United States District Court, E.D. Pennsylvania
UNITED STATES, ex rel. DONALD PALMER, Plaintiff,
C & D TECHNOLOGIES, INC., Defendant.
E.K. PRATTER United States District Judge
devil often lurks in the details of lawyers' billing
records. It is a hellish judicial duty to review and resolve
disputed attorneys' fee petitions, particularly in cases,
like this one, where the adversaries fan the flames at
virtually every opportunity. To listen to the combatants, the
Court is being asked, according to one side, to acknowledge,
with considerable recompense, long-suffering avenging angels,
or, on the other hand, to once and for all quell
avariciousness and inefficiency and only give the devil what
is reasonably due. It is surely no surprise that determining
what is “reasonably due” leads to this
False Claims Act action, Donald Palmer claimed that C&D
Technologies manufactured and shipped some 349 defective
batteries to the United States government for use in ICBM
missile launch controls. Following a criminal investigation
that had been instigated, at least in part, as a result of
Mr. Palmer's claims, the government closed the
investigation, electing to take no action against C&D.
Palmer was a Senior Design and Development Engineer for
C&D from 2007 through 2011. He claimed that the batteries
manufactured per C&D's government contract were not
manufactured to specifications. In particular, Mr. Palmer
claimed that C&D failed to use the proper grit material
and pressure in preparing and sealing the covers and jars of
the batteries. Initially, Mr. Palmer also claimed that he was
fired from his job in retaliation for reporting the
manufacturing problems to senior C&D management, but he
withdrew that claim when he was confronted with the fact that
he had released all of his employment claims in exchange for
a severance package.
Palmer did initiate this Qui Tam litigation, however.
Consistent with the ultimate results of the criminal
investigation, the government declined to intervene in this
some four years of litigation, the parties at first appeared
to accept finally the Court's encouragement to engage in
active mediation activities in the summer of 2014. Mr.
Palmer, the Relator, then demanded a settlement of $1.5
million, plus fees and costs. The 2014 negotiations were
unsuccessful. During those discussions, C&D reportedly
advised Mr. Palmer's attorneys of C&D precarious
financial condition, including sharing with them a C&D
months later, in the spring of 2015, Mr. Palmer filed a
Second Amended Complaint in which he expanded his demands for
alleged damages to some $30, 000, 000. Summary judgment
motion practice then ensued, culminating in the Court's
denial of the cross motions. Ultimately, the parties settled
the case for $1.7 million, representing about 6% of the total
amount demanded in Mr. Palmer's Second Amended
Complaint. As a statutorily technical matter, the
settlement makes Mr. Palmer a “prevailing party”,
arguably entitling him to an award of fees and costs under
the False Claims Act.
the parties supposedly settled the substance of the case,
they have been unable to reach an agreement on fees. The
parties initially submitted their position papers on the fees
issues to the Court in January 2016. At that time, Mr.
Palmer's counsel sought $2, 367, 904.85 in attorneys'
fees as of December 31, 2015. C&D responded that the
reasonable fee amount should have been no more than about
half that amount, arguing essentially that the case had been
over-staffed and over-worked by the Relator's various
sets of lawyers, and that the fee petition was based on the
wrong hourly rates and included duplicative entries,
inappropriate submissions such as for travel time and,
finally, that there should be a reduction of the amount
awarded for degree of success, or rather, lack of success,
given the modest settlement amount.
Court repeatedly offered certain guidance for possibly
bridging the chasm and directed the parties' counsel to
exchange various pertinent information in an effort to
minimize areas of disagreement. Counsel were equally slow to
do so, and the hoped for exercise that the Court intended as
a way to persuade counsel of the benefits of good faith and
good sense achieved very little - other than to lead to an
exchange dueling briefs, innuendo and insults.
Palmer's lawyers appear to believe that the key to
resolving this dispute is to increase their fee
demand. They now want $3, 278, 115.99 in fees, almost $1
million more than the fees they sought a year ago
and almost twice the dollar amount of the settlement they
reached. They now choose to use higher hourly rates than they
originally used to calculate their fee demand, rates that
they have somehow and for some reason
“extrapolated” from actual Community Legal
Services hourly rates. For their part, the lawyers for
C&D oppose the fee demand, unhelpfully describing their
opponents as “disingenuous”,
“opportunistic” and looking to “recover . .
. a boon of attorneys' fees” that they describe as
“exorbitant” and having been based on
“hours amassed” and supported by
“regurgitated”, “biased”, and
result, counsel seemingly overlook the fact that the Court
was at all times well aware of who was doing what, to what
possible end and has been entirely attentive to the at times
puzzling performance of the professional duties of the
lawyers. The discussion that follows reflects the Court's
hands-on contemporaneous evaluation (and necessary attendant
factual findings) of the services performed and for which
payment is sought. The parties have declined the Court's
encouragement to navigate their own ships through the fee
swells. The Court will do so for them, lest one or
both of them find themselves and their clients wrecked upon
the rocky shoals without even a paddle.
Applicable Legal Standard
False Claims Act provides that a successful relator
“shall…receive reasonable attorneys' fees
and costs.” 31 U.S.C. § 3730 (d)(2). “Fees
are presumed reasonable when calculated using the
‘lodestar' method, by which a court assigns a
reasonable hourly rate and multiplies that rate by a
reasonable number of hours on the litigation.”
Simring v. Rutgers, 634 Fed. App'x. 853, 857 (3d
Cir. 2015). Here, although he endeavors to place the ultimate
burden on C&D to undermine the fee application, Mr.
Palmer (as the nominal champion of his lawyers, who are,
obviously, the interested parties on this issue) bears the
burden of establishing the reasonableness of the rate(s)
claimed and the hours allegedly logged and claimed.
Loughner v. Univ. of Pittsburgh, 260 F.3d 173,
178-80 (3d Cir 2001).
determine the reasonable hourly rate(s), the Court most
typically looks to the prevailing rate charged by lawyers in
the community where the matter is being litigated and
professional services performed, considering lawyers of
equivalent experience, proficiency and reputation.
Simring, 634 Fed. App'x. at 857. (As will be
addressed below, even this rather rudimentary proposition is
a subject of dispute in this case.) Then, to find a
reasonable number of hours, not unexpectedly, the initial
benchmark would be the number of hours actually devoted to
the subject activity.
for good or ill, the Court's job is far more challenging
than to be a disengaged robotic calculator, because, while
the Court cannot sua sponte reduce the fees being
sought, the Court may indeed respond to meritorious
objections to exclude hours that are not reasonably spent on
the alleged activity, such as hours that are excessive,
redundant or otherwise unnecessary. Simring, 634
Fed. App'x. at 857. See also Interfaith Cmty. Org. v.
Honeywell Int'l, Inc., 426 F.3d 694, 713 (3d Cir.
2005). To discharge its duties, the Court must conduct a
“thorough and searching analysis.” Zebroski
v. Gouak, Civil Action No. 09-1857, 2011 WL 3565223, at
*2 (E.D. Pa. Aug. 12, 2011). Of course, while these duties
fall within the Court's broad but sound discretion, the
exercise of that discretion should be well within
conventional guideposts. See, e.g.,
Boles v. Wal-Mart Stores, 650 Fed. App'x. 125
(3d Cir. 2016). The Court has endeavored to do just that
here, giving due regard to the exhibits proffered by C&D,
the affidavits submitted by Relator and the Court's
firsthand knowledge of the case.
on the Court's detailed efforts to persuade these parties
and counsel to reach an amicable resolution of this fee
dispute, it should come, once again, as no surprise to them
that the Court's primary guideposts, with varying
comparative primacy (depending upon the specific matter being
examined), are the following:
• For which tasks is compensation merited? And which
• As performed by how many and which lawyers?
• For how much time?
• At what hourly or other ...