Source: https://www.justice.gov/osg/brief/applegate-v-united-states-opposition
Timestamp: 2019-04-22 02:56:17+00:00

Document:
1. Whether the Court of Federal Claims erred in determining what constitutes "reasonable attorneys' fees" under a settlement agreement by reference to principles expressed in this Court's fee-shifting cases.
2. Whether the Court of Federal Claims abused its discretion in concluding that the attorneys' fee award should not be subject to an "exceptional results" multiplier.
The judgment of the court of appeals (Pet. App. 1a-2a) is not published in the Federal Reporter but is reprinted in 70 Fed. Appx. 582. The opinion of the Court of Federal Claims (Pet. App. 3a- 49a) is reported at 52 Fed. Cl. 751.
The judgment of the court of appeals was entered on July 17, 2003. The petition for a writ of certiorari was filed on October 14, 2003. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).
Following Congress's appropriation of funds necessary for the beach fill project, petitioners filed a motion seeking $1,990,189 in attorneys' fees, along with additional costs and expert fees. Pet. App. 7a. Petitioners later filed an amended motion seeking a much larger fee award. C.A. App. 378-396. In the amended motion, petitioners asserted that they were entitled either to fees equivalent to 40% of the landowners' monetary and non-monetary benefits, which would generate a fee of more than $12 million, or to fees equivalent to an enhanced lodestar amount, which petitioners calculated to be more than $6 million. Id. at 393. The parties were not able to agree on the proper amount of "reasonable" attorneys' fees. After briefing and a two-day evidentiary hearing, the Court of Federal Claims determined that reasonable attorneys' fees amounted to $1,803,575. Pet. App. 4a, 49a.
In reaching its determination, the court rejected petitioners' attempts to analogize the case to a "common fund" case, pointing out that the settlement agreement did not create an identifiable common fund from which fees could be taken, but instead required the United States to pay the fees. Pet. App. 20a-21a. The court accordingly concluded that it was more appropriate to draw on statutory fee-shifting principles, which calculate a "lodestar" amount based on hours reasonably expended on the litigation multiplied by a reasonable hourly rate. Id at 23a. The court concluded from contemporaneous billing records both the reasonable number of hours petitioners' counsel spent on the matter and reasonable hourly rates, yielding a lodestar of $1,994,277. Id. at 29a.
The court reduced the lodestar amount by $190,702 as a result of an earlier sanctions order that barred petitioners from recovering any attorneys' fees for one phase of the litigation. Pet. App. 29a-34a. The court rejected the government's arguments that other reductions should be made to the lodestar to eliminate hours spent on certain unsuccessful arguments and because of inadequate documentation. Id. at 34a-41a. The court also rejected petitioners' efforts to enhance the lodestar to compensate for delay in payment and for allegedly "exceptional results," obtained in the litigation. Id. at 41a-49a.
The court of appeals affirmed the judgment without opinion. Pet. App. 1a-2a.
The Court of Federal Claims correctly determined the amount of "reasonable" attorneys' fees in accordance with the parties' settlement agreement. The court of appeals' unpublished affirmance of that decision, which interprets and applies the terms of a particular agreement, does not conflict with any decision of this Court or another court of appeals, and it does not present an issue of broad national significance or one that is even likely to recur. This Court's review is not warranted.
The Court of Federal Claims explained that it was "evaluating what is 'reasonable' within the meaning of the Agreement." Pet. App. 8a. It then considered "cases construing * * * fee-shifting provisions, as well as those involving the 'common fund' doctrine * * * to harvest the principles for determining what is a 'reasonable' fee here." Id. at 10a. It considered "whether- -and to what extent-this case is more appropriately analogized to a statutory fee case, as opposed to a common fund case," id. at 19a, and it ultimately determined that "this case is most analogous to a fee shifting matter," id. at 21a. The court determined that fee shifting was the appropriate analogy here because the settlement agreement called for fees to be paid by the United States rather than paid out of petitioners' recovery. Id. at 22a-23a. The court used principles from statutory fee shifting cases as a guide for determining a "reasonable" fee, noting that this Court has found in such cases that there is a "'strong presumption' that the lodestar represents the 'reasonable fee' promised in most fee-shifting provisions." Id. at 26a (quoting City of Burlington v. Dague, 505 U.S. 557, 562 (1992)).
A trial court has broad discretion in determining what constitutes a "reasonable" attorney fee award, whether under a fee-shifting statute, Hensley v. Eckerhart, 461 U.S. 424, 437 (1983), or under a settlement agreement that confers that authority on the court. The Court of Federal Claims did not abuse its discretion in determining that the lodestar approach provided a "reasonable" attorneys' fee award for petitioners in this case.
We have established a "strong presumption" that the lodestar represents the "reasonable" fee, Delaware Valley I, supra, [478 U.S.] at 565, and have placed upon the fee applicant who seeks more than that the burden of showing that "such an adjustment is necessary to the determination of a reasonable fee." Blum v. Stenson, 465 U.S. 886, 898 (1984).
505 U.S. at 562. In Blum v. Stenson, 465 U.S. 886 (1994), this Court overturned as an abuse of discretion a fee award that included an "exceptional results" enhancement based upon the complexity of the litigation, the novelty of the issues, the high quality of representation, the great benefit to the class, and the riskiness of the law suit. Id. at 898. The Court found that those factors were normally reflected in the number of billable hours claimed and the hourly rates charged. The Court stated that an enhancement to the lodestar could be justified on those grounds "only in the rare case where the fee applicant offers specific evidence to show that the quality of service rendered was superior to that one reasonably should expect in light of the hourly rates charged and that the success was 'exceptional.'" Id. at 899.
The Court of Federal Claims applied that standard and, after a comprehensive consideration of petitioners' arguments, concluded that they had not carried their burden of showing that this was one of the "rare" or "exceptional" cases that warrants a multiplier of the lodestar. Pet. App. 44a-49a. In particular, the court pointed to the facts that: (1) the relief obtained was simply what the complaint sought (and indeed was less than the total asked for); (2) the relief with respect to this project did not affect Corps of Engineers policy generally; (3) the successful resolution of the case was attributable to the substantial efforts of the Florida congressional delegation as well as to the work of plaintiffs and their attorneys; (4) there was no evidence that it was customary in the area for attorneys to charge an additional fee above their hourly rates for an "exceptional" result; and (5) this was not an unattractive case, but one that brought the firm significant positive publicity. Id. at 45a-49a.
Petitioners focus on the first of those five factors, contending that the court created a "legal standard for exceptionality" that requires attorneys to obtain relief beyond what the complaint requests. Pet. 24. The court did not, however, elevate that particular consideration to the status of a legal standard. That factor was simply one consideration, among others, that weighed against a finding that petitioners had carried their burden of showing that this was a "rare" case where an enhancement of the lodestar was warranted. The court properly pointed out, for example, that the result here-the rebuilding of a single beach-did not change agency policy or have an impact beyond the confines of the litigation. Pet. App. 46a. The limited nature of the relief distinguishes this case from Hyatt v. Apfel, 195 F.3d 188 (4th Cir. 1999). The court in that case upheld an enhancement where the litigation had caused the Social Security Administration to promulgate a new nationwide regulation that reversed its past policy and extended the benefits of the suit to "hundreds of thousands of disability claims." Id. at 191-192. The Court of Federal Claims plainly did not abuse its discretion in refusing to award a multiplier in this case.
1 The settlement agreement does not mention petitioners' private fee agreements with their attorneys. Those contracts provide that, if the litigation is successful, petitioners would pay costs and a fee equal to one-third of the value of the benefits obtained by the suit, or 40% if an appeal is involved, out of their recovery. Pet. App. 4a.
2 There is also no support in the record for petitioners' statement (Pet. 3) that "undisputed testimony and Respondent's admissions established that Petitioners' contingent fee agreements were reasonable." Petitioners simply cite their own appellate briefs in support of that assertion. The petition contains many factual assertions that are based solely on statements in petitioners' appellate briefs. See, e.g., Pet. 3, 8, 9, 10 n.9, 18 n.15, 24 n.16, 25 n.17. The Court has no obligation to credit as true statements that are unsupported by any findings or record evidence.
3 Petitioners ignore a variety of factors, in addition to the source of the fee payment, that support the court's determination to seek guidance from fee-shifting cases. First, had this inverse condemnation suit been litigated to conclusion and petitioners prevailed, fees would have been controlled by a fee-shifting statute -the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. 4654(c). That fee-shifting statute formed the backdrop for the negotiation of the settlement agreement. Second, the settlement agreement required "the submission of documentation of said costs and fees," C.A. App. 366, which is consistent with a fee award based on hours reasonably expended, rather than on a percentage of recovery. Third, the agreement said nothing suggesting an intent to incorporate the contingent fee agreements petitioners had entered into with their attorneys. Finally, petitioners' initial fee application sought fees in the amount of $1,990,189, reflecting the lodestar approach, rather than a contingent fee. Pet. App. 7a; see id. at 29a. Hence, petitioners' own conduct confirms that the parties contemplated use of a lodestar approach-until petitioners filed an amended fee application seeking a dramatically larger award and raising for the first time the theory that an award should be based on the contingent fee contracts.
[W]e have said repeatedly that "[t]he initial estimate of a reasonable attorney's fee is properly calculated by multiplying the number of hours reasonably expended on the litigation times a reasonable hourly rate." Blum v. Stenson, 465 U.S. 886, 888 (1984). The courts may then adjust this lodestar calculation by other factors. We have never suggested that a different approach is to be followed in cases where the prevailing party and his (or her) attorney have executed a contingent-fee agreement.
Blanchard v. Bergeron, 489 U.S. 87, 94 (1989); see Dague, 505 U.S. at 565-566 ("we have generally turned away from the contingent-fee model-which would make the fee award a percentage of the value of the relief awarded in the primary action-to the lodestar model") (footnote omitted).
5 Wing and Dutchak permitted the recovery of fees greater than the lodestar amount based on provisions of the particular settlement agreements in those cases that are not present here. In Wing, the court of appeals concluded that a fee award equal to twice the lodestar amount was not an abuse of discretion, where the settlement agreement had expressly contemplated a fee award of more than twice the amount of the agreed-upon lodestar figure of $4 million. 114 F.3d at 988. In Dutchak, the court of appeals upheld a lodestar multiplier to compensate for the contingent nature of the case, but only because the settlement agreement specifically adopted as guideposts four lower court decisions that had approved contingency multipliers. 932 F.2d at 593 n.1, 595-596. None of these features supporting enhancement of the lodestar were present in the settlement agreement in this case.

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