United States of America v. Prism Autism Foundation

District Court, S.D. California·Decided October 6, 2022·No. 3:19-cv-00043·Unknown

Opinion

UNITED STATES OF AMERICA and Case No.: 3:19-cv-00043-W-BLM the STATE OF CALIFORNIA, ORDER GRANTING MOTION FOR Ex rel. DIANA MASON ATTORNEY’S FEES UNDER 31 U.S.C. 3730 [DOC. 22 & 24] Plaintiffs, v. PRISM AUTISM FOUNDATION d/b/a PRISM BEHAVIORAL SOLUTIONS, Defendants. Pending before this Court is Relator Diana Mason’s Motion for Attorney’s Fees under 31 U.S.C. § 3730. Defendant Prism Autism Foundation d/b/a Prism Behavioral Solutions (“Prism”) opposes this motion. The Court decides the matter on the papers submitted and without oral argument. Civ. L. R. 7.1.d.1. For the reasons stated below, the Court GRANTS Relator’s motion [Doc. 22 & 24] and AWARDS $118,023.99 in attorneys’ fees and costs. On January 8, 2019, Relator Diana Mason filed this qui tam action under seal pursuant to 31 U.S.C. § 3730(b)(2), alleging that Prism violated the California and Federal False Claims Acts. (See Compl. [Doc 1].) According to the Complaint, “Prism serves families with children or young adults on the Autism spectrum.” (Id. ¶ 2.) Relator was employed by Prism from March to June 2018 to work “directly with families to develop and implement appropriate behavioral interventions for children and young adults.” (Id. ¶¶ 8, 9.) Relator alleges that Prism defrauded Medicaid by (1) billing for services not rendered, (2) overbilling for services rendered, and (3) billing for services rendered without the supervision of a qualified provider. (Id. ¶ 3.) Before filing the Complaint, Relator provided the Government with a pre-suit Disclosure Statement and over sixty exhibits. (P&A [Doc. 22-2] pg. 4–5; Compl. ¶ 18.) After over a three-year investigation, the U.S. Attorney for the Southern District of California determined Prism “knowingly submitted over 2,300 claims for Medicaid reimbursement for services not rendered.” (P&A pg. 3.) On May 6, 2022, both the state and federal governments intervened for purposes of entering a settlement with Prism. (Notice of Election to Intervene [Doc 20] 1:18–27.) Ultimately, the U.S. and California recovered $650,000 in civil penalties and fines from Prism. (P&A pg. 3.) While the settlement agreement was being finalized, Relator and Prism attempted to negotiate reimbursement of Relator’s attorney’s fees and costs. Because the parties were unable to agree, Relator filed this motion seeking $118,973.99 in fees and costs. Prism opposes. The Supreme Court prefers the lodestar method to calculate attorney’s fees for several reasons. First, “lodestar looks to ‘the prevailing market rates in the relevant community.’” Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 551 (2010) (quoting Blum v. Stenson, 465 U.S. 886, 895 (1984)). Second, “the lodestar method produces an award that roughly approximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case.” Id. Finally, “the lodestar method is readily administrable” and the calculation is objective, which “cabins the discretion of trial judges, permits meaningful judicial review, and produces reasonably predictable results.” Id. The lodestar method requires “the district court to calculate the reasonable number of hours” an attorney has “expended and multiply that number by the reasonable hourly rate for” the attorney’s services. United States ex rel. Sant v. Biotronik, Inc., 716 F. App'x 590, 591 (9th Cir. 2017) (citations omitted). The fee applicant bears the “burden of producing evidence that their requested fees are ‘in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.’” Chaudhry v. City of Los Angeles, 751 F.3d 1096, 1110 (9th Cir. 2014) (quoting Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 980 (9th Cir. 2008)). The “general rule” when calculating this fee “is that the rates of attorneys practicing in the forum district… are used.” Gates v. Deukmejian, 987 F.2d 1392, 1405 (9th Cir. 1992). After a fee applicant has met their burden, the defendant must then submit evidence showing the requested fee is unreasonable. Id. at 1397–98. This may include “affidavits of the plaintiffs’ attorney and other attorneys regarding prevailing fees in the community, and rate determinations in other cases, particularly those setting a rate for the plaintiffs’ attorney.” Beauchamp v. Anaheim Union High Sch. Dist., 816 F.3d 1216, 1224 (9th Cir. 2016) (quoting United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir.1990)). When determining a rate’s reasonability, a judge may “rel[y] on their own knowledge of customary rates and their experience concerning reasonable and proper fees.” Ingram v. Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011). // // // A. Hourly Rates For purposes of evaluating if Relator’s attorney’s hourly rate is reasonable, Relator argues the “community” of lawyers should not be attorneys practicing in this district, but rather all “attorneys who specialize in qui tam litigation.” (P&A pg. 10.) Prism responds by pointing out that Relator failed to offer evidence “on local prevailing market rates” and, therefore, argues her fee request should be denied. (Opp. [Doc 31] 6:8.) As an initial matter, the Court agrees with Prism that Relator failed to provide any information regarding the prevailing market rates, whether among attorneys in this district or, as Relator proposes, those specializing in qui tam litigation nationwide. Nowhere in the points and authorities does Relator identify the rates of other attorneys practicing in this district or in qui tam cases generally. (See P&A pg. 10–13.) The only information provided by Relator concerns her attorneys. (See id.) Next, the Court also finds Relator failed to support her contention that the relevant community should be attorneys specializing in qui tam litigation. A court may “look outside the forum when the relevant community lacks attorneys with ‘the degree of experience, expertise, or specialization required to properly handle the case.’” Wright v. Tehachapi Unified Sch. Dist., 743 F. App'x 125, 126 (9th Cir. 2018) (quoting Gates, 987 F.2d at 1405). Here, Relator has failed to provide any evidence that competent counsel in San Diego was unavailable. See Gates, 987 F.2d at 1405 (approving San Francisco attorney rates because moving party “offered numerous declarations of San Francisco and Sacramento attorneys which directly support their contention that Sacramento attorneys and law firms with the requisite expertise and experience to handle this type of complex institutional prison reform litigation were unavailable.”) Notwithstanding Relator’s failure to provide evidence regarding the local prevailing market rates, the Court disagrees with Prism’s contention that Relator’s motion should be denied for two reasons. First, an award of attorneys’ fees in this case are not discretionary. Instead, 31 U.S.C. § 3730(d)(1) requires the Court to award Relator “an amount for reasonable expenses which the Court finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs.” Second, the declarations attached to Relator’s motion, along w

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