MICHAEL SABO, NICHOLAS WELLS, JUAN PEREZ, ALAN PITTS, BILLY J. TALLEY, AIMEE SHERROD, and TYLER EINARSON on behalf of themselves and all other individuals similarly situated, Plaintiffs, v. THE UNITED STATES, Defendant.
No. 08-899C
In the United States Court of Federal Claims
July 26, 2016
SWEENEY, Judge
Application for Attorneys’ Fees and Expenses Under the EAJA; Antiassignment Act; Prevailing Party; Substantial Justification; Application of VASRD § 4.129 to Service Members Discharged With PTSD; 10 U.S.C. Chapter 61; Adequacy of Supporting Documentation
Douglas K. Mickle, United States Department of Justice, Washington, DC, for defendant.
OPINION AND ORDER
SWEENEY, Judge
Plaintiffs, and the members of the class they represent, were medically separated from the United States military due to posttraumatic stress disorder (“PTSD“) resulting from their service in Iraq and Afghanistan during Operation Iraqi Freedom and Operation Enduring Freedom. In conjunction with their separations, the military assigned them disability ratings for their PTSD of less than 50%. Contending that they were entitled to disability ratings of 50% for their PTSD under federal law, plaintiffs filed suit to obtain the higher disability rating and the benefits that would flow from that higher rating. The parties ultimately reached a settlement. Now before the court are plaintiffs’ applications for attorneys’ fees and expenses. As explained below, the court grants plaintiffs’ applications in their entirety and awards plaintiffs attorneys’ fees and expenses in the amount of $3,862,924.53.
I. BACKGROUND
To place the issues raised in plaintiffs’ applications for attorneys’ fees and expenses in the proper context, the court provides the following pertinent background information, beginning with an overview of the military‘s disability evaluation system.1
A. The Military‘s Disability Evaluation System
When a physical disability renders a member of the military unfit to perform his or her duties, the member may be separated or retired from service.
The military‘s disability evaluation process begins with a medical evaluation by a Medical Evaluation Board (“MEB“).3 DoDI 1332.38, ¶¶ E3.P1.1.1, E3.P1.2. The MEB documents the service member‘s medical condition,
PEBs conduct physical disability evaluations to determine “the fitness of Service members with medical impairments to perform their military duties[.]”
A case referred by an MEB is considered first by an informal PEB.
Once the PEB documents its findings and recommendations, a service member‘s case is referred to the final reviewing authority within the relevant military department for a final determination.
B. The VASRD and PTSD Disability Ratings in the Military‘s Disability Evaluation System
1. The Pre-2008 Statutory and Regulatory Framework
Prior to 2008, a service member with at least thirty days of active duty service who was deemed unfit for duty could be permanently retired pursuant to
The VASRD contains two provisions that specifically address PTSD. VASRD § 4.129 provides:
Mental disorders due to traumatic stress
When a mental disorder that develops in service as a result of a highly stressful event is severe enough to bring about the veteran‘s release from active military service, the rating agency shall assign an evaluation of not less than 50 percent and schedule an examination within the six month period following the veteran‘s discharge to determine whether a change in evaluation is warranted.
Although the military was statutorily required to use the VASRD to determine disability ratings, the Department of Defense recognized that some of the provisions of the VASRD were not applicable to the military‘s performance of this task. Specifically, it noted:
[N]ot all the general policy provisions in Sections 4.1 - 4.31 of the VASRD are applicable to the Military Departments. . . . [DoDI 1332.39] replaces these sections of the VASRD. The remainder of the VASRD is applicable except those portions that pertain to [VA] determinations of Service connection, refer to
internal [VA] procedures or practices, or are otherwise specifically identified in Enclosure 2 [of DoDI 1332.39] as being inapplicable.
DoDI 1332.39, ¶ 4.2.
One of the “general policy provisions” that the Department of Defense deemed inapplicable to the military concerned convalescent ratings. VASRD § 4.30 provides:
Convalescent ratings.
A total disability rating (100 percent) will be assigned without regard to other provisions of the rating schedule when it is established by report at hospital discharge (regular discharge or release to non-bed care) or outpatient release that entitlement is warranted under paragraph (a) (1), (2) or (3) of this section effective the date of hospital admission or outpatient treatment and continuing for a period of 1, 2, or 3 months from the first day of the month following such hospital discharge or outpatient release. . . .
(a) Total ratings will be assigned under this section if treatment of a service-connected disability resulted in:
(1) Surgery necessitating at least one month of convalescence. . . .
(2) Surgery with severe postoperative residuals . . . .
(3) Immobilization by cast, without surgery, of one major joint or more.
Convalescence ratings following extended hospitalization.
If a mental disorder has been assigned a total evaluation due to a continuous period of hospitalization lasting six months or more, the rating agency shall continue the total evaluation indefinitely and schedule a mandatory examination six months after the veteran is discharged or released to nonbed care.
Under certain diagnostic codes, the VASRD provides for a convalescent rating to be awarded for specified periods of time without regard to the actual degree of impairment of function. SUCH RATINGS DO NOT APPLY TO THE
MILITARY DEPARTMENTS. Convalescence will ordinarily have been completed by the time optimum hospital improvement (for disposition purposes) has been attained. If not, rate according to the manifest impairment.
DoDI 1332.39, ¶ 6.7.
The parties have not identified, and the court could not locate, any military regulations deeming VASRD § 4.129 to be a convalescent rating. However, in 2002 and 2005, the Army issued substantially identical policy memoranda to the presidents of its PEBs in which it declared that the 50% disability rating set forth in VASRD § 4.129 was a convalescent rating and that, therefore, it would not use VASRD § 4.129 when assigning disability ratings to soldiers deemed unfit for duty due to PTSD. See United States Army Physical Disability Agency, Memorandum for Physical Evaluation Board Presidents, Policy/Guidance Memorandum #7: The Department of Veterans Affairs Schedule for Rating Disabilities (VASRD) Ratings for Mental Disorders, Narcolepsy, and Sleep Apnea Syndrome, Enclosure 1, ¶ 1(e) (Feb. 25, 2005) (“The Army does not use convalescent ratings. Paragraph 4.129 . . . is essentially a convalescent rating and will not be used.“); United States Army Physical Disability Agency, Memorandum for Physical Evaluation Board Presidents, Policy/Guidance Memorandum #7: The Department of Veterans Affairs Schedule for Rating Disabilities (VASRD) Ratings for Mental Disorders, Narcolepsy, and Sleep Apnea Syndrome ¶ 4(a)(5) (Apr. 8, 2002) (same). It further bears noting that the Department of Defense distinguished convalescent ratings from observation ratings and minimum ratings, both of which the military departments would apply in the appropriate circumstances. See DoDI 1332.39, ¶¶ 6.8 (indicating that observation ratings apply to the military departments), 6.10.2 (“In some instances the VASRD provides a ‘minimum rating’ without qualifications as to residuals or impairment. Diagnosis alone is sufficient to justify the minimum rating. . . . Although higher ratings may be awarded in consonance with degree of severity, no rating lower than the ‘minimum’ may be used if the diagnosis is satisfactorily established.“).
2. The National Defense Authorization Act for Fiscal Year 2008 and Related Regulations
On January 28, 2008, Congress enacted the National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, 122 Stat. 3 (“2008 NDAA“). Title XVI of that Act was the Wounded Warrior Act,
[P]rocedures to eliminate unacceptable discrepancies and improve consistency among disability ratings assigned by the military departments and the [VA],
. . . .
(ii) Under such procedures, each Secretary of a military department shall, to the extent feasible, utilize the standard schedule for rating disabilities in use by the [VA] . . . .
Utilization of VA Schedule for Rating Disabilities in Determinations of Disability.–
(1) In making a determination of disability of a member of the armed forces for purposes of this chapter, the Secretary concerned–
(A) shall, to the extent feasible, utilize the schedule for rating disabilities in use by the [VA], including any applicable interpretation of the schedule by the United States Court of Appeals for Veterans Claims; and
(B) except as provided in paragraph (2), may not deviate from the schedule or any such interpretation of the schedule.
On October 14, 2008, the Department of Defense issued a policy memorandum regarding implementation of the Wounded Warrior Act. See Under Secretary of Defense for Personnel and Readiness, Memorandum for Secretaries of the Military Departments et al., Policy Memorandum on Implementing Disability-Related Provisions of the National Defense Authorization Act of 2008 (Pub. L. 110-181) (Oct. 14, 2008). With this memorandum, the Department of Defense rescinded DoDI 1332.39–pertaining to the military‘s application of the VASRD–and directed the military departments to prospectively apply VASRD § 4.129 to service members deemed unfit for duty due to PTSD.
[DoDI] 6040.44 . . . directs the PDBR in reviewing prior disability ratings to disregard any Military Department guidelines that were inconsistent with the VASRD. While reliance on section 4.130, rather than section 4.129, was arguably consistent with the VASRD, the PDBR has concluded that equity favors giving applicants the benefit of section 4.129. Consultations with the [boards for correction of military records (“BCMRs“)] indicate recognition of the desirability of consistency among the BCMRs and PDBR in adjudicating these cases.
Therefore, as a matter of policy, the PDBR and all three BCMRs will apply VASRD Section 4.129 to PTSD unfitting conditions for applicants discharged after September 11, 2001, and in such cases, where a grant of relief is appropriate, assign a disability rating of not less than 50% for PTSD unfitting conditions for an initial period of six months following separation, with subsequent fitness and PTSD ratings based on the applicable evidence.
C. Procedural History
1. The Complaint and Initial Attempts to Administratively Resolve the Claims of Plaintiffs and the Class Members
As previously noted, plaintiffs served in Iraq and Afghanistan and were subsequently diagnosed with PTSD. As a result, they were deemed unfit for duty and medically separated from their respective service branches. In accordance with the military‘s interpretation of the regulations then in effect, all were assigned disability ratings of less than 50% for their PTSD.
Believing that their assigned disability ratings were contrary to law, plaintiffs, on December 17, 2008, filed suit in this court on behalf of themselves and other similarly situated individuals. They sought to enjoin the military‘s practice of disregarding the VASRD when assigning disability ratings for PTSD, and requested the disability retired pay and other benefits that they would have received had they been assigned a 50% disability rating for their PTSD as required by
Defendant did not immediately file an answer to plaintiffs’ complaint. Instead, during a June 12, 2009 status conference, it proposed certain administrative procedures and policy
If you join this lawsuit, you will be given the opportunity to, but are not required to, apply for a prioritized review by a military records correction board . . . . You will be sent a preformatted application requesting assignment of higher rating(s) for PTSD than you received from the PEB.
If you file the application described in the prior paragraph, the board will correct your military records to show that your disability rating for PTSD was at least 50% for the six-month period following the date you were released from the service. In addition, the board will determine whether–between the date six months after your release from the service to the date of the board‘s review–your PTSD disability rating of at least 50% should be increased, decreased, or remain the same, but absent fraud or unforeseen circumstances, your application will not result in the board reducing the PTSD rating(s) that the PEB previously assigned to you. In other words, you cannot end up with lower disability ratings for PTSD by joining this lawsuit and applying for prioritized review . . . .
If you were medically separated or permanently retired by the PEB, then the PTSD rating assigned by the military records correction board for the later period (that is the date six months after your release to the date of the board‘s decision) will be a permanent disability rating for PTSD.
If you are currently on the [TDRL], and you join this lawsuit and file your application for prioritized review, the military records correction board cannot take you off the TDRL and separate you without giving you permanent disability retirement benefits.
Order Ex. 1 at 4-5, Dec. 18, 2009. The Notice also contained more detailed information regarding the records correction process:
If you join this lawsuit, you will be sent a special preformatted application form for use in applying to one of two military records correction boards – the [PDBR] or the [BCMR] of the service branch in which you served. Included with the application will be written advice from the lawyers who represent the veterans
After the board receives your application, it will obtain the medical records that were reviewed by the PEB in your case. If you have already applied for VA benefits and consent to the release of your VA records, the board may obtain from the VA a copy of the records that are in your VA claims file. . . . In addition, you may submit evidence about your PTSD that may not be in your PEB or VA claims file.
You will not have to travel to appear before the board, and the board will not hold a hearing. The board will make a decision based on the records described above and any documents you may submit.
How will the lawyers be paid?
[Class Counsel] are representing the veterans who filed this lawsuit and those who decide to join this lawsuit without charging any of these veterans any money. However, if Class Counsel obtains money or benefits for any of these veterans, they may ask the Court to order the government to pay their fees and expenses. Under no circumstances will any of these fees and expenses come from the money or benefits to which you may become entitled as a result of this lawsuit.
During the pendency of the stay of proceedings, plaintiffs became dissatisfied with the pace at which the PDBR was adjudicating the applications of the more than 2100 class members, notwithstanding defendant‘s representation that it established “the processes necessary to expedite review of the class members’ applications” to allow for “the boards to complete adjudications at a faster pace . . . .”7 Joint Status Report 2, June 21, 2010; see also
(indicating defendant‘s “hope[] that the average processing time for a Sabo class-member‘s application to move through the [processes] to be approximately five months on average[,] a considerable improvement over the typical 10-month average time it takes for non-Sabo cases to be processed.“). They further believed that some of the BCMR decisions were improper. Thus, on January 28, 2011, plaintiffs filed a motion to lift the stay of proceedings and a motion for summary judgment. The court granted plaintiffs’ motion to lift the stay on February 14, 2011.
2. The Settlement
Upon the lifting of the stay of proceedings, the parties resumed their settlement discussions. Shortly thereafter, on March 11, 2011, they jointly requested that proceedings again be stayed to accommodate their negotiations. The court granted the parties’ request, and proceedings remained stayed until July 15, 2011, when the parties filed a proposed “Settlement Agreement and Stipulation and Order of Dismissal.”
Paragraph six of the proposed settlement agreement contained the general settlement framework:
Within six months of the date on which the Court approves this Settlement Agreement, defendant shall take all steps necessary to execute the following actions:
(i) in the case of a class member who was separated or retired without being placed on the TDRL, change the military records of each such class member . . . so that they reflect (a) the member was placed on the TDRL and assigned a disability rating for PTSD of 50%, effective for the six-month period beginning on the date the member was released from active service, and (b) the member was taken off the TDRL, and assigned the permanent disability rating for PTSD listed in the applicable exhibit [attached to the settlement agreement], effective six months after the member was released from active service; or,
(ii) in the case of a class member who was placed on the TDRL, change the military records so that they reflect that the member was assigned a disability rating for PTSD of 50 percent, effective continuously for the TDRL period; and
(iii) in the case of a class member who was found to have an unfitting condition other than PTSD prior to release from active service, change the military records of that class member to reflect a combined disability rating for the member‘s unfitting conditions that takes into account the changes in the disability rating for PTSD made pursuant to subsection (i) or (ii) of this paragraph; and
(iv) transmit a copy of the changed military records . . . to (a) the class member, (b) counsel for the plaintiff class, and (c) the Defense Finance and Accounting Service . . . .
Settlement Agreement ¶ 6, July 15, 2011. Paragraphs seven through nineteen of the proposed settlement agreement contained language that divided the class members into nine groups based on certain shared characteristics (severance pay versus retired pay, placement on the TDRL, receipt of a decision from the PDBR or a BCMR),8 and described how the general settlement framework would be applied to each group. Of note, 1052 class members would receive lifetime military disability retirement pay and benefits without needing to secure a decision from the PDBR or a BCMR;9 893 class members already receiving military disability retirement pay and benefits would have their PTSD disability rating increased to 50% without needing to secure a decision from the PDBR or a BCMR;10 and 553 class members who had already obtained a decision from the PDBR or a BCMR would have the opportunity to reject that decision and obtain the relief provided for in the settlement agreement.11 Also of note, the parties identified approximately 517 class members who might be affected by an anomaly in the statutory formula for Combat-Related Special Compensation; paragraph twenty-six of the proposed settlement agreement provided a detailed mechanism to ensure that the affected class members would not see a reduction in pay as a result of the settlement.
The parties framed their proposed settlement agreement to ensure that the court would retain jurisdiction over the claims of a plaintiff or class member until the parties “submit[ted] to the Court a joint status report that lists . . . the names of those plaintiffs whose military records have been changed pursuant to the agreed upon terms [set forth in paragraphs one through nineteen.]”
As required by Rule 23(e) of the Rules of the United States Court of Federal Claims (“RCFC“), the court directed that notice of the proposed settlement be sent to all class members and then conducted a fairness hearing. Ultimately, in a December 22, 2011 Opinion and Order, the court granted the parties’ joint motion for final approval of the settlement agreement and approved the settlement as “fair, reasonable, and adequate.” Sabo v. United States, 102 Fed. Cl. 619, 630 (2011); see also
Upon the court‘s approval of the settlement agreement, the military departments began correcting the records of the class members in accordance with the terms of the agreement. Unfortunately, a number of issues arose that delayed full implementation of the settlement.12 Eventually, on February 6, 2013, plaintiffs filed a motion for judicial enforcement of the settlement agreement, which addressed defendant‘s delay in paying monetary benefits to approximately 950 members of the class. Plaintiffs filed a second motion for judicial enforcement of the settlement agreement on March 14, 2013, which addressed defendant‘s delay in paying monetary benefits to approximately 1050 other class members. Defendant did not file a response to either of the two motions. Instead, as reflected in an April 29, 2013 joint status report, the parties reached an agreement regarding the relief that plaintiffs sought in their two motions. Pursuant to that agreement, the parties began to submit the names of the class members whose claims could be dismissed from the lawsuit. The court dismissed the claims of the first group of class members on May 9, 2013. In every order dismissing class member claims, the court noted that the parties requested the entry of “an order dismissing [the] claims with prejudice and incorporating the terms of the parties’ settlement agreement,” and accordingly ordered that the claims be “dismissed with prejudice subject to the terms of the settlement agreement.” See, e.g., Order, May 9, 2013. As of the date of this Opinion and Order, the claims of only a single class member remain outstanding.
3. Plaintiffs’ Applications for Attorneys’ Fees and Expenses
On October 10, 2012, while the parties were working to implement the settlement, plaintiffs filed their initial application for attorneys’ fees and expenses (“fee application“), seeking reimbursement for fees and expenses incurred through October 31, 2011. Specifically, plaintiffs requested $498,414.74 in attorneys’ fees and $12,161.37 in expenses for the work
Eventually, on February 2, 2015, plaintiffs filed a motion to supplement and finalize their fee application (“supplemental fee application“). In their motion, plaintiffs sought reimbursement for attorneys’ fees and expenses incurred from November 1, 2011, through January 15, 2015, and represented that they were waiving any rights to seek reimbursement for attorneys’ fees and expenses incurred after January 15, 2015. Specifically, plaintiffs requested an additional $209,883.60 in attorneys’ fees and $3795.13 in expenses for the work performed by Morgan Lewis, and an additional $1,619,449.74 in attorneys’ fees and $41,766.58 in expenses for the work performed by the NVLSP. Defendant responded to plaintiffs’ motion on April 8, 2015, and plaintiffs filed a reply on May 29, 2015. Then, at the court‘s request, the parties filed status reports addressing the existence of additional authority. Plaintiffs’ request for attorneys’ fees and expenses is fully briefed, and the court deems oral argument unnecessary.
II. THE EQUAL ACCESS TO JUSTICE ACT
Plaintiffs seek an award of attorneys’ fees and expenses pursuant to section 204(a) of the Equal Access to Justice Act (“EAJA“),
Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses . . . incurred by that party in any civil action (other than cases sounding in tort) . . . brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.
III. PLAINTIFFS’ ENTITLEMENT TO AN AWARD OF ATTORNEYS’ FEES AND EXPENSES
A. The Antiassignment Act Does Not Bar Plaintiffs’ Fee Application
Before the court can determine whether the requirements of the EAJA have been satisfied in this case, it must address defendant‘s contention that plaintiffs’ fee application is barred by what is commonly referred to as the Antiassignment Act. The Antiassignment Act provides that an assignment of a claim, or an interest in a claim, against the United States “may be made only after a claim is allowed, the amount of the claim is decided, and a warrant for payment of the claim has been issued.”
[W]e also question whether [the fee application] even qualifies as an attorney fee application. The source of our concern is the application itself, which states that it is not being filed to recoup attorney fees (indeed counsel worked pro bono) but to fund a contribution to “charitable and legal services organizations” of the attorneys’ choosing.[] However, the clear language of the EAJA statute provides that attorney fees are paid to the prevailing party, not the attorney.
Mot. to Dismiss 6 n.4 (citation omitted). In response, plaintiffs stated that defendant‘s concern was unwarranted because “the retention arrangements in this case include assignment provisions regarding fee awards.” Resp. to Mot. to Dismiss 13. From this statement, and the fact that
As defendant correctly notes, under the EAJA, attorneys’ fees and expenses are to be awarded to the prevailing party, and not the party‘s attorneys.
However, courts have long recognized that certain types of agreements between parties and their attorneys do not violate the Antiassignment Act. For example, in Nutt, the United States Supreme Court (“Supreme Court“) held that a party‘s agreement to pay her attorney one third of the amount recovered on her claim against the United States did not violate the Antiassignment Act because the “agreement did not give the attorney any interest or share in the claim itself, nor any interest in the particular money paid over to the claimant by the government.” 200 U.S. at 20. In addition, in Phillips v. General Services Administration, 924 F.2d 1577 (Fed. Cir. 1991) (per curiam), the United States Court of Appeals for the Federal Circuit (“Federal Circuit“) held that a party‘s agreement to pay her attorney $2500 and “whatever additional fee that might be allowed” to her for his services did not violate the Antiassignment Act. Id. at 1579. The court explained:
[W]e construe the fee arrangement between [the party] and her attorney to mean that if an award of attorney fees is obtained on her behalf she is obligated to turn it over to her attorney. In this sense, [the party] incurs the attorney fees that may be awarded her. On the other hand, if no fee award is made to her, she does not have any obligation to pay any further fees to her attorney from her own resources. Inherent in the agreement is an intention on the part of [the party] to be obligated to her counsel for fees properly obtainable under the statute.
The Supreme Court in Ratliff did not overrule the holdings of Nutt, Phillips, or First Federal Savings & Loan, even upon holding that under the EAJA, attorneys’ fees and expenses are to be awarded to the prevailing party, and not the party‘s attorneys. See 560 U.S. at 591-93. Indeed, after reaching that conclusion, the Supreme Court acknowledged the federal government‘s continued practice of directing the payment of an EAJA award to a party‘s attorney when the party does not owe a debt to the United States and has assigned its right to the award to the attorney, but did not address whether the practice would be impermissible under the Antiassignment Act. Id. at 597-98. Rather, it noted both “the practical reality that attorneys are the beneficiaries and, almost always, the ultimate recipients of the fees that the statute awards to ‘prevailing part[ies],‘” and the necessity of “contractual and other assignment-based[] rights that typically confer upon the attorney the entitlement to payment of the fees award the statute confers on the prevailing litigant.” Id. at 598.
Defendant does not address the holdings of Nutt, Phillips, or First Federal Savings & Loan. Nor does it address the Supreme Court‘s failure to denounce the common practice of EAJA award assignments in Ratliff. Rather, defendant relies on an unpublished order from the United States District Court for the District of Arizona in which the court declined to pay an EAJA award directly to the plaintiff‘s attorney notwithstanding the fact that the plaintiff had assigned her rights to any EAJA award to her attorney. See Alexander v. Astrue, No. CV11-02465-PHX-DGC, 2012 WL 5989450, at *2-3 (D. Ariz. Nov. 29, 2012). The court acknowledged that “district courts in other circuits [had] ordered fees paid directly to counsel so long as the government [was] afforded an opportunity to offset any preexisting debt owed by the plaintiff, and the plaintiff [had] assigned all rights in the fee award to counsel.” Id. at *2. Nevertheless, it concluded that the assignment violated the Antiassignment Act. Id. at *3.
This court is not persuaded that the holding in Alexander is, as defendant contends, applicable in this case. First, defendant‘s argument that plaintiffs’ fee application is barred by the Antiassignment Act is based solely on plaintiffs’ representation that the retention agreements contain “assignment provisions regarding fee awards.” Plaintiffs acknowledge that they “assigned to counsel their interests in the proceeds of any fee awards.” Fee Appl. Reply 7. However, the precise language of the assignment provisions at issue is not before the court, and plaintiffs have not requested, either in their fee application or their supplemental fee application, that the court order any EAJA award be paid directly to their attorneys. Accordingly, there is no evidence that the assignment provisions do anything more than reflect plaintiffs’ agreement that their attorneys are entitled to any award of attorneys’ fees and expenses that plaintiffs might receive under the EAJA–a type of agreement that the Antiassignment Act does not forbid. See Phillips, 924 F.2d at 1582-83; accord Ratliff, 560 U.S. at 597-98.
Finally, none of the purposes of the Antiassignment Act would have been implicated if plaintiffs had requested, pursuant to an assignment agreement, that any EAJA award be paid to their attorneys. In Aetna Casualty & Surety Co. v. United States, the Supreme Court summarized the purposes of the Antiassignment Act:
Its primary purpose was undoubtedly to prevent persons of influence from buying up claims against the United States, which might then be improperly urged upon officers of the Government. Another purpose . . . was to prevent possible multiple payment of claims, to make unnecessary the investigation of alleged assignments, and to enable the Government to deal only with the original claimant.
338 U.S. 366, 373 (1949) (footnote and citation omitted); accord Nutt, 200 U.S. at 20 (“[The Antiassignment Act‘s] obvious purpose . . . was to forbid anyone who was a stranger to the original transaction to come between the claimant and the government, prior to the allowance of a claim . . . .“); cf. Tuftco Corp., 614 F.2d at 744-45 (“Over time, the courts, sensitive to the purposes of the [Antiassignment Act], exempted from [its] broad reach certain assignments when it was concluded assignment did not present the danger the statutes were designed to obviate.“). Plaintiffs’ assignment to their attorneys of any EAJA award they might receive raises no danger that third parties–not involved in the underlying dispute–could buy plaintiffs’ claims to pursue on their own behalf. Nor would such an assignment result in the multiple payment of claims–because plaintiffs’ attorneys worked pro bono, plaintiffs would have no incentive to seek an award of attorneys’ fees and expenses after assigning their right to any such award to their attorneys. And, an assignment in these circumstances would not require an investigation of the assignment, since defendant was already aware that plaintiffs intended to assign their rights to an EAJA award to their attorneys.
The court is also not persuaded by defendant‘s contention that plaintiffs’ assignment of their rights to an EAJA award undermines defendant‘s ability to exercise its right of offset against such an award. As defendant notes, EAJA awards are subject to administrative offset by
In sum, plaintiffs’ fee application is not barred by the Antiassignment Act. Accordingly, the court turns its attention to whether the requirements of the EAJA have been satisfied.
B. Plaintiffs Are Eligible to Recover Attorneys’ Fees and Expenses Under the EAJA
As a threshold matter, plaintiffs must establish their eligibility for an EAJA award. Specifically, each plaintiff must demonstrate that his or her net worth did not exceed $2,000,000 at the time the lawsuit was filed.
C. Plaintiffs Are Prevailing Parties
In addition to establishing their eligibility for an EAJA award, plaintiffs must demonstrate that they are prevailing parties. See
of Health & Human Res., 532 U.S. 598, 603-04 (2001); accord
Plaintiffs contend that they are prevailing parties by virtue of the court‘s approval of the parties’ settlement agreement in December 2011. Specifically, they note that (1) under the terms of the settlement agreement, all of the class members obtained relief on the merits of their claims; (2) the parties agreed in paragraph thirty-three of the settlement agreement that the terms of the settlement agreement would be adopted as an order of the court; and (3) the court, in its decision approving the settlement, ordered that the settlement agreement be approved and expressly retained jurisdiction over the class members’ claims to ensure the settlement‘s implementation. Defendant disputes plaintiffs’ contention that they are prevailing parties, arguing that the relief that plaintiffs obtained was the result of its own voluntary conduct.16 In particular, it contends:
[T]he parties voluntarily settled the case, the United States voluntarily changed its practices regarding implementation of the VASRD, the United States voluntarily determined that when effectuating its new policy regarding the application of certain VASRD provisions it would allow corrections board[s] to apply them retroactively, and the United States voluntarily determined that it would apply these new policies to the named plaintiffs and other former service members who met the regulatory provisions.
Because the court has not issued a judgment on the merits or a consent decree, plaintiffs may be considered prevailing parties only if the court has issued an order that is equivalent to a judgment or consent decree. Rice Servs., 405 F.3d at 1025. Plaintiffs do not contend that the court issued an order equivalent to a judgment on the merits. Thus, the court must determine whether it has issued an order that is equivalent to a consent decree. A consent decree is a court order that
embodies an agreement of the parties and thus in some respects is contractual in nature. But it is an agreement that the parties desire and expect will be reflected in, and be enforceable as, a judicial decree that is subject to the rules generally applicable to other judgments and decrees.
Rufo v. Inmates of the Suffolk Cty. Jail, 502 U.S. 367, 378 (1992). The court agrees with plaintiffs that the December 22, 2011 Opinion and Order, especially when read in conjunction with the subsequent orders in which the court dismissed the claims of class members who had received relief pursuant to the terms of the settlement agreement, is the functional equivalent of a consent decree.
In its December 22, 2011 Opinion and Order, the court approved the settlement—which provided that each class member would, at a minimum, have his or her military records corrected to reflect a 50% disability rating for PTSD for a six-month period—pursuant to
This conclusion is buttressed by the fact that the court incorporated the terms of
Defendant’s arguments regarding the voluntary nature of its conduct are misplaced. In any case where the litigants are pursuing a settlement, when a settlement is reached that provides a plaintiff with some relief, the defendant necessarily has voluntarily agreed to provide that relief. If the court does not thereafter issue an order approving the settlement, the plaintiff’s lawsuit would be considered merely the catalyst for the defendant’s changed conduct, foreclosing the plaintiff’s ability to be deemed the prevailing party. See Buckhannon, 532 U.S. at 605 (“A defendant’s voluntary change in conduct, although perhaps accomplishing what the plaintiff sought to achieve by the lawsuit, lacks the necessary judicial imprimatur on the change.”), 606 (“We cannot agree that the term ‘prevailing party’ authorizes federal courts to award attorney’s fees to a plaintiff who, by simply filing a nonfrivolous but nonetheless potentially meritless lawsuit (it will never be determined), has reached the ‘sought-after destination’ without obtaining any judicial relief.”); see also Rice Servs., 405 F.3d at 1026-28 & n.5 (holding that an order in which a court acknowledged an agency’s intent to take corrective action, directed the agency to take the corrective action, granted the government’s motion to dismiss the lawsuit as moot, and dismissed the lawsuit “without prejudice to the assertion of any new protest action addressed to the remedial action in progress” was not the equivalent of a consent decree, and that the plaintiff’s lawsuit merely served as a catalyst for the agency’s voluntary change in conduct). However, a plaintiff’s lawsuit is more than just a catalyst for the defendant’s changed conduct when it results in a court order in which the court
In sum, plaintiffs have established that they are prevailing parties under the
D. The Government’s Position Was Not Substantially Justified
Once a plaintiff establishes that it is a prevailing party, the burden shifts to the defendant to prove that “the position of the United States was substantially justified . . . .”
For a court to conclude that the government’s position was “substantially justified,”
Overall, “[w]hether or not the position of the United States was substantially justified shall be determined on the basis of the record (including the record with respect to the action or failure to act by the agency upon which the civil action is based) which is made in the civil action for which fees and other expenses are sought.”
The court begins its analysis by evaluating whether the military’s failure, prior to October 2008, to apply
a. VASRD § 4.129 Was Applicable to the Military Prior to 2008
Defendant first argues that the military’s prelitigation position was substantially justified because
The court rejects defendant’s characterization of
notwithstanding their authority to promulgate regulations to implement the statutory provisions.20 See Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-43 & n.9 (1984) (holding that if the intent of Congress is clear from the language of the statute, then the court and the agency must give effect to that intent); Fed. Election Comm’n v. Democratic Senatorial Campaign Comm., 454 U.S. 27, 32 (1981) (“[Courts] must reject administrative constructions of the statute . . . that are inconsistent with the statutory mandate or that frustrate the policy that Congress sought to implement.”). Thus, while the Secretaries of the military departments have “all powers, functions, and duties incident to the determination” of service members’ “percentage of disability,”
Indeed, paragraph 4.2 of
First, defendant misapplies paragraph 4.2 of
When a mental disorder that develops in service as a result of a highly stressful event is severe enough to bring about the veteran’s release from active military service, the rating agency shall assign an evaluation of not less than 50 percent and schedule an examination within the six month period following the veteran’s discharge to determine whether a change in evaluation is warranted.
Second, contrary to defendant’s assertion,
In sum, because the military departments were required by statute to apply the
b. VASRD § 4.129 Is Not a Convalescent Rating
Defendant next argues that the military’s prelitigation position was substantially justified because the military reasonably considered
As noted above, the Department of Defense’s rejection of convalescent ratings is set forth in paragraph 6.7 of
Under certain diagnostic codes, the VASRD provides for a convalescent rating to be awarded for specified periods of time without regard to the actual degree of impairment of function. SUCH RATINGS DO NOT APPLY TO THE MILITARY DEPARTMENTS. Convalescence will ordinarily have been completed by the time optimum hospital improvement (for disposition purposes) has been attained. If not, rate according to the manifest impairment.
However, neither the Department of Defense nor the military departments have issued
As described in
c. Plaintiffs’ Alleged Waiver of Their Right to Judicial Relief Is Irrelevant
Finally, defendant argues that the military’s prelitigation position was substantially justified because plaintiffs waived their right to judicial relief by not challenging the military’s failure to apply
d. Defendant Has Not Established That the Military’s Prelitigation Position Was Substantially Justified
To sum up, the court has rejected each of the arguments presented by defendant in support of its contention that the military’s prelitigation position was substantially justified. Contrary to defendant’s arguments,
2. Although Defendant’s Decision to Pursue a Settlement Was Substantially Justified, Defendant Has Not Satisfied Its Burden of Proof With Respect to Other Litigation Positions
Defendant’s failure to establish that the military’s prelitigation position was not substantially justified does not, however, end the court’s inquiry. The court must also determine whether defendant’s litigation positions were substantially justified.
As recounted above, after plaintiffs filed their complaint on December 17, 2008, defendant proposed administrative procedures and policy changes to resolve plaintiffs’ claims. While the parties discussed defendant’s proposal, plaintiffs filed an amended complaint and the court certified the case as a class action. Defendant did not file an answer to the complaint or the amended complaint. By December 18, 2009, the parties reached an agreement regarding the procedure for resolving plaintiffs’ and the class members’ claims. The court stayed proceedings to allow the parties to implement their agreement. However, plaintiffs became dissatisfied with the pace of implementation. Therefore, on January 28, 2011, they filed a motion to lift the stay of proceedings and a motion for summary judgment. The court lifted the stay shortly thereafter and defendant, rather than responding to plaintiffs’ summary judgment motion, re-engaged plaintiffs in settlement discussions. At the parties’ request, the court stayed proceedings on March 24, 2011, and then, on July 15, 2011, the parties filed their proposed settlement agreement. The court approved the settlement agreement on December 22, 2011. Full implementation of the settlement was delayed, leading plaintiffs to file motions for judicial enforcement of the settlement on February 6, 2013, and March 14, 2013. Defendant did not respond to these motions but instead worked with plaintiffs to reach a resolution. Eventually, class members began to obtain the relief to which they were entitled under the settlement agreement and on May 9, 2013, the court began to dismiss the claims of class members who had obtained such relief.
Defendant identifies three factors in support of its contention that its litigation position was substantially justified. First, defendant notes that it agreed to settle the case “in the interest
Plaintiffs disagree that defendant’s litigation position was substantially justified. In their fee application, they contend that the parties’ original agreement provided for an expedited review of all class member applications by the PDBR and BCMRs, but that defendant did not allocate sufficient resources for such an expedited review despite its promises to do so, derailing the agreed-to process. Ultimately, as reflected in the court-approved settlement agreement, the parties decided on a process in which no class member was required to apply to the PDBR or a BCMR to obtain relief. As a result, plaintiffs assert, they needlessly expended enormous resources in preparing, processing, and filing PDBR and BCMR applications for plaintiffs and the class members. Further, in their reply in support of their fee application, plaintiffs contend that defendant is incorrect, as a matter of law, in asserting that the court could not provide them with their requested relief, and that, in fact, the court-approved settlement agreement did not require adjudication by the PDBR or the BCMRs. Plaintiffs also argue that consideration of defendant’s waiver argument would impermissibly require the court to consider evidence outside of the existing record, and that in any event, they could have successfully resisted any motion to dismiss.
Before the court can determine whether defendant’s litigation position was substantially justified, it must first answer the question, “What was defendant’s litigation position?” Notably, it is not possible to ascertain defendant’s litigation position with respect to the merits of plaintiffs’ claims. Defendant did not file an answer in response to either of plaintiffs’ complaints and therefore did not admit or deny any of plaintiffs’ allegations or articulate any affirmative defenses. The parties did not file a joint preliminary status report, a document that might have reflected defendant’s position. And, defendant neither filed a response to plaintiffs’ motion for summary judgment nor filed its own dispositive motion. It was not until defendant filed its response to plaintiffs’ fee application that it advanced a position on the merits of plaintiffs’ claims by describing the defenses it would have offered had it chosen to do so.23 Defendant’s
Although defendant never formally took a position on the merits of plaintiffs’ claims, it did take other actions that can be evaluated by the court. Defendant proposed administrative procedures and policy changes to resolve plaintiffs’ claims and worked with plaintiffs to reach an agreement with respect to that proposal. Then, when plaintiffs objected to the pace at which defendant was implementing the agreement by seeking to lift the stay of proceedings and filing a motion for summary judgment, defendant re-engaged plaintiffs in settlement discussions, which resulted in a court-approved settlement agreement. Finally, when plaintiffs lodged objections to the implementation of the settlement agreement, defendant worked with plaintiffs to resolve the issues. All of these actions constitute reviewable litigation positions.
Defendant contends that its decision to pursue a settlement with plaintiffs was substantially justified, and the court agrees.24 Indeed, given that the military was always obligated to apply
3. The Government’s Overall Position Was Not Substantially Justified
Having determined that the military’s prelitigation position was not substantially justified, that defendant’s decision to pursue a settlement was substantially justified, and that defendant did not satisfy its burden of proof with respect to its efforts to implement the parties’ original agreement to resolve plaintiffs’ and the class members’ claims, the court must determine whether, in light of “the entirety of the government’s conduct,” Chiu, 948 F.2d at 715, “the position of the United States was substantially justified,”
E. There Are No Special Circumstances Making an Award of Attorneys’ Fees and Expenses Unjust
Even though defendant has not established that the government’s position was substantially justified, the court cannot award plaintiffs attorneys’ fees and expenses if “special circumstances make an award unjust.”
[T]he Government should not be held liable where “special circumstances would make an award unjust.” This “safety valve” helps to insure that the Government is not deterred from advancing in good faith the novel but credible extensions and interpretations of the law that often underlie vigorous enforcement efforts. It also gives the court discretion to deny awards where equitable considerations dictate an award should not be made.
Defendant does not identify any special circumstances that would make an award of attorneys’ fees and expenses unjust in this case. And, the court does not discern the presence of any special circumstances—defendant was not attempting to advance a “novel but credible extension[] and interpretation[] of the law,” and there are no “equitable considerations” foreclosing an award of attorneys’ fees and expenses. Accordingly, the court concludes that plaintiffs, having satisfied all of the
Having concluded that an
“fees and other expenses” includes the reasonable expenses of expert witnesses, the reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party’s case, and reasonable attorney fees (The amount of fees awarded under this subsection shall be based upon prevailing market rates for the kind and quality of the services furnished, except that (i) no expert witness shall be compensated at a rate in excess of the highest rate of compensation for expert witnesses paid by the United States; and (ii) attorney fees shall not be awarded in excess of $125 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.)[.]
To determine the amount of “reasonable attorneys fees,”
Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. . . . In these circumstances the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in
the lawsuit. Litigants in good faith may raise alternative legal grounds for a desired outcome, and the court’s rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee. The result is what matters.
Id. at 435 (citation omitted).
In determining the amount of allowable expenses, a court “must use its discretion, in view of the record before it, to determine whether a specific expense may be recovered by the” prevailing party. Oliveira, 827 F.2d at 744. The “expenses of an attorney that are not incurred or expended solely or exclusively in connection with the case before the court, or which expenses the court finds to be unreasonable or unnecessary in the pending litigation, cannot be awarded under the EAJA.” Id.
The prevailing party bears the burden of supporting its application for attorneys’ fees and expenses with documentation that will enable an evaluation of the reasonableness of its request. See Hensley, 461 U.S. at 437; Owen v. United States, 861 F.2d 1273, 1275 (Fed. Cir. 1988) (per curiam). “Sufficient documentation requires ‘contemporaneous records of exact time spent on the case, by whom, their status and usual billing rates, as well as a breakdown of expenses such as the amounts spent copying documents, telephone bills, mail costs and other expenditures related to the case.’” Cmty. Heating & Plumbing Co. v. Garrett, 2 F.3d 1143, 1146 (Fed. Cir. 1993) (quoting Naporano Iron & Metal Co. v. United States, 825 F.2d 403, 404 (Fed. Cir. 1987)); see also Hensley, 461 U.S. at 437 n.12 (noting that time records should “identify the general subject matter of [the] time expenditures,” but need not reflect “in great detail how each minute . . . was expended”). If the documentation is inadequate, the court “may reduce the award accordingly.” Hensley, 461 U.S. at 433.
A. Plaintiffs’ Attorneys
When they filed this lawsuit, plaintiffs were ably represented by Brad Fagg from Morgan Lewis and Barton F. Stichman from the NVLSP. Mr. Fagg is a partner in Morgan Lewis’s litigation department who has practiced law for more than twenty years. Mr. Stichman is joint executive director of the NVLSP, an independent nonprofit veterans service organization, who has practiced law since 1975. Attorneys from Morgan Lewis and the NVLSP—including Mr. Fagg and Mr. Stichman—were appointed as class counsel by the court on September 29, 2009. During the pendency of this litigation, Mr. Fagg was assisted by more than fifteen attorneys from Morgan Lewis and Mr. Stichman was assisted by eleven attorneys and a law clerk at the NVLSP. The attorneys from Morgan Lewis and the NVLSP have represented plaintiffs and the class pro bono.
In their fee application, plaintiffs request reimbursement for attorneys’ fees and expenses incurred through October 31, 2011, for the work performed by attorneys from Morgan Lewis and the NVLSP. Their attorneys engaged in the following activities during that time:
- Initial research regarding identification and selection of, as well as initial consultations with, appropriate class representatives, and research and drafting of both the original and First Amended Complaints;
- Research and drafting class allegations, including preliminary approval of the class and drafting the notice to putative class members;
- Negotiation with the Government on its proposal to provide relief through the use of the [PDBR] and the individual military service branches’ [BCMRs], including negotiating details of the administrative process, drafting revised PDBR and BCMR application forms, and finalizing terms of Memorandum of Understanding with Government;
- Provide resources and counseling to putative class members regarding the application process to these various review boards, including preparation of training materials and actual training of attorneys providing advice and counsel;
- Analyze cases of putative class members not identified by the Government, resulting in identification of over 100 additional putative class members;
- Respond to thousands of calls from the over 4,400 putative class members with individualized legal advice and answers to question regarding process;
- Draft different sets of written legal advice, depending on the individual class member’s situation, about which military review board to apply to, and how best to pursue relief on the merits;
- Monitor progress of opt-in process, including tracking and documenting 2,176 opt-ins and hundreds of undeliverable legal notices for use in Status Reports and notice to Government;
- Research, and counseling regarding, various military benefits effected by proposed class relief, including effects of glitch in statutory calculation formula for Combat-Related Special Compensation;
Respond to thousands of calls from among the 2,176 opted-in class members about the interim administrative process and status of lawsuit, as well as training to pro bono attorneys from corporate partners to help with same; - Continued monitoring and data administration of military review board decision process, including reviewing sufficiency of, and correcting errors in, over 1,200 applications received by class counsel for review before submission to the various review board[s];
- Development and update of litigation website for putative class members;
- Periodic search of Government web portal for new military review board decisions, and follow-up analysis of over 600 decisions to provide legal advice to class members and information to the Court through Status Reports;
- Research and preparation of motion to lift stay;
- Research and preparation of motion for summary judgment;
- Negotiations with Government counsel to resolve case, including drafting the final settlement agreement and the motion for preliminary approval of class action litigation;
- Research to determine the appropriate placement of class members in the nine discrete subgroups created for purposes of settlement;
- Research for inclusion with legal notice of the settlement agreement the individualized information for each of the 2,176 distinct Disclosure Statements;
- Respond to hundreds of individual class member inquiries regarding the Settlement Agreement and impact on them; and
- Numerous appearances at Court status hearings, as well as preparation and filing of numerous joint status reports.
Fee Appl. Ex. 2 at ¶ 6, Ex. 3 at ¶ 5. For this work, plaintiffs request $498,414.74 in attorneys’ fees and $12,161.37 in expenses charged by Morgan Lewis, and $1,467,303.16 in attorneys’ fees and $43,403.33 in expenses charged by the NVLSP. They represent that during the relevant time period, the attorneys at Morgan Lewis typically billed at hourly rates between $235 to $825, and although the NVLSP does not have billable rates, the prevailing market rates for its attorneys’ services ranged from $225 to $475 per hour. Because these hourly rates exceed the maximum
Defendant raises three objections to plaintiffs’ fee application. First, it argues that because the military was “acting in accordance with the applicable law and regulations” until July 1, 2008, plaintiffs’ claim should be reduced to “exclude fees related to all plaintiffs whose PEB determinations were made” prior to that date. Fee Appl. Resp. 30. Based on the number of months that the military was purportedly acting properly relative to the time period at issue in this lawsuit, defendant avers that plaintiffs’ claim should be reduced by 93%. Defendant’s second objection relates to the $11,574.37 in attorneys’ fees claimed for “preparing for press conferences and other media related matters,” which defendant asserts are not allowable.
In their reply in support of their fee application, plaintiffs acknowledge the accuracy of defendant’s latter two objections and accordingly reduce their request for attorneys’ fees and expenses by $33,253.12. With respect to defendant’s first objection, plaintiffs contend that “prior to the filing of this lawsuit, the government never acted in compliance with ‘applicable law and regulation’” because the military did not, as required, apply
The court finds that the attorneys’ fees and expenses requested by plaintiffs in their fee application, as amended, were reasonable and necessary to pursue this litigation. Accordingly, the court awards plaintiffs $1,988,029.48 for attorneys’ fees and expenses incurred through October 31, 2011, for the work performed by attorneys from Morgan Lewis and the NVLSP.
C. Plaintiffs’ Supplemental Fee Application
In their supplemental fee application, plaintiffs request reimbursement for attorneys’ fees and expenses incurred for the work performed by attorneys from Morgan Lewis and the NVLSP from November 1, 2011, through January 15, 2015. During that time period, their attorneys engaged in the following activities:
- Prepare motions, engage in communications with government representatives, perform research, and take other steps to enforce settlement agreement with respect to categories of class members, as well as individual class members;
Extensive communications with government personnel regarding interpretation and enforcement of the Settlement Agreement; - Research, including individualized research and factual investigation, regarding impacts and elections for large numbers of class members;
- Respond to hundreds and hundreds of calls from class members with individualized legal advice and answers to questions regarding process and impacts;
- Research, and counseling regarding, various military benefits effected by proposed class relief, including effects of glitch in statutory calculation formula for Combat-Related Special Compensation;
- Tracking and monitoring of individual relief, and follow-up analysis to provide legal advice to class members and information to the Court through Status Reports; and
- Research and prepare
EAJA fee application and briefing in response to opposition to same.
Suppl. Fee Appl. Ex. 1 at ¶ 5, Ex. 2 at ¶ 5. For this work, plaintiffs request $209,883.60 in attorneys’ fees and $3795.13 in expenses charged by Morgan Lewis, and $1,619,449.74 in attorneys’ fees and $41,766.58 in expenses charged by the NVLSP. Plaintiffs represent that during the relevant time period, the attorneys at Morgan Lewis typically billed at hourly rates between $410 to $825, and the prevailing market rates for NVLSP’s attorneys’ services ranged from $240 to $520 per hour. However, to conform to the
Defendant opposes plaintiffs’ supplemental fee application, arguing that plaintiffs have not provided sufficient supporting detail that would permit defendant to evaluate whether the claimed hours were reasonably expended.25 It explains that the bulk of the claimed hours relate
The parties agree that courts have awarded attorneys’ fees and expenses for monitoring and enforcing consent decrees and similar judgments. See, e.g., Pennsylvania v. Del. Valley Citizens’ Council for Clean Air, 478 U.S. 546, 561 (1986) (concluding that the activities of the respondent’s attorneys were “crucial to the vindication of [the respondent’s] rights under the consent decree” and that “compensation for these activities was entirely proper”); see also Binta B. v. Gordon, 710 F.3d 608, 623-25 (6th Cir. 2013) (describing a split in the federal circuit courts regarding whether, post-Buckhannon, attorneys’ fees and expenses are allowable for monitoring and enforcement activities that do not result in additional court-ordered relief26). In addition, there is no dispute that such attorneys’ fees and expenses, as with all other fees and expenses, are reimbursable only to the extent that they are reasonable and necessary. See Ass’n for Retarded Citizens of N.D. v. Schafer, 83 F.3d 1008, 1011 (8th Cir. 1996) (citing Hensley, 461 U.S. at 424).
As defendant notes, an application for attorneys’ fees and expenses must be supported by documentation sufficiently detailed to permit an evaluation of the reasonableness and necessity of the claimed fees and expenses. See Hensley, 461 U.S. at 437; Owen, 861 F.2d at 1275. To satisfy this requirement, plaintiffs submitted (1) statements containing itemized billing entries that included the name of the attorney who performed the work, the date the work was
As an initial matter, the court notes that although defendant contends that plaintiffs’ documentation—the itemized billing entries in particular—lack sufficient detail, it does not identify any specific billing entry that describes nonallowable work or is inappropriately vague. Rather, defendant merely states, without support, that “[a] majority of the entries in plaintiffs’ submitted billing statements simply note that plaintiffs’ counsel ‘contact[ed]’ or ‘communicat[ed]’ with ‘Sabo plaintiffs.’” Suppl. Fee Appl. Resp. 2-3. However, a review of the documentation submitted by plaintiffs does not reveal any—much less a majority—of billing entries that “simply note” a communication with a plaintiff. Instead, the billing entries that reflect a communication with a plaintiff or class member indicate the reason for the communication. See, e.g., Suppl. Fee Appl. Ex. 2, Attach. A at 194 (“Call Sabo class members in response to their survey responses indicating difficulties encountered in obtaining settlement benefits in order to obtain additional information and attempt to resolve their benefits problems.”), 238 (“Communicate with Sabo class members experiencing difficulty accessing settlement agreement benefits in order to advise the class members on resolving those problems.”), 562 (“Took hotline calls from class members [with] concerns and complaints about the government’s implementation of the Settlement Agreement and class members’ ability to access settlement benefits; update hotline log and attorney notes re: same.”).27 Moreover, it appears to the court from its review of all of the billing entries that each one contains descriptions of both the action that was taken and the reason for the action. The billing entries therefore provide sufficient detail to enable an evaluation of the reasonableness and necessity of the claimed attorneys’ fees and expenses. Accord Beta Sys., Inc. v. United States, 866 F.2d 1404, 1406 (Fed. Cir. 1989) (“[The time sheets submitted by the plaintiff] are typical billing records, showing time and charges, a description of the work done, and by whom. The accounting comports with the statutory and case law for such records.”).
Plaintiffs indicate that the work described in their supplemental fee application includes preparation of their applications for attorneys’ fees and expenses, work accomplished prior to the court’s approval of the parties’ settlement agreement, activities required by court order or the settlement agreement, and activities related to postsettlement monitoring and enforcement. In the latter two categories, plaintiffs identify the following ten activities (the first four required by court order or the settlement agreement and the final six related to monitoring and enforcement):
- Notifying 522 class members listed on exhibits D, F, H, or K of their right under the settlement agreement to make an election regarding relief,
answering their questions and providing advice about their elections, and notifying the government of the elections ultimately made. - Notifying the 53 class members listed on exhibit L of their opportunity to obtain permanent military disability retirement benefits under the settlement agreement by pursuing a VA claim, answering their specific questions, and monitoring the results of their VA claims.
- Activities related to implementation of settlement agreement ¶ 26.
- Preparation of joint status reports.
- Activities related to government failure to correct military records by the settlement agreement deadline.
- Activities related to the government’s inaccurate correction of the military records of more than 350 class members.
- Activities related to plaintiffs’ 2013 motion for judicial enforcement of settlement agreement to address government delay in determining the amount of money it owed as a result of the settlement agreement to 950 class members listed on exhibits F, G, H, and K.
- Activities related to plaintiffs’ second enforcement motion to address government delay in determining the amount of money it owed as a result of the settlement agreement to 1,050 class members listed on exhibits C and D.
- Monitoring activities following plaintiffs’ two enforcement motions.
- Responding to thousands of inquiries from many class members about the government’s implementation of the settlement agreement.
Suppl. Fee Appl. Reply 5-16. For each of these categories, plaintiffs explain the work performed by their attorneys. They also provide examples of relevant billing entries for all but two of the categories.28
As noted above, defendant does not challenge the propriety of any particular billing entry. In addition, defendant does not argue that any of the activities identified by plaintiffs—as reflected in the individual billing entries—are not the types of activities for which plaintiffs can recover attorneys’ fees and expenses, notwithstanding the fact that it clearly recognized from reviewing
In sum, the attorneys’ fees and expenses requested by plaintiffs in their supplemental fee application were reasonable and necessary to pursue this litigation. The court therefore awards plaintiffs $1,874,895.05 for attorneys’ fees and expenses incurred from November 1, 2011, through January 15, 2015, for the work performed by attorneys from Morgan Lewis and the NVLSP.30
V. CONCLUSION
As set forth above, the court finds that plaintiffs have satisfied the requirements of the
IT IS SO ORDERED.
s/ Margaret M. Sweeney
MARGARET M. SWEENEY
Judge
Notes
United States v. 515 Granby, LLC, 736 F.3d 309, 315-16 (4th Cir. 2013) (footnote and citations omitted). The Federal Circuit has not addressed the issue.[W]e now turn to the more challenging question of how to assess substantial justification when the government’s prelitigation position was unreasonable but its litigation position was reasonable. For this analysis, we can draw guidance from the views of our sister circuits, who have addressed the question directly, albeit with differing results. Some have gone as far as stating that a reasonable litigation position can never cure an unreasonable prelitigation stance. . . . Other circuits have emphasized the importance of the prelitigation position without creating a bright-line rule.