Opinion
Civ. 3:19-CV-1824
05-24-2024
UNITED STATES OF AMERICA, EX REL DIVYAKANT PATEL, HARSHAD PATEL, Plaintiff, v. THE FIDELITY DEPOSIT & DICOUNT BANK, et al., Defendants.
Munley, Judge
REPORT AND RECOMMENDATION
DARYL F. BLOOM, UNITED STATES MAGISTRATE JUDGE
I. Introduction
This case comes before us for consideration of a motion for attorney's fees and expenses filed by Fidelity D&D Bancorp (“Bancorp”), a defendant that has been dismissed from this qui tam action with prejudice. (Doc. 123). To prevail on a motion for attorney's fees and expenses, the movant must present evidence supporting its requested fee rate and the number of hours worked. Rode v. Dellarcipret, 892 F.2d 1177, 1183 (3d Cir. 1990). Here, Bancorp has not presented any evidence supporting its motion. Therefore, we recommend dismissing the motion without prejudice.
II. Background
The relators-Divyakant and Harshad Patel-allege that the defendants violated the False Claims Act (“FCA”) by making false representations to the United States Small Business Administration (“SBA”) and defrauding the SBA out of a $1.1 million lien. (Doc. 59 ¶¶ 25-82). The second amended complaint, which is the operative pleading, contains only one allegation against Bancorp-that it is the holding company for Fidelity Deposit & Discount Bank, another defendant in this action. (Id. at ¶ 8). On June 4, 2021, all defendants moved to dismiss the second amended complaint. (Docs. 62-63). On July 27, 2022, Judge Carlson issued a report and recommendation recommending, among other things that the claims against Bancorp be dismissed because a parent company is not liable for the acts of its subsidiaries. (Doc. 93 at 20, 42). On June 27, 2023, the court adopted the report and recommendation with slight modifications and dismissed the claims against Bancorp with prejudice. (Doc. 102 ¶4(a)).
On February 21, 2024, Bancorp moved for attorney's fees and expenses under 31 U.S.C. 3730(d)(4), the FCA's fee-shifting provision. (Doc. 123). The relators opposed the motion. (Doc. 130). After consideration, we recommend denying the motion without prejudice because Bancorp has not provided evidence regarding its fee rate or the number of hours worked.
III. Bancorp's Motion for Fees and Costs Should Be Denied Without Prejudice.
To prevail on a motion for attorney's fees and expenses under 31 USC § 3730(d)(4), a defendant must show “that (1) the government did not proceed in the action; (2) defendant[] prevailed in the action; (3) the claim was clearly frivolous, clearly vexatious, or primarily for the purposes of harassment; and (4) the requested fees are reasonable.” U.S. ex rel Atkinson v Pennsylvania Shipbuilding Co., 528 F.Supp.2d 533, 537 (E.D. Pa. 2007). The party seeking fees and expenses has the burden of showing that its request is reasonable. Rode v. Dellarcipret, 892 F.2d 1177, 1183 (3d Cir. 1990). “To meet its burden, the fee petitioner must “‘submit evidence supporting the hours worked and rates claimed.'” Id. (quoting Hensley v. Eckerhar, 461 U.S. 424, 433 (1983)).
Here, Bancorp has not shown that its request is reasonable because it has not submitted any evidence regarding its fee rate or the number of hours worked. Rather, Bancorp merely requests-in a single sentence, without argument-that the court schedule a hearing to determine the appropriate amount of fees. (Doc. 123 at 9). This request is premature because Bancorp has not identified a disputed question of fact which would warrant a hearing. Drelles v Metro. Life Ins. Co., 90 Fed.Appx. 587, 591 (3d Cir. 2004) (upholding the district court's decision not to hold a hearing where the sole dispute-whether the movant's billing practices were proper-could be adequately explored on the briefs); Blum v. Witco Chem. Corp., 829 F.2d 367, 377 (3d Cir. 1987) (explaining that “[a] hearing must be held only where the court cannot fairly decide disputed questions of fact without it.”). Because a hearing would be premature and Bancorp has not submitted any evidence in support of its motion, Bancorp has not shown that its request for fees and expenses is reasonable.
Accordingly, we recommend denying Bancorp's motion for attorney's fees and expenses without prejudice, so that Bancorp may have an opportunity to present supporting evidence.
IV. Recommendation
For the foregoing reasons, IT IS RECOMMENDED THAT Fidelity D&D Bancorp's motion for attorney's fees and expenses (Doc. 123) under 31 U.S.C. § 3730(d)(4) be DENIED WITHOUT PREJUDICE.
The parties are further placed on notice that pursuant to Local Rule 72.3:
Any party may object to a magistrate judge's proposed findings, recommendations or report addressing a motion or matter described in 28 U.S.C. § 636 (b)(1)(B) or making a recommendation for the disposition of a prisoner case or a habeas corpus petition within fourteen (14) days after being served with a copy thereof. Such party shall file with the clerk of court, and serve on the magistrate judge and all parties, written objections which shall specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The briefing requirements set forth in Local Rule 72.2 shall apply. A judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge, however, need conduct a new hearing only in his or her discretion or where required by law, and may consider the record developed before the magistrate judge, making his or her own determination on the basis of that record. The judge may also receive further evidence, recall witnesses or recommit the matter to the magistrate judge with instructions.
Submitted this 24th day of May 2024.