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United States ex rel. Rigsby v. State Farm Fire and Casualty Co.

United States District Court, S.D. Mississippi, Southern Division

February 21, 2014

UNITED STATES OF AMERICA ex rel. CORI RIGSBY and KERRI RIGSBY Relators,
v.
STATE FARM FIRE AND CASUALTY CO., et al. Defendants.

MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DENYING IN PART RELATORS' MOTION TO INITIATE DISCOVERY, IMPOSE MAXIMUM PENALTY, AWARD MAXIMUM RELATORS' SHARE, AND AWARD RELATORS THEIR ATTORNEYS' FEES, EXPENSES, AND COSTS

HALIL SULEYMAN OZERDEN, District Judge.

BEFORE THE COURT is the Motion to Initiate Discovery, Impose Maximum Penalty, Award Maximum Relators' Share, and Award Relators Their Attorneys' Fees, Expenses, and Costs [1104], filed by Relators Cori Rigsby and Kerri Rigsby. Both the United States of America[1] and Defendant State Farm Fire and Casualty Company ["State Farm"] have filed Responses [1106], [1107] to the Motion [1104], and Relators have filed a Reply [1112]. After consideration of the Motion, the related pleadings, the record in this case, and relevant legal authorities, and for the reasons that follow, the Court finds that Relators' Motion [1104] should be granted in part and denied in part. Relators' request to award the maximum Relators' share will be granted, their request to initiate expanded discovery will be denied, and their requests for an award of the maximum civil penalty and for attorneys' fees, expenses, and costs will be granted in part and denied in part. In accordance with 31 U.S.C. § 3729(a), the United States Government will be awarded treble damages in the amount of $750, 000.00, plus a civil penalty in the amount of $8, 250.00, for a total sum of $758, 250.00. Relators will be awarded 30 percent of this amount pursuant to 31 U.S.C. § 3730(d)(2), with 15 percent being awarded to each Relator. Relators are also entitled to recover reasonable attorneys' fees in the amount of $2, 610, 149.80 and expenses in the amount of $303, 078.89, for a total award of $2, 913, 228.69 in fees and expenses, as well as their costs upon submission of an appropriate bill of costs.

I. BACKGROUND

Relators Cori Rigsby and Kerri Rigsby filed their initial Complaint [2] in this case on April 26, 2006, in camera and under seal, pursuant to the False Claims Act ["FCA"], 31 U.S.C. §§ 3729, et seq. Relators filed an Amended Complaint [16] on May 22, 2007, which remains the operative pleading. Relators allege that State Farm attempted to shift its responsibility for Hurricane Katrina wind damage at residential properties covered by both a homeowner's insurance policy and a flood insurance policy by classifying wind damage as storm surge damage, thereby recasting State Farm's liability for wind losses on such properties as flood losses which the Government would be responsible to pay under the National Flood Insurance Program ["NFIP"]. At the conclusion of a trial in this case, the jury determined that State Farm had submitted to the Government a false claim and a false record material to a false claim in connection with damage to the home of Thomas and Pamela McIntosh located in Biloxi, Mississippi. A more detailed procedural history of this case can be found in the Court's Order [1127] denying State Farm's Motions for Judgment as a Matter of Law [1101] and for a New Trial [1102].

Relators have charged that State Farm engaged in a scheme to defraud the Government and have sought expansive discovery into flood claims made at residential properties other than the McIntoshes'. It is undisputed that Relators did not have firsthand knowledge of these other alleged claims. This Court has previously determined that

[t]he McIntosh claim is the only instance of State Farm's having submitted an allegedly false claim of which the Relator Kerri Rigsby has first hand knowledge, i.e. direct and independent knowledge sufficient to support the Court's subject matter jurisdiction, in light of the decision of the United States not to intervene.

Mem. Op. [343], at 10. For this reason, earlier in this litigation the Court limited Relators' request for discovery, stating that "[i]n the event the Relators prevail on the merits of their allegations concerning the McIntosh claim, [the Court] will then consider whether additional discovery and further proceedings are warranted." Id.

On April 8, 2013, the jury reached its unanimous verdict on Relators' remaining two claims. Specifically, the jury found that State Farm knowingly presented, or caused to be presented, to an officer or employee of the United States Government, a false or fraudulent claim for payment or approval in connection with the McIntosh flood claim, in violation of 31 U.S.C. § 3729(a)(1) (1994), and that State Farm knowingly made, used, or caused to be made or used, a false record or statement material to a false or fraudulent claim in connection with the McIntosh flood claim, in violation of 31 U.S.C. § 3729(a)(1)(B) (2009). Special Verdict Form [1092] at 2-3. The jury determined that the Government suffered damages in connection with the McIntosh flood claim in the amount of $250, 000.00. Id. at 3.

In light of the jury's verdict, Relators now ask the Court to permit them to initiate expanded discovery into claims on other properties insured by State Farm, to impose the maximum civil penalty and award the maximum Relators' share allowable for FCA claims, and to award Relators their attorneys' fees, expenses, and costs.

II. DISCUSSION

A. Relators' Request for Expanded Discovery

1. The Parties' Positions

Relators assert that they "have earned the right to take discovery regarding the full scope of State Farm's now indisputable fraud." Relators' Mem. in Supp. of Mot. [1105] at 11. Relators contend that they have alleged a fraudulent scheme in their Amended Complaint with sufficient particularity to obtain discovery not limited to the specific examples of that fraud identified in the Amended Complaint. Id. at 14.

State Farm responds that Relators are attempting to "claim smuggle" and that the Court has no jurisdiction in this case over any other potential claims under 31 U.S.C. § 3730(e)(4). Def.'s Mem. in Opp'n to Relators' Mot. [1108] at 8. State Farm argues that the jury did not determine State Farm engaged in any "scheme" to defraud the Government and that Relators are not entitled to additional discovery based upon any such alleged fraudulent scheme. Id. at 10-12. In support of its position, State Farm points out that Relators' conspiracy claim was dismissed at trial for insufficiency of evidence. Id. at 18.

State Farm also maintains that Relators have not pleaded which additional false claims State Farm submitted with particularity sufficient to provide a reliable indicia that State Farm engaged in a scheme to shift Hurricane Katrina wind damage to the Government through the NFIP. Id. at 12-16. State Farm contends that Relators' conduct in connection with the allegations "should have enabled Relators to come forward long before now and allege specific facts sufficient under Rule 9(b) to support additional alleged FCA violations, if there were such facts." Id. at 17. According to State Farm, Relators cannot now "discover' their way into original source' status." Id.

In an earlier Memorandum Opinion [343] entered on August 10, 2009, the Court considered ten substantive Motions, including State Farm's Motion to Dismiss [98] pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6). At that time, the Court found that Relators had stated their FCA claim as to the McIntosh property with sufficient particularity to satisfy the requirements of Rule 9(b). Mem. Op. [343] at 9. Because the McIntosh claim was the only instance of State Farm's having submitted an allegedly false claim of which either Relator had firsthand knowledge, the Court "limit[ed] the presentation of evidence in this action to facts relevant to the McIntosh claim." Id. at 10. "In the event the Relators prevail on the merits of their allegations concerning the McIntosh claim, " the Court stated that it would "then consider whether additional discovery and further proceedings are warranted." Id. The Court did not state or indicate that expanded discovery would automatically result from a favorable jury verdict on the McIntosh claim.

2. Legal Standard

Federal Rule of Civil Procedure 9(b) provides that, "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed.R.Civ.P. 9(b). "[C]laims brought under the FCA must comply with the particularity requirements of Rule 9(b) for claims of fraud." United States ex rel. Steury v. Cardinal Health, Inc., 735 F.3d 202, 204 (5th Cir. 2013) (quotation omitted).

With respect to the scope of discovery generally,

[u]nless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense-including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).

Fed. R. Civ. P. 26(b)(1). "A district court has broad discretion in all discovery matters...." Moore v. CITGO Refining and Chemicals Co., 735 F.3d 309, 315 (5th Cir. 2013) (quotation omitted). "Discovery rulings are committed to the sound discretion of the trial court." McCreary v. Richardson, 738 F.3d 651, 654 (5th Cir. 2013) (quotation omitted).

In United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180 (5th Cir. 2009), a False Claims Act case in which doctors and a hospital allegedly billed Medicare and Medicaid for services not performed, the United States Court of Appeals for the Fifth Circuit considered the level of detail required by Rule 9(b) in a False Claims Act case.

[T]o plead with particularity the circumstances constituting fraud for a False Claims Act § 3729(a)(1) claim, a relator's complaint, if it cannot allege the details of an actually submitted false claim, may nevertheless survive by alleging particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were actually submitted.

Grubbs, 565 F.3d at 190. The Fifth Circuit explained that the details which would lead to a "strong inference" that false claims were "actually submitted" would include items "such as dates and descriptions of recorded, but unprovided, services and a description of the billing system that the records were likely entered into...." Id. at 190-91. In this context, however, Rule 9(b) "prevents... the filing of baseless claims as a pretext to gain access to a fishing expedition.'" Id. at 191. Finding that the relator in that case, Dr. Grubbs, had alleged sufficient detail to satisfy Rule 9(b), the Fifth Circuit "emphasize[d] that we decide only that the allegations are sufficient to gain Dr. Grubbs access to the discovery process. We leave to the able district court to manage this access-discovery targeted to the claims alleged, avoiding a search for new claims. " Id. at 195 (emphasis added).

3. Analysis

In their briefing on the present Motion and in their Amended Complaint [16], Relators rely upon their theory about State Farm's alleged scheme to shift its responsibility to pay claims for wind damage under State Farm homeowner's insurance policies to the United States Government through the NFIP as a justification for the expansion of discovery. Even assuming Relators have pleaded sufficient details regarding the existence of a scheme, as to any claims other than the McIntosh claim, the Amended Complaint [16] lacks sufficient details that lead to a "strong inference" that any additional claims were "actually submitted" to the Government, as required by Grubbs. [2] In other words, the Relators attempt to rely upon the existence of a scheme and the single false McIntosh claim to open the door to additional discovery into other suspected false claims, for which few if any details at all have been pleaded. Grubbs requires more than simply adequately pleading the existence of a scheme and one specific claim; information which would support the strong inference that other claims were actually submitted is also necessary. Grubbs teaches that under the circumstances of this case, the expansion of discovery beyond the McIntosh claim would amount to, as Grubbs described it, a "fishing expedition" for new claims. See Grubbs, 565 F.3d at 190-91.

Armed with knowledge of a purported scheme and evidence related to the single McIntosh claim, Relators seek far-reaching, unfettered discovery in order to search for new claims beyond the McIntosh claim, the only false claim of which they have firsthand knowledge. Grubbs states that even if a complaint survives a Rule 9(b) challenge, discovery should be tailored to the claims alleged, so as to avoid a search for new claims. Id. at 195. To allow expanded discovery in the fashion Relators seek would permit improper smuggling of additional claims beyond the single claim of which Relators have personal knowledge.

Had Relators pleaded sufficient facts to create a strong inference that State Farm had submitted any other claims to the Government in conjunction with the alleged scheme, the Court could "limit[] any fishing' to a small pond that is either stocked or dead." Id. at 191. However, Relators have not pleaded sufficient details regarding any other claims to survive a Rule 9(b) challenge. Were the Court to grant Relators' request, discovery would necessarily be overly broad because the Amended Complaint lacks enough detail to permit the Court to craft reasonable discovery parameters. Beyond the McIntosh claim, the Relators' conclusory allegations in the Amended Complaint [16] as to the existence of other specific FCA violations do not satisfy the particularity requirements of Rule 9(b), and expanded discovery would lead to an inappropriate fishing expedition for new claims. See Grubbs, 565 F.3d at 190-91. Relators' request for additional discovery should be denied.

Relators have not sought leave to amend the pleadings to allege any additional details about other claims. Relators have attached to their Reply [1112] in support of the present Motion a list of "Revised Engineering Reports" supplied by Forensic Analysis & Engineering Corporation. The list appears to reflect eighteen (18) engineering reports performed on properties in addition to the McIntoshes'. Relators assert that "State Farm coerced the results of an engineering analysis" on these properties. Reply [1112] at 7. Even if this list attached to a Reply brief could somehow be construed as a request by Relators to amend the pleadings, for the reasons that follow Relators' conclusory statements as to the import of these reports would be insufficient to survive a Rule 9(b) challenge.

Relators obtained the list during discovery from former Defendant Forensic, in response to an interrogatory that asked Forensic to "[i]dentify each engineering report related to damage caused by Hurricane Katrina that was reviewed, updated, changed, or altered in any way after such report was provided to State Farm." Forensic's Resps. [992-2] at 4. The Fifth Circuit has held that the requirement for particularity in pleading fraud "must be laid out before access to the discovery process is granted, " and that courts are required to apply Rule 9(b) "with force, without apology." Williams v. WMX Techs., Inc., 112 F.3d 175, 178 (5th Cir. 1997) (emphasis in original). Other district courts in the Fifth Circuit have rejected attempts to amend a fraud complaint based upon facts learned during discovery. See, e.g., In re Gulf States Long Term Acute Care of Covington, LLC, Nos. 11-1659 & 13-508, 2014 WL 107870, at *2 (E.D. La. Jan. 9, 2014) (citing United States for the Use and Benefit of Siemens Bldg. Techs., Inc. v. Grot, Inc., No. 4:05CV77, 2005 WL 2012263, at **2-3 (E.D. Tex. Aug. 19, 2005)).

The central issue in this case has been State Farm's adjustment of flood claims under the NFIP. Relators have maintained throughout this litigation that State Farm ordered engineering reports only in instances where it was adjusting wind claims, and that the reports were contained in State Farm homeowners' wind claim files, not in flood claim files. The list attached to Relators' Reply provides, at most, reliable indicia that the owners of these eighteen (18) properties more likely than not had a homeowners' policy with State Farm, that those insured individuals submitted a homeowners' claim to State Farm for wind damage sustained during Hurricane Katrina, and that the engineering reports in the homeowners' claim files were "reviewed, updated, changed, or altered in any way after such report was provided to State Farm." Forensic's Resps. [992-2] at 4. It is unclear from Relators' discovery request and the list itself what changes were made to the reports and whether such changes had anything to do with flood damage, if any, sustained at that particular property. State Farm's conduct with respect to the adjustment of homeowners' claims, in and of itself, is insufficient to state a claim that State Farm violated the FCA with respect to a particular flood claim.

For instance, Relators have not alleged that any of these eighteen (18) properties were even covered by an SFIP, let alone an SFIP issued and adjusted by State Farm. Even assuming all eighteen (18) properties were covered by a State Farm issued SFIP, Relators have not offered sufficient detail to provide reliable indicia that would lead to a strong inference that any flood claims were actually submitted on any of these eighteen (18) properties. See Grubbs, 565 F.3d at 190.[3] Even if State Farm somehow coerced Forensic to manipulate the engineering reports for homeowners' wind claim files, as Relators allege, this fact alone would not necessarily mean that these properties were also covered by a State Farm issued SFIP or that any claims, false or otherwise, were made on a particular SFIP. The Court therefore finds that the inclusion of this list in a Second Amended Complaint would not add sufficiently detailed factual allegations to overcome a motion to dismiss. For these reasons as well, Relators' request to expand discovery should be denied.

B. Relators' Request for the Court to Impose Maximum Civil Penalty

Relators assert that "[i]n light of the magnitude of State Farm's intentional fraud upon the federal government, the Court should assess the maximum civil penalty of $11, 000 against State Farm." Relators' Mem. in Supp. of Mot. [1105] at 17. Relators contend that "State Farm knowingly employed a systematic fraud in the wake of a devastating natural disaster to enrich itself at the Government's expense." Id. at 18.

State Farm responds that "[a] jury's finding of a single putative false claim cannot be characterized as systematic' in any sense." Def.'s Mem. in Opp'n to Relators' Mot. [1108] at 24. State Farm maintains that there is no basis in the record for imposition of the maximum penalty and that imposition of the minimum civil penalty of $5, 500.00 is appropriate. Id. at 23-24.

31 U.S.C. § 3729(a) provides that any person who violates § 3729(a)(1) "is liable to the United States Government for a civil penalty of not less than $5, 000 and not more than $10, 000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990...." 31 U.S.C. § 3729(a) (2009); see Federal Civil Penalties Inflation and Adjustment Act of 1990, Pub. L. No. 101-410, 104 Stat. 890 (1990). Pursuant to the adjustment, the civil penalty presently ranges from $5, 500.00 to $11, 000.00. 28 C.F.R. § 85.3(a)(9). The parties do not dispute that this is the appropriate range for the Court to consider. See, e.g., Relators' Mem. in Supp. of Mot. [1105] at 6; Def.'s Mem. in Opp'n to Relators' Mot. [1108] at 23.

"Congress... afforded the federal trial courts considerable discretion in calculating damages and ascertaining the amount of the civil penalty component, within the statutory range." Morse Diesel Intern., Inc. v. United States, 79 Fed.Cl. 116, 124 (2007) (citing 31 U.S.C. § 3729). While the FCA "does not set any specific formula for imposing civil penalties, [the Act] authorizes federal trial courts to award monetary relief that will afford the Government a base civil penalty amount that can be adjusted, in the court's discretion, up to the statutory ceiling." Id. (citing 31 U.S.C. § 3729(a)(1), (b)(1)). Considering the totality of the circumstances surrounding this case, including the evidence and testimony adduced at trial, the Court is of the opinion that Relators' request for the maximum civil penalty should be granted in part and denied in part, and that a penalty in the middle of the range is most appropriate. The Court will therefore assess a civil penalty against State Farm in the amount of $8, 250.00.

C. Relators' Request for the Court to Award Maximum Relators' Share

Relators contend that they "are entitled to the maximum FCA relator fee of 30 percent in light of the burdens that they have carried, the substantial contributions they have made with no assistance from the government, and the sacrifices they have endured for seven years." Relators' Mem. in Supp. of Mot. [1105] at 18. According to Relators, "[t]he ponderous docket in this case is a testament to the Relators' contribution and the oppressiveness of the burdens they have endured." Id. at 20.

The Government has responded to this portion of Relators' Motion [1104] and takes the position that Relators' request for a share of the recovery should be denied without prejudice as premature. Govt.'s Resp. [1106] at 1. According to the Government, in most cases the United States Department of Justice is able to negotiate an agreement with a relator's counsel without the need for involvement from the court, and this issue is not yet ripe for determination because State Farm's liability has not been adjudged with finality in light of the pendency of State Farm's post-trial Motions. Id. at 2. The Government also states that in the event the scope of proceedings are expanded, Relators might obtain a significantly larger recovery. Id. at 3.

State Farm maintains that "[t]he Court should pretermit this issue altogether." Def.'s Mem. in Opp'n to Relators' Mot. [1108] at 24. State Farm asserts that the Department of Justice and Relators should first determine any Relators' share, such that this matter is not ripe for judicial review and adjudication. Id.

State Farm's post-trial Motions and Relators' request to expand the scope of these proceedings have now been resolved. The Government has had ample time to negotiate a resolution with Relators. The Government has cited no authority, and the Court has found none, which requires the Court to give the Government any additional time beyond what it has already had to negotiate a settlement. While the Court appreciates the Government's position, in the current procedural posture of this case the Court finds that a stay pending such negotiation is not warranted. The Court sees no just reason to delay resolution of the question of Relators' share.

The Government has elected not intervene in this case. See, e.g., Notice [56] at 1. If the Government does not proceed with an action under the FCA,

the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and damages. The amount shall be not less than 25 percent and not more than 30 percent of the proceeds of the action or settlement and shall be paid out of such proceeds.

31 U.S.C. § 3730(d)(2).

This matter has been pending for nearly eight (8) years, and Relators' current counsel has litigated this case for over five and a half (5 ½) years, responding to numerous dispositive motions and voluminous pleadings. Relators have shouldered the entire burden of prosecuting this matter and bringing the McIntosh claim to verdict. Given the extensive amount of time and effort expended and the significant expenses incurred by Relators, without any involvement by the Government, the Court finds that the maximum 30 percent share is an appropriate award for Relators. See 31 U.S.C. § 3730(d)(2). The Court will divide this share equally between the two Relators in this case, 15 percent to Cori Rigsby and 15 percent to Kerri Rigsby. Relators' request for the Court to award the maximum share will be granted.

D. Relators' Request for the Court to Award Attorneys' Fees, Expenses, and Costs

1. The Parties' Positions

Relators assert that they are entitled to an award against State Farm of their attorneys' fees, costs, and expenses incurred to obtain the verdict against State Farm. Relators' Mem. in Supp. of Mot. [1105] at 23. Relators seek fees, costs, and expenses for work performed by the two law firms that currently represent them, Weisbrod Matteis & Copley, PLLC ["WMC"] and Heidelberg Harmon PLLC ["HH"], in the amounts of $1, 232, 735.06, and $287, 346.34, respectively. Id. at 23-26. Relators have also submitted a request for the fees, costs, and expenses of a law firm that previously represented them, Gilbert LLP ["Gilbert"], in the amount of $5, 225, 303.67. Id. Relators have supplied declarations and affidavits supporting the billings by WMC and HH; however, they have submitted only spreadsheets of fees and costs reported by Gilbert. Relators "invited Gilbert to provide an affidavit or declaration as to the reasonableness of the fees and expenses reflected on those spreadsheets, and Gilbert has declined to do so at this time." Id. at 24 n.59.

State Farm responds that Relators have failed to show any entitlement to an award of legal fees and expenses and have failed to establish the reasonableness of their litigation expense reimbursement requests. Def.'s Mem. in Opp'n to Relators' Mot. [1108] at 25 (citing Saizan v. Delta Concrete Prods. Co., 448 F.3d 795, 800 (5th Cir. 2006)). State Farm agrees that the lodestar analysis is appropriate in this case, but argues that the hourly rates claimed for Gilbert attorneys are "patently unreasonable for this jurisdiction" and that "the failure of Gilbert or anyone else to provide proper support for the rates requested forfeits the opportunity to submit any further evidence by affidavit or otherwise on the issue." Id. at 27 (citing La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 326 (5th Cir. 1999)). State Farm complains that the documentation submitted does not identify the Gilbert attorneys by name or experience. Id. at 27 n.7. State Farm also argues that the rates for WMC are unreasonable in this district and are based upon rates within the District of Columbia, and that HH "apparently already has been paid by either the Gilbert firm or WMC...." Id. at 28.

With respect to the number of hours expended by Relators' counsel, State Farm contends that the descriptions of work performed by Gilbert employees is too vague to determine the nature of the work billed or whether the work was performed by an attorney or paralegal. Id. at 29. State Farm also complains that Relators have submitted bills related to all claims, regardless of whether Relators prevailed on them. State Farm argues that a significant downward adjustment of at least one-third of the requested amounts should be made due to the number of unsuccessful claims, including Relators' claims for retaliatory discharge, reverse false claim, and conspiracy, and due to the number of original Defendants, eleven (11), who were voluntarily dismissed by Relators without the benefit of a settlement. Id. at 29-30 (citing Johnson v. Ga. Hwy. Express, Inc., 488 F.2d 714 (5th Cir. 1974)). State Farm further suggests that an additional downward adjustment from the lodestar calculation is warranted because "Relators have refused to document their attorneys' and fee [sic] requests with copies of their fee agreements with their attorneys notwithstanding that the agreements were requested by State Farm during discovery and ordered produced by this Court." Id. at 30.

State Farm posits that Relators' retention of counsel from Washington, D.C., was unnecessary and unreasonably drove up the hourly rates, that the billing records reflect purported "inefficiencies and duplication of effort, " and that "a significant portion of the fees and expenses sought was unnecessarily incurred" as a result of issues with Relators' former counsel, whom this Court disqualified from representing Relators. Id. at 32. Finally, State Farm argues that the out-of-state travel expenses being sought were unnecessary because Mississippi counsel was available, and other charges including in-office meals for Relators' counsel, office air conditioning charges, and reimbursement for Kerri Rigsby's credit card, are unauthorized and are "classic examples of double dipping since they are already a component of the attorneys' hourly rates." Id. at 32-33.

2. Analysis

If the Government does not proceed with an action under the FCA, the person bringing the action

shall also receive 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).

a. Attorneys' Fees

(1) Legal Standard

Relators and State Farm ask the Court to apply the lodestar method in determining the amount of attorneys' fees Relators should be awarded. Relators' Mem. in Supp. of Mot. [1105] at 24; Def.'s Mem. in Opp'n to Relators' Mot. [1108] at 26. While neither side has cited the Court to any binding authority holding that the lodestar method should be utilized in an FCA case, other Circuit Courts of Appeals have approved use of this method in FCA cases. See, e.g., United States ex rel. Vuyyuru v. Jadhav, 555 F.3d 337, 356-57 (4th Cir. 2009); Gonter v. Hunt Valve Co., 510 F.3d 610, 616-17 (6th Cir. 2007). The Court finds this authority persuasive and will employ the lodestar method to calculate the appropriate attorneys' fee award in this case.

In the first step of this method, the Court determines the lodestar, which "is calculated by multiplying the number of hours an attorney reasonably spent on the case by an appropriate hourly rate, which is the market rate in the community for this work." Black v. SettlePou, P.C., 732 F.3d 492, 502 (5th Cir. 2013) (citation omitted). The resulting figure provides an objective basis upon which to make an initial assessment of the value of a lawyer's services. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). A plaintiff bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates. Id. at 436; Black, 732 F.3d at 502. The ...


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