UNITED STATES OF AMERICA and STATE OF NEW YORK ex rel. SONER YASTI v. NAGAN…

Background

Soner Yasti, called the relator under the False Claims Act, brought this action against Nagan Construction and Nadir Uygan under the federal False Claims Act and the New York State False Claims Act. He alleged that the defendants underpaid employees while falsely certifying compliance with legal requirements and also underpaid taxes.

The federal government intervened on August 2, 2019. The parties then filed settlement agreements requiring the defendants to pay $435,000 to the federal government and $396,000 to the state government. Yasti was to receive 20 percent of both recoveries. The settlements expressly left attorneys’ fees and costs unresolved.

Yasti moved under 31 U.S.C. § 3730(d)(1) for attorneys’ fees and costs. He requested $331,577.50 in attorneys’ fees and $8,777.48 in litigation expenses. The defendants argued that the award should be limited to $130,000 in fees and $4,877.48 in costs.

Evidentiary issue

Yasti objected to the defendants’ use of certain fee reports from settlement discussions. The court held that the August report could be considered to evaluate whether the requested fees were reasonable. But the court struck the March report because its disclosure violated the parties’ mediation agreement. The court stated that it did not rely on the substance of that report.

Legal standard

The False Claims Act authorizes reasonable attorneys’ fees and costs for a relator. The court used the lodestar method, which generally calculates a presumptively reasonable fee by multiplying a reasonable hourly rate by a reasonable number of hours. The court considered the attorneys’ experience, the type of case, prevailing rates in the district, the work performed, and whether the billed time was excessive, duplicative, vague, or clerical.

Hourly rates

The court approved an hourly rate of $800 for Deborah Marcuse, Edward Feinstein, and Ross Brooks. It applied a blended rate of $600 to Inayat Hemani, considering his experience over the course of the litigation and his role in the successful action. The court approved rates of $400 for Whitney Barth and $425 for Lila Miller, and $150 for the legal assistants who performed paralegal work.

Hours and reductions

The court found that much of the challenged time reflected reasonable collaboration, review, document work, and preparation. It nevertheless reduced the award by five percent for duplicative time. It also reduced the award by five percent for vague entries and purely clerical work, such as scheduling calls, organizing documents, and arranging travel.

The court reduced travel time by one-half. It did not exclude work performed before the retainer agreement because the work, including legal research and document review, was reasonably related to the litigation. The court also found no basis to exclude time spent on settlement negotiations, mediation, or correcting the fee records because there was no evidence of bad faith or prejudice.

Calculation and disposition

The court calculated a base fee award of $278,762.50. After the two five-percent reductions, it awarded $250,886.25 in attorneys’ fees. It also awarded the full $8,777.48 in litigation costs, including the mediation fee.

The court’s conclusion states that Yasti’s motion for attorneys’ fees was GRANTED in part and DENIED in part. The total award was $259,663.73. The court directed Yasti to submit a supplemental motion for fees and costs incurred after February 2020 by April 18, 2021, and directed the Clerk of Court to terminate the motion at ECF No. 34.