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United States ex rel. Tommasino v. Guida

United States District Court, E.D. New York

March 6, 2017

United States EX REL. Joseph F. Tommasino, P.A., PhD, ET AL., Plaintiffs,
v.
Anthony A. Guida, M.D., ET AL., Defendants.

          MEMORANDUM AND ORDER

          JOSEPH F. BIANCO United States District Judge.

         Suspecting Medicare fraud, Relator Joseph F. Tommasino (“relator”) commenced this action against defendants Anthony Guida, M.D., Dr. Joseph Gigante, Dr. Leonard Savino, Dr. Robert Sica, Island Medical of Medford LLP, and Guida and Savino, LLP (collectively “defendants”) in the name of the United States (the “government”) pursuant to the qui tam provisions of the False Claims Act (“FCA”), 31 U.S.C. §§ 3729-33. (Compl., ECF No. 1, at ¶ 9.) The government settled the case on August 28, 2015 in the amount of $106, 393.30, and relator received an 18% relator share of the proceeds. (ECF No. 22-4, Exs. B, C.) Relator now seeks reasonable attorneys' fees from defendants in the amount of $115, 807 and costs in the amount of $1, 127.68 in connection with the underlying qui tam action. (ECF No. 22.) He also seeks $51, 132.50 in attorneys' fees and $4, 017.67 in costs in connection with the instant fee application. (ECF No. 28.)

         For the reasons set forth below, the Court awards relator $79, 953.30 in attorneys' fees and $1, 127.68 in costs for the underlying qui tam action, and $14, 422 in fees and $1, 312 in costs for the instant fee application.

         I. Attorneys' Fees

         “The general rule in our legal system is that each party must pay its own attorney's fees and expenses.” Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 550 (2010). Under the FCA, however, a relator who brings a successful qui tam lawsuit is entitled to attorneys' fees. See United States v. Keshner, 794 F.3d 232, 237 (2d Cir. 2015) (citing 31 U.S.C. 3730(d)(1)).

         Generally, to determine reasonable attorneys' fees, a court must calculate a “lodestar figure, ” which is determined by multiplying the number of hours reasonably expended on a case by a reasonable hourly rate. See Hens-ley v. Eckerhart, 461 U.S. 424, 433 (1983); see also Luciano v. Olsten Corp., 109 F.3d 111, 115 (2d Cir. 1997). “Both [the Second Circuit] and the Supreme Court have held that the lodestar . . . creates a ‘presumptively reasonable fee.'” Millea v. Metro-N. R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011) (citing Arbor Hill Concerned Citizens Neighborhood Assoc. v. Cnty. of Albany, 522 F.3d 182, 183 (2d Cir. 2008); Perdue, 559 U.S. at 542). “‘[T]he lodestar figure includes most, if not all, of the relevant factors constituting a ‘reasonable' attorney's fee.'” Perdue, 559 U.S. at 553 (quoting Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 546, 566 (1986)). Thus, the Supreme Court has recognized that “the lodestar method produces an award that roughly approximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case.” Id. at 551. “The burden is on the party seeking attorney's fees to submit sufficient evidence to support the hours worked and the rates claimed.” Hugee v. Kimso Apartments, LLC, 852 F.Supp.2d 281, 298 (E.D.N.Y. 2012) (citing Hensley, 461 U.S. at 433).

         A. Proportionality

         As a threshold matter, defendants argue that relator's request for $115, 807 in attorneys' fees is excessive and should receive an across-the-board cut because the case settled for $106, 393.30, of which relator only received $19, 150.79. (Def.'s Mem. Law Opp'n Mot. for Attorneys' Fees and Expenses (“Def.'s Br.”), ECF No. 27, at 1-2, 11-13.) Relator counters that disproportionality between results and fees does not warrant a reduction because, from counsel's ex ante perspective, the case appeared to be worth much more, the government intervened in the action (and thus confirmed its merit), and reduction based on disproportionality would undermine the purpose of the FCA. (Pl.'s Reply Mem. Supp. Award of Attorneys' Fees and Expenses (“Pl.'s Reply”), ECF No. 28, at 2-5.)

         The Supreme Court has recognized that “plaintiff's success is a crucial factor in determining the proper amount of an award of attorney's fees.” Hensley, 461 U.S. at 440; see also Stanczyk v. City of New York, 752 F.3d 273, 284-85 (2d Cir. 2014) (citing Hensley, 461 U.S. at 434-35). The Court has also stated that, “where the plaintiff achieved only limited success, the district court should award only that amount of fees that is reasonable in relation to the results obtained.” Hensley, 461 U.S. at 440; see also Green v. Torres, 361 F.3d 96, 99 (2d Cir. 2004). Correspondingly, in determining the prevailing party's degree of success, a court must consider “‘the quantity and quality of relief obtained, ' as compared to what the plaintiff sought to achieve as evidenced in her complaint . . . .” Barfield v. N.Y. City Health & Hosps. Corp., 537 F.3d 132, 152 (2d Cir. 2008) (quoting Carroll v. Blinken, 105 F.3d 79, 81 (2d Cir. 1997)). For instance, the Second Circuit has indicated that a reduction in attorneys' fees is warranted where a plaintiff who sought substantial monetary damages is only awarded a nominal sum. See, e.g., Carroll, 105 F.3d at 81-82 (affirming district court's reduction of requested attorneys' fees because, inter alia, “[t]here was no damage award”); Pino v. Locascio, 101 F.3d 235, 238-39 (2d Cir. 1996) (holding that district court erred in awarding attorneys' fees in civil rights action where plaintiff only recovered $1 in nominal damages).

         On the other hand, the Second Circuit has “repeatedly rejected the notion that a fee may be reduced merely because the fee would be disproportionate to the financial interest at stake in the litigation.” Kassim v. City of Schenectady, 415 F.3d 246, 252 (2d Cir. 2005) (collecting cases); see also City of Riverside v. Rivera, 477 U.S. 561, 574 (1986) (“We reject the proposition that fee awards under [42 U.S.C.] § 1988 should necessarily be proportionate to the amount of damages a civil rights plaintiff actually recovers.”); Townsend v. Benjamin Enterprises, Inc., 679 F.3d 41, 60 (2d Cir. 2012) (“[A] presumptively correct ‘lodestar' figure should not be reduced simply because a plaintiff recovered a low damage award.” (quoting Cowan v. Prudential Ins. Co. of Am., 935 F.2d 522, 526 (2d Cir. 1991))). This rule is especially prevalent in the civil rights context, where “a rule calling for proportionality between the fee and the monetary amount involved in the litigation would effectively prevent plaintiffs from obtaining counsel in cases where deprivation of a constitutional right caused injury of low monetary value.” Kassim, 415 F.3d at 252. Some courts have applied this rule in quitam cases as well, reasoning that large fee awards advance the purpose of the FCA to encourage employees to report suspected violations by their employers. See U.S.A. v. CDW-Government, Inc., No. 305CV00033 (DRH) (PMF), 2013 WL 11267176, at *13 (S.D. Ill. May 17, 2013).

         The Court declines to reduce attorneys' fees in this case based on the amount of the recovery. Congress designed the FCA “to prevent the United States Treasury from being drained of millions of dollars by fraudulent billings by federal government contractors.” U.S. by Dep't of Def. v. CACI Int'l Inc., 953 F.Supp. 74, 77 (S.D.N.Y. 1995). Correspondingly, the FCA's qui tam provisions “encourage private individuals to bring suits on behalf of the government.” Id. If, however, a court were to substantially reduce a relator's attorneys' fees because the government settles for less than the amount expected by the relator, it would discourage attorneys from investing the time and resources necessary to bring a quitam action, thereby undermining the purpose of the FCA. See CDW- Government, 2013 WL 11267176, at *13. Thus, a disproportionality rule in this context would have the same effect as that rule in the civil rights context, discouraging lawyers from pursuing potentially meritorious actions because the risk significantly outweighs the reward. See Kassim, 415 F.3d at 252; see also Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992) (“The relevant issue, however, is not whether hindsight vindicates an attorney's time expenditures, but whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures.”).

         In addition, even if a disproportionality rule were appropriate in the FCA context, the Court concludes that its application is not warranted here. First, although the case only settled for $106, 393.30 where relator initially expected a recovery of millions, relator's counsel had no control over the settlement procured by the government and limited influence in the investigation once the government intervened. Counsel, therefore, bears no responsibility for the settlement's relative modesty-at least in comparison to their initial expectations. Furthermore, relator did not obtain only nominal damages. See, e.g., Carroll, 105 F.3d at 81-82; Pino, 101 F.3d at 238-39. Instead, his recovery was substantial, amounting to almost $20, 000 (from a settlement of $106, 393.30), an amount large enough to warrant a significant fee. See Townsend, 679 F.3d at 47 (affirming award of $141, 308.80 in attorneys' fees despite recovery of about $30, 000); Grant v. Martinez, 973 F.2d 96, 101 (2d Cir. 1992) (upholding award of over $500, 000 despite recovery of only $60, 000); Brown v. Starrett City As-socs., No. 09-CV-3282 JBW, 2011 WL 5118438, at *9 (E.D.N.Y. Oct. 27, 2011) (awarding over $80, 000 in attorneys' fees despite jury award of only $500); CDW-Gov-ernment, 2013 WL 11267176, at *13 (awarding approximately $3.7 million in attorneys' fees, “53% of the entire recovery in this case”); see also Hines v. City of Albany, 613 F.App'x 52, 54 (2d Cir. 2015) (“We are unpersuaded by Defendants' attempts to characterize the $10, 000 settlement in this case as meager. Moreover, the success here was hardly technical.”). Accordingly, the Court declines to reduce the award for disproportionality under the circumstances of this case.

         B. Reasonable Hourly Rates

         “The reasonable hourly rate is the rate a paying client would be willing to pay.” Arbor Hill, 522 F.3d at 190. The Second Circuit's “‘forum rule' generally requires use of ‘the hourly rates employed in the district in which the reviewing court sits in calculating the presumptively reasonable fee.'” Berger-son v. N.Y. State Office of Mental Health, Cent. N.Y. Psychiatric Ctr., 652 F.3d 277, 290 (2d Cir. 2011) (quoting Simmons v. N.Y.C. Transit Auth., 575 F.3d 170, 174 (2d Cir. 2009)). The Second Circuit also instructed district courts to consider the factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974), abrogated on other grounds by Blanchard v. Bergeron, 489 U.S. 87, 92-93 (1989). See Arbor Hill, 522 F.3d at 190. The twelve Johnson factors are:

(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

Id. at 186 n.3 (quoting Johnson, 488 F.2d at 717-19). Finally, a district court should also consider “that a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively, ” and “that such an individual might be able to negotiate with his or her attorneys, using their desire to obtain the reputational benefits that might accrue from being associated with the case.” Id. at 190. “The burden rests with the prevailing party to justify the reasonableness of the requested rate, ” and a plaintiff's attorney “should establish his hourly rate with satisfactory evidence-in addition to the attorney's own affidavits.” Hugee, 852 F.Supp.2d at 298.

         In general, “[c]ourts in the Eastern District of New York award hourly rates ranging from $200 to $450 per hour for partners, $100 to $300 per hour for associates, and $70 to $100 per hour for paralegals.” D'Annunzio v. Ayken, Inc., No. 11-CV-3303 (WFK)(WDW), 2015 WL 5308094, at *4 (E.D.N.Y. Sept. 10, 2015); see also Sass v. MTA Bus Co., 6 F.Supp.3d 238, 261 (E.D.N.Y. 2014) (“Recent opinions issued by courts within the Eastern District of New York have found reasonable hourly rates to be approximately $300-$450 for partners, $200-$325 for senior associates, and $100- $200 for junior associates.” (citations omitted)). Of course, in light of the numerous factors that courts in this circuit consider to determine a reasonable hourly rate, “the range of ‘reasonable' attorney fee rates in this district varies depending on the type of case, the nature of the litigation, the size of the firm, and the expertise of its attorneys.” Siracuse v. Program for the Dev. of Human Potential, No. 07-CV-2205 (CLP), 2012 WL 1624291, at *30 (E.D.N.Y. Apr. 30, 2012).

         Relator requests a billing rate of between $425 and $525 for the two attorneys for whom he seeks attorneys' fees, William Leonard and Kimberly D. Sutton. (See Mot. for Attorney Fees by Joseph F. Tommasino, ECF No. 22, Ex. A (“Billing Mem.”), at 3- 12.) He also seeks between $160 and $175 per hour in fees for the work completed by three paralegals. (See id.) Defendant claims that these rates are not consistent with rates typically awarded in this district. (Defs.' Br. at 4-5.)

         1. William Leonard

         Leonard graduated from the Dickinson School of Law and is currently a partner at the law firm of Obermayer Rebmann Maxwell & Hippell LLP (“Obermayer”), where he has worked for 22 years. (Decl. of William J. Leonard Supp. Mot. for Attorneys' Fees and Expenses (“Leonard Decl.”), ECF No. 22-2, ¶¶ 1, 3.). He has practiced law as a commercial litigator for 31 years and as a qui tam litigator since 2009. (Id. ¶ 3.) His customary hourly rate was $500 from 2010 through 2011 and then increased to $525 on January 1, 2012, where it remains today. (Id. ¶ 25.)

         The rates sought for Leonard exceed the rates normally awarded in the Eastern District for attorneys of similar experience. See Sass, 6 F.Supp.3d at 261 (“Recent opinions issued by courts within the Eastern District of New York have found reasonable hourly rates to be approximately $300-$450 for partners, $200-$325 for senior associates, and $100-$200 for junior associates.” (citations omitted)); see, e.g., 246 Sears Rd. Corp. v. Exxon Mobil Corp., No. 09-CV-889 NGG JMA, 2013 WL 4506973, at *11 (E.D.N.Y. Aug. 22, 2013) (awarding $425 hourly rate for attorney with 30 years' experience); Bar-kley v. United Homes, LLC, No. 04-CV-875 KAM RLM, 2012 WL 3095526, at *8 (E.D.N.Y. July 30, 2012) (awarding $400 hourly rate for attorney with 30 years' experience and $450 for attorney with 40 years' experience). Indeed, they even exceed “[t]he highest rates in this district, ” which “are reserved for expert trial attorneys with extensive experience before the federal bar, who specialize in the practice of [a particular area of] law and are recognized by their peers as leaders and experts in their fields.” Hugee, 852 F.Supp.2d at 300.

         Relator argues, however, that such a high rate is consistent with U.S. ex rel. Doe v. Ac-upath Labs., Inc., No. CV 10-4819, 2015 WL 1293019, at *10 (E.D.N.Y. Mar. 19, 2015), a qui tam case where Judge Wexler adopted the Magistrate Judge's recommendation that Attorney Robert Sadowski receive an hourly rate of $450 for 2010, $500 for 2011, $550 for 2012, and $600 for 2013. At the outset, however, it should be noted the Magistrate Judge reduced the hourly rate in that case from a requested rate of $575 for 2010, $600 for 2011, $700 for 2012, and $850 for 2013. See Id. at *9. It should also be noted that Sa-dowski had extensive expertise in qui tam cases and healthcare fraud, having served as the Health Care Fraud Coordinator in the U.S. ...


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