Jeff D, et al v. Kempthorne, et al

Filing 785

MEMORANDUM DECISION AND ORDER - Plaintiffs Motion for Relief from Order Awarding Attorneys Fees (Dkt. 777 ) is DENIED. Defendants evidentiary objection (Dkt. 781 ) is OVERRULED. Signed by Judge B Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (lm)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
JEFF D., et. al,

Case No. 4:80-cv-04091-BLW

Plaintiffs,

MEMORANDUM DECISION AND
ORDER

v.
BRAD LITTLE, et. al,
Defendants.

INTRODUCTION
Before the Court is Plaintiffs’ Motion for Relief from Order Awarding
Attorneys’ Fees. Plaintiffs ask the Court to award $515,473.20 in attorneys’ fees
for services rendered over 16 years ago. The Court will deny the motion because it
was not timely filed and because the requested fees were not reasonably incurred.
BACKGROUND
A.

The Consent Decrees
This lawsuit has been pending in one form or another for over 40 years.

Plaintiffs are a class of indigent children suffering from severe emotional
disabilities. In 1980, they sued Idaho state officials, alleging that these officials
were providing inadequate care and had thereby violated plaintiffs’ constitutional
and statutory rights. The parties reached agreements intended to remedy the
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deficiencies, and this Court entered three separate consent decrees embodying
those agreements.
Under the consent decrees, the Idaho Department of Health & Welfare
(IDHW) agreed to take certain specified steps. As required by the last of the three
consent decrees, the parties submitted a compliance plan that would serve as a
comprehensive blueprint for IDHW to satisfy the decrees. The Court eventually
adopted a final compliance plan, known as the Implementation Plan, which
included 252 action items to be completed by IDHW.
B.

The Vacatur of the Consent Decrees
In September 2006, the Court conducted a 10-day compliance hearing. After

the hearing, the Court concluded that IDWH had complied with 231 of the 252
action items and ordered the Department to take all steps necessary to substantially
comply with the 21 outstanding items within 120 days. Thereafter, the Court
concluded that IDHW had substantially complied with all action items and vacated
the consent decrees. Significantly, however, even though the Court vacated the
consent decrees over plaintiffs’ objections, the Court determined plaintiffs were the
“prevailing parties” in the litigation. See Am. Order, Dkt. 707 at 12. Accordingly,
when plaintiffs’ counsel sought a fee award for the monitoring work performed
under the consent decrees between 2004 and 2007, the Court concluded counsel
was entitled to an award so long as the services were reasonably performed. Id.
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Applying that standard, the Court awarded plaintiffs’ attorneys $320,332.39 in fees
and costs. Plaintiffs’ counsel had sought a larger award, but the Court found that a
portion of the fees had not been reasonably incurred. As the Court put it at the
time:
The Court is inclined . . . to award Plaintiffs their costs and fees
associated with monitoring the case from 2004 through 2007. [¶]
However, there does exist a major exception to the reasonableness
of Plaintiffs’ counsel’s continued monitoring of the case. That
exception relates to fees incurred during the compliance hearing
held in September 2006.
Id. at 12-13. The Court reduced the fees incurred during the relevant period
(September 1, 2006 through February 28, 2007) by 90%. Additionally, plaintiffs’
counsel had voluntarily reduced their fees by 20% for fees incurred between June
2006 and December 2006. The Court applied that 20% reduction to fees incurred
between June and August 2006. See id. at 19. In the end, plaintiffs’ counsel
recovered approximately 64% of their requested fees and costs. See id. at 21-22.
C.

The Appeal
Plaintiffs appealed the Court’s November 2007 order and judgment but did

not pursue the fee-reduction issue on appeal. Ultimately, plaintiffs successfully
argued that this Court had erred by applying the civil contempt standard in
determining whether to vacate the consent decrees. See Jeff D. v. Otter, 643 F.3d
278 (9th Cir. 2011). The Ninth Circuit explained that while the parties agreed that
the relevant standard was “substantial compliance”—that is, the correct, key
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question was whether defendants had substantially complied with the consent
decrees—this Court had erred by failing to require Defendants to come forward
and demonstrate substantial compliance by a preponderance of the evidence. Id. at
285. Instead, the Court wrongly placed the burden on “the Plaintiffs to come
forward and show, by clear and convincing evidence, that, first, the Defendants
had ‘violated the Action Items beyond substantial compliance,’ and, second, ‘that
the violation was not based on good faith and reasonable interpretation of the
judgment.’” Id. Additionally, the Ninth Circuit held that the Court erred by not
explicitly considering whether the goals of the decrees and the Implementation
Plan had been adequately served in deciding whether to vacate the decrees. Id. at
288-89.
In light of these holdings, the Ninth Circuit reversed this Court’s order
vacating the consent decrees and remanded the case for further proceedings. The
Circuit did not disturb the Court’s individual factual findings, however, despite
Plaintiffs’ urging that it do so. As the Circuit explained, “We have no way of
determining whether and how these findings would change when the evidence is
assessed by the district court with the burden of proof by a preponderance of the
evidence placed on the Defendants to show substantial compliance with the Action
Items.” Id. at 287.

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D. The Post-Remand Settlement
On remand, the parties settled their substantive disputes. They also entered
into a stipulation regarding attorneys’ fees that had been incurred post-remand. The
fee stipulation carved out disputes related to this Court’s 2007 decision to reduce
plaintiffs’ requested fees. See May 20, 2015 Stip., Dkt. 777-3, at 3. Because of that
carve-out, plaintiffs are once again before this Court, challenging the fee reduction
the Court applied back in November 2007.
LEGAL STANDARD
Rule 60(b)(5) permits a district court, in its discretion, to “relieve a party or
a party’s legal representative from a final judgment, order, or proceeding” when
(1) “the judgment has been satisfied, released, or discharged,” or (2) “a prior
judgment upon which it is based has been reversed or otherwise vacated,” or (3) “it
is no longer equitable that the judgment should have prospective application....”
Fed. R. Civ. P. 60(b)(5); see also Casey v. Albertson’s Inc., 362 F.3d 1254, 1257
(9th Cir. 2004) (holding that Rule 60(b) motions committed to sound discretion of
district court). Although Rule 60(b)(5) has three subparts, plaintiffs argue for relief
based only on the second listed ground—that the Ninth Circuit vacated this Court’s
November 2007 judgment.
Generally speaking Rule 60(b) is remedial in nature and thus should be
liberally applied. Still, though Rule 60(b)(5) motions must be brought within a
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“reasonable time.” See Fed. R. Civ. P. 60(c)(1). “What constitutes a reasonable
time “depends on the facts of each case, taking into consideration the interest in
finality, the reason for delay, the practical ability of the litigant to learn earlier of
the grounds relied upon, and prejudice to other parties.” Ashford v. Steuart, 657
F.2d 1053, 1055 (9th Cir. 1981).
ANALYSIS
A.

The Motion is Untimely
According to plaintiffs’ logic, the moment the Ninth Circuit handed down its

2011 decision, their attorneys were automatically entitled to an award of the
disputed fees. All they had to do was ask. Yet they waited 12 years before filing
this motion.
The Court is willing to overlook the four years following the Ninth Circuit’s
2011 decision because the parties entered into lengthy settlement negotiations
which resulted in their agreeing to disagree about the disputed fees. But that leaves
the eight years between June 2015 and June 2023. And those eight years are filled
with long, insufficiently explained silences. For starters, plaintiffs’ counsel waited
until December 2016—roughly 18 months after the fee stipulation was signed—
before sending a letter to defense counsel raising the fee issue. In that letter,
counsel offered to settle the matter for a $150,000 payment to Howard Belodoff,
one of the three attorneys who had worked on the matter in 2006 and 2007. Dec.

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20, 2016 Letter, Ex. 4 to Belodoff Dec., Dkt. 777-3. 1 After sending that December
2016 letter, Mr. Belodoff waited another four and one-half years before following
up with defense counsel in writing. On June 23, 2021, he sent an email to attorney
Chelsea Kidney, asking for a discussion of what he described as his “past due fees
and attempts to resolve this issue.” Belodoff Dec., Ex. 5, Dkt. 777-3. Once again,
defense counsel did not respond in writing, and, once again, Mr. Belodoff waited a
lengthy period—this time 15 months—before sending another written
communication.
In September 2022, Mr. Belodoff sent a letter to defense counsel, again
asking about the fee issue. This time, defense counsel responded in writing. In a
January 4, 2023, letter, defense counsel formally notified Mr. Belodoff that
defendants did not believe the disputed fees were owing, and, therefore, did not
intend to pay them. Within that letter, defense counsel stated, “We have learned
that this same request has been made and denied in the past, though perhaps not as
formally as you deemed necessary, Howard.” Jan. 4. 2023 Letter, Dkt. 777-4, at 1.
Roughly six months after receiving that January 4, 2023 letter, plaintiff filed the
pending motion.

1

Mr. Belodoff said that “[t]he other attorneys have not been involved in the case for
many years and have not requested any attorney fees.” Id.
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On this record, the Court cannot find that the motion was filed within a
“reasonable time.” As noted above, key considerations here include (1) prejudice
to the defendants; (2) finality; and (3) and the length of and reasons for the delay.
The first factor weighs in favor of the plaintiffs, as defendants have not claimed
any specific prejudice or surprise. But the second and third factors weigh heavily
in defendants’ favor.
Regarding finality, memories fade, claims grow stale, and relevant details
are lost to the sands of time. Mr. Belodoff alludes to this problem in his
declaration, where he referred to “recoverable” written communications. He also
refers—only generally—to “numerous conversations” he had with defense counsel
over the “subsequent years.” See Belodoff Dec., Dkt. 777-2, ¶ 2. In short, allowing
an issue to fester for over a decade does not serve the interests of finality. Just the
opposite.
Turning to the length of and reasons for the delay, courts have found
unexcused delays of much shorter than 12 years unreasonable. 2 Counsel argues that

2

See, e.g., Morse-Starrett Prods. Co. v. Steccone, 205 F.2d 244 (9th Cir. 1953)
(insufficiently explained 22-month delay in bringing Rule 60(b) motion unreasonable); James v.
United States, 603 F. Supp. 2d 472, 479 (E.D.N.Y. 2009) (unexplained 25-month delay in
bringing Rule 60(b)(5) motion unreasonable); Moses v. United States, 97 CIV 2833, 2002 WL
31011864, at *2 (S.D.N.Y. Sept. 9, 2002) (listing decisions that rejected 60(b) motions on
timeliness grounds for delays ranging from 10 to 20 months) (citations omitted); see also United
States v. Roccisano, 89 CR.206 (PKC), 2005 WL 3543695, at *2 (S.D.N.Y. Dec. 28, 2005)

(Continued)

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the delay here is excusable because during this entire time, he was raising the issue
with defendants. But at some point well before 12 years had elapsed, it was
incumbent upon plaintiffs’ counsel to act and clarify, rather than to simply express
frustration with defense counsel every so often. And counsel cannot overcome the
lengthy silences detailed above with a single, general statement that he had
“numerous” conversations with defense counsel over the decade-plus that this
issue was ongoing. See id. Finally, counsel’s heavy reliance on his assertion that, at
some unspecified point after June 2021, one of the attorneys working at the AG’s
office (Chelsea Kidney) told him defense counsel would negotiate the fee issue in
good faith, is misplaced. Specifically, Mr. Belodoff points to his September 2022
letter to defendants. Within that September 2022 letter, Mr. Belodoff pointed back
to his then 15-month-old, June 2021 letter to Ms. Kidney—saying that in response
to that June 2021 letter, Ms. Kidney had said “the ‘parties previously agreed to
negotiate fees in good faith to reduce the costs of implementation’ and the
Department was willing to negotiate in good faith towards resolution.’” Sept. 21,
2022 Letter from Belodoff to Kidney, Garrett & Stretch, Ex. 6 to Belodoff Dec.,
Dkt. 777-4.

(finding petitioner's 60(b) motion untimely because he had waited for approximately 25 months
to file it).
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As an initial matter, the Court will overrule defendants’ hearsay objection to
Ms. Kidney’s statement. Plaintiffs rightfully point out that such a statement is
admissible as an exception to the hearsay rule under Federal Rule of Evidence
801(d)(2)(A) and (C).
But Ms. Kidney’s statement does not show that plaintiffs acted within a
reasonable time. Based on the correspondence chain before the Court, the Court
can’t even tell whether Ms. Kidney’s statement about being willing to negotiate
relates to the disputed fees at issue in this motion. Rather, the email she responded
to raised various fee issues, not just issues related to the disputed fees. See Ex. 6 to
Belodoff Dec., Dkt. 777-4. And, more substantively, even if Ms. Kidney was
referring to the disputed fees, plaintiffs’ counsel still hasn’t adequately explained
the lengthy periods of inaction both before and after sending the June 2021 letter.
As already noted, counsel’s vague, general assertions that he had numerous
conversations with defense counsel over the years is insufficient to explain away
these periods of silence.
In sum, having considered the relevant factors here, the Court cannot find
that plaintiffs brought their motion in a reasonable time, as required by Rule 60.
Accordingly, the Court will deny the motion as untimely.

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B.

The Motion Lacks Merit
Alternatively, the Court will deny the motion on the merits. Plaintiffs

contend that “[w]hen the Ninth Circuit reversed the Court’s compliance
determination as a matter of law, the legal and factual basis justifying the 90% and
20% reductions in attorney fees were no longer applicable to the attorney fee
award.” Mtn. Mem., Dkt. 777-1 at 9. The Court disagrees. The fact that the Ninth
Circuit said this Court applied the wrong standard in deciding whether to vacate
the consent decrees does not negate the Court’s reasons for reducing plaintiff’s
counsel’s requested fee award in the first place. It bears repeating that before the
appeal in this matter, the Court determined plaintiffs were prevailing parties and
thus entitled to a fee award. And the Court did not reduce the fees simply because
it decided the consent decrees should be vacated. Rather, the fees were reduced
because plaintiffs’ counsel did not reasonably incur them. Indeed, even if the Court
had decided to leave the consent decrees in place after the 2007 compliance
hearing, it still would have reduced plaintiffs’ fee award for the reasons explained
at the time.
As the Court explained in 2007, plaintiffs’ attorneys’ fees were reduced
because, among other things, “prior to the hearing, Plaintiffs failed to concede
issues where it appeared that the defendants were clearly in compliance with the
consent decrees.” Order, Dkt. 707, at 14. Those sorts of factual determinations
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would have remained in place regardless of which standard the Court applied—
meaning that the fee reductions would likewise remain in place.
Similarly, regardless of who prevailed at the compliance hearing, plaintiffs’
counsel unreasonably incurred fees by not heeding the Court’s guidance in
preparing for that hearing. The Court had informed the parties it intended to make
its findings on an action-item-by-action-item basis, yet plaintiffs failed to present
evidence consistently with that instruction. Granted, on appeal, the Ninth Circuit
said the Court could not limit itself to considering only the action items. But that
doesn’t mean the Court would have totally abandoned the issue-by-issue method of
presentation. As the Court sees it, with the Ninth Circuit’s ruling in place, the
Court still would examine each action item individually (and thus asked counsel to
present evidence to accommodate that goal) and then, more broadly, asked whether
the general goals of the consent decree had been accomplished. See Jeff D., 643
F.3d at 288-89. Nothing about the Ninth Circuit’s ruling indicates that such an
approach to the compliance hearing was erroneous, or even inadvisable, for that
matter. To the contrary, the Jeff D. Court recognized that compliance with the
action items might be all that was needed to satisfy some of the overall purposes of
the decrees. Id. at 289. Thus, plaintiffs’ failure to heed the Court’s instruction
regarding presentation of evidence at the compliance hearing was unreasonable
before the Ninth Circuit reversal and it remains so afterward.
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More generally, the Court notes that after remand, a relatively small universe
of factual determinations, if any, would have changed based on application of a
different standard. After all, the key question would remain the same: Have
defendants substantially complied with Action Item X? And, more broadly: Have
the goals of the Consent Decree been accomplished? Under these circumstances,
the attorneys’ fees that had been unreasonably incurred would not simply
transform themselves into reasonable fees. In bringing their motion, plaintiffs don’t
engage with that more difficult, nuanced question. Instead, they present the
bluntest of arguments, effectively saying, “We prevailed on appeal so the district
court has no choice but to undo the earlier fee reduction.” For the reasons just
explained, the Court is not persuaded by that argument.
And plaintiff’s reliance on California Medical Association v. Shalala, 207
F.3d 575 (9th Cir. 2000) is misplaced because the case is distinguishable. In
Shalala, the district court awarded plaintiff damages under 42 U.S.C. § 1983 and
statutory attorney’s fees as well because the plaintiff was the “prevailing party.” Id.
at 576. The defendant appealed the merits of the judgment, and the Ninth Circuit
reversed. Id. After reversal, the defendant moved for relief from the attorney's fees
award under Rule 60(b)(5) in the district court. Id. The district court denied the
motion, saying that the plaintiff should have appealed. The Ninth Circuit reversed,
holding that the district court abused its discretion, even though the defendant did
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not appeal the attorney's fees award, because the merits judgment “provided the
ground on which [the plaintiff] based their motion for fees,” so the “reversal of the
merits remove[d] the underpinning of the fee award.” Id. at 577-78.
Shalala, then, presented a straightforward, binary situation – plaintiff won
the day in district court and was awarded fees. Defendant—the losing party across
the board in district court—then appealed and won. In that straightforward
situation, it almost goes without saying that defendant should no longer have to
pay the fees. That is not the case here. Rather, as has been noted several times now,
plaintiffs were deemed the prevailing party in the trial court. So Shalala is
distinguishable on that basis alone. And Shalala is further distinguishable here
because the Ninth Circuit didn’t upset this Court’s substantive factual
determination regarding compliance.
Finally, the Court is not persuaded by plaintiffs’ argument that this Court
should, in an exercise of its ancillary jurisdiction, order defendants to pay the
disputed fees. For the reasons already explained, the motion was untimely and the
fees were not reasonably incurred. The fact that courts have ancillary jurisdiction
to resolve attorneys’ fees disputes would not change the outcome.
ORDER
IT IS ORDERED that:
1. Plaintiffs’ Motion for Relief from Order Awarding Attorneys’ Fees (Dkt.
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777) is DENIED.
2. Defendants’ evidentiary objection (Dkt. 781) is OVERRULED.
DATED: November 1, 2023
_________________________
B. Lynn Winmill
U.S. District Court Judge

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