Wagda v. AT&T Corp. ( 2022 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 EASTERN DISTRICT OF CALIFORNIA 9 10 UNITED STATES OF AMERICA, ex No. 2:19-cv-01057-JAM-AC rel. DONALD CLOYCE WAGDA, 11 Plaintiff, 12 ORDER DENYING DEFENDANTS’ MOTION v. FOR ATTORNEYS’ FEES 13 AT&T CORP., a corporation, et 14 al. 15 Defendants. 16 17 Donald Cloyce Wagda (“Realtor”) filed this qui tam case 18 against AT&T Inc. and its subsidiaries (collectively referred to 19 as “Defendants”) under § 3729(a)(1)(C) and (D) of the False 20 Claims Act (“FCA”). See Compl., ECF No. 1. On July 1, 2022, the 21 Court dismissed Realtor’s claims with prejudice under Federal 22 Rule of Civil Procedure 12(b)(7) for failing to join an 23 indispensable party and Realtor appealed. See Order at 6, ECF 24 No. 56; Notice of Appeal, ECF No. 62. 25 This matter is now before the Court on Defendants’ motion for 26 attorney’s fees. See Def.’s Mot. for Attorney’s Fees (“Mot.”), 27 ECF No. 61. Plaintiff opposes the motion. See Opp’n, ECF No. 70. 28 Defendants replied. See Reply, ECF No. 71. For the reasons set 1 forth below, Defendants’ motion is denied1 2 I. OPINION 3 A. Jurisdiction 4 “The effective filing of a notice of appeal transfers 5 jurisdiction from the district court to the court of appeals 6 with respect to all matters involved in the appeal.” Masalosalo 7 by Masalosalo v. Stonewall Ins. Co., 718 F.2d 955, 956 (9th Cir. 8 1983). “The district court retain[s] the power to award 9 attorneys' fees after the notice of appeal from the decision on 10 the merits has been filed.” Id. at 957. Thus, this Court can 11 decide the motion for fees despite Relator's pending appeal. 12 B. Attorneys’ Feed Under the FCA 13 Under the “American Rule,” each party in a lawsuit 14 “ordinarily bears its own attorney’s fees unless there is express 15 statutory authorization to the contrary.” Hensley v. Eckerhart, 16 461 U.S. 424, 429 (1983). The FCA provides that “[i]f the 17 Government does not proceed with the action and the person 18 bringing the action conducts the action, the court may award to 19 the defendant its reasonable attorneys' fees and expenses if the 20 defendant prevails in the action and the court finds that the 21 claim of the person bringing the action was clearly frivolous, 22 clearly vexatious, or brought primarily for purposes of 23 harassment.” 31 U.S.C. § 3730(d)(4). Here, the Government 24 declined to intervene. As a result, the Court must determine 25 whether Plaintiff’s action was “clearly frivolous, clearly 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for October 18, 2022. 1 vexatious, or brought primarily for purposes of harassment” to 2 entitle Defendants to the requested attorneys’ fees as § 3 3730(d)(4) prescribes. 4 Defendants argue this Court should grant attorneys’ fees 5 because Realtor’s claims were frivolous. See Mot. at 2-3, 6-8. 6 Courts have found an FCA “claim is frivolous when, viewed 7 objectively, it may be said to have no reasonable chance of 8 success, and present no valid argument to modify present law.” 9 Mikes v. Straus, 274 F.3d 687, 705 (2d Cir. 2001) (abrogated on 10 other grounds by Universal Health Services, Inc. v. U.S., 136 S. 11 Ct. 1989 (2016)). Accordingly, “[t]he award of fees under the 12 [FCA] is reserved for rare and special circumstances,” Pfingston 13 v. Ronan Eng'g Co., 284 F.3d 999, 1006-07 (9th Cir. 2002), and 14 subject to “exacting standards” that are difficult to fulfill. 15 See U.S. ex re. Madden v. General Dynamics Corp., 4 F.3d 827, 831 16 (9th Cir. 1993) Nonetheless, there are few decisions awarding 17 attorneys’ fees under the FCA. In turn, this Court follows the 18 Ninth Circuit’s reasoning that 42 U.S.C. § 1988 “cases are 19 instructive in deciding whether fees are appropriate under the 20 [FCA]” because the award of attorneys’ fees under the FCA “tracks 21 the formulation as to when fees are appropriate under [] 22 § 1988 . . . .” 23 When analyzing a § 1988 attorneys’ fees claim, this 24 jurisdiction applies the Christianburg standard that only awards 25 attorneys’ fees when “the plaintiff's action was frivolous, 26 unreasonable, or without foundation, even though not brought in 27 subjective bad faith.” Christianburg Garment Co. v. EEOC, 434 28 U.S. 412, 421 (1978). “In determining whether this standard has nnn enn nee en nn ne nnn 1 | been met, a district court must assess the claim at the time the 2 complaint was filed, and must avoid post hoc reasoning by 3 concluding that, because a plaintiff did not ultimately prevail, 4} his action must have been unreasonable or without foundation.” 5 Tutor-Saliba Corp. v. City of Hailey, 452 F.3d 1055, 1060 (9th 6 Cir. 2006) (internal citations omitted). As a result, under 7 Christianburg, attorneys’ fees are not awarded routinely or 8 simply because a defendant succeeds. Christianburg, 434 U.S. at 9} 421. 10 After review, the Court finds that Defendants failed to 11 satisfy the strict governing standard for fee awards to 12 prevailing defendants in a FCA case. Although Realtor’s claims 13 were unsuccessful, they were not “frivolous, unreasonable, or 14 without foundation” when filed. Id. Defendants did not prove 15 exceptional circumstances exist warranting a fee award.? 16 | Accordingly, the Court declines to exercise its discretion to 17 award attorney’s fees under the § 3730(d) (4) of the FCA . 18 Il. ORDER 19 For the reasons set forth above, the Court DENIES 20 Defendants’ Motion for Attorneys’ Fees. 21 IT IS SO ORDERED. 22 Dated: December 5, 2022 23 opens JOHN A. MENDEZ 25 SENIOR UNITED*STATES DISTRICT JUDGE 26 fF 2 Even if attorney’s fees were recoverable, the Court notes that 27 Defendants’ request for $100,247.61 for a motion to dismiss is grossly excessive and any award would have been significantly 28 | reduced.