UNITED STATES OF AMERICA, ex rel. DONALD PALMER
C&D TECHNOLOGIES, INC. Donald Palmer, Appellant
Submitted Under Third Circuit L.A.R. 34.1(a) March 13, 2018
Appeal from the United States District Court for the Eastern
District of Pennsylvania (D.C. Civ. Action No. 2:12-cv-00907)
District Judge: Honorable Gene E. K. Pratter
Begelman Marc Orlow Begelman & Orlow James B. Helmer, Jr.
Paul B. Martins James A. Tate Helmer, Martins, Rice &
Popham Co. Attorneys for Appellant
C. Cedillo Charles D. Ray Thomas J. Finn McCarter &
English Katelyn Gillece Michael J. Glasheen McCarter &
English Attorneys for Appellee
Before: JORDAN, KRAUSE, and GREENBERG, Circuit Judges
GREENBERG, CIRCUIT JUDGE.
action under the False Claims Act, 31 U.S.C. §§
3729-3733 (2012), Donald Palmer ("Relator") settled
his claim with defendant C&D Technologies, Inc.
("C&D"), thereby entitling Relator to
reasonable attorneys' fees and costs. Id. §
3730(d)(2). The parties, however, were unable to reach
an agreement on attorneys' fees. In contesting the fees,
both parties adopted unproductive tactics and strayed from
professional etiquette, conduct that ultimately caused the
District Court to proclaim that "[i]t 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." App. 8. While Relator sought $3, 113,
530.50 in fees, the Court reduced that amount to $1, 794,
427.27. Relator timely appealed from orders that
the Court entered on April 25, 2017, and May 24, 2017,
awarding fees and costs. We will remand on one narrow ground,
but otherwise affirm the Court's orders in all other
False Claims Act action, Relator claimed that C&D
manufactured and shipped some 349 defective batteries to the
United States government for use in intercontinental
ballistic missile launch controls. In the summer of 2014,
after some four years of litigation, the parties engaged in
active mediation. Relator subsequently demanded a settlement
of $1.5 million, plus fees and costs, and the negotiations
ended without success.
in the spring of 2015, Relator filed a Second Amended
Complaint in which he expanded his demands for alleged
damages to $30 million, or twenty times the amount of his
initial demand. After the District Court denied cross-motions
for summary judgment, the parties settled the case for $1.7
million, representing about six percent of the total amount
that the Relator demanded in his Second Amended Complaint.
Attorneys' Fees Dispute
statutory matter, the settlement made Relator a prevailing
party under the False Claims Act, entitling him to an award
of "reasonable attorneys' fees and
costs." 31 U.S.C. § 3730(d)(2) (emphasis added).
Although the parties settled the merits of the case, they
were not able to agree on the fees that Relator should
recover. Initially Relator sought $2, 367, 904.85 in
attorneys' fees as of December 31, 2015. As the District
Court explained, "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." App. 10.
to the District Court, both parties' counsel were
uncooperative and did not act in good faith:
The 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 [of] dueling briefs, innuendo and insults.
responded to C&D's objections by increasing his fee
demand to $3, 278, 115.99, or, as the District Court
observed, "almost $1 million more than the fees
[he] sought a year ago and almost twice the dollar amount of
the settlement [he] reached." App. 11. Notably, Relator
opted to apply hourly rates that he "extrapolated"
from actual Community Legal Services ("CLS") rates
and which were higher than those that he originally used to
calculate his fee demand. App. 11.
The District Court's Rulings
decision, the District Court emphasized that it "was at
all times well aware of who was doing what, to what possible
end and [had] been entirely attentive to the at times
puzzling performance of the professional duties of the
lawyers." App. 11. The Court noted that its resolution
of the fee award reflected its "hands-on contemporaneous
evaluation (and necessary attendant factual findings) of the
services performed and for which payment is sought."
App. 11. It found that, "[i]n the main, . . .
C&D's opposition to the fee petition adopts most of
the Court's guidance as to, for lack of a better term,
'lawyer hours' and acceptable rates for various tasks
undertaken." App. 11 n.6. It then proceeded to resolve
the areas in dispute.
parties and the District Court agreed that the rate issue was
"best resolved by using primarily - if not exclusively -
the rates promulgated by the Philadelphia office of Community
Legal Services." App. 15 (citing Maldonado v.
Houstoun, 256 F.3d 181, 187-88 (3d Cir. 2001) ("The
fee schedule established by [CLS] has been approvingly cited
by the Third Circuit as being well developed and has been
found by [the Eastern District of Pennsylvania] to be a fair
reflection of the prevailing market rates in
Philadelphia." (second alteration in original)
(quotation marks and citation omitted)). The Court rejected
Relator's "extrapolated" rates that were higher
than the CLS rates because "the CLS rates promulgated in
2014 remain the actual current rates; neither CLS nor any
court in any reported opinions that this Court has been able
to locate have resorted to the 'extrapolation'
technique now used by [Relator's] counsel." App. 16.
Because the CLS rates provided a range-rather than a specific
dollar amount-for reasonable hourly rates, the Court elected
"to take an equitable approach" and
"direct[ed] counsel to use for each time-keeper for whom
a fee is sought and permitted an hourly rate at the mid-point
of the applicable range."  App. 16.
Reasonableness of Hours Claimed
District Court reduced Relator's recoverable attorney
hours for, inter alia, depositions, document review,
summary judgment motions, a motion for reconsideration,
Daubert motions, and travel time expenses.
regard to depositions, C&D objected both to the number of
hours involved in taking and preparing for depositions, as
well as the number of attorneys attending some of those
depositions on behalf of Relator. In its decision, the
District Court remarked that during its various meetings
regarding the fee dispute, it had "frequently addressed
the matter of the crowd of counsel at the depositions and in
preparation sessions for them." App. 17.
on previous guidance that it had issued to the parties, the
District Court permitted Relator to receive fees for the
twelve depositions that C&D specifically challenged, but
limited those fees in each deposition to those generated by
the Relator lawyer who actually did the questioning and one
other Relator lawyer actually in attendance. The Court also
allowed "[p]rep time compensation" for each
deposition of one lawyer per deposition (i.e., the
lawyer who actually logged preparation time for the
deposition), "up to a maximum of 1.75 preparation hours
per hour of documented deposition time." App. 17. If
less than 1.75 hours/deposition hour was recorded, then the
lesser time value had to be used.
Summary Judgment and ...