United States District Court, D. Idaho
THE UNITED STATES OF AMERICA, ex. rel. RAFTER H CONSTRUCTION, LLC, an Idaho limited liability company, and NEAL HIKIDA, Plaintiffs,
BIG-D CONSTRUCTION CORP, a Utah corporation, and BIG-D CORPORATION, a Utah corporation and DOE DEFENDANTS 1-20, Defendants.
MEMORANDUM DECISION AND ORDER
C. NYE U.S. DISTRICT COURT JUDGE
before the Court is Plaintiffs/Relators, Rafter H
Construction, LLC, and Neal Hikida's
(“Plaintiffs”) Motion for Attorney Fees and
Costs. Dkt. 15. Having reviewed the record and briefs, the
Court finds that the facts and legal arguments are adequately
presented. Accordingly, in the interest of avoiding further
delay, and because the Court finds that the decisional
process would not be significantly aided by oral argument,
the Court will decide the Motion without oral argument. Dist.
Idaho Loc. Civ. R. 7.1(d)(2)(ii). For the reasons set forth
below, the Court finds good cause to GRANT the Motion.
September 6, 2016, Plaintiffs filed a qui tam action pursuant
to the False Claims Act (“FCA”) against
Defendants Big-D Construction Corporation and Big-D
Corporation (“Defendants”). Plaintiffs filed
their Complaint under seal in the United States District
Court for the District of Idaho. On March 6, 2018, the United
States filed its Notice of Intervention for the Purpose of
Settlement and to Unseal the Case. Dkt. 13. Subsequently, on
April 24, 2018, Plaintiffs notified the Court that the matter
had settled and moved for dismissal of the Complaint. Dkt.
16. The Court granted the same on April 25, 2018. Dkt. 18.
Importantly, even though the Court dismissed the case, it
retained jurisdiction for the sole purpose of
“resolv[ing] any outstanding issues regarding
Relators' entitlement to a share of the proceeds of the
settlement amount and to attorneys' fees.” Dkt. 18,
settlement agreement in this case (the “Big-D
Settlement Agreement”) included another qui tam action
filed against the same Big-D defendants in the United State
District Court for the District of Utah. The Big-D
Settlement Agreement resulted in a payment by the Big-D
defendants to the United States in the amount of $1, 500,
00.00, of which $437, 100.00 was designated as settlement of
the Idaho Action. The Big-D Settlement Agreement specifically
preserved the Relators' right and claim to attorneys'
fees from the Big-D defendants. Following the Big-D
Settlement Agreement, the United States and the Relators
entered into a settlement agreement (the “Relator
Settlement Agreement”) regarding the disbursement of
the Relators' settlement proceeds pursuant to 31 U.S.C.
3730(d)(1). Importantly, the Relator Settlement Agreement
also specifically preserved the issue of Relators'
entitlement to expenses, costs, and attorneys' fees
pursuant to 31 U.S.C. § 3730(d)(1).
FCA action, a qui tam plaintiff is entitled to “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)
(emphasis added). Furthermore, these expenses “shall be
awarded against the defendant” and not taken out of the
overall proceeds-a portion of which the qui tam plaintiff is
also entitled to. Id.
determining that a basis exists for a proper award of
attorney fees, the Court must calculate a reasonable fee
award. Hensley v. Eckerhart, 461 U.S. 424, (1983).
Generally, the Court utilizes the “lodestar figure,
” which multiplies the number of hours reasonably
expended on the litigation by a reasonable hourly rate.
Id. The Court can then adjust the lodestar figure if
necessary, based upon the factors set forth in Kerr v.
Screen Extras Guild, Inc., 526 F.2d 67 (9th Cir.1975),
that have not been subsumed in the lodestar calculation.
See Camacho v. Bridgeport Fin., Inc., 523 F.3d 973,
982 (9th Cir. 2008).
Ninth Circuit has succinctly described the structure of an
FCA case as follows:
Under the False Claims Act, any person who defrauds the
United States Government is liable for civil penalties. 31
U.S.C. § 3729 (1994). Although the FCA requires the
Attorney General to investigate possible violations,
id. § 3730(a), the FCA also permits civil qui
tam actions by private persons, known as relators,
id. § 3730(b). In a qui tam action, the relator
sues on behalf of the government as well as himself. If the
relator prevails, he receives a percentage of the recovery,
with the remainder being paid to the government.
U.S. ex rel. Biddle v. Bd. of Trustees of Leland
Stanford, Jr. Univ., 161 F.3d 533, 535 (9th Cir. 1998).
“Two of the primary purposes of the FCA are to alert
the government as early as possible to fraud that is being
committed against it and to encourage insiders to come
forward with such information where they would otherwise have
little incentive to do so.” Id. at 538. After
a qui tam action has been filed, the government may elect to
“(1) intervene in such an action and take over its
prosecution, 31 U.S.C. § 3730(b)(2); (2) ‘pursue
its claim through any alternate remedy available to the
Government,' instead, id. § 3730(c)(5); or
(3) decide not to take any action, allowing the private
individual, . . . to pursue the claim to completion,
id. § 3730(c)(3).” United States v.
Sprint Commc'ns, Inc., 855 F.3d 985, 988 (9th Cir.
2017). If the government proceeds with an action, the qui tam
plaintiff is entitled to a share of the proceeds and his fees
and costs. 31 U.S.C. § 3730(d)(1).
case, the government elected to intervene. Subsequently, the
parties agreed to a settlement that encompassed both the
Idaho action and the Utah action. This outcome-as outlined in
the FCA-mandates that Plaintiffs receive a share of the
proceeds as well as their reasonable costs and attorney fees.
Defendants raise three arguments in opposition to
Plaintiffs' request for attorney fees. First, Defendants
claim that because this case was not filed first, Plaintiffs
are barred from recovering their fees and costs. Second,
Defendants claim that Plaintiffs requested fees are excessive
or improper. Third, Defendants assert that the Court should
apply any award as an offset to monies owing, rather than a
direct payment to either Plaintiffs or Plaintiffs'
Counsel. The Court will address each argument in turn.
First to file
claim that the instant action is a subsequent action and
therefore, Plaintiffs cannot recover their attorney fees.
While Defendants cite to a correct legal principle in FCA
actions,  this argument is misplaced for three
there is no indication that Plaintiffs knew about the Utah
action. While the Utah case was filed on December 16,
2011-almost five years before this case (Dkt. 24-3, at 3)-it
was not unsealed until October 6, 2017-approximately 11
months after this case was filed (Id. at
7). Plaintiffs' Counsel testified that they were wholly
unaware of the Utah action until it was unsealed and brought
to their attention. Dkt. 24-2, at 3. Additionally, the fact
that both complaints allege similar behavior-which, according
to Defendants, is an indication of a copycat suit-does not
indicate that these actions were filed as a coordinated
effort. Big-D points to seven lines that are similar between
the two suits, but any similarities are more likely due to
the fact that Big-D was engaging in similar behavior that
resulted in multiple lawsuits. In support of this idea is the
fact that the Big-D Settlement ...