Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 1 of 12 IN THE UNITED STATES COURT OF FEDERAL CLAIMS
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1 Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 1 of 12 IN THE UNITED STATES COURT OF FEDERAL CLAIMS KANE COUNTY, UTAH, individually and on behalf of all others similarly situated, No C Plaintiffs, No C (Consolidated Vs. (Judge Elaine D. Kaplan THE UNITED STATES, Defendant. DECLARATION OF ALAN I. SALTMAN Alan I. Saltman SMITH, CURRIE & HANCOCK LLP 1025 Connecticut Avenue, N.W., Suite 600 Washington, D.C ( ( facsimile aisaltman@smithcurrie.com Counsel for Plaintiffs OF COUNSEL: Robert O. Fleming, Jr. SMITH, CURRIE & HANCOCK LLP 245 Peachtree Center Avenue, N.E. Suite 2700, Marquis One Tower Atlanta, Georgia ( ( facsimile rofleming@smithcurrie.com Dated: September 27, 2018
2 Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 2 of 12 IN THE UNITED STATES COURT OF FEDERAL CLAIMS KANE COUNTY, UTAH, individually and on behalf of all others similarly situated, No C Plaintiffs, No C (Consolidated Vs. (Judge Elaine D. Kaplan THE UNITED STATES, Defendant. DECLARATION OF ALAN I. SALTMAN I, Alan I. Saltman, under the penalties of perjury, hereby depose and state that: Background 1. I am a partner in the Washington, D.C. office of Smith, Currie & Hancock LLP (Smith Currie. 2. On June 1, 2017, Smith Currie and I were engaged by Kane County, Utah, on behalf of itself and all other local governments similarly situated, to bring suit against the United States for amounts to which each was entitled under the Payments in Lieu of Taxes Act, 31 USC 6901, et seq. (PILT, but were not paid in FYs 2015, 2016, and 2017 because Congress did not appropriate sufficient funds. 3. Under the terms of our agreement with Kane County, Smith Currie is to receive a fee of one-third of all amounts recovered, plus expenses. (A copy of this fee agreement is attached as Exhibit A. 1
3 Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 3 of We filed a complaint in this Court on June 2, 2017 for the FY 2015 and FY 2016 PILT underpayments, and filed a second complaint on December 20, 2017 for the FY 2017 PILT underpayments. 5. On December 15, 2017, the Court granted Kane County s motion for summary judgment (as to liability and denied the government s motion to dismiss the first lawsuit; on March 20, 2018, the Court granted Kane County s motion for summary judgment (as to liability and dismissed the government s motion to dismiss the second lawsuit. 6. Kane County then moved to certify a class made up of all local governments that received PILT payments in FYs 2015, 2016, and/or On April 26, 2018, the Court certified that class and named me and Smith Currie as Class Counsel. Underpayment Amounts 7. The government and Class Counsel have agreed that total PILT underpayments in FYs amount to $17,952,808. That is the total potential benefit to the class: 100% of all underpayments to all class members. Expertise of Class Counsel 8. To achieve that result, Class Counsel brought to bear its considerable expertise and experience in appropriation law, particularly as applied to PILT. At the risk of immodesty, it is entirely unlikely that anyone has the experience that I have in litigating the issues at the intersection of appropriation law and PILT entitlement. 9. My experience with appropriation law started when I was an Attorney-Advisor at the General Accounting Office (now the Government Accountability Office from June 1973 until July GAO is headed by the Comptroller General and is recognized as authoritative on appropriation law and government obligations. Many of the cases I worked on at GAO 2
4 Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 4 of 12 involved appropriation law issues, or the creation of obligations that were binding on the government, or both. 10. I started private practice in July I continued to deal with appropriation law, statutory entitlements, and funding issues as part of my practice from that time forward, and have published articles on government obligations funded through the annual appropriation process. Examples are: Alan I. Saltman, The Government s Liability for Actions of Its Agents That Are Not Specifically Authorized: The Continuing Influence of Merrill and Richmond, 32 PUB. CONT. L.J (2003 (discussing the Appropriation Clause of the Constitution and the Anti-Deficiency Act; Alan I. Saltman, The Ferris Doctrine: Reaffirmed, 26 NASH & CIBINIC REP. 46 (Sept (discussing the effect exhaustion of an appropriation has on existing obligations. 11. I first investigated PILT underfunding in 2004, when I was engaged by Greenlee County, Arizona to bring suit in this Court to recover the substantial underpayments to PILT recipients in the late 1990s and early 2000s that resulted from under-appropriation by Congress. 12. The Greenlee County case required a complete dissection of the original PILT Act and its amendments, and legal research on the extent to which otherwise-unconditional payment obligations enacted by Congress may be limited, suspended, or repealed (expressly or by implication. That work led to a decision by the Federal Circuit that, ultimately, was not only educational to me but provided a useful roadmap to this Court in deciding the Kane County consolidated cases. The Federal Circuit held that language in (pre U.S.C was the functional equivalent of subject to the availability of appropriations, language that is commonly used to limit the government s payment obligation to the amount appropriated by Congress. Greenlee County, Ariz. v. United States, 487 F.3d 871, 878 (Fed Cir., reh g and reh g en banc denied (Fed. Cir. 2007, cert. denied, 552 U.S (2008. But the Greenlee 3
5 Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 5 of 12 Court also concluded that 6902 of the PILT Act creates a money-mandating duty which would have been breached in the absence of the limiting language elsewhere in the Act. 487 F.3d at Several years later the Supreme Court, in Salazar v. Ramah Navaho Chapter, 567 U.S. 182 (2012, held that subject to the availability of appropriations language in a series of government contracts did not relieve the government of its contractual payment obligations when the amount appropriated by Congress was insufficient to pay all contractors in full. As a result, Smith Currie and I were retained in 2013 by Prairie County, Montana and Greenlee County, Arizona to recover PILT underpayments for FYs 2006 and The issue presented was whether subject to the availability of appropriations meant something different when applied to statutory payment obligations (like PILT than it did when applied to payment obligations created by government contract (as in Ramah. The Federal Circuit concluded that Ramah is limited to contracts and does not apply to statutory obligations like PILT, so that Greenlee still controlled. Prairie County, Mont. v. United States, 782 F.3d 685, (Fed. Cir. 2015, cert. denied, 136 U.S. 319 ( In 2014, Smith Currie and I were retained by Kane County to seek the recovery of PILT underpayments for FY That case involved an analysis of the payment obligations created by the PILT statute as it then existed, and whether those obligations were enforceable despite the sequestration (under the 2011 Budget Control Act and 2013 Taxpayer Relief Act of 5% of the existing direct spending authority that otherwise would have fully paid FY 2013 PILT entitlements. The court ruled that the Budget Control Act and Taxpayer Relief Act amended the mandatory nature of 6902 of the PILT Act to the extent that direct spending authority was 4
6 Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 6 of 12 sequestered, so that the sequester-caused underpayments in FY 2013 were not recoverable. Kane County, Utah v. United States, 127 Fed. Cl. 696, (2016 (Kane I. 15. Neither I nor Smith Currie received any payment for work done on the Greenlee, Prairie County, or Kane I lawsuits. Risk of Non-Payment 16. Given that history: (a I was personally willing to undertake Kane County s representation in the FY PILT underpayment cases; (b I was willing to ask Smith Currie s management to agree to undertake that representation; and (c Smith Currie s management was willing to do so, only because of the prospect of receiving a substantial fee if successful. Absent the prospect of a fee award large enough to justify the risk of non-payment, I would not have asked and neither I nor Smith Currie would have agreed to again shoulder the risk inherent in these cases. Non-Taxable Expenses Incurred By Class Counsel Attached as Exhibit B is a summary of the non-taxable expenses incurred through September 14, 2018, for which Class Counsel seeks reimbursement from the common fund. The total sought is $26,936.96, made up of a very modest $2, in litigation expenses and $24, in class administration expenses. Litigation Expenses 18. As explained in the fee agreement with Kane County (Exhibit A, Smith Currie does not ordinarily bill for many items routine copying, local travel, routine postage, occasional overnight delivery traditionally considered reimbursable. Instead, it considers them overhead and covered by the fees it is paid. For that reason, the only litigation expenses Class 1 Class Counsel does not seek reimbursement of taxable costs from the common fund. 5
7 Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 7 of 12 Counsel asks the Court to award are travel expenses for two trips by Robert Fleming from Atlanta, Georgia to Washington, D.C. (12/12-13/2017 and 03/14-15/2018 to appear before this Court and present Kane County s argument at the two motion hearings held in this consolidated case. The air fares are the lowest-priced coach fares available, and the hotel charges are the lowest rates for reasonably-located hotels available, at the time the hearings were scheduled on fairly short notice. 2 The other charges are for meals, airport parking in Atlanta, and taxi in Washington, D.C. All these expenses were, in my opinion, necessary for the best representation of Kane county and the then-putative class, and perfectly reasonable in amount. Class Administration Expenses 19. We decided that self-administration of the notice and opt-in process would be more efficient and less expensive than hiring a third-party administrator. After the Class was certified, we held a meeting on May 10, 2018 in our Atlanta office to develop a plan for notifying the Class and managing the opt-in process. It was held in Atlanta because our D.C. office is small and most of the lawyers and support staff who would be involved in the planning and execution of notifying the Class and managing the opt-in process are located in Atlanta. The only expenses related to that meeting for which we seek reimbursement are for my round-trip travel from D.C. to Atlanta, a total of $ That expense was, in my opinion, entirely necessary to proper class administration and quite reasonable in amount At the May 10 meeting, we decided to: (1 set up a website so that Class Members could opt in, securely and easily, online; (2 add a PILT informational page to the Smith Currie 2 We chose the lowest available coach air fares, and lowest available rates for reasonably-located hotels, for all travel described in this Declaration. 3 To avoid repetition: All the expenses discussed in the balance of this Declaration were, in my opinion, both reasonable and necessary. 6
8 Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 8 of 12 website (where we could post links to: (a the Court s orders, the Class Notice, and the opt-in website; (b Frequently Asked Questions, and (c a method for Class Members to submit written questions directly to Class Counsel; and (3 rent a Post Office box to receive opt-ins submitted by U.S. Mail. To implement our decision, we spent: (1 $2, to register the domain name PILTPayments.com for online opt-ins; (2 $7, to design, maintain, and update the opt-in website and our informational webpage (SmithCurrie.com/PILTPaymentsInfo; and (3 $ for a (shortest-available six-month Post Office box rental. That totals $10,171.17, for which we seek reimbursement. 21. Once the Class Notice was approved by the Court, we needed to deliver those Notices to Class Members. The address list of PILT recipients provided by the Department of the Interior, through government counsel, was woefully inadequate for that task. With very few exceptions, it lacked the name of a contact person or responsible official at the 1,952 local governments that made up the Class. We asked the National Association of Counties (NACo for help, and they did two things. 22. First, NACo agreed to give us access to their mailing list of key individuals at local governments that were NACo members, which we combined with the DOI-provided list. But uncertainty as to the correctness and completeness of even that combined DOI-NACo list caused us to form a PILT follow-up calling team of lawyers and paralegals in our Atlanta office, to verify that the 1,952 Class Notices mailed on June 18-19, 2018 were actually received, and delivered to the decision-makers at those local governments. That follow-up effort did not begin in earnest until July 17, four weeks after the Notices were mailed, and was directed to Class Members that had neither opted in nor submitted a question by phone or through our informational website. Set up and initial training for that team required that I travel to Atlanta 7
9 Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 9 of 12 June 12-13, 2018; the travel expenses for that trip totaled $1,369.89, for which we seek reimbursement. 23. Second, NACo agreed to host a call-in conference to get the word out and give Class Members an opportunity to hear directly from and submit questions to Class Counsel. That conference took place on June 19, 2018, and was announced by a NACo June 14 Action Alert sent to: (a all local governments who receive PILT payments, NACo members and non-members alike; (b the executive directors of all state associations of counties; and (c all 81 members of the NACo Public Lands Steering Committee. The only expense associated with participating in the NACo conference was my taxi fare to and from NACo s office, $ At the time NACo sent its June 14 Action Alert, virtually no PILT recipients other than Kane County were aware of the existence of this litigation. Even a sophisticated organization like NACo was at the time I contacted it for help with a mailing list under the mistaken impression that PILT had been fully funded in FYs A great many, likely most, of the 1,952 Class Members had very little understanding of the inner workings of PILT. And when I participated in the June 19 NACo-sponsored call-in conference, two things became immediately apparent: (1 there was great demand for information about PILT and the class action lawsuit the response was so overwhelming that the original conference call facility NACo set up was swamped, and the start of the conference was delayed while it was switched to a larger capacity conference call facility that could accommodate the unexpectedly high call-in volume; and (2 the number of questions, concerns, and misconceptions about PILT, the class action, and the ramifications of opting in was far greater than I ever anticipated. That, plus the fact that the Class consists of 1,952 political entities, most of which are run by a board or council within three to five members (for a total of 6,000 10,000 individual politicians, told me that 8
10 Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 10 of 12 our PILT follow-up calling team had to be able to deal with a wide range of questions, from simple to complex, during their calls to Class Members. 25. We incurred the following expenses in preparing and mailing the Class Notices on June 18-19, 2018 for which we seek reimbursement: $ to print 2,000 Notices and 2,000 Opt-In Forms $ to print 2,000 envelopes with this return address: $ to print mailing labels $2, for postage $49.94 for courier service to deliver mailings to USPS $29.55 and $32.27 on August 11 and August 18, for overnight delivery of Notices that never arrived by USPS 26. Training and overseeing our Atlanta follow-up team of lawyers and paralegals did not require that I become temporarily a resident in Atlanta, but it did require that I travel to Atlanta for two to three days at least every other week. The expenses for those trips (06/20-21/2018; 07/09-10/2018; 07/30-08/01/2018; 08/13-15/2018; and 08/27-29/2018 totaled $5,926.84, for which we seek reimbursement. 27. The unexpected extent of lack of information, misinformation, and misconception also made it prudent for Robert Fleming and me to travel to the NACo annual convention in Nashville, Tennessee, where we attended the Public Lands Steering Committee sessions and 9
11 Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 11 of 12 answered questions, allayed unfounded concerns, debunked misconceptions, and efficiently spread the word. The travel expenses for that trip, July 12-13, 2018, totaled $2,092.44, for which we seek reimbursement. Notice of Fee Request 28. The Class Notice informs Class Members that Class Counsel will ask the Court for an award of attorney fees, and that a proportional share of whatever fees the Court awards will be deducted from their underpayment amounts to determine the amounts of their net recoveries. What that Notice did not say is what Class Counsel would request as fees: one-third of the common fund. 29. During the June 19 NACo-sponsored call-in conference, however, I expressly told all participants that we would ask the Court to award attorney fees equal to one-third of all amounts recovered on behalf of the Class. 30. In early July, we began to get questions (submitted through our informational website about what we would ask the Court to award as fees. In addition to answering all such inquiries directly, on July 9 we added an FAQ (Q&A 13 to our informational website explaining that we would ask the Court to award one-third of the common fund as fees, and that each Class Member would receive notice when our request is filed and have the opportunity to object should it wish to do so. FAQ 13 is accurately set out, in full, at p. 17 of our Brief in Support of Motion for Award of Attorney Fees and Expenses. 31. Because more than 300 local governments had already opted in before FAQ 13 was posted, on July 31, 2018 we ed all 677 local governments who had opted in through July 30, telling them: For information about the attorney s fees and expenses that Class Counsel will ask the Court to award it in this case, see Q&A 13 in the Frequently Asked Questions at: 10
12 Case 1:17-cv EDK Document 47-1 Filed 09/27/18 Page 12 of 12 On August 31, we sent the same to the 384 local governments whose opt ins were received July 31 through August 31; and on September 17 to the 194 local governments whose opt ins were received after August On September 27, 2018, we gave notice of our Motion for Award of Attorney Fees and Non-Taxable Expenses (filed the same day, via , to each Class Member who timely opted into the lawsuit. In that notice we suggested to them that if they wished to object to our Motion, they do so no later than October 11, We also told them we had posted copies of our Motion, Brief in Support, and this Declaration on our informational website. Class Members that Opted Into the Lawsuit 33. Attached as Exhibit C is a list of all Class Members that timely opted into the class action lawsuit, arranged alphabetically by state, and within each state alphabetically by unit of local government, with the FYs PILT underpayment shown for each local government. Dated: September 27, 2018 /s/ Alan I. Saltman SMITH, CURRIE & HANCOCK LLP 1025 Connecticut Avenue, N.W., Suite 600 Washington, D.C ( ( facsimile aisaltman@smithcurrie.com Counsel for Plaintiffs 11
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