Of the Federal Circuit, sitting by designation. *

United States Court of Appeals

For the First Circuit

No. 09-2684

UNITED STATES OF AMERICA, 

Appellee,

v.

OVERSEAS SHIPHOLDING GROUP, INC.,

Defendant,

ZACK HAWTHORN,

Movant, Appellant.

ON APPEAL FROM AN ORDER REGARDING ATTORNEY’S FEES ENTERED IN THE

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Richard G. Stearns, U.S. District Judge]

Before

Boudin, Dyk, and Thompson, Circuit Judges. *

Zack Hawthorn, pro se.

Jonathan F. Mitchell, Assistant United States Attorney, with

whom Carmen M. Ortiz, United States Attorney, was on brief, for the

appellee.

October 18, 2010
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DYK, Circuit Judge. Zack Hawthorn (“Hawthorn”) appeals

from a district court decision limiting Hawthorn’s legal fees under

two contingent fee agreements. The district court barred Hawthorn

from receiving a fee in excess of $25,000 under a contingent fee

agreement with Benedict Barroso (“Barroso”) and barred Hawthorn

from recovering any fee at all under a contingent fee agreement

with John Altura (“Altura”). We conclude that the district court

did not err in finding Hawthorn’s contractual fee amounts with

respect to both clients to be excessive. However, we conclude that

the district court abused its discretion in disallowing any fee

from the representation of Altura. We hold that Hawthorn should

receive a fee of $25,000 for each client and accordingly affirm-inpart and reverse-in-part.

I.

This case arises out of a government investigation in six

judicial districts into allegations that Overseas Shipholding

Group, Inc. (“OSG”) had for years engaged in the practice of

discharging oil from its vessels in American waters and falsifying

mandatory ship records to conceal the discharges, in violation of

the Act to Prevent Pollution from Ships (“APPS”), 33 U.S.C. §

1908(a).

In September of 2005, Barroso worked aboard the M/T

Pacific Ruby (“the Pacific Ruby”), a tanker ship owned and operated

by OSG. On September 15, 2005, Barroso telephoned the United
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States Coast Guard on behalf of himself and three crew members

(including Altura), all Filipino nationals (“the Texas

whistleblowers”). Barroso reported that he had observed the chief

engineer illegally bypassing the ship’s oil pollution prevention

equipment. Barroso told the Coast Guard that the four men were

willing to testify against OSG. Based on Barroso’s report, the

Coast Guard conducted two boardings of the ship. The four Texas

whistleblowers provided information that supported the allegations

of illegal activity by OSG.

A grand jury investigation was commenced in the Eastern

District of Texas in late 2005. A magistrate judge appointed

separate counsel for each whistleblower from the district’s

Criminal Justice Act (“CJA”) panel. On October 7, 2005, Hawthorn

was appointed to represent Barroso, and another lawyer, Bill Harris

(“Harris”), was appointed to represent Altura. The scope of the

representation in each case was to determine whether the client was

a target or subject of a criminal investigation, to advise him of

his Fifth Amendment rights, and to assist him in his appearance

before the grand jury and during interviews with the government.

Based on the Texas whistleblowers’ testimony, in August

of 2006, the chief engineer of the Pacific Ruby, Kun Yun Jho, and

OSG were indicted in the Eastern District of Texas on charges of

conspiracy under 18 U.S.C. § 371, false statements under 18 U.S.C.

§ 1001, and violations under APPS, 33 U.S.C. § 1908(a). The APPS
The Fifth Circuit ultimately reversed and reinstated 1

the APPS charges. See United States v. Kun Yun Jho & Overseas

Shipholding Group, Inc., 534 F.3d 398 (5th Cir. 2008).

The other four districts were: the Central District of 2

California, the Northern District of California, the District of

Maine, and the Eastern District of North Carolina.

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case against OSG was then expanded to include a dozen OSG ships

involved in oil dumping incidents in five other judicial districts,

including the District of Massachusetts. Twelve whistleblowers in

total provided information as to the incidents that formed the

basis for the charges in the six districts. 

The APPS, 33 U.S.C. § 1908(a), provides that “[i]n the

discretion of the Court, an amount equal to not more than 1/2 of [a

criminal APPS] fine may be paid to the person giving information

leading to conviction.” In November and December of 2006,

government counsel informed Hawthorn that Barroso might be eligible

for a monetary whistleblower award under the APPS. As a result,

Hawthorn learned for the first time that his client might receive

an award. However, on December 4, 2006, the Eastern District of

Texas dismissed the APPS counts against OSG and the government

appealed. See United States v. Kun Yun Jho & Overseas Shipholding

Grp. Inc., 465 F. Supp. 2d 618 (E.D Tex. 2006). On December 19, 1

2006, the government announced an agreement covering the six

districts in which OSG was under investigation, including the

District of Massachusetts and the Eastern District of Texas. With 2

respect to the cases other than the Texas case, the agreement

specified that the parties would recommend that the five cases be
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consolidated in Massachusetts for plea and sentencing. OSG agreed

to plead guilty to representative APPS counts in each of the five

cases. Under the terms of the agreement, OSG would pay a total

monetary fine of $27.8 million, of which $10.5 million was

allocated to APPS violations. The agreement also provided that if

the Fifth Circuit reversed the Texas dismissal of the three APPS

counts, OSG would plead guilty to those counts as well and a fine

under the APPS of $2.4 million would be imposed. If not, OSG would

instead plead guilty in the Eastern District of Texas to three

additional counts of making false statements in violation of 18

U.S.C. § 1001. The agreement left open the possibility that an

additional fine would be imposed in the Texas proceeding. The

agreement contemplated that a single plea and sentencing proceeding

for the five cases would be scheduled in the Massachusetts district

court in the near future, at which time that court would consider

whistleblower awards.

On January 3, 2007, Hawthorn sent Barroso an email in

which he informed Barroso of the plea agreement and that he might

be eligible for a whistleblower award. Hawthorn added that he

could represent Barroso in pursuing any legal rights he might have

to a whistleblower award, but that his representation would be

separate from his court-appointed representation. The email stated

that despite the dismissal in the Eastern District of Texas,

Hawthorn thought that Barroso could still be compensated in the
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Massachusetts proceeding, but that the possibility of recovery was

uncertain. Because Barroso was indigent, Hawthorn proposed

representation on a contingent fee basis whereby he would receive

33% of whatever award Barroso received. A proposed contingent fee

agreement was attached. Hawthorn also stated that he could not

begin working for Barroso on the whistleblower award matter until

Hawthorn received a signed copy of the agreement. Barroso

responded, stating that he needed to discuss the matter with the

other three whistleblowers with whom he was associated.

On January 29, 2007, the five pending cases (other than

the Texas case) were consolidated and the plea and sentencing

hearings were set for March 21, 2007, in Boston. On March 9, 2007,

government counsel contacted Hawthorn, along with the lawyers for

the other whistleblowers to advise them of the potential

availability of the APPS awards in the Massachusetts case. On

March 12, 2007, government counsel informed Hawthorn that the

government was considering filing a motion in support of an award.

That same day, since Hawthorn was not familiar with whistleblower

proceedings, he asked government counsel for a sample of a motion

filed on behalf of whistleblowers in other cases. The government

provided Hawthorn with a sample motion filed by the government in

another case.

On March 13, 2007, Altura contacted Hawthorn by email,

introducing himself and requesting that Hawthorn represent him in
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the upcoming whistleblower action on the same contingency terms

that Hawthorn had proposed to Barroso, stating: “[I] would gladly

appreciate if you could represent me in a legal matter concerning

any claim from the Pacific Ruby Incident.” Gov’t’s Suppl. App’x

251. He explained that he was having trouble reaching his courtappointed attorney (Harris) in the criminal case, stating that “I

want to inform you that since I’ve joined this vessel I haven’t

heard from Bill Harris. That’s why I’ve decided to ask you if you

could represent myself.” Id. at 252. Hawthorn did not attempt to

contact Altura’s court-appointed attorney nor did he contact the

Texas district court. Hawthorn e-mailed Altura the fee agreement

along with a conflict of interest waiver. Altura signed the fee

agreement, which Hawthorn had dated March 13, 2007. On March 14,

2007, Barroso agreed to a fee agreement as well. Hawthorn advised

both Altura and Barroso of a possible conflict of interest in

representing both in the same matter, and they waived any conflicts

of interest stemming from the joint representation.

On March 14 and 15, 2007, the government filed motions

for whistleblower awards in the Massachusetts proceeding, detailing

the contributions of all of the whistleblowers (i.e., the four

whistleblowers in the Texas case and the eight whistleblowers in

the other cases) and recommending that the court award $437,500 to

each whistleblower. The government asked that the court award

equal sums to each of the whistleblowers involved in the
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consolidated cases as well as to the whistleblowers involved in the

Eastern District of Texas case because the contributions of the

twelve whistleblowers to the overall outcome of the case were

roughly equal. This recommendation was made even though the

whistleblowers from the Texas case, including Barroso and Altura,

were not witnesses in any of the five cases consolidated in the

District of Massachusetts and there had been no APPS conviction in

the Eastern District of Texas.

On March 16, 2007, OSG filed a response to the

government’s whistleblower motion, stating that though it did not

oppose the government’s motion, it was concerned about a grant of

awards to the whistleblowers in the Texas case. OSG argued that

any APPS awards to those individuals should be administered by the

district court in Texas. On March 19, 2007, the government

replied, explaining that because the four Texas whistleblowers

contributed to the successful overall resolution of the case

against OSG, the Massachusetts district court had discretion to

issue awards to them. That same day, Hawthorn filed a nine-page

memorandum responding to OSG, and arguing that Barroso and Altura

deserved awards because they contributed to OSG’s plea of guilty in

the consolidated case. Hawthorn also pointed out that all of the

APPS counts that were pending in the Eastern District of Texas had

been dismissed and as it currently stood, there were no awards to

be administered by that court. He argued that even if the
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dismissal were overturned, Altura and Barroso would receive less in

the Eastern District of Texas as the total amount of the fine there

would be less than the fine from the consolidated cases, even

though Barroso and Altura contributed to the overall result. 

The plea and sentencing hearing was held on March 21,

2007. In accordance with the plea agreement, the district court

imposed a fine of $10.5 million for APPS violations. Under the

statue one-half of the total was available for awards to

whistleblowers. At the hearing, OSG argued that the Texas

whistleblowers should not receive whistleblower awards. The

government urged the district court to award fees to all twelve

whistleblowers. The court then voiced “a modest reservation” about

issuing awards to the Texas whistleblowers. Gov’t’s Suppl. App’x

159. The court heard from Hawthorn, who argued for an award to

Barroso and Altura. The district court then concluded it would

make the whistleblower awards as proposed by the government. On

May 25, 2007, the court issued an order authorizing awards of

$437,500 to each of the twelve whistleblowers, and further ordered

that “any proposed legal fees in excess of $10,000 for legal

services performed in connection with the granting of the

whistleblower awards in this case, must be approved by the Court

after notice to the government.” United States v. Overseas

Shipholding Grp., Inc., No. 1:06-cr-10408-RGS (D. Mass. May 25,

2007) (order concerning whistleblower awards).
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On August 15, 2007, Hawthorn filed a motion for approval

of attorney’s fees in which he sought to receive one third of the

whistleblower awards to Barroso and Altura, for a total of $291,677

in legal fees. No other counsel for the whistleblowers sought

approval for a fee in excess of $10,000. Barroso and Altura did

not object to Hawthorn’s fees at the time. The government opposed

Hawthorn’s request on the ground that the fees were unethically

excessive.

The district court referred the matter of Hawthorn’s fee

request to a magistrate judge for a recommendation. On April 22,

2008, after conducting an evidentiary hearing, the magistrate judge

issued a memorandum and order finding that Hawthorn’s requested

fees were “unethically excessive,” and recommending reducing the

fees to $25,000 for each client for a total of $50,000, a figure

that represented the “outer limit of reasonableness.” United

States v. Overseas Shipholding Grp., Inc., 547 F. Supp. 2d 75, 91

(D. Mass. 2008) (opinion of magistrate judge) (quotations omitted).

However, the magistrate judge requested that the district court for

the Eastern District of Texas determine whether it would violate

that court’s CJA plan if Hawthorn were to receive a contingent fee

for representing Barroso in the whistleblower matter. The Eastern

District of Texas eventually advised that Hawthorn’s contingent fee
On June 23, 2008, without filing an objection in the 3

district court to the Magistrate Judge’s order, Hawthorn filed a

notice of appeal directly with this court. On September 18,

2009, this court dismissed his appeal for lack of jurisdiction. 

On October 7, 2008, Hawthorn filed an objection to the Magistrate

Judge’s order in the district court. 

Although Hawthorn failed to object to the Magistrate

Judge's report within ten days, see Fed. R. Civ P. 72(b)(2), the

failure to timely file an objection is not jurisdictional. See

Spence v. Superintendent, Great Meadow Corr. Facility, 219 F.3d

162, 174 (2d Cir. 2000); United States v. Polishan, 336 F.3d 234,

239-40 (3d Cir. 2003); Souter v. Jones, 395 F.3d 577, 585 (6th

Cir. 2005); Allen v. Sybase, 468 F.3d 642, 658 (10th Cir. 2006);

see also Thomas v. Arn, 474 U.S. 140, 155 (1985).

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agreement with Barroso did not violate the terms of the CJA plan.

The magistrate judge adopted this ruling.3

On December 1, 2009, the district court adopted the

magistrate’s recommendation in part. United States v. Overseas

Shipholding Grp., Inc., 672 F. Supp. 2d 188 (D. Mass. Dec. 1,

2009). The court held that the $50,000 award for legal services to

both men “approach[es], if not exceed[s], the limits of reasonable

compensation under the circumstances,” but stated that it would

defer to the magistrate judge in setting the “baseline figure.”

Id. at 197. (In the following discussion, we refer to the portions

of the magistrate’s recommendation adopted by the district court as

the district court’s decision.)

However, the district court sua sponte further held that

because Altura may still have been represented by Harris in the

same matter at the time that Hawthorn sent him a contingent fee

agreement, and because Altura may not have fully understood his
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legal interests, Hawthorn “violated the spirit, if not the letter,

of two, and perhaps three, attorney disciplinary rules,” namely

Mass. R. Prof’l. C. 4.2 (concerning communications with represented

persons), 4.3(b) (prohibiting legal advice to potentially

conflicted persons), and 7,3(b) (prohibiting solicitation of

professional employment from impaired persons). Id. at 198-99.

The district court accordingly disallowed the $25,000 awarded to

Hawthorn for services rendered to Altura.

Hawthorn timely appealed, and we have jurisdiction

pursuant to 28 U.S.C. § 1291.

II.

Hawthorn first argues that the district court lacked the

authority to adjudicate the propriety of the contingent fee

agreements because neither Barroso nor Altura objected. Hawthorn

posits that there was never any “case” or “controversy” to be

decided, and that accordingly the district court lacked

jurisdiction. See, e.g., Moore v. Charlotte-Mecklenburg Bd. of

Ed., 402 U.S. 47, 48 (1971) (finding no case or controversy under

Article III of the United States Constitution where “both litigants

desire[d] precisely the same result”). Hawthorn’s argument is

premised on the Fifth Circuit’s holding in Brown v. Watkins Motor

Lines, Inc., 596 F.2d 129, 131 (5th Cir. 1979). In Brown, the

Fifth Circuit held that where the parties agreed to the fee

arrangement there was no case or controversy, and that the district
See also McKenzie Constr., Inc. v. Maynard, 758 F.2d 4

97, 101 (3d Cir. 1985) (“Because courts have special concern to

supervise contingent attorney fee agreements, they are not to be

enforced on the same basis as ordinary commercial contracts.”);

In re A.H. Robins Co., 86 F.3d 364, 373 (4th Cir. 1996) (“The

district courts’ supervisory jurisdiction over contingent fee

contracts for services rendered in cases before them is wellestablished.”).

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court lacked jurisdiction to adjudicate the amount to be paid to

the plaintiff’s lawyer. Id.

We disagree with Brown, and its approach has been

previously rejected by this court. It is well-established that a

district court has inherent authority to supervise the conduct of

attorneys that appear before it. See United States v. Klubock, 832

F.2d 664, 667 (1st Cir. 1987) (en banc). Both this court and other

courts of appeals have held that this supervisory authority

encompasses the power to assess the fairness of attorney fee

agreements, including contingent fee arrangements. See, e.g., Bos.

& Me. Corp. v. Sheehan, Phinney, Bass & Green, P.A., 778 F.2d 890,

896 (1st Cir. 1985) (“Contingent fees are, of course, of special

concern to courts and are subject to strict judicial

supervision.”); Farmington Dowel Prods. Co. v. Forster Mfg. Co.,

421 F.2d 61, 87 (1st Cir. 1969) (“Farmington Dowel I”). This is 4

so because “[c]ourts have a stake in attorney’s fees contracts; the

fairness of the terms reflects directly on the court and its bar.”

Rosquist v. Soo Line R.R., 692 F.2d 1107, 1111 (7th Cir. 1982).

Thus, a court “has a particular interest in assuring itself that it
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is not an unwitting accessory to an excessive fee.” Farmington

Dowel I, 421 F.2d at 87.

As this court explained in Farmington Dowel I, “courts

generally are not without power to modify excessive fee

arrangements.” Farmington Dowel I, 421 F.2d at 87-88. While a

court is not obligated in every case to ask whether a fee

arrangement provides for excessive fees, “a court may in its

discretion inquire into such issue, particularly when it is brought

to the court’s attention.” Id. Further, this supervisory power is

not dependent on whether a party challenges a fee arrangement. To

the contrary, “it seems clear that the court’s power to prevent

excessive fees must be operative regardless of the arrangement by

which the fee is obtained.” Id. at 87. Thus, whether a client

objects to a fee arrangement is relevant to whether the fee is

excessive, but it is “not controlling, for the object of the

court’s concern is not only a particular party but the conformance

of the legal profession to its own high standards of fairness.”

Id. at 90 n.62. We conclude that the district court had the

authority to review the fee agreements even though the clients did

not object at the time.

III.

We review the district court’s exercise of its

supervisory authority for abuse of discretion. See De Jesus

Nazario v. Morris Rodriguez, 554 F.3d 196, 199 (1st Cir. 2009);
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Ramos Colon v. Sec’y of Health & Human Servs., 850 F.2d 25, 26 (1st

Cir. 1988).

Unlike awards under the fee-shifting statutes, where fees

are normally limited to “reasonable” compensation, fee awards

stemming from privately negotiated attorney’s fees agreements are

reviewed deferentially. The court may exercise its supervisory

power to reduce a fee only in exceptional circumstances. Sargeant

v. Sharp, 579 F.2d 645, 648 n.4 (1st Cir. 1978). Thus, “if the

Court finds that an agreement provides for an unethically excessive

fee, it may sparingly exercise its supervisory powers over the bar

to limit the amount the attorney may actually receive.” Id. at

648. The power to review fees pursuant to an agreement is not

limited to situations in which the fee is ethically excessive at

the inception but extends to situations in which “the

unreasonableness is due to factors that occur after the fee

arrangement is made.” McKenzie, 758 F.2d at 101.

While we do not think the fee here was ethically

excessive, the court’s supervisory power is not limited to the

situation in which the fees are ethically excessive. Courts can

limit the fee on the ground that it exceeds the outer limit of

reasonableness even if it is not ethically excessive. McKenzie,

758 F.2d at 100-01 (3rd Cir. 1985); Green v. Nevers, 111 F.3d 1295,

1302 (6th Cir. 1997). In these circumstances, the court is

determining whether the fee “has resulted in such an enrichment at
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the expense of the client that it offends a court’s sense of

fundamental fairness and equity.” McKenzie, 758 F.2d at 101. A

fee can exceed the outer limit of reasonableness “without

necessarily being so ‘clearly excessive’ as to justify a finding of

a breach of ethics.” Id. at 100; Green, 111 F.3d at 1302. 

Although limitations on fees should only be imposed in

exceptional circumstances, they are particularly appropriate in

situations such as this where awarding an excessive fee to the

attorney would itself undermine the objectives of the federal

statutory scheme. The whole purpose of the discretionary award to

whistleblowers under this statute is to create incentives for the

whistleblower to take risks that may disadvantage the whistleblower

in his relationship to his employer. The amount of the fee that

will be siphoned off by the lawyer significantly affects the size

of that award and the power of the incentive. The court in

administering this statute is obligated to ensure his excessive

legal fees will not diminish the statutory incentive.

In determining whether an attorney’s fee is clearly

excessive, this court has held that courts should consider a

variety of factors to determine the “outer limit” of

reasonableness:

1. the time and labor required, the novelty and

difficulty of the questions involved and the necessary

skill level;
We note that these factors are similar to those used by 5

Massachusetts courts to determine whether a fee is “clearly

excessive.” See Mass R. Prof’l Conduct 1.5(a) (listing eight

factors to consider).

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2. whether work on the case would preclude the attorney’s

performing other work;

3. the customary charges of the Bar for similar services;

4. the amount involved in the controversy;

5. the contingency or the certainty of the compensation;

and

6. the character of the employment, whether casual or for

an established and constant client.

Farmington Dowel I, 421 F.2d at 89. (adopting factors listed in

Farmington Dowel Prods. Co. v. Forster Mfg. Co., 297 F. Supp. 924,

926 n.1 (D. Me. 1969)). For the purposes of determining whether 5

a fee is excessive, “the fee arrangement should be viewed to some

extent according to the circumstances in which it was made.” Id.;

see also Bos. & Me. Corp., 778 F.2d at 898 (“To deny [a] fee . .

. because it exceeds time charges and looks high in hindsight would

penalize [an attorney] for a job well done . . . .” (emphasis in

original)). However, a court may nonetheless consider “postagreement factors such as complexity of problems, quality of work,

and results obtained.” Farmington Dowel Prods. Co. v. Forster Mfg.

Co., 436 F.2d 699, 701 (1st Cir. 1970) (“Farmington Dowel II”); see

also McKenzie, 758 F.2d at 101.
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IV.

Hawthorn contends that the district court applied an

improper standard in evaluating the fee agreements. There is no

merit to the contention that the district court improperly applied

the criteria from the fee-shifting statutes (which look to the

reasonableness of the fee). The magistrate judge’s opinion

explicitly rejected that standard, noting that “the Court is

applying the more ‘deferential’ standard applicable to contingent

fee agreements rather than the ‘reasonable compensation’ standard

applicable to determining fee awards pursuant to fee shifting

statutes.” See Overseas Shipholding, 547 F. Supp. 2d at 91. The

magistrate judge’s opinion, adopted in this respect by the district

court, also looked to the pertinent factors as set forth in

Farmington Dowel. There is no requirement that all of the listed

factors be explicitly considered, especially when not appropriate

to the particular case, and we have clearly stated that it can be

appropriate to consider additional factors. See Farmington Dowel

I, 421 F.2d at 89.

The district court’s factual findings are, of course,

reviewed under a clearly erroneous standard. Cumpiano v. Banco

Satander Puerto Rico, 902 F.2d 148, 152 (1st Cir. 1990). We see no

error in the district court’s findings with respect to the specific

factors.
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First, there was no clear error in finding that the time

and labor actually expended were not significant. See Overseas

Shipholding, 672 F. Supp. 2d at 195. The record reflects that

Hawthorn performed little or no substantive work on the

whistleblower claims until approximately one week before the

sentencing hearing on March 21, 2007. Hawthorn was contacted by

Altura on March 13, 2007, and received the signed agreement from

him the same day. Hawthorn did not receive the signed agreement

from Barroso until March 14, 2007, and represented in an email to

Barroso that he could not begin work on the whistleblower award

matter until he received a signed agreement. Between March 13,

2007 and the sentencing hearing on March 21, 2007, a period of only

8 days, Hawthorn worked on a nine-page memorandum during parts of

two days. On March 20, 2007, he traveled to Boston and met with

local counsel concerning the sentencing hearing. On March 21,

2007, he argued at the sentencing hearing. Hawthorn maintained

below that he devoted a significant amount of time to communicating

with his clients in order to prepare his arguments. However, the

district court rejected this claim as “implausible.” Overseas

Shipholding, 547 F. Supp. 2d at 90 n.8; see Overseas Shipholding,

672 F. Supp.2d at 195 nn.14 & 16. 

Second, there was no clear error in finding that there

was no significant risk that substantial additional time and effort

might be required. Hawthorn contends that there was a possibility
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of a trial-type hearing pursuant to Miller v. United States, 455

F.2d 833 (4th Cir. 1971). In Miller, the Fourth Circuit held that

where individuals had monetary claims pursuant to a whistleblower

provision of the Refuse Act, 33 U.S.C. § 411,the due process clause

of the Fifth Amendment guaranteed those individuals the “right to

confront and to cross-examine adverse witnesses, the right to

participate in the proceedings by counsel and to adduce relevant,

admissible evidence in their own behalf, and the right to a

decision based upon evidence adduced at such a hearing.” Miller,

455 F.2d at 836. Even if we were to assume that Miller was

correctly decided and that it applied to the whistleblower

provision of the APPS (both dubious propositions), there was no

showing that at the time the agreements were executed Hawthorn

intended to request a trial-type hearing in the Massachusetts

proceeding.

Indeed, the evidence is to the contrary. Hawthorn’s

March 12, 2007, correspondence with the government, which took

place shortly before the agreements were executed on March 13 and

14, shows that he intended to largely piggyback on the government’s

efforts and that he was aware that substantial effort on his part

would not be required. In that correspondence, he asked the

government for a sample motion in support of a whistleblower award,

which he received and used to prepare his motion. He also noted

that he would wait until the government had filed its sentencing
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memorandum before he filed his, stating: “I trust you would set

forth everything fairly and accurately because your knowledge of

the case is substantially greater than mine.” Overseas

Shipholding, 547 F. Supp. 2d. at 81. Hawthorn’s January 3rd email

to Barroso stated that “I expect . . . expenses to be minimal.”

Id. at 80. This statement is strong evidence that a trial-type

proceeding was not anticipated. There is no error in the district

court’s finding that as of the time when Hawthorn executed the

contracts with Barroso and Altura, “Hawthorn must have known that

he did not face depositions, discovery or a protracted trial” and

that he “should have been aware that his efforts would be limited

to filing a sentencing memorandum and presenting an argument at

sentencing.” Id. at 88.

Hawthorn also argues that there was a possibility of

significantly more work under the agreements as both agreements

provided that Hawthorn would represent Barroso and Altura in the

event of an appeal. Even if we were to assume that Barroso and

Altura had a right to appeal the denial of a Massachusetts award,

any such appeals would not likely require significant work on

Hawthorn’s part, given the government’s lead role.

Hawthorn also contends that if his efforts to secure

compensation in Massachusetts were ineffective, he would have been

obligated to proceed in Texas. Additionally, he notes that as the

Fifth Circuit has now overturned the dismissals in Texas, an
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additional criminal fine may be imposed, and Barroso and Altura may

now, if they choose, seek whistleblower awards in Texas. Hawthorn

suggests the he is still obligated under the contracts to file and

litigate these claims if his clients so choose, and therefore, his

work under the contracts may not yet even be completed. But again,

assuming that this is so, this can not affect the propriety of the

fee in the Massachusetts proceeding. The district court did not

abuse its discretion in assessing the excessiveness of Hawthorn’s

fee exclusively with respect to work performed in the Massachusetts

proceeding. If Hawthorn were to eventually secure an additional

award from the Eastern District of Texas on behalf of his clients

(perhaps an unlikely eventuality), under the fee agreements he

would be entitled to a third of the Texas award. The Eastern

District of Texas could then, in an exercise of its discretion,

inquire into the appropriateness of Hawthorn’s compensation with

respect to the work performed before that court. We see no error

in evaluating the Massachusetts and Texas proceedings

independently.

Third, the results obtained in the Massachusetts

proceeding were quite beneficial to Hawthorne’s clients. The APPS

permits but does not require the district court to award

compensation to whistleblowers who supply information “leading to

conviction,” 33 U.S.C. § 1908(a) (2006). In fact the Texas

prosecution based on the information that Barroso and Altura
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supplied to the government had been dismissed. See United States

v. Jho, 465 F. Supp. 2d 618, 622-26 (E.D. Tex. 2006). OSG,

moreover, objected to an award to the Texas wistleblowers. Despite

these objections, Hawthorn's clients were awarded substantial sums.

Nonetheless, the district court did not err in finding that the

success achieved was largely due to the government’s efforts.

Hawthorn was not skilled in the relevant area of law. The record

reflects that Hawthorn was unfamiliar with whistleblower awards

until this case. He relied on the government’s expertise and

advocacy on behalf of the whistleblowers and acknowledged that the

government’s knowledge of the case was “substantially greater than

[his].” Overseas Shipholding, 547 F. Supp. 2d at 80-81. It is

clear that whether or not Barroso and/or Altura received an award

was almost entirely dependent on the government’s recommendations,

and that Hawthorn’s efforts had little effect. See id. at 91.

Fourth, the district court did not err in failing to

accord more weight to the fact that a contingency fee of 33% is not

unusual. While 33% contingent fees are not unusual as a general

matter, there was no showing that such a fee was usual in the

unique context of whistleblowing litigation or some similar

context. Moreover, even an agreement that was “reasonable when

made” is not necessarily “insulated from all attack” when “it

yields a fee out of proportion to the extent or the benefit of

services rendered.” Farmington Dowel I, 421 F.2d at 89.
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Fifth, the district court appropriately considered the

circumstances under which the fee agreements were executed. As the

magistrate judge observed, there was reason to question whether

Barroso and Altura were in a position to make informed decisions

about their representation. See Overseas Shipholding, 547 F. Supp.

2d at 87-88. Both men were foreign nationals who were sufficiently

indigent to quality for court-appointed counsel. Further, both

were out at sea when they signed the agreements and were

disadvantaged in their ability to shop around for other

representation. Although both were competent to retain counsel (as

we describe below), the information discrepancy between Hawthorn

and his clients suggests that Barroso and Altura were not in a

position to make an informed decision about the appropriate level

of compensation or to “shop around for other representation.” Id.

at 87; see Schlesinger v. Teitelbaum, 475 F.2d 137, 140 (3d Cir.

1973) (holding that contingent fee agreements were subject to

heightened scrutiny because of the vulnerabilities of seamen); In

re Vioxx Prods. Liab. Litig., 574 F. Supp. 2d 606, 612 n.12 (E.D.

La. 2008) (noting that “federal courts have long endeavored to

protect seamen from unfair contingent fee contracts”). 

Sixth, the district court did not err in finding that the

contingent nature of the representation did not justify a higher

award. As we have noted, the fact that a fee arrangement is

contingent upon success is a relevant factor in determining the
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appropriate fee level. See Farmington Dowel I, 421 F.2d at 90.

The reason is that “the fact that the attorney is willing to take

an all-or-nothing arrangement might justify a fee which is higher

than the going hourly rate in the community.” Id. Though this

factor favors a higher fee for Hawthorn than the usual hourly rate,

the district court did not err in finding it not to be significant.

In assessing whether a contingent fee award is excessive, we

consider whether the attorney faced meaningful risk. See Bos. &

Me. Corp., 778 F.2d at 897. Here, there was indeed a risk of no

recovery because (as noted earlier) there was an issue as to

whether the Massachusetts district court had the authority to grant

awards to Barroso and Altura. Despite these hurdles, the amount of

the contributions Hawthorn could have, and did make, in this case

were “necessarily finite.” Overseas Shipholding, 547 F. Supp. 2d

at 89. The size of an appropriate contingent fee award should be

determined in part by multiplying the expected number of hours of

work times the usual hourly rate, increased to take account of the

possibility that the attorney’s efforts might not be successful.

Cf. Coutin v. Young & Rubicam Puerto Rico, Inc., 124 F.3d 331, 337

(1st Cir. 1997). Hawthorn has made no showing that a $25,000 fee

for each client (for a total of $50,000) is insufficient to take

account of the contingent nature of the agreement.

Finally, there was no evidence that the representation

precluded other employment by Hawthorn, or that other factors would
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justify the claimed fee. To be sure, the record reflects that at

least as of the time that Hawthorn moved for approval of his fees,

his clients wished the agreements to be enforced. As noted above,

a client’s willingness to abide by the fee arrangement is relevant

but not controlling. Farmingtown Dowel I, 421 F.2d at 90 n.62.

Rather, in reviewing the propriety of fee agreements, the key issue

is “the conformance of the legal profession to its own high

standards of fairness.” Id. The magistrate judge did not abuse

his discretion in discounting the clients' agreement, especially in

light of the indigent status of both clients.

In conclusion, the district court did not err in

considering the relevant factors and did not abuse its discretion

in concluding that Hawthorn’s requested fees were excessive. Nor

did the district court err in concluding that fees of $25,000 for

each client was an appropriate figure representing the outer limit

of reasonable compensation under the circumstances.

V.

Hawthorn contends that the district court abused its

discretion in further reducing his share of Altura’s award from

$25,000 to zero. Though “[d]enial of attorneys’ fees may be a

proper sanction for violation of an ethical canon,” Culebras

Enters. Corp. v. Rivera-Rios, 846 F.2d 95, 97 (1st Cir. 1988), we

conclude that Hawthorn did not violate any ethical canons.
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When Hawthorn was admitted pro hac vice to appear before

the district court, he became subject to the Massachusetts Rules of

Professional Conduct, which the District of Massachusetts has

adopted. See Local Rules for the District of Massachusetts

83.6(4)(b). The district court denied Hawthorn a fee for his

representation of Altura on the ground that “Hawthorn's conduct .

. . violated the spirit, if not the letter, of two, and perhaps

three, attorney disciplinary rules,” namely Massachusetts Rules of

Professional Conduct 4.2, 4.3, and 7.3. Overseas Shipholding, 672

F. Supp. 2d at 197-98.

Mass. R. Prof’l. Conduct 4.2 states that “[i]n

representing a client, a lawyer shall not communicate about the

subject of the representation with a person the lawyer knows to be

represented by another lawyer in the matter, unless the lawyer has

the consent of the other lawyer or is authorized by law to do so.”

The district court seemed to believe that Altura was represented by

his CJA counsel, Harris, in the same matter as in which Hawthorn

agreed to represent Altura. The record is unclear whether Altura

was still represented by Harris in the Texas criminal matter at the

time that he became Hawthorn’s client. However, the whistleblower

claim was not the "same matter” in which Harris represented Altura.

The record indicates that Harris was appointed under the Criminal

Justice Act to represent Altura and to determine whether Altura was

a target or subject of a criminal investigation, to advise him of
-28-

his Fifth Amendment rights, and to assist him in his appearance

before the grand jury and during interviews with the government.

The magistrate judge in Massachusetts adopted the Eastern District

of Texas’ conclusion that Barroso’s whistleblower claim was not the

“same matter” as the CJA representation by Hawthorn. If that was

the case for Barroso, then certainly Hawthorn’s representation of

Altura for his whistleblower claim in Massachusetts was not the

“same matter” for which Harris had been appointed to represent him.

Since the criminal representation was not the same matter

as the whistleblower compensation proceedings, we do not think that

Hawthorn had any obligation to contact Hawthorn’s criminal counsel,

or to assist Altura in doing so as the district court suggested.

Moreover, Altura had already attempted to get in contact with

Harris and had indicated to Hawthorn that Harris was unresponsive.

There is a strong public interest in permitting an individual to

obtain the counsel of his choice. See Wheat v. United States, 486

U.S. 153, 164 (1988); Morris v. Slappy, 461 U.S. 1, 22-25 (1983).

The sentencing hearing was rapidly approaching and Altura was

entitled to secure counsel to represent him in that proceeding. 

Requiring Hawthorn to contact previous counsel or to insist that

Altura make such a contact might interfere with Altura’s ability to

obtain counsel in time for the sentencing hearing. Requiring new

counsel to contact previous counsel or to insist that the client do

so might, in fact, subject the client to importuning from previous
-29-

counsel to retain him in connection with the new matter, even where

the client had decided that he did not want previous counsel to

represent him in the new matter. While courtesy might typically

suggest that previous counsel be informed of the new

representation, we hold that Hawthorn had no duty to contact

Altura’s counsel in the Texas criminal matter or to require Altura

to do so, and accordingly, he did not violate the letter or spirit

of Mass R. Prof’l Conduct 4.2.

Mass. R. Prof’l. Conduct 4.3 states that “[i]n dealing on

behalf of a client with a person who is not represented by counsel,

a lawyer shall not state or imply that the lawyer is

disinterested.” The district court seemed to believe that Hawthorn

violated the spirit of this rule by communicating with Altura

although he was already representing Barroso. We see no basis for

concluding that Hawthorn violated either the letter, or the spirit,

of this rule. Altura already knew that Hawthorn was representing

Barroso—there was no need for Hawthorn to inform him of that fact.

Rule 4.3(b) states that “[d]uring the course of

representation of a client, a lawyer shall not give advice to an

unrepresented person, other than the advice to secure counsel, if

the interests of that person are or have a reasonable possibility

of being in conflict with the interests of the client.” Nothing in

the record shows that Hawthorn gave any advice to Altura before he

was engaged to represent Altura, other than to secure counsel.
-30-

Hawthorn told both clients about a potential conflict of interest,

and they both waived those possible conflicts.

Mass. R. Prof’l Conduct 7.3(b) provides that “a lawyer

shall not solicit professional employment if . . . the lawyer knows

or reasonably should know that the physical, mental, or emotional

state of the prospective client is such that there is a substantial

potential that the person cannot exercise reasonable judgment in

employing a lawyer.” Hawthorn did not solicit business from

Altura; Altura sought Hawthorn out. There is no basis for

concluding that Altura was incapable of “exercis[ing] reasonable

judgment in employing a lawyer.” A contrary approach would deprive

individuals in Altura’s position of the opportunity to secure legal

representation. If Barroso was capable of employing Hawthorn, as

the district court assumed, so was Altura. 

We therefore hold that the district court abused its

discretion in disallowing Hawthorn from recovering a fee from his

representation of Altura. He should receive a fee of $25,000 for

his representation of Altura.

VI.

For the foregoing reasons, we affirm the district court’s

approval of fees in the amount of $25,000 for Hawthorn’s

representation of Barroso. We reverse the district court’s

disapproval of any fee for the Altura representation, and hold that
-31-

Hawthorn may collect $25,000 in fees from his representation of Altura.

Affirmed-in-part, reversed-in-part, and remanded.