981 F.3d 32
1st Cir.2020Background
- Akebia Therapeutics sought $312,899.22 in restitution under the Mandatory Victims Restitution Act (MVRA) for attorney and related fees incurred while cooperating with a DOJ investigation and prosecution of insider-trading-related crimes.
- The district court awarded roughly half (~$170,476.36), allowing costs for document compilation/production, employee prep for government interviews, some attorney time, transportation to court, and a reduced portion of time spent pursuing restitution; it disallowed many other categories (e.g., most outside-counsel trial attendance, FOIA work, PR, certain preparatory hours).
- Akebia petitioned this court for a writ of mandamus under the Crime Victims’ Rights Act (CVRA), arguing the district court misapplied precedent (overrelying on Supreme Court’s Lagos) and abused its discretion in excluding certain expenses.
- The core legal question was how to apply Lagos (limiting MVRA coverage for private-investigation costs and emphasizing “necessary” expenses) together with prior First Circuit tests (e.g., Janosko’s foreseeability, non-attenuation, and causation criteria).
- The First Circuit held the district court did not abuse its discretion: Lagos and Janosko are both applicable, Lagos sharpened focus on “necessary” expenses, and the district court reasonably resolved the fact-specific restitution items.
- The petition for a writ of mandamus was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court applied wrong precedent (Lagos vs Janosko) | Akebia: district court improperly "dispensed with" Janosko and over-relied on Lagos; Janosko’s foreseeability/causation test should govern | District Court/Defs: Lagos is controlling on scope and emphasizes necessity; Janosko’s tests still relevant but Lagos narrows the inquiry | Court: Both Lagos and Janosko apply; Lagos refines focus on "necessary" expenses but does not overrule Janosko; no abuse of discretion |
| Reduction of 80% of claimed hours for preparing and pursuing restitution | Akebia: hours were necessary and the court previously indicated such expenses covered | District Court: 137 hours were excessive/unreasonable; allowed only 20% as reasonable | Court: District court’s reduction was within its discretion; no clear error |
| Denial of fees for preparing corporate witnesses for DOJ meetings/trial prep | Akebia: preparatory work was necessary to participate in prosecution | District Court/Defs: witness preparation is primarily government prosecutors’ role, not reimbursable private-counsel work | Court: District court reasonably denied those hours as not necessary under MVRA; no abuse of discretion |
| Categorical refusal to reimburse attorneys for attending/reporting on criminal proceedings | Akebia: attendance protected Akebia’s confidential/proprietary interests and was foreseeable/necessary; district court even allowed travel costs | District Court/Defs: trial-attendance/reporting hours were neither necessary nor foreseeable (a luxury); allowed limited travel costs only | Court: District court did not adopt an improper per se rule and reasonably denied attendance hours; affirmed |
Key Cases Cited
- United States v. Lagos, 138 S. Ct. 1684 (2018) (Supreme Court holding MVRA does not cover expenses of private investigations and emphasizing MVRA reimburses only "necessary" expenses incurred during participation in government investigation/prosecution)
- United States v. Janosko, 642 F.3d 40 (1st Cir. 2011) (MVRA expenses must be caused by the offense, not too attenuated, and reasonably foreseeable)
- United States v. Newell, 658 F.3d 1 (1st Cir. 2011) (requiring case-specific, fact-intensive inquiry into foreseeability and necessity)
- United States v. González-Calderón, 920 F.3d 83 (1st Cir. 2019) (restitution must have a rational basis in the record and district court’s determination reviewed for abuse of discretion)
- United States v. Aguirre-González, 597 F.3d 46 (1st Cir. 2010) (CVRA mandamus petition is the exclusive appellate mechanism for victims challenging sentencing orders; apply ordinary appellate standards)
- United States v. Salas-Fernández, 620 F.3d 45 (1st Cir. 2010) (restitution’s purpose is to make the victim whole; district court need not be mathematically precise)