Lawyers are aware of the increasing sensitivity—and hostility—of clients to block-billing: lumping more than one activity into a single time entry. A new Fifth Circuit decision shows that courts can be equally sensitive—and hostile—to the practice. The court upheld an award of $739,000 in attorneys’ fees in response to a petition that started at nearly $3.5 million.
Amy Cook-Reska, a coding specialist at a Community Health Systems hospital, filed a qui tam action alleging False Claims Act violations. The U.S. invited her to work with other relators in a nationwide investigation of the Community system’s emergency department (ED) practices. In 2014 the U.S., all relators, and Community entered into a global settlement dividing the claims into ED Claims and Non-ED Claims. The U.S. awarded Amy $2.1 million. She petitioned for $3.5 million in attorneys’ fees and costs for both sets of claims.
The court granted Community’s petition to transfer Amy’s ED Claims to a Tennessee federal court, where other ED Claims were being litigated, and to limit her attorneys’ fees petition to Non-ED Claims. She asked for $2 million and submitted attorney time sheets with block-billing entries attributing 1,024 hours to Non-ED Claims, 2,144 hours to “Both” ED and Non-ED Claims, and 3,540 to ED Claims.
The court awarded only $730,000, reasoning that she should recover all Non-ED hours but only the “Both” hours that preceded her involvement in the nationwide investigation of ED Claims and also reducing the hourly rate from $800 to $550.
On April 29 the Fifth Circuit rejected the Amy’s appeal of the reduction. The opinion opened with citation of authorities declaring how much federal courts “disfavor” block-billing. It then reminded Amy and her lawyers that they had known since March 2011 that they were dealing with two discrete sets of claims. Concluding that the lower court’s slashing of the fees wasn’t an abuse of discretion, the court upheld the award.
The case is U.S. ex rel. Cook-Reska v. Community Health Systems, No. 15-20312 (5th Cir. 2016).
