United States of America v. Academy Mortgage Corporation

• Court: District Court, N.D. California
• Decided: September 13, 2024
• Docket: 3:16-cv-02120
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 UNITED STATES OF AMERICA ex rel. Case No. 16-cv-02120-EMC GWEN THROWER, 8 Plaintiff, ORDER GRANTING IN PART 9 RELATOR GWEN THROWER’S v. MOTION RE ACCRUAL OF 10 INTEREST AND FOR ACADEMY MORTGAGE SUPPLEMENTAL ATTORNEYS’ FEES 11 CORPORATIONN, Docket No. 508 12 Defendant.

14 Presently pending before this Court is Relator Gwen Thrower’s “Motion to Set the Date on 15 Which Interest Started Accruing on the Attorneys’ Fees and Expenses that the Court Ordered on 16 May 31, 2024 and for Supplemental Attorneys’ Fees to Secure that Order and to Collect the 17 Attorneys’ Fees and Expenses” at Docket No. 508 (“Mot.”). The Court finds that interest on 18 attorneys’ fees and expenses began to accrue from the Court’s May 31 Order Granting In Part 19 Relator’s Motion for Fees, Docket No. 500, with a post-judgment interest rate of 5.20%. The 20 Court grants Relator’s Interim Attorneys’ Fees subject to a 15% reduction. The reduced award 21 totals to $468,022.24 ($550,614.40 x .85). 22

23 I. BACKGROUND 24 On January 27, 2023, the Court entered its Order Approving Stipulation of Partial 25 Dismissal (“January 27 Order”). See Dkt. No. 438. In this January 27 Order, the issue of fees was 26 specifically carved out from the settlement agreement and the Court retained jurisdiction to decide 27 the applicable fees. The January 27 Order noted that Relator’s claims were dismissed “except 1 with respect to Relator’s claims pursuant to applicable law for reasonable expenses necessarily 2 incurred and reasonable attorneys’ fees and costs … which are not dismissed and shall remain 3 pending.” Dkt. No. 438, at 2. 4 After briefing and argument, on May 31, 2024, the Court entered an Order Granting In Part 5 Relator’s Motion for Fees (“May 31 Order”), awarding Relator $8,585,530.20 for attorneys’ fees 6 and $89,437.77 for expenses. The attorneys’ fees comprised “$7,798,146.44 for merits work 7 ((T&S) $7,655,431.44 and (RBGG) $142,715) and $787,383.76 for fee motion fees” that had been 8 incurred. Dkt. No. 500 at ECF 2. After meeting and conferring, the parties agreed that 9 $11,645.54 would be added to the fees total as prejudgment interest on the Rosen Bien Galvan & 10 Grunfeld LLP (“RBGG”) merits fees which had been paid by Relator’s counsel during the 11 litigation, and that the Court’s May 31 Order should be unsealed and filed on the Court’s public 12 docket. See Dkt. No. 502 at ECF 2. 13 After additional meeting and conferring, on July 1, 2024, Academy Mortgage paid 14 Relator’s counsel a total of $5,405,714.33, constituting the Court’s entire lodestar fees and 15 expenses award. The parties’ counsel were unable to agree on resolution concerning (1) the date 16 on which interest started accruing; (2) the 1.75% multiplier ($3,280,899.19) that the Court 17 awarded; (3) disposition of $292,754.80 for RBGG’s fees work from August 14 through 18 November 30, 2023 and December 1, 2023 through February 12, 2024, see Dkt. Nos. 477 and 494, 19 that was not addressed in the Court’s May 31 Order; (4) RBGG’s additional fees for work 20 commencing February 13, 2024 through July 14, 2024 ($216,528.40) to complete the work in this 21 Court and to collect the attorneys’ fees and expenses; and now (5) RBGG’s supplemental fees for 22 fees work from August 14, 2023 through the August 28, 2024 (the date of the hearing on the 23 Motion). The total for all three additional buckets of supplemental fees from items 3, 4, and 5, 24 comes to $550,614.40. 25 On July 1, 2024, Academy filed its notice of appeal. Dkt. No. 504. As the parties 26 confirmed at the hearing herein, Academy is appealing only the award of the 1.75% multiplier, 27 amounting to $3,280,899.19. See Mediation Questionnaire at 2, United States ex rel. Thrower v. 1 day, Academy filed the Parties’ stipulation “that execution of the Court’s May 31, 2024 Order, 2 Dkt. No. 500, will be stayed for 45 days, through August 15, 2024, and Academy need not pay 3 any supersedeas bond during that time.” The stipulation further recited, inter alia, “Whereas 4 Academy has agreed to pay [and has paid] $5,405,714.33 to Relator on July 1, 2024 (the 5 ‘Payment’), in satisfaction of an uncontested portion of the Fee Award.” Dkt. No. 505. 6 On August 19, 2024, the Parties filed another stipulation, reciting “Whereas the Court 7 entered a prior stipulation by the Parties to stay execution of the judgment through August 15, 8 2024. Whereas the Parties have agreed that a three-week extension of the previous stipulation is 9 appropriate for the Parties to come to an agreement on the Surety. Wherefore, it is hereby 10 stipulated that execution of the Court’s May 31, 2024 Order, Dkt. No. 500, will be stayed for an 11 additional three weeks, through September 9, 2024, and Academy need not provide any 12 supersedeas bond during that time.” Dkt. No. 513. On September 9, 2024, the Parties filed 13 another stipulation, reciting “Wherefore, It Is Hereby Stipulated that execution of the Court’s May 14 31, 2024 Order, Dkt. 500, will be stayed until October 14, 2024, and Academy need not provide 15 any supersedeas bond during that time.” Dkt. No. 517. 16 17 II. APPLICABLE DATE UPON WHICH POST-JUDGMENT INTEREST BEGAN TO 18 ACCRUE. 19 The Court first addresses what the applicable date is upon which post-judgment interest on 20 attorneys’ fees and expenses (as distinct from the damages on the merits) began to accrue. Post 21 judgment interest rates are governed by 28 U.S.C. 1961(a) which provides that: Interest shall be allowed on any money judgment in a civil case 22 recovered in a district court …. Such interest shall be calculated from the date of the entry of the judgment, at a rate equal to the 23 weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, 24 for the calendar week preceding the date of the judgment …. 25 Relator argues the relevant “date of the entry of the judgment” is January 27, 2023— 26 the date the Court entered its Order Approving Stipulation of Partial Dismissal (“January 27 27 Order”). See Dkt. 438. Academy argues the relevant date is the date on which a “money 1 2024, the date the Court entered its Order Granting In Part Relator’s Motion for Fees in a specified 2 dollar amount (“May 31 Order”). See Dkt. 500. Academy argues that the Court’s January 27 3 Order was not a “money judgment” entitling Relator to attorneys’ fees because the Court 4 specifically retained jurisdiction over the matter to determine the attorneys’ fees and costs Relator 5 were owed and did not enter a money judgment for fees. 6 Rather than relying on a money judgment of the Court or any order declaring Relators 7 were in fact legally entitled to fees – neither of which occurred until the May 31 Order – Relator 8 argues that the January 27 Order established Relator’s counsel “entitlement” to attorneys’ fees as a 9 matter of law because the False Claims Act mandates that after “settling the claim,” Relator “shall 10 receive … reasonable attorneys’ fees and costs.” 31 U.S.C. § 3730(d)(2). However, Relator is 11 unable to point to any case where a party was awarded post-judgment interest going back to an 12 order granting fees. Cases cited by the parties typically involve an award of interest at the point 13 fees are actually granted. See Friend v. Kolodzieczak, 72 F.3d 1386, 1391-92 (9th Cir. 1995) 14 (holding that the post-judgment interest on the fee-on-fee award dated back to the original order 15 granting attorney’s fees where the court awarded the plaintiff the fee-on-fee award, with the 16 amount to be decided later); Guam Soc’y of Obstetricians & Gynecologists v. Ada, 100 F.3d 691 17 (9th Cir. 1996) (awarding plaintiffs interest from the date of the initial fee award as well as 18 interim fees). To be sure, a specific monetary award for fees is not required to start the running of 19 post-judgment interest if the court rules that the plaintiff is “unconditionally entitled” to fees. 20 Miller v. Vicorp Restaurants, Inc., No. C-03-00777 RMW, 2006 WL 463544 (N.D. Cal. Feb. 24, 21 2006), amended, No. C-03-00777 RMW, 2006 WL 8443027 (N.D. Cal. Apr. 14, 2006) (denying 22 post-judgment interest from date of jury verdict because the verdict did not “unconditionally 23 entitle” Relator to attorneys’ fees, many of the causes of actions were CA state law with a fee- 24 shifting scheme for prevailing plaintiff) (collecting cases); L.H. v. Schwarzenegger, 645 F. Supp. 25 2d 888, 902 (E.D. Cal. 2009) (granting interest on attorney’s fees from date of order entering 26 stipulated settlement and injunction where stipulated judgment provides that “plaintiffs are the 27 prevailing party in the action and that they could accordingly move for attorneys fees”). But no 1 Accordingly, the Court concludes that post-judgment interest began to accrue on the day of 2 the Court’s May 31 Order. 3 4 III. APPLICABLE INTEREST RATE 5 Because the Parties did not propose an interest rate for the May 31 Order, the Court refers 6 to https://www.casb.uscourts.gov/post-judgment-interest-rates-2024. Relator’s Counsel suggests 7 this page—the United States Bankruptcy Court Post-Judgment Interest Rates— which identifies 8 the federal judgment rate pursuant to 28 U.S.C. § 1961(a). Declaration of Sanford Jay Rosen, 9 Docket No. 508-1. The Court located the applicable rate on the May 31 Order as of May 31, 2024 10 of 5.20%. 11 12 IV. SUPPLEMENTAL ATTORNEYS’ FEES, FEES ON FEES 13 The Parties next dispute whether this Court has jurisdiction to address Relator’s request for 14 supplemental attorneys’ fees. 15 Relator argues this Court has jurisdiction because none of these new fee requests were the 16 subject of the Court’s May 31 Order at Dkt. 500 that Academy has appealed. Academy appeals 17 the 1.75% multiplier ($3,280,899.19) that the Court awarded on the fees already accrued and 18 awarded. Academy argues that this Court is stripped of jurisdiction because the appeal is on 19 attorneys’ fees, the same general subject matter of this new request, arguing “an order on 20 attorney’s fees is not ‘collateral’ to a new request for attorneys’ fees—they are the same issue.” 21 Opp. at 6. 22 Generally, the filing of a notice of appeal “confers jurisdiction on the court of appeals and 23 divests the district court of its control over those aspects of the case involved in the appeal.” 24 Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58 (1982); Hendricks v. Starkist Co., No. 25 13-CV-00729-HSG, 2017 WL 2289210, at *2 (N.D. Cal. May 25, 2017). The purpose of this rule 26 “is to promote judicial economy and avoid the confusion that would ensue from having the same 27 issues before two courts simultaneously.” Natural Res. Def. Council v. Sw. Marine, Inc., 242 F.3d 1 1983)). This rule “is a creature of judicial prudence, however, and is not absolute.” Masalosalo, 2 718 F.2d at 956. The court is not divested of jurisdiction over matters collateral to a determination 3 of the merits of the case. See United States ex rel. Shutt v. Cmty. Home & Health Care Servs., 4 Inc., 550 F.3d 764, 766 (9th Cir. 2008) (factual issues are “collateral to the main action” when 5 they involve a “factual inquiry distinct from one addressing the merits”); Masalosalo, 718 F.2d at 6 957 (district court retains power to award attorneys' fees after notice of appeal from decision on 7 merits). 8 Typically, a motion for attorneys’ fees is considered “collateral” to a decision on the 9 merits. See Budinich v. Becton Dickinson & Co., 486 U.S. 196, 200 (1988). This is because a 10 question that remains undecided after a final order on the merits will not alter or amend the 11 decisions embodied by the order which is the subject of the appeal. Id. at 199. An attorneys’ fees 12 determination (distinct from the merits) typically fits this description. Id. at 199–200. However, if 13 “the order from which the appeal is taken is the very order” that a party “seeks to augment,” then 14 the district court cannot retain control of the aspects of the case on appeal. Kowalski v. Farella, 15 Braun & Martel, LLP, No. C-06-3341 MMC, 2010 WL 475357, at *1 (N.D. Cal. Feb. 4, 2010) 16 (finding that the court lacked jurisdiction to rule on the plaintiff’s motion for fees on remand, 17 where the court had already issued a prior order regarding fees and costs and the appeal of that 18 order remained pending); see also Budinich, 486 U.S. at 200 (“If one were to regard the demand 19 for attorney’s fees as itself part of the merits, the analysis would not apply.”) (emphasis in 20 original). 21 Here, Academy confirmed at the hearing that Academy is appealing only the award of the 22 multiplier (amounting to $3,280,899.19), and not the merits of the Court’s May 31 Order. Neither 23 of Relator’s requests for supplemental fees was a part of the Order that is now being appealed. 24 Relator does not “seek[] to augment” the Court’s May 31 Order. The Court deciding these new 25 supplemental requests for attorneys’ fees will not result in the “same issues [being heard] before 26 two courts simultaneously.” Natural Res. Def. Council v. Sw. Marine, Inc., 242 F.3d 1163, 1166 27 (9th Cir. 2001). Just as a motion for attorneys’ fees on the merits is deemed collateral to an order 1 embodied by the order, Budinich, 486 U.S. at 199, so too is a motion for attorneys’ fees-on-fees 2 collateral to an order regarding attorneys’ fees on the merits. Thus, this Court retains jurisdiction 3 to decide Relator’s supplemental requests for attorneys’ fees. 4 In the Ninth Circuit, reasonable attorneys’ fees are determined by first calculating the 5 “lodestar.” Jordan v. Multnomah County, 815 F.2d 1258, 1262 (9th Cir. 1987). “The ‘lodestar’ is 6 calculated by multiplying the number of hours the prevailing party reasonably expended on the 7 litigation by a reasonable hourly rate.” Morales v. City of San Rafael, 96 F.3d 359, 363 (9th Cir. 8 1996) (citation omitted). There is a presumption that the lodestar figure represents a reasonable 9 fee, but “[t]he fee applicant has the burden of producing satisfactory evidence, in addition to the 10 affidavits of its counsel, that the requested rates are in line with those prevailing in the community 11 for similar services of lawyers of reasonably comparable skill and reputation.” Jordan, 815 F.2d 12 at 1262-63; see also Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979-80 (9th Cir. 2008). 13 Additionally, “[t]he fee applicant bears the burden of documenting the appropriate hours expended 14 in the litigation and must submit evidence in support of those hours worked.” See Gates v. 15 Deukmejian, 987 F.2d 1392, 1397 (9th Cir. 1992) (citation omitted). “The party opposing the fee 16 application has a burden of rebuttal that requires submission of evidence to the district court 17 challenging the accuracy and reasonableness of the hours charged or the facts asserted by the 18 prevailing party . . . .” Id. at 1397-98. 19 In determining a reasonable amount of hours, the court must review time records to decide 20 whether the hours claimed by the applicant are adequately documented and whether any of the 21 hours were unnecessary, duplicative or excessive. Chambers v. City of L.A., 796 F.2d 1205, 1210 22 (9th Cir.1986), reh’g denied, amended on other grounds, 808 F.2d 1373 (9th Cir.1987). To 23 determine reasonable hourly rates, the court must look to the prevailing rate in the community— 24 generally, the forum in which the district court sits—for similar work performed by attorneys of 25 comparable skill, experience, and reputation. Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 26 979 (9th Cir.2008). Parties may seek reasonable attorneys’ fees for work performed on the 27 application for attorneys’ fees and costs (“fees on fees”). Anderson v. Dir., Office of Workers 1 Cir.1991). This Court has already done a comprehensive assessment of attorneys’ fees, reasonable 2 rates, and reasonable hours in its May 31 Order to which the Parties may refer. See Dkt. No 500. 3 Relator’s Counsel submitted four declarations and over 50 pages of time entries to justify 4 their fee award request. Relator’s Counsel stated they made discrete billing reductions, and further 5 reduced their lodestar by 20%. The Court finds that the billable rates charged by Counsel – 6 pegged to its 2023 rates – are reasonable. Academy has failed to present any evidence suggesting 7 these fees do not reflect reasonable market rates given the experience and quality of work 8 performed. RBGG affirms their 2023 rates “continue to be at the lower range of rates for 9 comparable attorneys who work on comparable matters to the instant matter in the San Francisco 10 Bay Area.” Declaration of Sanford Jay Rosen, Docket No. 508-1 at 2. 11 The issue lies in the time spent on the supplemental work. The Court has broken down the 12 time periods and docket items filed for each time period in the table below. Number of Total 13 Time Period Work Performed Reduction Hours/Lodestar Award 14 Tranche 1 8/14/23- 383.5 hours • January 11, 2024 2/12/24 $292,754.80 hearing 15 (6 months) • R ree vs ip ewon ind g t o p rR oF dP us c, i ng Dkt 477, Dkt documents 16 494 • Discovery briefs (5 pages) 17 • Draft supplemental brief, ECF No 474 (10 pages) 18 • Compile accounting requested by the 19 Court in the Order. Dkt No. 491 (7 pages) 20 • Respond to two of Academy’s 21 Supplemental Brief and AMFUS, Dkt Nos. 463, 470, 487, 22 492 (49 pages)

23 Tranche 2 2/14/24- 244.8 hours • Filing interim fee 6/14/24 $216,528.40 motion (Dkt 495 and 24 (4 months) 4 p9 ag7 e) s( 3 e xp ha ig be its s )+ 42 25 Dkt 508-1 • Preparing Present Interest and Fees motion Dkt 508 (14 26 pages + 29 page attachments) 27 • Collections efforts (Academy assets • Meet, Confer, 1 Research Tranche 3 7/15/24- 32.6 hours • Filing the instant 2 8/28/24 $41,331.20 Motion on July 15 • Reply brief Dkt 512 3 (1 month) (15 pages) Dkt 512-1 • $15,000 in additional 4 fees anticipated to be incurred by Relator’s counsel between 5 August 4 and the August 28, 2024 6 hearing. TOTAL 660.9 hours 15% $468,022.24 7 $550,614.40 8 9 In addition to the over 1,000 hours on fee work for which the Court granted an award in 10 the May 31 Order, Relators’ Counsel now seek fees for an additional 660 hours of work. 11 At the outset, the Court notes that the more than 1,660 hours for fee work on fees sought 12 herein exceed that which this Court has seen, even in complicated cases. See, e.g., City & Cnty. of 13 San Francisco, 748 F. Supp. at 1438 (awarding fees for 600 hours of fee motion work). 14 Drilling down, the hours spent do appear excessive in light of the tasks accomplished. In 15 Tranche 1, for example, a total of less than 75 pages of briefing was filed, there was one hearing, 16 and some discovery taken. Relator’s Counsel asks this Court to approve 383.5 hours for these 17 tasks but details no support explaining why the tasks took such a substantial amount of time. In 18 Tranche 2, Relator’s Counsel filed a total of less than 20 pages of briefs, with 60 pages of exhibits, 19 did collections efforts, met and conferred, and did research, yet there is no explanation how this 20 warranted 244.8 hours of work, especially given that a more complex and time intensive motion 21 for attorneys’ fees had already briefed and decided. 22 The Court finds that a 15% cut is warranted here. The Court acknowledges this reduction 23 exceeds the discretionary 10% overall “haircut” to the fees-on-fees work for which no explanation 24 is required under Ninth Circuit law. Moreno v. City of Sacramento, 534 F.3d 1106, 1112 (9th Cir. 25 2008) (holding that a district court may apply a 10% haircut on fee award as a matter of general 26 discretion); see also Greenpeace, 2020 WL 2465321, at *9 (citing Moreno, 534 F.3d at 1112). 27 The Court also acknowledges that Relator argues that their fees-on-fees request in the aggregate is 1 that sought herein, may not seem excessive. Id. However, as described above, the additional 600 2 || hours is not fully justified here. While the prior award based on 1,000 hours for fees-on-fees work 3 was justified in light of the fact that that motion addressed fees that spanned seven years of 4 |} litigation and involved extensive briefing on the highly contested attorneys’ fees, the addition of 5 over 60% of that amount against cannot be similarly justified. 6 Academy asks this Court to reduce the present fees by 50% to get the total for time spent 7 on attorneys’ fees down to 1,300 hours (1,000 already awarded + 300 of the hours now sought) but 8 does not do much analysis to justify such a drastic cut. 9 Instead based on the work done in connection with the supplemental fee request, the Court 10 || finds a 15% cut reasonable. Accordingly, the Court awards an additional amount of fees based on 11 || the supplementary work of $468,022.24 ($550,614.40 x .85). 12 IT IS SO ORDERED.

14 Dated: September 13, 2024

5 EDW D M. CHEN nited States District Judge 18 19 20 21 22 23 24 25 26 27 28