# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

__ __ __ __ __ __ __ __ __ __ __ __ __ _
No. 1 8- 23 43

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St efan A. Toli n

ll ll ll ll ll ll ll ll ll ll l Peti ti on er

v.

Co m m is si on er o f In te rn al Rev en ue

ll ll ll ll ll ll ll ll ll ll l Resp on de nt

__ __ __ __ __ __ App eal fro m

The Un it ed Sta te s Tax Co ur t

__ __ __ __ __ __
Su bm it te d: Jan ua ry

15 , 20 19 Fi le d: Ju ly 3, 20 19

__ __ __ __ __ __ Befo re SM ITH, Chi ef J ud ge , COLLOTO N and ERICKSON, Ci rcu it Ju dg es

.

__ __ __ __ __ __

SMI TH, Chi ef J ud ge

.

Tax pa y er St efan Tol in pr ev ai le d in a de fic ie nc y pr oc eed in g be fo re th e Uni te d
St at es Tax Co ur t. He th en so ug ht an award of at to rn ey ’s fees

. The ta x co ur t gr an te d 1
th e award
, bu t it de ni ed Tol in ’s req ue st fo r a n e n h a n c e men t to th e ho ur ly fee rat e. Tol in rece iv ed an award of at to rn ey ’s fees at th e st at ut or y rat e of $1 80 pe r ho ur

. Se e

The Hon or ab le Jo se ph H. Gale, Un it ed Sta te s Tax Co ur t J ud ge

. 126 U.S.C. § 74 30

. The ta x co ur t al so red uc ed th e nu m be r of co m

pe ns ab le ho ur s. On

ap pe al
, Tol in cl ai ms t h e ta x co ur t erre d by red uc in g th e ho ur s cl ai m ed an d by cal cu la ti ng th e award us in g t he st at ut or y rat e. W e aff

irm.

I. Bac kg ro un d Tol in
, a Mi nn es ot a at to rn ey , own ed a th or ou gh br ed ho rs e raci ng an d br eed in g bu si ne ss

. Tol in ’s bu si ne ss pr im ari ly so l d b reed in g rig ht s fo r hi s pr iz ed st al li on , Ch oo si ng Ch oi ce. Tho ug h he li ve d in Mi nn es ot a, Tol in bo ard ed Ch oo si ng Ch oi ce in
Lou is ia na un de r th e care of th or ou gh br ed in du st ry pr of es si on a ls

. He ge ne ral ly

co nd uc te d hi s bu si ne ss vi a te le ph on e, bu t he als o pre pa red m ark et in g m at eri al s and

m ad e se ve ral tri ps to Lou is ia na each y ear to pr om ot e th e st al li on am on g br eed ers th ere.

In 20 08
, the Co m

m iss ion er of In te rn al Re venu e (“ Co m m is si on er”) is su ed Tol in

a n ot ic e o f de fic ie nc y

for hi s 2 00 2, 2 00 3, an d 20 04 fed eral in co m e ta x re tu rn s. Th e

no ti ce in fo rm ed hi m th at th e ne t lo ss es he ha d cl ai m ed fo r hi s th or ou gh br ed bu si ne ss du rin g th os e y ears were di sa ll owe d as “ pa ss i v e act iv it y lo ss es ” un de r 26 U.S.C. § 46 9. Sect io n 46 9 pr oh ib it s ta xp ay ers fro m of fs et ti ng th ei r act iv e in co m e wit h lo ss es in cu rred th ro ug h bu si ne ss act iv it ie s “ in whi ch th e ta xp a ye r d o e s no t

m at eri al ly pa rti ci pa te

. ” Id

. § 46 9( c)(1 )(B)

. Afte r rece iv in g th e no ti ce, Tol in hi red Ri ch ard Crai go , a Cal ifo rn ia at t o r n e y w h o sp eci al iz es in ta x is su es co m m on to th e th or ou gh br ed ho rs e in du st ry , to pe ti ti on th e ta x c ou rt f or red et erm in at io n.

To av oi d th e ta x de fic ie nc y , Tol in ne ed ed to de m on st rat e th at he m et an y on e of s e v e n a va il ab le te st s to qu al ify hi s co nd uc t as “ m at eri al pa rti ci pa ti on ” in th e th or ou gh br ed act iv it y

. Se e 26 C.F.R. § 1.4 69 -5 T(a). T he fir st of th es e te st s re qu ire s sh owi ng th at “ [t]he in di vi du a l p a rti ci pa te s in th e act iv it y fo r m or e th an 50 0 ho ur s du rin g” th e ta xa bl e y ear. Id

. § 1.4 69 -5 T(a)(1 ). Cu m

ul at iv el y , Tol in es ti m at ed th at he ha d pa rti ci pa te d in th e t h o r ou gh br ed act iv it y fo r 89 1 ho ur s in 20 02
, 86 2 ho ur s in
20 03
, an d 93 7.5 ho ur s in 20 04

. He co rro bo rat ed th es e es ti m at es wit h ph on e reco rd s,

-2

-wit ne ss te st im on y , an d ot he r m at eri al s. The cas e pr oc eed ed to tri al
, an d th e ta x co ur t

ul ti m at el y de te rm in ed th at Tol in pe rfo rm ed m or e th an 50 0 ho ur s of qu al ifyin g wor k du rin g each of th e y ears in qu es ti on

. The co ur t fo un d Tol in ’s act iv it ie s m et th e

“ m at eri al pa rti ci pa ti on ” te st . C on se qu en tl y , h e was en ti tl e d t o cl ai m de du ct io ns fo r th e lo ss es he ha d in cu rred th ro ug h th e bu si ne ss an d av oi d th e de fic ie nc y cl ai m ed by th e Co m m is si on er.

Fo ll owi ng hi s tri al su cces s, Tol in pe ti ti on ed th e co ur t fo r reas on ab le li ti ga ti on

co st s an d at to rn ey ’s fees al lo wab le un de r 26 U.S.C. § 74 30

. He so ug ht at to rn ey ’s fees

to ta li ng $2 56 ,92 0, ba se d on 64 2.3 ho ur s of wor k be twee n May 1, 20 09
, an d Ja nu ary 31
, 20 11
, cal cu la te d at a rat e of $4 00 pe r ho ur

. The go ve rn m en t arg ue d th at Crai go ’s ti m e ex pe nd it ur e an d rat e were no t reas on ab le gi ve n th e na tu re of th e cas e an d th at § 7 43 0 l im it s t he ho ur ly rate fo r at to rn ey ’s fees to $1 80 pe r ho ur

.

The ta x co ur t co nc lu de d th at Tol in was a “ pr ev ai li ng pa rty” en ti tl ed to reco ve r fees in cu rred aft er Decem be r 1, 20 0 9

— t h e p oi nt at whi ch th e ta x co ur t de te rm in ed th e go ve rn m en t’s li ti ga ti on po si ti on was no lo ng er “ su bs ta nt ia ll y jus ti fie d.” Se e 26 U.S.C. § 74 30 (c)( 4)

. The co ur t di vi de d th e rel ev an t ho ur s fo r se pa rat e co ns id erat io n: ho ur s cl ai m ed du rin g pr et ria l an d tri al po rti on s of th e pr oc eed in g (1 53 .7), an d ho ur s cl ai m ed fo r po st -tr ia l wor k (3 00 .1). The ta x co ur t red uc ed th e pr et ria l an d tri al po rti on of th e reco ve ry to 11 6 ho ur s. Tol in do es no t co nt es t th a t po rti on of th e ru li ng on
ap pe al

.

The n th e ta x co ur t an al y zed th e cl ai m ed po st -tr ia l ho ur s by di vi di ng th em in to
pe rio ds du rin g whi ch th e po st -tr ia l op en in g br ie f an d rep ly br ie f were pr ep ared

. Fi rs t, Crai go reco rd ed 19 6.3 ho ur s in hi s ti m es he et s fro m Aug us t 21 th ro ug h Decem be r 8,
20 10 . De sc rib in g th e ti m es he e t s a s “ sk el et al ,” th e ta x co ur t de te rm in ed th at Crai go
sp en t 17 6.3 of th os e ho ur s pr ep ari n g th e po st -tr ia l op en in g br ie f. To li n v. Co mm’r
, 11 5 T.C.M. (CCH) 11 19
, 20 18 W L 13 91 81 5, at *1 5 (2 01 8)

. The rem ai ni ng 20 ho ur s

were sp en t id en ti fy in g an d co rrec ti ng an erro r in a tri al ex hi bi t. The ta x co ur t

-3

-de te rm in ed th at th e ho ur s sp en t on co rrec ti ng th e ex hi bi t were reas on ab ly ex pe nd ed
,

bu t i t t oo k i ss ue wit h s om e o f th e rem ai ni ng 17 6.3 ho ur s fo r br ie fin g.

The op en in g br ie f, th e ta x co ur t no te d, was on ly 3 6 p ag es lo ng an d “ was de vo te d to de m on st rat in g th at [Tol in ] h ad sa ti sf ie d th ree of th e reg ul at or y te st s fo r

m at eri al pa rti ci pa ti on .” Id

. at *1 6. The co ur t’s rev ie w of Crai go ’s ti m es he et s sh owe d

an “ ex tra or d i n ary nu m

be r of te le ph on e co nf

eren ces be twee n” Tol in an d Crai go du rin g th e br ie fin g pe rio d, le ad in g th e ta x co ur t to “ co nc lu de th at th e

co ns ul ta ti on

. . . cau se d th e pr ep arat io n ti m e to be co m e un reas on ab le in rel at io n to th e
ta sk a t h a n d .” Id

. The co ur t no te d th at a “ ha ll m ark ” of Tol in ’s act iv it y in hi s th or ou gh br ed bu si ne ss was m ak in g num er ous da ily phon e ca lls to busi ne ss as so ci at es ,
an d it su rm is ed th at hi s “ pe nc ha nt for in ces sa nt tel ep ho ni ng an d m ic ro m an ag em en t

ca r rie d ov er in to hi s pa rti ci pa ti on in th e br ie fin g of th e de fic ie nc y cas e.” Id

. Co ns eq ue nt ly, th e ta x co ur t tre at ed on ly on e-h al f of th e 17 6.3 op en in g br ie f ho ur s as ha vi ng be en reas on ab ly ex pe nd ed

. The ta x co ur t si m il arl y red uc ed by ha lf th e 10 3.8 ho ur s t ha t Cr ai go su bm it te d fo r wor k o n t he rep ly brie f, ci ti ng th e sa m e rea so ns

.

Last ly, th e ta x co ur t li m it ed Tol in ’s reco ve rab le at to rn ey ’s f e e s r a te to th e
st at ut or y m ax im

um . Th e ta x co ur t ack no wled ge d th at an en ha nc ed rat e is av ai la bl e

u n d er § 74 30 (c)( 1) (B)( ii i) whe n jus ti fie d by th e pr es en ce of so m e “ sp eci al fa c t o r

. ”
Bu t it co nc lu de d th at no th in g m or e th an ge ne ral iz ed ta x an d li ti ga ti on ex pe rie nc e was

ne ed ed to pr ov e th e ex te nt of Tol in ’s pa rti ci pa ti on in th e th or ou gh br ed act iv it y

. The

ta x c ou rt a ward ed fees fo r 16 0.1 ho ur s of po st -tr ia l work at th e st at ut or y rat e. Tol in fil ed a m ot io n fo r rec on si de rat io n, wh ic h t he tax co ur t d en ie d.

II. Dis cu ss io n On ap pe al
, Tol in arg ue s th at th e ta x co ur t erre d by de cl in in g t o f i nd th e
pr es en c e o f a sp eci al fact or warra nt in g an en ha nc ed fee rat e an d by red uc in g th e

nu m be r of ho ur s w o r k e d du rin g th e po st -tr ia l pr oc es s. W e rev ie w th e ta x co ur t’s

-4

-de te rm in at io n of at to rn ey ’s fe e s u n d e r § 74 30 fo r an ab us e of di sc ret io n. Uni te d

St at es v. Bis be e , 24 5 F .3d 10 01 , 10 07 (8t h C ir. 2 00 1)

.

A. Pres en ce o

f “S pe ci al Fact or ”
A “ pr ev ai li ng pa r t y ” in a de fic ie nc y cas e is en ti tl ed to reco ve r reas on ab le

at to rn ey ’s fees

. 26 U.S.C. § 74 30

. Sect io n 74 30 (c)( 1) (B)( ii i) pr ov id es a st at ut or y cap

on at to rn ey ’s fees “ un le ss th e co ur t de t e r mine s th at a sp eci al fact or , su ch as th e li m it ed av ai l ab il it y of qu al ifi ed at to rn ey s fo r su ch pr oc eed in g, th e di ffi cu lt y of th e is su es pr es en te d in th e cas e, or th e lo cal av ai la bi li ty of ta x ex pe rti se , jus ti fie s a hi gh er
rat e. ” G en eral kn owl ed ge an d li ti ga ti on ab il it ie s are no t en ou gh to jus ti fy th e

en ha nc em en t; th e “ qu al ifi ed at to rn ey ” m us t po ss es s “ so m e di st in ct iv e kn owl ed ge or
sp eci al iz ed sk il l ne ed fu l fo r th e li t i g a t i on in qu es ti on .” Pier ce v. Und er wo od
, 48 7 U.S. 55 2, 57 2 (1 98 8) (d is cu ss in g th e sp eci a l fact or de te rm in at io n in co nt ex t of th e Equ al A c c es s to Ju st ic e Act (EAJA), whi ch co nt ai ns a ne arl y id en ti cal fee li m it in g
pr ov is io n)

.

Tol in as se rts th at C r a i g o po ss es se d th ree sp eci al fact or s th at th e ta x co ur t ig no red

. The fir st was Crai go ’s sp eci al ex pe rti se in th e eq ui ne in du st ry

. The se co nd

was Crai go ’s 10 0 per cen t su cces s rate on th e on e di sp ut ed tri al is su e. The th ird was

a n “agg reg at io n” of hi s eq ui ne ex pe rti se an d tri al su cces s fact or s wit h hi s g e n e r a l le ga l ex pe rie nc e an d hi s su bs ta nt ia l ex pe rie nc e wit h ta x la w. Tol in ad m it s he ha s no t fo un d cas e la w to su pp or t hi s ag gr eg at io n th eo ry , bu t he su bm it s th at it is a pl au si bl e

res ul t t ha t h as no t yet be en au th or it at iv el y di sa ll owe d.

Fi rs t, Tol in ci te s an ou t-o f-ci rcu it cas e fo r th e pr op os it io n th at hi s eq ui ne k n o w l e dg e sh ou ld qu al ify as a sp eci al fact or

. Se e Bod e v. Uni te d St at es , 91 9 F

. 2 d
10 44 (5 th Ci r. 19 90 ). In Bod e , th e co ur t ack no wled ge d th at th e m eri ts of th at cas e ha d

po ss ib ly req ui red an at to rn ey ’s sp eci al kn owl ed ge ab ou t qu art erh or se s, an d it st at ed th at su ch ex pe rti se “ m ay well ha ve qu al ifi ed as a sp eci al fact or ,” wit ho ut reac hi ng th e is su e of whe th er it qu al ifi ed in th at cas e. Id

. at 10 51

. Here, th e ta x co ur t

-5

-ack no wled ge d Bod e ’s di ct a, bu t it co nc lu de d th at Crai go ’s sp eci al iz ed kn owl ed ge of

th e h or se in du st ry

was n ot “ ne ed fu l fo r th e li ti ga ti on in qu es ti on .” Se e Und er wo od
, 48 7 U.S. at 5 7 2

. To pr ev ai l in hi s cas e, Tol in on ly ha d to de sc rib e th e na tu re an d

ex te nt of hi s pa rti ci pa ti on in hi s th or ou gh br ed bu si ne ss . T h e ta x co ur t di d no t ha ve

“ to m ak e an y de te rm in at io ns reg ard in g br eed i n g r i g ht s, st ud or sa le co nt ract s, di st rib ut io n of race win ni ng s, o r a n y o th er eq ui ne -rel at ed is su es ,” so Crai go ’s

sp eci al iz ed kn owl ed ge di d n ot si gn ifi can tl y co nt rib ut e to th e li ti ga ti on

. To li n , 20 18
W L 13 91 81 5, at *1 6.

Tol in arg ue s th at kn owl ed ge of in du st ry pr act ic es an d st an da rd s is in te gr al to
ap pl y in g th e co m

pl ex ru le s th at co m

pr is e th is area of th e ta x la w. B u t an at to rn ey wit ho ut Crai go ’s eq ui ne ex pe rti se co ul d st il l ex pl ai n th e na tu re of Tol in ’s wor k an d why it qu al ifi ed un de r an y on e of th e se ve n “ m at eri al pa rti ci pa ti on ” te st s ou tl in ed in 2
th e reg ul at io ns

. The ta x co ur t di d no t ab us e it s di sc ret io n in de te rm in in g th at Crai go ’s

sp eci al iz ed kn owl ed ge di d n o t warra nt an up ward de pa rtu re fro m th e st at ut or y fee

rat e.

Tol in al so ci te s Bod e to su pp or t fin di ng th e ex is te nc e of a sp eci al fact or ba se d

on hi s “ ex cep ti on al res ul ts ” at tri al

. 91 9 F

. 2 d a t 10 51 –5 2 (“ To th e ex te nt th at

ex cep ti on al res ul ts can be a sp eci al fact or

. . . th e di st ric t co ur t co ul d fin d

. . . th at th e

res ul ts ob ta in ed in th is cas e m eet th at de fin it io n.” ). Bu t acco rd in g to th e Co de of Fed eral Reg ul at io ns , “ [t]he un de si rab il it y of th e cas e, th e wor k an d th e ab il it y of

co un se l, th e re su lt

s ob ta in ed
, an d cu st om ary fees an d award s in ot he r cas es

. . . do no t

co ns ti tu te sp eci al fact or s” th at wou ld warra nt m or e th an th e st at ut or y rat e. 26 C.F.R.

Tho ug h th e ta x c ou rt o nl y an al y zed Tol in ’s par ti ci pa ti on un de r th e fir st te st , 2 Tol in arg ue d be lo w th at he m et th e req ui rem en ts of at le as t th ree: pa rti ci pa ti on in th e act iv it y for m or e th an 50 0 h ou rs du rin g t he y ear in qu es ti on ; pa rti ci pa ti on fo r m or e th an 10 0 ho ur s du rin g th e ye a r whi le hi s pa rti ci pa ti on was no t le ss th an th at of an y ot he r in di vi du al fo r th at y ear; an d pa rti ci pa ti on “o n a reg ul ar, co nt in uo us , an d

su bs ta nt ia l b as is du rin g [t he ] y ear.” Se e 26 C.F.R. § 1.4 69 –5 T(a)(7 ).

-6

-§ 3 01 .74 30 -4 (b )(3 )(i ii )(B) (em ph as is ad de d)

. W e ag ree wit h th e ta x co ur t th at th i s

was no t a pa rti cu la rly co m pl ex or sp eci al iz ed tax cas e. Onl y on e is su e wen t to tri al

. The cas e tu rn e d o n th e vo lu m e an d de ta il of Tol in ’s ph on e cal l reco rd s an d hi s bu si ne ss tri ps to Lou is ia na

. The se fact s al on e la rg el y co nv in ced th e ta x co ur t th at Tol in m at eri al ly pa rti ci pa te d in th e bu si ne ss

. On th is reco rd
, we co nc lu de Tol in ha s

no t es ta bl is he d t he pre se nc e o f a s pe ci al fact or as c on te m pl at ed by § 74 30

.

Tol in ’s f in al arg um en t at te m

pt s to ag gr eg at e th es e un pe rs ua si ve fact or s wit h Crai go ’s le ga l ex pe rie nc e a n d t a x ex pe rti se

. W e fin d it un av ai li ng

. Tho ug h th e bu si ne ss co nt ex t m ay ha ve be en no ve l, th is was , n o n e t h el es s, a st an da rd ta x cas e

ev al ua ti ng bu si ne ss pa rti ci pa ti on

. The ta x co ur t di d no t ab u s e it s di sc ret io n by de te rm in in g t ha t a h ig he r rat e was un warra nt ed

.

B. Red uc ti on of Reas on ab le Hou rs

“ The pa rty se ek in g an award of fees sh ou ld su bm it ev id e n c e s u p po rti ng th e ho ur s wor ke d an d rat es cl ai m ed

. W he re th e do cu m en ta ti on of ho ur s is in ad eq ua te , th e [tr ia l] co ur t m ay red uc e th e award acco rd in gl y .” Hen sl ey v. Ecker ha rt , 46 1 U.S. 42 4,
43 3 (1 98 3) . The co ur t s ho ul d li ke wis e ex cl ud e an y “ ho ur s th at were no t reas on ab ly

ex pe nd ed ,” su ch as th os e “ th at are ex ces si ve , red un da nt , or ot he rwis e un ne ces sa ry .” Id . at 4 34 (in te rn al qu ot at io n o m it te d)

.

In i t s r e as on ab le ho ur s an al y si s, th e ta x co ur t fir st di sc us se d de fic ie nc ie s in Crai go ’s su bm it te d t im ek eep in g re co rd s:

-7

-The en tri es do no t

. . . br eak do wn th e ti m e ex pe n d e d o n a gi ve n ta sk

.

Co ns eq ue nt ly, we are un ab le to de te rm in e th e nu m be r of ho u r s th at pe ti ti on er’s co un se l ex pe nd ed fo r va rio us ta sk s. Se e Huf f m a n v. Co mmis si on er , T.C. Mem o. 19 94 –7 3, 19 94 W L 52 36 8, at *1

. Thi s has

m ad e th e Co ur t ’s t a sk of de te rm in in g th e reas on ab le ne ss of th e fees di ffi cu lt in so m e in st an ces

. Si nc e “ [t]he fee ap pl ic an t ha s th e bu rd en of pr od uc in g sa ti sf

act or y ev id en ce as to th e nu m be r of h o u r s reas on ab ly sp en t on t h e c a s e,” id

. , an y es ti m at es we ha ve m ad e th at wor k to pe ti ti on er’s d et riment a re p ro pe rly att rib ut ed to a fai lu re o f pr oo f.

To li n , 20 18 W L 13 91 81 5, at *1 2. Bec au se th e en tri es do no t br eak do wn th e ti m e, th e
pa rti es de ba te ho w m an y of th e su bm it te d ho ur s were act ua ll y sp en t on th e nu m ero us ph on e cal ls be twee n Tol in an d Crai go

. Bu t, reg ard le ss of th e nu m be r of ho ur s act ua ll y
at is su e, th e ta x co ur t di sc us se d th e vo lu m e of cal ls an d ch arac te riz ed th em as “ a ke y

cau se of t he ex ces si ve ho ur s ex pe nd ed ” o n t he bri efi ng

. Id . at * 16

.

Tol in co nt en ds th at th e ta x co ur t’s so le rat io na le fo r red uc in g th e ho ur s was th e

nu m be r of ph on e cal ls

. W e di sa gr ee. In fact
, th e ta x co ur t fo un d th at 17 6.3 ho ur s was

“ ex ces si ve ” in li gh t of th e sh or t le ng th an d rel at iv el y no n- co m pl ex co nt en t of th e
op en in g br ie f

. I d

. “ Fo r th e sa m e reas on s,” it fo un d th at 10 3.8 ho ur s was an

un reas on ab le nu m

be r of ho ur s t o s pe nd pre pa rin g t he rep ly brie f. Id

.

W he n de te rm in in g th e nu m be r of ho ur s reas on ab ly ex pe nd e d
, “ [t]ri al jud ge s sh ou ld weig h th e ho ur s c l a i m ed ag ai ns t th ei r own kn owl ed ge , ex pe rie nc e, an d

e xp ert is e of th e ti m e req ui red to co m pl et e si m il ar act iv it ie s.” Par is Sc h. Dis t

. v

. H a r t e r , 89 4 F.3 d 88 5, 88 9 (8 th Ci r. 20 18 ) (cl ean ed up ). A tri al co ur t “ is in a m uc h be tt er po si ti on to m ak e th is ap pr ai sa l th an is an ap pe ll a t e c o u r t.” Id

. (in te rn al

qu ot at io n om it te d)

. Here, th e ta x co ur t ha s a “ su pe rio r un de rs ta nd in g” of th e rel ev an t li ti ga ti on an d th e un de rlyin g f a c t s affe ct in g th e reas on ab le ne ss of a fee award

. Se e Hen sl ey , 46 1 U.S. at 43 7.

-8

-Tha t sa id
, th is co u r t ha s si m il arl y red uc ed a § 74 30 fee award fo r ex ces si ve

ho ur s su bm it te d. In Mil le r v. Ala mo , ta xp ay ers ’ at to rn ey s su bm it te d a to ta l 27 4 ho ur s
sp en t on pr ep ari ng an ap pe al

. 98 3 F.2 d 85 6, 86 1 (8 th Ci r. 19 93 ). Bec au se th e is su es ha d be en res earc he d be fo reh an d to pr ep are f o r t h e un de rlyin g tri al
, we red uc ed an

“ ex ces si ve ” 11 8 ho ur s— sp en t on res earc hi ng , dr aft in g, pr ep ari ng , an d rev ie win g th e
ap pe ll at e br ie f—t o 60 ho ur s. Id

. W e al so red uc ed th e “ un us u al ly hi gh nu m be r of ho ur s” sp en t on , in te r al ia , at to rn ey co nf eren ces an d te le ph on e cal ls
, fro m 95 ho ur s
to 60 ho ur s. Id

.

In th is cas e, Crai go ’s su bm it te d ho ur s am ou nt ed to ne arl y fo ur an d a ha lf week s of fu ll -ti m e wor k on th e po st -tr ia l op en in g br ie f, an d ov er two an d a ha lf week s of

wor k on th e rep ly br ie f. The ta x co ur t de te rm in ed th at th es e ho ur s were un reas on ab ly

ex pe nd ed in rel at io n to th e ta sk at ha nd
, in st ead gr an ti ng 88 .2 ho ur s and 51 .9 h ou rs fo r each
, res pe ct iv el y

. W e ha ve no reas on to se co nd -g ue ss th e ta x co ur t’s as se ss m en t,

es pe ci al ly in l ig ht of o ur

own cal cu la ti on s i n Ala mo

.

Fu rth er, th e go ve rn m en t’s in it ia l no ti ce of de fic ie nc y so ug ht ab ou t $6 0,0 00 in ad di ti on al ta xe s and pe na lt ie s fro m Tol in

. Tol in ’s req ue st ed at to rn ey ’s fees
, jus t for th e 28 0.1 ho ur s su bm it te d fo r po st -tr ia l br ie fin g, wou ld ha ve ex ceed ed $5 0,0 00
, ev en
at th e lo wer st at ut or y rat e of $1 80 pe r ho ur

. “ ‘[B] il li ng jud gm en t’ is an im p or ta nt

co m po ne nt in fee se tt in g.

. . . H o u r s t h a t are no t pr op erl y bi ll ed to on e’s cl ie nt al so

are no t pro pe rly bi ll ed to on e’s ad ver sa ry pu rs ua nt to st at ut or y au th or it y .” Hen sl ey , 46 1 U.S. at 43 4 (in te rn al qu ot at io n om it te d)

. The ta x co ur t di d no t ab us e it s di sc ret io n by det erm in in g t ha t t he req ue st ed fee awa rd was u nr eas on ab le

.

III. Co nc lu si on W e aff irm th e g ran t o f at to rn ey ’s fees as d et erm in ed by the tax co ur t.

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