Cafasso v. General Dynamics C4 Systems, et al.,

Filing 446

ORDER that Defendant-Counterclaimant-Appellee's Request for Attorneys' Fees, filed as docket entry 75-1, in No. 09-16181, United States Court of Appeals for the Ninth Circuit, and transferred to this Court (Doc. 442) is granted under A.R.S. § 12-341.01(A) in the amount of $64,849.50. It is further ordered that the Clerk enter judgment in favor of General Dynamics C4 Systems, Inc., against Mary A. Cafasso in the amount of $64,849.50 for attorney fees pursuant to A.R.S. § 12-341.01(A). Signed by Judge Neil V Wake on 06/21/11. (ESL)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9
10
11
12
13
14
15
16
17
18
19
20

)
)
)
Plaintiff-Relator,
)
)
vs.
)
)
)
General Dynamics C4 Systems, Inc.,
)
)
Defendant.
)
_________________________________ )
)
)
)
General Dynamics C4 Systems, Inc.,
)
)
Counterclaimant,
)
)
vs.
)
)
Mary A. Cafasso,
)
)
Counterdefendant.
)
United States ex rel. Mary A. Cafasso,

No. CV-06-01381 PHX NVW
ORDER

[Not for Publication]

21
Before the Court is Defendant-Counterclaimant-Appellee’s Request for Attorneys’
22
Fees, filed as docket entry 75-1, in No. 09-16181, United States Court of Appeals for the
23
Ninth Circuit, and transferred to this Court for consideration. (Doc. 442.)
24
I.

Background

25
The underlying facts and procedural history of this case before appeal are
26
summarized at Doc. 419. Defendant-Counterclaimant-Appellee General Dynamics C4
27
Systems, Inc. (“GDC4S”) obtained judgment on the pleadings on Plaintiff28

1

Counterdefendant-Appellant Mary A. Cafasso’s qui tam claim and obtained summary

2

judgment on her retaliation and state law contract claims. On Cafasso’s appeal, the

3

dismissal of her qui tam claim, denial of leave to further amend, summary judgment on

4

her False Claims Act retaliation claim, summary judgment on GDC4S’s contract claim,

5

and award of attorney fees on GDC4S’s successful contract claim were affirmed.

6

Cafasso v. General Dynamics C4 Systems, Inc., 637 F.3d 1047 (9th Cir. 2011). On

7

GDC4S’s motion, consideration of its application for attorney fees on appeal was

8

transferred to this Court. (Doc. 442.) GDC4S seeks award of attorneys’ fees incurred

9

defending the summary judgment on GDC4S’s contract claim and related fee award on

10

appeal.

11

II.

12

Legal Standard
A.R.S. § 12-341.01(A) provides, “In any contested action arising out of a contract,

13

express or implied, the court may award the successful party reasonable attorney fees.”

14

An award of reasonable attorney fees under § 12-341.01(A) “should be made to mitigate

15

the burden of the expense of litigation to establish a just claim or a just defense.” A.R.S.

16

§ 12-341.01(B). “It need not equal or relate to the attorney fees actually paid or

17

contracted, but the award may not exceed the amount paid or agreed to be paid.” Id.

18

To determine whether to award fees, the Court considers the factors governing

19

awards under the statute, including the merits of Cafasso’s defense, GDC4S’s success in

20

obtaining the relief sought, the avoidable expense incurred, the possibility that the award

21

will cause “extreme hardship,” any chilling effect the award might have on other parties

22

with tenable claims or defenses, and the novelty of the legal questions presented. See

23

Associated Indem. Corp. v. Warner, 143 Ariz. 567, 570, 694 P.2d 1181, 1184 (1995).

24

III.

Analysis

25

A.

26

Determining whether to award fees incurred on appeal under A.R.S.

A.R.S. § 12-341.01(A) Factors Favor an Award of Fees to GDC4S.

27

§ 12-341.01(A) requires the same analysis as did the determination regarding award of

28

fees incurred below. It is not necessary to restate that analysis here. (See Doc. 419.)
-2-

1

On appeal, GDC4S prevailed in every respect, including on challenges to the

2

summary judgment on its contract claim and the award of fees arising out of contract.

3

The Court of Appeals affirmed summary judgment on GDC4S’s contract claim with

4

strong language:

5
6

Although we see some merit in the public policy exception that
Cafasso proposes, we need not decide whether to adopt it here. Even were
we to adopt such an exception, it would not cover Cafasso’s conduct given
her vast and indiscriminate appropriation of GDC4S files. . . .

7
8
9
10
11
12
13
14
15

Were we to adopt a public policy exception to confidentiality
agreements to protect relators—a matter we reserve for another day—those
asserting its protection would need to justify why removal of the documents
was reasonably necessary to pursue an FCA claim. Cafasso has made no
such particularized showing. The need to facilitate valid claims does not
justify the wholesale stripping of a company’s confidential documents.
Although courts perhaps should consider in particular instances for
particular documents whether confidentiality policies must give way to the
needs of FCA litigation for the public’s interest, Cafasso’s grabbing of tens
of thousands of documents here is overbroad and unreasonable, and cannot
be sustained by reference to a public policy exception. We affirm the
district court’s grant of summary judgment on GDC4S’s contract claim.
637 F.3d at 1062.
Regarding a potential chilling effect of the fee award, the Court of Appeals

16

seriously considered “Cafasso’s concern that awarding fees against a qui tam claimant

17

may chill prospective relators from exposing frauds on the government,” but cautioned

18

that “relators and their attorneys are not free to engage in misconduct without

19

consequences merely because those consequences might chill others.” 637 F.3d at 1062-

20

63. The Court of Appeals further explained that “the awarded fees cover GDC4S’s

21

successful contract claim, not Cafasso’s FCA claim,” and it was “confident that future

22

litigants will appreciate the difference.” Id. at 1063. The Court of Appeals’ reasoning

23

applies equally to the award of fees incurred on appeal.

24

Cafasso contends that the previous $300,000 fee award “will likely bankrupt her”

25

and that “the Court should decline to pile on to Relator’s burden.” However, regardless

26

of whether GDC4S will be able to collect any or all of the fees awarded, there is no

27

justification for permitting Cafasso to prolong this litigation without consequences.

28

Cafasso chose to pursue the appeal with full knowledge of its risks.
-3-

1

B.

The Amount Requested Fairly Represents Fees Arising Out of
Contract.

2
Cafasso does not object to any specific expense item in GDC4S’s fee request, but
3
instead objects to GDC4S’s apportionment of fees. However, GDC4S seeks only
4
reimbursement of the following fees earned by its primary counsel of Steptoe & Johnson
5
LLP:
6
•

100% of fees incurred on tasks exclusively related to the appeal of

7
GDC4S’s contract claim and the fee award;
8
•

50% of fees incurred related to the Taxpayers Against Fraud amicus brief

9
because approximately half of the brief related to the contract claim; and
10
•

16.7% of fees incurred related to the appeal as a whole because

11
approximately one-sixth of GDC4S’s Answering Brief related to the
12
contract claim and the fee award.
13
GDC4S has excluded from its request the following fees:
14
•

fees incurred before receiving Cafasso’s Opening Brief, including those

15
related to Cafasso’s multiple Notices of Appeal, her Motion to Consolidate,
16
her failure to post a bond, her motions to file overlength briefs, scheduling
17
and docketing issues, and participating in Ninth Circuit mediation
18
assessment conferences;
19
•

fees incurred related to its fee request;

•

fees earned by three associate attorneys and two paralegals; and

•

fees earned by co-counsel from Jenner & Block LLP.

20
21
22
Thus, the amount GDC4S requests, $64,849.50, includes a significant reduction from the
23
amount of fees that the Court has discretion to award under A.R.S. § 12-341.01(A). This
24

reduction more than adequately compensates Cafasso for any extreme hardship.1

25
26
27

1

Cafasso has not filed in this Court any evidence of her current financial status.

28
-4-

1

IT IS THEREFORE ORDERED that Defendant-Counterclaimant-Appellee’s

2

Request for Attorneys’ Fees, filed as docket entry 75-1, in No. 09-16181, United States

3

Court of Appeals for the Ninth Circuit, and transferred to this Court (Doc. 442) is granted

4

under A.R.S. § 12-341.01(A) in the amount of $64,849.50.

5

IT IS FURTHER ORDERED that the Clerk enter judgment in favor of General

6

Dynamics C4 Systems, Inc., against Mary A. Cafasso in the amount of $64,849.50 for

7

attorney fees pursuant to A.R.S. § 12-341.01(A).

8

DATED this 21st day of June, 2011.

9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-5-