Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-05-05090/USCOURTS-caDC-05-05090-0/pdf.json

Parties Involved:
Samuel W. Bodman
Appellee
George B. Breznay
Appellee
Philip P. Kalodner
Appellant

Document Text:

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 13, 2006 Decided April 21, 2006 

No. 05-5089 

CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., ET AL., 

APPELLANTS

V. 

SAMUEL W. BODMAN, 

SECRETARY OF ENERGY, UNITED STATES AND 

GEORGE B. BREZNAY, DIRECTOR, OFFICE OF HEARINGS AND 

APPEALS OF U.S. DEPARTMENT OF ENERGY, 

APPELLEES

Consolidated with 

05-5090 and 05-5223 

No. 05-7009 

PHILIP P. KALODNER,

APPELLANT

V.

PUBLIC SERVICE ELECTRIC & GAS COMPANY, ET AL.,

APPELLEES

USCA Case #05-5090 Document #964088 Filed: 04/21/2006 Page 1 of 42
2

Appeal from the United States District Court 

for the District of Columbia 

(No. 03cv01991) 

(No. 05cv00024) 

(No. 04cv00152) 

Philip P. Kalodner, appearing pro se in Nos. 05-5090 and 

05-7009 and on behalf of Consolidated Edison Company of 

New York, Inc., et al. in Nos. 05-5089 and 05-5223, argued 

the cause and filed the briefs for appellants/cross-appellees. 

In Nos. 05-5089, 05-5090, and 05-5223, William G. 

Kanter, Deputy Director, U.S. Department of Justice, argued 

the cause for appellees/cross-appellants. With him on the 

briefs were Peter D. Keisler, Assistant Attorney General, 

Kenneth L. Wainstein, U.S. Attorney, and Edward 

Himmelfarb, Attorney. Stephen C. Skubel and Thomas H. 

Kemp, Attorneys, U.S. Department of Energy, entered 

appearances. 

In No. 05-7009, Michael F. Healy argued the cause for 

appellees Public Service Electric & Gas Company, et al. With 

him on the brief were Thomas A. Schmutz and Brooke Clagett. 

Also in No. 05-7009, David F. Smith argued the cause for 

appellees General Council on Finance and Administration of 

the United Methodist Church, et al. With him on the brief 

was Stanley O. Sher. 

Before: SENTELLE, Circuit Judge, and EDWARDS and 

WILLIAMS, Senior Circuit Judges. 

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS. 

USCA Case #05-5090 Document #964088 Filed: 04/21/2006 Page 2 of 42
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WILLIAMS, Senior Circuit Judge: For eight years (from 

1973 to 1981) the government imposed price controls on the 

sale of crude oil. In and since that period, it has collected 

refunds from the suppliers whose prices exceeded the ceilings 

and has distributed the proceeds to persons and firms that paid 

supra-ceiling prices. Indeed, the process of distributing 

refunds continues to this day. The statutory authority 

underlying these efforts appears in the Emergency Petroleum 

Allocation Act of 1973, Pub. L. No. 93-159, 87 Stat. 627 

(1973) (“EPAA”), incorporating the Economic Stabilization 

Act Amendments of 1971, Pub. L. No. 92-10, 85 Stat. 743 

(1971) (“ESA”). We deal here with claims for attorneys’ fees 

for litigation undertaken by Philip P. Kalodner in connection 

with the distribution. 

For roughly two decades, Kalodner has represented a 

group of six electric utility companies and three paper 

manufacturers (collectively, the “clients”) in their quests to 

obtain crude oil pricing refunds. On behalf of himself and his 

clients, he invokes the “common fund” theory to support 

claims for legal fees, making claims against both the 

government and many of the refund beneficiaries who were 

not his clients. The common funds, he claims, arose out of 

alleged legal victories in two cases, known here as Con Ed IV

(more formally, Consolidated Edison Co. of New York v. 

Abraham, 271 F. Supp. 2d 104 (D.D.C. 2003)), and Con Ed V 

(more formally, Consolidated Edison Co. of New York v. 

Abraham, No. 03-1991 (D.D.C. June 30, 2004)). Although 

the amounts at stake keep shifting for a variety of reasons, 

Con Ed IV involves about $264 million, Con Ed V about $35 

USCA Case #05-5090 Document #964088 Filed: 04/21/2006 Page 3 of 42
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million (which may overlap with the $264 million).1

 We 

have, then, two sets of claimants (Kalodner and his clients), 

two sets of possible fee payers (the government and the 

beneficiaries), and two alleged legal “wins” (Con Ed IV and 

Con Ed V). Because of the complexity we provide a 

scorecard: 

Table 1: An Overview of the Claims 

 Fee Applicant:

 Clients Kalodner Kalodner 

 Against 

Government 

Against 

Government 

Against 

Beneficiaries 

Seeking fee 

for 

Con Ed IV

($264MM) 

1. 

District court 

denies; we reverse 

and remand. 

(2004 Motion) 

3. 

District court 

denies; we 

affirm. 

(2005 lawsuit) 

5. 

District court 

denies; we 

reverse and 

remand. 

(2004 lawsuit) 

Seeking fee 

for 

Con Ed V

($35MM) 

2. 

District court 

grants; we reverse. 

(2004 Motion) 

4. 

District court 

denies; we 

affirm. 

(2005 lawsuit) 

6. 

District court 

denies; we 

affirm. 

(2004 lawsuit) 

 

 

1

 See Notice of Final Procedures for Distribution of 

Remaining Crude Oil Overcharge Refunds, 69 Fed. Reg. 29,300, 

29,301 (May 21, 2004). We use these numbers only to give an idea 

of the magnitudes; in the event that any fees are awarded, sorting 

out the amounts, and the degree to which they are attributable to the 

one court decision left standing as conceivably justifying a fee 

(Con Ed IV), will not be simple. 

USCA Case #05-5090 Document #964088 Filed: 04/21/2006 Page 4 of 42
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The fee claims under review were asserted in a motion in 

Con Ed V and in two separate lawsuits. Specifically, the 

claims against the government took the form of (1) a motion 

in 2004 in Con Ed V on behalf of Kalodner’s clients for fees 

in winning the alleged victories in both cases (claims 1 & 2 in 

Table 1), and (2) a separate lawsuit in 2005 on behalf of 

Kalodner himself, again for both alleged victories (claims 3 & 

4 in Table 1). In each the clients and Kalodner sought a fee of 

10% of the final distribution. In a consolidated opinion, the 

district court rejected Kalodner’s claims (against the 

government) with respect to both Con Ed IV and Con Ed V, 

reasoning primarily that the partial waiver of sovereign 

immunity provided by the Equal Access to Justice Act, 28 

U.S.C. § 2412(b) (“EAJA”), runs in favor only of parties, not 

their lawyers. See Mem. Op. at 6 (D.D.C. Jan. 26, 2005) 

(“Consolidated Mem. Op.”), filed in both Con Ed V and 

Kalodner v. Abraham, No. 05-0024 (D.D.C. Jan. 26, 2005) 

(“Kalodner-Abraham”). Kalodner appeals (Kalodner v. 

Abraham appears sub nom. Kalodner v. Bodman, No. 05-

5090),2 and we affirm (thus rejecting claims 3 & 4 in Table 1). 

In the same opinion the court also rejected the clients’ 

claims against the government with respect to Con Ed IV

(claims 1 & 2 in Table 1). Consolidated Mem. Op. at 5-6. In 

doing so it said it was applying the law-of-the-case doctrine, 

citing its own prior decision finding the fees claim barred by 

sovereign immunity. See Order, Con Ed IV (Dec. 4, 2003) 

(the “Dec. 4, 2003 Order”), aff’d, Consolidated Edison Co. of 

New York v. Abraham, No. 04-1141 (Fed. Cir. June 14, 2004). 

 

2

 Kalodner simultaneously appealed to the Federal Circuit as 

No. 05-1310, which that circuit deferred pending decisions here. 

See Order (Fed. Cir. May 31, 2005). 

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(The district court later characterized the second motion for 

fees for work in Con Ed IV as “an improper collateral attack 

on the decision of the Federal Circuit.” Consolidated Mem. 

Op at 11, thus invoking issue and/or claim preclusion, which 

appear, given the Federal Circuit’s affirmance of the court’s 

earlier decision, to be the most apt doctrines.) But the court 

accepted the clients’ claims for their lawyer’s supposed 

contribution in Con Ed V, and awarded a fee of 30% of the 

roughly $35 million there at stake. See Consolidated Mem. 

Op. at 9-11. (We have discovered no request by Kalodner in 

these cases for more than 10%.) The clients appeal as to 

Con Ed IV (our No. 05-5089), and the government crossappeals as to Con Ed V (our No. 05-5223).3

 We reverse and 

remand the judgment against the clients as to Con Ed IV, 

because Kalodner’s efforts in that case may have satisfied the 

causal requirements for a common fund recovery. (The 

government having failed to argue issue or claim preclusion, 

we express no opinion on those defenses.) We reverse the 

judgment in favor of the clients as to Con Ed V, because it is 

clear that that lawsuit failed to yield any court-ordered relief 

and more generally played no material role in the successes 

claimed. 

In the second independent lawsuit, Kalodner brought 

claims on his own behalf (not for the clients) against refund 

beneficiaries in 2004 (claims 5 & 6 in Table 1), again seeking 

10% of the total recovery. The district court resolved the 

claims against him, Kalodner v. Public Service Electric & 

 

3

 The clients simultaneously appealed to the Federal Circuit as 

No. 05-1309, and DOE cross-appealed there as No. 05-1450. The 

Federal Circuit entered an order deferring consideration of these 

parallel appeals. See Order (Fed. Cir. June 17, 2005). 

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Gas, No. 04-152 (D.D.C. Dec. 20, 2004) (“Kalodner-Public 

Service”), and he appeals (our No. 05-7009).4 We reverse that 

decision in part and remand, finding that Kalodner may be 

able to show that his activity in Con Ed IV played a sufficient 

role to justify a fee recovery; we also affirm in part, as the 

record makes clear that there was no such victory in Con 

Ed V. 

We note by way of background that the common fund 

theory conventionally rests on a theory that beneficiaries of 

the lawsuit would be unjustly enriched if not compelled to pay 

a share of the fees that made success possible. See, e.g., 

Swedish Hospital v. Shalala, 1 F.3d 1261, 1265 (D.C. Cir. 

1993). It may well be that courts have found it sensible to 

apply the unjust enrichment principle here (after all, human 

life abounds in windfalls) because doing so answers a 

potential free-rider problem. See Wal-Mart Stores Health & 

Welfare Plan v. Wells, 213 F.3d 398, 402 (7th Cir. 2000) 

(noting that free riding on attorney’s efforts would be 

“contrary to the equitable concept of ‘common fund’”); cf. 

United States v. Tobias, 935 F.2d 666, 668 (4th Cir. 1991) 

(“Generally, a fund claimant who is represented by 

counsel . . . is deemed not to have taken a ‘free ride’ on the 

efforts of another’s counsel.”); John P. Dawson, Lawyers and 

Involuntary Clients: Attorney Fees from Funds, 87 HARV. L.

REV. 1597, 1647-51 (1974) (discussing incentives to free ride 

on attorneys’ efforts). If lawyers considering representation 

of some but not all of a cluster of beneficiaries can recover 

compensation only from beneficiaries who actively retain 

 

4

 Kalodner simultaneously appealed to the Federal Circuit as 

No. 05-1214, which the circuit deferred pending decisions here. 

See Order (Fed. Cir. Mar. 25, 2005). 

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them, claims will not be brought—even though meritorious—

where the expected value of the gains for beneficiaries willing 

to participate can’t generate adequate compensation for 

counsel (and thus enable the bringing of suit). Under a rule 

awarding fees out of litigation proceeds received by passive 

beneficiaries, lawyers’ anticipation of fee recoveries will 

provide the requisite incentive. In some cases, of course, a 

subset of potential beneficiaries will have stakes large enough 

to call forth ample litigation effort; if so, the free-rider 

concern declines, possibly to nil. This last point would be 

pertinent, if at all, in calculation of fees. 

* * * 

The history preceding these cases is a long and tortured 

one, recounted in bits and pieces elsewhere. See Kalodner v. 

Abraham, 310 F.3d 767 (D.C. Cir. 2002) (“Kalodner I”); 

Consolidated Edison Co. of New York v. Abraham, 303 F.3d 

1310 (Fed. Cir. 2002); Consolidated Edison Co. of New York 

v. Ashcroft, 286 F.3d 600 (D.C. Cir. 2002); Consolidated 

Edison Co. of New York v. Richardson, 233 F.3d 1376 (Fed. 

Cir. 2000) (“Con Ed III”); Kalodner v. Abraham, 309 F. Supp. 

2d 100 (D.D.C. 2004); Con Ed IV; Consolidated Edison Co. 

of New York v. O’Leary, 4 Energy Management (CCH) 

¶ 26,698 (D.D.C. 1996), aff’d, 117 F.3d 538 (Fed. Cir. 1997) 

(“Con Ed II”); Consolidated Edison Co. v. Herrington, 752 F. 

Supp. 1082 (D.D.C. 1990). For our purposes, it suffices to 

summarize only the bare background facts. 

The statutes mentioned at the outset empowered the 

Department of Energy (“DOE”) to recover overcharges in 

violation of the price controls, and it has done so to the tune of 

several billion dollars. As part of a settlement in a multiUSCA Case #05-5090 Document #964088 Filed: 04/21/2006 Page 8 of 42
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district litigation, In re Department of Energy Stripper Well 

Exemption Litigation, 653 F. Supp. 108 (D. Kan. 1986) 

(“Stripper Well”), DOE authorized its Office of Hearings and 

Appeals (“OHA”) to begin distributions of this money to 

parties who had paid supra-ceiling prices. DOE placed 20% 

of the remaining crude oil overcharge funds into escrow for 

potential distribution to private firms and persons that were 

not parties to the settlement, leaving the remaining 80% to be 

split between federal and state governments. See Statement of 

Modified Restitutionary Policy in Crude Oil Cases, 51 Fed. 

Reg. 27,899 (Aug. 4, 1986). Since then, OHA has processed 

over 100,000 claims, and in two rounds of distributions has 

paid out roughly $610 million to private beneficiaries (as 

opposed to governments). See Con Ed IV, 271 F. Supp. 2d at 

106-07. The cases here concern the distribution of roughly 

$280 million remaining in escrow at the date of oral argument. 

Kalodner’s clients will cumulatively receive up to 15% of 

all crude oil refunds to private parties. The clients have 

compensated him for his services, but he and the clients now 

seek a common fund fee of approximately $27 million out of 

the sums paid or to be paid to many of the roughly 56,000 

other refund recipients (past or future). We say “many” 

because the fee claimants have evidently chosen not to pursue 

parties receiving relatively small amounts, as well as about 30 

beneficiaries with whom Kalodner has fee agreements. 

(Although in all instances the fees would in economic reality 

be paid by the beneficiaries, we distinguish (as does the law) 

between claims made against the government and ones made 

against beneficiaries.) 

Kalodner and his clients assert that his civil litigation in 

Con Ed IV and Con Ed V preserved and increased the 

remaining final distribution for the benefit of the whole class. 

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In Con Ed IV, they claim, Kalodner created or preserved a 

common fund (now amounting to about $280 million) by 

securing a declaratory judgment that the government 

distribute all remaining amounts of money in the 20% reserve 

for private parties. There his clients had moved for partial 

summary judgment on prayers for relief (1) that the fund be 

expanded beyond the 20% reserve, (2) that certain proceeds 

from a settlement agreement be included in the 20% reserve, 

and (3) that the funds collected be distributed without further 

delay. The district court denied the motion with respect to the 

first two requests, and granted it in part with respect to the 

third, declaring the beneficiaries’ entitlement to have DOE 

distribute the money “insofar as practicable.” 271 F. Supp. 2d 

at 112. But the court neither ordered an immediate 

distribution nor issued a timetable. Contrary to the clients’ 

request, the court found itself “unable either to issue a writ of 

mandamus ordering DOE to complete distribution of those 

funds or to declare that further delay in making the final 

distribution is unjustified.” Id. at 111. 

As noted above, the decision under review denying 

Kalodner’s clients’ request for a fee based on Con Ed IV is the 

second district court decision to do so. The clients initially 

moved for fees in Con Ed IV in 2003 (then seeking only 5%), 

and the court denied the motion on the ground that the money 

was in the possession of the U.S. government and thereby 

protected by sovereign immunity. Dec. 4, 2003 Order at 1-2. 

The clients at the same time moved for joinder of sixteen 

refund beneficiaries as class representatives of the 

“respondents” to the fee motion. See Motion to Add Parties 

as Respondents to Motion for Award of Common Fund Fee at 

1, Con Ed IV (Oct. 9, 2003). The court denied the motion for 

joinder, on the grounds that it would be “inappropriate, 

particularly given the Court’s ruling on [sovereign 

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immunity].” Id. The clients appealed the Dec. 4, 2003 Order 

to the Federal Circuit, which has exclusive jurisdiction over 

ESA issues, see ESA § 211(b)(2), amended by Pub. L. No. 

102-572, 106 Stat. 4506 (1992), and that court affirmed 

without opinion. See Consolidated Edison Co. of New York v. 

Abraham, 101 Fed. Appx. 356 (Fed. Cir. 2004). In 2004 the 

clients filed another motion, renewing the claim, which the 

district court, noting the unsuccessful appeal to the Federal 

Circuit, denied on grounds of preclusion. The clients appeal. 

As to Con Ed V, Kalodner and his clients argue that the 

litigation increased the beneficiaries’ refunds by roughly $35 

million by compelling DOE to modify its “volumetric 

method” of calculation. See Mem. Op., Con Ed V (June 30, 

2004). The clients’ lawsuit sought an order of final 

distribution and alluded in general terms to the methodology 

for computing refunds. Of the two modifications that 

Kalodner and the clients would now attribute to Con Ed V, 

one (“deferral”) is not mentioned in the complaint; the other 

(inclusion of the “Citronelle account”) is mentioned but as we 

shall see (in Part III below on “Causation”) appears never to 

have been in dispute. After the case was filed, DOE issued its 

notice of proposed procedures for final distribution. See 

Notice of Proposed Procedures for Distribution of Remaining 

Crude Oil Overcharge Refunds and Opportunity for 

Comment, 68 Fed. Reg. 64,098 (Nov. 12, 2003) (“Proposed 

Procedures”). Kalodner participated on behalf of his clients 

in the ensuing administrative proceeding, and in that forum 

urged inclusion of the Citronelle account and, for the first 

time, “deferral.” Another participant urged the same points. 

DOE accepted these suggestions, with the result (we are told) 

of effectively increasing the total refund amount by $35 

million, and published its final order several months later. 

See Notice of Final Procedures for Distribution of Remaining 

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Crude Oil Overcharge Refunds, 69 Fed. Reg. 29,300 (May 21, 

2004) (“Final Procedures”). Because the final distribution 

appeared to be well under way by the time the court ruled, the 

court dismissed Con Ed V as moot. Mem. Op., Con Ed V

(June 30, 2004). 

* * * 

We review the several dispositions de novo. This is 

obvious for the outright dismissals of claims, see, e.g., 

Masonry Masters v. Nelson, 105 F.3d 708, 710-11 (D.C. Cir. 

1997), but also applies to the court’s grant of fees in favor of 

Kalodner’s clients for his work on Con Ed V, as the issues, 

with one exception, are ones of law, for which the standard of 

review is almost invariably de novo. See Edmonds v. FBI, 

417 F.3d 1319, 1322 (D.C. Cir. 2005). The exception relates 

to Kalodner’s causal role in generating the beneficiaries’ 

recovery, an issue of course containing elements of fact. But 

the district court has so far engaged in no fact-finding, and all 

we have before us are the movants’ allegations. We assume 

the correctness of the allegations of specific facts, but not of 

conclusions. For these we ask whether the record and specific 

allegations support an inference of causation. See Judicial 

Watch, Inc. v. U.S. Senate, 432 F.3d 359, 360 (D.C. Cir. 

2005). 

We proceed below in three steps. First, we consider 

sovereign immunity. We find that three claims (claims 2, 3 & 

4) are barred. The fee sought by Kalodner’s clients from the 

government (claim 2) is barred with respect to his efforts in 

Con Ed V (allegedly modifying the volumetric method): 

sovereign immunity applies, so that the clients are barred in 

the absence of a waiver, and they were not prevailing parties 

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within the meaning of EAJA’s waiver provision. With respect 

to work in Con Ed IV, however, the clients qualify under 

EAJA as prevailing parties in the minimal sense of the term; 

but (as we see in the third step) there is considerable doubt 

whether their litigation efforts played the causal role needed to 

qualify for a common fund fee recovery. Kalodner’s suit 

against the government in his own name (claims 3 & 4) enjoys 

no EAJA waiver because he was not a party to the underlying 

suits. And because Kalodner’s claims against the 

beneficiaries (claims 5 & 6) are not against the government 

(except with respect to one remedy request, which is 

severable), sovereign immunity is completely inapplicable. 

Thus, the only claims surviving sovereign immunity are the 

clients’ claim against the government for Con Ed IV and both 

of Kalodner’s claims against beneficiaries (claims 1, 5 & 6). 

Second, preclusion issues abound. The beneficiaries fail 

to make out a case for issue preclusion of the claims against 

them (claims 5 & 6). The government has failed to press its 

possible preclusion arguments (claim 1); thus we discuss them 

only briefly and note that under our case law the omission 

need not be fatal to the preclusion arguments’ resurrection on 

remand. See Stanton v. District of Columbia Court of 

Appeals, 127 F.3d 72, 77 (D.C. Cir. 1997). 

Finally, as our summary has made clear, for claims not 

barred by sovereign immunity, the controlling issue is whether 

Kalodner’s civil litigation played a sufficient role in 

generating the supposed “common funds” to warrant a fee 

award. The answer is “maybe” for Con Ed IV (for the claim 

by the clients against the government (claim 1) and the claim 

by Kalodner against the beneficiaries (claim 5)), and “no” for 

Con Ed V (claim 6). 

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We note that the government distributed the bulk of the 

remaining refunds on the day of oral argument. See Final 

Procedures for Distribution of Remaining Crude Oil 

Overcharge Refunds, 71 Fed. Reg. 2,195 (Jan. 13, 2006). But 

as the government set aside 10% of the private party refunds 

pending this litigation (i.e., 10% of the 20% reserved for 

private parties under the Stripper Well settlement, see 

discussion in Part III.A. below), id. at 2,195-96, the 

distribution doesn’t moot the case. 

I. Sovereign Immunity 

The threshold issue for the fee recovery suits is whether 

the funds are protected by sovereign immunity. Monetary 

claims against the government are barred by sovereign 

immunity unless the government has expressly waived its 

immunity. See Lane v. Peña, 518 U.S. 187, 192 (1996). To 

some degree Kalodner and his clients argue that sovereign 

immunity is simply out of the picture because of the nature of 

their claims and the status of the refund process. In 

anticipation of the failure of this theory, they assert a waiver 

theory under EAJA. We address first the suit by Kalodner’s 

clients against the government, then Kalodner’s own suit 

against the government, and finally his suit against the 

beneficiaries. Lastly, in all claims Kalodner and his clients 

invoke ESA § 209 as yet another waiver theory. We find that 

resolution of an ESA issue, which falls under the exclusive 

appellate jurisdiction of the Federal Circuit, is not likely to be 

required. 

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 A. Kalodner’s clients’ claims against the government 

In Kalodner I, addressing Kalodner’s efforts to recover a 

common fund fee in other crude oil refund litigation, we held 

that “the sine qua non of federal sovereign immunity is the 

federal government’s possession of the money in question.” 

310 F.3d at 770. We found sovereign immunity applicable, 

without more, once we had determined that the government 

was in possession of the relevant funds. Thus Kalodner I

makes clear that government possession of funds is itself 

sufficient to establish sovereign immunity. Here, except for 

the money distributed, which the government no longer 

possesses, the money in dispute is clearly in the government’s 

possession so that, under Kalodner I, sovereign immunity 

appears to apply. Unless Kalodner’s clients can point to a 

waiver, their claims against the government (claims 1 & 2) are 

barred. 

The clients’ first effort to overcome that conclusion rests 

on a number of inapplicable cases. First they cite the 

Supreme Court’s decision in Boeing Co. v. Van Gemert, 444 

U.S. 472 (1980), especially its observation that a common 

fund fee recovery would be appropriate “when each member 

of a certified class has an undisputed and mathematically 

ascertainable claim to part of a lump-sum judgment recovered 

on his behalf.” Id. at 479. But the decision involves fee 

recovery in private litigation and has nothing to do with 

sovereign immunity. Were the clients to establish the 

inapplicability of sovereign immunity, or a waiver, Boeing

might help them meet the ordinary common fund 

prerequisites, but it does nothing to get them over the initial 

sovereign immunity hurdle. Commonwealth of Puerto Rico v. 

Heckler, 745 F.2d 709 (D.C. Cir. 1984), and Swedish Hospital 

Corp. v. Shalala, 1 F.3d 1261 (D.C. Cir. 1993), are equally 

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16

useless in the clients’ effort to finesse the sovereign immunity 

problem. Although both were suits against the government, in 

Puerto Rico we found EAJA applicable (thus presupposing a 

sovereign immunity bar), and in Swedish Hospital the only 

issue was computation of the fee, the entitlement having 

evidently been conceded or established. Finally, National 

Treasury Employees Union v. Nixon, 521 F.2d 317 (D.C. Cir. 

1975), is of no use to the clients on sovereign immunity; as we 

said in Kalodner I, the money with respect to which a fee was 

claimed had already been distributed. See Kalodner I, 310 

F.3d at 770. 

In a more realistic vein, the clients assert waiver under 

EAJA. Although much of the clients’ language seems to 

disclaim any reliance on EAJA, see CrossAppellees’/Appellants’ Reply Brief at 31 (“they are not” 

“seeking a fee pursuant to the EAJA”) (emphasis added); see 

also Appellant’s Initial Brief at 20 (“By his Complaint and his 

Motion for Preliminary Injunction, Kalodner sought a fee . . . 

not pursuant to the EAJA.”) (emphasis added), the briefs also 

rather obscurely reserve EAJA as a “back-up,” see CrossAppellees’/Appellants’ Reply Brief at 54 (“Even if it were 

necessary for Kalodner to rely on the EAJA, the reliance is 

solely for the purpose of obtaining a waiver of sovereign 

immunity.”); Appellant’s Initial Brief at 40 (“if not already so 

waived, sovereign immunity is waived by the EAJA”). 

Giving the clients the benefit of the doubt, we proceed to the 

EAJA analysis. 

EAJA provides: 

Unless expressly prohibited by statute, a court may award 

reasonable fees and expenses of attorneys . . . to the 

prevailing party in any civil action brought by or against 

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the United States or any agency or any official of the 

United States acting in his or her official capacity in any 

court having jurisdiction of such action. The United 

States shall be liable for such fees and expenses to the 

same extent that any other party would be liable under the 

common law or under the terms of any statute which 

specifically provides for such an award. 

28 U.S.C. § 2412(b) (emphasis added). (This waiver appears 

quite distinct from the more familiar § 2412(d), which 

contains additional qualifications. See, e.g., § 2412(d)(1)(B) 

& (d)(2)(B).)

In Buckhannon Board & Care Home, Inc. v. West 

Virginia Department of Health & Human Resources, 532 U.S. 

598, 603-04 (2001), the Supreme Court interpreted two (nonEAJA) statutes authorizing fee-shifting for prevailing parties, 

and held that a party has not “prevailed” unless it has secured 

some form of court-ordered relief. In so ruling, it rejected the 

“catalyst theory,” under which a party could be found to 

prevail if a defendant changed its conduct in response to a 

pending law suit. Id. at 603. We have held that this 

understanding of “prevailing party” applies to EAJA’s use of 

the term. See Select Milk Producers, Inc. v. Johanns, 400 

F.3d 939, 945 (D.C. Cir. 2005). 

In Con Ed V, the clients obtained relief—but not from the 

court. It came as a result of the agency’s favorable response 

to their (and others’) comments in the agency proceeding, 

suggesting two changes in the “volumetric” computation. 

Although the complaint alluded vaguely to the method of 

computation, it never framed a request for a change. The 

agency accepted the theory—presumably on its merits, there 

being no detectable judicial pressure to do so, much less a 

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18

judgment or any other form of court-ordered relief. The 

clients are therefore not prevailing parties with respect to Con 

Ed V, and the funds (sought in claim 2) remain protected by 

sovereign immunity. 

We note that the district court mistakenly distinguished 

Kalodner I, evidently believing that EAJA had not been 

considered by the court nor raised by the parties in that case. 

Consolidated Mem. Op. at 8-9. In fact EAJA had been raised 

in Kalodner I, albeit by the government. See Brief for the 

Appellees at 28-29, Kalodner I. Our omission of any 

discussion was plainly because of the ample reasons why 

EAJA would not have availed Kalodner, the most obvious 

being that Kalodner was simply not a “party” at all. 

With respect to the work in Con Ed IV, however, the 

clients appear to meet the minimum qualifications for 

prevailing parties (claim 1). Although the Con Ed IV court 

rejected two of the three claims sought in their motion for 

partial summary judgment, it did grant a declaratory judgment 

that the clients were entitled “to a distribution of the entire 

20% reserve, insofar as practicable.” 271 F. Supp. 2d at 112. 

As the court rejected the clients’ claims with respect to the 

amount to be distributed, and as it imposed neither deadlines 

nor even criteria for judging practicability, this was pretty thin 

gruel, as we shall see when we discuss whether the judgment 

may have had enough of a causal effect to justify a common 

fund fee. But it does appear to meet the minimum 

requirement of constituting court-ordered relief. Insofar as 

qualification as “prevailing” requires more than the raw 

Buckhannon minimum, see, e.g., Farrar v. Hobby, 506 U.S. 

103, 109 (1992) (requiring that plaintiffs “succeed on any 

significant issue in litigation which achieves some of the 

benefit the parties sought in bringing suit”), that inquiry is 

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19

here subsumed in our discussion in Part III of whether 

Kalodner’s civil litigation played enough of a role in 

generating the beneficiaries’ recovery to warrant a common 

fund fee. 

 B. Kalodner’s claims against the government 

We affirm the district court’s dismissal of Kalodner’s suit 

on his own behalf against the government (claims 3 & 4). 

Sovereign immunity applies unless waived, for the reasons 

addressed above. As to any EAJA waiver, Kalodner was 

counsel in Con Ed IV and Con Ed V, not a party, and EAJA 

provides attorneys’ fees only for parties. See Consolidated 

Mem. Op. at 6. 

 C. Kalodner’s claims against the beneficiaries

The beneficiaries argue that sovereign immunity also bars 

Kalodner’s attempt to recover fees from them (claims 5 & 6) 

by virtue of Kalodner I’s holding that sovereign immunity 

applies if the government is in possession of the relevant 

funds. With respect to some of the relief sought by Kalodner, 

this counter-intuitive proposition is correct. He indeed asks 

for “[a]n Order directing the defendants [i.e., named nonclient beneficiaries] on behalf of each of the class members to 

direct the DOE to withhold the fee awarded to plaintiff [i.e., 

Kalodner].” Complaint at 18, Kalodner-Public Service (Feb. 

3, 2004). Unless the requested communication to DOE were 

purely precatory (“Would you be so kind as to send some of 

my money to Mr. Kalodner?”), it would pose the same 

sovereign immunity issues as a direct court order against the 

government. But Kalodner appears independently to also ask 

for an order “awarding to plaintiff [from the beneficiaries] 

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10% of the distribution to each member of the [beneficiary] 

class.” Id. Indeed in a later filing, Kalodner clarified that he 

was requesting a declaratory judgment that beneficiaries have 

an obligation to pay attorneys’ fees once the money is 

distributed. See Plaintiff’s Motion for Summary Judgment at 

1, Kalodner-Public Service (June 1, 2004); Plaintiff’s 

Statement of Material Facts in Support of Plaintiff’s Motion 

for Summary Judgment at 19, 38, Kalodner-Public Service

(June 1, 2004). And at oral argument, Kalodner verified that 

the two requests were independent. See Oral Argument Tape 

at 18:40-19:28, Kalodner-Public Service; see also Appellant’s 

Initial Brief at 37-38; Appellant’s Reply Brief at 6-7. 

Sovereign immunity poses no bar to Kalodner’s fee claims 

against beneficiaries (claims 5 & 6). 

D. ESA waiver theory 

We come finally to the theory—asserted for all claims—

that Congress waived the government’s sovereign immunity 

in ESA § 209. At the outset, we note that we’re puzzled by 

the theory of § 209’s relevance. Kalodner and his clients 

argue that because the underlying suits waived sovereign 

immunity under ESA, immunity was also waived as to any 

request for attorneys’ fees. But the ESA jurisdictional basis 

that they asserted for their suits in Con Ed IV and Con Ed V

was § 210, not § 209. See Complaint at 3, Con Ed IV (Mar. 

15, 2001); Complaint at 2-3, Con Ed V (Sep. 25, 2003). 

As to the merits of the ESA § 209 theory, matters of 

interpretation of EPAA and ESA generally fall under the 

exclusive appellate jurisdiction of the Federal Circuit. See 

ESA § 211(b)(2), amended by Pub. L. No. 102-572, 106 Stat. 

4506 (1992) (providing that “[a]ppeals from orders or 

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21

judgments . . . in cases or controversies arising under [the 

ESA] shall be brought in the . . . Federal Circuit”); 28 U.S.C. 

§ 1295(a) (providing that the “Federal Circuit shall have 

exclusive jurisdiction . . . of an appeal under section 211 of 

the [ESA]”); Consolidated Edison Co. of New York v. 

Abraham, 303 F.3d 1310, 1313-16 (Fed. Cir. 2002); 

Consolidated Edison Co. of New York v. Ashcroft, 286 F.3d 

600, 602-05 (D.C. Cir. 2002); Con Ed II, 117 F.3d at 541-42; 

Texas American Oil Corp. v. United States Department of 

Energy, 44 F.3d 1557, 1563 (Fed. Cir. 1995). For all claims 

before us, the Federal Circuit has deferred parallel appeals to 

await our decisions. See supra notes 2-4. In determining the 

scope of the Federal Circuit’s exclusive jurisdiction, we not 

surprisingly follow that circuit’s two-fold criteria: “First, 

resolution of the litigation must require application or 

interpretation of the ESA or regulations issued thereunder; 

and second, the ESA issue must have been adjudicated in the 

district court.” Consolidated Edison Co. of New York v. 

Ashcroft, 286 F.3d 600, 603 (D.C. Cir. 2002) (citing Texas 

American Oil Corp., 44 F.3d at 1563). 

In the end it seems quite likely that no claim will meet the 

first criterion. The three claims based on the work in 

Con Ed V (claims 2, 4 & 6) cannot win regardless of any ESA 

waiver; as we discuss in Part III, the absence of causation is 

fatal. The claims based on litigation in Con Ed IV (claims 1, 3 

& 5) may well also be finally resolved without regard to the 

ESA. If on remand the district court finds that the Con Ed IV

litigation had insufficient causal effect, that is the end of the 

matter. None of these fee claims could succeed. Even if the 

court finds causation, Kalodner’s claim against the 

government may be unavailing because any further fee 

recovery for work on Con Ed IV would duplicate his recovery 

against the beneficiaries and the clients’ recovery against the 

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government. The same is also true for the special type of 

relief in Kalodner’s claim against the beneficiaries that we 

found barred by sovereign immunity, namely the demand for 

an order directing them to direct DOE to pay a portion of their 

entitlements to Kalodner. While there may be scenarios under 

which the application of preclusion would give a potentially 

broad ESA waiver significance, it is premature to evaluate 

such possibilities at this stage. 

In closing, we note that the clients try to make something 

of our statement in Kalodner I that “Congress has waived 

sovereign immunity for Subpart V claimants.” 310 F.3d at 

770. See Motion for Award of a Common Fund Fee at 24, 

Con Ed V (July 12, 2004). But the sentence does them no 

good. Our sole concern in that passage was to rebut 

Kalodner’s claim under ESA § 210, and doing so required us 

only to observe that Kalodner was not a “Subpart V claimant,” 

310 F.3d at 770; he was their lawyer. 

To recap, sovereign immunity bars Kalodner’s claims 

against the government (claims 3 & 4) and the clients’ claim 

against the government for Con Ed V (claim 2). Three claims 

survive: Kalodner’s claims against beneficiaries (claims 5 & 

6) and the clients’ claim against the government for Con Ed 

IV (claim 1). 

II. Preclusion 

Before considering the merits of the surviving common 

fund claims (Kalodner against the beneficiaries for both cases, 

and the clients against the government for Con Ed IV), we 

must note the issue of possible preclusion from the district 

court’s December 4, 2003 rejection of the clients’ claims for a 

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fee for the work in Con Ed IV and that decision’s later 

affirmance by the Federal Circuit. 

 A. Kalodner’s claims against the beneficiaries 

In its December 4, 2003 fee decision in Con Ed IV, the 

district court dismissed the clients’ motion to join refund 

beneficiaries. They appealed to the Federal Circuit, which 

denied the appeal by order. The refund beneficiaries argue 

that the dismissal (and loss of the appeal) should preclude 

Kalodner’s fee claim against beneficiaries for Con Ed IV’s 

declaratory judgment (claim 5). Leaping over the issue of 

whether Kalodner should be bound by his clients’ loss, we 

address the nature of the district court’s order of dismissal, a 

more obvious obstacle to the beneficiaries’ theory. The order 

appears not to have been based on the merits or on any other 

substantive theory. The court said simply that “joinder of 

[beneficiaries] at this stage of the litigation and for this 

purpose would be inappropriate, particularly given the Court’s 

ruling on the previous motion [denying a fee claim against the 

government on sovereign immunity grounds].” Dec. 4, 2003 

Order at 3. Sovereign immunity, of course, would be no bar 

to a claim directed to the beneficiaries, so the court’s entire 

substantive discussion would have been, as to them, beside the 

point. Indeed, the court seemed affirmatively to contemplate 

the clients’ future pursuit of fees, suggesting that “[a] more 

suitable option would be . . . to initiate a separate lawsuit 

against applicable claimants . . . once [the government] 

distribute[s] the monies from the 20% reserve.” Id. As the 

court was evidently ruling only that the clients’ fee claim 

against beneficiaries should be addressed in some other 

context, it clearly did not resolve the issue before us—the 

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merits of that claim (or Kalodner’s). See Yamaha Corp. of 

America v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992). 

We do not understand the beneficiaries to be arguing 

claim preclusion—really a rule against claim splitting. See, 

e.g., Gener-Villar v. Adcom Group, Inc., 417 F.3d 201, 205 

(1st Cir. 2005) (noting that claim preclusion “generally binds 

parties from litigating or relitigating any [claim] that was or 

could have been litigated in a prior adjudication and prevents 

claim splitting”) (internal quotation omitted, brackets in 

original). The case is unusual in that the district court created 

the split by declining to reach the merits of the claim against 

the beneficiaries. But there might be an argument that the 

claims against the government and against the beneficiaries 

were properly viewed as a single claim, so that the clients’ 

failure to get that aspect of the district court’s judgment 

reversed would bind the claimants (and even Kalodner, if the 

beneficiaries’ theory of privity is correct). We express no 

opinion on such a theory. 

The beneficiaries also make a distinctly confusing 

argument that certain of the decisions under review here bar 

Kalodner’s claims against them by virtue of issue preclusion. 

In one respect the claim has merit, though the beneficiaries’ 

labeling is wrong. In so far as they argue that Kalodner 

cannot double dip, recovering both through his clients and/or 

against the government, and independently against 

themselves, the beneficiaries are right, as Kalodner 

forthrightly conceded at oral argument. See Oral Argument 

Tape at 0:37-1:12 (in appeal No. 05-5089). That is not a 

matter of issue preclusion, but of double recovery. See, e.g., 

Commissioners Court of Medina County v. United States, 719 

F.2d 1179, 1182 n.6 (D.C. Cir. 1983). So far as issue 

preclusion is concerned, the dispositive issue in the one case 

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not on review before us (i.e., the December 4, 2003 decision 

and the failed appeal) related to sovereign immunity, which 

provides the beneficiaries no defense. Thus, issue preclusion 

cannot bar Kalodner’s claims against the beneficiaries (claims 

5 & 6). 

 B. Kalodner’s clients’ claim against the government

With respect to the clients’ surviving fee claim against 

the government (claim 1), DOE’s brief proclaimed it 

unnecessary to delve into the preclusive effect of the 

December 4, 2003 Order, instead relying on sovereign 

immunity alone. This tactical choice is especially perplexing 

because the district court invoked preclusion in finding in the 

government’s favor as to Con Ed IV. As to those fees, we’ve 

just ruled, the clients formally qualify as “prevailing parties” 

under EAJA’s waiver provision. As the government failed to 

brief the preclusion issue for fee claims against it, and as we 

are remanding the issue, for prudential reasons we do not 

address it here. We note for the benefit of the parties and the 

district court, however, that because interests of judicial 

economy are at stake in preclusion doctrines, courts retain the 

power to consider such doctrines sua sponte. See Stanton v. 

District of Columbia Court of Appeals, 127 F.3d 72, 77 (D.C. 

Cir. 1997). 

III. Common Fund Causation 

Our circuit law permits “a party who creates, preserves, 

or increases the value of a fund in which others have an 

ownership interest to be reimbursed from that fund for 

litigation expenses incurred.” Swedish Hospital, 1 F.3d at 

1265 (emphasis added). All three variants express the 

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necessity that the claiming parties’ litigation have played a 

causal role in achieving the benefits for which they seek fee 

reimbursement. Similarly, the Supreme Court has demanded 

that “[t]he benefits could be traced with some accuracy.” 

Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 

240, 265 n.39 (1975). See also In re Holocaust Victim Assets 

Litigation, 424 F.3d 150, 157 (2d Cir. 2005) (“The actions of 

the party seeking to recover costs must . . . be a substantial 

cause of the benefit obtained.”) (citation and internal 

quotation omitted); Knight v. United States, 982 F.2d 1573, 

1579-80 (Fed. Cir. 1993) (describing typical cases to involve 

third party beneficiaries of enhancement or preservation of 

assets or trust); Vincent v. Hughes Air West, 557 F.2d 759, 

771 n.10 (9th Cir. 1977) (“[T]he common fund doctrine 

requires that the work of the attorney seeking an extra fee be a 

cause-in-fact of any claimed benefit to the fund and its 

beneficiaries.”); see generally FEDERAL JUDICIAL CENTER,

AWARDING ATTORNEYS’ FEES AND MANAGING FEE 

LITIGATION 62-64 (2005) (“the plaintiff must . . . establish that 

its suit was a ‘but for’ cause of the fund (or at least ensured 

access to the fund).”). 

The question hence becomes whether Kalodner and the 

clients have pleaded facts supporting an inference of the 

requisite causation on the three potentially viable claims 

(claims 1, 5 & 6). We remand the two claims that ride on the 

alleged success in Con Ed IV so as to give the fee claimants a 

chance to make their case (claims 1 & 5). As to Kalodner’s 

claim against the beneficiaries based on Con Ed V (claim 6, 

the only claim based on Con Ed V not already found barred by 

sovereign immunity), the record shows the absence of 

causation as a matter of law. 

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A. The declaratory judgment in Con Ed IV

Kalodner argues that Con Ed IV’s declaratory judgment 

created or preserved the fund by requiring the government to 

distribute the previously undistributed portion of the private 

parties’ 20% of collections set aside pursuant to the Stripper 

Well settlement, overcoming DOE’s alleged reservation of a 

right not to do so. Yet DOE’s expression of a reservation 

does not mean in itself that Con Ed IV was a cause (much less 

a substantial cause) of the final distribution. Reluctance is not 

refusal. We find the record inconclusive. 

We note a few basic points at the outset. First, the 

decision to grant private crude oil purchasers 20% of certain 

overcharge collections dates back to the 1986 settlement. See 

Stripper Well, 653 F. Supp. at 114 (noting that DOE “will . . . 

establish an initial reserve for [private beneficiaries not party 

to the settlement agreement] amounting to twenty percent of 

the funds received by the DOE”); Statement of Modified 

Restitutionary Policy in Crude Oil Cases, 51 Fed. Reg. 

27,899, 27,900 (Aug. 4, 1986) (providing that “OHA will 

establish an initial reserve fund for these claims of twenty 

percent” of crude oil overcharges). Although DOE 

undoubtedly hemmed and hawed a good deal on the followthrough, Kalodner and his clients have never pointed to any 

statement indicating an affirmative intent to renege on the 

planned distribution of the 20% reserve. 

Second, although some of the language in the Con Ed IV

decision seems directed to getting DOE moving, there is no 

claim that Kalodner’s civil litigation helped the beneficiaries 

by accelerating pay-out. Nor does it appear that there could 

be. First, it will be recalled that the Con Ed IV expressly 

declined to impose any deadline. More pertinently, interest 

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has been accruing on the funds (evidently from the outset, and 

certainly during the period relevant to Kalodner’s litigation 

activities in Con Ed IV and Con Ed V), see, e.g., CitronelleMobile Gathering, Inc. v. Edwards, 669 F.2d 717, 723 (Temp. 

Emer. Ct. App. 1982) (noting “that the Government has a duty

to try to ascertain those overcharged, and refund them, with 

interest, from the restitution funds”) (second emphasis added); 

Final Procedures, 69 Fed. Reg. at 29,301 (noting that 

“interest will continue to accrue . . . until the refund process is 

completed”), so the beneficiaries have been and are being held 

harmless from the effects of delay. 

Third, the government and beneficiaries assert that the 

court should not award a common fund fee because it was 

DOE’s own pursuit of the overcharging crude oil sellers that 

led to the accumulation of the funds to be distributed. This is, 

of course, true, but in significant part it misses the point. It 

may come as a surprise to counsel, but in all lawsuits 

producing only money judgments or fund pay-outs, it is not 

counsel who have created the wealth to be distributed. 

Mandatory payments do not create wealth (except indirectly, 

in so far as they enforce rules that provide incentives for 

wealth-creating behavior); they simply redistribute it. This is 

true whether the funds distributed originate with taxpayers or, 

as here, with sellers of crude oil and the government’s refund 

mavens. But the common fund theory provides a potential 

basis for payment nonetheless; to the extent that the litigation 

secured for the beneficiaries sums that otherwise would have 

flowed to other parties or would have been retained by the 

government, a common fund fee would be in order. See, e.g., 

United States v. American Society of Composers, Authors and 

Publishers, 466 F.2d 917 (2d Cir. 1972). 

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Fourth, Kalodner and the clients mistakenly argue that the 

district court made a factual finding of causation deserving of 

deference. Such a finding would of course be surprising, 

given the court’s dismissal of the claims with respect to Con 

Ed IV on preclusion grounds. Kalodner points to the district 

court’s statement that Con Ed V “insured the implementation 

of the Court’s declaratory judgment in Con Ed IV that DOE 

should disburse approximately $275 million in funds.” 

Consolidated Mem. Op. at 10. But this adds up to very little. 

The language appears more aimed at describing the effect of 

Con Ed V (which we address below) on ensuring the 

implementation of the prior declaratory judgment than the 

effect of the declaratory judgment itself. And the district 

court’s opinion in Con Ed IV seems in fact (1) to have 

recognized that its word was by no means the last and (2) to 

have believed that the government’s primary concern was to 

be assured that all refund claims should be properly resolved. 

See 271 F. Supp. 2d at 110 (noting that “OHA has advised 

plaintiffs that it will not be in a position to determine whether 

any further direct payments to plaintiffs is [sic] warranted 

until all remaining refund claims are processed”) (internal 

quotation omitted). Worst for the argument advanced by 

Kalodner and his clients is that this language runs straight into 

the earlier order dismissing Con Ed V as moot and saying that 

the court “decline[d] [plaintiffs’] invitation to declare them 

‘victor’ just because the contemporaneous administrative 

process adopted many of their distribution criteria.” Mem. 

Op. at 2-3, Con Ed V (June 30, 2004). And the court’s 

statement that “Kalodner was successful in two adverse civil 

suits against DOE,” Consolidated Mem. Op. at 5, fails to 

make a finding as to any substantive consequence of 

Kalodner’s “success.” While formal success may be 

minimally sufficient to qualify Kalodner’s clients as 

prevailing parties under Buckhannon, see 532 U.S. at 604, it 

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doesn’t establish common fund causation. And the district 

court simply did not come close to making such a factual 

finding. 

We now turn to the main substantive question of what 

DOE was likely to have done independent of the litigation. Its 

communications leave us uncertain how to classify its intent, 

as between serious contemplation of an ultimate decision not 

to make the roughly $280 million final distribution and merely 

a plan to go slow in light of continuing uncertainties. OHA 

said, for instance, in reply to one of Kalodner’s letters 

requesting distribution (amid many calling for distribution and 

also asserting various computational claims), that it “should 

continue to devote all available resources to the completion of 

pending original and supplemental applications, before 

addressing the issue of whether to make a final payment to 

applicants that have already received refunds [among them, 

Kalodner’s clients].” Letter from George B. Breznay, 

Director, OHA, to Philip P. Kalodner (July 11, 2000) (filed as 

Exhibit D of Plaintiffs’ Motion for Partial Summary 

Judgment, Con Ed IV (Sep. 4, 2001)). Though the “whether” 

suggests uncertainty about making any final payment to 

parties situated as were Kalodner’s clients (and, evidently, the 

beneficiaries here), the letter also appears to reflect a 

straightforward matter of priorities—putting work on pending 

applications first. 

Indeed, it isn’t altogether clear that even the clients saw 

OHA’s position as seriously considering non-payment. Like 

many communications to the agency, the Con Ed IV

complaint seems driven more by plaintiffs’ unsuccessful 

efforts to get beyond the 20% limitation. Thus the complaint 

asserted that “Defendant Breznay continues (in decisions 

issued with regard to claimants being approved for refunds) to 

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refuse to commit DOE to any distribution . . . he has indicated 

that any such subsequent distribution will in any event be 

limited by employing in all distributions only 20% of the 

funds.” Complaint at 11, Con Ed IV (Mar. 15, 2001). 

On the fee claimants’ side we note that the outstanding 

potential claims against the fund seem modest in relation to 

the sums available. In other words, there was no risk that the 

remaining money in the 20% reserve would be fully or even 

largely depleted; the lack of money doesn’t seem to have 

warranted a determination as to “whether any further direct 

payments . . . [are] warranted.” In the government’s motion to 

dismiss, it described “several hundred refund cases pending” 

and then noted pending litigation that seemed to put at risk 

about $11.5 million (DOE noted four pending cases, 

indicating the amounts at stake in each of three suits, namely 

$930,063, $3,591,485, and $6,977,635). See Defendants’ 

Memorandum of Points and Authorities in Support of Their 

Motion to Dismiss or in the Alternative for Summary 

Judgment at 15 & n.4, Con Ed IV (Aug. 1, 2001). In addition, 

there seem to have been about $1 million outstanding in small 

claims. See 271 F. Supp. 2d at 107, 106 & n.7, 111 n.7. 

Other statements of the government also seem to reflect 

an idea that plaintiffs may have been due no more than what 

they had already received. At one point, for instance, DOE 

made a rather sweeping statement implying that it thought that 

a final distribution was entirely discretionary: 

[T]he fact that OHA has determined that plaintiffs were 

eligible to receive an initial distribution does not compel 

the conclusion that an additional payment is now 

required. Plaintiffs point to nothing in the record to 

support such a contention or to show that the funds 

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32

already paid [to] plaintiffs may not be sufficient to 

compensate them for any actual injuries suffered.

Defendants’ Reply in Support of Their Motion to Dismiss or 

in the Alternative for Summary Judgment at 2-3, Con Ed IV

(Oct. 1, 2001) (emphasis added). The district court flatly 

rejected this, finding that plaintiffs “are entitled to the 

complete distribution of the 20% reserve funds that the DOE 

created” and that “[t]he DOE cannot now suddenly change 

that commitment and the implementing regulations unless and 

until the 20% reserve proves to be more money than needed, 

which is clearly not the case.” 271 F. Supp. 2d at 110. 

But other statements cut against the fee claimants’ 

interpretation. DOE gave strong signs of moving 

independently towards making a final distribution. For 

example, DOE spoke of “a determination by DOE as to the 

distribution of the more than $262 million now in escrow in 

the U.S. Treasury” and that “Breznay . . . has submitted a 

memorandum [in December 2001] containing his 

recommendation as to such distribution to the Office of 

General Counsel of DOE, the contents of which are unknown 

to plaintiffs, but no action has been taken on such 

recommendation by the defendant Secretary of Energy.” Joint 

Memorandum of Status at 6-7, Con Ed IV (Mar. 14, 2002). 

Indeed, the Joint Memorandum’s summary of DOE’s 

positions seems to focus on (1) legalistic claims that plaintiffs 

lack a cause of action to compel immediate distribution and 

(2) computational issues on which plaintiffs ultimately lost. 

Id. at 4-6. See, e.g., Letter from Philip P. Kalodner to George 

B. Breznay, Director, OHA (Mar. 8, 1999) (filed as Exhibit D 

of Plaintiffs’ Motion for Partial Summary Judgment, Con Ed 

IV (Sep. 4, 2001)) (stating that “unless you advise me prior to 

March 31, 1999 that you will recognize my clients’ immediate 

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33

right to receive the balance of the $2800 per million gallons 

not yet paid them . . . I will institute a mandamus action to 

require OHA and DOE to make such a supplemental 

distribution to my clients” and threatening to request an 

“order[] to make an immediate distribution”). As the 

plaintiffs in Con Ed IV loudly proclaimed, they had peppered 

OHA with letters demanding attention and complaining of 

OHA’s failure to reply promptly. See Plaintiffs’ Statement of 

Points and Authorities in Opposition to Defendants’ Motion to 

Dismiss or in the Alternative for Summary Judgment and in 

Support of Plaintiffs’ Motion for Partial Summary Judgment 

at 29-31, Con Ed IV (Sep. 4, 2001). Conceivably even a very 

dutiful official might have come to perceive Kalodner as a 

nuisance, and such a perception might have colored his 

reactions and provoked a use of legalistic defenses, even if, as 

a substantive matter, the government fully intended to 

distribute the money in any case. 

Lastly, we are unpersuaded by the fee claimants’ 

suggestion that DOE’s Proposed Procedures decision itself 

establishes that Con Ed IV caused the final distribution. In the 

summary of the order DOE said that Con Ed IV “rendered a 

declaratory judgment that successful claimants are entitled to 

a distribution of the entire remaining amount of crude oil 

overcharges reserved for direct restitution, ‘insofar as 

practicable.’ OHA will therefore make a final distribution in 

the long-standing crude oil refund proceeding.” 68 Fed. Reg. 

at 64,098 (emphasis added). But in this very passage DOE 

refers to the amount as already “reserved for direct 

restitution,” id., arguably implying that it would have been 

distributed even without the declaratory judgment. 

In the end, our efforts to draw an inference of causation 

face major informational deficits. Notably, the record 

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contains allusions to the December 2001 OHA memorandum 

to DOE counsel proposing a disposition of the $270 million 

then on hand, see Reply Memorandum in Support of Motion 

for Award of Common Fund Fee at 16-17, Con Ed IV (June 

12, 2003), but not the memorandum itself. Clients assert that 

DOE has refused to release it. Id. The OHA memorandum 

itself, of course, may not be dispositive, as the ultimate 

decision may have lain with others, such as DOE counsel or 

perhaps the Secretary of Energy. Given the ambiguities in 

OHA’s formal public position, we are unable to reach a 

conclusion about causation and we agree with the clients and 

Kalodner that limited discovery may be useful to bring OHA’s 

position to light and thus afford them an adequate opportunity 

to establish that DOE would not have paid out the refunds had 

Con Ed IV never been brought.

B. The volumetric adjustment of Con Ed V 

While sovereign immunity bars the clients’ claim to a fee 

for the legal efforts involved in Con Ed V (for want of courtordered relief), that doctrine has no effect on Kalodner’s claim 

against the beneficiaries based on that case (claim 6). We 

thus must assess whether those efforts increased the common 

fund by certain adjustments in the “volumetric” amount, or 

simply “volumetric,” used to calculate refunds. The 

“volumetric” amount represents the total dollar amount 

remaining in the reserve (the numerator) divided by the total 

number of gallons purchased by all eligible claimants (the 

denominator). See Proposed Procedures, 68 Fed. Reg at 

64,100. Each claimant would then receive a refund of the 

volumetric times the number of gallons purchased by that 

claimant (effectively a weighted average of the reserve). 

Kalodner claims that Con Ed V increased the common fund 

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via two adjustments of the volumetric adopted in the Final 

Procedures. First, the Final Procedures included $9.5 million 

in escrow in the “Citronelle” account in the numerator, 

thereby increasing the total payout to all beneficiaries; the 

Proposed Procedures hadn’t mentioned this one way or the 

other. 

Second, the Final Procedures deferred calculation until 

verification of all claims (other than time-barred ones) was 

complete, thus excluding ineligible claims from the 

denominator (and thereby increasing the pay-out). Claims 

might ultimately be found ineligible for a number of reasons, 

including: (a) forfeiture by large refund recipients of future 

claims due to failure to request supplement refunds, (b) failure 

by small refund recipients to apply for a final distribution due 

in large part because no notice would be provided, (c) a 

finding that claimants are unqualified successors-in-interest, 

or (d) reduction of a prior award. See Philip P. Kalodner, 

Comments of Utilities, Transporters and Manufacturers at 7-

13 (Jan. 8, 2004); Douglas B. Mitchell, Comments Regarding 

the Proposed Procedures for Distribution of Remaining Crude 

Oil Overchange [sic] Refunds at 3 (Jan. 12, 2004). Here the 

difference between the Proposed and the Final Procedures

appears sharper than for the Citronelle account, as the 

Proposed Procedures seemed to include such claims in the 

denominator, whereas Kalodner’s and Mitchell’s proposed use 

of the (already planned) 180-day notice period could be 

expected to weed out the ineligibles. 

Kalodner claims that the two adjustments increased the 

common fund by $35 million. As both the Proposed and the 

Final Procedures made this round of distributions truly final, 

allocating any leftover sums to state and federal governments, 

see Proposed Procedures, 68 Fed. Reg. at 64,100; Final 

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Procedures, 69 Fed. Reg. at 29,301-02, the adjustments came 

at the expense of those governments. (It appears that 

Kalodner is including interest payments. These of course did 

increase the gross sum paid out—but only by an amount 

needed to compensate recipients for the delay that Kalodner 

himself sought.) 

The district court attributed this $35 million increase to 

Kalodner’s litigating efforts in Con Ed V and awarded a fee 

calculated as 30% of that supposed increase. We find nothing 

in the record supporting the idea that Con Ed V played any 

such role. 

The fact that the Con Ed V suit was dismissed for 

mootness is not in itself dispositive. It is true that common 

fund cases typically hinge on some form of court-ordered 

relief. See, e.g., Mills v. Electric Auto-Lite Co., 396 U.S. 375, 

393-94 (1970); National Treasury Employees Union v. Nixon, 

521 F.2d 317, 320-21 (D.C. Cir. 1975); see generally ALBA 

CONTE, I ATTORNEY FEE AWARDS § 2.1 at 41 (3d ed. 2005) 

(noting that “the unarticulated threshold requirement for 

application of the common-benefit doctrine is that the 

claimant must enjoy some form of success on the merits of the 

litigation”). But in this area some version of the catalyst 

theory applies, illustrated by decisions awarding common 

fund fees even where the claimants’ action was dismissed as 

moot. In Koppel v. Wien, 743 F.2d 129 (2d Cir. 1984), for 

instance, the Second Circuit reversed the district court’s denial 

of a common fund fee where the defendants, after the suit was 

filed, had voluntarily abandoned the project plaintiffs had 

sued to enjoin. Id. at 131-32, 135. See also Savoie v. 

Merchants Bank, 84 F.3d 52, 56-57 (2d Cir. 1996). Although 

in Koppel and Savoie the Second Circuit held that where a 

case is mooted the burden shifts to defendants to prove the 

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absence of causation, see 743 F.2d at 135; 84 F.3d at 57, in 

both cases the record appeared to offer no plausible 

explanation for the defendants’ action other than the lawsuit 

itself. In contrast, the Con Ed V litigation occurred in parallel 

with an entirely separate administrative proceeding conducted 

by DOE, in which Kalodner and others participated actively. 

As the district court said in finding the Con Ed V suit moot, 

“[t]he appropriate venue for consideration of the plaintiffs’ 

proposed distribution methodology was the administrative 

comment process, which they successfully utilized.” Mem. 

Op. at 3, Con Ed V (June 30, 2004). Kalodner doesn’t even 

appear to claim that his persuasive efforts before DOE, 

independent of some supposed judicial pressure induced by 

his civil litigation, could entitle him to fees. That implied 

concession appears in full accord with the law. See Knight, 

982 F.2d at 1576, 1581 (denying common fund fee for results 

of administrative action taken before any court order or indeed 

any filing of suit). 

Of the two changes supposedly wrought by Con Ed V, we 

consider first the idea of deferring the calculation until the end 

of a 180-day period (already provided for in the Proposed 

Procedures), so as to exclude unresolved claims from the 

denominator of the fraction governing the beneficiaries’ 

entitlements. The complaint in Con Ed V never requests any 

such deferral. It merely requests “an Order directing the 

defendants to distribute to plaintiffs and the members of the 

class an amount per million gallons of qualified product 

purchases determined pursuant to the formula set forth in 

paragraph 33 [of the complaint], some $650 to more than 

$700 per million gallons.” The $650-700 per million gallons 

is close to the range that DOE itself proposed in its Proposed 

Procedures. See 68 Fed. Reg. at 64,100 (proposing 

volumetric amount of $670 per million gallons). Given the 

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38

numbers in the complaint, we are baffled by Kalodner’s 

assertion on brief that Con Ed V increased the amount from 

$670 to $750-800 per million gallons. 

Worse for Kalodner, the complaint appears to demand a 

denominator consisting of “the sum of the volume of 

purchases by applicant end user claimants already found 

qualified for recovery and the volume of purchases by 

claimants whose claims have not as yet been processed.” 

Complaint at 11, Con Ed V (Sep. 25, 2003) (emphasis added). 

It thus implicitly urged inclusion of those very claims for 

which Kalodner, in his administrative comment, successfully 

advocated exclusion. The relationship completely contradicts 

Kalodner’s claims for Con Ed V. 

In fact, the first time that Kalodner’s clients ever 

appeared to raise the deferral issue in Con Ed V was in their 

motion for summary judgment, filed with the court nearly four 

months after the complaint and eight days after Kalodner filed 

comments in the administrative proceeding. See Plaintiffs’ 

Memorandum in Opposition to Defendants’ Motion to 

Dismiss and Statement of Points and Authorities in Support of 

Plaintiffs’ Motion for Summary Judgment at 13-14, Con Ed V

(Jan. 16, 2004). See also Plaintiffs’ Memorandum in Reply to 

Defendants’ Opposition to Plaintiffs’ Motion for Summary 

Judgment at 10, Con Ed V (Mar. 18, 2004) (noting that 

deferral was raised in the “Initial Memorandum,” i.e., the 

motion for summary judgment, see id. at 3-4, but not noting 

the complaint); Defendants’ Memorandum of Points and 

Authorities in Reply to Plaintiffs’ Opposition to Defendants’ 

Motion to Dismiss and in Opposition to Plaintiffs’ Motion for 

Summary Judgment at 2, Con Ed V (Feb. 20, 2004) (correctly 

noting that “[n]one of these allegations [about deferral] are 

raised in plaintiffs’ complaint in this matter which simply 

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39

sought the distribution the agency has stated it will 

undertake.”). 

Further weakening the causal link is the fact that not only 

Kalodner, but another lawyer, Douglas B. Mitchell, acting on 

behalf of 104 individual claimants and two filing services, 

filed a comment suggesting deferral. See Douglas B. 

Mitchell, Comments Regarding the Proposed Procedures for 

Distribution of Remaining Crude Oil Overchange [sic] 

Refunds at 2-3 (Jan. 12, 2004) (“Mitchell Comments”) 

(suggesting deferral until verification is complete, after a 180-

day last-chance notice period); see also Declaration of George 

B. Breznay, Con Ed V (Feb. 9, 2005). Even where court 

action is the source of the relief sought, the fact that parties 

with interests in the common fund were separately represented 

may militate against the award of a common fund fee. See, 

e.g., United States v. Tobias, 935 F.2d 666, 668 (4th Cir. 

1991); Vincent v. Hughes Air West, Inc., 557 F.2d 759, 771 

(9th Cir. 1977); see generally 20 AM. JUR. 2D COSTS § 66. In 

any event, as we noted earlier, Kalodner appears to concede 

that triumphs at the agency level, unless shown to have been 

caused by some sort of actual or realistically threatened 

judicial action, give rise to no common fund entitlement. 

Unlike its treatment of deferral, the complaint at least 

took the same position on the $9.5 million Citronelle account 

that Kalodner did in the administrative proceeding. But there 

is no evidence that the Con Ed V filing caused its inclusion in 

the numerator in the Final Procedures. As with deferral, 

Mitchell’s comment also advocated the inclusion of the 

Citronelle account. See Mitchell Comments at 2. More 

important, inclusion of the Citronelle refund appears to have 

already been contemplated by DOE. In its reply to the 

comments, DOE expressly stated, “It is already DOE’s 

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practice that ‘returned funds’ . . . are deposited.” 69 Fed. Reg. 

at 29,301. Further, the settlement under which the Citronelle 

funds were recouped (to which Kalodner was a signatory) 

itself required that those funds be paid to the other crude oil 

end users. See Declaration of George B. Breznay at ¶ 16 

(February 9, 2005). Kalodner offers nothing other than a 

conclusory assertion to contradict the reasoning behind 

Breznay’s explanation of why “those funds would have been 

included in the final crude oil distribution, regardless of any 

comment by Mr. Kalodner.” Id. See also Brief for the 

Appellees/Cross-Appellants at 33 n.6. 

Lastly, we also find that there is no evidence that Con Ed 

V contributed to the probability of the final distribution vel 

non. It is undisputed that in a series of telephone 

conversations with Kalodner from August 25 to September 

22, 2003, before the September 25, 2003 filing of the 

Con Ed V complaint, DOE Assistant General Counsel Skubel 

indicated that OHA was proceeding with plans for a final 

distribution. Nonetheless, Kalodner’s clients proceeded to file 

their complaint. Moreover, that filing occurred only some 20 

weeks after Con Ed IV’s declaratory judgment, which itself 

specifically left timing to OHA’s discretion. See 271 F. Supp. 

2d at 111. The timing and circumstances suggest that Con Ed 

V did nothing more than exhibit once again Kalodner’s 

trigger-happiness (and perhaps that of his clients). 

Notwithstanding the district court’s language, there is simply 

no evidence in the record that Con Ed V in any way “caused” 

the distribution itself. 

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* * * 

To recap by reference to the claims as enumerated in 

Table 1: the December 4, 2003 order may preclude the 

clients’ fee claim against the government for Con Ed IV

(claim 1). If not, the claim turns on the causal effect (if any) 

of Con Ed IV. The clients’ claim against the government for 

Con Ed V (claim 2) and each of the claims by Kalodner 

against the government (claims 3 & 4) are barred by sovereign 

immunity. Lastly, Kalodner’s claim against the beneficiaries 

for Con Ed IV (claim 5), if not precluded, turns on the causal 

effect of Con Ed IV, while that for Con Ed V (claim 6) fails 

for lack of causation. 

We repeat that on remand the preclusion arguments are 

not themselves precluded. To the extent that claims (not 

already defeated by sovereign immunity) survive any 

reconsideration of preclusion, the court should conduct a 

limited hearing or discovery for purposes of determining the 

causal effect of Con Ed IV. See Copeland v. Marshall, 641 

F.2d 880, 905 n.57 (D.C. Cir. 1980). 

If Kalodner or the clients get past the basic causation 

hurdle, fee computation may be quite complex. In 

Democratic Central Committee of D.C. v. WMATC, 38 F.3d 

603, 606 (D.C. Cir. 1994), we noted that payment should be 

allowed “only as a reasonable proportion of the amount 

actually collected . . . for which petitioners’ attorneys were 

responsible,” i.e., proportional to the degree to which the civil 

litigation enhanced the probability of pay-out to the 

beneficiaries in question and the amount distributed. 

Presumably the aim should be to assure that Kalodner’s total 

recovery would approximate what a single claimant to the 

common fund would have negotiated with him absent the 

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42

transactions costs due to free-rider temptations and sheer 

numbers. Thus, if the probable effect of the litigation was to 

raise the chances of recovery from, say, 95% to 100%, we 

suppose that this relationship would be reflected in the fee. 

We note also that Kalodner originally sought a 5% common 

fund fee in Con Ed IV, whereas he asks for 10% here. 

Compare Motion for Award of Common Fund Fee at 3, Con 

Ed IV (May 23, 2003) (requesting “5% of the amount to be 

distributed to all claimants”); with Motion of Award of 

Common Fund Fee at 1, Con Ed V (July 12, 2004) (requesting 

10% fee); Complaint at 2, Kalodner-Abraham (Jan. 7, 2005) 

(requesting 10% fee); First Amended Complaint at 18, 

Kalodner-Public Service (Mar. 8, 2004) (requesting 10% fee). 

If the 5% represents Kalodner’s own theory of the marginal 

value of his contribution in Con Ed IV, whereas the 10% 

request here represents his guess for efforts both in Con Ed IV

and Con Ed V, then our denial of his fee request in Con Ed V

would have implications for Kalodner’s maximum claim. 

We affirm the dismissal of Kalodner’s claims against the 

government for his efforts in both Con Ed IV and Con Ed V

and of his claim against the beneficiaries for his work in 

Con Ed V (claims 3, 4 & 6). We reverse the grant of the 

clients’ claim against the government relating to Con Ed V

(claim 2). This leaves two claims— the clients’ claim against 

the government, and Kalodner’s claim against the 

beneficiaries—both for Kalodner’s efforts in Con Ed IV

(claims 1 & 5). As to these, we reverse the judgments 

denying recovery and remand for further proceedings 

consistent with this opinion. 

So ordered. 

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