Kane County, Utah v. United States ( 2019 )

In the United States Court of Federal Claims
Nos. 17-739C; 17-1991C
(Consolidated)
Filed: September 25, 2019
)
KANE COUNTY, UTAH, individually and ) Keywords: Attorney Fees; Lodestar
on behalf of all others similarly situated, ) Cross-Check; Class Action; Common
) Fund Doctrine
Plaintiffs, )
)
v. )
)
THE UNITED STATES OF AMERICA, )
)
Defendant. )
)
Alan I. Saltman, Smith, Currie & Hancock LLP, Washington, DC, for Plaintiffs. Robert O.
Fleming, Smith, Currie & Hancock LLP, Atlanta, GA, Of Counsel.
Mollie Lenore Finnan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, Washington, DC, for Defendant, with whom were Claudia Burke,
Assistant Director, Robert E. Kirschman, Jr., Director, and Joseph H. Hunt, Assistant Attorney
General. Tony Irish, Division of General Law, Office of the Solicitor, Department of the Interior,
Of Counsel.
OPINION AND ORDER
KAPLAN, Judge.
Currently before the Court is Plaintiffs’ motion for an award of attorney fees and non-
taxable expenses. Plaintiffs seek an award of attorney fees in the amount of $5,740,607, or one
third of the total amount recovered on behalf of all class members who timely opted into the
lawsuit. They also request an award of $26,936.96 in out-of-pocket expenses incurred.
Because the government’s appeal has been dismissed, the Court LIFTS the existing stay
of its consideration of Plaintiffs’ motion for an award of attorney fees and non-taxable expenses.
ECF No. 58. The Court finds that it possesses authority to award fees and expenses in
accordance with the common fund doctrine. It also finds that the amount of fees and expenses
requested is reasonable. Plaintiffs’ motion for an award of attorney fees and non-taxable
expenses is therefore GRANTED. 1
BACKGROUND
These consolidated cases arise out of suits that Kane County, Utah, brought alleging that
the federal government owed it and other similarly-situated units of local government additional
payments under the Payment in Lieu of Taxes Act (“PILT”) (codified at 31 U.S.C. § 6901 et
seq.) for fiscal years 2015, 2016, and 2017. See Compl. in No. 17-739, ECF No. 1 (covering
fiscal years 2015 and 2016); Compl. in No. 17-1991C (covering fiscal year 2017). The Court
granted summary judgment in the Plaintiffs’ favor in both cases, finding that eligible units of
local government were entitled by law to receive the full amount of the payments they were due
under PILT, irrespective of a shortfall in the appropriations for those payments in fiscal years
2015, 2016, and 2017. See Kane Cty. v. United States, 135 Fed. Cl. 632 (2017); see also Kane
Cty. v. United States, 136 Fed. Cl. 644 (2018). On April 26, 2018, the Court certified a class
consisting of “[a]ll ‘unit[s] of general local government,’ as defined in 31 U.S.C. § 6901(2), that
received payment under 31 U.S.C. § 6902(a) of the Payment in Lieu of Taxes Act in fiscal years
2015, 2016 and/or 2017.” Op. & Order at 5, ECF No. 38.
On October 12, 2018, the parties filed a joint status report stipulating to the amounts due
to each class member in accordance with the Court’s decision. ECF No. 50. On October 22,
2018, the Court, finding no just reason for delay under RCFC 54(b), directed the Clerk to enter
final judgment in favor of the Plaintiffs in the consolidated cases in the total amount of
$17,221,821, allocated to each class member as provided in the stipulation. ECF No. 51. On
November 13, 2018, the government filed a motion requesting that the Court amend the
judgment by entering separate judgments in each case. ECF No. 56. The Court granted that
motion on November 15, 2018, ECF No. 59, and on November 16, 2018 the Clerk entered
judgments for $16,322,574 in No. 17-739C, ECF No. 60, and for $899,247 in No. 17-1991C,
ECF No. 15.
In the meantime, on September 27, 2018, and prior to the first entry of judgment in the
case, Plaintiffs filed a motion for an award of attorney fees and non-taxable expenses and an
accompanying brief, requesting an award of “one-third of the total amount recovered on behalf
of all Class Members that timely opted into th[e] lawsuit” ($5,740,607) and “[r]easonable and
necessary non-taxable, out-of-pocket litigation and [c]lass administration expenses incurred”
($26,936.96). Mot. for Award of Att’y Fees & Non-Taxable Expenses at 1, ECF No. 46; see also
Br. in Supp. of Mot. for Award of Att’y Fees & Non-Taxable Expenses, ECF No. 47. 2 The
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Plaintiffs’ bill of costs shall be considered by the Clerk, in accordance with Rule 54(d)(1) of the
Rules of the Court of Federal Claims (“RCFC”).
2
The motion was amended, with leave of the Court, to account for a timely opt-in form received
by the Town of Sanbornton, New Hampshire. See Mot. for Leave to Am. at 1, ECF No. 48; Am.
Mot. for Award of Att’y Fees & Non-Taxable Expenses, ECF No. 48-1; Am. Br. in Supp. of Am.
Mot. for Award of Att’y Fees & Non-Taxable Expenses (“Pls.’ Br.”), ECF No. 49; Order at 1,
2
government has represented that it takes no position regarding Plaintiffs’ motion. Def.’s Resp. to
the Am. Mot. for Award of Att’y Fees and Non-Taxable Expenses, ECF No. 55.
On November 13, 2018, in light of the government’s representation that it anticipated
filing a notice of appeal of the Court’s decision, the Court stayed consideration of Plaintiffs’
motion for attorney fees pending a final decision from the court of appeals. See ECF No. 58. The
government noted an appeal to the United States Court of Appeals for the Federal Circuit on
January 11, 2019. ECF No. 65.
On May 15, 2019, the parties filed an agreement pursuant to Fed. R. App. P. 42(b) that
the appeal be dismissed. Joint Stipulation of Voluntary Dismissals, Kane Cty. v. United States,
No. 19-1432 (Fed. Cir. May 15, 2019), ECF No. 24. On May 15, 2019, the court of appeals
dismissed the appeals. ECF No. 68; Order, Kane Cty. v. United States, No. 19-1432 (Fed. Cir.
May 16, 2019), ECF No. 25. In light of that action, the Court has lifted its stay of the motion for
attorney fees and non-taxable expenses and, for the reasons set forth below, GRANTS Plaintiffs’
motion.
DISCUSSION
I. An Award of Reasonable Attorney Fees and Expenses is Available Under the
Common Fund Doctrine
RCFC 23(h) provides that “[i]n a certified class action, the court may award reasonable
attorney’s fees and nontaxable costs that are authorized by law or by the parties’ agreement.”
Here, Plaintiffs base their fee request on the common fund doctrine. See Pls.’ Br. at 2. Under that
doctrine, “a litigant or a lawyer who recovers a common fund for the benefit of persons other
than himself or his client is entitled to reasonable attorney fees from the fund as a whole.”
Haggart v. Woodley, 809 F.3d 1336, 1352 (Fed. Cir. 2016) (citing Boeing Co. v. Van Gemert,
444 U.S. 472, 478 (1980)) (internal quotations and modifications omitted).
The Supreme Court has held that the criteria for the application of the common fund
doctrine “are satisfied when each member of a certified class has an undisputed and
mathematically ascertainable claim to part of a lump-sum judgment recovered on his behalf.”
Boeing Co., 444 U.S. at 479. In this case, the lump-sum amount awarded to the class is
$17,221,821 (the sum of $16,322,574 for Case No. 17-739C and $899,247 for Case No.
17-1991C). See Order at 2, ECF No. 59 (amending prior judgment). Each plaintiff in this case is
entitled to a sum certain from the overall judgment awarded. See List A, ECF No. 59-1 (amount
to be recovered by local governments in Case No. 17-739C); List B, ECF No. 59-2 (amount to be
recovered by local governments in Case No. 17-1991C). Therefore, a common fund exists in this
case.
ECF No. 54 (granting Plaintiffs’ motion to amend). The figures above (in parentheses) reflect the
amounts requested in the amended motion.
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“[T]he question of whether a common fund has been created,” however, “is distinct from
whether the doctrine may be applied to allow class counsel or the prevailing litigant to recover
attorney fees.” Haggart, 809 F.3d at 1352. “Recovery of attorney fees under a common fund is
based on the existence of some inequity borne by counsel or the successful litigant.” Id. Such
inequity exists where, in a class action under RCFC 23, some opt-in plaintiffs are not
contractually obligated to contribute to the costs of the litigation because they have not entered
separate fee agreements with class counsel. Id. at 1354.
In this case, only the lead Plaintiff, Kane County, has entered a fee agreement with class
counsel. Therefore, it is appropriate to direct an award of attorney fees and expenses based on the
common fund doctrine so that the other plaintiffs pay their fair share of the costs of class
counsel’s advocacy on their behalf.
II. Reasonableness of Plaintiffs’ Fee Request
The United States Court of Appeals for the Federal Circuit has held that, in common fund
cases, reasonable attorney fees may be calculated using either the percentage or the lodestar
method. See id. at 1355. It has also observed that when the lodestar method is used, a court may
apply a risk multiplier as appropriate. Id. at n.19 (citing Staton v. Boeing Co., 327 F.3d 938, 968
(9th Cir. 2003) (observing that “[a] ‘multiplier’ is a number, such as 1.5 or 2, by which the base
lodestar figure is multiplied in order to increase (or decrease) the award of attorneys’ fees on the
basis of such factors as the risk involved and the length of the proceedings”)).
Plaintiffs maintain that use of the percentage method is appropriate in this case. Pls.’ Br.
at 8–12 (arguing that the percentage method simplifies administration and conserves scarce
judicial resources; permits compensation for results, not hours; adequately aligns the interests of
class members and class counsel; rewards efficiency; more appropriately approximates market
rates; creates predictability; and avoids payment delay). They ask the Court to award class
counsel one third of the total amount recovered for attorney fees and an additional $26,936.96 in
out-of-pocket costs incurred.
The Federal Circuit has not specified what considerations govern the assessment of the
reasonableness of fee requests in common fund cases. A number of judges on this court,
however, have used a multi-factor test to make that determination, under which the Court
considers: (1) the quality of counsel; (2) the complexity and duration of the litigation; (3) the risk
of nonrecovery; (4) the fee that likely would have been negotiated between private parties in
similar cases; (5) any class members’ objections to the settlement terms or fees requested by
class counsel; (6) the percentage applied in other class actions; and (7) the size of the award.
Moore v. United States, 63 Fed. Cl. 781, 787 (2005) (citing Manual for Complex Litig. (4th ed.)
§ 14.121 (2004)); see also Lambert v. United States, 124 Fed. Cl. 675, 683 (2015); Raulerson v.
United States, 108 Fed. Cl. 675, 679–80 (2013); Quimby v. United States, 107 Fed. Cl. 126, 133
(2012).
The Court’s evaluation of these factors indicates that an attorney fee award of one third
of the total amount recovered for the class is reasonable. Beginning with the quality of counsel
factor, the Court notes that class counsel, Alan Saltman, has extensive experience in
appropriation law generally and particularly in issues related to PILT entitlement. See Decl. of
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Alan Saltman (“Saltman Decl.”) ¶ 8–13, ECF No. 49-1. And while the litigation itself was not
unusually complex, it required the oversight and coordination of 1256 local governments, and
resulted in a significant recovery of over $17 million.
Further, the risk of non-recovery in this case was substantial. Indeed, class counsel
brought three earlier suits on behalf of local governments seeking recovery under PILT, each of
which was unsuccessful. See Prairie Cty. v. United States, 782 F.3d 685 (Fed. Cir. 2015);
Greenlee Cty. v. United States, 487 F.3d 871 (Fed. Cir. 2007); Kane Cty. v. United States, 127
Fed. Cl. 696 (2016).
A fee of one third the total recovery is consistent with the fee that likely would have been
negotiated by private parties. In fact, that was the fee negotiated between class counsel and the
lead plaintiff, Kane County. See Pls.’ Br. Ex. A, at 1, ECF No. 49-2 (email confirming terms of
representation, indicating that “Smith Currie shall be entitled [to] 33% of any and all
amounts . . . to which Kane County is found entitled in a final judgment from a court and/or
through settlement”).
Class counsel directed notice of its motion for fees to class members in a reasonable
manner as required by RCFC 23(h)(1). The notice of class action sent to putative class members
stated that class counsel intended to seek a percentage of any award received for fees. See Joint
Proposed Class Action Notice at 9, ECF No. 39-1; Saltman Decl. ¶ 28. Class counsel also made
subsequent efforts to inform all class members that the percentage sought would be equivalent to
one third of the total recovery. Saltman Decl. ¶ 30. He informed participants on a conference call
sponsored by the National Association of Counties on June 19, 2018 that he would seek one third
of the total amount recovered for attorney fees. Pls.’ Br. at 16. In addition, on July 9, 2018, class
counsel posted an FAQ on his informational website that informed class members of his intent to
file a motion asking the Court to award as attorney fees one third of the amounts recovered on
behalf of class members who opted in, plus actual out-of-pocket expenses. Id. at 16–17. Class
counsel sent several subsequent emails directing class members to this FAQ.
On September 27, 2018, class counsel provided class members notice of its motion for
award of fees and expenses via email and posted copies of the motion, supporting memorandum,
and declaration of class counsel on its informational website. Id. at 18. In the notice, counsel
suggested that class members who wished to file an objection do so within fourteen days. Id. No
such objections have been filed.
The Court is satisfied that an award equal to one third of the common fund is
commensurate with attorney fees awarded in other class action common fund cases. See, e.g.,
Raulerson, 108 Fed. Cl. at 680 (awarding fees at the requested 33% of the common fund);
Quimby, 107 Fed. Cl. at 133 (finding a fee of 33% of the common fund acceptable); Moore, 63
Fed. Cl. at 789 (awarding fees equal to 34% of the common fund). Moreover, the recovery was
substantial in this case and is consistent with the requested attorney fees. See David F. Herr,
Ann. Manual for Complex Litig. (4th ed.) § 14.121 (2019) (explaining that “a common fund is
itself the measure of success . . . [and] represents the benchmark from which a reasonable fee
will be awarded”)); Raulerson, 108 Fed. Cl. at 680 (noting that the size of the fees sought was
commensurate with the total amount recovered on behalf of the class); Quimby, 107 Fed. Cl. at
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133–34 (awarding about $22 million to two attorneys, which represented thirty percent of the
total recovery, an amount agreed to by class members).
Finally, the Court has subjected Plaintiffs’ fee request to a “lodestar cross-check,” which
compares the percentage fee “against the fee that lead counsel would have been awarded on a
lodestar basis” to ensure that the award is neither too low, nor too high. In re HPL Techs., Inc.
Sec. Litig., 366 F. Supp. 2d 912, 915 (N.D. Cal. 2005); see also In re Online DVD-Rental
Antitrust Litig., 779 F.3d 934, 955 (9th Cir. 2015); In re Rite Aid Corp. Sec. Litig., 396 F.3d
294, 305, 306 (3d Cir. 2005); Goldberger v. Integrated Res., Inc., 209 F.3d 43, 50 (2d Cir. 2000);
In re BioScrip, Inc. Sec. Litig., 273 F. Supp. 3d 474, 496 (S.D.N.Y. 2017), aff’d sub nom. Fresno
Cty. Emps.’ Ret. Ass’n v. Isaacson/Weaver Family Tr., 925 F.3d 63 (2d Cir. 2019); Geneva
Rock Prods., Inc. v. United States, 119 Fed. Cl. 581, 594 (2015), rev’d on other grounds,
Longnecker Prop. v. United States, 2016 WL 9445914, at *1 (Fed. Cir. 2016); Haggart v. United
States, 116 Fed. Cl. 131, 148 (2014), rev’d on other grounds, Haggart, 809 F.3d at 1359.
As the United States Court of Appeals for the Third Circuit observed in In re Rite Aid
Corp. Securities Litigation, “[t]he lodestar cross-check calculation need entail neither
mathematical precision nor bean-counting.” 396 F.3d at 306. The Court’s cross-check consisted
of a general review of the hours reflected in class counsel’s timesheets, which appear reasonable
and commensurate with the work required for this large class action. Excluding hours spent on
its motion for attorney fees and subsequent briefing, and using market rates for the District of
Columbia that are derived from “the Legal Services Index-adjusted Laffey Matrix (also known
as the Kavanaugh Matrix) rates for attorneys, paralegals, and law clerks,” the lodestar amount
was $936,212 for 1201 hours of work. Supp. Mem. at 1, ECF No. 70. 3 In order to equal one third
of the total recovery, this lodestar amount must be subjected to a multiplier of approximately
6.13, which is within the range courts have approved in common fund cases. See, e.g., Steiner v.
Am. Broadcasting Co., Inc., 248 F. App’x 780, 783 (9th Cir. 2007) (finding that though a 6.85
multiplier was “higher than those in many common fund cases . . . it still f[ell] well within the
range of multipliers that courts have allowed”); Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th
Cir. 2002) (setting forth table of percentage-based attorney fees in common fund cases between
1996 and 2001, with multipliers ranging from 0.6 to 19.6); Geneva Rock Prods., 119 Fed. Cl. at
595 (finding a multiplier of 5.39 reasonable), rev’d on other grounds, Longnecker Prop., 2016
WL 9445914, at *1; Bozak v. FedEx Ground Package Sys., Inc., No: 3:11-cv-00738-RNC, 2014
WL 3778211, at *7 (D. Conn. July 31, 2014) (citing cases with multipliers ranging from 2 to
8.74 for cases from 1991 to 2013); Ramirez v. Lovin’ Oven Catering Suffolk, Inc., No. 11-cv-
0520, 2012 WL 651640 (S.D.N.Y. Feb. 24, 2012) (granting attorney fees equal to 6.8 times the
lodestar in a case resolved at an early stage of litigation).
The lodestar cross-check thus yields an award consistent with the one derived from the
application of the percentage fee Plaintiffs have requested. For that reason, as well as those
described above, the Court concludes that the percentage-based fees sought by Plaintiffs’ counsel
are reasonable.
3
This includes work done by class counsel, associate attorneys, and paralegals. See generally
Supp. Mem. Ex. 1, at 1, ECF No. 70-3. (summary of hours and rates).
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III. Out-of-Pocket Expenses
Class counsel seeks reimbursement of $2,639.45 in litigation expenses and $24,297.51 in
class notice and administrative expenses (a total of $26,936.96) from the common fund. See Pls.’
Br. at 19. These expenses include: (i) two trips made by Robert Fleming to appear before the
Court, Saltman Decl. ¶ 18; (ii) class counsel’s occasional travel to coordinate with his team to
establish logistics, provide training, and oversee the general administration of the class
notification and opt-in process, see id. ¶¶ 19, 22, 23, 26, 27; (iii) costs associated with the
registration, design, and maintenance of the opt-in website and informational webpage, id. ¶ 20;
and (iv) various mailing expenses, id. ¶ 25. Class counsel does not seek reimbursement for “the
time its attorneys and paralegals spent on administration,” Pls.’ Br. at 20, or for overhead
expenses such as “routine copying, local travel, routine postage, [and] occasional overnight
delivery,” Saltman Decl. ¶ 18.
The Court has reviewed these expenses and finds them to be reasonable. It therefore
grants Plaintiffs’ request for an award of non-taxable costs and expenses.
CONCLUSION
For the foregoing reasons, the Court’s stays of the motion for attorney fees and
applications for bill of costs are LIFTED. The motion for attorney fees and non-taxable
expenses is GRANTED. The Clerk is directed to enter judgment in the amount of
$5,767,543.96, which shall be paid to Smith, Currie & Hancock LLP from the class fund. The
applications for bill of costs in Case Nos. 17-739C and 17-1991C shall remain pending for the
Clerk.
IT IS SO ORDERED.
s/ Elaine D. Kaplan
ELAINE D. KAPLAN
Judge
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