UNITED STATES OF AMERICA et al v. Pathway of Baldwin County, LLC et al

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
UNITED STATES OF AMERICA, 	)
ex rel RICHARD J. SHEPPARD, 	)
)
Plaintiff, 	)
)
vs. 	) 	CIVIL ACTION NO. 17-00355-KD-N
)
PATHWAY OF BALDWIN COUNTY, 	)
LLC and PATHWAY, INC., 	)
)
Defendants. 	)
ORDER
This action is before the Court on the motion for attorney’s fees and non-taxable
expenses filed by the Relator Richard J. Sheppard and documents in support (docs. 157, 165,
166, 170, 171), the response in opposition and documents in support filed by Defendants
Pathway of Baldwin County LLC and Pathway, Inc. (docs. 163, 173, 174) and Sheppard’s reply
and documents in support (docs. 164, 176,1 178, 179).2 Upon consideration, and for the reasons
set forth herein the motion for attorney’s fees is granted in part and the motion for non-taxable
expenses is granted.
I. Background
1 Sheppard’s objections to Defendants’ evidentiary submissions (doc. 176) are moot. The Court
did not rely upon the evidence to which Sheppard objects in reaching its decision.
2 Defendants’ motion to exclude the declaration of James A. Johnson (doc. 175) is denied. The
safeguards of establishing reliability, relevance, and helpfulness to the trier of fact provided for
in Daubert are less of a concern when the decision will be made by the Court instead of a jury.
See United States v. Brown, 415 F.3d 1257, 1268 (11th Cir. 2005) (“There is less need for the
gatekeeper to keep the gate when the gatekeeper is keeping the gate only for himself.”).
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Sheppard filed his False Claims Act (FCA) Complaint against Defendants on August 4,
2017 (doc. 1). For the next five years, the action remained under seal. In September 2022, the
United States intervened for the purpose of settlement (docs. 30, 33). The action was settled as to
Counts I, II, III, and IV (doc. 34). Sheppard’s claim for retaliation against Defendants remained
pending (doc. 38, amended complaint).
Sheppard moved pursuant to 31 U.S.C.A. § 3730(d) for an award of reasonable attorneys’
fees and costs incurred from March 28, 2017, his first contact with counsel, through the approval
of the settlement on November 29, 2022 (docs. 35, 36, 37). Sheppard supplemented his motion
(docs. 53-56, 59-60). The motion and supplementations were held in abeyance (docs. 44, 79).
Ultimately, Sheppard prevailed at trial on his claim for retaliation (doc. 153, verdict) and
judgment was entered on July 17, 2024 (doc. 155). Sheppard filed his Bill of Costs and costs
have been taxed against the Defendants in the amount of $4,494.02 (docs. 158, 158).
Within two weeks of the judgment, Sheppard filed a motion for attorney’s fees and non-
taxable expenses (doc. 157). At that time, he requested “approximately $800,000.00”3 for
attorney’s fees, expenses, and cost incurred to date. Sheppard stated he would supplement his
motion with documentation within a month.
Sheppard did not meet his own deadline. Defendants then filed a response and argued
that because Sheppard’s motion was not supported by any evidence, it should be dismissed (doc.
163). Alternatively, Defendants stated that if Sheppard was allowed to file “delayed evidentiary
support” then they request the opportunity to respond (doc. 163, p. 2). Sheppard replied and
stated that he would file evidentiary materials as soon as possible and planned to obtain expert
testimony from other attorneys in Mobile, Alabama (doc. 164).
3 Sheppard later explained that his attorney fees at that time were $944,809.00 (doc. 178).
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Approximately seven weeks later, Sheppard filed a brief, affidavit, and exhibits in
support of his motion (docs. 165, 166, 166-1 through 166-15). At that time, he sought attorney
and paralegal fees in the total amount of $1,048,822.50 (doc. 166-1, Invoice). He also served
interrogatories and requests for production on Defendant’s counsel (doc. 172) and filed two
declarations by local attorneys in support of his motion (docs. 170, 171). Sheppard also stated
that the recently submitted motion, brief, and evidentiary materials replaced the previously filed
motion and supplementations (docs. 35, 36, 37, 53-56, 59-60) (doc. 165, p. 30).
Defendants had their opportunity4 to respond. They filed their opposition (see docs. 173,
174) as well as a motion to strike part of Sheppard’s evidentiary submissions (see Footnote 1).
Sheppard filed his reply (doc. 178). And then submitted another declaration and invoice
from his counsel in the amount of $1,110,730.00 as the total amount of attorney and paralegal
fees expended in this action (docs. 179, 179-1).
II. Motion for attorney fees and non-taxable expenses
A. Entitlement
The FCA provides that a relator's attorney fees and costs “shall be awarded against the
defendant.” 31 U.S.C. § 3730(d)(1). “The fee applicant must ‘establish[ ] entitlement’ to fees and
document ‘the appropriate hours and hourly rates.’” United States ex rel. McCutcheon v. QBR,
LLC, 2024 WL 4403709, at *3 (N.D. Ala. Oct. 3, 2024) (quoting Norman v. Hous. Auth. of
Montgomery, 836 F.2d 1292, 1299 (11th Cir. 1988).
Sheppard argues that he is entitled to attorney’s fees and non-taxable expenses for the qui
tam portion of this litigation because the “FCA deems a Relator entitled to attorney’s fees and
4 Defendants’ motion for extension of time to respond to Sheppard’s motion was granted (docs.
167, 168).
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expenses from a defendant in the following circumstances: (a) if a Relator files a qui tam action,
(b) if the U.S. Government intervenes, and (c) if a Relator substantially contributes to the
prosecution of the action.” (doc. 165, p. 13) (citing 31 U.S.C. § 3730(d)(1) and Hunt v. Cochise
Consultancy, Inc., 887 F.3d 1081, 1087 (11th Cir. 2018)).
The United States intervened in this action, settled the qui tam claims against Defendants,
and agreed to pay Sheppard 18% of the settlement proceeds for his contribution to the
prosecution of the action. Accordingly, Sheppard is entitled to recover his reasonable attorneys’
fees pursuant to 31 U.S.C. § 3730(d)(1). See Singbush v. Fla. Neurological Ctr., LLC, 2022 WL
21830631, at *5 (M.D. Fla. Dec. 15, 2022) (finding that the Magistrate Judge correctly found
that the relators were entitled to recover their reasonable attorneys’ fees pursuant to §
3730(d)(1)) (citing United States ex rel. Bryant v. Cmty. Health Sys., Inc., 24 F.4th 1024, 1033–
34 (6th Cir. 2022)).
However, Sheppard is not entitled to recover attorney fees for negotiating his percent of
the settlement from the 15% initially offered by the United States to the 18% to which the parties
agreed. relator's share.5 United States ex rel. Zediker v. OrthoGeorgia, 407 F. Supp. 3d 1330,
1348–49 (M.D. Ga. 2019), aff'd sub nom. Zediker v. OrthoGeorgia, 857 Fed. Appx. 600 (11th
Cir. 2021) (finding that “Zediker's counsel may not recover for work involving a dispute solely
between the relator and the Government.”) (citing United States ex rel. Taxpayers Against Fraud
and Walsh v. Gen. Elec. Co., 41 F.3d 1032, 1045-46 (6th Cir. 1994) (for the finding that fees
incurred in a dispute with the United States about the relator's share are not included within the
5 Defendants calculated that approximately 82.2 hours were for negotiating and documenting
Sheppard’s percentage of the recovery from the United States and argues that the Court should
reduce his hours by this amount (doc. 173, p. 17, citing doc. 173-2). At Sheppard’s requested rate
of $500.00 per hour, the fee would be $40,594.00.
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scope of § 3730(d)(1) & (2)). United States ex rel. Chiba v. Guntersville Breathables, Inc., 421 F.
Supp. 3d 1241, 1263 (N.D. Ala. 2019) (“However, the Relators cannot obtain recompense for the
time Plant and Battle spent negotiating and processing the Relators' share of the proceeds.”)
(citations omitted).
Pursuant to 31 U.S.C. § 3730(h), which provides relief from retaliatory actions, Sheppard
may be compensated for “litigation costs and reasonable attorneys' fees.” Sheppard argues that
he is entitled to attorney’s fees and non-taxable expenses for successfully prosecuting his claim
of retaliation against the Defendants (doc. 165, p. 14). Sheppard obtained a jury verdict in his
favor. Therefore, he is entitled to litigation costs and a reasonable attorney’s fees for prosecuting
his retaliation claim.
Sheppard also argues that he is entitled to a reasonable attorney’s fee for preparing,
supporting, and defending his motion for attorney fees (doc. 165, p. 31). The Court agrees. See
Norelus v. Denny's, Inc., 628 F.3d 1270, 1301 (11th Cir. 2010) (noting “fees-on-fees” should be
awarded as reasonable costs of establishing the right to, and the amount of, attorney's fees when
doing so is warranted under the text of the rule or statute at issue because to deny such awards
would “undermine the congressional policies behind awarding attorney's fees”); Singbush, 2022
WL 21830631, at *5 (allowing “fees on fees” and citing Norelus, 628 F. 3d at 1301).
B. Lodestar analysis
Federal courts have applied the standard “lodestar” method to determine a reasonable
attorney’s fee in qui tam actions under the FCA. Zediker v. OrthoGeorgia, 857 Fed. Appx. 600,
608 (11th Cir. 2021). “Under the lodestar method, courts determine attorney's fees based on the
product of the reasonable hours spent on the case and a reasonable hourly rate.” Id. (quoting In re
Home Depot Inc., 931 F.3d 1065, 1076 (11th Cir. 2019) (citing Hensley v. Eckerhart, 461 U.S.
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424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)). “This product is called the ‘lodestar,’ and
‘there is a strong presumption that the lodestar is the reasonable sum the attorneys deserve.’” Id.
(citing Bivins v. Wrap It Up, Inc., 548 F.3d 1348, 1350 (11th Cir. 2008) (quotation marks and
citation omitted). A “downward adjustment of the lodestar is ‘merited ... if the prevailing party
was partially successful in its efforts,’ a determination the district court makes on a case-by-case
basis.” Id., (quoting Resolution Trust Corp. v. Hallmark Builders, Inc., 996 F.2d 1144, 1150
(11th Cir. 1993)). Overall, the Court is not authorized “to be generous with the money of others,
and it is as much the duty of courts to see that excessive fees and expenses are not awarded as it
is to see that an adequate amount is awarded.” American Civil Liberties Union of Ga. v. Barnes,
168 F.3d 423, 428 (11th Cir. 1999).
“’In determining the reasonableness of the requested hourly rate and the reported hours
an attorney spent on a case, a district court should consider twelve factors . . . adopted in part in
Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974).’” Id., at *4 (quoting
Norman, 836 F. 2d at 1299). Specifically,
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3)
the skill required to perform the legal services properly; (4) the preclusion of
other employment by the attorney due to acceptance of the case; (5) the
customary fee in the community; (6) whether the fee is fixed or contingent; (7)
time limitations imposed by the client or circumstances; (8) the amount involved
and the results obtained; (9) the experience, reputation, and ability of the
attorneys; (10) the undesirability of the case; (11) the nature and length of the
professional relationship with the client; and (12) awards in similar cases.
Johnson, 488 F.2d at 717-19 (internal quotations omitted). Overall, the district court is “an expert
on the question of fees, and may consider its own knowledge and experience in making a fee
award.” Davis v. Nat'l Med. Enters., Inc., 253 F.3d 1314, 1322 n.12 (11th Cir. 2001).
1. Reasonable hourly rate
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“Generally, a ‘reasonable hourly rate is the prevailing market rate in the relevant legal
community for similar services by lawyers of reasonably comparable skills, experience, and
reputation.’” Zediker, 857 Fed. Appx. at 609 (11th Cir. 2021) (quoting Norman, 836 F.2d at
1299). The “relevant market” is usually the “place where the case is filed.” Barnes, 168 F.3d at
437 (citation and internal quotation marks omitted). “‘The party seeking attorney's fees bears the
burden of producing satisfactory evidence that the requested rate is in line with prevailing market
rates.’” Zediker, 857 Fed. Appx. at 609 (quoting Loranger v. Stierheim, 10 F.3d 776, 781 (11th
Cir. 1994). Overall, the court is “‘itself an expert on the question and may consider its own
knowledge and experience concerning reasonable and proper fees and may form an independent
judgment either with or without the aid of witnesses as to value.” Loranger, 10 F.3d at 781)
(citation omitted). But the district courts are warned that “a court should hesitate to give
controlling weight to prior awards, even though they may be relevant.” Dillard v. City of
Greensboro, 213 F.3d 1347, 1355 (11th Cir. 2000).
a. Attorney
Sheppard argues that $500.00 per hour is a reasonable hourly rate for his counsel’s
representation in this action. In support, he points out that his counsel has 30 years of experience
in complex litigation (doc. 165). Sheppard also moves the Court to apply a 1.5 multiplier to
account for the delay in payment and application of the Johnson factors6 and find that $750.00
6 In his declaration, Sheppard’s counsel explains that the multiplier should be applied to reflect
the true value of counsel’s representation and that, in addition to the delay in payment, eleven of
the Johnson factors weigh in favor of a multiplier. Sheppard did not proffer an award of a similar
hourly rate in a qui tam action to satisfy the factor of “awards in similar cases” (doc. 166, p. 33-
41). Instead, Sheppard states that his counsel “was unable to find any reported cases in the U.S.
District Court for the Southern District of Alabama in which the Court awarded attorney’s fees to
FCA counsel.” (doc. 165, p. 18).
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per hour is a reasonable hourly rate. Sheppard also states that “[i]f Defense counsel disputes the
assertion that $500.00 per hour is the prevailing rate in this market, then Defense Counsel should
submit their own hourly rates, charged to Defendants in this case, in order to provide context for
the Court’s decision.” (doc. 165, p. 24).
Defendants contend that Sheppard’s request for an hourly rate of $500.00, with a
multiplier of 1.5 for an hourly rate of $750.00,7 for his attorney is unreasonable and not
consistent with the prevailing market rate for attorneys of similar skill and experience working
on complex litigation in Mobile, Alabama (doc. 174, p. 26-31). Defendants suggest that a rate
not exceeding $350.00 per hour is reasonable for an attorney with similar skill and years of
practice as Sheppard’s attorney, with no prior experience in FCA litigation, and would be
comparable with past awards by the Court.
Defendants also state that their lead counsel, with approximately 50 years of experience
and specialization in qui tam actions, is paid a fee of $400.00 per hour and second counsel is paid
a fee of $240.00. From the extensive amount of time spent researching qui tam actions and
drafting the qui tam pleadings, Defendants extrapolate that this was Sheppard’s attorney’s first
qui tam litigation.
Sheppard does not dispute that this was his attorney’s first qui tam litigation (doc. 178).
In support of the requested hourly rate, Sheppard provides a declaration of counsel, not involved
in this action but with qui tam litigation experience, to the effect that $500.00 is a reasonable
7 Defendants point out that the qui tam action, the more complex part of the litigation where
representation may have merited a multiplier was not litigated by Sheppard, but instead “was
investigated, worked up, negotiated, and settled by the Government.” (doc. 174, p. 28)
Defendants also point out that Sheppard’s counsel expended more than 1,200 hours on the
retaliation claim but it was “not complex or different from a run-of-the-mill employment case,
and it did not require any complex skill or knowledge beyond what an employment lawyer
would usually know.” (Id.).
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hourly rate in this area (doc. 170).8 Sheppard also provides his counsel’s declaration, supported
in turn by a declaration made in another case in this court (doc. 171).9 Sheppard also argues that
the Middle District of Alabama and the Northern District of Alabama have awarded hourly rates
higher than $500.00 in cases decided five years ago (doc. 165, p. 18).
In his declaration, Sheppard’s counsel states that he has 30 years of experience including
extensive experience in complex civil litigation, is admitted to practice in multiple courts, has
been elected to positions of trust with the Alabama State Bar and Mobile Bar Association, and
has been rated AV preeminent by Martindale-Hubble since 2017 (doc. 166). Counsel also details
the work he performed during the seven years of this qui tam action and specifically the work
performed during the negotiation and settlement of the qui tam portion. (Id.).
Historically, this Court has found that $300.00 to $350.00 per hour was a reasonable
hourly rate for an attorney with 30 years of experience in complex civil litigation. 10 	McKean v.
City of Mobile, 2023 WL 5004062, at *6 (S.D. Ala. Aug. 4, 2023) (collecting cases; Stevens v.
Mobile Cnty. Bd. of Sch. Commissioners, 2020 WL 1921557, at *6 (S.D. Ala. Apr. 20, 2020)
(awarding $350 per hour as a reasonable hourly rate for an attorney with approximately 30 years
8 Relying upon a declaration by James A. Johnson, Sheppard asserts that Johnson, an attorney
with 30 years of experience generally, and specific experience in qui tam litigation, affirmed that
$500.00 was a reasonable hourly rate for plaintiff’s counsel in a qui tam action.
9 Relying upon a declaration by Edward Hawkins made in 2020, Sheppard asserts that at that
time prevailing hourly rates for complex litigation were $275.00 to $480.00 per hour depending
upon the skill and years of experience of the attorney, and that defense counsel in this action had
been awarded $400.00 per hour in 2014.
10 “Although the Court does not give controlling weight to prior awards, those awards are
relevant and instructive in determining whether the ‘requested rate is in line with prevailing
market rates’ in this district for attorneys of reasonably comparable skill, experience, and
reputation to that of [the attorney] seeking an award of attorney's fees pursuant to a fee-shifting
statute.” Langford v. Hale Cnty. Ala. Comm'n, 2016 WL 4976859, at *3 (S.D. Ala. Sep. 16,
2016).
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of experience and extensive experience in civil rights and employment discrimination litigation);
United States v. Approximately $299,873.70 seized from a Bank of Am. Acct., 2020 WL
4808891, at *3 (S.D. Ala. Aug. 18, 2020) (awarding $350.00 per hour for an attorney with 38
years of experience and specialization in criminal trial law).
The Court has considered the relevant Johnson factors, including Sheppard’s counsel
Harry Satterwhite’s specialized skills, abilities, and years of experience as well as the novelty or
difficulty of the issues in this action, the customary fee in the Mobile area, and awards in similar
actions. The Court has also considered Sheppard’s argument as to the risk involved in contingent
fee representation, and the preclusion from other work brought about by this lengthy litigation.
The Court also acknowledges the general increase in costs of doing business that has occurred
over the past seven years. Relying upon the Court’s own experience, generally and in this
action, the Court finds that a reasonable hourly rate for Sheppard’s attorney is $350.00.
b. Paralegals
Sheppard argues that $135.00 per hour is a reasonable hourly rate for paralegals Mechele
Marshall and Debra French and that $100.00 is a reasonable hourly rate for paralegal Vangie
Waltman. He argues that the requested rates are based upon Marshall and French’s skill,
experience, and reputation. Sheppard also acknowledges the Court’s history of allowing $75.00
per hour as a reasonable paralegal hourly rate and argues that this rate should be adjusted for
inflation and that the prevailing market rates for paralegals working on complex litigation in
Mobile, Alabama is at least the $135.00 requested (doc. 165, p. 2, 28-29).
Historically, this Court has found that absent special circumstances, the reasonable hourly
rate for paralegals in Mobile, Alabama is $75.00 per hour. Troxel v. Gunite Pros, LLC, 2022 WL
17416492, at *4 (S.D. Ala. Dec. 5, 2022) (declining to award $145.00 per hour without a
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showing of extraordinary qualifications or expertise and allowing $75.00 per hour as the standard
lodestar hourly rate).
Sheppard asserts that Marshall has 35 years of experience as a paralegal in the Mobile
legal community and has worked in his firm for the past 18 years. He points out that Marshall
has experience in complex commercial litigation with specialized skill in accounting and
bookkeeping and that she is among the top 1% of paralegals in this area.11 (doc. 166, p. 42-43).
Sheppard asserts that French has 23 years of experience and although she was recently
employed, she was highly recommended by her past employer who described her as a skilled
litigation paralegal with experience in personal injury actions. He points out that she is proficient
in drafting documents, and an expert in handling large volumes of electronically stored
information and trial preparation (doc. 166, p. 43-44).12
Sheppard did not provide the Court with information regarding Waltman’s skill and
experience.
The Court has considered the relevant Johnson factors, including Marshall and French’s
specialized skills, abilities, and years of experience as well as the novelty or difficulty of the
issues upon which they worked.13 The Court has also considered the absence of any information
as to Waltman’s skill and experience. The Court also acknowledges the general increase in costs
of doing business that has occurred over the past seven years. Relying upon the Court’s own
experience, generally and in this action, the Court finds that a reasonable hourly rate for Marshall
11 See Marshall’s resume (doc. 166-13).
12 See French’s resume (doc.166-14).
13 The invoices indicate that Marshall worked on the action from its inception, French worked on
pretrial matters and trial, and both worked extensively on the motion for attorney’s fees and
expenses (docs. 166-1, 179-1).
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is $100.00, French is $100.00, and Waltman is $75.00.14 See Fitzwater v. Cole, No. CV 18-
00137-N, 2020 WL 620670, at *2 (S.D. Ala. Feb. 10, 2020) (finding $90.00 per hour was a
reasonable hourly rate for a paralegal); Townson v. Garland, No. CV 1:22-00251-KD-N, 2024
WL 3363850, at *10 (S.D. Ala. July 10, 2024) (after consideration of “its own knowledge and
experience with paralegal fees in the Mobile market,” finding that an hourly rate of $100.00 was
reasonable for a paralegal with more than a decade of specialized experience) (noting Laird v.
Jiya Jeel LLC, No. 1:22-CV-259-KD-N (S.D. Ala. 2023) (Doc. 23 at 15), wherein the Court
found $100.00 per hour was reasonable for a paralegal in a Fair Labor Standard Act action).
2. Number of hours reasonably expended
“When a district court finds the number of hours claimed is unreasonably high, the court
has two choices: it may conduct an hour-by-hour analysis or it may reduce the requested hours
with an across-the-board cut.” Bivins, 548 F.3d at 1350 (citing Loranger, 10 F. 3d at 783).
Although an hour-by-hour approach is sometimes preferable, in some circumstances, “where the
fee motion and supporting documents are so voluminous, it is sufficient for the court to provide a
concise but clear explanation of its reasons for the reduction.” Loranger, 10 F.3d at 783 (further
explaining that when the courts utilize an across-the-board percentage reduction, the courts must
“clearly articulate their reasons for selecting specific percentage reductions”). If the court
conducts an hour-by-hour analysis, the court should exclude “hours that were not reasonably
expended,” such as work that was “excessive, redundant, or otherwise unnecessary.” Hensley,
461 U.S. at 434, 103 S.Ct. 1933. The Court may also discount a time entry “where the
description of the work performed is overly vague.” McConnell v. Am. Gen. Life Ins., Co., 2020
WL 3452983, at *9 (S.D. Ala. June 24, 2020) (internal quotes omitted). The Court may also
14 The invoice indicates that Waltman was employed in 2023 (doc. 166-1).
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reduce the hours claimed where “block billing” prevents a meaningful review of the hours.
“‘Block billing’ occurs when an attorney lists all the day's tasks on a case in a single entry,
without separately identifying the time spent on each task.” McConnell, 2020 WL 3452983, *9.
“Regardless of who is doing the billing, courts may only award fees for time spent by
attorneys, or for the work of non-lawyer paralegals but only to the extent they perform work
traditionally done by an attorney.” McKean, 2023 WL 5004062, at *5 (citing Nail v. Shipp, 2020
WL 1670459 (S.D. Ala. Apr. 3, 2020) (citing Missouri v. Jenkins, 491 U.S. 274, 288 at note 10
(1989) (“purely clerical or secretarial tasks should not be billed at a paralegal rate, regardless of
who performs them [ ]”)).
“Such non-recoverable tasks include time billed for: setup of a file, calendaring
deadlines, receiving, reviewing, and indexing documents, sending or receiving emails with
documents attached, preparing civil cover sheets and summons, receiving and indexing certified
mail receipts, e-filing documents with the Court, receiving and indexing those documents,
mailing and telefaxing correspondence, making calls to clients, obtaining pleadings from the
court's database, printing documents, miscellaneous scanning of documents, etc.” McKean, 2023
WL 5004062, at *5 (quoting Ford v. Navika Capital Grp., LLC, 2017 WL 1381668, *3-4 (S.D.
Ala. Apr. 17, 2017) (internal citations omitted)).
“Work that may appropriately be performed by paralegals and billed to a client or a
losing party includes ‘factual investigation, including locating and interviewing witnesses;
assistance with depositions, interrogatories, and document production; compilation of statistical
and financial date; checking legal citations; and drafting correspondence.’” Allen v. McClain EZ
Pack of Ala., Inc., 2005 WL 1926636, at *3 (S.D. Ala. Aug. 8, 2005) (quoting Missouri, 491
U.S. at 288 n.10, 109 S.Ct. 2463).
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Sheppard claims a total of 2,117.80 hours (docs. 166-1; 179-1) expended by his attorney
and a total of 388.10 hours (docs. 166-1; 179-1) of work performed by the paralegals from
March 2017 to January 2025.
Defendants argue that the hours for which it must pay Sheppard’s attorney’s fees should
be reduced. Generally, Defendants argue that because the hours are excessive with unreasonable
hours spent on revising documents that a more skilled attorney or paralegal would not have
needed to revise, and frequently double-billed between the attorney and the paralegals.
Specifically, Defendants argue that the following entries are not recoverable: 1) hours
negotiating Sheppard’s percent of the United States’ recovery (doc. 174, p. 16) (deducting 82.2
hours), 2) hours for basic research – to get up to speed or learn about the basic principles of qui
tam litigation – (Id., p. 17) (deducting 84.1 hours), 3) the excessive amount of hours to correct
and refile Sheppard’s deficient response to Defendants’ motion for summary judgment (Id., p.
18) (deducting 93.1 hours), 4) hours incurred for Sheppard’s claim for unemployment benefits
(Id., p. 19) (deducting 10 hours); 5) hours incurred preparing generic discovery requests and
reviewing Defendants’ objections (Id., p. 20) (deducting 52.3 hour), 6) hours incurred for clerical
work (doc. 174, p. 21) (deducting 65.6 hours), 7) hours incurred negotiating Sheppard’s
settlement with Defendants because his settlement demands were unrealistic (Id., p. 22)
(deducting 92.2 hours), and 8) the excessive hours spent drafting and amending the complaint
and other pleadings (Id., p. 22) (deducting 71.6 hours before the qui tam action was settled, 19.6
hours amending the complaint after the qui tam action was settled, and 24 hours on non-complex
initial disclosures).
Defendants also argue that the hours spent on the motion for attorney’s fees are excessive
and should be reduced. Defendants estimate that Sheppard and his paralegals spent
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approximately 435 hours working on the time sheets and the motion (Id., p. 24-25). They argue
that this amount is excessive because it includes time for clerical and administrative tasks, and
correcting and revising the time sheets, but if contemporaneous time records had been kept, the
time entries would not have needed revisions (Id.). Defendants also argue that the hours are
unreasonable because many of the hours result from settlement negotiations between Sheppard
and Defendants wherein Sheppard made unreasonable settlement demands.
Sheppard argues that all the hours expended were reasonable. He asserts that the
corrections and revisions were made to eliminate time entries that are disfavored by the Court
such as block-billing. He also argues that Defendants have criticized and second guessed his
attorney’s time keeping methods and personally attacked his attorney, and that Defendants
substantially misrepresented the actual hours expended for certain tasks (docs. 165, 166, 178).
As previously stated, when the Court “finds the number of hours claimed is unreasonably
high, the court has two choices: it may conduct an hour-by-hour analysis or it may reduce the
requested hours with an across-the-board cut.” Bivins, 548 F.3d at 1350. Here, the Court finds an
across-the-board reduction is reasonable. The Court has reviewed the invoices (docs. 166-1, 179-
1) and finds that the time entries are excessive and duplicative for the preparation and drafting of
the complaint and amended complaint, for responding to the motion for summary judgment,
preparation (including research), and especially excessive for drafting the motion for attorney’s
fees, and supporting documents (including the declarations), and revising the invoice to correct
entries which counsel thought would not comply with the Court’s prior orders (block billing,
redundancy, excessive, duplicative, etc.). The Court also finds that hours spent researching qui
tam actions and educating Sheppard’s counsel on an area of law with which he was not familiar
is excessive, that an award of attorney’s fees for hours spent negotiating Sheppard’s percentage
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of the settlement amount with the United States is not recoverable, and that there are time entries
which reflect non-recoverable clerical work.
Accordingly, Sheppard’s request for 2,117.80 hour of work expended by his attorney is
reduced by approximately 50% to 1,058 hours. His request for 252.00 hours of work expended
by paralegal Marshall is reduced by approximately 35% to 164 hours. His request for 120.00
hours for work expended by paralegal French is reduced by approximately 35% to 78 hours. His
request for 16.10 hours for work expended by paralegal Waltman is reduced by approximately
35% to 10.5 hours.
3. Calculating the lodestar
Multiplying 1,058 hours of time expended by Sheppard’s attorney by his approved hourly
rate of $350.00 yields $370,300.00. Applying a rate of $100.00 per hour for paralegals Marshall
and French, to their combined 242 hours of time expended, yields a lodestar of $24,200.00.
Applying a rate of $75.00 per hour for paralegal Waltman to her 10.5 hours of time expended,
yields a lodestar of $787.50, for a total of $24,987.00 for the work performed by the paralegals.
The total amount is $395,287.50.
4. Reductions for limited success
Defendants argue that after conducting the lodestar analysis, the Court should further
reduce the fees because of Sheppard’s overall lack of success (doc. 174, p. 10-16). Specifically,
that the United States’ settlement with Defendants was based on a theory of recovery that was
wholly unrelated to the theory presented by Sheppard in his qui tam complaint, that only one of
Sheppard’s six claims survived (retaliation), that Sheppard obtained a low (18%) percentage of
the qui tam recovery (the statutory range is 15% to 25%) which reflects his limited contribution
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to the recovery, and that Sheppard recovered only $30,000 for his retaliation claim which was far
below and a small percentage of the amount he initially demanded to settle the claim.
The Court declines to make any further reduction.
5. Nontaxable expenses
Sheppard was awarded costs for the filing fee ($400.00), for summons and subpoenas
($339.00), and for printed or electronically recorded transcripts necessarily obtained for use in
the case ($3,755.02) for a total of $4,494.02 (doc. 156, Bill of Cost; doc. 158, costs taxed).
Review of the itemization and documents in support of the Bill of Costs shows that Sheppard
sought costs taxable pursuant to 28 U.S.C. § 1920. Defendants did not move the Court to re-tax
these costs.
Sheppard now seeks non-taxable litigation expenses in the amount of $2,802.85 (doc.
165, p. 31-32; doc. 166-15, itemization and supporting documents). He argues that these
expenses were necessarily and reasonably incurred in the litigation and that “as a successful FCA
Relator” he is “entitled to receive payment for non-taxable litigation expenses.” (doc. 165, p. 31-
32) (citing 31 U.S.C. §§ 3730(d)(1); 3730(h)(1); 3730(h)(2)).
Defendants respond that “[T]hough insignificant in amount, [Sheppard] seeks to charge
Pathway for administrative and overhead costs that are not properly attributed to Pathway,
including $53 to buy drinks and snacks for counsel’s office … and parking costs” as evidence of
Sheppard’s (doc 174, p. 21). Otherwise, Defendants did not respond.
Pursuant to 31 U.S.C. § 3730(d)(1), Sheppard, as the qui tam plaintiff, “shall also receive
an amount for reasonable expenses which the court finds to have been necessarily incurred, plus
reasonable attorneys’ fees and costs. All such expenses, fees, and costs shall be awarded against
the defendant.” Pursuant to 31 U.S.C. § 3730(h)(2), relevant to Sheppard’s claim of retaliation,
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he is entitled to be made “whole” and obtain relief in the form of compensation for “litigation
costs”. The Court has reviewed the expenses and finds that they are related to the litigation and
appear to have been reasonably expended. The majority were incurred for obtaining medical
records and obtaining deposition items that could not be taxed as costs such as travel transcripts,
deposition USBs, and video depositions. Accordingly, expenses are awarded in the amount of
$2,802.85.
III. Conclusion
For the reasons set forth herein, Sheppard is awarded attorney’s fees in the amount of
$395,287.50 and expenses in the amount of $2,802.85.
DONE and ORDERED this the 21st day of March 2025.
s/Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE
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