Florida, for plaintiff. With him were Andrew S. Ittleman and Mitchell Fuerst, Fuerst Ittleman David & Joseph, PL, Miami, Florida.
James R. Sweet, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for defendant. With him were Reginald T. Blades, Jr., Assistant Director, Jeanne E. Davidson, Director, Commercial Litigation Branch, and Stuart F. Delery, Acting Assistant Attorney General, Civil Division.
Plaintiff, Marcum LLP, is a professional services firm with offices in New York, New Jersey, Connecticut, Pennsylvania, Florida, Massachusetts, California, Grand Cayman, and China. Among the services plaintiff offers, plaintiff provides forensic accounting and litigation support services, including expert witness services, for both civil and criminal trials. Plaintiff filed its original complaint in the United States Court of Federal Claims on March 13, 2013, and an amended complaint on May 30, 2013, alleging that the Chief Judge of the United States Court of Appeals for the Fifth Circuit, Edith H. Jones, caused an uncompensated taking of plaintiff's property in violation of the Fifth Amendment to the United States Constitution when she issued a Service Provider Continuity and Payment Order (Continuity and Payment Order), coupled with a notice of a contempt hearing, resulting in "an enforced requisitioning of Marcum'sbusiness for the duration of Mr. Stanford's criminal trial."1 Plaintiff claims a property interest in what it describes generally as "professional services" and "'business assets' [that] include, but are not limited to, contract rights, the right to exclusive use of its property, and the right to dispose of its property."
Plaintiff's claim arises out of services it rendered to assist in the criminal defense of Mr. Stanford, who was indicted by the United States in the United States District Court for the Southern District of Texas on June 18, 2009. In the indictment, the government alleged that Mr. Stanford had defrauded investors through a multi-billion dollar "Ponzi"-type scheme. Plaintiff states that on June 19, 2009, the government made public its indictment of Mr. Stanford and arrested him. According to plaintiff's amended complaint, on the same day, the Securities and Exchange Commission instituted fraud proceedings against Mr. Stanford and his company, the Stanford Financial Group, and the government "seized 33 offices of the Stanford Financial Group" along with Mr. Stanford's personal assets.
Plaintiff alleges that Judge David Hittner of the United States District Court for the Southern District of Texas, who presided over Mr. Stanford's trial court, criminal proceedings, declared Mr. Stanford indigent on October 27, 2010, after finding that the government's seizure of Mr. Stanford's assets left him without sufficient financial resources to retain defense counsel. Pursuant to the Criminal Justice Act (CJA), Judge Hittner appointed defense counsel to Mr. Stanford. See 18 U.S.C. § 3006A (Supp. IV 2010). Plaintiff asserts that, in June 2011, because the government's case against Mr. Stanford was broad in scope and implicated highly technical financial transactions, Mr. Stanford's appointed defense attorneys sought assistance from plaintiff in preparation for trial, including forensic accounting and expert witness services. Plaintiff was appointed to assist in Mr. Stanford's defense under a provision of the CJA that provides for "[s]ervices other than counsel." See 18 U.S.C. § 3006A(e)(1). The applicable provision states:
Plaintiff's compensation was governed by the following provision of the CJA, which also addresses the process for the approval of requests for compensation that exceed the statutory maximum:
Compensation to be paid to a person for services rendered by him to a person under this subsection, or to be paid to an organization for services rendered by an employee thereof, shall not exceed $2,400, exclusive of reimbursement for expenses reasonably incurred, unless payment in excess of that limit is certified by the court, or by the United States magistrate judge if the services were rendered in connection with a case disposed of entirely before him, as necessary to provide fair compensation for services of an unusual character or duration, and the amount of the excess payment is approved by the chief judge of the circuit. The chief judge of the circuit may delegate such approval authority to an active or senior circuit judge.
Plaintiff maintains that, pursuant to the CJA provisions quoted above, it was required to obtain court certification as the cost of the services it rendered for Mr. Stanford's defense substantially would exceed $2,400.00. Before beginning its work, plaintiff asserts that it submitted to presiding District Court Judge Hittner a preliminary budget which estimated the projected cost of its services at approximately $4.5 million. Plaintiff alleges that Judge Hittner approved plaintiff's preliminary budget and authorized plaintiff to commence its work.2 Plaintiff's amended complaint does not allege, however, that the Chief Judge of the Circuit or her delegee approved plaintiff's preliminary budget or the revised budget that plaintiff alleges to have subsequently submitted.
Plaintiff states that, in accordance with the Southern District of Texas' CJA plan, it submitted monthly vouchers for services rendered in June, July, and August 2011 to the District Court for the Southern District of Texas. In September 2011, plaintiff claims that it became aware that Judge Hittner had certified its June, July, and August 2011 vouchers and submitted them for approval to the United States Court of Appeals for the Fifth Circuit. Plaintiff further states that it was paid pursuant to its June, July, and August 2011 vouchers in October 2011. In addition, plaintiff alleges that, in September2011, it submitted a revised budget at the request of defense counsel and the District Court. Plaintiff's revised budget reduced its estimated costs to $3.2 million, based on its anticipated expenses of $428,250.00 per month for September, October, November, and December 2011.
Plaintiff also alleges that it submitted monthly vouchers to Judge Hittner, totaling $845,588.48, for services rendered in September, October, and November 2011. Before Judge Hittner certified either of plaintiff's September or October 2011 vouchers, plaintiff alleges that, at the request of the Court of Appeals for the Fifth Circuit, Judge Hittner appointed attorney Marlo P. Cadeddu to act as a discovery expert and to review plaintiff's budget and expenses. Plaintiff states that, in a memorandum to the Chief Judge of the Court of Appeals for the Fifth Circuit, dated December 20, 2011, which plaintiff characterizes as "highly favorable," Ms. Cadeddu recommended that Mr. Stanford's defense experts continue to receive funding, given the highly technical nature of Mr. Stanford's case. According to plaintiff's amended complaint, Judge Hittner certified plaintiff's vouchers for September and October 2011, but took no action on its November 2011 voucher.
Plaintiff alleges in its amended complaint that, as of December 30, 2011, Marcum was still working, but had not been paid for any of the work it performed in September, October, November, and December of 2011, despite a favorable review regarding plaintiff's work as essential to Mr. Stanford's defense. Plaintiff alleges it then "was owed approximately $700,000." Plaintiff states that the lack of payment for its services led it to tender a letter of resignation to Mr. Stanford's defense counsel on December 30, 2011. According to plaintiff's amended complaint, on the same day, Mr. Stanford's defense attorneys filed plaintiff's letter of resignation under seal with the District Court, as an attachment to an agreed motion to continue Mr. Stanford's fast approaching January 23, 2012 trial date.
According to plaintiff, on January 4, 2012, the Chief Judge of the United States Court of Appeals for the Fifth Circuit entered a Continuity and Payment Order, which directed plaintiff to continue work on Mr. Stanford's defense through the conclusion of the case in the District Court, as the impending trial date, at that point less than three weeks away, would have made finding a replacement "neither feasible nor economical." In addition to requiring plaintiff to continue assisting with Mr. Stanford's defense, in the same Continuity and Payment Order, Chief Judge Jones approved payment of $205,000.00 on plaintiff's September, October, and November 2011 vouchers, pending Judge Hittner's certification of plaintiff's November 2011 voucher. Plaintiff also maintains that, on January 6, 2012, it was advised that Chief Judge Jones had noticed Marcum for a contempt hearing scheduled for January 9, 2012.
In response to Chief Judge Jones' Continuity and Payment Order, plaintiff alleges it retained its own counsel, who filed numerous motions on Marcum's behalf. On January 7, 2012, plaintiff filed an ex parte emergency motion with Chief Judge Jones asking her to...
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