United States ex rel Dr. Brian A. Foley v. Mitchell et al
Filing
86
MEMORANDUM OPINION. Signed by Honorable Judge Royce C. Lamberth on 11/18/19. (djy, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
EASTERN DIVISION
UNITED STATES OF AMERICA,ex
rel. BRIAN A. FOLEY,
Plaintiffs and Relators,
v.
Case No. 3:14-cv-135-RCL
DR. JOHN W. MITCHELL; THE
HEART CENTER CARDIOLOGY,PC,
et al.,
Defendants.
MEMORANDUM OPINION
Plaintiffs Motion 'for Reasonable Expenses; Attorneys' Fees, and Cots(ECF No. 77)
arises out of a 2014 False Claims Act("FCA")suit that Dr. Brian Foley filed against Dr. John
Mitchell, The Heart Center Cardiology("THC"), and East Alabama Medical Center("EAMC").
The underlying lawsuit alleged that Dr. Mitchell was falsifying medical records and performing
unnecessary heart stent procedures. That suit resulted in a settlement pursuant to the terms of
which Dr. Mitchell and THC paid $35,000. EAMC—the hospital at which Dr. Mitchell
practiced—settled for $1,000,000. Counsel for EAMC paid relator's attorneys' fees ($98,905.21)
and expenses($5,375.78). Relator now seeks reimbursement from Dr. Mitchell and THC for
attorneys' fees in the amount of$19,269.60 and reimbursement for expenses in the amount of
$832.94. He asks for a total of $20,102.54. Dr. Mitchell and THC have refused to pay and
believe that the requested amount is not proportional to the result. For the reasons set forth
below, the Court will grant in part and deny in part relator's motion.
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LEGAL STANDARD
The FCA allows a qui tam relator like Dr. Foley to "receive an amount for reasonable
expenses which the court finds to have been necessarily incurred, plus reasonable attorneys' fees
and costs." 31 U.S.C. § 3730(d)(1). The FCA further states that 141 such expenses, fees, and
costs shall be awarded against the defendant." Id. In determining the amount to be paid,"[t]here
is no precise rule or formula." Hensley v. Eckerhart, 461 U.S. 424, 436 (1983). The Court has
discretion when determining what amount is reasonable. See Gray v. Lockheed Aeronautical Sys.
Co., 125 F.3d 1387, 1389 (11th Cir. 1997). Courts generally calculate attorneys' fees under the
lodestar formula, meaning "the number of hours reasonably expended on the litigation multiplied
by a reasonable hourly rate."1 Hensley, 461 U.S. at 433. When analyzing a reasonable hourly
rate, cöurts look at "the prevailirig market rate in the relevant legal community for similar
services by lawyers of reasonably comparable skills, experience, and reputation." Norman v.
Hous. Auth. ofMontgomery, 836 F.2d 1292, 1299(11th Cir. 1988). The "relevant market" is
usually the "place where the case is filed." Cullens v. Ga. Dep't ofTransp., 29 F.3d 1489, 1494
(11th Cir. 1994). Litigants have no duty to select "the nearest and cheapest attorney" in order to
win expenses and fees. Johnson v. Univ. Coll. of Univ. ofAla. in Birmingham, 706 F.2d 1205,
1208 (11th Cir. 1983). A reasonable fee is one that is "sufficient to induce a capable attorney to
undertake the representation of a meritorious ... case." Perdue v. Kenny A. ex rel. Winn, 559
U.S. 542, 552(2010).
The lodestar method takes into account twelve different factors:(1)the time and labor required;(2)the novelty and
difficulty of the questions;(3)the skill required to perform the legal service properly;(4)the preclusion of
employment by the attorney due to acceptance of the case;(5)the customary fee;(6) whether the fee is fixed or
contingent;(7)time limitations imposed by the client or the circumstances;(8)the amount involved and the results
obtained;(9)the experience, reputation, and ability of the attorneys;(10)the undesirability of the case;(11)the
nature and length of the professional relationship with the client; and (12)awards in similar cases. Johnson v. Ga.
Highway Express, Inc., 488 F.2d 714, 717-19.(5th Cir. 1974).
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Although the lodestar method is the primary formula for calculating expenses and fees,
courts may adjust the formula to account for other factors. See Hensley, 461 U.S. at 434. In the
Eleventh Circuit, courts also reduce the amount awarded in cases that resulted in only partial or
limited success. See Norman, 836 F.2d at 1302. In addition to being reasonable, the fee
breakdown must also be specific and detailed rather than vague or cursory. Awarding fees and
expenses is an area in which courts inherently have a great deal of discretion, so the Court must
focus on what amount is reasonable under the totality of the circumstances.
ANALYSIS
In this case, relator seeks reimbursement for attorneys' fees in the amount of $19,269.60
and reimbursement for expenses in the amount of $832.94 for a total of $20,102.54. As
explained below, the Court finds that relator did prevail to some extent and that the hourly rate
and time spent on the case were both reasonable; however, because relator was not entirely
successful, the $20,102.54 will be reduced to $8,041.02.
I. The Requested Attorneys' Fees are Reasonable.
When assessing fees under the lodestar method, both the hours worked and the rate
charged must be reasonable. Here, both lodestar components were reasonable.
A. The Reported Hours were Reasonable.
The hours reported are comprised of work directly attributable to the claims against Dr.
Mitchell and THC along with some expenses and fees common to Dr. Mitchell, THC,and
EAMC. When Dr. Foley settled the costs and fees claim with EAMC,he removed any time
solely attributable to work related to Dr. Mitchell and THC. Most courts hold that defendants are
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jointly and severally liable for fees and expenses, though in this case relator attempted to allocate
the fees and expenses to the party related to the corresponding work rather than collecting all or
any portion from one defendant. In light of the difficulty of the case, the hours expended were
reasonable, as FCA claims are inherently complex. Additionally, the attorneys kept meticulous
time logs and billing descriptions and have reported their hours with the requisite specificity. The
logs in ECF 78-7 are concrete and specific rather than vague or cursory, with each entry
describing a specific task. Similarly, ECF 78-10 breaks down the expenses for working on the
case rather than simply estimating an amount. It is also worth noting that Dr. Mitchell's
Response and Objection to Relator's Motion for Reasonable Expenses, Attorneys' Fees, and
Costs does not even meaningfully dispute that the hours expended were reasonable.2 ECF No.
81'-1. For these reasons, there is no need for any redu6tion on the basis of vague or generic
billing practices. There is also no issue with the fact that more than one attorney worked on the
case, as that is common practice with FCA claims.
B. The Reported Rate was Reasonable.
The hourly rates charged by the attorneys are reasonable. The attorneys in this case have
reputations for being successful in FCA cases. They also submitted affidavits explaining their
backgrounds, credentials, and work in this case. Contrary to defendants' assertions, courts do
consider attorneys' backgrounds and resumes in deciding whether a fee is reasonable; to
disregard such information would be illogical, as clients choose attorneys based on their
reputations, and fees are generally established at the beginning of the attorney-clientrelationship.
Unlike in most fee disputes, defendants never attempt to explain why the number of hours expended is
unreasonable, and they never argue that the time logs are too vague or non-specific. Although defendants do
challenge the hourly rate, as explained elsewhere in this Memorandum Opinion, the Court disagrees with that
challenge.
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Defendants do not even attempt to meaningfully contest the attorneys' past successes, asking the
Court to focus instead on the attorneys' supposed lack of success in this case. As explained
below, however, the Court strongly disagrees with defendants' contention that relator did not
prevail to any extent. Additionally, the reasonableness of a fee does not necessarily hinge on the
outcome of the case. When a client selects an attorney and agrees to pay a certain hourly rate, he
is bound by that hourly rate (barring exceptional circumstances). He does not get to claim that
the fee he agreed to is suddenly unreasonable simply because he lost his case. The same principle
applies here. With that principle and the available information about relator's attorneys in mind,
the Court finds that the hourly rates for all four attorneys were reasonable.
Looking first at Don McKenna, he has repeatedly been recognized for his work in both
regional and natio' nal publications. He has been involved with FCA Work since 1997 and won
recoveries totaling more than $1.6 billion. Additionally, he has given speeches and lectures on
the FCA throughout the country. The Court finds that Mr. McKenna's rate of $510 per hour in
2014 and $525 for all subsequent years was reasonable. Turning next to Scott Powell, he is a
senior partner at Hare, Wynn,Newell & Newton, LLP. He has been involved with FCA cases
and the qui tam provisions of the Act since the mid-1990s and has won some of the most
significant monetary awards in FCA history for his clients. He is involved with groups dedicated
to fighting fraud and has served as the President of numerous prestigious legal organizations.
The Court finds that Mr. Powell's rate of $650 per hour was reasonable. As for Randi McCoy,
she has worked on numerous FCA cases. She joined Hare, Wynn,Newell & Newton, LLP in
2015 and has been practicing exclusively in the area ofthe FCA ever since. The Court finds that
her initial hourly rate of $125 was reasonable, as was the increase to $150 once she gained more
experience in FCA litigation. Finally, Jonathan Corley has been a partner at Whittelsey,
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Whittelsey, Poole & Corley, P.C. since 2014. Although he does not have an FCA-specific
background, he has extensive experience with litigation. The Court finds that Mr. Corley's
hourly rate of $350 was reasonable. Furthermore, Adam Plant was specifically retained to review
the hourly rates of all four attorneys, and he determined that the rates were reasonable based on
the attorneys' reputations, experience, and work product. See ECF 78-13.
II. The United States and Relator Partially Prevailed in the Underlying Litigation.
Dr. Mitchell and THC settled the underlying lawsuit for $35,000. Even though Dr. Foley
had sought millions of dollars in damages and agreed to the $35,000 reluctantly, his reluctance
does not change the fact that the ultimate settlement was only $35,000. Dr. Foley's stated reasons
for accepting the lower amount are also immaterial, so there is no need to discuss the parties'
dispute about relator's rationale for entering into the settlement agreement. Regardless of why
the government pressured Dr. Foley to settle (or whether they pressured him at all), $35,000 is
still substantially lower than the amount that he initially sought.
.
The parties also disagree about whether the underlying lawsuit led to any changes in
hospital policy. If there was in fact a policy change, that would increase the extent to which Dr.
Foley prevailed on his underlying claim, as a monetary award is not the sole measure of success.
The Court, however,finds that Dr. Foley has brought forth insufficient evidence to prove that
any meaningful changes to hospital policy actually occurred. He had the burden to make such a
showing, but he failed to do so. This failure is exemplified by his own Memorandum(ECF 78)
accompanying his Motion for Reasonable Expenses, Attorneys' Fees, and Costs. In claiming that
"policies related to cardiac procedures have been updated at EAMC," he cites only Exhibit 4 to
the Memorandum. ECF 78 at 9. Upon closer review, the Court has discovered that Exhibit 4 is
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simply the Declaration of Don McKenna.3 Moreover, the Declaration merely states in the most
cursory sense that the settlement led to "policy changes to protect patients."4 ECF 78-4 at ¶ 30.
Mr. McKenna never explains how he learned that information, nor does he provide any other
proof to support his statement. The word "policy" is not mentioned again in Exhibit 4(nor in any
other exhibit). Dr. Foley's Memorandum mentions the alleged policy changes several times, but
not once does he offer any evidence of or explanation regarding such changes. In fact, Dr. Foley
never explains what the supposed changes actually are. Even without the evidence that Dr.
Mitchell and THC put forth to rebut Dr. Foley's assertion, the Court would not be able to find
that Dr. Foley proved the existence of any post-settlement policy changes. The Court is not
necessarily accusing Dr. Foley or his attorneys of lying about the existence of hospital policy
changes; hoWever, the complete lack of any evidentiary support'for relator's contentions is
concerning. Regardless of relator's intent, there is simply insufficient evidence to prove that such
changes ever actually occurred.
Having disposed of any arguments regarding the reasons behind the settlement or alleged
hospital policy changes, the Court is left to make a decision based solely on a comparison of
relator's original claims and the ultimate settlement amount. Dr. Foley initially brought two
claims:(1)fraudulent billing for unnecessary stenting; and (2)fraudulent billing for
unsupervised cardiac testing. The Court granted Dr. Mitchell's Motion to Dismiss for the second
claim, meaning that 50% of his initial claim was dismissed outright. At the same time, however,
this Court is unconvinced by defendants' contention that "neither the government nor the relator
3 As previously noted, Don McKenna is one of Dr. Foley's attorneys in this case.
4 The paragraph in full reads as follows: "Although, the $35,000 settlement amount alone is sufficient to justify the
request for fees and expenses, the additional value added from: exposure ofthe conduct; criminal prosecution and
plea; policy changes to protect patients; and, a companion million-dollar settlement are further justification for the
award." ECF 78-4 at ¶ 30(emphasis added).
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were the prevailing party in the criminal case." ECF No. 81-1 at 6. A settlement of any amount
still means that relator prevailed to some extent, even if he did not fully prevail. When the hours
and hourly rate are both reasonable but "the plaintiff achieved only limited success, the district
court should award only that amount offees that is reasonable in relation to the results obtained."
Cullens, 29 F.3d at 1492 (citing Hensley, 461 U.S. at 434).
Defendants are correct that it would be unfair to require payment of 100% of the fees
incurred throughout the lawsuit when relator did not prevail on 100% of his claims. The
unreasonableness of the requested amount is exemplified by comparing it to the amount that
EAMC paid. EAMC settled the case for $1,000,000 and paid $104,280.99 in fees and expenses.
$104,280.99 is equal to roughly 10% ofthe $1,000,000 settlement. In contrast, the $20,102.54
that relator seeks in fees and expenses from Dr. Mitchell and THC is equal to approximately
•
57% of the $35,000 settlement amount. The amount that relator requests is simply
disproportionate to the result. Therefore, because Dr. Foley prevailed on only one of his two
claims, the Court will reduce the award by 50%. This 50% reduction would leave Dr. Foley with
$10,051.27 total for fees and expenses.
As previously explained, however, relator also did not entirelyprevail on his first claim.
Therefore, awarding 50% of all requested fees would still be too high. The 50% reduction in fees
and expenses would leave relator with $10,051.27, which is equal to approximately 29% of the
$35,000 settlement amount. This is still disproportionate, especially because (as noted above)
$35,000 is substantially less than the millions that Dr. Foley initially sought. Therefore, the Court
has decided to award only 80% of the remaining $10,051.27. Defendants will be ordered to pay
$7,707.84 in fees and $333.18 in expenses for a total of $8,041.02. Determining expenses and
fees is far from a precise science, but after analyzing Dr. Foley's limited overall success, the
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Court believes that $8,041.02 is reasonable. Moreover, $8,041.02 is still equal to nearly 23% of
the settlement amount, which is significantly higher than the percentage of fees paid in the
EAMC settlement.
Finally, relator requests leave to file a subsequent motion to recover the fees and
expenses associated with filing the Motion for Reasonable Expenses, Attorneys' Fees, and Costs
as well as for fees and expenses associated with filing the Reply to Defendants' Objection to
fees is not
RelgtorstUption for.ReasOnable Expenses, Attorneys' Fees, and Costs. A requestfOr.
supposed to "result in a second major litigation" and thus courts are permitted to award these
additional fees and expenses. Hensley, 461 U.S. at 437. Defendants were well within their rights
to object to relator's disproportionate request for $20,102.54, and had they made even the
slightest attempt to negotiate for a lower amount, Dr. Foley would be barred from requesting any
additional fees and expenses. Instead of attempting to compromise, however, Dr. Mitchell and
THC refused to pay a single penny in fees or expenses. This left Dr. Foley with no choice but to
seek relief from this Court. Therefore, the Court will grant leave for relator to file a subsequent
petition.
CONCLUSION
Based on the foregoing, the Court will GRANT IN PART AND DENY IN PART
Relator's Motion for Reasonable Expenses, Attorneys' Fees, and Costs.
It will be ORDERED that Dr. Mitchell and THC must pay $333.18 in expenses and
$7,707.84 in attorneys' fees for a total of $8,041.02.
It will be FURTHER ORDERED that Dr. Foley's request for leave to file a petition for
fees and expenses associated with filing the Motion for Reasonable Expenses, Attorneys' Fees,
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and Costs as well as for fees and expenses associated with filing the Reply to Defendants'
Objection to Relator's Motion for Reasonable Expenses, Attorneys' Fees, and Costs is
GRANTED.
A separate Order accompanies this Memorandum Opinion.
Date:
i
//rI/1
Royce C. Lamberth
United States District Court Judge
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