United States Of America v. Avalign Technologies, Inc.
- Edgardo Ramos
- 1:14-cv-04958
- U.S. District Court · Southern District of New York
- 19
In United States v. Avalign Technologies, Judge Ramos granted in part and denied in part a fee motion, awarding $1,493,290 and $2,792.13 in costs.
Relator Mary Bixler Wood received the fee and cost award; CareFusion and the Avalign Defendants were affected by the award, while the opinion states that other non-settled claims remained contested.
What happened
United States of America v. Avalign Technologies, Inc. began when Mary Bixler Wood alleged that companies marketed medical devices without required federal clearance and that healthcare programs improperly paid for procedures using them. The United States later joined one theory of liability, and settlements followed with CareFusion and the Avalign Defendants.
Wood asked for $2,225,690 in attorney’s fees, $4,188.19 in costs, and $27,840 for preparing the fee motion. The defendants challenged the hourly rates and the time claimed, arguing that much of the work involved unsuccessful or unrelated claims. The court accepted the proposed hourly rates but reduced the compensable time by $708,690 and approved other deductions.
Judge Ramos granted in part and denied in part the motion. He awarded Wood $1,493,290 in attorney’s fees and $2,792.13 in costs, and directed the Clerk of Court to terminate the motion.
The detailed version
- United States Of America v. Avalign Technologies, Inc. · No. 1:14-cv-04958
- Edgardo Ramos
- May 20, 2020
Background
Mary Bixler Wood filed a private lawsuit on behalf of the United States and various states, commonwealths, and the District of Columbia under the federal False Claims Act and corresponding state laws. She alleged that the defendants marketed medical devices without required Food and Drug Administration clearance and that federal and state healthcare programs reimbursed procedures using those devices.
The United States partially joined the case. Its participation covered one theory: that Instrumed sold devices it claimed qualified for an exception for devices marketed before the 1976 medical-device amendments, even though Instrumed knew they did not qualify. The Government did not join Wood’s other theories. The Government and CareFusion reached a settlement for $2,821,539.92. The Government also settled with the Avalign Defendants for $8,128,440.60 plus annual interest. Wood received a 21% share of the two settlements. The remaining non-settled claims continued to be contested.
Fee request and objections
Wood moved under Federal Rule of Civil Procedure 54(d)(2) for $2,225,690 in attorney’s fees and $4,188.19 in costs connected with obtaining the settlements. She also requested $27,840 for preparing the fee application. Her requested fees included common fees and fees attributed specifically to the Avalign Defendants and CareFusion.
CareFusion and the Avalign Defendants challenged the requested hourly rates and the number of hours. They argued that the application included work on unsuccessful claims, claims against non-settling defendants, state-law claims, travel, settlement-share negotiations, and entries that were vague, block-billed, or heavily redacted. CareFusion requested a much larger reduction, including compensation for only one-eighth of the claimed work. The Avalign Defendants sought a reduction of at least 90%.
Court’s analysis
The court used the lodestar method, which calculates a presumptively reasonable fee by multiplying a reasonable hourly rate by a reasonable number of hours. It accepted Wood’s proposed rates of $800 per hour for partners, $500 for senior associates, $400 for associates, and $100 to $150 for paralegals and litigation-support staff. The court declined to use lower rates based on the firms’ locations outside the Southern District of New York and concluded that the record supported the requested rates.
Wood’s attorneys agreed to remove $7,950 for time spent negotiating Wood’s share of the settlements and $36,000 for travel to and from New York City. Wood also voluntarily omitted another $640 entry. The court approved those deductions.
The court found that many time entries did not adequately show whether the work concerned the successful settled claim rather than unsuccessful or still-pending claims. The entries also sometimes combined work on multiple matters, making the time difficult to separate. The court therefore reduced the disputed settlement-related hours by 1,038 hours, valued at approximately $708,690. It rejected the defendants’ requests for a seven-eighths or 90% reduction, finding those reductions too broad. The court also concluded that the reduction already accounted for concerns about block billing and redactions, so it imposed no additional reduction on those grounds.
After the deductions, the court calculated a presumptively reasonable lodestar of $1,472,410 for work connected with the settlements. For preparing the fee application, the court reduced the requested $27,840 by 25% because some partner time involved tasks such as redacting time entries and researching basic case law that could more appropriately have been performed at the associate level. That produced an additional fee award of $20,880. The court also reduced the requested costs by one-third, to $2,792.13.
Disposition
Judge Edgardo Ramos granted in part and denied in part Wood’s motion for attorney’s fees and costs. The court awarded a total of $1,493,290 in attorney’s fees and $2,792.13 in costs. The Clerk of Court was directed to terminate the motion.
Read the full 19-page opinion on CourtListener, the free public archive maintained by the Free Law Project.