Kane Cnty. v. United States, 17-739C

KANE COUNTY, UTAH,individually and on behalf of all others similarly situated, Plaintiffs, v. THE UNITED STATES OF AMERICA, Defendant.

No. 17-739C

No. 17-1991C (Consolidated)

United States Court of Federal Claims

September 25, 2019

Keywords: Attorney Fees; Lodestar Cross-Check; Class Action; Common Fund Doctrine

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 Thegovernment 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.

"[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....