Dissenting Circuit Judge M. Smith concluded that the district court acted within its discretion in determining this case to be “rare and exceptional” and thereby justifying such an enhancement.
In must reading for attorneys seeking positive enhancements for a federal case in the Ninth Circuit, Thrower v. Academy Mortgage Corp., Case No. 34-4103 (9th Cir. April 6, 2026) (published), a 2-1 opinion where there was disagreement on whether the case was rare and exceptional for multiplier purposes, although all circuit judges agreed the district judge did provide specificity in awarding a 1.75 multiplier to plaintiff’s counsel reaching a large settlement in a False Claims Act (FCA) case authorizing mandatory fees and expenses under 31 U.S.C. section 3730(d)(2).
After surviving a motion to dismiss by defendant and the government as well as expending 875 days of investigative work to expose the fraud, plaintiff’s counsel later obtained a $38.5 million settlement, $27 million of which went to the government and other amounts to plaintiff/counsel under a fee arrangement. However, FCA fees needed to be determined. After some reductions (including excessive hourly rates), the lodestar was set at around $4.375 million, augmented by a 1.75 positive multiplier bringing the total award to a little under $8.6 million.
On appeal, the majority believed the motion to dismiss and investigative work was subsumed within the lodestar calculation so the multiplier was not justified on those grounds. It also found the district court’s reasoning was not specific enough, reversing and remanding because it had yet to see evidence of extraordinary delay, a statutory cap on the lodestar evidence as under other statutes, or proof of counsel’s superior performance by analogy to other recoveries.
The concurring/dissenting circuit judge (M. Smith) dissented because he did not believe the district court abused its discretion in concluding the settlement result was superior and unprecedented in nature. He, too, decided the reasons for the selection of a 1.75 multiplier was not articulated with particularity such that a remand was warranted.