NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION File Na me: 10a0590n.06 Nos. 08-5216, 08-5296, 08- 5390, 08-5510 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT

UNI TED STATES OF AMERI CA, ex rel, Bring ing This Action on Be half of T he United States of Americ a; DENN I S L EFA N, B ring ing T his Action on Be half of T he United States of A merica ; J ASON GI BSON, B ring ing T his Action on Be half of T he U n i t e d S t a t e s o f A m e r i c a ; H A R O L D D I L B A C K ; J. KEI TH L AX; L . E L S W OR TH C RA NOR ; J EFF ASHBY ; CONNI E SUE ORTEN, Plaintiffs and Relators-A

ppellees Cr os s- Ap pe lla

nts , HEL MER, MARTI

NS, RI CE & POPHAM CO., L .P.A., Ap pe lla

nt,
v. GENERAL

EL ECTRI C COMP ANY; PRECI SI ON CASTPAR TS CORP ORATI ON; AL COA, I NC., De fe nd ants -A

pp e lla nts Cr os s- Ap pe lle e s. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ON APPEALFROM THE UN I TE D ST AT ES D I STR I CT CO UR T F OR

TH E WE STE RN DI STRI CT OF KENTUCKY OP IN ION

Be for e : R

YA N, CO OK

and W HIT E, C ir c uitJudg e s. HELE NE N. WHITE, Circuit Jud ge. De fe nd ant s G e n e r a l E l e c t r i c C o . , P r e c i s i o n

C a stp a rt s Corp., and Alcoa , I nc. (c ollectively “GE” ), appe al from the de cision of the dis trict court a war ding Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 1Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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Tw o o the r f

ir ms s ha re d in the re pr e se ntatio n in

the ins tant ca se . Th os e fi rm s e nte re d in to 1 a se ttl e me nt a g re e me nt wi th GE fo llo wi ng or a l argume nt and have be e n dis mis se d f ro m th e a pp e a l. Se ve ra l ot he r i nd ivi du a ls w e re la te r ad de d to the a c tio n; we re fe r t o th e g ro up c oll e c tiv e ly 2 as “Relators.” 2 attorney s’ fe es following the settlement of a Fa lse Claims Act (FCA) suit
. The law firm of He lmer, Martins, Rice & Popham (HMRP) cross-a ppeals. We affir

m in part and re verse in part. 1 I GE had multiple contra cts to manufac ture jet e ng ines for use in mili tary airc raf t. I n 2000,
a qui tam action wa s filed under seal by two relators pursuant to the Fa lse Claims Act (FCA) , 31

2 U.S.C. § 3729 et seq . Th e a c tio n all e g e d tha t flig ht- c ri tic a l e ng ine bla de s and va ne s w e re imp ro pe rl y
manu fa c tur e d, te ste d, and ins pe c te d at G E’s Mad iso nv ill e , K e ntu c ky , p lant, and that G E f

a lse ly
cer tified to the Gover

nment that the par

ts met cont ra ct s p ec i fications. Relators initi ally hired the L ouisvill e-ba sed firm of Priddy , Cutler, Miller and Mea de (PCMM) to repr esent them. Alton Priddy (Priddy ), a la bor attorne y , was lea d counsel. The De partment of Justice obtai n ed a pa rtial unsealingof the c ase in 2001, at which point GE re ceive d a copy

of the a ction. GE re tained counse l an d beg an pre paringits defense . I n 2002, Pr idd y de te rm ine d th a t Re la tor s’ int e re sts wo uld be be st se rv e d b y a sso c ia tin g c o- c ouns e l w ithF CA
e xpe rt ise . A ft e r a br ie f se arc h, he c on ta c te d F re de ri c k Mo rg an, Jr. (M or g an) , a pa rt ne r a t Cin c inn a tibased H elmer, Ma

rtins & Morg an (H MM), and t h e t wo fi rms undertook joint repr esentation of Re lato rs . In 2 00 5, Mo rg an a nd Mary Jone s ( Jone s) , a

pa ra le g a l w or

kin g on the ma tte r, mov e d to another Ohio fi rm , Volkema Thoma s (VT). Subseque ntly , HMM beca me HMRP. Morga

n and Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 2Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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Three Relators cla imed t h at GE h ad retaliated a g ainst them for their w histleblowing 3 activities. Those c ases ha ve also be en settled. 3 Priddy rema ined prim ary counsel for Relators, wit h Morg an per forming the majority of work in the
case . I n 2006, the Gover

nment formally

intervene d as co- plaintiff and a settlement was r eac hed. Un de r t he se ttl e me nt, GE a dmi tte d no wr on g do ing bu t ag re e d to pa y $1 1. 5 mi lli on

do lla rs , of wh ic h Re la tor s r e c e ive d n e arl y $2 .4 mil lio n. On

July 20 , 2 00 6, the dis tr ic t c ourt dis mis se d w ith prejudice “all
. . . claims conce rning the Covered Conduc t . . . asserte d in prior complaints here in on behalf of the United States under the qui tam provisions of t he False Cl aims Act.” O nly the three ind ivi du a l r e ta liatio n c la ims a s w e ll as c la ims fo r attor ne y s’ fe e s r e ma ine d a c tiv e be fo re the c ourt
. 3 Th e pa rt ie s e ng a g e d in

ne g ot iat ion s o ve r t

he fe e s b ut w e re un a

ble to r e a c h a

n a g re e me nt. U l t i m a t e l y, H M R P an d

P C M M / V T f

i l e d s e p ar a t e m o t i o n s f

o r a t t o r n e y f e e s . A f t e r l i m i t e d d i s c o v e r y, GE filed motions in oppositi on, cont es t i n g various methods used by the firms to ca lculate the appropr iate fees
. I n particula r, GE a nd the firms disag ree d on whether preva iling Ke ntucky

rate s should apply to the attorney s of t he Ohio-based firms, and whether the firms ade quately documented the ir c la ime d h ours and

e xpe ns e s. The dist rict court enter ed it s order on the motions on J anuar y 15, 2008. The c ourt ruled that the 2007 hourly

billing rates cha

rg ed by the Kentuc ky

firm PCMM—$250 per hour for partners a nd $200 per hour

for a ssociates—would be used to ca lculate reasona ble fees for w ork per formed on the
case . The orde r made four e x ceptions: 1) Morg an’s billing rate was set at $400 per hour, “ba sed on his ex pertise a

nd national pra ctice” in FCA ca ses; 2) Priddy ’s rate was se t at $ 3 2 5 p er h o ur; 3) Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 3Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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Sub seque nt t o h e ari ngor a l argume nt, thi s p ane l r e qu e ste d th a t th e pa rt ie s r e tur

n to 4 mediation. P C M M an d VT re solved their diffe renc es with GE, and those two firms have been dis mis se d f

ro m th e a pp e a l and c ro ss- a pp e a ls. 4 HMRP partner James Helmer ’s rate was se t at $325 per hour ; and 4) Jones’ rate was set at $200 per hour. The c ourt ac cepte d near ly all of t h e h o u rs claimed by the firms, re ducing fee s by only 0.2 hours billed for the reser

vation of a confe renc e room. The c ourt denied the firms’ re quests for f ee enhanc ements for “ exceptional succe ss,” but allowed f ees f or fe e-r elated litig ation and almost all of the fi rm s’ c os ts a

nd e xpe ns e s. I n total, the court awarde d Relators nearly $2.2 milli on in fee s and expenses for the work of the three law fir m s . GE fi l ed a n otice of a ppeal on F ebrua

ry 14, 2008. Relators filed a notice of
cross-a ppeal on Ma

rch 3, a nd an ame nded notice on Ma rch 14. 4 GE a lso mov e d to sta y the e nf or c e me nt of the fe e awa

rd wh ile it ap pe a le d the or de r t o th is court, a nd for a pproval of a

superse deas bond in the amount of $2.4 m illion. R elators oppose d the bond, claiming that it was insufficient to cove r intere st on the awa rd, which the y

claimed should be calc ulated fr om the time of the s ettlement i n J uly 2006. Relators asked for a bond of nea rly $2.75 milli on. I n addition, Relators filed a motion for c larification seeking an order from the district cour

t that interest on attorne y s’ fe es would be calc ulated from the J uly 2006 partial dism issal rathe r than the ac tual order g ranting attorney s’ fee s. On Marc h 28, the district court g rante d GE’s motion and approve d a bond in the amount of $2.4 million. The cour t denied R elators’ motion for clar ification Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 4Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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5 for lac k of jurisdiction. On April 15, 2008, R el at o rs am en d ed their appea l to include the district court’s a pproval of the superse deas bond. II HMRP asserts three cross-c laims on appea l: 1) that the district court er red in a war ding r ates to many of its attorney s based on preva iling Kentucky rate s, rathe r than pre vailing r ates for qui tam specia lists; 2) that the district cour t improperly

failed to a

war d it a ttorney s’ fe es for all work perf ormed; and 3) t hat t he dis trict court incorrec tly calc ulated int ere st on the awa rd whe n it set the amount of the super sedea s bond. GE conte sts the timeliness of HMR P’s two claims relating to the di strict court’s c alculation of attorne y s’ fe es. The dist rict court enter ed it s order awa rding attorney s’ fees on J anuar y 15, 2008. GE filed its appe al on Fe bruar y 14, 2008. Relators filed a notice of cross a ppeal on Ma

rch 3, 2008, and an a mended notice containing HMRP’s cross-cla ims on March 14, 2008. F e de ra l Ru le of

Ap pe llate Pr oc e dure 4( a )( 1) (A ) re qu ir e s a par ty to fi le a no tic e of a pp e a l in a civil ac tion “within 30 day s after the judg ment or orde r appe aled f rom is entere d.” Howe ver, “[w]hen the United States . . . is a par t y , t h e notice of appea l may

be filed by

any party within 60 day s afte r the judgme nt or order appea led from is ente red.” Fe d. R. App. P. 4(a)(1) (B ). HMRP’s
cross-a ppeal of the district court’s J anuar y 15 order , there fore , is only timely if the long er, 60- day period a pplies. I n the instant case , the United States wa s unquestionably a par ty to the underlying FCA c laim. Se e Un ite d Stat es ex re l. Eis e ns te in v. City of N e w York , 129 S. Ct . 2230, 2234 (2009) (“ T h e U n i t e d

S t a t e s , t h e r e f

o r e , i s a “ p art y ” t o a

p r i v a t e l y f i l e d F C A a c t i o n. . . i f

i ti n t e r v e n e s in
acc ordanc e with the proc edure s established by fede ral law .”). Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 5Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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Whil e it is true that, for the purpose of finality , an aw ard of attorney s’ fe es is considere d 5 collater al to the under ly ing c laim, see e .g., Budinich v. Be cton Dick inson & Co. , 486 U.S. 196, 200 (1988), this does not re nder the proce eding s independe nt of the under ly ing c laim. Cf. Sprague v. T i co n i c N a t. Bank , 307 U.S. 161, 170 (1939) (“ [W ]e view the petition for [attorney ’s fe es] as an independe nt proce eding supplemental to the orig inal proce eding . . .”). 6 Whil e the United States w as not involved in the attorney s’ fe e litigation, the liti g ation was sp awn e d b y

Re la tor s’ pr e va ili ngin t he un de rl y ingF CA c la im. Th e awa rd of a tto rn e y s’ fe e s is mandated by the same section of the FCA as Relators’ entitlement to a share of the proc eeds. See 31 U.S.C. § 3730(d)(1). Thus the statute treats the awa rd of attorney s fee s as another phase of the
same lit ig a tio n. As the Un ite d St a te s w a s a pa rt y to the u nd e rl y inglit ig a tio n, the 60 -d ay lim it presc ribed in Rule 4(a )(1) (B ) applies to all subsequent proc eeding s, not simpl y to those in which the Un ite d St a te s a c tiv e ly

pa rt ic ipate s. 5 III The pa rties contest va

rious aspec ts of t he dis trict court’s de termination of the attorney s’ fe e
awa rd. We revie w a district cour t’s awa rd of attorney s’ fees for a

buse of discr etion. Gonter v. H unt Valve Co. , 510 F.3d 610, 616 (6th Cir. 2007). “The district court a buses its discretion if it applies t h e w ro n g l ega l s t an d ar d , m i s ap p l i es t h e c o rr ec tl ega l s t an d ar d , o r re lies on clea rl y erro n eo u s fi n d i n gs of fa ct.” Che rry

Hi ll V ine y ar ds , LLC v . Li lly , 553 F.3d 423, 435 ( 6th Cir. 2008) (interna l quotation marks omitted). I n revie wing the awa rd of attorney s’ fe es, “the primary conce rn is that th e fee
awa rded be rea sonable.” Gonter , 510 F .3 d at 61 6 ( int e rn a l qu otatio n ma rk s o mit te d) . Are a so na

ble fee is “one that is adequately compensatory to attract competent counsel y et which avoids producing Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 6Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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The district cour

t noted that Relators had pr esente d evidenc e re g arding“the lac k of 6 experience d Fa lse Claims Act liti g ators within the Court’s jurisdiction.” 7 a w in d f a ll f o r lawy ers.” Gei e r v . S

un dq uis t , 3 7 2 F. 3 d

7 8 4 , 7 9 1 (6 t h C i r. 2 0 0 4 ) ( qu o t i n g Ree d v. Rhodes , 179 F.3d 453, 471 ( 6th Cir. 1999)). A B oth pa rt ie s c la im that the dis tr ic t c ourt a bu se d its dis c re tio n w he n it c a lc ulate d th e ho ur ly rate s awa rded to Relator s’ Ohio-ba sed counsel. GE asserts that the district court e rre d in awar ding
rate s exce e din g pr e va ili ng Ke ntu c ky ra te s to HMRP att or

ne y Mo rg an an d para le g a l Jone s. HM RP contends that all of i ts attorney s should have re ceive d their normal billing r ates, not the lowe r rates found by th e c o urt. We h a v e h e ld th a t i nd e te r

mi n in g th e a

p p r o p r iate f

e e s f o r an“ o u t- of-town specialist,” a district court “must deter mine (1) whe ther hiring the out-of- town specia list was
rea sonable in the fir st instance, and ( 2) whe ther the rat es s o u ght by the out-of- town specia list are
re as o n ab l e for an attorney of his or her

deg ree of skill, ex perie nce, a nd reputation.” Hadix v. Johnson , 65 F.3d 532, 535 ( 6th Cir.1995). The district c o u rt ’s order does not specif

ically mention Ha dix , b ut d oe s c omp or t w ithits dictates. The district c ourt stated that Relators we re r equire d to “establish the nec essity of re taining outside, non-local c ounsel” a nd discussed i n detail the par ties’ ar g uments conce rning the nee d to hire non-loca l qui tam specia lists. The c ourt also re fer red to Relators’ argument conce rning the 6 “re putation a

nd cre dentials of the attorney s and law firms involved in this matter.” I n the sec tion of the or de r ann ounc ing the c ourt ’s rate de te rm inatio n, the c ourt a g a in r e fe rr e d to the pa

rt ie s’ po sit ion s. I t awar ded Morg an a higher r ate due to his “expertise and national practice in [ FCA] case s,” but set Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 7Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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8 the g e ne ra l r a te fo r HM RP atto rn e y s at the ra te s cha rg e d by PCMM be c a

us e the a tto rn e y s “ c ho se to prac tice within this Court’s jurisdi ction” of wester n Kentucky . The c ourt did not ex plain its decision to a wa rd Jone s a ra te of $ 20 0 per

ho ur , b ut r e fe rr e d g e ne ra lly to t he pa rt ie s su bmi ssi on s o n r a te s, which included doc umentation that J ones h ad wo rk ed on F CA and complex lit iga tion matters for
near ly a dec ade a

nd was HMRP’s “most experience d para leg al.” I t is clear that the court found J ones’ e x perie nce a

nd expertise merited the hig her r ate. Vie wing the orde r as a whole, we conclude that th e dis tr ic t c ourt

c on sid e re d th e pa

rt ie s’ de ta ile d s ub mis sio ns and c ra ft ed what it

fe lt w a s a
rea sonably

compensatory rate , g iving due consideration to, although not spe cifica lly identifying, the fac tors identified in Ha dix . Given the br oad def ere nce w e ac cord to such de cisions, we c annot say that the district court a

bused its discretion in making this determination. B G E a l s o c h a l l e n g e s t h e d i s t r i c tc o u rt ’ s d e c i s i o nt o aw ar d f e e s f o r t h e r e m a i n i n g a t t o r

n e ys based on the 2007 hourly rate s char g ed by

PCMM
. W e h av e h eld t hat “the district c ourt has the dis c re tio n to c ho os e e ith e r c ur re nt o r h ist or ic a l r a te s so lon g a s it e xpla ins ho w the de c isi on c omp or ts with the ul timate g oals of awarding rea sonable fe es.” Gonter , 510 F.3d at 617. I n the instant case, the dis tr ic t court no te d the pa rt ie s’ argume nts and de te rm ine d tha t the 20 07 rate s we re ne c e ssa ry to

“ c omp e ns a te the law f

ir ms f or the ir de lay

in r e c e ivi ngpa

y me nt. ” I t th e n s ta te d th a t th is w ou ld “produc e hourly

rate s that are ‘ adequately c ompensatory to attract compe tent counsel y et which avoid pr oducing a w indfall f or attorneys .’” (empha sis in orig inal). The court thus consider ed the parties’ positions, s tated its rea son for c hoosing a n approp riate r ate, a

nd quoted the standa

rd for a Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 8Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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The distri ct co u rt accepted ne arly all of the c laimed hours. I t did deduct .20 hours of 7 Pr idd y ’s tim e sp e nt r e se rv inga c on fe re nc e ro om.

9 re a so na ble fe e awa

rd that w e have lon g a

pp lie d. W e con clu de tha t th is r e a so nin g su ff

ic ie ntl y i n d i ca t es h o w t h e d i s t ri ct co u rt ’s d i s cr et i o nwa s ex er ci s ed , an d af fi rm i t s fi n d i n g. C GE ’s fi na l c la im is that th e dis tr ic t c ourt a bu se d it s d isc re tio n b y

fa ili ngto e xclu de fr om i ts calc ulation of attorney s’ fe es “va g ue time entrie s.” The “key require ment for a

n awa rd of attorney 7 fe e s is that ‘[t]he do c ume ntatio n off e re d in supp or

t of the ho ur s c ha

rg e d mu st b e of

su ff ic ie nt d e ta il and probative value to ena ble the cour

t to determine with a hig h deg ree of ce rtainty that such hours
wer e ac tually

and re asonably

expended in the prosec ution of the litigation.’” Imwalle v. Re liance Med. Prods., I

nc. , 5 1 5 F. 3 d 5 3 1 , 5 5 3 (6 t h C i r . 2 0 0 8 ) ( q u o t i n g U n i t e d S l a t e, L o c a l

3 0 7 v . G & M Roofing & Sheet M

etal Co., 732 F.2d 495, 502 n.2 ( 6th Cir.1984)). Ho we v er , entries may be sufficie nt “eve n if the desc ription for ea ch entr y [i s] not expli citly

detailed.” Mc Com bs v . M e ije r, Inc. , 395 F.3d 346, 360 ( 6th Cir. 2005). The S u p reme Court has held that “c ounsel . . . is not require d to rec ord in g reat detail how eac h minute of [ ] time was ex pended .
. . [but ] shoul d identify the g ener al subject matter of [] time expen d i t u re s.” He ns le yv . Ec k e rh ar t , 461 U.S. 424, 437 n.12 (1983). GE conte nds t h at “hundreds” of entries submitted by

Relators’ c ounsel should have be en disreg arde d as t o o v ag ue. GE points to time entries mar ked, for example, “Email,” “ Telephone Confere nce w/REL ,” and “Tra vel to O wensboro” as examples of such e ntries. Howe ver, the district court c ould determine f

rom the billing stateme nts submit ted and the context of t he trial ti meline that Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 9Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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The dist rict court’s order is not included in the record before this court. Howeve r, the pa rties 8 do no t di sp ute that th e c ourt re qu e ste d th e Re la tor s se ttl e the fi rs t- to- fi le iss ue be fo re pr oc e e din g wi th the instant case
. 10 t h ese e ntries ade quately

descr ibed the wor

k perf ormed. See I

mwalle, 5 1 5 F
. 3 d

a t5 5 4
. R e l a t o r s’ counsel submitted extensive list s of ac tiviti es, ac counting for time spe nt to the f rac tion of the hour. Many of the de sc ri pti on s, wh ile br ie f, re fe rr e d to fr e qu e nt e ve nts . F or e xamp le, “tr avel t o Owensbor o,” t h e Kentucky city in which Relators we re loc ated, is suffic iently detailed within the context of the liti g ation for the court to de termine that such time w as expended on matters re lated to the case . I t was not an a buse of discr etion for the c ourt to acc ept such hours in the calculation of HM RP’ s f

e e s. D HMRP challeng es t he decision of t he dis trict court not t o awa rd it fee s for wor

k perf ormed
on a related first-to-file challeng e. The FCA provides that “[w]hen a person br ings a n action under this subsec tion, no person other than the Gove rnment may intervene or bringa re lated ac tion based
on the fa c ts und e rl y ing the pe nd ing a c tio n. ” 31 U. S.C. § 373 0( b) (5 ). Th is ha s b e e n a pp lie d to c re a te a “f irst-to-file” bar, pr eventingsucce ssive FCA suits based on the same underly ing fac ts. See, e .g., United States ex

rel. Poteet v . Medtronic I nc. , 5 52 F .3 d 5 03 , 51 5- 17 (6 th Cir . 2 00 9) (a na ly zingfi rs tto-file issues and c ollecting case s). I n th e ins tant c a se , Re la tor s, a t th e re qu est of the dis tr ic t c ourt , lit ig a te d, and ult imate ly 8 preva iled in, a first-to-f

ile dispute with a third-pa rt y relator. GE ar g ued that the f irst-to-file issue “had nothingto do with advancingthe m at t er relating to GE” and should not fac tor into the fee Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 10Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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We note that HMRP cites no leg al authority befor e this court to support its contention that 9 the first-to-f

ile hours ar e compe nsable. 11 awa rd. The district c ourt acc epted GE ’s ar g ument and subtrac ted $10,967.75 from HMRP’s total fee awa rd, bec ause it found that HMRP “does not a ppear to dispute [GE’s] contention.” HMRP did, in fac t, dispute GE’s contention in both its Reply Memorandum and Second Reply Memorandum befor e the district cour

t. See R. 8 8 at 12 (under the hea ding “ Our F irst-to-File L itigation Was Related To Ge nera l Electric” ); R. 135 at 12 n.27. Neve rtheless, our prec edent preclude s HMRP’s rec overy of litigation ex penses r elated to the first-to-file issue beca

use the action “did not dire ctly involve the qui tam defe ndants.” United States

ex re l. Taxpayers Against Fraud v. Ge n. Elec

. Co. , 4 1 F
. 3 d 1 0 3 2 , 1 0 4 6 ( 6 t h C i r . 1 9 9 4 )
. In Tax pa y e rs , this court deter

mined that the relators wer e not entitled to attorney s’ fe es for litigation ag ainst the Gover

nment reg ardingth ei r s h are of a qui tam rec overy . The c ourt held that the 9 de fe nd ant i n th a t c a se , a lso Ge ne ra l E le c tr ic Co. , w a s n ot r e sp on sib le fo r t he fe e s b e c a

us e [a]lt ho ug h G E e a g e rl y

a ssi ste d in

the g ov e rnmen t's effo rt s to re du c e the re la tor s’ bo un ty , G E’ s r ole wa s c omp ara tiv e ly pe ri ph e ra l. It ha d n o le g a l sta nd ing or ri g ht t o participate in the proc eeding s. Nothing in the rec ord sug g ests that the g overnme nt initiated its contest ag ainst the relators beca use of GE, and nothing sug g ests that GE prolong ed the litigation process or c ould have ha stened its conclusion. Id. T h i s re as o n i n g ap p l i es t o t h e i n s t an tca s e. GE h adn o p ar t i ci p at i o ni n , o r ap p ar en t l y k n o wl ed ge of, the fir st-to-file dispute. I t ne ither initiated the conte st nor had any control over

its resolution. As GE had no r ole or intere st in the first-to-file proc eed i n gs , we af fi rm the district court’ s denial of HMRP’s request for

attorney s’ fe es for

the time it spent lit iga

ting the f irst-to-file issue. Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 11Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

Un ite d S tat es, e t al . v . G e ne ra l E le c tri c , e t al

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12 E HM RP f ur the r c la ims tha

t th e dis tr ic t c ourt

a bu se d it s d isc re tio n b y

fa ili ngto a

pp ro pr ia te ly
co mp en s at e t h e f

i rm fo r f ee s i n cu rr edl i t i gat i n g t h e a t t o rn ey s ’ f ee i s s u e. “‘ T i m e s p en ti np re p ar i n g, prese nting, and try ing attorney fee applications is compensa ble’ a s part of the rea sonable fe e,” but
rec overy is “limit ed.” Gonter , 5 1 0 F. 3 d at 6 2 0 (q u o t i n g Coulter v. Tennessee , 8 0 5 F. 2 d 1 4 6, 151 (6th Cir. 1986)) (e mphasis omitt ed). We have held that whe n a ca se is settled without a trial, “in the
a bs e nc e of unus ua l c ir c ums tanc e s, the ho ur s a llo we d f or pr e pa ri ngand lit ig a tin g the a tto r

n e y f e e c a se should not ex cee d 3% of the hours in the main case .” Coulter , 805 F.2d at 151 (noting that a fiveperc ent limit applies if the case g oes to trial). I n the instant case , the district court stated its intention to “awa rd the Relators attorney s’ fee s for f ee- relat ed l i t i gat i o n based upon the rea sonable ra tes set forth . . . a

bove.” T he orde r did not specify an amount re prese nting thre e per cent of fee s incurre d in the main case . Rather, the c ourt stated “[t] he Court ac cepts that the Relators’ attorne y ’s fe es f o r t he fe e-r elated litig ation do not exceed the 3% hourly

limitsince the D efe ndants do not argue to the contr ary .” Ul tim a te ly , th e c ourt

awa rd e d H MRP $ 1, 00 0, 09 1. 50 in f e e s, ba se d o n th e ho urs H MRP submitt ed in its initial fee application on F ebrua ry 9, 2007, which appa

rently included some hours spent in liti g ating the fe e issue. The court did not include 1 7 6
. 4 ad d i t ional hours claimed to have been spe nt on fee -re lated litigation, submi tted to the court by HMRP on March 13, 2007, nor w ere the later -submitted hours m entioned in the court’s order
. HMRP corr ectly asser ts that those hours
a lso sh ou ld h a ve be e n c on sid e re d b y the dis tr ic t c ourt
. Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 12Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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HMRP arg ues that on rema nd, the district c ourt “should not be constraine d by the 3% . . . 10 g uid e lin e [] .
. . becau se the re are ‘u nu su a l c ir c ums tanc e s. ’” Ho we ve r, HM RP di d n ot m a ke thi s argument befor e the district cour t and our re view of the rec ord finds no circ umstances wa rra nting deviation from the de fault rule. 13 We the re fo re re mand fo r the dis tr ic t cou rt to ma ke a c a lc ulatio n of the ho ur s spe nt b y HM RP
on the un derly ingF CA c la im a lon e . T he dis tr ic t c ourt sh ou ld t he n e xer c ise its dis c re tio n to de te rm ine a

re a so na ble fe e -r e la te d lit ig a tio n awa rd ba se d up on

a ll o f t he ho ur s su

bmi tte d b y

HM RP, subject to the three -per cent c ap. 10 IV Finally , HMRP claims that the district court improper ly calc ulated the inter est owed on the
a t t o r n e ys ’ f e e aw a r d i ns e t t i n g a

s u p e r s e d e a s b o n d a m o u n t
. T h e d e c i s i o nt o g r an to r d e n y a
s u p e r s e d e a s b o n d is r e v ie w e d f o r a b u s e o f d is c r e ti o n . Ar ba n v. W . P ub . Co rp , 345 F.3d 390, 409 (6th Cir. 2003) (apply ing abuse of discretion st andar d wher e the district cour t gr anted a

stay without requiringa super sedea s bond). T h e u n d er l y i n g qui tam a c tio n wa s settle d o n July 21 , 2 00 6. Th e pa

rt ie s c on tin

ue d to lit ig a te the whistleblower a ctions. Relators filed reque sts for attorney s’ fees for HMRP on March 15, 2007. The district cour

t issued its order g ranting in part and denying in part the fee motions on J anuar y 15, 2008. The order

awa rded Relators near ly

$2.2 milli on in fee s and expenses for the work of

the three law fi rm s. GE mov e d to sta y the e nf or c e me nt of the fe e awa

rd wh ile it a

pp e a le d the ord er t o this court, a nd for approva l of a superse deas bond in the amount of $2.4 milli on. Relators opposed the bond, claiming that it was insufficient to cove r intere st on the awa rd, which the y claimed should be calc ulated fr om t h e ti me of the se ttlement, in J uly 2006. Relators soug ht a bond of ne arly $2.75 Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 13Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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14 milli on. I n addition, Relators filed a mot ion for clarification seeking an order from the district court that interest on attorne y s’ fe es would be calc ulated from the J uly 2006 partial dismissal rather than the a c tua l or de r g ra

nti nga tto rn e y s’ fe e s. On Marc h 28, 2 0 0 8 , th e d is tr ic t c o u rt g r an te d G E ’ s mo ti o n an d a p p r o v e d a bond in the amount of $2.4 million, st ating that Relators bec ame “ en t i t l ed ” t o attorney s’ fe es on January 15, 2008, when th e c o u rt e n te r e d it s o r d e r qu an ti f y in g th e f e e s , an d c a lc u late d

in te r e s t o nth e aw ard
a c c or din g ly . T he c ourt

state d th a t th e J anu ary

15 or de r “ c on sti tut e s th e on e and on ly ‘j ud g me nt’ fr om w hic h p os t-

jud g me nt i nte re st c an a c c ru e . A c c or din g ly , th e Court a c c e pts the De fe nd a nts ’ calc ulation of post-judg ment i n t er es t for the pur poses of the supe rsede as bond and f inds that the amount of the bond is suffic ient.” F eder al Rule of Civil Proce dure 62(d) allows a party to stay the execution of a judg ment pending appea l by providing a superse deas bond. The stay is effe ctive upon ap p ro v al o f t h e b o n d

b y t h e c o u rt
. Fe d
. R
. C i v . P
. 6 2 (d ). C o m m en t at o rs h av e n o t edt h at “[ a] l t h o u gh the amount of the bond usua lly will be set in an amount that will permit satisfac tion of the judg ment in f ull, to gethe r with c os ts, int e re st, and dama g e s f

or de lay , th e c ourt s h a ve inh e re nt p ow e r . . . to provid e fo r a b o n d in a lesser amount or to permit sec urity other than the bond.” 11 C HARL ES W R I GHT , E T AL ., F ED ER A L P RACTI CE & P ROCE D U RE § 2905, at 522 (4th ed. 2008)
. I n the i nstant case , the district court’s a pproval of the superse deas bond pur ported to include enoug h interest to satisfy

the judg ment in full. To determine the date from which int ere st should be
awa rded, the court c ite d t h i s co urt’s holding in Associated Ge neral Contractors of Ohio, Inc. v. Drab ik that post-judgme nt interest beg ins “to run on an [ sic ] fee aw ard f rom the time of entr

y of the judgme nt which unconditionally entitles the prevailing party to rea sonable attorney

fee s.” 250 F .3d Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 14Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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15 482, 495 (6th Cir. 2001) (c itation omit ted). The court de termi n ed t h at t he Jul y 21, 2006 partial dismiss al was not a

“judg ment on the merits” e ntitli ng Relators to attorney s’ fe es, and that such an
e nti tle me nt d id n ot o c c ur

un til the Janu ary

20 08 or de r q

ua nti fy ingtho se fe e s. Th e pa rt ie s d isp ute the po int

a t w hic h Re la tor s b e c a me “ un c on dit ion a lly e nti tle d” to
rea sonable attorney s’ fe es. This court ha s not addresse d whether a re lator i s unconditionally entitled to attorney s’ fe es upon the c ourt’s cons en t t o a p ar tial settlement ag ree ment, or whe ther the c ourt must iss ue a f

inal judgme nt indicating th e en t i tlement to attorney s’ fe es. In light of the FCA’s
mand a tor y fe e -s hif tin g pr ov isi on , w e ho ld t

hat a fi nal ord er is su e d in an F CA c a se that e nti tle s a relator to a shar e of the Gover nment’s re cover

y also entitles the re lator to attorney s’ fe es. The Supreme Cou rt has held that, f or the purpose s of finality and appe al, an a

war d of attorney s’ fees i s collater al t o the j udg ment on the m erits i n the underlying c ase. Budinich , 4 86 U. S. at 200. Thus, a judg ment on the merits of Relator s’ under ly ing c laim was i ssued on J uly 21, 2006. At t h at p o i n t , Relators bec ame c onclusively entitled to “at lea st 15 perce nt but not more than 25 perc ent of t he .
. . se ttl e me nt of the c la im. ” 31 U. S.C. § 37 30 (d )( 1)
. Th e F CA state s that a
s u c c e s s f u l r elator “ sh all ” re ceive rea sonable attorney s’ fe es. Id. (empha sis added). While the district court re tained dis cre tion to deter mine what amount of attorney s’ fees would be r easona ble, Relators ha d a n e nti tle me nt t o a

re a so na ble a mou nt. Th e dis tr ic t c ourt ’s fi nd ing that Relator s did n ot b e c ome entitled to an awa

rd until that awar d was qua ntified was in e rror . Whil e the amount of the eve ntual
awa rd wa s not cer

tain when the FCA claims wer e settl ed, the exis tence of t he aw ard w as. Ther efor e the district court mi sapplied t he lega l standard we set out in As so c iat e d G e n. Con tra c tor s , 250 F.3d at 495, constituting a

n abuse of

discretion. Se e Che rry

Hi ll V ine y ar ds , LLC , 553 F.3d at 435. Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 15Nos. 08-5216, 08-5296, 08- 5390, and 08-5510

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16 V We AF F IRM the di strict court’s J anuar y 15, 2008 order awa

rding attorney s’ fe es, except for its calculation of the a

ppropriate fee -re lated litigation awar d. On that issue, we REMAND for further proce eding s consistent with this opinion. Fur ther, we VA CA TE the Marc h 28, 2008 order of t he dis trict court approving a supersedea s bond in the amount of $2.4 m illion and REMAND wi th instructions to calculate interest owe d in all further proce eding s from Jul y

21, 2006. Case: 08-5216 Document: 006110724419 Filed: 09/03/2010 Page: 16