" Naporano Iron & Metal Co. v. United States, 825 F.2d 403, 404 (Fed. Cir. 1987). But see TGS Int'l, Inc. v. United States, 983 F.2d 229, 230 n.1 (Fed. Cir. 1993) (accepting an "itemized computation . . . showing the date, the hours expended, and an identification of the work done in each time increment" that apparently was not created contemporaneously with the work performed). These records should "identify the general subject matter of [the] time expenditures," but need not reflect "in great detail how each minute . . . was expended."
As discussed, however, the EAJA's requirement that the fees be "incurred" is incorporated into the Hyde Amendment. In TGS International, Inc. v. United States, 983 F.2d 229 (Fed. Cir. 1993), TGS, a government contractor, prevailed against the Government on the issue of liability, based on its delay in accepting and activating an electrical substation. Id. at 229.
" Id. at 437 n. 12, 103 S.Ct. 1933. Under numerous fee-shifting statutes, courts of appeals have consistently required that attorneys' fee applicants provide the general subject matter of their billing entries. Although this court has not directly addressed the level of specificity required in subject matter disclosures under EAJA, we have stated that time records will satisfy EAJA's itemized statement requirement when they provide "contemporaneous records of exact time spent on the case, by whom, their status and usual billing rates," Naporano Iron Metal Co. v. United States, 825 F.2d 403, 404-05 (Fed. Cir. 1987), as well as "an identification of the work done in each time increment," TGS Int'l, Inc. v. United States, 983 F.2d 229, 230 n. 1 (Fed. Cir. 1993). See, e.g., Role Models Am., Inc. v. Brownlee, 353 F.3d 962, 971 (D.C. Cir. 2004) (collecting cases in which the District of Columbia Circuit found inadequate detail in fee applications when the general subject matter of billing entries was not disclosed and finding entries inadequate that were merely "for time spent in teleconferences or meetings [when] the purposes [of those entries were] not provided"); Fischer v. SJB-P.D., Inc., 214 F.3d 1115, 1121 (9th Cir. 2000) (involving 42 U.S.C. § 12205 under the Americans with Disabilities Act and requiring applicant to "identify[] the general subject matter of his time expenditures"); HJ. Inc. v. Flygt Corp., 925 F.2d 257, 260 (8th Cir. 1991) (involving antitrust fee-shifting statute at 15 U.S.C. § 15 and reducing recovery for failure to adequately describe purpose of billing entries).
See United States v. 122.00 Acres of Land, 856 F.2d 56, 58 (8th Cir. 1988). Similarly, the Equal Access to Justice Act, 28 U.S.C. § 2412(d)(1)(A), authorizes monetary recovery for attorney's fees "incurred" as a result of unjustified federal action, see TGS Int'l, Inc. v. United States, 983 F.2d 229, 230 (Fed. Cir. 1993); United States v. Paisley, 957 F.2d 1161, 1164 (4th Cir. 1992), and an analogous statute contained in the Internal Revenue Code permits recovery of attorney's fees "paid" or "incurred" in successful challenges to tax related actions, 26 U.S.C. § 7430(c)(1)(B)(iii); see Marre v. United States, 38 F.3d 823, 828-29 (5th Cir. 1994). These three statutes, all of which aim to check or deter unjustified governmental conduct, permit parties to be reimbursed for fees actually incurred in achieving victory.
Federal Circuit precedent is fully in accord. See, e.g., TGS Intern., Inc. v. United States, 983 F.2d 229, 229-30 (Fed. Cir. 1993) (the question is whether the government's position was substantially justified overall); Chiu v. United States, 948 F.2d 711, 715 (Fed. Cir. 1991) ("The 1985 amendment clarified that, when assessing whether to award attorney fees incurred by a party who has successfully challenged a governmental action in a particular court, the entirety of the conduct of the government is to be viewed, including the action or inaction by the agency prior to litigation."); Luciano Pisoni Fabbrica Accessori Instrumenti Musicali v. United States, 837 F.2d 465, 466 (Fed. Cir. 1988) ("This court has defined `substantially justified' to require `that the government show that it was clearly reasonable in asserting its position, including its position at the agency level, in view of the law and the facts'") (citing Gavette).
And when a contingency fee agreement is involved, any attorney's fee award is capped at whatever the plaintiff will actually be legally obligated to pay his or her attorney. See, e.g., United States v. Claro, 579 F.3d 452, 462 (5th Cir. 2009) (noting that "contingent-fee agreements . . . provide a cap above which plaintiffs cannot recover"); Marré, 38 F.3d at 829 ("Because [the statute] limits attorney's fees to those actually incurred, [plaintiff] is entitled only to the amount owed under the contingency fee agreement plus costs, to the extent reasonable."); TGS Int'l, Inc. v. United States, 983 F.2d 229, 230 (Fed. Cir. 1993) (rejecting calculation of attorney's fees "based on attorney time actually expended" where the "fee arrangement was for an initial retainer paid to the attorney, plus a contingent fee to be based upon actual recovery"); Estate of Russell v. Commissioner, 1998 WL 852974, at *2 (U.S. Tax Ct. 1998) ("An award of attorney's fees should not be in excess of the fees agreed to by the taxpayer and his attorney and actually paid or incurred by the taxpayer."). Although there is not an actual statute at issue here, the limited Maryland exception as articulated by the Maryland Court of Appeals undoubtedly includes the critical "incurred" language that courts have deemed determinative.
There is nothing controversial about that conclusion. Of course litigants can incur attorney's fees under contingency fee agreements, just as they can under hourly fee agreements. But the critical feature of Claro and the cases on which it relied—a feature that was missing in the facts of Murkeldove itself—was that the litigants' contingent obligation to pay their attorneys had already been triggered.See id. at 458–61 (citing TGS Int'l, Inc. v. United States, 983 F.2d 229, 229 (Fed.Cir.1993) (plaintiff had already received judgment in contract action); Estate of Lee v. FEMA, 812 F.2d 253, 255 (5th Cir.1987) (plaintiff had already received judgment in insurance coverage action); Marre v. United States, 38 F.3d 823, 825 (5th Cir.1994) (plaintiff had already received judgment in wrongful disclosure action)). Those litigants had already received monetary judgments in their favor and thus owed their attorneys money.
When actually recording the amount of hours worked for the purpose of seeking fee shifting, the record keeping requirements are rudimentary. 28 U.S.C. § 2412(d)(1)(b) requires an itemized statement including the actual time expended and the rate at which the expenses were calculated. An itemization is adequate if it sets forth in sufficient detail the number of hours expended, the date on which the work was incurred, and a brief identification of the work done in each time increment. TGS Int'l v. United States, 983 F.2d 229 (Fed. Cir. 1993). The requirement is not intended to be unduly burdensome: "[P]laintiff's counsel, of course, is not required to record in great detail how each minute of his time was expended.
This means that any contractual fee arrangement between Plaintiffs and Plaintiffs' counsel could reduce the amount of fee award permitted under Section 2412(d). See TGS Int'l, Inc. v. United States, 983 F.2d 229, 230 (Fed. Cir. 1993) ("In its requirement that fees have been `incurred' by the party, § 2412(d) differs from § 2412(b) and other fee-shifting statutes that authorize the award of `a reasonable attorney's fee.'") Plaintiffs' counsel did not charge Plaintiffs prevailing market rates for their services.