Shaw v. AAA Engineering & Drafting, Inc.

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
MAY 18 2000
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

DEBRA A. SHAW; Sued as UNITED
STATES ex rel,

Plaintiff-Appellee,

v.

AAA ENGINEERING & DRAFTING,
No. 98-6172
INC., a Utah corporation; WILBUR L.
BRAKHAGE, Supervisor; JANICE
KELLIN,

Defendants-Appellants.

_____________________

DEBRA A. SHAW,

Plaintiff-Appellee,

v.
No. 98-6173
AAA ENGINEERING & DRAFTING, No. 98-6362
INC., a Utah corporation; WILBUR L.
BRAKHAGE, Supervisor; JANICE
KELLIN,

Defendants-Appellants.

Appeal from the United States District Court
for the W. District of Oklahoma
 (D.C. No. 95-CV-950-M)
(D.C. No. 95-CV-951-M)

John B. Hayes, of Hayes & Magrini, Oklahoma City, Oklahoma, for Defendants-
Appellants.

Marilyn D. Barringer, Oklahoma City, Oklahoma (Micheal C. Salem, Norman,
Oklahoma, with her on the brief) for Plaintiffs-Appellees.

Before HENRY, and MURPHY, Circuit Judges, and KIMBALL, *

MURPHY, Circuit Judge.

I. INTRODUCTION

Defendants AAA Engineering & Drafting, Inc., Wilbur L. Brakhage, and

Janice Keelin (collectively “Defendants”) appeal from an Amended Order and

Judgment on Attorneys’ Fees and Litigation Expenses. This court concludes that

the district court did not abuse its discretion in its award of attorney’s fees,

expenses, and costs, and that the award of attorney’s fees for post-judgment

enforcement and collection activities was proper under the False Claims Act

(“FCA”). This court exercises jurisdiction pursuant to 28 U.S.C. § 1291 and

affirms.

*
Honorable Dale A. Kimball, District Judge, United States District Court
for the District of Utah, sitting by designation.

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II. FACTS AND PROCEDURAL HISTORY

In June 1997, the district court entered judgment following a jury verdict

for plaintiff Debra Shaw in a consolidated FCA qui tam and wrongful discharge

action and pendant state law wrongful discharge action. Shaw then moved for an

award of attorney’s fees, litigation expenses, and court costs on the FCA qui tam

and wrongful discharge actions (collectively “fees and expenses”). Defendants

agreed the FCA qui tam and wrongful discharge provisions both authorize the

award of reasonable fees and expenses, but they disagreed as to the proper

amount to be awarded.

Defendants appealed the judgment 1 and applied for an order staying

execution on the judgment. In addition, Defendants asked that the stay on the

judgment be entered immediately but that the amount of the supersedeas bond 2 be

set only after entry of judgment on fees and costs. Shaw opposed a stay without

a bond and asked the district court to deny Defendants’ application to stay

1
In the related merits appeal, also decided today, this court affirmed the
FCA qui tam and wrongful discharge portions of the underlying judgment.
Although Shaw had prevailed on the state law claim below, that portion of the
judgment was reversed on appeal. See Shaw v. AAA Engineering and Drafting,
Inc., __ F.3d. __, __, __ (10th Cir. 2000) (“Shaw I”).
2
“When an appeal is taken the appellant by giving a supersedeas bond may
obtain a stay subject to the exceptions contained in subdivision (a) of this rule.
The bond may be given at or after the time of filing the notice of appeal . . . .
The stay is effective when the supersedeas bond is approved by the court.” Fed.
R. Civ. P. 62(d).

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execution and to immediately set the amount of the bond. By October 1997,

some three months later, the district court had not yet ruled on the motion for

fees and expenses, and Defendants had not filed a supersedeas bond. Shaw

commenced execution on the judgment and moved for a Writ of Garnishment.

Defendants then moved for the immediate approval of a supersedeas bond and to

quash the garnishment proceeding. In February 1998, the district court granted

Defendants’ motion for approval of the supersedeas bond and quashed the Writ

of Garnishment.

In March 1998, the district court held a hearing to determine the proper

amount of fees and expenses to be awarded. Shaw presented two expert

witnesses, both of whom testified $175 per hour was a reasonable hourly rate for

a plaintiff’s attorney with the experience of Shaw’s counsel in federal

employment litigation. One witness also testified that both FCA qui tam and

wrongful termination actions involve complex issues requiring substantial

expenditures of time. Shaw’s counsel also testified that this case was particularly

difficult for her, in part because of the need for information and assistance from

the government and because of the extensive document preparation involved.

Defendants cross-examined each of these witnesses. Defendants also called an

expert witness who testified that reasonable rates for the defense bar in

Oklahoma were $100 to $125 per hour. This witness had not, however, examined

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the specific facts of the underlying case and was thus unable to address its

complexity.

After the hearing, the district court entered judgment in favor of Shaw for

fees and expenses. 3 Shaw then moved to amend this judgment to include fees

and expenses incurred after the date of her initial application for fees and

expenses but before the district court’s hearing on the application. 4 The

additional fees and expenses sought included fees for time spent on post-

judgment collection activities. Defendants opposed the portion of the request for

additional fees and expenses based on post-judgment collection activities, but

they did not request a second evidentiary hearing. The district court, without

conducting a second hearing, granted Shaw’s motion. Noting that Defendants

contested the award of additional fees but did not contest the reasonableness of

the amount requested, the district court amended the judgment to include all the

additional fees and expenses claimed by Shaw. Under the amended judgment,

Shaw was awarded $87,829.00 in attorney’s fees, $2267.34 in costs, and

$7339.40 in expenses, for a total of $97,435.74 plus interest in the qui tam

3
This award was for $76,882.75 in attorney’s fees, $6653.90 in expenses,
and $2267.34 in costs, for a total of $85,803.99 plus interest in the qui
tam action, as well as $63,822.50 in attorney’s fees, $1751.45 in expenses, and
$2267.33 in costs, for a total of $67,841.28 plus interest in the wrongful
discharge action.
4
Shaw sought an additional $21,892.50 in attorney’s fees and $1,371.00 in
litigation expenses, for a total of $23,263.50.

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action, as well as $74,768.75 in attorney’s fees, $2267.33 in costs, and $2436.95

in expenses, for a total of $79,473.03 plus interest in the wrongful discharge

action. Defendants appeal the amended fees and expenses judgment.

The FCA provides that a qui tam relator who successfully brings an FCA

action shall receive an amount between twenty-five and thirty percent of the

proceeds from the action and “an amount for reasonable expenses which the court

finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs.

All such expenses, fees, and costs shall be awarded against the defendant.” 31

U.S.C. § 3730(d)(2). Under the FCA wrongful termination provisions, a plaintiff

is entitled to “all relief necessary to make the employee whole. Such relief shall

include . . . litigation costs and reasonable attorneys’ fees.” 31 U.S.C. § 3730(h).

III. DISCUSSION

A. Reasonableness of Attorney’s Hours and Rate

1) Standard of Review

Defendants argue the district court granted Shaw excessive attorney’s fees.

Specifically, they argue the district court should have 1) required a more detailed

explanation by Shaw’s counsel as to the number of hours spent on specific tasks;

2) given more weight to the disparity between the hours claimed by Shaw’s

counsel and the hours billed by Defendants’ counsel; and 3) allowed Defendants

to cross-examine Shaw’s counsel concerning her fee agreement with Shaw.

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 This court reviews the district court’s determination of the amount of

attorney’s fees to be awarded for an abuse of discretion. See Wolfe v. New

Mexico Dep’t of Human Servs., 28 F.3d 1056, 1058-59 (10th Cir. 1994). A court

abuses its discretion when it bases its decision on an erroneous conclusion of law

or when there is no rational basis in evidence for its ruling. See Mann v.

Reynolds, 46 F.3d 1055, 1062 (10th Cir. 1995).

2) Number of Hours Spent on Specific Tasks

Defendants contend the district court should have required Shaw’s counsel

to give a detailed analysis of her reasons for the amount of time she spent on

specific tasks. For example, Shaw’s counsel recorded thirteen hours for

preparing suggested voir dire questions in the qui tam case, six hours for writing

two Freedom of Information Act letters, approximately forty hours for responding

to a summary judgment motion, and eight hours for drafting a complaint.

Shaw responds that she did present evidence explaining much of this time.

For example, her expert witness testified that in preparing voir dire questions for

a qui tam case, he would have to spend more time than in a typical employment

law case, and that he was not surprised 13 hours were spent preparing voir dire.

He also testified that six hours spent writing Freedom of Information Act letters

was even less surprising. In addition, Shaw’s counsel also offered some

explanation for the time she spent drafting the qui tam complaint, noting the FCA

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has specific requirements which she had to follow. Additionally, Defendants’

counsel cross-examined Shaw’s attorney, yet only questioned her briefly about

the time spent on voir dire and not at all about time spent on the other matters

now raised on appeal. Defendants themselves did not call any witnesses to testify

that the amount of time spent on these tasks was excessive.

Shaw is entitled to “reasonable attorneys’ fees” under both the qui tam and

wrongful discharge provisions of the FCA. 31 U.S.C. § 3730(d)(2), (h). This

court has previously noted that when examining an attorney’s fee claim, the

district court should examine the hours spent on each task to determine the

reasonableness of the hours reported. See Ramos v. Lamm, 713 F.2d 546, 554

(10th Cir. 1983) (reviewing award of attorney’s fees under 42 U.S.C. § 1988).

The district court, however, does not have to justify every hour allowed in

awarding attorney’s fees under federal statutes. See Malloy v. Monahan, 73 F.3d

1012, 1018 (10th Cir. 1996). “[W]hat is reasonable in a particular case can

depend upon factors such as the complexity of the case, the number of reasonable

strategies pursued, and the responses necessitated by the maneuvering of the

other side.” Ramos, 713 F.2d at 554. The district court’s superior perspective on

the presence or absence of these particular factors in the underlying merits

litigation counsels deference to the district court’s decision as to whether the

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number of hours claimed is reasonable. See Hensley v. Eckerhart, 461 U.S. 424,

437 (1983).

In this case, the district court reviewed Shaw’s counsel’s records and heard

testimony that the posture and complexity of this case required substantial

expenditure of time. The Defendants failed to meaningfully question this

testimony. This court concludes the district court had a “sufficient basis for its

determination that the claimed hours were reasonable,” and there was no abuse of

discretion in the award of attorney’s fees for the hours claimed. Malloy, 73 F.3d

at 1018.

3) Comparing Counsels’ Time

In her initial fee request, Shaw’s counsel claimed approximately 804 hours

for prosecuting the underlying merits lawsuit, while Defendants’ counsel billed

approximately 425 hours for defending the action. Defendants argue the district

court should have given more weight to this time difference, and that testimony

by Shaw’s counsel was not adequate to explain the amount of time which she

recorded. 5

Evidence of the hours expended by opposing counsel may be helpful in

determining whether time expended on a case was reasonable, but the opponent’s

5
Insofar as Defendants are arguing the district court did not compare the
time recorded by the parties at all, this is incorrect. Defense counsel’s time
records were admitted at the March 1998 hearing.

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time is not an “immutable yardstick of reasonableness.” Robinson v. City of

Edmond, 160 F.3d 1275, 1284 (10th Cir. 1998) (reviewing attorney’s fees award

under 42 U.S.C. §1988). The district court had first hand knowledge of the

complexity of the case and the voluminous number of documents Shaw, who had

the burden of proof, presented at trail. See Hensley, 461 U.S. at 437. The district

court did not abuse its discretion in finding counsel’s hours reasonable in spite of

the contrast with defense counsel’s time.

4) Hourly Rate

The district court received into evidence the affidavit of Shaw’s counsel,

which indicated that Shaw’s agreement with her counsel was for a contingency

fee and that Shaw paid only costs and expenses. The affidavit thereafter refers to

an hourly rate of $150. It would appear, however, that Shaw’s counsel was

explaining that $150/hour was her normal billing rate at the time of the fee

arrangement, some two years antedating the affidavit and claim premised on a

$175/hour rate.

After the admission of this affidavit, Defendants asked Shaw’s counsel in

cross-examination, “[Y]ou say in your affidavit that you had a contract with your

client. What was that, please, ma’am, and did you bring it to court today?” Shaw

objected to this line of questioning, arguing that the fee agreement was irrelevant

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to a determination of a reasonable fee. The district court sustained this objection,

though without specifically stating the reasons for its ruling.

On appeal, Defendants argue that if the trial court had allowed them to

address the terms of the representation agreement, this could have led to a

revelation that the agreement reflected a rate of $150/hour. This, Defendants

argue, in turn might have convinced the district court to apply an hourly rate less

than the $175/hour on which it ultimately settled. The affidavit of Shaw’s

counsel, however, established that her regular hourly rate was $150/hour, the

very rate Defendants suggest is the reason cross-examination on the fee

arrangement should have been allowed. Therefore, any error by the district court

in sustaining Shaw’s objection was harmless. See United States v. Rothbart, 723

F.2d 752, 755 (10th Cir. 1983); Fed. R. Civ. P. 61 (“No error in either the

admission or the exclusion of evidence . . . is a ground for . . . vacating,

modifying, or otherwise disturbing a judgment or order, unless refusal to take

such action appears to the court inconsistent with substantial justice.”).

B. The Amended Judgment

1) Standard of Review

In the Order granting Shaw’s Motion to Alter or Amend the Judgment on

Attorneys’ Fees, Costs, and Litigation Expenses (“motion to amend”), a portion

of the fees awarded by the district court was for time spent in post-judgment

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collection proceedings. Shaw’s counsel’s hours included time spent objecting to

Defendants’ motion to stay execution and preparing for execution and

garnishment proceedings. Defendants argue on appeal the district court erred 1)

in awarding Shaw attorney’s fees for this time; and 2) in granting Shaw’s motion

to amend without conducting a second evidentiary hearing. This court reviews

the district court’s grant of attorney’s fees for an abuse of discretion. See Wolfe,

28 F.3d at 1058-59. Factual resolutions are reviewed for clear error; the statutory

interpretation and legal analysis supporting the district court’s decision are

reviewed de novo. See id.

2) Award of Fees for Post-judgment Collection Activities

There is no precedent in this circuit nor authority from other circuits

resolving whether attorney’s fees can be awarded under the FCA for post-

judgment collection activities. Cases addressing claims for post-judgment fee

awards under the Civil Rights Attorney’s Fees Awards Act, 42 U.S.C. § 1988(b),

and the citizen suit attorney’s fee provision of the Clean Air Act, id. § 7604(d),

however, are instructive. See, e.g., Pennsylvania v. Delaware Valley Citizens’

Council for Clean Air, 478 U.S. 546, 558-60 (1986).

The Civil Rights Attorney’s Fees Awards Act states “the court, in its

discretion, may allow . . . a reasonable attorney’s fee.” 42 U.S.C. §1988(b). The

Clean Air Act citizen suit attorney’s fee provision provides the court “may award

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costs of litigation (including reasonable attorney and expert witness fees) to any

party, whenever the court determines such award is appropriate.” Id. § 7604(d).

Similarly, the FCA qui tam attorney’s fees provision states that one who

successfully brings an FCA action “shall . . . receive . . . reasonable attorneys’

fees and costs.” 31 U.S.C. § 3730(d)(2) (emphasis added). The FCA wrongful

discharge attorney’s fees provision likewise states that a plaintiff “shall be

entitled to all relief necessary to make the employee whole . . . [including]

reasonable attorneys’ fees.” 31 U.S.C. § 3730(h) (emphasis added). All four

provisions share the requirement that attorney’s fees awards must be

“reasonable.” 31 U.S.C. § 3730(d)(2), (h); 42 U.S.C. § 1988(b); id. § 7604(d).

The only significant difference between the FCA and the attorney’s fees

provisions in the other statutes is that the FCA provisions are mandatory on their

face. See 32 U.S.C. § 3730(d)(2), (h).

Courts interpreting the Civil Rights Attorney’s Fees Awards Act and the

citizen suit attorney’s fee provision of the Clean Air Act have consistently

allowed attorney’s fees for post-judgment enforcement and collection activities.

See, e.g., Delaware Valley, 478 U.S. at 558-60; Wolfe, 28 F.3d at 1059. 6 In

6
In addition, the courts have not limited post-judgment attorney’s fees
awards under the Civil Rights Attorney’s Fees Awards Act to time spent securing
non-monetary forms of relief. See Balark v. Curtin, 655 F.2d 798, 802-03 (7th
Cir. 1981). The Balark court upheld the award of fees for time spent litigating
(continued...)

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Delaware Valley, the court noted that both of these statutory provisions were

enacted to encourage citizen enforcement of important federal policies. See 478

U.S. at 560. The FCA is also intended to encourage citizen enforcement of

important federal policies. Two of the FCA’s main goals are to enhance the

government’s ability to recover losses resulting from fraud and to encourage

individuals who know of government fraud to come forward with that

information. See S. Rep. 99-345, at 1, 6 (1986), reprinted in 1986 U.S.C.C.A.N.

5266, 5266, 5271; United States ex rel. Precision Co. v. Koch Indus., 971 F.2d

548, 552 (10th Cir. 1992). The FCA attorney’s fees provisions are central to the

implementation of these policies. As noted in the FCA’s legislative history,

“[u]navailability of attorneys fees inhibits and precludes many private

individuals, as well as their attorneys, from bringing civil fraud suits.” S. Rep.

99-345, at 29 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5294.

We see no reason why the attorney’s fees provisions of the FCA should be

applied differently than those of the civil rights laws or the Clean Air Act. This

court thus concludes that both FCA attorney fee provisions allow the award of

6
(...continued)
collection procedures for a civil rights judgment, stating “[t]he compensatory
goals of the civil rights laws would thus be undermined if fees were not also
available when defendants oppose the collection of civil rights judgments.” 655
F.2d at 803; see also Powell v. Georgia-Pacific Corp., 119 F.3d 703, 707 (8th
Cir. 1997).

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attorney’s fees for time spent in post-judgment collection activities. See 31

U.S.C. § 3730(d)(2), (h).

3) Failure to Hold a Second Evidentiary Hearing

Defendants argue the district court erred when it did not conduct an

evidentiary hearing on Shaw’s motion to amend. Defendants, however, did not

request such an evidentiary hearing. See Robinson, 160 F.3d at 1286

(“Ordinarily, a district court does not abuse its discretion in deciding not to hold

an evidentiary hearing when no such request is ever made.”) Additionally, this

court notes that in Defendants’ response to Shaw’s motion to amend, Defendants

made no factual challenges which would have necessitated an evidentiary

hearing. Defendants instead asserted two purely legal issues: 1) that the district

court had resolved all the matters presented in the motion to amend at the original

March 13, 1998 hearing, and these resolutions became the law of the case and 2)

the FCA does not authorize an award of attorney’s fees for post-judgment

collection activities. An evidentiary hearing, however, was unnecessary to

resolve these legal issues. Defendants certainly did not assert below, as they do

on appeal, that an evidentiary hearing was necessary to distinguish time spent on

post-judgment collection activities from time which was not contested by

Defendants or to allow Defendants the opportunity to cross-examine Shaw’s

counsel as to the reasonableness of the additional hours claimed. The district

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court therefore did not abuse its discretion in not conducting the hearing. See id.;

King of the Mountain Sports, Inc. v. Chrysler Corp., 185 F.3d 1084, 1091 n.2

(10th Cir. 1999).

IV. CONCLUSION

For the reasons stated above, this court AFFIRMS the district court’s

Amended Order and Judgment on Attorneys’ Fees and Litigation Expenses.

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