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Fletcher v. United States

United States District Court, N.D. Oklahoma

February 21, 2019

WILLIAM FLETCHER, et al., Plaintiffs,
v.
THE UNITED STATES OF AMERICA, et al., Defendants.

          OPINION AND ORDER

          GREGORY K. FRIZZELL, CHLFEF JUDGE

         Before the court is the Motion for Attorney Fees and Costs [Doc. 13');">1353] filed by plaintiffs, William Fletcher, et al.[1" name="FN1" id= "FN1">1] For the reasons set forth below, plaintiffs' motion is granted in part and denied in part.

         I. BACKGROUND

         This case has a long and complicated history. Plaintiffs filed the case on May 31, 2002. Their original Complaint contained four claims: (1) that the government's regulations violated their First, Fifth and Fourteenth Amendment rights to vote in Osage tribal elections and to participate in the Osage Tribe's government; (2) that the government breached its trust responsibilities by (a) eliminating plaintiffs' right to participate or vote in Osage tribal elections, and (b) allowing headrights to be alienated to persons not of Osage blood; (3) that the government's failure to manage the Tribe's assets, coupled with the government's inability to keep Osage headrights from passing into the hands of those who are not of Osage blood, constituted a Fifth Amendment taking; and (4) that federal regulations restricting plaintiffs' right to participate in tribal government constituted illegal agency action pursuant to the Administrative Procedures Act, 5 U.S.C. § 706. [Doc. 1, pp. 6-12]. Plaintiffs sought the following relief: (a) an order holding that the federal regulation pertaining to Osage tribal elections violated their constitutional rights; (b) an order holding that the government breached its trust responsibilities by restricting plaintiffs' right to participate in tribal elections and by allowing Osage headrights to be alienated to those not of Osage blood; (c) an order holding that, by allowing the alienation of headright interests to those not of Osage blood, the government effected an unconstitutional taking of a protected property interest; and (d) an order directing the government to pay attorney fees and costs under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412.

         The government moved to dismiss the Complaint for failure to join the Osage Tribal Council as a necessary and indispensable party under Fed.R.Civ.1');">p. 19. On June 6, 2004, Senior United States District Judge James O. Ellison granted the motion to dismiss [Doc. 13');">13]. Plaintiffs appealed. On December 3, 2004, while the appeal was pending, Congress reaffirmed the Osage Tribe's inherent sovereign right to determine its own membership, provided that the rights of any person to Osage mineral estate shares are not diminished thereby. See Public Law 108-431, 118 Stat. 2609. On November 19, 2005, the members of the Osage Nation overwhelmingly voted that all adult tribal members, not just mineral rights owners, could vote in future elections. A month later, the Tenth Circuit vacated the dismissal of this case and remanded to determine whether the Osage Tribal Council was a necessary and indispensable party with regard to the breach of trust and takings claims. See Fletcher v. United States, 160 Fed.Appx. 792');">160 Fed.Appx. 792 (10th Cir. Dec. 29, 2005) (hereinafter, Fletcher I). The circuit panel held that this court had jurisdiction over plaintiffs' breach of trust and takings claims, as plaintiffs did not seek money damages under 5 U.S.C. § 702.

         On remand in 2006, this case was reassigned to United States District Judge Terence Kern, and plaintiffs filed a First Amended Complaint [Doc. 23; Doc. 24]. Plaintiffs asserted three claims: (1) that the government breached its statutory trust responsibilities by wrongfully distributing royalty payments to persons who are not Osage Indians, and by failing to account to plaintiffs for all funds resulting from the Osage Mineral Estate and available to be distributed as trust property; (2) that the government's failure to properly manage the Osage Tribe's trust accounts and funds, coupled with the distribution of headright payments to persons who are not Osage Indians, constituted a taking in violation of the Fifth Amendment; and (3) that the government's administrative actions were not in accordance with law and were contrary to plaintiffs' constitutionally and statutorily guaranteed property rights. Plaintiffs sought certification of a class action and requested the following relief: (a) an order compelling the government to provide an accounting of royalty payments distributed from the Osage Mineral Estate, including whether such royalty payments have been distributed only to Osage Indians; (b) a reformation of plaintiffs' and class members' trust funds found to be due and owing to them, following completion of the accounting; and (c) an order compelling the government to prospectively distribute trust property only to Osage Indians.

         The government moved to dismiss the First Amended Complaint on the following grounds: (a) failure to join other necessary and indispensable parties, including the Osage Nation and non-Osage owners of headrights; (b) lack of jurisdiction for failure to comply with the final agency action prerequisites to judicial review under the Administrative Procedures Act, 5 U.S.C. § 701; and (c) failure to challenge an actionable final agency action within the applicable statute of limitations. [Doc. 46].

         In 2007, the case was transferred to the undersigned. The court granted the government's motion to dismiss in part and denied it in part, holding that (a) the Osage Nation was not a required party under Rule 19(a); (b) non-Osage headright owners were required parties because plaintiffs sought to terminate their property interest in quarterly headright royalty distributions; and (c) it was impossible to discern from the face of the First Amended Complaint the specific agency actions and/or inactions plaintiffs were challenging. The court directed plaintiffs to file a Second Amended Complaint adding all non-Osage headright owners as defendants and identifying with specificity the challenged agency actions and/or inactions. [Doc. 79].

         On June 12, 2009, plaintiffs filed their Second Amended Complaint [Doc. 97], which joined the approximately 1, 700 non-Osage headright owners. However, because plaintiffs again failed to specify the agency actions being challenged, the court again ordered plaintiffs to amend. [Doc. 213');">13]. Plaintiffs filed their Third Amended Complaint [Doc. 985] on May 6, 2010.

         Many of the non-Osage headright owners filed motions to dismiss. In an Opinion and Order [Doc. 1122');">1122] dated March 31, 2011, the court granted a motion to dismiss filed by defendant Ben T. Benedum for failure of the Third Amended Complaint to state a claim upon which relief could be granted. The court rejected plaintiffs' overarching legal argument that the Osage Allotment Act precludes non-Osage from receiving quarterly income payments from the Osage mineral estate. [Doc. 1122');">1122, p. 9]. On May 16, 2011, the court dismissed the remaining 1, 700 non-Osage headright owners for the same reason. [Doc. 1143].

         On May 2, 2011, the government moved to dismiss the Third Amended Complaint, contending that the portions premised on plaintiffs' argument that non-Osage cannot hold legal or equitable title to a headright should be dismissed for (1) failure to state a claim; (2) lack of subject matter jurisdiction; and (3) failure to identify a specific final agency action for judicial review. The government also argued that the portions of the Third Amended Complaint in which plaintiffs claimed a right to an accounting should be dismissed because there was no trust relationship between the government and headright owners, and because the statutes upon which plaintiffs relied did not afford them a right to an accounting. The court granted the motion to dismiss as to the allegations of wrongful distributions to non-Osage headright owners for failure to state a claim and for failure to specify any challenged agency actions or inactions. The court rejected the government's argument that it has no trust obligations to headright owners, but held that plaintiffs had not identified a statutory right to an accounting of distributions from the Osage Mineral Estate. [Doc. 1164]. Plaintiffs appealed the dismissal of the accounting claim, and the Tenth Circuit reversed and remanded, holding that plaintiffs were entitled to seek an accounting under 25 U.S.C. § 4011(a). Fletcher v. United States, 1206');">730 F.3d 1206 (10th Cir. 2013');">13) (hereinafter, Fletcher II).

         On remand, this court granted plaintiffs' Motion to Certify Class [Doc. 1196]. The government filed the administrative record, and the parties briefed the scope of the government's accounting duty. The court concluded that plaintiffs were not limited to an accounting of their respective Individual Indian Money (IIM) accounts, but were entitled to an accounting of the Osage tribal trust account, and that the Osage Nation had not waived the plaintiffs' individual accounting rights in connection with the Nation's settlement of a lawsuit against the United States in the Court of Federal Claims. Fletcher v. United States, 153 F.Supp.3d 13');">1354');">153 F.Supp.3d 13');">1354, 13');">1361-68 (N.D. Okla. 2015). The court then ordered the government to provide plaintiffs an accounting running from the first quarter of 2002, and specified six additional requirements.

         Both parties then filed Rule 59(e) motions to alter or amend the judgment. The court granted the government's request for additional time to complete the accounting, and granted plaintiffs' request to have the accounting deadline run from the entry of the court's judgment. However, the court denied plaintiffs' request to require a more detailed accounting and to expand the time frame of the accounting back to 1906. Fletcher v. United States, 2016 WL 927196 (N.D. Okla. Mar. 11, 2016), [Doc. 13');">1306].

         Plaintiffs appealed and the Tenth Circuit affirmed. The panel held that the district court did not abuse its discretion when it ordered the accounting to run from 2002, and noted that “even if a more detailed accounting might uncover additional evidence of misdistribution, the increased expense to do so is not justified.” Fletcher v. United States, 1201');">854 F.3d 1201, 1207 (10th Cir. 2017) (hereinafter, Fletcher III).

         In their initial motion for attorney fees and costs under EAJA, plaintiffs requested $1, 835, 665.19 in attorney fees and $57, 817.43 in costs and “other expenses.” [Doc. 1291');">1291, 1');">p. 15');">1');">p. 15]. In response, the government argued that plaintiffs had failed to satisfy certain threshold eligibility requirements. The government argued that threshold legal questions existed as to plaintiffs' net worth eligibility under EAJA. It also argued that plaintiffs had not met their burden of demonstrating that they have “incurred” fees and other expenses for which reimbursement is proper under EAJA; that no EAJA award is proper because the government's position was substantially justified; and that any award must be limited because plaintiffs only partially prevailed. See [Doc. 13');">1316]. Concurrently with their initial fee request, plaintiffs filed a Bill of Costs pursuant to Fed.R.Civ.P. 54(d)(1), seeking $34, 839.61. [Doc. 1290]. The Court Clerk held a hearing and taxed costs in the amount of $30, 003.19 pursuant to Rule 54. [Doc. 13');">1317]. The government then moved to review the Clerk's taxation of costs, arguing that plaintiffs' Bill of Costs must be considered under EAJA. [Doc. 13');">1322].

         The court stayed the proceedings on plaintiffs' Motion for Attorney's Fees and Costs under EAJA pending plaintiffs' appeal of the court's accounting order. [Doc. 13');">1337]. Upon the issuance of the mandate affirming the accounting order, this court issued an order granting the government's Motion to Review the Court Clerk's Taxation of costs, concluding that “any award of costs must be evaluated pursuant to EAJA, not Rule 54.” [Doc. 13');">1345');">13');">1345, p. 3');">p. 3]. The court directed the parties to “address the appropriateness of recovery of . . . court costs under EAJA in supplemental briefing, specifically identifying, attributing, and separating expenses in relation to the claim on which plaintiffs prevailed.” [Doc. 13');">1345');">13');">1345, p. 3');">p. 3].

         On June 22, 2017, plaintiffs moved to lift the stay, and sought leave to re-file or supplement their EAJA motion. [Doc. 13');">1346]. On July 13');">13, 2017, the court granted the plaintiffs' motion to lift the stay, struck plaintiffs' first motion for fees and costs, and ordered consolidated briefing as follows:

Because EAJA governs this court's analysis on both attorneys' fees and court cost issues, the court strikes plaintiffs' pending requests on both those subjects and orders consolidated briefing on the following: (1) threshold EAJA issues identified above and in Doc. 13');">1316[2]; and (2) identification, attribution, and separation of attorney's fees and costs in relation to the claim on which plaintiffs prevailed. However, plaintiffs shall not be permitted to request attorneys' fees or costs in excess of the amounts previously stated in their bill of costs or their initial attorneys' fees briefing.

[Doc. 13');">1348, p1');">p. 1-2].

         Plaintiffs filed their second motion for EAJA fees and costs on August 17, 2017. [Doc. 13');">1353]. The following day, the court discovered that plaintiffs had submitted lump sum billing summaries for their attorney fees and expenses, which did not meet EAJA's standard that a prevailing party must provide sufficient detail for time spent. The court directed plaintiffs to file detailed attorney time records identifying, at a minimum, the attorney(s) who performed the work, a description of the work performed, the time allocated to each task, and the hourly rate. [Doc. 13');">1354]. On August 25, 2017, plaintiffs filed their time records. [Doc. 13');">1355]. Shortly thereafter, on September 5, 2017, the government moved to strike plaintiffs' second EAJA motion and time records on the grounds that plaintiffs (1) had not addressed whether their costs and fees were “incurred”; (2) had not complied with this court's directive to identify, attribute, and separate attorney fees and costs in relation to the claim on which plaintiffs prevailed; (3) had requested attorney fees and costs in excess of the amounts previously requested, in violation of the court's Order of July 13');">13, 2017; and (4) had submitted new evidence in the form of a purported expert declaration. The court denied the government's motion to strike, but granted the government's alternative request for an extension of time to present its defenses to plaintiffs' EAJA claims. [Doc. 13');">1357].

         The government responded to plaintiffs' second EAJA motion on March 30, 2018. [Doc. 13');">1379]. Plaintiffs filed a motion to strike [Doc. 13');">1386] the expert declaration attached to the government's response, which the court granted. Plaintiffs filed a reply, and briefing on the EAJA motion is now complete.

         II. THE APPLICABLE STANDARDS

         EAJA provides that a prevailing party shall recover reasonable attorney fees and expenses incurred in any civil action against the United States, unless the position of the United States was substantially justified or special circumstances make an award unjust:

Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

28 U.S.C. § 2412(d)(1)(A). EAJA also provides that a prevailing party may recover costs incurred in any civil action against the United States or one of its agencies:

Except as otherwise specifically provided by statute, a judgment for costs, as enumerated in section 1920 of this title, but not including the fees and expenses of attorneys, may be awarded to the prevailing party in any civil action brought by or against the United States or any agency or any official of the United States acting in his or her official capacity in any court having jurisdiction of such action. A judgment for costs when taxed against the United States shall, in an amount established by statute, court rule, or order, be limited to reimbursing in whole or in part the prevailing party for the costs incurred by such party in the litigation.

Id. § 2412(a)(1).

         III. THE REQUEST FOR EAJA FEES AND EXPENSES

         Plaintiffs' request for EAJA fees and expenses presents two primary issues: (a) whether plaintiffs are entitled to recover fees and expenses under EAJA; and, if so, (b) whether the request is reasonable. For the reasons set forth below, the court holds that plaintiffs are not entitled to recover fees and expenses under EAJA. Moreover, even if plaintiffs were so entitled, their request is unreasonable and excessive.

         a. Plaintiffs' Entitlement to Recovery

         In order for plaintiffs to recover reasonable fees and expenses under EAJA, the court must find that (i) the named plaintiffs meet EAJA's net worth eligibility requirement; (ii) plaintiffs are the prevailing parties; (iii) plaintiffs have “incurred” fees and expenses; (iv) the government's position was not substantially justified; and (v) no special circumstances make recovery unjust.

         i. Plaintiffs meet EAJA's net worth eligibility requirement

         An individual seeking an EAJA award must establish that his or her “net worth did not exceed $2, 000, 000 at the time the civil action was filed.” 28 U.S.C. § 2412(d)(2)(B). “Net worth” is calculated by subtracting total liabilities from total assets. Shooting Star Ranch, LLC v. United States, 1176');">230 F.3d 1176, 1178 (10th Cir. 2000). In a class action such as this, the named plaintiffs must each satisfy the net worth requirement. Olenhouse v. Commodity Credit Corp., 922 F.Supp. 489, 493 (D. Kan. 1996). “In the face of a challenge to a party's eligibility for an EAJA award, that party must do more than make a bare assertion that it meets the statutory criteria. This is especially true when the government points to facts indicating that a serious question exists as to the party's eligibility.” United States v. 819.8 Acres of Land, 13');">133 F.3d 933');">13');">133 F.3d 933, at *3 (10th Cir. Jan. 7, 1998) (table). “However, the Tenth Circuit has indicated that absent a challenge otherwise, an affidavit from a party indicating that they meet the net worth requirement is sufficient.” United States v. Gwilliam, 2012 WL 3527893, at *2 (D. Utah Aug. 2012) (citing 819.8 Acres, 13');">133 F.3d 933');">13');">133 F.3d 933, at *3 and Shooting Star, 230 F.3d at 1178).

         As an initial matter, the parties dispute the date on which the named plaintiffs' net worths should be determined. Plaintiffs argue for the date they filed their original Complaint (May 31, 2002), since EAJA defines a “party” as an individual whose net worth did not exceed $2, 000, 000 at the time the civil action was filed.” 28 U.S.C. § 2412(d)(2)(B) (emphasis added). The government argues for April 4, 2006, because plaintiffs first asserted an accounting claim in their First Amended Complaint filed that day. Based upon the statutory language, the court concludes that the date on which plaintiffs' net worth is to be determined is May 31, 2002.

         To establish their net worth, plaintiffs have submitted the declarations of Tara Damron, the executor of the estate of named plaintiff Charles Arthur Pratt, Jr., and the declaration of plaintiff William S. Fletcher. Damron declares that Pratt's net worth did not exceed $2 million on or after May 31, 2002; that Pratt's assets in 2002 included his $170, 000 house and three vehicles; and that his W-2 income for 2002 was $14, 533.36. [Doc. 13');">1353-11]. Fletcher declares that he “had some real estate holdings, [a] BIA account, and a bank account in May, 2002, but [he does] not know the exact balances of the accounts or the exact values of the other assets”; that he is “confident that the total value of all [his] assets as of May 2002, was less than $2 million”; and that “most of the information needed to determine the values of his assets in May, 2002, can be provided by the [BIA] . . . [and he is] in the process of retrieving, compiling, and analyzing the detailed information . . . . [and] will supplement [his] declaration to set forth the details and to attach copies of relevant account statements and other documents.” [Doc. 13');">1353-12]. No. such supplement has been submitted.

         Plaintiffs have also submitted an affidavit of S. Christopher Lopp, a certified public accountant with the CPA firm HoganTaylor LLP in Tulsa, Oklahoma, calculating the net worth of the five named plaintiffs on May 31, 2002. Lopp states he “applied Generally Accepted Accounting Principles and ...


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