Clemente et al v. Lead Teach Mentor LLC et al

Filing 71

ORDER granting in part and denying in part 60 motion for attorney's fees and costs. Separate defendants Lead Teach Mentor LLC, Curtiss Robinson, and Vicki Robinson are awarded $8,025.75 in attorney's fees and $2,172.70 in costs pursuant to 31 U.S.C. § 3730(d)(4) and 28 U.S.C. § 1920. Signed by Judge Susan Webber Wright on 6/27/2019. (jbh)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
WESTERN DIVISION
UNITED STATES OF AMERICA ex
rel., JACQUELINE CLEMENTE,
COLLIN DAVIES, MIA GORDON,
KATHI KINDER, and MAUREEN
SKINNER

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PLAINTIFFS
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V.
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LEAD TEACH MENTOR LLC;
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CURTISS ROBINSON; and VICKI
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ROBINSON
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DEFENDANTS *
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ORDER

CASE NO. 4:16CV00875 SWW

Before the Court is a motion for attorney’s fees and costs [ECF Nos. 60, 61] by
separate defendants Lead Teach Mentor LLC (“LTM”) and Curtiss and Vicki Robinson
(“the Robinsons”). The relators have filed a response in opposition [ECF No. 65] and
separate defendants have replied [ECF No. 68]. After careful consideration, and for
reasons that follow, the motion is granted in part and denied in part. The separate
defendants are awarded $8,025.75 in attorney’s fees and $2,172.70 in costs.
Former employees of mental health counseling franchises commenced this qui tam
action as relators for the United States, charging that the franchise owners and others
submitted fraudulent insurance claims in violation of the False Claims Act (“FCA”). The
relators named defendants Thriveworks Franchising LLC, Thriveworks, Inc. and VIP
Solutions LLC (“the Thriveworks Defendants”); Anthony Centore (“Centore”); LTM;
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and the Robinsons. The Court dismissed claims against the Thriveworks Defendants and
Centore under Fed. R. Civ. P. 12(b)(6) and later granted summary judgment in favor of
LTM and the Robinsons. LTM and the Robinsons now seek an award of attorney’s fees
and costs, asserting that the relators had no proof to support their claims. According to
the separate defendants, this case was merely “an effort by former employees to
financially cripple Defendants to the benefit of their new employer, which is Defendants’
competitor.”1
The Court has discretion to award attorney’s fees and expenses to a prevailing
defendant in a qui tam action as follows:
If the Government does not proceed with the action and the person bringing
the action conducts the action, the court may award to the defendant its
reasonable attorneys’ fees and expenses if the defendant prevails in the action
and the court finds that the claim of the person bringing the action was clearly
frivolous, clearly vexatious, or brought primarily for purposes of harassment.
31 U.S.C. § 3730(d)(4). Legislative history indicates that Congress intended that the
standard for awarding fees under § 3730(d)(4) correspond to the standard employed
under 42 U.S.C. § 1988. See S. Rep. No. 99-345, at 29, reprinted in 1986 U.S.C.C.A.N.
5266, 5294 (“This standard reflects that which is found in section 1988 of the Civil
Rights Attorneys Fees Awards Act of 1976.”). Although the Eighth Circuit has not
parsed the standard for determining whether an FCA claim is “clearly frivolous, clearly
vexatious, or brought primarily for purposes of harassment,” it has observed that a court
may award a prevailing defendant attorney fees in a Title VII action2 only if the
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ECF No. 61, at 2.
The standards for awarding attorney’s fees under Title VII of the Civil Rights Act of 1974 and 42 U.S.C. § 1988
are the same. See Bowers v. Kraft Foods Corp., 606 F.2d 816, 818 n.3 (8th Cir. 1979).

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plaintiff’s claim was “frivolous, unreasonable, or groundless, or . . . the plaintiff
continued to litigate after it clearly became so.” See Meriwether v. Caraustar Packaging
Co., 326 F.3d 990, 994 (8th Cir. 2003)(quoting Christiansburg Garment Co. v. EEOC,
434 U.S. 412, 422, 98 S. Ct. 694 (1978)). A complaint is frivolous where it lacks an
arguable basis either in law or fact, and it lacks an arguable basis in law if the claim is
based on an indisputably meritless legal theory. See Neitzke v. Williams, 490 U.S. 319,
325-27 (1989).
In this case, the relators charged that the defendants violated the FCA by two
means: (1) impliedly certifying that they were operating the counseling centers in
accordance with state and federal law and (2) knowingly presenting false claims for
payment. The Court granted motions to dismiss by the Thriveworks Defendants and
Centore, finding that the allegations against these defendants failed to meet particularity
pleading requirement for fraud claims. In its order of dismissal, the Court noted the
absence of factual allegations regarding the separate defendants’ role in submitting false
claims.
Subsequently, LTM and the Robinsons moved for summary judgment and
submitted evidence showing that if any false claims were tendered, they were submitted
by relators Skinner, Davies, and Gordon, who had the sole authority to bill for services
and the obligation to ensure that billing was accurate and proper. Plaintiffs did not
respond to the motion for summary judgment, and the Court found no issues for trial with
respect to the charge that the defendants knowingly submitted false claims.

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With respect to plaintiff’s implied-certification claims, the separate defendants
argued that the MCA applied to the practice of medicine, not psychology. After
reviewing the relevant statutes, the Court found, as a matter of law, that the defendants
were not required to comply with MCA licensing requirements.
After careful consideration, the Court finds that relators’ claim that defendants
knowingly submitted false claims for payment was without a factual basis. The
allegations against the Thriveworks Defendants and Centore were entirely conclusory,
and the relators’ own testimony demonstrated that it was not possible that LTM or the
Robinsons submitted false claims. When faced with the undisputed facts, rather than
concede that a portion of their claims were without merit, the relators chose not to
respond. The Court finds that the relators’ claim that defendants knowing submitted false
claims was entirely frivolous. On the other hand, the implied-certification claim was
based on a plausible interpretation of Arkansas law. Because the Court finds that the
implied-certification claim was not clearly frivolous, it also finds that LTM and the
Robinsons are entitled to only a portion of their attorney’s fees and costs.
The normal procedure used in calculating attorney fees is to compute the base
“lodestar” figure by multiplying the number of hours reasonably expended by the
reasonable hourly rates. See Fish v. St. Cloud State University, 295 F.3d 849, 851 (8th
Cir. 2002)(quoting Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S. Ct. 1933 (1983)).
Counsel for separate defendants, Stephen B. Niswanger, has provided invoices listing the
fees and expenses billed to his clients, which document a total $16,052.25 in attorney’s
fees—based on roughly 71.34 hours at an hourly rate of $225. While Plaintiffs argue that
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the separate defendants are not entitled to a fee award because the claims against them
were not frivolous, vexatious, or harassing in nature, they do not assert that Mr.
Niswanger’s hourly rate or hours expended are unreasonable.
By affidavit, Mr. Niswanger states that he has practiced law for approximately 23
years, specializing in commercial, business, and general litigation. The Court finds Mr.
Niswanger to be an experienced attorney, who has demonstrated superior legal skills and
advocacy in this case and that the requested hourly rate is well in line with the ordinary
rate for similar work in this area.
The Court has reviewed the invoices for documentation of attorney hours
expended. The information provided is sufficiently detailed, and the Court finds no
excessive, redundant, or unnecessary time reported. However, because it is impossible
to identify specific hours related to defending against plaintiffs’ implied-certification
claim, the Court will award fees for half of the hours billed, for a total fee award of
$8,025.75—based on 35.67 hours at an hourly rate of $225.
Separate defendants submit a bill of costs totaling $2,172.70 for copies and fees of
court reporters for transcripts that were obtained for use in the case. These items may be
taxed as costs under 28 U.S.C. § 1920, and the Court finds that they are recoverable.
IT IS THEREFORE ORDERED that the motion for attorney’s fees and costs
[ECF No. 60] is GRANTED IN PART and DENIED IN PART as follows:
Separate defendants Lead Teach Mentor LLC, Curtiss Robinson, and Vicki Robinson are
awarded $8,025.75 in attorney’s fees and $2,172.70 in costs pursuant to 31 U.S.C.
§ 3730(d)(4) and 28 U.S.C. § 1920.
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IT IS SO ORDERED THIS 27TH DAY OF JUNE, 2019.

/s/Susan Webber Wright
UNITED STATES DISTRICT JUDGE

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