by bvernia | September 3rd, 2009
On August 28, the District Court in Colorado adopted a Magistrate Judge’s Report and Recommendation granting attorney’s fees in the amount of $9,274.16 after a nine-year qui tam battle that included an appeal to the 10th Circuit, a cert petition to the Supreme Court, and two jury trials.
The relator in the case, US ex rel Bahrani v. Conagra, Inc., alleged that the defendants altered food safety export certificates for meat and hide exports, thereby violating the “reverse false claims” provision of the FCA. The relator lost his claims on the meat export certificates when a jury found that he was not an original source of the information alleged in his complaint. After a jury trial on the hide export certificates, the jury concluded that he had proved only five FCA violations valued at $21.50 each; after trebling and penalties, the relator’s judgment was for $27,822.50.
The Magistrate Judge rejected the defendants’ argument that the relator was not a prevailing party under FRCP 54, and, applying caselaw involving civil rights claims which mandated attorney’s fees, concluded that the principal question for attorney’s fees under the FCA is the degree of the relator’s success. Under this standard, the Court reasoned, the relator deserved very little.
I find that although Relator prevailed on a legal issue of some significance, i.e., that Defendants significantly altered a very small number of the hide export certificates at issue without paying the government for replacement certificates, this nearly decade-long litigation has consumed an enormous amount of public and private resources without serving any significant public purpose, such as vindicating civil rights or punishing pervasive illegal conduct. Relator’s “Pyrrhic victory” is simply not the type of triumph for which an award of expenses, attorneys’ fees or costs in the amount that he seeks is reasonable.
The Magistrate concluded that the use of a contingent fee model was appropriate, and accordingly awarded fees in the amount of 1/3 of the total recovery.
The Court also rejected the defendants’ cross-motion for fees, finding that the case failed to meet the FCA’s standard for frivolous or vexatious claims.
