[00:00:00] Speaker 02:
The last case this morning is Gerald Kandel et al.

[00:00:04] Speaker 02:
versus United States, 2024-2193.

[00:00:10] Speaker 02:
When you are ready, Mr. Mazula.

[00:00:14] Speaker 03:
Thank you, Your Honor, and good morning.

[00:00:18] Speaker 03:
This case presents two issues for determination by the court today.

[00:00:22] Speaker 03:
The first is whether the trial court erred in failing to pay

[00:00:29] Speaker 03:
the class administrator costs and expenses under Section B, boy, of AJA, and second, whether the trial court erred in failing to consider the actions of the relevant federal agencies in making his determination about substantial justification under Section D of AJA.

[00:00:55] Speaker 03:
So to go first to the class administrator issue,

[00:01:00] Speaker 03:
Section B of EJA doesn't have this substantial justification requirement, but rather it states that the United States shall be liable for expenses, non-taxable expenses, to the same extent as any other party.

[00:01:21] Speaker 03:
Historically, this court, the Court of Federal Claims, and virtually all other courts that have considered the issue

[00:01:29] Speaker 03:
have awarded the cost to a class administrator who performs an essential function in the process of administering a class action.

[00:01:45] Speaker 01:
But that, I understand, is typically an award that comes out of the sum of money that is charged against

[00:01:56] Speaker 01:
the defendant, that is to say, money that would otherwise go to the plaintiffs, that some portion of it is allocated to a class administrator.

[00:02:05] Speaker 01:
That is my understanding of the typical way that class actions deal with administrative costs of that sort.

[00:02:12] Speaker 01:
That would seem to us.

[00:02:14] Speaker 03:
No.

[00:02:14] Speaker 03:
Your Honor, I think not.

[00:02:17] Speaker 01:
That is the... I had a class action just a month ago.

[00:02:20] Speaker 01:
in which that's exactly what happened.

[00:02:23] Speaker 01:
And my research suggested to me that that is exactly the way it works in at least an ordinary class action situations.

[00:02:33] Speaker 03:
Well, that's the common fund analysis that the court is talking about in which the payments, both of attorney's fees and expenses, come out of the judgment as opposed to

[00:02:45] Speaker 03:
being paid by the defendant.

[00:02:48] Speaker 03:
But in point of fact, and you could take a look at Rule 23, Section G says that the court made in its certification order

[00:03:01] Speaker 03:
provide for the payment of both attorney's fees and expenses of the case.

[00:03:08] Speaker 03:
And in subsection H, it provides, of course, for a process whereby those issues may be objected to by the plaintiffs in the case.

[00:03:22] Speaker 03:
It doesn't require, and I think we've cited a great number of cases, and certainly including cases

[00:03:29] Speaker 03:
involving this very same class administrator, Epic Systems.

[00:03:35] Speaker 02:
Epic Systems Council, I'll be heading the cart before the horse as we're talking about the class administrator.

[00:03:42] Speaker 02:
The question here is substantial justification.

[00:03:45] Speaker 02:
I mean, if you lose on that, then you lose on the class administrator.

[00:03:51] Speaker 02:
And the law was unsettled during this period of time.

[00:03:56] Speaker 02:
And then Akuleta and Athi came along, and the claims court used the language of string of successes so that there was not a lack of substantial justification for the government's position.

[00:04:13] Speaker 03:
If I may, Your Honor, subsection B of IJA does not address a substantial justification.

[00:04:22] Speaker 03:
That's found in subsection B, an entirely different section, subsection B on which we rely.

[00:04:29] Speaker 03:
provides that the United States shall be liable to the same extent as any other party.

[00:04:35] Speaker 03:
We've cited quite a number of cases in which private parties, as well as the United States, have been held liable for the other expenses.

[00:04:46] Speaker 03:
I can tell you that Epic Systems has now withdrawn from

[00:04:53] Speaker 03:
acting as a class action administrator as a result of this decision and is no longer available even though they had been the class action administrator in a number of cases.

[00:05:04] Speaker 03:
So that company, which was appointed by the court, acted at the court's behest.

[00:05:09] Speaker 03:
has found itself without any payment, whatever, as a result of the trial court's decision, which, Your Honor, I think you're correct.

[00:05:23] Speaker 03:
I think the trial court

[00:05:24] Speaker 03:
probably mixed section B with section D of EJA, boy and dog, B and D, and applied the same substantial justification requirement to both.

[00:05:41] Speaker 01:
It doesn't apply to both.

[00:05:41] Speaker 01:
Is it the case that Epic has not been paid anything for its work to date?

[00:05:46] Speaker 01:
My understanding was that there was a contract between Epic

[00:05:50] Speaker 01:
And I suppose it's the representative of class to do the class administration.

[00:05:58] Speaker 01:
And was there not payment made to EPIC pursuant to that contract?

[00:06:03] Speaker 03:
Payment has not been made, Your Honor.

[00:06:05] Speaker 01:
They haven't gotten a dime.

[00:06:07] Speaker 03:
That's my understanding, yes, Your Honor.

[00:06:09] Speaker 01:
But there was a contract, as I understand it.

[00:06:11] Speaker 01:
There was a contract, and there was a court appointment.

[00:06:15] Speaker 01:
Well, the court appointment occurs as a matter of course, because you can't

[00:06:19] Speaker 01:
have somebody out there freelancing as a claims administrator without any kind of court supervision.

[00:06:25] Speaker 01:
But that doesn't mean appointment doesn't mean that you're agreeing that the defendant will pay.

[00:06:31] Speaker 03:
Yes.

[00:06:31] Speaker 01:
That's the question.

[00:06:32] Speaker 01:
Does the defendant pay for the cost of the class administrator?

[00:06:35] Speaker 01:
And I do not think that is the normal course of things.

[00:06:41] Speaker 01:
It comes out of the judgment, as I understand it, unless the court directs otherwise.

[00:06:47] Speaker 03:
Yes, unless the court directs otherwise.

[00:06:48] Speaker 01:
Right, which doesn't typically happen, is my understanding.

[00:06:52] Speaker 03:
But here, the court made no determination, Your Honor.

[00:06:55] Speaker 03:
There's no rule in whatever.

[00:06:56] Speaker 03:
The court simply didn't make the award.

[00:07:00] Speaker 03:
Now, if you had a justification, I think the court, as Judge Lowry

[00:07:07] Speaker 03:
indicated, I think the trial court made the mistake of believing that substantial justification applied to the award here.

[00:07:19] Speaker 03:
And what we're saying is under subsection B, it does not apply.

[00:07:25] Speaker 03:
Moving to substantial justification, the trial court

[00:07:30] Speaker 03:
failed to consider the actions of the agencies themselves.

[00:07:36] Speaker 03:
There were, I believe, 30 agencies.

[00:07:39] Speaker 03:
I've seen 29.

[00:07:40] Speaker 03:
I've seen 30.

[00:07:41] Speaker 00:
So, Counselor, those actions of the agency itself, you're talking about pre-suit actions and post-suit actions, correct?

[00:07:51] Speaker 00:
I'm sorry.

[00:07:52] Speaker 00:
Oh, pre-suit, yes, Your Honor.

[00:07:54] Speaker 03:
Pre-suit and post-suit.

[00:07:56] Speaker 03:
And of course... Did it address both?

[00:07:59] Speaker 03:
I'm sorry, did the trial court address both?

[00:08:02] Speaker 03:
No, the trial court didn't really address the actions of the agencies at all.

[00:08:09] Speaker 03:
And the actions of the agencies were to fail to pay their employees an amount that was pretty obviously due under the Lumsum Act.

[00:08:19] Speaker 00:
Lumsum Act says they are to be paid the amount of... It seems to me that the record is pretty robust.

[00:08:30] Speaker 00:
with discussion and treatment of the issue of post-suit actions.

[00:08:37] Speaker 03:
Correct.

[00:08:39] Speaker 03:
Agreed.

[00:08:39] Speaker 03:
And what's missing, Your Honor, is the pre-suit actions, or put another way, the actions of the agencies opposed to the Justice Department, the actions that gave rise to this lawsuit in the first place.

[00:08:55] Speaker 03:
Had the lawsuit not been brought, these employees never had been paid what they were entitled to.

[00:09:01] Speaker 00:
Is it your argument that those issues were not addressed at all?

[00:09:07] Speaker 03:
Yes.

[00:09:08] Speaker 03:
They were not addressed at all by the trial court.

[00:09:10] Speaker 03:
And as a result,

[00:09:12] Speaker 03:
There was an abuse of discretion here for failure to consider a critical part of the record.

[00:09:20] Speaker 03:
The 1985 amendment to IJA specifically included it overruled prior authority and requires that the court consider the record of the agencies.

[00:09:32] Speaker 03:
He simply failed to do that.

[00:09:35] Speaker 03:
He talks about

[00:09:38] Speaker 03:
the many, the string of successes, as you say, by the Justice Department.

[00:09:43] Speaker 03:
And we can go back and forth on that.

[00:09:47] Speaker 03:
Suffice to say that in a back pay case, the only entity with the information about who got paid, who the employees are, and who's entitled to payment is the agency.

[00:10:00] Speaker 03:
So it's not particularly unusual.

[00:10:04] Speaker 03:
that the agency would be able to come back with the Justice Department, could come back to the court and move to dismiss Agency A because Agency A didn't have any employees who weren't paid.

[00:10:20] Speaker 03:
Well, the plaintiff, the class, doesn't know that until the agency comes forward with that information.

[00:10:27] Speaker 03:
So that's where that string of successes comes from.

[00:10:30] Speaker 03:
But suffice to say that what the court considered was only the string of successes.

[00:10:38] Speaker 03:
And that's the abuse of discretion as we see it.

[00:10:42] Speaker 03:
We think that the court should reverse and remand on the attorney's fee issue.

[00:10:46] Speaker 00:
and asked the court to consider in the substantial justification determination whether the... Was evidence or argument presented with respect to the pre-suit filing?

[00:11:02] Speaker 03:
Yes, there was discussion in the motion for attorney's fees.

[00:11:12] Speaker 03:
Unfortunately, the trial judge here, or the judge making this decision, kind of wasn't the trial judge.

[00:11:19] Speaker 03:
He hadn't been involved in any of the prior proceedings.

[00:11:21] Speaker 03:
It had bounced through four or five different judges before it got to him.

[00:11:27] Speaker 03:
So he didn't have the advantage the trial judges usually have of having sat through the proceedings.

[00:11:32] Speaker 00:
I read that, but I didn't find that persuasive.

[00:11:34] Speaker 03:
Yeah.

[00:11:35] Speaker 03:
Well, I say only that, that all he had was the record of the

[00:11:45] Speaker 03:
motions that had been made, the fact that there is an OMB regulation.

[00:11:51] Speaker 00:
Can you point to the record and show where you raised the actions of the agency that were pre-suit filing?

[00:12:01] Speaker 03:
I don't have a page, Your Honor.

[00:12:04] Speaker 03:
The motion itself, the motion for attorney's fees and administrative costs, is at appendix 140 through about 160.

[00:12:17] Speaker 03:
And that's a pretty robust description of the background of all of these issues.

[00:12:25] Speaker 03:
And in short, I don't think the trial judge

[00:12:29] Speaker 03:
did not know or could not have known that the whole action was based on the fact that these agencies had failed to pay what the OMB regulation and the Lumpsum Act required them to pay.

[00:12:46] Speaker 03:
The OMB regulation of 1999?

[00:12:48] Speaker 01:
That's correct, Your Honor.

[00:12:49] Speaker 01:
But that was after the whole set of claims was raised, which goes to the pre-1999 period.

[00:12:59] Speaker 01:
How could the agencies necessarily, at least, have known that the 1999 regulation would be applicable to this pre-1999 period?

[00:13:10] Speaker 03:
Well, that in large part was the basis for the settlement of every one of these cases.

[00:13:18] Speaker 01:
Well, settlements occurred for a variety of reasons.

[00:13:21] Speaker 01:
But that doesn't mean that because the government ultimately settled,

[00:13:26] Speaker 01:
a small percentage of the claims, that that means that the government was acknowledging that the agencies acted improperly in not anticipating that the 1999 regulations would require payment above and beyond the amount that the employees were being paid when they left.

[00:13:44] Speaker 03:
Well, agreed, Your Honor.

[00:13:47] Speaker 03:
The Lumpsum Act itself, however, said the employee, when he leaves, is to be paid the amount for unused vacation.

[00:13:55] Speaker 03:
that he would have received had he continued to work for that period of time.

[00:14:00] Speaker 03:
He has 60 days.

[00:14:01] Speaker 03:
He gets paid for those 60 days at the rate that he would have received if he'd stayed on the job.

[00:14:08] Speaker 02:
Counselor, I would note that the statute reads talking about whether the action of the United States was reasonable, not necessarily the agency.

[00:14:21] Speaker 02:
Your interrobital time was just, Judge Price, another further question.

[00:14:28] Speaker 02:
Thank you, Your Honor.

[00:14:28] Speaker 03:
Although I would say, Your Honor, the statute itself, EJ itself, says the record of the agency is to be taken into account.

[00:14:38] Speaker 02:
We'll give you three minutes for a bottle.

[00:14:40] Speaker 03:
Thank you, Your Honor.

[00:14:42] Speaker 02:
Mr. Kalman.

[00:14:51] Speaker 04:
Thank you, Your Honor.

[00:14:53] Speaker 04:
May it please the court.

[00:14:55] Speaker 04:
The class has failed to show that the trial court abused its discretion in denying IJA fees and concluding that the government's position was substantially justified.

[00:15:03] Speaker 04:
I think that the statutory text of IJA illustrates the fundamental issues with the class's argument.

[00:15:09] Speaker 04:
IJA says, whether or not the position of the United States was substantially justified shall be determined on the basis of the record, including the record with respect to the action or failure to act by the agency upon which the civil action is based.

[00:15:24] Speaker 04:
Now here, the class does not identify any record by any agency that the trial court failed to consider.

[00:15:31] Speaker 04:
That is because there was no agency position, policy, or personnel decision to consider.

[00:15:38] Speaker 04:
The class only points to the fact that the government settled

[00:15:41] Speaker 04:
with a small number of plaintiffs with mistakes in their supplemental lump sum payments.

[00:15:45] Speaker 04:
But that falls under Egypt's prevailing party analysis, not the substantial justification analysis.

[00:15:51] Speaker 04:
Here, the trial court correctly looked at the position of the United States as a whole, including the fact that the United States demonstrated that, at the agency level, only 1,103 out of millions of government employees across the vast majority of government agencies had errors in their supplemental lump sum payments, and that the government had a string of significant wins in litigation.

[00:16:11] Speaker 04:
and taking all this together, determined that the position of the United States was substantially justified.

[00:16:17] Speaker 04:
And in responding to a few things that my friend on the other side said, I think it's important to note that the class did not identify any piece of the record before the agency that the trial court did not consider.

[00:16:32] Speaker 04:
The trial court articulated the standard correctly.

[00:16:35] Speaker 04:
The trial court acknowledged that it was looking at the administrative.

[00:16:38] Speaker 00:
Did the trial court consider presued actions?

[00:16:41] Speaker 04:
Yes, it did.

[00:16:42] Speaker 04:
Where?

[00:16:43] Speaker 04:
This is at Appendix 8.

[00:16:46] Speaker 04:
The trial court noted that the United States had demonstrated that some agencies were either not subject to the relevant law or had already paid their former employees correctly.

[00:16:56] Speaker 04:
The government had evinced that several other agencies had already made it.

[00:17:01] Speaker 00:
What page are you reading?

[00:17:03] Speaker 04:
Appendix 8.

[00:17:05] Speaker 04:
8?

[00:17:06] Speaker 04:
Yes.

[00:17:06] Speaker 04:
Basically, the trial court acknowledged that the United States had paid the vast majority of the potential claimants in this class correctly.

[00:17:13] Speaker 01:
Well, OK.

[00:17:13] Speaker 01:
But if you could respond with specificity to Judge Raina's question, I'd be interested in the answer as well.

[00:17:23] Speaker 00:
Sure.

[00:17:23] Speaker 01:
Where exactly on page 8 are you focusing on to demonstrate that the trial judge actually considered pre-litigation agency conduct?

[00:17:34] Speaker 01:
Sure.

[00:17:34] Speaker 01:
So the particular lines of page 8.

[00:17:38] Speaker 04:
Yeah.

[00:17:38] Speaker 04:
So if you're looking at, this is the third bullet down.

[00:17:42] Speaker 04:
It says, accurate payments.

[00:17:45] Speaker 04:
And it goes on to show that the United States made accurate payments.

[00:17:49] Speaker 01:
Made several of the agents made accurate payments.

[00:17:51] Speaker 01:
Right.

[00:17:52] Speaker 01:
The result, however, in other agencies appears to be that they were inaccurate.

[00:17:59] Speaker 04:
Well, actually, even within the same agency, there was no one agency that made all inaccurate payments.

[00:18:09] Speaker 01:
Well, OK.

[00:18:10] Speaker 01:
But the question is, did this judge focus on pre-litigation agency conduct?

[00:18:18] Speaker 01:
And you say, oh, yes.

[00:18:20] Speaker 01:
And you point me to something that says that several of the agencies made the proper payments.

[00:18:27] Speaker 01:
That does not, to me, translate to the judge focused on the pre-litigation conduct of the agencies.

[00:18:37] Speaker 01:
Where, if anywhere, does a judge address that issue?

[00:18:42] Speaker 04:
Well, so that issue applies equally to the pre-litigation conduct as well as the litigation position, because there was no records before the agency for the trial court to consider.

[00:18:54] Speaker 04:
So the only way for the trial court to consider what happened at the agency level was by looking at what happened during the litigation.

[00:19:02] Speaker 04:
And during the litigation, the government showed that the overwhelming majority of agencies paid the correct supplemental lump sum payments.

[00:19:12] Speaker 04:
impacts the agency level just as well as it does the litigation level.

[00:19:19] Speaker 00:
Your argument seems to be contrary to the statute which actually speaks to presuit conduct and its litigation position.

[00:19:32] Speaker 00:
It doesn't conflate the two.

[00:19:35] Speaker 00:
Right.

[00:19:36] Speaker 00:
But there was no- You still haven't pointed, or I haven't heard you point, to, for in the record, do we find where the presuit conduct of the agency was addressed?

[00:19:51] Speaker 04:
So it's on page 8.

[00:19:57] Speaker 00:
The trial court recognizes first, and this is at the top line of the second- If we don't find it on page 8, can we assume it's not in the record at all?

[00:20:05] Speaker 04:
I mean, let's take even assuming it's not in the record at all, that there was no position from any of these agencies that the trial court could address at all.

[00:20:18] Speaker 00:
And that's your argument.

[00:20:19] Speaker 00:
What did the trial court find?

[00:20:22] Speaker 04:
The trial court acknowledged the plaintiff's argument that because that 23 different agencies and the plaintiff's words had no basis in factor law to pay any of the required lumps on payments,

[00:20:35] Speaker 04:
The trial court said, moving on, to say that plaintiffs seem to also maintain that by virtue of the plaintiffs being a prevailing party, the United States could not be substantially justified.

[00:20:46] Speaker 04:
And they went on to the top of that third paragraph to say, although success or failure on the merits is not always determinative, in cases such as this one involving multiple decisions,

[00:20:56] Speaker 04:
multiple issues and decisions, a string of losses can be indicative and even more so a string of successes.

[00:21:02] Speaker 04:
So the trial court acknowledged plaintiff's argument, which was that the agencies failed to properly pay lump sum payments correctly to a small number of individuals, and said that this basically equates to an argument that they win because they succeeded on the merits, and continued to say that although success from the merits is not always determinative, here there was a string of

[00:21:26] Speaker 04:
wins by the government that ultimately substantially justified its position.

[00:21:30] Speaker 04:
And to the extent that we're searching for some kind of agency record that the trial court failed to consider, there was none here.

[00:21:40] Speaker 04:
The plaintiffs don't allege that they ever raised these issues before an agency.

[00:21:47] Speaker 04:
They don't allege that there was any record before these agencies that the trial court failed to consider.

[00:21:54] Speaker 04:
And one thing that my friend on the other side said was that only the agencies had access to these records.

[00:22:00] Speaker 04:
But a supplemental lump sum payment calculation could be made based on the records that an individual has.

[00:22:07] Speaker 04:
The only information you need is the amount of leave that you had with the time you separated and in your pay rate and whether there was an increase in premium pay the following year.

[00:22:19] Speaker 01:
As I understand it, the Federal Personnel Manual at the time before the 1999 regulation was instituted suggested that you didn't get these add-ons.

[00:22:30] Speaker 01:
Is that right?

[00:22:31] Speaker 01:
That you got paid at the rate that you were being paid on the day you separated.

[00:22:37] Speaker 04:
Right.

[00:22:37] Speaker 04:
So that was OPM's policy.

[00:22:39] Speaker 04:
And OPM's policy specifically was that the lump sum payment covers the period over which an employee's annual leave would have carried them if he had actually used it based on the pay rate he is receiving immediately prior to the date he is considered.

[00:22:50] Speaker 01:
That's what I understood.

[00:22:53] Speaker 01:
Now, do you think that the fact that the agencies, at least in the contested cases, followed that OPM directive

[00:23:06] Speaker 01:
is enough to render their conduct, the conduct of the agencies, reasonable.

[00:23:13] Speaker 01:
Substantially justified.

[00:23:15] Speaker 04:
I think yes, Your Honor.

[00:23:17] Speaker 04:
I think that goes to show the way that this law was unsettled before the regulations were promulgated in 1999 for the reasons that we discussed in our brief.

[00:23:27] Speaker 04:
But there was no sort of like determinative fact that these people must be paid supplemental lump sum payments until those regulations were promulgated in 1999.

[00:23:40] Speaker 01:
So suppose that the action had been brought only by the 1,000 or so employees who ended up, I gather, I gather that's roughly the number, that ended up getting a supplemental award in this case.

[00:23:57] Speaker 01:
And those had been the only named plaintiffs in the case.

[00:24:01] Speaker 01:
only members of the class, would you think that under those circumstances that the government was substantially justified in the position that it took, if it lost with respect to every single one of the employees?

[00:24:17] Speaker 04:
I think that would certainly be a more difficult case for the government to show substantial justification, but I think that the trial judge would need to weigh that against the litigation success of the government and where it pared down the case in other ways, like for example here as to entitlement to interest.

[00:24:35] Speaker 04:
And I think that that hypothetical kind of helped show sort of the difference in this case, which is where this was a class action involving almost every federal agency except for the 17, the 18 that were previously settled.

[00:24:51] Speaker 04:
And so here, when we're looking at the position of the United States as a whole, as Ija instructs, when we're looking at the agency level as a trial court acknowledged, we can see that where we were faced with a potential situation where this could be millions of claimants, it ended up only being 1,000 employees who the government settled with.

[00:25:12] Speaker 01:
What about the argument for the class administrators being paid?

[00:25:18] Speaker 01:
from the government under subsection B. Right, Your Honor.

[00:25:23] Speaker 04:
So the problem here is that the class did not raise this argument before the trial court.

[00:25:28] Speaker 04:
The class didn't argue at all that the class administrator was separately entitled to fees other than through D.

[00:25:40] Speaker 04:
And in fact, with respect to subsection B, the class had already raised a separate motion for fees under subsection B, which the trial court denied.

[00:25:49] Speaker 04:
And the docket entry for this is 436 at appendix 47.

[00:25:52] Speaker 04:
And so this is just not an issue that the class raised to the trial court.

[00:25:57] Speaker 04:
So the trial court had no opportunity to consider class administrator expenses under any other part.

[00:26:03] Speaker 01:
Setting that aside, what do you think is the proper way to address the question of

[00:26:08] Speaker 01:
fees for the class administrator in a class action against the government in which a B request is made?

[00:26:17] Speaker 04:
I think that there's no, in which a B request is made, there's, I think that that question, I don't really have a position on that because it wasn't presented here.

[00:26:30] Speaker 01:
Well, if we find that it was presented,

[00:26:34] Speaker 01:
then I'd be really curious to know what the government's position is.

[00:26:40] Speaker 01:
Do you understand what the typical practice is in class actions with respect to class administrators?

[00:26:47] Speaker 01:
This comes up all the time.

[00:26:49] Speaker 04:
Sure.

[00:26:49] Speaker 04:
I think I do at a high level.

[00:26:51] Speaker 04:
It typically gets paid out of the common fund, which comes out of the amount that gets paid out to the class.

[00:26:58] Speaker 01:
Right.

[00:26:58] Speaker 01:
And so I don't see a way in which... And B, which incorporates A, is intended to put the government in the same position

[00:27:09] Speaker 01:
with respect to its obligations as a private party would have in a similar situation, correct?

[00:27:16] Speaker 01:
Correct.

[00:27:16] Speaker 01:
Okay.

[00:27:17] Speaker 01:
So then we look to what would happen in a typical private setting as to the class administrator fee.

[00:27:25] Speaker 01:
And if we conclude that that is paid out of the common fund, then the government has no obligation in this case.

[00:27:33] Speaker 01:
Do you think that's right?

[00:27:34] Speaker 04:
I think that's right, Your Honor, and my understanding is that's what the trial court concluded as well.

[00:27:39] Speaker 01:
And is there any indication in the court's opinion as to where the trial court reached that?

[00:27:45] Speaker 04:
No, because it was in a separate opinion, Your Honor.

[00:27:47] Speaker 01:
This was out of the... Okay, but where?

[00:27:50] Speaker 01:
Show me where in that separate opinion the trial court answered that question.

[00:27:55] Speaker 04:
Oh, sorry, that separate opinion's not in the record, but it's docket 436 in this case.

[00:27:59] Speaker 01:
Okay, so that's in the record.

[00:28:01] Speaker 01:
Docket 436.

[00:28:03] Speaker 04:
All right.

[00:28:06] Speaker 04:
Good.

[00:28:06] Speaker 04:
But yeah, to sum up, the class didn't raise the B issue.

[00:28:11] Speaker 04:
And for the reasons that we discussed, the common fund isn't something that pays out to the government.

[00:28:18] Speaker 04:
And the class doesn't suggest a reason that the government would be on the hook for that.

[00:28:23] Speaker 00:
Since this isn't a common fund case, this is not a common fund case, who

[00:28:31] Speaker 00:
normally pays for the other costs in situations like this?

[00:28:38] Speaker 04:
In situations like this, it would be the class.

[00:28:43] Speaker 04:
The class had a contract with the class council, or excuse me, with the class administrator, in which they agreed to pay the class administrator.

[00:28:53] Speaker 04:
So it would be the class council.

[00:29:04] Speaker 04:
And if there are no further questions, we respectfully request that the court affirm the court of federal crimes decision.

[00:29:14] Speaker 02:
Thank you, Mr. Coleman.

[00:29:15] Speaker 02:
Mr. Muswell has three minutes.

[00:29:22] Speaker 03:
Thank you, Your Honor, and I'll take even less than that.

[00:29:25] Speaker 03:
First of all, this case did not involve millions of employees.

[00:29:30] Speaker 03:
There was an Archuleta case.

[00:29:32] Speaker 03:
At the case, this case involved 30 agencies.

[00:29:38] Speaker 03:
They didn't employ millions.

[00:29:39] Speaker 03:
In fact, many of those agencies were very small.

[00:29:42] Speaker 03:
I don't know the exact number.

[00:29:44] Speaker 03:
But that's another factual error that the trial judge made.

[00:29:49] Speaker 03:
And he made that, I think, because he incorporated

[00:29:53] Speaker 03:
the Athie decision and maybe even the Archuleta decision.

[00:29:57] Speaker 03:
I will point out in the Archuleta decision, the fees and expenses were paid by the United States.

[00:30:05] Speaker 03:
They weren't paid out of a common fund.

[00:30:09] Speaker 03:
Second, as to the Common Fund, that is exactly the argument that Candell made at the trial court.

[00:30:17] Speaker 03:
Trial court found that Common Fund did not apply in this case.

[00:30:21] Speaker 03:
And had it, note that the judgment here is $264,000 approximately.

[00:30:30] Speaker 03:
The class administrator.

[00:30:31] Speaker 03:
had expended and I think requested several hundred thousand more than that amount.

[00:30:38] Speaker 03:
So the fund couldn't have paid that amount.

[00:30:43] Speaker 03:
Third, counsel keeps referencing the record.

[00:30:47] Speaker 03:
But this court in Chu versus United States and the Supreme Court

[00:30:55] Speaker 03:
in Commissioner versus Gene, both individual cases did not go to an administrative record, did not say you have to have an administrative record as in an APA case in order to have the trial court look at what the agency did.

[00:31:14] Speaker 03:
But rather, what those cases and many others that we cite in our brief said is,

[00:31:22] Speaker 03:
The trial court must look at why did this suit have to be brought in the first place?

[00:31:29] Speaker 03:
And that is to look at the action of the agency, not some official position of the agency, but just what did the agency do vis-a-vis this individual.

[00:31:41] Speaker 03:
And with that, I think it works.

[00:31:43] Speaker 01:
Let me ask one further question.

[00:31:44] Speaker 01:
Certainly.

[00:31:44] Speaker 01:
This goes back to the argument that Mr. Kalman was making right at the outset.

[00:31:50] Speaker 01:
The proportionality problem, suppose

[00:31:56] Speaker 01:
contrary to the fact that at the end of the litigation, there were only seven individuals who, it turns out, were underpaid, even according to the plaintiff's theory.

[00:32:09] Speaker 01:
But they were underpaid, and there was a total of, let's say, $1,000 total to those seven individuals.

[00:32:19] Speaker 01:
Would the error of the agency and the

[00:32:23] Speaker 01:
the government in litigating that be sufficient to justify the payment of attorney's fees, in your view, and the payment of a class administrator?

[00:32:35] Speaker 03:
Obviously, I'll start by saying it depends on the facts.

[00:32:38] Speaker 03:
Well, with what facts does it depend on?

[00:32:41] Speaker 03:
That's my question, really.

[00:32:42] Speaker 03:
Right.

[00:32:43] Speaker 03:
As to those individuals, I would say, first of all, the government looks at this from the point of view of the agency

[00:32:50] Speaker 03:
and the broad workforce.

[00:32:52] Speaker 03:
But as to each individual, that person didn't get paid.

[00:32:56] Speaker 03:
So think of it as an individual case.

[00:33:00] Speaker 03:
If only Mr. Kendall had brought this as an individual case and had received a full payment of the amount that he was due, would it be said that under IJA, even though the purpose of IJA was to allow individuals to vindicate

[00:33:17] Speaker 03:
rights that they might otherwise not be able to vindicate.

[00:33:23] Speaker 03:
Even under that purpose, should Mr. Kandel not have brought the lawsuit because there just wasn't enough money to worry about?

[00:33:29] Speaker 01:
I don't think that's what he just said.

[00:33:31] Speaker 01:
On the other side of that coin is, should the government be required to pay, let's say, several hundred thousand dollars in legal fees

[00:33:40] Speaker 01:
for a case that was only worth $1,000.

[00:33:42] Speaker 03:
It depends on how the government litigated it.

[00:33:47] Speaker 03:
Why shouldn't the government have paid those seven individuals and disposed of the case, rather than, as in our case, making them wait 14 years, Your Honor, to get paid?

[00:34:04] Speaker 00:
litigation isn't that evidence or that goes to who's a prevailing party yes and it's also evidence your honor that goes to

[00:34:18] Speaker 03:
the question of how much should the attorney's fee be.

[00:34:26] Speaker 03:
Courts will often say, we won't pay for all of these actions.

[00:34:31] Speaker 03:
Say, the motions that the government prevail on, the court might not pay for those.

[00:34:36] Speaker 03:
But the court

[00:34:38] Speaker 03:
normally does not say the Justice Department won a bunch of motions, so I don't care how unjustified those agencies were in not paying their employees and in resisting this case for 14 years.

[00:34:53] Speaker 03:
I'm just not going to consider that.

[00:34:55] Speaker 00:
The only thing I'll consider is whether the justice department.

[00:34:58] Speaker 00:
And at that point, we go to substantially justified argument.

[00:35:01] Speaker 03:
Yeah.

[00:35:01] Speaker 03:
So it all fits into the substantially justified argument.

[00:35:06] Speaker 03:
And all we're saying here is that part of that analysis has to be what the agencies did in the first place.

[00:35:15] Speaker 03:
That's what the trial court failed to do here.

[00:35:17] Speaker 03:
And that's why we think it should be remitted.

[00:35:21] Speaker 02:
Thank you to both counsels for