Haggart v. United States

• Court: Court of Appeals for the Federal Circuit
• Decided: May 5, 2022
• Docket: 21-1658
• Status: Unpublished

Opinion

Case: 21-1658 Document: 30 Page: 1 Filed: 05/05/2022

NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit ______________________

DANIEL HAGGART, KATHY HAGGART, HUSBAND AND WIFE, FOR THEMSELVES AND AS REPRESENTATIVES OF A CLASS OF SIMILARLY SITUATED PERSONS, GORDON ARTHUR WOODLEY, PERSONAL COUNSEL FOR KITTINGER DEED CLAIMANTS, DENISE LYNN WOODLEY, WESTPOINT PROPERTIES, LLC, C/O FARAMARZ GHODDOUSSI, CLEVELAND SQUARE, LLC, RC TC MERIDIAN RIDGE, LLC, TWOSONS LLC, GRETCHEN CHAMBERS, WILLIAM AMES, DENNIS J. CRISPIN, DEBLOIS PROPERTIES, LLC, C/O DAVID AND DEBRA DEBLOIS, MICHAEL B. JACOBSEN, FRANCES JANE LEE, SUSAN B. LONG, CLAUDIA MANSFIELD, FREDERICK P. MILLER, SUSAN L. MILLER, PBI ENTERPRISES, LLC, MICHAEL G. RUSSELL, ELANA RUSSELL, JAMES M. SATHER, KELLY J. SATHER, JAMES E. STRANG, D. MICHAEL YOUNG, JULIA H. YOUNG, MOLLY A. JACOBSEN, LESLIE MILSTEIN, ALISON L. WEBB, PATRICIA STRANG, Plaintiffs

STAR L. EVANS, Plaintiff-Appellant

v.

UNITED STATES, Defendant-Appellee ______________________ Case: 21-1658 Document: 30 Page: 2 Filed: 05/05/2022

2021-1658 ______________________

Appeal from the United States Court of Federal Claims in No. 1:09-cv-00103-CFL, Senior Judge Charles F. Lettow. ______________________

Decided: May 5, 2022 ______________________

STAR EVANS, Bellevue, WA, pro se.

BRIAN C. TOTH, Environmental and Natural Resources Division, United States Department of Justice, Washing- ton, DC, for defendant-appellee. Also represented by JEAN E. WILLIAMS. ______________________

Before PROST, REYNA, and TARANTO, Circuit Judges. PER CURIAM. Star Evans, a class member in this rails-to-trails tak- ings case, appeals a judgment of the Court of Federal Claims (“Claims Court”) awarding legal fees and costs un- der the Uniform Relocation Assistance and Real Property Acquisition Policies Act (“URA”), 42 U.S.C. § 4654(c). The gravamen of her argument is that class counsel improperly reduced her recovery based on a contingent fee agreement. For the reasons below, we affirm the judgment with respect to the issues Ms. Evans raises. BACKGROUND The procedural history of this class action is extensive, involving numerous reported opinions from the Claims Court and two from this court. E.g., Haggart v. United States, 116 Fed. Cl. 131 (2014) (“Haggart I”), vacated and remanded sub nom. Haggart v. Woodley, 809 F.3d 1336 Case: 21-1658 Document: 30 Page: 3 Filed: 05/05/2022

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(Fed. Cir. 2016) (“Haggart II”); Haggart v. United States, 136 Fed. Cl. 70 (2018) (“Haggart III”), aff’d, 943 F.3d 943 (Fed. Cir. 2019) (“Haggart IV”); Haggart v. United States, 149 Fed. Cl. 651 (2020) (“Haggart V”), amended in part on reconsideration, Haggart v. United States, 151 Fed. Cl. 58 (2020) (“Haggart VI”). We briefly recount the portions of that saga relevant here. In 2009, Daniel and Kathy Haggart sued the govern- ment for violating the Fifth Amendment. Haggart II, 809 F.3d at 1341. The government, they argued, took their private property for public use without just compensation when it converted a stretch of railroad corridor in the State of Washington to a public trail pursuant to Section 208 of the National Trails System Act Amendments of 1983, 16 U.S.C. § 1247(d). Id. at 1340–41. Later that year, the Claims Court certified a class that, by the end of summary- judgment proceedings, consisted of 253 members. Id. at 1341. Although the Claims Court in 2014 approved a settlement in the amount of $110 million with interest com- pounding at 4.2%, id. at 1342, we vacated its decision be- cause it erred in “approving a settlement agreement where class counsel withheld critical information” and in award- ing class counsel additional fees under the common-fund doctrine, which, we held, the URA precluded, id. at 1351, 1359. The case returned to the Claims Court, where the gov- ernment objected to the settlement agreement because, among other reasons, contingent fee agreements signed by some of the class members rendered it unfair. U.S. Appx. 164. 1 Around the same time, certain class members moved to substitute counsel—indicating, among other things, that they intended “at an appropriate junc- ture” to challenge the validity of those contingent fee

1 U.S. Appx. refers to the appendix submitted by the government in this appeal. Case: 21-1658 Document: 30 Page: 4 Filed: 05/05/2022

agreements. U.S. Appx. 139. Ms. Evans, a member of that group, stated through counsel that she “approve[d] of the settlement fully” but would “continue[] to retain her right to challenge [her] contingent-fee agreement” and that “whether or not she has to share any of her portion of the settlement with class counsel is a matter for another day, a matter of private contract,” such that there was “no basis to challenge the fairness of [the] settlement on the basis of a potential dispute over the enforceability of a contingent- fee agreement.” U.S. Appx. 180. Eventually, the Claims Court approved the settlement agreement again. It entered partial final judgment “in the total amount of $159,636,521.65, consisting of $110,000,000 in principal and $49,636,521.65 in interest,” and it deferred a determination of the amount of attorney fees and costs. Haggart III, 136 Fed. Cl. at 81. In doing so, it ordered that “[t]he judgment is payable to class counsel for distribution to the class according to the terms of the Settlement Agreement and this opinion and order.” Id. Along the way, it concluded that the “contingent fee agree- ments are private contracts that do not directly affect the government’s payment of the settlement award.” Id. at 78. Rather, the Claims Court opined, it “reviews contingent fee agreements only in the context of fairness to the class” and, in this case, the agreements were “reasonable.” Id. at 78, 80. In so concluding, the Claims Court cited class members’ “approval of the fee arrangements” and their “concern that class counsel has not been paid despite eight years of work.” Id. at 80 (“The sentiment among class members in attendance was not that class counsel would be overpaid or that the class members were being treated unfairly, but rather that the government was seeking to use the issue of contingent fee agreements to stall and work against class members’ interests.”). The government ap- pealed, and we affirmed. Haggart IV, 943 F.3d at 952. The case returned again to the Claims Court, which en- tertained motions for attorneys’ fees incurred to enforce Case: 21-1658 Document: 30 Page: 5 Filed: 05/05/2022

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and defend the settlement agreement. Some class mem- bers (Ms. Evans included) contended that the URA re- quired the government to reimburse them for fees retained by counsel under contingent fee agreements. U.S. Appx. 195–96. They also asked the court to “set a briefing schedule to determine the validity of the contin- gency fee agreements.” U.S. Appx. 196. In support, they submitted a declaration from Ms. Evans, stating: At the beginning of this case, [class counsel] Thomas Stewart encouraged me to sign a contin- gency fee agreement. I did not know I could be part of the class without signing a contingent fee agree- ment, or that other members of the class had not signed a contingent fee agreement. Had I known, I would not have signed a contingency fee agree- ment. Mr. Stewart did not inform me that there was a statutory basis for the Court to award attor- neys’ fees that would fully compensate [c]lass [c]ounsel without reducing my recovery. Had I known that, I would not have signed a contingency fee agreement. I believe the United States should pay all attorneys’ fees and costs incurred in this matter, whether hourly or contingency fee so that my recovery is not reduced and I am made whole. U.S. Appx. 197 (paragraph formatting normalized). Later, after receiving her settlement check from class counsel, Ms. Evans submitted a supplemental declaration stating: “Class [c]ounsel deducted a contingency fee from my settle- ment payment, although I do not know the exact dollar amount of the fees he retained.” U.S. Appx. 202. Case: 21-1658 Document: 30 Page: 6 Filed: 05/05/2022

Without reaching the validity of the contingent fee agreements, Informal Br. 1 2; Appellee’s Br. 16, the Claims Court entered final judgment awarding legal fees and costs (calculated via the lodestar method), including $2,389,527.13 for class counsel’s law firm Stewart Wald. Haggart V, 149 Fed. Cl. at 666. Ms. Evans appeals. 3 We have jurisdiction under 28 U.S.C. § 1295(a)(3). DISCUSSION First, Ms. Evans asserts that the government should have paid her share of the settlement to her directly, rather than through class counsel. Informal Br. 2, 4. But as the government notes, payment through counsel is just what the Claims Court ordered in Haggart III: “The judgment is payable to class counsel for distribution to the class accord- ing to the terms of the Settlement Agreement and this opinion and order.” 136 Fed. Cl. at 81; see also U.S. Appx. 193. Given that we already affirmed the Hag- gart III judgment in Haggart IV, we cannot entertain Ms. Evans’s direct-payment argument. At any rate, the parties cite no authority holding that payment through class counsel is improper, and the government represents that it “routinely pays judgment and settlement amounts to counsel trust accounts.” Appellee’s Br. 22. Second, Ms. Evans contends that the URA requires the government to reimburse her for contingent fees that she alleges class counsel retained. Informal Br. 2–3. The URA

2 The page numbers we cite for Ms. Evans’s informal brief reference the typewritten document she submitted as an attachment to our informal brief form. 3 A separate appeal from this judgment, No. 21-1660, filed by different class members, is pending. Other appeals from this judgment were voluntarily dis- missed. Haggart v. United States, No. 2021-1072, 2021 WL 3629353, at *1 (Fed. Cir. May 18, 2021). Case: 21-1658 Document: 30 Page: 7 Filed: 05/05/2022

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provides that “[t]he court . . . shall determine and award or allow to such plaintiff, as a part of [a] judgment or settle- ment, . . . his reasonable costs, disbursements, and ex- penses, including reasonable attorney . . . fees, actually incurred because of [the] proceeding.” 42 U.S.C. § 4654(c). As we’ve explained, this “is a fee-shifting statute and pro- vides for the award of ‘reasonable’ attorney fees.” Hag- gart II, 809 F.3d at 1355. Here, the Claims Court already calculated those “reasonable” fees via the lodestar method, Haggart V, 149 Fed. Cl. at 670, and the government doesn’t dispute its obligation to pay them, Appellee’s Br. 24–25. In arguing that the URA additionally requires the gov- ernment to reimburse her for fees that counsel retained un- der her contingent fee agreement, Ms. Evans invokes our statement in Haggart II that “the URA provision was ex- pressly enacted with the primary purpose of rendering property owners whole.” 809 F.3d at 1359; see Informal Br. 3. But this merely states the URA’s rationale for providing a “reasonable fee.” We do not read our prior statement to mean that the government must, on top of paying that reasonable fee, also reimburse Ms. Evans for further fees retained by counsel under a contingent fee agreement, which we said in Haggart II is “a matter of in- dividual contract.” 809 F.3d at 1357; see also Haggart III, 136 Fed. Cl. at 79 (“The amount that any one class member would pay to class counsel or other counsel under an indi- vidual agreement is a matter of private contract.”). As we’ve noted before, the Supreme Court has held that a dif- ferent fee-shifting statute does “not invalidate contingent fee contracts that would require a prevailing plaintiff to pay his attorney more than the statutory award against the defendant.” Haggart II, 809 F.3d at 1356–57 (discussing Venegas v. Mitchell, 495 U.S. 82, 90 (1990) (explaining that 42 U.S.C. § 1988 “controls what the losing defendant must pay, not what the prevailing plaintiff must pay his law- yer”)). Case: 21-1658 Document: 30 Page: 8 Filed: 05/05/2022

Third, Ms. Evans asserts that class counsel extracted an “improper, unethical, and illegal” contingent fee agree- ment and therefore should repay what he retained. Infor- mal Br. 4. According to Ms. Evans, class counsel retained over $250,000 from her recovery. Informal Br. 2. For its part, the government states that “[c]lass counsel should an- swer, and this Court should address, Ms. Evans’[s] allega- tions about the impropriety of her contingent-fee agreement.” Appellee’s Br. 2. In the government’s view, that agreement “potentially implicates several rules of pro- fessional conduct for attorneys.” Appellee’s Br. 18. And, during the pendency of this appeal, the government filed a notice (which we construed as a motion) indicating that, in its view, “it would be appropriate for [class counsel] Mr. Stewart to be named as an appellee in this appeal so that he may be a party to this appeal and may respond to [Ms. Evans’s] arguments.” Motion at 2, Haggart v. United States, No. 21-1658 (Fed. Cir. Apr. 26, 2021), ECF No. 10; see Order at 2, Haggart v. United States, No. 21-1658 (Fed. Cir. May 18, 2021), ECF No. 15. We agree with the government insofar as it argues that Ms. Evans’s allegations about the impropriety of her con- tingent fee agreement are directed at class counsel, not the government. But we decline the government’s invitation to add Mr. Stewart as appellee so that we can address this right here and now, and we therefore deny the govern- ment’s motion. It’s not for us—in the first instance on ap- peal and in a case to which Mr. Stewart isn’t a party—to adjudicate this undeveloped issue. If Ms. Evans has a mer- itorious claim against Mr. Stewart, she is free to pursue it in an appropriate forum. CONCLUSION We have considered the parties’ remaining arguments but find them unpersuasive. For the reasons set forth above, we affirm the Claims Court’s judgment with respect to the issues raised by Ms. Evans in this appeal. Case: 21-1658 Document: 30 Page: 9 Filed: 05/05/2022

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AFFIRMED COSTS The parties shall bear their own costs.