Miller v. Holzmann

• Decision Date: 12 August 2008
• Docket Number: Civil Action No. 95-1231 (RCL).
• Citation: 575 F.Supp.2d 2
• Parties: Richard F. MILLER, Plaintiff, v. Philipp HOLZMANN, et al., Defendants.
• Court: U.S. District Court — District of Columbia

575 F.Supp.2d 2

Richard F. MILLER, Plaintiff, v. Philipp HOLZMANN, et al., Defendants.

Civil Action No. 95-1231 (RCL).

United States District Court, District of Columbia.

August 12, 2008.

Keith V. Morgan, U.S. Attorney's Office, Robert B. Bell, Gregory B. Reece, Howard M. Shapiro, Jennifer M. O'Connor, Matthew B. Baumgartner, Monya Monique Bunch, Wilmer Cutler Pickering Hale & Dorr LLP, Jonathan Goldman Cedarbaum, Wilmer Hale, Kevin Michael Henry, Sidley Austin, LLP, Washington, DC, Robert D. Cultice, Wilmer Cutler Pickering Hale & Dorr LLP, Boston, MA, for Plaintiff.

Charles Anthony Zdebski, Troutman Sanders LLP, Barry Coburn, Coburn & Coffman, PLLC, Jeffrey J. Lopez, Michael Reilly Miner, Elizabeth Ewert, Michael J. McManus, Drinker, Biddle & Reath LLP, David Schertler, Schertler & Onorato, L.L.P., Andrew Lawrence Hurst, Stephen Printiss Murphy, Reed Smith LLP, Washington, DC, Brian P. Watt, June Ann Sauntry, Bryan B. Lavine, Troutman Sanders LLP, Charles C. Murphy, Jr., Ellen G. Schlossberg, Vaughan & Murphy, Atlanta, GA, for Defendants.

MEMORANDUM OPINION

ROYCE C. LAMBERTH, Chief Judge.

Winston Churchill prescribed magnanimity in victory. See Winston S. Churchill, THE SECOND WORLD WAR, VOLUME I: THE GATHERING STORM xiii (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 defendants¹ for over $90 million.² (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.³ Relator, in turn, requests reimbursement for $31,973.96 in costs.⁴ Separately, relator seeks $9,945,765.25 in attorneys' fees⁵ and $511,723.06 in associated costs and expenses.⁶ 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.⁷ 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."⁸ See, e.g., Richlin Sec. Serv. Co. v. Chertoff, ___ U.S. ___, 128 S.Ct. 2007, 2011, 170 L.Ed.2d 960 (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., ___ U.S. ___, 127 S.Ct. 1994, 2002, 167 L.Ed.2d 904 (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, 113 S.Ct. 566, 121 L.Ed.2d 494 (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).⁹ 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, 109 S.Ct. 1500, 103 L.Ed.2d 891 (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.¹⁰ 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, 93 S.Ct. 2448, 37 L.Ed.2d 522 (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...