Peterson v. Sanborn Map Company, Inc.

Filing 81

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Relator James Peterson's motion for attorneys' fees and costs to be paid by Defendant is GRANTED in the amount of $82,540.00. (Doc. No. 72 .) A separate Order of Dismissal shall accom pany this memorandum and Order. The Order of Dismissal shall provide that this Court retains jurisdiction over the matter, pursuant to the Government's request, for the purpose of enforcing the terms of the settlement until such time as Defendant's payment obligations have been met. Signed by District Judge Audrey G. Fleissig on June 23, 2014. (BRP)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
UNITED STATES OF AMERICA,
ex rel. JAMES PETERSON,
Plaintiff,
v.
SANBORN MAP COMPANY, INC.,
Defendant.

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Case No. 4:11CV000902 AGF

MEMORANDUM AND ORDER
This qui tam action brought under the False Claims Act (“FCA”) is before the
Court on the motion of Relator James Peterson for attorneys’ fees in the amount of
$100,190.00, and $350.00 in litigation expenses, for a total of $100,540.00 to be paid by
Defendant Sanborn Map Company, Inc. For the reasons set forth below, the motion shall
be granted in the amount of $82,540.00.
BACKGROUND
Relator, a former vice president and general manager of Defendant, first met with
his counsel in July 2010. On May 19, 2011, Relator filed a 26-page complaint alleging
that Defendant violated the FCA by using unapproved subcontractors for digital mapping
work performed for the United States Army Corps of Engineers on three contracts. The
Government intervened in the action on July 31, 2013. Defendant and the Government
eventually reached a settlement agreement pursuant to which Defendant would pay the
Government $2.1 million and Relator would receive a share of the settlement amount

plus attorneys’ fees and costs. On July 17, 2013, Relator disputed that a settlement had
been reached because he had never agreed to the scope of the release of claims he had
against Defendant. On August 15, 2013, the Government filed a motion for the Court to
approve the settlement and to determine Relator’s share of the settlement and Relator’s
award of attorneys’ fees. On February 4, 2014, following a hearing, the Court rejected
Relator’s position and held that a settlement agreement, except with respect to Relator’s
share and fees, had been reached on June 25, 2013, and granted the Government’s
motion.
On February 25, 2014, Relator filed two motions: one for Relator’s share of the
settlement and one for attorneys’ fees and expenses to be paid by Defendant pursuant to
31 U.S.C. § 3730(d)(1). On April 10, 2014, the Court awarded Relator a 19% share of
the settlement, or $339,000.00. With respect to the motion for fees, the motion now
under consideration, Relator seeks reimbursement for 363.4 hours his three attorneys
spent on the case between July 14, 2010, and February 17, 2014. Relator asserts that his
counsel spent a total of 948.85 hours on this matter but that his counsel “exercised billing
judgment and discretion” in voluntarily excluding approximately 60% of the total hours
to eliminate or decrease entries that were not sufficiently descriptive, appeared to be
duplicative, included non-essential tasks, or were related to responding to the
Government’s motion to enforce the settlement agreement.
The 363.4 hours Relator claims that his counsel expended on this matter are
broken down between his three attorneys as follows:
• Law Office of Kevin Dolley, LLC:
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Kevin J. Dolley (lead attorney) - 183.4 hours
Conor R. McCullough (senior associate) - 12.1 hours
• Mielcarek Law Firm, LLC:
Ryan C. Mielcarek - 167.9 hours
(Doc. No. 73.) Specifically, Relator seeks fees for approximately:
• 15 hours for conducting initial investigations during which counsel met and
interviewed Relator and conducted a preliminary assessment of his claims;
• 21 hours of legal research into the action against Defendant as well as into the
specific complexities surrounding Defendant’s fraud as it pertained to the mapping
industry;
• 50 hours during the main investigation phase of the litigation reviewing
documents and conducting factual investigations to develop potential claims
against Defendant and to validate that the facts of Relator’s claim could be proven;
• 67 hours for drafting documents throughout the litigation:
24 hours drafting the qui tam complaint,
30 hours drafting the motion for Relator’s share, and
16 hours drafting the fee petition on review now;
• 41 hours for producing documents for the Government to assist in its
investigation, including assembling a binder with hard copy documents, creating a
flash drive with electronic documents, compiling Relator’s 60-page case summary
containing contracts between Defendant and the Government, project documents,
internal emails, task orders, and damage calculations, and generating an index of
the documents provided;
• 43 hours in settlement negotiations with the Government and Defendant;
• 39 hours communicating with the Government in regard to its investigation of the
claims and the case filing. Relator’s counsel stated that they remained in regular
contact with the Government through the course of litigation, and cooperated and
met with the Department of Justice during its two-year investigation of this matter;
and
• 82 hours meeting with, advising, and counseling Relator throughout the litigation.
(Id.)
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Relator requests $350.00 per hour for Dolley, which Relator states is consistent
with the $300.00 to $400.00 per hour Dolley’s firm charges for partner work; $200.00 per
hour for McCullough, which he asserts is consistent with the $150.00 to $200.00 per hour
Dolley’s firm charges for associate work; and $200.00 per hour for Mielcarek which is
what Mielcarek charges in non-contingent cases such as this. Relator argues that these
requested rates are reasonable and comparable to the market rates for partner, associate,
and solo practitioner work within the St. Louis community.
In support of these requested rates, Relator attached declarations from Dolley and
Mielcarek, detailing their qualifications (Doc. No. 73-5 to 73-7), articles discussing the
billing rates of Missouri attorneys (Doc. No. 73-8), and tables illustrating in-state rates
for Missouri attorneys and out-of-state rates for attorneys (Doc. No. 73-8). These
documents reveal that Relator’s requested hourly rates are less than or comparable to the
rates of Missouri attorneys generally. Also attached is the “Laffey Matrix 2003-2013”
which was prepared by the Civil Division of the United States Attorney’s Office for the
District of Columbia to be used in cases in which a fee-shifting statute permits the
prevailing party to recover reasonable attorneys’ fees (Doc. No. 73-9). The Laffey
Matrix reveals that the rates Relator requests are less than the rates courts considered
reasonable in 2012-2013 in the District of Columbia. Relator notes that the requested
rates are less than the hourly rate charged by Defendant’s counsel, an estimated $400.00
to $600.00 per hour.
In sum, Relator requests $100,190.00 to be paid by Defendant for attorneys’ fees.
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Additionally, Relator requests $350.00 in litigation expenses (cost of filing the
complaint), bringing the total requested amount to be paid by Defendant to $100,540.00.
Defendant argues that Relator’s requested amount for attorneys’ fees is
unreasonable despite the alleged “exercise in billing judgment.” Defendant states that the
Government purposely excluded Relator and Relator’s counsel from litigation because
Relator was “unreliable, exercised poor judgment, and provided bad information.”
Further, Defendant asserts that Relator unnecessarily complicated the proceedings as well
as the investigation. Defendant notes that Relator’s counsel does not have any experience
with qui tam litigation and therefore the requested hourly rates are unjustified. Defendant
believes that no more than $39,378.00 in attorneys’ fees is warranted in this matter
because Relator and Relator’s counsels’ involvement was minimal and the matter settled
prior to any discovery and without a trial.
Specifically, Defendant asserts that Relator’s fee application should be reduced as
follows:
• $17,080.00 for time spent researching, negotiating, and litigating Relator’s share
of the settlement because such work is not recoverable by law;
• $6,255.00 for the time spent on what Defendant characterizes as clerical work
including assembling binders of documents for the Government and creating an
index of the documents provided;
• $1,722.50 for “excessive” time spent conducting legal research and drafting
Relator’s motion for attorneys’ fees (reducing the total time spent on the fee
petition by 50%, from 16.1 hours to 8.05 hours);
• $3,102.50, or 50%, for “excessive” time Relator’s counsel spent drafting the
complaint, especially in light of the additional compensation requested for time
spent researching and gathering facts which likely contributed to the substance of
the complaint;
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• $2,650.00 for time Relator’s counsel spent, according to Defendant, “getting up to
speed” on qui tam actions; and
• $1,340.00 for time spent challenging the settlement agreement entered into on
June 25, 2013.
(Doc. No. 76.)
Defendant argues that the hourly rates of Relator’s counsels’ requests are
unreasonable because Relator’s counsels lack any experience in qui tam actions.
Defendant asserts that Dolley’s rate should be reduced to $250.00 per hour and
McCullough’s and Mielcarek’s rates should be reduced to $150.00 per hour, especially in
light of the fact that McCullough had only been practicing law for a little over a year
when this action commenced. Further, Defendant argues that Relator has not provided
any evidence establishing the prevailing hourly rates in St. Louis for qui tam actions by
attorneys with similar skills, experiences, and reputations as Relator’s counsels.
Defendant asserts that the time entries submitted by Relator are too vague to denote
whether they are duplicative or reasonable and therefore Relator’s total fee application
must be reduced by an additional 20% because Relator has failed to provide
“unequivocal” billing records to enable the Court to determine the reasonableness of the
time expended.
DISCUSSION
Under the FCA, where the Government intervenes in an action brought by a
relator and settles the claim, the defendant must pay the relator his or her “reasonable
expenses which the court finds to have been necessarily incurred, plus reasonable
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attorneys’ fees and costs.” 31 U.S.C. § 3730(d)(1). The Court is allowed discretion
when determining the amount of attorneys’ fees that should be awarded. Wal-Mart
Stores, Inc. v. Barton, 223 F.3d 770, 772 (8th Cir. 2000); Greggory G. v. Burlington
Resources Oil & Gas Co, LP., No. 4:10CV00088 CSM, 2013 WL 6150783, at *10
(D.N.D. Nov. 22, 2013).
A. Hourly Rate
The burden is on the party seeking the fee award to provide evidence supporting
the rate claimed and hours expended. U.S. ex rel. Thompson v. Walgreen Co., 621 F.
Supp. 2d 710, 713 (D. Minn. 2009) (citing Hensley v. Eckerhart, 461 U.S. 424, 433
(1983)). Reasonable attorneys’ fee should be calculated using the prevailing rates within
the relevant legal market. Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984). Based on the
evidence provided by Relator, this Court agrees with Relator that Dolley is entitled to an
hourly rate of $350.00 per hour, and McCullough and Mielcarek are entitled to an hourly
rate of $200.00 per hour.
B. Fees Related to Relator’s Share
Many jurisdictions, including the Eighth Circuit, “disallow compensation for
attorney’s fees and costs incurred in connection with the [R]elator’s share
negotiation/litigation.” See U.S. ex rel. Thompson, 621 F. Supp. 2d at 727; see also U.S.
ex rel. Rille v. Hewlett Packard Co., No. 4:04CV00989 BRW, 2011 WL 4625646, at *3
(E.D. Ark. Oct. 5, 2011) (following precedent within the Eighth Circuit in adopting the
Sixth Circuit’s rule that Defendant does not have to pay Relator’s attorneys’ fees for time
expended on litigating Relator’s share of the settlement in FCA actions); U. S. ex rel.
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Taxpayers Against Fraud v. Gen. Elec. Co., 41 F.3d 1032, 1046 (6th Cir. 1994).
Therefore, the Court agrees with Defendant that Relator’s fee application should be
reduced by $17,080.00 to account for the time spent on researching, negotiating, and
litigating Relator’s share.
C. Fees Related to Work Characterized by Defendant as Clerical
The Court accepts Relator’s assertion that the work characterized by Defendant as
clerical needed to be performed by an attorney familiar with the case. See U.S. ex rel.
LeFran v. Gen. Elec. Co., No. 4:00CV00222 JHM, 2008 WL 152091, at *4 (W.D. Ky.
Jan. 15, 2008) (holding that while some of the billed tasks appeared to be clerical, it was
necessary for them to be handled by an attorney familiar with the facts and law relating to
the case.)
D. Fees Related to Motion for Attorney’s Fees
Defendant argues that the 16.1 hours Relator alleges his attorneys spent
researching and preparing his fee application is excessive and should be reduced by 50%.
However, Defendant fails to point to specific time entries which are excessive, and the
Court does not believe that 16.1 hours is excessive for this task. See, e.g., Bowen, 2013
WL 942443, at *4 (holding that 20 hours expended on preparation of the fee application
was reasonable).
E. Fees Related to Drafting the Complaint
Defendant fails to explain how Relator could have drafted the complaint more
efficiently. Courts are awarded discretion when determining what a reasonable amount
of time is for a particular task. Bowman v. White, No. 0305225 JLH, 2006 WL 2221429,
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at *3 (W.D. Ark. Aug. 2, 2006) (noting that it is difficult to judge how long a task took
and that the Court may adjust the requested time as it sees fit.) While 24 hours would be
the maximum the Court would allow for this task, the Court agrees with Relator that 24
hours spent drafting the complaint is reasonable and should be included in Relator’s
award of attorney’s fees. The Court finds this reasonable based upon the complexity of
the case and the length of the complaint.
F. Fees Related to Time Relator’s Counsel Spent “Getting Up to Speed”
On review of the record, the Court agrees with Relator that the time Defendant
characterizes as time spent “getting up to speed” represents essential legal research into
the substantive law of the matter necessary to the success of the case. See, e.g., U.S. ex
rel. Kimball v. Cathedral Rock Corp., No. 4:03CV01090 HEA, 2010 WL 147810, at *1
(E.D. Mo. Jan. 11, 2010) (noting that ethical obligations require thorough research of the
law in each case even when a firm has extensive experience in qui tam actions because
the law might have changed). Relator’s fee application will thus not be reduced by
$2,650.00 as sought by Defendant.
G. Fees Related to Time Spent Challenging the Settlement Agreement
The Court agrees with Defendant that time spent by Relator’s counsel challenging
the settlement agreement after it was reached on June 25, 2013, is not compensable.
However, Defendant has not explained how it arrived at the $1,340.00 it seeks to strike
from the fee application. Upon the Court’s review of the billing records, it concludes that
Relator seeks fees for 4.6 hours expended on this task by Mielcarek after June 25, 2013.
Based upon Mielcarek’s rate, $200.00 per hour, the Court will reduce Relator’s fee
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application by $920.00.
H. Overall 20% Reduction to Relator’s Fee Application
Defendant asserts that Relator’s attorneys’ fees should be subjected to an overall
20% reduction because the billing record is vague in its entries which makes it impossible
to determine what tasks were completed and which warrant compensation. As explained
in U.S. ex rel. Thompson, a
Fee petitioner must submit evidence that justifies the hours which counsel is
claimed to have worked and where documentation of hours in inadequate, the
district court may reduce the awards accordingly. Therefore, the fee petitioner
should maintain billing records in a manner that will enable the reviewing court to
identify the distinct claims.
621 F. Supp. 2d at 727 (citations omitted). Here, the billing record submitted by Relator
sufficiently details how the 363.4 hours claimed by Relator were expended. The Court
therefore disagrees with Defendant and will not apply an overall 20% reduction to
Relator’s attorney’s fees award. Further, an overall 20% reduction is not warranted
because a reduction for any vagueness is already accounted for by Relator’s counsels’
60% reduction through “billing discretion” to the total hours expended.
CONCLUSION
The Court finds that Relator should be awarded $82,190.00 in attorneys’ fees.
This total reflects the requested loadstar total of $100,190.00 less $17,080.00 for fees
related to Relator’s share and $920.00 for fees related to challenging the settlement
agreement. Additionally, the Court shall award Relator $350.00 in litigation expenses.

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Accordingly,
IT IS HEREBY ORDERED that Relator James Peterson’s motion for attorneys’
fees and costs to be paid by Defendant is GRANTED in the amount of $82,540.00.
(Doc. No. 72.)
A separate Order of Dismissal shall accompany this memorandum and Order. The
Order of Dismissal shall provide that this Court retains jurisdiction over the matter,
pursuant to the Government’s request, for the purpose of enforcing the terms of the
settlement until such time as Defendant’s payment obligations have been met.

________________________________
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 23rd day of June, 2014.

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