A recent Legal Intelligencer story by PJ D’Annunzio, “In Suit Over Faculty Nuclear Missile Parts, Court Shoots Down $3M Attorney Fee Request,” reports that, in a settled lawsuit over defective batteries sold to the U.S. government for use in intercontinental ballistic missile launch systems, a federal appeals court upheld a decision denying the government’s lawyers’ demand for millions of dollars in fees.  The case involved a contentious dispute over how much the firm representing the government should be paid for the time put into the case.  While the case settled for $1.7 million, lawyers for the government requested $3.11 million in fees.

Attorneys hurled insults and innuendo at one another during the case, prompting U.S. District Judge Gene E.K. Pratter of the Eastern District of Pennsylvania, the trial judge handling the matter, to proclaim, “it is a hellish judicial duty to review and resolve disputed attorneys’ fee petitions, particularly in cases, like this one, where the adversaries fan the flames at virtually every opportunity,” according to an opinion from the U.S. Court of Appeals for the Third Circuit, which reviewed the case.

Pratter slashed the attorney fee amount to roughly $1.8 million, leading the plaintiff to file an appeal to get the full amount requested.  The government and its relator in the False Claims Act case, Donald Palmer, said it was unfair for the court to award an amount even less than the one suggested by the defendant, C&D Technologies.  “Relator does not cite any decision that requires a district court to award at a minimum the amount of attorneys’ fees that the opposing party contends is reasonable, and we decline to make such a ruling today,” Senior Judge Morton Greenberg of the U.S. Court of Appeals for the Third Circuit wrote in the court’s July 17 opinion.

“Rather, our case law provides district courts with substantial discretion to determine what constitutes reasonable attorneys’ fees because they are ‘better informed than an appellate court about the underlying litigation and an award of attorney fees is fact specific.’”  However, the court did remand the case for Pratter to review whether the government and Palmer were entitled to “fees on fees,” that is, fees to compensate lawyers for the time spent arguing over how much they should be paid.

“The district court should proceed in two steps: (1) as with all fee petitions, it must first determine whether the fees on fees are reasonable; and (2) once the reasonability analysis is complete, the court must consider the success of the original fee petition and determine whether the fees on fees should be reduced based on the results obtained,” Greenberg said.