Court Opinion

ID: 9497852
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:01:46.47542+00
Date Added: 2024-06-11T17:58:27.594650
License: Public Domain

BEA, Circuit Judge,
dissenting:
We are called upon to interpret the phrase “extraordinary payments” found in Section 1103 of the Sarbanes-Oxley Act. 15 U.S.C. § 78u-3(c)(3)(A)(i). In my view, the majority errs in two regards.
First, the majority interprets “extraordinary payments” to mean “payments under extraordinary circumstances.” See Maj. Op. at 1044-46. This first step enables the majority to take account of a variety of circumstances (such as the fact that the payments at issue were made “in the shadow” of conduct ultimately giving rise to the SEC’s investigation) that are only indirectly related (or, in some cases, not related at all) to the payments at issue. See id. at 1046. Of course, it is perfectly proper for the SEC to consider such circumstances in deciding whether to initiate an investigation regarding possible violations of the federal securities laws. But by also conscripting these and similar circumstances to render payments “extraordinary,” the majority violates basic canons of statutory construction, rewriting the statute and, in so doing, rendering the very term at issue surplusage.
Second,' by establishing as the principally relevant standard whether the circumstances surrounding the payments at issue are “extraordinary” not for other companies, but for the company making the payments, any payment made under any situation novel to that company is now subject to escrow. Thus, the first time a company under SEC investigation gives a departing executive not a golden parachute, but a mere gold watch (or, even, a gold-plated watch), escrow will be available to the SEC. This alone renders the majority’s standard unworkable. But the majority then exacerbates the problem by conceding that comparison to the industry or other companies may also be relevant in some circumstances, thereby creating a second standard but without providing any guidance as to when each of these potentially conflicting standards applies.
Reading the statute as it is written rather than as some may wish it had been written and applying' what is a workable standard, I continue to believe the SEC must present evidence that a payment was extraordinary relative to payments made by other comparable companies, under circumstances which have not resulted in an investigation by securities agencies, but which are otherwise comparable. Because the SEC presented no such evidence, I would vacate the district court’s order and remand to permit the SEC the opportunity to present appropriate evidence. Accordingly, I respectfully dissent.
' I.
Before I address what I regard as the majority’s, two errors in interpreting the statute, it is important to set the record straight as to what is at stake. The majority describes the escrow as “nothing more onerous than a temporary order re*1052quiring the issuer under scrutiny to escrow those intended payments to a clearly defined group of insiders for no more than 45 days in a very familiar device, an interest-bearing account — all of this subject to court supervision.” Maj. Op. at 1035. This is, at best, a naive view — blinkered from what can and did happen in this case. Once the subject of an investigation is charged with a securities violation by the commencement of a civil action, “the [escrow] order shall remain in effect, subject to court approval, until the conclusion of any legal proceedings related thereto ....” 15 U.S.C. § 78u — 3(c) (3) (B)(i) (emphasis added). Here, the district court’s initial escrow order was effective as of May 9, 2003. Nearly two years have passed, and Yuen’s and Leung’s payments remain in escrow.
II.
Section 1103 provides in relevant part:
Whenever, during the course of a lawful investigation involving possible violations of the Federal securities laws by an issuer of publicly traded securities or any of its directors, officers, partners, controlling persons, agents, or employees, it shall appear to the Commission that it is likely that the issuer will make extraordinary payments (whether compensation or otherwise) to any of the foregoing persons, the Commission may petition a Federal district court for a temporary order requiring the issuer to escrow, subject to court supervision, those payments in an interest-bearing account for 45 days.
15 U.S.C. § 78u-3(c)(3)(A)(i) (emphasis added). Congress did not define “extraordinary payments.”1 Nor has the SEC promulgated regulations doing so, although it is empowered to adopt regulations for the implementation of the Sar-banes-Oxley Act. 15 U.S.C. § 78w(a)(l).
Thus, purporting to rely on the statute’s “plain language,” Maj. Op. at 1045, but presumably influenced by what it perceives to have been Congress’ intent in enacting Section 1103, id. at 1035-36, the majority defines “extraordinary payments” as those “that would not typically be made by a company in its customary course of business.” Id. at 1045. Continuing, the majority explains that “[c]ontext-speeific factors such as the circumstances under which the payment is contemplated or made ... may inform whether a payment is extraordinary” — indeed, that “a payment made by a company that would otherwise be unremarkable may be rendered extraordinary by unusual circumstances ’’ — and, thus, that the district court correctly focused not only on the size of the payment, but also on “the circumstances of the payment” and “the purpose of the payment.” Id. at 1045 (emphasis added); accord id. at 1046 (“The court correctly focused on the nature, purpose, and circumstances of the payments_”). Finally, in affirming the district court’s order, the majority concludes:
We believe, as did the district court, that Gemstar’s execution of its overall business objectives and ordinary management of its business operations did not entail terminating its CEO and CFO in the shadow of misstated revenues, misleading public statements, securities *1053fraud investigations, plunging stock prices, and public relations debacles, not to mention Yuen’s and Leung’s inability to certify Gemstar’s books as accurate. Gemstar’s Form 8-K filings certainly raise red flags the SEC would be remiss to ignore.
Id. at 1046 (emphasis in original); accord id. at 1046 (“Using as a measure what ordinarily goes on in the process of the issuer’s business, these facts are clearly unusual and extraordinary.”).
In so interpreting the statute, the majority errs in two regards.
A.
First, the majority’s interpretation violates basic canons of statutory construction. To begin, the majority has not so much interpreted the statute as it has rewritten it. As explained above, the majority’s interpretation of “extraordinary payments” amounts to “payments under extraordinary circumstances.” See Maj. Op. at 1045-46. Indeed, the majority itself explains that “a payment made by a company that would otherwise be unremarkable may be rendered extraordinary by unusual circumstances.” Id. at 1045. Thus, under the majority’s interpretation, any payment following “extraordinary circumstances” may be subject to escrow. Yuen and Leung could have been paid $1 or $1 billion — it would make no difference to the majority.
But this simply is not what the statute says. As the statute is written, “extraordinary” modifies “payments”; as the majority has rewritten it, “extraordinary” modifies the circumstances under which the payments were made. To put it bluntly, where in the statute is the word “circumstances”? Moreover, the majority has not only inserted words into the statute, it has rearranged the remainder of it. This we cannot do, even for the laudable purpose of giving effect to important public interests:
Our concern for the protective.purposes of remedial legislation ... does not vest this court with a license to rewrite the statute, for “our problem is to construe what Congress has written. After all, Congress expresses its purpose by words. It is for us to ascertain — neither to add nor to subtract, neither to delete nor distort.” 62 Cases, More or Less, Each Containing Six Jars of Jam v. United States, 340 U.S. 593, 596, 71 S.Ct. 515, 518, 95 L.Ed. 566 (1951). “Our compass is not to read a statute to reach what we perceive — or even what we think a reasonable person should perceive — is a ‘sensible result’; Congress must be taken at its word unless hue are to assume the role of statute revisers.” Bifulco v. United States, 447 U.S. 381, 401, 100 S.Ct. 2247, 2259, 65 L.Ed.2d 205 (1980).
United States v. Smith, 740 F.2d 734, 738 (9th Cir.1984) (emphasis added) (internal parentheticals omitted); see also Xi v. INS, 298 F.3d 832, 839 (9th Cir.2002) (“[A] decision to rearrange or rewrite the statute falls within the legislative, not the judicial, prerogative.”); Lewis v. McAdam, 762 F.2d 800, 804 (9th Cir.1985) (“We have no constitutional authority to rewrite a [securities] statute simply because we may determine that it is susceptible of improvement.”) (citing Badaracco v. Commissioner, 464 U.S. 386, 398, 104 S.Ct. 756, 78 L.Ed.2d 549 (1984)).
Further, given the circumstances the majority finds relevant, the majority’s interpretation renders “extraordinary” sur-plusage. According to the majority, that the payments here were made “in the shadow of misstated revenues, misleading public statements, securities fraud investigations, plunging stock- prices, and public relations debacles,” “Yuen’s and Leung’s inability to certify Gemstar’s books as ac-eurate[,][and] Gemstar’s Form 8-K filings” are all indicia that the payments here were “extraordinary” — or, more accurately, *1054made under extraordinary circumstances. Maj. Op. at 1046.
Some of these factors are certain to be present any time the SEC investigates a company for possible violations of the federal securities laws, and the rest are likely to be present. But the escrow provision is, in any event, applicable only when “during the course of a lawful investigation involving possible violations of the Federal securities laws ” it appears to the SEC that “extraordinary payments” are to be made. 15 U.S.C. § 78u-3(c)(3)(A)(i) (emphasis added). Thus, by defining “extraordinary” to mean little if anything more than that circumstances exist that might give cause to the SEC to initiate a lawful investigation, “extraordinary” serves no independent modifying purpose. Each payment made in the midst of circumstances likely to lead to an SEC investigation becomes made under “extraordinary circumstances,” therefore an “extraordinary payment.” Hence, the majority’s interpretation violates the “ ‘cardinal principle of statutory construction’ that ‘a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant.’ ” TRW Inc. v. Andrews, 534 U.S. 19, 31, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001) (quoting Duncan v. Walker, 533 U.S. 167, 174, 121 S.Ct. 2120, 150 L.Ed.2d 251 (2001)).
Congress could have written the statute differently. The SEC might have been able to promulgate regulations so interpreting the statute. Congress didn’t, the SEC hasn’t, and we mustn’t.2
B.
Second, even had the majority not rewritten the statute and, indeed, written the very term at issue out of the statute, its interpretation is unworkable as a practical matter. The majority first interprets “extraordinary payments” as those “that would not typically be made by a company in its customary course of business,” Maj. Op. at 1045 (emphasis added). Thus, as the majority explains, “[t]he standard of comparison is the company’s common or regular behavior.” Id. (emphasis added). This alone raises a significant practical concern. Presumably, terminating the CEO’s and CFO’s employment is never done “by a company in its customary course of business.” Id. (emphasis added). I think we can all agree that these events do not occur, for any given business, each Monday morning as the doors open for *1055business. Does this mean, then, that any payment to a departing CEO, CFO or, for that matter, any officer or director may be subject to escrow? As mentioned before, even if the payment is not a golden parachute, but a mere gold watch (or even a gold-plated watch)? Can this really be what Congress meant by “extraordinary”? And if not, upon what articulable principle ingrained in the standard adopted by the majority could we arrive at a contrary conclusion? 3
This practical concern is made worse by the majority’s concession that we must do more than compare what the subject company is doing now merely with what it has done in the past. From a company-specific test, the majority daintily dips its toe in Lake Eversharp:4 “Evidence of the company’s deviation from an ‘industry standard’ — or the practice of similarly situated businesses — -also might reveal whether a payment is extraordinary.” Id. at 1045. Well, which one is it? What the subject company has done in the past or what other companies have done? That is, is the test internal to the subject company or external to practices of the industry in which the company competes? What if under the internal test the payment is not extraordinary, but under the external test it is? Or vice-versa? Does the internal trump the external, or is it the other way around? Or, must the payment be extraordinary under both tests? Are we going to say nothing more than that the matter will be dealt with on a “ease-by-case” basis, that favorite ploy to avoid a statement of principle?
The majority takes refuge in its assertion that “the statute does not compel any specific method of making the determination but allows for the consideration of a variety of factors, as the situation may warrant,” id., and in its mandate that “the determination of whether a payment is extraordinary will be a fact-based and flexible inquiry.” Id. at 1045. Standards that call for an evaluation of the totality of the circumstances are, of course, well known to the law, but they are workable only when those circumstances are compared against a known, fixed standard. Here, by contrast, the majority proffers two standards that, depending on the facts of the case, may very well conflict.
III.
Because as the statute is written “extraordinary” modifies “payments” rather than the circumstances under which those payments were made, and because the majority’s standard principally requiring a comparison to the past practice of the corn-*1056party at issue is unworkable, I must interpret “extraordinary payments” to mean payments not usual or ordinary relative to those made by other comparable companies, under circumstances which have not resulted in an investigation by securities agencies, but which are otherwise comparable. Factors to be considered in identifying comparable companies may include them size (measured in terms of annual revenues, annual net profit, market capitalization, some other appropriate measure, or a combination of these considerations) 5 and the industry or market in which they do business.6 Relevant comparable circumstances may include the position of those whose employment is being terminated, the length of their tenure, and the reason their employment was terminated. However, I reiterate that the comparison should not be to payments made by other companies that were engaged in conduct which ultimately resulted in investigation by securities agencies.7
Nor is this an undertaking to which federal courts are unaccustomed or for which they are ill-equipped. Legislation which uses relative adjectives to proscribe activities is hardly unknown to the law. Statutes and law commonly prohibit “excessive” verdicts and sanction “unreasonable” behavior. E.g., State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 416, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) (“The Due Process Clause of the Fourteenth Amendment prohibits the imposition of grossly excessive or arbitrary punishments on a tortfea-sor.”); Cal.Civ.Proc.Code § 657 (permitting modification or vacatur of a judgment where the award of damages is “[ejxces-sive or inadequate”); Restatement (Second) of Torts § 282 (defining “negligence” as “conduct which falls below the standard established by law for the protection of others against unreasonable risk of harm”). It is not beyond the judiciary’s capacity to interpret and apply statutes which prohibit “excessive” or “unreasonable” amounts. Indeed, trial and appellate courts are called upon to do so every day.8 *1057And, as is of particular relevance here, courts are even asked whether some remuneration constitutes “extraordinary payment.” An example is the line of cases which determines whether payments made by a corporation to an employee are deductible from gross income as “ordinary and necessary” business expenses or, rather, are “extraordinary payments” disallowed as a deduction. See, e.g., Label-Graphics, Inc. v. IRS, 221 F.3d 1091, 1095 (9th Cir.2000) (explaining that a corporation may deduct “a reasonable allowance for salaries or other compensation for personal services actually rendered” and noting as one of the factors relevant in making this determination “a comparison of the employee’s salary with those paid by similar companies for similar services”) (citing Elliotts, Inc. v. IRS, 716 F.2d 1241 (9th Cir.1983)).
Whether the adjective is “excessive,” “unreasonable” or “extraordinary,” the cases in which’ those terms appear use similar processes of judgment. The trier-of-fact determines first what constitutes “adequate compensation,” “reasonable care,” or “customary or ordinary payments.” Such determinations require evidence which consists of similar factual situations which can be compared to the case at hand. If the case at hand falls outside the bounds permitted in the comparison cases, that result is deemed “excessive,” “unreasonable,” or “extraordinary.”
A.
Here, the SEC limited its proof in its Section 1103 application to an investigating attorney’s affidavit. The affidavit — and consequently the record — is completely silent regarding what constituted usual or ordinary payments upon termination of a CEO and Chairman of the Board (Yuen) or COO and CFO (Leung) of companies with comparable financial statements and operating results. Undoubtedly, their payments were large — extraordinary, even, relative to what federal judges or, for that matter, most anyone is paid.9 *1058Such payments may be called “golden parachutes” or “golden handshakes” in the press, but purple prose is not enough to prove a statutory requirement in court. For enforcement of the securities laws of the United States, evidence of what is usual or ordinary for comparable companies under circumstances which have not resulted in an investigation by securities agencies but which 'are otherwise comparable, is necessary to distinguish “extraordinary payments” and to order their escrow pursuant to Section 1103. Such evidence was not adduced in the district court; that absence requires the reversal of the judgment of the district court.10
B.
The remaining factors on which the majority relies are either irrelevant or fail to evidence that the payments here were extraordinary. Thus, because I interpret “extraordinary” to modify “payments” rather than the circumstances under which those payments were made, that “ ‘the termination agreements were executed as part of the process of removing both Leung and Yuen from their positions as Gemstar Officers,’ ” that “the bonuses appear to be fruit of the alleged fraudulent financial results,” that the “executives [were] resigning under fire from key management positions,” and that the payments were made “in the shadow of misstated revenues, misleading public statements, securities fraud investigations, plunging stock prices, ... public relations debacles, ... [and] Yuen’s and Leung’s inability to certify Gemstar’s books as accurate,” Maj. Op. at 1046, is irrelevant. Likewise, because I believe that the relevant comparison is to other companies rather than to Gemstar’s past practices, that the “negotiated Termination Agreement payments here are five and six times greater than Yuen’s and Leung’s base salary,” that “the component amounts that make up the lump sum payments are different than the amounts due under their employment agreements,” that “the termination fees are different from what they may have been entitled to under existing agreements,” and that “the vacation pay item did not exist under their contracts,” id. at 1046, also is, absent evidence of other companies’ practices, irrelevant.
This, then, leaves only three factors on which the majority relies that at best serve as evidence that either Gemstar or Yuen and Leung themselves believed the payments to be extraordinary and, thus, as circumstantial evidence that they were extraordinary: (1) that “ ‘[t]he payments were negotiated over a five month period and involved the participation of the Gems-tar Board, a Special Committee, and outside consultants,’ ” and “ ‘[t]he Board, the Special Committee, and the Intervenors Yuen and Leung were each represented by separate sets of counsel’ (2) that ‘Yuen would not discuss these matters with the Commission, choosing instead to assert his Fifth Amendment privilege”; and (3) that Gemstar reported the terms of the termination agreements in a Form 8-K filing. Id. at 1046.
As for the negotiation of the termination agreements, nothing in the record suggests that this extended negotiation constitutes a deviation from the norm for corporate decision-making of this type under circumstances not resulting in an investigation by securities agencies, but which *1059are otherwise comparable. Indeed, for all the persons involved in the negotiations, not one presented evidence before the district court that the period or mechanics of the negotiations were out of the ordinary. While common experience of the district court might help to determine what is the usual way to negotiate the termination of a lawyer at a law firm or a staff member of the court, common experiences of this kind do not aid judgment with respect to the termination of Yuen’s and Leung’s employment with Gemstar.
Further, even on their own terms, these negotiations are not particularly suspicious given the context. To begin, as the declaration of Yuen’s and Leung’s counsel shows, GemstarTV Guide was the product of a merger between, on the one hand, an off-shore company founded by Yuen and Leung and, on the other, TV Guide, a subsidiary of News Corporation, itself a large telecommunications company. Yuen and Leung presented uncontradicted evidence that their revenue-producing strategies differed, if not clashed, with those of News Corporation. Whereas Yuen and Leung were interested primarily in raising revenue attributable to the corporation’s sales, the minority owners, Gems-tar’s current management, were in part interested in publicizing one of their sister corporations through Gemstar’s operations, without paying Gemstar any advertising revenue. Such a strategy would increase revenues for the sister corporation, but not for Gemstar. As owners and officers in Gemstar, Yuen and Leung would not share in the profits of the sister corporation.
In addition, in the event that Yuen or Leung were terminated “without cause,” as they were, lengthy and complex employment agreements governed their termination payments. Yuen and Leung had three different components for calculation of their Annual Incentive Bonuses. Complex enough when based on the company’s past performance, computations also had to be done for future payments, with the consequent and predictable squabbling over methods for projecting future financial performance. Thus, in view of Gems-tar’s revenue structure, the conflicting strategies, and the complex schemes for computation of termination payments, it is not the least bit surprising that the negotiations pertaining to Yuen’s and Leung’s departures would be lengthy and that all interested parties would be represented by counsel.
As for Yuen asserting his Fifth Amendment privilege, it is hard to imagine what inference this raises given the context. Yuen had been the CEO of a company that the SEC was investigating for securities violations. It is more likely than not that his invocation says a great deal more about those alleged securities violations than it does about whether his payment was extraordinary.
Last, a Form 8-K filing is required from an “issuer of securities when substantial events occur.... ” Scherk v. Alberto-Culver Co., 417 U.S. 506, 528 n. 6, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974). In this era of heightened corporate vigilance, it is not surprising that Gemstar management should choose to make this report upon the termination of the founders of the company, who were being paid millions of dollars on departure in an amount approximating 15 percent of the previous year’s revenues. But a discretionary corporate disclosure is not an admission that the company has paid an “extraordinary” amount. In any event, there was also no evidence of whether other “issuers” had made similar reports for similar sums paid to similarly departing upper management. A “substantial event” may or may not coincide with an “extraordinary payment.” Only *1060evidence of comparable events and circumstances can tell us.
IV.
The majority’s interpretation of “extraordinary payments” may very well best empower the SEC to remedy the outrageous corporate misconduct that gave birth to the Sarbanes-Oxley Act. However, we are not a junior varsity legislature, see Mistretta v. United States, 488 U.S. 361, 427, 109 S.Ct. 647, 102 L.Ed.2d 714 (1989) (Scalia, J., dissenting), and must take Congress at its word, see Bifulco, 447 U.S. at 401, 100 S.Ct. 2247, ever cognizant that Congress and the Judiciary alike are in the business of using language precisely. Where Congress fails to do so, it should not look to the Judiciary for a remedy— nor need it.
Section 1103 empowers the SEC to escrow “extraordinary payments,” not payments made under extraordinary circumstances, particularly where “extraordinary circumstances” means little if anything more than that the company is under investigation for securities violations. Further, if it is to be a workable standard, the relevant comparison must be not to the company at issue, but to other comparable companies, under circumstances which have not resulted in an investigation by securities agencies, but which are otherwise comparable. Because the SEC failed to adduce any such relevant evidence, I would vacate the district court’s order and permit the SEC the opportunity to do so. Accordingly, I respectfully dissent.

. When Congress wants to "cap” termination payments, it certainly knows how to do it with unquestionable precision. See, e.g., 11 U.S.C. § 502(b)(7) (capping an employee’s claim for damages resulting from the termination of an employment agreement when the employer has filed for bankruptcy to (1) one year’s compensation provided by such contract measured from the earlier of the date of the filing of the bankruptcy petition or the date of termination, plus (2) any unpaid compensation due under such contract owing on such date).

. I can only assume that the majority's insouciance for these canons of statutory construction stems from its desire to give effect to what it perceives as Congressional intent. Setting aside the principle that Congress’ words are the best evidence of its intent, the majority’s description of Congress' intent in enacting Section 1103 does not support the majority's interpretation of "extraordinary payments.” According to the majority, Congress' purpose in enacting Section 1103 was to prevent "persons, companies, and pensions plans” from being "left holding an empty bag” while, by contrast, corporate insiders are well compensated. Maj. Op. at 1036 "By the time the authorities have been alerted to the fraud," explains the majority, "it’s too late [because] the assets of the company have already disappeared.... In the meanwhile, the disappearance of such funds impoverishes and damages the issuer itself....” Id. at 1035. Likewise, the majority quotes Representative Sensenbrenner's explanation that Section 1103 would prevent "top executives” from "pilfer[ing] the assets of the company.” Id. at 1036 (citing 148 Cong. Rec. H4685 (daily ed. July 16, 2002)). If it was assets "disappear[ing]” and being "pilfer[ed]” while people and pension plans were left holding an "empty bag” and issuers were "impoverished]” that so concerned Congress, wouldn't the size of the payment rather than the circumstances surrounding the payment have been of utmost importance? Tellingly, although he did not limit “extraordinary payments” to "huge bonuses,” Representative Sensenbrenner identified no other example of an "extraordinary payment! ].”

. The majority cites three cases for the proposition that this court has previously relied on evidence of a company’s own past practices to determine "extraordinary expenses.” Maj. Op. at 1045 n. 2. In the first, the court held that a brokerage firm's commissions were excessive because ”[n]o reasonable broker could think it could fairly charge commissions so high” and rejected the brokerage firm's asserted defense that it "provided unique and special services and [thus] incurred [relatively] high expenses.” Atlanta-One, Inc. v. SEC, 100 F.3d 105, 107-08 (9th Cir.1996) (emphasis added). In other words, the court compared the brokerage firm's commissions and expenses not to its prior practice, but to what the "reasonable” broker might charge and to what services were typically offered in the industry. That is what should happen here. In the remaining two cases, the governing statute or rule of law called for a comparison between the expense claimed extraordinary and the company's past practice. In re United States Trustee, 32 F.3d 1370, 1374 (9th Cir.1994) (bankruptcy trustees seeking reimbursement of expenses); Frito-Lay, Inc. v. Local Union No. 137, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, 623 F.2d 1354, 1365 n. 11 (9th Cir.1980) (company suing for damages resulting from an unlawful strike). Of course, Gemstar had no such past practice; the cited cases are inapposite.

. The Eversharp Company used to advertise its wares: "Compare! Comparison proves!”.

. Such financial measures of the revenue size of the company that made the payments at issue may be artificially inflated as a result of the securities violations in which it is alleged to have engaged. Appropriate adjustments should and can be made to compensate for this.

. No two companies are identical, but adjustments can be made to compensate for any material peculiarities of a given company. Comparisons of this sort are daily made, for example, in equalization of property tax assessments in the real property field, where the value of a subject property is determined by the value of comparable properties as measured by such factors as the square footage, location, size of buildings and probable income. After determination of comparability, adjustments are made to compensate for peculiarities individual to the subject property. Thus, for example, if the subject property has a lis pendens or an unrecorded easement claimed against it, the value will likely be adjusted downwards. A similar method is used in condemnation actions. Likewise, in the field of traded securities, the market adjusts stock prices for companies with comparable earnings, but with, for example, dissimilar litigation or investigational backgrounds.

. The majority, then, misstates my position when it states:
The dissent suggests that to establish what is "extraordinary, ” the government must offer evidence of what constitutes "usual or ordinary payments to a CEO and a CFO under [comparable] circumstances,” i.e., payments contemplated under threat of de-listing, in a fight with its independent auditor; and during an investigation for having misstated revenues, cooked the books, defrauded investors, employees and the market, and possibly committed a basket full of crimes.
Maj. Op. at 1046.

. For instance, courts are often called upon to determine whether awards of attorney’s fees are “reasonable.” See Pennsylvania v. Dela*1057ware Valley Citizens’ Council for Clean Air, 478 U.S. 546, 562, 106 S.Ct. 3088, 92 L.Ed.2d 439 (1986) (“There are over 100 separate statutes providing for the award of attorney's fees; and although these provisions cover a wide variety of contexts and causes of action, the benchmark for the awards under nearly all of these statutes is that the attorney’s fee must be reasonable.’ ’’). " 'The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate,' ” id. at 564, 106 S.Ct. 3088, and it is "[t]he fee applicant [that] has the burden of producing satisfactory evidence, in addition to the affidavits of its counsel, that the requested rates are in line with those prevailing in the community for similar services of lawyers of reasonably comparable skill and reputation.” Jordan v. Multnomah County, 815 F.2d 1258, 1263 (9th Cir.1987). Likewise, courts daily determine what are "extraordinary” fees in probate courts across the country. But, unlike the district court here, those probate courts have elaborate statutes, rules of procedure and case authority to guide them in determining what services by estate representatives are “ordinary” (and covered by the statutory fees) and what expenses are "extraordinary,” conferring entitlement to added fees. See, e.g., Cal. Prob. Code §§ 10801, 10811; Cal. Court R. 7.702; In re Fulcher's Estate, 234 Cal.App.2d 710, 718, 44 Cal.Rptr. 861, 866 (1965).

. But not quite "anyone.” For example, the average value of severance packages awarded in fiscal year 2000 to CEOs of companies in the S & P 500, conservatively calculated, is more than $11.4 million. See Paul Hodgson, Golden Parachutes and Cushion Landings: Termination Payments and Policy in the S & P 500, at 18-21 (2003). Of course, some CEOs are awarded severance packages that are worth many multiples of the average. E.g., Chad Terhune et al., "Coke Tradition: CEOs Go Better With a Fat Send-Off,” Wall Street Journal, June 11, 2003, at B1 (reporting M. Douglas Ivester’s “exit package” upon being "ousted” as Chairman and CEO of Coca-Cola in February 2000 as $119 million); Sam Zuckerman, "The Fall and Rise of David Coulter,” San Francisco Chronicle, May 25, 2002, at Al (reporting David Coulter's severance package after being "unceremoniously *1058ousted” as CEO of Bank of America and "le[aving] San Francisco with his reputation in tatters” as "nearly $100 million”).

. Nor, frankly, would requiring such evidence be particularly onerous for the SEC. Evidence in the form of expert testimony or an affidavit or declaration comparing the payments under scrutiny with other executives' compensation packages is readily ascertainable from public filings. See supra note 8.