### INTHE UNITED S TATESCOU RT OFAPPEALS FORTHEFIFTH CIRCU IT

N o. 07- 20732 UN I TE D S TA TE S OF AM ERI CA P l ai n t i f f

- A pp el l ee v. J OHN A NT HONYC LAR O D efen d a n t- A p p ell a n t

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rom t h e U n i t ed S t ates D i st ri ctC ou rt f ort he Sout her n D i st r i c tof Texas U SD C N o. 4: 04- C R

- 126- 1 B ef ore R E AV L E Y , B A R K S D A L E , an d G A R Z A , C i rcui tJu dg es . R H E S AH A W K IN S B A R D K S D A L E , C i rcui tJu dg e: A n i n di ct m en tagainstJoh n A n t h on y C l aro, a l aw yer, ha vi n g been di sm i ss edi n 20 0 5 , an dthe G ov ern m en t’ s h a vin g n eit h er a p p ea l ed thatdi sm i ss al n or s ou gh tt o re- i n di ctC l aro, he f i l ed a m ot i on foratt orney’ s f ees and l i t i gati on ex p en ses , pu rsu a n t t o th e H yd e A m en d m en t, P u b . L . 1 0 5 -11 9 , § 61 7 , 1 1 1 S tat. 2 5 1 9 (1 9 9 7 ), r ep rin tedin1 8 U . S. C. § 3 00 6A, N o t e (pr o vi di ng t hatpr e va i l i ng cri m i n aldef

en da n t s m ay r e co v e r “a re a so n a b le a tto rn e y ’ s fe e a n doth e r liti g a tion expe nse s”w her e t he G ove r nm ent ’ s pos i t i on w as “vex at i ous , f r ivol ous , ori n bad fa i t h ” ) . Th e m o t i o n wa s g r a n t e di n p a r ta n dd e n i e di n p a r t . C l a r o a p p e a l s t wo of t h e den i ed fees r equ est s. United States Court of App eals Fifth Circuit 

### F I L E D Aug ust12, 2009 Cha rl es R. F ulb ru g e II I ClerkN o. 07- 20732

2 A ti ssue are w h et h er th e H yd e A m en dm en tal l ow s t h e rec overy of at t o r ne y’ s fe e s : f

o rCl ar o ’ s c o nt i nge nt - fe e c o nt r ac tw i t h a n a t t o r ne y t o pur s ue C l ar o’ s c l ai m s und ert he H yde A m endm ent ; and f orun com pensa t ed par al egal servi ces provi dedby C l aro’ s w i fe f or defen di n g aga i n stt h e cr i m inal cha rges a g a i n s tC l a r o . A F F I RMED I N P AR T ; VAC AT ED I N P AR T ; a n dR EMANDE D. I. T h i s m att er ari ses f

rom a cri m i n al proceedi n g i n t h e S ou t h ern D i st ri ctof T exas aga i n stC l aro— a l aw yer— an d seven others. In 200 4, t h ey w ere i n di ct ed f or c on spi racy, m a ilfr au d, m on et ary t ran sact i on s w i t h cr i m i n al l y derived pr o pe r t y, a nd m o ne y l aund e r i ng. Def en da n t s w e r e c har ge d wi t h de f r aud i ng m illio n s o f d o lla r s o f p r e m iu m p a y m e n ts fr o m e m p lo y e e h e a lth -c a r e b e n e fit program s. In Ju l y 200 5, t h e di st ri ctcourtdi sm i ssed t h e i n di ct m en tagainstC l aro w i t ho utpr ej udi c e . The G o ve r nm e nt ne i t he r ap pe al e d t hat di s m i s s al no rs o ugh t an ew i n d i ctm en t. T h a t S e p te m b e r , u n d e rth e H y d e A m e n d m e n t, C la r o m o v e d to r e c o v e rh is att orney’ s fees an d expen ses, both f or defen se of

t h e un derl yi n g cri m i n alcharges a n d for pur sui ng t he H yde A m endm entc l ai m . Ahear i ng on t he m ot i on w as he l d i n Apr i l 20 06 , dur i ng w hi c h t he di s t r i c t c o ur ta dm o ni s he d the G o ve r nm e nt f or f i l i n g an “i n com preh en sibl e” indic t m en ta n d sub sequ en tbi l lof parti cul ars, a n df or a cti n g w i th “re ck l ess d i sreg a rdfor th e tru tho r fa l sity of th e ch a rg e”. It e nt e r e d a n o r de rt hat : ( 1) t he G o ve r nm e ntw o ul d p ayCl ar o ’ s a t t o r ne y’ s f e e s a nd exp en ses; an d ( 2) al on g t h at li n e, C l aro w as t o subm i ta one-page cal cul ati on of hi s r e que s t e d fe e s and e xp e ns e s , t o be f o l l o w e d by t he G o ve r nm e nt ’ s s ubm i t t i ng aon e-pa ge “calculationof i ts po sit i on on C l a ro’ s ca l cu l a ti on s”.N o. 07- 20732

3 C la r o s u b m itt e dth e fo llo w in g . F o rfe e s a n d e x p e n s e s in c u r r e din def endi ng agai nstt he c r i m i na lc ha r ges , he r eques t ed: ( 1) $329, 106. 29 f ort he l aw f i r m of H ar t z o g Cong e rC as o n & N e vil l e (t he N e vil l e f i r m ) ; ( 2) $1, 68 6. 42 f

o rt he l aw firm of C ruse S cot tH en derson; a n d ( 3) $ 292 , 910 . 53 f or C l aro an d h i s w i fe. Forfe e s a nd e xp e ns e s fo rpur s ui ng t he H yd e A m e ndm e ntcl ai m , he r e que s t e d: ( 1) $ 24 9, 48 1. 29 f

o rt he l aw f

i r m of D e G ue r i n Di c ks o n & H e nne s s e y ( a 40 pe r c e nt co n tin g e n t fe e b a se do n th e to ta l a b o v e -d e sc rib e dre q u e ste dfee s a n dex p e n se s); ( 2) $ 2, 00 0 f

o rpe ndi ng l e ga le xp e ns e s ; a nd ( 3) $ 3, 50 0 f o re s t i m at e d f

e e s a nd e x p e n se s (forth e sc h e d u led9 M a y2 0 0 6 h e a rin gon th e su b m itted re q u e sts ). The G o ve r nm e nt ’ s m e m o r and um i n o ppo s i t i on c o nt e nde d: ( 1) t he at t o r ne y’ s fe e s a w ar de d t o C l ar o sho ul d b e l i m i t e d t o t he c r i m i nalpr o s e c ut i o n, an d they sh ou l d be f u rt h er l i m i t ed t o t h e st atutor y cap of $12 5 an hou r (pl u s a c os t - of

- l ivi ng adj ust m ent) be c ause ther e w er e no “ spe c i alfac t or s”m er i t i ng an u pw ard adj u st m en tfr om tha tcap ; (2) the fees r equ est ed f or th e w ork by C l aro a n dh i s w i fe w ere n ot “i n cu rred ” by C l a ro, a s req u i redbythe H yd e A m en d m en t, anda c c o r d i n g l yn o tr e i m b u r s a b l e ; a n d( 3 ) b e c a u s e n o p r o v i s i o n i n t h e Hyde A m e n d m e n t p e r m i t s aco n tin g e n t-fe e a w a r d , C la r o ’ s re q u e s t b a s e do n h is conti n gen t - fee contr actha d n o l egal basi s. At t he 9 M ay 20 06 he ar i ng o n Cl ar o ’ s c l ai m , s e ve r al i nvo lve d i n t he proceedi n gs f

or each si de t est i f

i ed r egard i n g t h e requ est ed f ees a n d expen ses. T h e d i stri ct cou rt’ s 31 J u ly2 0 0 7 op i n i on gra n tedi n pa rt, an dde n i edi n pa rt, C la r o ’ s cla im . I ta w ar de d: ( 1) $ 33 2, 60 6. 29 f o rt he N e vil l e f

i r m , f o r de fe ndi ng ag ai ns tt he c r i m i nalc har ge s ; ( 2) $ 28 , 00 0 f o rt h at s am e f

i r m f o rpur s ui ng t he H yd e Am e ndm e ntc l ai m ( as di s c us s e d i nf ra , i tha d n ot don e so) ; an d ( 3) $1, 686 . 42 forN o. 07- 20732

4 C r u s e S c o ttH e n d e r s o n , fo rd e fe n d in ga g a in s t th e cr im in a l ch a r g e s . F in d in git unr e as o nab l e , t he c o ur tde ni e d the c o nt i nge ntfe e fo r$ 24 9, 48 1. 29 f o rt he D eG u eri n f

i rm ’ s w ork on t h e H yd e A m en dm en tcl ai m , fort h e reasons di scussed i nf ra . Fi nall y, o f

t he $ 29 2, 91 0. 53 r e que s t e d b y Cl ar o f o rhi s a nd h i s w i fe ’ s w o r k, t h e di st ri ctcourt : ( 1) gran t ed $2 9, 000 f or C l aro’ s di rect exp en ses, f or it em s s u ch as c o py i ng, f

i l i ng, a i rfar e f

o rt he N e vil l e f

i r m ’ s at t o r ne ys , andt r ans c r i pt s ; a nd ( 2) den i ed the $75 , 250 requested f or C l aro’ s w ork an d t h e $18 3, 750 requested f or hi s w i fe’ s par al egalw or k, r ul i ng t hei rw or k di d notc ons t i t ut e “i ncur r ed” fee s as d e s c r ib e db yth e s ta tu te . I n t o t al , t hr o ugh a 31 July 20 07 O r de ro n Defe ns e Fe e s a nd Exp e ns e s , t he di st ri ct co u rt aw arded$39 1, 292 . 29 to C l aro f or at t orney’ s f

ees and expen ses. T h a t a m o u n t h a s b e e n p a id . (T h e G o v e r n m e n t v o lu n ta r ilyd is m is s e dits a p p e a l.) II. C l aro does n otc o nt e s tthe den i alo f hi s c l ai m f

o rhi s w o r k i n de fe ndi ng a g a in s t t h e cr im in a l ch a r g e s . H e d o e s ch a lle n g e th e o th e rtw o d e n ia ls . Ati s s ue a r e : ( 1) w h et he rCl ar o c an r e c o ve ra t t o r ne y’ s fe e s f o rt he D e G ue r i n f

i r m ’ s pur s ui ng, und e rit s c o nt i nge nt - fe e c o nt r ac t , t he H yd e Am e ndm e nt c l ai m ( as di s c us s e d i nf ra , the $28 , 000 a w arded forthe N evi l l e f i rm w as i n err or; itdi d n otp u rsue t h e cl ai m ) ; a n d ( 2) w h et h er C l aro can recover f or hi s w i fe ’ s pa r al e ga lw o r k f o rt he und e r l yi ng c r i m i nalpr o c e e di ngs . A gai n, t he b a la n c e o f th e a w a r do f a p p r o x im a te ly$ 3 9 1 ,0 0 0 is n o t d is p u te d . An aw ar d o rdeni alof at t o r ne y’ s f e e s a nd e xp e ns e s und e rt he H yd e A m e n d m e n t is re v ie w e dfo ra b u s e o f d is c r e tio n . E . g. , Un i t ed S ta tes v. Tru es d a le , 211 F . 3d898 , 905 ( 5th C i r. 200 0) . L egal determ i n ati on s un derl yi n g t h e aw ard ar e , o f c o ur s e , r e vi e w e d de no vo . I d. at906.N o. 07- 20732

5 T h e H yd e A m en dm en tw as ena ct ed byC on gress i n 199 7 to al l ow w r o ngf u l l y prosecuted cr i m i n aldefe nda nt s “ a m e anst os anc ti o n theG o ve r nm e nt fo r p r o s e c u to r ia l m is c o n d u c t” . Un i t ed S t ate s v. Hri st ov , 39 6 F . 3 d10 4 4 , 10 4 6 ( 9 th Ci r . 2 00 5) (i nt e r nalq uo t at i o n m ar ks a nd c i t at i on o m i t t e d) . The Am e ndm e nt a u t h o r iz e s t h e d is t r ic tc o u r tto a w a r dap r e v a il in gp a r t y“a r e a s o n a b le a t t o r n e y ’s fe e a nd o t he rl i t i ga t i o n e xp e ns e s , w he r e t he c o ur tf i nds t hat t he po s i t i o n o f t he U ni t e d St at es was v e xa t i o us , f r ivo l o us , o ri n b adfait h, unl e s s t he c o ur tf i nds t h a ts p e c i a lc i r c u m s t a n c e s mak e s s u c h a n a w ar d unj u s t” . 1 8 U. S . C. § 3 0 0 6 A, N o te . A m ot i on und er t he H yde A m endm ent i m pl i c at es i nt er es t s i dent i c a lto t h o s e i m p l i c a t e d b y o n e u n d e r t h e Eq u a l Ac c e s s t o J u s t i c e Ac t ( EAJA) , 2 8 U. S . C. § 2 41 2: “ I n e ac h c as e , the m o va nti s s e e ki ng an aw ar d o f a t t o r ne y’ s fe e s [ and e xp e ns e s ] b as e d up o n al i t i ga t i ng s t r at e gye m pl o ye d b y t he g o ve r nm e n tt hat , t he m o v a n t c la im s , co n flic ts w ith ce r ta in s ta tu to r ilyd e f i n e dn o tio n s o f fa irp la y .” Tru es d a le , 21 1 F . 3 dat 90 4 . A ccord i n gly, i n en a cti n g th e H yd e A m en d m en t, C on gr ess directe d t h a t th e p roce d u res a n dl i m i tati on s of th e E AJ Aare , w i th l i m i t e d e xc e pt i o ns , i nc o r po r at e d i nt o t he H yd e Am e ndm e nt . I d. a t 9 0 3 . In th is r e ga r d, 1 8 U . S. C. § 3 00 6A, N o t e pr o vi de s : “ Suc h a w ar ds [ m ad e pur s uantt o t he H yd e Am e ndm e nt] s hallb e g r ant e d p ur s uantt o t he pr o c e dur e s a nd li m i t at i o ns (butno tt he b ur de n o f pr o o f ) pr o vi de d f

o ra n a w ar d un de rs e c t i o n 2 412 [ o f t he E AJ A].” S ect io n 2 4 1 2 of th e E AJA , h ow ev er, con tain s tw o p rov i sion s relati n g to a tt o r n e y ’ s fe e s : su b p a r ts (b ) a n d(d). S u b p a r t (b ) p r o v id e s , in tera lia , tha t a di s t r i c tc o ur t“ m aya w ar d r e as o nab l e fe e s a nd e xp e ns e s o f a t t o r ne ys . . . t o t he pre vail i ng par t y i n any c ivilac t i on br oughtby oragai nstthe U ni t ed St at es ” . 28N o. 07- 20732

6 U . S. C . § 2412(b) . Subpart( d) c ont ai ns the “ pro c edur es and l i m i t at i ons ” f oran a w a r du n d e rth e A c t. 2 8 U .S .C . § 2 4 1 2 (d ). F o rt h e tw o is s u e s a t h a n d , w e jo in ou r si st er ci rcui t s t h at have h el d the “ procedu res an d l i m i t ati on s” i n corporat ed b y t h e H yd e A m en d m en t a re th ose i n su b p a rt (d). S ee Uni t e d S t at e s v. A i senberg , 3 5 8 F .3d 1 3 2 7 , 1 3 3 9 -4 2 (11 th C ir. 2 0 0 4 ); Un itedS ta tes v. Kn o tt , 256 F .3d 2 0 , 2 6 -2 7 (1s t C ir. 2 0 0 1 ); Uni t e d St at e s v . She r bur ne , 249 F. 3d 1121 , 1129 (9 th C ir. 2 0 0 1 ); Un i t ed Stat es v. R anger E lec. Com m c’ n s, I n c. , 210 F. 3d 627, 633 (6 th C ir. 2 0 0 0 ), o v e r r ule d o n o t he r gro unds by Sc ar bo ro ughv . Pr i nc i pi , 5 41 U . S. 4 0 1 (2 0 0 4 ). S ect i o n 24 12 ( d) s t at e s , i n pe r t i ne nt pa r t : “ [A] c o ur t s hall awar d to a p r e v a i l i n gp a r ty. . . fe e s a n do th e re x p e n s e s . . . i n curred b y t h a t p a rty . . . u n le s s th e co u r t fin d s th e p o s itio n o f th e U n it e d S t a te s w a s s u b s ta n tia lly j u s t i f i e do rt h a ts p e c i a lc i r c u m s t a n c e s mak e a n a wa r du nj u s t” . 2 8 U. S . C. § 2 4 1 2 (d) ( 1 ) (A) ( e m p h a s i s a d d e d) . “ F e e s a n do t h e re x p e n s e s ” in c lu d e“r e a s o n ab le att orney fees . . . based u pon prevai l i n g m arket rat es f or th e ki n d an d qu al i t y of th e s e rv ic e s fu r n is h e d , e x c e p tt h a t . . . a tt o r n e yfe e s s h a ll n o t b e a w a r d e din excess of

$12 5 per h ou r u n l ess the courtdeter m i n es t h at an i n crease i n t h e cos t o f livin gorasp e cia l fa cto r . . . j u stifies ah igh e r fe e ”. 2 8 U .S .C . § 2 4 1 2 (d)(2)(A). T o s u p p o r t a n a w a r d , th e p r e v a ilin gp a r tyis re q u ir e d , in tera lia , to “ su b m i t t o t he c o ur ta n a pp l i cat i o n f o rfe e s a nd o t he re xp e ns e s . . . [ s ho w i ng] t he a m o unt soug h t , i n cl u di n g an i t em i zed st atem en tf rom an y att orney . . . representi n g or a p p ea ri n g inbe h a l f of th e p a rty sta ti n g t h e actu a lti m e ex p en d edan dthe rate a t w h ich fee s a n doth e r e x p e n se s w e re co m p u te d”. 2 8 U .S .C . § 2 4 1 2 (d)(1)(B ).N o. 07- 20732

7 A. The r e que s t e d $ 24 9, 48 1. 29 f o rt he D e G ue r i n f

i r m ’ s pur sui n g t he H yd e A m e n d m e n t c la im w as bas ed o n C l ar o’ s c ont i ngent - fee agr ee m entw i t h t hat firm : i t w a s to rece ive a 4 0 p erce n t con ti n ge n t fee “on an y H yd e p eti ti on aw a rd ”. I n o t he rw o r ds , t hatf i r m w as t o r e c o ve r4 0 pe r c e nto f t he a w ar d f

o rw o r k d o ne in th e u n d e r ly in gcr im in a l p r o c e e d in g s . The di s t r i c tc o ur tr ul e d thi s r e que s tw as unr e as o nab l e . I n do i ng s o , t he cou rt ad d ed : “D eG u er in didn o w ork . D eG u erinw a s u n a b l e a t he a ri n gs to answ ers i m pl e q ues t i ons abo utt he c as e. Cl ar o a nd N evil l e’ s f i r m di d, ai ded by an exception a lparalegal . ” Th e courtconcl u dedt h at a r eason able am ou n tf or purs ui ng t he H yde c l ai m “ [u] ndert he bas e f ee and t he fac t or s”w as $28, 000. Inst eadof

aw ardi n g t h e $28 , 000 f or w ork don e by the D eG u eri n f i rm , how ever, th e cou rt aw a rd edi t t o th e N ev i l l e f i rm , C l a ro’ s crim i n a l -defen se attorn ey s. (It, how eve r , di d notdo suc h w or k. O n t he o t herhand, as dis c uss ed, C l ar o w as aw ar ded appr oxi m at ely $333 , 000 f ort hat f i r m ’ s w or k i n t he under l yi ng c r i m i nal p r o c e e d in g s .) Iti s un cl ear f

rom the di st ri ctcou rt ’ s op i n i on w h et h er i t s ru l i n g w as based o n t h e c o n c l u s i o n t h a tc o n t i n g e n t - fe e b a s e da wa r d s p u r s u a n tt o t h e H yd e A m en dm en tare un reasona bl e per s e , or w h et h er t h e request w as den i ed ba sed on t h e court ’ s c on cl u si on tha t“D eG u eri n di d n o w ork”. I ti s al so un cl ear w h et h er “D eG u erin ” refere n ces a n attorn eyor th e law fi rm o f w h i ch h e i s am em b er. In any e ve nt , be c aus e w he t he rc o nt i nge nt - fe e b as e d a w ar ds a r e pr o pe rund e rt he H yd e Am e ndm e nti s aq ue s t i o n o f l aw, r e vi e w e d de no vo , se e Tru es d a le , 211 F. 3d at9 06 , a nd, b e c aus e i ti s no tdi s put e d thatt he H yd e c l ai m w as pur s ue d b y t he D e G u e r in fir m , th e m e a n in go f “D e G u e r in ” in th e d is tr ic t c o u r t’s o p in io n isN o. 07- 20732

8 i m m ater i alt o o url e ga la nalys i s . (Al s o i m m at e r i alt o o ura nalys i s i s t he st atem en ti n C l aro’ s bri ef on ap pea lt h at he seeks a reducedconti n gen tfee of $10 0, 000 , pl u s $1, 049 . 64 i n expen ses, becau se t h e D eG u eri n f i rm w as reli eved of i t s obl i gati on t o represent C l aro on ap pea l , an d, a s a r esul t , t h e conti n gen t - fee c o n tr a c t w a s m o d ifie d .) C l aro cl ai m s f

ees based on a conti n gen t - fee contr actare r ecoverabl e un der t h e A m en dm en tbecau se s u ch fees are recover able u n der t h e E AJAan d becau se t hi s c i r c ui tha s he l d c o nt i nge ntfe e s a r e r e c o ve r ab l e und e rs i m i l arfe e - s hi f t i ng s ta tu te s . T h e G ov ern m en t cou n ters th a t C l a ro d i dn ot car ryh i s bu rd en of p roo f to e s t ab l i s h t hatt he fe e s a ti s s ue w e r e “i nc ur r e d” be c aus e he fail e d t o pr e s e nta ny i t em i zed bi l l i n g recor ds f rom t h e D eG u eri n f

i rm . Fu rt h er, C l aro fai l ed to att ach s uc h r e c o r ds t o hi s m o t i o n f o rr e c o ns i de r at i o n. The r e f o r e, ac c o r di ng t o t he G overnm en t , C l aro not on ly fai l ed to est abli sh the D eG u eri n f i rm ’ s f ees w ere “r e a s o n a b le ”, b u t a ls o fo r fe ite da n ycla im fo rre a s o n a b le fe e s . In ad di t i on , t h e G overnm en tcontends th e au t h orit i es c i t ed byC l aro are i n ap posi t e becau se th ey on l y st an d f or th e p ro posi t i on t h at c on t i n gen t - fee ag r e e m e nt s i m po s e ac e i l i ng o n a t t o r ne y’ s - fe e s a w ar ds ; t he y do no tr e m o vet he di st ri ctcourt ’ s authori t y t o deci de w h et h er r equ est ed fees are reason a b le. F u rth e r, b e ca u se th e H y d e A m e n d m en tw aives soverei gni m m u n ity, an d becau se i tdo e s no te xp r e s s l y autho r i z e c o nt i nge nt - fe e b as e d a w ar ds , t he G o ve r nm e nt m a in ta in s s u c h fe e s a r e n o t a u th o r iz e d . I n t he a l t e r nat ive , t he G o ve r nm e ntc l ai m s w e ne e d no t c o ns i de rt he i s s ue bec ause : t he di st r i c tc our tdi d notabus e it s di sc r et i on i n c onc l udi ng $28, 000 w as a r e as o nab l e fe e f

o rpur s ui ng t he H yd e c l ai m ; t h ata m o untw as a w ar de d a ndN o. 07- 20732

9 p a idto C la r o ; a n dit is fo r C la r o to d e c id e w h o is e n tit le dto it. (A l on g t h at li n e, C l ar o a nd t he G ove r nm entagr ee the di st r i c tcour terr oneo usly aw ar ded $28 , 000 fo rth e N e v ille fir m ’ s w o r ko n th e H y d e cla im , b e c a u s e it d idn o t w o r ko n it.) 1. O u r ana l ysi s i s governedby the w el l

- est abli shed p ri n ci pl e tha tw aivers of s o v e r e ig n im m u n ity , s u c h a s th r o u g h th e H y d e A m e n d m e n t, a r e s tr ic tly c o n s tr u e dinfa v o ro f th e s o v e r e ig n . E . g. , Lane v . Pe na , 5 1 8 U .S . 1 8 7 , 1 9 2 (19 9 6 ); L i n kou s v. Un i t ed S t ate s , 1 42 F. 3d2 71 , 2 75 ( 5t h Ci r . 1 99 8) . Both t he H yd e A m en dm e n t a n d the E AJAare s i l en ton the i ssue of conti n gen t - fee based a w a r d s . A lth o u gh th e E AJAre q u ir e s th a t t h e fe e s b e “in c u r r e d”, see2 8 U. S . C. § 2 4 1 2 (d)( 1 )(A), th ere is n o su ch e xp ress re q u i rem en t in th e H yd e A m en d m en t. S ee 1 8 U . S . C . § 30 0 6 A , N ote (“th e cou rt . . . m a y aw a rd to a p rev a ilin gp a r ty

. . . ar e as o nab l e a t t o rney ’ s fe e a nd o t he rl i t i ga t i o n e xp e ns e s ” ) . As di s c us s e d, h ow ev er, th e E AJA ’ s req u i rem en t th a t th e fees b e “i n cu rred ” i s i n corp ora tedi n to th e H y d e A m e n d m e n t. I n TG SIn t ernati on al, In c. v. Un i t ed S t ate s , 9 8 3 F .2d2 2 9 (F e d . C ir. 1 9 9 3 ), TG S, ag o ve r nm e ntc o nt r ac t o r , pr e va i l e d ag ai ns tt he G o ve r nm e nton the i s s ue of l i abi l i t y, bas ed o n i ts d elay i n ac c ept i ng and ac t ivat i ng an el ec t r i c al s u b s t a tio n . I

d. at 22 9 . T h e G ov ern m en t ap p ea l ed , bu t th e F ed era lC ir c u it rem an dedt o t h e A rm ed S e rv ices B oard of C on t ractA pp eal s onl y f or d e te r m in a tio n o f th e a m o u n t o f r e c o v e r yb yT G S . I d. (c i t i ng TG S Int ’l, Lt d. v. Un i t ed S t ate s , 9 49 F. 2d4 02 ( Fed . Ci r . 1 99 1) ) . W hi l e t he m at t er w as pe ndi ng b efore th e B oa rd , T G S m ov ed , u n d er E AJ A§ 24 1 2 (d), f or a ttorn ey ’ s fee s w i th r e s p e c t t o th e a p p e a l. I d. a t2 3 0 . T h e fe e s a mo u n twa s b a s e do n “ a t t o r n e yt i meN o. 07- 20732

10 a c tu a llye x p e n d e d ”. I d. TG S’c ont r ac tw i t h i t s at t or ney, how eve r , c al l ed f oran in itia l re ta in e rp lu s “a co n tin g e n t fe e to b e b a s e du p o n a c tu a l re c o v e r y”. I d. T h e F ederalC i rcui t h el d th at, pu rsuan tt o t h e E AJA , T G S w as enti t l ed t o an aw ard ba sed o n th e con t i n gen t - fee contr act , rat h er th an it s r equ est ed awar d b as e d o n t he w o r k b y t he a t t orney, b eca us e “t he na t ur e o f t he arran gem en tbetw eenT G S a n d i t s c ou n selw as such t h at th e fees a ctu a lly i nc ur r e d by T G S w ou l d n otbe kn ow n un t i laf t er det erm i n ati on of qu an t u m on r e m a n d ”. I

d. (e m p h a sis a d d e d). T h e im p o rt o f TG S I nt e r nat i o nal , th e r e fo r e , is th a t co n tin g e n t-fe e c o n tr a c ts m a yb e a n a p p r o p r ia te m e a s u r e o f fe e s re c o v e r a b le u n d e r § 2 4 1 2 (d). Tur ni ng t o t hi s c i r c ui t ’ s de c i s i o ns , i n Es t a t eof L e ev . F EM A , 812 F. 2d 253, 25 5 ( 5th Ci r . 1 98 7) , pl ai nt i f f pr e va i l e d i n a n a ct i on aga i ns tFEM A f o rt he r ec ove r y o f

i nsur ance pr oc ee ds un d er a N at i onalFl oo d I nsur ancePro gr am p o lic y . I

d. Af t era be nch t r i al , t he pl ai nt i f f w as aw ar ded o ver$188, 000 i n ac t ual d a m a g e s . Id . H a v in gfo u n dth e p o s itio n o f th e U n ite dS ta te s n o t “ s u b s ta n tia lly j us t i f i e d” , t he di s t r i c tc o ur ta l s o o r de r e d FE M A t o payat t o r ne y’ s fe e s und e rt he E AJ Ain th e a m o u n to f o n e -t h ir do f p la in t if f’s r e c o v e r y , b a s e do n p la in t if f’s c o n tin g e n t-fe e co n tr a c t. I d. at256- 57. The aw ar ded am ountex c ee ded w hat p lai n t i f f w ou l d otherw i se hav e rec overed u n der t h e E AJAbased on t h e hou rs w orkedby the att orneys. Id . at257. R eason i n g t h at th e t h en st atutor y h ou rly cap of $ 7 5 w a s “a st atutor y c e i l i ng andno taf

l o o r” , a n d n ot i ng t he di s t r i c tc o ur t ’ s fail ur e t o di s c us s “ any e xc e pt i o nalc i r c um s t anc e s upo n wh i ch i tb as e d the a w ar d” , o urc o ur the l d no

“ s pe c i alfac t o r s e xi s t [ e d] t o j us t i f y an awar d e xc e e di ng t he s t at ut o r y m ax i m um r a te ”. I d. I t f u r t h e rs t a t e d : “ T h e fa c tt h a t[p l a i n t i f f ] h a dc o n t r a c t e d , o f

it s o wnN o. 07- 20732

11 vo l i t i o n, t o ac o nt i nge nc y fe e ar r ang e m e ntw i t h i t s at t o r ne ys , i s nota s uf f i c i e nt rea son f

or d ev i a ti n g from the l eg a lstan d a rdset bystatu te. ” I d. (citin gw i th a p p r o v a l Joh n son v. G a. High w ay Express , I n c. , 488 F . 2d714 , 718 ( 5th C i r. 1 9 7 4 ), ab rogate dby B la n cha rd v. B erge ron , 4 89 U . S. 8 7 ( 19 89 ) , f o rt he proposi t i on t h at “t h e courtshou l d n otrely ont h e parti es’contin g e n cy f ee a r r a n g e m e n t in d e te r m in in gare a s o n a b le a tt o r n e yfe e a w a r d”). I n Marre v. Un i t ed S t ate s , 38 F. 3d 823 ( 5th C i r. 199 4) , how ever, our court m od i fi ed a distri ct cou rt’ s attorn ey ’ s-f ee s aw a rdba sed on an h ou rl y ra te to r e fle c t a c o n t i n g e n t-fe e a g r e e m e n t. I d. a t 8 2 8 -2 9 . Marrei n volvedan act i on aga i n stt h e G overnm en t , pu rsuan tt o 26 U . S . C . § 7431 , f or w rongfuldi scl osure o f ta x -r e tu r n in fo r m a t i o n . I d. a t 8 2 5 . T h e d istr ict co u rt a w a rd e dp la in tiff $ 2 1 5 ,0 0 0 in s ta tu to r yd a m a g e s . Id . ( O n l y st atutor y da m ages w ere aw arded b e c a u s e th e d is tr ic t co u r t fo u n d th e p la in tiff s u ffe r e dn o a c tu a l d a m a g e s . I d. ) T h e di strictcou rt a lso a w a rd e d$ 3 2 6 ,18 2 .62 inlitig a tion co sts a n da tto rn e y ’ s f ees p u r s u a n t t o 2 6 U .S .C . § 7 4 3 0 (p r o v id in gfo rre a s o n a b le litig a tio n co s ts ). I d. The fees w ere based on a reasonab l e hou rly rat e of $1 70 t i m es the n u m ber of h ou rs w o r k e d . I

d. T h e G o v e r n m e n tc h a lle n g e d , in tera lia , t he l i t i ga t i o n- c o s t s a nd att orney’ s- fee aw ard, cl ai m i n g t h at, pu rsuan tt o t h e 50 percen tconti n gen t - fee c ont r ac tw i t h hi s c ounse l , pl ai nt i f f i ncur r ed at t or ney’ s fee s i n an am ounteq ual to o n lyo n e h a lf o f th e s ta tu to r yd a m a g e s . I d. at828. The s t at ut e a ti s s ue i n Marreprovi ded t hat“the prev ai l i ng par t y m ay be a w a r d e daju d g m e n t . . . fo r r e a s o n a b le litig a tio n co s ts in c u r r e d”. Id . (c i t i ng 26 U .S .C . § § 7 4 3 0 (a ), (c ) (d e fin in g“r e a s o n a b le litig a tio n co s ts ” t o in c lu d e , in tera lia , “ r e as o nab l e fe e s pa i d o ri nc ur r e d f o rt he s e rvi c e s o f at t o r ne ys . . . [ no tt o e xc e e d] $1 25 pe rho ur” unl e s s s pe c i alfac t o r s j us t i f y a hi ghe rra t e ) . Relyi ng o n de c i s i o nsN o. 07- 20732

12 i n terp retings i m i l a r fee -shif ti n g statu tes, o u r c ou rt h eld: “B eca u se § 74 3 0 l i m i ts att orney’ s f

ees t o t h ose act u all y i n curred , [pl ai nt i f f ] i s e nt i t l e d o nl y t o t he a m o u n t o w e du n d e rth e co n ti n g e n c y -fe e a g r e e m e n t p lu s co s ts , t o t heex t e nt re a so n a b le . ” I

d. a t 8 2 8 -2 9 (c itin gw ith a p p r o v a l Un i t ed Stat es v. 122 . 00 A cre s of Land , 8 5 6 F .2 d5 6 , 5 8 (8 th C ir . 1 9 8 8 ), a n ds ta tin gth a t “ th e E ig h th C ir c u it h e ld t h at a part y ‘ act u al l y i n curs’onlyth e am ou n tow ed u n der a conti n gen cy f ee a g r e e m e n t” ) (e m p h a s is a d d e d); Un i t ed Stat es v . Pa isley , 957 F. 2d 1161, 1164 ( 4th C i r. 199 2) ( att orney’ s f ees n ot i n curred u n der E AJAw h ere pl ai n t i f f entit l ed to fu ll in d e m n ific a tio n b ye m p lo y e r); McCorm ack v. Un i t ed S t ate s , 891 F. 2d 24, 25 ( 1s t C i r . 1989) ( at t or ney’ s fee s noti ncur r ed under§ 7430 bya pro sep a rty). A ccord i n gly, th e a w a rd , ba sed on the con ti n ge n t- fee con tract, w a s re d u cedto o n e -h a lf o f th e a w a r d e ds ta tu to r yd a m a g e s . I d. a t 8 2 9 . In th is re g a r d , Marredi s t i ngu i s he d B lan cha rd , 489 U . S . at87, becau se t he fe e - s hif

t i ng s t at ut e i n B lan cha rd di d no t r e quir e t hat t he fee be i n curr e d. Marre , 3 8 F. 3da t8 29 . I n B lan cha rd , t he Supr e m e Cour tc o nf r o nt e d the i s s ue w h et h er a f

ee aw arded un der 42 U . S . C . § 1988 , a ll o w in gcourt s t o aw ard preva i l i n g pa rt i es “reasona bl e att orney’ s f ees as partof

t h e cos t s” , w as l i m i t ed b yaco n tin g e n t-fe e co n tr a c t. B lan cha rd , 489 U . S. at88. There , t hro ugh 42 U .S .C . § 1 9 8 3 , p la in tiff p u r s u e d a c iv il-r ig h ts a c tio n in d is tr ic t c o u r t. I d. at89. T h e ju r ya w a r d e d$ 5 ,0 0 0 ina c tu a l, a n d$ 5 ,0 0 0 inp u n i t iv e , d a m a g e s . I d. Pl ai nt i f f r eques t ed o ver$40, 000 i n at t or ney’ s fees and ex pense s und er§ 1988. I d. A f t er re v iew in g t h e bi l l i n g an d cost s r ecords, how ever, t h e di st ri ctcourt a w a r d e d$ 7 ,5 0 0 infe e s , a n dle s s th a n $ 1 ,0 0 0 i n e x p e n s e s . I d. Plai n t i f

f on ap pe als o ugh ta n i nc r e as e of t hi s aw ar d; ourco ur t , howev e r , f ur t he rr e duc e d the fee s aw ar d t o $ 4, 000, hol di ng t he 40 per c entc ont i ngent - fee c ont r ac ts erved asN o. 07- 20732

13 a cap on t h e am ou n t of fees t o be aw arded i n t h e l i gh tof Joh n son , 488 F. 2d at 7 1 8 (listin g1 2 fac to rs ford e te rm in in gfee a w a rd s in T itl e V II a ctio n s). B lan cha rd , 489 U . S. at90. The Supr e m e Cour tr e ve r s e d, ho l d i n gap r e v a ili n gp a r ty ’ s f e ea r r ang e m e nt w ith its a tt o r n e y , “s ta n d i n ga lo n e , is n o t d is p o s itiv e ”. I d. at 93. Th e C ou rt r e as o ne d that , t o ho l d o t he r w i s e , w o ul d be i nc o ns i s t e ntw i t h § 19 88 ’ s poli c y and purpos e o f

vi ndi c at i ng i m por t antc onsti tu ti onalr i ght s and ensur i ng t hat “c o m p e te n t c o u n s e l w a s a v a ila b le to civ il rig h t s p l a i n tiffs ”. I d. Th e C ou rt s ta te d , in tera lia : C o n g r e s s im p le m e n te dits p u r p o s e b yb r o a d lyre q u ir in ga ll d e fe n d a n ts to p a yare a s o n a b l e fe e to a ll p r e v a ilin gp la in tiffs , if ordered to do so by the court . T h u s iti s t h at a p la in tiff ’ s r ecovery w i l lno tb e r e duc e d b y w hathe m us tpa y hi s c o uns e l . Pl ai nt i f fs w ho c an af f o r d t o hir e t he i ro w n l awye r s , a s w e l la s i m pe c uni o us l i t i gan t s, m ay take ad van t age of this p rovi si on . A n d w h ere there are l aw yer s o ro r ga ni z at i o ns t hatw i l lt ak e apl ai nt i f f ’ s c as e w i t ho ut com pen sati on , t h at factdoes not bar t h e aw ard of a reason able fee. Al lo f t hi s i s c o ns i s t e ntw i t h a nd r e f l e c t s o urde c i s i o ns i n c ases i n volvi n g court- aw ardedatt orney’ s f ees. I d. a t 9 4 . R eg a rd i n g co n ti n ge n t- fee con tracts in th e con tex t of civil -ri gh ts litig a tio n , th e C o u r t e x p la in e d : If a c on t i n gen t - fee agreem en tw ere t o govern a s a st ri ctl i m i t ati on on t he aw ar d of

at t or ney’ s fee s, an und es i r abl e em phasi s m i ghtbe p l a cedon the i m p orta n ce of th e reco ve ryo f d a m a ge s i n civilri gh ts l i t i ga t i o n. The i nt e nt i o n o f Cong r e s s w as t o e nc o ur ag e s uc c ess f ul c ivilr i ght s l i ti gat i on, nott o c r eat e as pec i ali nce nt ive t o pr ove da m ages an d sh ort cha n ge ef f ort s t o seek ef

fect ive inju n ct ive or dec l ar at or y r eli ef. A ff i rm i ng t he dec i si on be l ow w oul d c r eat e a n a rtifici a ldisi n cen tive f or an a ttorn ey w h o en ters i n to a co n ti n ge n tfee ag ree m en t, u n su re of w h eth er h i s cl i en t’ s cl a i m s ou n d edinstate to r t la w o rinfe d e r a l civ il rig h ts , fro m fu llye x p l o r i n ga ll p o s s ib le av e nue s o f

r e l i e f. Se c t i o n 1 98 8 m ak e s no di s t i nc t i o n b e t w e e n a c t i o nsN o. 07- 20732

14 for da m a ge s an dsu i ts f or e q u i tab l e reli ef. C on gr ess h a s electedto en courage m erit ori ou s civi lri gh t s c l ai m s because of t h e ben ef

i t s of such l i t i gati o n fo r th e na m ed p l ai n t i f f an d f or s oci et y at l arge, i rres pective of

w h et h er th e act i on seeks m on et ary da m ages. I d. a t9 5- 96 . Ac c o r di ngly, b e c aus e t he “cont i nge nt - fe e m o de l , pr e m i s e d o n t he aw ard to an att orney of an am ou n trepresenti n g a percentage o f th e dam ages, is . . . in a p p r o p r ia te fo rt h e d e te r m in a tio n o f fe e s u n d e r§ 1 9 8 8 ”, th e C o u r t h e ld t h e conti n gen t - fee contr actw as “ n ota ceil i n gu p o n th e fees r ecoverabl e un der § 1 9 8 8 ”. I

d. a t 9 6 . I n c o nt r as t , t he El e ve nt h Ci r c ui ti n Un i t ed S t ate s v. A d ki n son , 36 0 F. 3d 1 2 5 7 , 1 2 5 9 (1 1 th C ir . 2 0 0 4 ), h e ldad is tr ic t c o u r t d idn o t a b u s e its d is c r e tio n in aw ardi n g a $5 0, 000 f l at fee u n der t h e H yd e A m en dm en t . T h at fee, agreed u pon byde fe nda nta nd h i s a t t o r ne y, t ur ne d o utt o b e sub s t ant i all y l o w e rt han t he § 2 4 1 2 (d )(2 )(A) fe e ca p . I d. A l t h o ught he di s t r i c tc o ur ti n A d ki n son f ou n dtha t, ba sed on an h ou r ly r at e , t he fe e a w ar d woul d ha vee xc eeded $ 19 1, 00 0, t he di s t r i c tc o ur the l d: becau se § 241 2( d) “ requ i res t h e fees t o be act u al l y i n curred t o be rei m bu rsabl e, t he fe e a gr e e m e ntc ap [ pe d] a n E A JAa w ar d . . . a nd thus aH yd e Am e ndm e nt a w a r d ”. Un i t ed S t ate s v. A d ki n son , 256 F. Supp. 2d 129 7, 1317 ( N . D . Fl a. 2003) (r e ly in go n , in tera lia , Marre , 38 F. 3d at 829, and di st i ngui shi ng B lan cha rd , 489 U . S. a t9 3, b as e d o n t he l ac k o f t he “i nc ur r e d” r e quir em en tin§ 1 98 8) . The A d ki n son di s t r i c t c o ur t f ur t he r di s t i ngu i s he d b e t w e e n t he pur po s e s und e r l yi ng § 1 9 8 8 a n dth e H y d e A m e n d m e n t: T h e pu rpose of

§ 1988 “w as t o m ak e sure th a t c om petent c ou n sel w a s av a i l a b l e to civilrig h ts p l a i n tiffs. ” B lan cha rd , 489 U . S. at93. Th e pur pos e o f

t he H yde A m endm enti s t o pun i sh th e f ede r al go ve rn m en t f

or b a d -fa i th pr ose cu ti on s by forci n g t h e g ov ern m en t t o com pen sate t hedef

e ndantf

or at t orneys’f

ees and expen ses i n curredN o. 07- 20732

15 as ar e s ul to f

th ep r o s e c ut i o n. Ens ur i ng t he a va i l ab i l i t y o f c o m pe t e nt crim i n a lde fen se co u n sel i s n ot a p u rp ose of th e H yd e A m en d m en t. A H yd e A m en dm en t aw ard c om es di rect l y f rom t h e U n i t ed S t ates trea su ryan di s th u s cl ea rl y disti n gu i sh a b l e f rom . . . th e civi lri gh ts c l ai m i n B lan cha rd , w her e the aw ar d w as pai d b y a l oc al go ve rn m en t w h o lack edsov ere i gn i m m u n ityor E l ev en th A m en dm en ti m m u nity. Aw ar ding a H yd eAm e ndm en tcl ai m an tfees in e x c e s s o f th e fe e a g r e e m e n t w o u lda m o u n t t o a w a r d in gaw in d fa ll atpubl i cex pense , an i nt ol er able resu l tc ons i der i ng t he r ul e that w aive r s o f

s o ve r e i gn i m m uni t y ar e t o b e na r r o w l y c o ns t r ue d. The H yd e Am e ndm e nt ’ s j o i ntpur po s e s o f pun i s h i n gthe g o ve r nm e nta nd c o m p e n s a tin gth e d e fe n d a n t c a n b e a c h ie v e db ya w a r d in gth e fu ll a m o u n t o f th e fe e co n tr a c t. I d. a t 1 3 1 7 (fo o tn o te ca lls o m itt e d , e m p h a s is ino r ig in a l). The a b o v e - c i t e da ut ho r i t i e s a ndthep r i nc i p l e t ha twaiv e r s o f s o ver ei gn i m m uni t y s ho ul d b e na r r o w l y c o ns t r ue d c o m pelour ho l di ng t hat , b e c aus e t he Hy d e A me n d me n ti n c o r p o r a t e s t h e “i n c u r r e d” r e q u i r e me n tf r o m t h e EAJ A, am ou n t s aw arded un der t h e H yd e A m en dm en t are capp ed at t h e rat es provi ded f o ri n c o nt i nge nt - fe e c o nt r ac t s , unl e s s , a s di s c us s e d i nf ra , a court determ i n es a c o n tin g e n t-fe e a m o u n t is u n r e a s o n a b le . S ee , e . g. , M ar re , 3 8 F. 3d8 28
- 29 ( am o unt of “i n curred” attor n ey’ s f ees un der 26 U . S . C . § 7430 equ alt o t h e am ou n tow ed u n d e r5 0 p e r c e n t c o n tin g e n t-fe e a g r e e m e n t); TG SI n t’l , 9 83 F. 2da t2 30 ( am o unt of “i nc urr e d”a tt orney’ s f ees t o be aw arded un der § 2412 ( d)( 1) (A) conti n gen tup on a m o u n t o f r e c o v e r yo n th e m e r its ); A d ki n son , 2 56 F. Supp. 2d at1317 ( att orney’ s f

ees t o be aw ardedun der H yd e A m en dm en tcapp ed at c on t i n gen t - fee r a te s ), aff’d , 3 6 0 F .3 d a t1 2 5 9 ; se e also Joh n son , 48 8 F . 2 dat 71 8 (n oti n g th a t, alt ho ughpa r t i e s ’fe e c o nt r ac t s w i t h the i ra t t o r ne ys “ s ho ul d no tde t e r m i ne t he c o u r t’s d e c is io n ” in ca lc u la tin gth e a m o u n t o f a tt o r n e y ’ s fe e s , “[i]n n o e v e n t, . . . sh ou l dthe l i ti ga n t be a w a rd e d a fee gre a ter th a n h e is con tractu a l l y b ou n dtoN o. 07- 20732

16 p a y”), abrogat e d by B lan cha rd , 4 89 U . S. at93 (ho l di ng t hat , b e c aus e t he r e i s no requ i rem en ti n § 1988 t h at at t orney’ s f ees be i n cur red , conti n gen t - fee a g re e m e n ts d o n o t im p o se a n a u to m a tic ce ilin gon th e fee s a m o u n t). A c c o r d in g ly , B lan ch a rd , d e c id e dinth e co n te x t o f § 1 9 8 8 , is di st i ngui shabl e. I n addi t i on t o t he “i ncur r ed” requir em entn otbe i ng i n § 19 88, t he po l i c y c o ns i de r at i o ns unde r l yi ng § 19 88 and di s c us s e d i n B lan cha rdare not pr e s e nti n H yd e Am e ndm e ntpr o c e e di ngs . The pur po s e o f t he H yd e Am e ndm e nt i s nott o e nco uragec r i m i nall i t i gat i on o rens ure t he avail abi l i t y o f a c r i m i nal d efen se c o u n s e l, bu t t o com p en sa te cri m i n a lde fen d a n ts f or th e a m ou n ts e xp e nde d o n t he i rde fe ns e , t o t he e xt e ntr e as o nable, a s w e l la s t o pun i s h t he G o ve r nm e ntf

o rv e xa t i o us , f

r ivo l o us , orb ad

- fait h pr o s e c ut i o ns . I n t hi s r e ga r d, t he di s t r i c tc o ur t ’ s r e as o ni ng i n A d ki n son is p e r s u a s iv e . A lon gth o se li n e s, b e ca u se of Est ateof L ee ’s r e fu s a l t o a w a r da t t o r n e y ’s fe e s u n d e rth e p a r t ie s ’ c o n t in g e n t -fe e a r r a n g e m e n tin e x c e s s o f t h e E AJA ’s s ta tu to r yca p , Est ateof L ee , 81 2 F . 2 dat 25 7 , is co n sist en t w i thou r h oldin g th a t, alt ho ugh p art i es m ayno tr e c o ve ri n e xc e s s o f t he a m o untpr o vi de d f o ri n a conti n gen t - fee contract , t h at am ou n t al on e does n otl i m i tt h e court ’ s di scr et i on in ca lc u la tin gre a s o n a b le fe e s a w a r d s . T h eref ore, c on t rary t o C l aro’ s c on t en t i on , t h e requested aw ard, based on a conti n gen t - fee contr act , f or pursu i n gth e H yd e A m en dm en tcl ai m i s not i m perative. B o th t h e H yd e A m en dm en tan d the E AJArequi re at t orney’ s- fees aw ards t o be re a so n a b le . A ccor di n gl y, al t h ou gh conti n gen t - fee agreem en t s are a ll o w e du n d e r th e H y d e A m e n d m e n t a n d p ro v id e aca p a b o v e w h ich p la in tiffs c anno tr e c o v e r , t hed i s t r i c tc o ur tn o ne t he l e s s r e t a i ns d i s c r e t i o n t o r e d uc e t hat am ou n tt o one that i s r eason able.N o. 07- 20732

17 W e s im ila r lyfin du n a v a ilin gC la r o ’ s p u b lic -p o l i c ycla im th a t “ th e o n ly vi able opti on ” t o ret ai n coun selt o pu rsue a H yd e A m en dm en tcl ai m , af t er a crim i n a lde fen d a n t ha s b e e n d r a in edof h i s f i n a n ci a lreso u rces h a vin g h a dto defend a ga in st a c ri m i n alcharge, i s t o eng age an att orney on a conti n gen t - fee basi s. “ [ F] e e a w ar ds , pr o pe r l y c al c ul at e d, b y de f i ni t i o n wi l lr e pr e s e ntt he r e as o nab l e w o r t h o f t he s e rvi ces r e nde r e d” i n pu r s ui ng t he pl ai nt i f f ’ s H yd e c la im . B lan cha rd , 4 89 U . S. a t9 6. T o rep eat , t he r e as o nab l e ne s s o f t he fee–con t i n gen tor n ot–i s f or th e courtt o deci de.

2. A s di scussed, t h e G overnm en tc o n ce d e s t h at onl y t h e D eG u eri n f i rm w o r k e do n th e H y d e c la im . N e v e r t h e le s s , itc o n t e n d s a n yc la im fo ra t t o r n e y ’s fees C l aro m i gh tha ve f or th at f i rm ’ s w ork h as b een for fei t ed becau se C l aro fai l ed t o pr e s e nti t e m i z e d t i m e a nd e xp e ns e r e c o r ds f r o m t hatf

i r m . I n t hatr e ga r d, t he r e c o r dco n ta in s a n a ffid a v it s u b m itt e db yo n e o f th e la w y e r s fr o m th e D e G u e r in f i r m. T h a tl a w y e rw o r k e do n p u r s u i n gt h e H y d e c l a i m. T h is a ffid a v it s ta te s , in tera lia , t hatt he D eG uer i n f i r m w as t o r ec eive a 40 p e r c e n t c o n tin g e n t fe e a n dth a t su c h fe e re p r e s e n te d“n e c e s s a r ya n dre a s o n a b le c o s t s b as e d o n t i m e s pe nta nd s pe c i alfac t o r s , s uc h a s the qua l i f i c at i o ns a nd ski l l s of t h e att orneys, an d w h et h er t h e att orney pract i ces i n a speci al i zed area o f l aw” . I n a ddit i o n, t he r e c o r d r e f l e c t s , o f

cou rse, t he c o ur tf i l i ngs a nd a p p e a r a n c e s , a n do th e rw o r kd o n e b yth a t fir m inre p r e s e n tin gC la r o o n h is H yd e Am e ndm e ntc l ai m . The r e f o r e , b as e d o n t hi s r e c o r d, a nd b e c au se t he D e G ue r i n f

i r m s ubm i t t e d ab as i s f o rfe e s und e ri t s c o nt i nge nt - fe e a gr e e m e nt w ith C la r o , th e r e w a s n o fo r fe itu r e .N o. 07- 20732

18 O n t he o t he rha nd, a s e xp r e s s l y r e quir e d b y t he E AJA , i nc o r po r at e d byt he H yd e A m en dm en t , detai l ed it em i zed s t atem en t s m u stbe subm i t t ed i n sup port of a H yd e A m en dm en tcl ai m . 28 U . S . C . § 2412 ( d)( 1 ) ( B ) ( such it em i zed s t at e m e nt s m us tst at e “ t he ac t ualt i m e ex pe nde d and t he ra t e a tw hi c h f e e s a nd o th e re x p e n s e s w e r e co m p u te d ”). A rgua bl y, the D eG u eri n f i rm ’ s fai l u re t o f

ol l ow t h i s express an d n ecess ary requ i rem en tf

or det erm i n i n g a “r eason able”fe e is fa t alt o t h e cl ai m presented he r e . I ti s no ti n t hi s i ns t anc e , ho w e ve r , f o rt he r e as o ns s t at e d abo ve , i nc l udi ng t he u n cert ai nt y o f

t he l aw pr i o rt o t hi s a ppe alo n a n a w ar d b as e d o n a c o nt i nge nt - fe e c o nt r ac t . I n t he f ut ur e , suc h det ail e d r e c o r ds m us tb e s ubm i t t e d. A ccor di n gl y, on rem an d, su ch rec ords m u stbe const ructed based on docu m en t ed w ork an d aff i da vi t s. O bviously, t h e rec ords’not hav ing been pre par ed c ont em por aneousl y w i t h t he c l ai m ed w or k w i l lbe a fac t ort o b e c ons i der ed byt he di st r i c tc our ti n dec i di ng on an aw ar d, if any. Ther e f o r e , b e c aus e o urhol di ng c l ar i f i e s t he s c o pe o f

t he H yd e Am e ndm e nt for t h i s con ti n ge n t- fee i ssu e, th i s m a tt e ris r em a n d edf or th e d i stri ct cou rt t o det er m i ne t he f

ee s t o be aw ar ded t he D eG uer i n f i r m , “ unl es s t he c our tf i nds t hat speci alcircum st an ces m ak e such a n aw ard u nj u st” . 18 U . S . C . § 3006 A , N ot e. Th e $ 28, 000 pr evi ous l y aw ar ded i n er r orf ort he N evil l e f

i r m nee d notbe vac at ed, be c ause itw as aw ar ded t o Claro a n d w as par tof t he am ountpai d by t h e G o v e rn m e n t to hi m . A s a r esul t , itw as f or C l aro t o deter m i n e w h i ch a tt o r n e y s w e r e e n tit le dto it. O n th e o th e rh a n d , a n ya m o u n t a w a r d e d , in ac c or dance w i t h t h i s op i n i on, f ort he w or k done by t he D eG uer i n f i r m i s t o b e offset b y th e $ 2 8 , 0 0 0 alrea d y p a i dbythe G ov ern m en t.N o. 07- 20732

19 B. C l ar o c ont ends t hath i s w i fe’ s par al egalw or k f orh i s c r i m i nalpr oc ee di ngs s h o u ldb e fu ll yc o m p e n s a b l e u n d e rth e H y d e A m e n d m e n t . A ft e rC la r o ’s i n d i ctm en t, M rs. C l a ro, acou rt rep or te r f or ov er 3 0 ye a rs w h o ow n eda co u rtreport i n g bu si n ess, si gn i f i can t l y redu ced her court- report i n g w orkl oad i n order t o a ss i stherhusband’ s def ens e. She pr ovi ded o ver2, 450 hour s of par al egal s e rvi c e s f

o rt he N e vil l e f

i r m dur i ng t h e p ro c e e di ngs . As no t e d sup ra , C l aro cl ai m s th i s w ork i s c om pen sabl e i n t h e am o u n tof $18 3, 750 : $75 per hou r f or 2 ,4 5 0 h o u r s w o r k e d . The c o r r e c t ne s s of

the am o untr e que s t e d i s no tc hall e nge d b y t he G o v e r n m e n t. R a th e r , a t is s u e is w h e th e ra n ys u c h fe e s a r e co m p e n s a b le u n der th e H yd e A m en d m en t. A s a hel pfulst art i n g poi n t , t h e Su pr e m eCour trec en t l y h el d p aral egal fees a r e re im b u r s a b le u n d e rth e E AJ A . S eeR ich linS ec . S er v . Co . v . Ch er toff , 1 28 S. C t . 2 0 0 7 , 2 0 1 2 (2 0 0 8 ). I tf u r t h e rh e ldth e yw o u ldb e r e c o v e r a b le a tth e lit ig a n t ’s

“ reasona bl e cos t” , w h i ch i tdeem ed to be the “ preva i l i n g m arket r ate” w h en such r a te s co u ldb e d e te r m in e d . I d. at 201 3. W h i l e R ich lincon fi n edits discu ssion to 28 U . S . C . § 504 ( a sect i on of t h e E AJArel ati n g t o att orney’ s f ees i n conn ect i on w ith pro c ee di ngs bef

or e a n adm i n i strative a ge n cy), it assu m ed , w ithoutdec i di ng, th a t it s re a s o n in gw o u lde x te n dto E A J A§ 2 4 1 2 a s w e ll. Id . at2012 n. 3. A ccor di n gl y, b ecau se the “proc edu res an d l i m i t ati on s” of t h e E AJAw i t h regard t o a t t or ney’ s fee s ar e i nco r por at ed i nt o the H yde A m endm ent, w e hol d t hat p a r a le g a l fe e s a r e re im b u r s a b le u n d e rth e H y d e A m e n d m e n t a s w e ll. C l aro contends h e shou l d be aw arded fees f or h is w ife’ s paral egal w ork b e c a u s e t h e fe e s we r e “i n c u r r e d” p u r s uantt o 2 8 U. S . C. § 2 4 1 2 ( d) ( 1 ) (A) . AsN o. 07- 20732

20 di sc uss ed m or e f

ul l y i nf ra , h e cl ai m s i tw as notnec es sa r y f orhi m t o havea l egal ob l i ga ti on to pa y h i s w i fe f or h er w ork i n ord er for the fee s to be “i n c u r r ed ”; r a t h e r , h e rw o r kw a s r e im b u r s a b le b e c a u s e , w it h o u ti t , t h e b u r d e n o f a t t o r n e y ’s fee s w oul d h ave bec om e a d et er r entt o li t i gat i on and, ac c or di ngl y, t he o bj ec t ive of t h e H yd e A m en dm en tw ou l d h ave been defeated. Th e G overnm en tcoun t ers: M rs. C l a ro w a s n ot a p a ra l eg a lbytrad e; sh e d i dn ot con tract w i thC l a ro to p r o v id e p a r a le g a l s e rv ic e s ; s h e s u b m itt e dn o b illin gs ta te m e n ts t o C la r o o rh is a tt o r n e y s ; a n d , th e r e fo r e , a s M r s . C la r o d idn o tb i l l fo rh e rs e rv ic e s , n o rd id C la ro p a yforh e r s e rv ice s, n o fee s w e re “in cu rr e d” u n d e r § 2 4 1 2 (d)(1)(A). Th e di st r i c tc our tdeni ed s uch f ee s f orM rs. C l ar o’ s w or k, c i t i ng K ay v . E h rler , 4 9 9 U .S . 4 3 2 , 4 3 6 -3 7 ( 1 9 9 1 ), in h o ld in gh e rw o r kw a s n o n -c o m p e n s a b le b e c a u s e s h e w a s a“d ir e c t, in te r e s te dp a r ty”. E h rler hel d a pro se l i t i ga nt , w ho i s al soa l aw yer , m ay notr ec ove rat t orn ey ’ s fees under 42 U . S. C . § 1988(b) (a w a rd in gre a so n a b le a tto rn e y ’ s fe e s in a ctio n s in v o lvin gciv il -rig h ts v iola tion s), b e c a u s e C o n g r e s s ’ i n t e r e s t i n e n s u r i n g e f fe c t iv e p r o s e c u t i o n o f c iv i lr i g h t s c l a i ms w as “bett er s erved bya ru l e t h at c reat es an i n centive t o ret ai n coun seli n every s u c h ca s e ”. I

d. at437- 38. A s urged b y C l aro, t h e circum st an ces w i t h regard t o hi s w i fe do n ot p r e s e n t t h e p o lic yco n c e r n s e x p r e s s e dinEh r le r . Cl a r o was r e p r e s e nt ed by c o uns e l , and t he as s i s t anc e of hi s w i fe di d no t“ de pr ive [] [hi m ] o f t he j udg m e nt o f a n in d e p e n d e n t t h ir dp a r tyinfr a m in gth e t h e o r yo f th e ca s e ”. Id . a t4 3 7 . We h ol d, non et h el ess, t h at C l aro i s not en t i t l ed t o fees f or h i s w i fe’ s w ork becau se, unl i ke , f

o re xa m pl e , t he w ork do ne b y t he l aw f i r m s i n de fe ndi ng ag ai ns tt he crim i n a lch a rg es, th e w ork do n e b y M rs. C l a ro d i dn ot rep rese n t “i n cu rred ” costs u n der § 2412 ( d); an d, t h ere are n o excepti on alcircum st an ces t h at w ou l d all owN o. 07- 20732

21 an aw ar d of

s uch f ee s, not w i t hst andi ng C l ar o’ s havi ng no l egalobl i gat i on topay f o rhi s w i fe ’ s w o r k. As n o t e d sup ra , the E AJA (an d , b y i n corp ora ti on , th e H yd e A m en d m en t) all o w s t he r e c o ve r y o f a t t o r ne y’ s fe e s “i n cur r e d” b y t he pr e va i li ng pa r t y i n t he l i ti ga ti on . 28 U . S . C . § 24 1 2 (d)( 1 )(A). N eit h er th e E AJ A , h o w ev er, n or it s l egi sl at ive hi st or y, def i nes “i ncur r ed” . W ebs t er ’ s D i c t i onar y def i nes “ i ncu r” as “t o b e c o m e lia b le o rs u bje c t t o ”, o rt o “b r in gd o w n u p o n o n e s e lf”. W EB ST ER’ S D I CT I ONARY63 2 ( 1 1 th ed . 20 0 3 ). B l a ck ’ s L a w D i cti on a rystates itm ea n s “t o s u ffe ro rb r in go n o n e s e lf (a lia b ilityo re x p e n s e )”. B LAC K’ S L AW D I CT I ONARY836 (9 th e d . 2 0 0 9 ). Thi s a ppe ar s t o b e t he g e ne r alr ul e : f e e s a r e “i nc ur r e d” w he n t he l i t i ga nt h a s ale g a l o b lig a tio n to p a yth e m . Se e SE C v . Com s e r v Cor p. , 908 F. 2d 1407, 141 4- 15 (8t h C i r. 1 990 ) (hol di n g, u n der t h e E AJA , a lit i gan td i d n ot“i n cur” fees w h e n h is fo r m e re m p lo y e ra g r e e dt o p a yh is le g a l fe e s a n de x p e n s e s ); Pais ley , 957 F. 2d at1164 (hol di ng, under t he E AJ A , a p rev ai l i ng par t y w i t h an u n cond i t i on alri gh t t o b e in dem n i f i ed f or hi s l egal exp en ses by a solven tt h i rd p a r tyh a dn o t “ in c u r r e d ” a tt o r n e y ’ s fe e s ); Phi l l i psv . G en. Se r v s . Adm i n. , 924 F. 2d1 57 7, 1 58 3 ( Fed . Ci r . 1 99 1) (ho l di ng “ i nc ur r e d” , w i t hi n t he m e ani ng o f t he E AJ A , re q u ir e s a n e x p r e s s o rim p lie da g r e e m e n t t h a t t h e fe e a w a r dw ill b e p a id o v e rto ale g a l re p r e s e n ta tiv e ). U n d e rth is fr a m e w o r k , C la r o w o u l d n o tb e e n tit le dto a n a w a r dfo rh is w i fe ’ s pa r al e ga lw o r k. Shedi d n otc ont r ac tw i t h C l ar o t o p rovi de par al egal se rvi c es , nordi d s he bil lhi m f or hert i m e s pentw or ki ng on hi s c r i m i nal proceedi ng. O n t he o t he r hand , t he am o unt s r e que s t e d f o r t he w o r k o f

t h ree pa ral egals w h o w ere em pl oyed byt he l aw f i r m s i n t he c r i m i nalpr o c e edi ngN o. 07- 20732

22 r e p r e s e n tin gC la r o –tw o a t t h e N e v ille fir m a n do n e a s s is tin glo c a l co u n s e l in H o u s to n–w e r e in c l u d e din t h e a t t o r n e y ’s fe e s a w a r d e dC l a r o . T h i s a p p r o p ria te ly r e f l e c t s t he Supr e m e C o ur t ’ s de c i s i o n i n R ich lin , as C l aro ha d a l egal obl i gati on t o payhi s atto rn e y s; an d, as R ich linhel d, a f i r m ’ s par al egals ervi c es m ay be i n cl u ded i n t h e def i n i t i on of

“fe e s” for pu rposes of att orney’ s- fees aw ards. R ich lin , 128 S. C t . at 201 2. C on versely, regardl ess of w h et h er M rs . C l aro e x p ect ed to be pa i d, C l aro ha d n o lega lo bl iga t i o n to p a yh e r , u n lik e h is o b lig a tio n to h is re ta in e dco u n s e l. M an y courts , how ever, ha ve recogni zed excepti on alsit u ati on s f or w h i ch an aw ard of

att orney’ s f

ees i s n otco n tin g e n t u p o n a n o b lig a tio n to p a yco u n s e l. M ore s pe c i f

i c all y, c o ur t s ha vea w ar de d a t t o r ne y’ s fe e s und e rt he EA JA, a nd o t he rs i m i l arfe e - s hif t i ng s t at ut e s r e quir i ng fe e s b e “i nc ur r e d” , w he n t he pr e va i l i ng pa r t y i s r e pr e s e nt e d pro bon o o rb y a l e ga l

- s e rvi c e s o r ga ni z at i o n. InCornel la v. S chw ei ker , 728 F. 2d 978 ( 8t h C i r . 1984) , t he c our tr ul ed that t he E AJA ’ s l egi sl at ive hi st or y s upport ed the c onc l usi on t hat awar ds i n pro b o no m at t e r s w e r e c o nt e m pl at e d b y C o ngr e s s . Tha thi s t o r y s t at e d: “ [T] he com pu t ati on of

att orney f

ees s h ou l d be ba sed on prevai l i n g m arket r ates w i t ho ut r ef e r e nc et o t hef

e ea rrange m e nt s b e t w e e n t heat t o r neyandc l i e nt”. I d. at986 (q u o tin gH .R . R e p . N o . 1 4 1 8 , 9 6 th C o n g ., 2 dS e s s . 1 5 , re p rin tedin1 98 0 U . S. C o d e C o n g . & A d . N e w s 4 9 9 4 ) (e m p h a s is ino r ig in a l). T h e court coup l ed th i s l egi sl ative h i st ory w i t h a st rong pol i cy j u st i f i cat i on for exte n d i n g E AJAfee aw a rd s to pro bon o or gani zat i ons , by not i ng t hat perm i t t i n g fees f

or pro bon o c ounse lunder t h e E A J A“i nsur e[ s] t hatl egal servi ces group s, an d other pro bon o c o uns e l , hav e a s t r o ng i nc e nt ivet o r e pr e s e nt in d ig e n t . . . cla im a n ts ”. I d. ( q u ota ti on m a r k s a n dci tati on om i tted). “ IfN o. 07- 20732

23 att orneys’fees t o pro bon o o r ga ni z at i o ns ar e no t all o w e d i n l i t i ga t i o n a ga i ns tt he fe de r alg o ve r nm e nt , itw o ul d . . . di s c o ur ag e i nvo lve m e ntb y t he s e o r ga ni z at i o ns i n such cases, ef

fect ivel y redu ci n g access t o t h e j u di c i ary f o rindi ge ntin divi du al s. S u c h are s u lt s u r e lyd o e s n o t fu r th e rth e g o a ls o f th e E AJ A”. Id . a t 9 8 6 -8 7 ; se e als o W atf ord v. Heckler , 765 F. 2d 1562, 1567 n. 6 ( 11t h C i r . 1985) (hol di ng t hat

“ i n l i ghtof

t he [ E AJA ’ s] l egi sl at ive hi st or y and f orr eas on s of p ubl i cpoli c y, pl ai n t i f fs w h o are r epresented w i t h ou tcharge are not generally precl u dedf rom a n a w a rdof a tto rn e y ’ s fe e s u n d e r th e E AJ A”); E dA . Wi lson Inc. , v. G en. S ervs . Adm i n. , 126 F . 3d140 6, 140 9 ( F ed. C i r. 199 7) (“ Iti s w el l

- set t l ed th at an aw ard of at t or ney f

ee s [u n dert he E AJA] i s notnec es sa r i l y c ont i ngentupon an o b lig a tio n to p a yco u n s e l. . . . T h e p r e s e n c e o f a n a tt o r n e y -c lie n t r e la tio n s h ip s uf f i c e s t o e nt i t l e pr e va i l i n g l i t i ga nt s t o r e c e ivefe e a w ar ds . ” ( quo t at i o n m ar ks a n dcita tion om itted )). A dd i t i on al l y , w h en pol i cy reasons l en d them selves t o such a res u l t , fee awar ds ha veb e e n gr ant e d ev e n when al i t i ga nti s ne i t he rr e pr e s e nt e d pro b o no n or oth erw i se lega l l y o b l i ga tedto pa y t h e attorn ey ’ s fees. InE dA . Wi lson , f or exam pl e, t h e courtgran t ed att orney’ s f ees u n der t h e E AJAto a sm al lbu si n ess ow n er, ev en tho u gh h i s i n su rer p a i d th e l eg a l fees i n h i s con tract d i sp u te w i th t he G o v e r nm e nto v e rwho was r e s p o ns ib l e f o rn e c e s s a r yr e p a i r s i n afe d er al bui l di ng w hen a s pri nkl erl i ne br oke duri ng W i l so n’ s r em ode l i ng of t he bui l di ng. E dA . Wi lson , 12 6 F . 3 dat 14 0 7 . T h e cou rt no tedtha t de n yin g th e righ t t o att orney’ s f

ees t o a sm al lbu si n ess t h at hadast u t el y procuredi n suran ce, i n order to p r o te c t it s e lf fr o m lia b ilityfo ra c c id e n ts d u r in gco n tr a c t p e r fo r m a n c e , w o u ld th w a rt th e E AJA ’ s p u rp ose of d eterrin g “u n rea son a b l e g ov ern m en tal acti on ”. I d. at1410.N o. 07- 20732

24 In t h at r egard , t h e courtreasonedt h at den yi n g att orney’ s fees w ou l d act as an i nc e nt ivef

o rt he g o ve r nm e ntt o r ej e c tm e r i t o r i o us c l ai m s , b e c aus e , “ [i] f t he s m a ll b u s in e s s h a s in s u r a n c e , th e g o v e r n m e n t [c a n ] d e n yth e co n tr a c to r ’ s cla im a n dlitig a te a n ya p p e a l o f th e d e n ia l w i t h o u tp e c u n ia r yris k ”. I d. Fu rt h er, w i t houtt he avail abil i t y o f a fee aw ar d, t he i nsur ancec om pany l ikely w oul d have i nc r e as e d W i l s o n’ s i ns ur anc e pr e m i um i f i tc ho s e t o l i t i ga t e , “r e i nt r o duc [i ng] t he costof l i t i gati on as a factori n t h e sm al lbu si n ess’deci si on w h et h er t o contes t g o v e r n m e n t a c tio n it d e e m s u n r e a s o n a b le ”, i d. a t141 1, a nd s ubv e r t i ng t he pur po s e o f

t he EA JA, w hi c h i s t o “ all o w [] ade c i s i o n to cont e s tG o ve r nm e nt a cti on to be ba sed on the m erits of t h e c a s e ra th er th a n the cost of li ti ga ti n g”. I d. ( quot i ng Com m ’

r, I NS v . Je an , 4 9 6 U .S . 1 5 4 , 1 6 5 n .14 (19 9 0 )). Fees have bee n al l ow ed i n t he abo ve c i r c um st ance s, des pi t e no l egal o bli ga t i o n o n the pre va i l i ng pa r t y t o pa y t he m , b e c aus e do i ng s o f ur t he r s t he C on gressi on al i n t en t u n derl yi n g t h e E AJA . T h e obj ect ive of t h e E AJA i s c l ear:
“ t o el i m i n ate f

i n an ci aldi si n centives f or th ose w h o w ou l d d efen d ag ai n st u nj u st i f i ed govern m en t ala ct i on a n d t h ereby t o d et er th e un reasona bl e exerci se o f G o v e r n m e n t a u th o r ity”. A r d e s t a n iv . I NS , 5 02 U . S. 1 29 , 1 38( 19 91 ) (c i t i ng Co n g r e s s i o n a lF i n d i n g s a n dP u r p o s e s , 9 4 S t a t . 2 3 2 5 , n o t e f o l l o wi n g5 U. S . C. § 5 0 4 ; H .R . R e p N o .96 -1 4 1 8 p p . 1 0 , 1 2 (19 8 0 ); S . R e p . N o . 9 6 -2 5 3 , p .5 (1 9 7 9 ); Je an , 496 U . S . at 163 ) . Th e E AJA ’ s pu rpose i s t o “ di m i n i sh the deterr en tef fect o f s e e k in gre v ie w o f, o rd e fe n d in ga g a i n s t, g o v e r n m e n ta l a c tio n ”. Su l l i van v. Hu d son , 490 U . S. 877, 890 ( 1989) ( quot i ng 94 St at . 2325) . A c c or di ngl y, “ E AJA aw ar ds sho ul d be avail abl e w her e the bu rd en o f att or neys ’fee s w oul d have de t e r r e d the l i t i ga t i o n c hall e ngi ng t he g o ve r nm e nt ’ s a c t i o ns , b ut no t w he r e noN o. 07- 20732

25 s u c h d e te r r e n c e e x is ts ”. T ex. F oodI n d . A ssoc . v. D ep’

tof Agri c. , 81 F. 3d 578, 585 ( 5t h C i r . 1996) ( quot i ng Com ser v , 9 0 8 F .2da t 1 4 1 5 -1 6 ) ( G a rz a , J ., d iss e n tin g). The ab o vedem o ns t r at e s t hatat t o r ne y’ s fe e s ha veb e e n g r ant e d un de rt he E AJAi n t h e f

ol l ow i n g broadcircum st an ces: ( 1) u n der t h e gen eral rul e, i n w h i ch t he l i t i ga nta c t uall y i nc ur s t he l e ga lo bli ga t i o n t o pa y t he f e e s ; ( 2) i n s i t uat i o ns i n whi c h a n i ndi ge ntli t i ga nti s r e pr e s e nt e d pro b o no ; o r( 3) i n al i m i t e d a m o unt of resi du al si t u ati on s i n w h i ch pol i cy di ct ates al l ow i n g fees t o f u rt h er th e abovedescribedg oal s of

the E AJA . A gainstthis b ackd rop, then , w e m u stask w h et h er C la r o ’s r e q u e s t , u n d e rth e H y d e A m e n d m e n t , fo ra t t o r n e y ’s fe e s fo rh is w ife ’s pa r al e ga lw o r k fall s i nt o a n e xc e pt i o n t o t he H yd e Am e ndm e nt ’ s i nc o r po r at i ng th e “in c u r r e d ” r e q u ir e m e n t fr o m th e E AJ A . A g a in , in th e d e fin iti o n a l se n se , C la ro d id n o t “in cu r” f e e s f o r h is w ife ’s assi st an ce. S h e w as n otem pl oyedb y an y of the l aw firm s representi n g C l aro, s he w as no te m pl o ye d b y Cl ar o , a nd s he di d no tb i l lhi m f o rhe rw o r k. C l aro contends that t h ere i s n o di st i n ct i on betw een h i s w i fe’ s provi si on of par al egals ervi c es and a pro bon o a t t o r n e y ’ s p r o v i s i o n o f l e g a ls e rv i c e s . H e c l ai m s i tw as nec es sa r y f orM r s. C l ar o t o pro vi de her se rvi c es “w i t houta f or m al ag r e e m e nt o r o bli ga t i o n t o pa y” f o r t he s am e r e as o n an i ndi ge nt l i t i ga ntseek s pro bon o representat i on–becau se ot h erw i se t h e bu rden of a ttorney ’ s f

ees becom es a deter rent t o l i t i gati on . O f course, C l aro di d n otha ve t h e opti on of de c l i ni ng t o li t i gat e ; he w as ade fe nda nti n ac r i m i nalpr o c e e di ng br o ugh t i nvo l unt ar i l y i nt o c o ur tb y t he G o ve r nm e nt . M o r e o ve r , Cl aro h ad c o m pe t e nt l egal representat i on , provi n g h e w as not deter red by the costof representat i on f rom est abli shi n g a st rong defen se. N o dou bt, hi s at t orney’ s f ees m ay h ave been m or e e xpens ive abs entt he ai d of hi s w i fe, w h o w as by al lac c ount s of gr eatN o. 07- 20732

26 a s s is ta n c e to C la r o ’ s re ta in e da tt o r n e y s . B u t, po s t - hocspe c ul at i o n a bo utt he r el at ive ef

fec t ivenes s of

hi s def

ens e abs enthi s w i fe’ s as sist a n ce cannotbe suff icien t t o j u st i f

y aw ardi n g att orney’ s f ees f or M rs. C l aro’ s vol u n t aryl abor, e s p e c ia llyw h e n t h e r e is n o e v id e n c e t h a t C la r o ’ s co u n s e l’ s p e r fo r m a n c e w a s in a n yw a yd e fic ie n t, o rw o u ldh a v e b e e n s o w ith o u t h e ra id . M ore ov er, th ere is n o i n d i ca ti on th a t th e a d d i ti on a lfee s C l a ro w a s ab l e to avoid by his w i fe’ s vol u n t ari l y perf orm i n g t h e l abor w ou l d n oth ave been covered und ert he H yde A m endm entif one of hi s at t or ne ys ’e m pl oye d par al egal s had per f or m ed the w or k. I n ot herw or ds, t he addit i onalex p en se w oul d nothave act ed as a deterr en tt o l i t i gati on , becau se itw ou l d h ave been com pen sabl e, j u st as t h e fees w ere f

or C l aro’ s at t orneys an d thei r paral egals . T h is c o n c lu s io n is s t r e n g t h e n e dw h e n w e e x a m in e t h e S u p r e m e C o u r t ’s ab o ve - di s c us s e d R ich lindeci si on , w h ich est abli shed t h at paral egal fees are r e c o ver able u nde rt he EA JA att he pr e va i l i ng m ar ke tr at e . W hi l e , a s no t e d, cou rts h a ve all ow edreco ve ryof fees w h en a n a ttorn eyis p rov i d i n g free lab or to h is clien t inth e for m of pro bon o r e pr e s e nt at i o n, t he r e i s no t hi ng i n R i chlin w h i ch est abli shes pa ral egal services shou l d be t reat ed si m i l arl y. I t s di scussi on o f p a r a le g a l fe e s w a s co n fin e ds o le lyto th o s e fe e s a s s o c ia te dw ith p a r a l e g a ls e m p lo y e db yth e la w fir m re p r e s e n tin gth e p la in tiff. R ich lin , 128 S. C t . at 2011. T h i s i s l og i ca l : w i th ou t pro bon o l eg a lrep rese n tati on , m a n y in d ig e n t cli en ts coul d n ever pu rsue t h ei r cl ai m s i n court. W i t h ou t “ pro bon o” paralegalservi ces, l i t i gan t s c an –an d C l aro di d– st i l lrely on representat i on f rom theirret ai n ed a ttorn ey s. O f cou rse, w e d o n o t su gg est th a t an attorn eyrep rese n ti n g a pa rty pro b o no c oul d not be r ei m burs ed f or t he se rvi c es of a par al egalem pl oye d by that at t or ney.N o. 07- 20732

27 N or i s t h e propri et y of an aw ard su ch as t h at r equ est ed byC l aro sugg est ed i n Mi ssou r iv . Je nki ns , 49 1 U . S . 27 4 ( 1 9 8 9 ), w h i ch esta b l i sh edthe ri gh t t o r e c o ve rpa r al e ga lfe e s und e r4 2 U . S. C. § 1 98 8(b) a nd f r o m w hi c h R ich linf

o und arig h t t o p a r a le g a l fe e s u n d e rth e E AJ A . S ee R ich lin , 128 S. C t . at2014 (“U n d e r th e re a so n in gof Je nki ns , w e tak e ita s ‘ sel f

- evi den t ’tha tw h en C on gress i ns t r uc t e d a ge nc i e s t o a w ar d ‘ att o r ne y . . . f e e s ’t o c e r t ai n pa r t i e s pr e va i l i ng agai nstt he G ove r nm ent , t hatt er m w as i nt ended t o e m br ac e par al egalfee s as w e l l . ” ) . I n Je nki ns , a s i n R i c hl i n, ati ss ue w as w het hert he par al egal s and l aw c l e r ks e m pl o ye d b y a c ivil

- r i ght s l awye ra nd the N AA CP , w hi c h r e pr e s e nt e d the pl ai nt i f f cl ass i n as c ho o l

- de s e gr e ga t i o n a c t i o n, s ho ul d b e c o m pe ns at e d a tt he m a r k e t ra te fo rth e irs e rv ic e s o ra t t h e irlo w e rco s t t o th e a tt o r n e y . Je nki ns , 491 U .S . a t 2 8 4 . T h e C o u r t, in d is c u s s in gth e s ta t u t o r yla n g u a g e , n o te dth a t “ r e a s o n a b le a tt o r n e y ’ s fe e ” w a s n o t m e a n t t o “c o m p e n s a te o n lyw o r kp e r fo r m e dp e r s o n a lly by m em bers of

t h e bar”, bu trat h er “ref er[red] t o a reasonab l e f ee fo r the w ork produ ctof

an att orney . . . . t ak [i n g] i n t o accoun tt h e w ork n oton l y of att orneys, bu t al so of secr et ari es, m essengers, l ibrari an s, j an i t ors, an d others w h ose l abor c o n tr ib u te s to th e w o r kp r o d u c t fo rw h i c h a n a tt o r n e yb ills h e rclie n t” . I d. at 285 . W h i l e, of course, far m ore w ork t h an t h at of an att orney i s of t en i n volved in d e v e lo p in gth e a tt o r n e y ’ s w o r k p r o d u c t, th e co m m o n th r e a du n itin ga ll o f th is com pen sabl e l abor–secret ar ies , m essengers, paralegal s–i s t h at th ey are e m p lo y e dw ith t h e p u r p o s e o f fu r th e r in gt h is g o a l. C la r o ’ s a tt o r n e y s d idn o t b ill f o rCl ar o w i fe ’ s l ab o rb e c aus e t he y c o ul d no t ; s he w as no te m pl o ye d b y t he m a nd t h u s n otobl i gated to provi de h er s ervi ces i n devel opi n g t h e att orney w ork p rod u ct.N o. 07- 20732

28 F in a lly , C la r o ’ s re q u e s t fo ra tt o r n e y ’ s fe e s fo rh is w ife ’ s la b o rd o e s n o t fa ll i nt o t he r e s i dua lc at e go r y o f c i r c um s t anc e s t hatw o ul d f ur t he rt he g o al s o f

t he H yd e A m e ndm e nt . I n fac t , t he i m pli c at i o ns o f a w ar di ng at t o r ne y’ s f e e s f o rt he w o r k o f a n i ndivi du al–afam i l y m e m be r , no l e s s –who p r o vi de s v o l unt ar y, no nc ont r ac t ual , non- obli gat or y as si st ancet o apr evail i ng par t y ar e t r oubl i ng, tos ay th e le a s t. In t h e a b o ve- cit ed cases– W atf ord , Co rn ella , a nd E dA . Wi lson–al t hough t he pr evail i ng par t y had no o bl i gat i on topay at t or ney’ s fee s, i tn onet hel es s had aco n tra ctu a lattorn ey/clie n t r e la tio n s h ip w ith th e p a r tyfo rw h o m th e fe e s w o u ld u l tim a t el y be pa i d bya t h i rd pa rt y. C on versely, C l aro’ s w i fe’ s s ervi ces w ere vol u n t aril y given , despi t e her desi re t h at she be pa i d f ol l ow i n g t h e concl u si on of t h e cr i m i n alpro ce e d in g . Sh e coul d h ave d i sconti n u ed h er s ervi ces t o her h u sb a n dan dresu m edh er fu l l -t i m e w o r k a s a co u rt rep orter a t an y ti m e. In c o n t r a s t , a c o n t r a c t u a l l y - o b l i g a t e da tt o r n e y , pro bon o o ro the r wi se , doe s nothave t he unli m i t e d f

r e e do m t o e xt r ac thi m s e l f f r o m r e pr e s e nt at i o n. E x t e n d i n gt h e a w a r do f a t t o r n e y ’ s fe e s t o t h e w o r ko f s o me o n e t o w h o m a pr e va i l i ng pa r t y w as ne i t he rc o nt r ac t uall y no rfi n an ci all y o bli ge d ha s t he potenti alt o open a P an dora’ s boxof cl ai m s f rom lit i gan t s w h o a sser ta f ri en d or fam i l y m em berw as “ of gr eatassi stan c e” i n t he l i t i gat i on butw ho, ul t i m at ely, had no ob l i gat i on t o a ss i st . W h i l e w e donots ugges tt hatM r s. C l ar o w as abu si n g t h e possibl e ri gh t t o such an aw ard, t h e potenti al f or abu se if

att orney’ sfees aw ards w ere t o be extended i n such a m an n er i s qu i t e h i gh . For exam pl e, w h at typ e of

“ assi st an ce” w ou l d be com pen sabl e? U n der w h at st an da rds a n d f or w h at am ou n tw ou l d on e com pen sate vol u n t ary l abor?N o. 07- 20732

29 T h e di f f i cul t i es i n set t i n g w el l

- defi n ed param et ers f or s u ch an ext en si on o f t he a w ar d o f

a t t o r ne y’ s fe e s a r e o bv i o us . As suc h, t he w i s e rc o ur s e , a nd the o ne we a d o p t , i s t o l i m i tc o m p e ns a b l e fe e s t o l a wye r s a ndfe e s p r o d uc e dby p erso n s em p l oy edbyl a w ye rs to f u rth er th e d ev elop m en t of the i r w ork pr od u ct. H ow ever val u able M rs. C l aro’ s s ervi ces m ay hav e been , w e decl i n e t o m ak e t h em com p en sa b l e u n d er th e H yd e A m en d m en t. III. Fort he f

o r go i ng r e as o ns , t he 3 1 Ju l y 20 07 O r de ro n Defe ns e Fe e s a nd E x p e n s e s is A F F IR M E D IN PA R T a n dVA C A T E D IN P A R T ; a n dt h is m a tt e ris R E M A N D E D to d is tr ic t c o u r t fo rfu r th e rp r o c e e d in g s co n s is te n t w ith th is o pi ni o n. AF F I RMED I N PAR T ; VAC AT ED I N P AR T ; a n dR EMANDE D.