[00:00:00] Speaker 00: Case 14-7035, et al. [00:00:04] Speaker 00: Oscar Salazar, by his parents and next friends. [00:00:07] Speaker 00: Adela and Oscar Salazar, et al. [00:00:09] Speaker 00: The District of Columbia, et al. [00:00:11] Speaker 00: Appellants. [00:00:12] Speaker 00: Chartered Health Plan and D.C. [00:00:13] Speaker 00: Chartered Health Plan, Inc. [00:00:15] Speaker 00: Mr. Love for the Appellants, Ms. [00:00:17] Speaker 00: Millian for the Epiles. [00:00:20] Speaker 00: Please proceed. [00:00:21] Speaker 06: Good morning, Your Honors. [00:00:22] Speaker 06: Richard Love for the District of Columbia. [00:00:25] Speaker 06: Your Honors, in awarding a total of over $2.1 million to lawyers for two years of post-judgment enforcement and monitoring of a 15-year-old consent decree, the District Court abused its discretion first by failing to restrain the pattern of overstaffing and excessive billing that the Court has repeatedly found [00:00:47] Speaker 06: Second, by declining to make any reduction and then refusing the district's request for plaintiffs to produce time records sufficient to satisfy their burden to demonstrate the reasonableness of their fees for the individual claims. [00:01:02] Speaker 06: And third, by awarding fees under paragraph 66, akin to those charged by partners in the nation's largest law firms for trials of complex federal issues, [00:01:13] Speaker 06: In a case where liability has already been established, there is no longer any risk of non-payment, few if any novel issues remain, and where the vast majority of courts in the District of Columbia have applied rates in active federal court litigation, that is 36% to 37% lower than that awarded here, and such rates are particularly inappropriate [00:01:38] Speaker 06: and unnecessary for counsel to... Can I start you on the last part, on the third part? [00:01:46] Speaker 03: So, as I understand the state of your argument, you have not taken issue with the proposition that this is complex federal litigation as to which one of the Laffey rates applies. [00:02:00] Speaker 06: Well, we do presently. [00:02:01] Speaker 06: I think, you know, I certainly wouldn't have taken that position with regard to the discovery trial. [00:02:08] Speaker 03: But I didn't see any notation in your filings below or in your briefs. [00:02:12] Speaker 03: In fact, I saw the opposite, which is that your argument is that the lower Laffey rate should apply rather than the higher Laffey rate. [00:02:20] Speaker 03: Not that Laffey itself, which is sort of coterminous with complex federal litigation, shouldn't apply at all. [00:02:26] Speaker 06: I guess I was focusing more on the issue of complex litigation. [00:02:29] Speaker 06: Because I think what the paragraph 66 fees should be determined in light of what type of litigation this is. [00:02:41] Speaker 06: And that prevailing market rates for for-profit lawyers is only applicable as this court recently said in Ely, you know, where it's the same type of litigation. [00:02:51] Speaker 03: But that's what I'm getting at with Ely because as I read Ely, Ely said in that case there was a sub-market. [00:03:00] Speaker 03: a sub market within complex federal litigation that had to do with IDEA litigation. [00:03:05] Speaker 03: As to IDEA litigation, the district had submitted some 40 cases in the district court record that said, look, in IDEA litigation, there's a sub market where some lower rates apply. [00:03:15] Speaker 03: So we're not in Laffeyland. [00:03:17] Speaker 03: But your argument here has always been different, I think, because you've never argued that this is not complex federal litigation, that there's some sub market as to which lower rates apply, which your argument has been. [00:03:28] Speaker 03: I'm not saying it's right or wrong. [00:03:29] Speaker 03: But what your argument has been is that if you look at what rates have been applied throughout these cases as a general matter, it's the lower Laffey rate, not the higher Laffey rate. [00:03:40] Speaker 03: But that still buys into the notion, I think, that this is complex federal litigation of the type that Laffey generally pertains to, not that there's a sub-market as to which there's an entirely different category of rates that you apply, which is the argument that was made and accepted in Ely. [00:03:59] Speaker 06: I mean, yes, you know, what we are indicating is that, or what we have argued, is that the lower laughing rates are applicable. [00:04:09] Speaker 06: They further, more appropriately, the goals of the fee-shifting statute by providing counsel sufficient to maintain representation in this type of case, balancing the public fist. [00:04:26] Speaker 06: But, you know, I do think we certainly make the argument in our brief, I believe, that this litigation is unique. [00:04:33] Speaker 06: I mean, we say the liability phase has ended. [00:04:38] Speaker 06: Council have no risk of non-payment. [00:04:40] Speaker 06: The issues that remain are those that routinely surface in consent to pre-monitor in case of this type. [00:04:46] Speaker 06: And very importantly, counsel have significant discretion in this case to determine what, when, and how much legal services to provide. [00:04:54] Speaker 06: And I think in our brief we said this case is not about attracting competent counsel. [00:04:58] Speaker 06: It's about mitigating excessive billing by a firm with a monopoly on receiving fees in this case. [00:05:05] Speaker 02: quite fair, is it because the question of attracting counsel refers to, you know, the kind of case. [00:05:12] Speaker 02: A class action like this that's a complex class action that's, you know, if successful, it's going to require monitoring. [00:05:19] Speaker 02: Counsel have to look at that and say, is it going to be worth my while to put, you know, 20 years of my legal career into such a case or not? [00:05:27] Speaker 02: you know, looking at the case from now, yes, they have a certain, you know, they're not winning the business, but that doesn't mean that attracting company counsel is not a relevant concern or, you know, maybe you disagree. [00:05:38] Speaker 02: But I just wanted to probe a little more on the question Judge Shrivastava was asking. [00:05:42] Speaker 02: As I understood your briefing, you were arguing that [00:05:49] Speaker 02: you know, yes, this is complex federal litigation, and you framed your argument in the district court that you wanted to have the rebuttal opportunity that Covington, our decision in Covington provides, and you said that the first Salazar case shouldn't be read to strip the district court of its opportunity to present contrary evidence to the evidentiary showing that the plaintiffs made, that their rate was reasonable. [00:06:11] Speaker 02: So they've made the [00:06:12] Speaker 02: come forward and made their showing and you're saying we want to rebut that because we want to point to the uniform practice in this jurisdiction of awarding a lower rate. [00:06:23] Speaker 02: And so in that sense you're saying this is complex federal litigation but we want the lower rate. [00:06:30] Speaker 02: Is that right? [00:06:33] Speaker 06: I mean, yes, in part, but I think that in the district court, counsel also raised the argument that this was an inappropriate rate for consent to pre-litigation against the District of Columbia. [00:06:48] Speaker 06: And I think in our brief, maybe we expand on that position to provide more of the indicia [00:06:55] Speaker 06: of consent decree litigation and the factors which I just articulated, which make it less appropriate for these higher rates. [00:07:05] Speaker 06: But with that caveat, yes. [00:07:08] Speaker 03: I'm sorry. [00:07:11] Speaker 03: Just letting you get your briefs on page 49. [00:07:14] Speaker 03: You say, in arguing as between the high Laffey and low Laffey, just to use shorthand. [00:07:21] Speaker 03: In arguing for low Laffey, you say, and it's contrary to, in FARC sees the rates applied by, this is at the top of the page, by almost all the district courts in this circuit in complex federal court litigation. [00:07:31] Speaker 03: And then later on in 50 to 51, it's a similar theme. [00:07:35] Speaker 03: Since 2000, when the district court first applied enhanced Laffey rates in this case, the vast majority of courts in this jurisdiction have been called upon to decide what rate to apply in complex federal litigation against the government have applied the USAO Laffey rate. [00:07:47] Speaker 03: So that accepts the premise that this is complex federal litigation, and then the question is, within the account of complex federal litigation, should you apply low Laffey or high less? [00:07:56] Speaker 06: But we also say this is especially so where the settlement order itself guarantees that terrorist private will be paid for their work on the case. [00:08:06] Speaker 06: In this way, as I said, this case is not about attracting competent counsel. [00:08:10] Speaker 05: That bothers me. [00:08:11] Speaker 05: I think perhaps I'm reiterating what my colleague already said, but can you get a point in a case and say, well, we're not going to talk any more about attracting competent counsel, because they've already been competent counsel in the case. [00:08:24] Speaker 05: We're going to go from here on, we're going to reduce the risk. [00:08:26] Speaker 05: We don't have to attract country council anymore. [00:08:29] Speaker 05: Can we slice it that way? [00:08:30] Speaker 05: Don't we have to? [00:08:31] Speaker 06: Well, I think we are talking about a unique type of litigation, and that's the only point I'm trying to make. [00:08:36] Speaker 06: I see my time. [00:08:37] Speaker 05: Now, you said unique twice, and then the first time that you said unique in the next minute, you said routinely. [00:08:42] Speaker 05: You can't have both unique and routinely. [00:08:46] Speaker 05: Forget whether it's unique or not. [00:08:48] Speaker 05: Can we talk about attracting counsel only in terms of applying that factor and setting a right for part of the litigation and then decide we don't need it anymore? [00:08:57] Speaker 05: Don't we have to look at what the counsel [00:09:00] Speaker 05: is getting himself or herself into in the first instance and stay with the same analysis on that part. [00:09:07] Speaker 06: Well, I suggest that it is appropriate to take into account the fact that this is 15 years out, that plaintiffs bear no risk of a non-liability or not prevailing or not [00:09:20] Speaker 06: of being paid, that the nature of the litigation has changed. [00:09:26] Speaker 02: Well, but they do. [00:09:26] Speaker 02: I mean, in fact, the district court has substantially discounted on various points. [00:09:32] Speaker 02: She's been very actively involved in reviewing the fees and, for example, co-counsel, you know, she'll look at big swaths of time they spend and say, no, I'm sorry, that's not going to be [00:09:43] Speaker 02: That's not going to be compensated. [00:09:44] Speaker 02: So there is scrutiny, and that's a heavy job on the district court to which we defer. [00:09:50] Speaker 02: So I take your argument to be in part because this is, as you say, it's a different kind of, it's more monitoring, it's more routine claims presentation, that given that, we should look to the different, the more generally inflation index rate rather than the legal services inflation index rate. [00:10:12] Speaker 02: And then you cite a lot of cases, actually the number of cases that you cite is impressive. [00:10:19] Speaker 02: Can you identify which of those cases actually dealt with the question of which of the two indices should be used? [00:10:26] Speaker 02: Because I read a bunch of them and they all seem to be cases in which nobody proposed anything other than the USAO rate. [00:10:33] Speaker 06: I believe DL does. [00:10:35] Speaker 06: In fact, I think in... Which one? [00:10:37] Speaker 06: DL. [00:10:38] Speaker 06: And in fact, I think the plaintiffs used some of the declarations where the attorneys sought these higher rates and the court did not agree and opposed the lower left. [00:10:49] Speaker 06: I see I have little time. [00:10:50] Speaker 06: I do want to reach, if I could, particularly the over staffing, because I think it's clear here that the district court itself recognized two problems. [00:11:03] Speaker 06: The district court noted several incidents of overstaffing and unnecessary billing and she applied some reductions in those areas. [00:11:13] Speaker 05: Yeah, that runs across. [00:11:14] Speaker 05: When you first got up, you said that you were setting forth the things where the district court aired. [00:11:18] Speaker 05: You said one was you refused to make any reduction. [00:11:21] Speaker 05: She made many reductions, didn't she? [00:11:22] Speaker 06: Well, she made no reductions for the pattern of over-staffing that she repeatedly found. [00:11:28] Speaker 05: So that's the context in which you would use the phrase, she refused to make any reductions. [00:11:32] Speaker 05: That's correct. [00:11:33] Speaker 05: Didn't she make some reductions for over-staffing along the way? [00:11:40] Speaker 06: Or incidents of over-staffing along the way. [00:11:44] Speaker 05: What's wrong with that? [00:11:47] Speaker 05: When you look back at, now, [00:11:50] Speaker 05: Each of you sat cases from the Special Division for Independent Counsel, which are not binding precedent, but they might be instructive. [00:11:58] Speaker 05: When you look back at those, I don't recall that we ever went through and said we're going to make a [00:12:02] Speaker 05: 40% reduction for overstaffing, we always went through when we were the quarter first instance and put in, well, they overstaffed at this conference, and therefore we reduced it. [00:12:11] Speaker 05: It wasn't you doing the same thing here. [00:12:13] Speaker 06: Well, I think that this is a unique situation. [00:12:16] Speaker 06: First of all, we pointed to orders going back five years to 2008 that found overstaffing in this case. [00:12:23] Speaker 06: And if I could point, Your Honors, to the last order at issue in this case from March of 2014. [00:12:30] Speaker 06: And the court found, first she says, I've noted several incidents of overstaffing and unnecessary billing, but the court goes further. [00:12:39] Speaker 06: She says the court has also found that plaintiffs' counsel repeatedly requests unreasonably high amounts in fees because they overstaff this case. [00:12:50] Speaker 06: But she didn't do anything about it. [00:12:53] Speaker 06: Instead, she merely warned the counsel not to over-lawyer the case and that she would carefully scrutinize future requests. [00:13:01] Speaker 06: This is six years later than the first time she identified over-staffing. [00:13:07] Speaker 06: We've already paid $8 million to counsel in this case. [00:13:11] Speaker 06: And we submit that's too little, too late to merely discharge your duty to ensure a reasonable fee by warning the plaintiffs not to continue to over-lawyer when it was first found six years earlier. [00:13:26] Speaker 05: Since we've already taken you beyond your time, I'm going to take you a little further beyond. [00:13:30] Speaker 05: You alluded to the Ely case, which came down so late that I understand why nobody did much with it. [00:13:38] Speaker 05: Does it tell us something about the burden to be applied in deciding between the USAO Laffey and the SLI Laffey, as to whose burden it is to convince the court? [00:13:52] Speaker 06: Yeah, it's the plaintiff's burden as the seeker of fees. [00:13:59] Speaker 06: And I think just to get to the last point I wanted to raise, which is the inadequacy of the time records. [00:14:07] Speaker 06: I think we've tried to explain in our briefs why it is [00:14:12] Speaker 06: practically possible to ascertain all of the work that was done on behalf of an individual. [00:14:18] Speaker 04: What should we do about that? [00:14:21] Speaker 04: If you prevail, what would our order be that would [00:14:24] Speaker 06: Well, I think the court could strike those fees. [00:14:28] Speaker 06: The court could send it back and direct the district court to reconsider the matter after records that are sufficiently probative to determine that information are submitted, and then we can determine whether or not there are additional areas in the category of individual claims. [00:14:46] Speaker 06: that are unreasonable and unwarranted, and that can be litigated. [00:14:50] Speaker 06: So I think those are the two options. [00:14:53] Speaker 06: But I was reminded of Ely when you asked that question, because Ely said, well, it flips the burden of persuasion. [00:15:00] Speaker 05: I think the fact that I put the word Ely in the question probably helped remind me. [00:15:04] Speaker 06: And that's what I think happened here with regard to the time records for individual claims. [00:15:11] Speaker 06: The court has no further questions and I serve the remainder of my time for, well, I have no time. [00:15:18] Speaker 03: We'll give you a little time. [00:15:19] Speaker 03: Thank you. [00:15:20] Speaker 05: We're good about that. [00:15:27] Speaker 01: Your Honor, may it please the court. [00:15:29] Speaker 01: I am Kathleen Millian and I represent the plaintiffs, a class of District of Columbia Medicaid beneficiaries. [00:15:36] Speaker 01: The plaintiffs, who are informapoparous, have been able to assert and vindicate their rights in this Court and below because of the fee-shifting provisions of Section 1988. [00:15:48] Speaker 01: Council claims that this case is now in a routine status. [00:15:53] Speaker 01: The record shows that the routine work that happens in this case, such as monitoring compliance with the decree and assisting individual class members, is done by plaintiff's counsel at below market rates, rates which are below even the U.S. [00:16:08] Speaker 01: attorney's version of the Laffey matrix, which relies on the all items consumer price index to increase it. [00:16:15] Speaker 01: Those rates are enshrined in the consent decree here and [00:16:21] Speaker 01: For example, with respect to my own work, in 2012, my market rate under the Laffey Matrix ought to have been $734, yet the rate that I am paid for work monitoring, the decree is $473 an hour. [00:16:37] Speaker 01: and the rate that I am paid when I work on individual claims for our class members is $134 an hour. [00:16:43] Speaker 01: The basis of the agreement between the parties was a significant compromise in attorney's fees rates for monitoring under the decree. [00:16:51] Speaker 01: The dispute between the parties about rates is for the few categories of work that were accepted from those agreements and as to which the parties also agreed and enshrined it in the consent decree that the ordinary law under section 1988 would apply. [00:17:07] Speaker 01: For that work, as the court has pointed out, Ely, as well as its predecessors, makes clear that plaintiffs bear the burden to show that the rates they are seeking are in line with the market. [00:17:18] Speaker 01: And here, plaintiffs unquestionably met that burden. [00:17:22] Speaker 01: We submitted 21 affidavits of attorneys who practiced complex federal litigation in the District of Columbia. [00:17:29] Speaker 01: We submitted reports of rates with hundreds of data points for the rates being sought by District of Columbia lawyers, [00:17:36] Speaker 01: conducting bankruptcy litigation, which is a form of complex litigation in the federal courts where lawyers must set forth their rates. [00:17:45] Speaker 01: We submitted summaries and analyses of the rates data that we presented to the court and showed that the LSI method, the Legal Services Index method, is much closer to actual Washington DC market rates for complex federal litigation. [00:18:00] Speaker 01: than the all-items CPI method. [00:18:03] Speaker 01: But even so, the Legal Services Index method understates actual market rates from between 14 to 20%. [00:18:09] Speaker 03: So in Ely, the plaintiffs made some submissions. [00:18:12] Speaker 03: I'm not going to do a direct comparison, but they did more than just submit the laughing matrix, I think. [00:18:18] Speaker 03: They submitted cases, at least a handful of cases. [00:18:22] Speaker 01: That's right. [00:18:22] Speaker 01: And they also submitted an expert affidavit. [00:18:24] Speaker 03: And that was not enough. [00:18:25] Speaker 01: That's what the court found was not enough that the council didn't show that the type of work done in that case met the standard for complex federal litigation in the district court and remanded for further proceedings. [00:18:38] Speaker 01: Here, I submit that there is no question that the work that is done in this case is complex federal litigation. [00:18:46] Speaker 01: The record shows that in 2011, the case was proceeding on five different tracks. [00:18:51] Speaker 01: and for which we are seeking fees. [00:18:53] Speaker 01: The monitoring of the compliance with the decree, the work for class members, the prosecution and argument of an appeal in this court under the Gonzaga case as to whether or not there was a private right of action to proceed with the EPSDT claims in the case concerning children's health, attorney's fees work and litigation, and comprehensive settlement negotiations between the parties, where in the years at issue here the parties engaged in [00:19:19] Speaker 01: lengthy efforts to see whether additional or further alternate agreements could be reached between them about proceeding forward in the case. [00:19:29] Speaker 01: And continuing back with the evidence that we submitted here, we also submitted an unrebutted expert affidavit which showed, Dr. Kavanaugh showed, that the All Items Consumer Price Index, which is used by the U.S. [00:19:43] Speaker 01: Attorney's Office here as its method of updating the Lafay Matrix, since 1998, [00:19:49] Speaker 01: has included West Virginia and outlying areas of Maryland and Virginia. [00:19:54] Speaker 01: Prior to 1998, it was more focused on Washington D.C. [00:19:57] Speaker 01: and the close-in suburbs. [00:19:58] Speaker 01: But since 1998, the geographic expanse of that index has increased. [00:20:04] Speaker 01: That's the all items index you're talking about? [00:20:06] Speaker 01: That's the all items index. [00:20:07] Speaker 01: And because our expert further explains, because 42 points out of the 100 points in that index are for housing costs, and housing costs vary considerably depending on how far one is away from the city center, that the index has become even less of a possible reasonable basis. [00:20:24] Speaker 05: What is the legal status, if there is one, of the Lafayette matrix? [00:20:30] Speaker 01: It's alive and well, Your Honor. [00:20:32] Speaker 01: Under Covington, this Court endorsed that the Laffey Matrix, either the U.S. [00:20:36] Speaker 01: Attorney's version or one updated by the Legal Services Index, can be relied upon by litigants. [00:20:42] Speaker 05: But we did not say which is appropriate to be relied on, or we just said it's case by case. [00:20:48] Speaker 05: What is the status of that? [00:20:50] Speaker 05: Is there authority, other than perhaps district court cases that are not binding, that says the AO version or the SL version is the right way to go? [00:21:02] Speaker 01: Well, as I understand the state of the law, [00:21:04] Speaker 01: As of now, both versions are permissible as a basis to award fees. [00:21:09] Speaker 05: And you have the burden of establishing that the higher one is the one that's supposed to be used under Healy, if not before, right? [00:21:18] Speaker 01: That's right. [00:21:18] Speaker 01: We would have the burden of showing that either one matches the market for complex federal litigation. [00:21:24] Speaker 05: Did the district court impose that burden on you? [00:21:28] Speaker 05: Did she apply the proper burden? [00:21:30] Speaker 01: She did. [00:21:31] Speaker 01: Now, this issue has been in front of the court at least four times, the district court. [00:21:36] Speaker 01: It was first before the court in 2000, where we presented the same kinds of evidence we presented again now. [00:21:42] Speaker 01: The district court made a ruling in 2000. [00:21:43] Speaker 01: We submitted in our papers that the District of Columbia has waived its right to appeal now, because it didn't appeal in 2000. [00:21:49] Speaker 01: Again, in litigation where the court issued its decision in 2011, [00:21:54] Speaker 01: rates were challenged on the same exact ground, that this group of rates where we don't have an agreement ought to be awarded to the U.S. [00:22:01] Speaker 01: attorneys. [00:22:01] Speaker 02: Which issue exactly are you saying was waived, because new fees are incurred, new work is done, the nature of the work is arguably fresh, and so you have a burden, I mean, certainly you have a burden to come forward with billing records, but so are you saying you don't have [00:22:18] Speaker 02: burden anymore or it's law of the case what the rate is or? [00:22:23] Speaker 01: We're saying that the factual question about which index ought to be used to update the Laffey matrix as to which we submit it is a question that requires, can require, can rely upon the expert testimony of an economist as we did here to say which index makes sense from an economics point of view. [00:22:43] Speaker 05: Is that a factual question or a legal question or do we run behind our [00:22:49] Speaker 05: it's a mixed question. [00:22:52] Speaker 01: Well, Your Honor, I would say it's a factual question as to which the abuse of discretion standard applies. [00:22:57] Speaker 03: I can see why you'd like it that way. [00:23:00] Speaker 03: But as to whether it's law of the case, you yourself are making the argument that the USAO laughing matrix changed because it now incorporates West Virginia and somewhere else I'm forgetting. [00:23:12] Speaker 03: That's true. [00:23:13] Speaker 03: So these things change? [00:23:14] Speaker 01: That's true. [00:23:15] Speaker 03: So if it changed, then it seems it's hard to say that it's law of the case. [00:23:19] Speaker 03: Suppose that the LSI index changes in some way to be taken cognizant of in a subsequent case. [00:23:25] Speaker 03: Would you say that it's law of the case? [00:23:27] Speaker 01: I would agree with that, Your Honor, but an exception to law of the case is to show that the facts have changed. [00:23:30] Speaker 01: And here the defendants are making the exact same argument they raised in 2000 with no new facts to support the claim that they're making. [00:23:44] Speaker 01: I would also note that the district court found here with respect to rates that the all items index. [00:23:51] Speaker 01: includes less than one-half of one point out of the 100 points in the index related to legal services. [00:23:58] Speaker 01: That point was found by the district court and not challenged on appeal by the District of Columbia. [00:24:02] Speaker 02: The district has cited many more cases, and I recognize that a lot of those cases are cases in which this issue, which of the two inflation adjustments should be used, wasn't presented. [00:24:16] Speaker 02: Do you have any explanation why the [00:24:22] Speaker 02: you know, expert supported legal services adjusted index is not more prevalent. [00:24:30] Speaker 01: I'm not sure why it's not more prevalent. [00:24:33] Speaker 01: I think that in most of those cases, the plaintiff's counsel has not made the kind of record that we've made here to show that the all items index update no longer comes anywhere close to the market, the actual market in Washington, D.C. [00:24:45] Speaker 01: for complex federal litigation. [00:24:47] Speaker 01: And that is what this court en banc in the Save Our Cumberland Mountains case said, that you avoid windfalls to counsel by paying them actual market rates. [00:24:57] Speaker 01: And that is what plaintiffs seek here. [00:25:00] Speaker 03: Now, on the question as between the two different Laffey methodologies, the district court's opinion relied in substantial measure on the now vacated district court opinion in Ely. [00:25:15] Speaker 01: Yes. [00:25:15] Speaker 03: So what do you think the status of that is since? [00:25:18] Speaker 01: I think that the judgment of the district court is before your honors, and the record that we made in the district court is before your honors, and the record overwhelmingly supports [00:25:29] Speaker 01: that the Legal Services Index, just as the court found in 2000 when it did not point to any other recent district court decision as agreeing with it, should stand and be affirmed. [00:25:40] Speaker 02: I wonder if you could just speak briefly to the question of the time that you spent on appeal against not the District of Columbia, but third parties, and why that should be compensable. [00:25:52] Speaker 01: Yes. [00:25:53] Speaker 01: So part of what we do under the Act is [00:25:59] Speaker 01: under the consent decree, excuse me, is assist individual class members who have an EPSDT claim. [00:26:04] Speaker 01: That's the Children's Health Program under Medicaid. [00:26:07] Speaker 01: In the context of assisting children who are in need, who have been prescribed by their doctors, home health services to be received in their home, we sought from the District of Columbia and its contractor the standard called the Interpol standard that it used to make those decisions. [00:26:23] Speaker 01: the district court and its contractor both refused to produce it. [00:26:27] Speaker 02: The district court and the District of Columbia? [00:26:30] Speaker 01: The defendants. [00:26:31] Speaker 01: You said the district court. [00:26:32] Speaker 01: Oh, I'm sorry. [00:26:33] Speaker 01: I'm sorry. [00:26:34] Speaker 01: The defendants and their contractor both refused to produce it. [00:26:39] Speaker 01: After extended litigation in district court, the district court ordered that we had a right to it. [00:26:46] Speaker 01: And then, during the course of that, the author of those copyrighted standards, [00:26:52] Speaker 01: McKesson intervened. [00:26:55] Speaker 01: After we had prevailed in the district court, the District of Columbia's contractor, HSCSN, and McKesson filed an appeal. [00:27:03] Speaker 05: But the district did not. [00:27:04] Speaker 01: But the district did not. [00:27:06] Speaker 01: But under judicial watch, the district had control over one of the parties who appealed, its own contractor. [00:27:14] Speaker 05: Did they in fact have litigation control? [00:27:18] Speaker 05: I didn't see anything that indicated there was record support for the proposition. [00:27:22] Speaker 05: their litigation. [00:27:23] Speaker 05: They're their subcontractor. [00:27:24] Speaker 05: They have control out there on the job site. [00:27:26] Speaker 05: But I didn't see anything. [00:27:28] Speaker 05: I don't think of record evidence that they had litigation control, that they were pulling the strings and the cash lender who it was was the public. [00:27:35] Speaker 01: They had the most important kind of practical control because they paid the contractor to provide Medicaid to children. [00:27:42] Speaker 01: The District of Columbia could have said either turn it over or don't use it. [00:27:46] Speaker 01: Use another standard that can be turned over without restrictions. [00:27:49] Speaker 05: I don't see how you can say [00:27:52] Speaker 05: that gives them control and litigation. [00:27:54] Speaker 05: If they've got a contract, their compliance with the contract is not dependent on the litigation conduct of the coincidental subcontract. [00:28:06] Speaker 05: I'm having real trouble with the concept. [00:28:08] Speaker 05: This is a tiny sliver of the fees involved, but I'm having real trouble with the concept of compelling [00:28:15] Speaker 05: taxpayers to pay for something, litigation, that the taxpayers' representatives were not engaged in. [00:28:22] Speaker 05: The district did not appeal. [00:28:25] Speaker 01: Well, I think an important point is that the district did oppose the turning over of these documents to plaintiffs all along the way. [00:28:32] Speaker 05: And then they lost. [00:28:33] Speaker 05: Then they lost. [00:28:35] Speaker 05: And then there was an appeal, but they didn't take an appeal. [00:28:38] Speaker 05: They accepted the order of the court. [00:28:41] Speaker 05: As far as the record shows, they accepted the order of the court, and the intervener is appealed. [00:28:45] Speaker 05: I'm having a real difficulty seeing what the jurisprudence would be, what opinion we would write that would create that kind of precedent. [00:28:54] Speaker 05: And judicial watch is very, I know everything's factually distinct, but judicial watch is very factually distinct. [00:29:03] Speaker 05: I'm not sure it's close enough to be any authority for this. [00:29:07] Speaker 02: I suppose the concern is that if the district can contract out various tasks, which modern government contracts out with great results, many tasks, and if the third party puts a roadblock in the way of some legal obligation, then there's no attorney who can pursue that and be assured of getting an ordinary fee shift simply because the [00:29:35] Speaker 02: the function's been contracted out as opposed to done by the government. [00:29:38] Speaker 02: There's a little anomaly there, you know, that the government somehow benefits in this odd way from the fact that the function has been contracted out to a third party. [00:29:50] Speaker 01: That's correct, and the district court made specific findings about that, that under the Medicaid statute, members have a right to know what the standards are going to be applied, whether or not they will get their medical services. [00:30:01] Speaker 01: And you can't shield that information from the members by saying, well, we have a third party who's handling all that for us. [00:30:08] Speaker 01: Don't come crying to us. [00:30:10] Speaker 05: That sounds like a marriage argument, not an argument as to whether they have to front the fees for somebody when they're not litigating themselves. [00:30:17] Speaker 05: They were not in this appeal, right? [00:30:19] Speaker 01: The decision of Columbia was not in the appeal. [00:30:21] Speaker 05: And I understand that the theory could exist. [00:30:23] Speaker 05: Well, they could have colluded with one of the parties who took the appeal, but there's no evidence that they did. [00:30:28] Speaker 01: Well, they also didn't turn the documents over to us while the appeal was pending, which they could have done if they wanted to nullify the issue and not benefit from the appeal that their contractor was taking. [00:30:43] Speaker 01: As the defendant's claims concerning hours, we submit that here the record is replete with a careful, detailed consideration of every objection raised by defendants and 74 pages of decisions by the district court ruling on those objections, granting some and not granting others. [00:31:04] Speaker 01: The district court not only considered carefully the hours, she carefully considered the rates once again, [00:31:10] Speaker 01: and applied the Lodestar method, which the Supreme Court has said continues to be the appropriate method to award attorney's fees. [00:31:18] Speaker 01: We submit, if the Court has no further questions, the decision should be affirmed. [00:31:21] Speaker 05: I want to just be very clear on one thing. [00:31:23] Speaker 05: On the Ely case, you have the burden of establishing which version of FLAFFY applies, do you not? [00:31:33] Speaker 01: I agree, yes. [00:31:34] Speaker 01: Okay. [00:31:35] Speaker 01: Thank you, Your Honor. [00:31:36] Speaker 05: I thought you said that the first time that I wasn't sure. [00:31:39] Speaker 05: I wanted to be sure I had the right answer today. [00:31:41] Speaker 05: I don't want to misconstrue it. [00:31:43] Speaker 05: We'll give you two minutes. [00:31:44] Speaker 06: Okay. [00:31:46] Speaker 06: First of all, this dispute is not about the availability of fees or the quality of representation. [00:31:51] Speaker 06: The issue here is about the reasonableness of plaintiff's fees. [00:31:54] Speaker 06: We spent a lot of time on paragraph 60. [00:31:56] Speaker 06: six fees, which do range all the way up to $753 an hour. [00:32:04] Speaker 06: But there are other large areas. [00:32:07] Speaker 06: The district court's failure to restrain the overspending it found repeatedly since 2008, I think, is a large one. [00:32:16] Speaker 06: And I think I've already addressed that. [00:32:18] Speaker 06: I've tried to also, but I wanted to reiterate that it also is, you know, there's 235, half of the fees under paragraph 66 are for fees on fees, $235,000. [00:32:33] Speaker 06: And, you know, it's simply, we would submit, not justified. [00:32:38] Speaker 06: Plaintiffs have all the incentive they need to competently recover their own fees. [00:32:43] Speaker 06: And in this case, they had 23 prior petitions. [00:32:47] Speaker 02: So any complexity that existed, I think, is no longer... Well, in most cases, it's my understanding that fees settle until you don't have... [00:32:55] Speaker 02: as much time of fees on fees. [00:32:58] Speaker 02: I mean, people have to keep their time, but that's not an avenue that's worked for the district in this case. [00:33:04] Speaker 06: It hasn't, and that's partly why we come to this Court for guidance on some of these issues that we feel the Court hasn't taken a sufficient action in order to ensure the reasonableness of the fees here. [00:33:17] Speaker 06: Just one word on the third party appeal. [00:33:20] Speaker 06: They weren't vindicating the district's interest here. [00:33:22] Speaker 06: The third party was vindicating its own commercial interests in its product. [00:33:32] Speaker 02: you know, said, well, you know, we're... The district was fine with the district to turn it over, although they did oppose that in the district court. [00:33:40] Speaker 02: But to the extent that the district has an obligation to supply whatever standard is being applied to make these determinations, it couldn't fulfill that obligation if it was using a contractor that had an intellectual property interest in keeping it. [00:33:57] Speaker 06: confidential so it's you know the district does have an interest or an obligation with respect to that information which took an appeal to to vindicate or to to enforce it wasn't the district's product to turn over the event i understand that took an appeal we expected that the appeal would resolve the issue they had the legal right to take an appeal in fact it did it never you know i don't think any brief was filed it was actually settled [00:34:24] Speaker 05: But nothing would have kept you from turning over the information during the pendency of somebody else's appeal, would it? [00:34:31] Speaker 02: Well, you would have been in violation of the intellectual property rights that they were asserting. [00:34:39] Speaker 06: In terms of your question, Judge Pillard, I think that the cases that we did cite repeatedly say that the lower rate is the benchmark in the District of Columbia. [00:34:51] Speaker 06: And the fact that many practitioners have accepted that, I thank councils to maintain that. [00:34:59] Speaker 02: But they're not saying a lower rate as between the two, because they're not even considering. [00:35:03] Speaker 02: Nobody was asking for the legal services index rate. [00:35:06] Speaker 02: My understanding is that in one or maybe two of the cases that I've seen, well, in Ely in this case and a couple of other cases, somebody asked for the legal services index rate. [00:35:20] Speaker 02: And in [00:35:22] Speaker 02: I guess there's a couple of those that was granted, a couple that wasn't, but it's not so much that this issue that you're raising has actually been decided or considered by these courts. [00:35:33] Speaker 06: No, I understand that. [00:35:34] Speaker 06: My only point is I think the court can accept the numerous cases that we've cited to in the district as indicia of the prevalence [00:35:44] Speaker 06: of these rates in the market. [00:35:46] Speaker 02: But how could we have a basis for reversing on that ground when the record in this case in the district court includes those sort of data points and vast array of information about what lawyers in practice [00:36:02] Speaker 02: actually charge and receive. [00:36:04] Speaker 02: I mean, many, many affidavits, the National Law Journal survey, the American Law Society. [00:36:09] Speaker 02: I mean, there's just so much information here. [00:36:12] Speaker 02: And the district judge considered it and made a decision. [00:36:16] Speaker 06: But the district court didn't reference any of that. [00:36:19] Speaker 06: The district court basically said that she found that the LSI index provided the more relevant data. [00:36:27] Speaker 06: Well, the thing that's, yeah. [00:36:28] Speaker 06: OK, go ahead. [00:36:29] Speaker 06: What we submit is that what's really relevant here [00:36:32] Speaker 06: is the type of litigation and the prevailing rates for the type of litigation that in 2012 and 2011 is being conducted in this case. [00:36:46] Speaker 02: Although, see, I think that gets back to where we started the question today. [00:36:49] Speaker 02: I think it's not quite fair to say the district court was just looking at the legal issue as between the two indices rather than the overall burden, because the way you briefed this issue in the district court was, yes, complex federal litigation, but as between these two indices, we think the lower one is better. [00:37:07] Speaker 02: So she's responding to the issue you've served up. [00:37:09] Speaker 02: And to now turn around and say, well, she's not making findings on these other things, those were things on which she made findings, and no issue was raised by the district, and the evidence is ample on that. [00:37:21] Speaker 02: And, you know, I think the JA 2023-2024 compilation is, you know, pretty illustrative of what was in the record in this case showing the USAO [00:37:37] Speaker 02: and the LSI adjustment stacked up against the information gleaned from the law firm specific, more granular, you know, concrete evidence in the case and just, you know, showing where this all falls and how both of the inflation-adjusted Laffey rates are lower than what the other data showed. [00:38:03] Speaker 06: I understand the court's observation. [00:38:06] Speaker 06: The only thing I can respond is that most recently, this court in Ely said, for-profit prevailing rates are applicable only if lawyers are doing the same type of litigation. [00:38:17] Speaker 06: And the preparation and trial of complex federal issues is not the same type of litigation as the post-judgment monitoring that's being conducted here. [00:38:26] Speaker 05: So what should we do then? [00:38:27] Speaker 05: Send it back for the district court to reconsider in light of our decision in Ely? [00:38:33] Speaker 06: I think the court might elaborate. [00:38:35] Speaker 06: I think this is an area that certainly is in need of guidance to the district court. [00:38:41] Speaker 06: These are ongoing fee requests. [00:38:45] Speaker 06: I think the plaintiffs have the right to submit requests quarterly. [00:38:49] Speaker 06: We're just dealing with 2011 and 2012. [00:38:52] Speaker 05: Never mind what they have the right to do quarterly. [00:38:55] Speaker 05: In the opinion that we would write, what is it you would have us say? [00:38:59] Speaker 06: I think it would not only be in light of the Ely decision, but in light of the nature of the litigation being conducted now in this case, and what is the appropriate rate for the litigation that's being conducted currently before the district court. [00:39:15] Speaker 05: That's not really telling us what we should tell the district court. [00:39:19] Speaker 05: You say in light of the litigation that's ongoing, you haven't said anything there, but we have to write something specific. [00:39:26] Speaker 05: What are we going to tell her that she did wrong and what are we going to tell her to do right? [00:39:30] Speaker 06: I think she failed to take account of the posture of this case. [00:39:39] Speaker 05: So we should say you failed to take account of the posture of this case. [00:39:43] Speaker 05: You think a district court can follow that kind of order? [00:39:45] Speaker 06: No, I'm certain this court could write it better than I can articulate. [00:39:49] Speaker 05: Well, do the best you can. [00:39:51] Speaker 06: Well, I think that, as I said, in Ely, we said that the rates that you're talking about here, $753 an hour, is only appropriate when they're doing the same type of litigation. [00:40:05] Speaker 06: And the court really didn't review [00:40:08] Speaker 06: the fee request in light of the type of litigation that's being conducted here. [00:40:13] Speaker 06: This is not active federal court litigation anymore. [00:40:17] Speaker 06: This is a post-judgment monitoring case, and the court should take that into account. [00:40:22] Speaker 05: Though also the court should take into account... Now, the opposing counsel posits that the monitoring activity is actually being billed at the lower life rate rather than the higher life rate. [00:40:32] Speaker 05: Is she wrong about that? [00:40:33] Speaker 06: Well, no, she's not wrong. [00:40:35] Speaker 06: Or even below that. [00:40:38] Speaker 05: That's lower than the lower left. [00:40:40] Speaker 06: I don't believe that's correct. [00:40:43] Speaker 06: But even if it were, I mean, these are negotiated rates. [00:40:48] Speaker 06: That's what the parties agreed to. [00:40:50] Speaker 06: The only rate that was left open. [00:40:52] Speaker 03: I thought those were under a different paragraph. [00:40:53] Speaker 03: We're talking about paragraph 66 rates. [00:40:56] Speaker 06: That's right. [00:40:57] Speaker 06: But she was talking about the rates under paragraph 64 and 65 that weren't negotiated. [00:41:01] Speaker 05: But you're bringing that back to life. [00:41:03] Speaker 05: You're bringing that back to life when you say that we should be looking at the nature of this litigation. [00:41:07] Speaker 05: And the basis on which you say that is they're now engaged in a monitoring activity rather than an ongoing litigation. [00:41:13] Speaker 05: So isn't that bringing life back into our proposition? [00:41:18] Speaker 06: Well, I take your point. [00:41:21] Speaker 06: I would phrase it better. [00:41:25] Speaker 06: It's for work that didn't fall under paragraph 64 and 65. [00:41:30] Speaker 06: Fees on fees is one large example. [00:41:33] Speaker 06: That's more than half of that amount. [00:41:35] Speaker 06: But the rates for monitoring run up to $562 an hour. [00:41:42] Speaker 06: I don't think that's below the... [00:41:46] Speaker 06: I mean, I think that's still about the lower laughing rate. [00:41:49] Speaker 03: But you don't disagree with the following proposition, which is that in Ely, the case was sent back in order to determine whether the species of litigation at issue qualified as complex federal litigation to begin with. [00:42:01] Speaker 06: That's correct. [00:42:02] Speaker 03: OK. [00:42:04] Speaker 06: Thank you. [00:42:04] Speaker 06: And we would ask that the court either make the requested reduction or remand for guidance to the district court on these issues. [00:42:12] Speaker 07: Thank you. [00:42:12] Speaker 03: Thank you. [00:42:13] Speaker 03: Case is submitted.