NVLSP v. US
Oral Argument — 01/07/2026 · Case 24-1757 · 28:36
0:00
Judge Lourie
Our next case is the National Veterans Legal Services Program et al.
0:04
versus the United States versus Eric Allen Isaacson, 2024-1757.
0:14
Mr. Isaacson, when you were ready.
0:16
Appellant Attorney (Deepak Gupta)
Good morning. May it please the Court.
0:18
I'm Eric Allen Isaacson, the class member, objector, and appellant in this case,
0:25
which raises several, I think, fairly important issues.
0:28
The first one to the district court's jurisdiction under the Little Tucker Act,
0:35
given the fact that the claims of some of the class members in this case would far exceed $10,000.
0:42
I think it exceeds the Tucker Act jurisdiction.
0:45
Judge Lourie
None of the individual claims does.
0:50
Appellant Attorney (Deepak Gupta)
Well, individual class members have claims that greatly exceed that.
0:54
If you want to talk about the individual claims,
0:57
they contend that...
0:58
That each download was a claim, an exaction claim.
1:02
Well, it is.
1:03
Judge Hughes
This is an illegal exaction claim theory,
1:07
and every single time the government extracts money illegally,
1:12
it's a separate claim.
1:14
Appellant Attorney (Deepak Gupta)
Well, the government doesn't extract money when people download from...
1:18
Judge Hughes
I don't want to debate the nature of the claims.
1:21
The fact is, it's an illegal exaction claim,
1:24
and what they're saying, what they said,
1:27
what their basis for jurisdiction was,
1:28
was this was an illegal exaction,
1:32
that the government extracted more money
1:34
than they were entitled to under the statute.
1:36
And it's every single time that happens.
1:39
It's not some kind of damages claim
1:43
where the government does something once
1:44
and then has a flow of damages from it.
1:47
This would come up in a statute of limitations context,
1:51
that every single one of these
1:52
would start the statute of limitations running anew.
1:55
Appellant Attorney (Deepak Gupta)
Well, PACER waives the exactions,
1:58
for the first $15 doubled to $30 per each quarter.
2:02
Judge Freeman
You're not doing yourself any benefits
2:03
by getting into the details of this.
2:05
Appellant Attorney (Deepak Gupta)
I would like, then, to move to the issue of attorney's duties,
2:10
where this court in Health Republic indicates
2:13
that the district court should act as a fiduciary for the class
2:18
and should not start with the request
2:20
that the class representatives are making,
2:23
the class counselor making.
2:24
Judge Hughes
So I get what you're arguing on this,
2:26
but I don't think that...
2:28
Health Republic goes as far as you think it goes.
2:31
It seems to me that what the point is,
2:33
is you shouldn't start with the class request
2:37
as a per se reasonable request,
2:40
but that you have to do an independent evaluation of it.
2:43
I think it seems like you're arguing
2:45
that the district court just has to get all the records
2:47
and go through the billing
2:49
and let a reasonable rating come up with its own fee.
2:51
And if that's what you're arguing,
2:52
that seems to me to be impractical
2:54
and not required by anything in Rule 23.
2:57
Well...
2:57
If you're arguing,
2:58
that as a matter of the district court's decision,
3:02
it didn't do an independent analysis,
3:05
then you can argue that,
3:06
but it seems to me that the district court
3:08
had a very thorough, reasoned opinion
3:11
about why the fees thought here were reasonable.
3:14
It looked at the percentage basis.
3:16
It did the cross-check on the Lodestar basis.
3:20
It looked at the ranges in these kind of classes
3:22
and all the different ranges in all these cases,
3:25
and it found that the request was reasonable.
3:28
That seems to me to be an independent review
3:32
of the attorney's fees request
3:34
as required by Health Republic and other precedent.
3:38
Appellant Attorney (Deepak Gupta)
Well, I think the first thing the court needs to do is...
3:40
Or one of the first things the court needs to do
3:42
is make a choice between a Lodestar fee
3:44
and a percent of fund fee.
3:47
And the first thing the court's going to look at is
3:49
what's the amount of the claimed Lodestar?
3:51
Unknown Speaker
Are you saying we should only do a Lodestar?
3:54
Because that's actually how your brief reads.
3:56
Appellant Attorney (Deepak Gupta)
I do not say that you should only do...
3:58
For example, it might be a case
4:01
where if you look at the Lodestar,
4:03
it amounts to 90% of the common fund.
4:05
If the Lodestar is amounting to 90% of the common fund,
4:09
it would be unreasonable to give a Lodestar award
4:12
more reasonable to go to a percentage award
4:15
and cap the fee at 20% or 30%.
4:18
In this case, if you look at the Lodestar,
4:21
you see that they have very high rates.
4:25
They're very good attorneys.
4:27
They have very high rates.
4:28
It's far above the matrix that...
4:30
Unknown Speaker
Well, but the district court found that
4:32
to be a reasonable rate in the jurisdiction.
4:34
Appellant Attorney (Deepak Gupta)
Well, if the district court is going to accept
4:37
their rates as very high and as reasonable,
4:41
still the fee that they're asking for
4:45
is about four times their Lodestar.
4:48
Unknown Speaker
Within the range that is allowed by the court,
4:51
the lower court.
4:52
Appellant Attorney (Deepak Gupta)
That's a range that can sometimes be allowed,
4:54
but you've got to have very good reasons
4:55
for allowing a larger amount.
4:58
The Lodestar.
4:59
The fee-shifting case is...
5:01
Judge Freeman
The district court gave reasons.
5:02
And also, it looked at the percentage basis
5:06
Judge Hughes
and said, this is well within the percentage
5:09
that we award when we look at percentage basis
5:11
for common fund, too.
5:12
So both checks were within ranges courts gave.
5:16
And when the court said, yes,
5:17
this is towards the upward range on Lodestar,
5:20
it said, this is a very complicated case.
5:23
It is a very complicated class action.
5:25
They're a very skilled counsel at class action.
5:28
And, you know, looking at the two different ways
5:31
of calculating it,
5:32
it found that it was a reasonable basis.
5:34
I don't understand.
5:36
Are you arguing there's legal error there somewhere?
5:39
Because if you're asking us to overturn that
5:40
for abuse of discretion,
5:42
I don't even think it's anywhere close
5:43
to an abuse of discretion.
5:45
Appellant Attorney (Deepak Gupta)
I think it's a question of approach.
5:46
I think that the Supreme Court in Purdue
5:49
says that Lodestar adequately compensates
5:52
class action counsel in the typical case.
5:55
If you are acting as a fiduciary...
5:57
Is that a common...
5:58
...clout?
5:58
Judge Hughes
It is a fee-shifting case.
6:01
Appellant Attorney (Deepak Gupta)
It is a fee-shifting case.
6:01
Judge Hughes
Well, there are vastly different reasons
6:03
for fee-shifting where the defendant pays
6:06
in common fund, which is the plaintiff's
6:09
paying their own attorneys.
6:11
And so I would never read that case
6:14
on fee-shifting to apply to a common fund situation.
6:17
Appellant Attorney (Deepak Gupta)
Well, in a fee-shifting case, you're right.
6:19
The assumption is that the defendant's
6:23
been found liable.
6:24
The defendant's a wrongdoer who has to pay
6:27
the plaintiff's fees as a consequence.
6:28
In a common fund case, class members
6:31
haven't done anything wrong.
6:33
If the compensation...
6:34
Judge Freeman
And they've engaged attorneys to represent them
6:38
to gain a settlement.
6:40
Judge Hughes
And if they agree to that settlement
6:42
and a certain range of attorney fees,
6:44
the attorneys are entitled to it
6:46
as long as it's reasonable under an independent evaluation.
6:49
Appellant Attorney (Deepak Gupta)
Well, I think an independent evaluation
6:51
starts by asking what's reasonable compensation.
6:54
And reasonable compensation starts
6:57
with the Lodestar ordinarily.
6:58
And after you look at the Lodestar,
7:00
you can think about percentage fee awards.
7:03
Unknown Speaker
But the law doesn't require that it start
7:05
with the Lodestar.
7:06
Under Rule 23, you can start with the percentage
7:10
of the common fund and do a cross-check.
7:13
It wouldn't be called a cross-check
7:15
if it had to be the first check.
7:17
Appellant Attorney (Deepak Gupta)
Well, you can start with the percentage of the fund,
7:20
you do a cross-check and see that it is
7:22
four times the Lodestar.
7:23
That's four times what would be sufficient
7:26
to compensate class candidates.
7:53
Unknown Speaker
I don't recall a case that said that fees
7:55
should be reduced because it came in a,
7:58
you know, in a, you know, in a, you know,
7:58
in the context of a settlement versus a verdict.
8:01
I don't know that case.
8:02
Appellant Attorney (Deepak Gupta)
Well, I think that...
8:04
Unknown Speaker
Can you cite that to me?
8:05
Appellant Attorney (Deepak Gupta)
I don't have a case site for you
8:07
off the top of my head, Your Honor.
8:08
But I do think that there are
8:10
substantially greater risks in going to trial.
8:13
And somebody who takes a case to trial and wins
8:15
has a stronger entitlement to a very generous fee
8:21
than somebody who settles a case.
8:23
Judge Hughes
This sounds like disagreement
8:24
with the district court's discretionary decision.
8:28
This is not a...
8:28
This does not sound like legal error to me.
8:30
Appellant Attorney (Deepak Gupta)
Well, I think it's a question of the proper approach
8:32
to the fee award.
8:34
Judge Hughes
I don't understand what you mean by that.
8:36
Do you mean that as a matter of law,
8:39
they have to start with Lodestar?
8:40
If that's the case, you're wrong.
8:42
You lose on the law, in my view.
8:45
If you have some other view of what the law is,
8:48
quit saying, general, the approach,
8:50
and tell me what you think legally
8:53
the district court is required to do.
8:54
Appellant Attorney (Deepak Gupta)
I think legally the district court
8:56
is required to act as a fiduciary.
8:58
It's supposed to give a moderate fee and...
9:02
Unknown Speaker
A reasonable fee, not a moderate fee.
9:05
Appellant Attorney (Deepak Gupta)
Well, the Supreme Court's...
9:06
Reasonable.
9:07
The Supreme Court's common fund precedent,
9:10
seminal common fund precedent, Reno,
9:12
trustees versus Reno,
9:13
says it has to be done with moderation
9:15
and a jealous regard for the interests of the class.
9:18
I mean...
9:20
Judge Freeman
Okay, but none of that is legal error.
9:23
The district court in this case
9:24
gave a very thorough, exhaustive analysis
9:28
that meets all of those requirements.
9:31
Appellant Attorney (Deepak Gupta)
Well, it's at the very, very high end of the awards.
9:43
Judge Hughes
We know it's at the very high end.
9:45
The district court gave reasons
9:47
for why he thought, in his discretion,
9:50
it was appropriate.
9:51
If there's an error law on that, you can tell me,
9:54
but if you're asking me to say
9:56
that's an abuse of discretion,
9:58
you're not going to win with me.
10:00
And I don't understand your legal argument
10:02
when you say it's the general approach,
10:05
because he followed the general approach.
10:07
Appellant Attorney (Deepak Gupta)
I think he started with the class council's free request
10:10
and asked,
10:11
is this something that can be defended as reasonable?
10:15
And I think Health Republic says you don't do that.
10:17
Judge Freeman
Okay.
10:18
Appellant Attorney (Deepak Gupta)
Quite frankly, Your Honor.
10:23
And my other problem with the settlement
10:26
is a question of the pro-rata distribution,
10:30
which doesn't take account of the fact
10:32
that the largest paying class members...
10:37
Judge Hughes
Do you want to talk about the incentive awards?
10:38
Because that's the issue you seem to be...
10:40
You seem to be teeing up for Supreme Court review.
10:42
And, I mean, it seems to me
10:44
that the Second Circuit and the Ninth Circuit
10:47
and the other circuits that have looked at this
10:49
have the better of the arguments,
10:50
but I don't...
10:52
That pro-rata stuff,
10:53
you're not going to get anywhere with me
10:54
that the clients paid their PACER fees.
10:57
I don't understand that at all.
10:59
Appellant Attorney (Deepak Gupta)
And classes.
11:00
And the clients and classes are not going to get it back.
11:05
And the fact is...
11:06
Judge Hughes
That's up to the clients and their attorneys.
11:10
That's not up to us.
11:11
Appellant Attorney (Deepak Gupta)
Well, I think it's a question of whether
11:13
the distribution is equitable.
11:16
And with respect to incentive awards,
11:19
the Supreme Court's opinions in Reno and...
11:23
Right.
11:23
Judge Hughes
The 1800s cases.
11:25
I mean, I understand that, you know,
11:29
the Eleventh Circuit bought off this argument,
11:32
although four judges dissented from the denial.
11:34
To me, old cases from a creditor situation
11:39
seem to have...
11:41
have very little relevance
11:42
to modern class action jurisprudence.
11:45
And even the Supreme Court
11:46
has at least nodded to incentive awards.
11:50
So what...
11:51
Is it just those two old Supreme Court cases
11:54
and the Eleventh Circuit case that you have?
11:58
Is there anything else?
11:59
Appellant Attorney (Deepak Gupta)
I have those two Supreme Court cases
12:00
and the Eleventh Circuit case,
12:02
and you have the Second Circuit opinion
12:04
in Fikes Wholesale,
12:05
where a panel of the Second Circuit writes an opinion
12:08
that basically seems to say,
12:09
we think the Eleventh Circuit case is...
12:11
The Eleventh Circuit is probably right,
12:12
but we think we're bound by pre-existing
12:14
Second Circuit authority
12:16
if we don't go in bank.
12:18
And then in the concurring opinion in that case,
12:24
which is written by the same judge...
12:25
Judge Hughes
So let me ask you this.
12:25
If we don't think those old Supreme Court cases
12:29
are binding because they don't involve Rule 23,
12:32
they involve creditors,
12:33
then under Rule 23,
12:35
without regard to those Supreme Court cases,
12:39
are incentive awards allowed?
12:41
Well, the fact that...
12:43
It's a reasonableness inquiry, right?
12:45
Appellant Attorney (Deepak Gupta)
Could you restate the question?
12:46
Judge Hughes
I'm just saying, ignore those Supreme Court cases.
12:49
Just look at Rule 23.
12:53
Hype that thing.
12:54
Are incentive awards allowed under Rule 23?
12:59
Appellant Attorney (Deepak Gupta)
Well, Rule 23 says nothing
13:01
to authorize incentive awards, Your Honor.
13:03
Does it say anything to prohibit them?
13:06
It doesn't specifically prohibit them, but...
13:09
Judge Hughes
So isn't the touchstone of a...
13:12
of a settlement is whether it's equitable and reasonable?
13:15
Appellant Attorney (Deepak Gupta)
It is generally understood that
13:17
when you are acting as a class representative,
13:20
you give up the opportunity to ask for special rewards
13:26
that the rest of the class isn't getting.
13:28
I see I'm going into my rebuttal time, Your Honor.
13:31
Judge Lourie
We will give you your three minutes back.
13:34
Appellee Attorney (Alexis M. Daniel)
Thank you, Your Honor.
13:35
Judge Lourie
Mr. Gupta.
13:38
Appellee Attorney (Alexis M. Daniel)
Thank you, and may it please the Court.
13:40
Deepak Gupta for the plaintiffs at Belize.
13:42
I will be sharing...
13:43
our time with Ms. Daniel from the Department of Justice.
13:47
This appeal concerns the District Court's careful approval
13:51
of a settlement resolving a decades-long historic class action
13:55
against the federal judiciary.
13:56
And before I jump into the legal issues
13:59
that Mr. Isingston has presented,
14:01
I just want to emphasize that under this settlement,
14:04
the vast majority of PACER users
14:06
will be refunded in full 100 cents on the dollar
14:09
for past charges.
14:11
The settlement resolves the claims
14:13
of what may well be the most litigious group
14:16
of people and entities ever assembled in a single case.
14:20
And yet, out of over a half million class members,
14:23
a lone objector now appeals.
14:27
Mr. Isingston's principal contention in his briefing
14:30
was that the settlement...
14:32
not that the settlement was unfair,
14:33
although he does argue that.
14:35
It's instead his chief argument
14:37
was that the DOJ, the AO, the Plaintiffs' Council,
14:41
and the two district judges who oversaw
14:43
this case were all laboring under a mistaken understanding
14:47
of the jurisdiction of the District Court
14:49
for the past decade of litigation.
14:51
And so in his view, the entire settlement must be unwound
14:54
and everyone has to go back to square one.
14:57
I'm not going to belabor the arguments there
14:59
because, Judge Hughes, I think you...
15:01
Judge Hughes
I don't really have much interest in that
15:02
unless my colleagues do.
15:03
Appellee Attorney (Alexis M. Daniel)
Right.
15:05
Judge Hughes
That would just blow up the settlement.
15:07
To the extent there's any assumption
15:09
that the government would just pay the amount
15:12
and it would just go to the smaller people,
15:13
is ridiculous.
15:15
I mean, it would blow it up.
15:17
And frankly, I don't know what would happen.
15:20
The big people would just go to the Court of Federal Claims
15:22
and sue, and there would be a different settlement.
15:24
And then a lot of these small-time payers
15:27
would probably just be left out.
15:29
But in any event, you could...
15:31
I guess you can do this in any way you want,
15:34
but I have two main points that I'd like to hear from you on.
15:39
And one is our precedent, the health, whatever precedent,
15:43
and whether the district court, the way it looked at
15:46
the attorney's fees complied with our precedent.
15:49
And two, this incentive stuff.
15:54
Sure, yeah.
15:55
The incentive stuff seems to be...
15:57
I mean, it's clear you understand, too,
15:58
that it's being teed up for the Supreme Court.
16:01
The Supreme Court denied cert on this, I think,
16:03
at least a couple times.
16:03
Appellee Attorney (Alexis M. Daniel)
It has denied cert on it, but Mr. Isaacson has sought certiorari.
16:08
Judge Hughes
Maybe at some point it will have to address it.
16:10
But those are the two things that I'm most concerned about.
16:12
And do it with the...
16:14
The overall approach to the attorney's fees,
16:16
I'm not pulling my punches.
16:19
I thought the district court judge did a very thorough
16:22
independent analysis of the attorney's fees,
16:24
but it seems like Mr. Isaacson has some dispute
16:28
that it's just improper altogether to start with
16:32
the attorney's fees request from class counsel
16:35
and then do the percentage and lodestar cross-ex.
16:39
Appellee Attorney (Alexis M. Daniel)
I do think Mr. Isaacson is misreading the Health Republic case.
16:43
I mean...
16:44
The Health Republic decision does emphasize
16:47
that what the district court is not supposed to do,
16:49
and I think what happened there,
16:51
is to simply defer to class counsel's request
16:54
and to treat it as almost a fait accompli
16:56
unless there's some, you know, error.
16:59
Instead, I think, and this is what Judge Friedman emphasized,
17:02
the district court is supposed to be a fiduciary
17:04
for the absent class members
17:05
and really has an important role to do an independent analysis
17:09
because you don't have the ordinary adversarial scenario.
17:13
And so, and that's why we have class action objections.
17:16
That's why we have Rule 23E.
17:17
That's the architecture of this whole enterprise.
17:20
And I think, you know, if I were teaching law students
17:22
about how to do this, or judges,
17:24
I think this district court decision is really a model
17:27
of the kind of analysis that a district judge should engage in.
17:31
It is very, very careful not to simply defer
17:35
to either of the parties,
17:37
but you do have an unusual situation here
17:39
in which the Department of Justice is representing
17:43
the defendants.
17:44
And the Department of Justice behaved, I think,
17:46
differently from the way private counsel
17:48
representing a corporate defendant might behave,
17:51
where all they care about is how much their client will be paying.
17:54
And so they don't really care as much
17:56
about the amount that goes to attorney's fees.
17:58
Whereas here, as part of the settlement architecture,
18:01
the Department of Justice negotiated for a percentage cap.
18:04
So even before it came to the district judge,
18:06
you already had the DOJ playing that role.
18:09
And then it played that role furthermore
18:11
in the settlement.
18:13
And then it played that role furthermore
18:13
in the settlement approval process.
18:14
But even if you set that all aside,
18:16
I think it's hard to read Judge Friedman's opinion
18:20
and not come away with the conclusion
18:22
that this is a district judge who took the responsibility
18:25
to act as a fiduciary very seriously
18:28
and didn't even rely on our expert reports
18:32
to come to the conclusion about the comparators.
18:35
He did his own analysis and found relevant comparators.
18:38
And so I think that's why that set of arguments fails.
18:41
I do want to...
18:43
jump to the incentive award question
18:45
because I think it's important.
18:46
I think you're right, Judge Hughes,
18:47
that the elephant in the room here
18:49
is that the objector is trying to tee this up
18:51
for Supreme Court review.
18:53
And so I would just urge this court
18:55
to do what Judge Friedman did,
18:57
which is to point out that even under the line of cases
19:02
that Mr. Isaacson is relying on,
19:04
that is, even if you were, you know,
19:06
even if you were under the 11th Circuit's approach
19:09
or the 19th century cases,
19:11
even those cases recognized
19:13
that a plaintiff suing on behalf of a class,
19:17
that it's appropriate for there to be reimbursement
19:19
for the out-of-pocket expenses or for the attorney expenses.
19:23
And that's what happened here.
19:24
You had three nonprofit associations
19:26
that served for a decade as the named plaintiffs,
19:30
and they incurred expenses.
19:32
They had attorneys who were...
19:34
They could have hired outside counsel, I suppose,
19:36
to protect their interests,
19:37
but they did things more efficiently.
19:39
They did it in-house.
19:40
And all we're saying is,
19:42
it's a reasonable measure of these incentive awards.
19:45
It's a bargain, frankly, for the class.
19:47
Judge Hughes
I mean, it has to be a severe bargain, right?
19:49
The incentive awards are what?
19:51
Appellee Attorney (Alexis M. Daniel)
They're $10,000.
19:52
Judge Hughes
So, I mean, NBLSP clearly spent more,
19:56
well in excess of $10,000 of its own attorney time on this case.
20:00
Correct. Yes.
20:02
As opposed to whoever the other ones were.
20:04
Correct.
20:05
Appellee Attorney (Alexis M. Daniel)
And so what I'm saying is, Judge Hughes,
20:07
I agree with all the things you were saying.
20:09
I do think, you know, the vast majority of the circuits...
20:11
Judge Hughes
You don't want us to decide that issue.
20:13
Appellee Attorney (Alexis M. Daniel)
I think maybe this is not the right case
20:15
to take a stand on this big issue because of the facts.
20:19
Unknown Speaker
I'm a little concerned about going in that direction.
20:22
For a different issue,
20:23
I'm concerned that we create a mini-industry
20:26
of class representatives hiring counsel to get reimbursed.
20:30
So this is not the typical class action case.
20:34
Appellee Attorney (Alexis M. Daniel)
Right.
20:34
Unknown Speaker
The typical class action case is a wage and hour case,
20:37
where an employee, or usually an ex-employee,
20:40
has stepped up.
20:41
Or a false advertising case where the bag of peas
20:46
didn't have, wasn't all natural.
20:49
And so I fear that if we go in this direction,
20:52
the consequences are actually far greater than the concern.
20:57
I just don't understand why.
20:59
Are you worried that Rule 23 isn't sturdy enough to...
21:02
Appellee Attorney (Alexis M. Daniel)
No, no, I think it is.
21:03
I just think, look, frankly,
21:05
that this class action has been held up for a couple of years now
21:09
because of this appeal.
21:10
Yes, right.
21:10
If it goes to the Supreme Court,
21:11
if there's a petition, it'll be held up longer.
21:13
And just to express, to address your concern, Judge Friedman,
21:17
I see I'm running out of time.
21:18
I think in those, you know, that kind of mind run of cases,
21:21
it's unlikely that an individual would have any need for counsel.
21:26
Where this comes up is in antitrust litigation.
21:28
We've cited examples where you do have entities
21:31
that have their own counsel.
21:33
And so the way to compensate them is in this manner.
21:36
Thank you.
21:38
Judge Lourie
Thank you, Mr. Gupta.
21:42
Thank you, Mr. Gupta.
21:43
Ms. Daniel.
21:48
Intervenor Attorney
May it please the court, Alexis Daniel,
21:50
on behalf of the United States.
21:51
Judge Hughes
Let me jump right in.
21:52
Yes.
21:52
Since you're from the Justice Department,
21:54
and I want to hear your all's view on this jurisdictional issue.
21:59
Because I mean, having been there myself,
22:02
I can see some appeal.
22:04
If I was representing the Justice Department to say that
22:07
this doesn't comply with the Little Tucker Act.
22:10
So do you agree that because of the nature of these illegal exaction claims
22:13
that everyone is a separate claim and it's under $10,000?
22:17
Yes.
22:18
So there was proper jurisdiction in the court or in the district court?
22:21
Intervenor Attorney
That's correct, Your Honor.
22:22
The United States does agree with that assessment here
22:24
based on the specific claims at issue.
22:27
We never contested jurisdiction because we believe there was correct
22:30
Little Tucker Act jurisdiction.
22:31
And when questioned by the district court, both that class certification
22:34
and the fairness hearing, we agreed that each PACER transaction gave rise
22:38
to an individual claim and there is no claim access.
22:41
Judge Lourie
So this case was here before too.
22:43
Intervenor Attorney
Yeah, that's correct, Your Honor.
22:45
And this specific jurisdictional issue wasn't at play, but the court
22:48
did seem to understand the nature of plaintiffs.
22:50
Judge Hughes
I guess my question is, why wasn't it the policy setting
22:58
that allowed for reimbursements of costs beyond what the PACER statute allowed?
23:04
Why isn't that a one-time wrong and it's just damages flowing from that?
23:11
Intervenor Attorney
Because there is the fee schedule, but each time that transaction occurs
23:16
is what creates the relationship between the government
23:18
and each PACER user.
23:20
So each time they're going in, selecting a download,
23:23
they're prompted to answer, do you agree to incur these charges?
23:26
And then they must agree to that before they incur it.
23:28
And each download itself is distinct.
23:30
It could be for different purposes, different documents,
23:33
different clients if it's an attorney.
23:35
So in our view, it really is distinct to that individual claim
23:40
and very unique to this case.
23:42
Judge Hughes
I'm glad you said that, but I want to make sure that you all know
23:46
that we're going to hold you to that in the next illegal,
23:48
exacting case, too, if you try to come in and get a kick
23:51
to the Court of Federal Blames by aggregating them.
23:54
Intervenor Attorney
Yes, we understand that, Your Honor.
23:55
And I think our view here is based on this specific transaction
23:59
at issue on these facts and circumstances and under Alaska Airlines
24:03
that this is the correct view in this case,
24:06
which is why jurisdiction was never contested by the United States.
24:10
I can briefly touch on attorney's fees and service awards
24:13
because I can see that the court is interested in that.
24:16
The United States does fully agree with the position of class counsel
24:19
that this is a...
24:20
It's a reasonable attorney fee award here.
24:22
The district court did thoughtfully apply this court's precedent.
24:25
It had discretion to choose percentage or lodestar.
24:29
It went with the percentage route, which is widely accepted
24:31
at the United States prompting.
24:33
It conducted a lodestar cross-check.
24:34
It then reviewed that lodestar cross-check to determine
24:37
that it was a reasonable range and still then thoughtfully reviewed it
24:41
to determine that it was reasonable against comparable cases,
24:44
the risks in this case, and class counsel.
24:46
Judge Hughes
And is it the government's position that Rule 23 allows
24:50
incentive awards?
24:52
Intervenor Attorney
Yes, Your Honor.
24:53
We do believe they allow incentive awards,
24:56
and to my co-appellee's point...
24:57
Judge Hughes
So if this goes up, we're not going to get a view from the SG
25:01
that incentive awards aren't allowed,
25:03
or it's your view at your level, not at the higher level?
25:08
Intervenor Attorney
I believe it is our view that the service awards are permissible
25:13
in this case, and particularly reasonable in this case.
25:16
Judge Hughes
That's a very careful answer.
25:17
Intervenor Attorney
Yeah.
25:18
Well, I have to admit,
25:20
I didn't check with the SG.
25:21
But...
25:21
That's fine.
25:22
Judge Hughes
I'm not going to hold you to what the SG says or not.
25:26
I'm just curious if this does go up,
25:28
if the SG is going to take a different view on this 1800s case law.
25:32
Intervenor Attorney
I have no reason to believe that the SG would take a different view
25:35
at this time.
25:36
The incentive awards here were reasonable.
25:38
Rule 23 does account for treating class members equitably.
25:42
Here, the named class members did contribute significant time
25:47
and expenses, whether they were attorneys or not.
25:49
I don't think there's anything...
25:50
dispute that they went above and beyond in their contributions, making them particularly
25:53
reasonable here to award those service awards.
25:56
Unknown Speaker
Can I circle back to the jurisdictional issue?
25:59
Yes, Your Honor.
25:59
I was surprised that Mr. Isaacson in some way sandbagged the appellees on the Keene
26:07
case, and I wondered if you wanted to make any comments about Section 1500 and the definition
26:14
of claim that he argues in the Keene case.
26:16
Intervenor Attorney
Yes, I can address that.
26:17
Our position would be that Keene is just totally distinguishable here from dealing
26:21
with the question of whether a claimant is bringing the same claim in one court versus
26:26
a different court versus this case where we need to look at the exact nature of the transactions
26:30
to determine there's a claim.
26:31
I think the line of authority is actually addressing the overcharges cases is most
26:35
instructive here.
26:37
Thank you.
26:38
If there are no further questions, the United States respectfully requests that this court
26:42
affirm the ruling of the district court.
26:44
Judge Lourie
Thank you.
26:45
Thank you, Counsel.
26:45
Thank you, Counsel.
26:46
Mr. Isaacson, we'll give you three minutes if you need it.
26:49
Appellant Attorney (Deepak Gupta)
Thank you, Your Honor.
26:59
First, I'd like to say that I didn't try to sandbag anybody with the Keene case.
27:04
The Keene case is a decision that I found when I was doing research for my reply brief.
27:09
It was not a case that I was aware of when I was writing my opening brief, Your Honor.
27:12
Had I been aware of it as a case that would be important to my argument on appeal, at
27:19
the point I was writing the opening brief, I would have included it there.
27:22
I think that you made a very important point.
27:26
With respect to the danger of having big incentive awards based on the fact that somebody
27:35
hired their own extra counsel to advise them internally, I think that's a legitimate concern,
27:42
and I think that this is a case ...
27:44
Unknown Speaker
Why can't that be handled under the normal fairness and equitable review you have to
27:50
do under Rule 23, as opposed to just outright forbidding them?
27:54
Appellant Attorney (Deepak Gupta)
Well, I think that there ...
27:56
Forbidden by Supreme Court precedent, Your Honor, but I also think that it matters that
28:03
the class notice in this case indicated that it would be asking for attorney's fees in
28:09
a given amount and for incentive awards in a given amount, and then they come into court
28:13
and say, oh, well, the incentive awards are really justifiable as attorney's fees.
28:18
Now, if somebody got sandbagged, it's me and other class members when they come in with
28:23
an attorney's fees argument for the incentive awards.
28:27
And unless you have some questions, I will submit the case.
28:32
Judge Lourie
Thank you to both counsel.
28:34
The case is submitted.
28:35
Thank you.