Court Opinion

ID: 4351310
Source: CourtListenerOpinion
Date Created: 2018-12-17 21:00:33.265982+00
Date Added: 2024-06-11T14:34:49.828720
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            DEC 17 2018
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

GARY BRUNSON, United States of                   No.   17-35402
America ex rel.,
                                                 D.C. No. 2:13-cv-05013-EFS
              Plaintiff-Appellant,

UNITED STATES OF AMERICA,                        MEMORANDUM*

              Plaintiff-Appellee,

 v.

THE LAMBERT FIRM PLC, Former
Counsel for Gary Brunson,

              Appellee,

BECHTEL NATIONAL, INC.;
BECHTEL CORPORATION; URS
CORPORATION; URS ENERGY AND
CONSTRUCTION, INC.,

              Defendants-Appellees.

UNITED STATES OF AMERICA,                        No.   17-35844

              Plaintiff-Appellee,                D.C. No. 2:13-cv-05013-EFS

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
GOVERNMENT ACCOUNTABILITY
PROJECT, GAP; PROJECT ON
GOVERNMENT OVERSIGHT, INC.,
POGO; CURTIS HALL, putative
intervenor,

             Intervenors-Appellants,

 v.

THE LAMBERT FIRM PLC, Former
Counsel for Gary Brunson,

             Appellee,

BECHTEL NATIONAL, INC.;
BECHTEL CORPORATION; URS
CORPORATION; URS ENERGY AND
CONSTRUCTION, INC.,

             Defendants-Appellees.

                   Appeal from the United States District Court
                     for the Eastern District of Washington
                    Edward F. Shea, District Judge, Presiding

                    Argued and Submitted December 5, 2018
                             Seattle, Washington

Before: W. FLETCHER, BYBEE, and WATFORD, Circuit Judges.

      Gary Brunson is one of three relators who filed a qui tam complaint under

the False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., against defendants

Bechtel National, Inc. and Bechtel Corporation (“Bechtel”), and URS Corporation

                                        2
and URS Energy and Construction, Inc. (“URS”). After entering into a settlement

agreement with defendants and the government, Brunson and a putative intervenor,

Curtis Hall, filed several motions in the district court. Brunson and Hall appeal the

district court’s rulings on these post-settlement motions. We have jurisdiction

under 28 U.S.C. § 1291, and we affirm in part, dismiss in part, vacate in part, and

remand.

      1.     The district court did not abuse its discretion in enforcing the

confidentiality provisions of the settlement agreement. See Golden v. Cal.

Emergency Physicians Med. Grp., 782 F.3d 1083, 1089 (9th Cir. 2015). The

confidentiality provisions are not void on public policy grounds, as they do not

implicate either of the two public policies identified by Brunson.

      First, the settlement agreement does not interfere with the public interest

underlying the FCA’s qui tam provisions—“encouraging insiders privy to a fraud

on the government to blow the whistle on the crime” by bringing forward

information to the government that the government could not otherwise obtain.

United States ex rel. Hall v. Teledyne Wah Chang Albany, 104 F.3d 230, 233 (9th

Cir. 1997) (internal alteration omitted) (quoting United States ex rel. Green v.

Northrop Corp., 59 F.3d 953, 963 (9th Cir. 1995)). The settlement agreement does

not in any way impede anyone’s ability to bring information to the government.

                                          3
      Second, the settlement agreement does not interfere with the public’s “right

to information necessary to protect members of the public from harm caused by

alleged hazards to the public.” Wash. Rev. Code § 4.24.601. The entire 239-page

qui tam complaint, which contains all of the allegations by all of the relators, is

publicly available.

      2.     The district court did not abuse its discretion in retaining the seal over

the settlement agreement, the government’s pre-settlement memoranda requesting

additional time for investigation, and the order ruling on the motion to intervene

filed by Hall, Government Accountability Project, and Project on Government

Oversight, Inc. See Oliner v. Kontrabecki, 745 F.3d 1024, 1025 (9th Cir. 2014).

      First, the confidential settlement agreement, which is a private agreement

reached without court assistance, is in the judicial record only because Brunson put

it there in an effort to have its confidentiality provisions declared void. The filing

had nothing to do with the merits of the litigation—indeed, the litigation has

settled—and the district court did not abuse its discretion in declining to unseal the

confidential agreement based on an unsuccessful challenge to its confidentiality.

See LEAP Sys., Inc. v. MoneyTrax, Inc., 638 F.3d 216, 220 (3d Cir. 2011); cf. In re

Midland Nat. Life Ins. Co. Annuity Sales Practices Litig., 686 F.3d 1115, 1120 (9th

Cir. 2012) (explaining that “compelling reasons” for sealing court records “exist

                                           4
when such ‘court files might have become a vehicle for improper purposes’”

(citation omitted)).

      Second, the government’s pre-settlement memoranda requesting extensions

of the FCA seal period disclosed confidential information concerning the

government’s internal investigation of the allegations in the complaint. The

district court did not abuse its discretion in determining that unsealing the

memoranda would jeopardize future investigations and that the government’s

interest in maintaining this information under seal outweighed the public’s interest

in accessing judicial records.

      Third, the sealed order regarding intervention contains information from

sealed filings, including the confidential settlement agreement. This order is at

most “tangentially related to the underlying cause of action,” Ctr. for Auto Safety v.

Chrysler Grp., LLC, 809 F.3d 1092, 1099 (9th Cir.), cert. denied sub nom. FCA

U.S. LLC v. Ctr. for Auto Safety, 137 S. Ct. 38 (2016), and the district court did not

abuse its discretion in concluding that maintaining the order under seal was

appropriate due to the inclusion of confidential information.

      3.     The district court did not abuse its discretion in denying Hall’s request

to intervene in the proceedings on Brunson’s motions regarding confidentiality and

unsealing, and we thus dismiss Hall’s appeal for lack of jurisdiction. See Perry v.

                                           5
Proposition 8 Official Proponents, 587 F.3d 947, 955 (9th Cir. 2009); Fed. R. Civ.

P. 24(b).

      With respect to Brunson’s motion to unseal, Hall conceded that he “is not

after the confidential information or sealed files at all.” Hall thus has no interest in

unsealing the record, and the district court properly denied his request to intervene

on that issue. See Perry, 587 F.3d at 955 (stating that the court may consider “the

nature and extent of the [applicant’s] interest” (citation omitted)).

      With respect to Brunson’s challenge to the confidentiality provisions in the

settlement agreement, allowing Hall to intervene would cause substantial prejudice

to the parties, who entered into a settlement agreement premised on confidentiality

after years of litigation. See Cty. of Orange v. Air Cal., 799 F.2d 535, 538 (9th Cir.

1986); Fed. R. Civ. P. 24(b)(3). Moreover, to the extent Hall has any interest in

this issue, it would be identical to the interest advanced by Brunson. The district

court thus appropriately declined to exercise its discretion in permitting Hall to

intervene. See Perry, 587 F.3d at 955; United States ex rel. Richards v. De Leon

Guerrero, 4 F.3d 749, 756 (9th Cir. 1993).

      4.     The district court erred in interpreting the contingency fee agreement

between The Lambert Firm PLC (“TLF”) and Brunson. We review de novo the

                                            6
district court’s interpretation of contract provisions. MHC Fin. Ltd. P’ship v. City

of San Rafael, 714 F.3d 1118, 1131 (9th Cir. 2013).

      The contingency fee agreement between TLF and the relators provides:

             From the gross amount of any settlement, judgment, claim
             and/or payment received by Attorneys on behalf of Client
             as a result of any efforts made by Attorneys in this matter,
             Client hereby authorizes Attorneys to retain, as
             compensation for their legal services, no more than and no
             less than THIRTY THREE AND ONE THIRD PERCENT
             (33.3%) of any such amount calculated PRIOR to any
             deduction for costs and expenses as outlined herein or the
             amount of Attorney’s fees awarded by the court, whichever
             is greater.

      The settlement amount in this case consisted of two components. First, the

relators received $25 million, which is 20% of defendants’ $125 million settlement

with the government. Second, the relators received $4 million from defendants in

satisfaction of defendants’ obligation to pay fees and costs under 31 U.S.C.

§ 3730(d). Thus, TLF is entitled to “no more than and no less than” 33.3% of the

“gross amount of [the] settlement . . . and/or payment”—i.e., 33.3% of $29 million.

      The district court interpreted the contingency fee agreement to mean that

TLF is entitled to 33.3% of the $25 million and nearly all of the $4 million (less

costs and expenses), concluding that the latter amount constituted “fees awarded by

the court” because it satisfied defendants’ obligations under § 3730(d). We

                                          7
disagree with this interpretation. The parties negotiated the $4 million amount as

part of the settlement; it was not awarded by the court. Indeed, had Brunson not

filed a motion seeking an interpretation of the fee agreement, the district court

would have had no involvement with respect to attorneys’ fees. The $4 million

was part of the “gross amount of [the] settlement . . . and/or payment received by

[TLF] on behalf of [the relators],” and TLF is entitled to only 33.3% of that

amount under the contingency fee agreement.

      Moreover, because the $4 million was a negotiated amount, there was no

dispute about “what the losing defendant must pay”; thus, the district court had no

basis for applying a lodestar analysis to determine a “reasonable attorney’s fee.”

Venegas v. Mitchell, 495 U.S. 82, 90 (1990); see Gisbrecht v. Barnhart, 535 U.S.

789, 806 (2002) (explaining that “the lodestar method was designed to govern

imposition of fees on the losing party,” not fees that an attorney can collect

“pursuant to contract[ ] from his own client”).

      We therefore vacate the district court’s orders regarding attorneys’ fees and

remand for further proceedings consistent with this disposition.

                                      *    *   *

      For the foregoing reasons, we AFFIRM the district court’s order upholding

the confidentiality provisions of the settlement agreement, AFFIRM the district

                                           8
court’s order maintaining portions of the judicial record under seal, DISMISS the

appeal of the district court’s order denying permissive intervention, VACATE the

district court’s orders regarding attorneys’ fees, and REMAND for further

proceedings consistent with this disposition. Each party shall bear its own costs on

appeal.

      AFFIRMED IN PART, DISMISSED IN PART, VACATED IN PART,

AND REMANDED.

                                         9