United States of America et al v. North East Medical Services, No. 4:2010cv01904 - Document 293 (N.D. Cal. 2016)

Court Description: ORDER GRANTING MOTION FOR RELATORS' ATTORNEYS' FEES AND COSTS by Hon. Claudia Wilken granting 259 Motion for Attorney Fees. (jebS, COURT STAFF) (Filed on 2/17/2016)
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United States of America et al v. North East Medical Services Doc. 293 IN THE UNITED STATES DISTRICT COURT 1 FOR THE NORTHERN DISTRICT OF CALIFORNIA 2 3 4 5 UNITED STATES OF AMERICA and STATE OF CALIFORNIA ex rel. LOI TRINH and ED TA-CHIANG HSU, 6 Plaintiffs, 7 8 9 No. C 10-1904 CW ORDER GRANTING MOTION FOR RELATORS' ATTORNEYS' FEES AND COSTS v. NORTHEAST MEDICAL SERVICES, INC., (Docket No. 259) Defendant. ________________________________/ 10 United States District Court For the Northern District of California 11 12 Loi Trinh and Ed Ta-Chiang Hsu (Relators) move for attorneys’ 13 fees and costs under 31 U.S.C. § 3730(d)(1) and California 14 Government Code section 12652(g)(8). 15 motion as outlined below, and awards $386,508.00 in fees and 16 $2,745.92 in costs. The Court grants Relators' BACKGROUND 17 18 This action arose out of a dispute concerning the scope of 19 the financial reporting obligations owed by Defendant Northeast 20 Medical Services, Inc. (NEMS) under the Medicaid Act. 21 2010, Relators, two former NEMS employees, filed this qui tam 22 action against NEMS. 23 the United States of America and the State of California 24 (collectively the Governments) under the False Claims Act, 31 25 U.S.C. §§ 3729 et seq., and the California False Claims Act, Cal. 26 Gov't Code §§ 12650 et seq. 27 intervene in August 2012, Docket No. 17, and the State of 28 California followed suit in January 2013, Docket No. 24. In May Relators asserted claims on behalf of both The United States elected to Dockets.Justia.com 1 Thereafter, the Governments filed their joint Complaint-In- 2 Intervention against NEMS, in which they alleged that NEMS failed 3 to disclose on its annual reconciliation requests all of the 4 payments it received from the San Francisco Health Plan. 5 No. 26. 6 alleged, NEMS received roughly twenty million dollars in 7 reconciliation payments between 2001 and 2010 to which it was not 8 entitled. 9 settlement to which the parties had agreed. Docket As a result of this failure to report, the Governments On January 13, 2015, Magistrate Judge Beeler enforced a Docket Nos. 223, 225 and 229. 11 United States District Court For the Northern District of California 10 requires NEMS to pay the Governments eight million dollars plus 12 interest, among other things. 13 NEMS's motions to vacate Magistrate Judge Beeler's order and the 14 judgment entered in this case.1 15 The Court entered judgment on August 19, 2015, which Docket No. 256. The Court denied Relators filed this motion timely on September 1, 2015. 16 Docket No. 259; see also Docket No. 256; L.R. 54-5(a). Relators 17 timely filed their Bill of Costs the following day. 18 256 and 263; Civ. L.R. 54-1(a). 19 September 15, 2015, Docket No. 266, and Relators filed a reply on 20 September 22, 2015, Docket No. 270. 21 to file supplemental documentation, Docket No. 273, Relators’ 22 counsel filed a supplemental declaration with redacted timesheets 23 attached, Docket No. 274. 24 requirements of Civil Local Rule 54-5(b). Docket Nos. NEMS filed a response on Following the Court’s order Relators’ motion satisfies the 25 26 27 1 The Court did, in fact, have the authority to enter Judgment in this case, as explained in the order denying NEMS's motions to alter, vacate or set aside judgment. See Docket No. 259 at 7. 28 2 DISCUSSION 1 2 Under both federal and state law, Relators are entitled to 3 reasonable attorneys’ fees and costs. 4 Cal. Gov't Code § 12652(g)(8). 5 I. Attorneys’ Fees 6 31 U.S.C. § 3730(d)(1); Relators brought and prevailed in both federal and California 7 state law claims. The Court applies both state and federal law 8 because both result in the same fee award. 9 the Ninth Circuit, reasonable attorneys' fees are determined by In California, as in first calculating the "lodestar." 11 United States District Court For the Northern District of California 10 Ketchum v. Moses, 24 Cal. 4th 1122, 1131 (2001) (citing Serrano v. Priest (Serrano III), 20 Cal. 12 3d 25 (1977)); Morales v. City of San Rafael, 96 F.3d 359, 363 13 (9th Cir. 1996). 14 number of hours spent on litigating the case and multiplying it by 15 a reasonable hourly rate of compensation for each attorney. 16 Ketchum, 24 Cal. 4th at 1131-32; Morales, 96 F.3d at 363. 17 may adjust the lodestar to address particular circumstances of the 18 lawsuit. 19 (citing Serrano III, 20 Cal. 3d at 49); Morales, 96 F.3d at 363-64 20 (permitting adjustments "that are not already subsumed in the 21 initial lodestar calculation"). The "lodestar" is calculated by compiling the A court Maria P. v. Riles, 43 Cal. 3d 1281, 1294 n.8 (1987) 22 A. Hourly Rate 23 Relators seek fees for two attorneys: James T. Diamond at a 24 rate of $625.00 per hour and Xochitl Carrion at a rate of $285.00 25 per hour. 26 dispute the reasonableness of Relators' counsel's hourly rates." 27 Docket No. 266 at 2 n.2. Docket No. 260, Diamond Dec. ¶ 13. 28 3 NEMS "does not 1 Determining a reasonable hourly rate is a critical inquiry. Jordan v. Multnomah Cnty., 815 F.2d 1258, 1262 (9th Cir. 1987) 3 (citing Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984)). 4 applicant has the burden to produce evidence, other than the 5 declarations of interested counsel, that the requested rates are 6 in accordance with those prevailing in the community for attorneys 7 of comparable skill and reputation. 8 Ketchum, 24 Cal. 4th at 1132. 9 hourly rate, the court may take into account: (1) the novelty and 10 complexity of the issues; (2) the special skill and experience of 11 United States District Court For the Northern District of California 2 counsel; (3) the quality of representation; and (4) the results 12 obtained. 13 Cir. 1988), vacated, 490 U.S. 1087, remanded to 886 F.2d 235 14 (reinstating the original opinion). 15 the initial lodestar calculation, and should not serve as 16 independent bases for adjusting fee awards. 17 363-64. 18 labor required; (2) the preclusion of employment by the attorney 19 due to acceptance of the case; (3) time limitations imposed by the 20 client or circumstances; (4) the amount involved and the results 21 obtained; (5) the "undesirability" of the case; and (6) awards in 22 similar cases. 23 (1983). 24 The fee Id. at 1263; see also In establishing the reasonable See Cabrales v. Cnty. of L.A., 864 F.2d 1454, 1464 (9th These factors are subsumed in Morales, 96 F.3d at Other factors that can be considered are (1) the time and Hensley v. Eckerhart, 461 U.S. 424, 430 n.3 The Court agrees with the parties that the proposed rates are 25 reasonable for several reasons. The requested rates are in 26 accordance with comparable rates within the community for 27 comparable work. 28 false claims suits are complex, and Relators' counsel have handled See Docket No. 261. 4 Further, state and federal 1 this years-long and highly-contested case with skill. Finally, an 2 eight million dollar judgment is an excellent outcome. The Court 3 proceeds using the agreed-upon rates. 4 B. Hours Expended 5 Under federal law, “the fee applicant bears the burden of 6 submitting ‘evidence supporting the hours worked . . . .’” 7 Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1121 (9th Cir. 2000) 8 (quoting Hensley, 461 U.S. at 433). 9 applicant to “show that the time spent was reasonably necessary This requires the fee and that its counsel made ‘a good faith effort to exclude from 11 United States District Court For the Northern District of California 10 [the] fee request hours that are excessive, redundant, or 12 otherwise unnecessary.’” 13 Sealey, Inc. v. Easy Living, Inc., 743 F.2d 1378, 1385 (9th Cir. 14 1984)). 15 evidence supporting the fee award. 16 182 Cal. App. 3d 553, 559 (1986) (concluding that the testimony of 17 an attorney as to the number of hours worked sufficed); Weber v. 18 Langholz, 39 Cal. App. 4th 1578, 1586-87 (1995) (holding that an 19 applicant’s declaration with hourly rate, statement that all fees 20 were connected to services, total amount of money, and a general 21 description of the work done sufficed). 22 law and California law, Relators have satisfied this burden. 23 Relators’ counsel described the work performed and submitted 24 redacted timesheets. 25 ¶¶ 7, 15-25; Docket No. 274. Jordan, 815 F.2d at 1263 n.8 (quoting California law also requires a fee applicant to submit See, e.g., Martino v. Denevi, Here, under both federal Docket No. 259 at 8-112; Docket No. 260 26 27 2 Page numbers refer to the docketed page numbers. 28 5 1 Originally, Relators sought fees for Mr. Diamond for 595.7 2 hours and for Ms. Carrion for 83.8 hours. 3 Relators updated their request by reducing Mr. Diamond’s hours 4 five percent to 565.7 hours in response to one of NEMS’s 5 arguments, discussed below. 6 requested fees for fifteen additional hours for Mr. Diamond’s work 7 relating to the reply brief for this motion and other post- 8 judgment work. 9 Docket No. 259 at 11. Docket No. 270 at 8. Relators also Id. NEMS’s arguments in response to the motion relate to the number of hours Relators’ attorneys worked.3 11 United States District Court For the Northern District of California 10 that Relators are not entitled to fees stemming from a forfeited 12 claim. 13 contained two claims: the Medi-Cal claim in which the Governments 14 ultimately intervened and a separate Medicare claim. 15 Relators later notified the Court that the Governments’ Complaint- 16 In-Intervention superseded their original complaint, and that 17 Relators no longer intended to pursue the Medicare claim. 18 No. 86 at 2. 19 the forfeited claim. 20 order for supplemental documentation, Relators submitted more 21 detailed timesheets and a declaration noting which entries related 22 to both claims and which entries related to the forfeited claim. 23 Docket No. 274. 24 entries were evenly split between the two claims. 25 26 27 Docket No. 266 at 5-6. First, NEMS argues Relators’ initial complaint Id. at 5. Docket Relators agree that they should not receive fees for Docket No. 270 at 6. Following the Court’s Mr. Diamond declared that 45.2 hours worth of 3 Id. ¶ 3. He NEMS argues that Relators have not provided enough information to support their motion. Docket No. 266 at 3-5. The Court need not discuss this argument because, ultimately, Relators filed the billing records upon which the fee motion is based. Docket No. 274. 28 6 1 further declared that 7.9 hours worth of entries related to time 2 spent solely on the forfeited claim. Id. ¶ 4. The Court agrees that fees should not be awarded for the 3 4 forfeited claim. The number of hours for which Mr. Diamond is 5 entitled to claim fees is equal to the total number of hours 6 claimed (610.7)4 minus half of the split time (22.6) and minus his 7 time spent on the forfeited claim (7.9). 8 award Mr. Diamond fees for 580.2 hours. Thus, the Court will Second, NEMS argues that the attorneys’ fees motion is 9 unreasonable because it fails to disentangle how much time 11 United States District Court For the Northern District of California 10 Relators' attorneys spent on a "theory of liability" from which 12 the Governments purportedly shifted. 13 According to NEMS, the Governments' Complaint-In-Intervention 14 rested on a theory that NEMS failed to report all revenue 15 received, but after summary judgment the Governments contended 16 that NEMS had built the cost of third-party services into its 17 rate. 18 its argument that it must be able to separate time spent on 19 different legal theories to rebut the fees motion. 20 Id. at 6-7. Docket No. 266 at 6-8. NEMS cites no legal authority in support of NEMS's premise is faulty under both federal and state 21 attorneys' fees law. 22 where a plaintiff brings multiple unrelated claims in a single 23 lawsuit and is successful on some but not others, "no fee may be 24 awarded for services on the unsuccessful claim." 25 Conversely, a plaintiff's claims may "involve a common core of 26 27 The Supreme Court explained in Hensley that, 4 461 U.S. at 435. This number is equal to the total number of hours originally claimed, 595.7 hours, plus the supplemental hours for reply briefing and post-judgment work, fifteen hours. 28 7 1 facts or will be based on related legal theories." Id. In these 2 instances, the lawsuit "cannot be viewed as a series of discrete 3 claims. 4 significance of the overall relief obtained by the plaintiff in 5 relation to the hours reasonably expended on the litigation." 6 Id.; see also Tutor-Saliba Corp. v. City of Hailey, 452 F.3d 1055, 7 1063 (9th Cir. 2006); Webb v. Sloan, 330 F.3d 1158, 1168 (9th Cir. 8 2003) (related claims "involve a common core of facts or are based 9 on related legal theories") (emphasis in original). Instead, the district court should focus on the California courts and courts calculating attorneys' fees under California law 11 United States District Court For the Northern District of California 10 have adopted this approach. 12 Jackson, 93 Cal. App. 4th 993, 1018-19 (2001) (adopting the 13 Hensley approach to relatedness in the private attorney general 14 context); Trulsson v. Cnty. of San Joaquin Dist. Attorney's 15 Office, 2014 WL 5472787, at *4-*5 (E.D. Cal.) (applying the 16 Hensley approach to relatedness to a state Fair Employment and 17 Housing Act claim); Nguyen v. Wells Fargo & Co., 2015 WL 78738 18 (Cal. App.) (describing this concept as the inquiry that applies 19 in "cases of limited success" in California). See, e.g., ComputerXpress, Inc. v. 20 Here, Relators' claims and the Governments' claims involved a 21 common core of facts, which alone suffices to demonstrate that the 22 work performed was for a single related claim. 23 legal theories were related; thus the Court need not decide 24 whether the two legal theories NEMS describes are actually 25 distinct. 26 spent on the initial "theory."5 27 28 Further, the two The Court will not reduce attorneys' fees for hours 5 The Court need not address Relators' other arguments in response to NEMS's relatedness argument in the reply brief. 8 In sum, the Court awards Relators’ counsel the following 1 2 fees. 3 Attorney Hours Rate Total 4 James T. Diamond 580.2 $625.00 $362,625 5 Xochitl Carrion 83.8 $285.00 $23,883 6 The Court need not adjust the award for any other reason. 7 See Morales, 96 F.3d at 363-64. 8 II. Costs 9 10 Relators move for costs for fees to the Clerk and interpreters. The Court finds these costs reasonable. United States District Court For the Northern District of California 11 CONCLUSION 12 For the foregoing reasons, the Court awards to Relators’ 13 counsel $386,508.00 in fees and $2,745.92 in costs. 14 pay this sum forthwith. NEMS shall 15 16 17 Dated: February 17, 2016 CLAUDIA WILKEN United States District Judge 18 19 20 21 22 23 24 25 26 27 28 9