Ninth Circuit Slashes Fee in U.S. ex rel. Hartpence FCA Case to $1.5M
Ninth Circuit cut FCA lawyers’ fees from $8.5M to $1.5M in U.S. ex rel. Hartpence v. KCI (May 2024).
Why it matters: Fee reductions of this scale will impact FCA whistleblower litigation strategy and economics. Law firms and clients must rethink fee requests and case selection as courts increase scrutiny and demand detailed evidence of billable work.
- On May 23, 2024, the Ninth Circuit decided U.S. ex rel. Hartpence v. Kinetic Concepts, Inc. (KCI).
- District court originally awarded $8.5M in attorneys’ fees to relator's counsel after settlement of FCA claims.
- The appellate panel found the fee request 'grossly excessive,' trimming fees to $1.5M after reviewing billing records.
- The court emphasized FCA fee awards must be reasonable and based on actual, documented work.
The U.S. Court of Appeals for the Ninth Circuit issued its ruling in U.S. ex rel. Hartpence v. Kinetic Concepts, Inc. on May 23, 2024, slashing an $8.5 million attorneys’ fee award to $1.5 million after finding significant overbilling by relator’s counsel in a False Claims Act (FCA) case.
- The FCA allows whistleblowers (relators) to bring suits on behalf of the government—and if successful, recover attorneys’ fees (31 U.S.C. § 3730(d)).
- The Ninth Circuit found the original fee demand was unsupported by time records and not proportional to the work done, calling some charges “unreasonable on their face.”
- The appellate panel also clarified that the ‘lodestar’ method for calculating fees in FCA cases requires “meticulous” documentation, not assumptions or block billing.
- Judge Ikuta, writing for the court, noted the necessity to ensure fee awards do not become windfalls for counsel.
This decision puts FCA plaintiffs’ attorneys on notice: courts will carefully evaluate fee submissions—potentially shifting cost-benefit calculations for bringing or settling FCA and other qui tam cases (where private individuals sue on behalf of the government for fraud or misconduct).
Legal professionals serving corporate defendants, government contractors, and whistleblowers in the Western U.S. should anticipate more rigorous court review of all fee petitions in federal FCA litigation following this precedent-setting opinion.
By the numbers:
- $8.5M — original attorney fee requested for FCA litigation
- $1.5M — fee awarded after Ninth Circuit review, an 82% reduction
- May 23, 2024 — date of Ninth Circuit opinion in U.S. ex rel. Hartpence v. KCI
Yes, but: Plaintiffs’ counsel can still recover fees under FCA, but must strictly document hours and rates to support their claims; the underlying FCA settlement remains undisturbed.
What's next: Counsel in ongoing and future FCA cases in the Ninth Circuit will likely adjust fee petitions to meet the stricter standard, and other circuits may follow suit.