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United States ex rel. Jacobs v. CDS, PA

United States District Court, D. Idaho

November 30, 2018

UNITED STATES OF AMERICA ex rel. DR. JEFFREY JACOBS, Plaintiff,
v.
CDS, P.A. d/b/a POCATELLO WOMEN'S HEALTH CLINIC; POCATELLO HOSPITAL, LLC, d/b/a PORTNEUF MEDICAL CENTER, LLC, a Delaware limited liability company; LHP POCATELLO, LLC, a Delaware limited liability company, Defendants.

          MEMORANDUM DECISION & ORDER

          B. LYNN WINMILL JUDGE

         INTRODUCTION

         Before the Court is Plaintiff-Relator Dr. Jeffrey Jacobs' Renewed Motion for Reasonable Attorneys' Fees and Costs (Dkt. 71). Plaintiff seeks $106, 532 in attorneys' fees and $1, 130.57 in costs. For the reasons explained below, the Court will award the full amount of costs but will reduce the attorneys' fees to $79, 904.

         BACKGROUND

         In July 2014, Dr. Jeffrey Jacobs filed this action on behalf of the United States pursuant to the qui tam provisions of the False Claims Act, 31 U.S.C. § 3724 et. seq. Jacobs alleged that the Pocatello Women's Health Clinic and the Portneuf Medical Center submitted patient claims to the Medicare and Medicaid programs, falsely certifying that such claims were in compliance with the Stark Act, 42 U.S.C. § 1395nn and the Anti-Kickback Act, 42 U.S.C. § 1320a-7b. According to Dr. Jacobs, the medical center and the women's health clinic engaged in a scheme to illegally shift the clinic's overhead costs to the medical center as a reward to the clinic for its referrals to the medical center.

         In January 2017, Dr. Jacobs filed a Chapter 7 bankruptcy petition, and shortly after that the United States decided not to intervene in this action. See In re Jacobs, No. 17-00018-TLM (Bankr. D. Idaho); Notice of Election to Decline Intervention, Dkt. 53. The bankruptcy trustee did not intend to litigate this action on behalf of the bankruptcy estate; he was prepared to abandon the estate's interest in this action, which would have allowed Dr. Jacobs to pursue it on his own.

         When defendants learned of a potential abandonment, they indicated a willingness to settle. See Ex. B to Casperson Dec., Motion to Approve Compromise, Dkt. 65-4, at 6. In late 2017, defense counsel and the bankruptcy trustee reached an agreement. See Settlement Agreement, In re Jacobs, No. 17-00018-TLM, Dkt. 41-1 (Bankr. D. Idaho). Defendants agreed to pay $69, 087 to the United States. See Id. ¶ 1. Of this amount, the United States would keep $51, 816 and the remaining $17, 271 would be paid to Dr. Jacobs' bankruptcy estate. The settlement agreement did not obligate defendants to pay attorneys' fees incurred in this action, but Dr. Jacobs did not release that claim either. Id. ¶ 2. Instead, the settlement agreement provided that this Court would retain jurisdiction to enforce the terms of the settlement agreement, “including but not limited to any claim by Relator for attorneys' fees. See Id. ¶ 13; see also Joint Stipulation of Dismissal, Dkt. 63, ¶ 5 (“The Court will retain jurisdiction over the Parties to the extent necessary to enforce the terms and conditions of the Settlement Agreement, including but not limited to any claim by Relator for attorney's fees.”).

         Shortly after the settlement agreement was finalized, Dr. Jacobs asked the Court to award attorneys' fees and costs. See Dkt. 65. The Court denied the motion, without prejudice, because the bankruptcy trustee had not yet abandoned any claim to attorneys' fees. See June 7, 2018 Order, Dkt. 69, at 4-5. Jacobs reports that the trustee has now abandoned any claim to attorneys' fees. See Dkt. 71-1, at 1. Accordingly, he renews his motion for attorneys' fees. He asks the Court to award $106, 532 in attorneys' fees and $1, 130.57 in costs.

         DISCUSSION

         1. Plaintiff's Entitlement to Attorneys' Fees

         It is undisputed that the prevailing plaintiff in a declined qui tam action is entitled to receive “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)(2). Here, Dr. Jacobs settled the claim with defendants, so there is no question that his attorneys are entitled to a fee award.

         The calculation of a reasonable fee award involves a two-step process. Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1119 (9th Cir. 2000). First, the court calculates the presumptive fee award, also known as the “lodestar figure, ” by taking the No. of hours reasonably expended on the litigation and multiplying it by a reasonable hourly rate. Id. (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). Second, in “appropriate cases” the court may enhance or reduce the lodestar figure based on an evaluation of the factors set forth in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 69-70 (9th Cir.1975), that were not taken into account in the initial lodestar calculation. Intel Corp. v. Terabyte Intern., Inc., 6 F.3d 614, 622 (9th Cir.1993) (citation omitted).[1] The Ninth Circuit has cautioned that there is a “strong presumption” that the lodestar figure represents a reasonable fee and that adjustment upward or downward is “the exception rather than the rule.” D'Emanuele v. Montgomery Ward & Co., 904 F.2d 1379, 1384 (9th Cir. 1990).

         A. The ...


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