United States District Court, S.D. Mississippi, Southern Division
UNITED STATES OF AMERICA ex rel . CORI RIGSBY and KERRI RIGSBY RELATORS
STATE FARM FIRE AND CASUALTY CO., et al. DEFENDANTS
MEMORANDUM OPINION AND ORDER GRANTING RELATORS'
 MOTION TO EXTINGUISH GILBERT LLP'S LIEN, DENYING
GILBERT LLP'S  COUNTER-MOTION TO SET VALUE OF LIEN,
AND EXTINGUISHING GILBERT LLP'S  LIEN
SULEYMAN OZERDEN, UNITED STATES DISTRICT JUDGE.
THE COURT are the Motion  to Extinguish Gilbert
LLP's Lien filed by Relators Cori Rigsby and Kerri
Rigsby, and the Counter-Motion  to Set Value of Lien
filed by Gilbert LLP (“Gilbert”). Both Motions
are fully briefed. The Court has also received supplemental
briefing , , , . After consideration
of the Motions, the related pleadings, the record in this
case, and relevant legal authority, the Court finds that
Relators' Motion  should be granted, that
Gilbert's Counter-Motion  should be denied, and
that Gilbert's lien  should be extinguished.
Cori Rigsby and Kerri Rigsby initiated this action by filing
a Complaint  on April 26, 2006, in camera and
under seal, pursuant to the False Claims Act
(“FCA”), 31 U.S.C. §§ 3729, et
seq. Relators named as a Defendant, among others, State
Farm Fire and Casualty Company (“State Farm”).
Compl.  at 1. State Farm filed a Counterclaim against
Relators. On October 29, 2015, State Farm filed its Third
Amended Counterclaim , which remains pending.
time Relators filed their original Complaint , they were
represented by counsel from the Scruggs Law Firm of Oxford,
Mississippi; Bartimus, Frickleton, Robertson & Gorny,
P.C. of Jefferson City, Missouri; and Bartle, Marcus &
Graves, PC of Kansas City, Missouri. Compl.  at 32-33.
Attorneys from the Scruggs Law Firm were permitted to
withdraw by Text Order entered on March 20, 2008. On May 19,
2008, the Court granted State Farm's Motion  to
Disqualify and disqualified Relators' remaining counsel
from further participation in this case. Mem. Op.  at 5;
Order  at 1. On June 19, 2008, the Court denied a Motion
for Reconsideration  of the disqualification Order
. Order  at 5.
30, 2008, local counsel C. Maison Heidelberg and Ginny Y.
Kennedy of Maison Heidelberg P.A. in Ridgeland, Mississippi,
entered appearances on behalf of Relators. Notice  at 1;
Notice  at 1. Thereafter, counsel from Gilbert sought
and obtained pro hac vice (“PHV”) admission for
attorneys including August J. Matteis, Jr., Craig J.
Litherland, Benjamin R. Davidson, Scott D. Gilbert, Derek
Yoshio Sugimura, and Lucian C. Martinez, Jr., to represent
Relators. These attorneys were all with the Gilbert law firm
when they sought admittance PHV. Over time the name of the
firm changed from Gilbert Randolph, LLP to Gilbert Oshinsky
LLP on October 17, 2008, see Notice  at 1, and
ultimately to Gilbert LLP on August 4, 2009, see
Notice  at 1.
Gilbert's engagement letters with Relators
LLP has submitted a copy of an engagement letter [1311-2]
between Gilbert Randolph LLP and Relators dated August 14,
2008 (the “August 2008 Engagement Letter”).
Though the letter contains blanks for Relators'
signatures, the copy provided to the Court is not executed.
See Aug. 2008 Engagement Letter [1311-2] at 2.
LLP has also presented copies of December 1, 2008, engagement
letters [1311-3], [1311-4] between Gilbert Oshinsky LLP and
Relators, which were executed by Matteis on behalf of the
firm and by each Relator (the “December 2008 Engagement
Letters”). These letters provide in relevant part that
Costs, Expenses, and Attorneys' Fees
This is a contingent fee agreement. Accordingly, you will not
be required to pay any amount to [Gilbert Oshinsky LLP]
unless you receive a monetary payment through settlement
Costs and Expenses
[Gilbert Oshinsky LLP] will advance all costs and expenses
related to this matter. If you prevail in this matter and
receive payment as a result of a judgment or settlement, you
will reimburse the Firm for all costs and expenses related to
this claim from the net amount received by you, not to exceed
7.5% of the net amount . . . .
If you recover nothing from the qui tam action, you will not
be charged for any costs or expenses. You and [Gilbert
Oshinsky LLP] also agree to seek recovery of all costs and
expenses from the defendants and/or the government, to the
extent that such a recovery is permitted under applicable
law. If [Gilbert Oshinsky LLP] recovers all costs and
expenses from defendants or the government, then [Gilbert
Oshinsky LLP] will not seek recovery of such costs and
expenses from you. However, if [Gilbert Oshinsky LLP] does
not recover all of its costs and expenses from the
defendants, you will reimburse [Gilbert Oshinsky LLP] for
costs and expenses up to 7.5% of your total net recovery as
If you recover money through judgment, settlement or other
means as the result of the qui tam action, then, in addition
to reimbursing the Firm for costs and expenses as described
above, you will pay the Firm a contingency fee of forty
percent (40%) of the gross amount of any sum that you recover
(calculated prior to the deduction of any costs and expenses
* * *
* * *
In the event that this representation is terminated prior to
the conclusion of this matter, you agree to reimburse
[Gilbert Oshinsky LLP] for costs and expenses as provided
above, in the section “Costs, Expenses, and
Attorneys' Fees.” In addition, [Gilbert Oshinsky
LLP] will be entitled to receive payment of its
attorneys' fees out of any ultimate award or settlement
that you receive for the services it rendered, from the
initiation of this representation to the date on which
[Gilbert Oshinsky LLP] withdrew or was terminated from the
representation. Such payment will be made on the basis of
its customary hourly rates rather than on a contingency-fee
basis. However, if [Gilbert Oshinsky LLP's]
representation is terminated by you, and you eventually
recover proceeds from the qui tam action through an
award or settlement, [Gilbert Oshinsky LLP] reserves the
right to seek a partial contingency fee award from the court,
2008 Engagement Letters [1311-3], [1311-4] at 2, 4 (footnote
as to customary rates omitted) (emphasis added).
Relators' termination of Gilbert
or around October 2011, Matteis and Sugimura withdrew from
Gilbert after Matteis formed Weisbrod Matteis & Copely
[sic] PLLC (‘WMC'). Sugimura joined Matteis at
WMC.” Decl. of Craig J. Litherland [1311-1] at 2.
“After Matteis formed WMC, Gilbert offered to continue
representing the Relators, but, ultimately, the Relators
chose to engage WMC and continue with Matteis as their lead
counsel.” Id. On March 30, 2012, Relators'
local counsel filed a Motion  for an Order authorizing
Gilbert LLP and its attorneys Gilbert, Litherland, and
Davidson to withdraw as counsel, which the Court granted by
Text Order on April 2, 2012.
January 25, 2013, Gilbert LLP filed a Notice of Former
Counsel's Lien . This Notice provided as follows:
Please take notice that the firm GILBERT LLP
(“Gilbert”), former counsel to Relators Cory
Rigsby and Kerri Rigsby (“Relators”) in the above
captioned case, holds a lien upon any funds or other assets
that Relators may recover based upon the causes of action
asserted by Relators herein. Such lien is security for the
fees and expenses owed to Gilbert in connection with its
services rendered in relation to the causes of action
asserted herein. The lienholder, Gilbert, may be contacted
c/o Craig J. Litherland
1100 New York Avenue, N.W.
Washington, D.C. 20005
 at 1.
The Court's award of attorneys' fees and expenses
merits of Relators' qui tam claims as to the
McIntosh property proceeded to trial from March 25, 2013, to
April 8, 2013. The jury found that State Farm had submitted a
false claim and a false record material to a false claim to
the Government in connection with damage to the home of
Thomas and Pamela McIntosh located in Biloxi, Mississippi.
or around April 2013, after prevailing against State Farm in
a jury trial, the Relators' current counsel contacted
Gilbert and requested that Gilbert submit a fee petition in
connection with separate fee petitions the Relators were
making through their present counsel.” Decl. of Craig
J. Litherland [1311-1] at 3. According to Litherland, Gilbert
declined this request because it no longer represented
Relators and believed that the “FCA's fee-shifting
provision did not permit Gilbert to make such a
request.” Id. “Relators' counsel
then requested that Gilbert provide versions of its fee and
expense invoices with such edits as Gilbert would apply if
Gilbert was submitting its own fee request.”
Id. Gilbert also declined to do this, as it
“believed that Relators' decision as to which fees
and expenses to seek from State Farm was a strategy decision
for Relators and their counsel.” Id.
of e-mails dated May 2 and 3, 2013, reflect that there was
more discussion between Relators' current counsel at WMC
and former counsel at Gilbert as to whether Gilbert would
submit a declaration, affidavit, or any other support for an
award of Gilbert's fees and expenses. See
E-Mails [1299-1] at 2-5. In the last email, a Gilbert
attorney informed Relators' counsel that he would be
sending an updated spreadsheet, but “[w]e will not be
submitting an affidavit regarding our fees and
expenses.” Id. at 2. In connection with the
present Motions, Litherland now informs the Court that
[a]s a means of cooperating with the Relators, Gilbert did
provide the Relators with spreadsheets containing a listing
of Gilbert's attorneys' fees and expenses incurred
during the course of Gilbert's representation of the
Relators. These largely unedited materials were ultimately
submitted as part of the Relators' fee petition, but
without any explanatory documentation or any declarations
from Mr. Matteis (who supervised the work giving rise to
these fees and expenses) attesting to their reasonableness.
of Craig J. Litherland [1311-1] at 3. What authority or
obligation Mr. Matteis would have had to attest to the
reasonableness of Gilbert's fees, other than his own, is
6, 2013, Relators filed a Motion to Initiate Discovery,
Impose Maximum Penalty, Award Maximum Relators' Share,
and Award Relators Their Attorneys' Fees, Expenses, and
Costs . Pursuant to 31 U.S.C. § 3730(d)(2),
Relators sought compensation for work performed by the two
law firms that currently represent them, Weisbrod Matteis
& Copley, PLLC (“WMC”) and Heidelberg Harmon
PLLC (“HH”), specifically attorneys' fees in
the amount of $1, 232, 735.0 and costs and expenses in the
amount of $287, 346.34. Relators also submitted a request for
the fees, costs, and expenses of Gilbert LLP in the amount of
$5, 225, 303.67. Relators supplied declarations and
affidavits supporting the billings by WMC and HH, but
submitted only the spreadsheets of fees and costs Gilbert had
February 21, 2014, the Court entered an Order  granting
in part and denying in part Relators' Motion . As
for Gilbert's attorneys' fees, the Court awarded
Relators $1, 080, 800.00 for work performed by Matteis while
at Gilbert and $421, 138.80 for work performed by Sugimura at
Gilbert, for a total of $1, 501, 938.80. Order  at 39.
The Court found that Relators sought “attorneys'
fees in the amount of $5, 225, 303.67 for work performed by
the Gilbert law firm and have submitted spreadsheets of fees
billed by Gilbert. The timekeepers [were] identified only by
their initials.” Id. at 29. Because the Court
was “unable to ascertain whether the hourly rates
listed or the amount of time expended is reasonable for these
unknown timekeepers, ” other than Matteis and Sugimura,
the Court disallowed these time entries. Id.
respect to Gilbert's expense request of $649, 843.67,
“[d]ue to the sparse detail contained in the Gilbert
expense spreadsheet, the Court [found] that the majority of
the expenses sought lack[ed] adequate support and should be
excluded.” Id. at 43. The Court also excluded
all overhead expenses normally absorbed into the
attorney's hourly rate and fees for expert witnesses who
were not called as witnesses at trial or even listed on the
witness list in the Second Amended Pretrial Order ,
including one who was excluded from testifying by the Court.
Id. Professional service fees paid by Gilbert to HH
for serving as local counsel were also declined, as the Court
had not been “provided the billing records supporting
HH's charges to Gilbert.” Id. at 44. The
Court ultimately found that expenses totaling $180, 756.78
from Gilbert were recoverable from State Farm. Id.
Court awarded the United States Government
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 the foregoing
amount in accordance with 31 U.S.C. § 3730(d)(2), with
15 percent awarded to Relator Cori Rigsby and 15 percent
awarded to Relator Kerri Rigsby. 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 ...