Sometimes It Pays to Fight the Fee Fight: Ninth Circuit Slashes $8.5M FCA Fee Award

In fee-shifting cases, it can be tempting to treat a post-judgment attorneys’ fee demand or motion as an unpleasant but largely unavoidable addition to litigation. Especially after a hard-fought merits battle, defendants may wonder whether it is worth spending more time and money to challenge a fee request. The Ninth Circuit’s recent decision in United States ex rel. Thrower v. Academy Mortgage Corp. suggests the answer is — sometimes — yes.

Case Background

A quick look at the path of Thrower shows why. In 2016, Gwen Thrower, a former mortgage underwriter, sued Academy under the False Claims Act (the FCA), alleging the company falsely certified compliance with the Federal Housing Administration’s Direct Endorsement Program, which allows approved lenders to underwrite mortgages for government insurance. Thrower’s case almost died early: after reviewing the allegations, the government declined to intervene in the case. But Thrower and her lawyers, a small firm in New York, pressed forward and defeated not only Academy’s motion to dismiss but also a rare motion to dismiss filed by the government.

After years of discovery and litigation, the case ended in a sizable settlement: Academy agreed to pay $38.5 million to resolve the FCA claims, with more than $11 million paid to Thrower under the FCA’s qui tam provision. But the settlement left open the issue of statutory attorneys’ fees, leaving that issue for the court to decide and setting up a second major battle over how much Thrower’s lawyers should recover.

Following months of fee litigation, the district court calculated a multimillion-dollar lodestar and enhanced it with a 1.75 multiplier based on counsel’s efforts fighting against not only Academy but also the government on motions to dismiss. The court also acknowledged and rewarded counsel’s investigative work. The resulting award totaled nearly $8.59 million in attorneys’ fees. Even though that amount was significantly lower than the $13 million originally requested, Academy appealed on the ground that the multiplier was unwarranted. The Ninth Circuit agreed.

The Ninth Circuit Rejects the Multiplier

The appellate panel held the district court did not adequately justify the enhancement, and this was not the “rare and exceptional” case justifying a lodestar multiplier. In the Ninth Circuit’s view, the two main reasons the district court gave — counsel’s extensive investigative work and a purportedly exceptional result — were already included in the lodestar. The hours spent investigating were reflected in the time billed, and the attorneys’ rates already accounted for the quality of their work. Without specific evidence showing the lodestar somehow still undervalued counsel’s work, adding a multiplier was improper. The panel also faulted the district court for failing to justify the 1.75 multiplier with any specific evidence that the lodestar was “unreasonably low.” At the same time, the Ninth Circuit did not hold that lodestar enhancements are never available. Its point was narrower: on these facts, and on this record, the multiplier was not justified.

Practical Takeaways

For defendants facing a large fee petition, Thrower is a useful reminder to approach the fee phase of litigation with the same discipline and advocacy as the merits phase. That means scrutinizing whether the claimed hours are reasonable, whether the rates are supported by the market, and whether any request for a multiplier simply repackages factors already reflected in the lodestar itself. Where your adversary relies on the complexity of the case, the quality of the lawyering, or the strength of the result, defendants should ask a basic question: what, exactly is not already accounted for in the hours and rates requested? If the answer is unclear, Thrower supports opposing the request.

More broadly, litigants should build a fee record early. Keep track of inefficiencies, duplication, overstaffing, unsuccessful positions, and litigation choices that unnecessarily increase costs. And if the court is considering an enhancement, press for a clear explanation tied to specific evidence — not generalized praise for counsel’s performance. Thrower does not eliminate multipliers, but it does reinforce they are the exception, not the rule. For parties on the paying side of a fee award, that is an important point: when the fee request is aggressive and the rationale is thin, it may be worth fighting.