Summary
holding that "attorneys fees awarded under 31 U.S.C. § 3730(d) should [not] be apportioned among defendants [because] all other recovery need not be"
Summary of this case from Miller v. HolzmannOpinion
CIVIL NO. Y-96-2219
March 22, 2001
Richard J. Magid, Esq., and Joseph V. Truhe, Jr., Esq., Baltimore, Maryland, counsel for relator.
Allen F. Loucks, Esq., Assistant United States Attorney, Baltimore, Maryland, counsel for the United States.
Thomas Hylden, Esq., and David C. Beck, Esq., Washington, D.C., counsel for defendant Geriatric Psychological Services, Inc.
David W. O'Brien, Esq., and Beth M. Kramer, Esq., Washington, D.C., counsel for defendants Ronald B. Hoekstra and Charter Enterprises, Inc.
John Rounsaville, Jr., Esq., Washington, D.C., counsel for defendant Timothy O'Shaughnessy.
Matthew Kline, pro se.
Stuart M. Gerson, Esq., Washington, D.C., counsel for defendant Maryalyce McCabe.
MEMORANDUM OPINION
Celeste B. Wiser, M.D., Relator, petitions for an award of attorneys' fees and costs against three defendants, Geriatric Psychological Services, Inc., Timothy O'Shaughnessy, and Matthew Kline. Each defendant has settled with the United States and with Wiser. O'Shaughnessy and Kline oppose the petition.
The Court exercises its discretion to accept defendant Kline's pro se opposition, as its untimely filing can be attributed to the Court. The Court accepts Relator's Motion to Strike Defendant Kline's Memorandum in Opposition to Relator's First Petition For Attorneys' Fees and Costs, Or, Alternatively, To File Reply in Further Support of Relator's Petition as a reply to Kline's opposition.
As a preliminary matter, the Court addresses Wiser's claims that some of her attorneys' billing entries are covered by the attorney-client or attorney work-product privileges.
Wiser initially submitted billing records on which the "professional services" listing for each billing was entirely redacted. Mot. Ex. 1A. Wiser has now submitted an unredacted billing statement for in camera review by the Court, in which she underlines and thus claims the privileges only for certain details. The underlined portions include particular statutes researched, general areas researched, the general subjects of conversations between lawyers, and the general topics of communications with the client.
The items not underlined on the in camera submission, which comprise the great majority of the information given under "professional services," should have been disclosed to defendants' counsel with the initial petition, and the Court will order that they be disclosed. The Court now turns to the items for which the relator continues to assert either or both of the privileges.
Wiser's counsel asserts that the attorney work-product privilege covers the bulk of the material underlined in the billing statement submitted in camera. The opinion work-product privilege covers "mental impressions, conclusions, opinions, or legal theories." Duplan Corp. v. Moulinage et Retorderie de Chavanoz, 509 F.2d 730, 732 (4th Cir. 1974). Some of the short references claimed are so general that they could never have revealed such material. Conversations among counsel about "status," "case status," "status and conference with client," work described as "review documents" or "case file," and research into "codes and statute" reveal nothing privileged under the work-product doctrine.
Although the letter from relator's counsel accompanying the in camera submission asserts a fact-based work-product privilege as well, few of the underlined entries disclose any facts over which relator might assert such a privilege. Accordingly the bulk of the Court's discussion focuses on the opinion work-product privilege.
Most published case law on both privileges focuses on protection of entire documents or portions of documents from discovery or subpoena. See, e.g., United States v. Under Seal (In re Grand Jury Proceedings), 33 F.3d 342 (4th Cir. 1994). Relator and her counsel assert the privileges over brief entries on billing records, highlighting the question whether either privilege arises on each item in the first place.
Many of the other brief references over which Wiser's counsel assert the privilege could arguably have revealed mental impressions, conclusions, opinions or legal theories when the case was ongoing and counsel had additional papers to file and actions to take. With the litigation concluded, however, most of the documents are a matter of public record, and cannot be said to reflect such theories, impressions, conclusions, or opinions. In addition, relator's counsel, who hold the work-product privilege, are seeking fees from the defendants, and the defendants have a due-process right to examine the hours claimed on particular issues to challenge the reasonableness of the fee request if they choose.
Of course, where it does apply, the work-product privilege survives the close of litigation, just as the attorney-client privilege, where it applies, survives even death. 509 F.2d at 732 (work-product); see also Swidler Berlin v. United States, 524 U.S. 399 (1998) (attorney-client).
After a qui tam action filed by the relator under the False Claims Act, it is a matter of public record that the relator's counsel researched "false claims suits," "qui tam procedures," the "false claims statute," and "venue." After a qui tam action on Medicare billing, research on that topic is now a matter of public record. Wiser filed the action against Geriatric Psychological Services, Inc., and research to identify the resident agent of that corporation is equally a matter of public record. It is likewise obvious from the court record that counsel drafted and reviewed a complaint, filed it under seal, served it on the United States, communicated with government attorneys, reviewed the government's filing, considered their client's ability to recover in a settlement, reviewed settlement issues and documents, and billed for their work. Finally, it is obvious that they read, researched, and reviewed the fee petition upon which the Court rules today, as well as defendants' oppositions and their own reply. The cursory references to these activities in the billing records does not disclose any legal theory or opinion beyond those publicly presented by relator's counsel in this litigation.
In a case involving the intersection of multiple statutes, disclosure of the relative time spent on different statutes might somehow, even after litigation, disclose an attorney's legal theory or opinion. The Court sees no risk whatsoever of such a disclosure in the case at bar. In addition, defendants have a right to challenge the reasonableness of time spent on research, and need to know what fee is claimed for what work in order to assess its reasonableness.
A few items for which Wiser's counsel claims the privilege could, however, reflect facts or legal theories or opinions not obvious on the face of the court record of this action. The Court approves redaction of the underlined portions related to (1) Conover's entry of May 29, 1996, (2) the conference of July 24, 1996, (3) Truhe's review of December 18, 1996, (4) Bers's research of March 19, 1999, (5) the Magid-Bers conference of March 30, 1999, and (6) the Magid-Stodghill conference of January 3, 2001. The Court will direct Wiser's counsel to release all other material over which counsel asserted the work-product privilege to defendants.
Wiser asserts that the attorney-client privilege covers a number of details that are underlined in the billing statement submitted in camera, citing the Fourth Circuit's opinion in Chaudhry v. Gallerizzo. 174 F.3d 394 (4th Cir. 1999). The Chaudhry court found that a portion of legal bills revealing statutes researched was privileged under the attorney-client privilege and should not be disclosed, as disclosure would divulge "confidential information regarding legal advice." 174 F.3d at 403. However, that case, like the Ninth Circuit case that it cited, concerned litigation in early stages, in which most or all of the legal advice remained confidential.
It is well established that the "attorney-client privilege normally does not extend to the payment of attorney's fees and expenses." United States v. Under Seal, 774 F.2d 624, 628 (4th Cir. 1985). The "attorney-client privilege protects only the disclosure of client communications, and not the disclosure of any underlying facts." Better Gov't Bureau, Inc. v. McGraw (In re Allen), 106 F.3d 582, 604 (4th Cir. 1997). It applies where the client "has communicated information which was intended to be kept confidential." In re Grand Jury Proceedings, 727 F.2d 1352, 1355 (4th Cir. 1984). The Fourth Circuit has noted that courts have consistently "refused to apply the privilege to information that the client intends his attorney to impart to others . . ., or which the client intends shall be published or made known to others." 727 F.2d at 1356. Nor does the privilege apply to information that has already been made public. United States v. Under Seal, 33 F.3d at 355.
Indeed, Judge Davis has observed that "a finding that information in attorneys' bills is within the attorney-client privilege is the exception and not the general rule." Maxima Corp. v. 6933 Arlington Dev. Ltd. P'ship, 100 Md. App. 441, 457-58, 641 A.2d 977, 984-85 (1994) (Davis, J.) (applying Maryland law).
Little of the material for which relator claims the attorney-client privilege reflects confidential communications that have not now been made part of the public record. No confidences are revealed by the information that counsel spoke to their client about "status," "case," "review status," or "meeting," nor by the information that counsel had discussed a "conference with client." That counsel drafted a letter "re: retainer/contingency" does not even disclose under which fee structure Wiser paid her counsel.
Nor, as relator's limited claims reflect, does the material not privileged under the work-product privilege fall under the attorney-client privilege. For instance, relator filed a qui tam action under the False Claims Act; the information that relator's counsel researched "qui tam procedures" or the "False Claims statute" is hardly confidential. "The fact that a motion was prepared or research was completed on an issue in a motion that was obviously already filed is a mere description of the work and is not privileged" under the attorney-client privilege. 100 Md. App. at 458, 641 A.2d at 985 (applying Maryland law).
Two items on the billing records do raise information that could potentially reflect a confidential communication from Wiser that has not been made public, and the Court approves their redaction. Bers's telephone call with the client on June 8, 1998, and Stodghill's review of an e-mail message from the client on January 5, 2001, fall under the attorney-client privilege. The Court will direct Wiser to release all other material over which she has asserted the attorney-client privilege to defendants.
On the merits of the fee petition, defendant Geriatric Psychological Services, Inc., has not filed an opposition. The individual defendants, O'Shaughnessy and Kline, argue that the relator's contribution to the litigation was not directed to them, and that accordingly they should not be liable for her attorneys' fees and costs. The relator initially sued only Geriatric Psychological Services, Inc. After the United States intervened, defendants Kline, O'Shaughnessy, and others were added to the case. A substantial percentage of the fees Wiser seeks to recover were incurred before the government intervened.
In an action in which the United States intervenes and prevails, the False Claims Act provides for an award to the relator of "reasonable attorneys' fees and costs" "against the defendant." 31 U.S.C. § 3730(d)(1). The usual structure of such litigation shows that Congress clearly intended that a relator can recover fees for work performed before the government's intervention. "Where one or more persons have committed a fraud upon the government in violation of the [False Claims Act], each is jointly and severally liable for the . . . statutory penalty." Mortgages, Inc. v. United States District Court for the District of Nevada, 934 F.2d 209, 212 (9th Cir. 1991); see also United States v. Cabrera-Diaz, 106 F. Supp.2d 234, 242 (D.P.R. 2000) (citing cases). O'Shaughnessy and Kline offer no authority under the False Claims Act for the proposition that attorney fees awarded under 31 U.S.C. § 3730(d)(1) should be apportioned among defendants when all other recovery need not be. Joint and several liability always poses a risk of unfair or uneven treatment of defendants. However, joint and several liability not only exists under the False Claims Act, but defendants have no right of contribution or indemnification under the False Claims Act despite the potential unfairness they may suffer without such rights. 934 F.2d at 212-14.
O'Shaughnessy and Kline do not base their arguments against fees on their own conduct, distinguishing their individual liabilities. Rather, they base their arguments on Wiser's conduct, arguing that Wiser's contribution to the litigation was not related to them, because the government, not Wiser, added them as defendants.
United States v. Gen. Elec., 808 F. Supp. 584 (S.D.Ohio 1992), rev'd in part, 41 F.3d 1032 (6th Cir. 1994), is not to the contrary. It involved only one defendant, and limited that defendant's liability for publicity and other work potentially unrelated to the relator's legal case. Defendants' argument would also penalize Wiser for having filed a claim meritorious enough to attract intervention by the United States. Had the United States not intervened, there is every reason to believe that Wiser would have proceeded with discovery and uncovered the same facts that led the government to add O'Shaughnessy and Kline to the case. Under defendants' argument, the government's intervention would penalize Wiser by reducing the scope of her opportunity to collect her attorneys' early fees. The penalty does not turn on the financial position of any particular defendant.
Considering the above analysis, the clear congressional policy of encouraging qui tam suits under the Act, and the unusual structure of qui tam litigation on the plaintiff's side, the Court declines to introduce fee apportionment methods used under other statutes. The Court will grant the relator's motion as to liability. Because the defendants have not yet seen the fuller billing records submitted to the Court in camera, they have twenty days from the date of this memorandum and order to submit any additional argument as to the amount, and the relator has a week to reply if she chooses. The Court will then enter a supplemental order as to the amount of fees granted, and will close this case on the records of the court.
ORDER
In accordance with the reasons set forth in the attached memorandum of law, it is this 22nd day of March, 2001, by the United States District Court for the District of Maryland, ORDERED, that:
1. Relator's Motion to Strike Defendant Kline's Memorandum in Opposition to Relator's First Petition for Attorneys' Fees and Costs, Or, Alternatively, To File Reply in Further Support of Relator's Petition BE, and the same IS, hereby GRANTED in the alternative as a reply;
2. Within one week of the date of this order, relator's counsel shall supply defendants with counsel's billing records contained in Relator's in camera submission to the Court of January 30, 2001, with redaction of no more than the eight items noted in the opinion, as underlined in the in camera submission;
3. Relator's First Petition for Attorneys' Fees and Costs BE, and the same hereby IS, GRANTED as to liability;
4. Within twenty days of the date of this order, defendants O'Shaughnessy and Kline may submit any additional argument they wish to present on the amount of fees awarded to relator; and
5. Within one week of any timely submission by defendants, relator may reply.