Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_06-cv-01381/USCOURTS-azd-2_06-cv-01381-4/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 31:3729 False Claims Act

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States ex rel. Mary A. Cafasso, 

Plaintiff-Relator, 

vs.

General Dynamics C4 Systems, Inc., 

Defendant. 

_________________________________

General Dynamics C4 Systems, Inc.,

Counterclaimant,

vs.

Mary A. Cafasso,

Counterdefendant.

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No. CV-06-01381 PHX NVW

ORDER

[Not for Publication]

Before the Court is Defendant-Counterclaimant-Appellee’s Request for Attorneys’

Fees, filed as docket entry 75-1, in No. 09-16181, United States Court of Appeals for the

Ninth Circuit, and transferred to this Court for consideration. (Doc. 442.)

I. Background

The underlying facts and procedural history of this case before appeal are

summarized at Doc. 419. Defendant-Counterclaimant-Appellee General Dynamics C4

Systems, Inc. (“GDC4S”) obtained judgment on the pleadings on PlaintiffCase 2:06-cv-01381-NVW Document 446 Filed 06/22/11 Page 1 of 5
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Counterdefendant-Appellant Mary A. Cafasso’s qui tam claim and obtained summary

judgment on her retaliation and state law contract claims. On Cafasso’s appeal, the

dismissal of her qui tam claim, denial of leave to further amend, summary judgment on

her False Claims Act retaliation claim, summary judgment on GDC4S’s contract claim,

and award of attorney fees on GDC4S’s successful contract claim were affirmed. 

Cafasso v. General Dynamics C4 Systems, Inc., 637 F.3d 1047 (9th Cir. 2011). On

GDC4S’s motion, consideration of its application for attorney fees on appeal was

transferred to this Court. (Doc. 442.) GDC4S seeks award of attorneys’ fees incurred

defending the summary judgment on GDC4S’s contract claim and related fee award on

appeal. 

II. Legal Standard

A.R.S. § 12-341.01(A) provides, “In any contested action arising out of a contract,

express or implied, the court may award the successful party reasonable attorney fees.” 

An award of reasonable attorney fees under § 12-341.01(A) “should be made to mitigate

the burden of the expense of litigation to establish a just claim or a just defense.” A.R.S.

§ 12-341.01(B). “It need not equal or relate to the attorney fees actually paid or

contracted, but the award may not exceed the amount paid or agreed to be paid.” Id.

To determine whether to award fees, the Court considers the factors governing

awards under the statute, including the merits of Cafasso’s defense, GDC4S’s success in

obtaining the relief sought, the avoidable expense incurred, the possibility that the award

will cause “extreme hardship,” any chilling effect the award might have on other parties

with tenable claims or defenses, and the novelty of the legal questions presented. See

Associated Indem. Corp. v. Warner, 143 Ariz. 567, 570, 694 P.2d 1181, 1184 (1995). 

III. Analysis

A. A.R.S. § 12-341.01(A) Factors Favor an Award of Fees to GDC4S.

Determining whether to award fees incurred on appeal under A.R.S.

§ 12-341.01(A) requires the same analysis as did the determination regarding award of

fees incurred below. It is not necessary to restate that analysis here. (See Doc. 419.) 

Case 2:06-cv-01381-NVW Document 446 Filed 06/22/11 Page 2 of 5
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On appeal, GDC4S prevailed in every respect, including on challenges to the

summary judgment on its contract claim and the award of fees arising out of contract. 

The Court of Appeals affirmed summary judgment on GDC4S’s contract claim with

strong language:

Although we see some merit in the public policy exception that

Cafasso proposes, we need not decide whether to adopt it here. Even were

we to adopt such an exception, it would not cover Cafasso’s conduct given

her vast and indiscriminate appropriation of GDC4S files. . . . 

Were we to adopt a public policy exception to confidentiality

agreements to protect relators—a matter we reserve for another day—those

asserting its protection would need to justify why removal of the documents

was reasonably necessary to pursue an FCA claim. Cafasso has made no

such particularized showing. The need to facilitate valid claims does not

justify the wholesale stripping of a company’s confidential documents. 

Although courts perhaps should consider in particular instances for

particular documents whether confidentiality policies must give way to the

needs of FCA litigation for the public’s interest, Cafasso’s grabbing of tens

of thousands of documents here is overbroad and unreasonable, and cannot

be sustained by reference to a public policy exception. We affirm the

district court’s grant of summary judgment on GDC4S’s contract claim.

637 F.3d at 1062.

Regarding a potential chilling effect of the fee award, the Court of Appeals

seriously considered “Cafasso’s concern that awarding fees against a qui tam claimant

may chill prospective relators from exposing frauds on the government,” but cautioned

that “relators and their attorneys are not free to engage in misconduct without

consequences merely because those consequences might chill others.” 637 F.3d at 1062-

63. The Court of Appeals further explained that “the awarded fees cover GDC4S’s

successful contract claim, not Cafasso’s FCA claim,” and it was “confident that future

litigants will appreciate the difference.” Id. at 1063. The Court of Appeals’ reasoning

applies equally to the award of fees incurred on appeal.

Cafasso contends that the previous $300,000 fee award “will likely bankrupt her”

and that “the Court should decline to pile on to Relator’s burden.” However, regardless

of whether GDC4S will be able to collect any or all of the fees awarded, there is no

justification for permitting Cafasso to prolong this litigation without consequences. 

Cafasso chose to pursue the appeal with full knowledge of its risks.

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Cafasso has not filed in this Court any evidence of her current financial status.

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B. The Amount Requested Fairly Represents Fees Arising Out of

Contract.

Cafasso does not object to any specific expense item in GDC4S’s fee request, but

instead objects to GDC4S’s apportionment of fees. However, GDC4S seeks only

reimbursement of the following fees earned by its primary counsel of Steptoe & Johnson

LLP: 

• 100% of fees incurred on tasks exclusively related to the appeal of

GDC4S’s contract claim and the fee award; 

• 50% of fees incurred related to the Taxpayers Against Fraud amicus brief

because approximately half of the brief related to the contract claim; and 

• 16.7% of fees incurred related to the appeal as a whole because

approximately one-sixth of GDC4S’s Answering Brief related to the

contract claim and the fee award. 

GDC4S has excluded from its request the following fees: 

• fees incurred before receiving Cafasso’s Opening Brief, including those

related to Cafasso’s multiple Notices of Appeal, her Motion to Consolidate,

her failure to post a bond, her motions to file overlength briefs, scheduling

and docketing issues, and participating in Ninth Circuit mediation

assessment conferences;

• fees incurred related to its fee request;

• fees earned by three associate attorneys and two paralegals; and

• fees earned by co-counsel from Jenner & Block LLP.

Thus, the amount GDC4S requests, $64,849.50, includes a significant reduction from the

amount of fees that the Court has discretion to award under A.R.S. § 12-341.01(A). This

reduction more than adequately compensates Cafasso for any extreme hardship.1

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IT IS THEREFORE ORDERED that Defendant-Counterclaimant-Appellee’s

Request for Attorneys’ Fees, filed as docket entry 75-1, in No. 09-16181, United States

Court of Appeals for the Ninth Circuit, and transferred to this Court (Doc. 442) is granted

under A.R.S. § 12-341.01(A) in the amount of $64,849.50.

IT IS FURTHER ORDERED that the Clerk enter judgment in favor of General

Dynamics C4 Systems, Inc., against Mary A. Cafasso in the amount of $64,849.50 for

attorney fees pursuant to A.R.S. § 12-341.01(A).

DATED this 21st day of June, 2011.

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