Podcast Unpacks Million-Dollar Fee Battles in FCA Whistleblower Cases
A recent podcast explores how relators in False Claims Act cases pursue multi-million dollar attorney fee awards.
Why it matters: Understanding the standards for attorneys’ fee petitions in FCA cases is essential for legal teams structuring settlements and managing client expectations. High-stakes disputes over what’s ‘reasonable’ can directly impact negotiation strategies and outcomes.
- FCA relators can collect 15–30% of government recoveries, plus reasonable attorney fees.
- Fee petitions can reach millions, with reasonableness determined by courts via the lodestar method.
- A recent Ninth Circuit decision reversed an $8.5M fee award, finding the multiplier unjustified.
- The fee-shifting provision aims to encourage whistleblowers by covering their legal costs.
The False Claims Act (FCA) empowers private citizens—relators—to sue on behalf of the U.S. government in cases of alleged fraud, sharing in a portion of the government’s recovery. In addition, they are entitled to have their reasonable attorneys’ fees and costs covered by the defendant, a mechanism designed to remove financial barriers for whistleblowers.
- Relators may claim between 15% and 30% of government recoveries. However, fee petitions—especially in complex or protracted litigation—can balloon into the millions, raising tough questions for courts and counsel alike.
- According to Kate Ledden, Partner at Husch Blackwell LLP: "Fee awards sometimes reach millions of dollars, raising important questions about what constitutes 'reasonable' compensation for qui tam counsel."
- The most common method for determining attorney fee awards is the lodestar method, calculated by multiplying hours reasonably expended by a reasonable hourly rate. "Courts favor the lodestar method as it provides an objective, reviewable approach that approximates what a paying client would pay in comparable hourly-billed litigation," Ledden notes.
- Disputes center on multipliers or enhancements. In United States ex rel. Thrower v. Academy Mortgage Corp., the district court awarded $8.5 million in attorneys’ fees—using a 1.75x multiplier on a $38.5 million settlement. On appeal, the Ninth Circuit reversed, holding that the enhancement was unjustified as "the exceptional result" was already reflected in the hours and rates used. (details)
The FCA’s fee-shifting provisions are intended to encourage the reporting of fraud, but judicial scrutiny is intensifying as fee awards grow in scale. Legal professionals need to stay alert to evolving standards and recent case law to counsel clients in FCA matters.
By the numbers:
- 15–30% — Relators’ share of government recovery in FCA cases
- $8.5M — Fee award reversed by Ninth Circuit in Academy Mortgage case
- $38.5M — Total settlement in the same case